China has announced a 7% increase in defence spending for 2026, marking the lowest rise in five years but still exceeding broader economic growth targets and outpacing other Asian nations. The announcement comes amid rising regional tensions, including over Taiwan, and ongoing efforts to modernise the People’s Liberation Army (PLA) by 2035.
Modernisation and Strategic Goals
Premier Li Qiang unveiled the defence budget during the opening of the annual parliamentary session, alongside a GDP growth forecast of 4.5–5%. Li emphasised that the additional funding would accelerate the development of “advanced combat capabilities” and improve combat readiness.
“All these steps will boost our strategic capacity to safeguard China’s sovereignty, security, and development interests,” Li said, noting that President Xi Jinping holds ultimate command responsibility over the armed forces.
China’s military has recently developed advanced missiles, ships, submarines, and surveillance systems, reflecting its broader efforts to modernise and strengthen regional influence.
Military Purge and Political Control
The defence announcement coincides with a high-profile purge of senior PLA generals. Veterans Zhang Youxia and He Weidong have been placed under investigation and expelled, leaving only two of the usual seven members on the Central Military Commission, alongside Xi and newly promoted Vice Chairman Zhang Shengmin.
Analysts say the corruption crackdown signals tighter oversight of military spending while reinforcing the Communist Party’s absolute leadership over the armed forces. Li reiterated the importance of political loyalty and improving military conduct as China works toward its centenary PLA goals.
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Taiwan and Regional Implications
Li Qiang reiterated China’s stance on Taiwan, pledging to “resolutely fight against separatist forces” and advance reunification, while opposing external interference. Taiwanese officials expressed concern over Beijing’s continued high military spending, despite an unstable economy and weak private consumption, describing it as a potential threat to the island.
The International Institute of Strategic Studies (IISS) notes that China’s military budget now represents almost 44% of total Asian defence spending, up from 37% between 2010 and 2020, even though its budget of 1.91 trillion yuan ($277 billion) remains roughly a quarter of the US defence budget.
International Response
Japan has raised concerns over China’s lack of transparency and growing regional capabilities, while analysts expect the PLA to continue improving its capabilities and modernising despite short-term disruptions caused by the purge.
Key Takeaway: China’s 2026 defence budget underscores its dual focus on modernisation and political control, with regional tensions, especially over Taiwan, driving continued military expansion and strategic investments across East Asia.
