In National Day speech, Lai says Taiwan values peace but won’t accept belittlement, defends defense spending as deterrence

On the 115th National Day of the Republic of China (Taiwan’s official name) and the 30th anniversary of Taiwan’s first direct presidential election, President Lai Ching-te (賴清德) delivered his third National Day address since taking office, on Oct. 10, centering it on building a “City upon a Hill” that safeguards democracy and freedom. He stressed that “peace cannot rely solely on wishes, and tolerance cannot become a pretext for aggressors to encroach ever further,” and reiterated that defense spending is meant to deter war.

Cross-strait relations and defense

Lai said Taiwan may be small in territory, but its defense of democracy, freedom, human rights and the rule of law acts like “salt” that brings out the flavor of a dish, making the island a stabilizing force the international community can trust.

Taiwan seeks neither hegemony nor dominion over others, Lai said, adding that, knowing the cost of conflict, it has chosen to make peace its mission and to serve as a reliable stabilizing force. He noted, however, that “peace cannot rely solely on wishes, and tolerance cannot become a pretext for aggressors to encroach ever further”.

Lai said China continues to apply pressure through military and gray-zone activities in an attempt to change the status quo in the Taiwan Strait. 

Facing authoritarian expansion, he said, Taiwan’s resolve concerns not only its own survival but also whether the international community still believes that force cannot override rules and that great powers cannot strip people of the right to decide their own future.

Increased defense spending is not meant to provoke but to deter war, Lai said. Taiwan’s efforts to strengthen its self-defense do not mean abandoning dialogue, he added, but ensure that talks can take place on an equal and dignified footing.

US-China dialogue

Lai said he welcomes efforts by Washington and Beijing to manage competition through dialogue and to reduce the risk of conflict and war. 

Maintaining regional security, peace and stability, he said, requires an accurate understanding of historical developments, with no tolerance for distortion of World War II history, as well as respect for the right of the Taiwanese people to exist. 

It also requires combining the strength of democracies across the Indo-Pacific to prevent the regional status quo of peace and stability from being altered, he said.

Taiwan cherishes peace but will not give up freedom, Lai said, and is willing to engage in exchanges but will not accept being subordinated.

Energy transition

Addressing widespread public concern over energy, Lai set out three goals of stable power supply, energy security and net-zero transition. 

Beyond continuing to develop diverse green energy, storage and conservation while strengthening grid resilience, he pledged to take a pragmatic approach in assessing all energy options based on scientific evidence, legal procedures and strict safety standards.

“Energy policy cannot be built on slogans; it must be built on considerations of safety, expertise, and responsibility,” Lai said, stressing that the government will not rule out options for ideological reasons or sacrifice long-term sustainability for short-term gain. 

The government will pragmatically ensure Taiwan’s future power supply and industrial competitiveness, he said.

Sharing economic gains

Lai noted that Taiwan’s economy grew 14.15% in the first half of 2026 and could exceed 11% for the full year, which would be the strongest performance in 39 years. Per capita GDP is projected to reach US$45,332, and the Taiwan stock index has surpassed the 49,000 mark.

To ensure the public feels the benefits, Lai announced major welfare measures, including plans for 2027 for a universal cash handout of NT$10,000 (about US$313) per person, an increase in the senior farmers’ allowance to NT$10,000 per month, and a rise in the national pension to NT$5,000 per month. The government also plans to raise six categories of living allowances for disadvantaged households, among other social welfare policies.

On industrial policy, Lai said the Executive Yuan is accelerating work on 13 core strategic industries. 

These, Lai noted, include five “trusted industries,” namely semiconductors, AI, military technology, security and surveillance, and next-generation communications, along with three key technologies, namely silicon photonics, quantum computing and robotics. 

Lai also highlighted biotech and healthcare, critical minerals, an Asian asset management hub, public infrastructure and urban renewal, cultural and creative industries and tourism, and a NT$100 billion program to revitalize micro-, small- and medium-sized enterprises, so that all sectors can grow together as “mountains protecting the nation.”