So what do you think is more important that 95% of the GDP should go towards?
What is more important than national security?
China's nuclear arsenal provides it's security now. The US thinks that the Chinese can destroy it and won't mess with it.
You think that if the Chinese increase military spending to 5% of GDP then China will be more secure? You are wrong as then the Japanese and Indians would also spend more to compensate. This would have the affect of hurting the civilian economy of China without any increase in relative strength.