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China’s military buildup has been a critical driver of defense budget increases elsewhere in the region.
The seemingly inevitable point at which China’s defense budget will top the combined military spending of its neighbors is slipping ever later as those countries keep boosting their coffers to counter Beijing.
Asia has long been a growth engine for global defense spending. In 2000-25, Asian military expenditure grew at an average rate of 4.8% in real terms each year compared with 2.9% for the rest of the world. During those two and a half decades, economic expansion in the Asia-Pacific region drove military spending to 25.9% of the global total from 16.4%, with the absolute total rising to $532.2 billion from $197.5 billion.
- Rising regional defense budgets keep neighbors ahead until the mid-2030s
- China has the ability to accelerate its spending
China has been the biggest driver of those figures. As the Chinese economy expanded at double-digit rates and Beijing began asserting its position as a great power, the country’s defense spending rose almost sevenfold in real terms to $310.8 billion in 2025 from $43 billion in 2000. China now accounts for almost half—49.3%—of military spending in the Asia-Pacific region.
For years it has appeared inevitable that Beijing would spend more money on defense than the rest of Asia combined. China was on pace in 2021 to reach that dominance by today. However, the slowdown in the country’s growth, coupled with regional security concerns that led neighbors to boost budgets, has pushed the date back repeatedly. In 2023, China was projected to pass the rest of the Asia-Pacific region around 2030. But following further changes to regional defense spending plans over the past 12 months, that milestone is now unlikely before the mid-2030s.
Many countries within the region have sought to raise their defense budgets to counter China’s long-term military investment, particularly since 2022, when Russia’s full-scale invasion of Ukraine elevated global concerns about security and stability to heights reminiscent of the Cold War. Australia, Japan, Singapore and Taiwan in particular have put long-term plans in place to expand their military capabilities.
China still has ample financial firepower to accelerate that date. Even if its neighbors maintain a relatively high level of spending, Beijing officially spends a relatively small amount on defense in relation to GDP—around 1.6%, based on official government numbers. A decision to prioritize defense and push spending toward even 2% of GDP would instantly put China into a seemingly unassailable lead.
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