The following is an extract from the August 2014 edition of China+ Geopolitics.
In recent years, China has shifted its foreign policy stance from former leader Deng Xiaoping’s long-standing dictum – “hide your strengths, bide your time”.
Throughout Deng’s period of leadership and even for a long period after, China showed a willingness to compromise and postpone resolution of differences with its neighbours. This was especially evident with the conflict over the Diaoyu/Senkaku Islands, with Deng proselytizing that it should be left for future generations to settle. The exceptions to this are of course Hong Kong, where return to China was skilfully managed, and Taiwan, where Beijing has ensured and consistently maintained its international isolation.
Over the past decade, China has spent heavily on military modernisation. This is difficult to measure reliably, however, the rate of spending has increased faster than GDP and is doubling every 7–8 years. Defence expenditure as a percentage of GDP is increasing, but is still likely less than 5% of total spend. Despite this increase, defence expenditure remains less than US spending in both absolute terms and as a share of GDP.
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