ESTIMATING NON-TRANSPARENT MILITARY EXPENDITURES - THE CASE OF CHINA (PRC)

Data limitations arising from non-transparency in military expenditure reporting impose significant constraints on economists studying count ry and comparative developments in this field. This article focuses on the case of China. It reviews the recent literature on China's milita ry expenditure, examines the variance in published estimates, and iden tifies three factors which help explain the variance: budgetary falsif ication; non-budgeted PLA revenue; and the US dollar purchasing-power parity of the yuan. Conclusions emphasize important policy implication s of such variance and suggest a more active role for defence economis ts in a field of research generating considerable attention from inter national relations scholars.