Taiwan's parliament has passed an opposition-backed law to boost home-grown defense and drone production, but markets reacted badly and Taichung politicians are split over whether local industry wins or loses.

• The law sets aside a large multi-year budget — about NT$240 billion over six years — for defense self-reliance and unmanned vehicles.
• Drone-related stocks fell sharply the day after it passed, a sign investors think the fine print holds problems rather than opportunity.
• Ho Hsin-chun, the DPP candidate for Taichung mayor, says the rules could choke the city's traditional manufacturers and drone makers.
• KMT candidate and deputy legislative speaker Chiang Chi-chen defends the bill as a cross-party compromise and promises money and policy will be spread fairly across cities and industries.
• The fight is also a campaign issue, with both candidates pushing rival childcare and family subsidy packages ahead of the local elections in three months.

Outlook: Expect a fight over how the money is actually allocated, with drone and supply-chain stocks staying shaky until the details become clear.