The 100th anniversary marking the fall of China’s last imperial dynasty upped tensions in the Taiwan Strait, with Chinese President Hu Jintao calling for “reunification through peaceful means” and his Taiwanese counterpart, Ma Ying-jeou, responding that he was just fine with the status quo.

The last thing needed is outside provocation. So we applaud the Obama administration’s compromise decision last month to go ahead with a $5.85 billion deal to upgrade Taiwan’s existing fleet of F-16 fighter jets.

Taiwan had wanted the U.S. to sell it 66 newer versions of the aircraft, and leaders of both parties in Congress pressured the administration to do so. China objects to any arms sale to Taiwan. The U.S. is obligated by a 1979 law to supply weapons to Taiwan, whose government broke from mainland China in 1949 after the Communist Party came to power.

The campaign for selling newer aircraft to Taiwan was led by Democratic Senator Robert Menendez of New Jersey and Republican Senator John Cornyn of Texas, where Lockheed Martin Corp. manufactures the F-16. A study commissioned by Lockheed estimated that selling Taiwan new planes would have been worth $8.7 billion and created about 16,000 jobs at a time when the U.S desperately needs to reduce unemployment. The assembly line might close now that the sale is off the table.

Yet selling new planes to Taiwan might have needlessly provoked China, a vital U.S. trade partner. Although China vies with the U.S. for influence in the region, the two nations also cooperate (sometimes fitfully) on a number of military and diplomatic issues, including keeping North Korea in check. China temporarily severed military ties with the U.S. after a round of arms sales to Taiwan in 2010 and has said it may do so again.

Taiwan, which publicly expressed gratitude for the upgrade deal, has to be privately disappointed. It has 400 combat aircraft, including 145 F-16s, 56 French-made Daussault Mirages and 60 F-5s. This fleet is no match for the 2,300 combat aircraft that China possesses. This imbalance doesn’t take account of 1,100 missiles aimed across the 100-mile-wide Taiwan Strait at the island that China considers a province temporarily occupied by a renegade regime.

The U.S. commitment to ensuring that the island is adequately armed makes diplomatic sense. Taiwan’s deterrent capability goes hand-in-hand with a thaw in relations between Taipei and Beijing. Direct air service between China and Taiwan started in 2008, and educational and cultural exchanges are increasing. Taiwan President Ma has renewed calls for China to respect the island’s self-governance.

Under the agreement, Taiwan’s A/B versions of the F-16 will be overhauled and given most of the capabilities of more advanced C/D models of the plane, including all-weather navigation and offensive firepower. The upgrade may have one distinct advantage: The Obama administration says it can be done more quickly than building new planes.

But the F-16 retrofitting deal leaves one issue unresolved. Many of Taiwan’s planes have outlived their useful life. Most troubling: Two Taiwanese F-5s crashed last month killing three people. An investigation is under way to determine the cause, but crashes of combat aircraft are often traced to mechanical failures. Taiwan temporarily grounded its F-5s, planes from the Vietnam War era, and repeated its request to buy new F-16s.

If Taiwan can prove ― perhaps with assistance from U.S. military analysts ― that the wear and tear on its fighter jets has rendered too many of them obsolete or unsafe, the Obama administration should reconsider selling the newer aircraft. Placating China at the expense of an ally’s ability to defend itself isn’t a trade-off worth making.

(Editorial, Bloomberg)