Saturday, November 11, 2006

The arms pruchase: additional comments

If you read the Wendell Minnick article at Taiwan Matters carefully, you will see the following sentence:

Officials at the Taiwan Ministry of Defense did not even send lawmakers their first "special budget" proposal to buy the U.S. arms until 2004.

That is true, but it is not the whole truth. The whole truth is more interesting, and it disappears in US commentary on the arms purchase impasse: the price of the subs is outrageous and the delay partly the fault of the US side. The subs were originally offered by Bush in 2001. However, the US navy did not get out a cost estimate on the subs for more than year, not until Dec of 2002. This meant that the Taiwan government did not get a chance to consider the matter until 2003, and of course a year of study was necessary before anything could be decided by the Ministry of Defense (which Chen personally pushed to get the job done), bureaucracies being what they are.

In other words, the delay began when the US dragged its feet issuing a price, and then set that price at three times the world rate, due to US internal politics. Why? If conventional submarines are built for Taiwan, the US will have to do it, because no one else will. However, the US Navy does not want a conventional sub capacity in the US, since conventional subs are cheaper than nukes. The Navy wants nukes, and fears that Congress will make it buy conventional subs if such a production capacity were available in the US. Hence it set the price far too high. Naturally, this insight is missing from comments by AIT chief Steve Young and other Americans who have been pressuring Taiwan to buy subs. As long as the subs are so costly, the KMT's opposition cannot be considered entirely irrational. Time to reduce the price, guys.


Anonymous said...

There is a good article called "China Trigger" on the site that you may find interesting. Its a scenario of the Chinese pulling the plug on us$ purchases.

PS. You are right about the B.T.P.O.T.Apes comment. It took me a long time to find that picture! What a great movie. Listening to the Scott Ritter audio (link on my site) made me instantly think about that scene.

Anonymous said...

I take your point, Michael.

Still, the KMT always had the option of insisting the deal be broken up piecemeal, and then approving the parts they found agreeable (as they're starting to do now with the anti-submarine planes).

Anonymous said...

(Sorry if I double posted that last comment. Wasn't sure if I was seeing a double 'v' or a 'w' in the word verification step.)

Also wanted to mention that the price of the subs is high because of their limited production run. If I asked Toyota to produce a custom line of 8 (and only 8) steam-powered automobiles, they'd quote me a pretty high price, too.

They couldn't turn a profit on volume, so they'd have to do it on the margin.

Chaon said...

Li-ao is only doing his patriotic duty to block these packages for as long as the word 'purchase' is spelled wrong. ;)

MJ Klein said...

reduce the price, or just make them in Taiwan.

Anonymous said...

Every China Post editorial I have seen on the topic of the arms purchase has included that idea, that "Chen did not even submit the budget proposal until three years into his term.."

As if to suggest that if it was really such an urgent matter, he would have done it sooner.

The journalistic standards of that paper are ridiculous. But I admit buying it now and then, just to see what they are saying.

Anonymous said...

Some news on the submarines, as well as the possibility of the F-16 sales going ahead - the latter sounds quite hopeful.