China already has the second largest military budget in the world. Now President Xi Jinping wants to invest even more – the budget is set to increase by a whopping 7.2 percent.
The People’s Congress in Beijing has approved a draft budget with a significantly increased military budget. The succus: China will invest massively in the military.
Specifically, the annual meeting approved a draft budget that provides for an increase in defense spending of 7.2 percent to around 1.78 trillion yuan (approximately 231 billion euros). The military budget had already grown by a similar amount in the previous year.
According to Trading Economics, military spending in China rose from 267 billion euros in 2022 to 270 billion euros in 2023 – the budget has risen steadily since 2012. And if you look at the period from 1989 to 2023, military spending in China averaged EUR 93 billion per year – a clear indication of the massive increase, which will now reach its (probably only temporary) record high.
Since taking office in 2013, President Xi Jinping has been pushing ahead with a comprehensive modernization of the Chinese military. The announced goal is to create a “world-class army” by 2049. Why 2049? The People’s Republic will be 100 years old this year and would like to have answered the “Taiwan question” by then at the latest. At the same time, Beijing repeatedly emphasizes that it is not pursuing any aggressive intentions; its efforts are merely aimed at “protecting its own sovereignty”, as it says.
Taiwan always in view
The increase in the military budget is taking place in particular against the backdrop of the conflict surrounding Taiwan.
“We will resolutely advance the cause of China’s reunification,” said Chinese Prime Minister Li Qiang in his annual work report to parliament. The People’s Republic will consistently defend itself against outside interference.
China is known to regard democratic Taiwan, with its 23 million inhabitants, as a renegade province – violent intervention has been repeatedly suggested.
Beijing has recently increased military pressure on Taiwan with major naval maneuvers. Chinese fighter jets are also repeatedly entering Taiwanese airspace.
China is also asserting far-reaching territorial claims in the South China Sea, which the Americans are watching with suspicious eyes and which also regularly prompts neighboring countries, such as the Philippines, to send notes of protest. In fact, there are repeated incidents in the South China Sea involving military and coast guard vessels. There are also territorial disputes with Japan in the east and with India in the Himalayan region.
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Prescribed economic growth
China also wants to become even more of an “engine in Asia” in economic terms: Economic growth of five percent is being targeted for the current year. Beijing wants to create twelve million additional jobs in the country’s cities this year and reduce the inflation rate to two percent.
As the world’s second-largest economy, China has been struggling with economic turbulence since the coronavirus pandemic five years ago. Weakening domestic demand and an ongoing debt crisis in the country’s huge real estate sector are having a particularly negative impact. The military build-up is now intended to provide economic incentives.
The additional tariffs imposed by US President Donald Trump on imports from China are also expected to have a massive impact: The doubling of US punitive tariffs on Chinese imports to 20 percent has just come into force. In response, the Chinese government has already announced punitive tariffs on agricultural products from the USA. Geopoliticians see this conflict – between the USA and China – as probably the decisive one that will shape the 21st century.
