Military Modernization Push: China Raises Defense Budget, Pressures Neighbours Including India

China has increased its national defense budget to $275 billion. This is $25 billion more than the previous year, indicating how fast China is modernizing its military. This amount has been announced by Premier Li Keqiang in his report to the National People’s Congress (NPC).

According to the report, China's defense spending is still considered relatively limited by several key parameters. Key indicators include the defense budget's share of GDP, defense expenditure per capita, and defense expenditure per soldier, which make China's military spending appear relatively low compared to other major countries.

This is the fourth successive year that China has increased its defense budget. The defense budget for 2025 has been increased by 7.2 percent to $249 billion, $17 billion more than the previous year. The defense budget in 2024 has been increased by 7.2 percent, reaching $232 billion or 1.67 trillion yuan, more than three times that of India’s defense budget.

China's defense expenditure, second only to the United States, has been steadily increasing for years. This growth is putting immense pressure on India and other neighboring countries to increase their defense budgets despite economic challenges. Concerns have been raised about China's rapid pace of military modernization, which includes the construction of aircraft carriers, the rapid construction of advanced naval vessels, and the development of modern stealth aircraft. Given this massive military modernization, China's defense budget figures are often questioned.

China has also lowered its economic growth (GDP) target for this year to between 4.5 and 5 percent. This decision has been taken in view of the escalating trade tariff dispute with the US, the deepening global crisis following the US-Iran war, and challenges facing the domestic economy.

For the past three years, China has been setting its GDP growth target at around 5 percent, but due to domestic economic pressures such as a decline in the real estate market and rising unemployment, this year it has been lowered for the first time to the range of 4.5 to 5 percent.