ISSUE 358
August 17, 2026
Who Really is Holding Taiwan’s Democracy Hostage?  
● This Week in Taiwan: 
Other Important Events This Week




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The Economist views Taiwan through a Western strategic lens, mistakenly arguing that refusing to join anti-China efforts amounts to betraying democracy.
Featured Opinion

Taiwan's Democracy More Than Just a Geopolitical Asset in Western Eyes

 

Recently, The Economist described Taiwan’s current political predicament as “freedom being betrayed from within.” At first glance, this appears to reflect concern for Taiwan. In reality, however, it once again exposes the habitual way the West comments on Taiwan: viewing Taiwan, which lives within the historical context of East Asia, from the strategic maps of Washington and London.

Featured Commentary
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Former President Tsai Ing-wen returns to the front line of campaigning. She and incumbent President Lai Ching-te, the “two suns” of the Democratic Progressive Party (DPP), reappear in a tense balance.

Tsai's Active Campaigning: Tense Balance with President Lai

 

Former President Tsai Ing-wen has agreed to serve across factions as campaign headquarters chair for the Democratic Progressive Party’s (DPP) mayoral and county executive candidates in New Taipei, Keelung, and Taitung. This arrangement does not necessarily mean that Tsai has plans for her own next political move. Rather, after returning to the front lines of election campaigning, the question is whether her involvement will alter the balance of power within the DPP, particularly affecting the delicate interactions between Tsai and President Lai Ching-te, who concurrently serves as party chairman.

Featured Opinion
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The Han Kuang military exercise is the most open in history, with unscripted simulations of protracted war showcasing Taiwan’s defense capabilities to both mainland China and the United States.

Most Open Military Exercise in History: What's Beijing Staged May Not Be Beijing's Script

 

The Han Kuang military exercise this year is the most open in history, with the scenarios and training objectives deliberately made as transparent as possible to the outside world. It is intended not only for Beijing to see, but also for the United States. Although the military gap across the Taiwan Strait has widened, if Communist China were to invade Taiwan, how Taiwan would resist is something Taiwan’s military wants Beijing to see this time, so that the other side will consider the costs it would have to bear to seize Taiwan militarily. Whether Beijing would actually fight according to the tactics designed by Taiwan, however, is another matter.

This Week in Taiwan
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The AI booms is driving Taiwan’s economy, with the growth rate forecast for this year revised upward to 11 percent, the highest in 39 years.

August 8:

Taiwan broke through Beijing’s diplomatic blockage and was able to secure an invitation to attend the 55th Pacific Islands Forum (PIF) to be held in Palau at the end of August. PIF Secretary-General Baron Waqa described Taiwan as a very important development partner. Taiwan was unable to attend last year because the Solomon Islands the host, excluded participation by partner countries at the summit.

August 9:

At the Nagasaki atomic bombing peace memorial ceremony, Ambassador Lee Yi-yang, representative to Japan, questioned the municipal government’s decision to seat Taiwan’s envoy outside the diplomatic corps section, calling it a downgrade of Taiwan’s status and dignity. He boycotted the event in protest.

August 10: 

The Directorate-General of Budget, Accounting and Statistics (DGBAS), Executive Yuan, released wage distribution data showing that over 70 percent of workers earn less than the average monthly salary of NT$49,000 (about US$1,530). This is the first time that the figure has exceeded 70 percent since records began.

August 11:

Two mainland Chinese men landed illegally on Bali Beach in New Taipei by rubber boat just before the Han Kuang military exercise. The Coast Guard Administration (CGA), Ocean Affairs Council, admitted radar operators had spotted a signal but misjudged it as “wave interference.” CGA Director-General Chang Chung-lung acknowledged human error. Reports that the men were mainland Chinese coast guard personnel remain unconfirmed.

August 12:

The People’s Liberation Army (PLA) announced it had completed a joint maritime navigation drill with the Indonesian Navy in waters east of Taiwan. The Ministry of Foreign Affairs strongly condemned the exercise, alleging that China once again disregarded international norms and responsibilities, further escalating regional tensions.

August 14:

The DGBAS issued a revised economic forecast, raising Taiwan’s projected annual growth rate to 11 percent thanks to the AI boom—up 1.41 percentage point from the May forecast, the highest in 39 years. The growth forecast for next year is 6 percent.

August 14:

The Legislative Yuan approved three referendum proposals: abolishing the nuclear-free homeland policy, introducing corporal punishment, and allocating all traffic fines to transportation infrastructure. These will be voted on alongside the year-end local elections. The euthanasia referendum did not pass.

August 14:

The Legislative Yuan passed the 2025 central government budget, cutting NT$48 billion (about US$1.5 billion), or 1.6 percent from expenditures. The total spending is NT$2.9 trillion (about US$93.2 billion). At the last minute, the Kuomintang (KMT) allowed the drone-related budget of NT$63.4 billion (about US$1.9 billion) to pass in full. This marks the latest passage of the annual budget in history.

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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