Taiwan Urges Better South China Sea Defense

TAIPEI - Taiwan's security chief called Oct. 26 for improved defenses of a group of islands in the South China Sea, reacting to reports that rival claimants to the disputed waters are building up arms.
"The Spratly Islands are our territory ... We should upgrade our defense capabilities and replace some aging equipment," Tsai De-sheng, head of the national security bureau, said in parliament.

Tsai's comments came after defense minister Kao Hua-chu endorsed a plan proposed by lawmakers to deploy advanced missiles in the contested waters over concerns that Taiwan's coast guards were vulnerable.
The Taiwanese coast guard currently has a 130-strong garrison on Taiping, the biggest island in the Spratlys archipelago.
Taiwan, Vietnam, Brunei, China, Malaysia and the Philippines claim all or part of the Spratlys, which could lie on top of large oil reserves.
All claimants except Brunei have troops based on the archipelago of more than 100 islets, reefs and atolls, which have a total land mass of less than five square kilometers (two square miles).
Taiwan's navy in July took a group of academics to the disputed islands despite a flare-up of regional tensions over rival claims for the contested waters.
Tensions in the decades-old dispute escalated this year amid accusations from the Philippines and Vietnam that China was becoming increasingly aggressive in staking its claims.

Singapore Sets Up Marine Design Arm in China

TAIPEI, Taiwan - Singapore Technologies (ST) Engineering's marine arm, ST Marine, has incorporated a wholly owned subsidiary, ST Marine (Wuhan) Engineering Design Consultancy, in Hubei Province, China.
"The company will offer engineering design and consultancy services for both local Chinese as well as international companies operating in China," a ST Engineering press release said on Oct. 20.

The new subsidiary will strengthen ST Marine's engineering team in Singapore and "leverage the latter's well-established naval design capability and engineering expertise," the release stated.
ST Marine's in-house Engineering Design Center has designed a variety of commercial and defense vessels, including the Diving Support Vessel, Seismic Survey Vessel and Anchor Handling Tug Supply Vessel.
"This new engineering design consultancy is set up as an extension of our in-house engineering design capability, and we are optimistic about the potential China has to offer as a marine power country and the world's largest shipbuilding country," said Ng Sing Chan, president of ST Marine.
ST Marine provides turnkey solutions from concept definition to detailed design, construction, on-board system installation and integration, testing, commissioning to through-life support.

China Strongly Condemns U.S.-Taiwan F-16 Deal

BEIJING - China on Sept. 22 strongly condemned a $5.85 billion U.S. deal to upgrade Taiwan's fleet of F-16 fighter jets, summoned the US ambassador and warned the move would undermine warming military relations.
China, which claims Taiwan as part of its territory, urged the United States to cancel the deal and said it had jeopardized recent improvements in military ties between the two world powers and affected relations with Taiwan.
But analysts said the deal, which stopped short of selling new planes to Taiwan, would probably not be as damaging as an earlier arms package that led to a break in China-U.S. military exchanges in 2010.
"The Chinese military expresses great indignation and strong condemnation," the defense ministry said in a strongly worded statement announcing it had called in the acting U.S. military attaché for talks.
"U.S. actions ... have caused serious damage to Sino-U.S. military relations and have seriously undermined the good momentum of the peaceful development of cross-strait relations," the statement said.
Vice Foreign Minister Zhang Zhijun urged Washington to "immediately cancel the wrong decision" and summoned U.S. Ambassador Gary Locke to protest against the deal, which was branded a "huge mistake" by China's top newspaper.
"If American politicians feel that the United States can ... irresponsibly and randomly damage China's core interests without paying the price, this is a major and huge mistake," said the People's Daily, considered the mouthpiece of China's Communist Party.
But Jean-Pierre Cabestan, political science professor at Hong Kong Baptist University, said Beijing had learned lessons from the 2010 break-off in military ties and was unlikely to react as strongly this time.
"They are going to react, to get angry, and the military may take measures to better counter these retrofitted F-16s, but they will not break military ties with the United States like they did before," he told AFP.
"They're (China) in a new phase - more flexible and accommodating, and with the Taiwanese electoral factor, it reduces their room for maneuver a lot, and it will force them not to overreact on this."
Taiwan's President Ma Ying-jeou of the Beijing-friendly Kuomintang party will seek re-election in January, and Cabestan said China would be keen not to cause any upsets ahead of the polls.
Russell Leigh Moses, a Beijing-based political analyst, said China's reaction was an exercise in "how to avoid slamming the door while shouting."
"I think that Beijing's outrage has multiple audiences, in particular those at home on the mainland and in Taiwan," he said. "There are ways in which they could have said hardly anything, but the consensus clearly was - we'll go into the default mode of being pretty upset and angry, but not like it was a year ago."
Taiwan first lodged a request to buy 66 F-16 C/D fighters - which have better radar and more powerful weapons systems than its F-16 A/Bs - in 2007 in response to China's growing military muscle.
The deal to upgrade the existing fleet includes equipment, parts, training and logistical support.
The Taiwan defense ministry said it was "another signal of the solid foundation for mutual trust and the close security cooperation between Taiwan and the United States."
Observers and media in Taiwan said that although the deal may mean little in any war with China, it represented a valuable sign of U.S. commitment to help the island's defense.
"This is a U.S. compromise to satisfy some of Taiwan's defense needs and maintain friendly ties with Taiwan without touching China's bottom-line by selling new jets," said Kenneth Wang, a military expert at Taiwan's Tamkang University.
Washington recognizes Beijing rather than Taipei but remains a leading arms supplier to the island of 23 million inhabitants, providing a source of continued U.S.-China tension.
However, relations between the U.S. and Chinese militaries have improved over the past year. In July, U.S. Navy Adm. Mike Mullen became the first chairman of the U.S. Joint Chiefs of Staff since 2007 to visit China.
Ties between China and Taiwan have improved since Ma came to power in 2008, but Beijing has refused to renounce the use of force against the island, even though it has ruled itself for more than six decades since their split in 1949.

Taiwanese Official: F-16 Buy From U.S. 'Hopeless'

TAIPEI, Taiwan - Taiwan's bid to buy F-16 fighter jets from the United States has become "hopeless," a top Taiwanese official was quoted as saying in an Aug. 20 report. This follows up a report by Defense News last week that Washington told Taiwan it will not sell the jets.

AN ARMED U.S.-BUILT F-16 fighter takes off during a drill in April. (Sam Yeh / Agence France-Presse)

The comments by parliamentary speaker Wang Jin-pyng, who said the U.S. had changed its mind about selling the jets, mark the first time an official has stated publicly that the long-awaited deal is expected to fall through.

At that time, both U.S. and Taiwanese officials insisted no decision had been made.

It is now "all but hopeless" for Taipei to get the jets, although Washington will still help it upgrade the F-16A/Bs and provide the island other defensive weapons, Wang said in an Aug. 19 speech, according to the report in the Taipei-based China times newspaper.

However, the Taiwanese defense ministry said it was still seeking to acquire the new jets.

"We will continue to push for our request to buy the F-16C/Ds and we will not give up on that," ministry spokesman David Lo said.

Taiwan applied to the U.S. in 2007 to buy the 66 F-16C/Ds, improved versions of the F-16A/Bs that the island's air force now uses, claiming that the new jets were needed to counter a rising China.

Washington recognizes Beijing rather than Taipei but remains a leading arms supplier to the island.

China reacted furiously in January 2010 when the Obama administration announced a $6.4 billion arms deal with Taiwan. That package included Patriot missiles, Black Hawk helicopters and equipment for Taiwan's existing F-16 fleet, but no submarines or new fighter jets.

Taiwan's Defense Show in Decline; F-16s in Limbo

TAIPEI - The biennial Taipei Aerospace & Defense Technology Exhibition (TADTE), which ran Aug. 11-14, was forced to share floor space with a comic book convention at the World Trade Center here. If that was not humiliating enough, several mainland Chinese businessmen were seen perusing booths. Who and what they were about remain a mystery.

A UCAV on display at the recent Taipei Aerospace & Defense Technology Exhibition. (Wendell Minnick / Staff)

Those familiar with the vibrancy of the Singapore Air Show might be surprised to learn that Taiwan spends about $2 billion more than Singapore on defense annually, yet there was no evidence of that at TADTE this year.

The show has seen steady declines over the past decade. Only six U.S. defense companies exhibited this year: ITT, Lockheed Martin, Northrop Grumman, Raytheon, Pratt & Whitney and Sikorsky Aircraft. Missing were BAE Systems, Bell Helicopter, Boeing, General Dynamics, L-3 Communications, Rockwell Collins, Thales and U.S. Ordnance, all of which traditionally have had booths.
Part of the lack of interest could be attributed to the fact that Taiwan's shopping list for new arms has been filled for the near term and there are few, if any, items left to procure. The military is struggling to pay for $16.5 billion in new U.S. arms released since 2007, including Patriot PAC-3 ballistic missile defense systems, P-3C Orion maritime patrol aircraft, AH-64D Apache attack helicopters and UH-60M Black Hawk utility helicopters.
Added to procurement costs are expensive reform programs. The Ministry of National Defense (MND) is implementing a streamlining and modernization program that will reduce troop strength from 275,000 to 215,000 within the next five to 10 years.
Despite the MND's financial struggles, a U.S. Department of Defense delegation was in Taiwan during TADTE to finalize price and availability options for a $4.2 billion upgrade package for 146 F-16A/B fighter jets.
Sources at TADTE said the midlife upgrade package has been renamed a "retrofit" to reduce complaints from China. To further placate China, the F-16A/B retrofit will be released incrementally rather than as a total package under the U.S. Foreign Military Sales program.
The only serious competition at TADTE was between Northrop Grumman and Raytheon to supply the active electronically scanned array (AESA) radar for the F-16A/B retrofit requirement. Northrop's Scalable Agile Beam Radar and the Raytheon Advanced Combat Radar are vying to replace the current APG-66(V)3 mechanical radar.
If the U.S. government does not release an AESA radar for Taiwan, TADTE sources indicate that the Northrop APG-68(V)9 mechanical radar would be offered as a substitute.
Taiwan is awaiting a final decision by the U.S. on a deal for 66 F-16C/D fighters for $8 billion, and a 2001 offer for eight diesel submarines estimated at more than $10 billion.
TADTE participants said the U.S. plans to release the F-16A/B retrofit with the AESA radar, but not new F-16C/D fighters.
A senior Taiwan MND official said he was "disappointed" by U.S. plans to deny Taiwan the new fighters.
But senior MND and U.S. government officials are denying the report. MND officials insist the U.S. Defense Department delegation did not inform Taiwan of a final decision on the F-16C/Ds, and hope remains for a positive release.
Since 2006, the U.S. has repeatedly denied Taiwan's request for F-16C/D fighters to placate China. In July, the U.S. State Department indicated a final decision on the F-16 issue would be made before Oct. 1.
News of the DoD delegation's visit comes at an awkward time for the administration of President Barack Obama. U.S. Vice President Joseph Biden arrived in Beijing on Aug. 17 to discuss economic and political issues. China has insisted the U.S. end all arms sales to Taiwan, and has threatened to invade the island should it continue to refuse unification.

MND Pavilion

During TADTE, the MND displayed a variety of new weapons and equipment. The most startling were exhibits by the military-run Chungshan Institute of Science and Technology (CSIST).
CSIST displayed the new Hsiung Feng 3 (Brave Wind 3) supersonic anti-ship missile. Though the missile had been displayed at TADTE 2009, this is the first time it was described as an "aircraft carrier killer," with a mural depicting three HF-3 missiles sinking China's new aircraft carrier, the Varyag.
China began sea trials for the Varyag on Aug. 10, the same day the HF-3 display was unveiled to the media. The Taiwan Navy has outfitted two Perry-class frigates, the 1101 Cheng Kung and 1103 Cheng Ho, with the HF-3.
CSIST also displayed models of two new unmanned aerial combat vehicle (UACV) concepts. CSIST officials did not provide any information about the UACV models, but one appeared similar to the General Atomics MQ-9 Reaper, while the other had a diamond-shaped fuselage similar to the Boeing X-45.
A CSIST animated demonstration video showed three X-45-like UACVs flying alongside an F-16 on a mission to attack a Chinese air base. The video also demonstrated how the Reaper-like UACV could be used to attack ground-based radar facilities in China.
The 202nd Arsenal displayed a new 105mm low-recoil turret being developed for the eight-wheeled Cloud Leopard armored vehicle. One Cloud Leopard on display was equipped with a 40mm grenade launcher. Full-rate production has begun, and the military has a requirement for 300 vehicles.

U.S. To Deny Taiwan New F-16 Fighters

Offers AESA Radar in Upgrade for Older Jets
TAIPEI - Bowing to Chinese pressure, the U.S. will deny Taiwan's request for 66 new F-16C/D fighter aircraft, a Taiwan Ministry of National Defense (MND) official said.

An armed U.S.-built F-16 fighter takes off during a drill in April. A Taiwan Ministry of National Defense official says Taipei will not be able to purchase new F-16s and is “so disappointed” in the U.S. decision. (Sam Yeh / Agence France-Presse)

"We are so disappointed in the United States," he said.

A U.S. Department of Defense (DoD) delegation arrived here last week to deliver the news and offer instead a retrofit package for older F-16A/Bs that includes an active electronically scanned array (AESA) radar.
The visit coincided with the biennial Taipei Aerospace and Defense Technology Exhibition (TADTE), held here Aug. 11-14.
"The U.S. Pentagon is here explaining what is in the upgrade package," a U.S. defense industry source said at TADTE. "They are going to split the baby: no C/Ds, but the A/B upgrade is going forward."
Sources said an official announcement of the decision is expected by month's end.
But an official at the American Institute in Taiwan (AIT), the de facto U.S. Embassy, said "no decisions have been made," while DoD officials declined to comment on their delegation's mission.
The proposed upgrade package would make the 146 Taiwanese F-16A/Bs among the most capable variants of the aircraft, perhaps second only to the APG-80 AESA-equipped F-16E/Fs flown by the United Arab Emirates.
Originally requested by Taipei in 2009, the package would cost $4.2 billion, sources at TADTE said.
The new gear would include an AESA radar, likely either Northrop Grumman's Scalable Agile Beam Radar or the Raytheon Advanced Combat Radar, to replace the planes' current APG-66(V)3 radar.
Either one would be an improvement on the Northrop APG-68(V)9 mechanical radar once contemplated for Taiwan's upgrade package. The switch is meant to soften the blow of denying new planes to Taipei, a Lockheed Martin source said.
A decision between the two AESA candidates could foreshadow the U.S. Air Force's own choice as it prepares to upgrade its fleet of F-16s. The upgrade package will also improve the planes' Raytheon ALQ-184(V)7 electronic countermeasures pod by adding the capacity to intercept and save hostile radar transmissions, then use the same frequency to jam them.
However, ITT is offering the ALQ-211 Advanced Integrated Defensive Electronic Warfare Suite pod as an alternative.
ITT is also offering the BRU-57/A Smart Twin Store Carrier, which doubles the number of bombs an F-16 can carry, an ITT source said.
The package would also replace the AIM-9P/M Sidewinder air-to-air missile with the new AIM-9X; fit the planes to carry enhanced GBU-12 Paveway II laser-guided bombs; and add a digital radar warning receiver, helmet-mounted cueing system and center pedestal display.
The package will not include new engines to better handle the additional weight and electrical draw, though there could be an upgrade to bring the existing Pratt & Whitney F100-PW-220 to the PW-220E standard. The upgrade would swap out obsolete parts for newer ones, but wouldn't offer any additional performance.
Lockheed Martin will be working with Taiwan's state-run Aerospace Industrial Development Corp. (AIDC) to integrate the new gear on the jets.
"Changing a fighter's major sensor should not be taken lightly. It is more than electrical capacity. It is the integration of sensors, weapons, displays, etc., that make a fighter aircraft effective," Lockheed spokeswoman Laura Siebert said.

Consequences

Siebert said the failure to release F-16C/Ds will weaken Lockheed Martin's plans to extend the production line for the fighter.
"While Congress has been notified of Oman and Iraq's desire for F-16s, the Taiwan order for 66 aircraft is very important to the long-term viability of the F-16 production to include the U.S. Air Force, Lockheed Martin and the thousands of suppliers throughout the U.S.," she said.
More than a few TADTE attendees said the Obama administration might reverse the decision as the 2012 presidential election approaches and political pressure for new jobs builds.
A June report by the Perryman Group, a Texas-based economic and financial analysis firm, estimated that Taiwan's F-16C/D program would create more than 16,000 jobs and almost $768 million in U.S. federal tax revenue. Much of that tax revenue and new jobs would go to election battleground states: California, Connecticut, Florida, Maryland, Ohio, Texas and Utah.
But China holds about 8 percent of U.S. debt, the largest block in foreign hands.
As one TADTE attendee said, "Beijing's Kung Fu is better than Washington's."
The denial of the new jets will likely lead AIDC officials to ask the government to expand upgrade plans for Taiwan's 126 Indigenous Defense Fighters, of which 71 are currently slated for upgrades.
The company has also been pushing Taiwan's Air Force to allocate funds for full-rate production of the IDF C/D Goshawk, which features improved range and weapons payload.

Background

In July, the U.S. State Department indicated a final decision on the F-16 issue would be made by Oct. 1. Since 2006, the U.S. has repeatedly denied Taiwan's request for 66 F-16C/D Block 50/52s, a prospective sale estimated at more than $8 billion.
The planes would replace 60 F-5 Tigers and 60 Mirage 2000-5s due for retirement within five to 10 years.
China has called the sale a "red line." A recent editorial in the state-controlled People's Daily called for the use of a "financial weapon" against the U.S. if new F-16s were released.
The U.S. decision comes as a blow to the self-ruled island's effort to counter China's growing military, whose first aircraft carrier began sea trials last week, and therefore to its independence.
There are fears that losing Taiwan could spell the end of U.S. power projection in the region. Losing Taiwan would "change everything from the operational arch perspective to the posture of Japan and the U.S." in the region, said Raytheon's Asia president, Walter Doran, a retired admiral who once commanded the U.S. Pacific Fleet.
Staff writer Dave Majumdar in Washington contributed to this report.

Andrew Yang

Taiwan's Deputy Defense Minister

Taiwan's Ministry of National Defense (MND) continues to maintain a strong deterrence in the face of a growing Chinese military threat. The island state's future is uncertain as the U.S. and China grow closer and Washington wavers on the sale of new F-16 fighter jets. This makes Nien-Dzu "Andrew" Yang's role as the MND's policy coordinator a challenge.

Andrew Yang is Taiwan's deputy defense minister. (Patrick Lin / AFP via Getty Images)

The stakes are high. Should China capture or confederate Taiwan, the potential is great for destabilizing the region. China, which continues to threaten to impose unification by force, has more than 1,400 short-range ballistic missiles aimed at Taiwan. The MND, meanwhile, faces budget constraints as it struggles to implement an all-volunteer force, begin an expensive streamlining program, pay for $16 billion in new U.S. arms released since 2007, and convince Washington to sell it F-16s and submarines. U.S. Secretary of State Hillary Clinton announced recently the decision would be made by Oct. 1.
Adding to the confusion, since 2008, China and Taiwan have signed historic economic agreements that are moving them closer together. Taiwan has just opened the floodgates for mainland Chinese visitors, prompting fears of an increase in espionage and agents of influence here.
Yang is a former secretary-general of the Chinese Council of Advanced Policy Studies and adviser to the Mainland Affairs Council, Ministry of Foreign Affairs and the MND.

Q. China now has unprecedented influence over the U.S. with its economic, diplomatic and military muscle. How can Taiwan expect the U.S. to continue to defend Taiwan?

A. We are certainly aware that Beijing is a very important global and regional power and has close mutual interests with the United States. High-level visits are becoming regular in intensity. Beijing is increasing their influence over Washington decision-making not only over Taiwan, but over other important regional and global issues.
We firmly believe that Washington still plays great influence in Asia and has repeatedly made strong commitments to regional security. Taiwan is a very important factor contributing to the multilateral effort to preserve peace and stability in this region. So I do not think the United States will tip over to Beijing's side and ignore its vested interest in the Asia-Pacific region, particularly Taiwan. The U.S. has repeatedly emphasized they will continue to honor the Taiwan Relations Act and provide adequate and necessary articles to enhance our self-defense.

Q. How has the U.S. reacted to a reduction of tension between China and Taiwan since Taiwan President Ma Ying-jeou's 2008 election?

A. The U.S. fully supports President Ma's strategy and approaches. They consider his approach as a way to de-escalate tensions and find opportunities to enhance peace dividends and to reduce misunderstanding and miscalculation. This has, in a way, made Beijing less belligerent toward Taiwan.

Q. Has China reduced the military threat against Taiwan, or the number of missiles aimed at Taiwan?

A. No, they have not done anything yet. There has been nothing from Beijing's top leadership on the issue. I think Beijing considers that both sides can create a new kind of status quo based on engagement. It doesn't mean that Beijing is reducing its military preparations over Taiwan, but they have to think twice in terms of their approach.
There are more mutual interests involved, not just between Taiwan and mainland China, but also multilateral interests in this region, which Beijing needs to continue to develop its economy and stabilize its society. So Beijing has to make some kind of calculation here - whether to rock the boat for the sake of pursuing Beijing's unification policy, either by force or by other means; or work side-by-side with Taiwan and regional partners to create a more stable, peaceful and prosperous environment.

Q. As the U.S. becomes economically weaker and defense budgets are slashed, many in China see the U.S. as a declining superpower. Will this encourage Chinese adventurism?

A. If you look at Chinese President Hu Jintao's visit to Washington earlier this year, it seems to me that from the policymaker's point of view, they don't look at each other as enemies. That's number one. They are still reaching out to each other to the best of their ability to create a win-win situation. From Chinese leaders' comments, they are not taking advantage of U.S. weakness to advance Chinese strategic or national interests in this region. They still emphasize that China should work along with the U.S. to resolve many problems around the world.

Q. U.S. Secretary of State Hillary Clinton has said the U.S. will decide about the sale of 66 F-16C/D fighters by Oct. 1. What do you think Beijing's reaction will be if the U.S. releases new F-16s to Taiwan? China calls it a "red line."

A. They will be extremely unpleasant and upset, as they always are. They've been calling everything a red line for 30 years, ever since 1979, when the U.S. switched relations from Taipei to Beijing.
If we don't get the F-16C/Ds to replace our vintage fighters, then we lose our leverage and immediately face the challenge of fulfilling our responsibility of preserving peace and stability in the region. Washington sometimes does not get the right picture of Taiwan's responsibility. That is part of the reason we want new fighters. Otherwise, the U.S. has to send its own military to replace our daily patrols in the region.
China has already sent a strong warning to Washington that if such a decision is adopted, then U.S.-China relations will be damaged. Cutting off regular military exchanges is one way to show Beijing's animosity. But if we look at previous experiences, they will be downgraded for a while, but they have strong mutual interests binding each other together. So they have to make a decision on what will be the next step.

Q. Economic sanctions?

A. I don't think Beijing will take drastic economic actions against the U.S., because they have a lot of investments, including huge foreign reserves in U.S. banks. If the U.S. economy suffers, Beijing suffers.

Q. The U.S. offered Taiwan eight submarines in 2001, but the deal has been stalled. What's the status?

A. It's a long-delayed decision by the U.S. We are constantly urging them to pay attention to our concerns because we consider submarines to be important to our self-defense.

Q. What would happen if China took control of Taiwan and placed bases here?

A. It opens the door for Chinese military and power projection not only into the East China Sea, but also into the South China Sea. Taiwan would become an important hub and stepping stone for China to exert and expand its presence in the South China Sea, which is certainly not in the U.S. interest. It would immediately challenge U.S. strategic calculations and its security umbrella in the Asia-Pacific region. If Taiwan becomes part of China in terms of political integration in the future, then immediately the United States will lose a vital interest in this part of the world.

Q. There has been talk about beefing up Taiwan's military presence on Taiping Island in the South China Sea.

A. We are not ruling out our options. But the current decision adopted by the National Security Council and the president is to improve and reinforce the Coast Guard's capability on the island. So the Marines are training the Coast Guard members stationed on the island. We are also evaluating whether they can actually perform the assigned responsibilities and duties to protect the island and conduct judicial patrol over the waters.
We will never allow China to step onto the island. It is part of our territory, under our management. There is no room for compromise.

Q. Is the primary Chinese military threat amphibious invasion or missile bombardment?

A. It's a combination. They have all sorts of options at hand.
Of course, Beijing will use the minimum military option to achieve maximum political objectives. Our way of defending ourselves is to make sure they pay a high price and cannot succeed in achieving their political objectives. We have to make sure that if Beijing launches missiles against Taiwan, they cannot immediately compromise our defense and force Taiwan to come to terms with Beijing.

Q. Is the streamlining program still on schedule? You are going from conscription to an all-volunteer military force.

A. It is very much on schedule. By law, we have to implement this streamlining process starting in January. We have to implement the all-volunteer program.
It's an incremental process. We are not targeting any particular date to complete this transformation. Certainly, they are predicated on continuous sufficient resource allocation and support from the legislature.

Q. Do you worry about Beijing becoming more nationalistic, more aggressive?

A. It is always a major concern. China is a dynamic society. You have many forces inside China. People only talk about the good side of Chinese development, but not many pay great attention to the challenges and the difficulties.
They are facing increasing domestic problems. We hope the Chinese government can have better management of those problems, but you never know. We worry about succession. Beijing is going to have a top leadership change next year, so who will be the official leader? What does he think about Taiwan? What will be his priorities? We don't want to wake up to a renegade in charge of China who fires missiles over the Taiwan Strait.

Q. How good is Taiwan's intelligence inside China?

A. We are collecting good stuff, at least from our neighborhood. We also share our intelligence during regular meetings with the United States and others. We are much better off than our counterparts, like Japan and the U.S. The U.S. has its satellite images, but we have our human intelligence, and our analysts are resourceful. We have analysts who have spent 30 years watching China.

Ministry Profile

Established as the Ministry of War in 1912 in China; became the Ministry of National Defense in 1946. Moved to Taiwan in 1949 at the end of the Chinese Civil War.
Defense budget:
■ $10.2 billion for 2011
■ $11.2 billion projected for 2012
Troop strength:
■ 275,000 currently
■ 215,000 projected for 2014

Taiwan's 'Carrier Killer' Aims To Sink China's Carrier

TAIPEI - In the event of war, Taiwan plans to sink China's new aircraft carrier, the Varyag, with its new "aircraft carrier killer" missile, the ramjet-powered supersonic anti-ship cruise missile Hsiung Feng 3. The revelation was made Aug. 10 on the same day China launched the Varyag for its first sea trials.

This mural was displayed at the Taipei Aerospace and Defense Technology Exhibition showing Taiwan Hsiung Feng 3 missiles attacking the new Chinese carrrier, Varyag. (Wendell Minnick)

The disclosure came during a preshow media tour of the biennial Taipei Aerospace and Defense Technology Exhibition (TADTE). Journalists inspecting the Hsiung Feng 3 were shocked to see a large mural of the Varyag being attacked by three Hsiung Feng 3 missiles. Two of the missiles impact the carrier's starboard bow and starboard quarter, with a third missile is en route to the ship.

The mural was reminiscent of similar displays at the 2010 Zhuhai Airshow in China, where anti-ship missiles were depicted attacking and sinking U.S. aircraft carriers.
The unveiling of the display comes at an uncomfortable time for Taiwan President Ma Ying-jeou. Since coming into office in 2008, Ma has eased cross-Strait tensions and signed historic economic agreements with China.
Military officials denied that calling Hsiung Feng 3 the "aircraft carrier killer" or displaying a mural of a missile attack on the Varyag were intended to send Beijing a political message. In the past, the Taiwan military often used ambiguous phrases to describe the "enemy" without mentioning China. Therefore, the Hsiung Feng 3 display was out of synch with normal military protocol that avoids enraging China.
The military-run Chungshun Institute of Science and Technology (CSIST) produces the Hsiung Feng family of anti-ship missiles, including the Tien Kung (Sky Bow) air defense missile and the Tien Chien (Sky Sword) missile.
CSIST is working on a highly classified missile system called the Hsiung Feng 2E, which is reportedly a land-attack cruise missile capable of hitting targets on mainland China. This missile has never been displayed to the public and the military refuses to discuss its existence. Another missile program considered secret is the Tien Chien 2A, which is reportedly an anti-radiation missile designed to destroy ground-based radar systems.
A CSIST official said the Hsiung Feng 3 has been outfitted on the 1101 and 1103 Perry-class frigates for testing. "We began building the Hsiung Feng III around five years ago."
The military might field the missile inland along the coast to fend off a Chinese invasion armada, he said. The Hsiung Feng 3 has a reported range of 130 kilometers.
Also on display at TADTE was the new Tien Kung 3 (Sky Bow) air defense missile. The Tien Kung is based on the U.S.-built Patriot missile defense system. Details of its probable deployment are classified.

Vietnam to Get Sub Fleet in 6 Years: State Media

HANOI - Vietnam will have a submarine fleet within six years, the defense minister reportedly confirmed Aug. 4, in what analysts say is intended as a deterrent to China's increasing assertiveness at sea.

"In the coming five to six years, we will have a submarine brigade with six Kilo 636-Class subs," Defence Minister Phung Quang Thanh was quoted as saying by the state-controlled Tuoi Tre newspaper.

Russian media reported in December 2009 that Vietnam had agreed to buy half a dozen diesel-electric submarines for about $2 billion.

Thanh said the fleet was "definitely not meant as a menace to regional nations," according to the report.

"Buying submarines, missiles, fighter jets and other equipment is for self-defense," he was quoted as saying.

Ian Storey, a regional security analyst at the Institute of Southeast Asian Studies (ISEAS) in Singapore, said the submarine deal has been driven by events in the South China Sea, where China and Vietnam have a longstanding territorial spat over the Paracel and Spratly archipelagos.

Tensions rose after Vietnam in May accused Chinese marine surveillance vessels of cutting the exploration cables of an oil survey ship inside the country's exclusive economic zone.

"These purchases are designed to deter the Chinese from encroaching on Vietnamese sovereignty," Storey told AFP.

He said the country already operates two midget submarines bought years ago from North Korea.

In the newspaper report, Thanh did not specify how Vietnam was paying for its naval upgrade.

"It depends on our economic ability. Vietnam has yet to produce modern weapons and military equipment, which are costly to import," he said.

Analysts say the country's economy is in turmoil with galloping inflation, large trade and budget deficits, inefficient state spending, and other woes.

Much of Vietnam's military hardware is antiquated but this week it received the first of three new coastal patrol planes for the marine police, announced the manufacturer, Madrid-based Airbus Military.

Russian media reported last year that Vietnam ordered 12 Sukhoi Su-30MK2 warplanes in a deal worth about $1 billion.

Other nations in the region have accused China in recent months of becoming more aggressive in enforcing its claims to parts of the South China Sea.

The Philippines, Malaysia, Brunei and Taiwan also have overlapping claims to all or parts of the waters, which are potentially rich in oil and gas deposits and straddle vital commercial shipping lanes.

Huge Cyber Spying Effort Revealed, China Suspected

WASHINGTON - The United States, United Nations, defense contractors and the International Olympic Committee were targets of a massive global cyber spying campaign, a computer security firm said on Aug. 3, with China seen as the likely culprit.

McAfee vice president for threat research Dmitri Alperovitch described it as a "five-year targeted operation by one specific actor" but declined to identify the country responsible.

California-based McAfee said in a report it had identified 72 victims in 14 countries of a sophisticated hacking effort dubbed "Operation Shady RAT," which it traced back to at least 2006.

The "compromised parties" included the governments of Canada, India, South Korea, Taiwan, the United States and Vietnam, McAfee said, as well as a U.S. Department of Energy research laboratory and around a dozen U.S. defense contractors.

Others included computer networks of the United Nations, the Association of Southeast Asian Nations, the International Olympic Committee, Asian and Western national Olympic committees and the Montreal-based World Anti-Doping Agency.

In a conference call with reporters, Alperovitch, the lead author of the report, said the intrusions into the systems of defense contractors targeted "sensitive military technologies."

He said McAfee had notified law enforcement about the cyber espionage campaign, briefed the White House and members of the U.S. Congress and was working with some of the targeted companies on remediation efforts.

"We believe based on the targeting and the scale and the impact of these operations, and the fact that they didn't just have an economic gain in mind but also political and military, that that this is clearly a nation-state but we're not pointing the finger at anyone," Alperovitch said.

James Lewis, a cybersecurity expert at the Center for Strategic and International Studies, said the evidence may not be "conclusive in a legal sense," but suspicion points towards China.

"You can think of at least three other large programs attributed to China that look very similar," Lewis told AFP. "It's a pattern of activity that we've seen before."

Google said in June that a cyber spying campaign originating in China had targeted Gmail accounts of senior U.S. officials, military personnel, journalists and Chinese political activists.

In January of last year, Google announced it was halting censorship of its Internet search engine in China after coming under attack along with 20 other companies from hackers based there.

In February, McAfee said in another report that hackers in China have penetrated computer networks of global oil companies, stealing financial documents on bidding plans and other confidential information.

McAfee said it had discovered the "Shady RAT" series of cyber attacks by gaining access to a command and control server in a Western country used by the intruders and examining its logs.

"After painstaking analysis of the logs, even we were surprised by the enormous diversity of the victim organizations and were taken aback by the audacity of the perpetrators," McAfee said.

McAfee said attacks on Asian and Western national Olympic committees, the International Olympic Committee and the World Anti-Doping Agency occurred in the lead-up and immediate follow-up to the 2008 Beijing Olympics.

It described this as "particularly intriguing and potentially pointed a finger at a state actor behind the intrusions, because there is likely no commercial benefit to be earned from such hacks."

Other targets included a private Western organization focused on promoting democracy, two U.S. national security think tanks, South Korean steel and construction firms, a Danish satellite communications company, a Singapore electronics company, a Taiwanese electronics firm, Vietnam's government-owned technology company and U.S. state and county governments, McAfee said.

It said a major U.S. news organization - identified as the Associated Press by The Washington Post - was "compromised at its New York headquarters and Hong Kong bureau for more than 21 months."

McAfee said the attacks involved sending infected emails to employees of the targeted companies. When opened, the emails implanted malware and established a backdoor communication channel to the command and control server.

Data theft appeared to be the chief objective of the attackers but Alperovitch warned the "potential exists for even more insidious activity."

"These intruders are in our systems, in the systems of all these companies, in all these government systems," he said. "The likelihood that they'll escalate the activity from just stealing data to modifying data or destroying data or destroying systems is also there."

U.S., China Discuss Weapons Sales to Taiwan

WASHINGTON - The United States and China on July 29 held top-level talks on Taiwan, with Washington working preemptively to avoid a fallout as a decision nears on whether to sell fighter-jets to Taiwan.
U.S. officials have said that they will decide by Oct. 1 on whether to sell F-16 jets to Taiwan, a longstanding request from the self-ruling island which fears that China's rapidly growing military has gained a major edge.

Wang Yi, the top Chinese official in charge of Taiwan, met with Deputy Secretary of State William Burns. Secretary of State Hillary Clinton joined part of the closed-door session, a State Department official said.
China's state-run Xinhua news agency said Wang "stressed that the Chinese mainland has been steadfast in opposing the U.S. arms sales to Taiwan, because it harms Sino-U.S. ties and the peaceful development of the cross-strait relations."
Burns took office as the State Department's No. 2 just July 28 after his nomination was held up by Sen. John Cornyn, R-Texas, who said he relented only after Clinton agreed to release a long-delayed report on Taiwan's arms needs. The jets would be built in Cornyn's home state.
Congress is a stronghold of support for Taiwan, with the House Foreign Affairs Committee last week voting without dissent on a measure urging "immediate steps" for arms sales.
China considers Taiwan to be a territory awaiting reunification, by force if necessary.
The United States switched diplomatic recognition to Beijing in 1979 but Congress at the same time approved the Taiwan Relations Act, which requires the United States to provide the islands enough weapons for self-defense. The law states that the U.S. administration will make the decision without consulting China.
U.S. Joint Chiefs of Staff Chairman Adm. Mike Mullen said he spoke about arms sales to Taiwan during a visit earlier in July to Beijing and "clearly, the Chinese would strongly prefer us to stop doing this."
But he said he explained to his Chinese counterpart, Gen. Chen Bingde, that the United States has "responsibilities, and they're legal responsibilities, in my country to support the Taiwan Relations Act."
The United States last year approved $6.4 billion in weapons for Taiwan, including Patriot missiles and Black Hawk helicopters, but not jets or submarines. China lodged a protest, suspending military ties with the United States for months.
Mullen has strongly advocated dialogue, saying it will be crucial to avoiding miscalculations as China ramps up its military budget.
The Pentagon offered praise on July 29 after China made a rare acknowledgement that it is building its first aircraft carrier.
State television on July 27 broadcast footage of the old Soviet ship, which is being refitted in the port city of Dalian. The defense ministry said the carrier would be used for "scientific research, experiments and training."
"That's a good sign to us. We've always talked about the need for transparency so that we better understand what their intentions are," Pentagon spokesman U.S. Marine Col. Dave Lapan told reporters.
He said that the Pentagon was already well aware of the carrier project, "but it's at least a positive sign that they are being more forthcoming."
China showed footage of the carrier at a time of high tensions on the South China Sea with Vietnam and the Philippines. China's defense ministry did not say when the carrier would be finished.
At a joint news conference during Mullen's visit, China's military chief Chen defended the project and noted that the United States has 11 aircraft carriers in service.
"China is a big country [and] we only have quite a number of ships, but small ships. And this is not commensurate with the status of the country of China," Chen said.

China Tells U.S. to Halt Spy Plane Flights: Report

BEIJING - China has demanded that the United States stop spy plane flights near the Chinese coast, saying they have "severely harmed" trust between the two countries, state-run media reported July 27.

The comments came after Taiwanese media reported two Chinese fighter jets attempted to scare off an American U-2 reconnaissance plane that was collecting intelligence on China while flying along the Taiwan Strait in late June.

Beijing's defense ministry said the U.S. must discontinue such flights, calling them a "major obstacle" as the two Pacific powers try to put a series of military disputes behind them, China's Global Times reported.

The flights "severely harmed" mutual trust, the paper quoted the ministry as saying.

"We demand that the U.S. respects China's sovereignty and security interests, and take concrete measures to boost a healthy and stable development of military relations," it added.

The ministry declined immediate comment when contacted by AFP.

Washington has said in the past that its reconnaissance flights are conducted in international airspace and will continue.

Sino-U.S. military relations have been plagued in recent years by periodic tensions stemming from U.S. plans for arms sales to Taiwan and naval standoffs in the disputed South China Sea.

Beijing considers Taiwan part of its territory and refuses to abandon the possibility of taking the self-ruled island by force. The two sides split at the end of a civil war.

The United States recognizes Beijing and not Taipei, but provides military support to Taiwan.

In the June encounter, one of the Chinese Sukhoi SU-27 fighters crossed over the Taiwan Strait's middle line, widely considered to be the boundary between Taiwan's airspace and that of the Chinese mainland, Taiwanese media have reported.

One of the Chinese jets did not leave until two Taiwanese planes were sent to intercept it, the island's United Daily News reported.

Washington is mulling a bilateral exchange of defense officials with Beijing to keep communication lines open, U.S. Joint Chiefs of Staff Chairman Adm. Mike Mullen wrote in the New York Times this week.

Mullen, the top American military official, earlier this month became the first chairman of the U.S. Joint Chiefs of Staff since 2007 to visit China, as the two sides seek to mend ties.

U.S. To Decide on Taiwan F-16s Oct. 1

TAIPEI - The Obama administration will make a final decision on the sale of 66 F-16C/D fighter jets to Taiwan by Oct. 1, U.S. Secretary of State Hillary Clinton told Sen. John Cornyn, R-Texas, on July 21.

A U.S. AIR Force F-16C fighter makes a flight from Tyndall Air Force Base, Fla., to Atlantic City, N.J., in this 2001 photo. Taiwan has requested permission from the U.S. government to purchase the F-16C and the F-16D, a two-seat fighter. (U.S. Air Force)

Since 2006, the U.S. has repeatedly rejected Taiwan's letter of request (LOR) for new F-16C/D fighters. China has called the proposed sale, estimated to be worth more than $8 billion, a "red line."

Cornyn has been blocking Senate confirmation of William Burns, nominated to become deputy secretary of state, in an effort to pressure Clinton to approve the deal.

Clinton appears less than likely to upset recent progress in Sino-U.S. relations by releasing new fighters to Taiwan, although she might instead release a mid-life upgrade (MLU) package for the self-governing island's 146 aging F-16A/B fighters.

Last year, the U.S. accepted Taiwan's LOR for the $4.5 billion upgrade package, but then froze the release due to Chinese pressure.

A State Department release of the F-16A/B MLU "would be a reiteration of a decision that is already over one year old," said Rupert Hammond-Chambers, president of the U.S.-Taiwan Business Council. "It is not a new commitment."

Since 2007, the U.S. has released more than $16 billion in new arms to Taiwan. After each release, China has increased rhetorical threats and punitive actions. In January 2010, after Washington released a $6.4 billion arms deal to Taiwan, Beijing threatened economic punishment and canceled military exchanges.

Restarting the military dialogue with China has been difficult. Adm. Mike Mullen, chairman of the U.S. Joint Chiefs of Staff, just concluded a trip to China to expand military relations. Though Mullen expressed concerns about China's military modernization after his trip, the U.S. appears committed to advancing strategic talks.

Clinton's announced deadline happens to fall on China's National Day, roughly equivalent to America's Fourth of July.

But Hammond-Chambers said the timing makes the release of new F-16s difficult for another reason: It is sandwiched between U.S. Vice President Joseph Biden's trip to China next month and Chinese President Hu Jintao's trip to Hawaii in November. Xi Jinping, Hu's anointed successor, will visit the U.S. this winter.

"It doesn't seem plausible that the Obama administration would stand-up for Taiwan policy in the face of two such senior visits from China," Hammond-Chambers said.

While the announcement to make a decision is welcome, "We suspect that the outcome simply reiterates decisions already made, and therefore fails to address Taiwan's central need - new combat aircraft to meet the growing threat from China," Hammond-Chambers said.

Andrew Yang, Taiwan's deputy minister of defense, said the release of new F-16s would not be the end of the world. China has been calling every arms sale a red line for 30 years, he said.

"China will be extremely unpleasant and upset," Yang said. "I don't believe they will take drastic action."

But a failure to release F-16s will damage Taiwan's ability to defend itself, he said. "If we don't have the required jets and replacement of vintage fighter aircraft, you lose your leverage."

Yang said Taiwan has the right to defend itself from outside aggression.

He confirmed that Taiwan's military is researching an electromagnetic pulse (EMP) weapon.

Taiwan also is developing new missiles, but Yang would not confirm whether the self-governing island is preparing to field the Hsiung Feng 2E land-attack cruise missile.

Yang said losing Taiwan to China would be catastrophic for U.S. military power in the Asia-Pacific region. If China built military bases on the island, they would threaten U.S. military dominance of the East China Sea and South China Sea.

The deputy defense minister said Washington also would lose a vital intelligence collector.

"We are collecting good stuff," and sharing it with the U.S., he said.

Taiwan's fighters are aging; meanwhile, China revealed in December its J-20 stealth fighter, and it is preparing sea trials of its first aircraft carrier by the end of the year.

Taiwan has 126 Indigenous Defense Fighters (IDFs), 56 Mirage 2000s, 146 F-16A/Bs and about 60 F-5E/F Tigers. The F-5s and Mirages have serious maintenance problems and will be retired within a decade.

Taiwan's state-run Aerospace Industrial Development Corp. is upgrading 71 IDFs, with delivery scheduled by 2014, and it could upgrade the remaining 55 IDFs if the F-16C/Ds are not approved. Taiwan also has an option to build a new C/D variant of the IDF, but this will not fill the fighter gap with China.

U.S. Lawmakers in New Bid for Taiwan Jets

WASHINGTON - A congressional panel on July 21 urged the United States to sell F-16 fighter jets to Taiwan, the latest appeal for the weaponry the island says it needs to counter a rising China.

A Taiwan Air Force F-16 fighter jet takes off from a highway in Taianan, Taiwan, on April 12 during a defense drill. A House panel voted July 21 to urge President Barack Obama to sell more jets to the island nation. (Sam Yeh / Agence France-Presse)

With no dissents, the House Foreign Affairs Committee voted for a measure saying President Barack Obama "should take immediate steps to sell Taiwan all the F-16 fighter jets that are needed by Taiwan," as well as submarines.

The text quotes a report last year from the U.S. Defense Department stating that China was gaining in its military edge over Taiwan and developing the capability to "settle the dispute on Beijing's terms."
The bill has little immediate effect as it was included as an amendment to a spending bill, one step in a long process in both houses of Congress to approve funding for the fiscal year that begins in October.
But the vote was the latest sign of restlessness in Congress over the weapons. In May, nearly half of the U.S. Senate across party lines sent a joint letter urging the administration to approve the jet sales to Taiwan.
The United States last year approved $6.4 billion in weapons for Taiwan, including Patriot missiles and Black Hawk helicopters. But the administration did not include the F-16s and has said little since on the issue.
Even without the jets, China lodged a strong protest and temporarily cut off military exchanges with the United States.
In 1979, the United States switched its recognition to Beijing from Taiwan, where China's nationalists had fled 30 years earlier after being defeated in the mainland's civil war. But Congress, a stronghold of support for Taiwan, mandated that the United States provide the island with means for self-defense.
Taiwan's President Ma Ying-jeou has repeatedly said that the island needs F-16s to upgrade its aging fleet, despite his drive to improve ties with the mainland since taking office in 2008.

Reports of Taiwan Sub Missile Test False: Experts

TAIPEI - Recent local media reports that Taiwan test-fired an anti-ship Hsiung Feng 2 (Brave Wind) missile from a Dutch-built Hai Lung (Sea Dragon) submarine during an exercise in late June now appear to be false.
On July 7, the Chinese-language Liberty Times reported the missile test, which was picked up by an English-language media service in Taipei without confirmation. The Liberty Times is closely linked to the pro-independence Democratic Progressive Party, which opposes unification with China.

Taiwan's Hai Lung's have "absolutely no capability" of launching anti-ship missiles from their torpedo tubes, said a former Taiwan Navy official who worked with ordnance used on the submarines. "This is common sense since they still have problems with just launching torpedoes with the old fire control system."
A former U.S. defense official agreed the fire control system was antiquated.
"This technology is believed to require significant and costly annual care and maintenance," he said.
Taiwan has only two combat operational diesel submarines acquired in the 1980s from the Netherlands and midlife upgrades on both are on hold until the Navy can secure the funds. Taiwan also has two World War II-era Guppy submarines used for training. In 2001, the U.S. offered to sell Taiwan eight diesel submarines, but political and technical problems haunted the program from the beginning.
The U.S. released a $200 million package for 32 UGM-84L sub-launched Harpoon anti-ship missiles to Taiwan in 2008, but the Navy has not gone forward with the order due to submarine upgrade delays and other budgeting issues.
"One of the optimal solutions is to replace the existing fire control system with a new one that would have Harpoon processing and also the existing torpedo launch capability embedded in it - the upgraded or new fire control system also would be able to handle future torpedoes," the former U.S. official source said.
However, the Taiwan Navy appears to favor a stand-alone processing and control system with links to the Harpoon or Hsiung Feng missile. This creates problems because all interaction between the torpedo and the missile would have to be "manual and not automated - meaning more time, weight, efficiency; not to mention the missile would be fired with less accurate data," he said.
Taiwan's Air Force and Navy have been using Harpoon anti-ship missiles since the 1990s on fighter aircraft and surface ships, not submarines, and recent sales demonstrate a continued reliance on the U.S. system. On July 7, the Pentagon's Foreign Military Sales Program awarded Boeing a $27 million contract for the procurement of two Lot 86 Harpoon missile bodies, two exercise Grade B canister All Up Round (AUR) and eight anti-submarine rocket AURs for Taiwan.
Taiwan's military-run Chungshan Institute of Science and Technology (CSIST) does have an indigenous anti-ship missile program. The Hsiung Feng family includes three variants and CSIST is now working on a land-attack cruise missile, the HF-2E, capable of hitting targets in China.