China raises defence budget to $249 bn: How does it compare to India?

China's annual NPC highlighted a focus on keeping urban unemployment at 5.5%, creating 12 million new urban jobs, and advancing emerging tech in 2025

China has announced a 7.2 per cent increase in its defence budget for 2025, at 1.784665 trillion yuan (approximately $249 billion), maintaining the same growth rate as the previous year. In comparison, India set its defence budget at Rs 6.81 trillion (approximately $81.72 billion) for the financial year beginning on April 1. 

 

The decision, unveiled in the government’s work report at the annual session of the National People’s Congress (NPC) on Wednesday, highlights Beijing’s continued military modernisation despite economic headwinds. 

 

China has also set an economic growth target of 5 per cent for 2025.

 

China’s defence budget

The new defence budget, while lower than the double-digit annual increases seen in previous decades, remains the second-largest globally, following the United States.

 

 

The defence budget increase comes as China continues to enhance its high-tech military capabilities, from stealth fighter jets and aircraft carriers to nuclear weapons. Rising tensions in the Taiwan Strait, the South China Sea, and with regional players such as Japan and the United States have further driven the focus on military modernisation.

 

China-Taiwan tensions

A key priority for the People’s Liberation Army (PLA), the armed wing of the ruling Communist Party, remains asserting control over Taiwan. Beijing considers the self-governing democracy a breakaway province and has intensified its military presence in the region.

 

Speaking at the NPC, Chinese Premier Li Qiang reiterated Beijing’s preference for a peaceful resolution but warned against those advocating for Taiwan’s formal independence. “We resolutely oppose separatist activities and their foreign supporters,” Li said, addressing nearly 3,000 lawmakers gathered at the Great Hall of the People in Beijing.

 

On Wednesday, China deployed a contingent of five aircraft and seven naval vessels near Taiwan, following a much larger military operation days earlier. Such incursions are part of a broader strategy aimed at exhausting Taiwan’s defences. Meanwhile, Taipei has been strengthening its military with upgraded US-made F-16 fighter jets, tanks, and advanced missile systems, alongside domestic defence developments.

 

China’s 2025 economic growth outlook

Beyond military spending, China has set an economic growth target of approximately 5 per cent for 2025, the same as last year.

 

The NPC also outlined key economic goals, including:

• Keeping urban unemployment around 5.5 per cent
• Creating over 12 million new urban jobs
• Targeting a 2 per cent increase in the consumer price index, down from 3 per cent last year

China sets sights on consumer spending, emerging tech

As 2025 marks the final year of China’s 14th Five-Year Plan (2021-2025), policymakers are also setting the stage for the next development blueprint. The government has placed a strong emphasis on “high-quality development,” prioritising domestic demand, industrial innovation, and emerging technologies.

 

The government report outlined several measures to boost economic activity, including the issuance of ultra-long special treasury bonds worth 300 billion yuan to support consumer spending and infrastructure investment.

 

Additionally, China aims to accelerate the adoption of cutting-edge technologies such as artificial intelligence (AI), quantum computing, and advanced manufacturing. These sectors are expected to play a crucial role in the country’s modernisation drive.

 

During the opening session of the NPC, lawmakers reviewed multiple reports from the State Council, including:

• The implementation of the 2024 economic and social development plan
• The draft plan for national economic development in 2025
• The execution of central and local budgets for 2024 and proposals for 2025

 

Vice Chairman of the NPC Standing Committee, Li Hongzhong, also presented a draft amendment to the Law on Deputies to the National People’s Congress and Local People’s Congresses, signalling potential legislative changes in governance structures.