Measuring hard power: China’s economic growth and military capacity

Abstract

China's rapid economic development has facilitated a dramatic increase in its military capacity and international security presence. But there is considerable disagreement over how large its economy and military capacity is. Underlying the debate is the fact that market and PPP exchange rate comparisons give very different pictures of China's relative economic size, and neither is the appropriate price deflator with which to compare relative military capacities. We address this issue by deriving a relative military cost (RMC) exchange rate for China which converts RMB to US dollar expenditures in terms of real military services. This shows that both market and PPP exchange rate comparisons of China's real GDP understate its relative military capacity. Nevertheless we also show that the real expansion of China's military capacity over the last decade has been much smaller than its GDP growth, due to the rapidly growing wage costs faced by China's military.

Military industry bubbles: are they crowding out utility investments?

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The demand for defense spending in Russia: Economic and strategic determinants

“…For Russia, (re)asserting its international strategic role necessitates a strong military pillar vis-à-vis the US or other major strategic players globally. Once again, in the case of the coefficient for China, a twofold explanation can be postulated: either a broad follower mode of behavior adopted by Russia as both rising powers are asserting and establishing their political and military presence and role in international affairs often in a loosely cooperative manner and/or an effort by Russia not to lag behind the massive Chinese military build-up fueled by the rapidly growing Chinese economy (Robertson and Sin, 2017). Finally, as a further step in the analysis and as a test of robustness, the nonparametric effects of the determinants of Russian military expenditure are graphically shown in Figs.…”

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