China hikes defence budget by 7% to $275 billion

China on Thursday, March 5, announced a 7% increase in its defence budget to about $275 billion, while also setting a lower economic growth target of 4.5-5% for the year, reflecting mounting global uncertainties and domestic economic challenges.Chinese Premier Li Qiang unveiled the defence allocation in his government work report presented at the opening session of the National People’s Congress (NPC), the country’s annual parliamentary meeting.

China will allocate roughly 1.9 trillion yuan (about $275 billion) for national defence in 2026, marking an increase of around $25 billion compared with the previous year, as per news agency PTI.
The government’s report emphasised that China’s defence expenditure remains relatively moderate when assessed through key indicators such as its share of GDP, per capita defence spending and expenditure per military personnel.Read more: US-Israel-Iran War LIVE Updates

India, China’s budget allocations

China’s military budget is the second largest in the world after that of the United States and has expanded steadily over the past decade. The growing outlay of China’s budget has added pressure on neighbouring countries, including India, to strengthen their own defence capabilities.

Last year, Beijing increased its defence budget by 7.2% to about $249 billion for 2025, representing a rise of $17 billion from 2024 levels, as per PTI.

In 2024, China had raised defence spending by 7.2% to about $232 billion (1.67 trillion yuan), as per PTI.

Meanwhile, in 2026, India allocated ₹7.85 lakh crore for the defence budget. This was 15.19% increase from last year.  In 2025, India’s defence budget was over ₹6.81 lakh crore.

China lowers GDP growth target

Alongside the defence announcement, Li said China aims for economic growth of 4.5 to 5% this year, slightly lower than the roughly 5% target set in recent years, as per PTI.

China’s economy expanded 5% in 2025 to $20.01 trillion, supported largely by strong exports despite US tariffs, while domestic consumption remained weak.

Li said the government would attempt to stabilise growth by boosting domestic demand and raising incomes.

Key economic goals include maintaining an urban unemployment rate of around 5.5%, creating over 12 million new urban jobs, and keeping consumer inflation at about 2%.

The government also aims to maintain grain production of around 700 million tonnes and reduce carbon emissions per unit of GDP by around 3.8%, as per PTI.

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