Taiwan's Cabinet announced plans to raise the defense budget for 2027 by 16%, exceeding NT$1 trillion (over NT$1.1 trillion) for the first time, maintaining defense spending at more than 3% of GDP, comparable to this year’s level [1, 2, 3, 4, 5]. The budget proposal includes funding for the coast guard, veterans, and special projects, as well as emphasis on military modernization and indigenous submarine development [1, 2, 3, 4, 5].
The Cabinet will finalize detailed budget figures after a meeting scheduled for August 20, 2026 [1, 2, 3, 4, 5]. The announcement comes amid Taiwan's annual Han Kuang military exercises ongoing this month, where President Lai Ching-te inspected drills in Taoyuan on August 9 and emphasized preparedness, stating, “Every bit of solid preparation in peacetime adds another measure of stability and strength for our nation.” [1, 2, 3, 4, 5]
Taiwan also conducted a nuclear, biological, and chemical decontamination drill simulating a chemical attack on its east coast today [4, 5]. President Lai reiterated that only Taiwan’s people can decide their future and labeled China as a "separatist" for refusing dialogue [1, 2, 3].
These steps come amid growing military and political pressure from China, which claims Taiwan as its territory. China has increased daily military operations near Taiwan and held major war games as recently as December 2025 [1, 2, 3, 4, 5]. In March 2026, China announced a 7% rise in its defense budget to 1.91 trillion yuan (approximately NT$8.7 trillion, or US$283 billion), underscoring a significant military spending gap [1, 2, 3, 4, 5].
Taiwan’s government has made military modernization a key policy focus, signaling a commitment to strengthening defense capabilities in light of Beijing’s continued military pressure [1, 2, 3, 4, 5]. The Cabinet's scheduled budget meeting on August 20 will reveal the final proposed figures for 2027 defense spending.
