China plans to increase its defense budget by 7% in 2025, marking the slowest annual rise since 2021.
Budget Announcement
The Ministry of Finance released a budget plan on Thursday outlining the proposed increase. The National People's Congress will officially approve these goals during its annual parliamentary meeting starting this week.
Geopolitical Context
This decision occurs amidst escalating conflicts in the Middle East and persistent tensions regarding Taiwan. Beijing aims to accelerate advanced combat capabilities while officially opposing separatist forces seeking independence.
Military Modernization
The working report highlighted several key developments:
- Acceleration of high-quality modernization for national defense.
- Commissioning of the domestically built aircraft carrier, Fujian, in November 2025.
- Display of latest weapon systems, including long-range missiles, during a military parade in September.
Spending Analysis
Analysts suggest actual military expenditures likely exceed official figures. According to the U.S. Department of Defense's 2025 report:
- Beijing spent between $304 billion and $377 billion on defense in 2024.
- China accounted for nearly 44% of Asia's defense spending in 2025, up from 39% in 2017.
- The U.S. budgeted $849.77 billion for defense during the 2025 fiscal year.