Taiwan’s Defense Budget: How Taipei’s Free Riding Risks War

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Taiwan spends far too little on its own defense,in large part because the Taiwanese believe theUnited States is their ultimate protector. TheTaiwan legislature’s six‐​year delay and severe downsizingof a budget to pay for weapons systems thatWashington has offered the island since 2001 isonly one piece of evidence of Taiwan’s free riding.Although Taiwan recently approved roughlyUS$300 million of the original budget of about$18 billion, the underlying problem remains: evenwith the new appropriation, Taiwan’s overallinvestment in defense — approximately 2.6 percentof GDP — is woefully inadequate, given the ongoingtensions with mainland China. America is now inthe unenviable position of having an implicit commitmentto defend a fellow democracy that seemslargely uninterested in defending itself.

Taiwan’s political leaders are creating theworst possible combination: the provocativecross‐​strait policy of President Chen Shui‐​bianand the opposition‐​dominated legislature’s irresponsiblepolicy on defense spending. That is ablueprint for disaster. The People’s Republic ofChina has already deployed nearly 1,000 ballisticmissiles across the strait from Taiwan, andBeijing’s military modernization programappears to be oriented toward credibly threateningmilitary action if Taipei’s moves toward independencecontinue. A bold cross‐​strait policycoupled with inadequate defense spending virtuallyinvites a PRC challenge at some point. AndAmerica would be caught in the middle.

It would be dubious enough for the UnitedStates to risk war with an emerging great powerlike China to defend a small client state, even ifthat state were making a serious effort to providefor its own defense. It would be even worse toincur that risk on behalf of a client state that isnot willing to make a robust defense effort. Tominimize the risk of a disastrous conflict,America should promptly terminate any implieddefense commitment to Taiwan.

Justin Logan and Ted Galen Carpenter

Justin Logan is a foreign policy analyst and Ted Galen Carpenter is vice president for defense and foreign policy studies at the Cato Institute and author of America’s Coming War with China: A Collision Course over Taiwan (2005).