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KEY TAKEAWAYS
- The PRC's long-term goal is to create an entirely self-reliant defense-industrial sector—fused with a strong civilian industrial and technology sector—that can meet the PLA's needs for modern military capabilities.
- The PRC has mobilized vast resources in support of its defense modernization, including through its MCF Development Strategy, as well as espionage activities to acquire sensitive, dual-use, and military-grade equipment. The PRC has substantially reorganized its defense-industrial sector to improve weapon system research, development, acquisition, testing, evaluation, and production.
- In 2022, the PRC announced its official annual military budget would increase by 7.1 percent, continuing more than 20 years of annual defense spending increases and sustaining its position as the second-largest military spender in the world. The PRC's published military budget omits several major categories of expenditures and its actual military-related spending is significantly higher than what it states in its official budget.
In 2022, China's defense budget marginally increased from $229 billion. According to a PRC "work report," the new defense budget aligned with PRC military goals associated with its 2027 and 2035 military modernization program. PRC state media reported that the part of the defense budget increase over the prior year focused on modernizing the PLA's training with realistic simulation and use of virtual reality; accelerating improvements in logistics capabilities, defense science, and technology; and enhancing the military's strategic capacities.
China is continuing to reorganize its defense, science, and commercial industries to ensure PLA access to the resources, technologies, and expertise required to militarily surpass the United States and develop capabilities for complex future military contingencies. China's efforts include developing and incorporating military-AI and other emerging disruptive technologies (EDT) to build an "intelligentized" force sufficiently equipped with high-tech weapons and advanced communications and information technologies to wage and win dynamic wars. While China's MCF strategy supports acquisition of foreign materiel, technology, and expertise through overt and illicit means, China is also accelerating efforts to build domestic capacity in these areas and reduce its vulnerabilities to foreign supply chokepoints.
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OFFICE OF THE SECRETARY OF DEFENSE
Annual Report to Congress: Military and Security Developments Involving the People's Republic of China
