They are literally manufacturing islands in the ocean.
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.
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.