MILITARY EXPENDITURES TRENDS
In 2022, the PRC announced a nominal 7.1 percent annual military budget increase to $229 billion, which is approximately 1.3 percent of gross domestic product. This year’s budget continues more than 20 years of annual defense spending increases and sustains the PRC’s position as the second-largest military spender in the world after the United States. The PRC’s defense budget has nearly doubled during the past 10 years—data from 2013 through 2022 indicates China’s official military budget grew 6 percent annually after adjusting for inflation. The PRC can support continued growth in defense spending for at least the next five to 10 years, based on economic data and growth projections.
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China: Official Defense Budget (2013–2022)
China’s Estimated Military Expenditures. The PRC’s published military budget does not include details of expenditure breakouts, including R&D and foreign weapons procurement. In 2022, China’s actual military-related spending could be significantly higher than its officially announced defense budget. Actual PRC military expenses are difficult to calculate, largely due to the PRC’s lack of transparency. United Kingdom and Europe-based think tanks estimate that the PRC’s actual 2022 defense budget is at least 30-40 percent higher than the PRC’s announced budget.
China’s Estimated Defense Budget Growth. If China’s official defense budget continues to increase annually by an average of 6 percent, the PLA can dedicate more money for training, operations, and personnel costs. Economic forecasters project that China’s economic growth will slow during the next 10 years, from about 3 percent in 2022 to around 4 percent in 2025, which could slow future defense spending growth. Assuming accurate economic projections and a steady defense burden, China will remain the second-largest spender after the United States.
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OFFICE OF THE SECRETARY OF DEFENSE
Annual Report to Congress: Military and Security Developments Involving the People's Republic of China
