Its hard to know exactly what the PLA spends its money on. Though the CCP releases its annual defense budget, it does no release the specifics of that budget. In 2021, they planned to spend $252 billion on defense. Compared with the US budget of $752.9 billion it may seem small, but that is still second highest amount of defense spending in the world.
To bring the conversation into relative terms, the US spends around 3.7% of its annual GDP on defense and security. China spends around 1.7% of its annual GDP on these. Lucie Beraud-Sudreau, director of the military and arms production program at the Stockholm International Peace Research Institute (SIPRI), says that 1.7% has been "relatively consistent" for the past 26 years. She says based on a 2019 white paper and other Chinese language sources she has studied, China spends about 31% of the military budget on personnel and 41% on equipment and research and development. It is hard to know these numbers exactly due to the lack of transparency in their military budget. We do not know how much of the personnel budget goes to military or their police/security forces. The science and technology spending is even murkier because of the mixing of dual use technologies and public-private venture expenditures.
What is the purpose of China spending all of this money? According to National Party Congress spokesman Zhang Yesui, it is to safeguard national sovereignty, securing development needs, fulfilling international responsibilities, and meeting the needs of military reforms. These can be roughly translated to some of the top issues for the CCP today including Taiwan and the South China Sea disputes, securing oil for China's manufacturing and energy needs, growing China's presence on international stage as a responsible actor and great power, and the People's Liberation Army's (PLA) desire to adapt to "informationized warfare."
In regard to these interests, the PLA continues to move away from the traditional "Big-army" mentality and is putting more emphasis on naval operations. The PLA Navy (PLAN) continues to grow in ship count and tonnage. Its transition from a brown water navy to a blue water navy is a key step to securing China's interests. This means improving it's power projection capabilities and maritime joint operations. The PLA Air Force (PLAAF) is also improving capabilities with an aim to transition from territorial air defense to more aggressive operations.
While the defense budget may not tell us everything China is spending money on, we can use its general size, proportions, and the comments around it to give us a better sense of what long term plans may include. It will be crucial for US policymakers and military leaders to keep a close on this budget in years to come.