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Facing threats from China, companies in Taiwan turn to weapons manufacturing

STEVE INSKEEP, HOST:

China and its neighbors are in an arms race to deter war or prepare for one. On Taiwan, private companies are pivoting to defense and making weapons. NPR's Emily Feng reports.

EMILY FENG, BYLINE: Plastic injection molding machines hum here at Hwameei, a company in Taiwan's city of Tainan. This is the technology that Hwameei once used to make Buddhist temple decorations. Vice President Lin Shun Fu explains.

LIN SHUN FU: (Through interpreter) This is a banner for supporting votive offerings. It was one of our first products.

FENG: Currently, Hwameei makes eyewear - skiing goggles, sunglasses and diving masks. But Mr. Lin has his eye on outfitting militaries. Today, he's testing Hwameei new line of eye protection for marine or navy use.

LIN: (Non-English language spoken).

FENG: Taiwan is looking for creative ways to boost its defense abilities in a short period of time. And it's loosening once strict procurement rules to allow private companies like his to develop dual-use technologies for its military.

LIN: (Through interpreter) Every year, Taiwan spends billions of dollars to buy American defense equipment. It's almost like we're paying the U.S. protection money. But if U.S. companies could support local businesses, some of the benefit would return to Taiwan and ensure we help each other.

FENG: China's military has already conducted military exercises twice simulating a blockade of Taiwan. In a real conflict, a blockade would make it impossible for any weapons or reinforcements to be shipped in. So Taiwan's manufacturers are asking, why not make more defense equipment at home?

MAX LO: Every country aims to be technologically self-reliant and should be building up its own supply chains. So when the need arises, we can quickly rise to meet our own national security needs.

FENG: That's Max Lo, the founder of Geosat. It's a Taiwanese company that once made drones used to spray pesticides on agricultural fields or even deliver packages. But given the growing threat from China, Geosat is pivoting to dual use drones that can also be mounted with guns, drop bombs or surveil enemy sites.

LO: (Through interpreter) What the Ukraine war has taught Taiwan is that small- and medium-sized drones can be used en masse and that commercially available drones can be rapidly modified for the battlefield as well.

FENG: The U.S. sells billions of dollars of weapons and defense systems like F-16 fighter jets to Taiwan every year, but those deliveries can be delayed if the U.S. has more urgent orders to fill.

LO: (Through interpreter) Because of the war in Ukraine, we see everyone's weapons. Inventories were depleted too quickly. Bring Taiwan into your defense systems. Move some production lines to Taiwan.

FENG: With that thought in mind, 25 U.S. defense contractors visited Taiwan in May, meeting with government officials and local companies looking for ways to make new systems together. But progress is slow. Contracts can take years to be approved. And U.S. export controls prevent many technologies and components from leaving the US. Mr. Lo, Geosat's founder, says Taiwan is working to address any security vulnerabilities, and it is best placed to create what he calls red-free, or China-free, supply chains.

LO: (Through interpreter) We had a short time period to substitute out every Chinese-made part in our supply chain. We did it mostly by sourcing from the European Union. Of course, this also tripled our costs.

FENG: And Taiwanese companies argue making arms and defense equipment is a natural step. The island's economy boomed in the 1970s as it became a manufacturing hotspot for cheap plastic and electric components. Now it's the world's foremost semiconductor manufacturing base. In the future, Taiwanese companies say, let us make weapons.

LAI BAISHENG: (Through interpreter) We won't give you bad-quality products. This is something every Taiwan production line and Taiwanese worker believes in.

FENG: This is Lai Baisheng, the founder of Sheng Yong, a company in the northern Taiwanese city of Yilan. It makes all sorts of high-end glass and optical components. Right now, they're one of the world's biggest makers of endoscopy and colonoscopy camera lenses. Now the company is pivoting as well. It's making gun scopes and specialty lenses that go into Taiwan's anti-aircraft rocket launchers.

LAI: (Through interpreter) I discovered defense and military products are a very good market.

FENG: Making parts for shoulder-launched missiles is very different from what his company, Sheng Yong, started out making. But Mr. Lai knows Taiwan needs to keep up with changing times and even the remotest possibility of conflict with China means Taiwan needs to be prepared and prepared to go it alone if necessary.

Emily Feng, NPR News, Tainan, Taiwan.

(SOUNDBITE OF ANDREW GIALANELLA'S "TRY AGAIN") Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Emily Feng is NPR's Beijing correspondent.