# COLUMN: what China's slowing military budget reveals about the balance of power

> People have often asked me, these past few weeks, what to really make of the 2026 Chinese defense budget. Set at 1.94 trillion yuan, roughly $282 billion, according to Reuters, this budget shows a 6.9% increase over…

- Author: Maxime Marquette
- Publisher: MadMax (https://mad-max.co)
- Section: Column
- Published: 2026-07-20
- Canonical URL: https://mad-max.co/en/article/column-what-china-s-slowing-military-budget-reveals-about-the-balance-of-power

## Introduction

People have often asked me, these past few weeks, what to really make of the **2026 Chinese defense budget**. Set at **1.94 trillion yuan**, roughly **$282 billion**, according to **Reuters**, this **budget** shows a **6.9%** increase over 2025, the slowest growth since 2021. This column does not aim to settle the debate, but to place this figure within a dynamic of power relations that extends well beyond the single **annual** budgetary framework.

What interests me in this file is not merely the percentage displayed by **Beijing**. It is what that percentage **reveals**, or **conceals**, about the real priorities of a major **military** power. According to Reuters, this budget remains devoted to **modernizing weapons** and defense technologies, an official statement that deserves to be tested against the **facts** documented on the ground, rather than taken at face value.

And the **facts**, precisely, speak: two **Type 055-class** destroyers, the **Dongguan** and the **Anqing**, were commissioned in the same period, according to the **IDSA**. *You can slow a percentage on a budgetary spreadsheet while accelerating, on the water, the commissioning of named and identified warships; it is that apparent contradiction that deserves to be told, patiently.*

## A figure that, alone, tells nothing

### 1.94 trillion yuan, an abstraction that needs a face

The figure of **1.94 trillion yuan** remains, for most readers, an abstraction that is hard to visualize. Converted into **$282 billion** according to **Reuters**, this amount becomes more tangible, but it remains, nonetheless, a sum so vast that it escapes any concrete intuition, except when set against what it actually finances on the ground.

It is precisely this act of comparison that interests me in this **column**: turning an abstract figure into a tangible **operational reality**, through the concrete example of the two Type 055 destroyers documented by the **IDSA**, rather than letting this amount float as a mere statistic with no anchor in the **real** world.

### 6.9%, a percentage that hides more than it reveals

The **6.9%** figure, presented by many outlets as the central data point of this **file**, actually masks a more interesting question: what does this increase, even slowed, concretely fund, in a context of growing **technological tensions** with **Washington**? This question, rarely asked directly, deserves nonetheless to be at the center of any serious analysis of this **budget**.

It is by answering this precise question, rather than settling for the single displayed **percentage**, that one can truly assess the real **balance of power** taking shape between **China** and its regional and Western rivals in the years ahead. *A percentage reads in a second; what it funds is understood only by digging, patiently, past the figure displayed on the front line of an official statement.*

## Dongguan and Anqing, two names that matter more than a percentage

### What a Type 055 destroyer represents

The **Type 055-class** **destroyers**, of which the **Dongguan** and the **Anqing** were commissioned according to the IDSA, rank among the most advanced warships of the contemporary **Chinese navy**, comparable in capability to some of the best Western destroyers currently in service within allied fleets in the Indo-Pacific **region**.

This technical comparability, documented by several specialized naval analyses, illustrates just how far **Chinese naval modernization** has progressed over the past decade, a progression that does not stop, as shown by the continued commissioning of these vessels despite the overall budget **slowdown** documented for 2026.

### Why naming these vessels changes the reading of this file

There is something different between reading "China slows its **budget** by 6.9%" and reading "China commissions the **Dongguan** and the **Anqing**." *A percentage remains abstract; the name of a warship, by contrast, becomes tangible, becomes locatable, becomes a reality one can place on a map and a precise timeline.* That concrete embodiment is what I seek to favor in this column, rather than settling for a disembodied **figure**.

This narrative approach, which favors **concrete embodiment** over statistical abstraction, allows, in my view, for a more faithful understanding of the real **balance of power** taking shape in the South and East China Seas, far beyond the official budgetary tables Beijing publishes each **year**.

## What the budget slowdown reveals about internal priorities

### A Chinese economy imposing its own limits

This slowdown to **6.9%**, the weakest since 2021 according to Reuters, fits within a broader context of Chinese **internal economic tensions**, documented alongside the context of American technological restrictions. These internal constraints, though not exhaustively detailed, suggest that even Beijing must now contend with **real budgetary limits** it perhaps could not ignore as easily during the years of double-digit **growth**.

This **internal constraint**, if confirmed in the years ahead, could progressively reshape Chinese **strategic priorities**, forcing Beijing to choose more rigorously between different **modernization programs** rather than uniformly funding its entire defense apparatus as in previous decades.

### Naval modernization as a priority maintained regardless

In this context of tighter budgetary choices, the **maintained priority** for naval modernization, documented through the commissioning of the Dongguan and the Anqing, reveals a clear **strategic** choice on Beijing's part: preserving maritime **power**, even at the cost of an overall budget slowdown on other, less prioritized spending lines according to internal Chinese criteria.

This strategic choice, concretely **documented** by these two destroyers, deserves to be read as a **strong signal** about Chinese maritime intentions, far more revealing than the single overall budget growth percentage displayed for 2026. *Choosing to build destroyers during a budget slowdown is never an accounting accident; it is a decision, and decisions can be read, not guessed at.*

## The chip war context, this budget's backdrop

### The MATCH Act and its shadow over budgetary priorities

This **military budget** cannot be understood in isolation from the broader context of the **chip war** between Washington and Beijing, documented by Reuters through the American **MATCH Act**, proposed on April 3, 2026. This **technological** confrontation, which aims to restrict Chinese access to advanced semiconductor manufacturing equipment, probably influences the internal Chinese budgetary choices documented for 2026.

This probable influence, though difficult to quantify precisely with the sources available, illustrates how **technological balances of power** and classic military balances of power are now intertwined in the strategic calculations of major contemporary powers, **Chinese** and American alike.

### A Chinese response that goes beyond the military framework alone

Facing these technological restrictions, the Chinese response is not limited to the military budgetary framework alone: it also extends, according to **Modern Diplomacy**, to targeted commercial retaliation measures, such as adding ten American companies to an export control list on June 22, 2026. *A military budget that slows can coexist with a commercial response that intensifies; balances of power no longer play out on a single field, but on several simultaneously.*

This multiplication of **fronts of confrontation**, **documented** through these various cross-cutting measures, illustrates the growing complexity of contemporary balances of power between Washington and Beijing, which can no longer be reduced to a simple comparison of official military budgets published each year.

## What regional partners take away from this

### A vigilance that does not depend on a single annual figure

Western regional partners, notably engaged in the **Balikatan 2026** exercise documented by **Asialink**, do not appear to have significantly altered their level of strategic vigilance in response to this Chinese budget slowdown. This continuity in regional vigilance, despite a figure that might seem reassuring, illustrates a sharper **reading** of real Chinese priorities among the most seasoned regional analysts.

This sharper reading, which favors concrete **operational indicators** such as the commissioning of new destroyers over the single annual budgetary percentage, now appears widely shared among security partners in the Indo-Pacific region facing the Chinese military rise documented over several years.

### Seven nations, seventeen thousand troops, a response that does not weaken

The **Balikatan 2026** exercise, mobilizing seventeen thousand troops from seven nations according to Asialink, illustrates a **regional** response that does not weaken despite the Chinese budget slowdown documented for 2026. This continuity of multinational **engagement**, including notably **Japan's first combat deployment** since 1945 according to the same sources, reflects a strategic concern that extends well beyond a single annual Chinese budgetary figure.

This sustained regional response, independent of the Chinese budgetary **signal**, confirms that **balances of power** in the South and East China Seas play out over a longer timeframe than a single annual budget cycle, an essential lesson for anyone seeking to understand the current regional strategic dynamic. *Seventeen thousand soldiers do not mobilize for a reassuring figure; they mobilize for an operational reality that, itself, does not slow down.*

## What this column ultimately takes away

### The figure and the fact, two different languages

At the end of this column, what strikes me as most revealing is not the 6.9% figure itself, but the **coexistence** of this statistical slowdown with the continued commissioning of top-tier destroyers. *The figure speaks the language of accounting; the fact speaks the language of real balances of power; and in geopolitics, it is always the latter that ends up having the last word.*

This coexistence, documented by identified primary sources, deserves to be told precisely as such, without excessive dramatization or complacent minimization, so the reader can form their own judgment about the real scope of this Chinese budget slowdown for 2026.

### What I will keep watching in the coming months

In the coming months, I will continue closely watching the evolution of these **cross-checked indicators** — annual budget, **naval modernization** programs, chip war context — rather than trusting a single isolated figure to assess China's real strategic **trajectory** during this period of **balances of power** undergoing full regional and global recomposition.

It is this **method**, patient and demanding, that this column intends to maintain in the face of every new development documented in this Chinese military budgetary file, however reassuring or alarming it may seem at first reading to a hurried reader.

## The broader lessons for understanding contemporary China

### Never read a budget without its operational context

The broadest lesson I draw from this file, applicable well beyond the Chinese case alone, is that a **military budget** is never understood in isolation from its concrete **operational context**: the vessels actually commissioned, the military exercises actually conducted, the technologies actually developed or restricted by strategic rivals.

This methodological lesson, applicable to the **analysis** of any contemporary military power, calls for always cross-referencing official budgetary data with verifiable **operational indicators**, rather than trusting a single annual figure which, taken in isolation, can easily mislead any hurried observer.

### Patience as a journalistic virtue facing these files

Facing files as complex as the Chinese military budget, **patience** remains, in my view, the most valuable journalistic virtue: patience to cross-reference sources, patience to verify documented facts, patience to resist the temptation of the shock figure that oversimplifies a strategic reality far more nuanced than a simple annual percentage suggests.

It is with this patience that I intend to keep handling this file, and every comparable geopolitical file, in columns to come, always favoring documented, embodied facts over disembodied figures which, alone, never tell the whole story. *Patience does not make catchy headlines; it does, however, make good analyses that stand the test of time.*

## What we take from a decade of unresolved tensions

### Scarborough, ten years after a ruling left unenforced

Ten years after the 2016 international arbitral ruling, **Filipino fishermen** remain, according to Reuters, driven away from **Scarborough Shoal** by a continuous presence of Chinese coast guard vessels and fishing boats. This unresolved territorial precedent, documented over an entire decade, offers an essential historical framework for understanding why **regional vigilance** does not waver in the face of China's 2026 budget slowdown.

This decade-long continuity of unresolved tensions illustrates, better than any annual budgetary figure, Chinese **strategic constancy** on the territorial files that matter to it, a **constancy** that contrasts with the apparent slowdown observed on the overall budgetary front alone, documented for the current year.

### What this constancy teaches about real priorities

This territorial constancy, maintained even as the overall budget slows, suggests that Beijing's specific **geographic priorities** — Scarborough, the Taiwan Strait, the East China Sea — are never sacrificed, even when other, less prioritized budgetary lines see a more pronounced slowdown documented by the sources available for 2026. *A budget that slows overall can still fund, without interruption, the few precise geographic points that truly matter to whoever writes it.*

It is this geographically targeted reading, rather than a global and uniform reading of the Chinese budget, that in my view allows for a better understanding of the real **balances of power** structuring the region in the years ahead.

## What other powers are doing comparably

### Japan, an example of discreet but real modernization

**Japan**, whose participation in the **Balikatan** 2026 exercise marks, according to Asialink, a first combat deployment since 1945, also illustrates a **discreet but real military modernization**, conducted in parallel with the Chinese developments documented in this column. This Japanese modernization, though less thoroughly documented in the sources consulted here, fits within the same logic of responding to constantly evolving **regional balances of power**.

This convergence between Chinese modernization and the Japanese response illustrates a broader regional dynamic in which each power adjusts its own budgetary **priorities** according to movements observed among its neighbors and strategic rivals, a permanent balancing act that extends well beyond the single Chinese case treated in this column.

### A regional race not limited to two actors

This regional dynamic is not limited to the sole relationship between Beijing and Washington: it also involves intermediate **regional powers** such as Japan, the **Philippines**, and the full set of seven nations mobilized during Balikatan 2026, each adjusting its own budgetary trajectory according to the signals sent by its strategic neighbors. *A Chinese budget is never read alone; it is always read in echo with what the other seven nations maneuvering in the same contested region do, or do not do.*

This broader regional reading, which integrates the full set of relevant actors rather than the classic Sino-American face-off alone, offers, in my view, a more complete understanding of the real **balances of power** now structuring strategic **competition** in the South and East China Seas.

## What official figures never say

### The deliberate opacity of Chinese budgetary categories

The **official budgetary categories** published by Beijing remain, according to Reuters, deliberately broad, potentially encompassing expenditures as diverse as military research, conventional weapons production, and technological investments tied to the competition with the United States in **semiconductors** and military artificial intelligence.

This deliberate **opacity**, implicitly documented by the absence of detailed breakdowns in official Chinese sources, makes necessary the kind of journalistic work this column seeks to carry out: cross-referencing **overall figures** with concrete operational indicators, such as the documented commissioning of named destroyers, to reconstruct a more faithful picture of Beijing's real priorities.

### Why this opacity is not unique to China

This budgetary opacity, one must honestly admit, is not unique to China: it applies, to varying degrees, to most **national military budgets** around the **world**, including those of Western powers, which likewise do not systematically detail every spending line in their official annual budgetary communications. *Beijing is often blamed for a budgetary opacity that few major military powers entirely avoid; the difference is not always one of nature, but often one of degree.*

This honest recognition of the universal limit of **official budgetary communications** does not excuse the specific Chinese opacity, but it calls for a more rigorous methodological comparison among the world's various military powers rather than an isolated and specifically suspicious treatment of the single Chinese case documented in this column.

## The weight of history in reading this file

### A regional memory that weighs on every new announcement

Every new Chinese budgetary announcement fits within a **regional memory** made of decades of documented territorial **tensions**, notably around Scarborough and the Taiwan Strait, a memory that inevitably shapes how **regional partners** interpret every new budgetary figure published by Beijing, regardless of its real scale.

This **regional memory**, documented through numerous unresolved territorial precedents, partly explains why Western **strategic vigilance** does not weaken even in the face of a Chinese budget slowdown that could, taken in isolation, seem reassuring to a hurried observer without this regional historical memory.

### What this memory teaches about necessary caution

This regional historical memory, made of unkept promises and international rulings left without concrete follow-up, teaches a **necessary caution** in the face of any signal that might seem reassuring coming from Beijing, a **caution** that stems not from gratuitous hostility but from the documented experience accumulated by regional partners over the decades. *A region that has already seen favorable rulings go unenforced for ten years no longer has the luxury of being easily reassured by a single annual budgetary percentage.*

It is this historically grounded caution, rather than simple ideological mistrust, that in my view explains the continuity of **regional vigilance** documented through the Balikatan 2026 exercise, independent of China's budget slowdown for 2026.

## What Manila takes from this regional file

### A diplomatic sanction added to the picture

On June 11, 2026, Beijing barred Philippine Defense Minister **Gilberto Teodoro** from entering its territory, according to **Al Jazeera**, a decision that came amid a **context** of growing tensions in the South China Sea documented by several concordant sources for 2026. This diplomatic sanction, added to the broader picture of this file, illustrates a **Chinese firmness** that does not waver even as the overall military budget slows on a strictly accounting level.

This combination of a budget slowdown and sustained diplomatic **firmness** illustrates, in my view, the need to read every Chinese signal as a **whole**, rather than relying in isolation on the single annual budgetary figure to judge Beijing's overall strategic trajectory toward its regional neighbors.

### Why this sanction matters more than it appears

This entry ban, even symbolic in appearance, sends a clear signal to the **Philippines' regional partners**: Chinese firmness on sensitive territorial files is not relaxing, whatever the evolution of the annual military budgetary percentage documented by Reuters for 2026. *One can refuse entry to a minister while slowing, on paper, the growth of one's own military budget; the two gestures do not contradict each other, they complement each other.*

It is this combined reading, which links documented diplomatic sanctions with official budgetary figures, that allows for a better grasp of the real **balances of power** at work in this contested region in the months ahead.

## What this column refuses to conclude too quickly

### Resisting the temptation of a definitive conclusion

Facing this whole set of cross-checked elements — a slowed budget, commissioned destroyers, maintained diplomatic sanctions, mobilized regional exercises — this column refuses the temptation of a **definitive conclusion** that would settle, one way or another, Beijing's ultimate intentions for the years ahead in this contested region.

This resistance to a hasty **conclusion**, adopted as a deliberate editorial choice, reflects, in my view, the only intellectually honest posture when facing a file as cross-cutting and as opaque as the **military budget** of a major regional power engaged on several simultaneous fronts documented here.

### What I will keep in mind for the rest of this file

What I will keep in mind, for the rest of this file, is the need to keep cross-referencing **budgetary figures**, **operational facts**, and **diplomatic signals** rather than favoring a single type of data at the expense of the others, a demanding method but, in my view, the only one that allows for a faithful reading of the real balances of power documented in this Chinese file. *A budget, a destroyer, a diplomatic **sanction**: taken separately, each tells little; together, they tell a trajectory.*

It is this cross-referenced method that this column will continue to apply, with the same demand for **documented caution**, to every new development in this **regional** file expected to evolve in the months and years following 2026.

## Conclusion

China's 2026 military budget, set at **$282 billion** according to Reuters with growth of 6.9% described as the weakest since 2021, does not reveal a strategic easing by Beijing. It reveals instead a **hierarchy of priorities**: naval modernization, embodied by the Dongguan and the Anqing according to the IDSA, continues to advance, while other budgetary lines apparently see a more pronounced slowdown.

This column has not sought to settle the debate between alarmism and complacency, but to precisely document this coexistence, the only honest way to handle a file as opaque as the military budget of a major regional power. *A percentage reassures; a destroyer's name warns; and it may be by holding both together, favoring neither, that one comes closest to the truth of this file.*

**By Maxime Marquette, columnist**

## Columnist's transparency note

### Editorial stance

I am not a journalist but a **columnist and analyst**. My expertise lies in observing and analysing the geopolitical, economic and strategic dynamics that shape our world. My work is to take political strategies apart, to understand global economic movements, to put the decisions of international actors in context and to offer analytical perspectives on the changes that are redefining our societies.

I do not claim the cold objectivity of traditional journalism, which stops at reporting facts. **I claim analytical clarity**, rigorous interpretation and a deep understanding of the complex issues that concern us all. My role is to give meaning to the facts, to place them in their historical and strategic context, and to offer a critical reading of events.

### Method and sources

This text keeps the basic distinction between **verified facts and interpretive analysis**. The rule never changes: a factual claim is published only when a verifiable source supports it, and the sources this article actually used are listed under **Sources**, never here.

**Primary source families** used by the publication, when the story has them: official statements from governments and international institutions, public statements by political leaders, reports from intergovernmental organisations, dispatches from recognised international news agencies.

**Secondary source families**: specialised publications, internationally recognised news media, analyses from established research institutions, reports from industry organisations.

When an article cites statistical, economic or geopolitical data, it comes from the institutions that produce it (intergovernmental organisations, central banks, national statistics offices), and the exact institution is named under **Sources**.

### Nature of the analysis

The analyses, interpretations and perspectives in the analytical sections of this article are a **critical, contextual synthesis** based on the information available, the trends observed and the expert comments cited in the sources consulted.

My role is to interpret these facts, to set them in the context of today's geopolitical and economic dynamics, and to give them a coherent meaning within the larger story of the changes shaping our time. These analyses reflect expertise built through continuous observation of international affairs and an understanding of the strategic mechanisms that drive global actors.

This article describes a documented state of affairs on its publication date, not a prediction: later developments may shift its outlook. No update is promised in advance; when an article is corrected or completed, the change is dated in the text.

## Sources

### Primary sources

- [Reuters — Chinese defense budget 2026, March 10, 2026](https://www.reuters.com/world/asia-pacific/china-lifts-military-budget-modernize-weapons-defence-technology-2026-03-10/)

- [Reuters — Context of technological tensions, April 3, 2026](https://www.reuters.com/world/china/us-targets-chinese-chipmaking-with-proposed-export-restrictions-asml-others-2026-04-03/)

### Secondary sources

- [IDSA — Chinese military digest, commissioning of the Dongguan and the Anqing, March 2026](https://idsa.in/wp-content/uploads/2024/07/China-Military-Digest-March-2026.pdf)

- [Modern Diplomacy — Context of the chip war, July 12, 2026](https://moderndiplomacy.eu/2026/07/12/starved-of-silicon-china-built-its-own/)

- [Asialink — Regional response via Balikatan 2026](https://asialink.unimelb.edu.au/diplomacy/insights/between-talks-and-tensions-why-south-china-sea-wont-stabilise-2026/)

- [Straits Times — Regional context of the Taiwan Strait, June 15, 2026](https://www.straitstimes.com/asia/east-asia/xi-swaps-fighter-jets-for-diplomatic-hardball-to-squeeze-taiwan)

- [Al Jazeera — Entry ban against Philippine minister Gilberto Teodoro, June 11, 2026](https://www.aljazeera.com/news/2026/6/11/china-bars-philippines-defence-chief-as-south-china-sea-spat-sails-onwards)

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Source: Maxime Marquette, MadMax. When citing, name the author and link https://mad-max.co/en/article/column-what-china-s-slowing-military-budget-reveals-about-the-balance-of-power