U.S. Defense Department says China's military budget understated

China was accused by the U.S. Defense Department of deceptively shrouding what it spends on rapidly expanding weapons programs including technology to disrupt U.S. space programs.

Testifying before a mostly supportive House Armed Services Committee on Wednesday, the deputy undersecretary of defense for Asia, Richard P. Lawless, said, "What we see is a deliberate effort on the part of China's leaders to mask the nature of Chinese military capabilities."

As a result, he said, "the outside world has limited knowledge of the motivations, decision-making and key capabilities of China's military or the direction of its modernization."

Still, Lawless said China's goals nonetheless were clear.

"We are seeing China emerge as a growing international space power" while rapidly developing its armed forces to compel Taiwan to bend to its demands, he said.

While China's long-range power remains limited, Lawless, who worked for the Central Intelligence Agency for 15 years before taking his Pentagon post five years ago, said China was modernizing its nuclear force to be capable of strategic strikes beyond the Asia-Pacific region.

In space, Lawless said, China was using proceeds from its growing wealth and gains from trade with the United States to develop robust anti-satellite weapons, ground-based lasers and satellite communication jammers designed to deny space access to other countries.

Still, the Pentagon official said that while China has shown some interest in discussing U.S. concerns, its leaders have not said much about what they plan to do with their emerging military capabilities. "We believe these questions are reasonable, and answering them in a transparent and forthright manner can only help to better understand each other," he said.

China rejected Lawless' comments as "irresponsible," saying it was committed to peaceful development and being "transparent and open" about its military expenditure.

Chinese Foreign Ministry spokesman Qin Gang said Thursday at a regular news conference that Lawless used "the so-called military capacity issue to spread China threat (theories) and interfere with China's internal affairs. We express our opposition to that."

Qin said China wanted increased dialogue with U.S. defense officials in order to enhance the trust between the sides. "We also hope that by those exchanges the U.S. side can truly recognize China's relevant defense policies in the right way and our principled positions on the Taiwan question," he said.

Committee members at the hearing generally shared the Pentagon's concerns.

The chairman, Rep. Ike Skelton, a Democrat, supported the Pentagon's accusation that China intentional understates what is spends on military programs. Its official defense budget for this year is about $45 billion (EUR33.8 billion), but the "real" budget is between $85 billion (EUR63.9 billion) and $125 billion (EUR95 billion), he said.

Skelton was critical also of China's anti-satellite missile test in January, saying it left dangerous debris in orbit for years, and that China continues its massing missiles across from Taiwan.

"Its power projection capabilities are steadily increasing," Skelton said, although China "is not necessarily destined to be a threat to the United States."

Rep. Duncan Hunter, the senior committee Republican, said China had at least 10 varieties of ballistic missiles deployed or in development, including about 900 short-range missiles across the 100-mile-wide (160 kilometer) wide Taiwan straits.

China's trade surplus with the United States has grown to more than $200 billion (EUR150.5 billion), a 25 percent increase from 2004, and is using American dollars to purchase ships, planes and missiles, he said.

In charging deception in its military spending figures, Lawless said the Pentagon's best estimate was that China could be spending $85 billion (EUR63.9 billion) to $125 billion (EUR95 billion) this year.

In 2003, he said, the most recent year of published spending estimates, China's official budget figure for military spending was$22.4 billion (EUR16.8 billion) while estimates of actual spending ranged from $30.6 billion (EUR23 billion) to $141 billion (EUR106.1 billion), Lawless said.

The Pentagon said last month in an annual report to Congress that China was modernizing its military in ways that give it options for launching surprise attacks, potentially far from its borders. The report said the Chinese are acquiring better missiles, submarines and aircraft and should more fully explain the purpose of a military buildup that has led some to view China as a threat.