China to hike defence budget by 7% amid rising global security tensions
China’s defence outlays are closely watched as a barometer of Beijing’s strategic priorities as it presses ahead with military modernisation.
Military delegates arriving outside the Great Hall of the People before the opening sessions of the annual Chinese People's Political Consultative Conference (CPPCC) and National People's Congress (NPC), in Beijing, China, on Mar 4, 2026. (Photo: CNA/Hu Chushi)
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BEIJING: China will raise its defence budget for the year by 7 per cent, a slight dip from last year’s 7.2 per cent increase amid strategic rivalry with the United States, tensions in the Taiwan Strait and a widening conflict in the Middle East.
The pot will grow to 1.91 trillion yuan (US$276.9 billion), according to a draft budget report released on Thursday (Mar 5) as Chinese Premier Li Qiang delivered the government work report at the opening session of the National People’s Congress (NPC).
It’s the lowest percentage increase in the national military budget since a 6.8 per cent hike in 2021. China’s defence budget rose 7.1 per cent in 2022 and 7.2 per cent annually from 2023 to 2025.
Since 2016, China’s defence budget has grown at single-digit rates, generally exceeding the gross domestic product (GDP) growth target set for the same year.
“Last year saw new achievements in modernising national defence and the armed forces,” Li said in his speech, without providing details.
“We will continue striving to achieve the centenary goals of the People’s Liberation Army (PLA), make solid progress in combat preparedness, enhance our strategic capabilities to safeguard national sovereignty, security and development interests, and advance cross-service reforms in a coordinated manner,” he added. The PLA marks its 100th anniversary in 2027.
Li also reaffirmed the Communist Party’s “absolute leadership” over the armed forces and stressed ideological continuity.
Calling for broader institutional backing, he added that "governments at all levels” should “provide strong support for national defence and military development, and consolidate unity between the military and the government and between the military and the people".
The defence budget is released annually at the Two Sessions, which comprise the NPC gathering and the meeting of the country’s top political advisory body. This year’s meetings come as China begins implementing its 15th Five-Year Plan, which will shape economic strategy through 2030.
China’s defence outlays are closely watched as a barometer of Beijing’s strategic priorities amid sustained tensions in the Taiwan Strait and the South China Sea, as well as intensifying Sino-US competition.
The escalating conflict in the Middle East - which is testing China’s oil security and Gulf partnerships - has further heightened global security concerns.
While Beijing maintains that its military spending is defensive in nature and remains far below that of Washington, analysts track the annual increase as a signal of the pace and direction of the PLA's modernisation drive.
China has pledged to complete the modernisation of its armed forces by 2035 and build a “world-class” military by mid-century.
The drive has also unfolded alongside a sweeping anti-corruption campaign in the armed forces that has ensnared a growing number of senior commanders.
