Well into his second term, Chen Shui-bian and the Democratic Progressive Party (DPP) continues to face a number of challenges in ensuring Taiwan’s defense and national security. With less than three years remaining in his term, President Chen is seeking to consolidate control over the country’s national security and defense establishment, and implement an ambitious force modernization and defense reform program.

However, a number of obstacles stand in the way of the Chen Shui-bian Administration’s successful pursuit of its defense and national security agenda. Perhaps the most significant is the DPP’s inability to ensure passage of an extra-budgetary funding request for weapon systems that are considered central to Taiwan’s force modernization program.

This quarter’s defense and national security analysis examines the special budget issue in detail, including how the special budget issue has evolved, and the domestic political and economic environment that has for so long been preventing its passage.

Executive Summary: Taiwan Defense & Security Report – Q2, 2005

In the wake of its failure to attain a majority in the December 2004 Legislative Yuan (LY) elections, the first quarter of 2005 was marked by a deepening of political divisions between the ruling Democratic Progressive Party (DPP) and the Kuomintang (KMT). A number of events this quarter have created a tense and emotional atmosphere, with significant implications for the future of Taiwan’s national security and cross-Strait stability.

This quarterly report reviews Taiwan’s security environment, including the Chinese Anti-Secession Law, the détente between the DPP and opposition People’s First Party (PFP), and the KMT’s cross-Strait initiative. This report then examines the implications of the environment on today’s key defense policy issue – the Chen Shui-bian administration’s NT$480 billion (US$15.29 billion) special budget request for diesel electric submarines, PATRIOT PAC-3 missile defense systems, and P-3C maritime patrol aircraft. Finally, we provide an update on key Army, Navy, and Air Force issues.

Executive Summary: Taiwan Defense & Security Report – Q1, 2005

In the wake of Taiwan’s legislative elections in December 2004, Chen Shui-bian’s Democratic Progressive Party (DPP) administration is grappling with a range of domestic and international challenges to safeguard Taiwan’s defense and national security. Over the past year, President Chen – having overseen a major transition in defense leadership during the first month of his second term and failing to secure a legislative majority in December – is trying to consolidate control over the country’s national security and defense establishments and trying to implement a far reaching force modernization and defense reform program.

However, a number of obstacles continue to slow progress. First, a highly divided domestic polity in which the opposition is using defense issues as a bully pulpit to further political agendas continues to stymie his efforts to develop a force capable of standing up to the growing threat from the People’s Republic of China (PRC). Taiwan continues to suffer from limited choices in its force modernization plan, an issue that is further complicated by an inefficient defense industrial infrastructure. This defense and national security analysis reviews the key events of 2004, assesses the results of the December 2004 legislative elections, and examines developments in Taiwan’s defense budget and procurement programs.

Executive Summary: Taiwan Defense & Security Report – Annual Review, 2004

As Taiwan enters a politically sensitive period preceding highly contested legislative elections in December, Chen Shui-bian’s Democratic Progressive Party (DPP) administration is traveling along a bumpy path to guarantee Taiwan’s defense and national security. President Chen, having overseen a major transition in defense leadership during the first month of his second term, is consolidating control over the country’s national security and defense establishments and trying to implement a far-reaching force modernization and defense reform program. However, a number of obstacles continue to slow progress.

First, a strategic and rational approach to force modernization is complicated by a highly divided domestic polity in which the opposition is using defense issues as a bully pulpit to further its political agenda. Second, Taiwan continues to suffer from limited choices in its force modernization plan, an issue that is only further complicated by an inefficient defense industrial infrastructure. This quarter’s defense and national security analysis examines the domestic political and economic environment in the lead-up to the December 2004 legislative elections, defense budget and procurement developments, and provides an update on key procurement programs.

Executive Summary: Taiwan Defense & Security Report – Q3, 2004

As they begin their second term, Taiwan President Chen Shui-bian and the Democratic Progressive Party (DPP) face a number of challenges in ensuring Taiwan’s defense and national security. Over the next four years, President Chen will seek to consolidate control over the country’s national security and defense establishments, and to implement an ambitious force modernization and defense reform program.

Obstacles in his path include a highly divided domestic polity in which a large segment of the opposition is against significant additional investment into defense, a restrictive international environment that limits Taiwan’s choices for procurement, a weak defense industrial base, and an economy that is becoming increasingly reliant on the mainland for growth.

This quarter’s defense and national security analysis examines the domestic political and economic environments that will help shape the direction of Taiwan’s defense and national security policies. The report will also discuss defense policy issues – including defense and national security leadership transitions and other personnel shifts – as well as defense budget and procurement developments, it will then conclude with a discussion of U.S.-Taiwan defense relations.

Executive Summary: Taiwan Defense & Security Report – Q2, 2004

Taiwan is in a period of political transition, as President Chen Shui-bian’s electoral victory is being contested within Taiwan’s judicial system. A second Democratic Progressive Party (DPP) administration has significant implications for force modernization and budget issues, as well as for defense reform, strategy, and U.S.-Taiwan defense relations.

Under normal circumstances, Chen’s election to a second term would have given the President more confidence to press the DPP’s defense agenda, which was first articulated in the party’s defense white paper issued in November 1999. However, allegations of DPP improprieties by the KMT/People’s First Party (PFP) coalition – collectively known as “Pan-Blue” – the narrow margin of victory, and the failure of the two referenda could hinder progress on a range of fronts, at least for the initial few months into Chen’s second term.

Executive Summary: Taiwan Defense & Security Report – Q1, 2004

The US-Taiwan military relationship saw a major, positive evolution during 2003. Although the year started out at low ebb, apparently hampered by major differences in strategic outlook and planning, it ended with a comprehensive, shared strategic vision to guide Taiwan’s modernization program over the next decade. This annual issue of the Defense & Aerospace Report will address those developments in the US-Taiwan military relationship, where funding is a key component, as well as the successful implementation of the plan for procurement, tied to the annual budget and to the special arms budget, which will be critical to achieving the shared strategic objectives that have emerged in the US-Taiwan relationship

In addition, we will examine the upcoming Taiwan presidential elections in March, a closely contested race that will have wide-ranging consequences not only for Taiwan’s domestic economic and political situation, but that will also impact China’s cross-Strait policies and influence the full scope of US-PRC-Taiwan relations. Incumbent President and Democratic Progressive Party (DPP) candidate Chen Shui-bian, with running mate Vice President Annette Lu, and the allied Kuomintang/People’s First Party (KMT/PFP) candidates Lien Chan and James Soong are already pulling out all the stops as they vie for popular support. Chen is appealing heavily to a populist sense of identity and nationalism with calls for constitutional change and a public referendum. Lien was carving out a platform calling for a more moderate approach to cross-Strait relations, but the Pan-Blue (KMT/PFP) coalition did not make headway attacking the quality of DPP governance, and has in recent weeks launched its own “nationalist” appeal with competing proposals for referenda and constitutional changes.

Finally, we will review some of what is known of the 2004 national defense budget, and provide a status report on the special arms budget and on the progress of Taiwan’s major arms programs. If President Chen wins the election, the special arms budget will likely move through as expected during the summer months, whereas a Pan-Blue victory could potentially delay the process as a result of the change in administration. As for the overall procurement program – addressing all the systems and projects that the Bush Administration approved in April 2001 – it is moving fairly slowly. With a plan finally in place, however, that pace should accelerate over the course of 2004. Barring unforeseen disruptions, the Taiwan military is poised to move forward on addressing its defense modernization objectives.

Executive Summary: Taiwan Defense & Security Report – Annual Review, 2003

Taiwan’s presidential elections in March 2004 will influence the debate and color any government decisions throughout the next six months. Key issues in the upcoming elections include the overall state of the Taiwan economy, as well as the state of U.S.-Taiwan and cross-Strait relations.

The elections will also signal Taiwan’s long- term strategic approach to the relationship with China, either towards unification if the pan-Blue Kuomintang (KMT)-People’s First Party (PFP) coalition wins, or continuing de facto independence if the Democratic Progressive Party (DPP) and its pan-Green supporters retains the presidency. The election results will have serious consequences for the losing party in the short run, as it will likely undergo major restructuring in hopes of regaining relevance on the Taiwan political scene, while also having consequences for the terms of Taiwan’s existence in the long run.

Over the past quarter, Taiwan officials have continued to be concerned over apparent improvements in U.S.-PRC relations, and they are taking clear and definitive steps to reassure the Taiwan public that the island’s interests will not be sacrificed because of those improvements. The Chen Administration’s draft defense budget for 2004 and its proposed special defense budget are both designed to show the public its commitment to national security, an issue that has garnered particular attention because of the ongoing discourse on direct cross-Strait links. With the continued sluggish economy, however, the increased size of the proposed 2004 defense budget could also increase Taiwan’s budget deficit and may also become an issue in the election.

On a positive note, the state of Taiwan’s military relations with the United States has taken a turn for the better over the last quarter, with much of the uncertainty that characterized the relationship in the first half of the year dissipating. That uncertainty has been replaced with more and better communication, which has led to a better understanding of each side’s needs, priorities, and strategic direction. Expanding U.S.-Taiwan military ties and continued and significant developments in the progress of arms sales programs both bode well for U.S. defense contractors.

Executive Summary: Taiwan Defense & Security Report – Q3, 2003