President Bush put off a possible sale of the Aegis naval air defence system to Taiwan, deciding yesterday to sell less advanced arms but to keep the option open should China pose a sufficient threat.
As most experts expected, Mr Bush "deferred" a decision on selling Taiwan the sophisticated Aegis naval defence system.
"The balance which we think had started toward [China's] favour in a dangerous way, is righted," said a senior White House official briefing reporters on the decision. "If the threat environment justifies additional anti-air capabilities, then we'll take another look at the Aegis."
For now, President Bush will offer Taiwan four modern Kidd class naval destroyers, rather than the more-advanced Arleigh Burke class destroyers Taiwan had requested. The Burke destroyers could be fitted with the sophisticated Aegis system staunchly opposed by China, while the Kidd has less advanced air defence capabilities.
China has also opposed any Kidd sale to Taiwan. But Beijing is known to be most concerned about the Aegis system, which it argued almost put Taiwan under a US missile defence shield.
The decision keeps the Aegis system as a bargaining chip in US-China relations.
"We think there is nothing in this package for China to fear somehow. This is a measured response to a change in the security environment caused by [China], the White House official said.
The US will also sell Taiwan 12 P-3 "Orion" antisubmarine aircraft and help it to buy eight diesel submarines, administration and congressional sources said.
The total package also includes items such as a technical briefing on the PAC-3 missile defence system which Taiwan may seek in the future, decoys, helicopter survival equipment, and self-propelled artillery.
The sales are under the Taiwan Relations Act, which requires the United States to sell weapons necessary to Taiwan's defence even though Washington recognises Beijing as the sole legitimate government of China.
A Taiwanese delegation will be notified of the decision today during a visit to the Pentagon.
The White House official said the Kidd destroyers would be available beginning in 2003, and were suitable to Taiwan's existing defence needs. The Arleigh Burke destroyers and Aegis system would not be available in any case until 2010.
Washington accompanied its decision with a message to China to reduce cross Taiwan Straits tensions and "things could be different".