China intends to boost defense spending by 7.2% in 2025, the same level for the third year in a row, it said Wednesday as the country continues to modernize its military amid its growing rivalry with the United States.

The 1.78 trillion yuan ($246 billion) budget, revealed at the annual session of China’s National People’s Congress, makes 2025 the 10th straight year to see a single-digit hike in the country’s defense spending.

China has continued to plow cash into an effort to forge a more powerful military, bolstering its missile and nuclear forces and building a massive navy that can project its power further from its shores.

While China has the world's second-largest military budget, this is dwarfed by the United States’ defense spending — nearly $850 billion this year. Still, the actual Chinese figure is likely much higher. In a report last year, the U.S. Defense Department estimated that defense spending was 40% to 90% more than publicly announced, equating to roughly $330 billion to $450 billion in 2024.

Chinese leader Xi Jinping, who has cemented his grip on power in recent years, has called for China to build a “world-class military” by 2027, when the Chinese People’s Liberation Army marks 100 years of its founding.

On Wednesday, Chinese Premier Li Qiang vowed "all-out efforts” to meet the 2027 goal.

"We will step up military training and combat readiness so as to firmly safeguard China’s sovereignty, security and development interests,” Li was quoted as saying as he delivered an annual government work report in Beijing.

Although the spending is partially a reflection of China’s economic growth, the military modernization also points to Beijing’s regional and global ambitions, particularly amid China’s territorial disputes with several of its neighbors — including Japan — and its intensifying strategic rivalry with the U.S.

Another key focus of the Asian powerhouse’s military modernization is self-ruled Taiwan, which Beijing views as a renegade province that must be united with the mainland, by force if necessary.

In his remarks, Li said China would "firmly advance" the push for "reunification" with the island democracy while opposing external interference.

Beijing’s defense budget announcement comes after the Pentagon last month proposed cutting 8% of its budget in each of the next five years — amounting to some $50 billion each year — but prioritized 17 areas ranging from drones to submarines, while also boosting funding for the U.S. military’s Indo-Pacific Command.

It also comes in the middle of Japan’s five-year, ¥43 trillion (roughly $315 billion when it was announced in 2022) spending plan as Tokyo aims to hit outlays equal to 2% of gross domestic product by fiscal 2027.