7.2% and Rising: China’s Military Budget Mirrors Modernization Drive

China has announced a 7.2% increase in its defense budget for the current year, mirroring last year’s growth rate and signaling a sustained commitment to military modernization despite facing economic challenges and a complex international situation. The announcement, made during the opening of the National People’s Congress in Beijing on March 5, 2025, details a defense expenditure of 1.78 trillion yuan ($245.65 billion), a substantial rise from 720 billion yuan in 2013 when President Xi Jinping assumed leadership.

Continued Military Expansion Underpins Strategic Ambitions

The consistent 7.2% budgetary increase, which exceeds China’s projected economic growth target of around 5% for the year, underscores Beijing’s unwavering focus on bolstering its military capabilities. Analysts interpret this steady growth as a reflection of China’s long-term strategic ambitions, particularly President Xi Jinping’s goal of achieving comprehensive military modernization by 2035. This modernization drive encompasses the development and deployment of advanced weaponry across all domains, including missiles, naval vessels, submarines, and sophisticated surveillance technologies.

The People’s Liberation Army is actively working to improve its combat readiness through increased training and large-scale military exercises, in addition to acquiring new hardware. Many of these exercises reportedly focus on scenarios involving Taiwan, which China views as a renegade province and has vowed to bring under its control, using force if necessary. This focus on readiness, along with technological advancements, shows a clear intent to project power and assert China’s interests both regionally and globally.

Navigating Geopolitical Crosscurrents

China’s sustained investment in defense comes at a time of heightened geopolitical complexity. Tensions remain elevated across multiple fronts, including relations with the United States, the status of Taiwan, territorial disputes in the South China Sea, and broader regional dynamics involving Japan and other neighboring countries. These factors are widely understood to be significant drivers behind Beijing’s commitment to military modernization. The perceived need to safeguard territorial claims, project influence in Asia, and potentially challenge the existing US-led security architecture are all contributing to the upward trajectory of China’s defense spending.

The ongoing situation in Ukraine and the broader global security environment also likely play a role in Beijing’s strategic calculations. While China maintains a subtle approach to the conflict, the perceived instability and fluidity of the international order may reinforce the leadership’s determination to strengthen its military capabilities as a form of insurance against unforeseen contingencies.

Economic Realities and Resource Allocation

Despite the defense budget increase, China’s economy is experiencing slower growth than in previous decades. This economic deceleration, coupled with domestic challenges, raises questions about resource allocation and strategic priorities. While the 7.2% increase is notable, it is considerably lower than the double-digit percentage increases witnessed in earlier years, potentially reflecting the impact of economic headwinds.

However, the continued prioritization of defense spending, even with economic constraints, suggests a firm political will within the Chinese Communist Party (CCP) to maintain momentum on military modernization. As noted by analysts, the CCP appears to be prioritizing strategic goals, such as technological advancement and military strength, potentially over other areas like social or economic reforms. This prioritization reflects the leadership’s view of military power as a crucial pillar for national rejuvenation and global influence.

Internal Scrutiny and International Comparisons

China’s military spending continues to increase despite internal corruption and a significantly smaller budget compared to the US. Although China maintains that its military posture is purely defensive, its actual spending might be higher than what is officially reported. Moreover, China’s military capabilities and ambitions suggest that its strategic outlook is not solely defensive but rather encompasses broader objectives.

Looking Ahead

The consistent 7.2% increase in China’s defense budget for 2024 underscores the nation’s determined pursuit of military modernization in a complex and evolving global landscape. While economic realities present challenges, Beijing’s strategic priorities appear firmly focused on building a world-class military capable of safeguarding its interests, asserting its regional influence, and potentially reshaping the global balance of power. The continued trajectory of China’s defense spending will remain a closely watched indicator of its long-term strategic intentions and its evolving role on the world stage.