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[Global Times Comprehensive Report] As Taiwan's military purchases from the United States have been delayed many times, Taiwan's "Audit Department" has recently disclosed that as of the end of last year, Taiwan's "Ministry of National Defense"'s "contract termination reserve" for military purchases from the United States is still 24.4 billion yuan (New Taiwan dollars, the same below) stranded in the United States and cannot be retrieved.

According to a report by Taiwan's China Times on July 31, Taiwan's Audit Department recently stated that by the end of 2023, the contract termination reserve for the military purchases being executed by Taiwan's Ministry of National Defense has been settled at about 24.4 billion yuan, an increase of about 12.6 billion yuan from the end of 2022. The so-called contract termination reserve refers to a fixed proportion of the amount that the United States requires Taiwan to pay in the early or middle stages of the military purchase. If the contract is terminated midway, it will be used to pay the losses of the contractor. In general, this money will be used to pay according to the progress of the military purchase, and any remaining amount will be returned when the case is closed.

According to the US regulations, military purchasers can use guaranteed letters of credit issued by qualified banks to replace contract termination reserves, but external banks must obtain a federal license issued by the US Office of the Comptroller of the Currency. Taiwan's "Audit Department" once asked the "Ministry of National Defense" to coordinate with the US to speed up the relevant operations. Since February last year, Taiwan's "Ministry of National Defense" has gradually promoted it, but as of the end of last year, no bank on the island has obtained a license. The US response is: Because it involves policy adjustments, and it is necessary to consider the interests of the US side and the consistency of various military purchasers, it will be handed over to the US State Department, the Treasury Department and external legal units for evaluation, and no exact completion date can be provided. This is equivalent to giving the Taiwan military a "soft nail".

Wang Hongwei, a member of the KMT, said during questioning that the contract termination reserve has left Taiwan with a huge amount of funds idle in the United States. According to Taiwanese media reports, Taiwan's defense budget for next year is rumored to be as high as 630 billion yuan, a record high. Li Yanxiu, a member of the KMT, said on July 30 that the island's fiscal discipline was corrupted during Tsai Ing-wen's administration, and "the bitter fruit of fiscal hell is just beginning."

Earlier, Taiwan’s United Daily News disclosed that many of Taiwan’s military purchases from the United States have been repeatedly delayed by the United States. Some “legislators” questioned that Taiwan’s “Ministry of National Defense” claimed to purchase 100 land-based “Harpoon” missile systems, including 400 missiles, from the United States. Among them, 32 systems and 128 “Harpoon” missiles were originally expected to be delivered in 2026, but according to public information from the United States, the Pentagon only placed an order for this number of missiles in 2023, and the plan is not expected to be completed until March 2029. Wang Boyuan, chairman of the Li Kuo-ting Science and Technology Development Foundation, wrote in the United Daily News on July 31 that Taiwan should think about how to avoid war, reduce the crisis in the Taiwan Strait, and maintain peace across the Taiwan Strait. The article stated that Taiwan should not deliberately provoke the red line of the other side, increase the danger, and then seek support from the United States and let it do whatever it wants. (Zhang Ruo)