Reuters/Jason Lee

China will boost military spending by 11.2 percent this year, the government said on Sunday, unveiling Beijing’s first defense budget since President Barack Obama launched a “pivot” to reinforce U.S. influence across the Asia-Pacific, according to a Reuters report.

The rise was announced by Li Zhaoxing, the spokesman for China’s parliament, and will bring official spending on the People’s Liberation Army to 670.2 billion yuan ($110 billion) for 2012, after a 12.7 percent increase last year and a nearly unbroken string of double-digit rises across over two decades.

“China is committed to the path of peaceful development and follows a defensive national defense policy,” Li told a news conference ahead of the annual session of the National People’s Congress, the Communist Party-controlled parliament that will approve the budget.

“China has 1.3 billion people, we have a large territory and a long coast line but our defense spending is relatively low compared with other major countries,” he added, in comments carried live on state television.

That said, Beijing’s public budget is widely viewed as low-balled. The U.S. Defense Intelligence Agency (DIA), for example, in its annual report to the Senate Armed Services Committee last month, estimates that China spent as much as $183 billion on military-related goods and services in 2011, compared to the $93 billion Beijing reported in its official military budget.

For comparison, the U.S., with an economy less than three times the size of China’s, has a military budget about six times as big, said Bloomberg. The Pentagon is asking for $613.9 billion next year, which also includes $88.5 billion in supplemental spending for wars. Unlike China’s, the U.S. defense budget is shrinking. The Pentagon’s request is $31.8 billion less than the amount enacted by Congress for 2012.

Regardless of how much China will really be spending, its military will have more money to spend on warships, fighter planes and missiles.

Most disturbing to the U.S., one could guess, are the missiles.

The DIA thinks China is preparing to deploy the DF-21D anti-ship ballistic missile, also known as “carrier killer.” If true, it would be the world’s first ASBM and the world’s first weapons system capable of targeting a moving aircraft carrier strike group from long-range, land-based mobile launchers.

With an estimated range of 1,700 miles, DF-21Ds could effectively neutralize the U.S. “pivot,” keeping carriers in the deep sea.

The United States Naval Institute in 2009 stated that the warhead is large enough to destroy an aircraft carrier in one hit, and that U.S. ships cannot defend against it.

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Ray Kwong is senior advisor to the USC US-China Institute, a charter member of the Asian International Business Advisory Group, a Forbes contributing writer and columnist for the Hong Kong Economic Journal. He is currently facilitating talks between China and U.S. interests on such matters as clean energy economics, nanotechnology and commercial aerospace. While it sounds way cooler than it really is, he is also a member of the Bloomberg BusinessWeek Market Advisory Board and the McKinsey Quarterly Executive Panel. You can follow him on Twitter @raykwong. Eyeball Ray's posts from Forbes ChinaTalk.
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