China will increase its defence spending by 7% in 2026, continuing a steady military buildup aimed at modernising the armed forces by 2035 even as economic growth slows and regional tensions persist.
The announcement came at the annual meeting of the National People’s Congress in Beijing, where Premier Li Qiang outlined the government’s policy priorities and broader economic goals. Although the increase represents the slowest rise in five years, it still exceeds the country’s projected economic growth target of roughly 4.5%–5%, highlighting Beijing’s sustained emphasis on military development.
Li said the new budget would help improve combat readiness and accelerate the development of “advanced combat capabilities,” strengthening China’s ability to safeguard its sovereignty and strategic interests. Ultimate command authority over the armed forces rests with President Xi Jinping, who also chairs the military’s top decision-making body.
The defence allocation is part of a longer-term effort to transform the People’s Liberation Army into a fully modern force by 2035. Over the past decade China has invested heavily in advanced missile systems, naval platforms, submarines and surveillance technologies, expanding its military reach across the Western Pacific.
Modernisation Amid Regional Tensions
China’s growing defence budget is being closely monitored by regional governments and security analysts, particularly as military activity has intensified around Taiwan and in contested maritime zones such as the South China Sea and East China Sea.
Beijing continues to view Taiwan as part of its territory and has vowed to oppose any moves toward formal independence. In his address, Li reiterated that China would “resolutely fight” separatist forces advocating Taiwanese independence and oppose foreign interference in cross-Strait affairs.
Officials in Taipei responded cautiously to the announcement but warned that the sustained growth in China’s defence budget remains a significant security concern. Taiwan’s government maintains that the island’s future should be determined solely by its own population.
Regional actors have also expressed unease. In Japan, Chief Cabinet Secretary Minoru Kihara criticised what Tokyo sees as a lack of transparency in China’s defence planning while noting that Japan will continue pursuing stable diplomatic relations with Beijing.
Military Purge Reshaping Command Structure
The spending increase comes against the backdrop of one of the most extensive anti-corruption purges within China’s military leadership in decades. Investigations have ensnared several senior commanders, including veteran general Zhang Youxia and former Central Military Commission member He Weidong.
The crackdown has left gaps in the leadership structure of the Central Military Commission, the body that oversees China’s armed forces. Only two of its usual seven members currently remain in place: Xi himself as chairman and newly promoted vice-chairman Zhang Shengmin.
While the purge may temporarily affect operational readiness, analysts say it also reflects Beijing’s effort to tighten oversight of military spending and ensure political loyalty within the armed forces. Anti-corruption drives have become a central feature of Xi’s governance strategy, extending across both civilian and military institutions.
Balancing Defence and Economic Constraints
Despite slower economic growth and weaker domestic consumption, China continues to maintain a relatively stable pace of military expansion. Analysts note that Beijing’s defence budget historically grows at a rate broadly aligned with economic expansion and inflation.
This year’s military spending will reach approximately 1.91 trillion yuan, or about $277 billion. Although substantial, the figure remains far below the roughly $1 trillion defence budget signed into law in the United States by President Donald Trump last year.
Still, China’s share of Asia’s total military spending has grown steadily. According to the International Institute for Strategic Studies, Beijing accounted for nearly 44% of the region’s military expenditure in 2025, compared with an average of about 37% during the previous decade.
Analytical Perspective
China’s defence budget increase reflects a broader strategic pattern: even as economic growth moderates, Beijing continues prioritising military modernisation as a central pillar of national power. The relatively stable growth rate suggests that defence planning is being pursued with long-term strategic consistency rather than reactive surges.
The timing is particularly significant. China is approaching the centenary of the founding of the People’s Liberation Army in 2027, a milestone widely believed to be linked to key modernisation targets set by Xi. Achieving major technological and operational upgrades by that date would reinforce China’s ambition to emerge as a leading global military power.
At the same time, the ongoing purge within the military leadership reveals the political dimension of China’s defence reforms. For Xi, modernisation is not only about weapons and capabilities but also about consolidating political control over the armed forces. Ensuring loyalty within the military hierarchy is viewed as essential to maintaining stability within the ruling system.
Taken together, the combination of steady defence spending, institutional restructuring and intensified regional activity indicates that China’s military rise is entering a more mature phase—one defined less by rapid expansion and more by consolidation, technological advancement and strategic positioning across the Indo-Pacific.
With information from Reuters.
