Military

ANNUAL REPORT TO CONGRESS
Military Power of the People's Republic of China
2006




Office of the Secretary of Defense


Military Power of the People's Republic of China

A Report to Congress Pursuant to the National Defense Authorization Act Fiscal Year 2000

Section 1202, “Annual Report on Military Power of the People’s Republic of China,” of the
National Defense Authorization Act for Fiscal Year 2000, Public Law 106-65, provides that
the Secretary of Defense shall submit a report “on the current and future military strategy
of the People’s Republic of China. The report shall address the current and probable future
course of military-technological development on the People’s Liberation Army and the tenets
and probable development of Chinese grand strategy, security strategy, and military strategy,
and of the military organizations and operational concepts, through the next 20 years.”


Executive Summary

China's rapid rise as a regional political and economic power with global aspirations is an important element of today's strategic environment - one that has significant implications for the region and the world. The United States welcomes the rise of a peaceful and prosperous China. U.S. policy encourages China to participate as a responsible international stakeholder by taking on a greater share of responsibility for the health and success of the global system from which China has derived great benefit.

China's leaders face some important choices as its power and influence grow. These choices span a range of issues: challenges of China's economic transition and political reform, rising nationalism, internal unrest, proliferation of dangerous technologies, adoption of international norms, and China's expanding military power.

The People's Liberation Army (PLA) is in the process of long-term transformation from a mass army designed for protracted wars of attrition on its territory to a more modern force capable of fighting short duration, high intensity conflicts against high-tech adversaries. Today, China's ability to sustain military power at a distance is limited. However, as the 2006 Quadrennial Defense Review Report notes, "China has the greatest potential to compete militarily with the United States and field disruptive military technologies that could over time offset traditional U.S. military advantages."

In the near term, China's military build-up appears focused on preparing for Taiwan Strait contingencies, including the possibility of U.S. intervention. However, analysis of China's military acquisitions suggest it is also generating capabilities that could apply to other regional contingencies, such as conflicts over resources or territory.

The PLA's transformation features new doctrine for modern warfare, reform of military institutions and personnel systems, improved exercise and training standards, and the acquisition of advanced foreign (especially Russian) and domestic weapon systems. Several aspects of China's military development have surprised U.S. analysts, including the pace and scope of its strategic forces modernization. China's military expansion is already such as to alter regional military balances. Long-term trends in China's strategic nuclear forces modernization, land- and sea-based access denial capabilities, and emerging precision-strike weapons have the potential to pose credible threats to modern militaries operating in the region.

China's leaders have yet to adequately explain the purposes or desired end-states of their military expansion. Estimates place Chinese defense expenditure at two to three times officially disclosed figures. The outside world has little knowledge of Chinese motivations and decision-making or of key capabilities supporting PLA modernization.

This lack of transparency prompts others to ask, as Secretary of Defense Rumsfeld did in June 2005: Why this growing investment? Why these continuing large and expanding arms purchases? Why these continuing robust deployments? Absent greater transparency, international reactions to China's military growth will understandably hedge against these unknowns.


Table of Contents


Chapter One: Key Developments 1
Chapter Two: Understanding China's Strategy 7
China's Uncertain Future 7
Strategy with Chinese Characteristics 9
Military Modernization . . . Beyond Taiwan 10
Chapter Three: China's Military Strategy and Doctrine 13
Deception in Chinese Military Strategy 14
The Strategic Direction of PLA Modernization 14
Chapter Four: Resources for Force Modernization 18
Seeking Sustainable Growth 18
Military Budget Trends 19
Determining Actual Military Expenditures 20
Foreign Weapons and Technology Acquisition 21
Military Industries and the Science and Technology Base 22
Lifting the European Union Arms Embargo 22
Chapter Five: Force Modernization Goals and Trends 24
Emerging Area Denial Capability 25
Strengthened Nuclear Deterrence 26
Building Capacity for Precision Strike 27
Improving Expeditionary Operations 29
Expanding Air Defense 30
Extended Range Maritime Presence 31
Space and Counterspace Developments 31
Exploiting Information Warfare 35
Chapter Six: PRC Force Modernization and Security in the Taiwan Strait 37
China's Strategy in the Taiwan Strait 37
Beijing's Options for Action against Taiwan 38
Persuasion and Coercion 38
Limited Force Options 39
Air and Missile Campaign 39
Blockade 39
Amphibious Invasion 40
Appendix: China and Taiwan Forces Data 43

Figures


1. Maximum Ranges for China's Conventional SRBM Force 11
2. Geographic Boundaries of the First and Second Island Chains 15
3. Chinese Defense Budgets and Estimates of Total Related Expenditures 19
4. Russian Arms Sales to China, 2001-2005 21
5. China's Military Regions 25
6. Medium- and Intercontinental-Range Ballistic Missiles 27
7. Surface-to-Air Missile Coverage over the Taiwan Strait 31
8. China's Critical Sea Lines of Communication 33
9. Taiwan Strait Military Balance, Ground Forces 44
10. Major Ground Force Units 45
11. Taiwan Strait Military Balance, Air Forces 46
12. Major Air Force Units 47
13. Taiwan Strait Military Balance, Naval Forces 48
14. Major Naval Units 49
15. China's Missile Forces 50



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