China Boosts Defence Budget by 7% to $275 Billion for 2026

As per PTI report, China has announced a 7% increase in its defence budget, allocating a total of $275 billion for 2026. This decision comes amid global uncertainties and domestic economic challenges, as reported at the annual National People's Congress session. 

Details of China's Defence Budget Hike 

On March 5, 2026, Premier Li Qiang revealed the new defence budget figures during the opening session of the National People's Congress (NPC).  

The allocation for national defence has reached approximately 1.9 trillion yuan (around $275 billion), marking a $25 billion rise from the previous year. 

This increase continues China's trend of defence budget expansion over the past decade, maintaining its position as the second-largest military spender in the world, following the United States. Notably, China increased its defence budget by 7.2% in 2025 and by 7.1% in 2022. 

China's Economic Target for 2026 

Alongside the defence budget increase, Premier Li Qiang has set a more modest economic growth target of 4.5% to 5% for 2026.  

This target is slightly lower than in recent years, taking into account the global economic climate and domestic consumption challenges. 

China's economy grew by 5% in 2025, primarily driven by robust export performance despite facing US tariffs. Li emphasised the importance of stimulating domestic demand and boosting incomes to stabilise economic growth. 

Read More: China Sets 4.5–5% Economic Growth Target For 2026! 

Additional Economic Goals 

Other significant objectives for China include maintaining an urban unemployment rate of around 5.5%, creating more than 12 million new urban jobs, and keeping consumer inflation at approximately 2%.  

Moreover, the government aims to sustain grain production at about 700 million tonnes and reduce carbon emissions per unit of GDP by 3.8%. 

Conclusion 

China's decision to enhance its defence spending while setting a lower economic growth target reflects its strategic priorities amid global uncertainties. This defence budget increase places added pressure on neighbouring countries and highlights the ongoing geopolitical dynamics in the region. 

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