Well you've been citing the absolute highest estimate as fact, but that's an acceptable rhetorical device. Very decent of you to show the full range.

There are a lot of issues regarding use of Purchasing Power Parity for your "real" equivalent.

Basically if you want the value to look big, use PPP, if you don't then use the market exchange rate.

Having spent many years in the developing world, it is true that some things are much, much cheaper than in the west, but other things are not, and some can even be more expensive (in terms of exchange rate).

Take Thailand for example, where cars commonly retail at a higher dollar price than in Europe, while a lunch may cost only 1/6th of a similar lunch in Europe.

But still it is clear that there is a major Chinese investment in modernising its military.

The question is nonetheless, what's in it for China to rock the international boat at this time? It is doing very well at the moment, and to throw it all away in a foolish military adventure smacks more of US fantasy than Chinese reality. Remember Deng Xiaoping's 24 character strategy

"Observe calmly; secure our position; cope with affairs calmly; hide our capacities and bide our time; be

good at maintaining a low profile; and never claim leadership.”

Basically this is a recipe for working towards becoming a future great power, and warns against reckless adventurism, and as the China Military Report 2008 points out, Hu Jintao follows these precepts.

Nice pdf by the way, thanks for linking it.

Full agreement there.