Notwithstanding the enormous conventional military potential in terms of manpower and equipment that the Chinese armed forces possess, China has essentially been successful in maintaining a healthy balance in its national development priorities and its defence posture. In its continuing pursuit of economic development and betterment of the state of its teeming millions, China has definitely and demonstrably accorded a lower priority to its military potential but is continuing to unabatedly upgrade its existing military potential with the incorporation of the latest modern technology. In terms of the relationship between the Chinese Gross Domestic Product (GDP) and the defence budget, the white paper slates that China, whose GDP (gross domestic product) in 2002 and 2003 was US 1.26 trillion dollars and 1.412 trillion dollars respectively, only spent 20.57 billion dollars and 22.98 billion dollars respectively on national defence in those years while China's defence budget for 2004 was 25.50 billion dollars.
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