In 1938, a year before Nazi Germany invaded Poland, France, and the United Kingdom allocated roughly 25–30 percent of their government expenditures to defense in preparation for war. Once the conflict erupted and France fell, the U.K. escalated its spending dramatically, dedicating around 50 percent of public funds to the war effort.
Fast forward to 2025, when Elbridge Colby, the Trump administration’s nominee for Pentagon undersecretary of defense for policy, suggested at his Senate confirmation hearing that Taiwan should aim to spend “more like 10 percent of its GDP, or at least something in that ballpark” on defense.
While Colby’s concern for Taiwan’s security is commendable, he may not fully appreciate the scale of the challenge. Allocating 10 percent of GDP to defense would consume over 80 percent of Taiwan’s total government budget, effectively forcing the country into a wartime economy – a level of spending that is unsustainable. Taiwan undoubtedly needs to take its defense more seriously, but the figure cited by Colby is not viable.
Colby is not the first U.S. official to urge Taiwan to increase its defense expenditures. In 2005, then-Deputy Undersecretary of Defense Richard Lawless of the Bush administration similarly criticized Taiwan for not allocating enough resources to defense. In both 2005 and 2025, the ruling Democratic Progressive Party (DPP) sought to boost military spending, while the China-leaning opposition Kuomintang (KMT), which held a legislative majority, moved to cut the budget.
Taiwan’s defense spending is already higher than often portrayed. The country has long divided its defense budget into three distinct categories: the Ministry of National Defense (MND), the Veteran Affairs Council (VAC), and a Special Budget for major arms procurement, which covers high-cost items such as F-16V fighter jets and M1A2 main battle tanks. Taken together, Taiwan’s total defense-related spending accounts for roughly 25 percent of its entire government budget and approaches 2.9 percent of its GDP – significantly higher than the 1.9 percent figure frequently cited by U.S. officials, which only reflects the MND’s budget.
That said, Taiwan’s defense challenges do not stem from a lack of spending per se but from inefficiencies in how its defense funds are allocated and utilized. Wellington Koo, Taiwan’s current defense minister and the first civilian to hold the position in eight years, can focus not just on increasing spending but on spending wisely.
Investing in technology, training, and organizational reforms will yield greater long-term benefits than simply throwing more money at the problem. A well-planned defense budget requires a clear understanding of emerging threats and a strategic vision. Taiwan’s defense planners must critically assess current programs, phase out outdated systems, and reallocate resources toward more effective capabilities – such as asymmetric warfare and network-centric operations.
An Overpriced, Top-Heavy Military
A major issue in Taiwan’s defense spending lies in its personnel costs. More than half of the MND budget is allocated to personnel expenses, leaving limited resources for training, operations, and critical defense investments. Combined with the VAC’s expenditures, nearly two-thirds of Taiwan’s defense-related spending goes toward personnel – even when accounting for the Special Budget for big-ticket items. By contrast, Japan’s Self-Defense Forces allocate only 42 percent of their defense budget to personnel. Given Japan’s higher per capita income, Taiwan’s allocation appears excessive and ineffective.
A key contributor to this problem is the military’s top-heavy force structure. The officer-to-soldier ratio in the U.S. Army and Marine Corps is about 1 to 10, but in Taiwan, the ratio is roughly 1 to 3.8, indicating a bloated officer corps. The disparity is even more glaring at the highest levels. The U.S. military, with a total force of about 1.31 million, has around 900 flag officers. Both Japan and South Korea follow a similar ratio. With only 176,000 personnel, Taiwan has almost 310 generals and admirals – more than one-third of the U.S. total, despite a far smaller military force. This excessive number of generals not only inflates personnel costs but also undermines combat effectiveness by diverting resources from enlisted soldiers and non-commissioned officers (NCOs), weakening morale and impacting combat effectiveness.
Taiwan’s diplomatic isolation has further hindered its military modernization. Its armed forces have been largely disconnected from global trends, indirectly acquiring much of their military knowledge – often via translated materials rather than through firsthand interactions with foreign militaries. As a result, entrenched warfighting mentalities persist, leading to a military ill-prepared for modern warfare. Instead of embracing the latest unmanned systems and networked operations, Taiwan’s military remains predominantly wedded to obsolete doctrines and tactics reminiscent of the Civil War that the then-ruling KMT lost in 1949.
Modern warfare has shifted away from the traditional “bigger is better” mindset, as space warfare, electromagnetic spectrum contests, network-centric warfare, and cyber operations have proven highly effective against enemy armed forces. However, Taiwan’s military leadership continues its over-reliance on large, conventional weapons that risk making the military slow, vulnerable, and unprepared for the rapidly evolving threats of modern battlefields.
One of Taiwan’s most glaring vulnerabilities is electronic warfare (EW). Modern conflicts increasingly rely on electronic jamming and spoofing, yet Taiwan’s EW systems remain outdated. The agencies responsible for EW operations continue to operate with an obsolete mindset, failing to prioritize the electromagnetic spectrum as a key battlespace domain. Subsequently, research, development, and procurement funding of next-generation EW systems remains inadequate.
Taiwan’s military leadership has failed to develop a comprehensive EW strategy, instead clinging to antiquated doctrines and legacy tactics that leave the armed forces ill-equipped for 21st-century warfare. Without urgent reforms and targeted investment, Taiwan risks falling further behind in the electronic battlespace, undermining its overall defense strategy.
The inefficiency of Taiwan’s defense procurement system exacerbates these technological challenges. Taking the U.S. Defense Innovation Unit as a model, Koo established the Defense Innovation Office (DIO) to accelerate the development and adoption of cutting-edge defense technologies, including artificial intelligence, unmanned systems, and anti-drone technologies. However, Taiwan’s Government Procurement Act is plagued by outdated provisions and bureaucratic red tape that delay acquisitions and stifle innovation. With the opposition controlling the Legislative Yuan, Koo faces significant hurdles in reforming the system and processes to speed up defense procurement. If Taiwan fails to streamline its acquisition processes, it risks not only wasting valuable resources but also falling behind China, which is accelerating its own military modernization.
The Importance of U.S. Commitment
To truly transform its military, Taiwan should not only boost its defense budget but also request that active U.S. military personnel be embedded within the MND and General Staff Headquarters (GSH) to assist in modernizing defense capabilities. This assistance should go beyond traditional advisory teams with short visits and seminars; it should place U.S. officers and NCOs directly within key GSH departments for a prolonged period to help implement a comprehensive overhaul – such as intelligence, training, net assessment, strategic planning, doctrine development, force deployment, operational requirements, and logistical support, among other critical areas.
At his Senate hearing, Colby stated that Taiwan’s fall would be a “disaster” for U.S. interests. This raises a critical question: If Taiwan were to allocate 10 percent of its GDP to defense, would the United States come to its aid in a Chinese invasion? Even at that level of spending, Taiwan’s defense expenditures would still be less than 40 percent of China’s total defense budget, meaning Taiwan’s forces would remain vastly outnumbered. The island would be hard-pressed to fend off a full-scale People’s Liberation Army onslaught without timely U.S. intervention.
Taiwan’s military suffers from a top-heavy command structure, where an excessive number of high-ranking officers inflates personnel costs and weakens combat effectiveness. Compounded by inefficient resource allocation, obsolete defense thinking, and a dysfunctional acquisition process, these structural flaws impede Taiwan’s ability to modernize its forces and respond effectively to evolving threats.
Ultimately, Taiwan’s defense is not just a matter of dollars and weapons – it’s a test of skilled talents, strategy, and, most importantly, the strength of the U.S. commitment. Rather than fixating on arbitrary spending targets, Taiwan and the United States must work together to reform unwieldy bureaucracy, decision-making processes, and operational frameworks to ensure that defense resources are allocated where they are needed most. If Washington truly sees Taiwan’s security as a priority, it must demonstrate a concrete and unwavering commitment to help modernize its armed forces.
