Oct 25 (Reuters) - The U.S. State Department has

approved a potential $2 billion sale to Taiwan of missiles and

radar systems, the Pentagon said on Friday, a week after China

staged war games near the island and including systems that have

been battle tested in Ukraine.

The United States is bound by law to provide Chinese-claimed

Taiwan with the means to defend itself despite the lack of

formal diplomatic ties, to the constant anger of Beijing.

China has been stepping up military pressure against Taiwan,

including holding a new round of war games around the island

last week, the second time it has done so since Lai Ching-te

took office as Taiwan's president in May.

The Pentagon's Defense Security Cooperation Agency said the

new sale consisted of $1.16 billion in missile systems and radar

systems worth an estimated $828 million. The principal

contractor for the missile system will be RTX Corp ( RTX ), the

Pentagon said.

"This proposed sale serves U.S. national, economic, and

security interests by supporting the recipient's continuing

efforts to modernize its armed forces and to maintain a credible

defensive capability," it said in a statement.

"The proposed sale will help improve the security of the

recipient and assist in maintaining political stability,

military balance, and economic progress in the region."

The missile system sale is for three National Advanced

Surface-to-Air Missile System (NASAMS) medium-range air defense

solutions that includes the advanced AMRAAM Extended Range

surface to air missiles, it added.

Demand for NASAMS has increased since the system was

employed in Ukraine.

Taiwan's defense ministry welcomed the announcement, noting

the "proven" use of NASAMS in Ukraine and saying it would help

Taiwan's air defense capabilities in the face of China's

frequent military maneuvers.

Taiwan's military is bolstering its armaments to be able to

better face any attack from China, including building its own

submarines to defend vital maritime supply lines.

China detests Lai as a "separatist" and has rebuffed his

repeated calls for talks. Lai rejects Beijing's sovereignty

claims saying only Taiwan's people can decide their future.