Taiwan proposes record USD 35B defence budget for 2027 as China's military pressure grows

Taipei: Taiwan government on Thursday proposed a record-high defence budget of 1.12 trillion Taiwan dollars (USD 35 billion) for next year, signalling intensifying efforts to deter China's military threats.

The administration's planned increase in military spending came after China stepped up its military and political pressure in recent years, asserting its claims that Taiwan was part of its sovereignty.

China sends military planes, as well as coast guard ships and other vessels, toward Taiwan regularly and carries out large-scale military exercises from time to time. It has not renounced the use of force to bring the island under its control.


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Under Taiwan's plans, the island's defence spending next year will exceed 3 per cent of its estimated gross domestic product. The amount would be an 18 per cent jump from last year's proposed budget, according to a government statement.

The government's overall spending plans, including on defence, will be sent to the opposition-controlled legislature for review before late August, it said. But the process may come with some challenges.

The legislature only passed the central government's 2026 budget last Friday, after a record 266-day delay, Taiwan's Central News Agency reported.

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Taiwan's President Lai Ching-te previously pledged to raise defence spending to 5 per cent of the island's GDP by 2030. On Monday, Lai said next year's defence budget would go beyond 1 trillion Taiwan dollars for the first time, adding that investing in national defence is an investment in peace.

Earlier this month, the island ramped up the intensity of its annual Han Kuang drills, aimed at modelling a response to a possible Chinese military invasion. It incorporated reservists and more civilians into the exercises with a focus on real-world scenarios. Mobile internet in parts of Taiwan was briefly slowed to text-only speed.

Previously, urban resilience drills in Taipei went largely unnoticed as they were not disruptive.

The United States has demanded that Taiwan raise its defence spending.

Washington does not have formal diplomatic relations with Taiwan, but maintains extensive unofficial relations and is required under US law to provide Taiwan with the means to defend itself. Under that framework, the US has long been Taiwan's main informal backer and arms supplier, a relationship that created tensions with Beijing.

When US President Donald Trump visited Beijing in May, China's President Xi Jinping warned him that their two countries could clash over Taiwan if the issue is not handled properly.

After Trump's trip to Beijing, he said arms sales to Taiwan were a "very good negotiating chip" with China, comments that stirred anxieties on the island.

China and Taiwan have been governed separately since 1949, when a civil war brought the Communist Party to power in Beijing. Defeated Nationalist Party forces fled to Taiwan. The island has operated since then with its own government.