Last week, China released its official defense budget for 2015. China will spend $144.2 billion on defense this year, an increase of 10.1 percent. As large as that is, it's only part of the story.
Across Asia, defense budgets are rising at an alarming rate. The figures are in large part a response to China's aggressive territorial claims in the South China Sea. They're a window into how China's neighbors to view the world — and the view isn't good.
For much of its modern history, China was a poor country. As recently as 1989 China was spending as little as $18.3 billion dollars annually on defense. That amounted to a paltry $4,615 per soldier at a time when the United States appropriated $246,000 per individual service member.
As China's economy continued to grow, the country's defense budget grew alongside it. Since the early 90s, the budget for the People's Liberation Army has regularly grown by double digits.
Although alarming, China's hike in defense spending is understandable. China is a physically large country in a dangerous neighborhood, with neighbors including Russia, North Korea, Pakistan, and even Afghanistan. China has also accumulated a great deal of wealth and raised the standard of living for hundreds of millions. All of that progress quite reasonably needs to be defended.
This year, China's neighbors are hiking their own defense spending — often substantially.
Russia's defense budget is increasing by 33 percent, while the Philippine government proposed a 29 percent increase for 2015. Indonesia is set to rise by 14 percent and India by 11 percent. Malaysia is rising by 10 percent, and South Korea by 4.9 percent.
Even Japan, whose public debt reached 246 percent of GDP, hiked spending by 2 percent.
China's neighbors are not frightened by the economic giant's defense budget increases. Those have been going on for more than two decades without the neighboring countries seeing the need to increase their own spending. Generally, Beijing's neighbors have only begun raising budgets in the last two years.
What frightens China's neighbors isn't the size of its defense budget, but the Chinese government's foreign policy.
China has territorial disputes with a dozen other countries. Some have been resolved peacefully. Others have not — at least not to the satisfaction of China's neighbors. Beijing recently claimed a portion of the South China Sea defined by the so-called "Nine Dash Line." China's portion is 90 percent of the South China Sea, including territorial waters claimed by other countries.
In the last four years China has challenged Japan's claim to the Senkaku Islands, sending ships and planes near what it calls the Diaoyu Islands. China has also squared off with the Philippines over the Second Thomas Shoal, stationed an oil rig in waters claimed by Vietnam, confronted the U.S. Navy, and demanded that the Indian Navy leave "Chinese territory" in what others considered international waters. China is even filling in a series of shoals and reefs in the South China Sea in disputed territory, both to bolster its claims in the area and expand the People's Liberation Army's presence.
Not all of these budget increases are about China. Russia's spending has more to do with Ukraine and the decrepit state of the Russian military than China. Most of them are, however, indicating how much risk these countries see in the world.
Defense spending is one form of insurance for nations. How much defense a government buys depends on how much risk it sees. Countries that are relatively secure, like Germany, get by with spending relatively little on defense. Countries that see tensions rising around them — like the Philippines — hike their budgets accordingly.
Whether it believes its neighbors have a legitimate grievance or not, China has given its neighbors plenty to be worried about. But that's precisely the problem — so far, China has shown that it doesn't believe there are legitimate points of view other than its own.
China expects smaller countries to stay out of the way and "not make trouble." International arbitration — as in the case with The Philippines — is refused. Any other points of view are incorrect — or worse, directed by Washington, D.C.
China will continue to push its territorial claims with ships and planes, and other countries will continue to push back. The possibility exists that one of these confrontations could get out of hand, and a shooting incident could occur.
The presence of more weapons or better trained troops on either side does not necessarily make war more likely. China's defense budget won't start a war, but how it treats other countries just might.