Abstract: Implement Chairman Hu’s spirit of Defense and Army Building comprehensively is a major political task and a long-term strategic task. It’s of great practical importance to research on this problem with economics methods. The key point of balance well the need to build a strong defense with economic development is to allocate national resources scientifically between military and civilian. When determining the demand of military expenditure,decisions must be based on an overall consideration of various factors including national income and the demand of military expenditure of other countries. And the key point of balance coordinating all aspects of the army construction is to allocate defense resources between human and weaponry. It’s crucial to utilize resources more effectively according to the relative price change of the weapons and equipments caused by the advancement of science and technology.