05 March 2018

Xi’s Strong Military Dream: China’s Defense Budget to Grow 8.1% to ~$175 billion This Year, Rate Exceeds ~6.5% Economic Growth Target

A major announcement today from the National People’s Congress in Beijing: China’s defense budget will grow by 8.1% to ~$175 billion (1.11 trillion yuan) this year, a rate increase from the 7% in 2017. This latest raise represents a reversal of three years of slowing growth. It exceeds this year’s economic growth target of ~6.5%.

Here’s my take:

 China’s official defense budget growth thus continues to exceed official economic growth. This shows that Xi’s grand strategy to ‘Make China Great Again’ includes not only a ‘China dream’ generally but also a ‘strong military dream’ specifically.

By any measure, China has the world’s second largest defense budget after the United States. It has already enabled China to achieve:


Read the Chinese and English-language full-text of the National People’s Congress reports, courtesy of the Wall Street Journal:

1) Report on the Work of the Government (Premier Li Keqiang)

2) National Development and Reform Commission Draft Plan for National Economic and Social Development

3) Ministry of Finance Budget Report



Simon Denyer, “China Boosts Defense Budget in Quest for ‘World-Class’ Military But Tells Neighbors Not to Worry,” Washington Post, 4 March 2018.

Andrew S. Erickson, “Beijing to Expand Defense Budget by About 7% This Year; Says it’s Enough to Protect ‘Rights and Interests’,” China Analysis from Original Sources 以第一手资料研究中国4 March 2017.

Jeremy Page and Chun Han Wong, “China Eases Foot Off Gas on Military Spending,” Wall Street Journal, 4 March 2017.

Andrew S. Erickson and Adam P. Liff, “The Limits of Growth: Economic Headwinds Inform China’s Latest Military Budget,” China Real Time Report (中国实时报), Wall Street Journal, 5 March 2016.

Andrew S. Erickson, “China Announces 7.6% Budget Increase to $146.67 Billion (954.35 Billion Yuan): Comprehensive Context & Analysis,” China Analysis from Original Sources 以第一手料研究中国, 4 March 2016.

Andrew S. Erickson and Adam P. Liff, “China’s Military Spending Swells Again Despite Domestic Headwinds,” China Real Time Report (中国实时报), Wall Street Journal, 5 March 2015.

Andrew S. Erickson and Adam P. Liff, “The Budget This Time: Taking the Measure of China’s Defense Spending,” ASAN Forum 2.2 (March-April 2014).

China’s Military Spending: At the Double,” The Economist, 15 March 2014.

Edward Wong, “China Announces 12.2% Increase in Military Budget,” New York Times, 5 March 2014.

Andrew S. Erickson and Adam P. Liff, “Full Steam Ahead: China’s Ever-Increasing Military Budget,” China Real Time Report (中国实时报), Wall Street Journal, 5 March 2014.

Andrew S. Erickson, “China’s Near-Seas Challenges,” The National Interest 129 (January-February 2014): 60-66.

Andrew S. Erickson, “Testimony before the U.S.-China Economic and Security Review Commission,” Panel II: “Inputs to China’s Military Modernization,” “China’s Military Modernization and its Implications for the United States” hearing, Washington, DC, 30 January 2014.

Andrew S. Erickson, “China’s Naval Modernization: Implications and Recommendations,” Testimony before the House Armed Services CommitteeSeapower and Projection Forces Subcommittee, “U.S. Asia-Pacific Strategic Considerations Related to PLA Naval Forces” hearing, Washington, DC, 11 December 2013. Click here for oral statement.

Adam P. Liff and Andrew S. Erickson, “Demystifying China’s Defence Spending: Less Mysterious in the Aggregate,”The China Quarterly 216 (December 2013): 805-30.

Nathaniel Austin, “Lifting the Shroud on China’s Defense Spending: Trends, Drivers, and Implications—An Interview with Andrew S. Erickson and Adam P. Liff,” Policy Q&A, National Bureau of Asian Research, 16 May 2013.

Andrew S. Erickson, “China’s Defense Budget: A Richer Nation Builds a Stronger Army,” Inaugural Presentation in “China Reality Check” Speaker Series, Center for Strategic and International Studies (CSIS), Washington, DC, 8 April 2012.

Andrew S. Erickson and Adam P. Liff, “China’s Military Development, Beyond the Numbers,” The Diplomat, 12 March 2013.

Andrew S. Erickson and Adam P. Liff, “A Player, but No Superpower,” Foreign Policy, 7 March 2013.
Andrew S. Erickson, “China’s Military Budget Bump: What it Means,” China Real Time Report (中国实时报), Wall Street Journal, 5 March 2013.