11 September 2024

Taiwan’s defense budget is set to increase significantly, reaching $23.4 billion (by 2029, driven by rising military pressure from China. This growth, reflecting a compound annual growth rate (CAGR) of 12.7%, is part of a broader strategy to modernize Taiwan’s military capabilities in response to ongoing threats.

As of August 29, 2024, China’s Ministry of National Defense has reiterated its claim over Taiwan, continuing to exert military pressure through missile tests and the deployment of aircraft and naval vessels near Taiwan’s borders. In reaction, Taiwan is concentrating on strengthening its military to ensure readiness for potential conflict.

A GlobalData report, titled “Taiwan Defense Market Size, Trends, Budget Allocation, Regulations, Acquisitions, Competitive Landscape and Forecast to 2029,” reveals that Taiwan’s defense spending, including special budgets, increased from $12 billion in 2020 to $19.4 billion by 2024. This increase is fueled by the need to support key arms acquisition programs. The report also notes that Taiwan’s cumulative defense expenditure from 2020 to 2024 totaled $79.5 billion, with $10.5 billion allocated specifically for acquisition programs. These investments have enhanced Taiwan’s military capabilities with assets such as Hai Kun-class submarines, F-16V aircraft, and 2,500-ton light frigates.

Taiwan’s defense strategy is evolving towards asymmetric warfare, known as the “porcupine doctrine,” which emphasizes intelligence gathering, reconnaissance, and utilizing geographic advantages to defend against possible Chinese aggression.

Akash Pratim Debbarma, an aerospace and defense analyst at GlobalData, pointed out that Taiwan relies on U.S. support for procuring advanced defense technologies. For example, the acquisition of RGM-84L-4 Harpoon Block-II Coastal Defense Systems and the planned purchase of the National Advanced Surface-to-Air Missile System (NASAMS) from the U.S. will enhance Taiwan’s coastal defenses and establish a comprehensive deterrence against China.

Taiwan’s defense planning also focuses on advanced early-warning systems, sophisticated weaponry, and a mobilizable reserve force, emphasizing a strong defensive stance amid escalating regional tensions.

Looking ahead, Taiwan may increasingly turn to indigenous defense solutions.