Booming Taiwan can well afford more military spending, president says

President Lai said Taiwan will use AI to establish a real-time defence system. Read more at straitstimes.com.

TAIPEI - Taiwan can well afford a US$40 billion (S$51.26 billion) special defence budget given its booming economy, President Lai Ching-te said on March 14, citing a US emphasis on collective burden-sharing.

Mr Lai's proposed spending, which he says is needed to better face a rising threat from China, has been bogged down in Parliament, where the opposition, which has a majority of seats, complains that the plans are unclear and says it cannot sign “blank cheques”.

Marking the 30th anniversary of Taiwan's first direct presidential election, when China fired missiles into the waters around the island hoping to influence the result, Mr Lai said in a speech that his government was determined to defend Taiwan and its hard-won democratic system.

“With Taiwan’s economic growth, we can absolutely afford it,” he said of the eight-year special defence spending plan. “If we look at the United States’ National Security Strategy, the USemphasises collective defence and burden-sharing.”

Tech powerhouse Taiwan, the dominant producer of advanced semiconductors, has boomed thanks to demand for artificial-intelligence applications.

Its economy expanded at its fastest pace in 15 years in 2025.