Despite Economic Recession, China's Defense Budget Increases Another 7%... Will the US Be Surpassed? [AK Radio]

China Increases Defense Budget by Over 7% for Four Consecutive Years
U.S. Focuses Military Power on Asia-Pacific Region

Despite severe economic recession and a youth unemployment rate reaching 15%, China has decided to increase its defense budget by 7.2% compared to last year. This continues the trend of raising defense spending by more than 7% annually for the past four years. In contrast, the United States announced that it will reduce its defense budget by 8% annually over the next five years starting this year. If this trend continues, there is a possibility that China's defense budget could surpass that of the U.S. around 2030, which is expected to bring significant changes to the international order.

The official reason given by the Chinese government for the increase in defense spending is related to the People's Liberation Army modernization project, which is being promoted in anticipation of the 100th anniversary of the founding of the armed forces in 2027. China emphasizes that this project is an essential undertaking that must continue regardless of economic conditions. The main purpose of the modernization project is described as building defensive capabilities to resist external invasions within mainland China and the East Asian region, with Taiwan being the key contentious area.

China considers Taiwan as part of its own territory and treats the Taiwanese government as a local regime. According to the Chinese government's logic, military exercises in the Taiwan Strait or operations encircling the entire island are regarded as defensive training to prevent external invasions. However, from the perspective of the Taiwanese government, these are serious military threats, causing international controversy.

China's goal is to build advanced capabilities in its army, navy, and air force to be able to confront U.S. forces stationed in Asia in the event of a localized conflict in the Taiwan Strait. With this 7% increase, China's defense budget is expected to reach $245 billion (approximately 353 trillion KRW). This is about six times South Korea's defense budget of 61 trillion KRW this year, raising concerns that China will possess the most powerful military force in Asia.

AP·Yonhap News

After U.S. Secretary of Defense Pete Hegseth announced plans to reduce the defense budget by 8% annually over the next five years, debates about the timing have arisen within the United States. Currently, the U.S. defense budget stands at around $850 billion, approximately 3.5 times larger than China's. On the surface, even if China's defense budget grows by 7% annually over the next five years, it would only reach about half of the U.S. defense budget.

However, most countries are skeptical about the official figures of China's defense budget. The U.S. Department of Defense estimates that China's actual defense spending is at least 1.5 to 2 times higher than the reported figures, and some academics argue it could be up to three times higher. If these estimates are accurate, maintaining a 7% annual growth rate could mean that by around 2030, China's real defense spending might reach or even surpass that of the U.S.

Seemingly aware of these concerns, the U.S. Department of Defense has announced plans to significantly cut budgets for European and Middle Eastern commands but not reduce the budget for the Asia-Pacific region at all. Especially recently, President Trump has shown a pro-Russian stance in the Ukraine-Russia war and has pursued peace negotiations, raising concerns that a similar approach might be taken regarding the China-Taiwan issue.

However, experts analyze that the strategic value of Ukraine and Taiwan is evaluated differently by the U.S. Ukraine is not a country within NATO's defense line, and the special strategic resources or advantages the U.S. can gain are relatively limited. Additionally, Russia is not considered a force that threatens the overall national security of the U.S.

On the other hand, Taiwan is an advanced semiconductor production base, and if it falls into the hands of hostile countries, the U.S. would suffer serious damage not only industrially but also in terms of security, as it depends on Taiwan for over 90% of military-use semiconductors. Therefore, Taiwan is regarded as a strategic stronghold that the U.S. cannot concede under any circumstances.

AP·Yonhap News

Moreover, unlike Russia, China is perceived as a real threat to the U.S. in terms of population, capital scale, economic power (second largest in the world), and rapidly growing military strength. China is currently seen as the most powerful competitor and potential adversary of the U.S. if not contained. Therefore, the Taiwan issue is judged to be a matter that the U.S. cannot easily concede or compromise on, unlike the Ukraine issue.

Despite the reduction in defense spending, the U.S. is showing movements to redeploy military forces stationed in Europe and the Middle East to the Asia region. This is a strategy to strengthen the containment of China, which has been pursued since the Biden administration but was delayed due to the Ukraine and Middle East wars. The Trump administration is accelerating the movement of U.S. forces to Asia as these two wars enter their final stages.

The U.S. government is preparing for the possibility that China might provoke a localized conflict or military provocation in Taiwan around 2027. Despite the defense budget cuts, it is expected that 60-80% of the U.S. total military power will be concentrated in the Asia region, which will likely increase the military pressure China feels.

This redeployment of U.S. forces is expected to escalate military tensions between the U.S. and China and have a significant impact on security on the Korean Peninsula. Especially since 2027 is just over two years away, the U.S. is likely to demand more participation and roles from Asian allies such as South Korea and Japan regarding regional defense strategies.

From South Korea's perspective, there is an increasing need to respond sensitively to changes in regional security related to China's Taiwan invasion scenarios. In particular, key issues of the Korea-U.S. alliance, such as the presence of U.S. forces in Korea and defense cost-sharing, may be readjusted amid these changes in the regional security framework. Going forward, South Korea is at a point where it must prepare strategic response measures to protect its national security interests amid rising military tensions between the U.S. and China.