During the last 2024 National People’s Congress that began on March 5, 2024, and ended on March 11, 2024, the People’s Republic of China (PRC) unveiled an ambitious 7.2% planned increase in defence spending despite its slowing economic growth.

As per the Ministry of Finance’s draft budget presented by Premier Li Qiang, national defence funding will reach RMB 1.665 trillion (USD 233 billion) in 2024, a 7.2% increase in nominal terms from last year’s RMB 1.554 trillion (USD 219 billion). Despite such an increase, the overall defence budget only amounts to 1.25% of the GDP, well below the 2% target followed by NATO countries.

While it is much lower than the defence budget of the United States, which is around USD 842 billion for the fiscal year 2024, the consecutive increase in the Chinese defence budget signals China’s preparation for a plausible conflict with the USA, especially concerning Taiwan. As per the recent report of the International Institute for Security Studies, since 2014, the annual growth in the defence budget for the USA has been 1.2%, while for the same duration, China has had an average growth of 6%.

While this amount in the budget will further be supplemented by research and development in the adjoining areas, the issue of widespread corruption still persists. Preparing China against a plausible conflict with the United States while simultaneously focusing on PLA modernization and curbing the persisting corruption will be important focuses for China’s Central Military Commission (CMC), which is chaired by President Xi Jinping himself at this moment.