China Announces 7.2 Percent Increase in Military Spending

U.S. officials and defense analysts have long believed the communist regime’s reported budget captures only a fraction of its true spending on the armed forces.

Military vehicles carrying DF-5B intercontinental ballistic missiles participate in a military parade at Tiananmen Square in Beijing on Oct. 1, 2019. Greg Baker/AFP via Getty Images

China plans to boost its defense spending by 7.2 percent this year, matching the pace of last year’s expansion as the communist regime strives to advance its armed forces despite economic headwinds.

With this increase, the official military expenditure is set to soar to roughly 1.8 trillion yuan ($245.6 billion), according to a draft budget unveiled during the annual meeting of China’s rubber-stamp Legislature, the National People’s Congress, on March 5.

For more than two decades, China has steadily increased its defense budget, making it the second-largest military spender in the world, following the United States.

The 7.2 percent hike in defense spending surpasses the country’s economic growth target, which is set at around 5 percent this year, raising questions among observers.

“The increase in military spending outpacing economic growth reflects that Beijing’s efforts to achieve its strategic objectives remain on track, particularly in their pursuit of maritime hegemony,” Su Tzu-yun, a Chinese military expert from the Institute for National Defense and Security Research, a government-funded think tank in Taiwan, told The Epoch Times.

Su anticipates China’s actual military expenditure will exceed the reported budget, “likely surpassing 2 trillion yuan,” which amounts to approximately $275.8 billion.

Defense analysts and U.S. officials have long contended that China’s official budget likely represents only a fraction of its actual investment in defense, with some estimates tripling the official amount, putting it on par with U.S. levels.

Analysts have suggested that Beijing’s actual military spending may be higher if investments in military research and development were included, an aspect that is difficult to gauge given China’s strategy of integrating private sector innovations into its military efforts—known as military-civil fusion.

The Pentagon’s latest estimates put China’s defense expenditure between $330 billion and $450 billion in 2024, which is about 1.5 to 2 times higher than Beijing’s figure.

Regional military attaches are closely watching the budget and the report, with some noting that the combat readiness references will mean further intense drills and deployments around Taiwan and across the wider region.

Chinese naval ships staged an unprecedented live-fire drill in the Tasman Sea between Australia and New Zealand in February, forcing commercial aircraft to be diverted.

The London-based International Institute for Strategic Studies noted in a February survey of the world’s militaries that given China’s economic constraints, “authorities face increasingly sharp questions about which areas to prioritise.”

Military Purge

Chinese Communist Party (CCP) leader Xi Jinping has instructed his commanders to complete the regime’s military modernization before 2035, which includes equipping the armed forces with advanced missiles and weaponry, expanding the navy, and enhancing its cyber capability.

By 2049, the 100th anniversary of the CCP’s rule, Xi aims to transform the People’s Liberation Army into a world-class armed force that he said can “fight and win” wars.

During the opening session of the National People’s Congress on March 5, Chinese Premier Li Qiang reaffirmed the commitment to modernize the armed forces, emphasizing the “absolute leadership of the Party over the military.”

He also indicated no slowing in the efforts to purge the defense sector, pledging to “continue to improve the political conduct” of the military.

The U.S. Department of Defense said in its 2024 report that Xi’s anti-corruption campaign may hinder the Chinese military’s modernization objectives.

Since the summer of 2023, the latest wave of purges has seen a number of senior military commanders removed from office, including two former defense ministers and the top official overseeing the military’s political work.

Luo Ya and Reuters contributed to this report.