Taiwan launches $40bn defence boost as Lai warns of intensifying military pressure from China

Taiwan’s President Lai Ching-te has announced a major new defence package worth 1.25 trillion New Taiwan dollars (about $40 billion), saying the island must urgently strengthen its military readiness in response to China’s expanding activities around its borders.

Speaking at a press briefing on Wednesday, Lai said Beijing had stepped up military drills and “gray-zone” tactics – actions designed to intimidate without triggering open conflict. He warned that China is pushing toward the capability to take Taiwan by force by 2027, citing what he described as an unprecedented pace of military expansion.

Lai accused Beijing of pairing its military pressure with a wide-ranging political influence campaign aimed at weakening Taiwan’s democracy and shaping public opinion. He said these efforts had intensified in recent months.

Beijing, which claims Taiwan as its territory, has repeatedly condemned the island’s government and conducted several large-scale exercises near Taiwanese waters. China’s own military spending rose more than 7% this year to roughly $245 billion, with many of its assets positioned close to the Taiwan Strait, according to analysts at the Center for Strategic and International Studies.

Lai said Taiwan’s new defence spending will focus on building the equipment, technologies and readiness needed to maintain a credible deterrent. The objective, he said, is to achieve strong defensive capacity by 2027.

The announcement comes at a time of rising diplomatic tensions in the region. China and Japan have traded sharp words after Japanese Prime Minister Sanae Takaichi warned that a Taiwan conflict could represent a “survival-threatening situation” for Japan – a statement Beijing denounced and demanded be retracted.

U.S. President Donald Trump spoke separately with China’s President Xi Jinping and Prime Minister Takaichi earlier this week. Analysts say the Taiwan issue likely featured prominently in both discussions.

Shortly before Lai’s remarks, China’s Taiwan Affairs Office restated its opposition to any external support for Taiwan, criticising Lai’s Democratic Progressive Party for what it called divisive policies.

Beijing has not yet issued an official response to the defence announcement.