The US-Taiwan Business Council welcomes the Thursday, August 12 decision by the Obama Administration to notify Congress of three Taiwan arms sales programs related to radar upgrades for Taiwan’s Indigenous Defense Fighters (IDF). These relatively small programs – held at the U.S. Department of State since late winter of 2010 – were Direct Commercial Sales (DCS) but required congressional notification given their value of greater than US$50 million.
Council president Rupert Hammond-Chambers noted, “The Obama Administration released several Bush-era programs for congressional notification on January 29, 2010. At that time, a decision was made to submit no further notifications for the year. However, that approach has caused some serious difficulties in areas of long standing bilateral cooperation, and the Council is encouraged by this apparent change in policy.”
The recent policy under both the Bush and Obama Administrations – freezing Taiwan arms sales notifications and then releasing them as packages – has had the inverse effect of its apparent intent. By creating multi-billion dollar packages that capture headlines, the policy has increased Chinese ire at such sales rather than reducing it. China has rightly deduced that the process is vulnerable to external pressure, and recently applied such pressure by threatening sanctions against American companies and by denying entry to China for U.S. Secretary of Defense Robert Gates.
China is employing a carrot and stick strategy with Taiwan, offering significant economic incentives with the recently signed Economic Cooperation Framework Agreement (ECFA) while continuing military modernization and expanding the material threat represented by the People’s Liberation Army (PLA) – as noted in the recently released and renamed “Military and Security Developments Involving the People’s Republic of China 2010”. This strategy compels a response from both Taiwan and the United States. Allowing China’s military threat to go unmet threatens any hope of long-term success in reducing cross-Strait tensions.
Both the U.S. and Taiwan must determine which actions to take in support of Taiwan’s national security, without caving to pressure from China. The August 12 decision represents a small step away from the package-freeze-notify approach, instead moving back toward the pre-2007 era in which programs went to Congress as the bureaucratic process was completed. Regularizing the Taiwan arms sales process will in the long term make support for Taiwan’s defense needs more transparent and stable.
Through the second quarter of 2010, the primary focus in Taiwan has been on the trade pact with China. Known as the Economic Cooperation Framework Agreement (ECFA), this is widely considered to be the single most important achievement for the Ma Ying-jeou administration during its first term. The ECFA may have broad-ranging implications – political as well as economic – for years to come. In conjunction with an improving economy, this significant milestone has certainly begun to help President Ma regain some of the popularity he lost since he took office in 2008.
The details of Taiwan’s defense and national security agenda for the next two years remains shrouded, although there are indications that the Ma Administration has begun to contemplate new defense procurement plans – possibly as part of an overall plan to ready Taiwan for eventual political dialogue with China.
This quarterly report provides a brief overview of significant developments during the past three months, and examines some of the factors that influenced the course of events during this period. The report will also cover implications for adding disaster relief to the core mission focus for the Ministry of National Defense (MND), along with a brief look at the status of select programs.
America’s defense relationship with Taiwan is again causing friction in Washington’s dealings with Beijing. Earlier this month China rejected a request from U.S. Defense Secretary Robert Gates to visit the mainland, citing recent U.S. arms sales to Taiwan. He rightly noted the sales issue is “far from new in this relationship.” But the fact is that the U.S.-Taiwan security relationship has never been more vulnerable, and the Chinese know it—and are taking advantage of the situation.
The key U.S.-Taiwan problem is that Washington has made changes in its process for selling arms to Taiwan that increase incentives for Beijing to raise a fuss. Traditionally, the U.S. had announced Taiwan weapons sales as the deals were completed, regardless of the condition of broader U.S.-China ties at that moment. Yet starting under the Bush administration in 2008, the State Department was allowed to sit on deals before announcing them to the Congress. State would wait for the “least worst time” to release the details; the yardstick for measuring “least worst time” would be the state of relations with China.
This change was part of an attempt to reduce Chinese objections to arms sales by announcing them only during periods of less intense bilateral U.S.-China activity—the idea being to avoid rocking the boat ahead of summits or amid negotiations where the U.S. hoped to cooperate on other, generally unrelated, issues with China. However, institutionalizing such concern over China’s reaction to Taiwan arms sales has had the effect of giving the Chinese greater leverage over how the U.S. implements its security commitment to Taiwan. Meanwhile, as high-level bilateral exchanges continue to multiply the windows available for vital arms sales narrow. Arms sales effectively froze during part of 2008 and again in 2009.
Not surprisingly, Beijing is trying to take advantage of this new opportunity to shape events. The mere rumor of an impending package in early January of this year led to increasingly shrill rhetoric from China. When the package was finally released later in the month, China threatened unspecified penalties for U.S. companies involved in the sales, as well as damage to bilateral initiatives such as cooperation on Iran and climate change. Beijing has not backed up any of these threats with action, at least not yet. But the fact that threats were made at all shows that far from smoothing the water, Washington’s new strategy creates incentives for Beijing to act out.
Report Cover: The Balance of Air Power in the Taiwan Strait
Executive Summary
Taiwan’s relationship with China continues to improve and expand. Yet the eroding cross-Strait military balance must be redressed so that Taiwan can approach the political dialogue from a position of confidence and strength.
Effective air defense is a crucial component if Taiwan is to mount a viable defense of the island. Taiwan’s current air defenses comprise 18 fighter squadrons with a nominal strength of 387 combat aircraft of U.S., French, and indigenous origins: 145 F-16A/Bs, 126 F-CK-1A/Bs, 56 Mirage 2000-5s, and 60 F-5E/Fs. All of these are reasonably modern “Fourth Generation” fighters with BVR AAM capability, with the F-5s – which are mainly used for operational conversion training with only a secondary combat role – as the exception.
The Taiwan Air Force (TAF) also controls ground-based air defense forces in the form of over 25 medium/long-range surface-to-air missile (SAM) batteries, using a mix of U.S. and indigenous missile systems (I-HAWK, Patriot, and Tien Kung-I/II). TAF has three existing PAC-2+ batteries (currently being upgraded) and is in the process of procuring 6 additional operational Patriot systems, for a total of 9 active PAC-3 batteries. There are also a number of short-range air defense SAM and gun systems, as well as field air defense assets operated by Taiwan’s ground forces.
In addition, Taiwan has a sophisticated integrated air defense command & control (C2) system, together with a modern network of ground-based surveillance radars and E-2 AEW&C aircraft. The air defense C2 infrastructure is currently being hardened, further modernized, and integrated with new capabilities such as the Link 16 datalink and the Surveillance Radar Program (SRP).
Taiwan’s air defense forces confront a unique threat environment involving long-range SAMs and over 1,300 tactical ballistic missiles (TBMs) and land-attack cruise missiles (LACMs), which could – in concert with manned strike aircraft, UAV, information warfare/electronic warfare and Special Operations Forces (SOF) attacks – threaten their bases and C2 installations. To defend against an integrated Chinese air campaign, Taiwan is investing heavily in active missile defense, BMC3I, and early-warning capabilities. But the runways at TAF air bases are vulnerable, and damaged runways could disable defensive air operations.
Block obsolescence is also a clear and present challenge to the TAF. Its F-5 fleet is nearing the end of its useful structurally-permitted service life, and is slated to retire by 2014. In addition, the actual number of airworthy twin-seat F-5Fs was reduced to just four aircraft in 2009. This shortfall is impacting lead-in fighter training (LIFT) for new pilots, and could erode pilot quality and operational readiness over time. Similarly, Taiwan will also need to address block obsolescence and reliability issues of its I-HAWK SAM systems.
Taiwan does not currently have a cost-effective means to address TAF’s fighter capability shortfall caused by F-5 obsolescence. Taiwan’s Mirage 2000 fleet suffers from very high Operations & Maintenance (O&M) costs and chronically low availability rates. The TAF poured substantial funding into addressing the Mirage issues over the past two years, leading to recent improvements in material readiness. But a tight O&M budget situation will almost certainly ensure a relapse into low Mirage material readiness over the next few years. Taiwan may resort to mothballing part of the fleet to conserve resources, and the combination of F-5 obsolescence and strained Mirage supportability will create a substantial shortfall of fighter aircraft for the TAF.
Meanwhile, China continues to aggressively introduce large numbers of modern combat aircraft into service. China currently deploys more than 700 combat aircraft within operational range of Taiwan, with hundreds more in ready reserve. These include over 500 very modern aircraft (Su-27, Su-30, J-10, JH-7), which are roughly comparable to TAF’s “Fourth Generation” aircraft types (F-16A/Bs, Mirage 2000-5s, F-CK-1A/Bs).
Conversely, TAF fighter strength is projected to decline to only around 300 aircraft by 2014-2015, and thus China will easily be able to array a better than 2:1 numerical superiority. Taiwan will then no longer have the number of combat aircraft necessary to meet the requirements for defending its air space from Chinese military threat.
The significant quantitative decline in air defense capability that Taiwan is expected to experience over the next several years could also have a profound and enduring impact by eroding the already marginal qualitative edge still held by Taiwan. Lessons from past Taiwan Strait crises have demonstrated the importance of Taiwan maintaining a qualitative edge against China, not only to prevail in conflict but also to strengthen deterrence.
The inability to provide timely replacements of obsolete equipment and/or prevent further deterioration in material readiness could result in Taiwan permanently losing its traditional edge in training and experience. Thus the current situation is both widening the quantitative gap in the cross-Strait power balance, and narrowing TAF’s qualitative edge in aircraft performance and pilot training/experience.
The principal mission requirements for the TAF are Combat Air Patrol (CAP), Defensive Counter-Air (DCA), Maritime Strike/Anti-Invasion, and Missile Defense (TBM/LACM). To carry out these missions, TAF will need a modern fighter aircraft with sufficient aerodynamic performance, BVR missile capability, and payload/range performance to effectively counter the expected Chinese aerial threats. Taiwan will also need upgraded SAM systems to engage TBMs and LACMs.
A review of the operational scenarios indicates that Taiwan’s current air defense forces are only marginally capable of meeting the island’s air defense needs. With effective fighter strength weakened by a combination of obsolescence of the F-5E/F fleet, low material availability of the Mirage 2000-5 aircraft, and obsolescence/declining reliability of I-HAWK SAM systems, Taiwan’s ability to defend its air space against likely threat scenarios can be expected to significantly deteriorate over the next few years.
TAF urgently needs to procure new combat aircraft to compensate for the significant loss in operational fighter strength projected over the next 5 years. The fighter gap, if not bridged in a timely manner, could solidify cross-Strait military imbalance in favor of China. That would both undermine deterrence and expose Taiwan to Chinese political extortion as the two sides move towards political dialogue.
A suitable candidate aircraft has to possess sufficiently high performance, BVR capability, and payload/range characteristics to conduct the CAP/DCA and maritime-strike/anti-invasion missions. Such aircraft also need to be supportable beyond 2025 and be export-releasable to Taiwan.
Given these criteria, the aircraft best suited to Taiwan’s current needs is the F-16C/D. Taiwan has been seeking U.S. approval for the sale of 66 new F-16C/D Block 50/52 fighters since 2006, but has been repeatedly discouraged by the U.S. Government to formally submit the associated Letter of Request (LOR). With the last F-16s under contract slated to be delivered at the end of 2013 – and given the 36-month manufacturing lead time – the production could be forced to close before a decision is made. Thus the window for Taiwan to purchase new-built F-16s is closing rapidly.
Another measure that could help address Taiwan’s predicament could include adopting a more rigorous, disciplined, life-cycle cost-based approach to force modernization planning and force management. Taiwan needs to implement a robust mid-life retrofit/modernization (MLU) program for its existing fleet of F-16A/B and F-CK-1A/B fighters, to address DMS/obsolescence issues, improve reliability/maintainability, improve survivability, and update aircraft capabilities.
Taiwan should exercise farsighted MLU investment choices in such systems as radar, electronic warfare systems, power plants, mission avionics, and air-launched weapons. Examples of such capabilities could include an active electronically-scanned array (AESA) radar and an upgraded engine, which could provide force-multiplying capabilities by significantly enhancing engagement capability per platform.
Taiwan should also consider further improving its ground-based air defense capability, through a combination of acquiring additional PAC-3 and other mobile SAM systems, upgrading existing I-HAWK batteries, and introducing mobile, low-altitude air defense systems. Other major force-multipliers for Taiwan would be a modern, integrated intelligence, surveillance and reconnaissance (ISR) capability, and additional investment in electronic warfare and information warfare (EW/IW) capabilities.
In addition to (and in combination with) maintaining a critical mass of air defense fighter capability and ground-based air defenses, Taiwan can also consider more asymmetrical approaches to the problem of integrated air defense, including passive defense measures (e.g. redundancy, dispersal, camouflage/deception, hardening, and rapid repair capabilities) and counter-strike capability (LACM, ARM, standoff-attack weapons).
In summary, Taiwan is facing a pressing fighter requirement that can best be met through acquisition of F-16C/D Block 50/52 aircraft from the United States. Taiwan can further strengthen its air defenses by investing intelligently in MLU programs for its F-16A/B and F-CK-1A/B fighters; by deploying more mobile SAM systems, upgrading existing I-HAWK batteries, and pushing ahead with its new low-altitude air defense system program; by developing advanced, integrated intelligence, surveillance, and reconnaissance (ISR) capabilities; and by adopting a number of asymmetrical measures.
A modernized and capable Taiwan air force could play an important and constructive role supporting U.S. forces in the event of a confrontation with China over Taiwan. In contrast, an absence of credible Taiwan airpower could accentuate U.S. vulnerabilities and negatively influence U.S. power-projection in the Pacific.
In addition, a stronger and more secure Taiwan can be expected to be more confident in its political dialogue with China, which could ultimately lead to a peaceful resolution of the situation in the Taiwan Strait. Such an outcome would certainly serve the national interest of the United States.
The U.S. can and should assist Taiwan in implementing these measures, to help strengthen deterrence and to support peace and stability in the region. Improving Taiwan’s defense capability will also help reinforce the positive steps that Taipei has taken in lowering cross-Strait tensions and expanding ties with Beijing.
This major report examining the cross-Strait balance of air power and Taiwan’s major air defense requirements is available on the US-Taiwan Business Council website:
The year 2010 began with encouraging progress for a number of Taiwan’s long-delayed defense programs. But President Ma Ying-jeou may be finding it increasingly difficult to justify his support of continued defense procurements, given his desire to highlight the positive changes in cross-Strait relations as his presidency approaches the mid-term mark. Meanwhile, political battles also loom as the island moves closer to its historic trade pact with China. Reeling from a series of political setbacks in 2009, the Ma Administration has been trying to regain some initiative, with limited success. In addition, fiscal challenges can be expected to continue to hamper Taiwan, despite apparent signs of an economic recovery.
This report provides a brief overview of significant developments during the first three months of 2010, and examines some of the factors that influenced the course of events during this period.
The US-Taiwan Business Council welcomes Congressional Notification of Arms Sales to Taiwan
The US-Taiwan Business Council today welcomed the Obama Administration’s decision to notify Congress of the following arms sales programs for Taiwan, with a total value of US$6.392 billion:
114 PATRIOT Advanced Capability (PAC-3) Missiles, 3 AN/MPQ-65 Radar Sets and Other Related Equipment & Services [US$2.81 billion]
60 UH-60M BLACK HAWK Helicopters, With Technical & Logistics Support [US$3.1 billion]
2 OSPREY Class Mine Hunting Ships, Including Refurbishment & Upgrade [US$105 million]
10 RTM-84L HARPOON Block II Telemetry Missiles, 2 ATM-84L HARPOON Block II Telemetry Missiles, and Other Related Equipment & Services [US$37 million]
35 Multifunctional Information Distribution Systems Low Volume Terminals (MIDS/LVT-1), with 25 MIDS On Ships Terminals and Other Related Equipment & Support [US$340 million]
The submarine “design phase” notification was not included and remains in limbo. Details on these arms sales programs are available via the DSCA website.
The United States provides Taiwan with these modern defensive weapons not as a goal in and of itself. It is China’s actions – its massive military expansion and modernization, and the commensurate imbalance it creates in the Taiwan Strait – that prompt this U.S. response.
Releasing these programs represents a step forward in the ongoing process of providing Taiwan with weapons systems for its own self defense. The Black Hawk program is particularly welcome, as Taiwan’s need for replacement helicopters is acute both for military and disaster relief operations. Given the aftermath of Typhoon Morakot this past August, it is evident that Black Hawks will offer a significant upgrade to the Taiwan military’s ability to assist citizens in times of national emergency.
While we welcome these notifications, the Council nevertheless remains concerned about the continued stacking of multiple congressional notifications into groups, as well as the increased stretches of time between such notification packages.
Despite continued improvement in cross-Strait relations, 2009 proved to be rather stormy for President Ma Ying-jeou, whose ability to govern is increasingly being questioned in the wake of a series of political crises. The overwhelming parliamentary majority enjoyed by the ruling Kuomintang (KMT) party has also proven to be of little consolation, as Mr. Ma’s style of leadership has not been conducive to coalition-building and has fueled dissent amongst the long-feuding factions within the party. Serious challenges are also looming in the defense arena, with one of President Ma’s key campaign promises on force reorganization now likely to fall through, and civil-military relations at an all-time low.
The dynamic between Taiwan defense/national security and cross-Strait détente is taking on unprecedented complexity, and it will remain a challenge for Taiwan through the foreseeable future. Yet despite these challenges, we have seen some progress through 2009. The Obama Administration has begun the congressional notification process for a substantial arms sale package to Taiwan, a process undertaken just as an official Taiwan delegation headed to Beijing to begin consultations on a major cross-Strait economic cooperation agreement.
This report provides a brief overview of significant developments through 2009, and examines some of the factors that influenced the course of events during 2009 and into early 2010.
The summer of 2009 was stormy for Taiwan, both literally and figuratively. While still struggling with a weak (albeit apparently stabilizing) economy, the island was hit by the most destructive typhoon in 50 years. Typhoon Morakot was a catastrophic event that also had powerful political ramifications. The political aftermath of the typhoon spilled over into the defense arena in the form of leadership changes and new mission priorities at the Ministry of National Defense (MND). In the meantime, the effects of Taiwan’s fiscal realities are beginning to show, with a significant tightening of defense spending in the FY2010 government budget.
This quarterly report will review the major political events that transpired during the third quarter of 2009, along with the significant defense and national security developments over this period. The report will also cover defense spending and budgetary issues, along with the normal look at the status of select programs.
Early last month, several of Taiwan’s Ministry of National Defense officials met with the Legislative Yuan’s Foreign and National Defense Committee. During his testimony, Chang Liang-jen, vice minister of national defense, noted that Taiwan’s defense procurement budget will be reduced as a result of the planned move to an all-volunteer force. He did not state whether that reduction is simply through the transition period or a long-term adjustment.
The move to an all-volunteer force is not the only pressure on Taiwan’s defense budget. Taiwan’s economy is expected to contract by 6 percent to 7 percent in 2009, and it is likely that defense spending will come under extensive budgetary pressures as the government of President Ma Ying-jeou seeks to allocate greater resources to social welfare and industrial development.
The contraction will allow Ma to claim that he is maintaining his commitment to spending 3 percent of GDP on defense. But as a practical matter, we would likely see a significant and real drop in defense spending.
Such a reduction in resources, and the slowing in Taiwan force modernization that comes with it, could seriously jeopardize the ability of the Ma government to place Taiwan’s relations with China on firm and sustainable footing.
Ma enjoys high support for his country’s policies toward China not as a goal unto itself, but as part of a broader strategy to improve Taiwan’s international profile and operating space.
Yet China continues to hedge on its Taiwan policy. China is continuing its force modernization efforts, and the People’s Liberation Army remains focused on ensuring its ability to coerce Taiwan while deterring U.S. intervention. The Chinese feel a need for options, including military ones.
Ma is therefore wholly beholden to the willingness of the Chinese to continue to provide Taiwan with greater international breathing room. If the Chinese balk or fail to make material concessions, domestic support for Ma’s policies will erode. The prospect of a chastened Ma government and a China frustrated over another failed strategy is deeply troubling. This is a contingency that should not be overlooked.
Conversely, Taiwan’s negotiating position is strengthened immeasurably by a robust U.S. security commitment; it underpins Ma’s outreach and ensures a degree of Chinese respect for Taiwan’s options. This is an essential component if Taiwan-China detente is to have legs and if Ma is to build enough momentum to ride out the rougher patches that are sure to come.
Taiwan continues to experience economic distress and ongoing internal political woes. In contrast, Taiwan’s relationship with China continues to show steady improvement, and the long-term prospects seem positive. Against this backdrop, President Ma Ying-jeou has decided to consolidate his influence over the ruling Kuomintang (KMT) party. It is a first step towards addressing the major economic and political challenges facing the island, as well as a means to help realize the promises of improved cross-Strait relations.
The outlook for Taiwan’s fiscal performance for the year remains bleak, which could have profound implications for the FY2010 government budget and spell serious trouble for defense spending. Meanwhile, Taiwan’s military begins a process of painful soul-searching, in a campaign to root out corruption.
This report will highlight the significant political and economic developments in Taiwan during the second quarter of 2009. It will also examine the notable defense and national security issues during the past three months, and offer updates on select weapons procurement programs.
