China to boost defense spending by 7%, slowest pace since 2021

China’s Defense Budget to Increase by 7% in 2026

China recently announced plans to increase its defense spending by 7% this year, marking the slowest rise in its annual military expenditure since 2021. The budget proposal, released by the Ministry of Finance, comes at a time when conflicts in the Middle East are escalating and tensions over Taiwan continue to persist amidst a backdrop of increasing global geopolitical fault lines.

Over the past three years, China has consistently budgeted for a 7.2% annual increase in defense spending. In 2022, Beijing increased spending by 7.1%, followed by a 6.8% increase in 2021, according to official data.

The government work report released on Thursday outlined Beijing’s plans to accelerate the development of advanced combat capabilities and focus on the “high-quality” modernization of its national defense and armed forces. The report also highlighted China’s first domestically built aircraft carrier, the Fujian, which was commissioned in November 2025. Additionally, some of China’s latest weapon systems, including long-range missiles, were showcased during a military parade in September.

In a show of resolve, Beijing stated its commitment to “resolutely fight against separatist forces aimed at ‘Taiwan independence,’ and oppose external interference.” This statement comes as tensions between China and Taiwan remain high.

China is gearing up for its 8-day National People’s Congress, an annual parliamentary meeting that officially approves the budget and development goals for the year.

In 2025, China proposed a national defense budget of 1.78 trillion yuan ($244.99 billion at the time). However, analysts believe that the official figures may be understated and exclude significant “off-budget” items.

According to the U.S. Department of Defense’s 2025 report to Congress on China’s military, Beijing’s actual defense spending in 2024 ranged between $304 billion and $377 billion, significantly higher than its officially announced budget of $231 billion.

China accounted for nearly 44% of Asia’s defense spending in 2025, up from 39% in 2017, according to the International Institute for Strategic Studies. Despite this, China still trails behind the U.S. in terms of military spending.

The U.S. budgeted $849.77 billion for defense during the 2025 fiscal year. However, estimates from non-profit USAFacts indicate that the U.S. ended up spending approximately $919.2 billion during that period, marking a 2% increase from the previous year and accounting for 13% of the federal budget.

As China continues to strengthen its military capabilities and assert its presence on the global stage, the world will be closely watching how these developments impact regional and international dynamics.