The Pentagon report cautions that China's "total military-related spending" might be two or three times as much as its official claim—in short, that the real figure might be between $70 billion and $105 billion. First, it's unclear what "military-related spending" means. (Does it include research, development, and dual-technology purchases of, say, all software and semiconductors? Probably.) The London-based International Institute for Strategic Studies, in its new edition of The Military Balance, puts the real figure at $39 billion, or about 10 percent higher than the official budget. Second, as many CIA analysts cautioned when they calculated Soviet military spending back in Cold War days, it's extremely difficult to translate a command economy's military budget into dollar terms. Still, even taking as true the Pentagon's most pessimistic estimate, China's spending would still be about the same as Japan's, way below America's, and the percentage of GDP it devotes to the military would be about the same as that of the United States. (The U.S. military budget for 2006 is about $450 billion, or roughly 4 percent of its $12.4 trillion GDP—not including the cost of the wars in Iraq and Afghanistan.)