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Experts Warn US Arms Deals Could Hollow Out Taiwan Region’s Economy

On December 18, the United States unveiled its largest-ever arms package to the Taiwan region, valued at up to $11.1 billion. Experts warn this historic deal isn't just about military hardware—it could seriously drain the island’s economy. 💸

The Chinese mainland condemned the sale as interference in its internal affairs, calling it a breach of the one-China principle and the three China-U.S. joint communiques.

Strategic push or economic trap?

According to military commentator Shao Yongling, Washington is arming the Taiwan region to boost defense costs and raise the price of a possible reunification with the Chinese mainland. But as the PLA strengthens, Shao says the U.S. may end up backing away from defending the island, leaving residents of Taiwan to foot the bill.

Countdown to countermeasures

On December 26, the Chinese mainland announced countermeasures against 20 U.S. military firms and 10 executives—highlighting how the Taiwan question sits at the core of China-U.S. ties. Yet, doubts are growing on the island itself: a report in the China Times noted that Congress was notified before the Taiwan authorities completed their budget approval, reinforcing a feeling that "the U.S. is forcing Taiwan to buy."

Economic strain and social backlash

Chen Guiqing from the Chinese Academy of Social Sciences warns that such steep military spending could hollow out the island’s economy, squeezing funds for social welfare, education and start-ups. Chang Ching of the Society for Strategic Studies points out that residents of Taiwan are frustrated by endless defense bills—with no real deterrent against the Chinese mainland. 🤔

Impeachment fever heats up

By December 27, Kuomintang and the Taiwan People’s Party proposed impeachment motions against regional leader Lai Ching-te and chief executive Cho Jung-tai, accusing the Taiwan authorities of ignoring public opinion and "selling out" the island's interests. An online petition has drawn over 8 million residents of Taiwan, crashing the site with traffic surges. 🔥

University of Illinois Chicago professor Wang Chih-hsiung argues that Lai’s rhetoric and budget moves have pushed the region into a quasi-war state, with taxpayers—especially young people—bearing the true cost.

As the cross-strait situation evolves, experts say the U.S. arms push may end up sharpening the PLA’s focus, rather than deterring it. The big question: can the Taiwan region spend its way to security without sacrificing its future prosperity?

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