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Defense budget of China (2020 - 2028, USD billion)

Industry: Aerospace, Defense and Space
Current: Macro-economic

The Defense budget of China attained a value of USD 230.32 billion in 2023
The indicator recorded a historical growth (CAGR) of 7.82% between...
GlobalData projects the indicator to grow at a CAGR of...

Defense budget of China (2020 - 2028, USD billion)

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China defense budget analysis

Chinese defense expenditure recorded a slow growth during 2017–21. Over 2022–26, it is forecasted to register a single digit growth. Territorial claims in the South China Sea and the increasing strength and assertiveness of the US have spurred the Chinese government to enhance its military capabilities. In order to achieve this, the Chinese government has approved a military modernization program, under which the Chinese Department of National Defense is expected to spend on the procurement of military hardware and the modernization of its armed forces. The consequent demand for defense equipment will revolve around fighter and multirole aircraft, corvettes, infrastructure construction, submarines, naval vessels, and surveillance equipment.

Despite the challenges posed by the COVID-19 outbreak in 2020, the economic pressure has not led to defense budget cuts this year. The defense budget is assessed to be higher due to areas of defense spending outside the budget, such as expenditure on the paramilitaries (People’s Armed Police, People’s Militia), National Defense Scientific Research, dual-use technologies, peacekeeping, subsidies for state-owned enterprises in the defense sector, and militia procurement and operations.

Chinese defense expenditure is primarily driven by the need to modernize its military, to ensure adequate protection from repeated military provocation from the US, external threats, neutralize border conflicts, and a desire to project itself as a major power globally. Strong economic growth during the last decade has further fueled China's defense industry growth.

China’s method of creating its diplomatic network uses economic cooperation with other states in a partnership. The Chinese Communist Party uses an economic partnership system, designating selected states as strategic partners. As partnerships are flexible, non-binding and make no mention of conventional security issues, China has built a wide-reaching global network, including US allies.

Faced with hostile neighbors on its northwestern and northeastern borders, China has been compelled to maintain a strong defense posture. The country's defense forces are usually held in high esteem among the common citizens and defense expenditure usually receives unequivocal legislative support in parliament.