The outlay will rise to some 1.78 trillion yuan ($245 billion) in 2025, according to a Finance Ministry report seen by Bloomberg Wednesday. The announcement is set to be made at an annual gathering of the nation’s legislature in Beijing that the government uses to roll out major plans and policies for the year.
The increase in defense expenditure contrasts with the Trump administration’s plans to slash projected US military funding by 8% over the next five years, part of a broader campaign to reduce the federal government’s budget and headcount.
China’s outlay on the People’s Liberation Army has risen by at least 6.6% each year for the past three decades, though its actual funding figure is likely much higher than the official one. Last year, the Pentagon estimated that the total amount was around $330 billion to $450 billion, or 1.5 to two times what was publicly announced.
The US dedicates the most money of any nation in the world to its armed forces, with China a distant second. Earlier this year, former US Defense Secretary Lloyd Austin proposed a five-year defense plan that started with $926.5 billion in fiscal 2026.
Despite the funding gap with the US, Xi has set a 2027 deadline to build a modern military, with the goal of making China’s armed forces among the world’s best by 2049. As part of that effort, the US has said Beijing is rapidly building out its arsenal of nuclear weapons, targeting to have at least 1,000 warheads by 2030, up from 500. The US has about 3,750.
China’s growing military assertiveness has seen the PLA recently hold military exercises off Australia, Vietnam and Taiwan, while its growing projection of power has attracted criticism from the Philippines, Japan and South Korea and India.
The PLA is especially focused on Taiwan, a self-governing democracy of 23 million people, located about 100 miles off China’s coast. Beijing wants to bring Taiwan under its control, by force if necessary. The Chinese military — which has more troops and naval vessels than any other nation — has carried out at least three rounds of major manoeuvres near the US-backed island since President Lai Ching-te took office in May last year.
China’s military ambitions face challenges from endemic corruption. A sweeping graft purge has ensnared at least 30 senior officials since mid-2023, including two that sat on the body leading the armed forces, the Central Military Commission.
