The Taiwanese Air Force received the first aircraft, which have been “retrofitted” by US aerospace company Lockheed Martin, today.
The Asia Times reports the F-16V features enhancements including an active, electronically scanned array radar, a new modular mission computer plus improvements to the cockpit.
The Taiwanese military is the first recipient of the F-16V after setting aside more than £3.2billion to upgrade its fleet of 144 planes to the latest configuration, which the process scheduled to take five years.
A Taiwanese defence official also told the Asian Times the country would be working alongside Lockheed Martin to construct a “depot-level maintenance and repair centre” for F-16s, meaning necessary work could be undertaken there rather than shipping the planes back to the United States.
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The country is reportedly ready to invest more than £385million in the project.
The move comes against a backdrop of rising tensions in the region in recent months, most recently illustrated by the US decision to dispatch to ships which sailed through the Taiwan Strait yesterday.
It was the second such operation this year, as the US military increases the frequency of transits through the strategic waterway.
Commander Nate Christensen, deputy spokesman for US Pacific Fleet, said in a statement: "The ships' transit through the Taiwan Strait demonstrates the US commitment to a free and open Indo-Pacific.
The Taiwan issue concerns China's sovereignty and territory, and is the most important, most sensitive issue in China-U.S. relations
“The US Navy will continue to fly, sail and operate anywhere international law allows.”
Taiwan's defence ministry said it closely monitored the operation and was able to "maintain the security of the seas and the airspace" as it occurred.
Beijing, which considers Taiwan a breakaway province of "oneChina", had already expressed "serious concern" to the United States, foreign ministry spokeswoman Hua Chunying told a regular briefing on Tuesday.
She said: ”The Taiwan issue concerns China's sovereignty and territory, and is the most important, most sensitive issue in China-U.S. relations.”
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China urged the United States to cautiously and appropriately handle the Taiwan issue to promote peace and stability in the Taiwan Strait, she added.
The US Navy conducted a similar mission in the strait's international waters in July, which had been the first such voyage in about a year. The latest operation shows the U.S. Navy is increasing the pace of strait passages.
Washington has no formal ties with Taiwan, but is bound by law to help it defend itself and is the island's main source of arms.
The Pentagon says Washington has sold Taiwan more than $15 billion in weaponry since 2010.
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In July, China told a US Navy P-8A Poseidon jet flying 16,500ft above coral reefs in the South China Sea which have been turned into a Chinese military base complete with five-story building, radar installations and runways for aircraft to “leave immediately”.
The US crew responded by saying: "I am a sovereign immune United States naval aircraft conducting lawful military activities beyond the national airspace of any coastal state.
"In exercising these rights as guaranteed by international law, I am operating with due regard for the rights and duties of all states."
China also protested after the US approved arms sales worth more than £250million to Taiwan last month.
(Additional reporting by Monika Pallenberg)