TAIWAN President Lee Teng-hui yesterday declared that the island must accelerate the strengthening of its military with 'second generation' weapon systems and modern rapid-reaction concepts in the face of the build-up of mainland military power. Mr Lee made the statement after reviewing Taiwan's second-generation military hardware in an exercise held at Tsoying naval base north of Kaohsiung. He said mainland Chinese leaders were 'unwilling to face the reality' of the existing cross-strait division and refused to abandon the possibility of the use of force against Taiwan, sharply expanding military spending and the armed forces in recent years. Beijing was 'altering their strategic deployment, posing an extremely large threat to Taiwan and the Asia-Pacific region', the President said. 'Facing this trend, only if we . . . accelerate the building of a second-generation armed force, intensify military training and build a strong national defence can we ensure national security and stability without fear of the Chinese communist armed intimidation.' There was no immediate response from the Foreign Ministry in Beijing. The exercise started a build-up to National Day on Tuesday. It involved a review of 60 frigates, 60 aircraft and 6,000 troops from the island's 500,000-strong Army, Air Force and Navy. During the exercise yesterday, each service displayed recent acquisitions. The flyover featured 12 supersonic Indigenous Defence Fighters, interceptors built by Taiwan, and newly bought E-2T early warning aircraft, as well as AH-IW Cobra attack helicopters bought from the US. Land forces included a rapid-reaction detachment and M60A3 tanks newly purchased from the US. Among the naval vessels on display were the Knox-class anti-submarine frigates leased from the US and four submarines made by Holland and the US. A number of opposition legislators criticised the exercise as having shrunk from an earlier concept involving the actual use of sea and air forces, largely in the face of concern over the mainland's reaction. Mr Lee announced the manoeuvre in July as a morale-boosting measure after China launched a series of missile tests north of the island. Legislator Lin Chuo-shui of the Democratic Progressive Party said: 'This type of shrunken exercise loses the desired effect of building popular confidence.' But Su Jing-chang, a defence analyst for the private Institute of National Policy Research, said that although no simulation of actual military action took place, 'the exercise displayed Taiwan's defence capabilities more effectively than a review in front of the Presidential Palace or manoeuvres at sea'.