To Strengthen Defense, Taiwan Must Revamp Its Military Procurement  – The Diplomat

As a country that faces significant external threats from China, Taiwan has consistently prioritized military procurement—whether by purchasing foreign weapons or relying on domestic defense suppliers—as an essential component in strengthening its self-defense capabilities. In November 2024. media reports revealed that the Taiwanese government is “considering buying a large package of US weapons” in response to incoming US President Donald Trump’s expectations that Taiwan will have to increase its defense budget.

In fact, Taiwan’s military spending has increased significantly since the Democratic Progressive Party (DPP) took office in 2016. Defense spending it is expected to rise to $20.25 billion next year, representing an increase from 2.38 percent of GDP this year to 2.45 percent in 2025.

Nevertheless, Taiwan’s military procurement has long been plagued by deep-seated problems that require thorough examination and significant reform to improve defense capability.

Issues surrounding Taiwan’s military procurement

Like many countries, Taiwan obtains most of its major military equipment and weapons from foreign suppliers, but has also made great efforts to encourage domestic entities to develop their manufacturing capabilities in recent years. More questions they appeared during the procurement process involving the Ministry of National Defense (MND), private arms manufacturers, and especially arms sales intermediaries. In addition to foreign military sales from the United States, international arms dealers have been unable to directly and openly sell arms to Taiwan’s MND due to political pressure from China, creating opportunities for middlemen to facilitate these transactions.

In the early 1990s, a political scandal broke out over the sale of six French La Fayette class frigates the Taiwanese Navy. Several high-ranking officials from France, as well as Taiwan’s Kuomintang (KMT), allegedly received bribes amounting to $500 million in commissions paid by French arms manufacturer Thomson-CSF.

In 1993 Andrew Wang, a Taiwanese arms broker for a French company involved in the deal, fled to the UK after Yin Ching-fenga Taiwanese military officer responsible for naval procurement, was found dead under suspicious circumstances near the coast. A total of eight people have died in mysterious ways in connection with this landmark scandal in Taiwan’s military history, involving authorities from Taiwan and France.

Most importantly, the La Fayette frigate scandal highlights the negative effects caused by arms dealers – such as Andrew Wang and others (e.g. Shan Yi-chengveteran and broker involved in another scandal involving Yin) involved in military affairs. These middlemen are primarily retired military officers with close ties to the KMT, which ruled Taiwan continuously from the end of World War II until 2000.

The networks forged between the military and retired officials turned arms dealers have survived through continued arms deals. Even after Taiwan’s democratization and election failure, individuals sought to join the networks as middlemen to grab some of the lucrative profits made in arms deals. These actors often lack knowledge about weapons, but maintain strong ties between government and business.

Since 2016, Program of indigenous defense submarines – one of the DPP’s key policies under President Tsai Ing-wen’s administration – is considered a vital component of Taiwan’s self-defense strategy, but also faces numerous challenges, particularly during the tender process. According to newspaper reportsthe company that successfully facilitated the $32.41 million submarine construction contract, Gavron Limited, has come under scrutiny for its weapons manufacturing credentials and capabilities. The Gibraltar-based consultancy was described as resembling a shell company, raising further suspicions.

Gavron Limited is affiliated with Kuo Hsia Taiwanese arms dealer and former naval officer who served under Yin and left the army after Yin’s death. The implication is that arms agencies remain a significant presence in Taiwan’s military procurement process.

Inside Taiwan: Challenges and Opportunities

Building on my personal experience with Taiwan’s defense policy and industry, more attention needs to be paid to how the authorities support and cooperate with domestic suppliers, in addition to foreign arms sales.

In 2023, I traveled to the United States with several friends, all military enthusiasts, to test resistance of plates to bullets it is used in bulletproof vests produced by the MND Ordnance Office. To our surprise, the results of our tests revealed that the plates could not only be penetrated by a bayonet, but also dented by three types of cartridges: M855/M193 (5.56 NATO), M80 (7.62 NATO) and 7.62 Soviet , which are comparable to the equivalents used by the Chinese military. These troubling revelations quickly caught the attention of the public in Taiwan.

However, MND he asserted that all vests purchased by the military meet the ballistic resistance standard set by US authorities 20 years ago. Clearly, such an outdated standard is not sufficient to protect Taiwanese soldiers in a potential armed conflict across the Taiwan Strait, especially given China’s rapid military development over the past years.

Moreover, bulletproof vests also represent a financial problem. According to Taiwan’s military, a two-panel vest costs $1,100, while a higher-standard panel vest that can withstand Chinese rifle ammunition costs just $200 in the United States. Moreover, similar vests and panels could probably be produced domestically in Taiwan at an even lower cost.

Personal military equipment may not be as expensive as tanks or fighter jets, but this incident – seemingly just the tip of the iceberg – raises further questions, especially about how Taiwan can purchase weapons and military equipment that meet its needs and are reasonably priced. . Taiwan’s reliable manufacturing capabilities and advanced techniques in certain fields provide a solid foundation for the development of the defense industry community, which could serve as a viable solution to the above issues.

In other words, cooperation between the military and domestic suppliers is essential not only to strengthen Taiwan’s defense industry, but also to ensure that the military acquires weapons without being undermined by scandal or corruption stemming from arms brokers, who exploit information asymmetries in the procurement process. For example, the establishment of the Taiwanese “Drone representation”, which connects the military with domestic companies in the drone industry, is a positive step forward. However, we face challenges similar to those facing the indigenous defense submarine program, as there are some techniques or equipment that need to be sourced from foreign suppliers.

Therefore, Taiwan’s military challenges cannot be solved by simply supporting the domestic defense industry. There are still problems in the procurement process, even when the suppliers are domestic – not to mention the constant reliance on imports of critical technologies and weapons from abroad. From this perspective, the fundamental key to Taiwan’s self-defense lies in establishing well-functioning institutions to oversee arms manufacturers and their agencies, and this approach is not mutually exclusive with building a resilient defense industry.

On the other hand, the frequent occurrence of scandals in military procurement can significantly undermine public confidence in Taiwan’s armed forces. This is of particular concern as Taiwan’s government seeks to expand its defense budget to cope with rising military sales and develop domestic suppliers – efforts that require support both from the legislature and the people of Taiwan. A well-institutionalized military procurement practice is essential to bridge public support for Taiwan’s goal of strengthening its self-defense capabilities.