Beijing’s threats to Taiwan are “intensifying” and its preparations for an invasion are intensifying, Taiwan’s government has said, announcing a $40 billion special defense budget and a series of measures to counter Chinese attacks.
Taiwanese President Lai Ching-tey said that “there is no room for compromise on national security”, and that he was committed to promoting Taiwan’s security with US support.
“This is not an ideological conflict, nor a ‘unification versus independence’ debate, but a struggle to defend ‘democratic Taiwan’ and refuse to become ‘China’s Taiwan.'”
Lai and the defense minister, Wellington Koo, announced the spending increase after a National Security Council briefing on Wednesday – an increase of at least $8 billion over what was previously marked.
He said Chinese authorities have increased military harassment, international pressure and propaganda, as well as espionage and infiltration inside Taiwan.
Lai said that according to a translation of his comments, the most dangerous annexation scenario was not Chinese military action, but Taiwan “giving up”.
He said, “History has proven that compromise with aggression only leads to war and slavery.”
He said Beijing’s offer of Hong Kong-style ‘one country, two systems’ governance under Chinese rule should be formally considered “an unbreakable red line for Taiwanese society”.
Kuo said the additional budget covering 2026-2033 would include AI tools to improve existing systems, as well as new missiles and drones.
He said the government would also reform military procurement (many large orders from the US have been significantly delayed), and take new measures to protect Taiwanese overseas from Chinese international repression.
The increase in the defense budget is expected to increase Taiwan’s spending to 3.3% of GDP in 2026, and Lai has promised to reach 5% by 2030.
Raymond Green, representative of the American Institute, US Embassy, said the announcement was “a major step toward maintaining peace and stability in the Taiwan Strait by strengthening deterrence”.
Peng Qiangen, spokesman for China’s Taiwan Affairs Office, earlier said in a press briefing that Taiwan was wasting money on “seeking favors with external powers.”
“This will only plunge Taiwan into disaster.”
The announcement followed a phone call between Donald Trump and Xi Jinping on Tuesday, in which Xi reiterated his claim to Taiwan and expressed his intention to eventually annex it.
According to a Chinese readout, he told Trump, “The return of Taiwan to China is an integral part of the post-war international order.”
It also comes amid an ongoing diplomatic dispute between China and Japan over its stance on Taiwan, after Japanese Prime Minister Sanae Takaichi said his country would likely get involved militarily if China attacked Taiwan. China launched a series of economic retaliations in response. He is also further angered by Japanese plans to install missiles on Yonaguni Island, the nearest territory to Taiwan, only 110 km off Japan’s east coast.
Tokyo Defense Minister Shinjiro Koizumi visited Yonaguni on Saturday and told the press that preparations for the medium-range, surface-to-air missile deployment were making “steady progress.”
The Chinese government accused Japan of deliberately provoking regional tensions.
“Japan’s deployment of offensive weapons in areas adjacent to China’s Taiwan region is extremely dangerous, deliberately stoking regional tensions and provoking military confrontation,” Peng said on Wednesday.
“We have the strong will, determination and strong ability to safeguard our national sovereignty and territorial integrity… We will crush all foreign interference.”
Lillian Yang and agencies contributed to this report
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