At a February press conference, Commander of the US Pacific Command Admiral Robert F. Willard noted that Taiwan’s forces would eventually ‘have to be recapitalised,’ signalling that the sale of the upgraded fighters is once again a live option.

Three key dynamics will shape the final US decision on whether to sell the upgraded jets to Taiwan.

Firstly, Washington has concerns about the shift in the military balance across the Taiwan Strait in favour of Beijing. Quantitatively, Taiwan’s air force has remained unchanged for the past 16 years. With the impending retirement of Taiwan’s obsolete F-5s, the temporary withdrawal of F-16A/Bs during a planned upgrade program and the rumoured mothballing of the expensive Mirage 2000 fleet, the F-16C/Ds are crucial to the maintenance of Taiwan’s existing air force. Over the same period, however, China’s force of modern, fourth-generation fighters has grown from about 100 aircraft to 650, and now constitutes the world’s largest force of Russian-designed SU-27 Flankers.

Another equally important concern relates to the potential for a more pronounced qualitative gap between the military forces of Beijing and Taipei.  On 11 January 2011, China conducted its first test flight of the Chengdu J-20 — allegedly a fifth-generation stealth fighter — during US Secretary of Defence Robert Gate’s visit to Beijing. But Washington has firmly rebuked Taipei’s request to procure American fifth-generation F-35 Joint Strike Fighters, given the destabilising effects it could have to cross-strait relations. In contrast, the technical capabilities of the Falcons are not enough for Taiwan alone to deny the PLA air superiority in a conflict. The F-16C/Ds, with improved radar and beyond-visible-range targeting, at least would improve Taipei’s chances of achieving the more limited goal of delaying PRC advances until Washington can intervene.

Secondly, the sale of the F-16s has important implications for political relations between Washington and Beijing. The PRC has long opposed US arms sales to Taiwan. In 2008, what was thought to be a deal — as part of a larger US$6.46 billion package of weapons approved by Congress — was blocked due to protests from Chinese officials. Beijing repeatedly reminded Washington that arms sales to Taiwan directly violated the August 1982 Shanghai Communiqué. Conversely, Taipei’s supporters in Washington insist that the 1982 agreement conflicts with the Taiwan Relations Act, which commits the US to provide weaponry ‘to enable Taiwan to maintain a sufficient defence capacity.’ Later, sources revealed that Chinese President Hu Jintao agreed to attend the June 2010 nuclear security summit only after the White House guaranteed that it would not sell the F-16C/Ds until after 2010.

Thirdly, the sale has implications for the broader balance of power in East Asia. The Obama administration is in a delicate situation. While Washington does not want to provoke China, it has no interest in seeing its East Asian ‘lilypads’ — Japan, South Korea and Taiwan — outgunned by the PLA. US–Taiwan sales represent a political message of continuing American support and commitment to its security partners, potentially offering a deterrent to Chinese attack. Despite the recent revival of Beijing’s ‘smile diplomacy,’ aggressive displays, such as the suspension of rare earth minerals during the 2010 Senkaku/Diaoyutai Crisis, have created the impetus in Washington to begin pushing back against China’s increasing leverage in the region.

Ultimately, Washington is likely to sell Taiwan the F-16C/Ds. With the development of the J-20 a year ahead of US intelligence forecasts — and estimated to enter service in five to seven years — the expansion of Taipei’s Fighting Falcon fleet represents the bare minimum needed to bolster Taiwan’s ability to hold-out in the event of a conflict.

The sale would also send some important messages: the US maintains a stake in the cross strait status quo; will not kowtow to Chinese military muscle and remains committed to the security of its regional partners through military modernisation efforts.

Sheryn Lee is a research assistant and Robert O’Neill Scholar at the Strategic & Defence Studies Centre, the Australian National University.