Final Pentagon budget bill features Taiwan, Aukus and counters to China's influence

The US Congress released its final version of the National Defence Authorisation Act for fiscal year 2024 late on Wednesday, clearing the sweeping legislation - which strengthens Taiwan training, the Aukus alliance and countering Chinese influence - for full votes in the Senate and House of Representatives.

As with previous years, the US$872.4 billion bicameral compromise leaves out the most controversial provisions from the draft versions. It is expected to pass both chambers and head to President Joe Biden for signing into law later this month.

The legislation, which establishes the top-line budget and directs policy for the Pentagon for the coming financial year, is a "must-pass" bill because its enactment is required for members of the military to receive their pay and benefits on time. As a result, provisions not strictly tied to defence often make it into the legislation.

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With speculation rife that Chinese President Xi Jinping has ordered People's Liberation Army troops to be ready to take Taiwan by force by 2027, the self-ruled island was a feature of the bill.

For the first time, the defence policy bill called for cybersecurity cooperation with Taiwan to "defend military networks, infrastructure and systems".

It also calls for the defence secretary to establish a programme of training, advising, and institutional capacity building with Taiwanese military forces - in line with a comprehensive effort in last year's NDAA to boost security cooperation with Taiwan.

But compared to last year, the bill has relatively little new on defending Taiwan, and instead calls for oversight for previously established programmes.

As with previous years, the bill avoids measures that explicitly challenge the US's one-China policy, in which Washington acknowledges Beijing's position that Taiwan is part of China.

Beijing regards Taiwan as a rogue province that must be eventually be united with the mainland, by force if necessary.

One such provision that got cut would have barred the Pentagon from funding any map that depicts "Taiwan, Kinmen [also known as Quemoy], Matsu, Penghu, Wuciou, Green Island or Orchid Island as part of the territory of the People's Republic of China".

Other Taiwan-related provisions in draft versions were removed, including ones requiring the Pentagon to maintain a non-combatant evacuation plan for Taiwan and to invite Taiwan to the US-led Rim of the Pacific military exercise.

While like most countries the United States does not recognise the island as an independent state, it is committed by law to support Taiwan's military defence capability - a stance Beijing strongly opposes.

The legislation included several measures to strengthen Aukus, the security partnership the US established in 2021 with Australia and Britain widely seen as an alliance to counter China in the Indo-Pacific.

The NDAA fully authorises the trilateral pact, which would allow the US and Britain to help Australia develop its own nuclear-powered submarine fleet.

It also requires both the Pentagon and State Department to prioritise Australia and Britain for arms sales processing, after Ukraine and Taiwan.

The legislation also includes several measures meant to counter Chinese influence in the US.

With its enactment, any school receiving Defence Department funding must commit to closing their Confucius Institutes by 2026.

The Beijing-financed cultural and language centres - fewer than five remain in the US - have been criticised for lack of transparency and being a potential vehicle for surveillance and Chinese influence.

According to the bill, no institution that now receives Pentagon funding hosts one of the centres. The bill also amends the definition of Confucius Institute to include "any cultural institute funded by the [Chinese government]".

The NDAA also prohibits Defence Department funding from supporting entertainment projects that have complied or "is likely to comply" with censorship demands from the Chinese government.

China's role in fentanyl trafficking, a priority topic in US-China relations, also found its way into the bill. One provision calls for the defence secretary to determine if Beijing has assisted in or approved the transfer of fentanyl precursors or products to Mexico.

The NDAA requires an audit of the Defence Department's funding to China's research laboratories. It also prohibits Pentagon procurement from Chinese military companies operating in the US.

But it omits a requirement in the draft that would have required researchers financed by the Pentagon to disclose personal information like their nationality and educational background. The White House had noted that such a provision would be unduly burdensome.

In the same vein, the bill left out a provision that would have prohibited the procurement of computers and printers from China.

Other high-profile China-related measures did not make it into the bill's final version.

One would have restricted outbound investment to China, in line with an August executive order from Biden.

The provision would have required US businesses to notify the Treasury Department before making transactions in China, Russia and other "countries of concern" involving technologies with military applications.

Representative Patrick McHenry, a North Carolina Republican and chairman of the House Financial Services Committee, pushed to drop the measure, which had bipartisan support.

McHenry has long argued that letting US companies make investments gives them control and useful insight into the national security and technology capabilities of foreign firms.

A funding programme for the Pacific Islands also failed to make the cut, though lawmakers are trying to push it through other vehicles.

Earlier this year, the Biden administration concluded negotiations for the Compacts of Free Association (COFA), a set of agreements providing economic assistance and migration rights to three Pacific Islands countries in exchange for exclusive military access.

But the funding for the programmes has yet to find a home, leading to concerns that Beijing might find a way to exploit the situation.

The bill includes a short-term extension of Section 702 of the Foreign Intelligence Surveillance Act of 1978.

The programme, which would have expired on December 31, allows the US government to conduct warrantless electronic surveillance on Americans when they interact with foreigners.

Several Asian-American groups have opposed its reauthorisation, claiming that it has been used in a discriminatory manner for purposes unrelated to national security.

Passage of the bill would extend Section 702 until April, giving Congress more time to come up with a compromise that can pass both chambers.

This article originally appeared on the South China Morning Post (SCMP).

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