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Exclusive: China spent $15.3 billion on Pacific exercises in 2023

A fishing boat sails past a Chinese warship during a military drill off the Chinese coast near Fuzhou, Fujian Province, across from the Taiwan-controlled Matsu Islands, China, April 11, 2023. REUTERS/Thomas Peter/File Photo Purchase Licensing Rights

China spent about $15 billion, or 7% of its defence budget, on exercises in the Western Pacific in 2023, according to a previously unpublished Taiwanese estimate, showing Beijing’s investment in military activity around Taiwan and its neighbours.
The internal research by Taiwan’s armed forces, reviewed by Reuters, offers a rare look into a slice of China’s defence spending as Beijing has ramped up its military presence amid rising tensions in the region.

China claims Taiwan as its own and has never renounced the use of force to bring the democratically governed island under its control despite Taiwan’s strong objections. It is also locked in disputes with several countries over sovereignty of large parts of the South China Sea and the East China Sea.
“This reveals the logic of allocation of their resources,” said a senior Taiwan official briefed on the research. “They are spending a huge amount of resources trying to gain control of the west of the First Island Chain.” The official, and two other people briefed on the research, declined to be identified for this story because of the sensitivity of the matter.

The First Island Chain is a collection of archipelagos running roughly from Indonesia in an arc northeast to Japan, encompassing the South China Sea and East China Sea.
In a statement to Reuters, Taiwan’s defence ministry declined to comment on the figures.
“But the Chinese Communist Party’s enormous military investment in recent years indeed has a negative impact to the peace and stability in the region, which is not conducive to global prosperity and development,” it added.
China’s defence ministry did not respond to a request for comment.
Zhang Youxia, vice chairman of the Central Military Commission and China’s second-highest-ranking military official, said in April the sea should not be an arena where countries can flex their “gunboat muscles”.
Carrying out “maritime containment, encirclement and island blockades will only plunge the world into a vortex of division and turbulence,” he added, in an apparent reference to the U.S. and its allies.
Taiwan’s defence ministry compiled the reports in May based on Taiwanese surveillance and intelligence on Chinese military activity in the Bohai Sea off northeast China, the East China Sea, the Taiwan Strait, the South China Sea, and the western Pacific Ocean.
The reports tallied China’s naval and air missions there in 2023, then estimated how much fuel and other consumables would cost for each hour of activity. The total was 110 billion yuan ($15.3 billion), including maintenance, repairs and salaries, the reports and the officials briefed on the research said.
The research was designed to help Taiwanese decision makers understand how China allocates military resources across regions, as well as to gauge what Taipei perceives as a “gap” between Beijing’s intentions and its capabilities, three officials briefed on the reports said.
Comparing the cost of the exercises to the state of China’s economy, they said, helps Taipei assess the risks for both Taiwan and China.
The 110 billion yuan figure amounts to about 85% of Taiwan’s 2023 defence budget, Reuters calculations show.
It is about 7% of China’s reported 2023 military spending of 1.55 trillion yuan, although diplomats and experts say that number is often opaque or not fully inclusive. China in March announced a 7.2% rise in defence spending for this year to 1.67 trillion yuan.
“It’s like a black hole,” said retired Taiwanese Navy Lieutenant Commander Lu Li-shih, noting that individual spending programmes were not broken out in China’s defence budget. “You can gauge the trend, but you can’t tell what the detailed items are.”

1.7 MILLION HOURS AT SEA

Both Washington and Beijing have significantly increased the volume of military exercises across Asia amid roiling tensions in recent years, though China’s drills still lag in scale and complexity, a study has found.
China’s state-backed Global Times newspaper said last year sending carrier groups into the waters of the Western Pacific was not only about flexing muscles around Taiwan, and that China’s navy needed to get used to operating far out at sea.
“China’s carrier battle group is facing not only the Taiwan authorities, but also the interference of external forces,” military expert Song Zhongping told the newspaper.
Four experts said the reports’ methodology was feasible and could provide valuable information, although they cautioned that it necessarily included some guesswork.
They also said direct comparisons on military exercise spending were difficult; no data was available, for instance, on how much the United States spent on such activities in 2023. But the U.S. Department of Defense has proposed spending $9.9 billion next year on the Pacific Deterrence Initiative, created to counter China’s military build-up.
Reuters could not independently confirm the accuracy of the Taiwanese estimate.
China has stepped up military incursions and war games near Taiwan.
In 2023, Chinese aircraft, including J-10 fighter jets, H-6 bombers, and drones, made more than 9,200 flights in the region, amounting to about 29,000 hours in the air, the report shows.
The Chinese navy made more than 70,000 sailings, including aircraft carriers and destroyers, amounting to a total time at sea of more than 1.7 million hours.
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