In a recent series of articles in the Global Taiwan Brief on the importance of new submarines for Taiwan’s defense capability, GTI Senior Fellow David An argued that, rather than seeking to develop submarines entirely on its own, Taiwan would be better off buying some of the more high-tech components needed. He suggested that this might be possible through discreet international cooperation. The case for doing so is strong. Unfortunately, it understates the political, technical and economic challenges involved.
That Taiwan badly needs new submarines is not in doubt. But new submarines do not come cheap. The United Kingdom is currently rolling out its new Astute class submarines, nuclear-powered but conventionally armed. The country has a long history of submarine building. It launched its first submarine in 1901 and its first nuclear submarine in 1960; but, despite this experience, the Astute program has been plagued by delays and cost overruns. The first vessel was launched more than 3 and a half years behind schedule and, according to Defense Industry Daily, the first three vessels cost more than US $1.5 billion each.
At 7,400 tons, the Astute class is much bigger than Taiwan’s requirements, for which a more appropriate comparison is probably the Republic of Korea’s KSS-III program. This is planned as a successor to the KSS-II class now entering service, which is a locally built version of Germany’s successful U-214 class of diesel-electric submarines. At around 1,800 tons, the KSS-II are less than half the size of the Astute class; the KSS-III program anticipates a larger design of around 3,000 tons. Work on the KSS-III program started in 2007, but like the Astute program in the UK, it has been beset by delays. Although the first submarine was originally planned to be in service by 2017, the date has been pushed back at least twice and is currently set for 2025. So far, a budget of one trillion won (US $850 million) has been committed, and each vessel is expected to cost about this amount when it enters into service. But, with entry into service nearly a decade away, the final cost is almost certain to rise.
By the time the first KSS-III enters service, Korea will have built 18 vessels under the KS-I and KS-II programs, giving it valuable experience in submarine construction. For Taiwan, new to building submarines, overall costs will inevitably be higher. The design and construction skills required are of a different order of magnitude than those for a conventional surface vessel, so it would seem prudent to budget on the basis of a minimum cost of around US $1 billion per vessel. Are Taiwanese politicians willing to commit to spending on this scale? The history of defense procurement in the country is a litany of projects that were delayed or never proceeded because insufficient funds were allocated at the outset. It is essential that legislators fully understand and accept the real costs involved from the outset if the submarine program is not to suffer the same fate. So far, just NT $3 billion (US $93 million) has been committed to the program.
Despite Korea’s experience in submarine construction, it still needed to seek overseas advice on the KSS-III program, especially on the design technology. And while the overall final design is likely to have been developed indigenously, it will more likely than not continue to rely heavily on foreign suppliers for many of the specialized components. Herein lies the second and greater challenge for Taiwan. David An suggests this could be possible through discreet arrangements made on a Direct Commercial Sales (DCS) basis. But any sale of defense technology, including dual-use technology (suitable for both civil and military use) requires an export license from the manufacturer’s host government. After the US government agreed to help Taiwan acquire conventional submarines in 2001, China quickly realized that the United States no longer had the capability to build such submarines and lobbied successfully to secure undertakings from other governments that their industries would not be involved in the program in any way. No major defense contractor would dare consider assisting Taiwan without the clear approval of its government to do so. And, as David An rightly suggests, no European government is currently willing to stand up to China and authorize such sales.
FMS sales, by contrast, are US government-mandated and accord the suppliers a degree of protection against Chinese retaliation, as they can legitimately claim that they are complying with US government obligations by supplying the equipment. This approach has allowed major US defense manufacturers to continue to undertake civil business in China while helping meet Taiwan’s defense needs. Honeywell, Rockwell Collins, and Lockheed Martin for example, all of whom have been significant suppliers to Taiwan over the years, also have successful operations in China. But perhaps the best example is Sikorsky Helicopters. Owned until 2015 by United Technologies, the scale of its business in China meant that its sale to Lockheed Martin required Chinese regulatory approval (which was granted).
So, rather than seeking specific technology through the DCS route, Taiwan’s submarine developers would be better advised to agree at the outset what specific technology is likely to be beyond the scope or capability of domestic production, then seek procurement of these through FMS contracts for individual components. Assuming this approach can be agreed upon by the US government, the Korean experience has shown that outside advice on the design and other aspects will remain essential going forward. In current circumstances, it is highly unlikely that European governments would be willing to agree even to this. Nor would the Korean government be likely to risk incurring Chinese anger by doing so. Japan, however, has a submarine building program, losing out recently to France in a competition to supply Australia. Japan and Taiwan also have a shared interest in resisting any threat from China to the freedom of navigation in the East China Sea and a history of discreet military contact and exchanges. There are, therefore, good strategic reasons for Japan discreetly to help Taiwan develop its own submarines.
As a final thought for Taiwanese policymakers, a submarine program may seem expensive, whether bought from elsewhere or built domestically. But civil society abounds with technology that originated in military programs, GPS navigation technology being just one example. The Taiwanese government already commits considerable sums to R&D programs and to supporting domestic industry. Encouraging domestic industry to work in this area would encourage the spread of innovation, new ideas and new product lines for Taiwan manufacturers, thereby bringing wider and longer term benefits to the economy.
The main point: In undertaking an indigenous submarine program, Taiwan needs to be aware of the extremely high cost and the large amount of time it will require to complete. In addition, while some argue that buying components from other countries would be more cost effective, Taiwan faces significant amounts of political obstacles from working with other countries, with the possible exception of Japan.