The U.S. has refused to sell Taiwan aircraft weapons that could be used to attack China. In particular, this means no radar homing (AGM-88C HARM) missiles and JDAM smart bombs. Both could be used to demolish Chinese anti-aircraft defenses. Late last year, it was agreed that refusing the HARM made some practical sense as well, because the new Chinese air defense systems (the Russian SA-10 series) has a long range radar that could detect and nail a HARM carrying aircraft, before the HARM could be launched.
To get around this refusal, Taiwan has been building their own version of the American JSOW (Joint Stand Off Weapon) Also called the AGM-154A, the Taiwanese version is called the Wan Chien. Taiwan recently made a very public announcement about Wan Chien, which was another way of sending a "don't attack us" message to China.
JSOW is basically a smart bomb with wings. That enables it to glide up to 70 kilometers from the aircraft dropping it, to a target on the ground. Range is about 25 kilometers if dropped from low altitude. JSOW also contains more elaborate fins and software that enables it to follow a specific route. Like the wingless JDAM smart bomb, JSOW uses GPS and inertial guidance (as a backup) to find its target. Like JDAM, JSOW hits within 30 feet of its aiming point. The U.S. pays about $250,000 for each JSOW. The Taiwanese could use their Wan Chien. JSOW as a form of HARM to take out the latest Chinese air defense radars, by adding additional sensors to the guidance system.
Taiwan is also building its own version of HARM, called Tien Chien 2A. JDAM technology is a lot simpler than these two other projects, and Taiwan could easily design and build its own. Refusing to sell them just costs the U.S. export sales. On the other hand, it allows the United States to tell China that it didn't sell JDAM to Taiwan, thus defusing tensions over Taiwan. In reality, of course, Taiwan can just go build their own JDAM, which they will probably do.