Money and a rehearsal
Published 8 October 2026
Money is the plainest measure of intent, and Taiwan's money has a history in 2026. On Thursday, August 21, 2025 Taiwan's Cabinet approved a 2026 defense budget of NT$949.5 billion, which is US$31.1 billion per CNA and US$31.3 billion per Taiwan Current News, or 3.32% of GDP, up 22.9% on 2025. Premier Cho Jung-tai said it was "calculated using NATO's model and standards." It includes NT$135.9 billion for the Coast Guard Administration and military retirement benefits, which were not counted in the previous year's figure. The opposition-controlled legislature had to approve it. Taiwan Current News calls it the first time since 2008 that spending passed 3% of GDP, a claim made by that source. INDSR analyst Chieh Chung, as quoted by NOWNEWS and Taiwan Current News, said weapons procurement and research allocations rose sharply while core operations funding for training, fuel and maintenance stayed flat. That is one analyst's reading. At the end of August 2025, Speaker Han Kuo-yu told visiting American senators Roger Wicker and Deb Fischer that a cross-party defense consensus had gradually formed after a year and a half of coordination.
The special budget was a separate, multi-year line. On Thursday, November 27, 2025 the Executive Yuan approved a NT$1.25 trillion (US$39.55 billion) special defense budget to bolster defense and asymmetric capabilities and sent it to the legislature. On Tuesday, December 2, the Kuomintang and People's Party blocked it at the Procedure Committee, and kept doing so, "demanding that military pay raises be incorporated into the central government's general budget." Friday, January 23, 2026 saw the eighth block. On Friday, May 8, 2026 the legislature passed the Kuomintang and People's Party version, NT$780 billion, about US$24 billion, "down from the NT$1.25 trillion initially proposed by the government." It runs to 2033 with two provisions: up to NT$300 billion for American arms sales approved in December 2025 and up to NT$480 billion for a further American package expected, both contingent on legislative review once Letters of Offer and Acceptance arrive.
What was cut is argued. A Taiwan News analysis of May 16, 2026, an opinion piece, says about 200,000 domestic drones and funding for the T-Dome and the Strong Bow anti-ballistic missile were cut, and that moving drones to the regular budget delays orders until 2027 at the earliest. The Taipei Times reported on August 16, 2026 that the Executive Yuan plans to restore the NT$1.25 trillion proposal through the 2027 budget and the 2026 supplementary budget. Its subtitle says NT$780 billion approved, NT$210 billion slated for drones and NT$260 billion remaining for items such as the T-Dome, and a record supplementary budget of about NT$200 billion was expected after the legislature approved the annual budget on August 14 "after a record delay." The breakdown comes from a subtitle and a "source said," so it is "reportedly." The special budget is separate from the annual defense budget, and the two are not added here. Lai's pledge of 3% in 2026 and 5% by 2030 dates to his October 10, 2025 speech, reported by the Taipei Times.
On August 19, 2026 the Cabinet approved a 2027 budget of NT$3.9266 trillion, including NT$1.1225 trillion for defense, the first time above NT$1 trillion. That is 3.93% of 2026 GDP or 3.01% of the projected 2027 figure. The 2026 level was 3.32%, and Lai's goal is 5% by 2030. Of the total, NT$691.9 billion is the defense ministry's line and NT$218.2 billion special budgets. The same Taipei Times article also prints "NT$1.225 trillion," which appears to be a typo, and it is a different line from the NT$949.5 billion 2026 figure above. The Ministry of National Defense's 2025 Quadrennial Defense Review, in its condensed English version of about 13,500 words, sets out reserve-force reform (training by mission profile, more junior leaders, equipment and civilian resources), conscript training, a "subtractive" management line for personnel, and a warning that the PRC conscripts civilian roll-on/roll-off ships as amphibious lift. It has no force-structure numbers, so none are printed.
The summer also had a rehearsal. On Thursday, July 23, the PLA held live-fire drills off Dongshan, a day after Secretary of State Rubio talked with Wang Yi. Reuters reported two days of live-fire drills from 6 a.m. to 6 p.m. each day around Dongshan Island, announced by maritime authorities. Taiwan's foreign ministry urged Beijing to "exercise 'rational self-restraint'" and to stop "gray-zone intrusions." Reuters recalled that the December war games had included 10 hours of live-fire exercises with rockets fired into waters north and south of Taiwan. The Pentagon says PLA pressure operations give the Navy and Air Force "frequent training opportunities around the island under near-real world conditions," which is its own framing of why daily pressure doubles as training.
Han Kuang 42 followed, from Wednesday, August 5 to Friday, August 14. The Ministry of National Defense briefed on it on Tuesday, July 28. The Taipei Times reported on August 6 that 20,000 reservists were called up for the 10-day live-fire portion, with a focus on decentralization and a move to unscripted live fire. The military said that, on American advice, it did not share the full exercise plans with officers so as to see real-time reactions. The 36th Tong Hsin Exercises ran alongside, mobilizing the whole Third Theater Taipei Reservist Brigade and the Fourth Theater's 137th Brigade, and the Fourth Theater in the Tainan region simulated purchase and requisition of civilian vehicles. Reporters were invited to test wartime information flow. It was, for the first time, also a drill with deliberate throttling of mobile internet, in two stages. On Monday, August 10, mobile data was slowed across a large part of central Taiwan, centered on Taichung, while ATMs, traffic signals, landlines and fixed internet kept working. Air raid sirens rang from 2:30 p.m. and people cleared the streets, and the government texted in Chinese and English about "simulated air attacks on communication infrastructure." On Thursday, August 13, in the last phase, operators in Taipei and six other cities and localities slowed mobile traffic to 256 Kbps for 30 minutes, enough for text messages and little else. President Lai apologized for the inconvenience: "We ask for your understanding and support, as this is a necessary drill." At a Taipei metro station, passengers waited 30 minutes for the gates to reopen. A tourist from Hong Kong told AP: "I did not expect it to be so real." Between Wednesday and Thursday morning of that week, Taiwan counted 18 Chinese warplanes and 11 navy ships around the island.
An October 7 analysis by K. Tristan Tang and H. Rion Wu in The Diplomat shifts attention from the equipment shopping list to the way Taiwan intends to fight. They describe a move toward an erosion strategy: successive resistance and sustained operations, with layered forces slowing and striking an attacker rather than relying on one decisive battle at the shoreline. Their account says more than half of Taiwan's active-duty army and marine brigade-level forces are normally in the north, around the political center, major command organizations and transport hubs. Reinforcement during exercises can raise that concentration further. In Han Kuang 2026, they identify elements of the Marine Corps' 99th Brigade, the Army's 564th Combined Arms Brigade and the 586th Combined Arms Brigade moving north from other regions. These are the authors' descriptions of deployment and training, not a complete order of battle released by the military.
That analysis makes a useful distinction. Decentralized command does not require scattering forces evenly across the island. A unit can be expected to carry out the higher command's intent after losing contact while still belonging to a concentrated defense of a particular region. The authors argue that joint command and control remains the difficult test. Navy shore units and air-defense units matter even after a fight moves inland; their weapons cannot be treated as belonging to separate wars. A ship, a missile battery and an infantry brigade can all appear on a procurement chart without the chart proving that they will share information, divide targets or keep working after communications fail. Longer exercises create time to test that problem. They do not certify that it has been solved.
Communications had its own rehearsal. Reporting on October 6, The Washington Times described a two-day tabletop exercise run by Foundation for Defense of Democracies experts in Taiwan. The simulated pressure began with limited cellphone disruption, cyberattacks, interference around cable landing areas and disinformation. It then escalated to disabled communications substations and multiple international cable cuts, putting replacement microwave links under strain. Participants representing Taiwan responded with redundant links and coordination with American and Japanese cable-repair ships and cyber support. Those responses happened in a simulation. No reader should mistake the exercise account for a report that China cut those cables that week. FDD's Craig Singleton argued that communications disruption could impose pressure without an invasion or blockade; retired Rear Admiral Mark Montgomery stressed the need to harden networks and coordinate outside help. Those are the exercise organizers' conclusions, not a prediction validated by a real conflict.
The practical question is narrower than whether the island has a backup somewhere. It is whether backups work together under load, whether the government can still reach people and whether repairs can arrive while pressure continues. A microwave link with less capacity than a severed cable might keep essential messages moving without restoring ordinary life. A functioning satellite connection is not the same thing as enough connections for an entire population. The tabletop exercise belongs beside the slow-mobile-data drill because both concern a state trying to govern with less bandwidth than its citizens are used to.
The slow-internet drill is a small detail with a large meaning. In a quarantine, a cable cut or a jamming campaign, Taiwan's government would need to reach 23 million people on devices that may not load a webpage. Rehearsing text-only communication is rehearsing for that day.