Welcome to the latest edition of ASPI’s ‘State of the Strait’ Weekly Digest.
Each week ASPI tracks Beijing’s pressure campaign against Taiwan, including military, economic, and diplomatic coercion, as well as political, cognitive, cyber, and legal warfare.
This edition covers the period: 27 January 2026 to 3 February 2026.
Taiwan is spending more on defence than ever before, yet the island has slid into a budget standoff in which political paralysis – not under-funding – is preventing a NT$1.25 trillion (AUD$62 billion) special defence package from advancing despite mounting pressure from China and the United States.
In the past week, the opposition bloc has gone further. They have advanced a much smaller, alternative defence proposal while continuing to block the government’s package, entrenching the standoff rather than resolving it.
The Kuomintang (KMT) and Taiwan People’s Party (TPP) insist the originalproposal lacks sufficient detail and demand that President Lai Ching-te appear before the legislature to answer questions – an arrangement the government argues is unconstitutional. At the same time, the Ministry of National Defense has publicly criticised the opposition’s alternative plan as “unworkable,” warning it would fragment procurement and fail to deliver the integrated capabilities Taiwan requires. The result is a sustained legislative freeze at precisely the moment when Taiwan is attempting to accelerate defence investment amid rising pressure from China.
This impasse sits atop a sharp increase in defence spending over the past two years. In 2024, Taiwan’s defence budget reached NT$606.8 billion (AUD$30 billion), rising to NT$647 billion in 2025 (AUD$32 billion), roughly 2.4–2.5% of GDP. These increases reflected a broad recognition that China’s pressure campaign required faster investment in asymmetric capabilities.
Building on this trajectory, the Lai administration proposed a step-change for 2026: a NT$949.5 billion defence budget (AUD$47 billion; 3.32% of GDP) alongside the NT$1.25 trillion multi-year special budget (AUD$62 billion) intended to fund missiles, air and missile defence, unmanned systems, and long-range precision strike. Senior US officials have publicly underscored that these investments are essential, framing Taiwan’s defence spending as a test of ally burden-sharing and credibility at a time of heightened regional risk.
The problem is that these plans collided with a highly polarised political landscape in Taiwan. Following the January 2024 elections, the KMT and TPP secured a legislative majority, while the presidency remained with the Democratic Progressive Party (DPP). Since then, defence budgeting has become a tool of political leverage rather than a vehicle for strategic consensus.
The first rupture came with the 2025 budget, when the opposition imposed NT$207.5 billion in cuts and freezes across government (AUD$10.5 billion), including NT$8.4 billion cut outright from defence (AUD$420 million) and nearly NT$90 billion frozen (AUD$4.5 billion) – more than 20% of proposed defence spending.
Such cuts were unprecedented in scale. Core programmes were directly affected: 50% of funding for the Indigenous Defence Submarine (IDS) programme was frozen pending further review, as was half the budget for a military-led drone industrial park. These were not symbolic gestures. They delayed programmes central to Taiwan’s asymmetric deterrence strategy and disrupted planning, contracting, and timelines.
The result is a widening gap between appropriation and execution. Taiwan’s defence spending has risen rapidly in nominal terms, but opposition-imposed cuts and freezes have blocked the timely release of funds, meaning that increased budgets have not translated cleanly into deployable capability. Put simply, Taiwan is spending more, but delivering less, more slowly.
That confrontation has since hardened into structural gridlock. Since late 2025, the special defence budget has been blocked multiple times before deliberation can begin. Rather than negotiating changes to the government’s proposal, the opposition has instead prioritised its own narrower bill – estimated at roughly NT$400 billion (AUD$20 billion) – while leaving the larger package procedurally stalled. The opposition frames this as fiscal oversight and procedural accountability; the government views it as obstruction that undermines national security. Neither side has shifted meaningfully, and compromise has been elusive.
This dysfunction matters for several reasons.
First, Taiwan’s strategy depends on timely acquisition, training, and sustainment. Budget paralysis delays contracts, compresses schedules, and raises costs.
Second, China judges Taiwan not only by its force structure, but by its capacity to mobilise resources under pressure. Prolonged, visible deadlock feeds a narrative of internal weakness.
Third, US officials have now explicitly and publicly linked Taiwan’s security to its willingness to pass defence budgets, sharpening the alliance consequences of legislative obstruction.
Fourth, long-lead systems such as submarines and missile defences cannot absorb repeated funding disruptions without strategic consequences.
Finally, public opinion data show majority support for higher defence spending and growing frustration with legislative stalling.
The risk for Taiwan is no longer whether it is willing to spend on defence, but whether its political system can still deliver deterrence at the pace the strategic environment and key security partners demand.
2-4 February: KMT-CCP Think Tank Exchange, Beijing, China
The Kuomintang (KMT) and the Chinese Communist Party (CCP) are scheduled to hold a think tank exchange in Beijing. According to KMT insiders, the exchange will focus on non-political topics, including artificial intelligence, disaster prevention, and low-carbon and sustainable industrial development, in an effort to reduce sensitivity.
17 February: Lunar New Year’s Day in China and Taiwan
Public holiday for Spring Festival in China will be 15 February (Sunday) to 23 February (Monday).
Late February: Meeting between leaders of the Kuomintang and the Chinese Communist Party
Throughout late 2025, several media and political commentary pieces referred to plans or speculation about a meeting between new KMT Chairperson Cheng Li-wun and CCP General Secretary Xi Jinping around Lunar New Year.
PLA reveals new weapons or military capabilities
China incursions surge 15-fold: report Taipei Times Chinese military aircraft incursions around Taiwan have surged nearly 15-fold over the past five years, according to a report released yesterday by the Democratic Progressive Party’s (DPP) Department of China Affairs. Sorties in the Taiwan Strait were previously irregular, totaling 380 in 2020, but have since evolved into routine operations, the report showed. “This demonstrates that the Taiwan Strait has become both the starting point and testing ground for Beijing’s expansionist ambitions,” it said.
PLA Navy warns off foreign jets with jamming missiles near Taiwan: CCTV South China Morning Post State media has released rare footage of one of the PLA Navy’s most advanced destroyers warning off foreign aircraft near Taiwan with electronic jamming missiles. The footage, part of a series by Chinese state broadcaster CCTV on the country’s naval power, involved the Yanan, a Type 055 guided-missile destroyer. CCTV said it was the first time the Yanan had been shown using “electronic countermeasures” in “waters near Taiwan island” to warn off foreign aircraft.
Weekly Charts: PLA activities in the waters and airspace around Taiwan
Source for charts: Taiwan’s ministry of national defense monitors PLA-AF aircraft, PLA-N naval vessels and PRC official ships (e.g. coast guard) and high-altitude balloons operating in the waters and airspace around Taiwan. Numbers are recorded daily for the 24-hour period 0600 to 0600 Taiwan Standard Time (UTC+8).
Economic boycott campaigns
China’s Ministry of Foreign Affairs claims public security in Japan is poor and earthquakes are frequent, urges people not to travel there during the Lunar New Year [中國外交部宣稱日本治安不佳地震頻繁 春節勿前往] Central News Agency (Taiwan) China’s Ministry of Foreign Affairs today issued a travel advisory claiming that Japan has recently seen “deteriorating public security, with frequent illegal criminal incidents targeting Chinese citizens,” and that some areas have experienced successive earthquakes. It asserted that Chinese citizens “face serious security threats in Japan.” With the Lunar New Year approaching, the ministry and China’s embassies and consulates in Japan are advising Chinese citizens to “avoid travelling to Japan in the near term” … After Japanese Prime Minister Sanae Takaichi stated in a parliamentary response in November 2025 that “a Taiwan contingency is a Japan contingency,” China’s Ministry of Foreign Affairs issued a “solemn reminder to citizens to avoid travelling to Japan in the near term” late on the night of 14 November that year. A series of Chinese measures boycotting Japanese tourism began from that point.
ASPI Comment: United front work targeting Taiwan is orchestrated by a network of party-state organisations that aim to influence, cultivate, and co-opt key figures within Taiwanese civil society. The Taiwan Affairs Office in China has described united front work as “an important magic weapon for the Communist Party of China to unite people and gather strength”. The CCP claims the right to speak on Taiwan’s behalf and uses united front work to claim legitimacy for annexation of Taiwan into the People’s Republic of China.
ASPI's State of the Strait tracks events that are facilitated by an agency within the united front and are intended to co-opt, exert malign influence, or redefine Taiwan, its people, and its history solely on CCP's terms.
KMT-CCP think tank exchange set for Feb. 2-4: Sources Focus Taiwan The Kuomintang (KMT) and the Chinese Communist Party (CCP) are scheduled to hold a think tank exchange from 2-4 February with Deputy KMT Chairman Hsiao Hsu-tsen set to lead a delegation to Beijing, KMT sources said 27 January. National Policy Foundation Deputy Chairman Lee Hong-yuan is also expected to attend the event, sources said, adding that Hsiao is scheduled to hold a press conference 28 January to brief the public on the visit. Speculation had earlier suggested the two sides could revive the KMT-CCP forum in Beijing from 27-29 January, after a hiatus of nine years.
Disinformation campaigns designed to undermine Taiwan
Japanese public figures criticize PM Takaichi’s Taiwan remarks, warn against military expansion Xinhua Japanese public figures across the political and academic spectrum gathered in Tokyo on Thursday to protest Prime Minister Sanae Takaichi’s erroneous remarks on Taiwan, warning that her comments and her administration’s push for military expansion risk heightening regional tensions and drawing Japan into war.
Mainland: Peaceful reunification to bring opportunities to Taiwan China Daily Spokesperson for China’s State Council Taiwan Affairs Office Zhang Han said on 28 January that peaceful reunification will create tremendous opportunities for Taiwan’s economic and social development. Backed by a strong motherland, all sectors of Taiwan, including infrastructure, will be better developed, Zhang said at a press conference. Taiwan compatriots will join their mainland counterparts in sharing the fruits of Chinese modernization and embracing a bright future of prosperity and stability, she added.
Ministry of National Defence: The DPP authorities are hollowing out Taiwan and accelerating its push towards the dangerous brink of military conflict [国防部：民进党当局掏空台湾 加速把台湾推向兵凶战危险境] Xinhua The DPP authorities fabricate pretexts, deceive the public, and engage in “black-box operations”, squandering the hard-earned money of the Taiwanese people to fatten foreign arms dealers, while using the process to line their own pockets through corruption. Such ugly practices have long lost popular support. NT$1.25 trillion cannot buy so-called “security”; it will only further hollow out Taiwan and accelerate its push towards the perilous brink of military conflict. The more rampant the “Taiwan independence” forces become in pursuing independence through provocation, the faster they will move towards destruction.
Amplifying criticism of Taiwan or the Lai administration
Taiwan Affairs Office: Lai Ching-te is a genuine “destroyer of peace”, “maker of crises”, and “instigator of war” [国台办：赖清德是不折不扣的“和平破坏者”“危机制造者”“战争煽动者”] Xinhua In response to pro-independence and provocative remarks recently made by Lai Ching-te at a forum, Zhang Han, spokesperson for the Taiwan Affairs Office of the State Council, said at a regular press briefing on 28 January that Lai habitually confuses right and wrong and turns black into white. The facts are clear: Lai Ching-te stubbornly adheres to a “Taiwan independence” separatist stance, refuses to acknowledge the “1992 Consensus”, and seriously challenges the one-China principle; he seeks independence by relying on external forces and by force of arms, continually exacerbating tensions in the Taiwan Strait; he disregards the mainstream public opinion in Taiwan that seeks peace, development, exchange and cooperation, and persistently manipulates “anti-China” narratives; he has intensified the manufacture of “green terror”, practised “Taiwan independence authoritarianism”, and deliberately restricted and sabotaged cross-strait exchanges and cooperation.
Excessive Taiwanese data collection and privacy infringement
DPP authorities hype so-called “cybersecurity risks” of mainland apps — Taiwan Affairs Office: reckless actions will inevitably bring consequences upon themselves [民进党当局针对大陆应用程序渲染所谓“资安风险” 国台办：恣意妄为必将自食恶果] Xinhua Zhang Han, spokesperson for the Taiwan Affairs Office of the State Council, responded to questions at a regular press briefing on 28 January, stating that the DPP authorities’ exaggeration of so-called “cybersecurity risks” posed by mainland applications is driven by malicious intent. Such actions deprive Taiwan’s public — especially young people — of their right to information and freedom to use social media platforms, cut off channels for cross-strait exchange, and deliberately incite so-called “resisting China to protect Taiwan”, exposing the authorities’ inner fear and insecurity. The DPP authorities are acting recklessly and will inevitably suffer the consequences of their own actions.
Outreach to Taiwan’s last 12 diplomatic allies
Why bipartisanship is Taiwan’s best defense in Paraguay (and beyond) The Diplomat Under President Lai Ching-te, Taiwan may have paused its diplomatic freefall, but survival, not success, will shape the future of Taiwan’s diplomacy. As China intensifies pressure across Latin America through economic persuasion and media influence, Taiwan’s allies are increasingly vulnerable to diplomatic switches. Paraguay’s wavering stance, for example, demonstrates the cost of neglecting opposition outreach.
New Honduran president inaugurated; Chinese ambassador attends and posts photo together [宏都拉斯新總統就職 中國駐宏國大使出席秀合照] Central News Agency (Taiwan) Honduras’ newly elected president, Nasry Asfura, was sworn into office on 27 January local time. China’s ambassador to Honduras, Yu Bo, attended Asfura’s inauguration ceremony at the invitation of the Honduran side and released a photograph of the two together. Honduras severed diplomatic relations with Taiwan in 2023, and Asfura had previously pledged to restore diplomatic ties with Taiwan.
China will not compromise on Taiwan question: Chinese Ambassador to Australia Global Times The Taiwan question concerns China’s sovereignty and territorial integrity and lies at the core of China’s core interests. On this issue, China will not compromise or back down, Chinese Ambassador to Australia Xiao Qian said on Wednesday in response to a recent statement by Australia’s Department of Foreign Affairs and Trade on Taiwan question. Attending a New Year media briefing and reception on Wednesday, Xiao took questions from journalists, explaining the thinking behind his recent article that responds to the Australian government’s statement related to Taiwan, according to a notice published on WeChat account of Chinese embassy in Australia.
Testing Taiwan’s security partners
Japan has no right to comment on China’s Taiwan: spokesperson CGTN Chinese Foreign Ministry spokesperson stated on 27 January that Japan has no right to comment on China’s Taiwan, either historically or legally, in response to Japanese Prime Minister Sanae Takaichi’s recent remarks. Takaichi had suggested that Japan and the U.S. might coordinate actions in case of a Taiwan Strait contingency. Spokesperson Guo Jiakun condemned Japan’s comments, accusing Japan’s right-wing forces of destabilizing the region and undermining China-Japan relations, and urging Japan to adhere to previous agreements and stop provoking issues related to Taiwan.
Reports increase of Taiwanese missing, detained in China Taipei Times Reports of Taiwanese going missing, being detained or interrogated, or having their personal liberties restricted in China increased about fourfold annually last year, the Mainland Affairs Council (MAC) said 28 January. Last year, 221 Taiwanese who traveled to China were reported missing, were detained and interrogated, or otherwise had their personal freedom restricted, up from 55 the previous year, the council said. Reopening group tours to China would be risky, as it would leave travelers with no way to seek help through official channels after Beijing shut down dialogue between the associations tasked with handling cross-strait tourism, the MAC said.
ASPI Comment: For reference, below are the numbers of Taiwanese nationals reported missing, detained in 2025 and 2024:
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Great Newsletter issue!