TAIPEI (Reuters) - Taiwan is moving ahead with plans to build its own submarines, with an initial design to be completed by the year-end, after lengthy delays in getting eight vessels under a 2001 U.S. defense deal and as China's navy expands rapidly.

While major obstacles remain, such as overcoming significant technical challenges and what would almost certainly be strenuous objections from Beijing, a political consensus has emerged in Taiwan in recent months that it can wait no longer, officials and lawmakers said.

China is Taiwan's largest trading partner and economic ties have warmed since China-friendly President Ma Ying-jeou came to power in 2008. But Beijing regards Taiwan as a renegade province and has never renounced the use of force to bring the proudly democratic island under its control.

Taiwan has four aging submarines including two that date back to World War II although its military is otherwise considered generally modern. China, however, has 70 submarines alone, along with dozens of surface ships and a refurbished aircraft carrier, although that vessel is not yet fully operational.

A recent Taiwanese government defense report said China would be capable of a successful invasion by 2020.

"Our determination to build indigenous submarines is very firm. The navy is very actively pushing this matter," said Major-General David Lo, spokesman for Taiwan's Ministry of National Defense.

"The Republic of China (Taiwan) will not engage in an arms race with China. We hope to acquire submarines to strengthen our self-defense."


Captain Lin Chau-luen, head of the ministry's naval force build-up and planning section, said during a recent conference in Taipei that plans encompassing the capacity and tonnage of a diesel-electric submarine would be finished by the end of the year.

The design of weapons systems would come later, with construction possibly starting in two years, he said, without saying how many vessels Taiwan wanted to build.

Telephoned by Reuters, Lin declined to give further details, saying he was only permitted to speak with the media at public engagements. Ma's office and the Foreign Ministry referred questions to the Ministry of National Defense.

Lo said it was too soon to make public comments on how far plans for homegrown submarines had advanced, but added that Taiwan would need assistance from the United States or other parties with experience building submarines.

Taiwan was not currently in any formal talks with foreign defense contractors, officials said.

Experts said European governments would likely prevent their defense companies from getting involved to avoid China's wrath.

"China is resolutely opposed to any form of military technological exchanges or cooperation or weapons sales from foreign countries to the Taiwan region," the Chinese Foreign Ministry said in a statement sent to Reuters.


An official at the Taiwanese Ministry of National Defense, who spoke on condition of anonymity, said Taiwanese industry could build basic surface ships but did not have experience with underwater vessels.

Shipbuilder CSBC Corp Taiwan, a company with the sole capability in Taiwan to build submarines, has indicated it was able to build a pressurized hull, the official said, but added that constructing a submarine was very complex.

A CSBC executive said the company had not received any orders and referred further questions to the government.

Taiwan first began considering building its own submarines in the early 2000s, when the deal with Washington to acquire eight diesel-electric submarines in 2001 got bogged down because of technical and political constraints.

Since the United States operates nuclear-powered submarines, Taiwan would have needed to buy vessels from foreign defense contractors or obtained enough technical details from Washington or other parties to refurbish older submarines acquired from the open market. But European countries, for example, balked in helping at the time for fear of damaging ties with China.

The United States was also concerned about the security of any technology transfers. Another roadblock early on was in Taiwan, where political infighting over budget allocations held up funding.

Washington is committed to assist Taiwan defend itself under the 1979 Taiwan Relations Act.

"The U.S. has received Taiwan's requests for diesel submarines. These requests remain under interagency review," said Marine Lieutenant-Colonel Jeffrey Pool, a Pentagon spokesman, referring to the 2001 deal.

A U.S. State Department official, without mentioning the submarine agreement, said Washington would continue to help Taiwan maintain sufficient self-defense capabilities.

"We carefully evaluate Taiwan's defensive needs on an ongoing basis and will consult with Congress as required before announcing any additional major arms sales to Taiwan," said the official, speaking on condition of anonymity.


Taipei's plans come as other regional navies expand their own submarine fleets in part to create a strategic deterrent against China's growing naval assertiveness in Asian waters.

Naval analysts say the stealth of a well-run submarine makes it a classic asymmetric weapon, complicating the strategic calculations of a potential foe with a larger navy.

Japan is gradually expanding its own fleet of advanced diesel-electric submarines, while Vietnam recently put its first two full-sized submarines to sea, with a further four diesel-electric vessels to be delivered within the next two years as part of a $2.6 billion deal with Russia.

For Taiwan, the balance of power favors China, at a time when many Taiwanese remain wary of autocratic China's designs on the island.

China's recent restrictions on how Hong Kong will elect its next leader in 2017 have also stirred concern in Taiwan should it ever come under Beijing's control.

"(China) is militarily stronger and stronger, while our submarines are older and older," said Lin Yu-fang, a ruling Nationalist party lawmaker in the Foreign Affairs and National Defense Committee at Taiwan's parliament. "We have to have something to build up the confidence in democracy in Taiwan."

The opposition Democratic Progressive Party has also advocated an indigenous submarine program.

A report by the Project 2049 Institute, a U.S.-based think tank specializing in Asian security issues, said a viable fleet of at least eight submarines operating as one component of a broader operational system could deny China's military uncontested control of the waters surrounding Taiwan.