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The defense industry of Taiwan is a strategically important sector and a significant employer. They primarily supply weapons and platforms to the Republic of China Armed Forces with few major weapons systems exported abroad. With foreign assistance the Taiwanese defense industry has produced fighter aircraft, missile systems, surface ships, radars, rocket artillery, armored vehicles, and small arms.

History

The defense sector was reinvigorated following the recognition of the PRC by the United States in 1979 and the subsequent uncertainty this injected into the US-Taiwan relationship. The KMT government aimed to eventually achieve full self sufficiency in weapons systems.

In 2014 the Aerospace Industrial Development Corporation was privatized with the government retaining a 39% stake and the National Chung-Shan Institute of Science and Technology was made an administrative corporation of the government rather than a constituent of the Armaments Bureau.

Under President Tsai Ing-wen there was a renewed focus on indigenous manufacturing, particularly of air defense and anti-ship missile systems.

Manufacturers

The National Chung-Shan Institute of Science and Technology and the Aerospace Industrial Development Corporation are the only two Taiwanese defense companies with the capabilities of a full defense prime. In addition to the big defense firms there are more than 200 small and medium businesses involved in the defense industry.

Law and regulation

In 2019 the Legislative Yuan passed the National Defense Industry Development Act which among other things instructed the Ministry of National Defense to evaluate prospective defense companies and rank them in three tiers based on their technological capability, the size of their operations and their experience in researching, developing, manufacturing and maintaining military equipment, as well as their track record working with academia, businesses or foreign companies.

Later in 2019 the Legislative Yuan passed a bill which encourages foreign direct investment in the defense industry and other ”strategic” industries. The bill allows foreign investors in these sectors to claim "special tax rates" and also tax rebates of up to half their tax bill.

Exports

The T65 and T91 assault rifles have been widely exported and the upper receiver for the T91 has been sold on the US civilian market. Taiwan has not exported any major high-end weapons systems but the Taiwanese Government is becoming more open to the idea.

Trade shows

The Taipei Aerospace & Defense Technology Exhibition is the primary Taiwanese defense industry trade show, it is held biennially.

See also

• Defense industry of Israel
• Defense industry of Russia
• Defense industry of Japan

References

1. David An; Matt Schrader; Ned Collins-Chase. "Taiwan's Indigenous Defense Industry: Centralized Control of Abundant Suppliers" (PDF). globaltaiwan.org. Global Taiwan Institute. Retrieved 9 January 2020.
2. "Taiwan's Modest Defense Industries Program" (PDF). www.cia.gov. Central Intelligence Agency. Retrieved 9 January 2020.
3. Pocock, Chris. "Taiwan's Good Technical Offer Is Affected By Politics". www.ainonline.com. AIN Online. Retrieved 9 January 2020.
4. "Meet the New Military-Industrial Complex in Taiwan". www.newdelhitimes.com. New Delhi Times. Retrieved 9 January 2020.
5. ^ Press, Associated (2018-05-14). "Taiwan keen to boost domestic defence industry amid rising tension with Beijing". www.scmp.com. Associated Press. Retrieved 10 January 2020.
6. Du, Eric. "VIEWPOINT: Business Opportunities for U.S. Defense Firms Abound in Taiwan". www.nationaldefensemagazine.org. National Defense Magazine. Retrieved 9 January 2020.
7. "Taiwan sanctions Defence Industry Act". www.newdelhitimes.com. New Delhi Times. Retrieved 9 January 2020.
8. Grevatt, Jon. "Taiwan looks to incentivise foreign investment in defence". www.janes.com. Janes. Retrieved 17 January 2020.
9. Chin, Johnathan. "Thousands of T91 rifles sold in US in one day: report". www.taipeitimes.com. Taipei Times. Retrieved 9 January 2020.
10. Ferry, Timothy (2019-11-14). "Growing Pains in Taiwan's Defense Sector". topics.amcham.com.tw. The American Chamber of Commerce. Retrieved 10 January 2020.
11. Minnick, Wendell. "Taiwan Defense Show Exhibits New Weapons". www.defensenews.com. Defense News. Retrieved 27 January 2020.

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• Military industry by country
• Industry in Taiwan
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