China has raised defence spending by 7.2% again – the third year in a row – amid an uncertain and fractured security climate.
This spike will increase the country’s defence expenditure up to 1.8trn yuan ($246bn) according to a draft budget report presented during the 14th session of the National People’s Congress, where nearly 3,000 delegates attended the forum in Beijing on 5 March 2025.
Go deeper with GlobalData
The State Council, the nation’s governing authority, styled its decision as a response to American animosity. The Party compared its own defence spending – which they emphasise is kept below the 1.5% proportion of its GDP – to what they say is the US government’s ‘pledge’ to keep defence spending no lower than 3% of its GDP.
Contrary to this assertion, the United States has no specific domestic minimum spending target besides the Nato guideline of spending at least 2% of GDP on defence – a guideline that has no legal mandate.
Nevertheless, it is worth noting that the US currently chooses to spend 4.2% of its GDP on defence. Despite being the largest military spender in the world in real terms, as a percentage of GDP the country currently ranks tenth according to GlobalData intelligence.
“China upholds a national defense policy that is defensive in nature,” the State Council maintained in a press release, “with its military spending mainly focusing on protecting its sovereignty, security and development interests.”
This thinly veiled posture refers to the country’s One China policy. The government claims sovereignty over Taiwan – an island 112 miles (180 kilometres) from China by sea, and hotbed for geopolitical tensions – and vast swathes of neighbouring territories from the Line of Actual Control on the Sino-Indian border to the exclusive economic zone of the Philippines.
China’s so-called Nine-Dash Line encompasses, the US says, approximately two million square kilometres of maritime space, an area equal to about 22% of China’s land area.
A closer comparison of the rivals’ defence spending
A closer look at comparative defence spending would acknowledge that other major countries – namely China and Russia – have significant purchasing power parity advantages that allow them to field larger numbers of personnel and equipment for a smaller overall price.
Although it remains safe to say the US military remains the most technologically dominant force in the world today.
Moreover, largely due to the substantial increase in spending supporting Ukraine in its war against invading Russian forces, US defence spending grew by more than 10% year-on-year.
However, on account of the recent drama playing out in US-Ukraine relations over the past several weeks, this figure is likely to reduce considerably going forward. A reality that ought to alleviate Chinese concerns over America’s “Cold War mentality” alluded to by the Chinese Foreign Ministry spokesperson, Lin Jian, a day before China’s decision to raise defence spending.
Another stinging provocation that has prompted the spending surge, the State Council suggested, is US President Donald Trump’s pressure on Europe to raise their defence spending to at least 5% of their respective GDPs.
However, on a political level, what may prove to be far more disruptive to China’s global strategy is the thawed – perhaps even friendly – relations between the US and Russia. The latter has, since it waged its full-scale invasion of Ukraine, been debilitated by Western sanctions and fallen increasingly into China’s control.
