China Raises Defense Budget by 7%, Slowest Increase Since 2021

China has steadily grown its military budget for years, budgeting 7.2% annual increases for the past three years, following a 7.1% rise in 2022 and 6.8% in 2021. On Thursday, as China kicked off its 8-day National People's Congress, Beijing's Ministry of Finance released a budget plan showing defense spending will rise by 7% in 2026, the slowest growth rate since 2021. Last year's official defense budget stood at 1.78 trillion yuan ($244.99 billion). Analysts, however, warn official figures are significantly understated. The US Department of Defense estimated China actually spent between $304 billion and $377 billion on defense in 2024, up to 63% above its officially declared $231 billion budget. Beijing accounts for nearly 44% of Asia's total defense spending, up from 39% in 2017, and ranks second globally behind the US, which spent approximately $919.2 billion on defense in fiscal year 2025.