2023/4/7 凌晨2:08 What Does China Really Spend on its Military?

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What Does China Really Spend on its Military?

Defense spending is one of the most direct ways of measuring a country’s potential military capability.
Comparing defense spending between countries—whether nominally or as a percentage of government
expenditure—is a useful gauge of relative military strength. Spending patterns can also reveal key political
events that have implications for defense and national security.

Understanding the connection between China’s military spending and its military power is made difficult
by a lack of transparency. Although Beijing provides figures for its defense spending each year, outside
estimates of China’s defense budget are often significantly higher than the official numbers. China
provides limited information on the distribution of its military spending, which further obscures spending
patterns.

Defense Spending Giants

This interactive compares China’s defense spending with that of other key countries. Use the filtering options
to select other measures of spending or to look at another country grouping. Data provided by the SIPRI
Military Expenditure Database.

Filter by category:

Spending (Constant 2020 US$)

Filter by grouping:

Top 10 Spenders

Filter by year:

2021

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= $3 bn

United States China

$767.8 bn $270 bn

India Russia United Kingdom Japan Saudi Arabia

$73.6 bn $63.5 bn $62.5 bn $55.8 bn $53.8 bn

France Germany South Korea

$53.6 bn $52.5 bn $47.7 bn

Source: Stockholm International Peace Research Institute (SIPRI)

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Tracking Chinese Military Spending

There is no universally accepted standard for reporting military spending. While international mechanisms
exist, such as the UN Report on Military Expenditures, participation is voluntary. This allows governments
to report their expenditure with varying degrees of detail. China joined the UN instrument in 2007, but it
remains less transparent than many countries.

The Chinese government announces expenditure information annually. In March 2022, China announced a
yearly defense budget of RMB 1.45 trillion ($229.6 billion),1 marking a 7.1 percent increase from the 2021
budget of RMB 1.36 trillion ($209.2 billion).2 This continues a recent trend that has seen yearly percentage
increases in the upper single digits. However, it is worth noting that the 2022 budget marks the only time
in the last decade that the budget’s growth rate has increased two years consecutively.

China's Official Defense Budget

Nominal US$ Constand 2015 US$

$250B

200B

150B

100B

50B

2008 2010 2012 2014 2016 2018 2020 2022

Note: Based on announced budget, not actual spending

Source: CSIS China Power Project; Chinese Central Government; National Bureau of Statistics of China; World Bank

While China releases an official defense budget, how much China actually spends on its military is widely
debated. The Stockholm International Peace Research Institute (SIPRI) estimates the overall 2021 figure to
be $293.4 billion and the International Institute for Strategic Studies (IISS) puts the number at $270 billion.

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Estimates of Chinese Defense Spending

Billions of current US$
Official Chinese Defense Budget SIPRI Estimate IISS Estimate

Note: The decline in 2023 is due to exchange rate effects. Spending in RMB increased by 7.2 percent.
Source: CSIS China Power Project; Chinese Central Government; SIPRI; IISS

Notwithstanding these differences, Beijing’s official figures may now more accurately represent defense
expenditures than in the past. In 2002, the U.S. Department of Defense (DoD) reported that China’s actual
defense spending may have been upwards of four times larger than its officially announced budget. In
2021, the DoD noted that China’s real military spending may now be around 1.1 to 2 times higher than
stated in its official budget.

Varying levels of transparency from Beijing add challenges for outside efforts to estimate China’s defense
budget. The publication of 11 defense white papers since 1995 has provided some insight into the nature of
Chinese military spending but with varying degrees of specificity. White papers published between 1998
and 2008 included comparative budget breakdowns between China and countries like Japan and Russia.
These comparisons were removed from white papers after 2008 but reappeared in the most recent white
paper that was released in July 2019.

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Chinese Defense Expenditure Breakdown (2020)

Billions of RMB

Militia and
Category Active Forces Reserve Forces others Total

Personnel 379.3 3.8 383.1

Training &
397.9 5.8 24.7 428.4
Maintenance

Equipment 474.5 4.8 1.1 480.4

Total 1251.7 14.4 25.8 1291.9

Source: CSIS China Power Project; United Nations

Most defense white papers—except those released in 2013 and 2015—also outline three spending
categories: personnel, training and maintenance, and equipment.3 Beijing states that it annually reports
categorized military spending information to the UN; however, this information is only available from the
UN in short reports for fiscal years 2006, 2007, 2008, 2017, and 2020.4 The reports from the mid-2000s show
roughly equal spending between each of these three categories. The 2019 white paper, which includes
spending breakdowns between 2010 and 2017, reveals a noticeable shift away from this even distribution,
with equipment accounting for just over 41 percent of total spending in 2017. However, the latest figures
posted by the UN show a slight reversal of this, with equipment accounting for 37 percent in 2020.

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Breakdown of China's Defense Spending by Type

Personnel Training & Maintenance Equipment

100.0%

80.0

60.0

40.0

20.0

2008 2010 2012 2014 2016 2018 2020

Note: 2010-2017 figures are from China's 2019 defense white paper; 2008, 2009, and 2020 figures are from the UN; 2018 and 2019 figures
are unavilable.
Source: CSIS China Power Project; Chinese Ministry of Defense; United Nations

Please note that the figures in the graph above are based on spending figures provided in the 2019 defense white paper and do not
match with figures provided by the Ministry of Finance.

Official military spending is further complicated by the Chinese government’s inconsistent reporting of
figures. The figures provided by the Ministry of Finance, for instance, differ from expenditure reported in
the 2019 defense white paper.5 This discrepancy may be the result of the Ministry of Finance excluding the
costs associated with militia forces in its defense figures. In 2017, this inconsistency resulted in a difference
of $2.9 billion.

China’s lack of transparency leads to discrepancies between official figures and outside estimates. Official
figures do not account for a number of military-related outlays, including some military research and
development, aspects of China’s space program, defense mobilization funds, authorized sales of land or
excess food produced by some units, recruitment bonuses for college students, and provincial military
base operating costs.6

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Comparison of Official Military Spending Figures

Billions of RMB (Billions of US$)

Year Ministry of Finance

2017 1023.7 ($151.5)

2016 954.6 ($143.7)

2015 886.9 ($142.4)

2014 805.5 ($131.1)

2013 720.2 ($116.3)

2012 650.6 ($103.1)

2011 583.0 ($90.2)

2010 518.2 ($76.5)

Note: US$ values are based on average annual exchange rates using data provided by the IMF
Source: CSIS China Power Project; Chinese Ministry of Finance; Chinese Ministry of Defense; International Monetary Fund

Official military spending also excludes spending on public security, which includes the People’s Armed
Police (PAP). The PAP is a paramilitary police component of China’s armed forces that is charged with
internal security, law enforcement, and maritime rights protection. The Central Military Commission
maintains direct control of the PAP. Official expenditure at the central level for the PAP stood at RMB 132
billion ($20.5 billion) in 2021, though this figure is widely believed to significantly undercount total
spending on the PAP.

China is not alone in excluding elements of defense-related spending from its official defense budget.
India’s paramilitary forces, which make up the Central Armed Police Forces, fall under the Ministry of
Home Affairs, not the Ministry of Defense. India is also not forthcoming about space and nuclear weapons
expenditures. The United States funds its nuclear weapons through the Department of Energy and does
not include these details in its defense budget. However, the US government maintains a high level of
budgetary transparency, which enables analysts to readily account for discrepancies.

Estimates of China’s military spending are further complicated by the reporting of costs not typically
included in the defense budgets of many other countries. For instance, disaster relief in China is funded
through the defense budget and is to be reimbursed by non-defense agencies. Likewise, perquisites for
retired senior officers—including offices, assistants, and special access to hospital facilities—are all funded
through China’s defense budget. In many other countries, these functions and associated costs are
typically incurred by nonmilitary organizations.

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The inconsistencies in estimates are compounded by a lack of pricing information. Beijing does not release
accurate cost data for military goods and services, making it difficult to make calculations based on
purchasing power parity (PPP). Some of the chief challenges are uncertainty over which goods to place in
China’s defense spending basket and which goods to compare between China and other countries.
Independent organizations, such as the IISS, caveat their PPP estimates, noting that no specific PPP rate
applies to the Chinese military sector and that there is no definitive means through which elements of
military spending can be calculated using PPP rates.

Comparing Chinese Military Spending

Calculations in this section are derived from the SIPRI Military Expenditure Database and are in constant
2020 US dollars.

China’s defense spending has grown five-fold over the past two decades, jumping from $50 billion in 2001
to $270 billion in 2021. This has had a significant impact on the balance of military power globally, but
especially within China’s neighborhood. In 2000, China was the second-largest defense spender in the
Indo-Pacific, behind Japan. In 2021, China spent more on defense than the next 13 Indo-Pacific economies
combined.

Defense Spending in the Indo-Pacific

China’s military is better funded than the next 13 Indo-Pacific militaries combined
China India Japan South Korea Australia Taiwan Next eight countries*

$250B
$50.9B

$12.1B
200B
$28.4B

150B $47.7B
$270B

100B $55.8B

50B
$73.6B

China Next 13 Indo-Pacific Militaries

Note: Figures are in billions of US$ (constant 2020).

*Includes Singapore. Pakistan, Indonesia, Thailand, Bangladesh, the Philippines, Malaysia, and New Zealand.
Source: CSIS China Power Project; SIPRI

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China’s rising defense spending corresponds with over two decades of modernization efforts. China began
military modernization in earnest after the 1995–1996 Taiwan Strait crisis, which exposed fundamental
weaknesses in China’s ability to deter foreign intervention in sovereignty disputes. The increase in China’s
defense spending in recent decades was, in part, also a response to domestic policies that left China’s
defense budget relatively stagnant prior to the 2000s.

Aggregate spending increases have corresponded with several high-profile procurement programs,
military reforms, and doctrinal and strategic shifts within the People’s Liberation Army. These shifts have
facilitated China playing a larger role in regional and international security. Some of these efforts, such as
China’s participation in UN peacekeeping operations, antipiracy efforts, and humanitarian assistance and
disaster relief (HA/DR) are welcome contributions to global governance. On the other hand, defending
China’s growing security interests in the East and South China Seas has strained relations with other
regional actors.

Global Defense Spending

Billions of US$ (constant 2020)
United States Rest of NATO China Russia Rest of World

100%

80

60

40

20

1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Source: CSIS China Power Project; SIPRI

Despite significant increases over the last two decades, China’s military spending pales in comparison to
that of the United States, which spent nearly three times as much as China in 2021, at $767.8 billion. Even
when accounting for reporting discrepancies, China would have to raise its spending considerably to
match the United States. However, it is worth noting that the United States maintains a global military
presence while China remains primarily focused on security issues within the Indo-Pacific.

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China’s rising defense spending is closely linked to its burgeoning gross domestic product (GDP). Since
2000, China’s defense expenditures as a share of its GDP has hovered at or below 2 percent. In
comparison, US military spending has averaged about 3.9 percent of GDP since 2000. Japan’s military
spending has remained set at approximately 1 percent of its GDP, but this is changing. In January 2022,
Japanese Defense Minister Nobuo Kishi said that 2021 defense spending reached 1.24 percent of GDP, and
in April, Japan’s ruling Liberal Democratic Party drafted a proposal to increase defense spending to 2
percent of GDP within five years.

Military Spending as a Percent of Government Spending

China United States Japan South Korea Philippines Russia

14%

12

10

0
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Source: CSIS China Power Project; SIPRI

Measuring defense spending as a percentage of government expenditure provides additional insight. The
United States saw a marked increase in defense spending as a percentage of total government
expenditure during its conflicts in the Middle East. U.S. military spending has since decreased and returned
to pre-September 11 levels (9.6 percent in 2001 and 8.3 percent in 2021). Russia’s military spending has
likewise fluctuated with its military interventions. Russian defense spending reached a peak of 14.8 percent
of government spending in 2016 before falling to 10.8 percent in 2021. However, Russia’s war in Ukraine will
likely cause another sharp rise in Russian defense spending.

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Military Spending as a Percent of GDP

China United States Japan South Korea Philippines Russia

5%

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Source: CSIS China Power Project; SIPRI

In comparison, Chinese military spending has shrunken considerably as a percent of total government
spending. However, China’s military spending as a share of government expenditure increased slightly in
2021 to 5 percent—up from 4.8 percent the previous year. While a small change, this marks the first year-
over-year uptick in two decades.

Photo Credit: Kevin Frayer/Getty Images

KEYWORDS defense budget military modernization military spending procurement

transparency white papers

DATA SOURCES
SIPRI Military Expenditure Database. VIEW 

China Power Team. "What Does China Really Spend on its Military?" China Power. December 28, 2015. Updated June 29,
2022. Accessed April 6, 2023. https://chinapower.csis.org/military-spending/

FURTHER READING

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2023/4/7 凌晨2:08 What Does China Really Spend on its Military? | ChinaPower Project

• Bonnie S. Glaser, Matthew P. Funaiole, and Brian Hart, “Breaking Down China’s 2020 Defense Budget,”
Center for Strategic and International Studies, May 22, 2020.

• Bonnie S. Glaser, Matthew P. Funaiole, Bonnie Chan, and Brian Hart, “Understanding China’s 2021
Defense Budget,” Center for Strategic and International Studies, March 5, 2021.

• “China’s National Defense in the New Era,” Ministry of National Defense of the People’s Republic of
China, July 24, 2019.

• International Institute for Strategic Studies (IISS), The Military Balance: The Annual Assessment of Global
Military and Capabilities and Defence Economics: 2021 (London, UK: Routledge, IISS, 2021).

• “Military and Security Developments Involving the People’s Republic of China 2021,” U.S. Department of
Defense, November 1, 2021.

• Nan Tian and Fei Su, “A New Estimate of China’s Military Expenditure,” Stockholm International Peace
Research Institute, January 2021.

• Joel Wuthnow, “China’s Other Army: The People’s Armed Police in an Era of Reform,” China Strategic
Perspectives no. 14, April 16, 2019.

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