Taiwan: Increased Military Spending in Response to Chinese Pressure.

Over the past five years, Taiwan has faced increasing political, diplomatic, and military pressure from China, which views the island as a "rebellious province." During a conference in Hong Kong, a senior official from the Chinese Communist Party, Shi Taifeng, reiterated that reunification with Taiwan would eventually occur, highlighting the persistent ambitions of Beijing. In this tense context, the island is preparing to bolster its defense capabilities.
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Last year, Taiwan had announced a moderate increase in its military budget, which was expected to reach 606 billion Taiwanese dollars in 2024, equivalent to approximately 17 billion euros (Picture source: Taiwanese MoD)

In 2023, the People's Liberation Army deployed around 1,700 aircraft near Taiwan, escalating the pressure on Taiwanese armed forces. This situation has strained the resources of Taiwan's air force, which relies on combat aircraft such as the Mirage 2000 and F-16. Facing the threat of a potential invasion, Taiwan has adopted a defensive strategy known as the "porcupine" approach, designed to deter potential aggressors by strengthening its defenses. This strategy includes significant military equipment orders, particularly from the United States, as well as increased support for Taiwan's domestic arms industry.

Last year, Taiwan had announced a moderate increase in its military budget, which was expected to reach 606 billion Taiwanese dollars in 2024, equivalent to approximately 17 billion euros. However, on August 22, Taipei announced its intention to further increase military spending by 7.7% year-on-year, raising the budget to 647 billion Taiwanese dollars, representing over 2.45% of the island's GDP. This increase surpasses Taiwan's projected economic growth, which is estimated at 3.26% for 2024.

These additional funds will be used to acquire new fighter jets, likely F-16 Vipers, and to modernize the maritime and aerial defense capabilities of Taiwan's armed forces. The Taiwanese government has specified that investment spending will reach 145.8 billion Taiwanese dollars in 2025, largely due to payments for weapons purchased from the United States.

This budget proposal still needs to be submitted to Parliament but enjoys broad consensus between the ruling majority and the opposition. However, the sustainability of this effort in the long term remains uncertain. The Taiwanese Ministry of Defense is considering the acquisition of seven locally designed submarines of the "Narwhal" or "Hai Kun" class, which could further increase the island's military expenditures.

According to Chieh Chung, an associate professor at the Institute of International Affairs and Strategic Studies at Tamkang University, the recent budget increases have been made possible through a special budget funded by public debt. However, it is unclear whether this mechanism will continue beyond 2026. Chieh Chung believes it may become difficult to maintain current levels of military spending in the future.