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US Department of Defense, Military Power of the People’s Republic of China, 2004

This is the Department of Defense’s annual report to Congress.

May 15, 2004

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Key Developments Between the 2003 and 2004 Reports to Congress

Between 2003 and 2004, DoD has identified improvements in China’s military capabilities in a significant number of areas. Highlights of these developments include:

Political. “Lessons learned” from Operation IRAQI FREEDOM (OIF):

·  The PLA is rethinking the concept inferred from Operation ALLIED FORCE that airpower alone is sufficient to prevail in a conflict.

·  The speed of Coalition ground force advances and the role of special forces in OIF have caused PLA theorists to rethink their assumptions about the value of long-range precision strikes, independent of ground forces, in any Taiwan conflict scenario.

·  Other OIF “lessons learned” impacting PLA thinking include the integration of psychological operations with air and rapid ground operations designed to target enemy leadership, its ability to communicate, and its will to fight.

·  Allied weapon system integration/interoperability has reinforced the PLA’s decision to accelerate acquisition of improved information technology and improvements to its weapons mobility, firepower, and precision weapons capabilities.

·  The success of Coalition joint operations has confirmed the PLA’s decision to improve its joint operations capability by developing advanced C4ISR systems and improving inter-service cooperation.

Defense Economics. This report’s assessment of China’s announced defense budget and estimated defense-related expenditures includes:

·  An expanded treatment of the economic context of defense spending, specifically including additional fidelity interpreting the breakout of the budget and how the budget fits within the context of the leadership’s economic priorities; total defenser elated expenditures; and national budget priorities, including a discussion of public trends within the announced defense budget and its lack of transparency.

·  Identification of sizable annual increases in procurement expenditures which have been allotted to fund the current military modernization.

·  Assessment that rising personnel costs strain budget allocations, especially since the divestiture of a number of PLA enterprises have reduced that funding source.

Arms Sales. Another change from the 2003 Report to Congress is a 7% increase in arms agreement values. Significant agreements include two Russian contracts:

·  $1 billion for 24 Su-30 fighter aircraft

·  $500 million for SA-20 surface to air missile systems. PLA Training and Exercises.

·  Increased interaction and cooperation with foreign militaries likely improved political and military ties, a prime example being a counterterrorism exercise with members of the Shanghai Cooperation Organization.

Logistics. The primary theme identified in this year’s report to Congress is the PLA’s desire to continue building a joint logistics system, primarily as a result of lessons learned from Operation IRAQI FREEDOM.

Defense Industries and Military Modernization. The 2004 Report to Congress contains more specific data than the 2003 report on defense industry/production material and its impact on military modernization. Broadly speaking:

·  Self-sufficiency will continue to be China’s long-term defense industrial goal, with plans to achieve weapon quality levels approaching those of the industrialized world within the next 5 to 10 years. At best, we expect China to meet with uneven success meeting this goal.

·  Chinese defense industries have pursued a variety of measures, to include imports of foreign equipment, technology, and expertise; cooperative research, development, and production efforts; domestic research initiatives; and, facility expansion and modernization.

·  China’s extensive and well-established ballistic missile industrial infrastructure continues to concentrate on replacing liquid-propellant missiles with mobile solidpropellant ones, reflecting concerns for survivability, maintenance, and reliability and developing high-priority LACMs for theater and strategic missions.

·  Specifically concerning conventional weapons platforms, Beijing:


·  Continues to research, develop, and produce a variety of systems – including tactical and special purpose (e.g., aerial refueling tankers, airborne early warning and collection, and electronic countermeasure) aircraft – as well as modern turbofan engine technology.

·  Continues to build more modern and combat-capable surface combatants, submarines, and amphibious vessels.

·  Continues to produce advanced armored systems, upgrade older models, and develop next- generation models.

Space. Beijing is advancing its military space capabilities across the board, including  reconnaissance, navigation, communications, meteorology, small satellite technology, and manned space. Major breakthroughs during 2003 include:

·  Launching and recovering of its first manned space mission.

·  Launching a new type of a geosynchronous orbit (GEO) military communications satellite (COMSAT).

·  Orbiting of a new type of film-based imagery satellite.

·  Launching a prototype low earth orbit COMSAT, a key step in China's developmentof mini-satellites.

·  Continuing efforts to investigate various means of tracking and defeating the space systems of potential opponents.

Missiles Forces. Changes since the 2003 Report to Congress include:

·  Increasing the number of SRBMs, from an estimated 450 (2002) to an estimated 500 (2003).

·  Continued development of conventional MRBMs, with deployment in the near future.

·  Continued development of LACMs, with LACM brigades likely to form by decade’s end.

·  Continued improvements to missile C3, precision strike, and denial and deception capabilities.

C4ISR. Since the 2003 Report to Congress, China has continued to improve its potential for joint operations via development of an integrated command and control network, a new command structure, and improved C4ISR platforms. As in previous years, China’s leaders realize that most of the PLA’s C4ISR equip ment lags generations behind that of the West and are encouraging a new generation of researchers, engineers, and officers to find ways to adapt to the dema nds of the modern battlefield. The acquisition of advanced C4ISR technology is one of the principal objectives of PRC collection activities.


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