Aircraft

The USA is likely to decide on Taiwan's request for 66 Lockheed Martin F-16C/D fighters only in 2008, with Washington delaying its approval due to a variety of political reasons.

Taiwan's legislature gave its defence ministry until October to report on the status of negotiations with the USA, after passing and then freezing an initial $450 million budget for the F-X fighter programme in June. At the same session, it approved funding for a separate arms package for equipment including 12 Lockheed P-3C Orion maritime patrol aircraft following a four-year delay that had irritated the US administration and made it drag its feet on approving the F-16 acquisition, first mooted in mid-2006.

Washington is unlikely to give its approval for the $1.3 billion F-16 deal any time soon, say industry sources. October is out as China will hold its annual national party congress then, and will be sensitive to anything involving Taiwan. The USA is also keen on smooth relations with China, as it needs Beijing's co-operation over North Korea.

The USA is also likely to wait until after Taiwan's presidential elections next March, say the sources. Washington is believed to favour Kuomintang candidate Ma Ying-Jeou, who has a more conciliatory approach to China, over the Democratic Progressive Party's Frank Hsieh, who is said to favour seeking unilateral independence.

"The legislature may have an October deadline, but it is out of Taiwan's hands," says a Taipei-based industry source. "The US can release the F-16s when it pleases, and it is increasingly careful about China's sensitivities. If Hsieh is elected, it could delay the decision even further."

Taiwan urgently needs new F-16s to refurbish its air force. Its ageing Northrop F-5s are increasingly accident-prone, half of its Dassault Mirage 2000s are believed to be grounded due to a lack of spares, and its indigenous F-CK-1s require upgrade, placing much of its reliance on around 150 ageing F-16A/Bs.