Military expenditure the Asia-Pacific (APAC) region increased sharply in the last year, reaching a total of $681bn - an increase of 8.1% year on year and the largest annual expansion in military spending since 2009, according to data from the Stockholm International Peace Research Institute (SIPRI), Asia Pacific Defence Reporter (APDR) writes. The scale of the increase highlights ongoing regional security concerns, particularly surrounding China’s military expansion and daily threats against Taiwan.

As the world’s second-largest military spender, China increased its defence outlays by a reported 7.4% to $336bn in all through 2025. In doing so it marked the 31st consecutive year of growth. The rise comes as Beijing continues to push an expansion and modernisation of the People’s Liberation Army across its air, naval and missile capabilities. This is in spite of a renewed anti-corruption campaign targeting military procurement processes and the removal of a number of senior military officers by President Xi Jinping in recent months.

The expansion of China’s military capacity has naturally been closely watched across the region, particularly on the back of its increasingly aggressive posture towards Taiwan. Regular large-scale Chinese military exercises in the waters and skies around the island by PLA air and naval forces are intended to intimidate Taipei and have heightened concerns to some degree that things could escalate further. Analysts in Asia have long seen Taiwan as the likeliest potential flashpoint in regional security dynamics, with China maintaining its claim that reunification is an unavoidable eventuality.

Taiwan meanwhile, responded by increasing defence spending by 14% to $18.2bn recently, a number equivalent to 2.1% of its GDP, the highest annual rise since at least 1988 the APDR report states. The increase is to help support the nation’s deterrence capabilities amid daily military pressure from Beijing which includes incursions by Chinese aircraft into Taiwan’s air defence identification zone and sustained maritime activity in the Taiwan Strait and at times waters east of the main island of Taiwan.

Japan has also continued its military spending, raising outlays by 9.7% to $62.2bn, a figure equal to 1.4% of GDP and the highest share since the late 1950s just after the post-WWII US occupation of the country ended. Tokyo has accelerated its defence build-up to counter increased threats related to China’s military growth as well as North Korea’s missile programme. Efforts to expand its long-range strike capabilities in conjunction with US forces stationed in the country will also benefit.

Across the wider APAC region, a number of other nations are also increasing defence budgets. These include Australia and the Philippines; again the result of longstanding regional tensions related to China and also growing uncertainty over US security commitments.

India too, as the world’s fifth-largest military spender in 2025, increased defence spending by almost 9% to just over $92bn – a reflection of its continued competition with China in India’s northern border regions. In turn, Pakistan added to its military expenditure with an increase of 11% to $11.9bn.