Taiwan’s Strategic Evolution: Building Resilience Against Regional Challenges in 2025

Growing Regional Tensions and Military Developments

China’s recent military parade showcased its strength, with President Xi Jinping declaring China’s “great rejuvenation” unstoppable while emphasizing the PLA’s role in safeguarding national sovereignty and territorial integrity.

While Taiwan remains a self-governing democracy of 23.4 million people, China maintains its claim over the island and, although preferring peaceful unification, insists on its right to use force.

Taiwan’s Defense Strategy and International Support

Taiwan has been strengthening its military readiness with consistent defense budget increases, averaging nearly 5% annual growth from 2019 to 2023. The government plans to increase defense spending to more than 3% of GDP in 2025.

In a significant development, Taiwan is building up its maritime drone force, recently showcasing advanced sea drones including the stealthy Carbon Voyager 1, fast-moving Black Tide I, and explosives-carrying Sea Shark 800. These drones are considered pivotal in Taiwan’s strategy to repel potential military actions.

International Relations and Support

Recent high-level visits from U.S. senators have reinforced American support, with senior Republican senators arriving in Taipei to discuss security matters and emphasize the “great partnership” between the U.S. and Taiwan.

However, challenges remain. Taiwan’s infrastructure, including energy, food, water, and communications systems, remains vulnerable to external disruption. Questions persist about the societal costs Taiwan’s people would face in a potential cross-Strait conflict.

Economic and Technological Developments

In the technological sphere, Taiwan’s semiconductor industry continues to evolve, with TSMC expanding its global footprint. Following the $280 billion U.S. chip manufacturing bill, TSMC announced in March 2025 a $100 billion investment plan for new chipmaking facilities in the United States.