Report

A Midterm Assessment of Taiwan’s First Quadrennial Defense Review

Dr. Alexander Chieh-cheng Huang

Nearly two years ago, on March 16, 2009, Taiwan’s Ministry of National Defense (MND) submitted the first Quadrennial Defense Review of the Republic of China (QDR) to the Legislative Yuan and became the second country, after the United States, to issue such a defense strategy and planning document every four years.

Taiwan’s first QDR is half way through its implementation, and a midterm assessment is warranted and useful.[1]

Inception

Since 1992, Taiwan’s MND has published 10 volumes of its National Defense Report of the Republic of China (NDR), commonly known as the defense white paper, as an effort to promote transparency in defense affairs alongside the process of rapid democratization in Taiwan politics. The practice was codified in the National Defense Act of 2000, requiring the defense ministry to issue the NDR regularly.   

Modeled on the concept and rationale of the U.S. Quadrennial Defense Review, in July 2008, Legislators Lin Yu-fang (KMT), Liu Sheng-liang (KMT), and Tsai Huang-lang (DPP)—the three conveners of the Foreign and Defense Affairs Committee of the Legislative Yuan (LY)—cosponsored an amendment to Article 31 of the National Defense Act. The amendment requires the MND to submit a QDR to the legislature within 10 months after every presidential inauguration—in other words, every four years at the most. The objective of this amendment, according to Lin Yu-fang, was to ask each newly-elected President to “thoroughly review the defense policy of the past four years” with the Ministry of National Defense “and lay out major issues for the next four years.”[2]

The advent of the QDR process in Taiwan is significant, as it will enhance civilian control over defense affairs, advance parliamentary oversight of defense policies and programs, and better connect defense strategy with available resources.

Conceptual Clarification 

There was some confusion, if not tacit suspicion, within policy circles when the idea of a QDR for Taiwan was first introduced. First, some questioned the term “review” (jiantao) itself, which in Chinese does not suggest a future-oriented policy planning, as the QDR intends, but instead implies evaluation of the past policy practice and execution.

Secondly, some have insisted that the long-practiced biannual publication of defense white papers already covers all major areas of defense affairs. In addition, the LY already required quite a few annual MND reports on topics such as policy planning and implementation, and military capabilities of the People’s Liberation Army. The necessity of yet another policy document was brought into question.

Thirdly, and more importantly, was that for decades Taiwan’s defense planning has been built upon a trinity of rolling review cycles: 10-year modernization planning (jianjun gouxiang), 5-year force planning (bingli zhengjian), and annual policy planning (shizheng jihua). The introduction of a 4-year cycle of defense planning like the QDR would have to match up with existing planning practice to ensure smooth implementation.

The Integrated Assessment Office (IAO) of the Office of the Minister of National Defense was designated the task of drafting the first QDR. The IAO’s initial draft was then circulated among departments, bureaus, and the Joint Staff for comments. External civilian subject matter experts were also involved in the deliberation process. Finally, consensus was reached that the QDR is defined as future-oriented, provides principal policy guidance, and will govern the regular review of the abovementioned planning trinity.      

The Main Themes

Taiwan’s first QDR has two main themes: prevention and transformation. The overall modernization of the nation’s defense is necessary to prevent military conflict in the Taiwan Strait, as it will raise the threshold and the cost for Chinese aggression. This will complicate China’s operational plans and can therefore deter potential intentions to use force. Transformation of the armed forces and the national defense strategy is necessary to enable the military to deal with the changing nature of modern warfare, advanced weapons systems, demographic change, an aging society, and limited financial resources.

For prevention, the Ma Ying-jeou administration does not rely solely on modernizing and building up its forces, but also strives to build manageable cross-strait relations—as well as closer defense collaboration with friends and allies in the Asia-Pacific region. The peaceful and stable environment that has prevailed across the Taiwan Strait for the past two-plus years under this strategy has allowed Taiwan to focus more on revitalizing it economy after the recent financial and economic crises, and to begin to undertake its military transformation.

For transformation, the ministry emphasizes reorganization, force restructuring and the need for jointness. The most ambitious reform program is revolutionizing Taiwan’s nearly 60-year-old conscription system and moving to an all-volunteer force capable of meeting the demands of high-tech warfare. The first QDR calls for the armed forces to cut 60,000 personnel and integrate the military police, reserve force, and joint logistics commands. In short, the Taiwanese military intends to build a smaller, more professional force with joint combat capability.[3]

Implementation of the QDR

In early April 2009, two weeks after the QDR was delivered to the LY, the MND issued an executive order requiring all subordinated agencies and commands to follow the QDR as guiding principles for every policy, program, and readiness planning. To ensure that the QDR mechanism will parallel the 4-year presidential terms and will function as a regular policy review, on July 1, 2009 the MND put in place the “QDR implementation and evaluation mechanism” to manage and control the pace and effectiveness of defense programs highlighted in the QDR.

According to the author’s conversations with senior MND officials, the mechanism requires series of internal working progress and review sessions chaired by a vice minister (Under Secretary-equivalent) every 3 months, and by the minister every 6 months.

The mechanism evaluating the implementation of the current QDR traces the 18 items listed in Chapters 3 and 4 of the document. The following are key developments that have taken place since the first QDR was released:

· The MND has incorporated the policy guidance of the QDR into the “National Military Modernization Planning for FY 2011-2020” in October 2009.

· In January 2010, the MND issued “Force Structuring Planning for FY 2011-2015,” aimed at the reduction of military manpower down to 215,000 personnel as indicated in the QDR.

· For the transformation of military service from the “dual-track of conscript and volunteer” to “full volunteer” system, the MND has submitted to the LY its proposed amendments to the “Military Service Act,” “Provision on Service of Military Officers and Non-Commissioned Officers,” “Provision on Service of Volunteer Enlisted Soldiers,” and “Provision on Military Medical Insurance”; the latter two were passed by the LY in 2009.

· The MND has decided to build military capability focusing on joint operations requirements, with emphasis on four areas: basic warfighting capability, asymmetric capability, sustainable capability, and disaster relief and crisis response.

· Since the QDR was issued, the LY has not yet called for hearings or special reports to monitor the progress and implementation of the QDR. The MND, however, has included its undertakings in its regular policy reports, volunteer force planning reports, and force restructuring reports to the LY.

Financial Challenges   

When the MND started drafting the first QDR, there were known factors that would make four-year planning difficult, such as China’s growing access denial capability, the beginning of the global financial crisis, the financial burden of the volunteer military system, and uncertainty about a modernization program based on foreign acquisitions.

But the primary challenge to the defense modernization plans laid out in the QDR is the lack of financial resources. Taiwan’s economy has been significantly damaged by the global financial crisis that began roughly with President Ma Ying-jeou’s term in office. The bad economy brought fewer revenues and more deficits: Taiwan’s national debt has risen from NT$ 4.32 trillion in 2009 to NT$ 4.47 trillion (approximately US$ 154 billion) at the end of 2010.[4] For FY 2011, Taiwan’s central government budget deficit and special budget deficit are anticipated to be NT$ 363 billion, approximately US$ 12.5 billion or 2.63% of Taiwan’s estimated GDP.[5]

With the recent cross-strait rapprochement, an unspoken public sentiment expecting a “peace dividend” has placed the MND in a politically difficult position when it comes to asking for its needed share of national revenue. Although the MND tries to propose an expanded annual defense budget up to 3 percent of the national GDP, the approved official MND budget dropped from NT$ 325.6 billion (2.51% of GDP) in FY 2009 to NT$ 297.2 billion (2.15% of GDP) in FY 2011.[6]

The transformation the armed forces to an all-volunteer force is another cash-draining program highlighted in the QDR. Even as the military continues to cut the number of personnel, it is estimated that the gradual introduction of a total volunteer force will require approximately US$ 5 billion per year in personnel costs in the next five years from FY 2012 to FY 2016, almost 1 percent of GDP and almost half of the official defense budget.[7]

In addition, according to Legislator Lin Yu-fang’s preliminary estimate, the funding required for the U.S. approved and executable arms procurements from 2011 to 2014 is around NT$ 201.1 billion. Procurements that Taiwan hopes to make, but which have not yet been approved, add significant additional costs. For example, costs for an “F-16 A/B upgrade”– the request that is most likely to be approved by Washington in the short term – and 3 other hoped-for items including new F-16C/Ds, Newport-class tank landing ships, and a feasibility study of diesel-electric submarines, are estimated at NT$ 182.8 billion. In Lin’s assessment, given that military investment funding for 2011 to 2014 is planned at NT$ 330.7 billion, there would be a budget shortfall of NT$ 53.2 billion (US$ 1.78 billion) in the coming 4 years if both the existing approved procurements and desired procurements are budgeted.[8] It is inconceivable that all four major new requests will be approved at once, but even the most likely procurement, the F-16A/B upgrade, will entail a considerable financial burden.

Consequently, there is a need for senior civilian leaders to give serious attention to the funding requirements that will enable implementation of the strategy laid out in the first QDR. Of course, a better economy and expanded national wealth, i.e. making the pie bigger, would be the best solution to this dilemma. But more realistically, difficult choices will likely have to be made, and all sides in the debate should be prepared to compromise, in order to find the combination of policies and expenditures that will best enable Taiwan to strengthen its economy, society, and defense.

China’s Military Rise

Taiwan clearly faces external threats that require modern self-defense capabilities. Since the rapprochement across the Taiwan Strait began in mid-2008, the Chinese intention of using force against Taiwan has seemed to recede, but there has been almost no sign that the pace of Chinese military modernization has slowed down.[9] On the contrary, evidence has shown significant progress of PLA capability in force projection capability, enabling it to enforce its anti-access and area denial strategy against possible foreign forces operating in the Western Pacific. In the past 2 years, the Chinese military inventory, as well as activities has expanded. New, or newly publicized, capabilities include:

· the deployment of short and medium range ballistic missiles along the southeast coastal provinces continue to grow;

· the development of the DF-21 anti-ship ballistic missile (ASBM);

· the open display of Chang Jian/CJ-10, or Dong Hai/DH-10 long range cruise missiles were in open display,

· improved avionics for ground attack capability for the J-10B jet;

· the open promotion of the construction of aircraft carriers by PLA senior officials and the development of carrier-based J-15;

· the test flight of the J-20, a prototype of China’s first stealth fighter;

· newly commissioned submarines, underway replenishment ships, and landing ships;

· penetration of the first island chain by a PLA Navy squadron which cruised a long distance to the Japanese-claimed Okinotori Islands deep in the Pacific; and

· implementation of PLA Navy exercises within the entire first island chain from the Yellow Sea to the South China Sea, areas considered by the Chinese “core interests.”

Foreign Military Acquisition

President Ma Ying-jeou has stated more than a dozen times that Taiwan is striving for a military capability to defend itself, but that it has no intention of engaging in a competitive arms build up. However, the Taiwanese military is encountering tremendous challenges simply trying to maintain a self defense capability. There are both political and administrative reasons for these difficulties, which include the lack of assured security assistance from democratic allies, and the difficulties in securing timely supply for the replacement of obsolete systems.

President Ma echoed the Pentagon’s views that Taiwan should focus its modernization along the concepts of “innovation” and “asymmetry.” Foreign military and technological assistance, especially from the U.S., is essential to developing such capabilities, which will help support Taiwan’s strategy of preventing conflict across the Taiwan Strait. In his recent conversation with Raymond Burghardt, chairman of the American Institute in Taiwan (AIT), President Ma stressed the growing gap in military power across the Taiwan Strait has become a common concern of Taiwan’s citizens, and would be a challenge to cross-strait ties and regional stability. President Ma reiterated: “We have long hoped to acquire F-16 C/Ds and diesel-electric submarines . . . The purpose of Taiwan’s weapons acquisition plans was not to pursue a military buildup but rather to replace aging aircraft and submarine fleets.”[10]

Renewing Security Relationships


Taiwan’s security and defense planning is closely tied with China’s economic and military rise, and with U.S. reengagement in the Asia-Pacific region in the 21st century. In addition to a smart Mainland policy and careful management of cross-strait relations, a strong and sustainable Taiwan military can contribute to peace and stability in the Taiwan Strait and the Western Pacific. In a more direct sense, the future of the long standing Taiwan-U.S. security cooperation and American strategic interests in Asia would be better served if both sides communicate more frequently in articulating their strategic thinking and defense planning.

Countries in the Asia-Pacific region, as well as Taiwan, welcome a normal military-to-military relationship between the U.S. and China, but they believe it should not be pursued at the expense of common security relationships between the U.S. and long term friends and allies. Taiwan’s military can best contribute to the region with enhanced capabilities in intelligence, surveillance, reconnaissance (ISR); integrated air and missile defense (IAMD); and joint anti-submarine warfare (ASW). Regular sales of defensive systems to Taiwan and the strengthening of U.S.-Taiwan security ties do not necessarily weaken China’s “core interests,” as all three parties prefer cooperation over confrontation, and all will benefit from security in the region.

Taiwan’s adoption of the quadrennial defense planning guidance reflects not only its commitment to a better civilian control and parliamentary oversight over the military, but to a better convergence of national resources and strategic planning. In about 15 months, in May 2012, when Taiwan holds its next presidential inauguration, the Taiwan military will begin to work on the next QDR. Within this framework, both Taipei and Washington, if desired, will have sufficient time to work together and pursue a better common agenda toward their future defense planning.


[1] “Quadrennial Defense Review 2009,” Ministry of National Defense, March 2009, http://www.mnd.gov.tw/qdr/.

[2] Huang Ming-xi, “Tai liyuan chushen: Guofangbu shunxiang liyuan ti sinianqi zong jiantao,” Da Ji Yuan (Epoch Times), July 14, 2008 http://www.epochtimes.com/b5/8/7/14/n2190657.htm. Taiwan’s presidential inaugurations normally take place on May 20, two months after the presidential election every four years. The last inauguration, of President Ma Ying-jeou, took place on May 20, 2008.

[3] See Alexander Chieh-cheng Huang, “The Road Ahead for the ROC Military,” Taipei Times, March 20, 2009, P. 8.

[4] Lin Yi-feng, “Guozhai qiaozhong: meiren qian 20.4 wan yuan,” Zhongyangshe (Central News Agency), January 7, 2011, http://www.cna.com.tw/SearchNews/doDetail.aspx?id=201101070060&q=%e5%9c%8b%e5%82%b5.

[5] Chen Jin-ji, “Jianshi yibainiandu zhongyang zhengfu zong yusuan an,” Taiwan Brain Trust, October 17, 2010, http://www.braintrust.tw/print.php?article_id=522.

[6] The “official” defense budget refers to the actual funding for MND’s operations. “Expanded defense budget” includes reconstruction funds for old barracks and old residence quarters of military relatives, and funds generated from military productions and services.

[7] Private studies show that an all-volunteer army is financially affordable if the government commits 3% of the GDP to the actual official defense budget. See, Liu Li-lun, “Quan mubingzhi tuidong yu guofang yusuan – zhanli jujiao de guofang zhuangxing,” at Legislator Shuai Hua-ming’s webpage: http://www.ans.org.tw/detail_page.php?category=04&tid=172#_ftn5.

[9] See Richard Bush, “Taiwan Faces Growing Threat: Communist China Undermines Rapprochement,” The Washington Times, September 8, 2010, https://www.brookings.edu/opinions/2010/0908_taiwan_bush.aspx; and Yuan-Kang Wang “China’s Growing Strength, Taiwan’s Diminishing Options,” Taiwan-U.S. Quarterly Analysis, The Brookings Institution, November 2010, https://www.brookings.edu/papers/2010/11_china_taiwan_wang.aspx.

[10] “F16 C/D Fighters Needed to Redress Military Imbalance: Ma,” Want China Times, January 25, 2011, http://www.wantchinatimes.com/news-subclass-cnt.aspx?cid=1101&MainCatID=11&id=20110125000140.

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