China hikes defence budget for 8th consecutive year by 7.2%

China, which had pegged its defence budget at 1.45 trillion yuan last year, increased its defence spending by 7.2% to 1.55 trillion yuan

China on March 5 hiked its defence budget by 7.2%, marginally higher than last year, to 1.55 trillion yuan (about $224 billion), marking the eighth consecutive year of increase in its military spending.

China last year pegged its defence budget at 1.45 trillion yuan, a 7.1% increase. This year, the defence spending is increased to 1.55 trillion yuan.

However, in view of the appreciation of the dollar against the yuan, this year’s defence spending of China totalled about $224 billion compared to last year’s $230 billion.

This is the eighth consecutive year that China has announced a single-digit percentage point increase in its military budget. In his work report presented to the opening session of the National People’s Congress (NPC) — the country’s rubber-stamp Parliament — outgoing Premier Li Keqiang called for the armed forces to boost combat preparedness.

“China’s armed forces, with a focus on the goals for the centenary of the People’s Liberation Army [PLA] in 2027, should work to carry out military operations, boost combat preparedness and enhance military capabilities so as to accomplish the tasks entrusted to them by the CPC [Chinese Communist Party] and the people,” Mr. Li said.

“The armed forces should intensify military training and preparedness across the board, develop new military strategic guidance, devote greater energy to training under combat conditions, and make well-coordinated efforts to strengthen military work in all directions and domains,” Mr. Li said.

China is the second biggest spender on defence next to the U.S. whose defence budget for 2023 totalled $816 billion.