By Jim Wolf
RICHMOND, Va (Reuters) - The Obama administration plans to supply state-of-the-art weapons for Taiwan's existing F-16 fighter fleet as part of a potential $5.85 billion upgrade, a U.S. official involved in Taiwan policy said on Tuesday, amid a push to shape perceptions about the deal.
"I do not have the impression that anything is being held back, frankly," said the official, referring to Taipei's request for technology involved in the "retrofit" of about 145 F-16 A/Bs sold by the United States in 1992.
The administration is set to notify Congress formally on Wednesday of the details of the F-16 upgrade package, requested by Taiwan in November 2009. Its broad outlines were briefed to foreign affairs committees in the Senate and House of Representatives on Friday.
It has sought to thread various diplomatic, military and strategic needles in rolling out the package while trying to send targeted, sometimes conflicting, messages to Beijing, Taipei and the U.S. Congress.
A U.S.-based expert on Taiwan's military who asked not to be named said the air-to-air hardware included "basically everything" Taipei had sought, including the latest version of heat-seeking Raytheon Co AIM-9X Sidewinder missiles and all-weather-capable AIM-120C7 Advanced Medium-Range Air-to-Air missiles, or AMRAAM.
The deal also includes state-of-the-art active, electronically scanned array, or AESA, radar, said the expert who spoke anonymously to protect access to sensitive information.
Lockheed Martin Corp builds the F-16. Raytheon and Northrop Grumman Corp are expected to compete to supply the AESA radar sets.
Such advanced radar "offers a significant capability that would be able to maintain Taiwan's qualitative advantage" over existing Chinese fighters, said Mark Stokes, a former Pentagon China desk chief who heads the Project 2049 Institute, an Asia security research group.
In opting for the F-16 upgrade, President Barack Obama deferred Taiwan's long-standing request for 66 new late-model F-16 C/D aircraft.
This disappointed many in Taiwan, which says it needs more modern fighters -- and more of them -- to deter a threat from China. Beijing deems the self-ruled island a breakaway subject to unification, by force if necessary.
The punt on new F-16s may please Beijing even though it opposes all arms sales to Taipei as meddling in its home affairs. It may conclude that it had succeeded in deterring Washington from supplying the newer models.
Those who described the upgrade package to Reuters spoke outside a defense industry conference in Virginia focused on Taiwan's security needs and China's growing military power.
Michael Pillsbury, a consultant to the Pentagon on Chinese leaders' perceptions of U.S. policies, said he feared that Beijing might ultimately conclude that the A/B upgrade would provide Taiwan even more capability than the new models.
"Their propensity to miscalculate us -- what they call the 'hegemon' -- is astonishing," he said. "From Beijing's point of view, the F-16 game is not over yet."
The official involved in Taiwan policy who outlined the upgrade to Reuters took issue with critics who portrayed the administration as bowing to Beijing's wishes in withholding the new jets. Rather, he described it as a no-brainer for Taiwan.
"So you're getting 145 planes upgraded to virtually the same as the C's and D's for $5.8 billion," versus what would have been an $8.3 billion tab for the 66 new planes, the official said.
Taking the analysis further, Rupert Hammond-Chambers, president of the U.S.-Taiwan Business Council, which hosted the conference in Richmond, voiced doubt that China would make a big fuss. He figured Beijing would rather enjoy whatever goodwill it may win in Washington by curbing any retaliation over the upgrades. It also might bask in the sense that it had "spooked" Washington into withholding the new jets, he said.
In January 2010, China froze military-to-military ties and threatened sanctions against U.S. firms after President Barack Obama approved a potential $6.4 billion arms sale to Taiwan left over from the administration of George W. Bush.
Richard Fisher, who monitors China's military modernization International Assessment and Strategy Center, a public policy research group, said of the conflicting messages: "It's the battle for the spin. That's what's happening."
On Capitol Hill, Senator John Cornyn advanced his effort to mandate the sale of at least 66 new F-16C/D fighters to Taiwan as an amendment to the Generalized System of Preferences bill now being considered on the Senate floor.
(Editing by Eric Walsh)