As China talks tough on the world stage when it comes to Taiwan, all that military spending comes at a cost. And it’s now impacting Beijing’s bottom line
Despite the government’s modest economic growth forecast, China will increase defence spending by 7.2% this year as Premier Li Keqiang called for an increase in combat readiness.
The national budget released earlier this year showed 1.55 trillion yuan ($224 billion) allocated to military spending.
As tensions over Taiwan have risen in recent years, China’s neighbours and the United States will closely monitor the defence budget.
Defence spending has risen by a single digit for the eighth consecutive year. There was no breakdown of spending like in previous years, only the overall amount and the rate of growth.
As the world’s second-largest economy faces domestic headwinds, the spending increase exceeds targeted economic growth of around 5 per cent.
In addition to Chinese-claimed Taiwan, U.S. naval and air missions near Chinese-occupied islands in the disputed South China Sea cause Beijing concern.
