Election politics and considerations dominated the year 2011 for Taiwan in almost every conceivable way. The January 14, 2012 Presidential/Legislative Yuan (parliamentary) elections were watched not without some anxiety by interested entities well beyond Taipei. Indeed, some of the actions taken by Washington and Beijing during the past year, and in the lead-up to the elections, may even suggest the emergence of a preliminary consensus – if not yet a new paradigm – for managing the complex and often sensitive U.S.-Taiwan-China strategic relationship.

As these critical elections were successfully concluded within two weeks of the end of 2011, this report will try to analyze their results in the context of the traditional defense and security focus of this annual review. The report will also provide an overview of the significant political, cross-Strait, and defense developments during 2011, which should perhaps offer some helpful indications as we look for factors that could influence key defense and national security policy developments during the next four years.

The third quarter of 2011 ended with the long-awaited – as well as repeatedly and seriously delayed – U.S. Government decision on the sale of F-16 fighters to Taiwan. More precisely, the U.S. government notified to Congress its intention to provide to Taiwan a major package of mid-life modernization for its existing F-16A/B fighters – argued by the Obama Administration as being a better option than the sale of replacement F-16C/D fighters.

The U.S. side insists that they have not ruled out selling a new tranche of F-16s to replace aging equipment, and Taiwan President Ma Ying-jeou has renewed calls for the new buy. Nevertheless, the controversial Obama Administration decision spoke volumes of the complex three-way dynamic between Washington, Taipei, and Beijing, and may herald a new reality that could soon confront Taiwan’s national security establishment.

In the meantime, everything related to Taiwan – including defense issues and cross-Strait relations – continues to take a backseat to, and merely serve as backdrop for, the campaigns ahead of the next joint presidential/legislative elections scheduled for January 14, 2012. In the presidential race, incumbent Ma Ying-jeou of the Kuomintang (KMT) faces opposition Democratic Progressive Party (DPP) Chairwoman Tsai Ing-wen in what will be a hotly contested and close race. The addition of Peoples First Party (PFP) Chairman James Soong to the contest adds a complicating factor for both candidates – but particularly for President Ma.

This quarterly analysis report provides a brief overview of significant developments in Taiwan during the past three months, and examines some of the factors that influenced the course of events during the third quarter of 2011. In addition to examining the current political environment in Taiwan, the report will look at defense policy, budget, and procurement issues. It will also provide an update on U.S.-Taiwan defense relations, and a look at the current status of select programs.

Preparations for and campaigning ahead of the upcoming Presidential and Legislative Yuan (LY) elections, which will both take place in January 2012, continued to dominate the Taiwan political environment through the second quarter of 2011. The elections will likely continue to affect the political and economic environment in Taiwan through the remainder of the year.

Defense and national security issues have so far not been central to the election calculus. As presidential election politics intensify, however, greater attention could be focused on President Ma Ying-jeou’s overall record on cross-Strait relations and national defense, and how these policy arenas relate to the economy, the government’s fiscal health, and wealth distribution under the Ma Administration. This is true to a lesser extent of the legislative elections as well. As the overall impact of President Ma’s first term in office gradually becomes discernible, the outcome of the 2012 elections could increasingly rest on a narrow band of middle voters, whose concerns may include a greater emphasis on defense.

For his part, Mr. Ma is clearly eager to achieve a breakthrough in defense sales before the election, in order to address criticisms that his government has been soft – or even negligent – on defense. However, his efforts at lobbying for U.S. action in the desired direction appear both late and inadequate.

This quarterly report provides a brief overview of significant developments in the past three month, and examines some of the factors that influenced the course of events in Taiwan during the second quarter of 2011.

The first quarter of 2011 witnessed the beginnings of the campaign season ahead of Taiwan’s 2012 presidential and legislative elections. Many of the political, cross-Strait, and other policy dynamics during the coming year can be expected to center around this theme. In particular, Taiwan’s 2012 presidential election and its potential impact on the cross-Strait dynamic will be the subject of considerable interest to analysts and policy makers in Taipei, in Beijing, and in Washington, D.C.

Over the past three years, the Ma Ying-jeou Administration’s record on fulfilling its declaratory commitment to Taiwan’s national defense has been lackluster. Whether and/or how this issue might play into the 2012 election also deserves close attention, as President Ma has long been sensitive to accusations – especially by U.S. officials or prominent observers – that he or his government is soft on defense.

This quarterly report provides a brief overview of significant developments in the past few months, examining some of the factors that influenced the course of events during the first quarter of 2011. It will provide an update on Taiwan’s political environment and cross-Strait relations, and offer a discussion on the defense budget and on Taiwan’s move to a volunteer force. In addition, the report will examine U.S.-Taiwan defense relations and the progress (or lack thereof) of select Taiwan arms procurement programs.

2010 could prove to be a defining year in the history of Taiwan’s relationship with China. The two sides signed the Economic Cooperation Framework Agreement (ECFA), a preferential trade agreement, in June, and have been working to continue to expand bilateral trade and cooperation since. Just like the two sides of the Taiwan Strait look to deepening and further broadening their ties, Washington and Beijing are also seriously pursuing mutually beneficial common grounds in their complex tangle of global strategic interests.

Marking the midway point of President Ma Ying-jeou’s four-year term, events in 2010 also prepared the political landscape for the fierce battles ahead in the lead-up to the next presidential election in March 2012. The economy, jobs, partisan unity, cross-Strait dynamics, and U.S.-Taiwan relations will all figure prominently in the 2012 campaigns.

However, issues concerning Taiwan’s defense and national security have not received as much attention as they probably should have so far under the Ma Administration. With much of his defense agenda facing serious challenges, and civil-military relations still rather frosty, President Ma’s record on defense could prove to be a major potential vulnerability as he heads into the 2012 presidential race.

This report provides a brief overview of significant developments in the past year, and examines some of the factors that influenced the course of events during 2010. It will also provide a brief update on the defense budget, on U.S.-Taiwan defense relations, and on the progress of select Taiwan arms procurement programs.

Having achieved a major milestone in cross-Strait relations over the summer with the signing of the Economic Cooperation Framework Agreement (ECFA), Taipei has begun to think more seriously about trying to better position itself for the next phase in its dealings with Beijing.

While notable progress continues to be made, China has consistently proven a shrewd and elusive adversary of ambitious (and unwavering) political objectives. Not surprisingly, there are significant uncertainties ahead, not least of which is the political fortune of President Ma Ying-jeou’s ruling Kuomintang (KMT) party in the upcoming municipality mayoral elections and next year’s parliamentary election, as well as for Mr. Ma’s own re-election in 2012. There are also major challenges on the defense and national security front in the foreseeable future, principally due to, and in the form of, budgetary constraints.

This report will review the major political events that transpired during the third quarter of 2010. It will also discuss the significant defense and national security developments over this period, and will provide a brief update on the progress for select Taiwan arms procurement programs.

Through the second quarter of 2010, the primary focus in Taiwan has been on the trade pact with China. Known as the Economic Cooperation Framework Agreement (ECFA), this is widely considered to be the single most important achievement for the Ma Ying-jeou administration during its first term. The ECFA may have broad-ranging implications – political as well as economic – for years to come. In conjunction with an improving economy, this significant milestone has certainly begun to help President Ma regain some of the popularity he lost since he took office in 2008.

The details of Taiwan’s defense and national security agenda for the next two years remains shrouded, although there are indications that the Ma Administration has begun to contemplate new defense procurement plans – possibly as part of an overall plan to ready Taiwan for eventual political dialogue with China.

This quarterly report provides a brief overview of significant developments during the past three months, and examines some of the factors that influenced the course of events during this period. The report will also cover implications for adding disaster relief to the core mission focus for the Ministry of National Defense (MND), along with a brief look at the status of select programs.

The year 2010 began with encouraging progress for a number of Taiwan’s long-delayed defense programs. But President Ma Ying-jeou may be finding it increasingly difficult to justify his support of continued defense procurements, given his desire to highlight the positive changes in cross-Strait relations as his presidency approaches the mid-term mark. Meanwhile, political battles also loom as the island moves closer to its historic trade pact with China. Reeling from a series of political setbacks in 2009, the Ma Administration has been trying to regain some initiative, with limited success. In addition, fiscal challenges can be expected to continue to hamper Taiwan, despite apparent signs of an economic recovery.

This report provides a brief overview of significant developments during the first three months of 2010, and examines some of the factors that influenced the course of events during this period.