Tue, May 15, 2018 - Page 3 News List

Reporter’s Notebook: Defense forum highlighted opportunities, problems

By Aaron Tu  /  Staff reporter

The Taiwan-US Defense Business Forum in Kaohsiung, attended by business representatives and former government officials, has opened the door for Taiwan to enter the global defense supply chain.

The meeting on Thursday was part of the annual US-Taiwan Defense Industry Conference, but it was the first time Taiwan had hosted such an event.

Defense corporations represented in the forum included Lockheed Martin and BAE Systems, while a former commander of the US Army Pacific, retired lieutenant general Francis Wiercinski, represented US-based Cubic Corp.

Most of the Taiwanese corporate representatives expressed confidence in their companies’ technical capabilities, a view echoed by their US counterparts’ appraisal of local enterprises.

However, the forum also made it abundantly clear that the government has an indispensable role in ensuring the sector’s future. No other entity appears capable of facilitating the integration of defense industries and guiding the sector’s growth, let alone pushing passage of a national defense industry revival bill.

In the 1990s, the nation built Cheng Gong-class frigates and Aerospace Industrial Development Corp (AIDC) built F-CK-1 jets, while the Chungshan Institute of Science and Technology directed upgrades to the Tien Kung and Hsiung Feng missiles.

However, those hard-won defense industry capabilities were dissipated by shifts in the international political situation and the nation’s defense budget priorities over the following years.

President Tsai Ing-wen’s (蔡英文) administration should, in implementing its defense industry self-sufficiency platform, pay close attention to the global division of labor and to the nation’s reliance on foreign sources for crucial technologies.

To address those issues, the government has to inventory the capabilities of the local defense industry and communicate its demands to the US about obtaining needed technologies.

To that end, establishing unofficial channels of communication through private-sector actors would bypass political minefields, provide an opportunity to nudge the private sector toward upgrading its technologies and obtain arms for the military.

The efficient integration of resources and leading companies in investing in technology are among the greatest challenges the government will have to confront.

While the nation’s manufacturers are confident about their technological capabilities and the quality of their products, they admit they lack the certification essential for collaborating with foreign industries.

The defense industry’s supply chain has also not been systematically integrated, they said.

There are other questions for the government to ponder, such as whether it is worth relying on Taiwan-US private-sector dialogue to create a stable platform for exchange that would allow the nation’s defense industry to keep pace with international trends.

Another issue is that the government might have to select or create an entity to oversee the integration of resources and production capacities for the ship-building program.

It also appears that a streamlined system for bringing together the products and capacities of the national defense industries would be needed.

While the text of the draft act to revive national defense industries was completed last year, the Legislative Yuan has yet to review it.

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