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

Lai previously laid out plans to boost annual defence spending to more than 3 percent of gross domestic product next year and 5 percent by 2030.

Taiwanese President William Lai Ching-te has announced a $40bn budget for defence spending over the next eight years, to get “closer to the vision of an unassailable Taiwan, safeguarded by innovation and technology”.

Taiwan has been ramping up defence spending over the past decade, but United States President Donald Trump’s administration has pushed the self-ruled island to further increase its defence spending as a means to deter a potential Chinese attempt to regain control over the territory.

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Lai said on Wednesday that the military aimed to have a “high level” of joint combat readiness against China by 2027 – which US officials have previously cited as a possible timeline for a Chinese military operation on the island.

“The ultimate goal is to establish defence capabilities that can permanently safeguard democratic Taiwan,” Lai said at a news conference in Taipei after announcing the $40bn spending plan in an opinion piece in The Washington Post newspaper.

Lai’s announcement came as Tokyo and Beijing were locked in a weeks-long diplomatic spat that followed remarks by Japanese Prime Minister Sanae Takaichi suggesting Japan could intervene militarily in any attack on Taiwan.

China claims the island is part of its territory and has threatened to use force to regain control over it.

US reaction

The US’s top envoy in Taiwan, Raymond Greene, said he “welcomes” the government’s spending plan and urged the island’s rival political parties to “find common ground” on boosting its defences.

Lai said the extra spending would go towards new arms purchases from the US, as well as enhancing Taiwan’s ability to wage asymmetrical warfare.

But he said the spending was not tied to Taiwan’s ongoing tariff negotiations with the US, insisting the main goal was to “demonstrate Taiwan’s determination to defend” itself.

His comments also follow US approval earlier this month for $330m of parts and components in Washington’s first military sale to Taiwan since Trump’s return to the White House.

Lai, who leads the Democratic Progressive Party (DPP), previously laid out plans to boost annual defence spending to more than 3 percent of gross domestic product next year and 5 percent by 2030.

Trump has demanded Taiwan raise its defence spending to as much as 10 percent of GDP, a proportion well above what the US or any of its key allies spend.

The government has proposed $949.5bn New Taiwan dollars ($30bn), or 3.32 percent of GDP, for defence spending next year.

Higher than expected

The additional spending plan announced on Wednesday exceeds the $32bn previously revealed to the AFP news agency by a senior DPP politician.

Speaking earlier in Beijing, Peng Qingen, a spokesperson for China’s Taiwan Affairs Office, said Taiwan was allowing “external forces” to dictate its decisions.

In the opinion piece, Lai said he would accelerate the development of the so-called “T-Dome” – a multi-layered air defence system – which will “bring us closer to the vision of an unassailable Taiwan, safeguarded by innovation and technology”.

But the government may struggle to get the proposed spending approved by parliament, where the main opposition Kuomintang party, which advocates closer ties with China, controls the purse strings with the help of the Taiwan People’s Party.

Recently elected Kuomintang chairperson Cheng Li-wun has previously opposed Lai’s defence spending plans, saying Taiwan “doesn’t have that much money”.