On September 3, 2025, China's liquid-fueled intercontinental strategic nuclear missiles DongFeng-5C, renowned for their extensive global strike range, traversed Tian'anmen Square during the V-Day military parade in Beijing.
BEIJING — The Ministry of Finance's latest budget plan, released on Thursday, indicates that China will increase its defense spending by 7% this year. This represents the slowest growth in annual military expenditure since 2021, a period marked by heightening global geopolitical tensions, including conflicts in the Middle East and ongoing issues over Taiwan.
For three consecutive years, China has consistently budgeted an annual defense spending increase of 7.2%. Official data shows that Beijing raised its military expenditure by 7.1% in 2022 and 6.8% in 2021.
A government work report, also issued on Thursday, reveals plans to accelerate the development of advanced combat capabilities, emphasizing the 'high-quality' modernization of China’s national defense and armed forces. The report also spotlighted China's first domestically produced aircraft carrier, the Fujian, which entered service in November 2025. Additionally, some of the country's latest weapons, including long-range missiles, were demonstrated during a military parade in September.
Beijing has reaffirmed its stance to 'resolutely fight against separatist forces aimed at 'Taiwan independence' and to oppose external interference aggressively.
On Thursday, China begins its annual 8-day National People's Congress, a parliamentary gathering that formally approves the budget and sets the developmental objectives for the forthcoming year.
Last year, China proposed a defense budget of 1.78 trillion yuan (equivalent to $244.99 billion at that time). However, analysts suggest that the official figures do not fully account for several significant 'off-budget' expenditures.
The U.S. Department of Defense's 2025 report to Congress on China's military activities estimates that Beijing's actual defense spending in 2024 ranged from $304 billion to $377 billion, which is 32% to 63% higher than the officially declared budget of $231 billion.
According to the International Institute for Strategic Studies, Beijing represented close to 44% of Asia's defense spending in 2025, an increase from 39% in 2017. Globally, China ranks second, trailing only the United States in military spending.
For the 2025 fiscal year, the U.S. allocated $849.77 billion for defense. However, data from non-profit USAFacts suggests that actual spending amounted to approximately $919.2 billion, marking a 2% increase from the prior year and constituting 13% of the federal budget.