The Executive Yuan of the Republic of China approved the central government’s total budget for the year 114 (2025) today, with the overall defense budget reaching NT$647 billion (approximately US$213.44 billion), accounting for about 2.45% of the GDP, hitting a new high.
The Chinese Communist Party has never occupied Taiwan’s territory, yet it claims Taiwan as part of its own. In March, the CCP announced a 7.2% increase in defense spending for this year, reaching 1.67 trillion yuan (approximately US$0.23 trillion). The CCP continues to threaten Taiwan with military force, sending aircraft and ships to harass Taiwan almost daily and escalating grey-zone operations and military coercion against Taiwan.
The Ministry of National Defense of the Republic of China released information about the dynamic activities of CCP aircraft and ships this morning, detecting 8 instances of CCP aircraft (including 3 entering southwest and eastern airspace) and 6 CCP ships, continuing activities around the Taiwan Strait. The military is closely monitoring and responding with aircraft and missile systems.
President of the Republic of China, Lai Ching-te, attended the opening ceremony of the “Ketagalan Forum: 2024 Indo-Pacific Security Dialogue” on the 21st, stating that the CCP’s military intimidation of neighboring countries destabilizes the region. The CCP seeks to alter the international order, and regional and global democratic countries need to unite to resist authoritarian expansion. He mentioned the continuous push for defense reform, increased defense budget, adequate weapons procurement through defense autonomy, and enhancement of national defense resilience to demonstrate self-defense determination.
Premier of the Republic of China, Su Tseng-chang, presided over the Executive Yuan meeting today, discussing the “114 Central Government Budget for Fiscal Year and Associated Unit Budget and Consolidated Plan, and the 5th Phase Special Budget of the Central Government Forward-looking Infrastructure Plan” presented by the Directorate-General of Budget, Accounting and Statistics. The total budget revenue for the central government next year is NT$3.1534 trillion, total expenditure is NT$3.1325 trillion, with a surplus of NT$20.9 billion, to be submitted to the legislature for review by the end of August.
In terms of defense expenditure, the Ministry of National Defense allocated NT$476 billion for the 114 fiscal year, an increase of NT$41.5 billion from the previous year, or about 9.6%. In addition, there is a special budget of NT$90.4 billion for the procurement of new fighter jets and the enhancement of naval and air capabilities, bringing the total to NT$566.4 billion, an increase of NT$37.7 billion from the previous year, or about 7.1%. When combined with the non-operational special funds of NT$80.6 billion, the total defense budget reaches NT$647 billion, accounting for approximately 2.45% of the GDP, an increase of NT$46.4 billion from the previous year, or about 7.7%.
The Directorate-General of Budget, Accounting and Statistics stated that the drafting of the 114 Central Government Budget adheres to budget laws, fiscal discipline laws, and public debt laws while considering national development and fiscal discipline. The budget is primarily used for balancing Taiwan’s infrastructure, fostering cross-domain innovation, enhancing social security systems, investing in future generations, promoting public health, and strengthening national defense security.
Nikki Haley, former Republican presidential candidate and former U.S. Ambassador to the United Nations, praised Taiwan’s commitment to regional security at the “Ketagalan Forum: 2024 Indo-Pacific Security Dialogue” on the 21st. She commended Taiwan for allocating 2.5% of GDP to defense and continuously increasing the defense budget for 7 straight years. She applauded Taiwan and hoped that other countries would follow suit, noting that Taiwan’s defense budget is comparable to Canada’s, and if U.S. allies align with Taiwan, the world will become safer.
Haley emphasized the need for the West to engage in diplomatic brinksmanship, advocating for raising Taiwan’s international profile. She stated that Taiwan should no longer be silenced in international affairs, especially as a beacon of freedom and democracy. She witnessed firsthand during her tenure at the UN how the CCP oppressed Taiwan, leading to unjust treatment and serious harm to world peace and prosperity through abuse of UN Resolution 2758 and expanded powers within the UN.
Yeh Chi-hsien, Director of the Budget Office of the Ministry of National Defense, expressed gratitude for the Executive Yuan’s support for the defense budget. He explained that the total defense budget for the 114 fiscal year is NT$647 billion, with an additional budget increase of NT$46.4 billion primarily allocated for personnel maintenance, operation maintenance, and military investments. In operation maintenance, an increase of NT$17.7 billion is mainly for components of main battle equipment, logistics support, ammunition procurement, and combat equipment replenishment. Military investment of NT$20.3 billion includes nearly NT$7 billion for new projects and the rest for ongoing project payment demands.
Yeh stated that the annual payments for ongoing projects fluctuate according to contract terms and the payment schedule of military procurement projects. As previous projects reach peak payment periods in recent years, military investment saw the most significant growth, with ongoing projects leading to subsequent new projects. The Defense Ministry will plan and consider overall needs based on defense operational requirements.
Regarding whether submarine budgets are included in the 114 budgets, Yeh mentioned that submarine budget plans are still under review and are expected to be submitted to the legislature by the end of the month. There have been various discussions and viewpoints on defense budget proportions recently, such as aiming for 3% or 5% of GDP, with some concerns about excessive growth overshadowing other policies. The Defense Ministry respects all perspectives, indicating that budget allocation is based on operational requirements and defense needs, considering the available weapons equipment and overall national finances without engaging in an arms race with other countries.
Yeh emphasized, “The Defense Ministry will proceed in a steady and prudent manner according to our needs. In recent years, the defense budget has achieved stable growth. Achieving 3% of GDP is a goal we aspire for, depending on whether we obtain critical and important weapons equipment. As the equipment is acquired, the defense budget will naturally increase.”
Media attention focused on the reasons for the record high defense budget for next year and whether there is an increase in drone expenditures. Yeh clarified that the increased defense budget for the following year is related to various defense policies. Payments are expected to reach peak levels next year, and budget allocation is based on payment demands and defense operational needs. Additionally, a significant portion of the next year’s defense budget is earmarked for drones.