NATO warns of Chinese military buildup and the danger of escalation around Taiwan, a critical point in global rivalries.
On June 23, 2025, NATO Secretary General Mark Rutte sounded the alarm about the People’s Republic of China’s military buildup, which he described as “massive.” This statement comes amid intensifying tensions around Taiwan, fueled by the findings of the May 2025 report by the US Defense Intelligence Agency (DIA). The document envisages a series of limited offensive scenarios by Beijing, including the takeover of peripheral islands such as Kinmen, Matsu, and Pratas, to put pressure on Taipei without launching a direct invasion.
This strategic hardening comes as NATO expands its focus to the Indo-Pacific theater, traditionally outside its original geographical area. The issue is all the more worrying as China’s military capabilities could be combined with those of Russia, forcing the Alliance to reassess its budgetary and operational priorities. One proposal aims to increase defense budgets to 5% of GDP, compared with the current target of 2%.
Beyond the risk of military confrontation, a conflict in the Taiwan Strait would have major economic repercussions, particularly for the global semiconductor industry. The article provides an in-depth analysis of the operational threats, China’s strategy, NATO’s capacity limitations, and the risks of the conflict spreading to other regions.
China’s rapid militarization: a change of scale
China’s military rise since 2015 has accelerated under Xi Jinping, with a profound transformation of the People’s Liberation Army (PLA). China’s official military budget for 2025 stands at €243 billion, an increase of 7.2% compared to 2024, according to official figures from Beijing. Unofficially, total spending could exceed €350 billion, including classified programs.
The naval forces have been at the heart of this expansion. The Chinese fleet now comprises more than 370 warships, including three aircraft carriers, compared to 296 for the US Navy. The third aircraft carrier, the Fujian, with conventional propulsion but an electromagnetic catapult, aims to project Beijing’s power far beyond the South China Sea. The development of anti-ship ballistic missiles such as the DF-21D and DF-26, capable of striking targets up to 4,000 km away, further strengthens this deterrent capability.
In the air, China is now deploying the J-20, a fifth-generation stealth fighter, in operational squadrons, and is continuing to develop the J-35, intended for aircraft carriers. Added to this is a massive deployment of MALE and HALE drones, as well as the increasing integration of electronic warfare systems, suggesting active preparation for a high-intensity conflict.
The scenario of a gradual attack on Taiwan
The May 2025 report by the Defense Intelligence Agency mentions a change in China’s approach to Taiwan. The hypothesis of a full invasion of the main island is now considered risky, both in terms of human costs and operational uncertainties. Instead, Beijing could opt for targeted operations on peripheral islands under Taipei’s control.
Among the identified targets are the Kinmen islands, located just 3 km off the Chinese coast, the Matsu islands, and the Pratas atoll, which is isolated but strategically located to the south. These actions would aim to demonstrate Beijing’s military projection capabilities while fracturing Taiwan’s psychological deterrence. The strategy is inspired by Russian techniques in the Sea of Azov and Crimea, combining military pressure, information warfare, and hybrid operations.
Since January 2025, the Chinese army has been conducting repeated exercises around these areas, involving amphibious units, naval drones, and special forces. These maneuvers are intended to simulate lightning takeovers, paralyzing Taiwanese defenses even before conventional troops are deployed.
The possibility of a total maritime blockade cannot be ruled out. Such an operation could stifle Taiwan economically without provoking a frontal attack and would complicate the US response, which is subject to internal debate on the nature of any intervention.
NATO’s capacity overload in the face of the Chinese threat
Faced with the changing global balance of power, NATO is confronted with a major strategic dilemma. The expansion of its security perimeter to the Pacific, historically excluded from its mandate, requires an increase in logistical, naval, air, and human resources.
The proposal to raise the defense spending of Alliance members to 5% of GDP was put forward behind closed doors by several Baltic states and Poland, supported by the United States. By comparison, only 11 NATO countries currently meet the 2% target. In France, this would mean increasing the annual defense budget from €60 billion to €150 billion, a budgetary effort unprecedented since the Cold War.
The current doctrine does not allow for simultaneous large-scale deployment in Eastern Europe and the Pacific. NATO’s maritime projection capabilities are limited: only a handful of aircraft carriers (the Charles de Gaulle, the British Queen Elizabeths, and a few US groups) can support prolonged operations in the Western Pacific.
The involvement of non-member states such as Japan, Australia, and South Korea is becoming essential. The Japan-US Security Treaty is now a pillar of regional coordination, but it remains outside the NATO framework. A gradual shift towards a “global” NATO is emerging, despite German and Italian reluctance to dilute European resources.
Taiwan, semiconductors and global dependence
The military risk surrounding Taiwan is not limited to issues of sovereignty or power relations. The island accounts for more than 60% of global semiconductor production and 90% of high-end chips used in military equipment, aerospace, telecommunications, and electric vehicles.
The TSMC (Taiwan Semiconductor Manufacturing Company) group is the central player in this ecosystem. Even a partial interruption of its production capacity would have immediate consequences for global supply chains. In 2021, a simple post-COVID shortage led to an estimated 10 million vehicles being taken off the global production line.
In the event of conflict, the facilities in Hsinchu or Tainan could become priority targets or be put out of action by fighting. The US strategy is to bring back some production to the US and Europe: TSMC is currently building factories in Arizona and Dresden, but they won’t be up and running until after 2027.
Western dependence on Taiwan therefore remains critical. An attack on the island would affect the microelectronics market, cause prices to skyrocket, and generate knock-on effects in the defense, automotive, and energy sectors. For NATO, this scenario calls for a comprehensive strategic review that includes industrial resilience.
War Wings Daily is an independant magazine.