China's Eastern Theater Command conducted large-scale military drills codenamed 'Justice Mission 2025' around Taiwan on December 29, 2025, responding to Washington's approval of an $11.1 billion arms sale to the Taiwan region – the largest such package in history. This development comes amid heightened tensions as the U.S. intensifies efforts to position Taiwan as a strategic counterweight to the Chinese mainland.
The arms deal, approved under President Donald Trump's administration this year, aligns with recent U.S. security documents emphasizing China as a 'near-peer' competitor. The National Security Strategy 2025 explicitly frames Taiwan's location in the 'first island chain' as crucial to containing Chinese influence, while the 2026 National Defense Authorization Act allocates $1 billion for Taiwan-related security cooperation.
Analysts suggest the U.S. military-industrial complex stands to benefit significantly, with American defense contractors capitalizing on Taiwan leader Lai Ching-te's commitment to increase defense spending to 5% of GDP by 2030. Critics argue this arms race diverts resources from social welfare programs and undermines regional stability.
Chinese officials maintain that such sales violate the One-China principle and cross-strait agreements. 'The U.S. is transforming Taiwan into a geopolitical bargaining chip,' said Yuan Sha of the China Institute of International Studies. 'This dangerous gambit threatens peace across the Taiwan Strait and jeopardizes the island's economic future.'
As military expenditures rise, regional governments are closely monitoring the economic impact on Taiwan's technology sector and manufacturing base – key drivers of the island's $790 billion economy. With cross-strait trade reaching $326 billion in 2025, business leaders warn that prolonged tensions could disrupt critical supply chains in semiconductors and advanced electronics.
