The Chinese do not report their defence spending to the United Nations in the standardised format. The United States Defense Secretary, William Perry, asked Peking last year to "improve the transparency of their military accounting". The IISS estimated Chinese military spending in 1994 was $28bn (pounds 17.5bn) - four times the official figure.
Calculating the defence spending of Communist reg-imes has always been difficult. This year's issue of the IISS's The Military Balance features detailed analyses of that of Russia and China. The latter is complicated by the fact that the People's Liberation Army not only manages armed forces of 4 million, making exact accounting impossible, but also has 25,000 industrial enterprises, distinct from the defence industries, with a civilian workforce of up to 3.5 million.
Since 1979 China has shifted from the doctrine of "People's war" - a guerrilla war on Chinese territory - to "local war" - a major regional conflict. Although the IISS considers this remote, China has formed rapid reaction forces and given top priority to modernising its equipment.