China on Thursday announced a 7 per cent increase in its defence Budget, allocating a total of $275 billion for the year 2026.That is second largest Budget after the US, which stands almost $ 961 billion for this fiscal. Beijing is spending more on its military than what India, Japan, South Korea and Australia collectively spend on their forces. India, South Korea, Japan and Australia have a Budget of $ 85.3 billion, $47.1 billion, $ 58 billion and $44.6 billion, respectively. This works out to be $235 billion.Beijing’s move comes amid global uncertainties and domestic economic challenges, as reported at the annual National People’s Congress (NPC) session.On March 5, 2026, Chinese Premier Li Qiang revealed the new defence budget figures during the opening session of the NPC.The allocation for national defence has reached approximately $275 billion, a $25 billion rise from the previous year.This increase continues China’s trend of defence Budget expansion over the past decade.Alongside the defence Budget increase, Premier Li Qiang has set a economic growth target of 4.5 per cent to 5 per cent for 2026.This target is slightly lower than in recent years, taking into account the global economic climate and domestic consumption challenges.Li emphasised the importance of stimulating domestic demand and boosting incomes to stabilise economic growth. This defence Budget increase places added pressure on neighbouring countries and highlights the ongoing geopolitical dynamics in the region.Earlier on February 1, Finance Minister Nirmala Sitharaman announced an allocation of Rs 7,84,678 cr (approximately $83.5 billion) for the Ministry of Defence for the fiscal commencing April 1. The allocation has a focus on self-reliance, modernisation, technology infusion and infrastructure building in border areas.