 Well, good morning, everyone. I'm Stephen Flanagan, the Henry Kissinger Chair in National Security and Diplomacy here at the Center for Strategic and International Studies. And it's a pleasure to welcome a number of good friends and former colleagues and those many good quality people interested in Taiwan and security relations in East Asia. We're also delighted to have as our speaker today a good friend of CSIS and many of us in the room, Mr. Andrew Nienzhu Yang, who is, of course, the Vice Minister for Policy at the Ministry of Defense in Taiwan, a position that he has held since just celebrating his second anniversary, a little over his second anniversary in that job since September of 2009. Vice Minister Yang, as many of you know, has been an influential scholar and advisor to policy makers on defense strategy, on cross-strait and regional security issues. He's perhaps best known in this audience for his work as Secretary General of the Chinese Council of Advanced Policy Study CAPS for nearly two decades. He's, of course, also held a number of faculty appointments at the Sun Yat-sen University, where he also worked as a research associate earlier in his career. He has, of course, been an influential advisor to policy makers in the Ministry of National Defense, the Mainland Affairs Council and the Ministry of Foreign Affairs over these many years. And as I said, a good friend to many people in this room. His education earlier was at Fujian University in sociology, quite diverse than going into a master's degree in industrial sociology, and then a master's degree also in economics at the London School of Economics. And he was also a research associate in political economy at Wilson College at Oxford University. Vice Minister Yang is going to talk about the security situation in the Asia Pacific region and on elements of Taiwan's defense strategy and defense transformation efforts. This address is on the record. He will speak for about 30 minutes, and then we will turn the floor over to discussion, which will be moderated by my colleague, Bonnie Glazer, a senior fellow with the Freeman Chair here at CSIS. So without further ado, let me welcome to the floor Admiral, I mean Vice Minister, I'm sorry, we also have an Admiral in the audience, Vice Minister Andrew Yang. Thank you, Stephen, for your such a gracious introduction. Good morning, ladies and gentlemen, and my good friends from here. This is my fifth visit to CSIS out of my 11th visit to Washington, D.C. for the last two years. When I joined the MND as Vice Defense Minister, it's a very, very precious experience for me, and I also personally witnessed a very strong ties between the United States and Republic of China on Taiwan. My visits also symbolize we have very robust, very productive, and very strong relations for the last couple of years. I want to address some of the issues which I personally involved and give you some of the perspectives about what should be done in terms of continued to consolidate and to strengthen ties between the U.S. and Taiwan. I think in terms of the strong and robust relations that we have experienced for the last couple of years, which symbolize this close and strong relations was based on a shared, the same values of upholding democracy and freedom, not only in Taiwan but also in terms of U.S. conduct of its foreign policies. Secondly, it is also a symbol of U.S. strong commitment to Taiwanese security codified by the Taiwan Relations Act and continuously supporting Taiwan to strengthen its self-defense. It is also symbolizing we have received strong executive branch and by the partisan congressional support over Taiwanese defense needs in the past couple of years. We also continuously conduct very productive, robust interactions at the policy level, at the working level, and at the service level throughout the years. In all those kind of very close and strong ties, we have achieved, I think, at least for several things. Number one, enhancing mutual trust between MND and Pentagon in terms of looking at and identifying some of the needed areas for strengthening our defense in the past. It also identify the areas of corporations and continuous corporations down the road as well. It is also a symbol of abundant mutual trust between both sides. It is also a symbol of strong support for our course of national policies in terms of conducting peaceful cross-strait interactions, assisting Taiwanese participation in many international activities. It also helping Taiwan to conduct its necessary defense transformations so that we can continue to strengthen our self-defense. So it is not only about ourselves in terms of U.S. Taiwanese self-defense ties. It is very much a comprehensive mutual relations covering not only national security issues, but also issues involving regional peace and stability as well. If we look at the situation in the western Pacific Ocean areas, we are still facing a number of challenges down the road. Not only in terms of the traditional security challenges in those disputes in the Korean Peninsula, in terms of Chinese continuous military modernization and its power projection, but also we also witness that there is a dynamic and potentially complex situation in the South China Sea and also in the East China Sea as well. So there are elements of uncertainties in terms of security challenges in the future. However, I think that we also continuously conduct robust interactions and exchanges to share our perceptions and assessments over the regional security issues and to address areas of mutual interest and continuous cooperation in order to continue to preserve peace and stability in those regions. In addition to that, we also enter into the discussions how to address the challenges emerging in terms of unconventional security issues, such as climate change and humanitarian and disaster relief, which are badly needed for not only countries in the region, but also for Taiwan as well. We also have to address the issue of preventing weapons of mass destruction and proliferation. We certainly have put in a lot of effort to address those mutual cooperation in this WM&D proliferation issue here. We also continue to share information in terms of preventing piracy at sea. This is also another area for our concern as well. In terms of addressing unconventional security challenges, in the past we already show some benefits and effects in terms of addressing the humanitarian and disaster relief operations, such as our efforts to conduct relief operations and disaster relief operations to assist Haitian earthquakes, aftermath rescue operations. This is the example of close cooperation between the United States and our Air Force in terms of assisting this long-range voyage to provide necessary help to Haitian earthquakes, disaster relief operations. We also witness there is cooperation in terms of addressing the needs and helps as a result of a type of monoclock taking place in Taiwan and US Marine and Navy providing necessary humanitarian assistance to assist our aftermath damage control in Taiwan as well. These are the two examples to show that there are areas for our cooperation in the future so that we can work together to prevent and address the needs to prevent the unconventional security challenges as well. In the meantime, we also have very proactive interactions in terms of addressing our future defense transformation needs. The emphasis is how to assist Taiwan to acquire asymmetrical capabilities and advanced technologies so that we can continue to strengthen our self-defense to support our peaceful approach to mainland China. I think the congressional hearings conducted in September, late September, and both Peter Lavoie, Assistant Secretary for Defense, and also Dr. Kirk Campbell, Assistant Secretary of State attended the hearing and gave a very, very comprehensive and detailed remarks to address why Taiwan is important and why Taiwan is still in need of US defense support. The message on the wall, abounding clear, that the United States' support for Taiwan is to enhance our self-confidence to conduct necessary policies to strengthen the peace and stability environment in this area. I think it shows that the United States and Taiwan share the same values, share the same concerns, and share the same interests not only to preserve peace and stability, but also to help countries in the neighborhood to conduct their identical imperial peace and freedom and democracy in order to upgrade their nation in a more stable road, down a road. So in that case, I think US-Taiwan security cooperation is vitally important. A very strong pillar to support the entire Asian Pacific region's future peace and stability and also continue to conduct economic modernization so that we can also share the accomplishments as a result of this effort. Recently, Secretary Clinton repeatedly addressed that US will continue to commit its support for Asia and also continue to show US strength to support Asian development as well. I think this message is well received at home. We will continue to go close ties with the United States and work closely with US government and also Pentagon in terms of not only to continue to strengthen our self-defense but also to share common objectives and views to address the security needs in this region. As for Taiwan, there are some areas for our concerns in our future continuous efforts to strengthen our self-defense. The number one concern is we want to get as much resources and support for our efforts at home. In terms of defense modernization and transformation, it is necessary to provide sufficient resources and support for this effort. This will be the task not only for MND to convince the legislators and cabinet to give us necessary support. We also want to alert the public that security should be the priority for our concern in the course of developing peace and stability in the region. Secondly, we have to pay attention to the demographic changes and the shortage of manpower in our society as well because that also related to the implementation of our volunteer system in the future. In terms of upgrading the quality of our personnel and manpower and in terms of getting the right people to cope with the necessary transformation in Taiwan, it is also very vital for our policy implementation in the future. Last but not least, we have to pay great attention and all the complex issues in terms of how to achieve our asymmetrical capability in the future. This will be the area for continuous discussions between my department and Pentagon in the future. I think we have to address the needs, how to enhance the quality of our defense, not only the quantity issue. We appreciate that the United States Defense Department has produced its Air Defense Review Report and submitted to the Congress in September. In fact, this report is very much based on a continuous discussion between Pentagon and MND in the last couple of years. We have actually examined the areas for our Air Defense requirements in the future. We will continue to discuss some of the priorities so that the Air Defense issue can be met in our discussion and acquisition in the future. What I want to say in the last few minutes is that my own personal experience has shown we maintain strong ties between the RSE, MND and Pentagon in the last couple of years. This is the result not only of mutual trust but also surprise-free. We continue to conduct this robust and trustworthy interactions both at a policy level and at a working level and continue to address the issue so that we will fulfill our objectives and with the U.S. assistance and commitments for our security and defense. Thank you. Thank you very much Vice Minister Young. Always a pleasure to have you back here at CSIS. We will now take questions from the floor and please wait for the microphone and identify yourself before asking your question. Thank you. I'm Tom Rekford with the World Affairs Council. Vice Minister, you referred slightly to issues in the South China Sea. We've heard a lot lately about claims from Beijing for the Spratly Islands. We know that Taiwan has similar claims but hasn't been talking so much about them. What is Taiwan's position on the South China Sea? Perhaps I could add to that question a little bit. There has been some discussion in the press about the possibility of Taiwan reinforcing its weapons on Taiping Island which it occupies. It belongs to the claim by the Republic of China as well as claimed by some other countries. Last year or earlier this year I think there were reports about the possibility of replacing the Coast Guard forces that is deployed there with Marines. I know there have been some denials issued from your defense ministry but perhaps you can clarify that as well. Thank you. Thank you for the question and thanks for Bonnie's further elaboration of the situation. First of all, our policy in terms of the area of South China Sea is very much holding the position that we are protecting our sovereignty in this area. We continue to address issues of cooperation and setting aside disputes and emphasizing areas of mutual interest and seeking cooperation to resolve the problems in the Spratly disputes. We also urge the regional multilateral mechanisms inviting Taiwan to be part of the process so that we can achieve peaceful co-conduct to manage the sea lanes of communication in this area. So our policy remain intact and still very much seeking cooperation and setting aside the disputes. With regard to the troop stations in the Spratly Islands we haven't changed our position since the beginning of this administration. That is, we continue to support the current Coast Guard substations at the Spratly Islands so that they will regulate the area to conduct judicial operations and defending the territory as well. We have no plan to replace the Coast Guards by the Armed Forces. We have no plan to reinforce the island security and defense by introduction of further high-tech weapons systems or troops stationed on the island. We still maintain the policy. We will support the Coast Guards and improving their abilities so that they can conduct their defense on the island and also regulating the sea areas surrounding the island. Richard Bush. You mentioned the creation of a volunteer force and you mentioned a couple of external challenges, manpower and budget. I wonder if you could talk a little bit about the challenges that you've identified internally when you make a transition from a conscript force to a volunteer force and what are the lessons you're learning? Thank you. Thank you, Richard, for the question. With regard to the internal challenges that we are facing in terms of replacing or not replacing, reinforcing the volunteer forces instead of emphasizing the construction that we have in the current day, there are three areas, internal challenges. Number one, legislative support for a necessary amendment of the military laws and regulations, organization laws and regulations to assist the implementation of this transformation. Not only the increasing the volunteers for our forces, but also to address the need for further defense restructuring, organizational changes as well. So these two or three pieces of legislation are vitally important for the success of assisting the volunteer systems to be enacted in the near future. That's number one. Number two, we need to convince the cabinet and also the OY to provide us with sufficient resources, adequate increase in our budget to pay for the necessary costs for the introduction of the volunteer system in the future. Number three is the proper support for the volunteer system. So that requires a lot of education, not only from the MND's point of view, but also in terms of the overall support from the grassroots. We need to enhance the educational systems to educate our youngsters what are the areas of necessities and importance so that the volunteer systems can actually helping us to conduct necessary transformation in the future. So those are the three major internal challenges that I can identify so far. John San with CTI TVI minister, Jan. Good to see you again here in DC. During your visit this time, have you heard any clarification from the Pentagon about Secretary Panetta's remarks that the U.S. gape Beijing heads up before the arms sales announcement? And have you heard any new movement on Taiwan's continuing request for the F-16 CDs? And also you spoke of the asymmetric capabilities. In what particular or specific areas would you like the United States to help Taiwan develop? Thank you very much. As far as I know, we haven't got a public announcement or statements regarding the issue you mentioned, the heads up issues that Secretary Panetta made the remarks during his visit to Asia. But we actually received private explanations of what's the situation in the course of conducting those remarks. And fully understand the remarks made in his talk was not related to anything that U.S. commitment to Taiwanese defense. So it's abundantly clear there's no direct relations between those remarks and U.S. commitment for our defense. That's number one. Number two, with regard to the F-16 CD issue you mentioned, I think Assistant Secretary of State and Assistant Secretary of Defense, they made those remarks at the congressional hearings already emphasizing this will be the issue under consideration by the U.S. government in the future as well. We will continue to discuss the issue with U.S. side to see what should be done in terms of handling the issue. So we have no further reports so far regarding the F-16 you mentioned. Asymmetric capability, this is a priority and vitally important for our continuous defense modernization and transformation. We take this issue very seriously and we continue to discuss with the U.S. side with Pentagon what should be done and what are the priorities in terms of enhancing our asymmetrical capabilities. We keep an open mind and there are many areas and opportunities to address the issue in the future. Alan Romberg. Thank you. Alan Romberg, Stimson Center. Good to see you. Taking advantage of John's precedent of asking two questions so I'm going to do that. Okay. One is to follow up on Tom Rekford's question about the South China Sea. The PRC is very unclear, shall we say, about the significance of the nine-dash line. But since it's a line that was drawn when the ROC was sitting on the mainland, I wonder if you could give us some help in understanding Taipei's understanding of what it means. Does it mean sovereignty over all the waters, over the land features? What about the possibility of territorial waters or EEZs? Do you have something you can help us understand Taipei's perspective since the claim is for the same set of islands, reefs and so on as Beijing claims? And yet their claim about the line itself is not very clear. The second is while I would welcome having you address political issues, my sense is you'll want to stay away from them like the plague. But the issue of a peace accord is on the table since President Mao raised it on October 17th. My question is from an MND perspective, although obviously this is an issue for the future. Not something that anybody has sort of figured out what should be and what shouldn't be and so on and so forth. But have you thought about conceptually what you would be concerned to be included in any peace accord and what you would be concerned should be excluded? Again, from an MND perspective. The first question is much easier than the second one. Comparities for speaking, yes. Well, in fact, you mentioned PRC is unclear about its nine dash claim. In reality, we call it historical waters in our perspective. So PRC just succeeded. They took over our claims as their claims so they don't have a position for it. Because so long as it's a historical water, as far as the ROC is concerned. And for Beijing, I mean PRC government, they consider they are the only legitimate government representing entire China. So they spontaneously, you know, without asking our consent or whatever, take over the claim by themselves. That's my understanding. So we call it our historical water. We don't have a clear definition of body-in-body international code of conduct. But it's as a result of post World War II events accumulated afterwards that we have explored the area and we consider this is our historical water. So PRC simply follow or to take over this claim by themselves. So if they are not clear, that's their business. It's not our business. So we still consider that so long as this historical issue cannot be resolved. And we set aside those disputes and seeking cooperation and peaceful resolutions for this area. So we are not enforcing as far as our policy is concerned. We are not enforcing these historical claims. We only address this is the historical issue. But we have one typing island which is under our control in our sovereignty in a sprawdy area. So we certainly have to do something about it. This is our position right now. I mentioned the second question will be very difficult. It's hypothetical area. You never ask hypothetical question in the past. But I will not speak for the MND's position. It's my own personal position here. I think one thing should be included should there be a peace accord in the future. There's no time table for it. I think Beijing must make it abundantly clear that they will not refer the use of force against Taiwan. Abandoning the use of force not only against Taiwan. Abandoning the use of force in their foreign policies for example. Or at least abandoning the use of force against Taiwan. That's the must. Without those terms how can you secure their peace based on this peace accord? And they have to honor it. Renouncing the use of force is vital for Beijing's approach. Short of that my personal opinion is that you cannot guarantee there's a peace. Even you sign an agreement with Beijing. Don't quote it as a government policy. It's my own personal opinion. Well maybe I can build on that and ask you your personal opinion. On a topic that we have talked about a great deal. Which is cross-strait confidence building measures in the military sphere. And what the prerequisite for CBMS would be. And I know that your ministry has done a great deal of research on military confidence building measures. And even in the absence of a formal agreement. There are some search and rescue type activities that are underway. Not between militaries but between the local law enforcement agencies. My view is as you well know that there is. There could be significant benefits to both sides in pursuing military CBMS. Particularly increasing the predictability of the security environment. And creating communication mechanisms between the two sides. That could be useful potentially in a crisis to deescalate and manage a situation. So my question is. Whether you think that there is some kind of an organic relationship between a peace accord. And beginning a discussion on military CBMS. Is there one that is required before the other? Do they go in parallel? Do you have any sense as to what you think in your personal view would make sense in terms of the sequencing? And my assumption of course is no timetable. So we're not talking about today or tomorrow or any time soon. Thank you Bonnie for the question. I think over the time gradually within my government there is a process of consensus building right now. That the situation between two sides of the Taiwan Strait is quite unique. It's difficult to adopt the experiences in other regions or other countries regarding building CBMS to be applied. Or to be imposed in the situation of the Taiwan Strait area. As a result of very complex historical issues on both sides. So I think the consensus building in recent months and over the year or so is that we should achieve political trust. I mean CBMS is predicated on a bound and insufficient political mutual trust between two sides. That's the kind of a notion and perception we have developed in our domestic, at least at a policy level. But out of a bound and insufficient political trust it would be difficult to put forward military to military competence building measures. I think that President Ma also made it bound and clear that to pursue economic and easy parts in the first place. And institutionalizing mutual agreement sign over the years regarding economic and investments between two sides. And that symbolizes this accumulated process to enhance mutual trust. So it's not in reverse that we should go for a meal or meal in the first place and seek peace for coal in the future. So I think that probably will be the general consensus in Taiwan right now. That doesn't necessary to say that we are not seeking in a possible CBMS. There's one area I think that it certainly was considering that is can either side to make efforts to think about how to make a unilateral declaration over certain issues. For example, the issues I mentioned that if Beijing considered continuous peaceful engagement with Taiwan as beneficial to Beijing's interests and they already achieve abundant confidence in conducting peaceful engagement with Taipei. Can Beijing simply renounce the use force? Can they simply say that we are in a very solid peaceful position right now? And we cherish this accomplishment made by both sides in the past and we want to continue to go for it. So the element to use force certainly will be a strong and big obstacle to handicap the process. So we'll be willing to renounce the use force or to consider to renounce the use force, for example. So either side can do unilateral declaration in order to enhance mutual trust so that we can achieve more peaceful elements to assist this process to resolve the difficult political issues in the future. So that's the kind of thing I'm thinking about. Still my personal opinion. Wait for your mic please. Thank you. Mr. Minister, a draft report of the U.S.-China Economic Security and Review Commission has found that the contracting for and delivery of some of the arms that Taiwan was seeking and that have been notified to Congress has been very slow. It said that four of 60 Black Hawk helicopters notified in January 2010 only had been placed on order and I think only 9% of Apache helicopters notified in October 2008 had been placed on order. Similarly, it raised the possibility that no orders or few orders had been placed for Patriot PAC-3 fire control units notified in January 2010. I wonder if in line with your remark that you have to discuss the needs of quality, not only quantity, Taiwan is in fact reducing its plan to purchase any or all of those systems and others for funding reasons or others. Can you clarify where that situation stands? Jim, you know better than I do that U.S.-China Economic Security Commission is established by the Congress to look into the issues, concerns U.S. economic security interests, and making recommendations to the government, U.S. government to adjust the policies or the policy implementation to protect U.S. interests in that regard. So the question you raised should be the concern from the Congress towards the U.S. government, not directly towards our government as far as I can see. In fact, our relations conducted between MND and Pentagon is very much based on the Taiwan Relations Act and the issues regarding arms sales and acquisitions very much based on the code of conduct signed by U.S. government and Taiwan following the 40-minute sales arrangements. So far as I can see, we haven't actually faced the concerns or problems or delays or shortages. You mentioned by the draft report, you know, deliberated by U.S. CC, because we have received no direct information or responses from our contact point at the Pentagon. So as far as I can see that things are going in accordance with the plan, with the schedule, even the issues raised by the U.S. CC was very much in control by the U.S. Defense Department and their conduct with the U.S. Defense Industries. Well, that's what I say in terms of addressing how to reinforce the asymmetrical capability in the future, because there are issues need to be addressed so that we will enhance our defense capabilities based on the asymmetrical perception. Just to drill down a bit, if I may, on that asymmetrical issue that you raised, you cited the report to Congress in September on airpower issues, air defense issues. And as we've since learned, the report shows concern for whether further investments in new F-16s makes good sense given the threat to Taiwan's runways in any crunch. And so one of the asymmetric solutions might be something like the F-35 short takeoff and vertical landing aircraft. I wonder whether you're interested in exploring with the United States the possibility of acquiring the Stovall version of the F-35, perhaps either in addition to the F-16 or as a substitute for the F-16, specifically because of the threat to Taiwan's runways. As I mentioned earlier, our position is quite open and we welcome any kind of meaningful discussions or suggestions in the process of identifying adequate and suitable and effective asymmetrical capability in the future. As I mentioned, we are quite open and waiting for interesting introductions. Interesting suggestions. Other questions? Andrew, I did have a question if we could come back to the earlier question about unconventional threats to Taiwan's security and to global security really. And that is the whole question of cyber defense. In fact, we had a very interesting conference here at CSIS on Monday on that question and looking more globally and also relations with our allies and partners on cyber defense. I wondered, obviously, as you know, the debate here in the U.S. has been partly around the whole question of who's in charge of cyber defense. Should it be a military lead, a military and elements of the intelligence and security services? And how do we integrate all of the elements including engaging the private sector in effective cyber defenses? And I wondered if you could describe how the Ministry of Defense in Taipei has looked at this, how your plans have evolved in terms of thinking about this challenge. And what is the state of your coordination with other agencies of government and the private sector in Taiwan more broadly about plans to deal with the potential disruption of critical communications and command control systems and critical infrastructure through cyber means? Thank you, Dr. Flanagan. Indeed, this is the vital important issue as far as MND is concerned. I would describe our current cyber defense situation in two parts. One, we have isolated military information systems, which is different from the non-monetary information system currently in Taiwan. So we sort of, this is a very rudimentary way to prevent any intrusion into the military information systems by simply isolating from the civilian use. Only in recent months, actually, government has put in great emphasis on setting up a national level of cyber and information security systems within the Executive Yuan. This is a coordination commission involving both military and non-monetary and other civilian departments to look into the areas should be strengthened in terms of protecting governments and civilian information systems. That's one system, I mean the newly created echelons under the Executive Yuan. The other one is created by the National Security Council. In that cyber and information security task force, MND has actively participating in assisting the National Security Council to set up this task group to look into the areas needed to be strengthened, both in the military sector and non-monetary sectors. And then they will make recommendations to the president and also to the cabinet in terms of how to combine this national security, cyber security task force, and the Executive Yuan commission to coordinate with each other and setting up the priorities for the improvements of the security apparatus here. So it's still in the very beginning of putting extra efforts and resources to consolidate this issue. We haven't decided yet who is in charge, but military tech elite to protect our military information system in the first place. And then lesson learned, I mean for other implications, they needed our assistance to provide our experiences to set up the cyber security for non-monetary use as well. So maybe in time we will decide who is going to lead this effort or not. So I cannot give you the definite answer right now. Mike Fonte. Dr. Yang, good to see you. Mike Fonte, I'm the Washington liaison for the Democratic Progressive Party. You mentioned that the good relations between Taiwan and the United States during the Mod administration, based on no surprises, is one element of it. I think a lot of people in Washington though have been surprised by the defense budget numbers going down rather significantly over the last two years. And I wonder if you could explain that a bit for us and how you indicated that you had, from MND's perspective, you had to convince both the LI and the executive branch to put money in the pot. And it seems a little strange with the KMT controlling both of those institutions that you're having so much trouble with defense budget. So I wonder if you would explain why the defense budget has gone down to 2.2 percent or something like that of GDP. Thanks. Thank you, Mike. Yes, this is indeed the fact that we haven't achieved the promised 3 percent GDP of a natural defense budget in the past couple of years. But if you look at the actual defense budget, which obviously has been affected by the government's concern for their priority spending, which is abundantly clear. I have to explain why the resources allocation decision making adopted by the government. Of course, we continue to make efforts to address the importance of adequate and sufficient defense resources allocation so that we can continue to conduct our defense transformation and implementing major defense policies in the future. Governments are aware of that. They consider there's a need for more resources allocation for defense. However, due to the constraint of the national budget and due to the priorities, we cannot achieve our objectives in the past two years. But if you look at the next year's budget, we are making effort even though there is a slightly increase for our national defense budget. But this is a result of a very intensive effort made by the M&D and convincing not only the cabinet but also AOI to give us money because we have a major task at hand. For example, implementing the volunteer system, that's number one, and also necessary acquisition in down the road as well. So next year if the budget can be approved by AOI before mid-December, then we will have a more budget for 2012. That's a step forward. But if you look down in the future, I'm confident that we will get more resources allocation given the fact we already received approval from the U.S. to provide F16AB retrofit. That certainly requires sufficient money to put into it. And if AOI can assist M&D to implement volunteer system, then we will get the more budget for personnel cost in the future as well. So that will add up to the defense spending for the following years. So I'm sure there are more resources available in terms of our future defense budgets. So consensus building and continuous effort to convince the cabinet and AOI that this is a priority for our country is important. Thank you. Can the back row? My name is Adam Carrington. My name is Adam Carrington. I'm a contractor with DOD. I was wondering if you could address some of the policy shifts that M&D has undertaken because of the general low fallout. And also, has there been any type of concurrent interface with DOD because of the fallout we're experiencing from the WikiLeaks case? And maybe the two are interacting with one another to address the problems from insider threats. Thank you. As far as I can see Adam, those two cases has not direct impact over our policies. We're still very much putting efforts to continue our current and future efforts to meet our defense transformation objectives. So far there's no impact over our policy. Let me ask another question. Several months ago President Ma talked about the need to establish some kind of a code of conduct that would guide the interaction between retired military officers in Taiwan and their counterparts on the mainland as a result of some cases and the large growing number of retired military officers that are visiting the mainland. So I'm wondering if you could talk about what the progress has been in that regard and what such a code of conduct might look like. And it's my understanding that it would not be legally binding. So how would it actually be implemented? Thank you. Thank you, Bonnie. In fact, there's no written code of conduct or any verbal code of conduct to be addressed to this issue. The only thing I can see is that there are moral persuasions. There were continuous moral persuasions conducted to convince those retired senior officers to pay great attention to our national interests. We are not prohibiting their visits to mainland China, but simply aware, alert those senior retired officers in the course of conducting their visit always address the needs to protect our national interests. So I call it as a moral persuasion and it's taking effect as well. Thank you. Other questions? So you guys are very satisfied. Well, it seems like you have answered all of our questions and probably solved all of the problems that Taiwan faces as well. So we would like to very much thank you for coming today and talking to us and hope that you'll come back soon. Thank you. Thank you, Stephen. Thank you, Bonnie. Thank you all.