Taipei: Taiwan's opposition-controlled Legislature approved a reduced defense budget on Friday, a move analysts described as a "positive first step" despite concerns about potential setbacks to Taiwan's long-term military development. The Legislative Yuan passed an opposition-backed bill with a spending cap of NT$780 billion (US$24.9 billion), rejecting the Cabinet's proposal for NT$1.25 trillion.
According to Focus Taiwan, the bill includes two significant funding allocations for U.S. weapons systems: NT$300 billion for arms sales approved by the United States for Taiwan on December 17, 2025, and NT$480 billion for a future arms package anticipated from Washington. Both current and future arms sales must receive legislative approval before funds can be released.
Su Tzu-yun, a research fellow at Taiwan's Institute for National Defense and Security Research, described the bill's passage as a "good start." He noted that the defense bill reflects the broader power dynamics between China and the U.S. Su highlighted China's efforts to portray Taiwan as hesitant in bolstering its defense, aiming to influence the U.S. to reconsider arms sales. Conversely, the U.S. seeks concrete actions from Taiwan to affirm its commitment to self-defense.
Amidst the U.S.-China rivalry, Su emphasized Taiwan's role as a proactive player, showcasing its readiness for self-defense despite partisan challenges over the bill. This process, he added, has fortified Taiwan's democratic system. China's Ministry of Foreign Affairs mentioned that Chinese President Xi Jinping advised U.S. President Donald Trump to "exercise caution" regarding arms sales to Taiwan during a call in February.
Bonnie Glaser, managing director of the German Marshall Fund's Indo-Pacific Program, told CNA that the U.S. government would likely view the bill as a "good step" and expects the Kuomintang (KMT) to support additional funding for upcoming arms sales.
Su expressed hope for bipartisan support for Taiwan's local defense industry through future supplementary defense budgets. Without stable funding, Taiwan's goal of "defense autonomy" could be jeopardized, as seen in the development challenges of the F-CK-1 "Ching Kuo" fighter jet program.
The Cabinet's bill rejection removed supplementary budget funding for local defense initiatives, including plans to expand Taiwan's drone production. Chieh Chung, another researcher at INDSR, stated that funding for these initiatives would now be part of the general budget, potentially affecting planned investments under the Ministry of National Defense's "Five-Year Force Buildup Plan."
Chieh noted that excluding these initiatives from the special budget creates uncertainty and could delay or cut funding. He emphasized the importance of opposition support for initiatives aligning with the bill's general direction, while specific items should be thoroughly scrutinized and debated.