In November 2025, Taiwan’s president Lai Ching-te proposed a “special defense budget” to spend $40 billion (approximately 1.25 trillion New Taiwan Dollars) on advanced military equipment. The “special defense budget” is part of Lai’s broader agenda to increase the island’s military spending and boost its defense and deterrence capabilities. [1]
Lai’s defense budget soon became a focal point for domestic and international contentions. Domestically, the bill sat at the center of a political struggle between the ruling Democratic Progressive Party (DPP) and the opposition party Kuomintang (KMT). The KMT first repeatedly blocked Lai’s budget in the Legislative Yuan and then proposed its own drastically watered down $11.8 billion version. Internationally, the U.S. pressed Taiwan to pass Lai’s budget, while China decried it.
As such, the defense budget itself becomes a bloodless battlefield and a looking glass for the tensions within Taiwanese politics. What, then, does Taiwan’s battle over the defense budget reveal about its volatile political landscape and delicate international positioning?
In an interview with Andrew J. Nathan, Professor of Political Science at Columbia University, we explore the geopolitical forces that shape the debate surrounding Taiwan’s defense budget. Nathan is an internationally-recognized expert on Chinese politics, foreign policy, and human rights. His best-known books include Chinese Democracy, The Tiananmen Papers (co-edited with Perry Link), and China’s Search for Security (co-authored with Andrew Scobell). Nathan is also keen to promote the study of East Asia: he served as the director of the Weatherhead East Asian Institute from 1991 to 1995 and launched the Andrew J. Nathan Taiwan Lecture Series in 2025.
This interview unfolds in three sections. The first section addresses the defense budget’s significance. The second section discusses the challenges posed by Taiwan’s divided government, and the third section concludes with an evaluation of how Taiwan’s major parties seek to position the island internationally.
This interview has been edited for brevity and clarity.
The Defense Budget’s Significance
Eleanor Cao: Before diving into Taiwan’s fractured domestic politics, could you first give us a sense of why Lai’s proposed budget is so significant? What can it achieve for Taiwan, and why is it such a huge issue?
Andrew J. Nathan: The defense budget is such a controversial issue because it has to do with both policy and power. To begin with, Taiwan inherently faces a very difficult challenge: the mainland, which is much stronger militarily, wants to unify it and control it. Therefore, the defense budget represents an authentic debate in terms of policy, the policy of how to respond to China’s threat.
Policy-wise, most people in Taiwan want to maintain the status quo of de facto independence, but they are polarized over how to maintain the status quo. One view contends that the status quo hinges on lowering the tension with the mainland by not declaring independence and not doing what the mainland resents. Conversely, the other view contends that China simply will not let Taiwan continue to remain de facto independent. In this case, Taiwan should be ready to defend itself, either through U.S. alliance or self-reliance. Strong alliance with the U.S. and self-reliance are inter-related: if Taiwan does not have a strong will to defend itself, then Washington will not be motivated to step up for Taiwan; if Taiwan does not have Washington’s support, its own will to resist will be weakened as well.
The defense budget becomes especially salient in Taiwan’s calculus because the current Trump administration views Taiwan’s increased investment in its defense as a sign of its will to resist. The Lai administration’s logic is that Taiwan will do what the U.S. wants: it will increase its defense budget and show its own will to resist. However, not all parties in Taiwan agree with Lai’s position. Therefore, from the perspective of foreign policy, the defense budget is genuinely contested.
In addition to policy debates, domestic politics also kicks in. Everywhere in the world, domestic politics is all about the power struggle between opposing people and parties who are fighting both for power and for policy. Politicians are constantly positioning themselves to meet the expectations and needs of their supporters. The Democratic Progressive Party adopts the position of doing what the U.S. is telling Taiwan to do, while the Kuomintang and Taiwan People’s Party both demand more information before passing the budget.
The defense budget takes on dual significance: it is both a policy struggle and a power struggle.
Volatile Political Landscape: The Defense Budget and Taiwan’s Divided Government
EC: Now, let us unpack what the debate surrounding the defense budget tells about Taiwan’s divided government. Since the 2024 elections, Taiwan has produced a Democratic Progressive Party (DPP)-led executive and a KMT-led legislature, and the executive and legislative branches have been in constant gridlock. President Lai’s bills, including the “special defense budget,” were bogged down because of legislative opposition. On the other hand, the KMT formed a coalition with the Taiwan People’s Party (TPP) and unilaterally passed their own bills, including a contentious proposal to aggrandize the power of the Legislative Yuan. These controversies culminated in the 2025 Great Recall Movement, in which civil society groups and the DPP attempted, but failed, to recall the 31 KMT legislators who were perceived to be too pro-China and pro-Communist. The ongoing controversy over the defense budget is only one episode in a now two-year-long struggle. Is Taiwan’s divided government and heightened polarization a liability in the face of China’s threat?
AJN: Without giving you a completely black-and-white answer, I want to highlight the fact that the leading parties in Taiwan take very different assessments of divided government as well. Just as they do not agree on Taiwan’s posture toward China, they also do not agree that divided government is harmful.
For the DPP, divided government is perilous, but for the KMT and TPP, divided government is not dangerous—for them, what is truly dangerous is encouraging the Lai administration to do what it wants to do.
The DPP sees having a divided government as dangerous because it hinders Taiwan’s self-defense. Taiwan can only reliably resist a potential Chinese invasion or blockade with a mix of civil defense, energy resilience, appropriate military preparations, and US intervention. Now, the divided government will severely slow everything down, but Taiwan does not have time—it cannot afford to take forever—to develop civil defense or become militarily prepared. If the Legislative Yuan does not pass budgets, Taiwan’s defense will be paralyzed. This is what makes divided government dangerous in the eyes of the DPP.
On the other hand, the KMT doubts the feasibility of the DPP’s self-defense strategy to start with. Instead, they believe that if left unchecked, Lai may anger China and make war more likely. So, for the KMT, divided government has the merit of constraining Lai.
Whether divided government is harmful or not really comes down to how the DPP and KMT perceive each other. Although the mainstream of the public and the politicians agree for now that Taiwan should maintain the status quo, each side thinks that the other side has a different long term vision that is nothing short of disastrous. The KMT believes that the DDP’s long-term vision is independence, and independence makes war more likely by angering China. Conversely, the DDP believes that the KMT’s long-term goal is some form of unification, and should unification happen, Taiwan will lose its democracy, not to mention the fact that DPP leaders will be persecuted by the Chinese regime. Both sides believe that if the other side takes power, something disastrous will happen. Broadly speaking the dynamic is the same in any country: the ruling party does not want divided government, and the opposition party welcomes it.
EC: Thank you for such an innovative take on this topic. Your answer brings out how we are missing the basic fact that the major parties in Taiwan disagree, even on the assumption underlying our analysis that Taiwan can feasibly defend itself. You also sketched a vivid picture of polarization in Taiwanese politics: Taiwan’s two major parties not only differ sharply regarding policies, but also tend to demonize each other and sometimes perceive the other side as more extreme than they actually are.
EC: A further question is whether Taiwan’s divided government is deliberately engineered by China to sow discord and weaken Taiwan’s defenses. After all, under Fu Kun-chi, the KMT caucus has repeatedly paid visits to China. They even met and shook hands with Wang Huning, who is regarded as the CCP’s chief ideologue and the deputy leader of the pro-unification Central Leading Group for Taiwan Affairs. The TPP also seemed to have close ties with China. They sparked outrage for putting “Chinese spouses”—who might have ostensibly maintained links with the CCP—onto their party list. One of the TPP’s prospective nominees in 2024, Xu Chunying, had just been indicted for espionage in March. What do you think of the level of Chinese interference in Taiwanese politics? Has China truly infiltrated—or at least is China attempting to infiltrate—opposition parties like the KMT and TPP to splinter Taiwanese politics?
AJN: I don’t have inside information, but it’s safe to assume that China is using various methods to try to influence public opinion and the behavior of politicians in Taiwan. It is in China’s national interest to do so.
China’s methods of influencing Taiwanese politics fall on a spectrum that extends from overt to clandestine. On the public side, China uses propaganda, summer camps, diplomacy, and threats. China also employs less overt, yet not secret, devices such as manipulating the internet and social media, decreasing mainland tourist traffic to Taiwan, and influencing the Taiwanese business community in China (Taishang).
If we go to the secret part of the spectrum, cases of bribery and espionage should be expected. We can assume China is doing what Russia does in the US or in Hungary, or things that the US does in Cuba. So, yes, China is trying to interfere in Taiwanese politics.
However, it is a different question to claim that one specific Taiwanese politician visits China because China has control over that person. As outsiders, we can’t say for sure whether a politician acts due to their genuine beliefs or due to Chinese influence. That their actions may benefit China does not entail that they are necessarily manipulated by China into acting the way they do.
Delicate International Position: The Defense Budget and Taiwanese Foreign Policy
EC: Finally, let us turn to examine what Taiwan’s debate over the defense budget reveals about its international position. The DPP, KMT, and TPP’s disagreement over the defense budget is fundamentally a disagreement over how Taiwan should position itself between China and the U.S. The DPP, overall, has very clearly aligned itself with Washington. Nonetheless, the KMT seems to be slightly more complicated. The KMT chairwoman Cheng Li-wun explicitly aligns herself with China and even met with Xi Jinping, but there are also people within the party who appear to disagree with Cheng. What do you think is the KMT’s foreign policy at this moment? How authoritative is Cheng’s extremely pro-China position within the party?
AJN: The KMT’s foreign policy stance is divided. Cheng is party chair but is not likely to be the party’s nominee for president in the next election. The presidential candidate’s position will determine the KMT’s overall stance, not the party chair’s position.
To understand the KMT’s foreign policy stance, we should pay attention to Lu Shiow-yen, the incumbent mayor of Taichung who is currently considered the most likely KMT presidential candidate. Lu toured the US this March, and while she was here, she articulated the position that Taiwan’s relationship with the US was the number one priority. That position seems different from Cheng’s. Additionally, Chiang Wan-an, the current mayor of Taipei city and another potential presidential candidate, also does not identify with Cheng.
Cheng Li-wun was elected the KMT chair with a very small number of votes because of the KMT’s voting system, which only allows party members to vote for the chair. However, most of the people who end up voting for the KMT in a national election are not party members. In other words, Cheng won a majority within a small group of people who are not representative of the general electorate.
To run for the presidency, as Lu seems likely to do, one needs to adopt a more mainstream position to get as many votes as possible. Cheng’s pro-China position will not be popular with Taiwan’s mainstream voters.
As a result, the party chair is unlikely to define the KMT’s foreign policy position. Instead, it depends on who the presidential candidate is and what their cross-strait strategy will be like.
EC: Regarding Taiwan’s international stance, is there a possible middle-ground between the DPP’s pro-American policy and Cheng Li-wun’s alignment with China? Eric Li-luan Chu, the former KMT chairman and 2016 presidential candidate, famously remarked in 2024 that Taiwan should be simultaneously amicable to China, the U.S., and Japan: “Be close to the U.S., be friendly toward Japan, be peaceful with China.” Is Chu’s approach of essentially not taking sides at all feasible in today’s international arena?
AJN: No. Taiwan is an absolutely crucial strategic stronghold. It forms part of the “first island chain” that can block China’s access to the Pacific, manufactures chips that keeps the global economy alive, and represents an alternative, democratic political model to China’s authoritarian rule. China cannot be secure without controlling Taiwan—it does not mean they will control Taiwan, but they need to do so. And, the reasons why China must control Taiwan are precisely the reasons why the US must not abandon Taiwan.
Therefore, I recently wrote in a book review titled “Zero-Sum” that “The Taiwan situation affords neither a solution nor a compromise that can satisfy all sides; it is a zero-sum game.” I don’t see how Chu’s approach of trying to satisfy all sides would succeed.
EC: Thank you so much for your time and insights! It was an absolute pleasure to discuss with you Taiwan’s international politics – the anxiety and fracturedness that seems to form an impossible Gordian knot – as well as the role of the United States in cross-strait relations.
Sources
[1] “President Lai Holds Press Conference on National Security Action Plans to Safeguard Democratic Taiwan,” Office of the President Republic of China (Taiwan), November 26, 2025, accessed April 7, 2026, https://english.president.gov.tw/NEWS/7048?SearchBy=defense%20budget.