Taiwanese leader pledges US$40 billion rise in defence spending to ‘defend democracy’
William Lai says in newspaper article that the eight-year spending commitment aimed to create ‘greater costs and uncertainties’ for Beijing
In an article for The Washington Post published on Wednesday, Lai said his government had committed to “significantly increase” military expenditure to 3.3 per cent of gross domestic product next year, then raise it further to 5 per cent by 2030.
“As part of this effort, my government will introduce a historic US$40 billion [around NT$1.25 trillion] supplementary defence budget, an investment that underscores our commitment to defending Taiwan’s democracy,” he wrote.
“We aim to bolster deterrence by inserting greater costs and uncertainties into Beijing’s decision-making on the use of force,” he wrote.
Lai did not say how Taiwan would finance the increase in defence spending, but critics have previously warned that spending on social welfare and other services may suffer since Taiwan has been running a deficit, which has to be financed by borrowing.
The proposal drew immediate backing from Washington. Raymond Greene, director of the American Institute in Taiwan – the de facto embassy – said the US welcomed the plan and supported Taiwan’s push to rapidly acquire “critical asymmetric capabilities”.
“Taiwan joins partners from across Europe to Japan and [South] Korea that are making critical defence investments necessary to deter unprecedented challenges to global peace and prosperity,” he said.
Beijing sharply criticised the remarks. “China’s position of opposing any official or military interaction between the United States and Taiwan is consistent,” foreign ministry spokeswoman Mao Ning said on Wednesday.
She said Lai’s Democratic Progressive Party would not succeed in “resisting reunification or seeking independence by military means”.
At a press conference in Taipei on Wednesday, Lai said the extra US$40 billion would be added to the defence budget in the eight years to 2033.
He warned that Beijing aimed to be ready to use force by 2027, pointing to large-scale mainland Chinese drills encircling the island in the past two years.
Drone operations, submarine cable attacks, near-daily warplane sorties and other operations, he said, were designed to wear down Taiwan’s sovereignty and shorten its reaction time.
He also repeated his argument that Taiwan and the mainland were “not subordinate to each other” – remarks that previously led Beijing to brand him an “obstinate separatist” – and said the island’s future must be decided solely by its 23 million people.
The fundamental contest, he argued, was “not unification versus independence, but a refusal to be turned from democratic Taiwan into Chinese Taiwan”.
He said Taipei had drafted two “Safeguard Democratic Taiwan” action plans – one to counter Beijing’s messaging and legal pressure internationally, and a second to rapidly strengthen hard power and build up the defence industry.
Beijing sees Taiwan as part of China, to be reunited by force if necessary. It has ramped up pressure on Taiwan since Lai took office last year.
Most countries, including its main international partner the United States, do not recognise Taiwan as an independent state. However, Washington is opposed to any attempt to take the island by force and is legally bound to supply it with weapons to defend itself.
Defence Minister Wellington Koo Li-hsiung, who was also present at the press conference, outlined a sweeping modernisation programme centred on the Taiwan Shield, also known as the T-Dome.
The proposed dome is a multilayered air and missile defence system supported by AI-enabled decision tools and reinforced command and control technology.
Koo said the plan included air and anti-missile defences, long-range precision strike missiles, precision artillery, surveillance and attack drones, as well as uncrewed surface craft.
There are also plans to expand ammunition production and stockpiles, and to set up joint development and procurement programmes with the US.
Koo suggested that Taiwan’s spending remained modest compared with countries such as Japan, South Korea and Australia, and reflected the island’s “front-line position in the first island chain”.
Lai rejected suggestions that the budget was being pushed by Washington.
“Our special budget is to protect our security and democratic way of life,” he said.
“Reconciliation also requires strength – without it, reconciliation becomes surrender.”
Trump has repeatedly demanded military US partners increase their military spending to 5 per cent of GDP although few have reached that target yet.
“Lai hopes to gain the Trump administration’s approval and support for his so-called Taiwanese defence interests,” Ni said.
Zhu Feng, dean of the school of international studies at Nanjing University, said Lai’s statement was “one of the most destructive pronouncements on cross-strait relations” since he took office last year.
“Even if Taiwan increases its military budget to 5 per cent of its GDP, it will be difficult to change the current disparity in strength between the two sides of the Taiwan Strait. It will be a statement to Japan and the United States of its determination to reject forced reunification,” he added.
The US House foreign affairs committee welcomed Lai’s commitment, saying in a social media post it was “a huge stride for Taiwan’s own defence and security throughout the Indo-Pacific”, and describing the island as a partner “willing to ante up serious resources toward defeating regional adversaries”.
Reaction on the island was more divided. The chairman of the opposition Taiwan People’s Party (TPP), Huang Kuo-chang, said he supported reasonable defence increases but warned the government “must not hollow out Taiwan’s democracy”.
He questioned the decision to make the spending pledge through an American newspaper rather than to the legislature or public, saying the TPP would “pragmatically and rationally” scrutinise the proposals.
The party’s chairwoman, Cheng Li-wun, lashed out at Lai for raising defence spending, accusing him of “playing with fire”.
“Lai Ching-te’s remarks have not only turned the Taiwan Strait into a powder magazine, but are also turning Taiwan into an arms factory,” she said.
“Are we to invest not only in war, but base all of Taiwan’s future economic development on war? Is this the Taiwan we know?”
One KMT lawmaker, Huang Chien-hao, accused Lai of using the pledge to institutionalise rejection of Beijing’s “one country, two systems” model for Taiwan and of seeking to tighten restrictions on those advocating engagement with Beijing.
Others, including Hsu Yu-jen, another lawmaker, questioned the lack of detail surrounding the spending commitment in light of its impact on public spending.
Critics have also pointed to previous US arms deals that were delayed or proved mismatched to Taiwan’s needs.
But Lai called for cross-party backing for the pledge, calling the island’s security “the foundation of everything else”.
“Only by supporting national security can we protect our way of life and sustain economic growth,” he said. “This is an investment in peace, in Taiwan’s security, and in the future of our democracy.”
Additional reporting by Alcott Wei