Taiwan’s government has proposed a record defense budget exceeding $31 billion for 2027, emphasizing drones, missiles, and asymmetric capabilities, while conducting routine military exercises to bolster resilience. Beijing maintains steady gray-zone pressure through coast guard patrols east of the island, naval presence in surrounding waters, and moderate air incursions, but has not escalated to the large-scale amphibious or missile preparations that would signal imminent invasion. Ongoing U.S.-China diplomatic engagement, including recent high-level contacts, and Taiwan’s legislative focus on spending priorities amid partisan disputes further support the market’s assessment that a full-scale operation by June 2027 remains unlikely under current conditions.