Taiwan is building cruise missiles in response to China's rapid missile and military modernization programs. Taiwan has also complained about the 900 missiles deployed by China against it. Taiwan has now tested a land-based cruise missile which has a 1,000 km range and could carry 400 kg warheads. The Taiwanese missile, Hsiung Feng 2E, is also under development, and can reach up to 600 km and more. According to Taiwanese defense officials, land based missiles are designed to strike against military sites in China that could launch an attack on Taiwan, like airfields and artillery sites. Taiwan is expected to showcase its Hsiung Feng cruise missile, which could undercut the overwhelming Chinese superiority, which has been criticized by the US who has emphasized the need for a defensive build up against China rather than acquiring offensive missile capabilities. The US has assured that it would cooperate with Taiwan in defending it from China, but not to support Taiwan's efforts to develop missiles that could target China.

There have been tensions between Taiwan and China since the Cold War began. China has considered Taiwan to be its legitimate territory, while Taiwan wants to be recognized as an independent nation. The Taiwanese missiles are "China centric" and would contribute to Taiwan strengthening its deterrent against China. However, these missiles are still in the development stage and cannot compete with the hundreds of missiles developed by China. But even unsophisticated missiles can provide deterrence, especially if they are capable of carrying nuclear weapons. Tamkang University's Alexander Huang says that the main purpose for developing missiles is not to launch attacks but to use them as bargaining chips in a conflict. He said, "I think Taiwan also believes that to acquire such a capability is for the purpose of deterrence, and not necessarily using it. Sometimes military modernization is not for military operations, it is for political negotiations." These missiles would provide Taiwan, however, the capability to attack airfields, missile launch sites, military bases, logistics centers and fuel storage facilities.

Hence, China would have to think twice before launching any attack on Taiwan. This has raised concerns for China as it cannot afford to lose Taiwan. If any other power gains control over Taiwan in future, it would threaten China's costal security. China has pursued several measures to achieve its objectives, like focusing on its military build-up against Taiwan to raise the cost of US intervention. The Taiwanese missiles make it difficult for China to achieve its primary objective, that being, preventing an independent Taiwan from arising. Taiwan has already taken a decision to hold a referendum on the island's bid to rejoin the UN. The development of missiles would further aggravate the situation between China and Taiwan.

The other concern has been disturbing the military balance of the region. Most experts say that Taiwan's cruise missiles would have a dramatic impact on its existing military balance with China. In turn, China could speed up its military modernization program as a protest against the US decision to deploy missile defenses in the region - China is against any kind of military aid given by the US to Taiwan and Japan. China regards US-Taiwan missile cooperation as a further step towards consolidating bi-lateral security ties - a development China regards as interference in its internal matters. China is also opposed to the Japanese missile defense system; the upper tier defense system of Japan could be used to protect Taiwan. In addition, the rapid military development of China would be a cause of great concern for India - which supposedly developed the Agni III missile keeping China's offensive capabilities in mind - and would also be followed by Pakistan's own military modernization. For these reasons, Washington is opposed to offensive missile build-ups of either side as this would lead to further "destabilization" in the region.

It is clear, however, that Taiwan is in no mood to compromise on its security. Taiwan has the ability to convert its Sky Bow anti-aircraft missile into a multi-stage ballistic missile. Under such conditions, China is left with two alternatives. The first is to cooperate with the US so as to oppose Taiwan's offensive missile programmes. The US is Taiwan's biggest arms supplier and largest trading partner. In these circumstances, it is not possible for Taiwan to ignore US concerns. The second option is that China should reduce its military build-up against Taiwan. Taiwan's Ministry of National Defense claims that China can target over 700 DF-15 and DF-11 class short-range ballistic missiles at Taiwan, a number that will exceed 800 next year. By the end of 2007, China could deploy 200 of its new class of LACM. At this rate, by 2010, China could have up to 2,000 ballistic and cruise missiles directed at Taiwan. China should understand that such a military build-up would only result in an arms race.