China Plans to Raise 2026 Defense Spending by 7% | China in Focus

Welcome to China In Focus, I'm Tiffany Meyer. Our top story. China's top annual political meeting begins Thursday under tight security in Beijing. The Chinese regime aims to raise defense spending by 7 percent amid growing geopolitical tensions. Mandating language, incentivizing cross-ethnic marriage, and rewriting the rules of faith, China's new law even requires parents to guide their children toward the Communist Party, raising alarms among human rights groups. The Pentagon says it's laser-focused on the Indo-Pacific, even as the Middle East operation continues. But how long and how deep will U.S. forces stay involved, and what does it mean for countering China? A former Marine colonel weighs in. It looks as if America is stuck there or has to leave without having finished the job. And at that point, you might find that Xi Jinping says, well, he's got an opportunity with Taiwan. How does the war in Iran change dynamics with China? David Stilwell weighs in on whether or not President Trump needs to visit China. I don't see the need to go to China, especially with this thing going right now. The last thing the president needs to do is to now be distracted and go offline in Beijing. And counterfeit goods flooding global markets, with most of it coming from China. We highlight what a new U.S. report says about the scale of the problem and the risks to consumers. China's most important annual political meeting kicks off Thursday with heavy security around Tiananmen Square in Beijing. This meeting is called a parliament meeting, but it works very differently from a democratic legislature. The so-called lawmakers are not elected by the people. Instead, they are appointed by the Communist Party. For decades, China's Congress has never rejected a single government proposal. As usual, this year's meetings are being accompanied by police vehicles and soldiers around the Thousands of delegates have arrived in Beijing this week for the meetings. Officials are expected to unveil this year's economic targets and five-year policy priorities. These include ambitions to upgrade China's industrial base, close the technology gap with the U.S. and boost consumer demand. At the opening session, Chinese Premier Li Qiang outlined plans for the world's second largest economy, highlighting two key figures. He announced a 7 percent increase in the national defense budget, slightly lower than last year. The figure would be even higher if investments in civil-military dual-use industries were taken into account. For comparison, South Korea raised its defense spending by 7.5 percent, slightly higher than China. And for both the United States and Japan, the increase is about 4.8 percent each. Back to the meeting in Beijing. The second major figure released Thursday is the economic growth target for the year. It's set at 4.5 to 5 percent, slightly lower than last year's 5 percent. Worth noting, experts are often skeptical about figures issued by Beijing. For example, last year, China's official growth target was 5 percent. However, some think tank estimates put actual growth below 3 percent. China's annual political season is underway in Beijing, and a controversial new bill is hitting the floor of the National People's Congress, raising major red flags for human rights groups and Taiwan. It's called the Ethnic Unity Promotion Law. On the surface, it sounds like a push for harmony. But a closer look shows the state reaching deep into the private lives of families. Now a bit of context, China's National People's Congress is not like the one in the U.S. The representatives aren't elected by the people. They answer directly to the Chinese Communist Party. The draft law is expected to pass. Here are the key takeaways. It mandates the use of Mandarin Chinese and simplified characters in ethnic regions. It even encourages parents to stop using their native dialects at home. This follows years of reports that authorities in Tibet, Xinjiang and Inner Mongolia have already been slashing local language education. But it goes further. The law requires parents to quote guide their children to identify with the Chinese Communist Party. The draft also pushes for so-called ethnic integration, moving minority groups into Han Chinese areas and vice versa. Authorities are incentivizing to reshape the population by offering benefits like better housing and good jobs to families who marry across ethnic lines. And then there's religion. The bill demands that all faiths follow the direction of synthesization of religion, which means that believers must put the party above their god. Analysts say we are witnessing a massive paradigm shift in how Beijing handles its diverse population. China has 56 ethnic groups. Before Xi Jinping took power, the ethnic policy was roughly autonomous, where different cultures, traditions and languages were recognized. But under Xi, he has been pushing a one-China identity. He wants every citizen to see themselves as part of the Chinese nation first, and their ethnic group second. This law will put that ideology into a legal mandate. The group called the Human Rights Watch is already sounding the alarm. They're warning that Beijing will use this law as a weapon to crush dissent and force minority groups to assimilate. And the ripples of this law are reaching far beyond mainland China. The draft explicitly says it's the legal duty of citizens in Hong Kong and Macau to uphold this ethnic unity. It also takes aim at Taiwan, calling for deepened integration to make people on the island feel more Chinese. Breaking these rules could lead to punishment. Observers call this a new front in Beijing's legal warfare against Taiwan. One of Taiwan's officials responded, saying the wording is incredibly vague. It gives Beijing a lot of room to interpret the law as it sees fit, and the number of people it could affect is huge. What will Iran's new leadership look like, and could the country ever become friendly toward Israel and the United States? For now, the answers remain uncertain. But if the U.S.-Israel operation drags on, how will it impact the Pentagon's planning, especially for countering China in the Indo-Pacific? NTD's Flora Hua spoke with retired Marine Colonel Grant Newsham, a senior fellow at The Pentagon's top policy official said the Pentagon is laser-focused on deterring China in the Indo-Pacific, responding to concerns about whether the military operation in Iran could affect U.S. assets in Asia. So how do you read this, and are you concerned the war could distract U.S. forces from countering the CCP? Well, I'm not worried yet. The U.S. military is still big enough, still has the capabilities to cover more than one area of the globe. But one concern that you have is that if the war in Iran, say, drags on, say if casualties get much higher, and particularly if the Iranian regime does not step down, does not end, at that point it starts to become more difficult. So if the war drags on, in your view, what moves could China and Russia, especially China, take? And if it does drag on, how would it affect the U.S. strategic focus on China? Well, if the war continues, and it looks like it isn't making much progress, then I think you're going to find huge domestic problems, politically, for the United States, for Donald Trump and for President Trump in particular. And that limits his freedom of movement, both to continue with Iran, continue with the Middle East, but also to deal with, say, an outbreak of fighting or some sort of conflict, say, over Taiwan, over the Philippines, Japan's southern islands, caused by China, of course. It just makes it harder to respond to that. But they're waiting to see how the war goes, how it ends, and if the Americans and their partners prevail, in which case that would cause the Chinese to slow down. Their objectives won't change, but it will cause them to pull back and not move ahead with whatever it is they're thinking. But if it looks like the Americans and the free world have gotten stuck in Iran, that the regime still is in place, at that point I think you could find the Chinese seeing Taiwan as a very juicy target. And maybe that the time is right, particularly if Donald Trump, President Trump, is handcuffed by domestic political problems. You may find China say, well, we'll never have a better opportunity than this, so let's move. Some analysts say this military operation sends a strong signal to Beijing that Washington and its allies can know exactly where those high-level meetings within those regimes are and where they are, who attend those meetings, and you know that much intelligence. And what kind of signals do you think this operation sends to high-level officials within the CCP and the Chinese military? With China, they probably assume that we have good intelligence and can find their top leaders if we want to. But I think the bigger message that's being sent to the Chinese and that they're learning is that the Americans have a very effective military. We've pulled off a very impressive operation a long way from the United States. We're the only country that can project power like this. It's been done, as noted, going through Chinese air defenses that the Iranians bought and other weaponry and hardware that the Chinese provided to Iran. So the capability of the U.S. military is on display, syncing that Iranian destroyer just yesterday, or the day before, is another message that gets sent. Ran Yousham, thank you so much for your time. Well, thanks for having me. I appreciate it. To discuss Iran's oil impact on China, President Trump's planned visit to Beijing and the major meetings taking place there, we spoke with retired Air Force Brigadier General David Stilwell. He has served as U.S. Defense Attaché in Beijing and as Assistant Secretary of State. Now, many reports have noted that about 80 to 90 percent of Iran's oil, its sanctioned oil, was going to China at very steep discounts. Why do you think China's not willing to, you know, support this militarily, if that is a lot of economic benefit, if you will? Or is it more of a benefit for Iran than it is for China? Oh, definitely a benefit for the PRC, whose oil starved. And if you think about it, the energy coming out of the Arabian Gulf was supposed to go to Gwadar at this point, the port in Pakistan, and then up through the China-Pakistan Economic Corridor into Kashgar, bypassing the Straits of Malacca and the South China Sea. Well, with the Iranians closing the Straits of Hormuz, they're effectively, you know, coming through there. Whether or not we cut off Iranian oil, the Iranians have done it themselves. My guess is there's some pretty angry phone calls going between Beijing and Iran right now to knock off the disruption of energy movement from the region. That's probably one productive thing that the Chinese could be doing right now, is leaning on their Iranian partners and telling them to stand down. And looking ahead, while it's not exactly confirmed, it does seem that there is going to be that April trip between President Trump and China's seat in Beijing, depending on, you know, if that happens, given everything that's happened since their first phone call, right, about this. How do you think that will play out? Does this give the president a lot more leverage? Because just a couple of weeks ago, all the headlines were saying, oh, the Supreme Court ruling on tariffs is kind of weakening Trump's hand when it comes to China. How do you see his stance now? Well, definitely a stronger position than prior to Venezuela and Iraq. I think, yeah, if you look at the timing, and I don't want to, you know, swear to this, but the initial request, I think, for the meeting probably came from the U.S. side, and it was an interest in resuming rare earth elements and magnets exports. The PRC is using strategically to choke, to make it more difficult for the U.S. to manufacture everything, to include high-end weapons. So the initial impetus for the trip to China was probably on the U.S. side, would be my guess, to, again, get the PRC to knock off their embargo. PRC did what it always did. They said they were going to do something. They probably released a little bit. And if you notice, there's reports in the news yesterday that, again, rare earths are not flowing at the rate we thought they were. So you give that, I mean, you don't want to mess with President Trump. Again, he's not going to redo talking points. He's going to probably do something. So if I was a PRC, this was probably a chance to go back to the agreement on rare earths, to make the conditions for a trip to China conducive, to, you know, grow the relationship back to something that's less hostile. We just got that way because of the PRC, by the way. But I don't, personally, I don't see the need of going. I don't see the need to go to China, especially with this thing going right now. The last thing the president needs to do is to, you know, be distracted and go offline in Beijing. So if it was me, I would suggest just offering a gentle bouffant bien. It is not convenient at this time. No excuses, and just say maybe we can do it at a later time. And now it sent a great message to the PRC, basically, that we don't need you. Hopefully, the plan to get rare earths manufacturing and processing back on the step where it should have been starting in 2010 is moving forward. And eventually, we can just say, hey, your monopoly on these things doesn't matter anymore, and we're going to do what we want. So we won't be held over a barrel anymore. We will act in our own interests. It stinks being in this position where you actually be holding to the Chinese side. That is one of very few times that I can remember in history where we found ourselves in this position. And with the two sessions happening, what are you watching for? There are some, you know, especially on the economic side, are trying to see if, you know, the GDP growth or consumer growth sentiment is rising. Perhaps not. China's economy has been struggling. But what are you watching to come out of the two sessions? More firings, 19 gone, what, two weeks ago, and nine of those were PLA, three more this week. I just saw another report that two more PLAs got fired. It's hard to keep track. You need a scorecard for this stuff. But there is a fairly significant message here, and that confidence in the PLA isn't where it should be. And that, do you remember, I think it was in the fall, maybe during the Party Congress or one of those events, there were like entire rows of empty seats in the meeting. I think you're going to see more of that this time, too. And then how far did it go? There's exactly two people on the Central Military Command right now, when there used to be nine or seven. But yeah, who knows where this is going? In fact, the next couple of days, these two meetings are going to be very informative as to exactly how strong Xi Jinping's feeling, how much control he exerts in this party. And again, I think it bears watching, and I know you guys will stay on top of it. Does that make Xi Jinping specifically more dangerous, though, if he's surrounded by no one now and feels like he's surrounded by people he can't trust? The jury's out on that one. Is it a factor of the emperor hating to hear that he has no clothes? Are people willing to tell him he has no clothes? Is he sensing resistance? Or is this more factional stuff that's going on where he senses a threat, not just from his own people, but from the outside, from the Jiang Zemin Shanghai group, or the Shanxi group, or the China Youth League, or whatever, the Communist Youth League? I don't know. And again, we'll hear more in the next couple of weeks. I don't want to go out on a limb and speculate, but all we do know is it's uncomfortable in Beijing right now. Definitely a lot to watch for here. General Stilwell, as always, thank you so much for joining us. Thank you. Coming up, is this war really just about Iran? China analysts say it's more about the Chinese Communist regime. I think it's very important to prevail and make sure that Iran becomes a free society. We do that. We certainly put China in a very difficult position. Counterfeit goods flooding global markets, with most of it coming from China. We highlight what a new U.S. report says about the scale of the problem and the risks to consumers. And a move triggered by trade tensions between the U.S. and China. American chip giant Nvidia has stopped production of its H200 chips that were bound for the Chinese market. More on that after the break. Here on China In Focus. Welcome back to China In Focus. I'm Tiffany Meyer. China analysts are saying President Trump's involvement in strikes on Iran has a lot to with the Chinese regime's influence in the region and elsewhere. NTD's Arlene Richards finds out more. Because we do something in one part of the world, it affects other parts of the world. Gordon Chang, China commentator and author of Plan Red, China's Project to Destroy America, says the recent U.S.-Israeli strike on Iran is a message to the Chinese Communist Party. What does a strike on Iran have to do with China? In an interview with Epoch TV's American Thought Leaders, Chang said that Trump's national security strategy hardly mentions China, but China is still top of mind. For instance, Chang said Trump's national security strategy says the U.S. won't allow hostile powers to encroach on America's free trade, like in the South China Sea. Well, there's only one country that fits that description, that has that ambition, and has that power. He said it's China. I think it's very important to prevail and make sure that Iran becomes a free society. We do that. We certainly put China in a very difficult position. Some reports say Beijing intends to use chaos in the Middle East to distract the United States from the Indo-Pacific, in particular, Taiwan. Chang says decisive action in the Middle East can hit Beijing where it hurts. Beijing has been courting governments and military establishments from Central Asia to Southeast Asia to Africa. The regime helped Iran build its massive missile arsenal. Chinese firms supplied guidance systems. They supplied precision components for really decades. And despite the heavy sanctions on Iran, the two partners have found ways to bypass the restrictions through loopholes. Zineb Reboa, a research fellow at the Hudson Institute, told CBS on Tuesday that the regime likes to play as the mediator, and they likely will not intervene in the strikes on Iran. They have been, in fact, very conflicted about what type of messaging they would send. I think that they made the calculus that the United States would never intervene to really make Iran less aggressive. It may have all started last May when Trump met with leaders of Saudi Arabia, Qatar and the United Arab Emirates. And what we have witnessed since then is the further reduction of Russian and Chinese influence there. Arlene Richards, NTD News. China remains the world's largest source of counterfeit goods. A new report Tuesday says fake products from the country make up the majority of items seized at American ports. Officials say the knockoffs range from luxury brands to toys and jewelry, and they're raising concerns about safety and intellectual property theft. According to the latest notorious markets list from the U.S. Trade Representative Office, China still dominates the global counterfeit market. Nearly 93% of the value of all fake goods seized by U.S. customs last fiscal year came from China. Authorities have intercepted several shipments in recent months, including more than $300,000 in counterfeit luxury items. In another case, customs officers seized a shipment of counterfeit toys worth over $775,000 in Virginia. The report also flags several Chinese e-commerce platforms as sites where counterfeit goods are widely sold. U.S. officials say intellectual property theft timed to the Chinese Communist Party have cost Americans up to $600 billion each year. And some of the stolen technology can help support Chinese military development. Investigators also warn the products themselves may be dangerous. A South Korean government study found that some counterfeit goods from China contain carcinogens at levels more than 900 times the safety limit. This substance has the potential to increase the risks of cancer. American chip giant NVIDIA has stopped production of its second most advanced artificial intelligence chips. People familiar with the matter told the Financial Times the move was triggered by U.S. export controls and China's own restrictions, which blocked sales. NVIDIA has reportedly stopped production of its second most advanced artificial intelligence chips, known as H200 chips, intended for the Chinese market. The Financial Times reported the update on Thursday, citing two people familiar with the situation. The report said the U.S. chipmaker has reallocated manufacturing capacity at chip contract maker TSMC away from making H200 chips to its next generation Vera Rubin hardware. NVIDIA and TSMC did not immediately respond to requests for comment. Last week, NVIDIA said it had received licenses from the U.S. government to ship small amounts of its H200 chips to customers in China. However, this move suggests NVIDIA does not expect any meaningful H200 sales in China in the near term. In January, U.S. President Donald Trump's administration gave a formal green light to China-bound sales of NVIDIA's H200 chips, but shipments remained stalled due to guardrails built into the process. For on-the-clock original news coverage, visit us at ntd.com or download our NTD app. Thanks for watching. See you tomorrow.