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

Taiwan's President Lai Ching-te announced on Monday that his government plans to propose record defence spending for 2027 due to growing military pressure from China. Beijing asserts Taiwan as part of its territory and has threatened force to annex the island. Taipei's move aligns with global governments increasing defence spending amid intensifying conflicts and concerns about U.S. commitment in the Asia-Pacific region.

Lai stated that Taiwan's total defence budget, including annual and special allocations, will surpass NT$1 trillion (approximately $35.2 billion) for the first time, representing over three percent of GDP. This investment demonstrates Taiwan's commitment to bolstering its self-defence capabilities in the region. Lai emphasized that investing in national defence is an investment in peace, emphasizing the need to maintain stability in the Taiwan Strait.

The island has been progressively enhancing its defences, acquiring advanced weaponry such as drones, to engage in asymmetric warfare against China. In response to U.S. pressure, Lai's administration aims to raise defence spending to five percent of GDP by 2030. However, Lai's government has clashed with Taiwan's opposition parties, which hold a majority in parliament, over the budget allocation for defence enhancements.

The opposition, led by the Kuomintang and Taiwan People's Party, passed a $25 billion special defence budget in May, reducing the government's initial request by a third. The opposition omitted about $15 billion intended for domestic drone procurement and other defence improvements. Lawmakers are currently evaluating alternative proposals for drone investment worth billions of dollars, potentially approved as early as this week.

Parliament previously approved the government's 2026 annual budget on Friday after a record-long delay, just before receiving the 2027 budget for review, expected by the end of August.