President Lai Ching-te (賴清德) has announced plans for a record defense budget while also proposing an “AI dividend” — a universal cash payment of NT$10,000 (US$315) to eligible residents.
The proposed 2027 defense budget, including regular and special allocations, would exceed NT$1 trillion for the first time. Yet new investments in the armed forces will not by themselves resolve one of the country’s most serious national-security vulnerabilities.
The combination of lenient espionage penalties and inadequate compensation for military personnel is a significant issue. Taiwan needs both the hardware to deter or repel a People’s Liberation Army attack and the legal and personnel reforms necessary to protect that hardware from Chinese infiltration.
Taiwan is repeatedly shaken by Chinese espionage cases, many involving the sale of military secrets for surprisingly small sums. Earlier this month, prosecutors indicted a 34-year-old sergeant from the Yilan Reserve Command for allegedly leaking classified military documents to a Chinese spy group over several years. Prosecutors said he received as much as NT$800,000 since 2022 in exchange for information related to the Hengshan military command-and-control system, the Patriot missile tactical handbook and Air Force operational intelligence.
The sergeant also allegedly recorded pledges of surrender and allegiance to China. In May 2024, prosecutors said, he accessed the military’s internal system and downloaded or photographed 60 classified electronic records related to military operations.
In April, six active and retired military personnel received prison sentences for leaking military secrets to China and helping form a spy organization. The lightest sentence was six months. The sentences could also be appealed, an outcome that underscores how inadequate penalties for military espionage can appear compared with those in other established democracies.
Spy sentence
The average sentence for military espionage is reportedly about 18 months. By contrast, comparable offenses in the US and the UK can result in sentences averaging roughly 20 years.
Su Tzu-yun (蘇紫雲), director of the research division at the Institute for National Defense and Security Research, has said courts imprison convicted traitors for periods 12.7 times shorter than those imposed in other democracies. The harshest sentence to date, he noted, was 7.5 years for a former Army colonel. A former major convicted of attempting to form a spy network for China received a suspended sentence of nine months.
In the same month, prosecutors indicted nine active-duty and discharged junior military officers for allegedly disclosing military secrets to China. One officer reportedly agreed to provide sensitive information for only NT$3,000 per month, plus a paid trip to China. The officers allegedly used smartphones to record base activities and transmit classified documents.
These cases reveal not only the reach of Chinese intelligence operations but also the ease with which vulnerable personnel can be recruited. If vital military information can be purchased for the price of a modest monthly allowance, Taiwan’s security system has a serious structural problem.
Chinese infiltration has also reached other critical parts of government. In June, a court sentenced a Chinese collaborator for leaking details of presidential and Air Force travel. That same month, opposition KMT legislators criticized reduced prison terms for aides to mainly ruling DPP legislators who had leaked confidential diplomatic information.
The information reportedly included details relevant to Chinese efforts to monitor then Vice President-elect Hsiao Bi-khim (蕭美琴) during her 2024 European travels, an operation that nearly led to a staged car collision involving Chinese embassy officials in the Czech Republic.
Time for change
As the saying goes, even a broken clock is right twice a day. The KMT has long advocated higher pay for military personnel, arguing that underpaid troops cannot adequately defend Taiwan. Given the DPP’s central message — “Resist China, Protect Taiwan” — the ruling party should be willing to support such a policy.
If the administration can distribute an AI dividend to residents, increasing compensation for the people responsible for operating the nation’s advanced weapons should also be within reach. The government could raise basic salaries, introduce special allowances, including an allowance comparable to the proposed cash dividend, and expand benefits for service members and their families.
Better compensation would serve several purposes. It could improve retention, help address the nation’s military personnel shortage and reinforce the social status of military service. It would also make military careers more competitive with other professions, reducing the financial vulnerability that Chinese intelligence services exploit.
Japan, arguably Taiwan’s most important regional partner, has also begun discussing better support for its armed forces. Facing the same strategic challenge from China, Japan’s Defense Minister Koizumi Shinjiro is considering the creation of a dedicated government agency as early as the next fiscal year. The agency would focus on post-retirement benefits, medical services and other forms of support for Self-Defense Force personnel and their families.
Hostile foreign power
Taiwan must pair better military pay and benefits with stronger deterrence against espionage. Major political parties should cooperate on a comprehensive overhaul of laws governing espionage across government agencies.
Penalties should reflect the grave harm caused by transferring military and diplomatic secrets to a hostile foreign power, while appeals procedures should not allow convicted spies to benefit disproportionately from delays or suspended sentences.
The KMT must also match its rhetoric with action. If the party is serious about improving military compensation and strengthening national security, it should work with the DPP rather than allow political disputes to delay essential defense measures. The KMT and its opposition partner, the TPP, delayed passage of the national budget for 266 days, the longest such delay in Taiwan’s legislative history.
Taiwan urgently needs tougher espionage penalties and comprehensive salary reforms to match its rising investment in military hardware. Without them, it will remain difficult to counter China’s increasingly asymmetric methods.
These reforms are neither extravagant nor unattainable. They would bring Taiwan closer to the standards and practices of other democracies while reducing the incentives for Chinese intelligence services to recruit Taiwanese personnel.
Only by making espionage costly and military service adequately valued can Taiwan better defend itself against the gray-zone pressure that China can impose at minimal cost.
Rath Wang is a political commentator based in Taipei who focuses on Taiwan’s politics, media, civil society and issues influencing the country’s future. He is a media producer and host of current-affairs talk shows and podcasts. He has worked on political campaigns and lived in Taiwan, Japan, Thailand and the US.
