Budget Slowdown and Rectification Storm: Contradictory Signals in the PLA's Modernization Process

In March 2026, China's announced defense budget and high-level personnel changes in the military sent two seemingly contradictory signals: on one hand, the growth rate of the defense budget has slowed to its lowest level since 2021; on the other hand, the campaign against senior PLA generals is still deepening. These two seemingly different trajectories actually reflect the underlying logic of military modernization under Xi Jinping's leadership—reshaping the military command structure through political purges under resource constraints, prioritizing the absolute control of the Party over the military.

The draft defense budget submitted to the National People's Congress for review in early March 2026 shows that the central government's defense spending is 1.91 trillion yuan (approximately $277 billion), an increase of 7% year-on-year. Although this growth rate continues the trend of the past two decades, it has dropped to the lowest point since 2021. Considering the downward pressure on China's economy in 2026 and the burden of local government debt, the relative restraint of the defense budget seems to align with macroeconomic realities. However, behind this figure lies a more complex prioritization: under limited fiscal resources, the PLA's modernization focus is shifting from quantity expansion to quality improvement and technological breakthroughs, particularly in emerging fields such as artificial intelligence, cyber warfare, and long-range precision strike capabilities.

In stark contrast to the slowing budget growth, the campaign against senior PLA officials is accelerating. On February 26, the Standing Committee of the National People's Congress expelled 19 representatives in one go, nine of whom were from the PLA system. This follows the expulsion of Zhang Youxia, former vice chairman of the Central Military Commission, and Liu Zhenli, former chief of staff of the Joint Staff Department, on January 24, marking another large-scale high-level purge. Since 2022, over 100 PLA generals and above have been investigated or dismissed, involving all five theater commands, various military branches, and departments directly under the Central Military Commission. Based on approximately 176 positions at the combat zone level and above in the PLA, over 50% of senior officer positions have undergone personnel changes.

The scale and depth of this purge are rare in PLA history, and its impact extends far beyond individual corruption cases. Each purged senior general has directly or indirectly influenced the promotion and appointment of at least hundreds of junior officers during their decades-long military careers. Therefore, the purge involving over 100 senior generals will inevitably affect tens of thousands of mid- and junior-level officers, causing systemic shocks to the PLA's command structure. More notably, this purge is particularly concentrated in the Western Theater Command—responsible for the critical areas of India and Central Asia. At least six senior generals who previously served in the Western Theater Command or the Xinjiang and Tibet Military Districts have been dismissed, including former Western Theater Commander He Weidong and Deputy Commander Xu Qiling. This phenomenon strongly suggests that the PLA's performance in the 2020 Galwan Valley conflict may not have been as successful as officially portrayed, and there is serious dissatisfaction from the central leadership regarding the operational capabilities and command decisions of the Western Theater Command.

From a governance perspective, Xi Jinping's purge has transcended mere anti-corruption efforts, transforming into a comprehensive political filtering and power restructuring. During the Deng Xiaoping era, the frequent rotation of senior PLA generals was a systemic arrangement to prevent local warlordism, but this mechanism gradually loosened during Hu Jintao's era, leading to the establishment of vast corruption networks and patronage systems by figures like Xu Caihou and Guo Boxiong. Xi Jinping faces a military officer corps with questionable loyalty, rife with internal factions, and potentially infiltrated by foreign intelligence agencies. In this context, large-scale purges are not only about punishing corruption but also about dismantling existing power networks, eliminating potential political threats, and ensuring absolute loyalty from the military.

However, this purge also exposes serious side effects. The Central Military Commission of the PLA currently has only one vice chairman, Zhang Shengmin, whose professional background is in political work rather than combat command. After the chief of staff and at least four deputy chiefs of staff of the Joint Staff Department were dismissed, actual power has further concentrated in the General Office of the Central Military Commission—an administrative body directly accountable to Xi Jinping but lacking combat expertise. This distortion of the command structure means that the PLA will find it difficult to effectively organize large-scale joint military operations in the short term. Although gray zone operations may continue, the ability to launch a full-scale offensive against Taiwan or other targets will be significantly constrained.

A deeper issue is that the frequent purges of officials appointed by Xi himself reveal systematic errors in his personnel decisions. Whether it is trusted aides like Zhang Youxia, who has followed Xi for many years, or theater commanders like He Weidong, they have been promoted to key positions without passing rigorous political scrutiny, only to be purged later for corruption or dereliction of duty. This pattern of improper appointments indicates that despite having a vast oversight system and political review mechanisms, Xi still lacks effective means of identifying and utilizing talent, relying more on ongoing deterrence and correction rather than proactive institutional arrangements. With no party elders able to constrain Xi's decision-making—Jiang Zemin has passed away, Hu Jintao has been publicly humiliated, Li Keqiang has died unexpectedly, and Wen Jiabao has been politically marginalized—this personalized power operation model may bring greater strategic risks.

For neighboring countries, especially India, the current internal turmoil within the PLA presents a rare strategic opportunity window. The large-scale personnel purges in the Western Theater Command, the paralysis of the command system, and the risk-averse mentality across the military mean that the PLA is unlikely to undertake large-scale military actions along the Indian border in the short term. India should take advantage of this period to accelerate border infrastructure development, enhance the combat capabilities of frontline troops, and prepare adequately for potential future conflicts. Historical experience shows that militaries often exhibit stronger combat effectiveness and higher discipline after a purge, but this requires years of rebuilding and adjustment. Once the PLA completes this process, its command structure will be more centralized, factional influence will be weakened, and politically reliable younger officers will occupy key positions, at which point its combat capabilities may significantly improve.

In the long run, the relative restraint of the 2026 defense budget may only be a temporary phenomenon. China is concentrating its limited resources on high-tech fields, including AI-driven command and control systems, hypersonic weapons, unmanned combat platforms, and cyber warfare capabilities. Although these investments will not immediately translate into military advantages, they will reshape the landscape of military competition between China and the U.S. in the next 5 to 10 years. Meanwhile, while the purge has weakened the PLA's command effectiveness in the short term, its goal is to establish a new type of military that is absolutely loyal, highly centralized, and technologically advanced. Xi clearly believes that the short-term chaos and decline in combat effectiveness are a necessary price to pay for long-term strategic objectives.

This strategic trade-off is particularly evident in the Taiwan Strait situation. In the past two weeks, the PLA's aerial activities around Taiwan have experienced an unprecedented pause, marking the longest period of calm since the Taiwan Ministry of National Defense began publicly releasing daily military activity data. Analysts have different interpretations of this: some believe it is related to U.S. military actions against Iran, with the PLA studying new tactics for modern warfare; others think it reflects the negative impact of the purge on routine military operations; and some view it as a political posture ahead of Trump's upcoming visit to China. Regardless of the true reason, this phenomenon confirms that the PLA is currently more inclined to exercise restraint, avoiding external military conflicts while internal restructuring is still incomplete.

Overall, the military modernization of China in 2026 presents a contradictory and complex picture: budget growth is slowing but technological investment is increasing, there are large-scale purges at the top but political control is strengthening, short-term combat capabilities are declining but long-term strategic goals are clear. For analysts observing Chinese military power, it is inaccurate to simply view the PLA as an expanding threat or as a force in chaos due to internal issues. The real challenge lies in understanding the political logic of this purge and its implications for future strategic behavior. Xi is engaged in a high-risk gamble: trading short-term chaos and uncertainty for a military that is absolutely loyal and highly modernized. Whether this gamble will succeed will gradually be revealed in the coming years.