Taiwan has announced plans to increase its military spending next year, but at a smaller percentage compared to previous years. This decision comes amid increased military pressure from Beijing, which considers Taiwan to be its territory. The government in Taipei is set to raise total defense spending to a record high of NT$606.8 billion ($19 billion), accounting for about 2.5% of GDP. This represents a 4.6% increase from the government's spending plans for 2023, which is significantly lower than the annual 12.5% increase seen this year.
President Tsai Ing-wen emphasized the importance of strengthening Taiwan's self-defense capabilities and securing national security and interests while seeking more international support. This deceleration in defense spending comes as Taiwan faces daily Chinese incursions across the Taiwan Strait. China conducted joint navy and air force exercises over the weekend as a warning to what it deems to be Taiwanese "separatist forces."
In addition to the military pressure, Taiwan's economy has been impacted by a decline in export orders for 11 consecutive months, primarily due to a global slump in consumer demand affecting the high-tech chip industry. Taiwan Semiconductor Manufacturing Co., the island's largest company, recently cut its annual revenue outlook, projecting a 10% sales reduction for this year.
Taiwan's Defense Ministry reported detecting 45 People's Liberation Army aircraft near Taiwan, with 27 crossing the median line into Taiwan's southwest ADIZ (Air Defense Identification Zone). The ministry also noted the presence of nine Chinese naval vessels during these incursions.
Despite these challenges, Taiwan is continuing its efforts to enhance its military capabilities. The upgrade of 141 F-16 fighter jets is expected to be completed by the end of the year. Additionally, the first domestically built submarine prototype is scheduled to begin sea trials next month.
In summary, Taiwan plans to increase its military spending, although at a slower pace than in previous years. The government aims to strengthen self-defense capabilities and ensure national security amidst increasing military pressure from Beijing. However, Taiwan's economy has been affected by a decline in export orders and reduced revenue projections, primarily in the high-tech chip industry. Despite these challenges, Taiwan remains committed to enhancing its military capabilities with planned upgrades to fighter jets and the development of domestically built submarines.