The rapid rise of the People’s Republic of China (PRC) as a regional political and economic power with global aspirations is one of the principal elements in the emergence of East Asia, a region that has changed greatly over the past quarter of a century. China’s emergence has significant implications for the region and the world. The United States welcomes the rise of a peaceful and prosperous China, one that becomes integrated as a constructive member of the international community. But, we see a China facing a strategic crossroads. Questions remain about the basic choices China’s leaders will make as China’s power and influence grow, particularly its military power.

The Chinese People’s Liberation Army (PLA) is modernizing its forces, emphasizing preparations to fight and win short-duration, high-intensity conflicts along China’s periphery. PLA modernization has accelerated since the mid-to-late 1990s in response to central leadership demands to develop military options for Taiwan scenarios.

In the short term, the PRC appears focused on preventing Taiwan independence or trying to compel Taiwan to negotiate a settlement on Beijing’s terms. A second set of objectives includes building counters to third-party, including potential U.S., intervention in cross-Strait crises. PLA preparations, including an expanding force of ballistic missiles (long-range and short-range), cruise missiles, submarines, advanced aircraft, and other modern systems, come against the background of a policy toward Taiwan that espouses "peaceful reunification." China has not renounced the use of force, however. Over the long term, if current trends persist, PLA capabilities could pose a credible threat to other modern militaries operating in the region.

The PLA is working toward these goals by acquiring new foreign and domestic weapon systems and military technologies, promulgating new doctrine for modern warfare, reforming military institutions, personnel development and professionalization, and improving exercise and training standards. We assess that China’s ability to project conventional military power beyond its periphery remains limited.

This report outlines what we know of China’s national and military strategies, progress and trends in its military modernization, and their implications for regional security and stability. But, secrecy envelops most aspects of Chinese security affairs. The outside world has little knowledge of Chinese motivations and decision-making and of key capabilities supporting PLA modernization. Hence, the findings and conclusions are based on incomplete data. These gaps are, of necessity, bridged by informed judgment.

The PLA’s routine publication of a biannual Defense White Paper demonstrates some improvement in transparency. However, China’s leaders continue to guard closely basic information on the quantity and quality of the Chinese armed forces. For example, the U.S. Department of Defense still does not know the full size and composition of Chinese government expenditure on national defense. Estimates put it at two to three times the officially published figures.

Chapter One: Key Developments 1

Chapter Two: Understanding China’s Strategy 7

Cooperative, Candid, and Constructive U.S.-China Relations 7

Images of China’s Future 7

Direct Insights into China’s Strategy are Few 9

Military Modernization . . . Beyond Taiwan 12

• In December 2004, Beijing released China’s National Defense in 2004 (hereinafter,

• China continued its strategic focus on building "comprehensive national power," with

an emphasis on economic development. This year, China will complete its 10th Five

Year Plan and finalize preparations for the 11th Five Year Plan (2006-2010).

• State President and Chinese Communist Party (CCP) General Secretary Hu Jintao

• The CMC expanded from eight to eleven members and added the commanders of the

• In 2004, China began to express increased concern over a perceived technology gap

• Domestic protests, mainly directed at local policies and officials, have grown violent

• China introduced "peaceful rise," a new term to describe China’s emergence.

• China became the world’s second largest consumer and third largest importer of oil in

• Beijing continued to play its role as the chief organizer of the Six-Party Talks aimed

• China expanded upon the successful conclusion in 2003 of the China-ASEAN Joint

• China continued to make progress on resolving its border dispute with India. In

• The PLA conducted joint maritime search and rescue drills for the first time with

• The 2004 Defense White Paper characterized the cross-Strait situation as "grim," and

• China’s National People’s Congress passed an "anti-secession law" in March 2005 as

• China held two large-scale amphibious exercises in 2004 (division to group-army

• China used diplomatic pressures and verbal warnings to try (unsuccessfully) to derail

• China continued to adhere to its policy of peaceful unification under the "one country,

• Kuomintang Chairman Lien Chan and the People’s First Party Chairman James

• Beijing continues to see the threat and possible use of force as integral to its policy of

• Ballistic Missiles. China has deployed some 650-730 mobile CSS-6 and CSS-7

• China is exploring the use of ballistic missiles for anti-access/sea-denial missions.

• China is modernizing its longer-range ballistic missile force by replacing older

• Air Power. China has more than 700 aircraft within un-refueled operational range of

• China’s indigenous 4th generation fighter, the F-10, completed development in 2004

• China is acquiring from abroad or developing advanced precision strike munitions,

• The PLA appears interested in converting retired fighter aircraft into unmanned

• Naval Power. China’s naval forces include 64 major surface combatants, some 55

• China deployed its first two Russian-made SOVREMENNYY-class guided missile

• China’s SONG-class diesel electric submarine has entered serial production. The

• China is acquiring eight additional KILO-class diesel electric submarines from Russia

• Air Defense. In August 2004, China received the final shipment from Russia of four

• The PLA fielded a new self-propelled tactical SAM to its air defense brigades, the

• Ground Forces. China has 375,000 ground forces personnel deployed to the three

• The PLA is expected to complete another round of downsizing, by some 200,000, by

• China acquired more Mi-17/171 medium-lift helicopters from Russia in 2004 and is

• China’s latest Defense White Paper deployed authoritatively a new doctrinal term to

• The PLA continues to improve its potential for joint operations by developing a

• During 2004, the PLA began to integrate military and civilian suppliers in the

• The PLA fielded its first experimental "joint logistical unit" in July 2004.

• China is digesting lessons learned from coalition military operations in Afghanistan

• China will continue to press the European Union (EU) to lift its embargo on the sale

• In addition to deliveries and standing orders for the Su-30MKK and Su-30MK2

• The cross-Strait military balance appears to be shifting toward Beijing as a result of

• Taiwan defense spending has steadily declined in real terms over the past decade,

• A $15.3 billion Special Budget for the purchase of Patriot PAC-III air defense

-- Deng Xiaoping1

• The United States and China have worked together to pursue the common

• Through the Joint Commission on Commerce and Trade and the Joint Economic

• The United States and China have agreed to a new, periodic senior dialogue on

• In our military-to-military relationship, we have expanded exchanges, including

1 As cited in "Deng Puts Forward New 12-Character Guiding Principle for Internal and Foreign Policies,"

• nationalistic fervor bred by expanding economic power and political influence;

• structural economic weaknesses and inefficiencies that could undermine economic growth;

• an inability to accommodate the forces of an open, transparent market economy;

• a government that is still adapting to great power roles; and,

• an expanding military-industrial complex that proliferates advanced arms.

• More Assertive Foreign and Security Policies. Continued strong economic

• Economic Stagnation. Economic stagnation – which could aggravate domestic

• Economic Downturn. An economic downturn might occur at some time in the

• Internal Unrest. Party leaders have relaxed their grip on the economic sphere and

• Territorial Disputes. China has made progress in recent years toward settling longstanding

"shi." CNP is the concept by which China’s strategic planners evaluate and measure

The "strategic configuration of power," or "shi," is roughly equivalent to an "alignment

suggest that "shi" refers to the "propensity of things," or the "potential born of

assessment by an adversary can recognize how "shi" can or will be exploited.

10

Since the early 1980s, as former paramount leader Deng Xiaoping pressed forward with

China’s "reform and opening up," Chinese leaders have described their national

development strategy as a quest to increase China’s CNP. As China’s leaders pursue

national development, they must constantly assess the broader security environment, or

"strategic configuration of power," for potential challenges and threats – as well as

opportunities – that might prompt an adjustment in national strategy.

In the early 1990s, former paramount leader Deng Xiaoping (d. 1997) gave guidance to China’s foreign and security policy apparatus that, collectively, has come to be known as the "24 character" strategy: "observe calmly; secure our position; cope with affairs calmly; hide our capacities and bide our time; be good at maintaining a low profile; and never claim leadership."

Later, the phrase, "make some contributions (you suo zuo wei)" was added.

The prospect of large-scale conflict, such as a war between China and Taiwan that

included direct U.S. involvement, would likely prompt China’s leaders to place the

reestablishment of a favorable "strategic configuration of power" ahead of national

development. Both Deng Xiaoping and Jiang Zemin indicated that in these

circumstances, one of China’s war aims would be to terminate the conflict on favorable

terms as quickly as possible to refocus national resources on developing CNP. There is

no evidence that China’s new leaders’ views on this point are any different.

In peacetime, we can expect China to pursue economic progress as part of its strategy to

build comprehensive national power. It has established a goal of doubling by 2010 the

size of its economy in 2000 and raising GDP per capita ($1,250 in 2004) to the levels of

an "intermediate developed country" (roughly $3,400) by 2049. Chinese leaders value

such progress for its own sake, as well as for the enhancements to military forces and

national power this progress will allow. Moreover, in contrast to a "development first

model," evidence suggests they seek to integrate the two to obviate, or at least minimize,

traditional "guns vs. butter" trade-offs.

In May 2003, President Hu Jintao stated that: "it is necessary . . . to establish a

mechanism of mutual promotion and coordinated development between national defense

building and economic development." China’s modernization indicates a buildup of

armaments that reinforces this notion of coordinated, integrated civilian and military

development.

11

The Chinese military forms an important, and growing, part of Beijing’s overall national

strategy. China’s leaders believe that control and use of the armed forces and other

instruments of power are essential to ensure that the Party remains dominant, and that

China can secure its borders, defend its territorial claims, and shape its security

environment in a way that allows its continued economic growth and development. As

China’s economy expands, so too will its interests and the perceived need to build an

armed force capable of protecting them. In its latest Defense White Paper, China notes

that, "the military factor plays a greater role in . . . national security," and, "the role

played by military power in safeguarding national security is assuming greater

prominence."

Consequently, although the principal focus of China’s military modernization in the near

term appears to be preparing for potential conflict in the Taiwan Strait, some of China’s

military planners are surveying the strategic landscape beyond Taiwan. Some Chinese

military analysts have expressed the view that control of Taiwan would enable the PLA

Navy to move its maritime defensive perimeter further seaward and improve Beijing’s

ability to influence regional sea lines of communication. Conversely, some of these

analysts believe, the political status quo with Taiwan constrains China’s ability to project

power. General Wen Zongren, Political Commissar of the elite PLA Academy of

Military Science, stated in a recent interview that resolving the Taiwan issue is of "far

reaching significance to breaking international forces’ blockade against China’s maritime

security. . . . Only when we break this blockade shall we be able to talk about China’s

rise. . . . To rise suddenly, China must pass through oceans and go out of the oceans in

its future development."

Analysis of Chinese military acquisitions also suggests the PLA is generating military

capabilities that go beyond a Taiwan scenario. All of China’s SRBMs, although

garrisoned opposite Taiwan, are mobile and can deploy throughout the country to take up

firing positions in support of a variety of regional contingencies. China is also

developing new medium-range systems that will improve its regional targeting capability.

There are corresponding improvements in intercontinental-range missiles capable of

striking targets across the globe, including in the United States.

Similarly, China’s air and naval force improvements – both complete and in the pipeline

– are scoped for operations beyond the geography around Taiwan. Airborne early

warning and control and aerial refueling programs for the PLA Air Force will extend the

operational range for its fighter and strike aircraft, permitting extended operations into

the South China Sea, for example. Naval acquisitions, such as advanced destroyers and

submarines, reflect Beijing’s pursuit of an "active offshore defense," to protect and

advance its maritime interests, including territorial claims, economic interests, and

critical sea lines of communication. Over the long-term, improvements in China’s

command, control, communication, computers, intelligence, surveillance, and

reconnaissance (C4ISR) capability, including space-based and over-the-horizon

12

platforms, could enable Beijing to identify, target, and track foreign military activities

deep into the western Pacific and provide, potentially, hemispheric coverage.

Note: China currently is capable of deploying ballistic missile forces to support a variety of regional contingencies.

Chinese forces have increased operations beyond China’s borders and home waters, most

notably the highly publicized intrusion of a HAN-class nuclear submarine last year in

Japanese territorial waters during operations far into the western Pacific Ocean. After

completing its first around-the-world cruise in July 2002, China continues to send its fleet

abroad to show the flag and gain familiarity with open-ocean operations. Finally, China

has increased participation in global peace operations. China now has some 1,000

peacekeepers abroad, including 500 attached to the UN Observer Mission in Liberia

(UNOMIL), 230 with the UN Observer Mission in the Democratic Republic of the Congo

(MONUC), and 125 as part of the UN Mission for Stabilization in Haiti (MINUSTAH).

China does not now face a direct threat from another nation. Yet, it continues to invest

heavily in its military, particularly in programs designed to improve power projection.

The pace and scope of China’s military build-up are, already, such as to put regional

military balances at risk. Current trends in China’s military modernization could provide

China with a force capable of prosecuting a range of military operations in Asia – well

beyond Taiwan – potentially posing a credible threat to modern militaries operating in the

region. China could accelerate its military development by using more of its civil

production capacity for military hardware (industrial facilities for China’s commercial

ship-building – which now occupy about 10% of the global market in terms of dead

13

weight ton production – are co-located with military shipyards, for example) or by

increasing purchases of advanced military hardware and technology from abroad.

Beijing has described its long-term political goals of developing comprehensive national

power and of ensuring a favorable strategic configuration of power in peaceful terms.

Themes include an emphasis on peace and development, the non-use of force in settling

disputes, non-intervention in the internal affairs of other countries, the defensive nature of

China’s military strategy, a policy of no first use of nuclear weapons, and support for

nuclear weapons-free zones.

Nevertheless, China’s military modernization remains ambitious. In the recent past,

moreover, military responses in support of Chinese claims to disputed territory or

resource rights have produced crises and conflicts with China’s neighbors, including

India, Japan, the Philippines, the then-Soviet Union, and Vietnam. In the future, as

China’s military power grows, China’s leaders may be tempted to resort to force or

coercion more quickly to press diplomatic advantage, advance security interests, or

resolve disputes.

14

Back to Table of Contents

Home

It is clear that China’s leaders view the military instrument as playing a central role in

support of national goals and objectives. China’s strategy for the employment of the

military to support these goals, or the conditions under which China’s leaders would

select military over non-military methods in problem-solving, however, are less clear.

China does not have a public document directly equivalent to the U.S. National Military

Strategy. Outside observers, therefore, have few direct insights into central leadership

PLA text, The Study of Campaigns (Zhanyi Xue), published in 2000, explains:

"Active defense" calls for forces to be postured to defend against perceived security

threats. China’s forces also seek to shape their security environment and prevent

adversaries from engaging in actions contrary to China’s national interests. Returning to

the 1979 conflict with Vietnam, Beijing launched that invasion as a punitive measure to

"teach Hanoi a lesson" following its incursion into Cambodia. China used military

coercion short of war when it launched missiles into closure areas off Taiwan in 1995 and

1996 to pressure Taipei.

Assessments indicate that Beijing’s capability for limited and relatively precise uses of

force is growing. Since the 1990s, PLA strategists have discussed in professional

journals the efficiency of limited applications of force to accomplish limited political

goals. Advances in military technology provide Beijing with an expanded set of limited

force options. Chinese operational-level military doctrine defines these options as "nonwar"

uses of force – an extension of political coercion and not an act of war.

15

Over the past several decades, there has been a resurgence in the study of ancient Chinese

statecraft within the PLA. Whole departments of military academies teach the precepts

of moulue, or strategic deception, derived from Chinese experience through the millennia,

particularly military aspects surrounding the dynastic cycle. Modern China also has a

track record of successfully deceiving opponents. Through effective use of deception

from the strategic to the tactical levels, China’s intervention in the Korean War caught

the United States by surprise. Similarly, India, the Soviet Union, and Vietnam, as well as

many outside observers, did not anticipate Chinese incursions into the territories of those

countries.

One might expect some secrecy in technological and weapon system development and

tactical deception about the location of units. China’s practice encompasses this and

more. In recent years, for example, China rolled out several new weapon systems whose

development was not previously known in the West.

Back to Table of Contents

Home

PLA reform and reorganization started in the early 1980s, accelerated in the latter half of

the 1990s, and will continue for the foreseeable future. The PLA is transforming from a

mass army designed to fight a protracted war of attrition within its territory to a smaller,

modern, professional force capable of fighting high-intensity, local wars of short duration

against high-tech adversaries. PLA theorists and planners believe future campaigns will

be conducted simultaneously on land, at sea, in the air, in space, and within the electronic

sphere. The PLA characterizes these conflicts as "local wars under conditions of

informationalization."

Local Wars Under the Conditions of Informationalization

The PLA desires to project joint conventional military power rapidly into its geographic

frontier to meet the enemy at or beyond Chinese territory. It is modernizing in all

16

services and at all levels to build a force capable of meeting the requirements of future

war, primarily through the improvement of the PLA’s joint operational capabilities.

The PLA’s ambition to conduct joint operations can be traced to lessons learned from

U.S. and allied operations since the Persian Gulf War. Although the PLA has devoted

considerable effort to develop joint capabilities, it faces a persistent lack of inter-service

cooperation and a lack of actual experience in joint operations. The PLA hopes

eventually to fuse service-level capabilities with an integrated C4ISR network, a new

command structure, and a joint logistics system. The inclusion of service commanders

on the Central Military Commission last year is an example of how China is

strengthening inter-service cooperation to develop joint capabilities. The lack of

experience in joint operations is a subset of the overall lack of operational experience in

the Chinese force.

The PLA’s future joint force has been influenced by U.S. capabilities and concepts and

by Soviet/Marxist-derived characteristics of warfare, but will unlikely mirror either. For

example, it appears that the PLA’s concept of joint operations provides for coordination

at or above the operational level of war. Since 2000, it has conducted some 14

multiservice exercises with "joint" characteristics and/or "joint" command and control,

improving PLA experience levels, and yielding some insights into its future direction.

These insights will become clearer as more advanced weapons, sensors, and platforms

enter the inventory and training begins to reflect true multiservice operations. For a

combination of technical and doctrinal reasons, the PLA has not demonstrated a

capability to conduct U.S.-style joint operations, nor is it likely to do so in the near future.

Back to Table of Contents

Home

China observes closely foreign military campaigns and defense modernization initiatives.

The United States factors heavily in these observations as a model of how a modern

military engages in modern warfare. China draws from U.S. military operations by

adopting or emulating lessons in some areas, and in others, by identifying exploitable

vulnerabilities in potential high-tech adversaries. In addition, U.S. defense

transformation, as demonstrated by recent U.S. operations, has highlighted to China the

expanding technological gap between modern military forces and those of developing

countries. The 2004 Defense White Paper identifies the "technological gap resulting

from the revolution in military affairs" as having a "major impact on China’s security."

These concerns have prompted China’s leaders, including President Hu Jintao, to order

the PLA to pursue "leap ahead" technologies and "informationalized" capabilities to

increase the mobility, firepower, and precision of PLA weapons and equipment.

Operation DESERT STORM (1991) was a primary motivator behind China’s efforts to

prepare for future warfare. The PLA noted that the rapid defeat of Iraqi forces revealed

how vulnerable China would be in a modern war. The Gulf War drove the PLA to update

doctrine for joint and combined operations to reflect modern warfare and to accelerate

reform and modernization. The Gulf War also spurred PLA debates on the implications

17

of the revolution in military affairs, and led China to seek modern C4ISR and to develop

new information warfare, air defense, precision strike, and logistics capabilities.

Operation ALLIED FORCE (1999) had a similar impact on PLA thinking, although more

as a validation of earlier assessments of the requirements of modern warfare than as a

catalyst for change. NATO’s air operations over Serbia provided the PLA insights into

how a technologically inferior force could defend against a superior opponent. PLA

observers noted how low-tech counter-reconnaissance and tactical deception measures,

such as camouflage, decoys, dispersion, and frequent movement of forces could deny an

adversary situational awareness and precision-strike capabilities. The air campaign

reinforced the PLA’s focus on passive defense measures such as hardening or burying

high-value targets, shifting to fiber-optic communications, and concealing supply depots.

The PLA applied the most significant lessons from Operation ALLIED FORCE in a

revised air defense training regime referred to as "Three Attacks, Three Defenses" (attack

stealth aircraft, cruise missiles, and helicopters; defend against precision strikes,

electronic warfare, and enemy reconnaissance). PLA theorists also began to conclude

that airpower and long-range strike diminished the role of ground forces. These

observations led to discussion of the value of precision air and missile strikes against

leadership and command and control targets to isolate and "decapitate" the enemy, and

thereby force a rapid capitulation with a minimum commitment of ground forces. These

observations most likely led to accelerated development and deployment of more capable

ballistic and cruise missiles and to acquisition of newer multi-role fighter aircraft to

support an evolving doctrine for independent, strategic air operations.

The PLA is digesting coalition operations in Afghanistan and Iraq to gain a better

understanding of the implications of modern war. At a minimum, it appears to have

drawn new lessons on the application of UAVs for reconnaissance and strike operations,

special forces for precision targeting, and the integration of psychological operations with

air and ground operations to target leadership and communication nodes. PLA observers

were impressed with weapon system integration and interoperability, and flexible logistic

support to mobile operations.

In contrast to conclusions drawn from previous conflicts, Operation IRAQI FREEDOM

appears to have prompted the PLA to rethink the notion that airpower and precisionstrike

technology alone are sufficient to prevail in a conflict. In June 2003, for example,

Jiang Zemin noted: "the Iraq war has once again proven that under high-tech conditions,

the factor determining the outcome of war is still human quality."

18

Observations of Operation IRAQI FREEDOM

-- On gleaning lessons from coalition operations: ". . . the trend of new military changes is

developing rapidly in the world, and the recent Iraq war has reflected this trend. We should not only profoundly research and analyze this trend but also actively push forward military changes with Chinese characteristics according to our country’s actual conditions."

-- On precision strike: ". . . the Iraq war reflected the tendency toward the development of

-- On mobility: "Either driving straight in along the south route or adopting air-mobility tactics

-- On integrated operations: "The U.S. and British allied forces gave full expression to the joint warfare theory [and] had all their arms and services to do everything possible to coordinate their actions in all directions and at all times to achieve rapid dominance on the battlefield, and their actions included air strikes, ground attacks, sea-based missile launches, satellites and information warfare."

-- On non-contact warfare: "Under the conditions in which high-tech weapons and equipment have been continuously developing, the effect and importance of non-contact fighting have become increasingly clear, but contact fighting is not to be ignored."

-- On implications for the PLA: "While studying this war, we should . . . pay attention to

-- Conclusion: "We should push forward the military reform with Chinese characteristics, which means that we should study and draw on the experiences and lessons of various countries in making military changes, including all the local wars fought under high-tech conditions, [but] we should not mechanically copy other countries’ pattern of military changes."

19

Back to Table of Contents

Home

Continued economic growth and reform are essential to PLA modernization. In absolute

terms, this translates into increased funding available for defense. Broad-based growth

and modernization also expands China’s economic capacities in industry, technology, and

human resources, enabling its leaders to accelerate military modernization in relative

terms, as well. If China is able to sustain past growth rates – a challenge due to projected

demographic changes, maturation of the industrial and technology base, and persistent

financial inefficiencies – its economy could expand to almost $6.4 trillion by 2025. For

comparison purposes, in 2025 Russia’s GDP is projected to be $1.5 trillion, Japan’s $6.3

trillion, and the U.S., $22.3 trillion. Based on past patterns, China’s defense sector will

probably benefit from continued overall economic performance.

Back to Table of Contents

Home

Figure 3. China’s Projected GDP Through 2025 (Constant 2005 Prices)

Tracking defense budgets is critical to understanding trends in China’s military

modernization as the budget reflects China’s capability to generate military power from

its economic base. Since the early 1990s, China has steadily increased resources for the

defense sector. On March 4, 2005, a spokesperson for China’s National People’s

Congress announced that China would increase its publicly disclosed defense budget in

2005 by 12.6 percent, to approximately $29.9 billion – double the figure for 2000. This

year’s increases continue trends that have prevailed for the past fifteen years of doubledigit

annual increases in China’s published figures. When adjusted for inflation, the

nominal increases have produced double-digit actual increases in China’s official defense

budget every year since the mid-1990s. However, the officially published figures

substantially underreport actual expenditures for national defense.

The opacity of the PLA budgeting system precludes significant outside analysis. A

further complication in the analysis of China’s defense spending trends is the wide

variation in methodologies (e.g., calculations based on market exchange rates, purchasing

power parity, or a mixture of the two, and in varying proportions).

***CHART NOT AVAILABLE***

Source: Defense Intelligence Agency.

Note: Projections, in constant 2005 dollars, show low, medium, and high-end

estimates of China’s future defense spending.

According to some estimates, the official budget does not include foreign weapons

procurement (up to $3.0 billion annually from Russia alone), expenses for the

paramilitary People’s Armed Police, funding to support nuclear weapon stockpiles and

the Second Artillery, subsidies to defense industries, some defense-related research

21

development, and local, provincial, or regional contributions to the armed forces.

Combined, these additional monies could increase actual defense expenditures by two to

three times the publicly available figure, suggesting the defense sector in China could

receive up to $90.0 billion in 2005, making China the third largest defense spender in the

world after the United States and Russia, and the largest in Asia.

Projecting out defense spending over a long period is problematic for the reasons cited

above. Assuming that China’s defense burden (proportion of defense expenditure as a

percentage of GDP) remains constant, China’s defense budget could rise three-fold or

greater by 2025.

According to intelligence community estimates, China’s defense industries are inefficient

and dependent on foreign suppliers for key technologies. Exceptions are few, such as

ballistic missile research, development, and production. China is reorganizing defense

industry, modernizing industrial facilities, and acquiring foreign technology to develop

and produce advanced weapons systems to support PLA modernization.

An important aspect of China’s overall modernization strategy is civil-military integration.

According to a recent RAND report, "China’s leaders remain convinced that the integration

of civilian and military production is the key to developing an advanced military. Although

in the early 1980s the primary hope was that China’s defense manufacturers would be able

to use their technological capabilities to generate profits on civilian markets, today the

principal hope seems to be that, through participation in commercial production, China’s

defense manufacturers will acquire dual-use technological capabilities." Civil-military

integration, as noted in the 2004 Defense White Paper, "will adhere to the strategic

guideline of combining military needs with civilian needs, reserving military potential

within civilian capability…." Civil-military integration will exploit civil technological

development for military application and maintain a pool of resources (people, material,

facilities) to support modernization in peacetime and necessity in wartime.

Reorganization and Modernization. China is changing industrial organizations and

Beijing’s approach to technology acquisition is called the "Three-Ways Policy": 1) foreign

import, 2) joint development (China plus a foreign entity), and 3) domestic development.

Beijing would prefer to produce systems indigenously, but is not yet capable and must rely

heavily on foreign sources. Priorities for technology acquisition – microelectronics,

nanotechnology, space systems, innovative materials, propulsion systems, missile systems,

computer-aided manufacturing and design, and information technologies – mirror those

identified in the outline documents for China’s current five-year plan (2001-2005).

have been China’s primary foreign sources of weapon systems and military technology.

Russia has supplied over 85% of all of China’s arms imports since the early 1990s and

has been a significant enabler of China’s military modernization. According to the

Defense Intelligence Agency, Russian conventional weapon technology transfers,

including better aircraft, quieter submarines, and more advanced munitions, have

advanced the lethality of every major category of weapon system under development in

China.

As China’s defense industries continue to mature, Beijing is purchasing from abroad

systems to meet near-term requirements. For example, China received deliveries of Su-

30MK2 multi-role FLANKER aircraft in 2004 to fill a gap until the F-10 or a license produced multi-role FLANKER could be deployed. China is also purchasing the Russian

AL-31FN aero-engine for the F-10 fighter, while working on an indigenously produced

turbofan engine. China received advanced Russian SA-10 and SA-20 SAM systems as

interim air defense solutions while it develops its own. The purchase of KILO-class

diesel electric submarines and SOVREMENNYY-class destroyers from Russia helped

equip the PLA Navy with modern systems while China produces its own SONG-class

diesel electric submarine and LUYANG-class destroyers. China will likely acquire

additional Su-30MK2, IL-76 transport planes, and IL-78 MIDAS air refueling aircraft

from Russia during 2005.

China also cooperates with Russia on licensed production and technical advice. To

acquire a modern, fourth generation fighter, China contracted with Russia to licenseproduce

the Su-27SK/F-11 FLANKER. In 2004, China requested to renegotiate the last

23

half of this contract to build a multi-role version of the FLANKER, the Su-27SMK.

Russia and China reportedly are cooperating on the seeker, rudder control actuation

system design, and inertial navigation system for the PL-12 air-to-air missile, which

continued testing in 2004. In 2004, China launched a new class of submarine, which

appears to incorporate Russian design characteristics, including possible air independent

propulsion, greatly increasing submerged endurance. China received help from Russia

on a turret for a new infantry fighting vehicle. Russian design features also appear in a

new multiple launch rocket system, the A-100.

Although Israel began the process of canceling the PHALCON program with China in

2000, Beijing continues to pursue an AWACs variant built on an IL-76 airframe. The

Israelis transferred HARPY UAVs to China in 2001 and conducted maintenance on

HARPY parts during 2003-2004.

China receives assistance from other nations too. For example, in 2001, China bought

British Spey Mk202 engines to install on the FB-7 fighter-bomber until a licenseproduced

version could be manufactured. Italy and France may be assisting China with a

new medium-lift helicopter. Over the last thirty years, China also has benefited from the

sale of munitions and dual-use use technologies from France, Germany, Italy, and the

United States.

technical education – including Western education – is providing positive feedback to

China’s defense industrial sector. On the other hand, quality and innovation remain

weaknesses. Chinese industry is still learning the importance of reliability and

repeatability. China has not yet demonstrated the ability or innovation to go through a

research, development, and acquisition process for a sophisticated weapon system

without foreign assistance. Also, many of the new and upgraded facilities are hampered

by inadequate electrical power generation and distribution systems. Raw materials are

backlogged by inadequate road, rail, and port services. Finally, China’s strategic metals

industry relies on imported raw materials and foreign mining and production facilities.

The effort by the European Union in 2004 to lift its arms embargo on China – in place

since the 1989 Tiananmen Square crackdown – followed intense lobbying by China to

remove the ban, which it refers to as a "relic of the Cold War." The consequences of an

EU arms embargo lift would be serious and numerous. Although the EU stated that any

lifting of the embargo would produce no qualitative or quantitative increases in China’s

military capabilities, the EU’s tools to enforce such a commitment remain inadequate.

Lifting the embargo could allow China access to military and dual-use technologies that

would help China to improve current weapon systems and to improve indigenous

industrial capabilities for production of future advanced weapons systems. Ending the

embargo could also remove implicit limits on Chinese military interaction with European

militaries, giving China’s armed forces broad access to critical military "software" such

24

as modern military management practices, operational doctrine and training, and logistics

expertise.

If the embargo is lifted, China’s strategy will likely center on establishing joint ventures

with EU companies as a means to acquire access to expertise and technology. China can

be expected to move slowly to avoid undermining its position that the embargo was

merely symbolic. Even if China were to move quickly, its defense industries would

require time to integrate new technologies, processes, and know-how into weapons

manufacturing or retro-fits. In the medium to long term, however, the acquisition of

European defense technology would significantly improve PLA capabilities. China is

most likely interested in acquiring advanced space technology, radar systems, earlywarning

aircraft, submarine technology, and advanced electronic components for

precision-guided weapons systems.

Lifting the EU embargo would also lead to greater foreign competition to sell arms to the

PLA, giving Beijing leverage over Russia, Israel, and other foreign suppliers to relax

limits on military sales to China. Potential competition from EU countries already may

have prompted Russia to expand the range of systems it is willing to market to China. In

2004, Russia provided a new version of the FLANKER, the Su-30MK2, to China and

signed a contract to sell S-300PMU2 SAM systems. The Su-30 aircraft features an

enhanced radar system and is equipped with long-range R-77 and R-27 missiles,

enhancing the capability of China’s air forces to conduct over-the-horizon and beyondvisual-

range attacks. Russia is also discussing the sale of advanced conventional

submarine co-production rights to China in anticipation of competition from the EU.

Such an acceleration of China’s military modernization would have direct implications

for stability in the Taiwan Strait and the safety of U.S. personnel; it would also accelerate

a shift in the regional balance of power, affecting the security of many countries.

Finally, Beijing’s track record in transfers of conventional arms and military technologies

suggests EU or other third-party sales to China could lead to improvements in the

systems that Chinese companies market abroad, including to countries of concern, such

as Iran. Of note, some of China’s major recipients of military assistance – Burma, Sudan,

and Zimbabwe – all are subject to EU arms embargoes.

25

-- President Hu Jintao, May 2003.

-- Gen Li Jinai, then-Director, PLA General Armaments

Department, August 2004.

China has stated its intentions and allocated resources to pursue force-wide

professionalization, improve training, conduct more robust, realistic joint exercises, and

accelerate acquisition of modern weapons. The U.S. Intelligence Community estimates

that China will require until the end of this decade or later for its military modernization

program to produce a modern force, capable of defeating a moderate-size adversary.

Meanwhile, China’s leaders appear to recognize the PLA’s deficiencies relative to

potential adversaries in the region and may have concluded that the PLA is presently

unable to compete directly with other modern military powers. We assess that this

conclusion might have given rise to a priority emphasis on asymmetric programs and

systems to leverage China’s advantages while exploiting the perceived vulnerabilities of

potential opponents – so-called Assassin’s Mace (sha shou jian) programs.

Consequently, as PLA modernization progresses, there are twin misperceptions that may

lead to miscalculation or crisis. First, other countries may underestimate the extent to

which Chinese forces have improved. Second, China’s leaders may overestimate the

proficiency of their forces by assuming that new systems are fully operational, adeptly

operated, adequately supplied and maintained, and well integrated with existing or other

new capabilities.

The following sections explore advances in Chinese military modernization in the areas

of: nuclear deterrence, precision strike, expeditionary operations, air defense, antiaccess,

lines of communication protection, joint logistics, space and counter-space, and

computer network operations.

26

China has the largest military in the world. China’s military comprises four services: ground

forces (PLA), naval forces (PLAN, includes marines and aviation components), air forces

(PLAAF, includes airborne forces), and strategic missile forces (Second Artillery). Following

downsizing this year, the active force will total some 2.3 million personnel. A fifth element

consists of the paramilitary People’s Armed Police (PAP) and reserves. The combined total,

distributed across seven military regions, exceeds 3.2 million. China also has some 10

million organized militia members throughout the country.

China is qualitatively and quantitatively improving its strategic missile force. This could

provide a credible, survivable nuclear deterrent and counterstrike capability. It is fielding

more survivable missiles capable of targeting India, Russia, virtually all of the United

States, and the Asia-Pacific theater as far south as Australia and New Zealand. Beijing

maintains a small strategic arsenal. Its stated nuclear weapons doctrine remains one of

"no first use."

Note: China currently is capable of targeting its nuclear forces throughout the region and

most of the world, including the continental United States. Newer systems, such as the

DF-31 and DF-31A, will give China a more survivable nuclear force.

China’s future strategic force will likely comprise enhanced silo-based CSS-4 ICBMs

(currently deployed), solid-fueled, road-mobile DF-31 (initial operational capability

2005-06) and DF-31A ICBMs (IOC 2007-09), and sea-based JL-2 SLBMs (IOC 2008-

10). China will also maintain a force of nuclear-armed CSS-5 MRBMs for regional

contingencies.

China currently deploys approximately twenty silo-based, liquid-propellant CSS-4

ICBMs, which constitute its primary nuclear deterrent. The Second Artillery also

maintains approximately twenty liquid-fueled, more limited-range CSS-3 ICBMs to

sustain its regional nuclear deterrent. The Second Artillery will likely keep this older

missile in service until it is replaced by the more survivable, road-mobile DF-31. China

supplements the aged CSS-2s with solid-propellant, road-mobile CSS-5 MRBMs.

28

The introduction of the road-mobile DF-31-series ICBMs will supplement China’s silobased

strategic force. The mobility of the new DF-31-class missiles will enable these

systems to operate over a larger area, making them more difficult to locate and neutralize.

The introduction of a new generation of SLBMs on China’s new ballistic-missile

submarine will provide an additional survivable nuclear option. Finally, replacement of

the older, silo-based CSS-4 Mod 1 with the longer range CSS-4 Mod 2, coupled with the

ongoing migration to mobile, solid-fueled systems will enhance the operational

capabilities and survivability of China’s strategic missile force.

The PLA envisions the use of precision strike to hold at risk such targets as Western

Pacific airbases, ports, surface combatants, land-based C4ISR and integrated air defense

systems, and command facilities. Most of the PLA units associated with precision strike

are rapid reaction units and/or those that would likely lead any contingency operation

around the mainland periphery.

• Short-Range Ballistic Missiles (SRBMs) (conventionally armed). China’s SRBM

force constitutes the bulk of its precision strike capability. Its first-generation

SRBMs do not possess true "precision strike" capability, but later generations have

greater ranges and improved accuracy. According to DIA estimates, China’s SRBM

force totals some 650-730 missiles, increasing at a rate of 75 to 120 missiles per year.

• Land-Attack Cruise Missiles (LACMs) (conventionally armed). China is developing

LACMs to achieve greater precision than historically available from ballistic missiles

for hard target strikes, and increased standoff. A first- and second-generation LACM

remain under development. There are no technological bars to placing on these

systems a nuclear payload, once developed.

• Air-to-Surface Missiles (ASMs). China is believed to have a small number of tactical

• Anti-Ship Cruise Missiles (ASCMs). The PLA Navy and Naval Air Force have or are

acquiring nearly a dozen varieties of ASCMs, from the 1950s-era CSS-N-2/STYX to

the modern Russian-made SS-N-22/SUNBURN and SS-N-27/SIZZLER. The pace of

indigenous ASCM research, development, and production – and of foreign

procurement – has accelerated over the past decade. Objectives for current and future

ASCMs include improving closure speed (e.g., ramjet propulsion, such as with the

SS-N-22), standoff distance (e.g., longer-range assets, such as the C-802), and

stealthier launch platforms (e.g., submarines). SS-N-22 missiles may be fitted on

smaller platforms in the future (e.g., the Russian Molniya patrol boat, which

originated as a joint effort with China, or on the new stealth fast attack patrol boat).

29

Note: China’s conventionally armed SRBM missiles opposite Taiwan are

mobile and can be redeployed to support a variety of regional conflict scenarios.

• Anti-Radiation Weapons (ARMs). The size and scope of China’s anti-radiation

weapons inventory remains unknown. The PLA has imported both the Israeli-made

HARPY UAV and Russian-made anti-radiation missiles. China’s doctrine calls for

seizing "electromagnetic superiority" early in a conflict. Acquiring anti-radiation

weapons – designed to acquire targets based on the targets’ own radar emissions –

supports this doctrine and is consistent with Chinese theories on "informationalized"

warfare.

PLA expeditionary forces include three airborne divisions, two amphibious infantry

divisions, two marine brigades, about seven special operations groups, and one

regimental-size reconnaissance element in the Second Artillery.

The PLA is focusing modernization for these units on procuring more equipment,

improving unit-level tactics, and coordination of joint operations. PLA ground forces in

the Nanjing and Guangzhou Military Regions have received upgraded amphibious armor

and other vehicles, such as tanks and APCs, and may add armored assault vehicles and

air-cushioned troop vehicles to improve lethality and speed for seaborne assaults.

Airborne forces will likely acquire more modern transport aircraft like the Russian

30

IL-76/CANDID and modern airmobile light weight vehicles. The PLA recently

increased amphibious ship production to address its lift deficiencies – although the

intelligence community believes these increases will be inadequate to meet requirements

– and is organizing its civilian merchant fleet and militia, which, given adequate

notification, could augment the PLA’s organic lift in amphibious operations.

Notional missions for these forces include: special operations forces to facilitate

amphibious operations and to disrupt critical communication nodes, air defense

capabilities, and critical lines of communication; airborne to seize airfields to facilitate

the flow of follow-on infantry forces; and, Second Artillery reconnaissance elements to

provide targeting information and battle damage assessments.

Combined training for all these units is seldom conducted in a major amphibious assault

exercise. Units tend to train for their missions in garrisons, local areas and regional

training facilities. China’s ability to integrate individual unit actions – or simulate

integration – to assess accurately operational capability, is not known.

Following planned force reductions and reorganizations, mechanized infantry, armored,

and army aviation units will make up a much larger percentage of the ground force.

China is also increasing the capabilities of reserve and militia units, and exploring ways to

outsource some combat service support functions and use civilian assets, such as ships

and aircraft, to support military operations. The fielding of new equipment for the ground

forces has been limited, compared to the other services which are more technology

intensive. Even with downsizing and the consolidation of ground forces into fewer units,

the army remains too large to effect rapid modernization throughout its force structure.

The PLA has shifted from point defense of key military, industrial, and political targets to

a new Joint Anti-Air Raid Campaign doctrine based on a modern, integrated air defense

system capable of effective offensive counter-air (OCA) and defensive counter-air

(DCA). Under this doctrine, the PLA will use aircraft, surface-to-surface missiles, longrange

artillery, special operations forces, naval forces, and guerrilla units to destroy an

enemy’s ability to conduct offensive air operations and provide comprehensive defense

of Chinese airspace.

Beijing has been acquiring foreign and domestic fourth generation tactical aircraft (e.g.,

Su-27 and Su-30 FLANKER variants, and the PLA’s indigenous F-10, which will begin

to enter service in 2005). The PLA has also acquired advanced air-to-surface missiles

that will allow its air forces to attack surface targets, afloat and ashore, from greater

distance and with more precision. Newer aircraft are also being equipped with advanced

air-to-air missiles and electronic warfare technology that give these aircraft technological

parity with or superiority over most potential adversaries.

31

with long-range, precision strike weapons for land attack and anti-ship missions and, in

some of these aircraft, in-flight refueling capabilities, which when fully operational, will

extend operating limits. Acquisition and production of AWACS aircraft and the purchase

of additional refueling aircraft will significantly extend the ranges of the modern air fleet.

China is still developing the FB-7, an all-weather, supersonic, medium-range fighterbomber

to have an anti-ship mission. Improvements to the FB-7 most likely will include

a better radar, night-attack avionics, and advanced weapons. China is improving the

capabilities of its special-mission aircraft, with a focus on electronic warfare, C4ISR, and

aerial refueling. China reportedly modified several of its larger aircraft for jamming

missions, and likely has several programs for new standoff and escort jammers using

bombers, transports, tactical aircraft, and UAVs. In addition, China is pursuing domestic

upgrades to its F-8II fighters, and has nearly completed development and testing of an

upgraded FBC-1 long-range fighter/attack aircraft.

The type and number of modern SAMs in Beijing’s inventory is increasing with the

acquisition of Russian-made strategic SA-10 and SA-20 systems. China is reverseengineering

its own version of the SA-10, the HQ-9, which has yet to enter the inventory.

China will likely acquire the extended range S-300PMU2 system in 2006. Acquisition

and deployment of the S-300PMU2 would allow China’s air defenses to engage aircraft

over Taiwan.

Note: This map depicts notional coverage provided by China’s

SA-10, SA-20 SAM systems, as well as the soon-to-be acquired

S-300PMU2. Actual coverage would be non-contiguous and

dependent upon precise deployment sites.

Preventing foreign military intervention, particularly along China’s coast, has been a goal

for Beijing throughout history, reinforcing the geostrategic value of Taiwan for China’s

security planners. As the Soviet threat ebbed in the late 1980s, China’s concern about its

9,000 mile coastline rose. China’s concept of sea denial in the Western Pacific

subsequently broadened beyond the independent use of naval assets to multi-dimensional

defense using air, surface, and subsurface elements. Reflecting the emphasis China

appears to be placing on anti-access strategies, most of the capabilities believed to fall

under the Assassin’s Mace program are designed to blunt adversaries’ military

advantages or deny entry into the theater of operations.

China is developing capabilities to achieve local sea denial, including naval mines,

submarines, cruise missiles, and special operations forces. Beijing is in serial production

of the domestic SONG-class submarine, acquiring more Russian KILO-class submarines,

developing a new YUAN-class conventional submarine, and developing the Type-093

nuclear attack submarine for missions requiring greater at-sea endurance. China is also

researching the possibility of using ballistic missiles and special operations forces to

strike ships or their ashore support infrastructure. Finally, China is developing or

improving counter-reconnaissance and counterspace capabilities using a range of

solutions from low-tech denial and deception based on camouflage, cover and

concealment, to high-tech lasers and space-tracking devices.

China does not appear to have broadened its concept of operations for anti-access and sea

denial to encompass sea control in waters beyond Taiwan and its immediate periphery. If

China were to shift to a broader "sea control" strategy, the primary indicators would

include: development of an aircraft carrier, development of robust anti-submarine warfare

capabilities, development of a true area anti-air warfare capability, acquisition of large

numbers of nuclear attack submarines, development of effective maritime C4ISR, and

increased open water training.

China’s expanding international presence reflects a growing interest in export markets

and imports of key resources, especially energy. As China’s economy grows, it will

become increasingly concerned with securing resource flows along key lines of

communication. For example, 80 percent of China’s oil imports pass through the Strait

of Malacca. In late 2003, President Hu referred to China’s need to secure its lines of

communication as the "Malacca Dilemma."

With its present force structure, according to the Intelligence Community, Chinese

surface combatants would have difficulty projecting power into the Strait of Malacca,

especially if it were conducting simultaneous blockade or invasion operations elsewhere.

Similarly, although the PLA Navy occasionally patrols as far as the Spratly Islands, its

limited organic air defense capability leaves surface ships vulnerable to attack from

33

hostile air and naval forces. The PLA Navy Air Force and PLA Air Force currently lack

the operational range to support PLA Navy operations. In recent years, however, the

PLA Navy’s South Sea Fleet, which has operational responsibility over the South China

Sea, has been assigned more capable surface combatants and submarines, including two

destroyers (one LUDA IV class and one LUHAI class) that provide it with its first shortrange

area air-defense capability, the HHQ-7C surface-to-air missile systems.

military applications include:

• China launched its first manned spacecraft into Earth orbit on October 15, 2003.

Chinese press reports indicate that it will send up a two-person crew on a five-day

mission in September 2005.

• China has two remote-sensing satellite programs known as Ziyuan-1 (ZY-1), also

known as the China-Brazil Earth Resources Satellite, and ZY-2. China launched the

ZY-1B in October 2003. A third ZY-2 satellite was launched in October 2004. ZY-2

payloads probably are digital imagery reconnaissance satellites and have worldwide

coverage. Beijing also tested new film-based imagery satellites and small digital

imagery satellites in 2003 and 2004.

• China is interested in electronic intelligence (ELINT) or signals intelligence

(SIGINT) reconnaissance satellites. Although these digital data systems probably

will be able to transmit directly to ground sites, China may be developing a system of

data relay satellites to support global coverage. Furthermore, Beijing has acquired

mobile data reception equipment that could support more rapid data transmission to

deployed military forces and units.

• China is studying and seeking foreign assistance on small satellites. It has launched a

number of them, including an oceanographic research satellite, Haiyang (HY)-1, in

2002 with at least two more satellites in this series, HY-2 and -3, expected. Beijing

launched four small satellites during 2004; two of these probably have imagery

missions and the other two possibly are conducting space environmental research.

Other missions for satellites of this class include Earth observation, communications,

and navigation.

• China is developing microsatellites – weighing less than 100 kilograms – for remote

sensing and networks of electro-optical and radar satellites. In April 2004 Beijing

launched a microsatellite with a probable imagery mission.

• A joint venture between China's Tsinghua University and the UK’s University of

China seeks to become a world leader in space development and maintain a leading role

in space launch activity. Beijing’s goal is to place a satellite into orbit "within hours

upon request." The Long March series of rockets can support that requirement as long

as adequate satellites remain in reserve. With ever-better satellites, China is becoming a

peer in quality to the world’s leading producers. In manned space, after the two-person

mission scheduled for this fall, China hopes to conduct space walks and docking

missions with a space lab by 2010, followed by a full space station by 2020.

In 2004, China placed 10 satellites into orbit, the most of any year, and has a similar

schedule through 2006. It hopes to have more than 100 satellites in orbit by 2010, and

launch an additional 100 satellites by 2020. In the next decade, Beijing most likely will

field radar, ocean surveillance, and improved film-based photo-reconnaissance satellites.

China will eventually deploy advanced imagery, reconnaissance, and Earth resource

systems with military applications. In the interim, China probably will supplement

existing coverage with commercial SPOT, LANDSAT, RADARSAT, Ikonos, and

Russian satellite imagery systems.

Anti-Satellite Weapons (ASATs). China is working on, and plans to field, ASAT

On March 14, 2005, China’s legislature, the National People’s Congress, passed the "anti secession law." The law’s passage followed months of speculation by outside observers over

its contents and a simultaneous lobbying effort on the part of Chinese officials to cast the law

in benign terms, while closely guarding the draft of the text. The law itself is broken into ten

articles that codify, or render as legal instruments, policies and statements applied by the

Chinese government to the Taiwan question. Key elements are described below.

checking Taiwan’s secession from China."

China "shall never allow" Taiwan to secede from China "under any name or by any means."

to "no interference by outside forces."

including "Taiwan compatriots."

as expanding cross-Strait exchanges, including cultural, economic, educational, science and

technology, health, and sports exchanges. It also refers to "other activities" conducive to

peace and stability, but does not offer details.

Strait consultations. The article states such negotiations would be on an "equal footing."

means to "protect China’s sovereignty and territorial integrity" if "secessionist forces . . .

cause the fact of Taiwan’s secession from China," if "major incidents entailing Taiwan’s

secession" occur, or if "possibilities for peaceful reunification" are exhausted.

property, and rights of Taiwan civilians and foreign nationals on Taiwan, and the rights of

Taiwan citizens in other parts of China.

Article Ten specifies that the law comes into force on the day of its proclamation.

38

China continues to declare a policy of peaceful resolution under the "one country, two

systems" framework that offers Taiwan limited autonomy in exchange for Taiwan’s

integration with the mainland. China sees the potential use of force as an integral part of

its policy of dissuading Taiwan from pursuing independence and encouraging it to unite

ultimately with the mainland. Beijing has not renounced the use of force against Taiwan.

The threat of force against Taiwan is now codified in the "anti-secession law," enacted by

the National People’s Congress in March 2005.

The circumstances in which Beijing has historically claimed it would use force against

the island include: a formal declaration of independence by Taipei, foreign intervention

in Taiwan's internal affairs, indefinite delays in the resumption of cross-Strait dialogue,

Taiwan's acquisition of nuclear weapons, and internal unrest on Taiwan. These

circumstances are not fixed and have evolved over the last decade in response to Taiwan

actions and changes in China’s own military capabilities. They are, moreover,

deliberately general, allowing Beijing to determine the timing and form of its response.

Although the costs of the use of force against Taiwan would be high, Beijing leaders

might use force if they believed they had no other way to prevent Taiwan independence

or, as implied in its "anti-secession law," to guarantee reunification over the long term.

The Chinese Communist Party came to power on its credentials as a defender of Chinese

sovereignty; its leaders appear to see progress – or perhaps, the absence of failure – on

the Taiwan issue as affecting the legitimacy of their rule.

Beijing is developing military capabilities that will enable it to pursue several courses of

action against Taiwan, allowing Chinese leaders more flexibility to apply pressure against

the island and minimize the risks of a military confrontation with the United States. The

PLA is simultaneously developing the capability to deter and/or slow a potential U.S., or

U.S.-led, response to defend Taiwan.

Persuasion and Coercion. China’s current approach to preventing Taiwan independence

combines diplomatic, economic, legal, psychological, and military instruments to

convince Taipei that the price of declaring independence is too high. This strategy

combines the credible threat to use military force with the economic and cultural tools

that China has at its disposal. China uses its growing economic links with Taiwan to

influence political behavior on the island. Beijing seeks to attract more Taiwan

investment in China, while emphasizing that peace in the Strait will bring prosperity.

Beijing is increasing its pressure on Taiwan businessmen operating in China to refrain

from supporting "pro-independence" parties or individuals on Taiwan. Beijing

emphasizes historic, ethnic, and cultural links between Taiwan and the mainland, and

unofficial diplomacy with "Taiwan compatriots" to generate domestic propaganda in

Taiwan in favor of reunification.

Beijing has also intensified its competition with Taiwan in the developing world for

diplomatic recognition. This effort has focused on eroding Taiwan’s diplomatic support

39

among the 26 remaining countries that recognize Taipei. Simultaneously, using

diplomatic and commercial levers, China has increased pressure on other states to limit

their relationships with and to restrain Taiwan.

Portraying a military threat to Taiwan backstops the overall campaign to isolate Taiwan

diplomatically and pressure Taiwan leaders. Exercises, deployments, and press

operations all contribute to Beijing’s policy of pressure.

Limited Force Options. Beijing could use limited strikes, employing information

operations, special operations forces on Taiwan, and SRBM or air strikes at key military

or political sites, to try to break the will of Taiwan’s leadership and population. Although

Beijing might view these as a complement to non-military coercion and as less than a full

use of force, others may view such actions differently. Such a Chinese miscalculation

could lead to a full-fledged conflict.

Some PLA theorists are aware of the electromagnetic effects of using a high-altitude nuclear

burst to generate high-altitude electromagnetic pulse (HEMP), and might consider using

HEMP as an unconventional attack, believing the United States and other nations would not

interpret it as a use of force and as crossing the nuclear threshold. This capability would most

likely be used as part of a larger campaign to intimidate, if not decapitate, the Taiwan

leadership. HEMP causes a substantial change in the ionization of the upper atmosphere,

including the ionosphere and magnetosphere. These effects likely would result in the

degradation of important war fighting capabilities, such as key communication links, radar

transmissions, and the full spectrum of electro-optic sensors. Additional effects could include

severe disruptions to civil electric/power and transportation. These effects cannot easily be

localized to Taiwan and would likely affect the mainland, Japan, the Philippines, and

commercial shipping and air routes in the region.

Such a campaign could include computer network attacks against Taiwan’s political,

military, and economic infrastructure to undermine the Taiwan population’s confidence

in its leadership. Simultaneously, PLA special operations forces infiltrated into Taiwan

could conduct acts of economic, political, and military sabotage.

The PLA could also use limited, coordinated SRBM, special operations forces, and air

strikes against air fields, radars, and communications facilities on Taiwan. Beijing could

use the shock of rapid, accurate, and coordinated strikes and their effects on Taiwan’s key

C4ISR nodes to try to push the Taiwan leadership towards accommodation. At the same

time, an information operations campaign on multiple levels could be launched to gain

legitimacy for Beijing’s claims on Taiwan and to reinforce the theme that military

operations were limited to key military infrastructure, not the Taiwan people.

Air and Missile Campaign. Surprise SRBM attacks and precision air strikes could

Beijing sees Washington and, increasingly, Tokyo as the principal hurdles to any attempt to use military force to coerce or capture Taiwan. Beijing might coerce or target other critical

countries to deny or delay their willingness to provide support, basing, overflight rights, or

transit authority to U.S. forces operating in the theater. Deterring, defeating, or delaying foreign intervention ahead of Taiwan’s capitulation is integral to Beijing’s strategy. To that end,

Beijing will pursue political and diplomatic efforts to keep the United States and Japan from

taking action to support Taiwan. The U.S. Intelligence Community also believes China will

consider a sea-denial strategy to attempt to hold at risk U.S. naval forces, including aircraft

carriers and logistic forces, approaching the Taiwan Strait.

Blockade. Beijing could threaten or deploy a naval blockade either as a "non-war"

pressure tactic in the pre-hostility phase or as a transition to active conflict. On one end

of the spectrum, Beijing could declare that ships en route to Taiwan ports must stop in

mainland ports for inspections prior to transiting on to Taiwan. Alternatively, China

could attempt the equivalent of a blockade of Taiwan ports by declaring exercise or

missile closure areas in approaches and roadsteads to ports to divert merchant traffic.

Chinese doctrine also includes activities such as an air blockade, missile attacks, and

mining or otherwise obstructing harbors and approaches.

More traditional methods of blockade would increase the impact on Taiwan, but also

would tax PLA Navy capabilities and raise the potential for direct military confrontation,

particularly with U.S. naval assets. Although sea lanes closer to China (i.e., the South

and East China Seas) could be interdicted, any attempt at a close-in blockade or

operations on the east side of Taiwan would strain the PLA Navy, which lacks significant

replenishment and open ocean surveillance capabilities. More restrictive blockades

increase the likelihood of international intervention. Although any blockade would have

an immediate economic impact, it would take time to realize decisive political results. It

would also increase the opportunity for countervailing U.S. and international pressure

and could lead to the protracted campaign Beijing seeks to avoid.

Amphibious Invasion. An invasion of Taiwan would be a complex and difficult

China is deterred from taking military action against Taiwan on two levels. It does not yet

possess the military capability to accomplish with confidence its political objectives on the

island, particularly when confronted with outside intervention. Beijing is also deterred by the

potential repercussions of any use of force against Taiwan. According to the Defense

Intelligence Agency, China’s leaders recognize that a war could severely retard economic

development. Taiwan is China’s single largest source of foreign direct investment. An

extended campaign would wreck Taiwan’s economic infrastructure, leading to high

reconstruction costs. International sanctions against Beijing, either by individual states or by

groups of states, could severely damage Beijing’s economic development.

Conflict with Taiwan could also lead to instability on the mainland. Maintaining internal

security in wartime appears to be an important consideration in PLA planning – reflecting

leadership concerns about political stability. Failure would almost certainly result in severe

repercussions for those in the leadership who had advocated such a course of action. A conflict also would severely hurt the image China has sought to project regionally and globally in recent years. If Beijing chose to use force against Taiwan prior to the 2008 Olympics, China would almost certainly face a boycott or loss of the games. Finally, Beijing must calculate the probability of U.S. intervention in any conflict in the Taiwan Strait. It views the United States as having advantages over China in many scenarios involving the use of military force. China’s leaders also calculate a conflict over Taiwan involving the United States would give rise to a long-term hostile relationship between the two nations – a result that would not be in China’s interests.

42

43

44

  45