Taiwan Plans Record Defense Budget to Counter China, Report Says

Taiwan is set to allocate a record NT$1.1 trillion towards its military in 2027, according to a semi-official media outlet report. This significant increase, which would surpass 3% of the country's GDP, was reported by the Taipei-based Central News Agency, citing an informed source. The figure contrasts with the NT$949.5 billion budget the cabinet originally proposed for the current year.

The cabinet is scheduled to deliberate on the spending plan on August 20, with the final amount contingent upon approval from the legislature, currently controlled by the opposition. Since assuming office over two years ago, Taiwan's President Lai Ching-te has emphasized strengthening defense spending and military readiness. The report coincides with Taiwan's annual Han Kuang military exercises.

President Lai had set a goal of spending 3% of the gross domestic product on the armed forces, following concerns raised by former US President Donald Trump about Taiwan's commitment to self-defense against China, which claims the island as its territory. Despite Beijing's territorial claims, Taipei maintains its stance and condemns China's increasing military and coast guard presence near Taiwan.

In February of the previous year, President Lai set a target of 3% of GDP for defense spending, following Trump's questioning of Taiwan's dedication to self-protection from China. Recently, Taiwanese lawmakers approved a $24.8 billion special defense budget, falling short of President Lai's desired allocation. Some of these funds will be directed towards the T-Dome air-defense system, designed to safeguard the island from aerial threats.

In contrast to this year's initial military budget, which rose by 23%, officials for the first time included expenses related to the coast guard and veteran pensions. The central government's 2026 budget, encompassing military allocations, remains pending approval by the legislature due to a political standoff.