Taiwan president says defence spending boost aims to deter war on National Day

Taiwanese President Lai Ching-te used the island's National Day address in Taipei to say Taiwan will not give up its freedom and will not accept subordination. Speaking outside the Presidential Office before thousands of people, including foreign diplomats, he said the government's aim in increasing defence investment was to deter war, not provoke it. Fighter jets and two Chinook helicopters carrying large Taiwan flags flew over the capital ahead of the speech.

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Lai said Taiwan "cherishes peace" and is open to exchanges, but warned that tolerance cannot become a pretext for aggression. He said China continued to apply pressure through military and grey-zone activities in an effort to alter the status quo across the Taiwan Strait. Grey-zone tactics are actions that stop short of open war, and Lai framed them as part of a broader campaign of coercion.

The speech came as Taiwan's government has set aside a record 1.1 trillion New Taiwan dollars, or $34.5bn, for defence in 2027, equal to more than 3% of gross domestic product. Lai said the island's 23 million people live under the constant threat of attack, while Beijing insists Taiwan is part of its territory and has not renounced the use of force. China has also called Lai a separatist, underscoring the political strain around his remarks.

The address carried added weight because it was delivered on Taiwan's National Day, which marks the 115th anniversary of a 1911 uprising that toppled China's last imperial dynasty and led to the founding of the Republic of China. The holiday is one of the most visible occasions for Taiwan to project its identity and political position. It also comes at a time when defence spending, deterrence and cross-strait stability remain central issues in the island's security debate.

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Lai also urged democracies in the Indo-Pacific to work together to preserve peace and stability in the region. He said he welcomed talks between the United States and China, but added that there must be respect for the right of the people of Taiwan to exist. The United States switched official diplomatic relations from Taipei to Beijing nearly 50 years ago, but remains Taiwan's most important security backer.

What remains unclear is how Beijing will respond to the speech and whether the defence budget plans will face any domestic or external pressure before implementation. China held war games around the island shortly after Lai's first National Day speech in 2024, but not last year, and its last drills near Taiwan were in late December after an arms deal with Washington. The next developments to watch are any new military activity, further statements from Taipei and Beijing, and progress on the 2027 defence allocation.

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