2021 is the opening year of the "14th five year plan", which breaks through the development law of loosening before and tightening after the plan in the past five years. The first year is the big year, the start is the decisive battle, and the start is the sprint. The whole industry shows a high level of demand, no time to wait, and supply is in full swing. The reform mechanism of state-owned enterprises is full of endogenous vitality, and private enterprises are fully engaged in seizing historic opportunities. In 2022, on the one hand, as the early stage of the comprehensive expansion of the military industry, the military industry will continue its high boom development trend; On the other hand, with the outbreak of the Russian Ukrainian war, geopolitical uncertainty has increased significantly, and the realistic contradiction that China's national defense strength does not match its economic strength has become increasingly prominent. The downstream demand of the military industry is expected to be further improved.
Military expenditure is the main source of funds and material basis of China's military industry, especially the equipment cost in military expenditure. It is the main source of military products business income of the main suppliers of the military industry. It digests the main supply capacity of the military industry and supports the development of relevant suppliers. Therefore, in the research, analysis and prediction of military industry, the in-depth study of military expenditure is necessary.
The 2022 military budget is of great significance. On the one hand, at present, it is only the early stage of the comprehensive expansion of military industry, and the military budget directly reflects the rhythm of national defense construction. On the other hand, in the era of epidemic, the uncertainty of global political, economic and military pattern has increased significantly, and the growth rate of military budget announced by many countries has increased significantly. In 2022, China's military budget increased by 7.1%, an increase of 0.3 percentage points over last year, and the increase exceeded 7% for the first time since 2019. Although in the context of China's economic downturn and facing greater inflationary pressure, from the perspective of financial support, government expenditure is more inclined to the field of people's livelihood, 7.1% in 2022 is still a not low and reasonable growth rate of military expenditure. It reflects that the government's decision-making, under the general tone of stability and seeking progress in stability, accelerating the modernization of national defense and the army and realizing the unity of rich country and strong army will still be the main melody of China's national defense construction.
On the other hand, since the two sessions last year, China has successively introduced the "Interim Provisions on the supervision and administration of military equipment procurement contracts", "provisions on the test and appraisal of military equipment", "provisions on the ordering of military equipment" and other work systems related to standardizing equipment ordering, highlighting that China's military spending is working in the two directions of scale, quantity and efficiency, Jointly support China's national defense construction and the development of the military industry, large-scale rapid growth and structural transformation and upgrading.
The improvement of the "quantity" and "efficiency" of military expenditure will promote the military industry to usher in substantial and significant changes and historic development opportunities in the three dimensions of quantity, quality and structure, and promote the military industry to usher in a new era and era with both growth and value, continuous improvement of landscape, and continuous consolidation, fulfillment, verification and strengthening of high economic growth expectations in the 14th five year plan.
The availability of military expenditure related data is poor, and the statistical caliber is difficult to unify, which brings great research difficulties, and most research institutions can only taste it. At the time of the announcement of the national defense budget of the two sessions, we try to do further research and discussion.
We have made an in-depth comparative analysis of global and Chinese military spending, discussed the factors driving the growth of military spending, and predicted China's military spending in combination with the current international situation and China's situation. On the basis of the above, we give the following four judgments:
1. Judgment on global military expenditure: there is great uncertainty in the economic prospect, and the conflict between Russia and Ukraine may accelerate a new round of global military expenditure;
2. Judgment on China's military expenditure: China's military expenditure is expected to maintain medium and high-speed growth, showing anti cyclical and counter cyclical characteristics;
3. Judgment on China's military expenditure structure: the proportion of equipment expenditure continues to increase, and aerospace may become a key investment field;
4. Judgment on the use efficiency of military expenditure: the two-way reform measures of supply and demand work together to promote the steady improvement of the overall use efficiency of military expenditure.
