Taiwan’s 2027 defence spending to rise 16%

Taiwan's cabinet plans to propose a 16% increase in defence spending for 2027, which will be the first time the budget exceeds T$1 trillion (US$31 billion), according to the official Central News Agency. This rise in defence funding comes as China continues to exert pressure on Taiwan, both militarily and politically, despite Taipei's refusal to acknowledge China's claims over the island.

The proposed budget includes funding for the coast guard, veterans, and special projects, and is expected to surpass 3% of Taiwan's GDP, the Central News Agency reported. President Lai Ching-te has embraced the US's call for increased defence spending, mirroring Europe's response to similar pressures. Detailed figures will be revealed during the final cabinet meeting on August 20, but Taiwan has long made military modernisation a key policy platform, with aims to develop made-in-Taiwan submarines amid the rising threat from China.

China's military regularly conducts operations near Taiwan and holds periodic war games, the last of which took place in late December. China also rapidly modernises its armed forces, with new aircraft carriers, stealth fighter jets, and missiles. In March, China announced a 7% increase in its defence spending to 1.91 trillion yuan (US$283.08 billion).

China refuses to engage with Lai, referring to him as a separatist, while he asserts that only Taiwan's people can decide their future. Currently, Taiwan is in the midst of its annual Han Kuang military exercises, which Lai described as a cumulative experience that boosts the military's confidence.