Taiwan Just Put a Price Tag on China's Pacific Drills: $21 Billion in 2024. Up 40 Percent.
- $21.25BTaiwan's armed-forces internal estimate of what China's PLA spent on Pacific drills in 2024 — built bottom-up from fuel, consumables, maintenance, repair and salary cost for every observed flight hour and ship-day in the Bohai, East China Sea, Taiwan Strait, South China Sea, and Western Pacific. Reported as 152 billion yuan.
- +40%Year-over-year increase in PLA Pacific-drill spending — Taiwan's same methodology applied to 2023 yielded roughly $15B, so the 2024 figure is up almost two-fifths in twelve months.
- 9%Share of China's officially reported 2024 defense budget consumed by Pacific drills alone — up from 7% in 2023. The exercises now eat one dollar of every eleven Beijing publicly admits to spending on its military.
- ~25%Share of Taiwan's 2024 defense budget that China's drill spending alone equals — Taipei's entire annual defense outlay is roughly four times what Beijing spends just rehearsing in Taiwan's neighborhood.
- 37,000Estimated PLA aircraft flight hours in the region in 2024 — ~12,000 sorties, a ~30% jump over 2023. The denominator under the dollar figure. Each hour of flight is fuel, maintenance, and pilot pay that Taiwan's analysts priced in.
- 32-63%Range by which the U.S. Department of Defense's 2025 China Military Power Report estimates Beijing understates its real defense spending — putting actual outlays at $304-377B against the $247B Beijing publicly declared for FY2025.
For years the answer to “what does it cost China to circle Taiwan” has been a hand-wave. Beijing does not publish a line item. Western analysts trade range estimates. Taiwan's own statements typically stay qualitative. That changed in August 2025, when Reuters' Yimou Lee and Ben Blanchard reviewed an internal Taiwan armed-forces research product, corroborated it with four named-rank Taiwan officials, and put a number on the page.
The number is $21.25 billion— the bottom-up cost, built from Taiwan's own surveillance, of every People's Liberation Army flight hour and ship-day in the Bohai Sea, the East China Sea, the Taiwan Strait, the South China Sea, and the Western Pacific in 2024. Fuel. Consumables. Maintenance. Repairs. Salaries. Priced and added. The total in renminbi was 152 billion yuan. The year-over-year jump from Taiwan's same-methodology 2023 estimate was 40 percent.
That works out to 9 percent of China's publicly declared 2024 defense budget spent on Pacific drills alone, up from 7 percent the year before. It also equals roughly a quarter of Taiwan's entire annual defense budget. The exercises Beijing files as routine readiness now cost, on the same dollar scale, four months of the defenders' entire military budget every year.
Taiwan's armed forces did not estimate China's drill spending from satellite-imagery guesses or open-source rumor. They built it from a data source they already maintain: their own surveillance. Every PLA Air Force sortie that crosses Taiwan's air-defense identification zone is logged. Every PLA Navy vessel that transits the Bashi Channel, the Miyako Strait, or the median line of the Taiwan Strait is tracked. Multiply observed hours and ship-days by the per-hour cost of fuel and consumables for each platform type, add maintenance and repair amortization, add personnel pay, and the cost ledger writes itself.
Reuters reported that defense analysts who reviewed the methodology described it as feasible — the same approach Western think tanks use to price NATO exercises — while cautioning that any such estimate “necessarily included some guesswork.” The guesswork lives at the margin. The order of magnitude does not. PLA aircraft flew approximately 12,000 sorties around Taiwan in 2024, amounting to roughly 37,000 hours in the air, a ~30 percent jump on 2023. Those are not estimates. Those are counts.
“China spent $21 billion on military exercises in the Taiwan Strait, the East and South China Sea and the Western Pacific last year, nearly 40% higher than 2023, according to Taiwan government estimates.”
Reuters Exclusive · Yimou Lee & Ben Blanchard · Aug 28, 2025
The $21.25 billion is not a Joint Sword line item. It is the sum of every PLA operation in the First Island Chain in 2024. But two named exercises sit inside it, and both are tied directly to Taiwan's newly inaugurated president, Lai Ching-te (DPP).
Joint Sword 2024A, May 23-24, 2024 — three days after Lai's inauguration. PLA Eastern Theater Command deployed 111 aircraft and 46 naval vessels around Taiwan, with 82 PLA aircraft crossing the median line of the Taiwan Strait. Joint fire-strike simulation involving the Rocket Force, Air Force, Navy, and Army.
Joint Sword 2024B, October 14, 2024 — following Lai's first National Day address. PLA conducted 153 aviation sortiesin six broad operating areas, simulating quarantine and blockade operations. The second named “gift” from Beijing to a sitting Taiwan president inside a five-month window.
By December 2025, the pattern had compounded into a third named exercise: Justice Mission 2025, launched in response to a U.S. $11.1 billion Taiwan arms package. Taiwan's Ministry of National Defense tracked 130 PLA aircraft, 14 PLAN ships and 8 official ships in a single 24-hour window — 90 of those 130 sorties crossing the median line of the Taiwan Strait.
The Reuters figure is a measurement of PLA spending. The harder question is whether the budget Beijing publicly declares contains it. The U.S. Department of War's 2025 China Military Power Report, published December 23, 2025, gives the operative answer: China's officially declared defense spending of roughly $247 billion for FY2025 understates actual outlays by 32 to 63 percent— placing real spending at $304-377 billion. CSIS's ChinaPower Project, using SIPRI's alternative methodology, puts the 2024 figure at $318 billion; one outside analysis goes as high as $471 billion. The omitted line items are familiar: R&D, foreign procurement, military pensions, paramilitary forces such as the People's Armed Police, and the Coast Guard.
What Beijing said it spent on its entire military in 2024: ~1.665 trillion yuan (~$233 billion at prevailing rates).
What Taiwan's armed forces estimate Beijing spent on Pacific drills alone in 2024: 152 billion yuan ($21.25 billion).
What the Pentagon estimates Beijing actually spent on its military, all-in, in 2024-25: $304-377 billion.
The drill spending lives inside that gap. Taiwan's methodology shows where, at minimum, $21 billion of the annual difference between declared and actual is going.
Adm. Samuel J. Paparo, Commander, U.S. Indo-Pacific Command, has spent two consecutive posture statements telling Congress that PLA exercises around Taiwan are no longer exercises. In his April 10, 2025 testimony to the Senate Armed Services Committee, he described 2024 PLA activity as “persistent multi-domain pressurization activities of increasing scope, scale, complexity, and number against Taiwan.” The order of battle he laid out for senators is the denominator under Taiwan's dollar figure: 2,100 PLA fighters, 200+ H-6 bombers, with PRC fighter production running 1.2 to 1 over the United States.
“China's increasingly aggressive actions near Taiwan are not just exercises. They are rehearsals.”
Adm. Samuel J. Paparo · Commander, USINDOPACOM · Senate Armed Services posture testimony, Apr 10, 2025
Secretary of Defense Pete Hegseth (R) extended the framing on May 31, 2025 at the IISS Shangri-La Dialogue in Singapore, addressing the assembled defense ministries of the Indo-Pacific. Beijing's public response was a Foreign Ministry rebuke accusing Hegseth of a “Cold War mentality.” The substance, on the U.S. side, has not moved.
“Beijing is credibly preparing to potentially use military force to alter the balance of power in the Indo-Pacific. Any attempt by Communist China to conquer Taiwan by force would result in devastating consequences for the Indo-Pacific and the world.”
Sec. Pete Hegseth · IISS Shangri-La Dialogue · Singapore, May 31, 2025
Three months after the Reuters scoop, Taiwan President Lai Ching-te (DPP) went to the Washington Post op-ed page and announced a NT$1.25 trillion (US$40 billion) eight-year supplementary defense budget— new missile defenses, long-range precision strike, unmanned systems. He paired the spending plan with a commitment to lift Taiwan's defense outlay to 5 percent of GDP by 2030, from the ~2.4 percent the budget represented in 2024. The Reuters number is the per-year benchmark the supplemental is built against: if Beijing can spend a Taiwan-quarter just rehearsing, Taipei's baseline cannot stay where it was.
The political problem is at home. By January 2026, the opposition-controlled legislature had repeatedly voted to slow Lai's special-budget package — the same opposition that voted in 2024 to cut intelligence-service allocations. NPR reported the gridlock as Beijing's drills compounded. Defense Minister Wellington Koo (DPP) condemned the December 2025 Justice Mission 2025 drills on the MND's X account and gave TIME the line that has now traveled:
We strongly condemn the PRC's irrational provocations and oppose the PLA's actions that undermine regional peace. Rapid Response Exercises are underway, with forces on high alert to defend the Republic of China and protect our people.
Verbatim from MND's public statement on Justice Mission 2025 drills, cross-referenced via USNI News and the Taipei Times coverage of the same posting.
“It is becoming more and more difficult to predict the possibility of the PLA turning an exercise into a real invasion.”
Defense Minister Wellington Koo (DPP) · TIME profile, December 2025
Through deterrence, capable forces, and ironclad alliances, USINDOPACOM remains committed to a free and open Indo-Pacific — together with allies and partners across the region.
Standing USINDOPACOM messaging consistent with Adm. Paparo's Apr 10, 2025 Senate Armed Services posture testimony.
The U.S. side of the equation entered a different phase on May 15, 2026. After his two-day summit with Chinese President Xi Jinping, President Donald J. Trump publicly hesitated on a planned $14 billion Taiwan arms package— missiles and air-defense interceptors that had been held up for months. Trump told reporters: “The last thing we need right now is a war that's 9,500 miles away.” Ambassador Mike Waltz subsequently said Trump had been “quite clear” with Beijing that Taiwan-policy posture would be “status quo going forward.”
Just finished a GREAT meeting with President Xi. Tremendous respect both ways. We discussed Taiwan in great detail. The United States wants PEACE — peace and prosperity for everyone. The last thing the world needs is a war 9,500 miles away. Status quo on Taiwan — that's the position.
Paraphrased commentary · not a verbatim post
Verbatim Truth Social text not yet archived in third-party trackers; substance reconstructed from Trump's post-summit press availability as reported by Axios and The Hill, May 15-16, 2026. Rendered here as a static editorial card rather than a verbatim embed.
The threat from Communist China to Taiwan is real, and it could be imminent. We will not be intimidated. Peace through strength — that's the doctrine. America's allies in the Indo-Pacific will not stand alone.
Paraphrased commentary · not a verbatim post
Substance from Hegseth's May 31, 2025 as-delivered Shangri-La address on file at defense.gov and the U.S. Embassy in Singapore. Rendered here as a static editorial card.
The political distance between the May 31, 2025 Hegseth speech (“imminent threat”) and the May 15, 2026 Trump arms-package pause is the editorial fault line worth naming. The Reuters $21 billion figure is the number that sits between them. It is the cost Beijing has been willing to absorb every year while the U.S. political signal moves.
$21.25 billion.Taiwan's armed-forces bottom-up estimate of China's 2024 Pacific-drill spending. Built from observed PLA flight hours and ship-days priced at fuel, maintenance, repair, and salary cost. Reuters, August 28, 2025, four-source corroboration.
+40 percent year-over-year. Up from roughly $15 billion in 2023.
9 percent of Beijing's declared defense budget.One in eleven yuan of admitted military spending now flows to Pacific drills alone — before you adjust the denominator upward by the 32 to 63 percent the Pentagon says is missing from the published figure.
~25 percent of Taiwan's entire defense budget.Beijing's rehearsal cost equals a quarter of the defender's annual all-in military outlay. Three months after the Reuters scoop, President Lai Ching-te (DPP) announced a $40 billion eight-year supplemental aimed at closing that ratio. The opposition-controlled legislature is slow-walking it.
The U.S. Department of War has filed two consecutive China Military Power Reports flagging the 2027 PLA-capability window. Adm. Paparo has filed two consecutive posture statements calling the drills rehearsals. Secretary Hegseth called the threat imminent at Shangri-La. The Trump-Xi summit then paused a $14 billion arms package. The underlying spending trajectory has not paused.