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Home»China
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Taiwan unveils $40bn budget for defence spending to counter China

Staff WriterBy Staff WriterNovember 26, 20253 Mins Read
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Lai Ching-te at a news conference in Taipei after his presidential election win on 13 January 2024. (Source – X)

By Sean Rayment

Taiwan will prepare for a full-scale war within the next two years amid “intensifying” threats from China, the nation’s president has declared.

China has been rapidly expanding its military capabilities over the past five years while routinely threatening to bring Taiwan under its control.

Lai Ching-te, the president of Taiwan, said the military aimed to be ready for combat against China by 2027 as he unveiled the £30.2 billion defence package in an announcement on Wednesday.

“There is no room for compromise on national security,” he said during the address at the presidential office.

“National sovereignty and the core values of freedom and democracy are the very foundation of our nation.”

Mr Lai first made the announcement in an opinion piece published on Tuesday in The Washington Post, in which he heaped praise on Donald Trump, writing that the US president had “made clear the importance of American leadership around the world”.

The world “is safer today because of the Trump administration’s pursuit of peace through strength”, he added.

Mr Trump has pushed Taiwan and other countries to increase defence spending as part of his America First strategy.

The United States is Taiwan’s most important international partner and its primary source of arms and equipment.

The move is not the first time that the Taiwanese president has appealed to the United States, and to the Trump administration specifically, since he was elected in May 2024.

He has given interviews to podcasters and influencers aligned with Mr Trump in an attempt to court support from Maga audiences.

Since taking office for the second time, Mr Trump has approved a 330 million dollar arms package for Taiwan, which includes fighter jets and other aircraft parts.

Mr Lai described the new defence package as a “historic” investment that “underscores our commitment to defending Taiwan’s democracy”.

In the opinion piece, he wrote: “The People’s Republic of China’s unprecedented military build-up, combined with intensifying provocations in the Taiwan Strait, in the East and South China Seas and across the Indo-Pacific, have highlighted the fragility of peace in the region.”

He added that the new budget would fund further arms purchases from the United States and expand Taiwan’s asymmetrical capabilities with the aim of “inserting greater costs and uncertainties into Beijing’s decision-making on the use of force”.

He had already announced that Taiwan’s defence spending would rise to 3.3 per cent of the country’s GDP next year, crossing the 3 per cent threshold for the first time in more than 15 years, with the goal of reaching 5 per cent by 2030.

This would mean spending would reach 949.5 billion New Taiwan dollars in 2026.

In the opinion piece, Mr Lai also wrote that he would accelerate the development of the T-Dome, an air defence system that many have compared with Israel’s Iron Dome network.

The T-Dome would serve to protect Taiwan from Chinese “missiles, rockets, drones and combat aircraft”.

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