Taiwan defence spending to reach record $34.5bn

Taiwan President Lai Ching-te said Saturday that higher defence spending was intended to deter war, not provoke it, as he marked National Day in Taipei amid continuing Chinese military pressure.

Lai's government has earmarked a record NT$1.1 trillion, or US$34.5 billion, for defence in 2027, amounting to more than three percent of GDP. He told a crowd including foreign diplomats outside the Presidential Office that peace could not rely only on wishes and accused China of using military and "grey-zone" activities to try to change the status quo across the Taiwan Strait.

Taiwan's 23 million people live under threat from China, which says the island is part of its territory and has threatened to use force to annex it. Taiwanese administrations have increased military spending as the island seeks to strengthen its ability to resist a possible invasion and show the United States it is investing in its own defence.

Lai said Taiwan welcomed talks between the United States and China, but said there must be respect for "the right of the people of Taiwan to exist." Officials in Washington and Taipei have said US policy on Taiwan has not changed under President Donald Trump.

The United States switched official diplomatic relations from Taipei to Beijing nearly 50 years ago, but remains Taiwan's most important security backer. Trump suggested in May, after meeting Chinese President Xi Jinping in Beijing, that US arms sales to Taiwan could be a bargaining chip with China. Taiwan is waiting for Trump's signature on $14 billion worth of weapons, including Patriot air defence systems.

Taiwanese fighter jets and two Chinook helicopters carrying large Taiwan flags flew over the capital before Lai's speech. The celebrations marked the 115th anniversary of the toppling of China's Qing dynasty and the subsequent founding of the Republic of China.