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PoliticsAI Desk•4 views

China's Defense Budget to Rise 7% in 2025, Slowest Pace Since 2021

China's 2025 defense budget is set to increase by 7%, the slowest annual rise since 2021, amid rising geopolitical tensions in the Middle East and over Taiwan. The government work report emphasizes military modernization, citing the Fujian aircraft carrier and advanced weapons systems. Official spending figures are likely underestimated, with U.S. estimates suggesting actual costs are significantly higher. China remains a dominant military spender in Asia, representing nearly half of the region's defense budget, and holds the second-largest global military expenditure after the United States. The budget approval process is part of the National People's Congress, highlighting its political importance.

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China's Defense Budget to Rise 7% in 2025, Slowest Pace Since 2021

China will increase its defense spending by 7% in 2025, the slowest annual growth since 2021, as geopolitical tensions escalate in the Middle East and Taiwan Strait.

Budget Proposal and Historical Context

  • The Ministry of Finance released the budget plan on Thursday, outlining a 7% rise in military expenditure.
  • This follows three consecutive years of 7.2% increases, with 7.1% in 2022 and 6.8% in 2021.
  • The 2024 defense budget was 1.78 trillion yuan ($244.99 billion at the time).

Government Modernization Goals

  • The government work report prioritizes accelerating the "high-quality" modernization of national defense and armed forces.
  • Key milestones include the commissioning of the domestically built aircraft carrier Fujian in November 2025.
  • Advanced weapons, such as the DongFeng-5C intercontinental ballistic missile, were displayed in a September military parade.
  • Beijing reaffirmed its stance to "resolutely fight against separatist forces aimed at 'Taiwan independence,' and oppose external interference."

Geopolitical and Legislative Framework

  • The budget decision coincides with escalating Middle East conflicts and persistent Taiwan Strait tensions.
  • China's National People's Congress, an 8-day session starting Thursday, will formally approve the budget and annual development targets.

Spending Discrepancies and Global Comparisons

  • Analysts argue official figures understate actual defense costs by excluding off-budget items.
  • The U.S. Department of Defense estimates China's 2024 spending at $304 billion to $377 billion, versus the official $231 billion—a 32% to 63% difference.
  • China accounted for nearly 44% of Asia's defense spending in 2025, up from 39% in 2017, per the International Institute for Strategic Studies.
  • Globally, China ranks second in military expenditure after the U.S., which budgeted $849.77 billion for 2025 but spent an estimated $919.2 billion.
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