TAIPEI (Taiwan News) — American Institute in Taiwan Director Raymond Greene welcomed President Lai Ching-te’s announcement of a NT$1.25 trillion (US$40 billion) special defense budget on Wednesday.

Greene called it “a major step towards maintaining peace and stability across the Taiwan Strait by strengthening deterrence.” Taiwan, along with Japan, South Korea, and European nations, is bolstering defense to uphold global peace, he said in a statement.

Lai said the new budget would go toward US arms procurements and boost Taiwan’s asymmetric capabilities, raising “greater costs and uncertainty to Beijing’s decision-making process regarding the use of force, thereby enhancing deterrence.” He added that Taiwan would invest in advanced technologies and expand its defense industrial base.

Green reiterated US support for Taiwan’s efforts to strengthen deterrence. “Whether your priority is preserving Taiwan’s democracy and market economy, fostering conditions for cross-strait dialogue, or maintaining support from the international community, increasing Taiwan’s defense capabilities is a necessary precondition,” he said.

The director emphasized that the international community has a vested interest in a peaceful resolution to challenges in the Taiwan Strait.