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Taiwan Defence and Security Report Q4 2009

Published by: Business Monitor International

Published: Oct. 21, 2009 - 56 Pages


Table of Contents


Executive Summary
SWOT Analysis
Taiwan Security SWOT
Taiwan Defence Industry SWOT
Taiwan Political SWOT
Taiwan Economic SWOT
Taiwan Business Environment SWOT
Political Overview
Domestic Political Outlook
Foreign Policy Outlook
Security Risk Analysis
BMI’s Security Ratings
Table: Asia Pacific Regional Security Ratings
Table: Asia Pacific State Vulnerability To Terrorism Index
Taiwan’s Security Risk
Conflict Risk
Terrorism Risk
Physical Safety Risk
City Terrorism Rating
Table: BMI’s Asia City Terrorism Index
North and South Asia Security Overview
Security Overview
Internal Security Situation
External Security Situation
Armed Forces And Government Spending
Armed Forces
Table: Regional Armed Forces, 2007 (including conscripted, ‘000)
Weapons of Mass Destruction
Market Structure
Recent Changes
Arms Trade Overview
Industry Trends and Developments
Procurement Trends and Developments
Competitive Landscape
Industry Forecast Scenario
Table: Taiwan’s Armed Forces, 2006-2013 (‘000 personnel unless otherwise stated)
Table: Taiwan’s Government Defence Expenditure, 2005-2012
Key Risks to BMI’s Forecast Scenario
Macroeconomic Forecast
Table: Taiwan - Economic Activity
Company Profiles
China Shipbuilding Corporation
Aerospace Industrial Development Corporation
Combined Service Forces
Chung Shan Institute of Science and Technology
Country Snapshot: Taiwan Demographic Data
Section 1: Population
Table: Demographic Indicators, 2000-2030
Section 2: Labour Market And Spending Power
Table: Employment Indicators, 2000-2005
Table: Consumer Expenditure, 2000-2005 (US$)
Table: Average Annual Manufacturing Wages, 2005-2012
BMI Methodology
How We Generate Our Industry Forecasts
Defence Industry
City Terrorism Rating
Table: Methodology
Sources

Abstract

Despite - or perhaps because of - its status as a renegade province of China, security and defence issuesin Taiwan change little from quarter to quarter. The three months ending September 2009 were noexception.

A highlight was the visit to Taiwan by the Dalai Lama, the spiritual leader-in-exile of China’s Tibetanpopulation. The Dalai Lama went to areas of the island that had been devastated by Typhoon Morakot. InBeijing, the Taiwan Affairs Office (TAO) of the Chinese government noted that the Dalai Lama’s visitwould likely have ‘a negative influence’ on Cross-Strait relations.

In practice, relations between Taiwan and China continue to improve - a point recognised by TAO headWang Yi in mid-September. Taiwanese President Ma Ying-jeou’s administration has achieved a steadystrengthening of cross-Strait links. Indeed, given the need to counter the impact on Taiwan’s exportorientatedeconomy of the slump in trade in the wake of the global financial crisis - and the comparativeeconomic resilience of mainland China - it could be argued that the Taiwanese government has noalternative.

In short, an invasion of Taiwan by China - which has always been a low probability scenario - is mostunlikely, not least because of the economic, military and political costs that it would entail for China.BMI’s assessment of other security challenges in Taiwan, such as crime and terrorism, has delivered oneof the highest overall risk ratings in the Asia-Pacific region.

In absolute terms, Taiwan remains one of the world’s largest importers of defence-aerospace materiel, notleast because the Ministry of National Defence is, like its peers in many other countries, seeking tostreamline and modernise the military. Although US groups remain the principal suppliers, Taiwan hasbeen diversifying its procurement sources, with the result that French and German firms regularlycompete in official tenders.

The indigenous defence industry is dominated by three firms - CSIST, AIDC and CSBC - all of whichsuffer from financial and organisational problems. In spite of the official policy of self-reliance in defenceproduction, foreign groups are the only suppliers that are actually able to provide Taiwan with the hightechequipment that its defence forces require.

Key issues remain the perceived inability of Taiwan’s air force to fight a war with China lasting morethan two days (given the lack of munitions) and the value of various Early Warning and missiledevelopment programmes.

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