Despite a difficult economic context, China increases its military budget

Gone are the periods of double-digit growth: China is struggling to restart the machine after the years of Covid. It is in this context of economic slowdown that Chinese Prime Minister Li Qiang opened the annual session of Parliament with a speech on Tuesday March 5 in Beijing. The head of the Chinese government tried to reassure the outlook for the Chinese economy and announced a sharp increase in the military budget for the year 2024.

Defense, a priority for the Chinese government

A few weeks after the election of a new president in Taiwan – whom Beijing describes as radical independence – the words of Prime Minister Li Xiang did not go unnoticed. “The army will have to strengthen its training, its combat preparation and firmly defend our sovereignty, our security and our interests. It is imperative to accelerate the implementation of major national defense development projects. Governments at all levels must strongly support them.”

The financial support to achieve this is substantial: China will devote $231 billion to its defense in 2024, a figure up more than 7% compared to the previous year. This is the first state budget ahead of public security, one of the regime’s other priorities. These massive investments allow the country to continuously modernize its military apparatus while its presence is increasingly visible in the South China Sea. The People’s Liberation Army has nevertheless experienced numerous difficulties in recent months with several corruption scandals and a series of dismissals. China changed its defense minister twice in 2023.

A change in discourse on the economy

Despite a growth target (5%) among the lowest in recent decades, the Chinese Prime Minister was keen to point out that the Chinese economy remained one of the most efficient in the world. Standing in front of President Xi Jiping in the Great Hall of the People, he also made remarks that we rarely hear from the mouths of officials, evoking the inadequacy of government work and a bureaucracy that “wreaks havoc”.

Without giving details, Li Xiang indicated that China wanted to transform its economic model to obtain greater performance, while ensuring “well-being of the population”. The expression came up several times in the Prime Minister’s speech on Tuesday, hinting at the regime’s fears about the emergence of a social protest movement linked to the current economic difficulties.