”The main source of friction is Taiwan and you cannot rule out a nationalistic military faction coming to power to taking a punt to have a quick go.” Chinese defence expenditure is estimated by the Pentagon to be $50 billion (£25 billion) but analysts believe large chunks of the budget are “squirreled away” and it could be as high as $200 billion making it the second largest in the world after America.
Other new weapons that are part of the precision-guided missile arsenal are advanced cruise missiles, medium-range ballistic missiles, the direct ascent anti-satellite missiles, like the one tested in January 2007.
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