Taiwan’s President has announced a record defense budget exceeding T$1 trillion, representing over 3% of the country’s GDP. This substantial increase aims to strengthen deterrence capabilities against China, which views Taiwan as a breakaway province. The budget reflects a strategy focused on maintaining a defensive posture rather than pursuing offensive measures, amid persistent tensions and regular People’s Liberation Army activities around the island. Markets interpret this increase as a favorable signal for a NO invasion scenario before 2027.
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