Making Sense of China’s Government Budget

China released its 2026 government budget projecting RMB 24.1 trillion in revenue and RMB 30 trillion in expenditure, resulting in an official deficit of RMB 5.9 trillion. Defense spending was set at RMB 1.9 trillion with a 7 percent increase, while actual military spending is estimated to be 30-40 percent higher than official figures. The budget reflects China's fiscal situation worsening despite spending increases in defense, foreign affairs, science, technology, and social welfare.