Taiwan Proposes Record Defence Budget, Crossing T$1 Trillion Mark

Taiwan's government has formally proposed a record defence budget for 2027, marking an 18% increase from the current year's spending. The cabinet approved the general budget on Thursday, setting defence allocations at T$1.1225 trillion ($31.41 billion), which surpasses 3% of the island's gross domestic product for the first time.

The proposal comes amid sustained military and political pressure from China, which claims Taiwan as its own territory. Beijing has intensified its operations in recent years, with Chinese military aircraft and vessels active around the island almost daily. China has also developed new tactics, including coastguard patrols off Taiwan's eastern coast in the Pacific Ocean.

Taipei has made military modernisation a central policy priority, with President Lai Ching-te embracing calls from Washington to increase self-defence spending. The budget includes funding for veterans and the Coast Guard, which supports the navy in protecting Taiwan's maritime areas.

The announcement follows Taiwan's annual Han Kuang military drills, which concluded last week and simulated scenarios including breaking a potential Chinese maritime blockade. China's Defence Ministry dismissed the exercises as a "wasteful charade" that "stoked war panic."

President Lai faces a challenge from Taiwan's opposition-controlled parliament, which delayed this year's budget for months before passing it late last Friday. The two main opposition parties have stated they will not write blank cheques for the government, though they have repeatedly affirmed their support for defence spending.

The defence spending figure was initially announced by Lai earlier this week, with the cabinet meeting formalising the proposal on Thursday.