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

Military Power of the People's Republic of China

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

Executive Summary

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

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

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

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

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

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

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

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