How Silicon Valley Sees Taiwan’s Miracle (4): Increase in Defense Budget?

While most people don’t think China will attack Taiwan in the next two years, many believe that the next three to five years after Chinese President Xi Jinping’s third term will be a high-risk period. I’m here. But is Taiwan ready? Some suggest that Taiwan’s annual defense spending is about $19 billion, or his 2.4% of GDP, and that over the next five years he will rise to $40 billion, or about 5% of GDP.

We all have different ideas about the likelihood and methods of a Chinese invasion. Seo Seungganga prominent Chinese economist, silicon valley events While many consider the war between Russia and Ukraine to be the model for China’s invasion of Taiwan, he believes China has its own credible experience. old pattern.

Much speculation about China’s invasion of Taiwan focuses on the use of new tools such as aircraft carriers. But what if China used fishing boats and ferries instead? Would that greatly change the mode of warfare in the Taiwan Strait? Mimicking the war between Russia and Ukraine carries a lot of risks and is not necessarily the model China will adopt.

Taiwan’s strong manufacturing capacity can be put to good use to strengthen Taiwan’s self-defense. Many are calling for Taiwan’s arms procurement to include technology transfer and adopt a joint production model. Taiwan has the ability to build submarines and missiles. During the Vietnam War, the United States and Taiwan undertook many similar cooperative projects. But this time, it is unprecedented for the United States to cooperate with a country that has no diplomatic ties to another country challenging US dominance in the Pacific. Taiwan is at the forefront of action, but does Taiwan have an alternative?

Defense spending is never enough for a small country at a crossroads. The key is not necessarily military power, nor is it who Taiwan is on. Instead, it must become the third side that both the other two need, increasing its bargaining chips and further increasing its own value.

Finally, if Internet access in Taiwan is blocked, Low Earth Orbit (LEO) satellites are certainly a viable option. But how can social strengths be harnessed to promote the development of related industries? Taiwan is not only underinvesting in its defense. There has been a lot of talk about digital transformation, but I have yet to see a government agency take a bold step in that direction. The problem had already surfaced.

Taiwan’s tax burden is very low, and in 2021 the government collected an additional TWD800 billion (US$25.85 billion) in tax revenue. Spending on forward-looking investments should be encouraged. In this new era, Taiwan needs a more capable government.

(Editor’s Note: This is part of a series of articles written by Colley Hwang, President of DIGITIMES Asia, about his observations during a recent visit to Silicon Valley.) How Silicon Valley Sees Taiwan’s Miracle (4): Increase in Defense Budget?

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