China on Thursday increased its defence budget to about 1.9 trillion yuan (around $275 billion), Chinese Premier Li Qiang announced while presenting the government’s work report at the opening session of the National People’s Congress (NPC).
The new allocation marks an increase of roughly $25 billion from last year and continues Beijing’s steady expansion of military spending as it pushes ahead with the modernisation of its armed forces. China’s defence budget is the second largest in the world after that of the United States.
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Military spending rises amid global conflicts
The increase comes at a time when conflicts and military tensions have intensified in several parts of the world, including the ongoing fighting in West Asia.
China has spent years upgrading its military capabilities, investing heavily in new aircraft carriers, advanced naval vessels and modern fighter aircraft as part of its long-term military modernisation plans.
According to the government report presented to lawmakers, China’s defence spending remains moderate when compared with indicators such as its share of GDP, per capita defence expenditure and spending per military personnel. Last year, China announced a 7.2 per cent rise in its defence budget to about $249 billion for 2025, following a similar increase in 2024 when spending reached roughly $232 billion.
Regional implications for neighbouring countries
The steady rise in China’s military spending has drawn attention across Asia, particularly in neighbouring countries such as India.
Security analysts say China’s growing military capabilities are likely to push regional powers to strengthen their own defence preparedness. India and China have witnessed tensions along their disputed border in recent years, including the deadly clashes in the Galwan Valley in 2020. While the situation has eased following rounds of military and diplomatic talks, the border dispute continues to influence defence planning on both sides.
China’s official defence figures are also viewed with caution by some observers, who note the scale of the country’s ongoing military expansion.
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Beijing announces support for state-owned banks
In the same report, China also outlined steps to strengthen its financial system. The government said it would inject 300 billion yuan (about $43.6 billion) into state-owned banks through special treasury bonds this year. The move is intended to strengthen financial institutions and help manage risks linked to the country’s slowing economy.
Chinese lenders have been dealing with rising bad loans tied to struggling property developers and financially strained local governments. The capital infusion follows a similar plan last year, worth about $72 billion, aimed at strengthening the core capital of major state-owned banks.
