Taiwan's president used the island's National Day speech to defend rising military spending and open-ended talks with Beijing — a firm but non-escalatory message aimed at China and at Taiwan's democratic partners.

• Lai Ching-te said Taiwan is spending more on defense to deter war, not to provoke one, and that stronger defenses are meant to make talks possible on equal terms.
• He accused China of using military pressure and "gray zone" tactics to change the status quo in the Taiwan Strait.
• Taiwan plans to turn its chip, telecom, and precision manufacturing strengths into weapons and defense industries of its own, alongside asymmetric warfare capabilities.
• A separate push is underway to keep energy, communications, transport, banking, food, and hospitals running in a crisis, tying together national, local, and civilian resources.
• He welcomed US-China talks to lower the risk of conflict but drew a line at rewriting World War II history or sidelining Taiwan's right to decide its own future.

Outlook: Expect more Taiwanese defense spending and domestic arms production, with Beijing likely to answer the speech with fresh military pressure.