Amid Middle East War, China Quietly Expands Military Spending

Amid rising geopolitical tensions and wars reshaping global power dynamics, China has announced a fresh increase in military spending for 2026. While the move follows a long trend of defence expansion, this year’s announcement comes at a particularly volatile moment for Beijing.

The Middle East conflict, strained energy routes, and internal upheaval within the Chinese military are all shaping the country’s strategic outlook. At the centre of it all is President Xi Jinping, who has consolidated unprecedented control over China’s armed forces even as the country accelerates its military modernisation.

Why Has China Increased Its Defence Budget in 2026?

China announced a 7% increase in its defence budget on March 5, taking military spending to RMB 1.91 trillion, or roughly USD 277 billion. The rise is slightly lower than the 7.2% increases recorded in each of the previous three years, yet it still underscores Beijing’s commitment to strengthening its military capabilities.

Explaining the decision, the official state news agency Xinhua quoted Chinese authorities as saying, "China maintains that adjusting defence budgets to meet national security demands is a sovereign right, and is keeping steady and moderate growth in military expenditures to safeguard its sovereignty, security and development interests in a fast-changing world."

Chinese officials have also emphasised that the country’s military spending remains relatively modest compared to other indicators. According to the government, its defence spending "remains comparatively modest across key relative indicators, including its share of gross domestic product, per capita defence expenditure, and defence expenditure per military personnel."

What Is Happening Inside China’s Military Leadership?

The defence budget announcement coincided with the annual meetings of China’s political leadership known as the Two Sessions, which include the National People’s Congress and the Chinese People's Political Consultative Conference.

During a key meeting on March 5, members of the People’s Liberation Army (PLA) and the People’s Armed Police received instructions from the Central Military Commission (CMC). Notably, only two individuals were seated at the main table — Xi Jinping and vice-chairman General Zhang Shengmin.

This reflects the dramatic restructuring of China’s military leadership under Xi. When he assumed the chairmanship of the CMC in 2012, the body had eleven members. Today, only Xi and Zhang remain.

The dramatic shrinkage is the result of a sweeping anti-corruption purge within the armed forces. Two senior figures, General Zhang Youxia and General He Weidong, were recently detained over unspecified allegations.

Research by the US-based Center for Strategic and International Studies indicates that Xi has purged 101 senior PLA leaders since 2022. Out of 47 generals who held or received three-star rank during that period, 41 have reportedly been removed or investigated.

At the March 5 meeting, Zhang instructed military forces to "thoroughly implement the system of ultimate responsibility resting with the CMC chairman, improve political rectification, and advance campaigns to improve conduct and combat corruption."

Is China’s Actual Defence Spending Higher Than Official Figures?

Although the official defence budget stands at RMB 1.9 trillion, analysts widely believe China’s real military expenditure is significantly higher.

A report by the US Pentagon released in December 2025 stated, "There is broad consensus among academic, think-tank and industry experts that China's publicly announced defence budget does not contain the totality of China's defence spending."

The report estimated that China’s real military spending in 2024 could have been between 32% and 63% higher than the officially declared amount.

One reason for the discrepancy is that several categories are excluded from the public budget, including defence-related research and development, certain infrastructure investments, internal security costs, and mobilisation activities.

What Are China’s Military Goals for the Coming Years?

Beijing has outlined an ambitious military transformation plan centred on the centenary of the People’s Liberation Army in 2027.

According to Chinese authorities, the budget will be used to "continue to advance combat training, accelerate the development of advanced capabilities and enhance the strategic capacity to safeguard national sovereignty, security and development interests."

It will also support the preparation of the military’s 15th Five-Year Plan for 2026-2030 and the implementation of major defence projects.

China says it intends to "accelerate the integrated development of mechanisation, informatization and intelligentisation" while modernising military theories, organisational structures, personnel training and weapons systems.

However, the Pentagon has noted that Beijing has not fully disclosed the specific requirements behind these goals. According to the report, "China obfuscates information surrounding these goals, and it has not publicly revealed significant requirements of its 2027 goals."

Why Does Taiwan Remain Central to China’s Strategy?

Taiwan continues to dominate China’s strategic planning. Beijing regards the island as a “core issue” and has increasingly signalled its willingness to pressure Taipei.

Military activity in the region has intensified sharply. In 2025 alone, Chinese aircraft conducted a record 5,709 sorties in the Taiwan Strait and into Taiwan’s air defence identification zone.

Chinese military doctrine describes three strategic capabilities needed to achieve its long-term objectives.

The first is “strategic decisive victory,” which refers to the ability to prevail in conflict at acceptable cost. The second is “strategic counterbalance,” which emphasises deterrence — including nuclear capabilities — to discourage external intervention, particularly by the United States. The third is “strategic deterrence and control,” aimed at preventing escalation or opportunistic actions by other countries during a conflict.

How Is the Middle East War Affecting China’s Calculations?

The ongoing war involving Iran, Israel and the United States has complicated China’s strategic environment, especially because of its heavy dependence on imported energy.

China is the world’s largest importer of oil and liquefied natural gas. Iran and Venezuela together supply roughly 17% of its oil imports.

Energy security is particularly sensitive because around 45% of China’s imported oil passes through the Strait of Hormuz. Last year alone, about five million barrels of crude oil destined for China moved through this vital shipping route every day.

Despite its close economic ties with Iran, Beijing has largely avoided direct involvement in the conflict. Analysts believe China is cautious about expanding its defence cooperation with Tehran due to potential diplomatic fallout and sanctions.

The Pentagon has previously stated that "Beijing probably is reluctant to deepen its modest defence relationship with Iran for fear of diplomatic blowback and sanctions."

How Strong Is China’s Global Arms Industry?

China has also made substantial progress in becoming self-reliant in defence manufacturing.

According to data released by the Stockholm International Peace Research Institute, China accounted for 5.6% of global arms exports between 2021 and 2025. Its primary customers were Pakistan, Serbia and Thailand.

Pakistan alone accounted for 61% of Chinese arms exports during this period.

At the same time, China’s dependence on imported weaponry has dropped sharply. SIPRI reported that China’s arms imports declined by 72% between the periods 2016-2020 and 2021-2025.

For the first time since the early 1990s, China has fallen out of the world’s top ten arms importers — a sign that domestic defence production has expanded significantly.

What Does This Mean for Global Power Politics?

China’s defence budget increase may appear routine, but it reflects deeper shifts in the global strategic landscape.

From rising tensions over Taiwan to disruptions in energy supply routes and sweeping internal military purges, Beijing is navigating a complex and increasingly unstable world.

Rather than dramatic military interventions abroad, China appears to be responding by quietly strengthening its armed forces and consolidating control at home.

The result is a steadily modernising military machine preparing for an uncertain future — one in which China expects strategic competition with the United States to intensify.

(With inputs from ANI)