BEIJING — China has significantly increased its military spending for 2026, announcing a defence budget hike of just over 10 per cent to reach approximately $275 billion (1.9 trillion yuan). The announcement was made by Chinese Premier Li Qiang on Thursday, March 5, 2026, during the presentation of his annual work report to the National People’s Congress (NPC). This year’s allocation is $25 billion higher than the 2025 budget, highlighting Beijing’s determination to accelerate its military modernization as it seeks to close the technological gap with the United States.
While the Chinese government maintains that its defence spending remains modest relative to its GDP and per capita military expenditure, the double-digit increase has sparked renewed concern among neighbouring nations, particularly India. For comparison, China’s 2025 budget saw a 7.2 per cent rise to $249 billion. The 2026 hike signals a more aggressive fiscal commitment to naval expansion, including the construction of advanced aircraft carriers and the mass production of stealth aircraft. Global observers remain skeptical of the official figures, suggesting that actual military investment may be significantly higher given the scale of modernization currently underway.
In a stark contrast to the rising military spending, China has lowered its annual economic growth target to a range of 4.5 to 5 per cent for the first time in three years. This downward revision reflects a complex array of domestic and international challenges, including an intensifying trade tariff war with the Trump administration and the global economic fallout from the ongoing US-Iran conflict. With a persistent property market slump and rising unemployment at home, the Chinese leadership is attempting to balance the high costs of military superiority against a decelerating economy and shifting global trade dynamics.
