TAIPEI — China spent about $15 billion, or 7% of its defense budget, on exercises in the Western Pacific in 2023, according to a previously unpublished Taiwanese estimate, showing Beijing’s investment in military activity around Taiwan and its neighbors.

The internal research by Taiwan’s armed forces, reviewed by Reuters, offers a rare look into a slice of China’s defense spending as Beijing has ramped up its military presence amid rising tensions in the region.

China claims Taiwan as its own and has never renounced the use of force to bring the democratically governed island under its control despite Taiwan’s strong objections. It is also locked in disputes with several countries over sovereignty of large parts of the South China Sea and the East China Sea.

“This reveals the logic of allocation of their resources,” said a senior Taiwan official briefed on the research. “They are spending a huge amount of resources trying to gain control of the west of the First Island Chain.” The official, and two other people briefed on the research, declined to be identified for this story because of the sensitivity of the matter.

The First Island Chain is a collection of archipelagos running roughly from Indonesia in an arc northeast to Japan, encompassing the South China Sea and East China Sea.

In a statement to Reuters, Taiwan’s defense ministry declined to comment on the figures.

“But the Chinese Communist Party’s enormous military investment in recent years indeed has a negative impact to the peace and stability in the region, which is not conducive to global prosperity and development,” it added.

China’s defense ministry did not respond to a request for comment.

Zhang Youxia, vice chairman of the Central Military Commission and China’s second-highest-ranking military official, said in April the sea should not be an arena where countries can flex their “gunboat muscles.”

Carrying out “maritime containment, encirclement and island blockades will only plunge the world into a vortex of division and turbulence,” he added, in an apparent reference to the US and its allies.

Taiwan’s defense ministry compiled the reports in May based on Taiwanese surveillance and intelligence on Chinese military activity in the Bohai Sea off northeast China, the East China Sea, the Taiwan Strait, the South China Sea, and the western Pacific Ocean.

The reports tallied China’s naval and air missions there in 2023, then estimated how much fuel and other consumables would cost for each hour of activity. The total was 110 billion yuan ($15.3 billion), including maintenance, repairs and salaries, the reports and the officials briefed on the research said.

The research was designed to help Taiwanese decision makers understand how China allocates military resources across regions, as well as to gauge what Taipei perceives as a “gap” between Beijing’s intentions and its capabilities, three officials briefed on the reports said.

Comparing the cost of the exercises to the state of China’s economy, they said, helps Taipei assess the risks for both Taiwan and China.

The 110-billion yuan figure amounts to about 85% of Taiwan’s 2023 defense budget, Reuters calculations show.

It is about 7% of China’s reported 2023 military spending of 1.55 trillion yuan, although diplomats and experts say that number is often opaque or not fully inclusive. China in March announced a 7.2% rise in defense spending for this year to 1.67 trillion yuan.

“It’s like a black hole,” said retired Taiwanese Navy Lieutenant Commander Lu Li-shih, noting that individual spending programmes were not broken out in China’s defense budget. “You can gauge the trend, but you can’t tell what the detailed items are.”  

1.7 MILLION HOURS AT SEA
Both Washington and Beijing have significantly increased the volume of military exercises across Asia amid roiling tensions in recent years, though China’s drills still lag in scale and complexity, a study has found.

China’s state-backed Global Times newspaper said last year sending carrier groups into the waters of the Western Pacific was not only about flexing muscles around Taiwan, and that China’s navy needed to get used to operating far out at sea.

“China’s carrier battle group is facing not only the Taiwan authorities, but also the interference of external forces,” military expert Song Zhongping told the newspaper.

Four experts said the report’s methodology was feasible and could provide valuable information, although they cautioned that it necessarily included some guesswork.

They also said direct comparisons on military exercise spending were difficult; no data was available, for instance, on how much the United States spent on such activities in 2023. But the US Department of Defense has proposed spending $9.9 billion next year on the Pacific Deterrence Initiative, created to counter China’s military build-up.

Reuters could not independently confirm the accuracy of the Taiwanese estimate.

China has stepped up military incursions and war games near Taiwan.

In 2023, Chinese aircraft, including J-10 fighter jets, H-6 bombers, and drones, made more than 9,200 flights in the region, amounting to about 29,000 hours in the air, the report shows.

The Chinese navy made more than 70,000 sailings, including aircraft carriers and destroyers, amounting to a total time at sea of more than 1.7 million hours.

Roughly 40% of the Chinese naval journeys were made in the highly contested South China Sea, about 20% were in the East China Sea bordering Japan and South Korea, and nearly 15% were in the sensitive Taiwan Strait, the report shows.

Taiwan has reported about 1,700 Chinese military planes have flown in its air defense identification zone so far this year, slightly more than the total for all of 2023, according to data compiled by Washington-based think tank the Center for Strategic and International Studies.

China also launched “punishment” drills around Taiwan in May 2024, sending heavily armed warplanes and staging mock attacks shortly after Taiwan President Lai Ching-te, who Beijing considers a separatist, took office.

During the two-day “Joint Sword — 2024A” war games that month, Chinese air and naval forces were estimated to have spent about $13.17 million on fuel and consumables, according to another internal Taiwan defense report reviewed by Reuters.

The estimated spending for that exercise did not include personnel and maintenance, which are usually about three times the cost of fuel and consumables, the three officials briefed on the research said.

Chinese warplanes made more than 100 flights and spent some 300 hours in the air during those exercises, the report shows, while Chinese warships and coast guard boats made about 90 trips.

Chieh Chung, a researcher at a Taipei-based think tank, the Association of Strategic Foresight, said the activity showed the Chinese military was building combat readiness.

“The Communist military is ramping up their training for a Taiwan invasion,” he said. “More aircraft and pilots are now capable of conducting such missions.” — Reuters

SEOUL — As South Korea scrambles to halt the sharp decline in its birth rate, policymakers are having a hard time convincing many in their 20s and 30s that parenthood is a better investment than stylish clothes or fancy restaurants.

Asia’s fourth-largest economy plans to launch a new government ministry dedicated to demographic challenges after years of incentives failed to ease the baby crisis.

But for Park Yeon, a 28-year-old fashion Instagrammer and aspiring singer, spending choices are guided mostly by her appetites for clothing and travel, leaving little budget for marriage and babies.

“I’m all about YOLO (you only live once),” said Ms. Park as she sells her Supreme T-shirts at a thrift fashion festival in Seoul’s high-fashion enclave of Seongsu-dong.

“There isn’t enough left to save each month after I do things to reward myself. Getting married might happen at some point but being happy right now — that’s more important, right?”

South Korea continues to break its own record for having the world’s lowest birth rate, which hit a fresh low last year.

Sociologists say the lifestyle priorities of Koreans in their 20s and 30s — considered Generations Y and Z — mean they spend more and save less on average than the wider population or their peers in other countries, neither of which are conducive to nest building.

“They are status hunting. Their high spending habits show young people are working on their own emblems of success online rather than focusing on the impossible goals of settling down and having children,” said Jung Jae-hoon, a sociology professor at Seoul Women’s University.

Not even South Korea’s aggressive interest rate hikes over the past three years have been able to rein in youthful spending.

The savings rate for those in their 30s declined to 28.5% in the first quarter from 29.4% five years ago, while that for all other age groups increased in the same period, central bank data shows.

At the same time, people in their 20s and 30s make up the biggest spenders at department stores and top-tier hotels while their travel spending rose to 40.1% from 33.3% in the past three years.

The proportion of spending by those in their 20s at high-end department stores has almost doubled to 12% in the three years to May, data from Hyundai Card shows, while that for all other age groups declined.

Last year alone, revenue at pricey buffet restaurants jumped 30.3%, versus a gain of 10.5% at fast food restaurants and 9% for the entire dining industry, according to market research firm Euromonitor.

In one example, sales at Seoul Dragon City Hotel — a popular Instagram spot — for its 90,000 won ($68) all-you-can-eat seasonal strawberry dessert jumped 150% from last winter, even after the hotel hiked the price by 12.5%.

In contrast, 25- to 29-year-olds in Australia slashed spending 3.5% in the first quarter of 2024 from a year earlier due to cost-of-living pressure, a report by Commonwealth Bank of Australia shows.

Koreans’ fancy tastes have made them the world’s biggest per-capita spenders on luxury brands, Morgan Stanley’s research showed last year, and a hot destination for the biggest luxury brands.

Chanel, Celine and Dior have all signed deals with teen-focused K-pop groups such as Blackpink and NewJeans as global brand ambassadors.

PLEASURE AND PAIN
To be sure, financial hardship is by far the biggest reason South Koreans cited for not having children, according to a survey by research firm PMI Co. in May.

About 46% of 1,800 respondents blamed either job uncertainty or education costs for this decision.

That’s worsened by annual incomes only rising 2.0% for those in their 20s and 30s last year, slower than the 4.5% increase for all households, according to Statistics Korea.

But professor Jung added a youth focus on more immediate pleasures also explains why young people don’t respond to the government’s subsidy-based baby boosting policies.

The Yoon Suk Yeol administration in May announced a plan to create a new ministry to focus on demographic issues, after dozens of policy measures including subsidies to reverse vasectomies, cash support for families with newborns, free taxi rides and longer paid childcare leave failed to reverse the plunging birth rates.

In a survey of 17 advanced countries by the US Pew Research Center in 2021 asking what makes life meaningful, South Korea was the only country where material well-being was the top response. Elsewhere, family or health was the top answer.

For Ms. Park, having children is an add-on she may consider if her singing career takes off.

“If things work out well with what I do, savings and getting married and all those will follow. For now, enjoying my life and working on my dream job are my priorities,” she said. — Reuters

ABOARD A US MILITARY AIRCRAFT — The near-term risk of a broader war in the Middle East has eased somewhat after Israel and Lebanon’s Hezbollah exchanged fire without further escalation but Iran still poses a significant danger as it weighs a strike on Israel, America’s top general said on Monday.

Air Force General C.Q. Brown, chairman of the Joint Chiefs of Staff, spoke to Reuters after emerging from a three-day trip to the Middle East that saw him fly into Israel just hours after Hezbollah launched hundreds of rockets and drones at Israel, and Israel’s military struck Lebanon to thwart a larger attack. It was one of the biggest clashes in more than 10 months of border warfare, but it also ended with limited damage in Israel and without immediate threats of more retaliation from either side.

Mr. Brown noted Hezbollah’s strike was just one of two major threatened attacks against Israel that emerged in recent weeks. Iran is also threatening an attack over the killing of a Hamas leader in Tehran last month.

Asked if the immediate risk of a regional war had declined, Mr. Brown said: “Somewhat, yes.”

“You had two things you knew were going to happen. One’s already happened. Now it depends on how the second is going to play out,” Mr. Brown said while flying out of Israel.

“How Iran responds will dictate how Israel responds, which will dictate whether there is going to be a broader conflict or not.”

Mr. Brown also cautioned that there was also the risk posed by Iran’s militant allies in places such as Iraq, Syria and Jordan who have attacked US troops as well as Yemen’s Houthis, who have targeted Red Sea shipping and even fired drones at Israel.

“And do these others actually go off and do things on their own because they’re not satisfied — the Houthis in particular,” Mr. Brown said, calling the Shia group the “wild card.”

Iran has vowed a severe response to the killing of Hamas leader Ismail Haniyeh, which took place as he visited Tehran late last month and which it blamed on Israel. Israel has neither confirmed or denied its involvement.

Mr. Brown said the US military was better positioned to aid in the defense of Israel, and its own forces in the Middle East, than it was on April 13, when Iran launched an unprecedented attack on Israel, unleashing hundreds of drones, cruise missiles and ballistic missiles.

Still, Israel, the US and other allies managed to destroy almost all of the weapons before they reached their targets.

“We’re better postured,” Mr. Brown said. He noted Sunday’s decision to maintain two aircraft carrier strike groups in the Middle East, as well as extra squadron of F-22 fighter jets.

“We try to improve upon what we did in April.”

Mr. Brown said whatever plans Iran’s military might have, it would be up to Iran’s political leaders to make a decision. “They want to do something that sends a message but they also, I think … don’t want to do something that’s going to create a broader conflict.”

STRUGGLING WITH GAZA FALLOUT
US President Joseph R. Biden’s administration has been seeking to limit the fallout from the war in Gaza between Hamas and Israel, now in its 11^th month. The conflict has leveled huge swathes of Gaza, triggered border clashes between Israel and Lebanon’s Iranian-backed Hezbollah movement and drawn in Yemen’s Houthis.

Mr. Brown traveled on Monday to the Israeli military’s Northern Command, where he was briefed on the threats along Israel’s borders with Lebanon and Syria. In Tel Aviv, he met Israel’s Defense Minister Yoav Gallant and its Chief of the General Staff Lieutenant General Herzi Halevi.

Asked about Lebanese Hezbollah’s military might, particularly after the strikes by Israel, Mr. Brown cautioned “they still have capability.”

The current war in the Gaza Strip began on Oct. 7, 2023, when Hamas gunmen stormed into Israeli communities, killing around 1,200 people and abducting about 250 hostages, according to Israeli tallies.

Since then, Israel’s military campaign has driven nearly all of the Palestinian enclave’s 2.3 million people from their homes, giving rise to deadly hunger and disease and killing at least 40,000 people, according to Palestinian health authorities. — Reuters