China plans to increase its defence spending by 7% in 2026 to modernise its military by 2035. The lowest rate in five years, but still exceeds the country’s overall economic growth targets and outpaces defence spending in much of Asia. This came after rising regional tensions between China and Taiwan.
Security analysts and regional military are watching China’s budget closely as it scrambles to modernise the military by 2035, while stepping up deployments across East Asia and purging the top brass to tackle graft.
China will improve its combat readiness and accelerate the development of advanced combat capabilities. At the opening of parliament’s annual meeting, while a broader GDP growth forecast of 4.5% to 5%, Premier Li Qiang said that “All these steps will boost our strategic capacity to safeguard China’s sovereignty, security and development interests,” Li said in his work report, adding that President Xi Jinping held ultimate command responsibility.
The figure of 7% follows a three-year annual rise of 7.2%, the lowest since 6.8% in 2021, and is part of a spending campaign in which China’s military has developed ships, new advanced missiles, submarines, and surveillance methods.
Regional analysts believe the founding anniversary, which will fall next year, will bring a further rise in military drills and deployments around Taiwan, the democratically governed island which Beijing views as its territory.
London-based IIS in last month’s report adds that the growth of Chinese military spending was consistent, outpacing the rest of Asia amid a global surge in defence budgets.
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China’s total share of military expenditure in Asia grew to almost 44% in 2025, up from the average of 33% between 2010 and 2020.
