TAIPEI (Reuters) -Taiwan plans to boost defence spending by a fifth next year, surpassing 3% of gross domestic product, as it invests billions more in new equipment to better face down China and convince the United States it takes seriously calls to bolster its military.

Taiwan President Lai Ching-te said on Friday he hoped defence spending would reach 5% of gross domestic product before 2030, upping a target of bolstering the island's military budget that Washington has pushed for.

Taiwan's cabinet will propose defence spending of T$949.5 billion ($31.27 billion) for next year, accounting for 3.32% of gross domestic product, the official Central News Agency reported on Thursday.