- China's defense budget will increase by 7%, the lowest rate since 2021.
- China promises to develop “advanced combat capabilities.”
- Prime Minister reiterates goal of “reunification” with Taiwan.
China will increase defense spending by 7% in 2026, it said on Thursday, the lowest rate in five years but still outpacing broader economic growth targets and the rest of Asia at a time of rising regional tension, including over Taiwan.
Security analysts and regional military attachés are closely watching China's budget as it strives to modernize the military by 2035, while stepping up deployments across East Asia and purging top brass to combat corruption.
China will improve its combat readiness and accelerate the development of “advanced combat capabilities”, Premier Li Qiang said at the opening of the annual meeting of parliament, unveiling a broader GDP growth forecast of 4.5% to 5%.
“All these steps will boost our strategic capability to safeguard China's sovereignty, security and development interests,” Li said in his work report, adding that President Xi Jinping had final command responsibility.
The 7% figure, which follows three years of annual increases of 7.2% and is the lowest since 6.8% in 2021, is part of a spending campaign in which China's military has developed new missiles, ships, submarines and advanced surveillance methods.
This year's increase showed that Beijing was maintaining a long-held principle of balancing economic growth with national defense goals, said James Char of the S. Rajaratnam School of International Studies in Singapore.
“Essentially, the People's Liberation Army budget has been growing at a fairly constant rate as a percentage of GDP… roughly the rate of GDP growth plus inflation,” added Char, a Chinese defense scholar.
It comes amid the most high-profile purge of senior military ranks in decades, with the two most senior generals caught up in disciplinary investigations.
Zhang Youxia, a veteran military ally of Xi, was placed under investigation in January, while another, He Weidong, was expelled in October last year.
The purge leaves only two members of the usual seven on the supreme Central Military Commission, Xi himself as its chairman and a newly promoted vice-president, Zhang Shengmin.
The fight against corruption showed that “Beijing will keep a tighter eye on military spending,” said Wen-Ti Sung, a Taiwan-based security analyst, although it was clear that all levels of government were becoming more frugal.
The government remains committed to the ruling Communist Party's “absolute leadership over the armed forces,” Li added.
“Guided by the principle of ensuring political loyalty in the military, we will continue to improve military political conduct and make great strides toward the centuries-old goals of the People's Liberation Army.”
Some regional analysts believe the founding anniversary, which falls next year, will bring new increases in military exercises and deployments around Taiwan, the democratically governed island that Beijing considers its territory.
'Reunification with Taiwan'
China “will resolutely fight separatist forces aiming for 'Taiwan independence' and oppose external interference,” Li vowed, virtually repeating comments from last year.
This would “promote the peaceful development of cross-Strait relations and advance the cause of national reunification,” he added.
Taiwan says only the island's people can decide its future. His government said it did not see any major change in policy toward Taiwan in Li's comments, but was concerned about China's defense spending.
“Even under conditions of unstable economy and weak private consumption, they are still willing to allocate a very large budget to military spending,” said Liang Wen-chieh, spokesman for the Mainland Affairs Council in Taipei.
“And of course that poses a threat to Taiwan,” the spokesman told reporters.
International environment
Li toned down a warning about the international environment from a year ago, calling it “complex and challenging” rather than “increasingly complex and severe” in comments that cited “changes not seen in a century.”
In Tokyo, Japan's Chief Cabinet Secretary Minoru Kihara said China was not transparent enough about its continued high level of defense spending and stronger capabilities.
Despite China's efforts to change the status quo in the East and South China Seas through “force or coercion,” Japan will maintain its efforts to build constructive and stable ties with that country, Kihara said at a news conference.
While the crackdown on corruption left gaps in the PLA's command structure and affected its short-term readiness, it was expected to continue improving its capabilities and expand modernization, the International Institute for Strategic Studies said.
Chinese military spending growth has consistently outpaced the rest of Asia amid a global rise in defense budgets, the London-based IISS said in a report last month.
China's share of Asia's total military spending grew to nearly 44% in 2025, up from an average of 37% between 2010 and 2020, it added.
China does not provide a breakdown of defense spending, although its 1.91 trillion yuan ($277 billion) budget is just a quarter of a $1 trillion defense bill that U.S. President Donald Trump signed into law in December.
