Is the Ambition Hypothesis Exist on China's Defense Spending?

Kennedy, Posma Sariguna Johnson (2022) Is the Ambition Hypothesis Exist on China's Defense Spending? Global Strategis - Cakra Studi Global Strategis, 16 (1). pp. 31-40. ISSN 1907-9729

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Official URL: https://e-journal.unair.ac.id/JGS/index

Abstract

Since China conducted the economic reform in 1987, it has advanced a leap in its economy, technology, research, and military capabilities, surpassing many countries globally, even to have matched the United States. This study aims to discover whether there has been an ambition hypothesis in China when the country increased its defense since carrying out the reforms. This study adopts a quantitative analysis method that builds two simultaneous regression structural equation models: economic growth and military equation. The study results then indicate that China’s alleged motivation for ambition in determining the defense budget is met, where economic growth and taxes positively affect the military budget. The fulfillment of the hypothesis ambition in China is in stark contrast to the case of the United States, where economic growth and taxes negatively impact the size of the country’s military budget. In other words, unlike China, the United States increased its military budget when its economic growth got disrupted. For instance, during the trade war between the United States and China in March 2018, the United States eventually increased its military strength though its economy was hampered. Keywords: Ambition Hypothesis, Defense Spending, Military Strength, China-United States Rivalry, Trade War. / Sejak melakukan reformasi ekonomi pada tahun 1987, Tiongkok telah mengalami lompatan kapabilitas ekonomi, teknologi, penelitian, dan militer hingga melampaui banyak negara secara global dan bahkan hampir menyamai Amerika Serikat. Tujuan dari penelitian ini lantas adalah untuk mengetahui apakah terdapat hipotesis ambisi di Tiongkok ketika meningkatkan pertahanannya sejak adanya reformasi. Metode penelitian yang digunakan adalah analisis kuantitatif dengan membangun dua model persamaan struktural, yaitu persamaan pertumbuhan ekonomi dan persamaan militer, yang akan diregresi secara simultan. Hasil penelitian menunjukkan bahwa dugaan motivasi ambisi Cina terpenuhi dalam penentuan anggaran pertahanannya, dimana pertumbuhan ekonomi dan pajak berpengaruh positif terhadap besaran anggaran militer. Pemenuhan hipotesis ambisi di Tiongkok berbanding terbalik dengan kasusu Amerika Serikat yang pertumbuhan ekonomi dan pajaknya justru berdampak negatif pada besaran anggaran militernya. Hal ini menunjukkan bahwa Amerika Serikat akan meningkatkan anggaran militernya ketika pertumbuhan ekonominya terganggu. Contohnya, ketika Perang Dagang dengan Tiongkok pada Maret 2018 lalu, Amerika Serikat justru meningkatkan kekuatan militernya walau perekonomiannya sedang terganggu. Kata kunci: Hipotesis Ambisi, Belanja Pertahanan, Kekuatan Militer, Rivalitas China-Amerika Serikat, Perang Dagang.

Item Type: Article
Subjects: SOCIAL SCIENCES > Finance
Depositing User: Mr Alexander Jeremia
Date Deposited: 04 Apr 2023 09:25
Last Modified: 04 Apr 2023 09:25
URI: http://repository.uki.ac.id/id/eprint/10885

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