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U.S. Department of Defense, "Military Power of the People's Republic of China," 2007

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

January 1, 2007

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Executive Summary

China’s rapid rise as a regional political and economic power with global aspirations is an important element of today’s strategic environment – one that has significant implications for the region and the world. The United States welcomes the rise of a peaceful and prosperous China, and it encourages China to participate as a responsible international stakeholder by taking on a greater share of responsibility for the health and success of the global system. However, much uncertainty surrounds the future course China’s leaders will set for their country, including in the area of China’s expanding military power and how that power might be used.

The People’s Liberation Army (PLA) is pursuing comprehensive transformation from a mass army designed for protracted wars of attrition on its territory to one capable of fighting and winning short-duration, high intensity conflicts against high-tech adversaries – which China refers to as “local wars under conditions of informatization.”

China’s ability to sustain military power at a distance, at present, remains limited but, as noted in the 2006 Quadrennial Defense Review Report, it “has the greatest potential to compete militarily with
the United States and field disruptive military technologies that could over time offset traditional U.S. military advantages.”

China’s near-term focus on preparing for military contingencies in the Taiwan Strait, including the possibility of U.S. intervention, appears to be an important driver of its modernization plans. However, analysis of China’s military acquisitions and strategic thinking suggests Beijing is also generating capabilities for other regional contingencies, such as conflict over resources or territory.

The pace and scope of China’s military transformation has increased in recent years, fueled by continued high rates of investment in its domestic defense and science and technology industries, acquisition of advanced foreign weapons, and far reaching reforms of the armed forces. The expanding military capabilities of China’s armed forces are a major factor in changing East Asian military balances; improvements in  China’s strategic capabilities have ramifications far beyond the Asia Pacific region.

China’s strategic forces modernization is enhancing strategic strike capabilities, as evidenced by the DF-31 intercontinental range ballistic missile, which achieved initial threat availability in 2006. China’s counterspace program – punctuated by the January 2007 successful test of a direct-ascent, anti-satellite weapon – poses
dangers to human space flight and puts at risk the assets of all space faring nations. China’s continued pursuit of area denial and anti-access strategies is expanding from the traditional land, air, and sea dimensions of the modern battlefield to include space and cyber-space.

The outside world has limited knowledge of the motivations, decision-making, and key capabilities supporting China’s military modernization. China’s leaders have yet to explain adequately the purposes or desired end states of the PLA’s expanding military capabilities. China’s actions in certain areas increasingly appear inconsistent with its declaratory policies. Actual Chinese defense expenditures remain far above officially disclosed figures. This lack of transparency in China’s military affairs will naturally and understandably prompt international responses that hedge against the unknown.

The full report can be found here.