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Taiwan not serious about Paying Market Prices for Submarines

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Taiwan’s 1940s US-built ex-Tench class Hai Shih (foreground) is the world’s oldest serving (but not truly operational) submarine. Taiwan has another 1940s vintage sub. The two ex-Dutch submarines in the background are “new” by comparison. Taiwan wants eight replacements – virtually for free.
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It is beyond doubt that Taiwan relies on a Taiwan Lobby of old American rightwingers and younger paid lobbyists to hopefully pressure the US Government. Taiwanese Cold Warriors hope that the US will return to near conflict with China. China is, however, too important economically to the US, now days. Since the 1970s the US One China policy steadily shifted to the PRC not Taiwan (including the US's weapons' policy).

After WWII the US donated many old Tench and Balao class subs to countries in Latin America, Europe and also Taiwan. After receiving the old US subs, renamed Hai Shih and Hai Bao in 1973,  Taiwan seems to be the only country that still expects such donations from the US. Taiwanese "headlines" like "Establishing a Submarine Development Center" are more a US-Taiwan Lobby lever on the US Government than a Taiwanese intention to foot US$Billions for a whole class of new submarines.

In order to get the Taiwan lobby off his back, in 2001, President George W. Bush made a policy decision he could not keep and never intended to honor. That decision was the US would, by some means, organise the supply of conventional submarines to Taiwan. The central problem, then, as now, is that the US does not build conventional submarines - this is for military, commercial, political and career reasons that are dear to the US.

Tellingly, even in 2001, Taiwan was unwilling to pay market prices to the US or a third country for submarines. Instead Taiwan decided to rely on the US Foreign Military Sales (FMS) system. FMS for submarines - large weapons systems the US did not actually produce - was a non-starter from the beginning.

Also Taiwan wanted medium to large conventional submarines. It would not settle for submarines of less than 1,000 tonnes - more than adequate for Taiwan Straits defense against China...

As well as not paying for the submarines Taiwan had and has ludicrous ideas on how to acquire them. These ideas all involve the US taking on the financial, political and technical burdens upfront and presumably for ongoing upgrades. For example potential scenarioslike:

-  the US buys old submarines from Australia and custom upgrades them for Taiwan.

-  the US organises for Japan to build the Soryu submarines for Taiwan and then Lockheed Martin
   integrates the US highly secret combat system into the submarines

-  that the US pressures Australia to participate with Taiwan in a joint purchase of Shortfins from
   DCNS

-  that the US assists Taiwan in building a submarine production line (in effective competition against    Japanese, South Korean and European submarine makers)

To achieve this Taiwan expects that the US (not Taiwan):

-  obtains submarine blueprints and organises technology transfer (perhaps from Japan? Russia?
    DCNS? Australia? TKMS?).
-  “clones” or "reverse engineers" more of Taiwan's existing two 1960s technology Dutch built 
     Zwaadvis-class design so the US can help Taiwan build more, 
     and/or
-   the US returns to building conventional submarines, but tailor-made, to Taiwan's specifications.

More details in a subscription-only Diplomat article.

Hence even accepting that China is putting up economic obstacles to any US or third country supply of submarines to Taiwan, Taiwan will still not receive submarines. 

1.  As I've said Taiwan needs to be prepared to pay international prices by contract for submarines. Israel, equally unpopular internationally has managed to organise Germany as a long term provider of TKMS Dolphin submarines. Israel is now reputedly paying full prices - including for maintenance. If Taiwan were serious Taiwan would not be waiting for the US to magically give Taiwan submarines.

2.  Countries also need to be confident any submarine secrets passed to Taiwan do not find their way to China in the medium to long term (in any political settlement with China).

3. There is no way around Taiwan building its own - the smaller (for defense) the easier to do.

Pete

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