The Indo-Pacific region has become a focal point of military tensions, marked by an increase in military exercises by both China and the United States. According to a recent Taiwanese estimate, China spent approximately $15 billion in 2023, which is about 7% of its defense budget and nearly 80% of Taiwan’s total defense budget, on military drills in the Western Pacific. Meanwhile, the U.S. Department of Defense proposed a $9.9 billion budget for the Pacific Deterrence Initiative in 2025 to counter China’s growing military influence.
China’s Military Spending and Drills
China’s investment in military drills highlights its strategic priorities in the Indo-Pacific. Despite spending billions on these exercises, studies show that Chinese drills still lag in scale and complexity compared to those of the U.S. and its allies. However, China’s substantial allocation of resources to military activities underscores its commitment to asserting control over the region, particularly around Taiwan and the First Island Chain, a crucial strategic area in the Western Pacific.
Taiwan’s Defense Budget and Military Preparations
In response to China’s aggressive posturing, Taiwan has approved its largest-ever defense budget for 2025, allocating NT $647 billion, a 7.7% increase from the previous year. This budget, which accounts for 2.45% of Taiwan’s GDP, includes significant investments in new fighter jets and missile production. Taiwan’s heightened defense spending reflects its need to bolster its military capabilities to counter potential threats from China.
China’s Strategic Objectives
China’s military drills serve multiple strategic objectives. While these exercises are meant to intimidate Taiwan, they also prepare the Chinese navy for operations beyond its immediate shores. China has made it clear that it views Taiwan as part of its territory and has not ruled out the use of force to bring the island under its control. By conducting extensive military drills, China demonstrates its readiness to exert military pressure on Taiwan and its other neighbors in the South China Sea and the East China Sea, regions where China has ongoing sovereignty disputes.
Reactions from Taiwan
Taiwanese officials have expressed concerns over China’s military activities, noting the threat they pose to regional peace and stability. While Taiwan’s defense ministry has refrained from commenting on specific figures related to Chinese military spending, it has acknowledged the destabilizing effects of China’s military investments. Taiwan’s internal research suggests that China is focused on gaining control of the west of the First Island Chain, which would be a significant strategic advantage in any conflict involving Taiwan.
Following the election of Taiwan President Lai Ching-te in May 2024, China launched punitive drills around Taiwan, perceiving Lai as a separatist. Lai’s party supports Taiwan’s separate status from China, and his administration has pledged to defend Taiwan’s democracy against Chinese coercion. The Chinese drills, part of the “Joint Sword-2024A” war games, cost an estimated $13.17 million in fuel and consumables, excluding personnel and maintenance costs, signaling the financial and strategic scale of China’s military operations.
China’s military exercises around Taiwan are not new. In August 2022, following a visit to Taiwan by then U.S. House Speaker Nancy Pelosi, China conducted extensive military drills, including missile tests that encroached on Taiwan’s territorial waters. These exercises demonstrated China’s willingness to escalate military tensions in response to perceived diplomatic slights or challenges to its sovereignty claims over Taiwan.
Military Exercises
The military exercises conducted by China serve as both a show of strength and a training ground for potential military operations against Taiwan. These drills allow the People’s Liberation Army (PLA) to gain experience in imposing blockades or quarantines around Taiwan, a tactic that could be employed in the event of a conflict. The repeated military maneuvers also serve to desensitize the international community to China’s aggressive actions, potentially normalizing such behavior.
Taiwan’s Military Countermeasures
In light of the growing threat, Taiwan has taken steps to enhance its military capabilities. Recently, Taiwan test-fired anti-amphibious landing missiles, demonstrating its commitment to maintaining a robust defense posture. These measures are part of Taiwan’s strategy to remain mobile and lethal, thereby deterring potential Chinese military action. The use of TOW 2A missiles during these exercises showcases Taiwan’s focus on countering amphibious assaults, a likely component of any Chinese invasion strategy.
Chinese Military Activities
The frequency and scale of Chinese military activities near Taiwan have increased markedly. In 2023, Chinese aircraft conducted over 9,200 flights in the region, amounting to about 29,000 hours in the air. Additionally, Chinese naval vessels logged more than 1.7 million hours of sailing. These activities are concentrated in the highly contested areas of the South China Sea, the East China Sea, and the Taiwan Strait, indicating China’s strategic focus on these regions.
Air Defense Incursions
The number of incursions into Taiwan’s air defense identification zone (ADIZ) by Chinese military aircraft has surged. In 2024 alone, Taiwan reported sighting 1,700 Chinese aircraft in its ADIZ, surpassing the total for 2023. These incursions are part of China’s broader strategy to pressure Taiwan and assert its military presence in the region, keeping Taiwan’s defenses on constant alert.
Since 2022, the PLA Navy has been practicing encircling Taiwan and patrolling the East China Sea, along with conducting live-fire drills in the Philippine Sea. These maneuvers aim to demonstrate China’s capability to project power and maintain a sustained military presence far from its shores. The involvement of the Liaoning aircraft carrier and other warships in these exercises signals China’s intent to develop a blue-water navy capable of challenging U.S. and allied forces in the Pacific.
To understand the potential outcomes of a conflict involving Taiwan, the Center for Strategic and International Studies (CSIS) developed a wargame scenario, simulating a Chinese amphibious invasion of Taiwan. The wargame was conducted 24 times, with the U.S., Taiwan, and Japan successfully repelling the invasion in each instance. However, these victories came at a significant cost, underscoring the heavy toll that any military confrontation over Taiwan would exact on all parties involved.
The findings from such strategic assessments highlight the need for Taiwan to continue strengthening its deterrence capabilities. In response, Taiwan has extended its mandatory military service to one year and has invested in building its submarines. Additionally, Taiwan continues to import advanced military equipment from the United States and engage in joint training exercises, reinforcing its ability to defend against a potential Chinese attack.
The increasing military exercises by China and the United States in the Indo-Pacific underscore the strategic importance of the region and the growing tensions surrounding Taiwan. As China continues to expand its military capabilities and assert its claims over Taiwan and other disputed areas, the risk of conflict remains high. Taiwan’s efforts to enhance its defense capabilities, combined with U.S. support, aim to deter aggression and maintain stability in the region. The ongoing military dynamics in the Indo-Pacific will require careful management to prevent escalation and ensure peace and security for all parties involved.
