World
China's Defence Budget and the 2027 Deadline Pressure
— 2 mins read
China lifts military spending to £217 billion while its economy buckles
China set its 2026 defence budget at 1.94 trillion yuan (c. £217 billion), at the National People's Congress in March. The rise of almost 7% marks the 11th year in a row of single-digit growth.
What the money buys
Defence ministry spokesman Zhang Xiaogang said the increase will fund advanced weapons, joint operations systems, and what Beijing calls 'intelligentised' warfare, meaning AI-driven military technology. The spending supports the People's Liberation Army's target of completing a major modernisation push by 2027, the 100th anniversary of its founding.
Chinese officials frame 2027 as a capability benchmark, not a date for military action. Western analysts, including the US Department of Defense, read it as the point at which the PLA wants the option of taking Taiwan by force. President Xi Jinping told officers in July that reunification with Taiwan remains an 'unshakable commitment', India Today reported.
The nuclear build-up is the fastest in the world
China now holds around 620 nuclear warheads, up about 20 in a year, according to estimates published by the Bulletin of the Atomic Scientists. That is the fastest expansion of any nuclear power. New missile silo fields are under construction in China's western deserts, and the Pentagon expects the stockpile to pass 1,000 by 2030. The United States holds more than 5,000 warheads.
The economy carrying the bill
The build-up rests on an economy in trouble. China's property crisis is still grinding on after the sentencing of Evergrande figures. Growth slowed to around 4.3% in the second quarter.
Total debt across government, companies, and households passed 302% of GDP in 2025, according to figures reported by UPI.
Total debt across government, companies, and households passed 302% of GDP in 2025.
Births fell to a record low of 7.92 million in 2025 and the fertility rate sits below one. A RAND Corporation study found the shrinking, ageing population squeezes both the military recruitment pool and the future tax base that pays for the armed forces.
The figure Beijing does not publish
The official budget equals roughly 1.5% of China's GDP. Almost nobody outside Beijing believes that number. The International Institute for Strategic Studies notes that real spending is likely far higher once research and hidden budget lines are counted. The Pentagon takes the same view.
The PLA also has internal problems. A wave of corruption purges has removed senior officers, including in the Rocket Force, which controls China's nuclear missiles, the defence analysis site War on the Rocks reported.
Where the US and its allies stand
The United States keeps clear advantages in aircraft carriers, submarines, global bases, alliances, and combat experience. China leads in regional missile forces, ship numbers and proximity to Taiwan. US defence spending runs at around 3.2% of GDP.
Despite the military rivalry, trade between the two powers continues.
