The annual defence expenditure of China is anticipated to reach $247.5bn by 2021, according to a report by Strategic Defence Intelligence (SDI). The country’s allocation for defence constitutes 32.8% of China’s total budget and is forecast to reach $159bn in 2017.

Titled ‘Future of the Chinese Defence Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2021‘, the report forecasts the future trends of defence industry in China, the world’s second biggest military spender after the US. It anticipates that the budgetary increase will be driven by the nation’s focus on improving its military units and technical capabilities.

"The budgetary increase will be driven by the nation’s focus on improving its military units and technical capabilities."

Sharing its borders with 14 nations means China will have be ready to deal with territorial conflicts, one of the major factors driving the incremental defence budget, according to the report.

Spending on homeland security is also expected to rise in response to increased organised crime and border conflicts with neighbouring countries, as well as a greater focus on building indigenous capabilities,

China’s current major defence programmes include fighter jets, multi-role aircraft, military infrastructure, surface-to-air missiles, cyber-security and naval surface combatants.

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