Taiwan Plans Record Defence Spending for 2027: The One-China Question and the Taiwan Strait Explained
On its National Day (10 October 2026), Taiwan's President said Taiwan is raising its defence spending to "deter war". Deterrence means becoming strong enough that an attacker decides an attack is not worth the cost.
Taiwan's Cabinet (the Executive Yuan) has proposed a record defence budget of about NT$1.1 trillion (around US$35 billion) for 2027. NT$ means New Taiwan dollars, Taiwan's currency. It is the first time the figure has crossed NT$1 trillion.
The 2027 amount equals a little over 3% of Taiwan's GDP (the total value of goods and services an economy produces in a year). Taiwan's stated goal is to keep defence above 3% of GDP and reach 5% by 2030.
The money covers the regular defence ministry budget, special budgets for weapons (including purchases from the United States) and a planned multi-layered air defence shield called "T-Dome".
The budget still has to be passed by Taiwan's legislature, where the government does not hold a majority. China has criticised the spending increase.
The move comes after years of large Chinese military drills around Taiwan, such as "Strait Thunder-2025A" (April 2025) and "Justice Mission-2025" (December 2025), which practised blockading Taiwan's ports.
One-China Policy and Cross-Strait Relations
The One-China idea is about one simple question: is Taiwan a part of China or not? The People's Republic of China (PRC), which rules mainland China from Beijing, says there is only one China, Taiwan is part of it, and the government in Beijing is its only legal government. Most countries, including India, have formal diplomatic ties only with Beijing, and keep only unofficial ties with Taiwan. "Cross-Strait relations" means the relationship between mainland China and Taiwan, which face each other across the Taiwan Strait.
Taiwan's record defence budget is a direct result of the unresolved One-China dispute. Beijing treats Taiwan as its own territory and has not ruled out force, so Taiwan is spending more to make any attack too costly. China's criticism of the budget shows that cross-Strait relations remain tense, with no official dialogue under the 1992 Consensus.
Taiwan Strait: Strategic Geography and the Median Line
The Taiwan Strait is the stretch of sea between the island of Taiwan and the Fujian province of mainland China. A strait is a narrow sea passage that connects two larger seas. The Taiwan Strait links the South China Sea in the south with the East China Sea in the north. It is one of the busiest shipping lanes in the world and one of the most tense military zones.
Taiwan's record defence budget is aimed above all at defending this narrow stretch of water. With Chinese drills now practising blockades and crossing the old median line regularly, Taiwan wants air defence, coastal missiles and other systems that would make any crossing of the strait too costly.
- Taiwan's proposed 2027 defence budget: about NT$1.1 trillion (around US$35 billion), a record and the first above NT$1 trillion
- Share of GDP: just over 3% for 2027; 2026 defence budget was about 3.3% of GDP
- Taiwan's goal: defence spending of 5% of GDP by 2030
- T-Dome: Taiwan's planned multi-layered air defence system
- Taiwan's National Day: 10 October
- UNGA Resolution 2758: 25 October 1971
- Anti-Secession Law of China: 14 March 2005 (Article 8: "non-peaceful means")
- Taiwan's formal diplomatic allies: 12 countries (as of 2026)
- India-Taiwan: India-Taipei Association and TECC New Delhi (1995); TECC Chennai (2012); TECC Mumbai (2024)