China has the largest armed forces in the world by active-duty military. The size of each country’s armed forces is determined by their economy and population.
China, with the world’s largest army, will continue to reform its military to take advantage of technology where possible while remaining mostly foot-mobile for such contested territories as Taiwan and along the South China Sea coast.
I believe that any other answer does not do justice to this question because it makes assumptions about what constitutes a “military,” while another simply states that China has 1/4th of all armies in terms of number which is not accurate information either since it includes paramilitary and regional militias.
US is second, followed by India at third. The United States has by far the largest defense budget in terms of absolute dollars, but no country has a higher proportional share of their economy devoted to military spending – 6% compared with 4-5% for most other big spenders on arms.
There are no reliable figures for Iran’s defense budget because it is not published or accounted for ahead of time, but Iranian President Mahmoud Ahmadinejad told CNN that Iran spent about $10 billion in 2011 – which would make it fifth in total expenditure behind China and four NATO members (the US, Britain, France and Germany).