Taiwan proposes 18% defense spending hike to record T$1.12 trillion

Key facts

• Taiwan's government proposed an 18% increase in defense spending for 2027.
• The proposed defense budget for 2027 is T$1.1225 trillion, exceeding 3% of GDP.
• This marks the first time Taiwan's defense spending will surpass T$1 trillion.
• The budget includes allocations for veterans and the Coast Guard.
• Taiwan is developing indigenous submarines as part of its military modernization efforts.

Taiwan's government has formally proposed an 18% increase in defense spending for 2027, aiming to reach a record T$1.1225 trillion, which would be the first time the budget exceeds T$1 trillion and surpasses 3% of the island's gross domestic product. This move comes as Taiwan continues to bolster its military capabilities in response to escalating military and political pressure from China, which claims the self-governing island as its territory.

President Lai Ching-te has supported increased defense expenditure, aligning with calls from Washington. The proposed budget also encompasses funds for veterans and the Coast Guard. Despite opposition parties indicating support for defense spending, they have cautioned against providing blank checks. Taiwan has prioritized military modernization, including the development of indigenous submarines, to counter the growing threat from China, which conducts near-daily military operations around the island and employs tactics like coastguard patrols.