Taiwan's President Lai Ching-te announced on Oct. 8 that the island will raise its defense spending to 5 percent of GDP by 2030, framing the increase as a necessary shift in how Taiwan prepares for potential conflict rather than a simple budget expansion. Speaking with a visiting U.S. congressional delegation led by Sen. Michael Bennet (D-Colo.), Lai called for deeper U.S.-Taiwan cooperation in defense technology and pushed for a drone supply chain that excludes Chinese components.
What did President Lai say about Taiwan's defense budget?
Lai said Taiwan's defense budget has already climbed to 3.2 percent of GDP this year and is projected to hit 3.9 percent next year, which would account for more than 20 percent of central government spending. The goal is to reach 5 percent of GDP by 2030.
“Taiwan is determined to enhance its self-defense capabilities and to safeguard peace through strength,” Lai said, according to Taiwan's Presidential Office.
He stressed that the increased investment is about transformation, not just numbers. “In increasing our investment in national defense, what matters is not simply a larger budget, but a change in the way Taiwan defends itself,” he said.
Why is Taiwan focusing on drones and new technology?
Lai outlined plans to integrate artificial intelligence, unmanned systems, space technology, and advanced communications into Taiwan's military. He specifically urged Washington and Taipei to build a drone supply chain that excludes Chinese technology, a move aimed at reducing vulnerabilities in a critical defense sector.
Sen. Bennet echoed the importance of unmanned systems, noting that conflicts in Ukraine and the Middle East have proven their value on the modern battlefield. He said developing these capabilities in Taiwan would strengthen the island's deterrence.
How does the U.S. factor into Taiwan's defense strategy?
Bennet said there is strong bipartisan support in Congress for maintaining peace and stability across the Taiwan Strait, including providing Taiwan with the weapons it needs for self-defense. He pledged to work with colleagues to ensure previously authorized and funded support is actually delivered.
“The American people stand with Taiwan,” Bennet said.
The senator also highlighted Taiwan's planned acquisition of more than $24 billion in military equipment through a special defense budget, plus over $7 billion allocated specifically for unmanned systems.
What about space cooperation and civilian resilience?
Lai noted that Bennet's home state of Colorado is a hub for American space technology, and he hopes to deepen U.S.-Taiwan cooperation in that field. Taiwan launched its first domestically developed optical remote-sensing satellite constellation, Formosat-8, last year.
Bennet said Colorado and Taiwan already partner on space, quantum technology, optoelectronics, agriculture, and semiconductors. He committed to promoting bipartisan Senate cooperation to strengthen U.S.-Taiwan space ties.
On the home front, Lai highlighted Taiwan's “whole-of-society defense resilience” approach. The island has merged its annual Han Kuang military exercises with urban resilience drills designed to prepare civilians and local communities for emergencies.
“By conducting them at the same time and under the same conditions, we aim to achieve the goals of military-civilian cooperation and all-out defense,” Lai said.
Why does this matter for the Indo-Pacific region?
Lai framed Taiwan's defense posture as a regional concern. “Peace and stability in the Taiwan Strait are not Taiwan's concern alone, but bear on the stability and development of the entire first island chain and the Indo-Pacific region,” he said.
Bennet praised Taiwan as one of the world's strongest and most dynamic democracies, saying its resilience is essential to maintaining a free and open Indo-Pacific.
Frequently asked questions about Taiwan's defense spending
Is Taiwan's defense spending increase a response to China?
Taiwan's government has framed the increase as a necessary step to deter aggression and secure regional stability. The focus on excluding Chinese technology from drone supply chains reflects concerns about dependency on a potential adversary.
How does Taiwan's defense budget compare to other countries?
At 3.2 percent of GDP this year, Taiwan already exceeds the NATO target of 2 percent. The planned 5 percent by 2030 would put it among the highest-spending nations relative to GDP, alongside the United States and several Gulf states.
What is the special defense budget?
Taiwan has a dedicated special budget for major military acquisitions, separate from its annual defense allocation. The current plan includes over $24 billion for equipment and more than $7 billion for unmanned systems.