Xiang Huaicheng, the outgoing finance minister, said that the government's budget for 2003 included Yn185.3bn for defence, 9.6 per cent more than in 2002. The rate of increase is far less than the 17.6 per cent recorded last year and military delegates to the National People's Congress said outside the meeting that this was too low.
Lieutenant General Liu Cangzi of the airforce commented that China's defence spending formed a far smaller proportion of its gross domestic product than that of the US or other developed countries and that the increase should be greater as the armed forces needed to upgrade their technology. However, an NPC finance committee member argued that the big increases of recent years had compensated the army for withdrawing from business activities and that this year government departments were being asked to freeze the growth in their spending.
Western observers believe that China's actual defence spending is at least double the formal budget allocation.