AGP Executive Report

Cross-Strait Tensions: A Chinese mainland spokesperson accused Taiwan’s DPP authorities of politically blocking tourism business visits after Taiwan rejected applications from Shanghai and Fujian operators, despite allowing individual travel under exchange measures. Maritime Pressure: The U.S., UK, France and Germany warned that China’s coast guard patrols and related activity off eastern Taiwan threaten stability and freedom of navigation, after Beijing said it was enforcing “maritime traffic” rules and conducting surveys. PLA Activity: Taiwan’s Defense Ministry said China’s newest aircraft carrier, the Fujian (CV-18), transited the Taiwan Strait while Taiwan tracked it with joint intelligence systems. Defense Posture: Taiwan is also moving to tighten readiness as China’s warning time is said to be shrinking, with reports of heightened Chinese military activity around the island. Tech & Industry: At InfoComm 2026, Taiwan’s “AI Island” push highlighted a shift from Pro AV hardware to software-defined AI infrastructure, while OpenAI unveiled its custom Jalapeño AI chip with Broadcom. US-Taiwan Links: California’s Senate passed a bipartisan pro-Taiwan resolution for the third straight year, reaffirming support and calling for deeper cooperation.

AI-driven Industry: Taiwan’s industrial production jumped 11.78% year-on-year in May, with electronics and semiconductors benefiting from AI demand, as the MOEA said growth marked a 27th straight month. Defense Readiness: Defense Minister Wellington Koo said the MND will review whether reservists’ drone training hours should be increased after lawmakers questioned if the current two-hour refresher is enough. Cross-strait Security Pressure: Taiwan’s drills continue as the UK, France and Germany issued a joint statement warning about “novel” Chinese coast guard activity east of the island, while Vice President Hsiao Bi-khim reiterated Taiwan’s role as a “stabilizer” for the Taiwan Strait status quo. China-Japan Tensions: China detained two Japanese nationals over alleged smuggling of banned goods, reportedly linked to rare earths, raising new concerns for Japanese firms operating in China. Markets & Chips: Taiwan stocks slid 2.24% as U.S. tech weakness hit sentiment, with Taiex pressured by heavy selling in major chip names. Sports & Culture: The New York Yankees signed 18-year-old Taiwanese pitcher Lai Chien-fan, and F4 with Ashin donated NT$2.5 million to Mindanao earthquake relief in the Philippines.

Taiwan-U.S. Business Ties: Taiwan’s top lawmakers and officials visited Phoenix to see how Taiwanese firms are expanding in Arizona, with stops including an ASU health showcase and the TSMC-linked push that’s turning semiconductors into broader biotech and healthcare partnerships. Cross-Strait Security: Taiwan reported China’s newest aircraft carrier sailing through the Taiwan Strait, underscoring rising military activity around the island. Defense Industry: Taiwan is moving to expand domestic drone capacity with a dedicated military procurement plan and stepped-up readiness drills as China pressure grows. Economy & Markets: Taiwan’s jobless rate fell for a second straight month in May, while investors also watched tech-led market swings tied to memory and AI supply chains. Cyber Safety: A new WhatsApp malware campaign is targeting users via fake business documents, aiming to hijack devices through malicious scripts. Regional Human Rights: A rights group says more than 5,300 people remain trapped in Myanmar scam centers near the Thai border, including Taiwanese victims. Energy & Trade Routes: More vessels are transiting the Strait of Hormuz as confidence improves after U.S.-Iran talks, easing oil-price pressure.

Military Readiness: Taiwan kicked off a five-day “immediate combat readiness” drill with tanks patrolling streets, as China’s grey-zone pressure continues. Public Health: Taiwan reported its first domestic cholera case since 2023, involving a woman in her 70s; health authorities are tracing six close contacts. Climate Preparedness: The MOENV will run a cross-agency anti-heat drill on June 29, simulating extreme heat above 40°C for more than three days. Economy & Jobs: Taiwan’s jobless rate fell for a second straight month in May to 3.27%, the lowest for the month since 2000. Tech & Markets: Taiwan shares closed lower as memory chip stocks slid after South Korea’s sharp drop; investors also grappled with a wider Asia tech sell-off. Environment & Conservation: A critically endangered shark ray was released off Taitung after being tagged, part of a cross-border conservation effort. Cybersecurity: Tata Electronics disclosed a ransomware-linked breach after files allegedly tied to Apple and Tesla appeared online. Business/Industry: Taiwan’s MOENV also flagged heat-wave impacts like power outages and traffic disruption in its drill scenario.

Cross-Strait Security: Taiwan kicked off a five-day “immediate combat readiness” drill to speed up rapid wartime transition as China steps up activity around the island. Defense & Industry: Taiwan’s ruling party pushed a $6.6bn special defense bill to expand domestic drone production, including large drone and munition purchases over 2026-2031. China Pressure & Sanctions: China announced new export-control countermeasures targeting 10 U.S. firms, while also releasing footage tied to a marine survey east of Taiwan amid reported Japanese and Taiwan-area interference. U.S.-Iran Ripple Effects: The U.S. authorized a temporary easing of sanctions to allow Iranian oil sales after progress in talks, with Strait of Hormuz transit commitments in focus. Tech & Economy: TSMC and advanced packaging deals stayed in the spotlight, while Taiwan’s HDRE said it plans $3bn in battery storage projects in Japan. Education & Culture: U of T ranked first in Canada and 20th globally in U.S. News & World Report’s Best Global Universities. Aviation: EVA Air President Clay Sun was elected to IATA’s board, the first Taiwanese airline leader to join the group’s top decision-making body.

Defense Drills: Taiwan kicked off a five-day “Immediate Combat Readiness” exercise to speed up rapid deployment and improve the peacetime-to-wartime transition as China ramps up activity around the island. Cross-Strait Travel: During China’s 2026 Dragon Boat Festival holiday, cross-border trips rose 12.9% year-on-year, with Taiwan-region travel up 18.4%. Public Safety Case: A Taipei court ordered detention of a 52-year-old suspect in a knife attack on a baseball cheerleader, with prosecutors citing attempted murder risk. Economy & Markets: UBS lifted its 2026 Taiwan GDP growth forecast to 9.9%, while Taiex surged to a new high as investors chased AI-linked chip momentum. Health Policy: Taiwan’s health ministry said it will not legalize euthanasia, instead pushing stronger palliative and long-term care services amid renewed debate. Tech & Business: Taiwan’s game software revenue hit NT$71 billion in 2025 (+48.7% over five years), and Shopee is set to integrate into ChatGPT via a new Sea/OpenAI partnership.

Cross-Strait Security: Taiwan’s Ministry of National Defense says it will run a five-day combat readiness drill starting June 22 to test rapid peacetime-to-wartime transition as China steps up military activity around the island. Defense & U.S. Posture: The U.S. Indo-Pacific Command is reverting to its Pacific Command name, and Guam-based assets are shifting toward Japan as part of broader regional readiness. Labor Rights Oversight: Taiwan’s Control Yuan says the island’s labor inspection system is structurally unable to properly catch forced labor in the textile sector, calling for an independent complaint and remedy mechanism. Semiconductor & AI Economy: Taiwan’s AI momentum stays in the spotlight, with fresh debate over how non-compete rules and chip supply partnerships could reshape the global foundry race. Weather Watch: The Central Weather Administration issues heat warnings across Taiwan ahead of Tropical Storm Mekkhala’s closest approach on Thursday. Public Safety Tech: New Taipei City launches a hornet hotspot warning system using a Line bot and mapping to alert residents near sting incidents. Housing Market: Taiwan property transactions fell to a nine-year low in 2025, linked to central bank selective credit controls. Culture & Identity: A cross-Strait Fuxi Ceremony in Gansu draws Taiwan participation, highlighting shared cultural roots.

Cross-Strait Security: Taiwan’s defense ministry reported a fresh spike in Chinese activity, detecting 2 PLA aircraft sorties, 8 PLAN vessels and 4 official ships around the island as of 6 a.m. Sunday, after similar detections Saturday. Readiness Drills: Taiwan will hold a five-day “Immediate Combat Readiness Exercise” starting Monday, using actual troops and equipment to train rapid peacetime-to-wartime transition amid ongoing regional tensions. Defense Policy: The defense ministry proposed tougher penalties for draft dodgers, shifting from fines to non-commutable prison terms of 1–5 years. U.S. Arms Push: President Lai Ching-te urged the U.S. to quickly process a roughly US$14 billion weapons package under review to strengthen Taiwan’s self-defense. Aviation/ISR Upgrade: Testing of the MQ-9B “SkyGuardian” drone is already underway in Taiwan, with four units delivered in 2026–2027 batches. Environment & Health: A study says climate change may lower Taiwan’s average PM2.5 over coming decades, but benefits could be uneven, creating regional “hotspots.” Local Governance: Hualien County faces scrutiny over alleged corruption tied to a free school lunch program. Sports: Olympic gold boxer Lin Yu-ting won silver at the 2026 World Boxing Cup in China. Culture: The ABS-CBN/Prime Video series “The Silent Noise” won Best Asian Content at the 2026 Global OTT Awards in Busan. Tech/Entertainment: Diablo 4: Lord of Hatred was listed for Nintendo Switch 2 on Taiwan’s game rating board, fueling renewed port speculation.

Cross-Strait Security: Taiwan’s defense and security agencies are on high alert as China steps up “gray zone” pressure, including coast guard activity around Taiwan and renewed territorial planning moves east of the island. Defense & Drones: Taiwan approved a $6.7 billion drone defense plan amid calls to expand European arms and UAV cooperation, while experts warn Taiwan needs layered defenses against “robot wolves.” U.S. Arms Package: Taiwan’s president pushed back on China’s pressure and sought swift approval of a U.S. arms package, as lawmakers discuss deeper tech ties. Weather Watch: Tropical Storm Mekkhala is strengthening toward a typhoon and could bring sea warnings to Taiwan later this week. Local Governance & Safety: Vision Zero Taiwan urged better pedestrian infrastructure to cut deaths and emissions, and Taiwan’s Control Yuan criticized red tape slowing domestic defense supply-chain building. Tech & Markets: IT’s share of major equity benchmarks hit record levels, with Taiwan’s TSMC revenue in focus as AI demand keeps semiconductors driving global indexes. Health & Society: A Taiwan study links air pollution to cardiovascular emergency surges, while Taiwan-backed projects support farmers abroad, including guava grafting training in Saint Lucia. Sports: Carlos Yulo and Eldrew Yulo advanced to Asian gymnastics apparatus finals, and Taiwan’s CTBC Brothers terminated a pitcher’s contract after a concealed drunk-driving crash.

Defense & U.S. Arms: President Lai Ching-te told Taiwan’s foreign press the island’s defense build-up isn’t meant to provoke Beijing, as he urged swift approval of a new U.S. arms package amid intensifying Chinese pressure. Cross-Strait Security: Taiwan’s military reported multiple PLA aircraft sorties and PLAN/official vessels operating around the island, with one PLA sortie crossing into Taiwan’s southwestern ADIZ. Cyber & Elections: A Taiwan cybersecurity expert warned of a coordinated Facebook disinformation push linked to China, aimed at building networks for influencing Taiwan’s November local elections. Economy & Housing: Taiwan’s central bank-linked selective credit controls helped drive residential and commercial property transactions to a nine-year low in 2025. Energy Prices: CPC Corp. said it will cut domestic gasoline and diesel prices next week as international crude pressure eases. Tech & Health: Taiwan’s central bank said AI-driven growth is also spreading into traditional manufacturing, while a new study found air pollution is a stronger trigger for cardiovascular emergencies than weather alone. International Links: MOFA Deputy Foreign Minister Chen Ming-chi inspected a “sovereign AI” data center site in Paraguay, Taiwan’s sole South American ally.

Semiconductor Pulse: TSMC posted record May revenue of US$13.2 billion, up 1.5% from April and 30.1% year-on-year, underscoring continued demand for advanced chips. Defense & Security: Taiwan is pushing to expand domestic drone capacity with a Cabinet-approved NT$6.7 billion drone bill, while China’s pressure remains a constant backdrop. Rare Earth Supply Chains: Taiwan’s ITRI says it has developed rare earth extraction tech and is looking to build a “non-China supply chain” with partners. Cross-Strait Tensions: Taiwan’s coast guard warned off and detained Chinese vessels in restricted Penghu waters, as Beijing’s “fake integration, real pressure” line continues to draw pushback. US-Taiwan Ties: President Lai met US lawmakers to seek faster approval of tax relief and deeper tech, trade, supply-chain, and defense cooperation. Trade & Industry: Japan is considering antidumping duties on stainless steel from China and Taiwan after a preliminary probe found unfairly low pricing. Local Economy: Taiwan’s carbon fee plan aims to drive over NT$1 trillion in supply-chain value by 2030, as policy makers try to steer investment toward greener industry.

Cross-strait security: Taiwan’s Coast Guard warned off Chinese oceanographic research vessel Xiang Yang Hong 22 from restricted waters off Su’ao, shadowing it with patrol ships and issuing radio orders; the vessel left early Friday as Taiwan accused Beijing of using research missions to expand influence. Defense posture: Taiwan carried out a first-of-its-kind live-fire drill firing 32 U.S.-supplied HIMARS rockets westward in “shoot-and-scoot” tests, a move Beijing condemned as provocation. China-Taiwan maritime pressure: Beijing also detailed a rare marine survey east of Taiwan, while Taiwan protested China’s “jurisdiction” claims and linked the activity to regional tensions. Weather watch: A tropical depression near Guam could strengthen into a storm and potentially approach Taiwan mid-next week, with localized rain possible. Regional politics & markets: Global stocks cooled after U.S.-Iran talks hit hurdles, with attention turning to the next steps for a lasting agreement; Taiwan markets were shut for the holiday. Tech & chips: The U.S. raised concerns with ASML over whether an EUV tool could have reached China; ASML denied any EUV shipment to China. Local culture: Sanxia residents and students revived a land-based dragon boat race on Old Street using recycled inflatable boats for the Dragon Boat Festival.

Cross-Strait Defense: Taiwan carried out a first-of-its-kind live-fire drill firing 32 U.S.-supplied HIMARS rockets westward toward waters near the Taiwan Strait, testing “shoot-and-scoot” tactics and rapid precision response; China condemned it as a provocation. U.S. Arms Push: President Lai Ching-te said Taiwan hopes the U.S. will approve a $14 billion arms sale “as soon as possible,” stressing Taiwan rejects unification and that defense efforts are not meant to provoke. Tech & Chips: Trump said Apple will “design and build” chips with Intel in the U.S., a headline that sent Intel shares soaring and adds pressure to diversify chip supply beyond Taiwan-based manufacturing. Maritime Tensions: China said it conducted a three-day marine environmental survey east of Taiwan, while Taiwan criticized the activity as illegal. Cybersecurity: A major Fortinet “FortiBleed” credential leak exposed tens of thousands of firewalls, with Taiwan among the hardest-hit. Media Habits: A Reuters report found social media and video platforms now lead as the top source for news globally, overtaking TV and news sites.

U.S.-Taiwan Defense Ties: Taiwan President Lai Ching-te said he hopes Washington approves a $14 billion arms sale “as soon as possible,” stressing Taiwan’s self-defense and rejecting unification; China called the move consistent with its “one-China” stance. Cross-Strait Military Posture: Taiwan fired 32 U.S.-supplied HIMARS rockets westward in a first-of-its-kind live-fire drill, testing “shoot-and-scoot” tactics and drawing Beijing’s condemnation as provocation. Diplomacy & Pressure on Partners: Taiwan accused Kenya of blocking its oceans-forum delegates under “high-level Chinese pressure,” warning this is becoming the “new normal.” Regional Security Talks: Japan and Taiwan pledged deeper cooperation with Japan on tech, AI, unmanned aircraft, and maritime security, while Lai said EEZ talks involving Japan and the Philippines won’t affect Taiwan’s rights. Economy & Markets: Taiwan’s Taiex hit record highs on AI-led tech buying, while the central bank kept rates unchanged; Taiwan also climbed to No. 4 in the IMD World Competitiveness Ranking. Cybersecurity: The FortiBleed campaign exposed Fortinet firewall credentials, with tens of thousands of devices reportedly compromised worldwide, including Taiwan.

Taiwan Strait Security: Taiwan conducted its first westward live-fire HIMARS drill, firing 32 U.S.-supplied rockets toward the Taiwan Strait to test “shoot-and-scoot” tactics and deter a possible amphibious invasion, while China condemned it as provocation. Diplomacy & Defense Spending: Taiwan’s opposition leader Cheng Li-wun faced cold treatment in Washington after blocking a proposed $40 billion emergency defense budget, with the U.S. reportedly canceling a planned meeting. G7 Signal on Taiwan: G7 leaders reaffirmed opposition to unilateral force or coercion across the Taiwan Strait and welcomed Taiwan’s Foreign Ministry response to the statement. Energy Contingency: CPC said it is ready to adjust crude and LNG procurement if the Strait of Hormuz reopens, citing high inventories and monitoring cargo situations. Cyber Risk: Researchers warned of the FortiBleed campaign targeting Fortinet firewalls and VPNs, with tens of thousands of exposed devices and stolen credentials. Tech & Markets: TSMC remained a key AI supply-chain driver in investor coverage, while Gartner’s 2026 supply-chain ranking placed Taiwan Semiconductor among the top 25. Culture & Society: A Lululemon Great Wall yoga event sparked backlash in China over a Japanese drum, prompting a public apology.

Taiwan Strait Deterrence: Taiwan fired 32 U.S.-supplied HIMARS rockets westward in a first-of-its-kind live-fire drill, testing “shoot-and-scoot” tactics for a response to a possible amphibious invasion; China condemned it as provocation. G7 Diplomacy: G7 leaders backed a U.S.-Iran deal to reopen the Strait of Hormuz and vowed stronger sanctions on Russia’s oil and gas, while reaffirming support for Ukraine and opposing any force or coercion to change the status quo across the Taiwan Strait. Cross-Strait Ties: Mainland officials said Taiwan residents’ entries via Fujian ports rose nearly 30% in the first five months of 2026, with ferry passenger trips also up. Security Court Ruling: A former diabolo instructor convicted of recruiting spies for China was sentenced to a total of 12 years and eight months for leaking sensitive military and presidential travel information. International Friction: Taiwan accused Kenya of deporting Taiwanese scholars attending an oceans conference under pressure from China, citing passport and phone confiscations. Local Life & Nature: Taijiang National Park will impose night traffic controls during mangrove land crab breeding season to protect migrating crabs.