Taiwan pledges $40 billion in additional defense budget to counter China
TAIPEI, TAIWAN – OCTOBER 10: Taiwan President Lai Ching-te (William Lai) delivers a national day speech during the National Day Ceremony in front of the Presidential Office in Taipei, Taiwan on October 10, 2025.
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Taiwan will submit an additional defense budget of 1.25 trillion Taiwan dollars ($40 billion) as Beijing steps up military preparations near the island, President Lai Ching-te said at a news conference on Wednesday.
According to a CNBC translation of his Mandarin remarks, Lai said China continues to step up military exercises and so-called “gray zone harassment” around Taiwan with the goal of seizing the island by force by 2027. The speech came in the wake of a diplomatic dispute between China and Japan over Taiwan.
Lai added that Beijing has intensified its “infiltration and influence campaign”, using a range of tools to intervene in Taiwan’s politics and society in a bid to influence public opinion and undermine the island’s democracy.
He also warned of Beijing’s “unprecedented military buildup” and “intensification of provocations across the Taiwan Strait, East and South China Seas, and the Indo-Pacific.”
Beijing considers democratically governed Taiwan as its own territory, and Chinese President Xi Jinping is considering Taiwan’s reunification with the mainland”a historical inevitability.” Taiwan denies these allegations.
China has been putting pressure on Taipei and has held numerous military exercises off the island’s coast over the past few years, issuing stern warnings about Taiwan’s “independence provocations”.
Lai vowed on Wednesday to improve Taiwan’s self-defense capabilities in the face of growing threats from Beijing and aim to achieve a high level of combat readiness by 2027.
China’s foreign ministry did not immediately respond to CNBC’s request for comment on Lai’s remarks.
China has been locked in a diplomatic row with Japan over Taiwan while Beijing accuses Tokyo of interfering in its internal affairs after Japanese Prime Minister Sanae Takaichi said earlier this month that the use of military force in any conflict in Taiwan could be considered a “survival-threatening situation” for Tokyo. Beijing called expressions “terrible” he said and requested a withdrawal.
US President Donald Trump spoke to Xi and Takaichi in separate phone calls on Monday. Experts say Xi likely used the call to urge Takaichi to ask Trump for help to soften his rhetoric on cross-Strait issues.
Shortly before Lai’s speech, the Chinese spokesman State Council Taiwan Affairs Office press conference He accused Lai’s Democratic Progressive Party of undermining Taiwan’s growth prospects, reiterating that Beijing “resolutely opposes any effort to aid Taiwan’s independence.”
