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Military

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

Chapter Two
Understanding China's 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."
- Deng Xiaoping1

China's Uncertain Future

The rapid growth of the PRC's economy, coupled with its military expansion, has propelled China's emergence as a regional power with an increasingly global foreign policy. However, there is much uncertainty surrounding China's future and the path it will take. As President Bush declared in the 2006 National Security Strategy, the U.S. "seeks to encourage China to make the right strategic choices for its people, while we hedge against other possibilities." This strategy is not unique to the United States; other regional actors, too, will naturally hedge against the unknown.

The direction China takes will be determined in part by the strategic choices its leaders make, but also by a variety of factors over which China will not have complete control. These choices and factors include:

Military Modernization. China continues to invest heavily in the PLA, particularly its strategic arsenal and power-projection capabilities. In March 2006 China announced that its annual defense budget would increase by 14.7 percent over the previous year, bringing the announced amount to approximately $35 billion, equal to about 1.5% of GDP. This year's increase sustains a trend that has persisted since the 1990s of defense budget growth rates exceeding overall economic growth, although the growth of defense expenditure has lagged behind the growth in overall government expenditure over the same period of time. As the 2006 Quadrennial Defense Review (QDR) Report notes, China is likely to continue making large investments in high-end, asymmetric military capabilities, emphasizing electronic and cyberwarfare; counter-space operations; ballistic and cruise missiles; advanced integrated air defense systems; next-generation torpedoes; advanced submarines; strategic nuclear strikes from modern, sophisticated land- and sea-based systems; and theater unmanned aerial vehicles for use by China's military and for global export.

Many aspects of China's national security policy, including its motivations, intentions, and decisionmaking processes, remain secret. Key aspects of China's military modernization goals and plans are not transparent. Since the early- to mid-1990s, China's military modernization has focused on expanding its options for Taiwan contingencies, including deterring or countering third-party intervention. Evidence also suggests that China is developing capabilities that will enable it to project power beyond Taiwan. As China's capabilities grow, its leaders could consider using force or threats to achieve their strategic objectives.

Nationalism. The Chinese Communist Party continues to rely on nationalism to shore up its legitimacy. However, rising nationalism could limit the options of China's leaders in a crisis. The Party's need to appear as the defender of Chinese sovereignty and national dignity could also lead to destabilizing actions. Examples include the March 2005 "anti-secession law" and widespread anti- Japanese protests the following month.

Economic Growth. The extraordinary economic success of the PRC is a central factor in its emergence as a regional and global power, and is the basis for China's increasingly capable military. The Party has also relied on the successful transformation of the economy as a primary source of legitimacy. However, underlying structural weaknesses threaten to undermine that economic growth. Whether China maintains its high rate of investment in its military in this context will be one important indication of its future trajectory.

Political Reform. The Chinese Communist Party continues to give priority to economic reform over political liberalization. However, internal pressures for political liberalization persist. An internal political crisis could lead China to turn inward, or alternatively could prompt a more assertive foreign policy to build domestic support.

Corruption. Corruption remains a systemic and growing problem throughout the Party apparatus, especially among officials at the provincial level and below, presenting a challenge to regime legitimacy. China's senior leaders recognize the deleterious effect that corruption has on the public's trust of the Party. In a speech before the Central Discipline Inspection Commission in January 2006, President Hu Jintao pointed out that " . . . bringing about a rapid and sound development of the economy and society will hinge on the [Party], and on whether or not the [Party] will be able to effectively manage its members and officials as well."

Non-Traditional Security Challenges. China faces growing internal challenges often manifested in "mass incidents" - large-scale protests - that have increased annually in China for more than a decade. The number of these incidents reached an estimated 74,000 in 2004. Accurate and complete data for 2005 are not yet available.2 Chinese analysts maintain that land seizures and illegal fees on rural farmers now represent the most frequent causes of unrest, estimating some 80,000 illegal seizures and other unlawful land-related practices occurred in 2004. These protests are becoming more violent, resulting in higher casualties for both demonstrators and police forces.

At the same time, Chinese leaders have recognized the potential negative impact that global and transnational threats have on China's economic development and domestic stability. These threats include: HIV/AIDS; the H5N1 avian influenza virus; international crime and narcotics trafficking; international terrorism; and proliferation of weapons of mass destruction. The Chinese government's success or failure in addressing these mounting nontraditional security challenges will help determine its own, as well as China's, future.

Global Security Roles. The Chinese government is still adapting to its role as an emerging power by taking on greater regional and international responsibilities. Positive steps include increasing participation in regional and global fora and in peace operations, humanitarian assistance, and disaster relief. China has hosted the Six-Party Talks aimed at eliminating North Korea's nuclear programs and has worked peacefully to address long-standing territorial disputes with Russia, Vietnam, India, and Central Asian countries. On the other hand, China continues to dispute sovereignty claims in the South and East China Seas and is preparing for potential conflict over Taiwan. Chinese companies continue to play a negative role in the proliferation of advanced military capabilities, and continue to supply countries such as Iran with critical military technologies. Beijing has refused to join the Proliferation Security Initiative. China has not fully leveraged its close ties with Pyongyang to stem North Korean nuclear ambitions, and continues to maintain or strengthen political, economic, and military ties with Iran, Sudan, Burma, Zimbabwe, Cuba, and Venezuela, undercutting international efforts to influence those states.

Strategy with Chinese Characteristics

China's grand strategy, as it defines it, is one of:

  • maintaining balance among competing priorities for sustaining momentum in national economic development; and,
  • maintaining favorable trends in the security environment within which such economic development can occur.

Two concepts central to understanding how China would achieve the goals of its grand strategy are "comprehensive national power" (CNP) (zonghe guoli) and the "strategic configuration of power," or "shi." CNP is the concept by which China's strategic planners evaluate and measure China's national standing in relation to other nations. It includes qualitative and quantitative measures of territory, natural resources, economic power, diplomatic influence, domestic government, military capability, and cultural influence.

The "24 Character" 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.

This strategy has often been quoted by senior Chinese national security officials, especially as it relates to China's diplomacy. Although certain aspects of this strategy have been debated in recent years within China's security establishment - namely the relative emphasis placed upon "never claim leadership" or "make some contributions" - taken as a whole, the strategy suggests both a short-term desire to downplay China's ambitions and a long-term strategy to build up China's power to maximize options for the future.

China's leading civilian and military think tanks and educational institutions apply slightly different measures to monitor changes in China's relative CNP. A recent report by the Chinese Academy of Social Sciences, for example, ranked China sixth among the top 10 nations, based upon economic, military, and diplomatic metrics. Such statistical modeling exemplifies China's interest in understanding the sources of national power and indicates how Chinese strategists measure the relative distribution of power in the international system.

The "strategic configuration of power," or "shi," is roughly equivalent to an "alignment of forces," although there is no direct Western equivalent to the term. Chinese linguists also suggest it refers to the "propensity of things," "potential," or the "potential born of disposition," that only a skilled strategist can exploit.

Since the early 1980s, Chinese leaders have described their national development strategy as a quest to increase China's CNP. They continuously assess the broader security environment, or "strategic configuration of power," for potential challenges and threats (e.g., potential conflict with Taiwan that involves the United States) as well as opportunities (e.g., the collapse of the Soviet Union) that might prompt an adjustment in national strategy.

China's leaders have identified the initial decades of the 21st Century as generally favorable, and view it as a "strategic opportunity" to make China an economically strong, unified state. 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.

Military Modernization . . . Beyond Taiwan

At the end of the Cold War, China entered a period unique in its modern history in that it does not 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 already place 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.

In its 2004 Defense White Paper, China notes that, "[t]he role played by military power in safeguarding national security is assuming greater prominence." As China's economy expands, so too will its interests and the perceived need to build a military capable of protecting them. In a January 2005 interview, Lieutenant General Liu Yazhou, currently Deputy Political Commissar of the PLA Air Force, discussed this dynamic in a more abstract form: "when a nation grows strong enough, it practices hegemony. The sole purpose of power is to pursue even greater power . . . Geography is destiny . . . when a country begins to rise, it should first set itself in an invincible position." Statements such as this, while not necessarily reflecting the views of senior Chinese leaders, nevertheless shed light on how influential military thinkers are characterizing the dynamics of power and strategy.

Although the principal focus of China's military modernization in the near term appears to be preparing for potential conflict in the Taiwan Strait, the writings of Chinese military strategists suggest Beijing is also surveying the strategic landscape beyond Taiwan. Some Chinese analysts have expressed the view that control of Taiwan would enable the PLA Navy to move its maritime "defensive" perimeter farther seaward and improve Beijing's ability to influence regional sea lines of communication. For example General Wen Zongren, then-Political Commissar of the elite PLA Academy of Military Science, stated in March 2005 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."


Analysis of PLA acquisitions also suggests China is generating military capabilities that would have utility beyond a Taiwan contingency. For example, all of China's SRBMs, although garrisoned opposite Taiwan, are mobile and can deploy throughout the country. China is also developing new mediumrange 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 are scoped for operations beyond Taiwan. Airborne early warning and control and aerial-refueling programs will extend the operational range for PLA fighter and strike aircraft, permitting extended operations into the South China Sea. Naval acquisitions, such as advanced destroyers and submarines, reflect Beijing's pursuit of capabilities to protect and advance its maritime interests. China also has an expressed interest in developing capabilities that could hold at risk maritime targets out to the "second island chain" some 1,000 miles from the Chinese coast. Over the long term, improvements in China's C4ISR, including spacebased and over-the-horizon sensors, could enable Beijing to identify, track and target foreign military activities deep into the western Pacific.

Chinese forces have increased operations beyond China's borders and coastal waters, most notably the highly publicized 2004 intrusion of a HAN-class nuclear submarine in Japanese territorial waters during operations far into the western Pacific Ocean. After completing its first around-theworld naval cruise in July 2002, China continues to send its fleet abroad to show the flag and gain familiarity with open-ocean operations. During a goodwill cruise to Pakistan, India, and Thailand in 2005, China conducted its first bilateral maritime exercises outside waters near China.

Finally, China has increased participation in global peacekeeping operations. China now has some 1,000 civilian police and support personnel serving as peacekeepers abroad, including 595 attached to the UN Observer Mission in Liberia (UNMIL), 230 with the UN Observer Mission in the Democratic Republic of the Congo (MONUC), and 127 as part of the UN Mission for Stabilization in Haiti (MINUSTAH). China is said to be considering committing troops to peacekeeping operations in Sudan, provided this meets with approval from the African Union and the Government of Sudan.

The purposes to which China could apply its current and future military power remain uncertain to the United States and countries in the region, owing to China's lack of transparency. As China's military power grows, its leaders' options increase with respect to the use of coercion to press diplomatic advantage, advance interests, or resolve disputes.

Disagreements over maritime claims remain with Japan and several Southeast Asian nations (i.e., Vietnam, the Philippines, Malaysia, and Brunei - all claimants to all or parts of the Spratly Islands in the South China Sea) and could lead to renewed tensions in these areas. Similarly, the need to protect China's energy investments in Central Asia could provide an incentive for military intervention if instability surfaces in the region. A failure to resolve the North Korean nuclear issue, combined with that country's increasingly perilous economic conditions, could produce instability on the Korean Peninsula or a collapse of the North Korean regime. In such a contingency, China could face a choice between unilateral and multilateral responses.


1 As cited in, "Deng Puts Forward New 12-Character Guiding Principle for Internal and Foreign Policies," Ching Pao (Hong Kong), No. 172, pp. 84-86, 5 November 1991. FBIS HK0611100091.

2 Official figures for protests in 2005 have yet to be published. Some Asian and Western media, based on official Chinese police crime reports, have widely reported a figure of 87,000 "protests" in 2005. Law enforcement specialists' careful analysis of the original Chinese terms suggest these reports have confused the police term for "mass incidents" (i.e. protests) with their somewhat similar term for a variety of "social order" crimes (e.g., disorderly conduct, fights, public intoxication). Statistical inconsistencies raise additional questions over whether the 87,000 figure refers to protests. The 87,000 figure is a reported 6.6 percent increase from 2004 to 2005 - statistically inconsistent with the known figure of 74,000 protests or "mass incidents" in 2004.




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