Taiwan has unveiled its first-ever domestically built submarine.
President Tsai Ing-wen said building submarines was a crucial military deterrence.
"Even if there are risks, and no matter how many challenges there are, Taiwan must take this step and allow the self-reliant national defense policy to grow and flourish on our land," Tsai said.
It must still undergo sea trials and will not enter service for another two years.
Taiwan's navy has two working submarines bought from the Netherlands in the 1980s. It previously said it had plans to build eight submarines.
What is Taiwan's combat capability?
Huang Shu-kuang, the convener of Taiwan's Indigenous Defense Submarine program, said he believes a fleet of 10 submarines would make it harder for the Chinese Navy to extend its power in the contested maritime region.
The island's Institute for National Defense and Security Research (INDSR) believes deploying submarines at major chokepoints would be enough to cause problems for China.
"It can disrupt the PLA's attempt to encircle and attack Taiwan from the east and west," Jiang Hsin-biao of the INDSR said.
China's Defense Ministry said Taiwan was "over-rating itself and attempting something impossible."
"No matter how many weapons [they] build or purchase, they cannot stop the general trend of national reunification, nor can they shake the People's Liberation Army's... strong ability to defend national sovereignty," spokesperson Wu Qian said.
China considers Taiwan part of its territory and has stressed it will not hesitate to use force to assert its power over the strait.
The Chinese threat to Taiwan
Taiwan Foreign Minister Joseph Wu said that Taipei had to strengthen its defenses as it faced with an increased threat from China's military.
"Having a new submarine is one of those strategies. For anyone who questions Taiwan's submarine strategy, I would be a most forceful advocate for Taiwan to acquire submarines because that's needed to deter war from taking place," Wu said.
China has one of the world's largest navies, with nuclear-powered submarines and aircraft carriers.
