Commentary China announced on March 5 that it would increase its defense budget by 7.1 percent in 2022, to 1.45 trillion yuan ($230.16 billion). This is Beijing’s largest annual increase in military expenditures in three years. Chinese defense spending increased by 6.8 percent in 2021 and 6.6 percent in 2020. The last time China increased its defense budget by more than 7 percent was 2019, when it rose 7.5 percent. What should we make of a 7.1 percent increase in Chinese military spending? On the one hand, Chinese defense spending has increased annually since the mid-1990s—that is, for over 25 years. In 1997, Chinese military expenditures amounted to only $10 billion, which was roughly on par with Taiwan and significantly lower than the defense budget of Japan or South Korea. Starting around the late 1990s, however, China began to experience double-digit real growth (that is, after taking inflation into account) in …