Taiwan to increase defense spending by 16 percent in 2027

Taiwan plans to increase defense spending by 16 percent by 2027, taking the country's defense budget above 1 trillion Taiwan dollars ($31 billion) for the first time, Reuters reported, citing Taiwan's official Central News Agency.

Taiwan's Cabinet on August 20 plans to present a defense budget of more than 1.1 trillion Taiwan dollars for 2027. The funds will be used to finance the coast guard, veterans and special projects. The final figures will be announced after the last Cabinet meeting. The new budget, like this year, will amount to more than 3 percent of Taiwan's gross domestic product.

**China threat grows**

Taiwan's decision to increase defense spending comes as China steps up military and political pressure on the island. Beijing considers democratically-ruled Taiwan to be part of its territory, a claim Taipei strongly denies, insisting that the island's future can only be determined by the people of Taiwan.

China's military conducts almost daily operations around Taiwan and regularly holds large-scale military exercises. In recent years, Beijing has been rapidly modernizing its armed forces, developing new aircraft carriers, stealth fighters and missile systems. In March 2026, China announced that it would increase defense spending by 7 percent this year to 1.91 trillion yuan (about $283 billion).

Beijing calls Taiwan's President Lai Ching-ten a "separatist" and refuses to engage with him. Lai says that only the island's people can decide Taiwan's future.

**US urges Taiwan to spend more**

Taiwan is also facing pressure from the US to increase its defense spending. Washington is demanding that its allies allocate more funds for its defense.

Taiwanese President Lai Ching-te has been actively promoting the country's policy of strengthening its military capabilities. The Taiwanese government has made military modernization one of the main political directions in recent years. In particular, the country is developing its own submarine production.

**Major military exercises continue in Taiwan**

Taiwan is currently holding its annual Han Kuang military exercises. Lai Ching-te observed the exercises in the northern city of Tayuan on August 9. He noted that each exercise increases the experience of the military and instills greater confidence in them. "Every thorough preparation in peacetime will further enhance the stability and strength of our country," the Taiwanese president said.

The military also conducted a nuclear, biological and chemical emergency drill on Taiwan's east coast. The drills simulated a chemical weapons scenario. Soldiers, tanks and armored vehicles were neutralized. The aim of the drills was to test the ability to respond quickly in the event of such an attack and return troops and equipment to the front as quickly as possible.