Taiwan President Lai Ching-te said on Friday that the government would build the "T-Dome" air defence system to provide multi-layered protection against enemy threats, and called on China to renounce the use of force to seize Taiwan.
Democratically governed Taiwan has faced increased military and political pressure from China, which views the island as its own territory over the strong objections of the government in Taipei.
Taiwan is ramping up defence spending and modernising its armed forces, but faces a China that has a far larger military and is adding advanced new weapons like stealth fighter jets, aircraft carriers and a huge array of missiles.
Lai said in his National Day address that Taiwan is determined to spend more on defence, and would at the end of this year propose a special budget for military spending, showing the government's determination to protect the island.
"The increase in defence spending has a purpose; it is a clear necessity to counter enemy threats and a driving force for developing our defence industries," he said.
"We will accelerate our building of the T-Dome, establish a rigorous air defence system in Taiwan with multi-layered defence, high-level detection, and effective interception, and weave a safety net for Taiwan to protect the lives and property of citizens," Lai said, to applause from the crowd.
He added that China should renounce the use of force or coercion to change the status quo across the Taiwan Strait.
There was no immediate reaction from Beijing to his speech.
China says Lai is a "separatist" and has rebuffed his offers of talks.
