Taiwan’s leader says government to propose record defence spending for 2027

Taiwan's President Lai Ching-te announced on August 17, 2026, that the government will propose record defence spending for 2027. This comes as China intensifies its military pressure on the island democracy. China claims Taiwan as its territory and has threatened to use force to annex the island, home to 23 million people.

Lai stated that the total defence budget, including both the annual and special budgets, will surpass NT$1 trillion for the first time, reaching NT$1.1225 trillion ($35.2 billion). This represents more than three percent of Taiwan's GDP, signifying the nation's commitment to enhancing its self-defense capabilities. Lai emphasized that investing in national defence is a step towards peace and stability in the Taiwan Strait and the region.

Taiwan has been steadily boosting its defence spending and acquiring smaller, more agile weaponry, such as drones, to engage in asymmetric warfare against China. Under pressure from the United States to bolster its security commitments, Lai's government aims to increase defence spending to five percent of GDP by 2030. However, the government has clashed with Taiwan's opposition parties, who hold a majority in parliament, over the allocation of funds for defense.

The main opposition party, Kuomintang, along with the Taiwan People's Party, passed a $25 billion special defence budget in May, reducing the amount Lai's Democratic Progressive Party sought by a third. The opposition stripped out approximately $15 billion intended for domestic drone procurement and other defense-related initiatives. Lawmakers are currently reviewing rival proposals for drone investment, which could be approved as early as this week.

Parliament previously approved the government's 2026 budget on Friday after a record delay, nearly eight months after the initial spending plan was due. The 2027 budget is expected to be reviewed by the end of August.