China’s Military Modernization: Goals and Objectives?

 June 18, 2008

China’s Military Modernization: Goals and Objectives?

John Tkacik
 

China is already an economic superpower. I don’t suppose anyone would disagree . . . all who disagree raise your hands. . . .

One might also point to new GDP figures that show China's economy as roughly the same size as Germany's -- at current exchange rates, while China's industrial and manufacturing sector could actually be the second largest in the world behind the United States -- and ahead of Japan and Germany -- at current exchange rates. I caution that the way China calculates its industrial output (in terms of output value) is different from the way most of the OECD calculates it -- in terms of consumption, but the point is that China's industrial sector is already up in the magnitude of $1.7 trillion -- compared to $3.912 trillion for the United States' industrial and manufacturing sector ; but significantly ahead of Japan's at $1.19 trillion , and Germany at about $985.5 billion.

I also noticed another startling fact. Do you all remember when China's published GDP figures broke the trillion dollar mark – in current exchange rate terms, that is? In 2003, according to the Chinese Statistical Bureau pegged GDP -- at $1.4 trillion -- with industrial output accounting for nearly two-thirds of economy growth. For 2004, China reported GDP at $1.6 trillion. And three years later, China reported GDP at $3.4 trillion -- double the 2004 level. Double -- in three years! Now, of course, there was a change in how China calculated its GDP which gave more weight to the service sector -- and of course, the U.S. dollar has depreciated significantly. But still, from an American's point of view, China's economy has doubled in magnitude in a very, very short time. And China's industrial and manufacturing sector is growing at about double the rate of the overall economy – still!

Let me reel off a few statistics: China is the world's top steel producer, top cement producer, tops in primary aluminum, in refined copper . . . China has a monopoly on rare earths oxides essential for all information technology -- IT -- applications.

China is the biggest producer of IT products, having supplanted the United States in 2007. China is the world's second largest auto market – second largest passenger car producer – after Japan . . . China produced twice as many passenger autos as the United States in 2007.

In April, China's foreign exchange reserves, that is, those reserves held under the control of the Central Bank, totaled US$1.7566 trillion dollars – more that the total foreign exchange reserves of the entire G-8 combined!

And lest you think that China still lacks a mature science and technology research and development base, a Georgia Institute of Technology study of Technology competitiveness published on January 22 of this year shows the indicators for China ahead of those for the United States.

That study predicts China will soon pass the United States in the critical ability to develop basic science and technology and the equally critical capacity to turn that science into marketable products and services. In fact, the study indicates that China and the United States are already at about the same level: Just a few days ago the RAND corporation came up with a new study that pointed out

“The United States accounts for 40 percent of the global spending on scientific research and development, employs 70 percent of the world's Nobel Prize winners and boasts three quarters of the world's top 40 universities.” RAND was rather sanguine that the U.S. can maintain its S&T leadership.

Now let me share with you my own observation from my daughter’s graduation at the University of Virginia, just a month ago tomorrow. Of the 82 doctorates in engineering, 46 were granted to foreign students, of whom 26 were Chinese. So, about a third of UVa's engineering PhDs were Chinese. I suspect that this is the rule rather than the exception at most American engineering schools.

These two perspectives -- first that the United States is losing its technology leadership to China, and second, that China's economy is growing extremely rapidly, not just vis-à-vis the United States, but in the global context -- must make us wonder.

What does it take to turn China from an economic superpower to a military superpower? Does it have the infrastructure? The financial and economic resources? Does it have the critical technologies? Above all, the question we must answer is does it have the intent to become a military superpower? Of course, they SAY they have no intention to hegemony, what are the things that the Chinese Central Military Commission is doing that make us horribly uneasy that perhaps they aren’t being completely frank with us?

Another question is . . . would a Chinese Military Superpower be a bad thing; and if it is, whether there is anything we can do about it. Have we already passed the tipping point? Is America's relative decline in technology and industry reflective of a systemic problem -- that will manifest itself in an absolute decline?

But by far the most disturbing prospect of a Chinese superpower is China's continuing support for every petty tyrant, dictator, genocidal criminal and nuclear blackmailer on the globe. I mean . . . is there a single one that China does not support? Last November, a friend of mine at the Chinese Institute for Contemporary International Affairs (CICIR) wrote ". . .而在世界上，几乎所有美国的对手都是中国的朋友，" or "Moreover, in the world today, it seems that every one of America's adversaries, well, they're all China's friends."

To help us sort through these issues this morning, we have four of Washington’s most knowledgeable China military analysts. Our first panel includes James Mulvenon and Ron O’Rourke who will look at China’s new capabilities on the Seas and in cyberspace, and the second panel includes Mark Stokes and Mike Pillsbury, whom I’ll introduce later, to look at China’s missile and space modernization and Scenarios after Taiwan.

Notes

http://www.bea.gov/newsreleases/national/gdp/2008/pdf/gdp407a.pdf.
http://www.esri.cao.go.jp/jp/sna/qe074/kjissuu.pdf.
http://www.destatis.de/jetspeed/portal/cms/Sites/destatis/Internet/EN/Co...
VolkswirtschaftlicheGesamtrechnungen/Inlandsprodukt/Tabellen/Content75/BWSnachBereichen,templateId=renderPrint.psml (19.94 billion euros for Agriculture; 563.12 for industry (including energy) and 88.24 billion for construction. - 672.30 billion euros - at an exchange rate of 1.4.
See Report on the Work of the Government - " China's GDP in 2004 reached 13.65 trillion yuan, an increase of 9.5% over the previous year." (Delivered at the Third Session of the Tenth National People's Congress on March 5, 2005), Wen Jiabao, Premier of the State Council, at http://www.gov.cn/english/official/2005-07/29/content_18351.htm.
See production figures from the International Organization of Motor Vehicle Manufacturers at http://oica.net/category/production-statistics/ (June 1, 2008).
Alan L Porter, Nils C. Newman, et al, “High Tech Indicators, Technology-based Competitiveness of 33 Nations 2007 Report,” Technology Policy and Assessment Center, Georgia Institute of Technology, January 22, 2008, at http://www.tpac.gatech.edu/hti2007/HTI2007TradReport2008mar4-wdisclaimer... (June 12, 2008).
See “Graduates and Degree Candidates” for 2008 at the University of Virginia website at http://www.virginia.edu/majorevents/archives/2008/images/program_graduat....
Yuan Peng, "Yuan Peng: Meiguo san da shouduan yanyuan Zhongguo jueqi" (Yuan Peng: America's three major schemes to impede China's rise), Guangzhou Ribao, November 23, 2007, p. A20, at http://gzdaily.dayoo.com/html/2007-11/23/content_86129.htm.