Fighter jets roared over Taipei on Saturday morning. Two Chinook helicopters followed, each hauling a giant Taiwan flag that rippled across the sky above thousands of people packed outside the Presidential Office. Then Lai Ching-te stepped to the podium and delivered a message aimed at three audiences at once: the 23 million people of Taiwan, the government in Beijing, and the man in the White House.
“Our aim by increasing investment in national defence is not to provoke,” Lai said, according to Al Jazeera’s account of the speech. “Rather, it is to deter war.”
That one sentence carries a lot of weight. It is a reassurance to Washington that Taiwan is pulling its own weight, a warning to Beijing that the island is not going to fold, and a pitch to voters at home who are tired of seeing defense money fought over in the legislature. Here is what Lai said, what China said back, and why the numbers behind the speech matter more than the flyovers.
What Lai Actually Said
October 10 is Taiwan’s National Day, often called Double Tenth. This year marked the 115th anniversary of the 1911 Wuchang uprising, which toppled China’s last imperial dynasty and led to the founding of the Republic of China. That is still Taiwan’s formal name, a reminder that the island’s political identity grew out of China’s civil war. Chiang Kai-shek’s Nationalist forces retreated to Taiwan in 1949 after losing to Mao Zedong’s Communists, and the two sides have been governed separately ever since.
Lai’s speech was built around a simple frame: Taiwan wants peace, but peace requires strength. He said Taiwan is “open to exchanges but will not accept subordination.” He accused China of using military and “grey-zone” pressure, the coast guard incursions, drills and harassment that fall short of open war, to change the status quo across the Taiwan Strait.
He also delivered the line most likely to be quoted in foreign capitals: “Peace cannot rely solely on wishes, and tolerance cannot become a pretext for aggressors to encroach ever further.”
On the United States and China, Lai was careful. He said he welcomed dialogue between Washington and Beijing on managing their competition, but added, as the Associated Press reported, that “there must be respect for the right of the people of Taiwan to exist.” He urged democracies in the Indo-Pacific to “join forces” to keep the regional status quo from being changed by force, and framed Taiwan’s stand as a test of whether the world still believes force cannot override rules.
The guest list sent its own message. Eswatini’s King Mswati III, the monarch of Taiwan’s only remaining diplomatic ally in Africa, attended. So did Indiana Lieutenant Governor Micah Beckwith and a delegation of Japanese lawmakers. For a government that Beijing works hard to isolate, every foreign face on the reviewing stand counts.
The Money Behind the Message
Speeches are cheap. Budgets are not. And the budget numbers are where Lai’s words either hold up or fall apart.
The government has set aside a record NT$1.1 trillion, about US$34.5 billion, for defense in 2027. That is more than 3 percent of Taiwan’s gross domestic product. A year ago, in his 2025 National Day address, Lai promised that defense spending as NATO defines it would top 3 percent of GDP and reach 5 percent by 2030. On paper, he is hitting the first milestone.
But the regular budget is only half the story. Last November, Lai proposed a separate special defense budget of NT$1.25 trillion, roughly US$39 billion to US$40 billion, spread over eight years. It was meant to buy advanced American weapons, invest in Taiwan’s own defense industry, and speed up a layered air defense network the government calls the “T-Dome.”
The opposition Kuomintang (KMT) and the smaller Taiwan People’s Party (TPP) control the legislature, and they had other ideas. In May, lawmakers passed a pared-back package of about NT$780 billion, close to US$25 billion. According to Breaking Defense, the bill passed 59 to 0 while 48 lawmakers from Lai’s Democratic Progressive Party (DPP) abstained. It covers U.S. weapons, including howitzers, ATACMS missiles and Javelin and TOW anti-tank missiles, plus money set aside for a future American package that KMT caucus leader Fu Kun-chi said would include Patriot interceptors, counter-drone systems and Hellfire missiles.
What it does not cover is Taiwan’s domestic defense industry. That cut hit the Chiang Kung, or “Strong Bow,” anti-ballistic missile, which was supposed to be the backbone of the T-Dome system.
The Opposition’s Case, in Its Own Words
It would be easy to paint the KMT as soft on China. That framing misses the actual argument, and it is worth hearing fairly.
The KMT says it supports a stronger military but will not hand the government a “blank cheque.” KMT legislator Hsu Chiao-hsin said the party backs “reasonable defense buildup and arms procurement” but could not accept lumping U.S. arms sales, commercial purchases and contracted production into a single bill. Opposition lawmakers argued that several line items were vague, and a Brookings Institution analysis by Drew Thompson in March noted that at least one item, “equipment related to sustained combat capability,” was described in terms that gave legislators little to evaluate. The opposition also described stripping domestic programs as a guard against corruption and waste.
There is a political reality here too. Defense money competes with pensions, health care and infrastructure in a zero-sum budget, and the KMT and TPP generally favor more practical engagement with Beijing. Their voters are not pacifists. They just want to see the receipts.
The DPP’s answer is blunt. Lawmaker Chen Kuan-ting accused KMT leaders of “trying to disarm Taiwan” and warned that buying only American weapons could leave the island unable to keep up its ammunition supply during a blockade, when shipments from the United States might not get through. Taiwan-built missiles and drones, the argument goes, are the ones you can actually count on when the sea lanes close.
Both sides have a point. American systems are proven and come with U.S. training and support. Homegrown systems are the ones Taiwan controls. The fight is less about whether to spend and more about where the money goes and who gets to check it.
How Beijing Answered
China did not wait long. Zhang Han, spokesperson for Beijing’s Taiwan Affairs Office, said the speech “disregards facts” and “reveals ulterior motives,” according to Chinese state news agency Xinhua. She accused Lai of clinging to “Taiwan independence” separatist thinking, exaggerating the threat from the mainland, and pushing a “democracy versus authoritarianism” storyline to seek independence through military means and foreign backing.
Beijing’s official position is that Taiwan is part of China and that the island’s future must be decided by all Chinese people, including those living in Taiwan. It has rejected Lai’s repeated offers of talks and calls him a separatist. China has never renounced the use of force to bring Taiwan under its control.
The military pressure is constant. Taiwan’s Ministry of National Defense reported 21 Chinese military aircraft and seven navy ships operating around the island in the 24 hours ending at 6 a.m. Saturday. Thirteen of those aircraft crossed the median line of the Taiwan Strait, the informal boundary that once kept both sides apart, and entered Taiwan’s air defense identification zone.
Whether Beijing escalates further is the question everyone is watching. China held large war games around Taiwan shortly after Lai’s first National Day speech in 2024 but did not do so after last year’s address. Its most recent major drills came in late December, after Washington cleared an $11 billion arms sale to Taipei. Stucci Media has covered Beijing’s pattern of promising “countermeasures” after American arms sales before, and the playbook rarely changes.
The Washington Wild Card
For all the talk about China, the most consequential decision maker for Taiwan right now may be President Donald Trump.
The United States switched formal diplomatic recognition from Taipei to Beijing nearly 50 years ago, but it remains Taiwan’s most important security partner and its main arms supplier. U.S. and Taiwanese officials both say American policy has not changed under Trump. Still, after meeting Xi Jinping in Beijing in May, Trump suggested arms sales to Taiwan could be part of a bargain with China. That remark rattled governments across Asia.
Since then, a record $14 billion arms package, including the Patriot air defense system, has been waiting for Trump’s sign-off. In September, according to the AP, Xi told Trump he hoped the United States would hold “the correct position of opposing ‘Taiwan independence'” and later asked Washington to handle the issue “prudently.”
This is the tension at the center of Lai’s speech. He welcomed U.S.-China talks because he has to. Taiwan cannot afford to look like an obstacle to a deal between the world’s two largest economies, especially as trade fights over rare earths and tariffs keep both capitals at the negotiating table. But he also drew a line: whatever Washington and Beijing work out, it cannot come at the cost of Taiwan’s right to exist as it is.
That is why the defense budget matters so much to the American side of the relationship. U.S. officials have pressed Taipei for years to spend more on its own defense. Raymond Greene, the top U.S. diplomat in Taiwan, said in April it was “vital” that the special budget pass. Every dollar Taiwan spends is an argument Lai can make in Washington that the island is a partner, not a charity case.
What It Means for Americans
It is fair to ask why a speech in Taipei should matter to someone in Ohio or Florida. The short answer is chips and sea lanes.
Taiwan makes the large majority of the world’s most advanced semiconductors, the chips inside phones, cars, data centers and American weapons systems. A blockade or conflict in the Taiwan Strait would not stay local. It would hit supply chains, prices and markets everywhere, and it could draw in U.S. forces under a long-standing policy of keeping Taiwan able to defend itself.
That is also why the “deter war” framing is not just rhetoric. Deterrence works when the other side believes an attack would cost more than it gains. Taiwan’s whole strategy, as we have reported in our look at the island’s military transformation, is to make itself too tough and too expensive to swallow: more missiles, more drones, more air defense, and a population trained to keep the country running under pressure.
The Bottom Line
Lai gave the speech you would expect from a leader in his position: firm on freedom, open to talks, and eager to show that Taiwan is paying for its own security. The harder test is not what he said on Saturday but what happens over the next few months. Will the legislature and the president find a deal on the domestic weapons the May bill left out? Will Trump sign off on the $14 billion package, or keep it on the table as a chip with Beijing? And will China answer with words, or with ships?
Peace through strength is an old idea. Taiwan is betting its future that it still works.
Frequently Asked Questions
What did Taiwan’s president say in his National Day speech?
Lai Ching-te said Taiwan cherishes peace but will not give up its freedom, that the island is open to exchanges with China but will not accept subordination, and that higher defense spending is meant to deter war rather than provoke it.
How much is Taiwan spending on defense?
Taiwan has set aside a record NT$1.1 trillion, about US$34.5 billion, for defense in 2027, which is more than 3 percent of GDP. Separately, the legislature approved a special defense package of about NT$780 billion in May, below the NT$1.25 trillion Lai proposed.
Why did Taiwan’s legislature cut the special defense budget?
The opposition KMT and TPP, which control the legislature, said they support defense spending but objected to vague line items and to combining U.S. arms purchases with domestic production in one bill. They funded U.S. weapons and cut money for Taiwan’s domestic defense industry.
How did China respond to Lai’s speech?
Beijing’s Taiwan Affairs Office said the speech “disregards facts” and accused Lai of clinging to separatist thinking. Taiwan reported 21 Chinese military aircraft and seven ships around the island in the 24 hours ending Saturday morning.
Is the United States still selling weapons to Taiwan?
Yes. Washington cleared an $11 billion package last December, but a record $14 billion package that includes Patriot air defense is still awaiting President Trump’s approval after stalling following his May summit with Xi Jinping.
Rocci J. Stucci is the founder and CEO of Stucci Media and host of The Rocci Stucci Show.
