TAIPEI: Taiwan’s cabinet will propose a 16% increase in defence spending for 2027, taking the island’s military budget above T$1 trillion ($31 billion) for the first time, official media reported Sunday.
The proposed budget, expected to exceed T$1.1 trillion, will be unveiled on August 20 and include funding for the military, coast guard, veterans and special defence projects, Taiwan’s Central News Agency reported.
The spending increase comes as Taiwan expands its military capabilities amid growing pressure from China, which claims the self-governed island as part of its territory. Taipei rejects Beijing’s sovereignty claims.
The proposed defence budget will account for more than 3% of Taiwan’s gross domestic product, continuing the government’s efforts to increase military spending and accelerate defence modernisation.
Why is Taiwan increasing defence spending?
Taiwanese authorities have made military modernisation a key policy priority, citing China’s growing military capabilities and frequent operations around the island.
The government has pledged to strengthen Taiwan’s defence capabilities, including through the development of domestically built submarines and other military systems.
Taiwan is also facing pressure from the United States to increase its defence spending and assume a greater share of responsibility for its own security.
China has conducted frequent military activities around Taiwan and held periodic large-scale exercises in the region. Beijing has also continued to modernise its armed forces, including expanding its naval and missile capabilities.
How does the increase compare with China’s spending?
China announced a 7% increase in its defence budget for 2026, taking total spending to 1.91 trillion yuan ($283.08 billion).
Taiwan’s proposed increase would therefore represent a significantly faster annual growth rate, although its overall defence budget remains substantially smaller than China’s.
Taiwan President Lai Ching-te has backed increased defence preparedness, saying military exercises help strengthen the armed forces’ ability to respond to potential threats.
Taiwan’s annual Han Kuang military exercises are currently underway, with troops conducting drills designed to improve battlefield readiness and operational coordination.