the caucus papers

THE CAUCUS PAPERSA Conversation on China

INSIDE:

U.S.-China Relations: Where it’s heading

The 411 on China’s Military Modernization

China’s Race for Energy and What it Means for the U.S.

Who’s Who in China’s Government

Congressman J. Randy ForbesThe Office of

www.forbes.house.gov�

INTRODUCTIONCONGRESSMAN J. RANDY FORBESARMED SERVICES READINESS SUBCOMMITTE CHAIRMAN

As the final seconds of the year �010 counted down, most Americans could not help but wonder what changes the New Year would bring. This was especially true of those who carefully watch U.S. – China relations.

The final weeks of �010 brought news that the country that owned over a quarter of the U.S. foreign debt had just developed a second missile system designed to attack ouraircraft carriers; unfortunately, we had not developed a defensive capability to stop the first system, much less the second one. Within days of that news, we heard the Chinese were planning to have double-digit increases in its military spending to add to the 339.8% increases they had made in the last ten years. As if this news was not bad enough, pictures soon surfaced of China’s new stealth aircraft, the J-�0. This plane was a rival to the F-�� and decisively superior to the F-35.

At the same time, Congress was contemplating increasing our debt ceiling, the Secretary of Defense had stopped production of the F-��, and the Department of Defenseannounced $78 billion of cuts to our national defense.

Although events that might unfold in the New Year were uncertain, one thing wasindisputable. The Chinese know far more about us than we know about them.

This booklet, “The Caucus Papers,” was designed to be a clearing house of information to assist policy makers in understanding the issues facing the United States as it struggles to find the right relationship with China. We hope it will provide you with a foundation to better evaluate those decisions.

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TABLE OF CONTENTS

4 China: An Overview

10 China’s Economy (& the Instant Pudding Mindset)

�� China’s Military (& the 1941 Malayan Bicycle Blitzkrieg)

48 Energy & Natural Resources in China (& the Anasazi Effect)

60 Technology & Education in China (& the Decline of the Boy Scouts)

70 China’s Government (& the Mirror Image Syndrome)

88 Important Reading

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CHINA: AN OVERVIEW

GEOPOLITICS

Contemporary China could be viewed as an island. Although China is not surrounded by water, which borders only its eastern flank, China is bordered by terrain that is difficult to traverse in virtually any direction. This phenomenon protects its major cities – Beijing, Shanghai, Chengdu, and Chonqing.

Internally, China is divided into two parts: the Chinese heartland (Han China) and the non-Chinese buffer regions surrounding it. There is a line in China

called the 15-inch isohyet, east of which more than 15 inches of rain fall each year and west of which the annual rainfall is less. The vast majority of Chinese live east and south of this line, in the region known as Han China. More than a billion people live in this area, about half the size of the United States.

CHINA AS AN ISLAND

15-INCH ISOHYET & CHINA POPULATION DENSITY

NATIONAL SNAPSHOT SIDE-BY-SIDE

Area of Country

Population

Age Structure of Population

Population Growth Rate

Urban Population

Ethnic Groups

Religions

Natural Resources

Languages

9,8�6,675 sq km3rd Largest in world

310,�3�,8633rd largest in the world

0-14 years: �0.�% 15-64 years: 67% 65 years and over: 1�.8%

0.97%

8�% of total population

white 79.96%, black 1�.85%, Asian 4.43%, Amerindian and Alaska native 0.97%, native Hawaiian and other Pacific islander 0.18%, two or more races 1.61% (July �007 estimate)*

coal, copper, lead, molybdenum, phosphates, uranium,bauxite, gold, iron, mercury, nickel, potash, silver, tungsten, zinc, petroleum, natural gas, timber**

Protestant 51.3%, Roman Catholic �3.9%, Mormon 1.7%, other Christian 1.6%, Jewish 1.7%, Buddhist 0.7%, Muslim 0.6%, other or unspecified �.5%, unaffiliated 1�.1%, none 4% (�007 est.)

English 8�.1%, Spanish 10.7%, other Indo-European 3.8%, Asian and Pacific island �.7%,

*The US Census Bureau did not include a separate listing for Hispanic in the 2000 Census; about 15.1% of the total US population is Hispanic.

** The US has the world’s largest coal reserves with 491 billion short tons accounting for 27% of the world’s total.

9,596,961 sq km4th Largest in world

1,330,141,�95Largest in the world

0-14 years: 19.8% 15-64 years: 7�.1% 65 years and over: 8.1%

0.494%

43% of total population

Han Chinese 91.5%, Zhuang, Manchu, Hui, Miao, Uighur, Tujia, Yi, Mongol, Tibetan, Buyi, Dong, Yao, Korean, and other nationalities 8.5%

coal, iron ore, petroleum, natural gas, mercury, tin, tungsten, antimony, manganese, molybdenum, vanadium, magnetite, aluminum, lead, zinc, uranium, hydropower potential (world’s largest)

Officially Atheist, Daoist (Taoist), Buddhist, Christian 3%-4%, Muslim 1%-�%

Standard Chinese or Mandarin (Putonghua, based on the Beijing dialect) (official), Yue (Cantonese), Wu (Shanghainese), Minbei (Fuzhou), Minnan (Hokkien-Taiwanese), Xiang, Gan, Hakka dialects, minority languages


The ring of non-Han buffer regions that surround this heartland – Tibet, Xinjiang province, Inner Mongolia and Manchuria – were historically under Chinese control when China was strong and have broken away when China was weak. Today, there is a great deal of Han settlement in these regions – a cause of friction. Yet, when China controls the buffer regions it is an insulated state with defensible borders, making it virtually invulnerable to attack. Thus, since the 15th century, China’s strategy has remained constant: the slow and systematic assertion of control over these outer regions to protect the Han from foreign incursion.

With the arrival of Europeans in the western Pacific in the mid-19th century, it became clear that China’s

most vulnerable point was its coast. Since then, China’s three overriding geopolitical imperatives have been:

(1) Maintain internal unity in the Han Chinese regions;

(�) Maintain control of the buffer regions; and

(3) Protect the coast from foreign encroachment.

CHINA PROVINCES AND BUFFER REGIONS

Read more: The Geopolitics of China, www.stratfor.com

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The vast majority of Chinese live in the region known as Han China. More than a billion people live in this area, about half the size of the United States.

Photo Credit: Andrew Donahue


TERRITORIAL DISPUTES

With China’s proximity and involvement in many of the world’s “flashpoints” such as North Korea, the Spratly Islands, the Senkaku Islands, Afghanistan, and Pakistan, China’s leaders hope to prevent regional instability from spilling across China’s borders and thereby interfering with economic development or domestic stability. Changes in regional security dynamics—such as perceived threats to China’s ability to access and transport foreign resources, or disruptions on the Korean Peninsula—could lead to shifts in China’s military development and deployment patterns, likely with consequences for neighboring states.

The East China Sea: The East China Sea contains approximately 7 trillion cubic feet of natural gas and up to 100 billion barrels of oil. Japan maintains that an equidistant line from each country involved should separate the EEZs, while China claims an Extended Continental Shelf beyond the equidistant line to the Okinawa Trench (which almost reaches Japan’s shore). In early �009, Japan accused China of violating a June �008 agreement providing for joint exploration of oil and natural gas fields, and claimed that China unilaterally drilled beneath the demarca-tion line and extracted reserves from the Japanese side. China and Japan continue to dispute possession of the nearby Senkaku Islands. However, both sides have said that this dispute should not undermine their overall relationship.

The South China Sea: The South China Sea plays an important role in Northeast Asia and Southeast Asia security considerations. Northeast Asia relies heavily on the flow of oil and commerce through the South China Sea shipping lanes, including 80 percent of the crude oil to Japan, South Korea, and Taiwan. China claims sovereignty over the Spratly and Paracel island groups—claims disputed in whole or part by Brunei, the Philippines, Malaysia, Indonesia, and Vietnam. Taiwan, which occupies Itu Aba in the Spratly Islands, also claims all four island groups in the South China Sea. In �009, China protested claims made by Malaysia and Vietnam and reiterated it has “indisputable sovereignty over the islands in the South China Sea and the adjacent waters and enjoys

sovereign rights and jurisdiction over the relevant waters as well as the seabed and subsoil thereof.”

China and India: Despite increased political and economic relations between China and India over the years, tensions remain along their shared 4,057 km border, most notably over Arunachal Pradesh, which China asserts is part of Tibet and therefore part of China, and over the Askai Chin region at the western end of the Tibetan Plateau. In �009, both countries stepped up efforts to assert their claims. China tried to block a $�.9 billion loan to India from the Asian Development Bank, claiming part of the loan would have been used for water projects in Arunachal Pradesh. This represented the first time China sought to influence this dispute through a multilateral institution. The then governor of Arunachal Pradesh announced that India would deploy more troops and fighter jets to the area. An Indian academic also noted that in �008, the Indian military had recorded �70 border violations and nearly �,300 cases of “aggressive border patrolling” by Chinese soldiers.

China’s leaders hope to prevent regional instability from spilling across its borders and thereby interfering with economic development or domestic stability.

{ }

Read more: “Annual Report to Congress: Military and Security Developments Involiving the People’s Republic

of China.” www.defense.gov

http://issuu.com/action/openurl?url=http://www.defense.gov


CHINA’S DISPUTED TERRITORIES

Although not exhaustive, three of China’s major ongoing territorial disputes are based on claims along its shared border with India and Bhutan, the South China Sea, and with Japan in the East China Sea.

China’s EconomyPhoto Credit: Marmotta

THE INSTANT PUDDING MINDSET

Step 1: Beat pudding mix into 2 cups cold milk with wire whisk. Step 2: Pour at once into 4 individual serving dishes. Pudding will be soft-set and ready to eat within 5 minutes.

America is suffering from an instant pudding mindset. We have grown accustomed to the harried pace and minimal effort of quick solutions and fast results. But the outcomes, in many cases, have been devastating. Breaking America’s dependence on deficit spending, righting our insolvent or soon-to-be-insolvent entitlement programs, unleashing a nimble and skilled labor force, and reordering our federal government will require long bouts of disciplined exertion. To catch up, meet, and exceed Chinese economic momentum, America must reorder its mindset. We must focus on the long-haul. Make difficult decisions. And do the hard work. There will be no instant pudding solutions to these challenges.

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CHINA’S ECONOMYSince the launch of economic reforms and trade liberalization 30 years ago, China has been one of the world’s fastest-growing economies and has become a major economic and trade power. China’s rapid economic growth has dramatically improved Chinese living standards. Trade and foreign investment flows have been major factors in China’s booming economy. Foreign direct investment has fueled this rapid growth and, combined with large trade surpluses and large-scale purchases of foreign currency – specifically dollars – China has become the world’s largest holder of foreign exchange reserves. Yet, despite a largely positive outlook for its economy, China faces challenges to its future economic growth and stability including an ineffective banking system, government corruption and a lack of rule of law.

ECONOMIC GROWTH

After three decades of growth averaging nearly 10 percent a year, China passed Japan in the first half of �010 to become the world’s second-largest economy, after the United States.

Although the gap between China’s $5 trillion economy and the nearly $15 trillion economy of the United States (at the �009 official exchange rate) remains very large, China’s advancement is remarkable for a country whose gross domestic product (GDP) was just half as much five years ago.

China’s per capita income has increased from $930 in �000 to $3,600 in �009.

China’s consumption as a share of GDP has fallen from 46 percent in �000 to below 36 percent in �009. In contrast, personal consumption in the United States has hovered around 70 percent of GDP for the last decade.

China’s government policies limit the ability of foreign companies to obtain Chinese government procurement contracts and to make sales to China’s state-owned enterprises, most recently through China’s new “indigenous innovation” policy. Companies in the United States and Europe have protested this discriminatory treatment.


GDP (2009 purchasing power parity)

GDP (2009 official exchange rate)

GDP (2009 real growth rate)

GDP (2009 per capita)

GDP (2009 composition by sector)

Labor force

Investment (gross fixed; records totalbusiness spending on fixed assets, which provide the basis for future production.)

Budget

Rate of Inflation

Market values of publically traded shares

Unemployment rate (Dec. 2010)

Population below poverty line**

Current account balance

Industries

Industrial production growth rate

$14.�56 trillion�nd in the world*

$14.1� trillion

- �.6%

$46,000

agriculture: 1.�%industry: �1.9%services: 76.9%

154.� million4th largest in the world

1�.�% of GDP145th in the world

revenues: $�.104 tril.expenditures: $3.5� tril.

- 0.3% ��nd in the world

$11.740 trillionLargest in the world

9.8%

1�%

- $378.4 billion 190th in the world

leading industrial power in the world, highly diversified & technologically advanced; petroleum, steel, motor vehicles, aerospace, telecommunica-tions, chemicals, electronics, food processing, consumer goods, lumber, mining

- 5.5% –117th in the world

$8.818 trillion3rd in world

$4.985 trillion

9.1%

$6,700

agriculture: 10.3%industry: 46.3%services: 43.4%

813.5 millionLargest in the world

46.3% of GDPLargest in the world

revenues: $1.00� tril.expenditures: $1.111 tril.

- 0.7% 14th in the world

$5.011 trillion4th largest in the world

4.�%**

�.8%***

$�97.1 billion1st in the world

mining, ore processing, iron, steel, aluminum, coal; textiles, apparel; petroleum; cement; chemicals; fertilizers; consumer products; transportation equip-ment; ships, aircraft; telecommu-nications equipment9.9% – 4th in the world

* European Union has the world’s largest GDP of $14.43 trillion.** Official data for urban areas only; including migrants may boost total unemployment to 9%; substantial unemployment and underemployment in rural areas .*** 21.5 million rural population live below the official “absolute poverty” line (approximately $90 per year); an additional 35.5 million rural population live above that level but below the official “low income” line (approximately $125 per year) (2007)

ECONOMY SIDE-BY-SIDE


The global economic crisis began to impact China’s economy in late �008. After growing by 13 percent in �007, China’s real GDP slowed to 9.0 percent in �008 and to 7.1 percent in the first half of �009. China’s trade and inflows of FDI diminished sharply, and millions of workers reportedly lost their jobs.

The Chinese government sought to boost the economy by implementing a $586 billion economic stimulus package, largely aimed at infrastructure projects, establishing easy money policies to boost banking lending, and providing assistance to various industries. Such policies were relatively successful in stabilizing China’s economy; real GDP was expected to grow by over 8 percent in �009—far higher than the expected growth of any other major economy at the time. In contract, US stimulus packages focused on social spending expended high costs for minimal positive impacts.

While the United States and the European Union (EU) are continuing to struggle in the wake of the global financial crisis, China has continued to grow: in the first quarter of �010, China posted growth of 11.9 percent at an annualized rate.

Although growth has been moderating since (10.3 percent in the second quarter at an annualized rate), China’s economy is forecast to expand about 10 percent in �010—continuing a remarkable, three- decade streak of double-digit growth on average.

China manipulates the value of its currency, the RMB, by requiring its citizens, businesses, and exporters to trade their dollars for RMB. By limiting the dollars in circulation within China, the government can then set a daily exchange rate between the RMB and the dollar. China maintains an artificially low value for the RMB that is estimated to be between �0 percent and 40 percent lower than it would otherwise be if it were allowed to respond to market forces.

Since June 19, �010, the RMB appreciated by just �.3 percent against the dollar (as of October �010). The RMB remains substantially undervalued against the dollar, which subsidizes Chinese exporters to the detriment of U.S. domestic producers. China’s undervalued currency also helps attract foreign companies to locate production in China.

THE ECONOMIC SLOWDOWN

RMB MANIPULATION



For the first eight months of �010, China’s goods exports to the United States were $��9.� billion, while U.S. goods exports to China were $55.8 billion, with the U.S. trade deficit in goods at $173.4 billion, an increase of �0.6 percent over the same period in �009 ($143.8 billion). This constitutes a four-to-one ratio of Chinese exports to its imports from the United States.

The U.S. trade deficit with China is a major drag on the U.S. economy. Despite the global financial crisis, China gained an even greater share of the U.S. trade deficit, while the overall U.S. trade deficit declined. The deficit in goods with China is by far the largest among U.S. trading partners: 45 percent of the total in �009 and 41.5 percent of the total for the first eight months of �010.

As the global recession reduced U.S. demand for imports, the U.S. trade deficit with the world and with China declined in �009. However, the relative por-tion of China’s share of the U.S. global trade deficit actually grew. In August �010, the U.S. trade deficit with China ($�8 billion) hit its highest level on record. The deficit in goods with China is by far the

largest among U.S. trading partners, 45 percent of the total in �009 and 41.5 percent of the total for the first eight months of �010.

The dominance of the dollar in international markets is more pronounced when measured by currency transactions. The dollar was used in 85 percent of international currency transactions, while the euro was involved in fewer than half as many currency swaps—39 percent.

Since China’s accession to the WTO in �001, the annual U.S. current account deficit with China has grown from $89 billion in �001 to $�64 billion in �009. Predictions of a more balanced traderelationship between the two countries as a result of China’s membership in the WTO have proven false. Since China’s entry into the WTO, the United States has run a cumulative deficit in goods with China of over $1.76 trillion.

TRADE

Despite the global financial crisis, China gained an even greater share of the U.S. trade deficit, while the overall U.S. trade deficit declined.

{ }

U.S.–CHINA TRADE IN GOODS ($ BILLION), 2000 – 2009

�000 �001 �00� �003 �004 �005 �006 �007 �008 �009

U.S. Exports

16.3 19.� ��.1 �8.4 34.7 41.8 55.� 65.� 69.7 69.5

U.S. Imports

100.0 10�.3 1�5.� 15�.4 196.7 �43.5 �87.8 3�1.5 337.8 �96.4

Balance -83.7 -83.1 -103.1 -1�4.1 -16�.1 -�01.6 -�3�.5 -�56.3 -�68.04 -��6.9

Source: Bureau of Economic Analysis, U.S. International Transcations Accounts Data: China (Washington, DC: U.S. Department of Commerce, June 17, 2010).

TRADE SIDE-BY-SIDE

Exports

Export-commodities

Export partners

Imports

Import-commodities

Import partners

Stock of direct foreign investment-at home

Stock of direct foreign investment-abroad

$1.069 trillion - 4th in the world

agricultural products (soybeans, fruit, corn) 9.�%, industrial supplies (organic chemicals) �6.8%, capital goods (transistors, aircraft, motor vehicle parts, computers, telecom-munications equipment) 49.0%, consumer goods (automobiles, medicines) 15.0%

Canada 19.37%, Mexico 1�.�1%, China 6.58%, Japan 4.84%, UK 4.33%, Germany 4.1%

$1.575 trillion - �nd in the world

agricultural products 4.9%, industri-al supplies 3�.9% (crude oil 8.�%), capital goods 30.4% (computers, telecommunications equipment, motor vehicle parts, office ma-chines, electric power machinery), consumer goods 31.8% (automo-biles, clothing, medicines, furniture, toys)

$�.41 trillion - 1st in the world

$3.367 trillion - 1st in the world

China 19.3%, Canada 14.�4%, Mexico 11.1�%, Japan 6.14%, Germany 4.53%

$1.�04 trillion - �nd in the world

electrical and other machinery, including data process-ing equipment, apparel, textiles, iron and steel, optical and medical equipment

US �0.03%, Hong Kong 1�.03%, Japan 8.3�%, South Korea 4.55%, Germany 4.�7%

$954.3 billion - 4th in the world

electrical and other machinery, oil and mineral fuels, optical and medi-cal equipment, metal ores, plastics, organic chemicals

$473.1 billion - 11th in world

$��9.6 billion - 15th in world

Japan 1�.�7%, Hong Kong 10.06%, South Korea 9.04%, US 7.66%, Taiwan 6.84%, Germany 5.54% (�009)

Investment (gross fixed): Records total business spending on fixed assets, such as factories, machinery, equipment, dwellings, and inventories of raw materials, which provide the basis for future production. It is measured gross of the depreciation of the assets.

Industrial production growth rate: Gives the annual percentage increase in industrial production (includes manufacturing, mining, and construction).

Current account balance: Records a country’s net trade in goods and services, plus net earnings from rents, interest, profits, and dividends, and net transfer payments to and from the rest of the world during the period specified. These figures are calculated on an exchange rate basis. Debt - external: Gives the total public and private debt owed to nonresidents repayable in internationally accepted currencies, goods, or services. These figures are calculated on an exchange rate basis.

Stock of direct foreign investment - at home: Gives the cumulative US dollar value of all investments in the home country made directly by residents - primarily companies - of other countries as of the end of the time period indicated. Direct investment excludes investment through purchase of shares.

Stock of direct foreign investment - abroad: Gives the cumulative US dollar value of all investments in foreign countries made directly by residents - primarily companies - of the home country, as of the end of the time period indicated. Direct investment excludes investment through purchase of shares.


U.S.–CHINA TRADE BALANCE (QUARTERLY, 2000 – 2010(THROUGH 2010 Q2)

$20

$0

- $20

- $40

- $60

- $80

- $100

Balance on currentaccount

Balance on goods

�000

:1

�000

:3

�001

:1

�001

:3

�00�

:1

�00�

:3

�003

:1

�003

:3

�004

:1

�004

:3

�005

:1

�005

:3

�006

:1

�006

:3

�007

:1

�007

:3

�008

:1

�008

:3

�009

:�

�009

:3

�010

:1

(U.S

. $ b

illion

s)

Balance on services


Of the $7.5 trillion in publicly held U.S. Treasury securities at the end of March 2010, $3.9trillion, or 52 percent, was held by foreigners. The Chinese government, through its central bank, has become the single largest foreign purchaser of U.S. government debt to finance the federalgovernment’s budget deficit. In July �010, forexample, China and Hong Kong together held $98� billion of the outstanding, officially registered U.S. Treasury securities. Thus, China accounted for a quarter of all the publicly held Treasuries owned by foreigners and about 1� percent of the overall publicly held Treasury debt.

The growing U.S. debt held by foreign governments, particularly that of China, has raised the fear that if foreigners suddenly decided to stop holding U.S. Treasury securities or decided to diversify their holdings, the dollar could plummet in value and interest rates would rise.

The People’s Bank of China holds, in dollar- denominated debt securities, an estimated 70percent of its self-reported $�.65 trillion in foreign exchange reserves, or $1.85 trillion.

As the holder of the world’s largest stock of foreign exchange reserves ($�.65 trillion as of October �010), Beijing has questioned the role of the U.S. dollar as the global reserve currency and has led the drive for greater representation on global bodies, such as the International Monetary Fund (IMF) and the World Bank.

U.S. FOREIGN DEBT

Major Foreign Holders of U.S. Securities(December 2009) Total: $2.7 Trillion

Thailand

France

Singapore

Korea, South

Ireland

CanadaGermany

Switzerland

Taiwan

Luxembourg

Russia

Brazil

Carib Bnking Ctrs

Oil Exporters

United Kingdom

China

Japan

All Others

Read more: “Annual Report to Congress, 2010,” www.uscc.gov.“China’s Economic Conditions,” Congressional Research Service.

“Foreign Holdings of Federal Debt,” Congressional Research Service.

http://issuu.com/action/openurl?url=http://www.uscc.gov

U.S. Current Account Balance with China and the World(U.S. $ Billions)

Year U.S. balance with world

U.S. balance with China

China’s share of U.S. global trade deficit

2000 - $417 - $88 21%2001 - $393 - $89 22%2002 - $459 - $110 24%2003 - $522 - $132 25%2004 - $631 - $172 27%2005 - $748 - $219 29%2006 - $803 - $261 33%2007 - $718 - $295 41%2008 - $669 - $308 46%2009 - $378 - $264 70%

Source: Bureau of Economic Analysis, U.S. International Transactions Accounts Data (Washington, DC: Department of Commerce, September 14, 2010).

A BRIEF LOOK AT DEBT & CURRENCY

Global Currency Composition of Official Foreign Exchange Reserves(U.S. $ million)

�,931,094

1,�49,776

156,373

3,500,000

3,000,000

�,500,000

�,000,000

1,500,000

1,000,000

500,000

0U.S. dollars Euros Japanese yen

International Monetary Fund Statistics Department, Currency Composition of Official Foreign Exchange Reserves Database and International Financial Statistics (as of second quarter 2010) (Washington, DC)

TRANSPORTATION SIDE-BY-SIDE

Airports

Pipelines

Railways

Roadways

Waterways

Merchant marine

Merchant marine – by type

Ports and terminals

Investment in High Speed Rail

Miles of High Speed Rail

15,079 - 1st in the world

petroleum products �44,6�0 km; natural gas 548,665 km

��6,4�7 km - 1st in the world

6,506,�04 km - 1st in the world

41,009 km - 4th in the world

418 total - �6th in the world

barge carrier 6, bulk carrier 58, cargo 58, carrier 3, chemical tanker 30, container 87,passenger 18, passenger/cargo 56, petroleum tanker 45,refrigerated cargo 3, roll on/roll off �7, vehicle carrier �7 foreign-owned: 86 (Australia 1, Bermuda 5, Canada 1, Denmark 34, France 4, Germany 3, Malaysia �, Nor-way 10, Singapore 17, Sweden 5, UK 4) registered in other countries: 734 (Antigua and Barbuda 6, Australia �, Bahamas 100,Belgium �, Bermuda �5,Cambodia 4, Canada 9, Cayman Islands 54, Comoros �, Cyprus 7, Georgia 1, Greece 7, Hong Kong 31, Indonesia �, Ireland �, Isle of Man �, Italy �1, Liberia 39, Luxembourg 3, Malta 35,Marshall Is. 168, Netherlands 15, Norway 9, Panama 10�, Portugal 4, Saint Kitts and Nevis 1, Saint Vincent and the Grenadines 19, Sierra Leone 1, Singapore 33, South Korea 8, UK 11 (�010)

Baton Rouge, Corpus Christi, Houston, Long Beach, LosAngeles, New Orleans, New York, Plaquemines, Tampa, Texas City

8 billion (�008)

413

50� - 15th in the world

gas 3�,545 km; oil �0,097 km; refined products 10,915 km

77,834 km - 3rd in the world

3,583,715 km - �nd in the world

110,000 km navigable - 1st in the world�,010 total - 3rd in the world

barge carrier 6, bulk carrier 571, cargo 639, carrier 5, chemical tanker 98,container �04, liquefied gas 55, passenger 9, passenger/cargo 83, petroleum tanker �71, refrigerated cargo 35, roll on/roll off 9, specialized tanker 1, vehicle carrier �4 foreign-owned: 18 (Germany 1, Hong Kong 15, Japan �) registered in other countries: 1,6�3(Bahamas 4, Bangladesh 1, Belize 64, Bermuda 13,Cambodia �03, Comoros 1, Cyprus 6, France 5, Georgia 11, Germany �, Honduras �, Hong Kong 43�, India 1, Indonesia 1, Kiribati �8, Liberia 10, Malta 11, Marshall Is. 16, North Korea 1, Norway �5, Panama 574, Philippines 4, Saint Kitts and Nevis 1, Saint Vincent and the Grenadines 8�, Sierra Leone 1�, Singapore �6, South Korea 9, Thailand 1, Togo �, Tuvalu 9, UK 7 (�010)

Dalian, Guangzhou, Ningbo, Qingdao, Qinhuangdao,Shanghai, Shenzhen, Tianjin

100 billion (�008)

4,680

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China’s Military

1941 Malayan Bicycle Blitzkrieg

It was 1941 - the outset of World War II - and the Imperial Japanese Army was outnumbered by as much as three to one on the Malay Peninsula. Yet in the days that would follow, the Japanese would launch a daring offense on the British forces: the conquest of the 700-mile Malay Peninsula in 70 days and the taking of the British Far East stronghold of Singapore.

Central to their unparalleled accomplishment: bicycles. Calculating for the intense heat and impassable jungle, Japanese military leaders equipped their infantry with bicycles rather than horses to move troops and materials. On bicycles, the Japanese foot soldiers traveled farther, faster, and with less fatigue over the vast number of rivers on the Malay peninsula. Despite the British burning over 250 bridges on their retreat, the Japanese infantry continued their unbroken advance, wading across the rivers carrying their bicycles on their shoulders, or crossing on log bridges held up on the shoulders of engineers standing in the stream.

The British could not escape the troops on bicycles. They were overtaken, driven out of the villages and into the jungle, and forced to surrender. After their relentless pursuit through the expansive peninsula, the Japanese Army invaded the island of Singapore on February 7, 1942 and took the island days later. Their victory would ultimately mark the end of the British Empire in Asia and the psychological impact of the defeat would stay with Britain throughout the entire war.

Stepping into the new century, America’s military forces are stretched across the globe, military budgets are shrinking, infrastructure is decaying, and security challenges are steady. On paper, American military strength is strong, but are we prepared to face resourceful, innovative enemies prepared with asymmetric tactics? Does America risk bicycle blitzkrieg?


CHINA’S MILITARY“I have moved from being curious to being genu-inely concerned [about China’s military programs]” - Admiral Michael Mullen, the Chairman of the Joints Chiefs of Staff, Asia Society Washington’s Annual Dinner, June 2010

The Department of Defense (DOD) and other observers believe that the near-term focus of China’s military modernization effort has been to develop military options for addressing the situation with Taiwan. Consistent with this goal, observers believe that China wants its military to be capable of acting as a so-called anti-access force—a force that can deter U.S. intervention in a conflict involving Taiwan, or failing that, delay the arrival or reduce the effectiveness of intervening U.S. naval and air forces. DOD and other observers believe that China’s military modernization effort, including its naval modernization effort, is increasingly oriented toward pursuing additional goals, such as asserting or defending China’s claims in maritime territorial disputes, protecting China’s sea lines of communications, displacing U.S. influence in the

Pacific, and asserting China’s status as a major world power.

On March 4, �010, Beijing announced a 7.5 percent increase in its military budget to approxi-mately $78.6 billion. This increase continues more than two decades of sustained annual increases in China’s announced military budget.

Analysis of �000-�009 data indicates China’s officially disclosed military budget grew at an average of 11.8 percent in inflation-adjusted terms over the period, while gross domestic product (GDP) grew at 9.6 percent.

The announced increase in the military budget for China in �010 is the smallest annual increase since 1995. Budget growth tends to slow in the last year of each Five-Year Program, and the defense budget growth is still higher than central government budget growth. This has now changed with recent rumors of double-digit expansion of China’s defense spending.

PRC Military Budget PRC Military Expenditure Estimate

160

1�0

100

1996 1997 1998 1999 �000 �001 �00� �003 �004 �005 �006 �007 �008 �009

60

40

�0

0

140

80

China’s Annual Real GDP and Military Budget Growth, 2000 - 2009

Billion 2009 US$

www.forbes.house.gov�5


China relies on foreign technology to advance military modernization. In the case of key national security technologies, controlled equipment, and other materials not readily obtainable through commercial means or academia, the PRC resorts to more focused efforts, including the use of its intelligence services and other-than legal means, in violation of U.S. laws and export controls. China has become the number one espionage threat to the United States.

• In July �009, PRC national Chi Tong Kuok was indicted for violating U.S. export laws after allegedly attempting to obtain sensitive cryptology equipment that would have allowed the PRC to monitor U.S. military communications.

• Another case involved a former U.S. Pacific Com-mand liaison official, who was charged in May �009 with knowingly passing classified and unclassified information, including U.S. policy documents, to a PRC agent.

• In July �009, a former professor at the University of Tennessee was sentenced to four years imprisonment for a case involving the export to PRC nationals of controlled technical data related to a restricted U.S. Air Force contract to develop plasma actuators for an unmanned aerial vehicle (UAV).

Beijing is using arm sales to enhance foreign relations and to generate revenue to support its domestic defense industry. From �005-�009, China sold approximately $8 billion worth of conventional weapons systems worldwide. PRC companies sell primarily to developing countries, where China’s low-cost weapons are able to achieve market access. In other instances, arms sales serve to cultivate relationships with important strategic partners, such as Pakistan.

Arms Sales

China’s Worldwide Arms Sales 2005-09

53%

11%

�6%

8%�%

Asia/Pacific

Europe

Latin America

Middle East & North Africa

SubSaharan Africa

The PRC resorts to more focused efforts, including the use of its intelligence services and other-than legal means, in violation of U.S. laws and export controls.

{ }

China does not publish equivalents to the U.S. National Security Strategy, National Defense Strategy, or National Military Strategy. Rather, China uses “white papers,” speeches, and articles as the principal mechanisms to communicate policy and strategy publicly.

The study of PLA views on strategy remains an inexact science, and outside observers have few direct insights into the formal strategies motivating China’s force build-up, the leadership’s thinking about the use of force, the contingency planning that shapes the PLA’s force structure or doctrine, or the linkages between strategic pronouncements and actual policy decisions, especially in crisis situations.

China’s naval modernization effort, which began in the 1990s, encompasses a broad array of weapon acquisition programs, including anti-ship ballistic missiles (ASBMs), submarines, and surface ships. China’s naval modernization effort also includes reforms and improvements in maintenance and logistics, naval doctrine, personnel quality, education, training, and exercises.

PRC President Hu Jintao called China a “sea power” and advocated a “powerful people’s navy” to “up-hold our maritime rights and interests” during a �006 speech at a Navy CCP Congress. Other civilian leaders, PLA Navy officials, government writings, and PLA journals have argued that China’s economic and political power is contingent upon access to and use of the sea, and that a strong navy is required to safeguard such access. Despite increased consideration of missions farther from China, the Navy’s primary focus will remain on preparing for operations within the “first and second island chains,” with emphasis on a potential conflict with U.S. forces over Taiwan. This is likely to remain true until there is a resolution of the Taiwan issue on terms Beijing finds acceptable.

According to the testimony of Admiral Robert F. Willard, Commander of the U.S. Pacific Command, China has increased its number of ships to �90, bypassing the current number of U.S. ships for the first time in any of our lifetimes. This is an increase of over 30 ships since the Department of Defense last released research on the size of China’s navy in March of �009.

MILITARY DOCTRINE

NAVAL WARFARE

The First and Second Island Chains. PRC military theorists conceive of two island “chains” as forming a geographic basis for China’s maritime defensive perimeter. www.defense.gov


Major Naval Units, www.defense.gov



China has an aircraft carrier research and design program. Beginning in early �006, PRC-owned media reported high-level government and military official statements on China’s intent to build aircraft carriers. In April �009 PRC Navy Commander Admiral Wu Shengli stated that “China will develop its fleet of aircraft carriers in a harmonious manner. We will prudently decide the policy [we will follow with regard to building aircraft carriers]. I am willing to listen to the views of experts from the navies of other countries and to seek opinions from our country.”

While meeting with Japanese Defense Minister Yasukazu Hamada in March �009, PRC Minister of Defense General Liang Guanglie stressed that China is the only big nation that does not have aircraft carriers and stated that “China cannot be without aircraft carriers forever.”

The PLA Navy has reportedly decided to initiate a program to train 50 navy pilots to operate fixed-wing aircraft from an aircraft carrier. Both government and outside analysts project that China will not have an operational, domestically produced carrier and associated ships before �015.

However, changes in China’s shipbuilding capability and degree of foreign assistance to the program could alter those projections. In March �009, PLA Navy Admiral Wu Huayang stated that “China is capable of building aircraft carriers. We have such strength. Building aircraft carriers requires economic and technological strength. Given the level of development in our country, I think we have such strength.” The PLA Navy is considering building multiple carriers by �0�0.

Status of Aircraft Carrier Developments

The PLA Navy is at the forefront of efforts to extend operational reach beyond China’s regional waters. The PLA Navy’s investment in platforms such as nuclear powered submarines and progress toward its first aircraft carrier (a refurbished ex-Russian Kuznetsov-class carrier) suggest China is seeking to support additional missions beyond a Taiwan contingency.

The PLA Navy has the largest force of principal combatants, submarines, and amphibious warfare ships in Asia. China’s naval forces include some 75 principal combatants, more than 60 submarines, 55 medium and large amphibious ships, and roughly 85 missile-equipped patrol craft.

China has an active aircraft carrier research and development program. Observers anticipate that the PRC shipbuilding industry could start construc-tion of an indigenous platform imminently, if not already. China is the second largest shipbuilder in the world.

China is interested in building multiple operational aircraft carriers with support ships in the next decade. The PLA Navy has reportedly decided to initiate a program to train 50 pilots to operate fixed-wing aircraft from an aircraft carrier. The initial program, presumably land-based, would be followed in about four years by ship-borne training.

The PLA Navy is improving its over-the-horizon (OTH) targeting capability. OTH radars could be used in conjunction with imagery satellites to assist in locating targets at great distances from PRC shores to support long range precision strikes, including by anti-ship ballistic missiles.

China continues production of its nuclear powered ballistic missile submarine (SSBN). China may field up to five new SSBNs. China is further expanding its current force of nuclear-powered attack submarines and may add up to five to the inventory in the coming years.

MILITARY OVERVIEW SIDE-BY-SIDE

Annual Defense Budget

Annual Percent Growth in Defense Budget

10-Year Percent Growth in Defense Budget (�000-�010)

Military branches

Military service and obligation

Manpower available for military service

Manpower fit for military service

4.06% of GDP

0% (�010)

75.5%

United States Armed Forces: US Army, US Navy (includes Marine Corps), US Air Force, US Coast Guard*

18 years of age (17 years of age with parental consent) for male and female voluntary service; maximum enlistment age 4� (Army), �7 (Air Force), 34 (Navy), �8 (Marines); service obliga-tion 8 years, including �-5 years active duty (Army), � years active (Navy), 4 years active (Air Force, Marines)

males 16-49: 73,145,586females 16-49: 71,880,788

males 16-49: 60,388,734females 16-49: 59,�17,809

4.3% of GDP

7.5% (�010)

339.8%

People’s Liberation Army (PLA): Ground Forces, Navy (includes marines and naval aviation), Air Force (Zhongguo Renmin Jie-fangjun Kongjun, PLAAF; includes Airborne Forces), and Second Artillery Corps (strategic missile force); People’s Armed Police (PAP); PLA Reserve Force (�010)

18-�� years of age for selective compulsory military service, with �4-month service obligation; no minimum age for voluntary service (all officers are volunteers); 18-19 years of age for women high school graduates who meet requirements for specific military jobs; in �010, a decision was made to allow women in combat roles (�010)

males 16-49: 381,747,145females 16-49: 360,385,6�9

males 16-49: 314,668,817females 16-49: �98,745,786

* Coast Guard administered in peacetime by the Department of Homeland Security, but in wartime reports to the Department of the Navy

MILITARY OVERVIEW SIDE-BY-SIDE CONT...

Navy- active personnel

- aircraft carriers

- cruisers

- destroyers

- frigates

- principal amphibious ships

- strategic submarines

- attack submarines

- naval bombers

- unmanned aerial vehicles

Air Force- active personnel

- fighters

- bombers


Army- active personnel

- main battle tanks

- armored personnel carriers

- artillery

- attack helicopters


Marines- active personnel

- tanks

- fighters

- attack helicopters


�15,000

0

0

�5

49

�

1*

60

50

0

330,000

0

0

�5

800,000

6,550+

3,300+

17,700+

1�6

Uncertain number

10,000

100+

0

0

0

3�9,390

11

��

56

�1

31

14

57

0

4�+

334,34�

11

��

56

553,044

5,850

19,637

6,�70+

1,035

4,034

�04,�61

403

354

145

3�

Select PLA Modernization Areas, 2000 - 2009

A BRIEF LOOK AT CHINA’S MIILTARY

2000 2004 2008 2009

Naval Surface Forces Submarine Forces Air Force Air Defense Force

Percent Modern60

50

40

30

20

10

0

PEOPLE’S REPUBLIC OF CHINA (MILLIONS OF US $)FISCAL YEAR: 2008

Active Forces

Reserve Forces

Militia Amount Percentage

Personnel 19,950 175 0 20,125 33.47

Training & Mainternance

18,599 247 1,149 19,989 33.24

Equipment 19,677 187 158 20,022 33,29

Total 58,221 608 1,307 60,136 100

Total

Notes: • Data drawn from China’s July 2009 report to the UN.• Personnel expenses cover salaries, allowances, food, clothing and bedding, insurance, welfare benefits and pensions for officers, non-ranking cadres, enlisted men, and contracted civilians.• Training and maintenance expenses cover troop training, institutional education, and running and development of daily work and activities.• Equipment expenses cover research and development, procurement, maintenance, and transportation and storage of weaponry and equipment.“Annual Report to Congress: Military & Security Developments Involving the People’s Republic of China,” www.defense.gov


AIR WARFARE

Expert witnesses testified to the United States China Commission that by �0�0, China’s Air Force will have transformed from a poorly equipped and trained service into one of the foremost in the world.

The PLA Air Force is one of four major services and arms in the PLA and is responsible for conducting offensive and defensive air operations in and around China.

With over 1,600 combat capable aircraft, it is the third-largest air force in the world (after the United States and Russia) and the largest in Asia.

The PLAAF continues its conversion from a force for limited territorial defense to a more flexible and agile

force able to operate off-shore in both offensive and defensive roles.

Over the past decade, the PLA Air Force has simultaneously decreased the overall size of its fleet while increasing the number of modern fighters. According to the U.S. Department of Defense, in �000 only two percent of China’s combat fighters were considered modern 4th generation and improved 3rd generation fighters. Today, thepercentage has climbed to almost �5 percent.

Read more: “Annual Report to Congress, 2010,”www.uscc.gov. “Annual Report to Congress: Military & Security Developments

Involving the People’s Republic of China, 2010,”www. defense.gov.

http://issuu.com/action/openurl?url=http://www.uscc.gov



In a significant departure from prior language, China’s �008 Defense White Paper maintains that: “China has become an important member of the international system and the future and destiny of China have been increasingly closely connected with the international community. China cannot develop in isolation from the rest of the world, nor can the world enjoy prosperity and stability without China.” Nonetheless, there are forces—some beyond the control of China’s leaders—that could reinforce a relatively inward focus, or that could divert China from a peaceful pathway:

Nationalism: Communist Party leaders continue to rely on nationalism, based on China’s economic achievements and increased international profile, to improve the legitimacy of the Party. China’s leaders have stoked patriotic sentiment to manipulate public opinion and deflect domestic criticism of the CCP.

Economics: Continued economic development remains the foundation of the Party’s popular legitimacy and underwrites its military power. Unexpected increases in resource demand, global resource shortages or price shocks, or restricted access to resources, could affect China’s strategic outlook and behavior, and might force its leadership to re-examine its resource allocation priorities, including those for the military.

Domestic Political Pressures: Regime survival and the maintenance of CCP rule shape the strategic outlook of China’s leaders and drive many of their choices. The Communist Party continues to face long-term popular demands for improved government responsiveness, transparency and accountability, which weakens its legitimacy.

Environment: China’s economic development has come at a significant environmental cost. China’s leaders are concerned that these problems could undermine regime legitimacy by threatening economic development, public health, social stability, and its international image.

China’s Peaceful Pathway?

China’s rapid and comprehensive transformation of its armed forces is affecting regional military balances and holds implications beyond the Asia-Pacific region. Of particular concern is that elements of China’s military modernization appear designed to challenge our freedom of action in the region. Admiral Robert F. Willard, commander of the U.S. Pacific Command, in testimony to Congress in March �010.

Since at least �000, China has been improving its conventional ballistic missile capabilities. Ten years ago, China had only one brigade of conventional short-range ballistic missiles (roughly �4–36 launchers). Today, the number has increased to seven brigades.

In addition to increasing the number of missiles, China is also extending their range, improving their accuracy, and increasing their payload. China’s conventional ballistic missiles can be divided into two types: short-range ballistic missiles and medium-range ballistic missiles.

China is also expanding its land-attack cruise missile capabilities. The PLA has two types of land-at-tack cruise missiles, both first deployed within the last ten years. The first, the Second Artillery’s DH–10, is China’s premier long-range cruise missile, with an estimated range of over 1,500 km. In addition, the PLA Air Force employs a new, air-launched, land-at-tack cruise missile, the YJ–63.

As a component of its overall desire to field a modern military, China is modernizing its air and missile forces and improving its capabilities to conduct offensive air and missile operations. These improvements have expanded China’s ability to operate outside its borders and reach U.S. regional allies, such as Japan, as well as U.S. forces in the region.

China has the most active land-based ballistic and cruise missile program in the world. It is developing and testing several new classes of offensive missiles, forming additional missile units, qualitatively upgrading certain missile systems, and developing methods to counter ballistic missile defenses.

AIR AND CONVENTIONAL MISSILE CAPABILITIES


China is developing an anti-ship ballistic missile (ASBM). The missile has a range in excess of 1,500 km and is intended to provide the PLA the capability to attack ships, including aircraft carriers, in the western Pacific Ocean.

China is modernizing its nuclear forces. In recent years intercontinental range ballistic missiles (ICBM) have entered service. One such missile, the DF-31A, has a range in excess of 11,�00 km and can reach most locations within the continental United States.

China’s current and projected force structure improvements will provide the PLA with systems that can engage adversary surface ships up to 1,000 nautical miles from the PRC coast. These include

• Anti-Ship Ballistic Missiles: MRBMs designed to target forces at sea, combined with overhead and over-the-horizon targeting systems to locate and track moving ships.

• Conventional and nuclear-powered attack submarines: KILO, SONG, YUAN, and SHANG attack submarines capable of firing advanced AS-CMs.

• Surface Combatants: LUYANG I/II, SOVREMEN-NYY-II, guided missile destroyers with advanced long-range anti-air and anti-ship missiles.

• Maritime Strike Aircraft: FB-7 and FB-7A and the SU-30 MK�, armed with ASCMs to engage surface combatants.

Missile Name Number of Missiles Number of Launchers Estimated Range

Short-Range Ballistic Missiles (<1,000 km range)

DF-11 700-750 1�0-140 300km

DF-15 350-400 90-110 600km

Short-Range Ballistic Missiles (<1,000 km range)

DF-3 15-�0 5-10 3,000+ km

DF-�1C 85-95 75-85 1,750+ km

DF-�1D Under development 1,750+ km

PLA Conventional Ballistic Missiles

Sources: USCC staff compiliation baed on the Secretary of Defense Annual Report to Congress: Military and Security Dveelopments Involving the PRC, and Global Security.org, “Weapons of Mass Destruction - China - Theater Missile Systems.”

Missile Type Number of Missiles

Number of Launchers

Estimated Range

DH-10 Ground Launched �00-500 45-55 1,500+ km

YJ-63 Air Launches unknown unknown �00+ km?

PLA’s Advanced Cruise Missiles

Source: Office of Secretary of Defense Annual Report to Congress: Military and Security Dveelopments Involving the PRC; Capabilities of the Chinese People’s Liberation Army to Carry Out Military Action in the Event of a Regional Military Conflic; Ballistic and Cruise Missile Threat.


Base Distance from ChinaPLA Nonnuclear Missile

Capabilities

Osan Air Base, South Korea 400 km480 theater ballistic missiles; 350 ground launched cruise missiles

Kunsan Air Base, South Korea 400 km48 theater ballistic missiles; 350 ground launhced cruise missiles

Kadena Air Base, Japan 650 km80 theater ballistic missiles; 350 ground launched cruise missiles

Misawa Air Base, Japan850 km (1,000 km without over-

flight rights from Russia)80 theater ballistic missiles; 350 ground launched cruise missiles

Yokota Air Base, Japan 1,100 km80 theater ballistic missiles; 350 ground launched cruise missiles

Andersen Air Force Base, Guam 3,000 km

Currently free from theater bal-listic missile threats; could face threats from medium-range bal-

listic missles, submarine luanched ballistic missiles, and air-launched

cruise missiles

PLA Conventional Missile Capabilities Against U.S. Air Force Bases in East Asia

Source: USCC staff, based upon testimony of Jeff Hagen. U.S.-China Economic and Security Review Commission, Hearing on China’s Emergent Military Aerospace and Commerical Aviation Capabilities.


Short-Range Ballistic Missiles (< 1,000 km). As of December �009, the PLA had somewhere between 1,050–1,150 SRBMs. The later versions have greater ranges, improved accuracy, and a variety of conventional payloads.

Medium-Range Ballistic Missiles (1,000-3,000 km). The PLA is acquiring conventional MRBMs to increase the range at which it can conduct precision strikes against land targets and naval ships, including aircraft carriers, operating far from China’s shores.

Land-Attack Cruise Missiles. The PLA is developing air- and ground-launched LACMs for precision strikes.

Ground Attack Munitions. The PLA Air Force has a small number of tactical air-to-surface missiles as well as precision-guided munitions including all-weather, satellite-guided bombs, anti-radiation missiles, and laser-guided bombs.

Anti-Ship Cruise Missiles. The PLA Navy has or is acquiring nearly a dozen ASCM variants. The pace of ASCM research, development and production within China and procurement from abroad—primarily Russia—has accelerated over the past decade.

BUILDING CAPACITY FOR CONVENTIONAL PRECISION STRIKE

This graphic of an anti-ship ballistic missile’s use of mid-course and terminal guidance to strike an aircraft carrier appears in a 2006 article from the Second Artillery Engineering College. www.defense.gov

Missle Flight Trajectory with Terminal Guidance

CATEGORIES OF MISSILES SIDE-BY-SIDE

Strategic Nuclear Missiles- Intercontinental ballistic missiles

- Submarine-launched ballistic missiles

Short-range ballistic missiles

Medium-range ballistic missiles

Land-attack cruise missiles

Air-to-Surface Missiles and Air-to-AirMissiles

Anti-ship ballistic missiles

• DF-4: 10-15 launchers; 10-15 warheads• DF-5: �0 launchers; �0 warheads• DF-31: <10 launchers; <10 warheads• DF31A: 10-15 launchers; 10-15 warheads

Minuteman III: 450 launchers; 500 warheads

JL-1: 1� (on one Xia-class SSBN of uncertain operational status)

JL-�: under development for deployment of 1� SLBMs on each of the new Jin-class SSBN with six submarines expected

Trident: 336 launchers; 115� warheads

M-9: 350-400 missiles

M-11: 700-750 missiles

DF-3: 15-�0 missiles

DF-�1: 85-95 missiles

Under the Treaty on the Elimination of Intermediate Range and Shorter-Range Missiles (INF Treaty) with the Soviet Union, the United States eliminated by 1991 all ground-launched ballistic and cruisemissiles with ranges between 500 and 5,500 km.

DH-10: �00-500 missiles

Air Force: 4,500+ air-to-surface and air-to-airmissiles

Air Force: 41,4��+ (�6,4��+ air-to-ground missiles, air-launched cruise missiles, and high-speed anti-radiation missiles; and 15,000+ air-to-air missiles)

DF-�1D: under development of the world’s only ASBM, could target aircraft carriers and other ships operating 1500 to �000 km from sites along China’s coast

Opposite Page: Conventional Anti-Access Capabilities. The PLA’s conventional forces are currently capable of striking targets well beyond China’s immedaite periphery. Not included are ranges for naval surface- and sub-surface-based weapons, whose employment at distances from China would be deteremined by doctrine and the scenario in which they are employed. www.defense.gov

This Page: Medium and Intercontental Range Ballistic Missiles. China is capable of targeting its nuclear forces throughout the region and most of the world, including the continental U.S. Newer systems, such as the DF-31, DF-31A, and JL-� will give China a more survivable nuclear force.www.defense.gov


The PLA has about 1.�5 million personnel in its ground forces. In addition to the active ground forces, China has a reserve force of some 500,000 (as of �008) and a large militia that can be mobilized in wartime to support the war effort within their home provinces. All males between 18 and 35 years of age not currently serving in the military are technically part of the militia system.

PLA ground forces are transitioning from a static defensive force to a more offensive and maneuver-oriented force organized and equipped for operations along China’s periphery.

GROUND WARFARE

SPACE WARFARE

China is developing the ability to attack an adversary’s space assets, accelerating the militarization of space.

PLA writings emphasize the necessity of “destroying, damaging, and interfering with the enemy’s reconnaissance ... and communications satellites,” suggesting that such systems, as well as navigation and early warning satellites, could be among initial targets of attack to “blind and deafen the enemy.”

PLA analysis of U.S. and Coalition military operations states that “destroying or capturing satellites and other sensors … will deprive the opponents of initiatives on the battlefield and [make it difficult] for them to bring their precision guided weapons into full play.”

The PLA Air Force (PLAAF) celebrated its 60th Anniversary in �009. In an interview on the occa-sion of the anniversary, PLAAF Commander General Xu Qiliang said that the trend of military competition extending to space is “inevitable” and emphasized the transformation of the PLAAF from a homeland defense focus to one that “integrates air and space,” and that possesses both “offensive and defensive” capabilities.

Beijing launched a navigation satellite in �009, and plans to have a full network to provide global positioning for military and civilian users by �015-�0�0.

China recently launched its 6th reconnaissance satellite orbited since �006.

In �007, China successfully tested an anti-satellite (ASAT) weapon against a PRC weather satellite, demonstrating its ability to attack satellites in low-Earth orbit. China continues to develop and refine this system, which is one component of a multidimensional program to limit or prevent the use of space-based assets by potential adversaries during times of crisis or conflict.

China is expanding its space-based intelligence, surveillance, reconnaissance, navigation, and communications satellite constellations. In parallel, China is developing a multidimensional program to improve its capabilities to limit or prevent the use of space-based assets by potential adversaries during times of crisis or conflict.

Service (and select strength) People’s Liberation Army United States Military

Strategic Nuclear ForcesTotal launchers: 50-60Total warheads: 175

Total launchers: 880Total warheads: �,15�

Active Personnel 1,355,000 1,4�1,037Reserves 500,000 855,000Militia 8-10 million* 0

* All males between 18 and 35 years of age not currently serving in the military are technically part of the militia system. Congressional Research Service.

China is developing the ability to attack an adversary’s space assets, accelerating the militarization of space.

{ }

In March �008, the PLA established an information warfare militia unit in Yongning County, in Ningxia Province. The establishment ceremony for the unit was publicized by the local government and included a number of prominent local figures. According to a concurrent Web posting made by the county government, the duties of an information warfare militia unit include “[s]trengthening research and exercises related to network warfare, and continuously improving methods for network attacks. . . In peacetime, extensively collect information from adversary networks and establish databases of adversary network data. . . . In wartime, attack adversary network systems, and resist enemy network attacks.”

According to a press release about the establishment ceremony for the unit, the Yongning Militia Information Warfare Unit will have approximately 80 personnel divided into three detachments, focused on network warfare, information collection and processing, and network defense. The unit was constructed according to ‘‘standardized requirements,’’ with facilities including an operations center, a generator room, the commander’s office, an activities room, and a set of charts and other necessary materials.

The same source indicated that individual unit personnel would undergo 10 days of foundational military training, including basic military skills and general knowledge of network warfare.

Finally, the local government announcement also underscored concern for the loyalty and political reliability of unit members, stating that their efforts would build “a unit that is steadfast in political belief, that has pure ideology and morals, that has a superior quality of professionalism . . . that performs propaganda for the Party, that benefits the people, and that can provide effective strength to the military for winning future wars under informationized conditions.”

Profile of a Chinese Information Warfare Militia Unit

CYBER WARFAREIn May �009, President Obama labeled cyber attacks “one of the most serious economic and national security challenges” that the country faces. As a means of enhancing its military modernization and economic development, China has been heavily involved in conducting human and cyber espionage against the United States. The quantity of malicious computer activities against the United States increased in �008 and rose sharply in �009; much of this activity appears to originate in China.

Joel Brenner, former director of the Office of the National Counterintelligence Executive, has identified China as the origin point of extensive malicious cyber activities that target the United States. Malicious activities directed against Defense Department computers in �009 were running at a rate of �40 every day, costing as much as $�00 million to repair the damage.

The PLA views computer network warfare as both a key enabler of modern warfare and a critical new spectrum of conflict in its own right. Chinese analysts also describe computer network warfare as a critical tool that can be exploited by a weaker military force to level the playing field against a stronger opponent.

According to a study for the U.S.-China Economic Security and Review Commission by Northrop

Grumman that implicates the Chinese government in extensive malicious cyber activities against the United States:

•China is likely using its maturing computer network exploitation capability to support intelligence collec-tion against the U.S. government and U.S. defense industries by conducting a long-term, sophisticated, computer network exploitation campaign.

•The depth of resources necessary to sustain the scope of computer network exploitation targeting the US and many countries around the world coupled with the extremely focused targeting of defense engineering data, US military operational information, and China-related policy information is beyond the capabilities or profile of virtually all organized cybercriminal enterprises and is difficult at best without some type of state-sponsorship.

•The type of information often targeted for exfiltration has no inherent monetary value to cybercriminals like credit card numbers or bank account information.

The PLA views computer network warfare as both a key enabler of modern warfare and a critical new spectrum of conflict in its own right.

{ }

Another category of actors involved in cyber activities directed against the United States consists of privately organized groups of Chinese computer hackers, sometimes referred to as ‘‘patriotic hackers.” Motivated both by a desire to test their hacking skills as well as an anti-western sense of Chinese nationalism, such groups have been involved in many high-profile ‘‘hacktivist’’ defacements or distributed denial of service attacks directed against U.S. Web sites.

These have most frequently occurred during times of strained Sino-American relations, such as in the aftermath of the accidental May 1999 bombing of a People’s Republic of China (PRC) embassy annex in Serbia by U.S. forces, or following the April �001 collision between a U.S. Navy surveillance aircraft and a PLA Navy fighter aircraft over the South China Sea.

Many Chinese hacker organizations operate quite openly on the Internet, maintaining their own Web pages, recruiting new members, and boasting of their hacking exploits. In the past, these groups have generally been tolerated by the Chinese government, as long as their hacking activities were directed abroad.

The Role of the “Patriotic Hacker”Another category of actors involved in cyber activities directed against the United States consists of privately organized groups of Chinese computer hackers, sometimes referred to as “patriotic hackers.” Motivated both by a desire to test their hacking skills as well as an anti-western sense of Chinese nationalism, such groups have been involved in many high-profile “hacktivist” defacements or distributed denial of service attacks directed against U.S. Web sites.

These have most frequently occurred during times of strained Sino-American relations, such as in the aftermath of the accidental May 1999 bombing of a People’s Republic of China (PRC) embassy annex in Serbia by U.S. forces, or following the April �001 collision between a U.S. Navy surveillance aircraft and a PLA Navy fighter aircraft over the South China Sea.

Many Chinese hacker organizations operate quite openly on the Internet, maintaining their own Web pages, recruiting new members, and boasting of their hacking exploits. In the past, these groups have generally been tolerated by the Chinese government, as long as their hacking activities were directed abroad.

The Role of the “Patriotic Hacker”


The PRC is also recruiting from its growing population of technically skilled people, including those from the private sector, to increase its cyber capabilities. It is recruiting skilled cyber operators from information technology firms and computer science programs into the ranks of numerous Information Warfare Militia units.

A �008 study by the Internet security research firm iDefense identified 33 probable cyber militia units in China, mostly located within government research institutes, information technology firms, or university computer science departments. 94% of those selected are members of either the Chinese Communist Party or its Communist Youth League.

In written testimony to the U.S. China Economic and Security Commission, a senior fellow with The Technolytics Institute (an information security consultancy) warned of Chinese computer exploitation and cited “reports of malicious code

being found in the computer systems of oil and gas distributors, telecommunications companies, [and] financial services industries.”

In �009, numerous computer systems around the world, including those owned by the U.S. government, continued to be the target of intrusions that appear to have originated within the PRC. These intrusions focused on exfiltrating information, some of which could be of strategic or military utility.

It remains unclear if these intrusions were conducted or endorsed by the PLA or other elements of the PRC government. However, developing capabilities for cyberwarfare is consistent with authoritative PLA military writings.

80000

70000

60000

50000

40000

30000

�0000

10000

0�000 �001 �00� �003 �004 �005 �006 �007 �008 �009 �010

NU

MB

ER O

F IN

CID

ENTS

Department of Defense Reported Incidents of Malicious Cyber Activity, 2000-2009, with Projection for 2010

Sources: U.S.-China Economic and Security Review Commission, testimony of Gary McAlum, May 20, 2008; Staff member, U.S. Strategic Command, telephone interview, August 28, 2009; Staff member, U.S. Cyber Command, email interview, August 17, 2010.

Read more: “China Naval Modernization: Implications for U.S. Navy Capabilities,” Congressional Research Service.

“Annual Report to Congress, 2009,” www.uscc.gov.

Prominent cyber attacks with likely Chinese nexus

2006: Computers in the U.S. House of Representatives were penetrated by hackers using Chinese addresses.

June 2007: The Office of the Secretary of Defense took its information systems offline for more than a week to defend against a serious infiltration that investigators attributed to China.

May 2008: The National Journal reported that Chinese cyber attacks may have been responsible for blackouts in �003 and �007 in New York and Florida, respectively.

March 2009: A renowned cyber think tank in Canada released a report implicating China in an extensive campaign of worldwide cyber infiltration, which they called “GhostNet.” GhostNet infected 1,�95 host computers in 103 different countries around the world, many of them belonging to embassies, ministries of foreign affairs, and other high-profile government targets, including the personal office of the Dalai Lama; the Tibetan government-in-exile in Dharamsala, India; and Tibetan government-in-exile offices in New York, Brussels, and London. GhostNet “command” and “control” servers were located in China. GhostNet network control interface used Chinese (Mandarin).

March 2009: Canadian researchers uncovered an electronic spy network, apparently based mainly in China, which had reportedly infiltrated Indian and other nations’ government offices around the world. More than 1,300 computers in 103 countries were identified.

April 2009: Reports surfaced that attacks on defense contractor information systems in �007 and �008 allowed intruders—probably operating from China—to successfully exfiltrate “several terabytes of data related to design and electronics systems” of the F35 Lightning II, one of the United States’ most advanced fighter planes.

Early 2010: Reports emerged of a large-scale cyber attack against Google’s operations in China. In January, Google’s chief legal officer announced that in mid-December �009, Google had ”detected a highly sophisticated and targeted attack on [its] corporate infrastructure originating from China that resulted in the theft of intellectual property.” Evidence from the ensuing investigation suggested that another “primary goal of the attackers was accessing the [Google e-mail] accounts of Chinese human rights activists.”

•

•

•

•

•

•

•

In January 2010, Google’s chief legal officer announced that in mid-December 2009, Google had “detected a highly sophisticated and targeted attack on [its] corporate infrastructure originating from China that resulted in the theft of intellectual property.”

Energy and Natural Resources in China

Photo Credit: Vmenkov

The anasazi effect

The Anasazi were amazing architects. A thousand years ago in what is now the American Southwest, the Anasazi built dramatic adobe dwellings. In Chaco Canyon, the center of Anasazi civilization, the pueblos rose four to five stories high and housed nearly 1,200 people — an astounding achievement for the time. The Anasazi civilization thrived making dramatic advances in agriculture, transportation, and architecture.

Yet from A.D. 1125 to 1180, very little rain fell in the region. Between 1270 and 1274 there was another long drought, followed by another period of normal rainfall. In 1275, yet another drought began. This one lasted 14 years.

When this cycle of drought began, Anasazi civilization was at its height. Communities were densely populated. Even with good rains, the Anasazi were using their land to its limits. Without rain, it was impossible to grow enough food to support the population. Widespread famine occurred. People left the area in large numbers to join other pueblo peoples to the south and east, abandoning the Chaco Canyon pueblos and, later, the smaller communities that surrounded them. Anasazi civilization began a long period of migration and decline after these years of drought and famine. By the 1300s, Anasazi civilization had all but died out.

While not facing droughts like the Anasazi, both America and China will face futures marked with challenges involving energy sources, natural resources, and food supply. How will the Anasazi Effect impact our cultures, our relationships, and our intertwined futures?


ENERGY AND NATURAL RESOURCES IN CHINA

Since �000, China has doubled its consumption of energy and, according to the International Energy Agency, “Prospects for further growth are very strong considering the country’s low per-capita consumption level and the fact that China is the most populous nation on the planet.”

In a study commissioned by the National Foreign Trade Council, the law firm of Dewey & LeBoeuf LLC noted: China’s continued economic growth—and stability—ultimately rests upon the availability of adequate supplies of energy. . . . At present rates of extraction, China will run out of domestic sources of petroleum, natural gas, and coal in an estimated 7, ��, and 75 years, respectively.

China is already a net energy importer. In �006, it became the world’s third-largest net importer of oil, with over 50 percent of its oil coming from overseas. And, despite having one of the world’s largest coal reserves, in �009, China became a net importer of coal.

China’s consumption of fossil fuels, especially coal, has made it the world’s largest emitter of carbon dioxide, emitting 8.1 billion metric tons in �009, or �1 percent of the world total.

China’s push for rapid economic development will dominate global energy markets and be the single biggest force in spurring higher oil prices and carbon emissions over the next quarter-century.

Over the last decade, China’s energy demand has doubled and, in the future, Chinese energy demand is expected to soar 75 percent by �035, accounting for more than a third of the growth in globalconsumption.

In a recent report, China’s Ministry of Environmental Protection announced that environmental accidents had increased by 96 percent in the first six months of �010. One of these accidents, an acid leak at a copper mine in Fujian Province, killed enough fish to feed 7�,000 people for a year.

China’s push for rapid economic development will dominate global energy markets and be the single biggest force in spurring higher oil prices and carbon emissions over the next quarter-century.

{ }

Photo Credit: Mark Schweiss


COAL: China’s coal consumption between �000 and �008 accounted for three-quarters of the global growth in coal demand. China is also the world’s largest producer and consumer of coal, with about half of its coal use being for electricity generation. Coal provides over 70% of China’s current electricity needs, and fuels much of the new power generation capacity being built.

GREEN ENERGY: With $735 billion in investment plans over the next decade in nuclear, wind, solar and biomass projects, China is becoming a world leader in low-carbon energy output.

NUCLEAR ENERGY: China has set a goal of building �0 nuclear power plants by �0�0, which would increase its nuclear capacity at least fourfold. If achieved, China will account for 57 percent of all new nuclear power plant construction globally between �007 and �0�0.

WIND POWER: Wind power is central to China’s plans for non-fossil energy to provide 15 percent of the country’s energy supply by �0�0. Although wind currently accounts for less than 1 percent of China’s total electricity consumption, the country has been adding capacity aggressively in recent years.

Adapted from International Energy Agency, World Economic Outlook 2007: China and India Insights (Paris, France: Organization for Economic Cooperation and Development, 2007), p. 289. www.uscc.gov

CHINA’S PRIMARY ENERGY DEMAND, 1980 - 2030

Mto

e

Coal Oil Gas Renewable Nuclear

1980 1990 �005 �015 �030

4,000

3,500

3,000

�,500

�,000

1,500

1,000

500

0

Read more: “Annual Report to Congress, 2010,”www.uscc.gov. “World Energy Outlook, 2010 - Executive Summary,” www.worldenergyoutlook.org.

http://issuu.com/action/openurl?url=www.uscc.gov

http://issuu.com/action/openurl?url=www.worldenergyoutlook.org


Military and Security Aspects of Beijing’s Regional Energy Strategy

Beijing has constructed or invested in energy projects in more than 50 countries. The majority of China’s external energy related projects and investment since �003 remains linked to securing long-term energy resources (primarily oil and gas) to sustain economic and industrial development. Oil currently contributes about �0 percent to national energy consumption. China meets 70 percent of its total energy needs through coal.

In �008, China imported 56 percent of its oil. Conservative estimates of future oil are 80 percent by �030.

A part of Beijing’s foreign energy strategy is the development of land-based pipeline corridors that avoid sensitive Sea Lines of Communication (SLOC). For instance, in �008, over 80 percent of China’s oil imports transited the Strait of Malacca.

In �006, a crude oil pipeline from Kazakhstan to China became operational. In May �009, construction began on a spur pipeline from Siberia

to Daqing. Another proposed pipeline would transport crude oil from Kyuakpya, Burma to Kumming, China, bypassing the Strait of Malacca. With these projects, China has become a major economic contributor in several states.

However, Beijing has not used oil as a foreign policy lever on the international stage. This is because China remains dependent on oil to support its own industrial and economic development, which makes it a less attractive foreign policy tool. The increasing presence of Chinese oil companies around the world cannot be discounted as a future tool of Beijing’s influence, though.

Nevertheless, evaluation of proven global oil reserves indicates that China’s future energy needs can only be met through suppliers in the Persian Gulf, Africa, and North America—all extraction points that willcontinue to require maritime transport along SLOCs.

Country Volume %Saudi Arabia 7�8 �0

Angola 599 17Iran 4�7 1�

Oman �9� 8Russia �33 7Sudan �10 6

Venezuela 130 4Kuwait 118 3

Kazakhstan 114 3UAE 9� 3

Other 639 3TOTAL 3582 17

China’s Top Crude Oil Suppliers 2008

Volumes are in 1,000 barrels per dayFigures have been rounded

ENERGY SIDE-BY-SIDE

Electricity – production

Electricity – consumption

Electricity – exports

Electricity – imports

Oil – production

Oil – consumption

Oil – exports

Oil – imports

Oil – proved reserves

Natural gas – production

Natural gas – consumption

Natural gas - exports

4.11 trillion kWh1st in the world

3.873 trillion kWh1st in the world

�4.08 billion kWh

57.0� billion kWh

9.056 million bbl/day3rd in the world

18.69 million bbl/day1st in the world

1.704 million bbl/day13th in the world

11.31 million bbl/day1st in the world.

19.1� billion bbl14th in the world

646.6 billion cu m1st in the world

593.4 billion cu m1st in the world

30.35 billion cu m9th in the world

3.451 trillion kWh�nd in the world

3.438 trillion kWh�nd in the world

16.64 billion kWh

3.84� billion kWh

3.991 million bbl/day 5th in the world

8.� million bbl/day3rd in the world

388,000 bbl/day3�nd in the world

4.393 million bbl/day4th in the world

�0.35 billion bbl13th in the world

87.08 billion cu m9th in the world

8�.94 billion cu m8th in the world

3.3� billion cu m31st in the world

Oil - proved reserves: This entry is the stock of proved reserves of crude oil in barrels (bbl). Proved reserves are those quantities of petroleum which, by analysis of geological and engineering data, can be estimated with a high degree of confidence to be commercially recoverable from a given date forward, from known reservoirs and under current economic conditions.

Over the last decade, China’s energy demand has doubled and is expected

to soar 75 percent by 2035.

Photo Credit: Rehman

A BRIEF LOOK AT CHINA & ENERGY

Coal-fired electricity generation by region in the New Policies Scenario

Incremental primary energy deman by fuel & region in the New Policies Scenario, 2008-2035


China’s important transit routes/critical chokepoints and proposed/under construction SLOC bypass routes. www.defense.gov


China produces as much as 97 percent of the world’s supply of rare earth elements (REEs), which are critical components in weapons systems and oth-er electronics such as cell phones, portable DVDs, and laptops. Recently China has introduced mea-sures aimed at restricting exports to foreign markets, to the detriment of foreign producers of a variety of cutting-edge technologies, such as the United States. Such export restrictions provide an unfair advantage to Chinese technology producers.

The concentration of production of rare earth elements outside the United States raises theimportant issue of supply vulnerability. While more abundant than many other minerals, REEsare not concentrated enough to make them easily exploitable economically. The United States was once self-reliant in domestically produced REEs, but over the past 15 years has become 100% reliant on imports, primarily from China, because of lower-cost operations.

Some of the major end uses for rare earth elements include use in automotive catalytic converters, fluid cracking catalysts in petroleum refining, phosphors in color television and flat panel displays (cell phones, portable DVDs, and laptops), permanent magnets and rechargeable batteries for hybrid and

electric vehicles, generators for wind turbines, and numerous medical devices. There are important defense applications, such as jet fighter engines, missile guidance systems, antimissile defense, and space-based satellites and communication systems.

World demand for rare earth elements is estimated at 134,000 tons per year, with global production around 1�4,000 tons annually. The difference is covered by previously mined above-ground stocks. World demand is projected to rise to 180,000 tons annually by �01�, while it is unlikely that new mine output will close the gap in the short term. New mining projects could easily take 10 years to reach production. In the long run, however, the USGS expects that global reserves and undiscovered resources are large enough to meet demand.

Rare Earth Metals

The U.S. was once self-reliant in domestically produced REEs, but over the past 15 years has become 100% reliant on imports, primarily from China, because of lower-cost operations.

{ }

China’s share of the projected net global increase for selected indicators in the New Policies Scenario


China is the world’s largest agricultural producer in terms of volume. Yet, China has less than 10 percent of the world’s arable land to support almost �� percent of the world’s population.

Beijing considers grain self-sufficiency a matter of national security. To ensure grain security, China set a “red line” to guarantee its arable land never shrinks to less than 1.8 billion mu (1�0 million hectares). According to statistics from China’s Ministry of Land and Resources (MLR), the country is already edging dangerously close to its “red line,” with just 1.8�6 billion mu available at the end of last year. Bank of America estimates that China’s arable land could decrease to 117 million hectares by �015.

Rattled by rapidly rising global grain prices, China is looking at strategies to ensure long-term food security for its 1.3 billion people such as procuring farmland overseas and opposing the formation of any international grain price–fixing monopolies.

The Asia Times indicates Chinese farming companies, likely backed by the government, are buying and leasing tracts of land in Africa and Latin America to grow crops. One estimate from the Chinese Ministry of Commerce puts the number of Chinese experts in Africa at over 1,100 and the number of farm laborers at over 1 million, dispersed throughout 18 countries. These Chinese experts help maintain at least 11 agricultural research stations and no less than 63 agricultural investment projects scattered over southern and eastern Africa.

The Economist has estimated that China could have signed 30 agricultural co-operation deals around the world covering over �m hectares since �007.

Food Security

China’s search for new land has led Beijing to aggressively seek large land leases in Mozambique over the past two years, particularly in its most fertile areas, such as the Zambezi valley in the north. The Zambezi valley is the richest region of Mozambique possessing some of the most fertile land in the world, as well as substantial resources below ground, such as coal, gold, and precious stones.

Chinese interest in the Zambezi valley started in mid-�006, when the Chinese state-owned Exibankgranted $� billion in soft loans to the Mozambican government to build the Mpanda Nkua mega-dam on the stretch of the Zambezi in Tete province. Since then, China has been requesting large land leases to establish Chinese-run mega-farms and cattle ranches. A memorandum of understanding was reported to have been signed in June �007, allowing an initial 3,000 Chinese settlers to move to the Zambezivalley to run farms along the valley. A Mozambican official said the number could eventually grow to 10,000.

China is committed to transforming Mozambique into one of its main food suppliers, particularly for rice, the basic element of Chinese diet. An analysis of China’s activities in the valley in the past two years provides some strong indication of China’s long term intentions.

In addition to building a major dam, China has offered to finance three other dams, build new roads, and modernize two harbors. This investment in infrastructure is clearly designed to maximize production and facilitate the rapid export of foodstuffs to China while also giving lucrativecontracts to Chinese companies.

The Zambezi Valley: China’s First Agricultural Colony?

Read more:”Rare Earth Elements: The Global Supply Chain,” Congressional Research Service.

“China’s eye on African agriculture,” Asia Times, www.atimes.com/atimes/China_Business/KJ02Cb01.html.

“Outsourcing’s third wave,” The Economist, www.economist.com/node/13692889.

http://issuu.com/action/openurl?url=www.economist.com/node/13692889

Technology and Education in China

the decline of the boy scouts

On my honor, I will do my bestTo do my duty to God and my country and to obey the Scout Law; To help other people at all times; To keep myself physically strong, mentally awake and morally straight. - The Boy Scout Oath

They have over 70 million current members. They are known for patriotic duty and lofty ideals. They are well-educated, temper themselves, and strive for moral integrity.

But they are not the Boy Scouts. They are the Communist Youth League of China, a mass organization of advanced youth under the leadership of the Communist Party whose purpose is to build the next generation of Chinese socialist leaders. Members of this League are particularly loyal to the Chinese Communist Party and, with increasing regularity, the Communist Party is looking towards the CYLC for recruits for its cyber militia, to join the Chinese intelligence services or to take on positions within the communist government.

By contrast, as Boy Scouts of America enters its 100th year, fewer and fewer American boys are joining their ranks. Recent reports show a steady and significant decline in men in their 20s and 30s reporting to having been in the Boy Scouts than their father’s generation. America’s premier youth organization known for driving the next generation towards personal excellence, for preparing them for stewardship and leadership and for instilling patriotic service is facing a rapidly decreasing membership. Does the decline of the Boy Scouts represent a cultural paradigm shift in America one marked with an erosion of national connection, innovation, purpose, or personal achievement? And, if this shift exists, how will it affect the next generation of education, innovation, and technology?


TECHNOLOGY AND EDUCATION IN CHINA

In response to disappointing international standardized test scores that left many Americaneducators in shock, Secretary of Education Arne Duncan spoke the hard truth that America is being “out-educated”—chiefly by China. Although the United States has a higher literacy rate and longer terms of school enrollment during primary and secondary terms, China has made significant gains in higher education and in critical subject areas like math and science.

The Programme for International Student Assessment (PISA) test scores show these gains in the starkest of terms: First in Reading, Shanghai; First in Math, Shanghai; First in Science, Shanghai; Thirty-first in Math; Seventeenth in Reading; Twenty-third in Science, United States. Although these results high-light a particular region of China in contrast to the average population of the entire United States, they nonetheless demonstrate that China is investing in education and where it is investing—science and engineering—there is marked progress.

Between 1998 and �006, the number of bachelor degrees awarded in science and engineering doubled, while those in the United States haveremained relatively flat.

In the United States, about five percent of allbachelor degrees are in engineering while over 33–percent of all bachelor degrees awarded in China are engineering degrees.

Of the more than four million university degrees awarded in science and engineering in �006, students in China earned about �1 percent, those in the European Union earned about 19 percent, and those in the United States earned about 11 percent.

China replaced the United States to become the world’s top producer of doctorate holders in �008. The number of PhD students in China reached �46,300 in �009, about five times the figure in 1999. As a result of this high number of doctoral candidates, Chinese universities have struggled to meet increasing enrollment demands with adequately trained faculty.

Based on 1,39� questionnaires, the book, China Doctor Quality Survey, by Zhou Guangli, a professor at the Huazhong University of Science and Technology, shows that China’s doctoral supervisors are heavily loaded, with 46 percent of the respondents supervising seven doctoral candidates at the same time. Thus, the quantity of China’s doctorate degrees does not translate to quality.

A �009 report of the Institute of International Education reveals that for the academic year �008-�009, the number of foreign-born students in the United States increased by 8.0%, the largest recorded increase since 1980. The growth of students from China contributed significantly to the increase.

NSF data reveal that in �006, the foreign student population earned approximately 36.�% of the doctorate degrees in the sciences and approximately 63.6% of the doctorate degrees in engineering.33.5% of all non-U.S. citizens awarded doctorates in Science and Engineering were Chinese nationals.

China is investing in education and where it is investing—science and engineering—there is marked progress.{ }

EDUCATION

Read more: “PISA 2009,” National Center for Education Statistics, www.nces.ed.gov.

“Science, Technology and Education News from China,” www.sinoptic.ch.

http://issuu.com/action/openurl?url=www.nces.ed.gov

http://issuu.com/action/openurl?url=www.sinopotic.ch

EDUCATION SIDE-BY-SIDE

Literacy

School life expectancy (primary to tertiary)

Education expenditures

PISA Test Ranking: Math

PISA Test Ranking: Science

PISA Test Ranking: Reading

Bachelor Degrees in Science andEngineering

Doctorate Degrees in Science

Doctorate Degrees in Engineering

Total Doctorate Degrees

Number of Scientists and Engineers

99% of population age 15 and over can read and write

16 years

5.5% of GDP

31st

�3rd

17th

1,50�,9��

19,733

7,634

1.6 million (�007)

49,56�

91.6% of population age 15 and over can read and write

11 years

1.9% of GDP

1st

1st

1,7�6,674

8,785

1st

1�,130

1.��4 million (�007)

50,000

School Life Expectancy: School life expectancy is defined as the total number of years of schooling which a child of a certain age can expect to receive in the future, assuming that the probability of his or her being enrolled in school at any particular age is equal to the current enrollment ratio for that age.

PISA: The Program for International Student Assessment (PISA) is a system of international assessments that focuses on 15-year-olds’ capabilities in reading literacy, mathematics literacy, and science literacy. PISA also includes measures of general or cross-curricular competencies such as problem solving.


In 187� the American essayist Ralph Waldo Emerson (1803-188�) had remarked in one of his lectures: “If a man can write a better book, preach a bet-ter sermon, or make a better mousetrap than his neighbor, though he build his house in the woods, the world will make a beaten path to his door.” China is undoubtedly committed to technological advancement, or this making “better.”

Although a variety of factors, including cheap labor and abundant resources, explain the beaten path to China’s door, the Chinese government has also taken an active role in fostering technological innovation. A range of government agencies, including Ministry of Science and Technology, Ministry of Finance, and Ministry of Education, have launched a nationwide campaign for technology innovations; Shanghai has been made an experimental site for the innovation initiative.

By �01�, Shanghai intends to create a technology innovation system dominated by industry, and guided by the marketplace, taking advantage of the combined strength of industry, universities and

research institutes, with a noticeably raised public awareness of innovation.

As a result, Shanghai’s R&D expenditure will hit 3.0 percent as a proportion of its GDP, with an industrial R&D expenditure at 70 percent, substantive break-throughs in key and core technologies, per million person/year invention patent grants reaching �45 in number, a proprietary technology possession rate at 3�%, and accelerated commercial applications of new technologies.

By that time, Shanghai’s major high tech industrial output will reach $160 billion, with a raised proportion of total industrial output up to 30 percent.

TECHNOLOGY & INNOVATION

By 2012, Shanghai intends to create a technology innovation system taking advantage of the combined strength of industry, universities and research institutes.

{ }


This Chinese student, a Communist Youth League

Member, built the following model when

asked to create something that “inspires him.”


Shanghai plans to focus on the following areas in read to boosting technological innovation and achieving national strategic objectives:

1) Incubate more innovation enterprises. By �01�, innovation businesses in Shanghai shall reach 500 in number;

�) Establish strategic alliances for technology innovation. By �01�, technology innovation alliances shall be established in 60 areas, including large airplane, semiconductor illumination, laser display, electronic tagging, next generation broadcasting and TV network, new energy, intelligent power grid, new energy autos, antibody drugs, medical instruments among many others;

3) Establish and perfect industrial technology innovation service platforms. By �01�, 15 national and municipal service platforms will be established for industrial technology innovation activities, raising the efficiency of technology innovation;

4) Strengthen the capacity building of technology innovation contingents;

5) Establish an S&T banking system, allowing the banking industry to play a role in supporting innovation businesses; and

6) Establish high tech industrialization bases and innovation parks, accelerating the construction of Zhangjiang Proprietary Innovation Demonstration Park, and Yangpu as an innovation district.

China has the most Internet users in the world, reaching 4�0 million by mid-�010—including 364 million with broadband connections.

The Chinese government continues to maintain a sophisticated Internet filtering system to restrict freedom of speech. Beyond filtering, the Chinese government has increasingly sought to direct public discussion over the Internet. Beijing outsources much of its censorship activities to the private sector.

CHINA UNITED STATES

1995 1996 1997 1998 1999 �000 �001 �00� �003 �004 �005 �006 �007 �008 �009 �010*

90

80

70

60

50

40

30

�0

10

0

Perc

en

tag

e o

f th

e P

op

ula

tion

Internet Users in China and the United States, 1995 - 2010*

Although China’s population of Internet users is far greater than the entire population of the United States, Internet access as a percentage of the population is still substantially lower in China. The graph excludes mobile devices. Numbers for �010 are accurate through June.

Sources: International Telecommunications Union; China Internet Network Informatino Center; State Council Information Office White paper, “China’s Internet Stats,”; Central Intelligence Agency, CIA World Factbook.

TECHNOLOGY SIDE-BY-SIDE

Telephones – main lines in use

Telephones – mobile cellular

Internet Hosts

Internet Users

Broadcast media

High Tech Indicators Rating (�008)

R&D Spending

Patent Applications (domestic)

Patents Granted (domestic)

Number of Researchers

High Tech Indicator’s Rating: Georgia Tech’s “High Tech Indicators” study ranks 33 nations relative to one another on “technological standing,” an output factor that indicates each nation’s recent success in exporting high technology products. Four major input factors help build future technological standing: national orientation toward technological competitiveness, socioeconomic infrastructure, technological infrastructure and productive capacity. Each of the indicators is based on a combination of statistical data and expert opinions.

150 million - �nd in the world

�70 million - 3rd in the world

439 million - 1st in the world

�31 million - �nd in the world

Four major terrestrial television networks with affiliate stations throughout the country, plus cable and satellite networks, independent stations, and a lim-ited public broadcasting sector that is largely supported by pri-vate grants; overall, thousands of TV stations broadcasting; multiple national radio networks with large numbers of affiliate stations; while most stations are commercial, National Public Ra-dio (NPR) has a network of some 600 member stations; satellite radio available; overall, nearly 15,000 radio stations operating

89,8�3 (�006)

1,447,718

�.7% of GDP

76.1

��1,784 (�006)

313.68 million - 1st in the world

747 million - 1st in the world

15.�51 million - 6th in the world

4�0 million - 1st in the world

All broadcast media are owned by, or affiliated with, the Communist Party of China or a government agency; no privately-owned television or radio stations with state-run Chinese Central TV, provincial, and municipal stations offering more than �,000 channels; the Central Propaganda Department lists subjects that are off limits to domestic broadcast media with the government maintaining authority to approve all programming; foreign-made TV programs must be approved prior to broadcast

��3,860 (�006)

1,4�3,381

1.5% of GDP

8�.8

470,34� (�006)


Shanghai has been made an experimental site for the

innovation initiative.


China’s first spacewalk was in �008. China continues its manned space program, including both manned and unmanned docking, with the final goal of a permanently manned space station by �0�0.

China has been developing a significant military and civilian space capability since 1955.

China has been launching satellites since 1970. Most of the launches are of Chinese communications, weather, remote sensing, navigation, or scientific satellites. Some of those satellites may be for military applications, or are dual use. Some were commercial launches for foreign countries or companies, primarily placing communications satellites into orbit.

On January 11, �007, China launched a missile into space, releasing a homing vehicle that destroyed an old Chinese weather satellite. This test demonstrated that, if it so chose, China could build a substantial number of these anti-satellite weapons (ASAT) and thus might soon be able to destroy substantial

numbers of U.S. satellites in low earth orbit (LEO), upon which the U.S. military heavily depends.

Chinese officials have been quoted discussing a three-step human spaceflight plan: send humans into Earth orbit, dock spacecraft together to form a small laboratory, and ultimately build a large space station.

The Chinese space agency’s long-range plans include a permanent space station as well as a lunar mission.

SPACE

China could build a substantial number of these anti-satellite weapons and thus might soon be able to destroy substantial numbers of U.S. satellites in low earth orbit.

{ }Read more: “China’s Space Program: An Overview,”

Congressional Research Service.“China, Space Weapons, & U.S. Security,”

www.csis.org.

http://issuu.com/action/openurl?url=www.csis.org

China’s Government

the mirror image syndrome

“Be Wary of Mirror Images,” the section begins. “One kind of assumption an analyst should always recognize and question is mirror-imaging--filling gaps in the analyst’s own knowledge by assuming that the other side is likely to act in a certain way familiar to the analyst.” The book, Psychology of Intelligence Analysis, continues: “To say, “if I were a Russian intelligence officer ...” or “if I were running the Indian Government ...” is mirror-imaging. … mirror-imaging leads to dangerous assumptions, because people in other cultures do not think the way we do. The US perspective on what is in another country’s national interest is usually irrelevant in intelligence analysis. Judgment must be based on how the other country perceives its national interest.”

It’s a basic tenant of intelligent analysis: be careful not to assume that others think like we do. And, yet, in many ways, the United States is guilty of mirror-imaging when it comes to China. What are the pitfalls the US faces when it mirror-images China? What opportunities will we miss and what threats will we not perceive when suffering from the Mirror Image Syndrome?

Photo Credit: Jakob Halun


CHINA’S GOVERNMENT

Opaque and shrouded in secrecy, China’s political system and decision-making processes are mysteries to most outsiders. At one level, China is a one-party state that has been ruled by the Chinese Communist Party (CCP) since 1949. But rather than being rigidly hierarchical and authoritarian, which is often the assumption, political power in China has shifted to a dispersed, complex, and at times highly competitive system. Despite its grip on power, the Party and its senior leaders are not always able to dictate policy decisions as they once did. Instead, present-day China’s political process is infused with other political actors that influence and sometimes deter-mine policy.

The 76 million-member Chinese Communist Party (CCP), authoritarian in structure and ideology, continues to dominate government. Nevertheless, China’s population, geographical vastness, and social diversity frustrate attempts to rule by fiat from Beijing. Central leaders must increasingly build con-sensus for new policies among party members, local and regional leaders, influential non-party members, and the population at large.

Theoretically, the party’s highest body is the Party Congress, which traditionally meets at least once every 5 years. The 17th Party Congress took place in fall �007. The 18th Party Congress will take place in �01�. The primary organs of power in the Communist Party include:

• The Politburo Standing Committee, which currently consists of nine members;

• The Politburo, consisting of �5 full members, including the members of the Politburo Standing Committee;

• The Secretariat, the principal administrative mechanism of the CCP, headed by Politburo Stand-ing Committee member and executive secretary Xi Jinping;

• The Central Military Commission;

• The Discipline Inspection Commission, which is charged with rooting out corruption and malfeasance among party cadres.

CHINESE COMMUNIST PARTY (CCP)


The Chinese Government has always been subordinate to the Chinese Communist Party (CCP); its role is to implement party policies. The primary organs of state power are the National People’s Congress (NPC), the President (the head of state), and the State Council.

Under the Chinese constitution, the NPC is the highest organ of state power. It meets annually for about two weeks to review and approve major new policy directions, laws, the budget, and major personnel changes. These initiatives are presented to the NPC for consideration by the State Council after previous endorsement by the Communist Party’s Central Committee.

Members of the State Council include Premier Wen Jiabao (the head of government), a variable number of vice premiers (now four), five state councilors (protocol equivalents of vice premiers but with narrower portfolios), and �5 ministers, the central bank governor, and the auditor-general.

Although the NPC generally approves State Council policy and personnel recommendations, various NPC committees hold active debate in closed sessions, and changes may be made to accommodate alternate views.

When the NPC is not in session, its permanent organ, the Standing Committee, exercises state power.

Since the victory of Mao Zedong’s communist forces in 1949, the Chinese mainland has been a communist state ruled by the Chinese Communist Party (CCP). Although other minor political parties exist, they are authorized by the CCP, operate under its leadership, and are effectively powerless. No independently organized and established political parties are tolerated, effectively making the PRC a one-party state.

The main political structure of the PRC is comprised of two vertically integrated, but interlocking institutions: the CCP, headed by the Party Politburo and its Standing Committee; and the state government apparatus, headed by the premier, who presides over the State Council, a de-facto cabinet.

In �01�, current CPC leaders will retire and a new generation – the so-called fifth generation – will take the helm. The transition will affect the CPC’s most powerful decision-making organs, determining the makeup of the 18th CPC Central Committee, the Political Bureau (Politburo) of the Central Committee, and most important, the nine-member Politburo Standing Committee that is the core of political power in China.

Xi Jinping and Li Keqiang have been tipped as front-runners to be Hu Jintao’s successor as Party secretary. After Xi and Li, the most likely contenders for seats on the Politburo Standing Committee are Li Yuanchao, director of the CPC’s powerful organization depart-ment, Wang Yang, member of the CPC’s Politburo, Liu Yunshan, director of the CPC’s propaganda department, and Vice Premier Wang Qishan. The next most likely candidates include Vice Premier Zhang Dejiang, Chongqing Party Secretary Bo Xilai, Tianjin Party Secretary Zhang Gaoli and CPC Gener-al Office Director Ling Jihua (secretary to Hu Jintao).

Appointments to the Politburo Standing Committee are the result of intense negotiation between the current committee members, with the retiring members (everyone except Xi Jinping and Li Keqiang) wielding the most influence.

STATE STRUCTURE

CHINA’S CIVILIAN LEADERSHIP

In 2012, current CCP leaders will retire and a new generation - the so-called fifth generation - will take the helm, affecting the CCP’s most powerful decision-making organs.

{ }

Read more: “Understanding China’s Political System,” Congressional Research Service.

“Looking to 2012: China’s Next Generation Leaderswww.stratfor.com.

http://issuu.com/action/openurl?url=www.stratfor.com

GOVERNMENT SIDE-BY-SIDE

Government type

Administrative Divisions

Legal System

Executive Branch

Legislative Branch

Judicial Branch

Political parties

Constitution-based federal republic; strong democratic tradition

50 states and 1 district

federal court system based on English common law; each state has its own unique legal system of which all but one (Louisiana, which is still influenced by the Napoleonic Code) is based on English common law; judicial review of legislative acts; has not accepted compulsory ICJ jurisdiction

Chief of State: President Barack ObamaVice President: Joseph Biden Head of Government: President Barack Obama

cabinet: Cabinet appointed by the president with Senate approval

elections: president and vice presi-dent elected on the same ticket by a college of representatives who are elected directly from each state; president and vice president serve four-year terms

bicameral Congress consists of the Senate (100 seats, � members elected from each state by popular vote to serve six-year terms; one-third elected every two years) and the House of Representatives (435 seats; members directly elected by popular vote to serve two-year terms)

Supreme Court (nine justices; nomi-nated by the president and confirmed with the advice and consent of the Senate; appointed to serve for life); United States Courts of Appeal; United States District Courts; State and County Courts

Democratic Party; Green Party; Libertarian Party; Republican Party

Communist state

�3 provinces*, 5 autonomous regions, and 4 municipalities

*China considers Taiwan its 23rd province** Only members of the CCP, its eight allied parties, and sympathetic independent candidates are elected

based on civil law system; derived from Soviet and continental civil code legal principles; legislature retains power to interpret statutes; constitution ambiguous on judicial review of legislation; party organs exercise authority over judiciary; has not accepted compulsory ICJ jurisdiction

Chief of State: President HU Jintao Vice President: XI Jinping Head of Government: Premier Wen Jiabao

cabinet: State Council appointed by National People’s Congress

elections: president and vice presi-dent elected by National People’s Congress for a five-year term; premier nominated by president, confirmed by National People’s Congress

unicameral National People’s Congress or Quanguo Renmin Daibiao Dahui (�,987 seats; members elected by municipal, regional, and provincial people’s congresses, and People’s Libera-tion Army to serve 5-year terms)**

Supreme People’s Court (judges appointed by the National People’s Congress); Local People’s Courts (comprise higher, intermediate, and basic courts); Special People’s Courts (primarily military, maritime, railway transportation, and forestry courts)

Chinese Communist Party or CCP; eight registered small parties con-trolled by CCP


Photo Credit: Thomas Fanghaenel


At the top of the Chinese Communist Party’s political structure is its Political Bureau (Politburo), generally regarded as the most important formal political institution in China. The official head of the Politburo is the Party’s general secretary.

Although officially the Politburo is the chief political decision-making body, its relatively unwieldy size and its lack of a known formalized meeting schedule have suggested that the full body is involved in decision-making only when the stakes are high–as when considering major policy shifts, dealing with matters of immediate urgency, or when a higher level of legitimization of a particular policy direction is necessary.

Of more significance than the full Politburo is its Standing Committee, the smaller group of elite Party members that wields much of the political power in China. The Politburo Standing Committee (PSC) that emerged from the 17th Party Congress has nine

members, including five returning members and four new members.

As part of a drive to gain political and cultural influence and to secure energy supplies and markets, also known as “soft power,” China has reached out to the developing world through high level official visits and exchanges; economic assistance, loans, and investment; participation in regional organizations; and Chinese language programs. Competition with Taiwan for diplomatic recognition has also spurred PRC engagement in Latin America, Africa, and the Southwest Pacific. According to some analysts, China has filled a diplomatic void left by the United States as Washington has been preoccupied with global terrorism, and many developing countries have perceived the U.S. government as having placed unreasonable conditions upon political support and economic assistance.

THE POLITURBO STANDING COMMITTEE

CHINA’S SOFT POWER IN THEDEVELOPING WORLD

There are currently differences in opinion among the Party’s top leadership concerning the best path for future development in China. Experts hold that the two frontrunners for Party secretary – Xi Jinping and Li Keqiang – each sit at the pinnacle of what effectively is an equal PSC split between two distinct leadership camps: the “populist” group, represented by Li Ke-qiang, and the “elitist” group, represented by Xi Jin-ping, one of the so-called “princelings” – meaning a child of one of the early senior CCP officials and thus some-one with elite personal connections. It is believed the “populist” group favors balance in economic development, focus on improving the lots of the poor and disenfranchised, and an emphasis on the principles of “harmonious society.” It is believed the “elitist” group favors continued rapid economic development, less emphasis on social issues, and seeks to nurture China’s growing capitalist and middle-class populations.

Factionalism

THE POLITICAL BUREAU (POLITURBO)

U.S.-CHINA COUNTERPARTS SIDE-BY-SIDE

U.S. Officialand Chinese Counterpart*

President Barack Obama

Vice President Joseph Biden

Speaker John Boehner

House Majority Leader Cantor

House Minority Leader Pelosi

Senate Majority Leader Reid

Senate Minority Leader McConnell

Attorney General Eric Holder

Secretary of State Hillary Clinton

Secretary of Defense Robert Gates

President HU Jintao; Premier WEN Jiabao

Vice President XI Jinping; Chair-man of the National People’s Congress WU Bangguo

Chairman of the National People’s Congress WU Bangguo

No equivalent

No equivalent

No equivalent

No equivalent

Minister of Justice WU Aiy-ing; Minister of Public Security MENG Jianzhu; Chinese Party Politburo Standing Commit-tee Member ZHOU Yongkang (China’s Security Chief); Procurator-general of the Supreme People’s Procuratorate CAO Jianming

State Councilor DAI Bingguo (S&ED Counterpart); Minister of Foreign Affairs YANG Jiechi

Gen. GUO Boxiong, Vice Chairman of the Central Military Commission (CMC); Gen. XU Caihou, Vice Chair-man of CMC; Gen. LIANG Guanglie, Minister of National Defense (All three are considered counterparts, in descending order of rank)

*The side-by-side reflects a close approximation of USG counterparts in China. Due to the different structures of our two systems of government, there is not always an obvious counterpart to a USG official (e.g. China has both a President and a Premier).

U.S.-CHINA COUNTERPARTS CONT...

U.S. Officialand Chinese Counterpart

Secretary of the Treasury Geithner

Secretary of Energy Chu

Secretary of Commerce Locke

Secretary of Agriculture Vilsack

Secretary of Labor Solis

Secretary of Education Duncan

Secretary of Homeland Security Napolitano

HHS Secretary Sebelius

Secretary of the Interior Salazar

Vice Premier WANG Qishan (S&ED Counterpart); Minister of Finance XIE Xuren

Vice Chairman of National Development and Reform Commission/Administrator of National Energy ZHANG Guobao; Minister of Science and Technology WAN Gang

Minister of Commerce CHEN Deming

Minister of Agriculture HAN Changfu

Minister of Human Resources and Social Security YIN Wei-min

Minister of Education YUAN Guiren

Minister of Public Security MENG Jianzhu

Minister of Health CHEN ZhuNo equivalent; Depending on the issue, approximate counterparts are the Admin-istrator of the State Forestry Administration JIA Zhibang, Vice Chairman of the Nation-al Development and Reform Commission/Administrator of National Energy ZHANG Guobao; Minister of Science and Technology WAN Gang; or Minister of Water Resourc-es CHEN Lei

Minister of Housing and Urban-Rural Development JIANG Weixin

U.S.-CHINA COUNTERPARTS CONT...

HUD Secretary Donovan

Secretary of Transportation LaHood

Federal Reserve Chairman Ben Bernanke

U.S. Ambassador to China Jon Huntsman

U.S. Ambassador to the UN Susan Rice

U.S. Trade Representative Ron Kirk

Chairman of the Joint Chiefs Mike Mullen

Army Sec. John McHugh

Navy Sec. Ray Mabus

Air Force Sec. Michael Donley

OMB Director Jacob Lew

EPA Administrator Lisa Jackson

Minister of Housing & Urban-Rural Development JIANG Weixin

Minister of Transport LI Shenglin

Governor of the People’s Bank of China ZHOU Xiaochuan

Chinese Ambassador to the United States ZHANG Yesui

Permanent Representative of China to the United Nations LI Baodong

Minister of Commerce CHEN Deming

No equivalent; visits hosted by PLA Chief of the General Staff General CHEN Bingde

No equivalent; closest approximation is PLA Deputy Chief of General Staff General ZHANG Qinsheng

No equivalent; closest approximation is PLA Navy Commander Admiral WU Shengli

No equivalent; closest approximation is PLA Air Force Commander General XU Qiliang

Minister of Finance XIE Xuren

Minister of Environmental Protection ZHOU Shengxian

U.S. Officialand Chinese Counterpart


Charts courtesy of STRATFOR, www.stratfor.com

Just as China’s civilian leadership will change, China’s military will see a sweeping change in leadership in �01�. The military’s influence over China’s politics and policies has grown over the past decade, as the country has striven to professionalize and modernize its forces and expand its capabilities in response to deepening international involvement and challenges to its internal stability.

OTHER IMPORTANT POLITICAL ACTORSGovernment-Sponsored Research Institutions. Think tanks and other research institutions, usually sponsored by and often linked to various government entities, have proliferated greatly in China in recent years. There appear to be several forces driving this trend. Not the least of these is the need for officials to have access to greater professional expertise as they wrestle with policy decisions that have become increasingly complex and sophisticated. Although there are many think tanks and research institutions in China, the box below lists what PRC authorities in �006 considered to be the most prominent. All are in Beijing, with one exception. They are all long-standing institutions, and all are sponsored by a state entity.

Zhou Xiaochuan – Governor, People’s Bank. This August, Internet rumors that Chinese central bank governor Zhou Xiaochuan had defected and sent portfolio managers and currency traders the world over scrambling for cover. Although the rumors were later proved false, they revealed how important Zhou has become to global economic stability. Last year, Zhou notoriously roiled markets by proposing a new international reserve currency to replace the U.S. dollar. This year, batting away demands that China allow its currency to appreciate, Zhou described yuan revaluation as a Western-style fantasy cure, “pills that solve your problem overnight,” as opposed to what’s needed: a proper Chinese-style treatment of “10 herbs put together … that solve the problem not overnight, but maybe in one month or two months.” (Foreign Policy Magazine, Dec-10)

Liu Xiaobo – Nobel Peace Prize Winner, Political Prisoner. When Liu Xiabo learned of his �010 Nobel Peace Prize, he wept and told his wife – who was visiting him in remote Jinzhou prison, where the dissident writer has been serving an 11-year sentence – that he was dedicating the award to “the lost souls” of Tiananmen Square, whose protest back in 1989 turned the soft-spoken professor into a political activist. Mr. Liu is perhaps China’s best known dissident. On December �5, �009, he was given an 11-year prison sentence on subversion charges. The Chinese Foreign Ministry reacted angrily to the news, calling it a “blasphemy” to the Peace Prize and saying it would harm Norwegian-Chinese relations. “Liu Xiaobo is a criminal who has been sentenced by Chinese judicial depart-ments for violating Chinese law.” (NYTimes) China’s state media have characterized the Nobel only as a tool of Western propagandists, and live feeds of CNN and the BBC went black during the prize’s announcement. (Foreign Policy Magazine, Dec-10)

Chinese Academy of Social Sciences (CASS)Development Research Center of the State Council

Chinese Academy of Sciences (CAS)Academy of Military Science

China Institute of International StudyChina Institute of Contemporary International Relations (CICIR)China National Committee for Pacific Economic Cooperation

China Association for Science and TechnologyChina International Institute of Strategic SocietyShanghai Institute for International Studies (SIIS)

* In March 2009, the State Council approved the founding of a new think tank in Beijing, the China Center for International Economic Exchanges.

Top Ten Prominent PRC Think Tanks


Han Han – Blogger and Novelist. At �8, Han Han may well be the world’s most popular living writer, perhaps the most-read blogger in a country of some 400 million Internet users. Also a novelist, he has become the inflammatory voice of the provoca-tive, status-obsessed cohort called the “post-80’s generation” in China. Han Han has gleefully taken on state TV’s self-censorship, China’s flawed educational system, and particularly wayward officials. In May, following news of a schoolhouse stabbing, Han Han wrote on his blog: “Wretched children, it is you who are poisoned by milk powder, harmed by vaccines, crushed by earthquakes, and burned in fires… I hope that when you grow up, you will not only protect your own children but build a society that protects everyone’s children.”

Zheng Bijian. One of the leading intellectuals of China’s Communist Party, Zheng was a key architect of the idea of China’s “peaceful rise,” which he introduced to the West in a �005 Foreign Affairs article. The theory laid the groundwork for a global strategy that would allow the country to continue its transformation into an economic juggernaut, while also seeking to allay fears that Beijing would use its newfound power to overturn the existing international balance of power. Most of China’s top leaders quickly came out in support of the motto, but the debate over it was instructive: Some Chinese scholars wor-ried that the word “rise” was too provocative for foreigners, while others didn’t like the word “peace,” arguing it wouldn’t allow for China to be aggressive if the need arose. (Foreign Policy Magazine, Dec-10).

Important Reading

NAME OF REPORT BY WHOM, FOR WHOM,AND WHEN

HISTORY/RELATION TO OTHER DOCUMENTS/COMMENTS

National Security Strategy Report

By the President annually to the Congress. Required to be transmitted on the date on which the President submits the annual budget to Congress (i.e., 1st Monday in February) and additionally within 150 days after the date on which a new President takes office.

“The President shall transmit to Congress each year a comprehensive report on the national security strategy of the United States…” From 1987 through �000, reports were submitted every year except for 1989 and 199�, though on varying dates. The George W. Bush Administra-tion released only two reports, the first in September �00� and the second in March �006. The Obama Administration released its first report on May �5, �010.

Quadrennial Defense Review

By the Secretary of Defense to the House and Senate Armed Services Committees. Original report due by May 15, 1997. �001 report due September 30, �001. Subsequent reviews due every four years on the date on which the president submits the annual budget to Congress (i.e., 1st Monday in February). Also requires the Chairman of the Joint Chiefs to submit an independent assessment of the QDR, including an assessment of risks in carrying out the national defense strategy. The Chairman’s assessment has been appended to each of the QDR reports.

Preceded by the 1990-1991 Base Force analysis and the 1993 Bottom-Up Review, which were DOD initiatives not required by law. Reports have all been released by the date required. By law, the QDR is required “to delineate a national defense strategy consistent with the most recent National Security Strategy prescribed by the President” and to “conduct a comprehen-sive examination … of … national defense strategy, force structure, force moderniza-tion plans, infrastructure, budget plan, and other elements of the defense program and policies of the United States with a view toward determining and expressing the defense strategy of the United States and establishing a defense program for the next �0 years.”

A Reading Guide to Key US-China Security Reports

National Defense Panel Panel of 9 members appointed by Secretary of Defense in consultation with chairmen and ranking members of Senate Armed Services and House National Security (temporary renaming of HASC) Committees. By March 14, 1997 the Panel was required to provide a report to the Secretary of Defense assessing the conduct of the QDR to date. Final report to Congress due December 1, 1997.

Required to review and assess a full range of alternative force structures, including the recommended QDR force structure, and required to recommend the optimal force structure to meet anticipated threats. The Panel reported that it did not have the time or resources to perform such a full assessment. It recommended much more attention to asymmetric challenges, reductions in selected capabilities for traditional conflicts, and extensive experimental testing of alternative technologies and organization.



Quadrennial Defense Review Independent Panel

Under the original statute, the report is to be prepared by an in-dependent panel appointed by the Secretary of Defense no later than six months before the QDR is due, with no guidance on the number of members or their qualifications. The FY�010 NDAA amendment adds eight members, two each appointed by Chairman and Ranking Member of the House and Senate Armed Services Commit-tees. The DOD Report on the QDR is required to include an interim assessment by the Panel. A final report to the House and Senate Armed Services Committees is due on July 15, �010, and a response by the Secretary of Defense is due by August 15, �010.

Required to submit an assessment of the QDR, including the recommendations of the QDR, the assumptions in the QDR, and the vulnerabilities of the strategy and force structure underlying the QDR. The final Panel report was critical of the QDR for not planning a full �0 years ahead, as required by the QDR statute, and for not including clear force sizing criteria. It urged greater efforts in cyberspace, homeland defense, and responding to anti-access strategies (all areas of emphasis in the QDR). It endorsed the planned size and composition of most of the force, but urged an increase in the size of the Navy based on assessments in the 1993 Bottom-Up Review.

National Defense Strategy Required to be prepared by the Secretary of Defense as part of the QDR. A discussion was included in QDRs in 1997 and �001. The Defense Department later prepared separate documents in May �005 and June �008.

The permanent QDR statute requires that the national defense strategy be consistent with the President’s National Security Strategy. The �008 National Defense Strategy report explains that the document “flows from” the President’s National Security Strategy and “informs the National Military Strategy.”

A Reading Guide to Key US-China Security Reports Cont...

National Military Strategy By the Chairman of the Joint Chiefs, to the House and Senate Armed Services Committees, due on February 15 of each even numbered year. A separate part of the statute requires an assessment of risks in executing the strategy, to be prepared by the Chairman “in conjunction with” the service chiefs and the commanders of the unified and specified commands, to be submitted to the Secretary of Defense. The Secretary’s assessment and comments are to be included in the report.

The report is required to delineate a national military strategy consistent with the most recent National Security Strategy and Qua-drennial Defense Review, and to assess the adequacy of planned forces to successfully execute the strategy. If the Chairman identifies any “significant” risks in executing the strategy, the Secretary of Defense is required to include in the report submitted to the congressional committees the Secretary’s plan for mitigating the risks.



Roles and Missions Report Initially required to be prepared by the Chairman of the Joint Chiefs and submitted to the Secretary of Defense. Required every three years or when requested by the Secretary of Defense or the President. As amended by the FY�008 NDAA, required to be prepared by the Secretary of De-fense, with an initial report to the Secretary by the Chairman of the Joint Chiefs. First review to be con-ducted in �008 and subsequent reviews to be conducted every four years beginning in �011. A report on the review is to be submitted to the House and Senate Armed Services Committees in the year following the review no later than the date on which the President’s annual budget is submitted to Congress.

Initially required the Chairman of the JCS to make recommendations for such “changes in the assignment of functions (or roles and missions) to the armed forces as the Chairman considers necessary to achieve maximum effectiveness of the armed forces.” As amended, requires the Chairman to organize forces into core mis-sion areas, avoid unnecessary duplication, identify core competencies associated with missions, identify gaps in capabilities, and report on plans for addressing gaps and reducing duplication.

Unified Command Plan An executive document signed by the President.

The Unified Command Plan is a classified document, signed by the President. The Defense Department has established a regular, biennial review cycle for considering changes in the UCP.


Annual “Posture” Statements Annual statements by each of the service chiefs and by the Chairman of the Joint Chiefs on the posture of the armed forces – presented as testimony to the congressional defense committees.



DoD Annual Report on Military and Security Developments Involving the People’s Republic of China

Prepared Annually by the Department of Defense

“The report shall address the current and probable future course of military- techno-logical development of the People’s Liberation Army and the tenets and probable development of Chinese security strategy and military strategy, and of the military organizations and operational concepts, through the next �0 years. The report shall also address United States-China engagement and cooperation on security matters during the period covered by the report, including through United States-China military-to-military contacts, and the United States strategy for such engagement and cooperation in the future.”

US-China Economic and Security Review Com-mission Annual Report to Congress

Prepared Annually by the U.S.-China Economic and Security Review Commission for Congress

The US-China Commission’s Annual Report to Congress sets forth the Commission’s analysis of the U.S.-China relationship in the topical areas designated by its Congressional mandate. These areas are China’s proliferation practices, the qualitative and quantitative nature of economic transfers of U.S. production activities to China, the effect of China’s development on world energy supplies, the access to and use of U.S. capital markets by China, China’s regional economic and security impacts, U.S.-China bilateral programs and agreements, China’s record of compliance with its World Trade Organization (WTO) commitments, and the implications of China’s restrictions on freedom of expression.



A Congressional Research Service Reading Guide on China

CRS.gov is the official, authoritative, non-partisan source for up-to-date, current CRS reports on major policy issues. CRS reports are available to Members, committees and staff.

ECONOMIC ISSUES

CRS Report RL33536, China-U.S. Trade Issues, by Wayne M. Morrison.

CRS Report RS�16�5, China’s Currency: A Summary of the Economic Issues, by Wayne M. Morrison and Marc Labonte.

CRS Report RL34314, China’s Holdings of U.S. Securities: Implications for the U.S. Economy, by Wayne M. Morrison and Marc Labonte.

CRS Report RS��984, China and the Global Financial Crisis: Implications for the United States, by Wayne M. Morrison.

CRS Report RS��713, Health and Safety Concerns Over U.S. Imports of Chinese Products: An Overview, by Wayne M. Morrison.

MILITARY AND SECURITY ISSUES

CRS Report RL3�496, U.S.-China Military Contacts: Issues for Congress, by Shirley A. Kan.

CRS Report RL31555, China and Proliferation of Weapons of Mass Destruction and Missiles: Policy Issues, by Shirley A. Kan.

CRS Report RL33153, China Naval Modernization: Implications for U.S. Navy Capabilities— Background and Issues for Congress, by Ronald O’Rourke.

CRS Report RL33001, U.S.-China Counterterrorism Cooperation: Issues for U.S. Policy, by Shirley A. Kan.

CRS Report RS��65�, China’s Anti-Satellite Weapon Test, by Shirley A. Kan.

TAIWAN

CRS Report R40493, Taiwan-U.S. Relations: Developments and Policy Implications, by Kerry Dumbaugh.

CRS Report RL30957, Taiwan: Major U.S. Arms Sales Since 1990, by Shirley A. Kan.

CRS Report RL30341, China/Taiwan: Evolution of the “One China” Policy—Key Statements from Washington, Beijing, and Taipei, by Shirley A. Kan.

CRS Report RL34441, Security Implications of Taiwan’s Presidential Election of March �008, by Shirley A. Kan.


GLOBAL ENVIRONMENT AND ENERGY

CRS Report R40493, Taiwan-U.S. Relations: Developments and Policy Implications, by Kerry Dumbaugh.

CRS Report RL30957, Taiwan: Major U.S. Arms Sales Since 1990, by Shirley A. Kan.

CRS Report RL30341, China/Taiwan: Evolution of the “One China” Policy—Key Statements from Washington, Beijing, and Taipei, by Shirley A. Kan.

CRS Report RL34441, Security Implications of Taiwan’s Presidential Election of March �008, by Shirley A. Kan.

CHINA’S POLITICAL SYSTEM AND HUMAN RIGHTS

CRS Report R41007, Understanding China’s Political System , by Kerry Dumbaugh and Michael F. Martin.

CRS Report RL347�9, Human Rights in China: Trends and Policy Implications, by Thomas Lum and Hannah Fischer.

CRS Report RL34445, Tibet: Problems, Prospects, and U.S. Policy, by Kerry Dumbaugh.

CRS Report R40453, The Tibetan Policy Act of �00�: Background and Implementation, by Kerry Dumbaugh.

CRS Report RS��663, U.S.-Funded Assistance Programs in China, by Thomas Lum.

FOREIGN POLICY

CRS Report RL34588, China’s Foreign Policy: What Does It Mean for U.S. Global Interests?, by Kerry Dumbaugh.

CRS Report RL346�0, Comparing Global Influence: China’s and U.S. Diplomacy, Foreign Aid, Trade, and Investment in the Developing World, coordinated by Thomas Lum.

CRS Report R40940, China’s Assistance and Government-Sponsored Investment Activities in Africa, Latin America, and Southeast Asia, by Thomas Lum.

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