ISSUE 317
October 20, 2025
Following U.S. Lead: President Lai Suddenly
Proposes Building “T-Dome”
● This Week in Taiwan: 
Other Important Events This Week




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President Lai Ching-te’s “T-Dome” initiative has been criticized as wasteful and potentially contradictory to asymmetric warfare strategy.
Featured Commentary

“T-Dome” Contradicts Current Asymmetric Defense Strategy

 

In his National Day address, President Lai Ching-te highlighted a pledge to propose a special defense budget to accelerate construction of a national air-defense system dubbed the “Taiwan Shield” (T-Dome). The announcement—one of the few notable points in an otherwise detail-heavy speech—dominated headlines the following day.

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Controversy erupted over defense budget spending: NT$50,000 chairs and NT$120 bottled water spark accusations of waste.

Defense Budget Sees Sharp Increase, Plagued by Inflated and Padded Allocations

 

Taiwan’s defense spending for next year is set to rise sharply. During a recent joint committee review of the “Special Budget for Strengthening Economic, Social, and National Security Resilience in Response to International Developments,” opposition lawmakers questioned several questionable allocations within the Joint Operations Center’s budget — including the purchase of chairs priced at NT$50,000 (about US$1,650) each for senior officers. The war-gaming room’s upgrade budget totals NT$30.45 million (about US$990,000), of which NT$2.5 million (about US$81,000) is earmarked solely for tables and chairs. In addition, the Ministry of National Defense (MND) planned to spend nearly NT$800 million (about US$26 million) to stockpile bottled water for wartime reserves, buying 500-milliliter custom-made bottles at NT$120 (about US$3.90) each—more than 10 times the current procurement price. The ministry later announced it would scrap the NT$50,000 chair purchase.

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The Kuomintang (KMT) is undergoing generational shift as Cheng Li-wun is elected party chair.

KMT Chairmanship Election Marks Generational Handover

 

The most suspenseful chairman election in the history of the Kuomintang (KMT) concluded yesterday with former Legislator Cheng Li-wen emerging victorious, while former Taipei Mayor Hau Lung-bin came in second. This outcome reflects the alignment between the will of party members and the expectations of the general public: both hope to see the KMT break away from its old framework and embrace a new image led by a younger generation. From another perspective, it also means that Ms. Cheng faces a formidable responsibility. Throughout the race, she has endured doubts from within the party regarding her stance, political direction, and loyalty. In addition to proving her leadership capability, she must humbly mend the divisions created during the campaign to lead the party back to power.

This Week in Taiwan
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Chairman C.C. Wei of the Taiwan Semiconductor Manufacturing Company (TSMC) confirmed purchase of a second plot near its Arizona plant to build a fully independent mega fab cluster.

October 11:

The Xiamen Public Security Bureau in mainland China disclosed the names of 18 members of Taiwan’s Psychological Warfare Unit, Political Warfare Bureau, Ministry of National Defense, and issued a public bounty. State media further warned that investigators have identified the real identities and job responsibilities of all, more than 250 members of the unit.

October 12:

During his National Day address, President Lai Ching-te announced a plan to build a “T-Dome” to strengthen air defense capabilities. Since this term has never appeared in previous military documents or statements, it raised concerns that the president may have introduced the policy without prior consultation with the Armed Forces. Academia also expressed doubts, noting that a “shield” is far more costly than a “spear,” poses no threat to adversaries, and contradicts Taiwan’s long-standing emphasis on asymmetric warfare.

October 13:

Following the House of Representatives, the United States Senate passed the National Defense Authorization Act for fiscal year 2026. Both chambers included provisions aimed at strengthening Taiwan’s defense capabilities and resilience. Notably, the Senate version strongly encourages the U.S. Secretary of Defense to invite Taiwan’s Navy to participate in the Rim of the Pacific (RIMPAC) military exercises. It also stipulates that if the Department of Defense decides not to extend the invitation, the Secretary must explain the reasons to the Congressional defense committees within 30 days.

October 13:

The Foreign Affairs and National Defense Committee, Legislative Yuan, held a closed-door meeting to receive a special report on the indigenous submarine program. Before the meeting, Minister of National Defense Wellington Koo confirmed to the media that the goal of delivering the prototype submarine Hai Kun in November faces “significant challenges.” After the meeting, the Navy Command issued a press release stating that the Hai Kun’s “main engine and power management system” and “integrated platform management system” have yet to be calibrated. Once completed, the vessel will meet the necessary conditions for submersion.

October 15:

Following recent incentives for first-time applicants of the Mainland Travel Permit for Taiwan Residents, the Taiwan Affairs Office (TAO) of China’s State Council announced plans to further attract Taiwanese visitors. The TAO previewed that the range of eligible entry points for on-arrival permit processing will expand to “all qualifying ports.” In the future, Taiwanese travelers, whether arriving via direct flights from Taiwan, through Hong Kong or Macau, or from other countries, will be able to apply for a one-time valid permit upon arrival at these designated ports.

October 16:

The Taiwan Semiconductor Manufacturing Company (TSMC) held its earnings call and released its third quarter financial report, posting a record-breaking quarterly net profit of NT$452.3 billion (about US$14.7 billion). As expected by analysts, the company also raised its full-year outlook. Chairman C.C. Wei confirmed that, in response to surging demand for AI, TSMC will acquire a second plot of land near its Arizona facility in the United States to build a self-sufficient mega-scale semiconductor fabrication complex (Gigafab cluster).

October 17:

Minister Chen Shu-tzu of the Directorate-General of Budget, Accounting and Statistics, Executive Yuan, announced an upward revision of Taiwan’s projected economic growth rate for the year to nearly 5 percent. The Chung-Hwa Institution for Economic Research (CIER) also released its latest forecast, citing early inventory pull-in driven by the tariff buffer period and the artificial intelligence (AI) boom. It revised its July projection of 3.05 percent up by 2.4 percentage points to 5.45 percent, becoming the first major domestic forecasting agency to raise its estimate above 5 percent. The CIER also forecasted a 2.55 percent growth rate for next year.

October 18:

The Kuomintang (KMT) chairmanship election results were announced, with former Legislator Cheng Li-wen winning with 50.1 percent of the vote. Cheng stated her intention not only to unify the KMT but also to bring together the opposition and all of Taiwan. She called upon the ruling Democratic Progressive Party (DPP) to stop internal strife and refrain from treating fellow citizens as enemies. Amid rising concerns over alleged “external interference” in the election results during its heated final phase, the TAO responded that comments made by some mainland Internet users do not represent the official stance. The TAO emphasized the mainland’s willingness to work with the new KMT leadership to promote party-to-party and cross-strait relations based on the shared political foundation of the 1992 Consensus and opposition to Taiwan independence.

Published since 2019 by the Fair Winds Foundation and Association of Foreign Relations, Taiwan Weekly provides in-depth report and analysis of the major issues facing Taiwan.

The conclusions and recommendations of any Taiwan Weekly article are solely those of its author(s) and do not reflect the views of the institutions that publish the newsletter.


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