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Home > Reports By Country > Asia > Taiwan
Taiwan Defence and Security Report Q3 2008
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Chinese and Taiwanese negotiators announced on June 13 that they had reached a landmark deal to allowdirect weekend charter flights between Taiwan and the mainland as of July 4. The resumption of regulardirect flights for the first time since 1949 was one of the campaign pledges of President Ma Ying-jeou,and it has therefore been a feat for him to close the deal so soon after his inauguration on May 20. Webelieve this was largely due to the details of the deal having been worked out in advance, with the finalapproval of Beijing awarded to Ma as a 'housewarming present' on his entry into the presidential palace.
Despite this, we envisage that cross-Strait relations are entering a more difficult phase following theinitial months of Ma Ying-jeou's presidency. The focus is likely to remain on economic relations, with apeace treaty between Beijing and Taipei remaining a distant prospect. Nevertheless, we expect Beijing tobe willing to accord Ma some concessions in order to maintain momentum in cross-Strait relations.
While spending on and preparation for defence has, traditionally, been constrained by the assumption thatthe US will prevent China from initiating an invasion of Taiwan, presidential candidate Frank Hsieh hasinsisted that Taipei needs to boost its defence budget to more than 3% of its GDP because of the threat ofattack by China. Taiwan’s cabinet has already announced plans to raise defence spending in 2008 tostrengthen the island's military in response to what it sees as a rising threat from China. The island’sdefence spending is estimated at 2.85% of GDP this year, up from 2.45% in 2006. Though Taiwancontinues to be one of the most significant importers of military equipment in the world, its spending, isstill only a quarter of China's official planned spend this year of US$45bn. A Pentagon report in May saidthat Beijing's total military-related spending could be more than double the official figure.
Taiwan’s Minister of National Defence, Lee Tien-yu also announced at the end of January thatconstruction of a runway on Taiping Island, the most southerly inhabited territory of the Republic ofChina (ROC), has been completed. Taiping Island is one of the largest land masses in the South ChinaSea’s Spratly islands. The construction of the runway has been contentious for neighbouring countriesand incurred protests from the Vietnamese government in 2005. President Chen Shui-bian visited the newisland at the start of February 2008, immediately triggering a fresh protest from Vietnam, while the visitcould additionally trigger protests from neighbouring countries that also claim sovereignty over theSpratly Islands in the South China Sea, including the Philippines, Malaysia, Brunei and China.
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