China to boost defense spending by 7%, slowest pace since 2021

BEIJING — China plans to increase its defense spending by 7% this year, the slowest rise in its annual military expenditure since 2021, according to a budget plan by the Ministry of Finance released Thursday.

The proposal comes as conflict in the Middle East escalates and tensions over Taiwan persist, amid a broader rise in global geopolitical fault lines.

For the last three years, China has budgeted a 7.2% annual increase in defense spending. Beijing had increased spending by 7.1% in 2022 and 6.8% in 2021, according to official data.

According to a government work report released Thursday, Beijing will accelerate the development of advanced combat capabilities and pursue the “high-quality” modernization of its national defense and armed forces.

The working report also highlighted China’s first domestically built aircraft carrier, the Fujian, which was commissioned in November 2025. Some of China’s latest weapon systems, including long-range missiles, were displayed during a military parade in September.

Beijing also said it would “resolutely fight against separatist forces aimed at ‘Taiwan independence,’ and oppose external interference.”

China is set to kick off its 8-day National People’s Congress on Thursday, an annual parliamentary meeting that officially approves the budget and development goals for the year.

Last year, China proposed a national defense budget of 1.78 trillion yuan ($244.99 billion at the time). However, analysts believe the official figures are understated and exclude significant “off-budget” items.

According to the U.S. Department of Defense’s 2025 report to Congress on China’s military, Beijing spent between $304 billion and $377 billion on defense in 2024 — about 32% to 63% higher than its officially announced budget of $231 billion.

Beijing accounted for nearly 44% of Asia’s defense spending in 2025, up from 39% in 2017, according to the International Institute for Strategic Studies.

China is also second to the U.S. in terms of military spending.

The U.S. budgeted $849.77 billion for defense during the 2025 fiscal year. But estimates from non-profit USAFacts indicate the U.S. ended up spending about $919.2 billion during that time, up 2% from the prior year and accounting for 13% of the federal budget.