They are literally manufacturing islands in the ocean.

Cheaply btw. Pumping sand is not hard. And, they're doing it on existing reef structures. The sand only lasts because there is an anchor there.

This is not primarily military budget, any more than the US army corps of construction is military budget when it builds dams and Levees in the USA mainland (which btw, it does, a lot)

Military budget is materiel. Sand, even runways, is not Materiel.

The only purpose for building those islands out is militarily. If it’s not coming out of the PLAN budget directly, I would be very surprised.

The purpose is to solidify the claim of territory, the enforcement will be military because China won't back down on this, and the law court path has been rejected. Open seas is the current active, western fleet response. If the Chinese miltary get the upper hand in the political conversation they WILL use this to argue for budget, to get more aircraft carriers, and more sea-active weapons. But that is future spend and is not on the current budget horizon is it?

So yes, there is a war war not jaw jaw aspect to building the islands, but the budgetary impact? low. Until they fund bulding the aircraft carriers, and stealth UAVs.

But without those investments those islands are hardly definsible, too far from hainan to be easily resupplied during hostilities and no intrinsic production capabilities in their own. Even with further military try investments, they are still probably strategically useless.