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With the end of the Cold War, the U.S. finds itself in a precarious situation in regard to its relations with the Peoples Republic of China (PRC). Prior to the collapse of the Soviet Union, the U.S. and China maintained rather cold relations as a balance-of-power approach. The logic behind this type of association was a strategic counterweight to Soviet military power. Since the collapse of the Soviet Union as a superpower, the necessity for this type of arrangement is no longer viable. The ensuing American foreign policy approach towards China can be described as “constructive engagement'”.. This is based upon the belief it is better to have some sort of relationship rather than becoming estranged and not be able to exercise any influence on political and economic change currently in progress in China. This essay looks at these changes and their possible consequences for the United States.

In order for any nation to be considered a military power, it must meet three basic criteria. These criteria include the following:

  • The weapon platforms must be capable; long-range platforms must be present in order for power projection to be a viable option as a nation’s strategy.
  • The military must be well trained, proficient at operating all the above platforms in order to use them to their fullest capability.
  • The military must have the financial backing of the nation. Included in this category is the national infrastructure to support the repair and maintenance of the aforementioned weapons platforms.

The primary focus of this essay is the final point. This is the starting point for any nation wishing to become a more viable military power. Without first establishing a means to support the military, both financially and materially, the military will not be able to sustain its operations. It is this area in which the PRC has made leaps and bounds towards advancing its military power. First, reformation has created a burgeoning economy in China. Second, technological advancement has significantly improved the PRC’s capacity to sustain its military weapon systems and improve its warfighting capability.

Economic Reforms

In 1978 a reform movement was started by Den Xiaoping. He wanted the Chinese economy, until then a slave of Soviet principles of central planning, state ownership and import substitution, to be reformed and opened to the outside world.

The first major reform was to shift from a state-run agricultural system to private market-controlled farms. This was accomplished by freeing prices of food, thus creating a market economy in food items. The groundwork had been laid for sustained growth and created a surplus of rural savings. This surplus would become extremely important as a launching point for the second phase of reforms.

The idea behind the second set of reforms which occurred in the mid-1980s was again to decentralize control; however, the industry became the emphasis vice agriculture. Along the way, a shift from the heavily agricultural-based rural areas to more industrial-based would also be accomplished. Throughout the rural areas, local government-controlled industries have started to crop up and now make up a major portion of the rural industrial base. These entities are referred to as Township and Village Enterprises (TV&).

virtues of an open door policy for foreign trade. The central government previously maintained monopolistic control over all trade with foreign entities. These zones were set up in strategic locations, three surrounding Hong Kong in the Guangdong province and one across the straits from Taiwan in the Fujian province.’ These centers have served as focus points for foreign investment into the nation as well as a source of trade export and import. As with the other reforms, the open door policy swept the nation. Since 1980, the dollar value of China’s trade has grown by more than 12 percent per year. This is twice as fast as the rest of the world. Foreign trade has become one of the primary catalysts for the growth of the Chinese economy.

The three reforms have resulted in the fastest-growing economy in the world. Since 1978, real GNP has grown by an average of almost 9 percent a year. In 1994, China’s economy was four times the size it was in 1978.’ This makes China the third-largest economy in the world, behind only Japan and the United States. Foreign trade, foreign investment, food production, and manufacturing have all grown at tremendous rates as a result of these reforms. Most importantly, a means has been provided from which technological advancements and further industrialization can occur. In other words, those who have money will spend it!

Technological Advancements

For hundreds of years before the late 19th century, China was the most advanced civilization in the world. Then for much of the first half of the 20th century China was mired in continuous social reform.As a result, China lagged significantly behind its western and Japanese counterparts both economically and technologically. When China’s economy began to burgeon, technological importation became a paramount interest within the nation. The lure of a market consisting of 1.2 billion people bas many countries and corporations licking their chops at the prospect of doing business in China. Thus, countries such as Japan, Hong Kong, Taiwan, Russia, Israel and even the U.S. have jumped on the band wagon of China trade.

China’s industries, and to an even greater extent, China’s government, have used rather overt methods for their technology acquisition. They have a four-tiered scheme based on the principle of ultimately achieving self-sufficiency in production.The scheme is as follows:

  • Try everything possible to steal the secrets of industry or to purchase single items and then produce those items indigenously through reverse engineering.
  • Encourage joint ventures in which foreign firms supply blueprints to China and allow access to the secrets of production.
  • Establish co-production with foreign firms, allowing the firm to supply some of the components, this allowed some withholding of secrets from China.
  • Then lastly if all else fails, purchase the equipment outright. Most of the overt acts have occurred within the defense industries; thus, the major concern looked at in trade considerations is that this trade is bolstering the military effectiveness of the Peoples Liberation Army (PLA).

One of the most interesting developments to occur during China’s drive for advancing technology has been the means by which the PLA has advanced itself. A complex military-industrial network has developed over the past couple of decades.. These industries are owned and manned by the military; control is via the Central Military Commission (CMC), directly or indirectly, via the State Council, with significant direction from the CMC. The CMC can be most closely related to our own Joint Chiefs of Staff. The primary function of these industries is to export and import goods between China and foreign nations. Exporting of goods produced within the industries is the source of funds used to import foreign weapons systems for use by the PLA. Since the PLA is permitted to keep its own profits it has expanded its manufactures from simple weapons to other goods such as pig iron, basketballs, bicycles, car jacks, silk jackets, and even negligees. 9 Along the way many military officers have raised their own standards of living as well as padded a few bank accounts.

One of the major strategies currently used by these import export companies is to buy small U.S. defense firms to get grassroots control of advanced technology. As of March 1993, seven different states in the U.S. contained companies which were owned and operated directly from the Chinese military-industrial network.10 Wendy Frieman, a Chinese specialist for the Virginia based think-tank Science Application International Corporation, stated,

“The Chinese military is pretty much doing anything it can to make money … so they can buy things primarily the U.S. won’t sell them. Opening businesses in the U.S. gives the defense firms a window into the U.S .. ”

The Chinese military has also purchased firms in Germany, the United Arab Emirates, Singapore and Hong Kong. Again the aim of these acquisitions is to arm the PLA with the most modem weapons technology they can get their hands on.

China’s spending on defense is the second largest in the Asian Pacific region, only Japan spends more.11 One must temper these official figures with the belief that a great portion of the dollars spent on defense are hidden within the military-industrial network. Consequently, China may in fact spend almost three times the official figure indicated by the State.

As a precursor to modernization, China reduced its force strength from four million to three million in the 1980s. This allowed more room in the budget to purchase advanced technology weapons systems. Several avenues have been used for these purchases. Outright buying, co-production, licensing, and joint commissions have all had a part in the technology acquisition. Among many outright purchases China has acquired four Kilo class submarines, 72 SU-27 long range fighters, 440 T-72M main battle tanks, and a long range Early Warning system all from Russia. 13 China is taking advantage of economic woes in Russia to advance its own military capability.

China is also using offset type agreements in its modernization efforts. With a purchase of 24 MIG-31 fighters from Russia, China licensed the production of 200 more indigenously.’ This requires the transfer of both the blueprints for the planes and the production technology used to build them. Co-production type contracts were used to purchase Israeli air-refueling capability and a radar system for its J-811 fighter aircraft. These two particular deals did not please U.S. officials since some of the technology originated in the U.S. While the U.S. was not pleased with these results, it too has begun to encourage trade with China.

For the past several years, officials in both countries have been trying to work out two deals for technology transfer. One would allow the sale of seven satellites to China, the other would allow the sale of a Cray Supercomputer . 15 The technology supported by these sales is meteorological prediction and communications. While neither are directly linked to the military, both supply technology which could be converted into military applications at future dates. These deals now appear to be ready to get off the ground since the two countries have been able to come to agreement on several trade issues.Purchasing capital assets has not been the only means by which China has advanced its technology base.

st few years China has successfully recruited Russian weapons systems experts to upgrade its nuclear and ballistic missile programs. 17 The Chinese media has claimed that as many as 3000 former Soviet experts are now working for the government. Some of the experts are even contributing via electronic mail vice moving to China. Still another means by which China seeks to better itself is by the use of joint commissions.

In October of 1994, Secretary of Defense William Perry and General Ding Henaggo, minister for China’s State Commission for Science, Technology and Industry for National Defense (COSTIND), met to establish a joint commission on military conversion. 11 The two governments desire the commission serve as a means by which technology can be shared and joint ventures between U.S. and Chinese business can be accommodated.

Whether for military modernization or for increased industrial capability, China is currently engaged in a massive effort to acquire modem technology. This endeavor has resulted in a very entrepreneurial minded military leadership, tremendous gains in foreign trade and investment, as well as the purchasing of many foreign firms by China. Since relations with China and the U.S. have never been much better than mutual distrust but acceptance nonetheless, the question should be asked, “How do these ongoing efforts affect our relationship with China”?

Implications for the U.S. Navy

China has taken tremendous steps towards providing the financial and material backing necessary for a viable power projection military force. They have even begun to purchase, or build indigenously, many power projection weapon platforms. While very few of these weapon platforms are directly related to a naval force, with the exception of the Kilo submarines, the technological background has been laid for China to start producing a much more significant naval presence. Combined with the currently existing weapons such as their nuclear attack subs and ballistic missiles, China has become a serious player in the Pacific region.

There has been much interest by China’s neighboring countries over the increasingly blue water capabilities of the PLA. China has already made public its desire to extend its control of the sea out to 1000 miles from shore. Certainly, one of their primary concerns is the acquisition of several island chains in the South China Sea which are believed to be rich in oil and other minerals. Most of the island chains in question are claimed by several different nations in the region, thus a concern for regional stability. In order to soothe the anxieties of many Asian nations, the U.S. will have to maintain somewhat of a presence in the East and South Asian areas. This should include a presence on the Korean peninsula, in Japan, and especially by maintaining a credible naval force for power projection and showing of the flag.

Finally, any U.S. naval forces operating in the South and East China Seas as well as the Sea of Japan will certainly come into contact with Chinese naval assets as they increase their sea going capabilities. As the infrastructure for a formidable navy is being built, and the platforms the PLA is purchasing, and building indigenously, are indeed much better than they have ever had; all that will hold back the Chinese naval presence is training and proficiency at operating their platforms. They are not likely to take this area lightly given their desire to expand their presence throughout the China Sea regions.


Plank Owner is writing ship’s history from 1944 to 1970.
Wants to hear from anyone who served on SEA FOX, giving
their thoughts, suggestions, recollections, etc. Wants to
highlight personal experiences. Please contact:

Dan Smith
101A Bobolink Way
Naples, Florida 34105
(941) 261-1883

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