Taiwan needs a “hornet’s nest” of drones to help deter conflict and provide security, the top U.S. diplomat to the democratically governed island said on Thursday.

The United States, Taiwan’s most important international backer and arms supplier despite the lack of formal diplomatic ties, has strongly backed the government’s military modernization plan and increased defense spending.

Taiwan says it needs to bolster its defenses in the face of a stepped-up threat from China, which claims the island as its own territory.

Speaking at a forum on drones in the central city of Taichung, Raymond Greene, director of the American Institute in Taiwan and the de facto U.S. ambassador, said drones represented a “game-changing opportunity” to enhance Taiwan’s security and reinforce peace in the broader region.

The U.S. and Taiwan can anchor “democratic” drone production and strengthen the collective deterrence posture of the free world, Greene said.

“Fortunately for Taiwan, drones have significantly boosted defenders, even when facing overwhelming odds,” he added, referring to the war in Ukraine.

“Nothing will deter conflict more effectively than turning Taiwan into a hornet’s nest of air, surface, and subsurface drones.”

DRONE SPENDING

While Taiwan’s government has prioritized drones and other asymmetric systems, in May the opposition-dominated parliament passed only two-thirds of the T$1.25 trillion ($40 billion) in extra defense spending President Lai Ching-te had asked for, earmarking funds only for U.S. arms.

The government has now proposed a new, T$210 billion ($6.59 billion) package for surveillance, coastal attack and small unmanned surface drones to the end of 2031.

The Kuomintang (KMT), Taiwan’s main opposition party, this week proposed its own drone legislation, with a spending cap set at T$240 billion over six years, and annual spending capped at T$40 billion. Its plan would fund drones from the main budget rather than a special budget, which is what the government wants.

Speaking at the same forum as Greene, Taichung Mayor Lu Shiow-yen, a senior member of the KMT, said parliament should “work together” on promoting the development of the drone industry.

“From Ukraine to Iran, the nature of international warfare has changed because of drones and unmanned vehicles,” said Lu, widely seen in political circles as a future presidential candidate.

Taichung is one of the centers of Taiwan’s drone industry, home to companies like Thunder Tiger and major government defense contractor Aerospace Industrial Development Corp (AIDC).

On Wednesday, President Lai Ching-te said the need for drones was pressing.

“Facing changes in the geopolitical situation and the evolution of modern warfare, building asymmetric combat capabilities is a national defense project that is a race against time,” he told a meeting of his Democratic Progressive Party.

Lai rejects Beijing’s sovereignty claims, saying only the island’s people can decide their future.