Finance

Hegseth urges allied defence spending boost despite praising US-China ties

US Defence Secretary Hegseth lauds improved bilateral relations with China while simultaneously pressing allied nations to raise defence budgets, citing a military build-up by Beijing.

Author
Owen Mercer
Markets and Finance Editor
Published
Draft
Source: Financial Times · original
Hegseth lauds better US ties with China
Pentagon chief calls for increased military expenditure to counter Beijing’s build-up, even as diplomatic relations strengthen

US Defence Secretary Hegseth has publicly praised the strengthening of diplomatic relations with China, marking a shift in tone as the United States engages in high-level talks with Beijing. Despite this positive assessment of the bilateral relationship, Hegseth continues to urge allied nations to increase their defence expenditure to counter what he describes as a military build-up by the Chinese government.

The comments come against the backdrop of a significant diplomatic event, with US President Donald Trump arriving in Beijing for a two-day summit with Chinese President Xi Jinping. This marks the first visit by an American president to China since 2017, underscoring the strategic importance of the current engagement between the two global powers.

The summit agenda is focused on critical areas including trade, artificial intelligence, and the Strait of Hormuz. The diplomatic outreach is accompanied by a delegation of major technology executives, including Elon Musk, Tim Cook, and Jensen Huang, highlighting the intersection of geopolitical stability and commercial interests.

Market participants have reacted positively to the ongoing summit and related approvals. On Thursday, US stock markets rose as the summit began, with the Dow Jones Industrial Average gaining 0.8%, the S&P 500 rising 0.3%, and the Nasdaq Composite climbing 0.2%. Nvidia shares also surged more than 2% following US approval for chip sales.

While the diplomatic and market environments appear favourable, Hegseth’s stance remains focused on military preparedness. He maintains that allied nations must boost their defence spending to address the perceived military expansion by Beijing, separating the current diplomatic thaw from strategic security concerns.

The specific metrics or evidence Hegseth is using to define the "military build-up" are not detailed in the source material. Furthermore, the extent to which the "strengthening of relations" cited by Hegseth correlates with tangible policy shifts or agreements reached during the Trump-Xi summit is not explicitly confirmed.

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