China announces 6.8% increase in 2021 defence budget

Announced on 5 March, China's 2021 defence budget will increase by 6.8% in 2021 - marking an end to its recent slowdown. However, analysis from Jon Grevatt and Andrew MacDonald highlights that this does not represent a significant departure from the country's recent military-expenditure trajectory...

China’s defence budget in 2021 will increase by 6.8% to CNY1.355 trillion (USD209.4 billion), according to the Chinese government.

The expenditure – the first within China’s new five-year plan – was announced on 5 March at the opening of the annual session of the National People’s Congress (NPC) in Beijing.
The new defence budget marks the sixth year in succession when the defence budget has increased by less than 10%. However, growth in the budget is also indicative of China’s economic resilience to the effects of the Covid-19 pandemic.

China’s 2021 defence budget represents the largest growth in military spending since 2019, and is a slight increase over the 6.6% growth recorded in 2020. China’s official defence budget last year was CNY1.268 trillion, and was the lowest rate of growth recorded for many years. In 2019 China’s defence budget increased by 7.5% to CNY1.19 trillion.

The 2021 defence budget is notable because it is the first within the country’s new 14th Five Year Plan (FYP), which runs from 2021 to 2025. 

According to blueprints of the 14th FYP, China’s objective during this period is to “make major strides in the modernisation of national defence and the armed forces”. 
The plan is also aimed at accelerating the PLA’s transition from “mechanisation” towards “informationisation” and “intelligentisation”. This is reference to a shift from military platform modernisation towards the adoption of digital and networked systems, and the integration of ‘intelligent’ systems utilising technologies such as artificial intelligence.