WASHINGTON -- Taiwan, China and Congress won't be cheering the Obama administration's decision to upgrade Taiwan's fleet of F-16 fighter jets but not sell it new planes. But it may be a compromise they can all live with.
The U.S. is obligated under a bill passed by Congress in 1979 to sell weapons for Taiwan's self-defense, and as China has invested heavily in its military over the past decade, the strategic balance across the 100-mile-wide Taiwan Strait has lurched in the mainland's favor.
That's left the self-governing island outgunned and Washington in an awkward position.
Selling the fighter jets that Taiwan first sought in 2006 risks damaging the administration's intense efforts to deepen relations with China. After the U.S. agreed in early 2010 to sell Apache helicopters to Taiwan, China cut military ties for several months.
According to congressional aides, the Obama administration now plans to offer to upgrade Taiwan's existing fleet of 145 F-16 A/Bs sold by the U.S. in the 1990s. A senior administration official says the administration will notify Congress on Wednesday. The official spoke on condition of anonymity because of the sensitivity of the issue.
In Taiwan, that will be seen as a rebuff to President Ma Ying-jeou, who also wants to purchase 66 more advanced F-16 C/D planes which he says will strengthen his negotiating position with Beijing. He faces a tough fight for re-election in January, and opponents accuse him of skimping on military spending and moving too fast to build ties with the mainland.
In Congress, both Republicans and Democrats support the sale of new planes to Taiwan. They accuse Obama of giving ground to an increasingly assertive China -- and passing up on an arms deal that would sustain thousands of American jobs.
But for the Obama administration, it probably looks like the least-worst option and one that offers a little something for everyone.
For Ma, the F-16 upgrades will mean concrete progress in boosting Taiwan's air power. According to a U.S. Defense Intelligence Agency assessment last year, Taiwan has fewer than 400 combat aircraft and far fewer of these are operationally capable. China has about 2,300 operational combat aircraft augmented by at least 1,100 missiles pointed across the Taiwan Strait.
The upgrades can be completed more quickly than acquisition of new planes, and depending on what is offered in terms of radar, avionics and offensive capabilities, the improved A/Bs could be nearly equivalent to the more advanced C/Ds. However, it leaves unresolved the question of how to replace Taiwan's French-made Mirage jets and U.S.-made F-5s that are virtually obsolete and would have been replaced by the C/Ds.
Perhaps just as important, it reflects a degree of U.S. political commitment. The hard reality is that the island's forces cannot match China's, and it would depend on U.S. help if it were to withstand an invasion attempt.
The Obama administration defends its record on supporting Taiwan, saying that if the F-16 upgrades go ahead, weapons exports to the island since 2009 would be double the sales during the previous four years under President George W. Bush's administration.
Yet Obama's compromise may still go part way to placating Beijing, which wants smooth relations with Washington as it faces its own leadership succession next year.
Beijing's initial response to reports of the upgrades appeared relatively muted. Chinese Foreign Ministry spokesman Hong Lei said Monday that the U.S. should refrain from selling arms to Taiwan "to avoid impairing bilateral relations as well as the peaceful development of cross-strait relations."
China also has an interest in not seeing Ma damaged politically. The Taiwanese president has vowed to push ahead with his engagement with Beijing if he wins a second term.
His opponent, Tsai Ing-Wen, comes from a party which has had tense relations with Beijing and talked in the past of seeking formal independence, although Tsai is emphasizing the importance of cross-strait stability.
In Congress, a compromise will be widely seen as a cop-out by Obama, but lawmakers have succeeded in prodding the administration into a decision it had dithered over. And it would be odd for lawmakers to push back the F-16 upgrades, particularly if the administration keeps open the option of supplying new planes in the future.
But Congress could yet throw a wrench in the works. Republican Sen. John Cornyn of Texas, where the Lockheed Martin plant that would build the F-16s is located, has taken the unusual step of introducing legislation demanding that Obama authorize the sale of the new planes. Decisions over foreign arms sales are typically delegated to the president.
A study commissioned by Lockheed estimates the C/D sales could generate $8.7 billion in economic output and 16,000 jobs. Advocates say the F-16 production line will close without the Taiwan deal.