Taiwan to Propose 16% Defence Spending Rise for 2027, Budget to Exceed T$1 Trillion
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Taiwan's cabinet will propose a 16% annual increase in defence spending for 2027, pushing the budget past T$1 trillion ($31 billion) for the first time, the official Central News Agency reported on Sunday. The proposed budget of more than T$1.1 trillion, to be unveiled on August 20, includes funding for the coast guard, veterans and special projects, and will exceed 3% of GDP. The move comes as China intensifies military pressure on the island and Washington urges Taipei to boost its self-defence capabilities.
Defence Budget Surge
Taiwan's 2027 defence spending will rise to over T$1.1 trillion, marking the first time the budget crosses the T$1 trillion threshold. The 16% increase, to be formally proposed on August 20, follows years of growing cross-strait tensions and U.S. demands for higher defence outlays. The spending package includes allocations for the coast guard, veterans, and classified projects, and is projected to stay above 3% of GDP, similar to the current year.
China Pressure and Military Modernisation
China, which claims Taiwan as its territory, has escalated military activities around the island, with near-daily operations and periodic war games, the latest in December 2025. Beijing is rapidly modernising its forces with new aircraft carriers, stealth fighters, and missiles, and raised its own 2026 defence budget by 7% to 1.91 trillion yuan ($283 billion). Taipei has responded with pledges to boost self-reliance, including building its own submarines, and views the spending hike as essential to deterrence.
Lai's Military Buildup Stance
President Lai Ching-te, whom Beijing labels a 'separatist', has embraced U.S. calls for increased defence spending. Observing the annual Han Kuang exercises on Sunday, Lai said every drill bolsters the military's confidence and stability. His administration has made military modernisation a core policy, aligning with Washington's push for allies to shoulder more of their defence burden.
What's Next
The cabinet is set to finalise the detailed budget figures at a meeting before the August 20 unveiling. It remains unclear how Beijing will react to Taipei's record military outlay, with analysts warning of potential further escalation in cross-strait tensions.
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Taiwan to Propose 16% Defence Spending Rise for 2027, Budget to Exceed T$1 Trillion
