3-15-2013 Speech by former AIT Director William Stanton on National Security and Taiwan's Future

Below is yesterday's speech by former AIT Director William Stanton at the World Taiwanese Congress yesterday in Taipei.  Mr. Stanton was kind enough to allow a number of people to repost the speech, on the condition that it was printed in its entirety.  

 

 

National Security and Taiwan's Future

Remarks by William A. Stanton

World Taiwanese Congress

Taipei, Taiwan

March 15, 2013

WELCOME AND INTRODUCTION (1)
Thank you, Dr. Kao, President of the Formosan Association for Public Affairs, for your kind introduction. And special thanks to Ms. Susan Chang, convener of the World Taiwanese Congress, for inviting me to attend this year's conference to address the critical issue of Taiwan's national security. …. [Acknowledge other VIPs]….. ladies and gentlemen, ….. Good Morning! 

Before I begin, let me stress that I speak only for myself. Although I spent 34 years as an American diplomat, I no longer work for the U.S. Government, and I am no longer Director of the American Institute in Taiwan. I do not represent anyone's views but my own.

That said, I also speak as someone who has spent a good share of my diplomatic career thinking about Taiwan and about Taiwan's national security. And I also speak as someone who cares deeply about Taiwan, its people and its culture, and who enjoys living here.
Perhaps the best evidence of this is that I have remained in Taiwan even after retiring from the Foreign Service. 

But I also continue to worry a great 

deal

 about Taiwan. I worry because I sometimes think the Taiwanese people do not worry enough.

Let me try to explain what I mean by that. (2) I see Taiwan as a modern miracle, and an astonishing success story. Working with virtually no natural resources but the talent, hard work, and determination of its people, Taiwan in fewer than 50 years managed to pull itself out of poverty and away from a military dictatorship and create a vibrant democracy and a thriving economy.

Taiwan today remarkably ranks as the 20th largest economy in the world in terms of purchasing power parity (3), according to the CIA's World Factbook, ahead of such economies as Argentina, the Netherlands , Hong Kong, Switzerland , and Singapore. Even on a strictly per capita GDP basis, Taiwan ranks 27th in the world, ahead of the United Kingdom (33rd), Japan (36th), the EU (39th), and South Korea (40th).

Similarly, Taiwan more recently ranked 20th in the world (4) in the Heritage Foundation's 2013 Index of Economic Freedom, well above mainland China's ranking in 136th place. (5, 6)

The people of Taiwan clearly have much to be proud of. The best values embodied in Chinese culture -- including a stress on 

education

, family, and hard work -- have truly paid off. And when Taiwan decided how it would be governed, it chose wisely, pursuing democracy and the principles of freedom, human rights and the rule of law, rather than the Marxist-Leninist rule of a one-party state.

But what makes Taiwan special goes beyond its values. I like to joke with my Taiwanese friends that Taiwan is the most Latin or most Mediterranean of Confucian societies. By that I mean, the Taiwan people are incredibly, warm, hospitable, and friendly. They welcome foreigners like me. 
And even while they work hard, they love to eat and drink with friends and family, to sing, and to enjoy life. (7) The Taiwanese have indeed created a unique and successful culture. 

Why then am I worried?

I worry because, to judge by the Taiwanese I know, they -- like most people everywhere -- are preoccupied with making a living, raising their families, working hard, and enjoying life. Yet Taiwan remains uniquely vulnerable.

Perhaps because its way of life and indeed its very existence have been under threat for so long, even while Taiwan has flourished, the Taiwanese do not always seem to be paying as much attention to their future as they should.
Meanwhile, the media and some in politics, like the media and politicians everywhere, including the United States, often seem preoccupied with trivial political in-fighting and entertainment. Too few seem to focus on the fundamental issue of where Taiwan is headed. Too few, in other words, think about Taiwan's national security. 

I believe national security needs to be understood in the broadest sense. Although it includes Taiwan's armed forces and weapons, it depends just as much on a range of other issues. Allow me to review a few, in no particular order, for in my view all are important to Taiwan's security.

THE DEMOGRAPHIC CHALLENGE
Let's start with Taiwan's demographic challenge. (8) As many of you know, except perhaps for a brief spike during last year's auspicious Year of the Dragon, too few babies are being born in Taiwan. According to the CIA's World Factbook estimates in 2012, Taiwan's fertility rate was barely over one child per woman. (9) Taiwan ranked 221 out of 224 countries in the world.

Not last place, but pretty close. Taiwan's low fertility rate raises the prospect of future labor shortages, falling domestic demand, and declining tax revenues. Among the many consequences, one of the most obvious is the prospect of an increasingly older population with increasingly fewer young people to pay for the medical and retirement costs of the aged. 

A related challenge (10) is that there are already too few students to fill what are now more than 160 Taiwan 

universities

 in an overall educational system that is widely acknowledged to need reform . In the longer term, there will also be far fewer young people with the energy and creativity to build the Taiwan of the future. 

ENERGY SECURITY 
Energy security is another looming challenge for Taiwan, given the absence of major indigenous energy sources and its dependence on importing fossil fuels. (11)The problem is even more serious because the consensus of most Taiwanese appears to be that Taiwan should give up nuclear energy. 

It is not at all clear, however, how nuclear energy will be effectively replaced to sustain Taiwan's huge needs. According to the CIA's World Factbook 's latest estimates, as of 2009 Taiwan ranked 18th in the world in its consumption of electricity, and ranked 12th in the world in the size of its oil imports. 73.6 percent of Taiwan's total installed energy capacity came from fossil fuels, 12.5 percent came from nuclear energy, 4.7 percent from hydroelectric power, and 2.7 percent from renewable sources.

Most experts with whom I have spoken say there is no way the difference nuclear energy makes can be supplanted by anything but more fossil fuels if Taiwan wishes to sustain its energy-intensive industrial base. Fossil fuels also carry the high cost of high carbon emissions, and there is no way to import them in the event of a blockade.

It is very easy to say "no" to nuclear energy, but it is much more difficult to find alternatives. Taiwan has tough decisions to make.

ECONOMIC CHALLENGES
One area where we might think we would find no major source of concern is Taiwan's economy. As I have already noted, Taiwan's GDP and purchasing power parity figures are strong. In addition, Taiwan runs a large trade surplus, and its foreign reserves are the world's fourth largest, behind only China, Japan, and Russia. 

Yet there are reasons for concern. (12)

As many observers have noted, Taiwan's economy is increasingly dependent on China. 

Now, as economists will correctly argue, this is natural. After all, Taiwan and China have cultural and linguistic affinities, close proximity, and complementary economies almost ready made for close linkage as partners in a production chain supplying developed countries.

It is therefore not surprising that Taiwan's smart business people would lash up with the world's fastest-growing major economy, with growth rates averaging 10% annually over the past 30 years. (13)

TRADE DEPENDENCY
What makes sense, however, from an economic point of view does not necessarily make sense from a national security perspective. Over the past few years, China, including Hong Kong, has become Taiwan's largest export market, taking some 40 to 42 percent of Taiwan's production. (14) Meanwhile, since 2005, China has overtaken the United States to become Taiwan's second-largest source of imports after Japan. China is now also Taiwan's number one destination for foreign direct investment

This economic dependency is problematic for a number of reasons.

First, as China continues to develop its high-tech industries, Taiwanese manufacturers will encounter increasing competition from their former best customers. Taiwan clearly needs to diversity its customer base.

Second, the easier and more immediately profitable preoccupation with trade with mainland China has both distracted and limited Taiwan's interest in developing trade with other partners. China reinforces this pattern by leveraging its economic weight against those who would seek expanded trade agreements with Taiwan without Beijing's approval. (15)

This focus on trade with China also in turn reinforces Taiwan's diplomatic isolation because Taiwan is not developing those regional and global ties that would give other countries a larger material stake in Taiwan's future. More extensive international trade ties would likely prove far more valuable to Taiwan in shaking its isolation than increased participation as an observer in international organizations.

Third, Taiwan's preoccupation with the ECFA Agreement, as valuable as it might be in itself, is at this point still a kind of "most favored nations" bilateral trading agreement, which serves as a poor model for the kind of free trade agreements which Taiwan needs to pursue to ensure deeper integration into the regional and global economies. ECFA has helped reinforce an unfortunate Taiwanese public perception that a trade agreement can be both beneficial and painless.

Fourth, ECFA did not require the politically difficult economic liberalization that Taiwan needs to implement to ensure an independent and prosperous economic future. In particular, Taiwan as a trading nation needs to find the political courage to end protectionism. It needs to avoid the prospect that in the future, it will again stall its trading relationship with the United States over an issue like beef because it wants to protect its domestic agricultural base. Agriculture in Taiwan, after all, only accounts for 1.8 percent of Taiwan's Gross Domestic Product.

Fifth, the risk of dependency on trade gives China leverage against Taiwan that is dangerous so long as the two sides remain politically divided. For example, in the fall of 2009 mainland tourist groups suddenly cancelled their visits to Kaohsiung over plans there to show a documentary about Uighur political dissident Rebiya Kadeer. If there are economic consequences for something so trivial, what might Beijing do in response to what it regards as a more serious offense?

MORE FOREIGN INVESTMENT FOR CHINA 
In addition to China becoming Taiwan's most important export market, China is now also Taiwan's number one destination for Foreign Direct Investment (FDI). According to some informal estimates, Taiwan may have historically invested as much as $300 billion USD in the mainland. (16) 

There is of course a certain symmetry and also irony in the fact that the major reason for Taiwan's economic success in recent years has been its booming trade with China. After all, it was the massive investments that Taiwan first put into China beginning in the late 1980s -- along with Taiwanese business experience and technological expertise -- that helped jump start China's economic miracle and in turn strengthen its military forces which now threaten Taiwan.

LESS FOREIGN INVESTMENT FOR TAIWAN 
Even as Taiwan's economic success is increasingly linked to China, Taiwan is also increasingly losing the regional competition in attracting Foreign Direct Investment (FDI). Currently, (17) according to the CIA's 2012 World Factbook, Taiwan ranks 52nd in the world as the destination for FDI, behind Hong Kong (3), China (7), Singapore (15), Thailand (27), Japan (28), South Korea (29), Indonesia (32), Malaysia (33), and Vietnam (47). Among comparable economies in Asia, it outranks only the Philippines (62).

According to the Financial Times 2012 report on Foreign Direct Investment, in 2011 Taiwan did not rank among the top 10 destinations in Asia for FDI. In other words, Taiwan is increasingly invested in China, but others are not investing in Taiwan. 

It remains to be seen how much China will be able to fill this FDI vacuum. 
Three cross-Strait financial memoranda of understanding, covering banking, securities, and insurance, took effect in mid-January 2010, opening Taiwan to greater investments from the mainland's financial firms and institutional investors, and providing new opportunities for Taiwan financial firms to operate in China.

Closer economic links with the mainland bring greater opportunities for the Taiwan economy, but also once again pose new challenges as Taiwan becomes more economically dependent on China while political differences remain unresolved.

INDUSTRIAL ESPIONAGE 
Two other worrisome phenomena that threaten Taiwan's national security are industrial espionage directed at stealing Taiwan's intellectual property and an ongoing "brain drain." Both are closely linked to China. (18)

Chinese industrial espionage first came to my attention from major American corporations here in Taiwan, where the United States still holds its position as the Taiwan's number one foreign investor. More than one top executive at high-tech firms described to me the problem of Taiwan engineers receiving huge financial incentives as well as other benefits from mainland companies if they would leave their jobs in Taiwan, move to China, and bring downloaded company secrets with them. 

If you look on the internet, however, you will see that there many reports on similar thefts from Taiwan companies. For example, last October, two former executives from the Taiwanese flat panel-maker and Apple supplier, AU Optronics, were arrested on suspicion of stealing advanced light-emitting diode technology for their new employer in China, TCL. They reportedly were receiving annual salaries in excess of $1 million USD from TCL while still employed at AU Optronics.

More recently of course, (19) the New York Times reported extensive cyber -attacks dating back years against U.S. companies and also aimed at stealing their technology. The cyber-security firm, Mandiant, which uncovered the source of the attacks, concluded in in their public report that: "The sheer scale and duration of sustained attacks against such a wide set of industries from a singularly identified group based in China leaves little doubt …the organization behind [the attacks]" is "the 2nd Bureau of the People’s Liberation Army (PLA) General Staff Department’s (GSD) 3rd Department which is most commonly known by its Military Unit Cover Designator as Unit 61398." 

THE BRAIN DRAIN
Meanwhile, a more overt form of loss for Taiwan has been a serious ongoing brain drain. (20) According to a story published in The China Post last month, Taiwan's LCD panel industry has lost many of its executives and engineers to competitors in China. The same story cited a report by a private consulting firm showing that 69 percent of the Taiwan companies it surveyed expected some of their employees to look for work in other Asian countries, particularly China, as well as Hong Kong and Singapore, in 2013. 

According to a report in Taiwan Today last September, Dr. Cyrus C.Y. Chu, Minister of the National Science Council (NSC), said at an NSC advisory meeting that "Taiwan's low salaries are driving the most capable away from the island." Meanwhile, Taiwan has been unable to attract skilled workers from abroad and, as a result, he said, "Taiwan has become a net exporter of talent." 

The same article in Taiwan Today attributed Taiwan's talent exodus to China's growing economic might. It cited a Taipei-based placement agency as saying "77 percent of local respondents saw working on the other side of the Strait as an opportunity for better career development and increased international exposure."

The net consequence of Taiwan's brain drain of course is that it becomes a less attractive destination for foreign investment, and there is less innovation and economic growth.

DEFENSE CHALLENGES
While all of the issues I have been addressing represent significant challenges to Taiwan's national security, they would not be so troubling if Taiwan were not forced to live under the continuing potential threat of an attack. (21) As unlikely as an attack may be, China's Anti-Secession Law --which went into effect eight years and one day ago (on March 14, 2005) --remains in force, and it still both defines and limits Taiwan's parameters of choice about its future. 

Meanwhile, Chinese military power has grown enormously since the law was passed. China's 2.3 million-strong army is more than 10 times as large as Taiwan's (22) and its ever expanding defense budget is more than 14 times greater. (23)

(24)According to the U.S. Department of Defense's 2012 Annual Report to Congress on PRC military developments, the PLA Navy now has the largest force of principal combatants, submarines, and amphibious warfare ships in Asia. China has 26 destroyers to Taiwan's 4; it has 53 frigates to Taiwan's 22; it has 48 diesel attack submarines and 5 nuclear attack submarines, to Taiwan's 4 submarines, two of which are of World War II vintage.

China's air combatant strength is equally daunting. (25) The PLA Air Force and Navy together have about 2120 operational combat aircraft, including air defense and multi-role fighters, ground attack, aircraft fighter-bombers, and bombers. In contrast, Taiwan has around 388 fighters and 22 bomber/attack aircraft.

In addition, the mainland advantage in land, air and sea-based missiles is overwhelming. (26)
At first glance, the huge superiority the mainland military increasingly enjoys might not perhaps seem so worrisome. After all, it is true that cross-Strait relations have significantly improved over the past few years. The United States and other countries have welcomed the stability that this rapprochement has helped to foster. 

At the same time, I firmly believe that sufficient self-defense forms the foundation from which Taipei can most confidently manage relations with Beijing, and thereby also contribute to both cross-Strait and regional stability. I know this has also been the position of both the current Taiwan government and of previous Taiwan governments as well.

For this reason, over the past four years I was pleased to see substantive efforts by Taiwan to strengthen its defensive capabilities, including the purchase of nearly $13 billion USD worth of defensive weapons systems. (27)

DEFENSE BUDGET
Nonetheless, Taiwan's overall defense spending strikes most expert observers as unrealistically low. (28) Since at least 1994 Taiwan's defense expenditures have steadily decreased both as a percentage of its GDP and as a percentage of total government spending. In fiscal year 2012, Taiwan's defense budget of USD $10.6 billion represented only 2.2 percent of GDP and only 16.4 percent of total government spending.

Compare those figures to 1994 when Taiwan devoted 3.8 percent of its GDP and 24.3 per cent of government spending to defense. Taiwan's defense spending has in fact been below 3 percent of GDP since the year 2000, a twelve-year period during which China's defense spending has massively increased.

TAIWAN'S DEFENSE NEEDS
A larger defense budget is not needed merely as a matter of buying more arms. (Let me add, by the way, that I am not here to promote arms sales!)

The need for more weapons systems, in fact, may be a moot question if Taiwan does not address other pressing problems. Simply put, there are insufficient funds to undertake the very expensive process of creating an all-volunteer military force which requires attracting and retaining recruits.

Nearly half of Taiwan's 2012 defense budget is already devoted to personnel costs, but that figure will have to climb since conscripted soldiers still make up about 60 percent of Taiwan's military. Of course the all-volunteer force assumes Taiwan can recruit enough soldiers. Consider that, according to a Financial Times report, in 2011 Taiwan's military recruitment drive only reached about half of its goal of 4300 soldiers.

At the same time that Taiwan is attempting to build a smaller, but more capable and professional volunteer force, it is also pursuing innovative and asymmetric approaches to defense. All such changes, however, also require more funding.

Absent a greater and more realistic commitment by the people of Taiwan to their defense budget, I am not optimistic that the Taiwan military can meet the objectives of it ambitious transformation plan. Unfortunately, as in every democracy, citizens want to be assured of a strong defense capability, but they are usually not willing to pay more taxes to obtain it.

MILITARY ESPIONAGE
One possible consequence of declining support for Taiwan's defense may be declining morale among Taiwan's forces, as evidenced by continuing incidents of successful Chinese espionage against Taiwan military. (29)

According to various media reports I could find, there were at least nine cases of Chinese espionage against Taiwan from 2004 to July 2011, and I am sure I missed several more. The most prominent of these was the arrest in early 2011 of Major General Lo Hsieh-che (羅賢哲) on charges of spying for China. He was subsequently convicted and sentenced to life in prison.

As the head of the electronic communications department in the Taiwan Army, Lo was reportedly the highest-ranking officer ever caught spying for the mainland. According to media reports, Lo received money and other incentives to spy, but the United Daily News also observed that his actions were "definitely related to Lo's confusion over the country's future and the loyalty of military servicemen." 

There have been even more cases since July 2011. In August 2011, Taiwan's High Court sentenced Lai Kun-chieh, a Taiwanese software engineer, to 18 months in prison for trying to obtain sensitive information about Patriot missiles from a military officer. 

In March 2012, an Air Force Captain identified only by the surname Chiang
(蔣), who worked at an air operations control center in northern Taiwan, was arrested for allegedly passing intelligence on Taiwan's air-defense command and control system to China.

More recently, on February 5, 2013, Taiwan's High Court gave retired air force Lieutenant Colonel Yuan Hsiao-feng (袁曉風) 12 life sentences for passing classified military information to China over a period of six years. Yuan reportedly passed the secret information to China between 2001 and 2007 through Chen Wen-jen (陳文仁), a former colleague in the Air Force.

Also in early February, Taiwan's Ministry of National Defense confirmed that a rear admiral had come under investigation as part of an espionage case involving the possible leak of Navy secrets. According to reports, Admiral Hsu Chung-hua (徐中華), commander of the 146th Flotilla based in Magong, Penghu, had been transferred from his position in connection with the case.

This case first emerged last year from the investigation of Lieutenant Colonel Chang Chih-hsin (張祉鑫), formerly a commander in charge of political warfare at the Taiwan Navy’s Meteorological & Oceanographic Office, which provides mapping data to the military. That investigation is continuing.

Also the same week in February, the Ministry of Defense announced that Army Major General Wu Chin-chun (吳金駿), reportedly a trusted aide to the Minister of National Defense, had been temporarily reassigned as investigators look into a possible connection between a relative of Wu and the Chang case, which has been described as possibly one of the most damaging espionage cases in recent years.

Even more recently, according to the Liberty Times, on February 27 a retired Taiwan Lieutenant General, Chen Chu-fan, was indicted for allegedly passing information to Chinese authorities via a retired Taiwan intelligence officer.

And on March 1, Chien Ching-kuo, a former Navy Lieutenant, was found guilty of leaking classified information to China and sentenced to three years in prison. It was learned that in August 2011 he had joined the Chinese Communist Party. 

Of course, these are only the cases that have been both uncovered and reported in the media, and other investigations are continuing.

What many of these incidents of espionage have in common is an effort to learn more about Taiwan's command and control and communication systems and U.S. weapons systems sold to Taiwan. 

These cases have been harmful not only because of the potential loss of unknown quantities of classified information, but also because their success and frequency serves to undermine U.S. confidence in security cooperation with Taiwan. 

It is also particularly troubling that so many of the espionage cases uncovered occurred at a time when cross-Strait relations were ostensibly better than ever before. 

TAIWAN PUBLIC OPINION FAVORS THE STATUS QUO

These economic, military, and other challenges Taiwan faces would not be so troubling if in fact the Taiwanese people agreed that unification with China was not only inevitable, but also welcome. That, however, is clearly not the case.

Every Taiwan public 

opinion poll

 I have ever seen has concluded that the overwhelming majority of Taiwanese want to maintain the status quo – in some shape or form -- with China. Very few Taiwanese believe independence is a viable option, but even fewer want unification now.

For example, (30) a telephone survey conducted by National Chengchi University from March 30 to April 2 last year and released by the Mainland Affairs Council, showed the following results:

-- Only 1.5 percent of respondents supported “unification at the earliest possible opportunity.”
-- About 8 percent supported “maintaining the status quo and seeking unification at a later date.”
-- 6.1 percent wanted to declare independence as soon as possible
-- 15.7 percent believed that Taiwan should “maintain the status quo and declare independence later.”
-- 29.9 percent said the “status quo” should be maintained in perpetuity. 
-- Another 32.4 percent of respondents said that the “status quo” should be maintained with any decision on unification left to the future. 

In other words, fewer than 10 percent of respondents supported unification with China, indicating that more than 90 percent of Taiwanese do not support unification. 

In fact, as a TVBS poll in February 2011 revealed, if the option of the "status quo" is removed from the polling questionnaire, the response is even clearer. (31) In the TVBS poll, given only the choice between becoming an independent nation or unifying with China, 68 percent of those responding chose "Taiwan independence" and only 18 percent chose "unification with China."

CAN THE STATUS QUO BE MAINTAINED?
In any case, the very concept of a Taiwanese "status quo" is problematic for two reasons:
• First, it is in fact an illusion because the situation is constantly changing. As we have seen, China is getting increasingly strong and Taiwan is growing increasingly dependent economically. Taiwan is simply drifting closer and closer to the mainland. (32)

• Second, the cross-Strait relationship will not be decided by the Taiwanese people alone, and we do not know the extent of mainland patience with a status quo that does not move quickly enough in the political direction it wants. 

Advocates of eventual unification often consider themselves realists, arguing that Taiwan has little choice in any case. Meanwhile, they hold out the hope that over time China will evolve in a positive direction under the influence of the positive model Taiwan provides.

In my view, however, there is no evidence that the Chinese Communist Party is willing to countenance democracy or any challenge to its grip on power. If anything, as it has grown economically stronger, China has grown increasingly nationalistic, expansionist, and belligerent.

Hong Kong hardly provides an attractive model of integration into the mainland. Not to mention non-Han Tibet and Xinjiang which now constitute one-third of Chinese territory but which were never considered part of China until the Manchu Qing Dynasty took them over. (33, 34, 35, 36, 37, 38)

It was during the Qing dynasty as well that the mainland first laid claim to Taiwan. And it was Chiang Kai-shek and Mao Ze-dong who first reasserted the Qing claims to this maximalist vision of China.

WHAT THEN SHOULD TAIWAN DO?
As always, (39) it is much easier to identify problems than to come up with solutions. And even when possible solutions are identified, implementation is never easy. Allow me to offer, however, a few preliminary suggestions for consideration.

First, I think there needs to be wider popular recognition and understanding of the national security challenges Taiwan faces. Such issues need to be an integral part of future national election campaigns and regular balanced coverage in the media. Controversial matters like nuclear energy should be the subject of serious national education and debate rather than just political jousting.

Second, Taiwan should further open its economy as it did when it joined the World Trade Organization, end short-sighted protectionism, and undertake measures that will attract more foreign investment and make free trade agreements with other countries possible. Stronger laws against industrial espionage should be introduced.

Third, the Taiwanese people should reexamine their support for national defense, draw the inevitable conclusion that more needs to be done, and act accordingly. Simply put, as a first step, more money needs to be spent on national defense. 

I recognize that such changes may not be popular or easy, but I also know that Taiwan has achieved great success in the face of enormous adversity. And Taiwan has so many friends, as is evident at this World Congress, who will support its efforts.

I look forward to discussing these and other issues during the course of the day. Thank you.

Enhancing U.S.-Taiwan Relations Part 4: Taiwan's Defensive Responsibilities

"The time of reckoning is upon us...The U.S. ability to contribute to Taiwan's defense in a crisis is going to be measured against Taiwan's ability to resist, defend, and survive based on its capabilities...As the lone superpower, our interests are plentiful and our attention short.  We cannot help defend you if you cannot defend yourself."
                                                                                           
--Deputy Under Secretary of Defense Richard Lawless (2005) 

      Although the Taiwan Relations Act was embedded into American law in 1979, Congress has always expected Taipei to maintain committed to its own defense.  In recent years, however, there has been a growing skepticism among some observors that lawmakers in Taiwan have not fully lived up to their responsibilities of maintaining Taiwan's military capabilities.  Although Taiwan still has one of the most modern and capable militaries in the East Asian region, it has seen its once formidable qualitative advantage over the Republic of China's People's Liberation Army (hereafter PLA) diminished to the point to where many analysts have concluded that such an advantage for Taiwan has been lost forever. 

     The reasons for such beliefs are many.  Lower annual military budgets, political gridlock,  espionage activities by the PRC, and a host of other factors have all combined to formulate a toxic mix that has raised red flags of concern to many long time supporters of Taiwan in Washington.  This article will explore some of these issues, as well as offer suggestions that could be used to reinvigorate Taiwan's armed forces.

You Get What You Pay for

"There are officials in the US who are questioning Taiwan's own defense commitment.  And an important indicator of that is the defense budget--a method to clearly show the US Taiwan's determination"
--Joseph Wu, Taiwan's former representative to the United States

To many in Washington, the downward trend of Taiwan's annual GDP spent on defense has been among the most worrisome aspects of the country's military state of affairs. While China has quadrapuled its defense budget since 2000 (13.4% for 2012, only including official statistics from the PRC, most experts believe that the actual number is significantly higher), Taiwan's defense spending has grown only 1.8% per-cent over the past decade.  Other countries in the region that are wary of an increasingly robust Chinese military have boosted their military spending to counter:

South Korea (4.8%)
India           (3.6%)
Japan          (3.5%)

While escalated tensions between Japan and China over the Senkaku islands  have been a recent development, Taiwan is undoubtedly the country in the region that has to face the highest probability  of armed conflict with China in the future, even though cross-Strait relations have improved during the Ma Administration.

Defense Budget of Taiwan prior to Ma Administration

Upon taking office in 2008, President Ma stated a goal to set the defense budget at a minimum of 3.0% of GDP.  Despite this promise, defense budgets in relation to GDP were cut in 2009, 2010, and 2011.  In 2012 (a Presidential election year in Taiwan), the budget was "increased" to 2.2% of GDP.

Taiwan's Defense Budget Under President Ma (GDP %) 

2008: 2.5% 
2009: 2.7%
2010: 2.2.%
2011: 2.1%
2012: 2.2%
2013: 2.2% (Est.) 

Taiwan's defense budget and military platform purchases have also become victim to political infighting within Taiwan's Legislative Yuan.  In an updated 2012 report on Major Arms Sales to Taiwan since 1990, the Congressional research service reported a number of instances where the defense budget, purchases, and special budget requests for arms sales fell victim to domestic politics inside Taiwan: Examples that took place during the DPP Presidential Administration Chen Shui-bian (2000-2008)

2005: Members of the Pan-blue aligned People's First Party (PFP) in the LY stated that major platform items to be purchased should come out of annual defense budgets, not special budgets. 
(*note-Taiwan's LY has the ability to pass "special budgets" in order to fund weapon platforms that would in most cases take an entire annual defense budget (if not exceed it) to acquire.  Examples include F-16 fighter jets, and submarine platforms) 

Since any major platform purchase would exceed an annual budget, such a proposal was likely proposed to block any such sale. 

KMT member Lien Chan criticized the special budget process, although it was used during KMT Presidential administrations in the 1990s.  

2006-07: The KMT-PFP camp blocked a special budget request 41 times in the procedures committee, in which the bill was to "permit the supplemental budget to pass through the procedural committee and be taken to the floor of legislature"

KMT LY member Lin Yu-fang questioned the legality of supplemental budget request

Such uncertainty over Taipei's political will  to actually purchase expensive arms platforms has been cited as one of the reasons that Taiwan's F-16 request, among others, has not been finalized, as both the Bush and Obama administrations saw a risk in raising tensions with China over such an approval that could have proved to be unnecessary in the case of Taiwan not providing the funds for such a purchase.  During the Chen administration, many within the blue camp stated that one of the reasons it did not approval special budgets for arms purchases was that it could potentially "embolden" the administration to make potentially provocative moves towards Taiwanese independence, thus raising the potential for a military conflict with China.  Yet during the four years of the Ma Administration, there has been no GDP-increase in defense spending.

While the Ma Administration has stated that its current economic state does not currently allow it the luxury to increase its defense spending, a report in 2012 by Jens Kastner and Wang Jyh-Perng show a different story:

" In recent reports on the economy, no other term occurs more often than "record high". Good corporate payment behavior and a very low probability of sovereign debt default made international credit-management groups raise Taiwan's credit risk ratings. Cited as one reason, next to Taiwan's strong economic rebound, are very high foreign-exchange reserves. At the end of September, the island's foreign exchange reserves rose for the 23rd consecutive month to reach a US$380.51 billion, making Taiwan the fourth-largest holder of foreign exchange reserves after China, Japan and Russia."


The government in Taiwan should not make the mistake of continuing to "politicize" its national defense.  While maintaining defense spending levels below NATO countries that do not face immediate threats, Taipei is showing a lack of seriousness of its ability to maintain a viable defensive deterrent against a rapidly modernizing PLA that has been built around the concept of retaking Taiwan by force if necessary.  Although it cannot expect to match China "dollar for dollar" in military spending, Taiwan could show the region, and the world, that it values its democracy, and is willing to pay the price to maintain it.  A repeated number  that this author has heard from officials in Washington is "three percent" (the minimum amount many feel that  Taiwan's GDP that should be allocated to defense spending).  Such an increase could show long time supporters of Taiwan in Washington that it is a cause still worth fighting for on Capitol Hill.









 

Redefining Taiwan's Defense Posture (Part 3 of U.S.-Taiwan Security Relationship Series)

          In parts 1 and 2 of the series, the history behind the Taiwan Relations Act of 1979 was examined, along with the recent trend of its effectiveness being eroded; as the executive branch  in recent administrations has essentially taken control over many aspects of the TRA away from Congress. The series also covered the confusing and often contradictory interpretation of the TRA within various levels of government in the United States, and methods of improvement were suggested.

     In part 3 of the series, the primary issue to be covered : The need for the United States government to potentially "redefine" what it considers "weapons of a defensive nature" for Taiwan.

What are Weapons of a Defensive Nature? 

One of the cornerstones of the Taiwan Relations Act is the carefully worded articles that deal with American arms sales to Taiwan.


3.4: 
(A)  "In Furtherance of the policy set forth in section 2 of this Act, the United States will make available to Taiwan such defense articles and defense services in such quantity as may be necessary to enable Taiwan to maintain a sufficient self-defense capability."

(B) "The President and the Congress shall determine the nature and quantity of such defense articles and services based solely upon their judgement of the needs of Taiwan, in accordance with procedures established by law.  Such determination of Taiwan's defense needs shall include review by United States military authorities in connection with recommendations to the President and Congress."

 The authors of the TRA likely chose the term "defense articles and defense services" for three primary reasons: 

1-) To imply that arms sales to Taiwan were solely for the purpose of Taiwan's defense capabilities,  which would allow for a greater global acceptance of such sales

2-) To deter Chinese aggression towards Taiwan; and equalize the force capabilities between the two actors in order to foster an atmosphere that would make peaceful negotiations the only viable option

3-) To lessen the diplomatic blowback from Beijing when such arms sales took place; with the additional objective of having the arms sales to Taiwan be of a benign nature

The  state of the People's Liberation Army (PLA) in  1979 was high in its numbers of  personnel; but had yet to undergo a full modernization in its military platforms or doctrine.  Therefore, it was well within the abilities of the United States to supply Taiwan with military hardware that would eliminate the PLA's quantitative advantages, as such equipment would ensure a distinct qualitative advantage for the ROC armed forces.  Additionally, even without a potential American military intervention in the case of hostilities between China and Taiwan, the PLA lacked the training, logistics, and platforms to make a successful military incursion into Taiwan at the time of the creation of the TRA, and defensive weapons sold to Taiwan by the United States was done under the idea that it would continue to maintain this reality for years to come. 

As late at 2000, the Rand Corporation published a report that concluded the PLA did not yet have the capabilities to launch a successful military campaign with the goal of annexing Taiwan with a high probability rate.  However, in a follow-up study published in 2009, the same group concluded that the PLA's improvement in its ballistic/cruise missile platforms (specifically accuracy and payload), as well as its modernized fighter aircraft, greatly improved the chances of a successful operation against Taiwan in a number of simulated scenarios, with many of the scenarios including the engagement of the United States on varying levels of support with the Taiwanese military forces.

     Within the span of only three decades, the PLA has transformed from a military that was guided by its sheer force of numbers to one that has significantly modernized its missile capabilities, fighter and naval platforms, training, and doctrine.  Behind this modernization there has consistently been a core objective of acquiring the military means to annex Taiwan into the PRC by force if necessary.  The PRC has modernized its approach to dealing with a potential conflict with Taiwan (and perhaps American involvement) by enhancing its platforms to deal simultaneously with two adversaries, while  using two different strategies.  While a military campaign against Taiwan would likely involve a "shock and awe" style campaign against Taiwan, it would also enact an Anti-Access Area Denial (A2AD) in the scenario that the United States chose to intercede in a China-Taiwan military escalation.  It appears that while the PLA has chosen to modernize its approach, Taiwan has been limited in its options due to the long-standing position of the United States to sell only "weapons of a defensive nature" to Taiwan for its defense needs.  A revision of this policy looks to be overdue.

 While platforms such as anti-aircraft and missile batteries can be safely placed in a defensive weaponry category, others can be open to interpretation.  Fighter aircraft, naval vessels, and even ballistic missiles could be used for offensive and defensive purposes. The PRC has even deemed its nuclear arsenal defensive in nature.  For decades Taiwan held the qualitative advantage over the PLA, due to its advanced defensive-minded purchases from the United States, yet China's heavy investment into its military modernization has produced Taipei's worst nightmare: A modernized foe with numbers.  Taiwan's ability to rely solely on strictly defined defensive weapons has become outdated in a number of varied scenarios in which its current defense capabilities would likely be over matched by PLA weaponry.

* While Taiwan has recently acquired newly updated PAC-3 surface to air missiles to defend against incoming ballistic missiles, the total estimated amount to be available by 2015 (400) will be dwarfed in comparison to the number of ballistic-cruise missiles (1,400 and increasing at a rate of 100 per year) available to the PLA's 2nd Artillery Corps within striking range of Taiwan.

*Until recently, it was perceived among experts that Taiwan would likely gain air superiority over the PLAAF  in a full-scale engagement scenario. However,  the modernization of the PLAAF aircraft, combined with available land-based missiles that could potentially destroy most (if not all) of Taiwan's aircraft runways at the outset of a conflict, have greatly lowered the probability of Taiwan controlling the air in such a conflict.  Additionally, the upcoming retirement its F-4 aircraft, along with a decade-long project to upgrade its F-16 & IDF fighters will leave its air force in a dangerous state.

What Can be Done? 

As previously stated, nearly any type of weapons platform could be utilized in an offensive or defensive engagement.  When the United States sold Taiwan its fleet of F-16s in the early 1990s,  the jets were equipped with a smaller engine thrust than other models.  The lower thrust lowers the overall range of the jets, thus limiting the area in which it can cover.  This was done primarily to lower the anger that would be coming from Beijing following the transaction.   It was also done to adhere to the defensive nature doctrine of the TRA.  While such limitations to Taiwan's capabilities were understandable in years prior, PLA capabilities and numbers have evolved to the stage that a strictly-defensive doctrine is no longer feasible for Taiwan to maintain.

 In any likely scenario involving a PRC-Taiwan military engagement, Taiwan would not be the party that initiates hostilities, and any response from it would be considered defensive in nature.  Therefore, platforms sold to or developed by Taiwan would in all likelihood be used as a defensive utility.  If Taiwan were to have F-16's with enhanced engine thrust, for example, they could also be used to deliver munitions against targets on China proper (missile sites, fuel depots, communication sites); a prospect that would surely give pause to decision-makers in Beijing before deciding on military actions.  If decision makers within the United States have a genuine desire to see a Taiwanese military that is capable of defending itself (and in turn Taiwan must make a genuine monetary commitment as well), the definition of defensive military platforms must be expanded.

Michal Thim's piece on Taiwan's counter-strike capabilities shows that Taiwan's offensive capabilities have not been ignored by decision makers in Taipei.  Its Hsuing Feng missile family has been developed with surface to surface and sea to surface capabilities, and will likely continue to be expanded in the near-term.  Even if the United States chooses to refrain from direct sales of what it considers platforms of an offensive nature, it could choose to transfer via technology such platforms to Taiwan, that would allow it to develop such programs "in-house", lowering the likely stern responses from Beijing.

While the PLA has greatly enhanced its military arsenal in recent decades, Taiwan has options. As Beijing has adopted the A2AD philosophy against a potential American entrance into a Taiwan conflict scenario, Taiwan could do likewise.  While a robust defensive deterrent is still vital for Taiwan's military, the ability to "punch back" should also be available, and would give Beijing pause before commencing military action towards Taiwan.  Overall, such restraint would allow for peace to be maintained across the Taiwan Strait: A scenario that be a catalyst for further discussions between the two countries.

Enhancing U.S.-Taiwan Relations Part 2: Enforcement of the Taiwan Relations Act of 1979

     In Part 1 of the series, China's questionable approaches towards a peaceful resolution of the Taiwan was highlighted, and recommendations were made regarding a United States "reaffirmation" towards the Taiwan Relations Act.  While both the United States and Taiwan need to reaffirm their commitment to the 1979 law, this portion of the series will highlight inconsistencies in the United States approach towards the TRA, outdated terminology that is applied by Washington regarding it, and recommendations towards the improvement of adherence.

     In regards to American military weaponry sales to Taiwan, the basis and legality of such sales can be found in Article 3.4 of the Taiwan Relations Act.

3.4: 
(A)  "In Furtherance of the policy set forth in section 2 of this Act, the United States will make available to Taiwan such defense articles and defense services in such quantity as may be necessary to enable Taiwan to maintain a sufficient self-defense capability."

(B) "The President and the Congress shall determine the nature and quantity of such defense articles and services based solely upon their judgement of the needs of Taiwan, in accordance with procedures established by law.  Such determination of Taiwan's defense needs shall include review by United States military authorities in connection with recommendations to the President and Congress."

     In addition to the TRA, the United States government position on arms sales to Taiwan has traditionally followed the 1982 "six assurances" made by President Reagan to Taiwan.  It is a little known fact that it was the Taiwanese government that proposed the concept of the six assurances to the United States (initially to Former Ambassador John Holdridge); and were accepted with the notification of Congress in 1982.  Although the six assurances to do not bind the American executive and legislative branches in a legal sense that the TRA does, they have nevertheless been adhered to in varying degrees by the Presidential administrations and Congressional bodies that have followed since 1982.  They are as follows:

--The United States would not set a date for termination of arms sales to Taiwan

--The United States would not alter the terms of the Taiwan Relations Act

--The United States would not consult with China in advance before making decisions about U.S. arms sales to Taiwan

--The United States would not mediate between Taiwan and China

--The United States would not alter its position about the sovereignty of Taiwan-which was, that the question was one to be decided peacefully by the Chinese themselves; and not pressure Taiwan to enter into negotiations with China.

--The United States would not formally recognize Chinese sovereignty over Taiwan

As with the TRA, the six assurances also stated that there was a "full expectation that the PRC approach to the resolution of the Taiwan issue will continue to be peaceful" and a reduction in U.S. arms sales were to be premised on the PRC policies towards Taiwan. (President Reagan's Secret Memorandum on the 1982 Comminique)

If the TRA and six assurances were to be followed as intended, the issue of arms sales between the United States and Taiwan would be relatively clear cut and void of confusion and ambiguity for not only the US and Taiwan, but China would understand the relationship as well, and be given the opportunity to alter the quantity and types of weapons to be sold based on its actions towards Taiwan.  Yet as the evidence will show, the growing economic and military clout of the PRC has allowed it to directly effect the U.S.-Taiwan relationship in a way that would not be possible if the TRA were to be adhered to by the U.S. government as intended.

  The Intended Procedures of U.S.-Taiwan Arms Sales 

In it's 2012 report on "Chinese Reactions to Taiwan Arms Sales" , The Project 2049 Institute highlighted the current procedures in which the arms sales between the two countries is to proceed:


"Upon the U.S. receiving an LOR for P&A data from Taiwan, the service responsible for the requested system – Army, Air Force, or Navy – prepares the LOA response. Before a draft LOA can be forwarded to Taiwan for countersignature, however, the Executive Branch must formally notify Congress of its intent to sell these specific arms to Taiwan. In accordance with Section 36(b) of the Arms Export Control Act (AECA)7, such a Congressional notification must take place 30 calendar days prior to any sale of major defense equipment valued at US$14 million or more, of defense articles or services valued at US$50 million or more, or of design and construction services valued at US$200 million or more.

Items that Taiwan is considered eligible to procure in a given year are included in the annual Javits Report, submitted to Congress by the U.S. Department of State. Nevertheless, Congressional notification under AECA36(b), necessary before signing the government-to-government Foreign Military Sales (FMS) agreement, is the only point in the arms sales process mandating a public acknowledgement of a pending transfer to Taiwan.9Upon Taiwan’s countersigning of the LOA, and upon initial transfer of the funding for the procurement program, the acquisition lead from the appropriate U.S. service determines which U.S. industrial supplier will actually participate in the program and concludes a contract with that supplier – a contract that may or may not be explicitly announced to the public."

     In 2001, President Bush altered the method in which arms sales between the two states was conducted. What was previously an annual arms meeting with Taiwanese government and military officials was changed in favor of routine and normal considerations on an "as-needed" basis.  While the intention of the Bush Administration was to "de-politicize" the arms sale process between the two nations, the result has been the opposite: with increased pressure from China appearing to have a direct impact on Presidential decision making regarding approval of Taiwanese requests, as well as a diminished role for Congressional oversight.

     As the case of Taiwan's request to purchase F-16 C/D fighter jets from the United States shows, the current model for Taiwan's weapon purchase requests has become highly politicized without a proper Congressional role as intended by the TRA; as well as Beijing having an illegal influence in the process.

Taiwan's air force is due to undergo a major facelift due to a sizable portion of its aircraft fleet reaching the end of its lifespan.  In the three years, the ROCAF is expected to retire 60 F-5 E/F fighters that were acquired from the United States during the Reagan Administration, as well as taking a portion of its F-CK-1 A/B Indigenous Fighters (IDF) offline for midlife upgrades.  Although the U.S. has approved midlife upgrades for Taiwan's current fleet of F-16's, which currently number 145, the U.S.-Taiwan Business Council  showed in a report last year why the "A/B" upgrade was insufficient for Taiwan's current defense needs.

Taiwan has repeatedly requested a purchase from the United States of new F-16 "C/D" fighters, which have superior capabilities over the A/B upgrades including a longer range, improved radar systems, and a longer range.  The Business Council also showed a number of additional reasons that gave evidence of the superiority of the C/D acquisition in lieu of the A/B package for reasons of performance, as well as cost-benefit to Taiwan:

*An improved F-16 C/D fleet would move Taiwan's ROCAF into the 2030s
*Planned A/B upgrades will add 600lbs to the A/B empty weight of the aircraft, leading to a 10% performance degradation
*Only 24 F-16s per year can be upgraded
*non-recurring engineering costs will raise the cost of the A/B upgrade package to $3.8 billion vs. $4.0 billion for 66 new F-16 C/D jets

With the F-16's being taken offline for upgrades over the next decade; the estimate for operational airframes available for the ROCAF in the coming years is as follows:

2012: 200
2015: 200 (Consisting of F-16, IDF, and Mirage jets)
2025: 80

When examining these numbers, as well as the overall long term cost-benefit of the ROCAF acquiring a superior product in the F-16 C/D (as well as receiving the new jets an estimated 2 years earlier than the final completion of the A/B upgrades), the question becomes: Why wasn't Taiwan allowed to purchase the F-16 C/D package?

Judging by the warnings that Beijing has issued over a potential F-16 C/D sale to Taiwan, the refusal of the sale appears to be an appeasement towards Chinese reaction over such a sale, which runs counter to the TRA law, as well as the six assurances.  In order for a Presidential administration to refuse a sale of military hardware to Taiwan without Congressional oversight, it must find a method in which it can claim that no request was received from Taipei.

In 2011, the Asia Times ran an article explaining in great detail about the request process that is in place between the United States and Taiwan regarding arms sales, showing that the current method is filled with loopholes that allow for both the United States and Taiwan to deny both asking for and granting weapon platforms (the former will be covered in part 4 of the series).

The article states the following:

  "(President) Ma has, by his calculation, called for the US to approve the sale of the F-16s "19 times".  No formal Letter of Request (LoR) has been received by the United States from the ROC government...because the US steadfastly refuses to accept the letter"

"On June 27, Wendell Minick reported in Gannett's Defense News that "Taiwan's June 24 petition to submit a letter of request (LoR) for new F-16 fighter jets was blocked by the U.S. State Department under orders from the U.S. National Security Council, sources in Taipei and Washington said." (emp. added)

"A U.S. defense undustry source said that Taiwan's de facto embassy in Washinton, the Taipei Economic and Cultural Representative Office (TECRO), was preparing to submit its fourth LoR for price-and-availability data for 66 F-16 C/D Block 50/52 fighters to the American Institute in Taiwan (AIT).  But it was told by AIT that the LoR would not be accepted.  AIT declined to comment."

"The issue has become a Catch-22 for Taiwan, in which TECRO cannot submit an LoR to AIT because it is under State Department orders to deny it, and then TECRO is told by the State Department that the LoR cannot be processed because it was not received."

Additionally, other weapon platforms, such as the AEGIS weapons system, high-speed anti-radiation missiles (HARM), joint direct attack munitions (jdam), and diesel submarine designs, have been either refused to be sold by Presidential Administrations, or simply not given a response.

Solutions

The primary concern among the current arms request-sales process between the United States and Taiwan is the process itself.  While the current process allows Taiwan to request weapon platforms on an as-needed basis, it does not hold any one branch of the United States government  responsible  for an explanation of why requests from Taiwan are refused.  Additionally, the government in Taiwan is not held responsible as to why specific platforms are not requested.  It would the suggestion of this author that a new process for arms sale requests was implemented.  Such a process would include:

*An annual conference in which Taiwan would formally request its weapon platform purchases; with officials in Washington initially accepting the request in its entirety.  Prior to the annual summit, Taiwan's Legislative Yuan would have access to the requests, and "pre-approve" the funds to be available for the requested purchases through means of its annual defense budget, and/or additional funds approved for more expensive platform purchases.  This would eliminate previous cases where Washington has approved Taiwanese requests for certain arms purchases, only to have the LY refuse funding of the project.  LY legislators would then have accountability to the voters of Taiwan for either approval or denial of funding of national security acquisitions.

Likewise, officials in the State Department, as well as Department of Defense officials would have to officially go on record stating approval or denial recommendations regarding requests from Taiwan, and the reasoning behind their decision making.  A Presidential administration would also have to account for refusal or acceptance of sending such requests to Congress for final approval.

*House Resolution 419 (H.R. 419) , also includes legislation that would call for a revised method in which the US government processes arms sales requests from Taiwan, as well as raising the issue of Taiwan's diminishing air power capabilities,  stating:

SEC. 202. ADVANCED COMBAT AIRCRAFT FOR TAIWAN.

(a) Statement of Policy- Notwithstanding the upgrade of Taiwan’s F-16 A/B aircraft, Taiwan will experience a growing shortfall in fighter aircraft, particularly as its F-5 aircraft are retired from service.
(b) Authority To Accept Letter of Request- Pursuant to the foreign military sales program authorized by the Arms Export Control Act, the President is authorized to accept a letter of request from Taiwan for price and availability data or for a formal sales offer with respect to the F-16C/D Fighting Falcon multirole fighter aircraft or other aircraft of similar capability, as may be necessary to enable Taiwan to maintain a sufficient self-defense capability.

SEC. 203. CONSULTATIONS ON TAIWAN ARMS SALES.

(a) Briefings- Not later than 90 days after the date of the enactment of this Act and at least annually thereafter, the Secretary of State, in consultation with the Secretary of Defense, shall provide detailed briefings to Congress on--

(1) any discussions conducted between any executive branch agency and the Government of Taiwan during a covered period; and
(2) any potential transfer to the Government of Taiwan of defense articles or defense services.
(b) Definitions- In this section and section 201:

(1) COVERED PERIOD- The term ‘covered period’ means, with respect to--

(A) the initial briefing required under subsection (a), the period beginning on the date of the enactment of this Act and ending on the date of such initial briefing; and
(B) subsequent briefings required under such subsection, the period beginning on the day after the date of the most recent briefing and ending on the date of any such subsequent briefing.
(2) EXECUTIVE BRANCH AGENCY- The term ‘executive branch agency’ has the meaning given the term ‘agency’ in section 551(1) of title 5, United States Code.
(3) DEFENSE ARTICLE- The term ‘defense article’ has the meaning given such term in section 47 of the Arms Export Control Act (22 U.S.C. 2794).
(4) DEFENSE SERVICE- The term ‘defense service’ has the meaning given such term in section 47 of the Arms Export Control Act (22 U.S.C. 2794).

SEC. 204. ANNUAL REPORT ON DEFENSE TRANSFERS TO TAIWAN.

(a) In General- Not later than 180 days after the date of the enactment of this Act and annually thereafter, the President shall transmit to Congress a report--

(1) detailing each of Taiwan’s requests for purchase of defense articles and defense services during the immediately preceding one-year period, whether submitted through a letter of request (LOR) or conveyed by other authoritative means, except that the first report under this section shall cover the period 2006 through 2011;
(2) describing the defense needs asserted by Taiwan as justification for such requests;
(3) describing the decisionmaking process used to reject, postpone, or modify any such request, including--

(A) with respect to significant military equipment, the country team assessment and recommendation as to whether the United States should sell such equipment; and
(B) for each request, the elapse of time between the submission of such request and the completion of the interagency review process by the United States; and
(4) detailing those defense articles and defense services listed in the Arms Sale Proposal described in section 25 of the Arms Export Control Act (22 U.S.C. 2765), including a description of the rationale for including or not including in such Proposal, as the case may be, all sales and licensed exports to Taiwan under such Act of major weapons or weapons-related defense equipment for $7,000,000 or more, and the extent to which a decision to not include in such Proposal such sales to Taiwan is consistent with such section.
(b) Form- The report required under subsection (a) shall be submitted in unclassified form, but may contain a classified annex if necessary.


*Finally, there must be a stated commitment from the United States government that neither prior consultation with China, nor its opinions in the matter of arms sales to Taiwan will be considered in the decision making process.  The PRC has often stated the sale of specific hardware to Taiwan would be "Crossing a Red Line", and diplomatic steps would be taken towards the United States if such sales occurred.  It remains in the interest that a viable defensive deterrent remain in Taiwan towards any potential Chinese aggression.  Additionally, the PRC does not use a similar mindset when it processes arms sales of its own that run counter to American interests.

*Assistance to Iran's NBC weapon programs

*Transfer of nuclear technology to Iran

* Playing a major role in Pakistan's nuclear program.  During the 1980s, China reportedly provided Pakistan with a proven nuclear weapon design and enough highly enriched uranium for two weapons.

*North Korea has been one of China's most consistent clients in the arms trade. Transfers since 1980 have included Romeo-class submarines, F-6 fighters, HY-2 "Silkworm" antishipping missiles, HN-5A man-portable surface-to-air-missiles, and multiple launch rocket systems.

A report also states that "China has blocked the release of embarrassing U.N. revelations of illicit arms transfers, stopped the reappointment of an arms expert who uncovered Chinese weapons and sought to restrict the budget to fund investigations. It has also consistently refused to allow U.N. investigators to trace the origin of Chinese weapons discovered in war zones."

A clear method in which U.S.-Taiwan arms sales can proceed will undoubtedly rile Beijing, and likely even bring about a number of concrete responses from Beijing.  Yet in the long term, China will realize that a capable military deterrent posed by Taiwan is of deep interest to the United States, and will force Beijing to realize the circumstances.

(Part three will consist of the final observation for the US analysis, Additionally, this author will question  weather or not the TRA-stated "weapons of a defensive nature" definition should be redefined in this era of the PLA's capability to use its ever growing arsenal  of ballistic weaponry in a Taiwan scenario, as well as suggestions regarding high level cabinet-military personnel visits between the two countries)

Enhancing U.S.-Taiwan Relations Part 1: Recommitting to the Taiwan Relations Act of 1979

   
          Vague.  Unique.  Uncertain.  Inconsistent.  Such adjectives could be used in describing both the American level of commitment towards military hardware sales towards Taiwan; as well as Taiwan's level of commitment towards making the economic investments in acquiring such platforms necessary to provide a viable deterrent against Chinese military aggression towards it.

     For the United States, the issue of arms sales to Taiwan is not an issue that has been championed or hindered by one particular political party: Since the passing of the Taiwan Relations Act  by Congress in 1979, Republican and Democratic administrations have both shown support in the form of weapon sales to Taiwan, as well as refusals of the sale of other platforms requested by Taiwan, often with little explanation behind such decisions.  Additionally, the long-standing American policy of "strategic ambiguity" towards its defense of Taiwan has caused uncertainty not only among Taiwanese officials and its citizens, but  has also caused speculation within China regarding America's level of commitment towards Taiwan.  There is a growing consensus among those with an understanding of the issue, that the lack of a clear American approach towards Taiwan has become outdated, and in need of clarification.

     In regards to Taiwan, declining military budgets and domestic political infighting over such budgets and military acquisition purchases have increasingly frustrated many of Taiwan's long-time political allies in Washington.  These issues have also raised concern within the American defense apparatus regarding Taiwan's commitment to its own national security interests, as well as a general perception within Taiwan an overconfidence that an American military defense of the island is all but assured in a Chinese military aggression scenario.  The relationship between the two countries in respect to arms sales and security arrangements has been unclear for decades, and in the wake of an increasingly assertive PRC in regional territorial matters, now is the time for clarity.  This series will offer several suggestions in which the United States and Taiwan can each improve their respective actions and procedures towards enhancing this unique and special relationship.


The United States (and Taiwan) should recommit to the Taiwan Relations Act of 1979

     
     On January 1st, 1979 the United States and the People's Republic of China formally established diplomatic relations, which resulted in the official severing of relations between the US and the Republic of China (ROC-Taiwan).  As a result, Congress drafted and passed the Taiwan Relations Act of 1979, which encoded a number of governmental procedures into law that were to be enacted towards  Taiwan; ensuring that diplomatic channels remain open between the two countries, as well as establishing guidelines in which the United States was to supply Taiwan with the sale of military hardware for its defense.  While the TRA was written to ensure that Taiwan was not permitted by law to be ignored by the American government; it was written in such a way that many areas of the TRA are open for multiple levels of interpretation.  The primary focus of this paper is to focus on two areas of the TRA: Expectations of Chinese actions taken towards resolution of the future of Taiwan; and American procedures towards military weapon sales-transfers to Taiwan, and the linkage between the two.

Section 2.3 of the Taiwan Relations Act: 

It is the Policy of the United States-
"To make clear that the United States decision to establish diplomatic relations with the People's Republic of China rests upon the expectation that the future of Taiwan will be determined by peaceful means"

"To consider any effort to determine the future of Taiwan by other than peaceful means, including boycotts or embargoes, a threat to the peace and security of the Western Pacific area, and of grave concern to the United States"

"To provide Taiwan with arms of a defensive character"

It can be assumed that with official diplomatic recognition of the PRC, the United States anticipated that the PRC could move away from its hostile stance towards Taiwan, and establish some lines of communication with the understanding that the United States would continue to supply Taiwan with defensive arms--which at the time gave Taiwan a formidable qualitative and quantitative advantage over the PLA.  From the American perspective in the TRA, it can be assumed that the PRC's approach towards establishing a peaceful resolution regarding the future of Taiwan, and its behavior towards Taiwan were one of the preconditions of establishing American recognition of the PRC.

However, as the PRC has strengthened its economy (and in turn modernized its military capabilities), it has shown in both words and actions that it is willing to use non-peaceful means towards a resolution with Taiwan if it deems necessary--actions which run counter to law embedded within the TRA. There is ample evidence to support China's willingness to use military action towards Taiwan:

*The 1995-96 Taiwan Strait Crisis:  PLA missile tests were conducted near Taiwan's north and west  coasts, with the intention of protesting ROC President Lee's recent visit to the United States, as well as attempting to intimidate Taiwanese voters during Taiwan's 1996 Presidential election.

*The 2000 PRC White Paper : "... if a grave turn of events occurs leading to the separation of Taiwan from China in any name, or if Taiwan is invaded and occupied by foreign countries, or if the Taiwan authorities refuse, sine die, the peaceful settlement of cross-Straits reunification through negotiations, then the Chinese government will only be forced to adopt all drastic measures possible, including the use of force, to safeguard China's sovereignty and territorial integrity and fulfill the great cause of reunification"

*The 2005 PRC Anti-Secession Law  "Article 8:  In the event that the "Taiwan independence" secessionist forces should act under any name or by any means to cause the fact of Taiwan's secession from China, or that major incidents entailing Taiwan's secession from China should occur, or that possibilities for a peaceful reunification should be completely exhausted, the state shall employ non-peaceful means and other necessary measures to protect China's sovereignty and territorial integrity"

     Both of the stated PRC documents allow for justification of PRC military intervention due to the lack of clarity in them.  In reality, the PRC could deem a newly elected administration in Taiwan would be less open to talks at the speed in which Beijing prefers, or does not hold the idea of a "One-China policy" as it does.  Social unrest, natural disasters, or other factors could also justify military action in the words from these documents.

*Although talks between the PRC and the ROC's Ma Presidential administration have resulted in closer ties between the two countries, the PRC continues to place medium range ballistic missiles on its southern coast, at a rate of approximately 100 per year.  The People's Liberation Army 2nd Artillery Corps has made no secret that these increasingly accurate missiles are placed in position towards Taiwan.

Solutions for Washington

Although aggressive actions and laws from the PRC towards Taiwan run directly counter to the basis of normalization of relations between the United States and China,  it would be foolish and naive to suggest that the US take any actions regarding its diplomatic and economic ties with China; American interests in this regard are myriad and nearly impossible at this stage of its relationship with the PRC.  However, if American Presidential Administrations and Congress were to "recommit" to the adherence of the TRA, it could send a clear message to China that its aggressive behavior and actions towards Taiwan  runs counter to America's interests in the region, as well American interests stated in the TRA.  Although it would take a unified bi-partisan effort by both Congress and the current Presidential Administration (no easy task in the current Washington toxic political environment), there is one step that could be taken that would give pause to Beijing.   This step would consist of both the Obama Administration and Congress publicly stating that "Due to  China's continued military buildup in its southern region directed towards Taiwan, as well as laws passed by the CCP regarding its intention of using military force towards Taiwan under various scenarios, the United States government has deemed such actions in violation of the Taiwan Relations Act of 1979 (as Article 2.3 states the American preconditions of diplomatic recognition with China).  As a result, the United States will continue to adhere to the TRA by continuing to sell arms of a defensive character to Taiwan.

 The message would be twofold to the PRC:

1.  Although the United States encourages the recent  peaceful means of communication between the PRC and Taiwan, future administrations in Beijing or Taipei could result in the break down of such talks, and the use of force or threatening actions from either side should not be taken as a result.

2.  If the PRC continues to advance its military capabilities in its southern region that are intended to pressure the Taiwanese government into negotiations; as well as to psychologically intimidate the citizens of Taiwan, the United States will continue to supply Taiwan weaponry necessary to deter PLA military aggression towards it.  Some experts have even stated that such sales enhance cross-strait cooperation , as Taiwan is able to negotiate with the PRC in a position of increased confidence.

Although a coordinated American statement such as the one suggested above is unlikely, a more tacit approach could be taken by modifying the complicated (and often politically inconsistent)  procedures in which the United States government approves or denies specific military platform purchase  requests from Taiwan.  Such an action would  show Beijing that the American commitment to Taiwan's defense remains intact, and bellicose behavior and laws issued  towards Taiwan will only strengthen America's commitment to Taiwan, which is one of the underlying principles behind the creation of the TRA.

In Part 2 of this series, the complicated process in which the United States conducts its arms sales with Taiwan will be explored, and methods of improvement will be suggested (as well as Taiwan's necessary commitment to the TRA).