Taiwan in 'race against time' to build defenses against China's military threat

Taiwan's President Lai Ching-te (賴清德) stated at a press conference that China hopes to be ready to attack Taiwan by 2027. 

At a press conference on November 26 at the Presidential Office under the title of “National Security Action Plans to Safeguard Democratic Taiwan,” President Lai said:

“The Beijing authorities have set the goal of completing military preparations to attempt unification with Taiwan by force by 2027, and are accelerating preparations for an attempted invasion. They continue to ramp up military exercises and gray-zone aggression around Taiwan with the ambition to annex Taiwan by militarily forcing unification or surrender.”


Taiwan sees itself as a self-governed democracy, while China views the island as a breakaway province and has not ruled out the use of force to unify it.

Lai announced that Taiwan, officially the Republic of China (ROC), will invest NT$1.25 trillion (about US$40 billion) over the next eight years through a special national defense budget to build key military capabilities.

He said the government plans to "uphold national sovereignty with a comprehensive democratic defense" and bolster defense capabilities while developing a robust, full-spectrum defense industry.

President Lai said that, in order to build key capabilities required for future warfare, Taiwan's Ministry of National Defense (MND) has completed the planning and budgeting for a special act on procurement for enhancing defense, resilience, and asymmetric capabilities.

Over eight years (2026–2033), Taiwan will invest NT$1.25 trillion to establish an advanced defense system featuring three major components, including the “Taiwan Defense Dome (T-Dome),” the introduction of high technology and artificial intelligence, and the enhancement of defense self-reliance and the expansion of the defense industry.

Low likelihood of conflict in 2027

President Lai’s remark during the November 26 press conference that the Beijing authorities aim to complete the military unification of Taiwan by 2027 sparked discussion in Taiwan.

He later clarified that he meant that Beijing has set the goal of completing military preparations to attempt unification with Taiwan by force by 2027. 

Speaking at a conference titled "Taiwan’s Predicament and Adaptive Strategies in the Trump 2.0 Era", former Kuomintang party (KMT) Premier Chen Chun (陳冲) said, “I have never believed that a war will break out in 2027. I’m sure Beijing has also read Sun Tzu’s The Art of War. They would want to ‘win first, then fight,’ and will carefully calculate their moves.”

Professor Liu Fu-Kuo (劉復國), Director of the Taiwan Center for Security Studies at Taiwan's National Chengchi University, told TCN that President Lai’s revised wording is closer to China's President Xi Jinping’s (習近平) original meaning, which is that the China's People's Liberation Army (PLA) should complete preparations for the military unification of Taiwan by 2027, rather than that China will necessarily carry out a forcible unification in that year. He added that US assessments also consider the likelihood of such an operation occurring in 2027 to be low as well.

Dr. Sy Tzu-yun (蘇紫雲), Director of the Division of Defense Strategy and Resources at Taiwan's Institute for National Defense and Security Research (INDSR), told TCN that Xi Jinping has demanded that the PLA possess the capability to attack Taiwan by 2027, but having that capability does not mean the PLA would succeed. He offered an analogy that it is like having the qualifications to run a 100-meter race, but that does not mean you will win the gold medal.



China is not ready to move

Chen said, “I believe China will not take military action in 2027, for one simple reason: financially, they are not feeling stable.”

Chen told TCN that indicators that China intends to attack Taiwan could include the progress of China's Cross-Border Inter-Bank Payment System (CIPS), the multiple central bank digital currency bridge (mBridge), or BRICS-related financial systems.

Another indicator could be the global RMB settlement share. If 10–15% of global transactions are settled in RMB, and the US dollar’s share falls below 40%, this would be a major indicator, said Chen. “If you were the governor of the People’s Bank of China, you would use these indicators to consider the problem,” he added

The CIPS is China's yuan-based international payment system, providing clearing and settlement services, while the mBridge is a cross-border payment platform piloted by the Bank for International Settlements (BIS) along with several Asian central banks, including those of China, Hong Kong, Thailand, the United Arab Emirates, and Saudi Arabia.

The Canadian Security Intelligence Service wrote that a fully operational CIPS would allow China to reduce its reliance on SWIFT while promoting the global status and acceptance of the renminbi. 

SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a global messaging network that facilitates secure financial transactions. After Russia invaded Ukraine, it was removed from SWIFT, crippling its ability to conduct international payments and access global financial markets.

US think tank the Atlantic Council reported that if China invades Taiwan, the US and its allies could implement blocking sanctions and deny SWIFT access to key institutions like China’s central bank, finance ministry, and its largest banks.

Signals Taiwan is sending

Professor Liu said that following President Lai’s conversations between senior US and Chinese officials, the timing of announcing the new defense spending policy may be a signal that the Lai administration aims to raise Taiwan’s defense budget to the level the US has long requested.

Doing so would stabilize US support for Taiwan, and Taipei's goal may be to show Washington that Taiwan is fully cooperating with the US to strengthen Taiwan-US relations, he added.

Dr. Su said that President Lai is signaling to the international community: Taiwan is not a free rider that relies on others for security and the protection of its freedoms.

Su argued that the current tension in cross-strait relations stems from China, as it is clear that Beijing intends to annex Taiwan.

The Republic of China, in accordance with its Constitution, naturally has the obligation to take self-defense measures, and investing in defense resources is simply to ensure the survival of the Republic of China, he added.

Peace through strength

Professor Liu said that at this stage, there are rising tensions between China and Japan, and Beijing continues to exert pressure through diplomatic means as well as gray-zone tactics such as sending coast guard vessels.

Japanese Premier Takaichi stated in early November that Chinese military action against Taiwan could prompt a Japanese military response. The statement sparked outrage in China, which retaliated by banning Japanese seafood imports and issuing an official travel warning for its citizens

These gray-zone tactics may be applied not only to Japan but also to Taiwan and the Philippines, Liu noted; therefore, President Lai may be using this major announcement on strengthening national defense to signal that Taiwan faces a serious threat and must rapidly bolster its defense capabilities, thereby aligning itself with Japan and the Philippines in confronting China.

Professor Liu noted that President Lai’s announcement of such a large defense budget goes beyond just purchasing weapons from the US. It also aims to establish stable cooperation with the US defense industry, as well as with Western countries and Japan.

This, Liu explained, suggests that Taiwan’s defense strategy involves not only weapons procurement but also defense-industrial collaboration with other nations. From the perspective of the Lai administration, the goal may be to link the Taiwan–China issue to broader regional and even global security concerns, signaling to Beijing that if a conflict were to erupt in the Taiwan Strait, China would face multiple Western nations standing behind Taiwan.



Race against time

Dr. Su said that with the investments proposed by President Lai, Taiwan could achieve a comprehensive national defense resilience by 2033.

Taiwan’s defense budget was indeed relatively low in the past, so this is essentially a “make-up exam,” and the hope is to rapidly enhance defensive capabilities and improve the security situation, he added.

Taiwan is in a race against time, but the goal is a relative, not absolute improvement, Su said.

Taipei aims to create strategic uncertainty for Beijing, so that China's ruling Chinese Communist Party cannot be confident of success if it attempts a military attack, said Su. Under such conditions, the incentive for Beijing to engage in risky military adventurism would be reduced, he added.