In response to the escalating Chinese threat, Taiwan's President Tsai Ing-wen announced on August 21 that the nation's Defense expenditure is set to experience a moderate 3.5 percent year-on-year increment, culminating in a historic peak in 2024. As indicated on channelnewsasia.com, China's intensifying displays of military prowess through expansive air and naval drills conducted in the vicinity of the island have compelled this strategic response.
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Taiwan’s President Tsai Ing-wen (center) inspects the annual Han Kuang military exercises on July 27, 2023 (Picture source: Taiwan's Presidential Office)
The proposed aggregate defense budget presented by President Tsai Ing-wen, subject to legislative endorsement, stands at NT$606.8 billion (equivalent to US$19 billion), signifying 2.5 percent of Taiwan's GDP. This prospective allocation marks the seventh consecutive annual uptick in military outlays, albeit at a notably more subdued pace compared to the substantial 14 percent year-on-year surge witnessed in the present fiscal cycle. Notably, the 2023 budget includes provisions for an enigmatic "special budget" meant for supplementary expenditures. When juxtaposed with China's own proposed 7.2 percent hike in defense spending this year (from 1.55 trillion yuan, or US$213.5 billion), Taiwan's augmentation of its defense budget appears comparatively restrained.
President Tsai's agenda entails the modernization of Taiwan's F-16 fighter aircraft fleet and the advancement of indigenous submarine capabilities. The imminent unveiling of the inaugural prototype of a homegrown submarine, scheduled for the coming month, attests to Taiwan's proactive pursuit of bolstered maritime security. This strategic stance is pivotal in light of the evolving geopolitical landscape and the ever-present dynamics in the region.
As reported by Time magazine, the Defense budget increase set to take effect in 2024 is part of Taiwan’s new “force realignment plan,” which also includes increasing its reserve personnel. Data from the International Institute for Strategic Studies’ (IISS) Military Balance 2022 report shows that the island’s 169,000-strong active military personnel is currently backed by some 1.66 million reservists. Though China’s 2-million-strong armed forces are undoubtedly superior, the threat of a costly armed engagement may encourage Beijing to pursue non-military scenarios to try to coerce Taiwan under its control.
Defense News August 2023
