China is increasing its military budget, the second largest in the world after the American one, but slowing the pace.
Beijing plans to spend 1.90 trillion yuan (238 billion euros, 276 billion dollars) on defense, about one-third of the U.S. military budget. China’s defense budget will increase by 7% in 2026, in line with expectations but slightly below last year’s 7.2%.
This emerges from the report published Thursday by Beijing’s Ministry of Finance, coinciding with the opening of the fourth annual session of the 14th National People’s Congress. On this occasion, President Xi Jinping presents the new Five-Year Plan for the country’s economic and political future, aiming to reduce his army’s and industry’s dependence on Western technology.
“All these steps will strengthen our strategic capacity to safeguard China’s sovereignty, security, and development interests,” said Premier Li Qiang at the annual opening of Parliament, during which he presented a broader GDP growth forecast, ranging between 4.5% and 5%.
All the details.
THE NUMBERS OF BEIJING’S DEFENSE BUDGET
China increases defense spending by 7%, the slowest pace since 2022, highlights Bloomberg. The announced Chinese military budget is slightly lower than last year’s. Since 2016, China has increased its military budget by 6% to 7% annually.
However, the 7% figure, following three years of 7.2% annual increases, is the lowest since 6.8% in 2021. The budget is part of a spending campaign in which the Chinese military has developed new advanced missiles, ships, submarines, and surveillance methods, notes Reuters.
OVERCOMING DEPENDENCE ON WESTERN TECHNOLOGIES
While Xi Jinping prepares to host U.S. President Donald Trump in early April to try to extend the trade truce, he is doubling down on the strategy to ensure that China’s economy and armed forces are not vulnerable to Western isolation regarding advanced semiconductors and other critical technologies, notes the New York Times.
GOAL: A MODERN ARMY, AMONG THE MOST ADVANCED IN THE WORLD BY 2049
Xi also indicated 2027 as the deadline for building a modern army, aiming to make the Chinese armed forces among the most advanced in the world by 2049. The project has attracted greater attention also in light of the recent purge of the armed forces initiated by the Chinese leader, which downsized the country’s main military body and led to the expulsion of the highest-ranking officer.
“Guided by the principle of ensuring political loyalty in the army, we will continue to improve military political conduct and make giant strides toward the centenary goals of the People’s Liberation Army,” Li said in his speech.
CHINESE DEFENSE NUMBERS COMPARED TO THE USA
Although China does not provide any breakdown of defense spending, its budget of 1.91 trillion yuan (277 billion dollars) represents only about a quarter of the 1 trillion dollar defense bill that U.S. President Trump signed in December.
On paper, Beijing spends less on defense than the United States. In practice, however, this comparison is misleading, notes an editorial by Bloomberg. Focusing on the headline figure rather than the long-term trajectory risks losing sight of the bigger picture: the speed at which President Xi Jinping’s military modernization plans are progressing.
According to the U.S. Department of Defense’s 2025 report to Congress on Chinese armed forces, Beijing spent between 304 and 377 billion dollars on defense in 2024, about 32-63% more than the officially announced budget of 231 billion dollars, recalls Cnbc.
WHAT THE IISS REVEALS
According to the International Institute for Strategic Studies (IISS), Beijing accounted for nearly 44% of Asia’s defense spending in 2025, up from 39% in 2017, compared to an average of 37% between 2010 and 2020. China’s military spending growth has consistently outpaced the rest of Asia amid a global increase in defense budgets, explained the London think tank in a report last month.
EXPERTS’ COMMENTS
This year’s increase demonstrated that Beijing adhered to a well-established principle of balancing economic growth with national defense goals, commented James Char of the S. Rajaratnam School of International Studies in Singapore, cited by Reuters.
“Essentially, the People’s Liberation Army budget has grown at a fairly steady rate as a percentage of GDP,” Char added.
“Defense spending must also be reduced to ensure that China does not spend beyond its means,” said Yang Zi, a researcher at the S. Rajaratnam School of International Studies. Furthermore, the actual amount China invests in its armed forces is likely higher than announced. According to Yang, “there is still a significant portion of the defense budget that is not included in the official data.”
