Taiwan proposes record $35B defence budget as PLA pressure grows

Taiwan unveiled a record NT$1.12 trillion (US$35 billion) defence budget for 2027, marking the first time spending has crossed the NT$1 trillion threshold. The proposal, approved by the cabinet on Thursday, is NT$173 billion (18.2%) higher than this year's allocation and accounts for 28.6% of the government's NT$3.93 trillion total expenditure. Military investment—covering weapons, ammunition, and operations—would jump by NT$97.5 billion to NT$259.1 billion, the largest chunk of the increase. The budget comes amid escalating military pressure from the People's Liberation Army and repeated U.S. calls for Taiwan to boost its own defence spending.

Taiwanese leader William Lai Ching-te has pledged to raise overall defence spending to 5% of GDP by 2030, aiming to strengthen the island's deterrence. The proposed 2027 budget moves toward that goal, reflecting a strategic shift from reliance on U.S. protection to greater self-defence capacity. Analysts see the increase as a direct response to China's growing assertiveness, including frequent incursions into Taiwan's air defence identification zone. The budget also funds procurement of U.S. weapons, with deliveries expected to accelerate in coming years. However, the boost raises questions about fiscal sustainability, as defence now consumes nearly NT$29 of every NT$100 in government spending, potentially squeezing social welfare and infrastructure budgets.