US lends Taiwan $2 billion to buy American defense equipment

U.S. President Joe Biden may have made a Christmas gift to Taiwan by signing into law a defense bill, in which the U.S. is to loan the democratic island U.S.$2 billion to bolster its capabilities against threats from China.

Biden signed on Friday the Fiscal 2023 National Defense Authorization Act (NDAA) into law allotting U.S. $816.7 billion to the Defense Department, the White House said in a statement.

The Act, known as H.R. 7776, authorizes “appropriations principally for Department of Defense programs and military construction,” as well as for the Department of State, Department of Homeland Security, Maritime Administration, U.S. Coast Guard, and the intelligence community.

On the same day, the House of Representatives also passed the Comprehensive Appropriations Act for Fiscal Year 2023 that had been passed by the Senate.

Under the NDAA, the U.S. State Department is authorized to provide Taiwan with up to U.S.$2 billion in accordance with the Foreign Military Finance grant and loan assistance program for purchasing U.S.-made weapons and defense equipment.

The loans come with a repayment period of 12 years, the Act stipulates.

The NDAA also includes a suggestion for Taiwan to officially participate in the upcoming Rim of the Pacific (RIMPAC) military exercise.

Taipei welcomes law

Taiwan's Ministry of Foreign Affairs welcomed the signing of the NDAA, saying it “highly demonstrates the firm stance of the United States to support the strengthening of all-round cooperation between Taiwan and the United States.”

It said in a statement that Taipei “will continue to communicate and discuss with the U.S. Congress and the executive branch in accordance with the overall national policy, and gradually promote the implementation of various friendship provisions with Taiwan at a steady pace.”

Yet one Taiwanese analyst said this “did not necessarily mean Taiwan would get all it desired.”

Lin Ying-yu, an assistant professor at Tamkang University's Graduate Institute of International Affairs and Strategic Studies, was quoted by the official Central News Agency as saying that “any decision on what to sell and what not to sell ultimately rested with the U.S. Department of State and Department of Defense, which are required to preclear and prioritize defense articles sold to Taiwan.”

Meanwhile China reacted angrily to the passage of the NDAA, calling it “a serious political provocation against China.”

The Chinese Foreign Ministry said: “China deplores and firmly opposes this U.S. move, and has made serious démarches to the U.S.”

China urged the U.S. to “abandon the Cold-War and zero-sum mentality and ideological bias” and not implement the act.

“China will take strong and resolute measures to firmly safeguard its sovereignty, security and development interests,” the ministry said.

China considers Taiwan a Chinese province that will be reunited with the mainland, by force if needed, and resolutely protests against the “involvement in the Taiwan issue by external forces.”