0113: Taiwan’s Special Defense Budget, “Taiwanese” Rep. Office in Lithuania, U.S. Support for Lithuania Against Chinese Bullying

Taiwan Passes US$8.56B Special Defense Budget as China Threat Grows

On January 11, Taiwan’s Legislative Yuan passed a special defense budget of NT$236.96 billion (US$8.56 billion) to procure weaponry over the next five years, with the aim of enhancing Taiwan’s defenses against rising Chinese aggression.

The special budget — called that because it is not subject to deficit spending constraints of the regular budgeting process and is separately financed — comes on top of a record annual defense budget of NT$471.7 billion (US$17.04 billion) for this fiscal year.

This special defense budget will be used primarily to buy locally made weapons systems to upgrade Taiwan’s anti-air and anti-surface capabilities, while NT$89.69 million (US$3.24 billion) is to be set aside for logistics and oversight.

Prioritizing locally made equipment creates a “win-win situation” for both Taiwan’s national security and its economy, Taiwan’s Executive Yuan said.

Eight types of weapon systems can be purchased under the special budget: shore-based anti-ship missiles, field and ground-based air defense systems, unmanned aerial vehicles (UAVs), air-to-ground and surface-to-surface cruise missile systems, high-performance submarines, and weapons systems for Taiwan’s Coast Guard.

Notably, the production of the Taiwan-made Tien Kung (Sky Bow), Tien Chien (Sky Sword), and Hsiung Feng (Brave Wind) series of missiles will be supported by this extra funding, Taiwan’s Ministry of National Defense (MND) said.

“[This special defense budget] will also be welcomed by the United States, which often complains that Taiwan focuses too much on large conventional platforms at the detriment of smaller, more dispersible and less costly ‘asymmetrical’ capabilities,” J. Michael Cole, a Taipei-based political and military analyst with the Canadian Macdonald-Laurier Institute, said.

[1] Taipei Times: https://www.taipeitimes.com/News/front/archives/2022/01/12/2003771197
[2] Focus Taiwan: https://focustaiwan.tw/politics/202201110016
[3] Defense Post: https://www.thedefensepost.com/2022/01/11/taiwan-defense-budget/

Lithuanian Government Stands Firm on the Opening of “Taiwanese” Representative Office

Lithuania “stands firm” on its decision to allow the opening of a “Taiwanese representative office” in the capital Vilnius last November, a government spokesperson said on January 5, a day after the Lithuanian president criticized the move that has led to sanctions by China. 

“The Lithuanian government stands firm on its decision to welcome the opening of the Taiwanese representative office,” Vytautė Šmaižytė-Kuliešienė, spokeswoman for the Lithuanian Ministry of Foreign Affairs, told CNA, when asked to comment on Lithuanian president’s criticism on the name of Taiwan office. “Support for democracy and human rights as universal values was part of the coalition agreement and makes up an important part of the government program of Lithuania,” she added.

In an interview on January 4, Lithuanian President Gitanas Nauseda said the office’s official name, “The Taiwanese Representative Office in Lithuania,” was a problem and had become a crucial issue that was strongly affecting his country’s relations with China. “I believe the name was the spark, and now we have to deal with the consequences,” he said.

According to three experts on the issue, Nauseda’s comments were a reflection of an internal power struggle over domestic politics rather than any change in his country’s policy towards Taiwan.

Nausėda’s position on the issue was immediately opposed by Viktorija Čmilytė-Nielsen, speaker of the Lithuanian parliament, who said on January 4 that she did not think the decision of opening the Taiwanese Representative Office was a mistake.

Head of the Lithuanian parliament’s Taiwan friendship group, Matas Maldeikis, also disagreed with Nausėda. “I think supporting democracy in Taiwan is the right thing to do, even if it’s hard,” Maldeikis tweeted on January 4. “The Lithuanian president, like me, should be proud to serve the country that stood up to the threats of the Chinese Communist Party,” he added.

China’s recent retaliatory actions have included recalling Chinese ambassador to Lithuania and expelling the Lithuanian ambassador from China, as well as suspending direct freight train services to the Baltic state and banning Lithuanian products from entering the Chinese market.

[1] Focus Taiwan: https://focustaiwan.tw/politics/202201050022
[2] Taipei Times: https://www.taipeitimes.com/News/taiwan/archives/2022/01/06/2003770844

U.S. Backs Lithuania in Spat with China, While Taiwan Deepens Economic Ties with Lithuania

The U.S. and Germany backed Lithuania in its spat with China, saying Chinese bullying and pressure against the small Baltic nation was unacceptable. Meanwhile, Taiwan pledged investment funds and credit loans to deepen Taiwan-Lithuania economic ties and show solidarity between the two countries amid increasing Chinese pressure.

Last year, Lithuania let the Taiwan office in Vilnius bear the name “Taiwanese,” instead of “Taipei,” which many countries use to avoid “angering” China. Lithuania’s move had infuriated Beijing and led to sanctions by China.

After a meeting in Washington with his German counterpart on January 5, U.S. Secretary of State Antony Blinken said, “we have immediate concern about the Government of China’s attempts to bully Lithuania, a country of fewer than three million people.” 

“China is pushing European and American companies to stop building products with components made in Lithuania or risk losing access to the Chinese market, all because Lithuania chose to expand their cooperation with Taiwan,” Blinken said.

“This isn’t just about Lithuania, but about how every country in the world should be able to determine its own foreign policy free from this kind of coercion,” he said, adding that the U.S. would work with its allies to diversify supply chains and counter “all forms of economic blackmail.”

German Minister of Foreign Affairs Annalena Baerbock also said that “we as Europeans stand in solidarity at Lithuania’s side.”

Meanwhile, on January 11, Lithuania reaffirmed via videoconference its intention to open a trade office in Taiwan this spring, while Taiwan reiterated pledges of US$200 million in investment funds and US$1 billion in credit loans, as the two countries work toward deepening their economic cooperation and ties.

“Whichever companies from Taiwan and Lithuania are interested in investment projects or joint ventures in Lithuania can apply for the investment funds and credit loans,” Taiwan’s National Development Council (NDC) Minister Kung Ming-hsin said. Taiwan can raise the amounts of the investment fund and credit loans, if necessary, Kung added.

Taiwan and Lithuania signed six memorandums of understanding last year on cooperation in semiconductor talent, the semiconductor industry, biotechnology, and scientific research and development, among other areas.

Exports account for 70 percent of Lithuania’s GDP, according to World Bank data. Lithuanian said its exports to Taiwan totaled 19 million euros (US$21.54 million) in 2020, while imports from Taiwan totaled 66 million euros, less than 1 percent of its foreign trade, which indicates that there is ample room for growth.

Minister Kung promised to lend a helping hand and said that a Lithuanian trade office in Taiwan would definitely help expand the scope of cooperation.

[1] Taipei Times: https://www.taipeitimes.com/News/front/archives/2022/01/07/2003770896
[2] Taipei Times: https://www.taipeitimes.com/News/front/archives/2022/01/12/2003771198
[3] Focus Taiwan: https://focustaiwan.tw/politics/202201060003