ANALYSIS OF TAIWAN ARMS SALES

United States Failing to Moderate Military Competition
   in Taiwan Straits

Summary

The Bush Administration has opted to forego the sale of the most
advanced U.S. destroyer to Taiwan to retain a bargaining chip in
future negotiations with China. But delaying the sale of the
Aegis radar-equipped destroyers is militarily insignificant. The
weapons approved for sale to Taiwan will do as much in the next
decade to advance Taipei's military capabilities against China as
an Aegis sale would have done in the long run. Bush's decision
will fail to moderate, and will probably accelerate, growing
military competition in Taiwan Straits.

Analysis

The Bush administration informed Taiwan Monday that its annual
request for U.S. military equipment - with the exception of its
appeal for four Aegis radar-equipped destroyers - has been
approved.

The administration made the Aegis exception in the hopes of
curbing China's military buildup, particularly Beijing's missile
force, which is seen as the gravest near-term threat to Taiwan.
China has been deploying an average of 50 CSS-8 and other
surface-to-surface missiles per year across from Taiwan, adding
to an estimated 300 already deployed. According to Bush
Administration officials, the United States will reconsider the
outstanding Aegis request if China continues to deploy missiles
aimed at Taiwan.

But Taiwan will get everything else it wants, from diesel-powered
submarines to submarine-hunting aircraft and amphibious assault
vehicles. The capabilities these weapons systems provide take aim
directly at China's military strengths in the cross-Straits
security competition.

Bush's decision not to sell Aegis-equipped destroyers to Taiwan
amid Chinese objections is a symbolic gesture and one that will
fail to stem the friction between the Chinese and Taiwanese
militaries. Moreover, because Taipei is to receive a variety of
advanced armaments that aim to undercut the People's Liberation
Army's relative strengths, Beijing will not scale back its wide-
ranging upgrade to the armed forces. China may in fact increase
its military buildup, including its missile bases across from
Taiwan, in response. The bargaining chip the Aegis boats
represent may serve little purpose in the future.

Embarked on a major military buildup, China earlier this year
increased defense spending by 17.7 percent, the largest increase
in real terms in two decades.

Much of this buildup has focused on developing the capabilities
needed should Beijing's 50-year desire of reuniting Taiwan with
the mainland come to blows.  These capabilities include building
an attack submarine force to deny access to the Taiwan Straits;
deploying new surface vessels such as Russian-built destroyers
that could help blockade the island; ordering new Russian-built
fighter aircraft to weaken Taiwan's relative air superiority;
and, of course, introducing an overwhelming missile force a short
distance from the Taiwanese capital.

In light of that buildup, Taiwan's newly approved American
weaponry will worry Chinese military planners because the
weaponry could shift the military balance toward Taiwan.

The approved package, which is in addition to $20 billion in U.S.
arms sales to Taiwan since 1992, includes: eight diesel-powered
submarines to be built by a third country, most likely in Europe;
four Kidd-class destroyers; up to 12 P-3 Orion anti-submarine
warfare aircraft; Paladin self-propelled artillery systems; MH-53
minesweeping helicopters; AAV7A1 amphibious assault vehicles; MK-
8 Mod-4 torpedoes; submarine- and surface-launched Harpoon anti-
ship missiles; and a technical briefing on the developmental
Patriot Advanced Capability-3 (PAC-3) mobile anti-missile system
for possible future sale.

The eight diesel submarines the United States has agreed to help
finance from a third party will prompt a Chinese response. One of
the People's Liberation Army Navy's modernization thrusts has
been in undersea warfare.

China has four diesel-powered Kilo-class attack submarines from
Russia. The first installment of a Chinese version of the
nuclear-powered Victor III class Russian attack submarine, the
so-called Type 093, is nearing completion.

Submarines are a critical component of Beijing's anti-access
strategy in the Taiwan Straits. A strong Taiwanese submarine
force - it currently does not have one to speak of - could not go
unchecked.

But when Taiwan will take possession of these submarines remains
unclear. The U.S. arms package stipulates they will be built and
delivered when Taiwan has the port facilities and operational
training to support them.

Moreover, Germany, one of the primary potential sources for the
diesel submarines, may not be so willing to build them for Taiwan
over Chinese objections. A government spokesman told the Germany
Press Agency on April 26: "As far as I know there has not been
any such request, and if it comes it will not be approved."

The submarines are not the only threat to China's growing
undersea fleet. The dozen P-3 Orion submarine-hunting aircraft
that have been approved for Taiwan will go a long way in helping
Taipei track China's submarine activities in the Taiwan Strait,
something Taiwan has had extreme difficulty doing - some Chinese
submarines transiting the waterway have gone completely
undetected, intelligence sources believe.

The Kidd-class destroyers lack the capabilities of the Aegis
radar and do not have the ability to launch Standard air defense
missiles from vertical launch tubes. Nonetheless, they provide
Taiwan's answer to the four Sovremenny-class destroyers China is
in the process of acquiring from Russia.

Submarine- and surface-launched Harpoon anti-ship missiles and
new torpedoes will likewise help Taiwan to chip away at China's
anti-access strategy and naval blockade strategy.

Amphibious assault vehicles and Paladin artillery systems raise
the specter of a future military confrontation that includes
Taiwanese operations on the mainland, something Beijing must
avoid to sustain its strategy. The technical briefing on PAC-3,
while only the first step in upgrading Taiwan's current Patriot
anti-missile force, takes direct aim at China's missile buildup
across the Straits, effectively doing what China sought to avoid
in fighting the Aegis radar sale.

The decision to sell Taiwan a package of new weaponry without the
Aegis destroyers is an effort to provide China with an incentive
to slow down its growing arms race with Taiwan.

Focusing on the Aegis destroyers, however, misses the unfolding
reality. Taiwan will get key capabilities - some of them sooner
than anticipated - that would degrade China's military
capabilities in a battle for Taiwan.

China will respond accordingly. Regardless, it will continue its
missile buildup across from Taiwan and other military
developments. The negotiating chip the United States has
attempted to retain will probably prove worthless. And the Aegis
destroyers will find their way to Taiwan.

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