By Jim Wolf and Chris Buckley
WASHINGTON/BEIJING (Reuters) - The Obama administration told the U.S. Congress on Wednesday that it planned a $5.3 billion upgrade of Taiwan's F-16 fighter fleet, angering Beijing but disappointing new arms-sales advocates.
China condemned the retrofit of Lockheed Martin Corp F-16 A/Bs sold in 1992 as a "grave interference" in its internal affairs and warned that it will damage military and security ties with the United States.
In January 2010, China froze military-to-military ties and threatened sanctions against U.S. arms makers after President Barack Obama approved a potential $6.4 billion arms sale to Taiwan left over from the administration of George W. Bush, including Black Hawk helicopters, Patriot anti-missile missiles and two refurbished Osprey-class mine-hunting ships.
The upgrade of the 145 F-16s will give them essentially the same capabilities as late-model F-16 C/Ds that Taiwan has sought for five years without success, U.S. officials said. They said Taiwan would get the capability sooner and cheaper, a point of contention with advocates of new F-16s.
The administration also notified Congress that it planned a five-year, $500 million extension of F-16 pilot training at Luke Air Force Base and to sell $52 million in spare parts for Taiwan's F-16s, F-5s, and C-130s. All together, the potential sales total $5.85 billion.
The Chinese Foreign Ministry said Taiwan was an "internal matter" that affected China's territorial integrity and the national feelings of 1.3 billion Chinese people.
"China urges the U.S. to clearly understand the acute sensitivity and serious harmfulness of selling arms to Taiwan, and to treat China's solemn stance seriously," Chinese Vice Foreign Minister Zhang Zhijun said.
Beijing deems Taiwan a renegade province and sees U.S. arms sales to the self-ruled island as the top obstacle to improved ties between the United States and China, now the world's two biggest economies.
China has shown no sign of ending an arms build-up that is focused on Taiwan. Beijing has never renounced the use of force to bring the island under its control.
Taiwan's military supply options are limited to the United States, with other countries refusing to sell it weapons, fearing an angry Chinese response.
MORE COMBAT CAPABILITY
In Taipei, Taiwan's defense ministry said the F-16 upgrade will contribute to regional peace by improving its defense capability in the face of what it called a continued threat from China.
Taiwan would continue to press for newer F-16s to replace its F-5 fighters that are more than 30 years old, the ministry said in a statement.
The retrofit will provide a substantial increase in the survivability, reliability and combat capabilities of the F-16A/Bs, said State Department spokeswoman Victoria Nuland.
"This will help ensure that Taiwan maintains the capability to protect its airspace in both peacetime and during any crisis," she said in a statement.
The United States firmly believes that its arms sales to Taiwan contribute to the maintenance of peace and stability across the Taiwan Strait, Nuland added in a statement.
Taiwan's request for new F-16s remains under consideration, Kurt Campbell, assistant secretary of state for the region, said at a news conference in New York.
The U.S.-Taiwan Business Council, whose members include arms maker Lockheed Martin, said the correct approach would be to have both programs running sequentially, so that new F-16 C/Ds would be delivered to Taiwan before it starts pulling front-line F-16 A/Bs out of operations.
"As presently structured, Taiwan will actually see a reduction in the number of operational F-16s over the next 10 years," council president Rupert Hammond-Chambers said.
RADARS AND MISSILES
The Pentagon said in its notice to Congress that Taiwan had requested 176 state-of-the-art Active Electronically Scanned Array, or AESA, radar sets, in addition to a long list of advanced air-to-air missiles, laser- and GPS-guided bombs and other weapons systems for its F-16 fleet.
AESA radar "offers a significant capability that would be able to maintain Taiwan's qualitative advantage" over currently deployed Chinese fighters, said Mark Stokes, a former Pentagon China desk chief who heads the Project 2049 Institute, an Asia security research group.
Raytheon Co and Northrop Grumman Corp (NOC.N) are expected to compete to supply the AESA radar sets.
The deal also would include 140 of the latest version of heat-seeking Raytheon AIM-9X Sidewinder missiles and 128 Joint Helmet-Mounted Cueing systems, which let pilots fire on targets from multiple angles without turning their heads or the plane.
In the U.S. Congress, 47 of the 100 U.S. senators and 181 of the 435 members of the House of Representatives have written to President Barack Obama since May to urge him to sell Taiwan the 66 late-model F-16 C/D planes it has sought since 2006.
The Obama administration is required by law to notify Congress of any proposed major arms sale. The sale may go ahead after 30 days unless Congress enacts a joint resolution blocking it in the allotted time.
Senator John Cornyn has proposed mandating the sale of at least 66 new F-16 C/D fighters to Taiwan as an amendment to legislation now being considered on the Senate floor.
Cornyn is a Republican from Texas, where Lockheed Martin manufactures the F-16. He said in a floor speech that Congress should pass his bill because, he said, China "respects only strength, not weakness." He has emphasized the jobs that building new planes would bring and the Taiwan Relations Act of 1979, which requires the U.S. government to provide Taiwan sufficient arms for its defense.
Republican presidential contender Mitt Romney deplored Obama's refusal to sell Taiwan new jets as "yet another example of his weak leadership in foreign policy."
(Additional reporting by Jonathan Standing and Christine Lu in Taipei; Ben Blanchard in Beijing, Susan Cornwell in Washington, Paul Eckert in New York; Editing by Anthony Boadle)