Toplines

Taiwan’s Legislative Yuan (LY) passed a NT$240 billion (US$7.3 billion) six-year budget for the procurement and development of unmanned systems. Taiwan’s legislature passed the opposition Kuomintang’s (KMT) version of the drone procurement bill on August 27, including funding for coastal attack drones, coastal reconnaissance drones, unmanned surface vehicles (USVs), and domestic drone industry development.[1] The original Cabinet bill requested funding for 208,200 one-way attack drones, 1,446 coastal reconnaissance drones, and 1,320 USVs. The KMT bill does not include procurement numbers, however, and instead focuses on developing Taiwan’s domestic drone industry.[2] The bill includes a NT$40 billion (US$1.26 billion) annual spending cap that may be increased with LY approval.[3] The bill also requires the Cabinet to establish a National Unmanned Vehicle Industry Development Strategy Special Committee to coordinate the national drone policy, whose members will be nominated by the LY.[4]

The bill designates Taiwan’s Ministry of Economic Affairs (MOEA) with overseeing the overall budget, while making Taiwan’s Ministry of National Defense (MND) responsible for military procurement. The MOEA will be responsible for setting standards for Taiwanese indigenous systems and supply chains, establishing test sites for manufacturers to evaluate drone performance, and accrediting local manufacturers who have reached the required domestic production levels.[5] The bill will take effect in 2027, six months after it is signed.[6]

The new drone budget will be funded as part of Taiwan’s annually approved general government budget, which will likely make the funding less stable than that of the Cabinet’s original special budget proposal.[7] Taiwanese Defense Minister Wellington Koo criticized the budget’s annual spending cap, saying it could delay and obstruct the military’s planned procurements. The MND has already announced plans to spend NT$42.1 billion (US$1.33 billion) on drones in 2027.[8] Taiwan has suffered partisan gridlock in the LY since 2024, which has complicated Taiwanese efforts to pass its annual budget and other legislation. Taiwan’s 2026 annual budget passed on August 14 after being delayed for nearly a year.[9] The LY’s nomination of oversight committee members may also be a source of friction.

The passage of this drone bill will nonetheless provide substantial funding for the asymmetric systems required for Taiwan’s self-defense. This bill will also provide funding for the development of Taiwan’s defense industry. Taiwan’s 2026 annual budget allocated $2 billion of funding for largely non-military drones and industry development.[10] A Taiwanese domestic drone industry would allow Taiwan to continue to manufacture drones during war or blockade and reduce its dependence on arms imports from the United States, which are often delayed.

The MND separately announced a NT$26.9 billion (US$847 million) contract on August 27 for 1,554 Altius-700M loitering munitions and 478 Altius-600ISR reconnaissance drones from the US defense firm Anduril.[11] The contract is part of a December 2025 US arms package and will be funded through the special defense budget passed in May.[12] The Altius-700M is a high-precision heavy strike drone meant for destroying fortified targets at ranges of up to 160 km. The Altius-700M can strike ships in the middle of the Taiwan Strait or just off the coast of the People’s Republic of China (PRC), significantly further than the range of Taiwan’s planned domestically developed one-way attack drones, which the bill describes as being for coastal defense.[13] The Altius-600ISR is a long-range, long-endurance surveillance and reconnaissance drone with a range of around 400 km, a much longer range than Taiwan’s planned indigenous reconnaissance drones.[14] Taiwan’s drone budgets could significantly improve its defense self-sufficiency but will not eliminate the importance of acquiring higher-end US systems.

The PRC is soliciting reports of corruption related to procurements for the PLA Rocket Force (PLARF), indicating that Beijing is dissatisfied with the progress of its anti-corruption campaign within the PLARF. The CCP likely fears that corruption may compromise the People’s Liberation Army (PLA) readiness for key wartime missions. The PLA’s procurement website issued a notice on August 24 that called for military suppliers, bidding agencies, evaluation experts, and military personnel to submit reports about suspected corruption in procurement for the PLARF by November 30.[15] The notice did not specify a requirement for when the reported corruption must have occurred. The website previously made a similar request for reports for the PLA Air Force (PLAAF) in December 2025 and the PLA Cyberspace Force in August 2024 — just four months after the PLA Cyberspace Force was created.[16]

Corruption within the PLARF was a likely impetus for a wave of high-level military purges and corruption investigations beginning in 2023 that have impacted a vast majority of the PLA’s top leadership. The CCP’s disciplinary body opened investigations in 2023 into former PLARF Commanders Li Yuchao, Zhou Yaning, and Wei Fenghe and expelled Li and Wei from the CCP in 2024.[17] The PLARF Commander who replaced Li Yuchao in 2023, Wang Houbin, was removed from his post and expelled from the CCP in 2025.[18] Western media and intelligence reports shed light on deep corruption in the PLARF, including unverified allegations that graft had led to non-functional missile silo doors and missiles being filled with water instead of fuel.[19] PLA purges have impacted all branches, services, and theater commands of the PLA as well as the Central Military Commission (CMC).[20] The PLA purges have expanded their scope beyond conventional corruption and likely led to purges based on perceived factionalism and ideological disagreements, as seen during the investigation into former CMC Senior Vice Chairman Zhang Youxia in January 2026. The CMC’s only remaining member besides CCP General Secretary Xi Jinping is the CMC’s former discipline inspection chief Zhang Shengmin. Zhang was promoted to vice chairman in October 2025.[21]

Xi is likely concerned that corruption regarding military procurement will harm the effectiveness of the PLARFs’ equipment. The procurement website notice and the purge of Wang Houbin — whom Xi himself promoted to lead the PLARF after removing his predecessors — indicate that the CCP believes that corruption remains within the PLARF. Faulty PLARF equipment could compromise PLA missions in an attack on Taiwan, including joint firepower strikes on key Taiwanese and partnered military infrastructure and anti-access/area denial preventing US forces from sending reinforcements to Taiwan. Xi may hope to root out corruption and ensure PLA loyalty ahead of the PLA’s 100th anniversary in August 2027. The CCP’s 21st National Party Congress will also happen in late 2027 and very likely feature a major leadership reshuffle of the aging senior leadership of the party.[22]