China Boosts Defense Budget by 7%: What It Means for Regional Security in the Indo-Pacific

Hwang Jin-hyun | 2026.03.11

  China and Taiwan [Photo: Getty Images]
  China and Taiwan [Photo: Getty Images]
Taiwan officials say Beijing’s 7% increase in defense spending this year signals an effort to ramp up military pressure across the Indo‑Pacific.

According to Taiwan media including the Liberty Times on March 11, Shen You‑chung (沈有忠), deputy chair of the Mainland Affairs Council (MAC), made the remarks at a seminar hosted by the Taiwan Homeland Security Society titled “External Affairs and Regional Security Prospects after China’s Two Sessions.” He analyzed China’s military readiness and its outward expansion during the event.

Shen said Beijing’s decision to raise its defense budget by 7.0% this year is aimed at steadily intensifying military pressure in the Indo‑Pacific, particularly along the first island chain — the Ryukyu Islands/Okinawa–Taiwan–Philippines–Malacca Strait.

He warned that these moves reveal a deliberate effort to alter the status quo in the Taiwan Strait and reshape the regional order.

Shen also pointed to the National People’s Congress (NPC) work report, which set the lower bound of China’s GDP growth target at 4.5%. Citing expanding local fiscal deficits and other economic indicators, he said doubts are growing about China’s growth momentum.

Despite those economic headwinds, Shen argued, Beijing’s decision to sharply increase defense spending demonstrates an intention to sustain military pressure on Taiwan and neighboring countries.

He noted democratic governments across the Indo‑Pacific are responding to the People’s Liberation Army’s expansion by boosting their defense budgets. A growing consensus, he said, holds that unilateral concessions or compromises will not preserve regional stability.

Shen urged Taiwanese society to clearly recognize the risks posed by China’s attempts to change the status quo, strengthen national defense through unity, and deepen cooperation with democratic allies.

He added that maintaining peace and development will require sufficient deterrence and multilateral defense cooperation to counter authoritarian expansion, summing up the approach as “peace through strength.”

Separately, the Chinese government set this year’s defense budget at CNY 1.9096 trillion (about $303.75 billion) — a 7% increase from last year — roughly ₩405 trillion (about $303.75 billion).