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Taiwan Defence and Security Report Q1 2011
Business Monitor International, Jan 2011, Pages: 81
The Taiwan Defence and Security Report provides industry professionals and strategists, corporate analysts, defence and security associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Taiwan's defence and security industry.
Overall, 2010 was a year in which the general trends within Taiwan’s security situation and Defence and Security Report 2011 industry remained unchanged. The central security threat that confronts government is the possibility that China, which reportedly has 1,300-1,500 short-range ballistic missiles (SRBMs) aimed at the island, seeks reunification by force. In the meantime, economic links between China and Taiwan continue to grow, at a time that the island is ruled by the Kuomintang (KMT) party. Taiwan’s government favours de facto independence – the status quo – while the economic reality is that the island may be moving towards de facto reunification. We continue to believe that a move towards outright, de jure, independence is a very unlikely scenario.
Defence and Security Report 2011 spending is around 2.7% of GDP, and has been falling by that measure, if not in absolute terms. Spending and procurement trends are overshadowed by a complex array of sometimes contradictory themes. Over the next three years, Taiwan’s military establishment hopes to reduce the size of the armed forces by around a quarter, with the result being that the island will have an all-volunteer force by 2014. There have been signs that, in spite of the strength of Taiwan’s economy by global (if not Asia-Pacific regional) standards, the government may be looking to defer the massive procurement of arms and material (mainly from the US, which remains the island’s main armourer and guarantor of de facto independence).
For its part, the most recent developments indicate that the US is a somewhat reluctant source of the equipment that Taiwan needs. The latest US$6.4bn package that was announced by the Obama administration at the beginning of 2010 was seen as objectionable by the Chinese government, which suspended contacts between China’s military and that of the US. However, the package did not include the F-16 fighters which would give – and be seen by the Chinese to give – Taiwan an edge in the event that it was attacked. As yet it is unclear when – if ever – Taiwan will actually acquire other big ticket items that the government has requested from the US, such as submarines.
Meanwhile, Taiwan continues to meet an increasing amount of procurement needs from its own suppliers. Over the course of H210, the government has confirmed publicly that the indigenous Defence and Security Report 2011 industry is working on a new fast-attack missile boat (which is still at the design stage), unmanned reconnaissance drones and cruise missiles. The last is significant in that development of cruise missiles had hitherto not been admitted by the government: the Hsiung Feng (HF) 2E is a Land Attack Cruise Missile (LACM) that would generally be considered to be an offensive, rather than a defensive weapon.
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