TAIPEI (Taiwan News) — Taiwan’s overseas investment has swung decisively away from China, with the US now the country’s top destination for capital and exports, President Lai Ching-te (賴清德) said Tuesday.

Meeting a visiting delegation from the Global Taiwan Institute in Taipei, Lai pointed to a steep drop in the share of outbound investment going to China, from 83.8% in 2010 to about 3.7% last year, per CNA.

The shift marks a significant change in Taiwan’s investment patterns, with the US now serving as both its largest export market and top destination for outbound investment. Lai said the two sides have recently advanced trade and investment arrangements, alongside cooperation in technology and industry.

He also linked economic changes to security concerns, citing continued pressure from China through military activity and other forms of coercion. Taiwan, he said, is responding by strengthening its defenses and building resilience across society.

According to Lai, defense spending has already exceeded 3% of GDP and should reach 5% by 2030, supported by his proposed eight-year NT$1.28 trillion (US$40 billion) special budget aimed at upgrading capabilities and expanding domestic defense production.

Framing Taiwan as a critical node in global trade, Lai noted the nation’s role in advanced semiconductor production and its position along major shipping routes, arguing that stability in the Taiwan Strait is closely tied to global economic health.