Taiwan proposes boosting 2027 defense spending 18% to a record high

Taipei – Taiwan’s government on Thursday proposed an 18% rise in defense spending for next year, including for drones and missiles, taking it above 1 trillion New Taiwan dollars ($31.41 billion) for the first time as Taipei bolsters its military to ward off China.

The budget details come as Beijing, which views democratically governed Taiwan as its own territory, has ramped up military and political pressure over the past few years to assert its claims, which Taipei strongly rejects.

Taiwan also faces calls from Washington to spend more on its own defense, mirroring U.S. pressure on Europe, something President Lai Ching-te has enthusiastically embraced.

The government said in a statement following a cabinet meeting to approve the 2027 general budget that defense spending in 2027 would reach NT$1.1225 trillion, exceeding 3% of gross domestic product. Hsieh Chi-hsien, who heads the defense ministry’s comptroller bureau, told reporters that the ministry’s plans include supplementary spending on drones and missiles, for which the government had previously been unable to get parliamentary approval.

Lai faces a challenge from Taiwan’s opposition-dominated parliament, which only passed this year’s budget late last Friday after months of delays.

The two main opposition parties say they will not write blank checks for the government, though they have repeatedly stressed they support defense spending. In May, parliament approved extra defense spending of $25 billion, or only around two-thirds of what the government had wanted and excluding money for domestic programs like drones.

The budget includes funds for veterans and also the Coast Guard, which has an auxiliary role to the navy in protecting Taiwan’s maritime areas.

Lai had already announced the defense spending number earlier this week.

Taiwan’s government has made military modernization a key policy platform and has repeatedly pledged to spend more on its defenses, including developing made-in-Taiwan submarines, given the rising threat from China.

China’s military operates almost daily in the waters and skies around Taiwan, and Beijing has also been honing new tactics, such as coastguard “law enforcement” patrols off the island’s east coast in the Pacific Ocean.

Taiwan finished its annual Han Kuang military drills last week, simulating a range of battle scenarios including how to break a potential Chinese maritime blockade. China’s Defense Ministry called the drills a “wasteful charade” that “stoked war panic.”