¹Early last month, China announced its projected 2014 defense budget of 808 billion yuan (roughly USD 132 billion), a 12.2 percent increase over the previous year. This continues the double-digit spending increases in nominal terms since 1989 (2010 was the exception, most likely because of priorities adjusted in the wake of the global financial crisis). China’s rapid rise in national power across the board and the pace and scale of its increasing investment in the PLA, together with its limited willingness to release a breakdown of how this money is spent, ensure that the annual announcement of its official defense budget for the forthcoming fiscal year attracts considerable attention. Annual multibillion-dollar increases suggest strong interest in furthering core strategic objectives, such as upholding island and maritime sovereignty claims in the East and South China Seas.²

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