China's Security: The New Roles of the Military 9781685858254

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China's Security

CHINA'S SECURITY The New Roles of the Military

Mel Gurtov Byong-Moo Hwang

LYN

PIE

R I E N N E R PUBLISHERS

BOULDER. L O N D O N

To Leigh Anne —M. G. To my mother, Roh Kapin —B.-M. H.

Published in the United States of America in 1998 by Lynne Rienner Publishers, Inc. 1800 30th Street, Boulder, Colorado 80301 and in the United Kingdom by Lynne Rienner Publishers, Inc. 3 Henrietta Street, Covent Garden, London WC2E 8LU © 1998 by Lynne Rienner Publishers, Inc. All rights reserved Library of Congress Cataloging-in-Publication Data Gurtov, Melvin. China's security : the new roles of the military / Mel Gurtov, Byong-Moo Hwang, p. cm. Includes bibliographical references and index. ISBN 1-55587-434-7 (alk. paper) 1. China—Armed Forces. 2. China—Military policy. 3. National security—China. I. Hwang, Byong-Moo. II. Title. UA835.G87 1997 335'.033051—dc21 97-18254 CIP British Cataloguing in Publication Data A Cataloguing in Publication record for this book is available from the British Library.

Printed and bound in the United States of America

@

The paper used in this publication meets the requirements of the American National Standard for Permanence of Paper for Printed Library Materials Z39.48-1984. 5 4 3 2 1

Contents List of Illustrations Preface

vii ix

1

China's National Security in the Reform Era

2

Civil-Military Relations

25

3

Security Policy Since 1980: An Overview

57

4

Military Doctrine and China's National Military Strategy

89

5

The New Military Economy

145

6

The PLA as Entrepreneur

187

7

Armaments and Arms Control

211

8

Military Power and Foreign Policy

259

9

The Military in China's Security

291

List of Acronyms and Abbreviations Bibliography Index About the Book

1

315 319 337 349

Illustrations Maps South China Sea Area

115

Figures 5.1 China's Defense Industrial Bureaucracies and Trading Companies

154

Tables 2.1

PLA Representation on the FALSG

4.1

The Situation of the PLA's Reserve Units

6.1

Principal Chinese Corporations Engaged in Military Exports and Imports China's Official Military Spending, 1986-1995 Comparative Military Spending: China, India, Japan Percentage Changes in China and Asia Pacific Official Defense Budgets, 1987-1993

6.2 6.3 6.4 7.1 7.2 7.3

Arms-Transfer Agreements with Developing Nations, by Supplier, 1987-1993 Value of Supplier Deliveries, by Region, 1987-1994 Known Nuclear Tests Worldwide, 1945-1996

Vll

42 103 195 198 200 201 215 217 241

Preface The "China threat" seems to have undergone a revival. Popular media and scholars alike are replicating imagery and patterns of argument that are in important respects throwbacks to the mid-1960s and 1970s. Then, the China threat to Southeast Asia was frequently used as the official rationale for U.S. involvement in Vietnam. Today, the phrase is being widely used to rationalize a balance of power in Asia Pacific, with the United States as the reluctant but indispensable balancer. Then, the China threat consisted of guerrilla "wars of national liberation" that were either sponsored by or at least supported by Beijing. Now, the "threat" is said to emanate from an economically rising China that is eager to flex its muscles and assert itself in the new, post-Cold War Asia. Though one argument of this book is that the China threat thesis is not supported by the evidence, our main intention is not to debate it. Our chief purpose is indicated in the book's subtitle: to analyze what China's rise has meant and is most likely to mean for its military forces. In the end, we dispute contentions of a China threat, now or in the immediate future; but we hope readers will pay attention to the chapters on China's security policies and strategic doctrine, the military's political and economic roles, military spending, and other topics that provide the appropriate context for appraising China's behavior and intentions. *

*

*

Many people contributed importantly to this book. For research assistance, Mel Gurtov wishes to thank Nathan Austin, Andrew Blum, Renato Corbetta, Todd Gilman, Hao Dawei, and Liu Meirui. Byong-Moo Hwang thanks Cho Kangrae, Jung Sangkook, Lee Pyojae, and Shin Kikyun of the Department of Strategic Studies, Korea National Defense University. A number of Chinese colleagues facilitated research in their country. We are very grateful to Zhao Zhenying, Ma Jisen, and Lan Yongwei at the Chinese

ix

x

Preface

Academy of Social Sciences, Beijing; Wang Shenzhi at the Heilongjiang Province Academy of Social Sciences in Harbin; and Jin Zhude and Chai Benliang at the China Association for Peaceful Use of Military Industrial Technologies. For valuable comments and support, we thank Milton Leitenberg (who not only reviewed portions of the manuscript, but also provided a great deal of help f r o m his files), Jonathan Pollack, Richard P. Suttmeier, Daniel Tretiak, and Dali Yang. To Françoise Demay and Mary Krug go many thanks for their work on the manuscript, as well as to Prescott Allen for the map of East Asia that appears in Chapter 4. Mel Gurtov Byong-Moo Hwang

1 China's National Security in the Reform Era

Redefining China's Security "Peace and Development" The post-Cold War era, most Chinese sources agree, has provided their country with a previously unknown degree of security from external threats. The collapse of Stalinist rule and command economies in the Soviet Union and Eastern Europe, the abrupt end of superpower competition for influence in Asia and elsewhere, the enhanced opportunities for commercial relationships across onetime ideological barriers—these are among the factors that enabled China to give priority attention to economic development. China's post-Mao leaders (including those purged for political sins, such as former premier and Communist Party secretary Zhao Ziyang) well recognize that the key to national strength, international stature, and even reunification with Taiwan lies in modernizing its economic and technological base. 1 If China does not do so, they warn, or falls further behind the dynamic economies of East Asia, it will never achieve either political stability or front-rank status in world affairs. Without a leadership attuned to this way of interpreting the end of the Cold War, however, China might have moved in a different direction. Until Mao Zedong's death in 1976 and the removal of the "Gang of Four" from political dominance, it was extremely hazardous for a Chinese political leader to suggest that China modernize quickly in order to catch up with the major economies. 2 The new political environment cleared the way for Deng Xiaoping's restoration to supreme power and thus to a position from which, starting in December 1978 (with decisions made at the 3rd Plenum of the 11th Central Committee of the Chinese Communist Party [CCP]), to engineer China's remarkable "second revolution." 3 Deng, like Mao and Chinese officials going back to the mid-nineteenth century, believed in the intimate relationship between domestic order and China's security. Also, like Mao, Deng was in a hurry: Only an economically strong and prospering China could enjoy political stability and international respect. Such a China would have to be under a one-party system and be defended by

1

2

China 's National

Security

strong military forces. But Deng would go about strengthening China in ways quite different from Mao, aided by the sharp decrease in international tensions that, by the mid-1980s, would bring the Cold War to an end. Deng's speeches during the first fifteen years of economic reform underscored the important relationship in Chinese thinking among domestic development, political order, and the post-Cold War international system. The speeches can be summarized under six themes. First, "socialism" mainly means "unleashing the productive forces" through rapid economic growth, which Mao and others, with "leftist thinking," neglected. Growth requires opening the economy to the outside world. The People's Republic of China (PRC) should aim by the year 2000 to double per capita income to $800 a person and reach a gross national product (GNP) of $1 trillion. 4 Second, world peace is essential to focusing on economic development, for "without a peaceful environment, how much construction could there be?" 5 The so-called peace and development line—the notion that world peace and China's economic development are mutually supportive and should be pursued—was officially announced as PRC policy by the end of 1982. 6 Actually, this line appears to have been in place from the beginning of the economic reforms in 1978, by which time (see Chapter 3) Deng had revised Mao's views on preparing for a major war. Third, for China to have domestic stability and order requires that economic growth bring about significantly improved living standards. 7 With a flourishing economy, Deng insisted, ordinary people are very unlikely to take to the streets and challenge one-party rule. China will avoid following the Soviets into economic decline and the collapse of communist authority. 8 Deng's fourth theme is the one most germane to our analysis: A stable, prospering China is the essential guarantor of China's external security. The $1 trillion GNP was almost a mantra: Once achieved, China would have "national strength," world influence, and foreign respect. 9 Foreign powers will be much less likely to threaten a strong China or be successful in attempts to undermine socialist authority. "The key to whether China can withstand the pressures of hegemonism and power politics and adhere to the socialist system lies in whether or not we can achieve a relatively high growth rate and realize our development strategy," Deng said in 1989. 10 Using the same image Sun Yat Sen employed early in the century, Deng also said: We must show foreigners that China's political situation is stable. If our country were plunged into disorder and our nation reduced to a heap of loose sand, how could we ever prosper? The reason the imperialists were able to bully us in the past was precisely that we were a heap of loose sand. 11

Fifth, a stable and prosperous China is also in the best interests of foreign investors and the world community: "We hope that foreign industrialists

China's National Security

3

and businessmen will consider co-operation with China in a world perspective. . . . Time will prove that those who help us will benefit no less in return. And their help will have even greater significance politically and strategically." 12 Deng was perfectly happy to strike a deal with the Americans, the Japanese, the International Monetary Fund, or anyone else that possessed the right technology, offered attractive financial terms, and did not interfere in China's domestic affairs. This last qualification leads to the sixth of Deng's themes: preservation of the one-party state. Economic need would not permit foreign meddling to change China's political course. For him as for Mao, it was not enough to develop China; development could only proceed within the framework of the "four cardinal principles": socialism, MarxismLeninism, the "people's democratic dictatorship," and Communist Party rule. 13 That is why the official appraisal of Mao in 1981 deplored only his methods of party leadership and not his purposes. 1 4 The sacredness of the party-state and its monopolization of legitimate leadership were held in equally high regard by Deng and Mao, both of whom believed that China's security was bound up in the security of the regime,15 Mao differed from Deng, however, in that he preferred home-grown solutions to economic development to keep his revolution pure. During the 1950s, for example, Mao commented that the United States would accept China's legitimacy only when China had produced 50 million tons of steel; and in the 1960s, he determined that the root cause of Soviet "collaboration" with the United States against China lay in its abandonment of true socialism. 16 He wanted China to produce the steel on its own, in the name of self-reliance; and he was willing to sacrifice enormous numbers of people and provoke social upheaval in order to attain his goals of independence and working-class unity. In the second half of the 1950s, faced with limited financial resources, he chose to cut military spending, reorganize rural society in people's communes, and thus pave the way for the disastrous "Great Leap Forward" of 1958-1962, in which it is now commonly estimated that 30 million people died of starvation. 17 Several years later, Mao launched the Cultural Revolution (1966-1976), in which millions more lost their lives. Again, China's economic development was consciously set back for the sake of avoiding Soviet-style revisionism and the reemergence of a "bourgeois" class. Deng, on the other hand, believed that rapid socialist modernization was the key to China's strength. An "organic" connection (in Zhao's words) existed between domestic and foreign affairs. Unless China opened its doors, said Deng, it would be condemned to backwardness. 1 8 And if China remained backward, it would also be internationally insignificant. Rapid modernization was the "core" and most important condition for our solving international and domestic problems. Everything depends on how well our own matters are taken

4

China 's National Security

care of. The size of our role in international affairs depends on the size of our success in economic construction. If our country develops, and even more, flourishes, our role in international affairs will be great. At present our role in world affairs is not small, but if our material base and material strength increase, our role will be even greater. 19

Deng, again like Mao, started out by giving lowest priority to military spending and military modernization. M a o ' s critique of international capitalism and his fear of dependence on other powers was rejected, however, in favor of kaifang: "opening to the outside world." Economic development necessitated a cooperative relationship between China and the capitalist w o r l d — " e n m e s h m e n t " in a single global economy, as Bruce C u m ings has written—rather than confrontation and "revolution." 2 0 The new strategy introduced market methods, expanded exports to pay for technological and other necessary imports, accepted foreign loans, promoted investment in China by overseas Chinese and other foreign firms, sent large numbers of students and younger scholars abroad, and invited foreigners with specialized scientific and business k n o w l e d g e to China. Following the example of Japan and the "four little dragons" of East Asia (South Korea, Taiwan, Hong Kong, and Singapore) in the early stages of their economic takeoffs, China aimed to be export-oriented, prosperous, and "neoauthoritarian" in leadership. 2 1 Growth with political order was the name of the game.

Nationalists

and

Internationalists

In our book China Under Threat, we proposed a f r a m e w o r k for understanding China's strategy and diplomacy in M a o ' s time. The f r a m e w o r k was based on looking at the world through the lens of the Chinese-Marxist experience, that is, f r o m the inside out, stressing the essentially domestic sources of PRC leaders' world outlook. We specified three foreign-policy sources, or "impulses," which we labeled "historical," "revolutionary," and "socialist." The historical impulse behind China's foreign policy stemmed from its struggles with foreign imperialism, struggles that could be resolved only by defeating or staving off the threats posed by "U.S. imperialism" and, later, by "Soviet revisionism." The revolutionary impulse referred to M a o ' s use of dialectical metaphors, largely inspired by guerrilla-warfare experiences, to support the world's weak (radical or strongly nationalistic Third World parties, resistance movements, and governments) against the m a j o r capitalist countries. The socialist impulse emerged f r o m China's unique brand of self-reliant development. Internationally, this impulse framed China's often difficult relations with the socialist world, in particular its virulent criticisms of Soviet-style development. Our framework still has value, we believe, for analyzing Chinese foreign policy and the role of the military in it today. While the revolutionary

China 's National

Security

5

impulse has for all practical purposes vanished, the other two impulses have become stronger. Socialist modernization and historically informed antihegemonism are now clearly the two major forces. The first is reflected in Chinese internationalism; the second undergirds Chinese nationalism. 2 2 Deng's redefinition of socialist modernization, with the official objectives of "peace and development," is the backbone of internationalism. It enabled China's full-fledged engagement with the capitalist world economy, including membership in nearly all the major world and regional economic institutions, such as the World Bank, the Asian Development Bank, and the Asia-Pacific Economic Cooperation forum (APEC). Internationalism also dictated that China exploit its position as a member of the Permanent Five in the United Nations Security Council and become more active in the management of world affairs, particularly with respect to how the UN Charter's principles of self-determination, nonintervention, and peaceful resolution of disputes would be implemented. At the same time, China's conventional and nuclear weapons would have to be subject to increasing international constraints that might range from regulation to criticism. At home, internationalism meant that the PRC would have to establish laws to protect foreign investors and engage the international community in discourse on human rights, which Beijing sees itself as promoting through increasing prosperity. China's opening internationalized "foreign affairs": It extended them far beyond mere diplomacy and, in the process, also enlarged the scope of bureaucratic interests pertaining to devising and implementing "foreign" and "national security" policies. 2 3 Yet historically rooted Chinese nationalism remains a bedrock source of foreign policy. 2 4 Though anchored in the past, contemporary Chinese nationalism is being shaped and nurtured by Deng's outward-looking socialism. Nationalism harkens back in time to eras of past Chinese greatness and to China's victimization, real or imagined, by more powerful states. Now that China is a major economy, the opportunity exists to restore that greatness. Moreover, Beijing is in a position to insist that its views about the shaping of world affairs be sought, that it be a rule maker and not merely a rule follower. Chinese leaders are forever telling the world that China "will never be a great power" and "will never seek hegemony." History tells them to remain distrustful of the games great powers play, as Deng's statement above on "bullying" clearly shows. But China wants to be treated as a great power, practices international relations like one, and has many of the assets of one. So the Chinese meaning is that it wants to be regarded as different from other great powers; thus it continues the search begun under Mao to create a new moral order to which it can claim leadership. Resisting external interference is a central element of such an order: China's critique of "hegemonism" and power politics is a fixture of its contemporary nationalism and of its international appeal. 25 China's hope is to attract allies in the Third World, still the "main force" for China in

6

China 's National

Security

world politics and one that, like nineteenth-century China, is (or likes to depict itself as being) still economically weak, militarily inferior, and exploited by the industrialized countries. A typical expression of the Chinese appeal is the following statement made in 1991 by Jiang Zemin, speaking in Moscow as the CCP general secretary: China advocates establishing a new political and economic international order on the basis of the five principles of peaceful coexistence. The five principles are interrelated, but mutual noninterference in internal political affairs is the most important of them. China does not seek hegemony. It opposes hegemonism and power politics in any form, and opposes any country that in any form crudely interferes in another country's internal affairs and tries to impose its own political system, economic system and values on another country. 26

In consistently emphasizing sovereign rights and noninterference, Beijing's usual point of reference is the power politics of the United States. 27 During the 1990s, Washington's threat to grant or withhold from China most-favored-nation (MFN) treatment, its insistence that China release political prisoners, its increasingly explicit support of Taiwan's international status, and its efforts to dissuade China from transferring arms and military technology to certain countries all aroused China's nationalistic ire. 28 But nationalism is not merely defensive. It also drives China's regional ambitions and interests, shapes its policies in global institutions (for example, on UN peacekeeping missions and arms control), and helps define perceptions of "pattern" and "order" in international affairs. Nationalism also fuels factional politics, providing a source of leverage for opponents of China's opening to the world and excessive compromising of the United States and of socialist values. 29 This updated Mao-era framework is still not entirely sufficient for our current purposes. The post-Cold War period has changed the external context of China's international relations just as dramatically as Deng's "revolution" has changed its domestic complexion. China under Mao usually was reacting to international developments: supporting revolutions against unfriendly governments abroad, confronting (sometimes simultaneously) U.S. imperialism and Soviet revisionism, aligning with the Third World on issues of global inequity—all, as we see it, to protect and promote his radical socialist vision. In the Deng era, China is acting as well as reacting; it is assertive and not merely defensive. It is a key player for the first time, not only because of its size in the world political economy ("China is a big country," as Beijing analysts frequently say these days, and by some measures the second-largest economy), but also because China is now a reference point for the decisions of others. Whether the subject is peacekeeping, war in the Middle East, nuclear proliferation, or protection of the environment, China's views must be taken into account. Besides this new

China 's National Security

1

place in the world, Chinese leaders clearly mean to project the country's security interests in ways not possible before. The end of the Cold War, by enhancing China's external security, we will argue, has also given China room for greater international assertiveness, making its precise ambitions a matter of considerable debate. We therefore offer a further distinction between Chinese internationalism's strategic perspective and Chinese nationalism's emphasis on tactical advantages. The strategic view focuses on the national-security implications of global interdependence. The multipolarization of world political economy, the regionalization of economic growth, and especially the distribution of scientific and technological power are considered central issues in China's ability to achieve peace and development. 30 For Chinese internationalists, those issues make it impossible to secure China with military capabilities alone, since economic and technological forces will profoundly shape the PRC's ability to catch up with the middle- and eventually the top-ranked industrialized states. Internationalists stress the need for "comprehensive security" (zonghe anchuan) or "comprehensive national strength" (zonghe guoli), which emphasize the nonmilitary dimensions of national power. 31 Comprehensive security is not a Chinese invention; it seems to have originated in Japan and has gained wide acceptance throughout Asia, where the tendency is to see national and regional security mainly in terms of economic, technological, and informational capacity. Such a perspective puts a premium on international cooperation, such as through diplomacy, trade, and technology transfers, to provide the "quiescent international environment" that is conducive to China's modernization. To the extent that PRC foreign-policy makers are able to demonstrate the usefulness of relying on global interdependence to modernize China, they are more likely to gain domestic support for abiding by international agreements and norms—provided that China is party to the making of the rules. The interface between domestic development and international security is the peculiar domain of internationalist strategic planners, since "diplomacy is the extension of internal affairs," as PRC Foreign Minister Qian Qichen, a career diplomat, said in 1990. He went on: "China's political situation and social order are stable. The economy continues to grow with the policies of reform and opening up to the outside world being implemented. This creates favourable conditions for diplomatic work." 32 Chinese internationalists' influence on the foreign-policy agenda is likely to be "increasingly dictated by its possible implication for its economic reforms and modernization, to the extent that political compromises are sometimes made to assure harmonious relations abroad." 33 Such seemed to be the case during most of the 1980s when the internationalists, led by Deng, pursued modernization at the expense of China's military budget and manpower. China began to show some interest in multilateral arms

8

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Security

control, reflecting the new belief (formalized when Premier Li Peng announced during a visit to Japan in 1991 that China would sign the Nuclear Nonproliferation Treaty [NPT]) that preventing the proliferation of weapons of mass destruction is in China's interest. 3 4 Five years later, China also signed the Comprehensive Test Ban Treaty (CTBT). Internationalism is mostly to be found in the two key ministries under the State Council responsible for diplomacy and trade—the Ministry of Foreign Affairs (MFA) and the Ministry of Foreign Trade and Economic Cooperation (MOFTEC, formerly the Ministry of Foreign Economic Relations and Trade)—and the foreign-policy think tanks under the State Council. But internationalist thinking cannot be exclusively associated with particular bureaucracies any more than nationalist thinking can. Qiao Shi, for example, a member of the CCP politburo and chairman of the standing committee of the National People's Congress (China's parliament), in a widely disseminated statement early in 1997, reiterated the standard dismissal of hegemonic politics as a mode of Chinese foreign-policy behavior. "Naturally," he said, "there does not exist the question of contention between China and any other country for so-called leadership." 3 5 The denial of a Chinese interest in contesting the United States is not something an ardent Chinese nationalist would be likely to say out loud. But Qiao's view was hardly heretical, since he was merely following guidelines set down by Jiang Zemin in 1992 (as well as by Deng even earlier) for dealing with the United States. Both stressed caution, cooperation, and avoidance of confrontation. 3 6 On the side of tactical thinking are those government agencies and offices, centered in the defense establishment headed by the Central Military Commission (CMC), the highest central organ of combined party-military authority, and the People's Liberation Army (PLA), that apply narrower national-interest calculations to security issues. They are joined by the radical left of the party elite in espousing an "assertive nationalism" that, Allen S. Whiting maintains, is "more a function of factional politics than of substantive issues." 37 Within China's overall strategic objective of making the international arena safe for socialist development and restoring China's rightful place in the world, the nationalists see themselves as the guardians of Chinese patriotism: protecting China's national identity and upholding its sovereignty. Their fundamental mission is to defeat or deter threats, whether at home or abroad. During the first half of the 1980s, the principal target of national defense was the USSR. In 1985, as we discuss later, the CMC shifted the key defense task to local wars along China's periphery. Not until the time of the Tiananmen Square crackdown was the PLA called upon to perform the professionally distasteful job of crushing internal dissension. From that event, however, some PLA authorities drew the conclusion that its mission would be increasingly internal, dealing with subversion, ethnic nationalism, and other threats to socialism and the state.

China's National Security

9

That shift was probably welcomed by the leftists who, especially since Tiananmen, have sought to use the external threat to Chinese socialism to justify slowing down the economic reforms, citing the danger of ideological subversion by capitalism. 38 Such thinking reflects a pessimism and a mistrust that are staples of the nationalists' analyses. They adhere much more closely than the internationalists to traditional realism. In general, nationalists are more likely to rely on the use of force when internationalists would prefer to negotiate; to prefer tactical (bilateral) partnerships to China's participation in multilateral organizations; to exaggerate external dangers (and accuse internationalists of soft-pedaling them); and to exploit the contradictions of opponents to overcome hegemonic forces that stand in China's way. Chinese nationalists are loath to give up or expose to foreign oversight nationalsecurity assets such as nuclear weapons and ballistic missiles. Unless arms-control agreements can be demonstrated to benefit China's security, the nationalists are likely to see them as naive, shortsighted efforts to curry favor with the major powers in order to gain economic benefits. Satisfying certain immediate "needs" also comes into play for Chinese nationalists. Some of these needs are tangible (such as energy, territory, profit making, regional political power, and force modernization); others are intangible (such as national sovereignty, prestige, and positions of strength). As they use the term comprehensive security, it is a "macro" concept for planning purposes. It tells strategic planners that many more than military factors alone must be considered when assessing both China's strength and the relative strength of China's rivals. 39 For nationalists, comprehensive security widens the scope of security challenges facing China, such as access to strategic resources; underscores the need to develop and acquire military technologies; and may imply a readiness to use force to meet the new kinds of security problems China now confronts. 4 0 China's rapid modernization has less meaning for this group as a sign of China's coming of age and great-power status—in fact, the workings of diplomacy are sometimes openly disparaged—than for its impact on China's actual capabilities to deal with threats and the benefits and opportunities these may bring to specific constituencies. Diplomats should either work on behalf of these constituencies or get out of the way. 41

Interpreting

China's National

Interests

All post-Mao PRC leaders combine elements of nationalism and internationalism in their approach to world affairs. 4 2 While one specialist has called nationalism the PLA's new ideology, it is a patterned way of thinking that would seem to characterize China's entire policymaking elite. 4 3 The mixture of the two strands does not seem to be disruptive to foreignpolicy making, which is mostly marked by consistency, continuity, and

10

China's National

Security

greater flexibility than in Mao's time. Internationalists and nationalists alike are motivated by national pride, national unity, and the desire to restore China's greatness. Policy consistency, however, is not the same as creativity. PRC foreign and security policy has often been reactive, lacking in notable initiatives. This conservatism may be traced to the subordination of foreign and defense policy to central party leadership, 4 4 to the tenuous balance among domestic political factions, 4 5 and to a common intellectual tradition in foreign-policy analysis that is quintessentially realist, rooted in shared norms such as the balance of power, the domestic sources of foreign policy, and bilateralism. 46 The mixture of internationalism and nationalism has the potential, however, to create different interpretations of the national interest, policy disputes, and contradictory foreign-policy behavior. 47 The "national interest," after all, is not a clear standard; an objective reading of it is often distorted by ideology (for which a fervent nationalism is often a substitute today), by the different missions and capabilities of bureaucracies, and by personal political ambitions. For nationalists, organizational and bureaucratic self-interest may take on the rhetoric of the national interest while in fact substituting for it—a phenomenon that is universal on military issues that involve resource allocations, such as arms control and the size and composition of the defense budget. As the domain of national security widens, the number of such issues does too. Nor is there a broad consensus about the means of fulfilling the national interest. While government ministries tend to rely on diplomatic give-and-take, that will not always suit the style and concerns of other bureaucracies, such as the PLA's General Staff. Two examples may illuminate the interplay of diverse notions of national interest. One appeared on both sides of the Sino-U.S. relationship in the mid-1990s. Those upholding a strategic view—on the Chinese side, that a willingness to make some concessions to U.S. human-rights, armscontrol, and trade concerns was worth the gains in international respect as a great power and trade partner; on the U.S. side, that "comprehensive engagement" with China, giving higher priority to commercial than to political and moral concerns, would ensure China's long-term stability and cooperativeness on international issues—failed to overcome nationalist resentments on a host of specific matters. Washington, pushed by new forces in Congress, accused China of repeatedly violating understandings on political prisoner releases, intellectual property rights, and nucleartechnology transfers. There was considerable pressure to punish China for these offenses. Chinese civilian and military leaders reacted bitterly to these charges, which they denied. Their views were colored by what they considered to be unwarranted (and growing) U.S. intrusions in matters that Beijing regarded as its sovereign affairs, such as welcoming the Dalai Lama's visit to the United States and Tibetan lobbying for independence

China 's National Security

11

and providing advanced arms to Taiwan. The theme of U.S. efforts to encircle and contain China, already nurtured by U.S. sanctions after the Tiananmen crackdown, got louder. 48 In Chapter 8, we pick up this story in 1995 as it unfolded in a U.S.-PRC confrontation brought about by Chinese missile tests near Taiwan. The second example of the interplay of nationalism and internationalism in PRC policy is quite different. It occurred as the result of the tense standoff between the United States and the Democratic People's Republic of Korea (DPRK, North Korea) during 1993-1994 over U.S. and South Korean accusations that Pyongyang's nuclear facilities were for bombmaking purposes. PRC policy was guided mainly by considerations of national interest in a global context, hence with achieving three objectives: avoiding war, preventing the confrontation from escalating to the point where the Republic of Korea (ROK, South Korea) or Japan would feel compelled to acquire nuclear weapons, and not damaging a dynamic economic relationship with the ROK, which was already becoming one of China's leading trade partners and regional investors. There appeared to be important nationalist objectives too. One was to retain influence with the DPRK. Another was to keep Korea peaceful but divided. War in Korea, or unification that came about chaotically, would probably create unmanageable border-control problems for China. Korean unification under any circumstances would also put another capitalist competitor on China's border, one that probably would have substantial Japanese economic involvement. 49 Moreover, North Korea, while a sometimes erratic partner, is a longtime ideological ally of China and a security buffer. Very likely, some of the PLA's top generals, with ties to North Korea dating from the Korean War, were among those in China who were determined not to discard the North Koreans for the sake of stability on the Korean peninsula. For this PRC group, it may have been important not to allow U.S. "power politics" to score a victory in its crusade for nuclear nonproliferation in the Third World. All these factors seemed to be behind China's insistence on a solution to the nuclear impasse by dialogue rather than by UN sanctions against Pyongyang. Beijing itself rejected taking any initiative to promote such dialogue, however. It apparently did urge a negotiated approach on the North Koreans behind the scenes when, in the spring of 1994, Pyongyang seemed on the verge of removing nuclear fuel rods from its nuclear facilities without international inspection. 50 Nevertheless, Beijing refused to be seen as endorsing the U.S. interest in nonproliferation, which it probably regarded as motivated by post-Cold War hegemonism and as undermining China's (or at least its arms-trading firms') own transfers of nuclear technology to Middle Eastern countries (see Chapter 7). In this case, China's strategy of arm's-length diplomacy worked. The United States and the DPRK reached an "Agreed Framework" at Geneva in October 1994 that

12

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Security

is intended to result in the dismantling of North Korea's nuclear facilities over time in exchange for international assistance to build two new nuclear reactors and obtain oil. Both Chinese internationalist and nationalist objectives were met, without associating China with U.S.-engineered enforcement of the international rules. Nationalism can thus reinforce diplomatic and economic efforts; it can also complicate and undermine them. The interplay of nationalism and internationalism, and of domestic and external concerns, makes the P R C ' s national-security and foreign-policy processes more complex, more reliant on cooperation across bureaucratic lines, and more difficult to predict than in M a o ' s time. We find that emphasizing the interplay of these forces, however, provides a useful analytical pathway to understanding how intertwined are China's security, the economic reforms, and the post-Cold War realignment of international political economy. Chinese leaders of all persuasions believe in a new world (or, as they prefer, international) order and want it to function to suit their changed set of national and international interests. In that new order, China's military forces are bound to be more assertive than ever before on behalf of the P R C ' s national interests.

The Military in China's Decisionmaking Roles of the Communist

Party's

Army

C h i n a ' s military establishment has fought wars in Korea, on the borders with India and Russia, and in Vietnam. It has put down religious and ethnic unrest in Tibet and rioting against Han Chinese authorities in China's far west. 5 1 It has been deployed to and seen action in the Taiwan Strait, in Vietnam (during the U.S.-Vietnam War), and on three occasions in the South China Sea. But the PLA has been much more than a fighting force. It has served, often against the better judgment of its top officers, a number of domestic political, social, and economic functions. The armed forces were instrumental in M a o ' s vision of a corruption-free, egalitarian society: Army units, and individual soldiers, were often proclaimed models of ideological rectitude and good socialist values; the army provided for a good deal of its own basic needs on state farms and in factories; and in the midst of domestic turmoil, the army's loyalty could always be counted on by the central party leaders. In the Cultural Revolution, it was the PLA's direct intervention in February 1967, at Mao's bidding, that probably saved the country f r o m being plunged into outright anarchy. And at Tiananmen in 1989, army units protected the party-state f r o m the student and worker demonstrators who might have turned China into another Poland. From Mao's time until 1982, Roderick MacFarquhar has written, the PLA achieved "a degree of military influence [that] is probably unprecedented in

China's National Security

13

any twentieth-century regime run by civilians," particularly with respect to representation at the top of the ladder, in the CCP politburo. 5 2 The interlocking character of party-army relations was best illustrated during and after the Cultural Revolution. While it went on, the PLA gained unprecedented entrée to political power once called upon, reluctantly, by Mao to "support the Left" in 1967. But as the country descended into virtual anarchy in many cities, the PLA, though officially barred from intervening in disputes between Red Guard factions and their party targets, often went into action anyway. Local army commanders, tied as much to the status quo as their party counterparts, could not help but protect their local counterparts in the Communist Party. 53 After the Cultural Revolution, the military had extraordinary representation in the 9th Party Congress leadership, holding thirteen of twenty-five politburo seats and heading twenty of twenty-nine provincial revolutionary committees. 5 4 Mao's problem was how to get the military leaders back to the barracks at a time of severe tensions with the Soviets and the Americans, as well as Lin Biao's ambitions to succeed him. The period after the Lin Biao affair—Lin's abortive coup attempt in 1971 and the shooting down of his aircraft as he sought to flee Chinese territory—provided a third illustration of party-army interconnectedness, but of a different sort. Lin's demise led to elimination of his power base, the replacement of pro-Lin PLA commanders with pro-Mao commanders, and attacks on the army's "arrogance" and loss of proper socialist spirit. 55 The rehabilitation of a number of purged senior party figures dates from Mao's questioning of the military's loyalty. In fact, however, these purges may not have gone as deeply as was once believed. The dual-leadership character of localities made it extremely difficult for the party to take back what it had lost to the military, either because some military commanders were the party leaders, or because the commanders simply refused to surrender their authority to them. 5 6 This situation lasted until the 10th Party Congress in August 1973, by which time the military's representation on the Central Committee declined significantly and "the PLA also lost control of the national defense industries." 5 7 The reappearance of Deng Xiaoping late in 1973 may have been caused by M a o ' s need of a person with prestige among the military, particularly as Mao wanted to reshuffle most of the military region commanders as part of his effort to reassert civilian control in the provinces. 5 8 Perhaps only a person with Deng's credentials could have instituted the major reorganizations of military affairs in the early 1980s that will be discussed in later chapters. As Jonathan Pollack has argued, overall the army under Mao enjoyed a privileged "way of life," "emperor of a vast realm of its own," in return for which it obeyed party authority. 59 Deng Xiaoping's reforms, to make the army more competent and efficient, did not fundamentally alter that arrangement. The reciprocal character, or "blending," of army-party relations

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Security

remains an enduring feature. As we emphasize in Chapter 2, in the Chinese party-state, the military is an organic part of the political system, not an organization whose interests are separate from and in competition with the party's (though the PLA certainly does have its own perspectives and policy preferences). Reliance on personal relationships in appointments of PLA leaders to top central posts is one way for the party to maintain the organic connection. 6 0 Another is the structure and composition of the CMC, the leading organ of military affairs in both the state and the Communist Party organizations. When the state Military Commission was created in 1982, it was widely assumed it would be functionally separate from the party Military Commission. 6 1 In fact, members of the party and state CMCs are identical, the senior military leaders on the CMC are traditionally also high-ranking members of the party Central Committee, and the CMC has always been chaired by the supreme party leader: Mao, Deng (from 1981 to 1989, even though he was not party chairman or party general secretary), and Jiang Zemin. Though the Chinese party and state constitutions leave some room for legal doubt, the political reality seems clear: The party, in Mao's familiar dictum, controls the gun. 62 At the same time, according to the best-informed studies, the senior military leaders were regularly consulted on major strategic issues in Deng's time as in Mao's; and they were able to make the professional military's case to the CMC on specific national-security-related decisions. 63 It is also apparent that today, as Michael Swaine's masterful examination of national-security policymaking shows, the military's presence and influence in central-level party organs are even stronger. 64 The core national-security functions of the PLA are little changed from the prereform period. The Chinese armed forces must still deter external attack or intimidation, demonstrate national strength, promote and protect Chinese interests beyond the borders, ensure regime survival, and bolster China's prestige as a major regional power. What has changed are the domestic and international contexts within which the PLA carries out these functions. The resulting expansion of the PLA's traditional and newer roles and responsibilities has brought with it greatly increased political influence. With the ending of the old era, dominated by the Cold War and Maoist development priorities, has come a blurring of the once fairly clear line of authority between the party center and the PLA. Among the reasons for this blurring are the opening up of China's economy, political realignments at the top (anticipating Deng's demise), the Cold War's end, the 1989 upheaval, changes in China's definition of national security and threats to it, increased budgetary allocations to the PLA since the late 1980s, and regionalist forces. Military affairs loom larger than perhaps at any time since the 1950s, when socialist reconstruction and the Korean War absorbed the leadership's attention.

China 's National Security

The Military as an Interest

15

Group

The PLA's larger role in decisionmaking may also be understood in bureaucratic terms. Like any large, multilayered, and widespread organization, it has many assets upon which to draw. What we call "the PLA" actually comprises several parts: the political leadership of the army centered in the CMC, the Ministry of National Defense (MND), the General Staff offices, the military services, the regional military headquarters, military industries, arms-trading companies that are ultimately responsible to the CMC, and research institutes and universities. Except for the last two, heads of all these units are players in what Swaine calls the "defense policy subarena." 6 5 Beyond it stretches the military-industrial complex, which embraces not only the PLA hierarchy, but also the industrial ministries, general corporations, trading firms, and weapons factories under the State Council. These elements provide diverse channels for enhancing the military's importance and increasing the resources at its disposal. For the PLA, which has always been an indispensable pillar of support for the Chinese party-state, there is the opportunity to play on its political importance and prestige to extract concessions. Prior to the prodemocracy demonstrations of May and June 1989, the PLA's political fortunes were headed downhill, as noted above. A number of regional commanders and elderly marshals were compelled to step down, reversing a historical tradition in Chinese political culture of promoting senior commanders to political leadership positions. 66 After 1989, however, the PLA appears to have significantly increased its political presence at the center. 67 As happened during the Cultural Revolution, so after the Tiananmen crackdown: The PLA increased its bargaining power vis-à-vis other bureaucracies. The military's strengthened political voice became even more apparent in late 1992, after the 14th National Party Congress (see Chapter 2). Its substantially greater representation in senior party decisionmaking groups, such as the CMC, coincided with renewed emphasis on the army's crucial role in containing and suppressing instability at home. A smooth transition to the post-Deng era was on everyone's mind. As one document put it, "the Armed Forces should eliminate the erroneous view that the Army's function is 'external rather than internal.'" The PLA would continue to be needed to combat "peaceful evolution" and other ideas hostile to socialism and the one-party state, notwithstanding improvements in the international climate. 68 This meant that a high price would have to be paid for the PLA's support of the economic reforms—in other words, for the "spirit of restraint" the military was being asked to maintain when it came to budget allocations and turnover of redundant military facilities to civilian use. 69 Besides greater access to decisionmaking, senior PLA officers were also

16

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Security

rewarded with promotions, such as the elevation of nineteen senior military and military-industrial leaders in mid-1994 to the rank of full general by Jiang Zemin. Clearly, these and previous promotions were made by Jiang to cement his position as heir to the then-ailing Deng Xiaoping. 7 0 Second, the military can take advantage of external conditions to increase its importance. Following the Soviet collapse, for example, the central leadership insisted on more political training in the army to ensure its loyalty, prevent the erosion of Communist Party authority in the ranks, and keep up morale in an era of peaceful coexistence. The army reportedly was able to extract some benefits from this nervousness, including a pay raise for soldiers, better conditions for demobilized service people, and an upgrading to cadre status of transferred regimental and division-level officers. 71 After the Gulf War, an enlarged meeting of the CMC reportedly communicated a five-year, 30 billion yuan increase in military research and production. The increase was based specifically on a new understanding of national-security needs. Then-president and CMC chairman Yang Shangkun said that China's actual capabilities were lagging in tactical nuclear weapons, long-distance counterattack aircraft, and offensive and defensive naval craft. Deng agreed, revising his view that economic successes alone would keep China's enemies at bay: A s a large nation with 1.1 billion people, if we do not have a solid economic foundation and perfected and advanced military strength sufficient to resist foreign aggression, threats, or interference, then w e will have no say in the international community and will just be at the mercy of other nations. China under CCP leadership will not bully weak and small nations; neither will it fear the hegemonist powers' intimidation or threats. This is noted by all nations. Our socialist construction urgently needs money, but things in the world will not necessarily develop according to our goodwill and wishes. If other people bully us, what should we do? If other people try to clamp down on us, what should we do? If other people blatantly interfere in our internal affairs, what should w e do? The only way to cope with these things is to make ourselves more powerful. 7 2

Third, the army can find a niche in economic development planning that will increase its own mission and resources. The PLA's, and especially the navy's, emphasis on small-scale conflicts in the 1990s may in part be a means of revitalizing an external mission and obtaining the weapons to carry it out in conditions of financial constraint. Military-industrial conversion, the commercial ventures undertaken by military units, and China's arms sales to the Third World, which we recount in Chapters 5 and 6, involve the PLA more deeply in the national economy than ever before. Fourth, the military can make itself essential to the "national interest" by the way its strategists define threats to national security and future security roles. In the post-Cold War and post-Gulf War periods, PRC military planners took advantage of the CMC's shift in 1985, in which regional

China's National Security

17

military threats replaced global threats, to acquire additional resources for local and limited wars (youxian jubu zhanzheng).73 Interservice rivalry, furthermore, may push these acquisitions as the navy and air force seek new missions in local conflicts. Our case studies of the Spratly Islands and the Taiwan Strait in Chapter 8 attempt to show how the PLA reemphasized the importance of military power in the reform era. It positioned itself to do what military services are traditionally supposed to do in peacetime: demonstrate their indispensability and in the process preserve and if possible expand their roles, missions, and, of course, budgets. 7 4 Fifth, bureaucratic rivalries that pit military and military-industrial interests against those of other bureaucracies can have important consequences for foreign and security policy. The rivalry between the MFA and the PLA has been noted in some analyses, for example. Chinese arms sales have assertedly been pushed by PLA arms firms without regard to the position of the Foreign Ministry and its interest in arms control and the maintenance of good relations with other countries. 75 By the early 1990s, China had not only become one of the top half dozen arms merchants in the Third World. Chinese nuclear, missile, and chemical-warfare technology and materials also began to be transferred to Middle Eastern countries, including Iran and Pakistan, apparently in violation of Beijing's commitments to international limits on such transfers. 76 The MFA had to answer to the charge that China was a proliferator of weapons of mass destruction. As we point out in Chapter 7, these charges were always denied; but Beijing did allow that certain state general corporations may have shipped nuclear and chemical materials and technologies without authorization. New Complexities

of the "Military

Viewpoint"

These examples of parochial interests may represent only the tip of the iceberg. For as China's global involvement increases, including its role (and concrete interests) in international organizations, the concept of national interest may be pulled in different directions. China's military-industrial complex is larger than ever before. 7 7 It may also be more self-interested than ever before. As in Russia and the United States, the Chinese militaryindustrial complex is likely to be a vigorous proponent of the professional military viewpoint. It is also likely to favor a tougher line toward rival powers and, in general, more assertive expressions of Chinese political will than the internationalists would favor. For the first time, profits and access to vital technologies are at stake for the military, not only for China's reputation or strategic position. We are mindful, however, of the need for caution in assigning toospecific foreign-policy preferences to the PLA, for the past suggests no tradition of a unified military view that might stand opposed to the party's. 7 8 The CCP politburo and the CMC under it are the unquestioned

18

China's National Security

sources of policy decisions; on national-security issues, the CMC probably is the crucial body, since it represents the combined authority of the party and military leaders. Strategic debates between military and party leaders naturally have occurred; but they have never pitted one institution against another. Factions debated, and loyalty to the center was the best predicter of which faction would win. 7 9 Nor, in Deng's time, does it appear that the great policy debates have concerned national-security affairs so much as they have the pace and role of market mechanisms and the "open door" in economic development. In short, while senior military officers have been more active participants in defense policymaking, there is no evidence of "the military" acting as a lobby to push its views or dominating the policymaking process. 8 0 On the other hand, precisely because economic reform and the end of the Cold War have changed domestic and international circumstances for China, and because one finds today many more "interests and players" in the policymaking process, 81 the past may not be a wholly reliable guide to the PLA establishment's impact on national policymaking. The militaryindustrial complex's increased role in the economy, its unprecedentedly large presence abroad (due, e.g., to arms and technology sales and transfers, service contacts, and naval maneuvers), the military's greater professionalism, uncertainties about the post-Deng transition, and the growing complexity and number of security issues with the end of U.S. and Soviet threats to the Chinese land mass—these are among the factors that seem likely to increase the PLA's influence on decisionmaking, making it something more than an institution subordinate to the party. What makes the PLA's role especially intriguing today is precisely that it is changing in response to accelerated modernization and rapid, mostly favorable changes in China's international environment. China is still China in geoeconomic terms: vast, underdeveloped, with porous, and in some cases disputed, borders inhabited on both sides by non-Han peoples. Its leaders seem as firmly committed as ever to maintaining a oneparty system. And the PLA is still more formidable in numbers than in weapons or technology. But China has become a "big country" politically and economically—a regional power with increasingly global interests. The PLA is gradually evolving from its technological backwardness into a more professionalized and technically up-to-date armed force, with greater balance among the three services. Like every other Chinese institution, the military has had to develop new leadership, doctrines, missions, and relationships to society and other institutions (not least, the CCP) in order to keep pace with rapidly changing internal and external circumstances. In doing so, the central political and military leaders have also had to devise policies quite different from those of the past in areas such as arms control, military industrialization, budgeting, and troop deployments. Our analysis seeks to portray this new military in these and other dimensions.

China 's National Security

19

Notes 1. Speaking in September 1982, Deng Xiaoping listed China's three major tasks as being (in order of importance) socialist modernization, reunification with Taiwan, and combating hegemonism. In that and numerous other speeches, he made clear that modernization was the key to accomplishing all other objectives (see Deng, Fundamental Issues, p. 4). 2. One who did was Premier Zhou Enlai. In January 1975, his "Report on the Work of the Government" to the 4th National People's Congress for the first time mentioned what would later be enshrined as the "four modernizations"—in industry, agriculture, technology, and military affairs. But Zhou had to give greater prominence to "grasping" and "promoting" revolution, meaning the Gang of Four's political agenda of criticism and struggle against domestic enemies (Beijing Review, no. 4 [January 24, 1975]: 23). 3. See Harding, China's Second Revolution. 4. Deng, Fundamental Issues, p. 47. 5. Ibid., p. 107. 6. Ibid., pp. 4, 46^47; Deng Xiaoping, speech of January 16, 1980, quoted in Barnett, China's Economy, p. 72. 7. Deng Xiaoping, "The International Situation and Economic Issues," talk with party members on March 3, 1990, in Beijing Review, no. 1 (January 3 - 9 , 1994): 1-2. 8. On this last point, note the Chinese critique of excessive Soviet military spending, official corruption, and centralization of power, cited in Armstrong, "Chinese Perspectives," p. 458. 9. Deng, Fundamental Issues, pp. 78, 90, 108, 173. 10. Deng, "The International Situation," p. 9. 11. Deng, Fundamental Issues, p. 165. 12. Ibid., pp. 70-71; also Huan Xiang (director of the Center for International Studies under the State Council), "On Sino-U.S. Relations," pp. 3 5 - 53. 13. Deng, Fundamental Issues, pp. 122, 163. The "four cardinal principles" are not really Deng's invention; they were enshrined by Mao in his well-known 1957 speech "On the Correct Handling of Contradictions Among the People," as he sought to provide boundaries for criticism and dissent. 14. Central Committee of the CCP, "On Questions of Party History," June 27, 1981, in Beijing Review, no. 27 (July 6, 1981): 10-39. 15. Deng's last major pronouncements came during his "southern tour" of Special Economic Zones in January and February 1992. He said that the "basic line" of the four cardinal principles and economic reform "should be adhered to for 100 years, and there must be no vacillation." While the speeches are usually remembered for what Deng said about rapid economic growth, in fact he was just as emphatic about "consolidating] the people's power by employing the force of the people's democratic dictatorship." "If anything goes wrong in China, it will have its root within the Party," he said, hence the need to ensure that the next generation of leaders was politically as well as technically competent (quotes from "Gist of Speeches Made in Wuchang, Shenzhen, Zhuhai and Shanghai," Beijing Review, Nos. 6 - 7 [February 7 - 2 0 , 1994]: 9-20). 16. Gurtov and Hwang, China Under Threat. 17. The terrible suffering in the countryside during that period has been most thoroughly documented by Jasper Becker in Hungry Ghosts. 18. Wang Jisi, "International Relations Theory," pp. 486-487. 19. Speech of January 16, 1980, in Deng Xiaoping, p. 65.

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20. Cumings, "The Political Economy of China's Turn Outward," pp. 204, 213. 21. From around 1986 to the crackdown on prodemocracy demonstrators in June 1989, "neoauthoritarianism" was the subject of debate among many Chinese intellectuals attached to state-run think tanks. Both sides in the debate shared an admiration for the economic successes and political orderliness of the "four dragons," though with important differences over the desirability of "strong-arm" leaders. Deng himself is said to have been attracted to their model of strong central leadership, while rejecting the view of some adherents that such a model should incorporate liberal political institutions (see Sautman, "Sirens of the Strongman," pp. 72-102). Some of the relevant documents in the debate are in Oksenberg et al., Beijing Spring, 1989, pp. 125-149. 22. Oksenberg, "The China Problem," pp. 1-16. 23. See Hamrin, "Elite Politics," pp. 89-92. 24. For similar comments on nationalism, see Levine, "Perception and Ideology," pp. 4 3 - 4 4 . 25. See, for example, the speech of Premier Li Peng at an Afro-Asian law conference, in Renmin ribao (People's Daily; Beijing), overseas ed. (unless otherwise indicated), March 13, 1990, p. 1; and Hu Sheng (president of the Chinese Academy of Social Sciences), "On the Establishment of a New International Order," pp. 5-12. 26. Renmin ribao, May 18, 1991, p. 1. The five principles are: (1) mutual respect for territorial integrity and sovereignty; (2) mutual nonaggression; (3) noninterference in one another's internal affairs; (4) equality and mutual benefit; and (5) peaceful coexistence. The principles first appeared in Chinese border and friendship agreements with Burma (now Myanmar) and India in 1954 and then were put forward by Deng Xiaoping in 1988 as the basis for the new international order. 27. As one of numerous examples, see Jin Junhui, "A Preliminary Analysis," pp. 1-5. The author, after accurately pointing out the contradictions between U.S. superpower ambitions and the constraints on them, concludes with a warning about U.S. interventionism in seeking to "impose its value system on other countries." 28. For typical PRC reactions earlier in the 1990s, see Julian Baum, Tai Ming Cheung, and Lincoln Kaye, "Ancient Fears," Far Eastern Economic Review, December 3, 1992, pp. 8 - 1 0 , and Qimao Chen, "New Approaches," pp. 248-251. 29. Armstrong, "Chinese Perspectives," pp. 471-475. See Allen S. Whiting, "Chinese Nationalism and Foreign Policy After Deng," China Quarterly, no. 142 (Summer 1995): 295-316. 30. See Qimao Chen, "New Approaches," pp. 240-241; and Glaser, "China's Security Perceptions," pp. 253-254. 31. As Foreign Minister Qian Qichen wrote, citing the rapid post-World War II rebirths of Western Europe and Japan: "People recognize more and more that in today's world, blindly craving increased military strength is not the way. A country's rise or fall depends more now than ever before on the strength or weakness of a multitude of power elements that make up comprehensive national strength, especially economic and technological development" ("A Year in Which the International Situation Seems to Have Improved," Renmin ribao, December 17, 1988, p. 2). 32. Quoted in "China's Important Role in World Affairs," Beijing Review, no. 42 (October 15-21, 1990): 11-12. 33. Liao Kuangsheng, "Sino-Japanese Relations," p. 10. 34. Garrett and Glaser, "Chinese Perspectives," p. 50. 35. Washington Post, January 18, 1997.

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21

36. Jiang's twenty-four character guideline was zengjia xinren, jianshao mafan, fazhan hezuo, bugao duikang ("increase trust, reduce trouble, develop cooperation, avoid confrontation"). See Jin Canrong, "Sino-U.S. Relations: An Overview," Beijing Review, no. 43 (October 21-27, 1996): 9-11. 37. Whiting, "Chinese Nationalism," p. 315. Whiting appropriately distinguishes "assertive" from the more intense "aggressive" nationalism. Both kinds of nationalism identify a foreign enemy, but aggressive nationalism seeks to mobilize for action against it. 38. See Xinshiqi Mao Zedong junshi sixiang di fazhan, pp. 113-114. For documentation of the leftists' criticisms of the reforms, see Whiting, "Chinese Nationalism," pp. 297-302. 39. Interview, June 1994, at the China Institute for International Strategic Studies (CIISS), the military's think tank in Beijing; Liao Kuangsheng, "SinoJapanese Relations," pp. 8 - 9 . In one military publication, "comprehensive national strength" is summarized as involving "three kinds of capabilities and nine essential factors. The capabilities are international contributions, survival, and coercion. The essential factors are actual economic strength, scientific and technological strength, political stability, educational level, military strength, foreign-policy capability, culture, population, and territory" (Deng Xiaoping, p. 110). 40. Hu, "Beijing's New Thinking," pp. 52-53; Huang Zhengji, "Prospects for a New Multipolar World," pp. 1-8. 41. As a senior officer of China's most active arms-trading firm, which is under the military, put it in an interview, the job of raising money "is a glorious mission that should claim precedence over all others. Right now the Ministry of Foreign Affairs should review how to serve this mission. . . . It is wrong to sacrifice the number one mission for the sake of foreign affairs" in Lewis, Hua, and Xue, "Beijing's Defense Establishment," p. 95. 42. Deng's mixture of nationalist and internationalist policy motives is explored by Yahuda, "Deng Xiaoping," pp. 551-572. 43. Segal, "China Changes Shape," p. 24. Levine ("Perception and Ideology," p. 43) writes of nationalism as an "informal ideology . . . rooted in a sense of Chinese national identity" and widely shared by political elites who might not agree on formal, Marxist-Leninist precepts. 44. As specialists interviewed in June 1994 at the CIISS in Beijing reminded us, in defense policy, the CCP is the leading or guiding organ (lingdao jigou or zhidao jigou), with the CMC under it; and in foreign policy, though there is no equivalent guiding organ, the CCP politburo serves as central policy coordinator. There are other foreign-policy coordinating bodies—the Foreign Affairs Office of the State Council and the Foreign Affairs Committee of the National People's Congress—but the party leads them too. 45. See Zhao Quansheng, "Domestic Factors of Chinese Foreign Policy," 158-175. 46. Shambaugh, "China's National Security Research Bureaucracy," p. 287: "Chinese analyses of international security are characterized by a strong emphasis on state sovereignty, national interests and geopolitics." Reflecting traditional concerns about China's development and imperialist encroachments, these analyses "are preoccupied with the international factors which affect their quest for modernity on the one hand, and articulating their perspectives of the confrontation between North and South on the other." See also Glaser, "China's Security Perceptions," pp. 253-254, and, for concrete examples, Qimao Chen, "New Approaches," pp. 238-240. 47. McNaugher, "Major Power Relations," pp. 130-134; Swaine, The Role of the Chinese Military, pp. 34-35.

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48. See Nicholas D. Kristof, "China Takes on the Role of Enemy No. 1 to the West," New York Times, September 22, 1991, sec. 4, p. 2; Baum, Cheunjg, and Kaye, "Ancient Fears," pp. 8 - 1 0 . 49. Glaser, "China's Security Perceptions," pp. 262-263. 50. See Gurtov, "South Korea's Foreign Policy," pp. 8 - 3 1 . 51. In Xinjiang Province, for example, Muslims staged a "rebellion" in 1990: see Daniel Southerland, "China Confirms 22 Dead in Clash in Western Area," Washington Post, April 23, 1990. In 1997, Uighurs rose up against Chinese authorities near the border with Kazakhstan: see Patrick E. Tyler, "Ethnic Strain in China's Far West Flares with Bombs and Rioting," New York Times, February 28, 1997, p. 1. Tyler reported: "Spontaneous riots have now shaken a number of cities in Xinjiang and have led to at least 3,000 arrests since April 1996, Chinese and Uighur leaders say." 52. MacFarquhar, "The End of the Long March," p. 42. 53. Zhu, "Party-Army Relations," pp. 344-348. 54. Ibid., p. 353. 55. Schram, ed., Mao Talks; Zhu, "Party-Army Relations," pp. 383-387. 56. Zhu, ibid., pp. 418-421. 57. Ibid., p. 421. In September, "the State Council and the CMC made the decision to abolish the CMC Leadership Group of National Defense Industries." Machine Industries Ministries 3 through 6 were taken over by a State Council Office of National Defense Industries. "All the enterprises and schools that belonged to these ministries were handed over to the provincial, municipal and autonomous regional authorities." But it took more than six months for the decision to be implemented (ibid., pp. 421-422). 58. Ibid., pp. 422-423. On the very day of Deng's appointment to the politburo and CMC, eight of eleven military region commanders were reassigned in December 1973. 59. Pollack, "Structure and Process," pp. 153-155. 60. Ibid., pp. 161-163. 61. Ibid., p. 163. 62. Article 21 of the C C P constitution of 1982 gives the Central Committee the power of appointment of the C M C ' s members. Until amended in 1987 to accommodate Deng, that article also required that the CMC chairman be a member of the party politburo's standing committee. In the state constitution (1982), two provisions concern control of the Chinese armed forces. Article 93 says that the CMC "directs" them; and Article 94 says that "the chairman of the Central Military Commission is responsible to the National People's Congress and its Standing Committee." Thus, one might say that while the PLA is an instrument of the state, it is led by the party in the same manner as the party, constitutionally, "leads" all the nation's institutions and people. For further discussion, see Wang, Contemporary Chinese Politics, pp. 77, 85. 63. Zhu, "Political Work in the Military," pp. 118-129; Swaine, The Role of the Chinese Military, pp. 11-13, 34. 64. Swaine, ibid., chap. 6, esp. pp. 73-77. 65. See ibid., fig. 4, p. 42, for a depiction of this arena. 66. Mao and Deng had consistently appointed the leading generals to the politburo, as happened at the 12th Party Congress in 1982. But in 1985 all this changed as Deng evidently sought to clear the decks of conservative opposition to the economic reforms. The remaining old marshals, as well as a number of regional commanders, were forced to step down (MacFarquhar, "The End of the Long

China 's National Security

23

March," pp. 42-43). As we will see, this trend was stopped and reversed following the PLA's intervention in the prodemocracy movement of 1989. 67. See Li and White, "The Army in the Succession," pp. 757-786. 68. Ho Po-shih, "Lamenting Changes in Soviet Union, CPC Seeks Tighter Control of Armed Forces," Tangtai (Contemporary; Hong Kong), January 15, 1992, in U.S. Consulate-General, Hong Kong, Foreign Broadcast Information Service, China (hereafter FBIS-CHI) 92-023, February 4, 1992, pp. 38-40. This report is based on a document of the PLA's General Political Department. 69. See PLA General Political Department, Mass Work Section, "Do a Good Job of Supporting the Government and Cherishing the People in the New Situation of Reform, Opening Up," Qiushi (Seek Truth; Beijing), no. 15 (August 1, 1992), in FBIS-CHI 92-173, September 4, 1992, pp. 34-38. 70. The promotions of nineteen senior figures in the General Staff and of military region commanders and military-industrial leaders was announced on June 8, 1994. It was Jiang's third (and by far the largest) set of promotions to full general. See "The Significance of Promoting Nineteen to Full General," Jiushi niandai (The Nineties; Hong Kong), July 1994, in Issues on the China Mainland, 16, no. 9 (September 1994): 72-75. 71. This was reported by Ming Pao ([Hong Kong], September 1, 1991) to have been the main subject of a large meeting of senior PRC military leaders in Guangzhou (in FBIS-CHI 91-172, September 5, 1991, p. 39). 72. Chen Shao-pin, "Inside Story of CPC Increasing Military Spending," ChingPao (Hong Kong), April 10, 1991, in FBIS-CHI 91-071, April 12, 1991, pp. 31-32. 73. For example, Li Qinggong, "The Changing International Military Pattern f r o m Old to New; Development Trends in the World Military Situation," Jiefangjun bao (Liberation Army Daily), April 24, 1992, in FBIS-CHI 92-095, May 15, 1992, pp. 20-22. See also Hu, "Beijing's New Thinking," pp. 54-56. 74. See Halperin, Bureaucratic Politics, chap. 2. 75. Lewis, Hua, and Xue, "Beijing's Defense Establishment," pp. 9 5 - 9 6 , 105-106. 76. Elaine Sciolino, "C.I.A. Report Says Chinese Sent Iran Arms Components," New York Times, June 22, 1995, p. A l . The report is cited as having stated that China supplied missile guidance systems and computerized machine tools to Iran for its North Korean-made Scud missiles and sold M - l 1 missile components to Pakistan. The latter case would represent the second such sale to Pakistan, since U.S. intelligence concluded in 1993 that China had violated the Missile Technology Control Regime. 77. See Frieman, "China's Defense Industries," pp. 51-62. 78. Discussion in this paragraph is indebted to Segal, "The PLA and Chinese Foreign Policy," pp. 449-466. 79. Gurtov and Hwang, China Under Threat, chap. 5 (written with Harry Harding), provides some evidence for this conclusion in an exploration of the reasons for the dismissal of Marshal Luo Ruiqing as PLA chief of staff in 1965, during debate over Vietnam policy. 80. Swaine, The Role of the Chinese Military, pp. 13, 34-35, 74. 81. Zhao Quansheng, "Domestic Factors of Chinese Foreign Policy," p. 174.

2 Civil-Military Relations

The PLA is a pivotal force in Chinese politics. Its support is crucial to the political stability of the leadership. For that reason, it is bound to be a key player in the Chinese leadership succession and in domestic-security policymaking. In this chapter, we explore civil-military (that is, CCP-PLA) relations in the reform era, the changing political role of the PLA, and implications for the post-Deng leadership. These issues raise several questions: What is the most appropriate model for understanding party-army relations in China? How and to what degree does the growth of professionalism in the PLA create military corporateness, which can be a threat to party control of the armed forces? What is the PLA's participation and role in the Chinese security policymaking process? How might the growth of economic regionalism affect the army? Finally, what might the PLA's reaction be should a succession struggle occur in the Beijing leadership?

Alternative Explanations for Civil-Military Relations Scholars have developed a number of different models to explain civilmilitary relations in the Chinese political system. Party-army interactions have been described in terms of the "party commands the gun," a partyarmy symbiosis, a civil-military dichotomy, and military professionalism. In the party-commands-the-gun model, the CCP's historical control of military institutions and ideology is emphasized. The PLA is subordinate to the party either because of political controls put in place by the party leadership to ensure loyalty or because the military has become (as during the Cultural Revolution) directly involved in politics. But it should be noted that political control has not prevented the PLA from forming a separate organizational identity. According to Ellis Joffe, Within the context of unquestioned but more abstract commitment to party leadership and control, the military developed autonomous v i e w s and interests that have clearly distinguished it from the party. Such autonomous tendencies of the PLA laid the groundwork for a conflict that has been the most outstanding and enduring feature of party-army relations. 1

25

26

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Relations

Joffe argues that the main reason the PLA has refrained from seizing power in the Chinese political system is the "professional ethic of the Chinese military," one that "undergirds their commitment to party supremacy and central control." 2 He regards the penetration of the army by party political controls and the careful screening of officers as secondary factors preventing the military from taking power. Hence, military professionalism is not all that distinct from the model of party control. Recognition of the army's loyalty to national political leadership is common to both perspectives. What is noteworthy about the military professionalism approach is its emphasis on tensions between the party and the army that arise because of value differences. The CCP's guideline for army building includes not only modernization, the military professionals' preeminent goal, but also regularization and revolutionization, which speak to adherence to rules and upholding spiritual discipline. 3 The party center distrusts both the "purely military point of view," with its onesided emphasis on modern weapons and military training, and "leftist views" within the army that are said to keep people's thinking locked in old ideas and past practices. 4 The growth of professionalism is a natural outcome of the simple fact that the Chinese army is part of a large and increasingly complex defense establishment. To fight a war "under modern conditions" or, most recently, "a limited war under high-technology conditions," the Chinese high command has had to develop new theories of warfare that build on the people's war theories it inherited, to reorganize the military structure, and acquire or develop high-tech weapons. Almost inevitably in such new and demanding circumstances, military professionalism, in the sense of a corporate identity, is growing in the Chinese military system. In that case, the PLA may become involved in politics either in order to advance its corporate interests or to respond to the party's call for intervention in domestic politics. To view civil-military relations in communist states in dichotomous terms is misleading for other reasons too. The institutional relationship between the party and the army is one of the whole and the part. The military as an institution is a part of the overall party structure and an element of the state, as we see, for example, in the common membership of the state and party Military Commissions. Ignoring this feature leads to erroneously viewing conflicts between civilian and military elites as rivalries between two different groups representing two distinctive institutions. Thus, what is generally called "party-army relations" in the party control model is actually civil-military relations within the party. Conflicts between civilian and military elites are intraparty elite conflicts first and civilian-military conflicts second. 5 Accordingly, the PLA's intervention in domestic politics results, not from party-army conflict, but from intraparty debate and decisions. Should China face a succession crisis or other political crisis in the

Civil-Military

Relations

27

future, we speculate that it will be caused, not by a rift in party-army relations, but by division in the Chinese party-state apparatus. 6 Some writers have characterized the party-army relationship as symbiotic. An essential symbiosis between revolutionary soldiers and party members did exist in the pre-1949 period. The PLA was not merely subordinate to the CCP. As a revolutionary fighting force, soldiers played multiple roles as combatants, political agitators, and ordinary workers. These traditions remain alive in the Chinese military system, though the PLA has obviously become a much more professional army in the meantime. It has also strengthened its corporate identity in new ways, such as (see Chapter 6) through commercial ventures by military units and offices to earn extrabudgetary income. 7 One may argue that the party-army relationship in China has evolved over time from symbiosis to control. It is well known that corporatism and professionalism in the PLA periodically challenged the party leadership in both the Mao and Deng eras. But the party never lost the power to control the PLA. When a party faction manipulates the PLA to resolve intraparty elite conflicts, it is a routine form of involvement. But if the PLA takes the initiative to intervene in central political affairs, it is effectively a signal that party control has crumbled. Intervention, as opposed to ordinary involvement, would represent a decided (and, for China, unprecedented) shift toward praetorianism, an indication that political strife within the party is perceived as a threat to national security. 8 All these models converge in the conclusion that the PLA has been a political participant. Such participation is legitimate in the Chinese political system, so long as it is restricted to representing PLA interests through normal state and party channels, by means of competing for resources and influencing policy decisions. At the extreme, the PLA may even act as a veto group. 9 When the PLA becomes directly involved in politics, it is usually at the behest of the party. Military involvement is a stabilizing action, an effort to reaffirm control of party or administrative agencies by bureaucrats, even though it stretches the limits of legitimate participation. In this regard, the PLA's political roles vary depending on the circumstances: political normalcy, conflict situations, and intraelite crises. 10 The degree and style of political involvement of the PLA are examined in the next section.

Between Professionalism and the Revolutionary Legacy During the reform era, the Chinese military has rapidly moved toward professionalism, yet it has shown by its actions that it retains important links with the past. This dual identity, as we will now try to show, affects the process of elite politics and policymaking on internal security.

28

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Professionalizing

Relations

the Cadre

System

In the process of army reform, the Chinese high command has reintroduced the long-standing policy, going back to revolutionary war days, of "crack troops and simpler administration" (jingbing jianzheng). A key aspect of the policy is to regularize and stabilize the cadre (officer) system in terms of age, education, and profession. Deng Xiaoping described the training and elevation of young leaders in the PLA as "a central goal of system reform." 1 1 "Professionalization" reached deep into the PLA, so that, by the mid-1980s, most officers in leadership positions had at least some college or university training. 12 The PLA's leadership has issued two sets of regulations governing military cadres. In September 1988, the Regulations for Military Service of Active Duty Officers of the PLA were formulated "with a view to building a contingent of younger, better educated, and more professionally competent and revolutionary military officers" (Article l). 1 3 Article 8 of the regulations specifies that cadres should be recruited from those who had received military academy training, instead of being promoted directly from the ranks of ordinary soldiers. Article 13 indicates maximum ages for officers in each combat unit level, thereby forcing elderly officers to relinquish their posts. The maximum age of military, political, and logistics officers of combat units in peacetime is fifty years for posts at the division level, fifty-five years for posts at the army level, and sixty-five years for posts at the military regional level. Officers who reach a certain age or have worked for a certain period will be either promoted in post or rank, transferred, or retired. The age limit has been imposed on all officers on the active list since 1988. With the exception of a few important posts that are subject to approval by the CCP politburo on a case-by-case basis, all officers past the retirement age were ordered to retire. A major reshuffle of China's military hierarchy on the eve of Army Day (August 1) in 1995 shows the result. Those retired from military service included the sixty-nine-year-old General Zhao Nanqi, commandant of the Academy of Military Science; the sixty-eight-year-old General Zhu Dunfa, commandant of the National Defense University (NDU); and the sixty-five-year-old General Li Jing, deputy chief of staff. This reshuffle reportedly will enable the fourth generation of military officers, those around fifty-five years of age, to lead the PLA into the twenty-first century. 14 The officer service regulations also highlight performance and conduct evaluation, reward based on merit, and democratic supervision (Article 10). Commanders at various military and political levels must periodically hold examinations for officers. The evaluation result is to serve as the major point of reference for appointing and dismissing officers. This regulation is designed to prevent the number of cadres from exceeding the

Civil-Military

Relations

29

total annual recruitment, an intriguing phenomenon that occurred in the PLA during the Cultural Revolution. At the same time, the high command wants to keep the number of discharged personnel and the rate of personnel turnover at a relatively stable level and to formalize the recruitment and discharging of officers. After twenty-three years without change, the Chinese army implemented a new system of officers' military ranks on October 1, 1988. As a Jiefangjun bao (Liberation Army Daily) editorial put it, the expectation is that implementation of the new military rank system will bring about three kinds of benefits to strengthen the cadres' work. First, the system will help rationalize the officer system so that all posts, military ranks, and number of years before promotion are known in advance. Second, the system is expected to contribute to more effective command of troops and to strengthening discipline. Third, the new system is supposed to be conducive to the readjustment of relations between new and old officers, helping younger ones to mature. 1 5 There is evidence that China's military cadres have been eager to have the new cadre and personnel system. A survey shows that 82.3 percent of the 782 military cadres regarded the time as being ripe for implementing the new rank system, and 75.1 percent of them also considered the time ripe for reform in cadre assessment methods. These cadres were more concerned about reform of the cadre system than about reform of the military structure. 16 Another aspect of military professionalization with long-term consequences is the promotion of officers with higher education. It may be that educational background in general, and school ties in particular—and not just frequent reshuffles of regional commanders as in decades past—will put an end to military factions based on the field army system. A new generation of well-educated military elites is coming to center stage, a transformation that Deng Xiaoping's constant reshuffling of regional military elites accelerated. 1 7 Two-thirds of the officers in the 14th CCP Central Committee (1992-1997) and three-quarters of the officer pool went to college. In both groups, about half (46 percent of the Central Committee and 52 percent of the pool) were educated at military academies. Among army cadres at or above the group army level, PRC sources reported in China Daily in 1997 that over 90 percent have some college background, 76 percent have received professional training, and one-half are considered professional technical cadres. They are the products of a new emphasis on advanced degrees that are being conferred by educational units of the PLA or universities affiliated with it. In 1990, about 73 percent of warship captains and their immediate deputies in the PLA Navy (PLAN) were trained in military academies. By 1992, about 65 percent of officers above the group army level were graduates of the NDU and its predecessors. Although the NDU was only founded in 1985, it already plays a vital role in

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Relations

the formation of the PLA leadership. 18 A number of generals in central political leadership positions were NDU students or officers. They include General Zhang Zhen, the first commandant of the NDU, who was appointed a vice chairman of the CMC in 1992; Fu Quanyou, a CMC member since 1992; and Li Desheng, first political commissar at the NDU and later a member of the standing committee of the Central Advisory Commission, which Deng created in 1982 as a kind of council of elders and once headed. 1 9 Influences from the Past It is too early to predict whether the rapid growth of professionalism in the PLA can eliminate all of the revolutionary legacy. One old problem is military cadres who disobey regulations and laws. At an armywide cadre meeting in November 1988, Yang Baibing, then director of the General Political Department (GPD) of the PLA, emphatically pointed out that "it is important to formulate regulations," but "it is all the more important to implement [them]." He added: The problems found in the building of the cadre ranks were caused by defective policies and systems, but quite a few of them were brought about by our failure to institute the rules and regulations in earnest. From now on, while continually improving the policies and institutions, we should pay more attention to the malpractice of out-and-out disregard for regulations and laws. Otherwise, it is useless to formulate more good regulations. 20

Lawbreaking, corruption, and poor discipline have become especially acute problems as PLA units and cadres have become extensively involved in moneymaking activities. The nature and motives of PLA entrepreneurship, and its potential to weaken the military and disrupt relations among the PLA, the central government, and local authorities, are covered in Chapter 6. Here, we can note that the problems associated with this new development have been a matter of concern to army leaders for at least a decade. On August 1, 1988, for example, Chi Haotian, then chief of the General Staff, described the destructive behavior of some units in their pursuit of profits: While carrying out economic development projects, some units disregard the security and interests of the state and damage some national defense facilities. In some localities, the incidents of ruining national defense facilities happen one after another. Proceeding from their local needs, some units forcibly occupy barracks and land, and arbitrarily exact payment. 21

By 1993, the official army newspaper was pointing out that the socialist market system had created profound changes in the relationships

Civil-Military

Relations

31

between officers and men, between the army and government, and between the army and people. A "materialization" of interpersonal exchanges had occurred, with such negative effects as nepotism on matters of admission to the party and of promotions, ostentatious and extravagant behavior, and army service to the people in expectation of reward. The Chinese high command worried that if materialism spread unchecked, it would inevitably weaken military morale, popular support, and combat effectiveness. 22 The scope of the problem seemed wide indeed. In August 1993, Chi Haotian, now the state councillor and minister of national defense, visited Tianjin to inspect some smuggling cases involving the military. Chi was reported to have remarked on "the spreading of corrupt phenomena in some units and departments, such as corruption, bribery, smuggling, trafficking in smuggled goods, seeking private gain at public expense, and selfish departmentalism." 2 3 The military leadership's concern must surely be that corruption may breed political unreliability among military officers. If the number of corrupt officers should significantly increase, and if such officers hold key command positions, they will be vulnerable to the appeal of "peaceful evolution" by hostile international forces. 2 4 Another hindrance to the normal growth of professionalism in the PLA may be the persistence of personalism in Chinese army units, as well as in the high command. Personalism may be seen in appointments of officers and in the distribution of benefits, both of which violate normal procedures, risk undermining morale, and run counter to the trend toward regularization. At higher levels, personalism translates to factionalism. Historically, factionalism in the PLA has always been a problem. From late 1992 through early 1993, it focused on Yang Shangkun, China's president and CMC vice chairman, and his half brother, General Yang Baibing, who was secretary-general of the CMC. They were removed from power, along with at least several hundred officers associated with them. The most widely cited reason was that the "Yang family clique" was reportedly seeking to create its own power base at Jiang Zemin's expense—systematically planning for the post-Deng era by placing loyalists in positions of power, while also discussing how to prevent the outbreak of civil disorder. 25 Despite weakening the Yangs, factionalism still remains in the Chinese high command. Michael Swaine argues that China's senior leadership can be divided into five major elder-led factions and two "wild card" leaders. These include the Deng-led 2nd Field Army faction; the faction of Hong Xuezhi, formerly CMC deputy secretary-general and head of the General Logistics Department (GLD) of the PLA; the 3rd Field Army faction under the retired General Zhang Aiping; the 5th Field Army (Bo Yibo) faction loyal to the retired General Yang Dezhi, former chief of the General Staff; the Yang Shangkun faction; and the faction of the party elders, Peng Zhen and the now-deceased Chen Yun. Among these, the 2nd Field Army faction enjoys a dominant position, with the 3rd Field Army faction

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Relations

being the second strongest. Swaine even suggests that a basis exists for a political alliance between the Yang Shangkun faction and the Peng Zhen group, because of their common, close association and support for the Tiananmen crackdown, and that a strong basis for alliance exists between the 2nd and 3rd Field Army factions, because of common links to the defense industry. 26 A second source of factionalism is suggested by the regional backgrounds of the PLA elite. Of the 175 top-ranking PLA officers listed in the 1994 edition of the Beijing-published reference work Who's Who in China: Current Leaders, 26.3 percent (forty-six officers) are from Shandong, a province with only 7.2 percent of the Chinese population. Shandong natives also represent one-third of the CMC's members. The commander and the commmissar of the navy were both born in Shandong, as were four of the fourteen commanders and commissars of the seven military regions. 27 The emergence of a Shandong faction, in addition to the field army factions, has implications for the PLA's power and behavior. First, these factors probably have to a certain extent strengthened the cohesive force of the Chinese army, cementing solidarity and cooperation among different units. They may also give Jiang Zemin, whose most recent power base was in Shanghai, an increasingly important say in the army. Second, although the risk of factional struggles may increase, different factions may also be encouraged to engage in mutually beneficial coexistence. Finally, today's factionalism may lead to an expansion of the army and more interference by soldiers in politics, especially at a time of intraparty elite conflict. 28 Under extreme circumstances, factionalism is all the more likely to foster use of military forces for political ends because of two basic characteristics of the PLA command system. First, as will be seen below, it presents major irregularities in procedure and potential ambiguities in authority relationships, especially during a leadership crisis. Second, it permits direct access by a command center in Beijing to both army and division headquarters. 29 Armies generally become involved in domestic politics for two reasons: when governments are believed to have failed in the performance of their duties and lose their legitimacy, or when the corporate interests of the military are not satisfied by civilian leaders. A combination of these motives is, of course, also possible. China is different: When the PLA has been drawn into politics, it is by party leaders for their own purposes, rather than because of internal military motives or ambitions. In the two cases in point, the Cultural Revolution and the Tiananmen crisis, the PLA moved massively into the political arena, not on its own initiative, but in response to the call of party superiors. 3 0 In the Cultural Revolution, the PLA moved in either to settle a factional fight or to support one leadership group against another. In the Tiananmen crisis, the PLA intervened at the very time when the struggle in the Beijing leadership had already been resolved and the army's order came from China's legitimate leaders. Despite

Civil-Military

Relations

33

their reluctance and misgivings, the PLA commanders crushed demonstrators who were portrayed by the political leadership under Deng as defying authority. In neither case did the PLA seek to advance its own interests, showing that it was not an army eager for political action. 31 There are a number of cases in which both party and military leaders used their army connections—historical, institutional, and personal—to advance their own political interests. Mao used the PLA in his burgeoning struggle against the party apparatus at the start of the Cultural Revolution in the mid-1960s, beginning with his assault on the Beijing party organization. Lin Biao, during his political ascent in the 1960s, and thereafter until his downfall in 1971, depended on a small faction of the PLA that consisted of several personally loyal officers. Ye Jianying relied on the PLA when it came time to eliminate the Gang of Four and consolidate his status as a national figure in the 1970s and 1980s. 32 And Deng Xiaoping also relied on the PLA as a power base in making his political comeback in the mid-1970s and throughout the reform period. For instance, Deng drew on PLA support for his dramatic reaffirmation of the economic reforms in 1992, when he made a now-famous trip through southern China and decided to increase the military's representation on the 14th CCP Central Committee. 3 3 The pattern of use of the PLA by political and military leaders is that the PLA becomes involved without intervening. Its political and military leaders may want to intervene, but the troops and officers stay out. This pattern is a legacy of the revolutionary period, one that probably will pass with the passing of the last of the old revolutionary leaders. Their political successors seem not to have the status within the PLA to use it for their own purposes, regardless of their formal positions. The second and third generations of the military leadership—including Liu Huaqing, Zhang Zhen, and Minister of Defense Chi Haotian, all of whom were CMC members in 1977—have high standing and visibility, but they do not carry the authority or influence of a Deng Xiaoping. Their weight will certainly be felt should there be a political crisis or succession issue, but it seems unlikely that future military leaders will be military-politicians. They will no longer automatically be involved in politics the way their precedecessors were. 3 4

The Military's Role in the Security Policymaking Process The Central Military

Commission:

Powers and

Membership

The highest authoritative organs controlling and commanding the armed forces in China are the Central Committee of the CCP and the Central Military Commission. If the party and state CMC organs were separate and

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Relations

consisted of different personnel, the question of which organ controls the military would arise. But as already noted, these two organs in fact represent two branches of one organization. Thus, establishment of the state CMC has not affected the party CMC's authority over the PLA. 3 5 According to the Chinese leaders' account, the setting up of the CMC in the state structure had two objectives: to bring the country's armed forces into the state system, thereby correcting their previously ambiguous position (based on the 1975 constitution) of seeming to be outside the state structure; and to clarify the state's authority to mobilize and assume command of the PLA in case of war. 36 The National Defense Law, which was submitted in draft to the National People's Congress in 1996, is supposed to differentiate the functions of the two CMC organs. According to Article 22 of the party constitution, appointment of the members of the CMC is subject to the authority of the CCP Central Committee. Two criteria for appointment are supposed to be primary: status as a military elder and designated responsibility for one of the few major defense offices, such as the MND or the PLA's GDL, GPD, or General Staff Department (GSD). But the CMC still lacks a standardized membership list. Appointments to the commission seem to be based on an uneasy mix of political, personal, and professional criteria. 37 In Mao's time, the chairman of the CMC was always the chairman of the CCP in accordance with the principle that the party commands the gun. In 1981, Deng Xiaoping became chairman of the CMC without simultaneously holding the position of general secretary of the party. In September 1982, there were four vice chairmen of the CMC: Ye Jianying, Xu Xiangqian, Nie Rongzhen, and Yang Shangkun. Yang was also made secretary-general of the CMC, and four generals—Yang Dezhi, Yu Qiuli, Zhang Aiping, and Hong Xuezhi—were appointed deputy secretariesgeneral. The power of secretary-general of the CMC seems great, mainly because the standing committee of the CMC is composed of the secretarygeneral and four deputy secretaries-general. The secretary-general's domain includes administration and personnel, issuing documents, and liaising with party and government departments. 38 The political nature of the CMC's membership may be seen in its shifting name list. In November 1987, Zhao Ziyang became first vice chairman of the CMC, reflecting his rising power as premier and party secretary-general. Yang Shangkun and Hong Xuezhi retained their posts on the CMC, while Liu Huaqing was appointed a deputy secretary-general. Soon after the Tiananmen incident, however, Zhao Ziyang lost his position; Jiang Zemin became chairman of the CMC, Yang Shangkun became first vice chairman, and Liu Huaqing became vice chairman. Yang Baibing, director of the GPD, was made secretary-general, and Qin Jiwei (defense minister), General Chi Haotian (then chief of the General Staff), and Zhao Nanqi (director of the GLD) were appointed as members. In October

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Relations

35

1992, at the 1st Plenum of the 14th CCP Central Committee, Zhang Zhen was promoted to vice chairman of the C M C , and Chi Haotian, Zhang Wannian (chief of the General Staff), Yu Yongbo (GPD director), and Fu Quanyou (GLD director) were made members. As previously noted, it was at this plenum that the Yang duo lost their positions when the posts of secretary- and deputy secretary-general were abolished. The expansion of the C M C ' s membership has implications for the decisionmaking process under Jiang Zemin, a man who does not have military experience. In September 1995, at the 5th Plenum of the 14th C C P Central Committee, Zhang Wannian and Chi Haotian were promoted to C M C vice chairmen. Wang Ke, commander of Shenyang Military Region, and Wang Ruilin, director of D e n g ' s office and deputy head of the GPD, were put on the C M C . As a result, the membership of the C M C rose f r o m seven to nine, and the number of C M C vice chairmen went f r o m two to four. In addition, the C M C reestablished the position of secretarygeneral. 3 9 Has this arrangement reinforced Jiang Z e m i n ' s position in the CMC, or has it weakened it? One interpretation is that the two continuing vice chairmen, Liu Huaqing and Zhang Zhen, may soon be too old to take care of the C M C ' s work. The promotions of Zhang Wannian and Chi Haotian were meant to assist Jiang Zemin in carrying out his work. Another opinion is that the expansion of the C M C membership has diluted Jiang's authority within this supreme military power organ, where power has normally been highly centralized. It therefore has increased the chance of friction in the decisionmaking process and has actually weakened Jiang's authority in military circles. Four vice chairmen on the C M C may be excessive, though as a transitional measure it is fine. As matters turned out, at the 15th CCP Congress in September 1997, Jiang Zemin replaced Generals Liu and Zhang Zhen with Generals Chi and Zhang Wannian, who were also elevated to the CCP politburo. Under the current system of the CMC, it is indeed no easy job for Jiang, who after all is also president and party general secretary, to keep tight control of his power while also playing the role of defender of collective leadership and democratic decisionmaking 4 0 —hence, his determined efforts to show personal concern about ordinary soldiers and his promotion of thirty-five senior officers to the rank of full general between 1994 and 1996. 41

The Party (CMC)

Commands

To the present, the party C M C theoretically has dominated important decisionmaking in military and d e f e n s e affairs. Its powers, in accordance with Central Committee policy and regulations, are to decide military strategy and army-building guidelines; to implement important military decisions and control; to decide the size of the armed forces, as well as policies governing the development of weapons and equipment; to enact

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laws and regulations in defense and military affairs; to appoint and transfer important military cadres; and to develop guidelines of ideological and political education for the PLA. 4 2 In practice, the C M C has no policy group assigned to these tasks. The staff of its administrative office (bangongting) is too small to do them. 4 3 It has served as a "court of last resort" for interorganizational conflicts regarding manpower, budgetary, and technical resources. The real source of the C M C ' s power lies in the authority and prestige of its membership, rather than in the institution itself, and in its ability to tap expertise within an extensive research and planning apparatus. 4 4 It can be argued that the f i v e senior m e m b e r s of the C M C constitute an informal "executive c o m m i t t e e " that exercises sole decisionmaking authority over the most critical military policy issues. A m o n g these five leaders, Liu H u a q i n g and Z h a n g Z h e n were almost certainly the critical decisionmakers, notwithstanding their ages. In the d e f e n s e area, Jiang Z e m i n almost certainly followed the lead of these two P L A elders. His policy role is probably limited to that of a c o m m u n i c a t o r and occasional advocate of the PLA's d e f e n s e policy views to his civilian colleagues on the politburo standing c o m m i t t e e and in the rest of the f o r e i g n - p o l i c y hierarchy. It is said that, not Jiang Zemin, but a close aide attends m a n y C M C meetings, serving as his "eyes and ears," especially when the meetings concern routine or technical issues. Generals Zhang Wannian and Chi Haotian clearly stood as "first a m o n g equals" in the successor generation of military leaders, particularly w h e n it came to d e f e n s e policy. Indeed, their selection as C M C vice chairmen signified that they were being g r o o m e d to replace Liu Huaqing and Zhang Z h e n when the latter retired. 4 5 Within the P L A , the f i v e - m a n C M C e x e c u t i v e c o m m i t t e e consults with the heads of the three P L A central staff departments (the G S D , G P D , and G L D ) . T h e M N D does not h a v e a large internal structure of b u r e a u s and o f f i c e s . Rather than h e a d i n g up the military bureaucracy, the M N D f u n c t i o n s as a m a n a g e r of C h i n a ' s s y s t e m of military attachés and P L A contacts with foreign armed forces. 4 6 T h e C M C occasionally f o r m s temporary, ad hoc s u b c o m m i t t e e s or functional committees to prepare the five-year d e f e n s e plan, study specific policy issues, and commission reports. T h e full C M C meets at least once a m o n t h and several other times during the year on an ad h o c basis in response to a specific need. In the case of m a j o r decisions, it holds enlarged m e e t i n g s at least twice a year to w h i c h large n u m b e r s of h i g h - r a n k i n g leaders are invited. 4 7 T h e objectives may be to discuss and ratify five- and ten-year d e f e n s e plans and the military budget, to transmit the views of the party center to the military high c o m m a n d , and probably to reinforce the necessity of the PLA's adherence to central political and strategic authority. For example, at one such enlarged meeting in late M a y and early June 1985, D e n g Xiaoping, as C M C chairman, talked about the necessity of ref o r m i n g the a r m y ' s structure and m a d e the strategic decision to reduce the

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37

armed forces by 1 million. 48 During the Tiananmen crisis, an enlarged meeting of the CMC was convened that included leaders without formal military responsibility, such as Li Peng and the mayor of Beijing, Chen Xitong. These leaders actually participated in the formal military decisionmaking process. The declaration of martial law and the subsequent resort to force that followed from the meeting derived from an ad hoc arrangement rather than from any regular decisionmaking procedures. 49 In a third case, an enlarged meeting of the CMC reportedly was held in Beijing's Jiangxi Hotel from March 1-2, 1993. Present at the meeting were over 130 people, a veritable who's who of China's military-industrial complex: members of the CMC, all the armed services heads, and leaders of all the major military regions, military academies, scientific research and production units for national defense, and administrative organs directly under the party and state CMC. The meeting, chaired by Jiang Zemin and Liu Huaqing, apparently did not aim at reaching any decisions. The speeches given were meant to reinforce the party's authority in army building, specifically with regard to organization, discipline, and the selection and promotion of outstanding personnel. 50 While the party is clearly in command, the army's presence in politics, and perhaps therefore its influence as well, is on the rise. Besides the increased number of generals on the CMC, there is the large military representation in the CCP Central Committee. In the 14th Central Committee, military leaders represented 24 percent of the total, with 46 of the 189 full seats. Forty-three generals, lieutenant generals, and major generals were among them. By contrast, only 17 percent of the full members of the 13th CCP Central Committee were military leaders. The figures show that military elites in 1992-1997 occupied the highest percentage in the Central Committee since 1977. 51 If a report from Hong Kong is accurate, moreover, an unprecedented integration of military and political leadership has occurred at central and local levels of power. Following a speech by Deng Xiaoping shortly after the 14th CCP Congress ended, the report said decisions were taken by the party politburo to allow ten senior generals (including some current and former CMC members) to attend its sessions as nonvoting members and to do likewise with commanders and political commissars in major military districts, who would participate in province and other local party committees. The impetus for these decisions was said to be protests by some of the CMC generals to Jiang Zemin over China's weak response to U.S. and other arms sales to Taiwan (discussed in Chapter 8). 52 What rings true about reports such as this one is that Deng Xiaoping probably wanted to do everything possible to smooth the way for Jiang Zemin's assumption of unquestioned power. Ensuring the military's loyalty, such as by giving it a bigger political voice, taking tougher stances in foreign policy, and not interfering with sales of Chinese weapons abroad, may be considered a small price for the civilian party leadership to pay.

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Relations

In a political crisis, a key issue that would test the party's control over the PLA is ordering troop movements. Regulations governing deployments of troops are ambiguous. Officially, moving an army requires the signature of the CMC chairman; for a division, the permission of the GSD and the CMC; for a regiment, the regional party committee's approval; for a battalion, the relevant army-level party committee's approval; and for a company, the division party committee's approval. 53 As power rests with party committees in each instance, the key fact is whether or not the commissar or commander is also the party secretary. According to Chinese norms, the commissar is party secretary at the division level and below, and the commander is the deputy secretary. At the army level, either commissar or commander is secretary, and the other is the deputy. At the regional level, the commander always becomes the party secretary. This implies that at the regional level, where there is power to move troops, the commander is given full, undivided military and political authority, whereas at the army level and above, political commissars have less power vis-à-vis commanders. This is the reason that the Beijing leadership attempts to assure the loyalty of military region commanders. In a domestic political crisis, the formal lines of command are likely to become blurred. While no one in the Beijing leadership disagrees with the dictum that "the party commands the gun," the harder question that might arise is: "Who in the party commands the gun?" For in a crisis, the formal lines of command are likely to be affected by factional politics based on family and personal connections. More important, in the Chinese political-military system, there is always some ambiguity as to whether commanders obey the party or the military high command. Two cases may illustrate the point. One occurred in late 1976, after Mao died. Zhang Chunqiao, director of the GPD, moved a division in the Shenyang Military Region to Beijing without the knowledge of Ye Jianying, who was the CMC vice chairman and defense minister. Ye was angry, because only the CMC could give permission to move a division. The significance of this event lies in the fact that Ye Jianying, who ranked lower than Zhang Chunqiao in the party hierarchy, was able to nullify Zhang's order in the name of the CMC. 5 4 The second example of troop movement politics took place on June 3 - 4 , 1989. The 38th Army commander received an order to move into Beijing via a telephone call from the CMC General Office, but he refused to do so, mainly because he did not have the signature of the CMC chairman. Since the party leadership was split on how to handle the crisis, it is clear that there was ambiguity as to whether the commander was to obey the party or the military high command. Indeed, during the Tiananmen crisis, Zhao Ziyang, as general secretary of the CCP, ostensibly had party authority to issue orders to the PLA, although Deng was China's de facto leader as well as chairman of the CMC. 5 5

Civil-Military

Defense Budgeting

and

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Planning

The CMC, in cooperation with the State Council, is in charge of deciding the size of the defense budget. The CMC must work out both an annual budget and a five-year development plan for the PLA, which is usually integrated into a five-year national economic plan. For such long-term planning, the CMC convenes a small group of representatives from the top military commands, then negotiates with their counterparts from the Finance Ministry and the commissions under the State Council responsible for economic planning. The scale of allocations is worked out through these negotiations, though key decisions are often made at the highest political levels and then put into detail by these working groups. 5 6 The military high command then will present a report written by the Policy Research Office of the General Staff Headquarters of the CMC and the Strategic Research Office of the MND. In one such report, the Chinese military leadership argued that military expenditures should increase progressively by 16 to 22 percent each year. But in the end, the decision was to increase official defense expenditures by a minimum of 10 percent each year for the 8th FiveYear Economic Plan (1991-1995). 5 7 To prepare the annual defense budget, the PLA GLD hosts an AllArmy Logistics Work Conference, where logistics officials from all the important military commands review their work over the past year and discuss priorities and allocations for the next year. Determining the annual budget is comparatively routine work, since the PLA negotiates in terms of a fixed rate of increase with the Finance Ministry, which has authority to decide the size of the annual allocation in accordance with the party center's instruction. 58 There are times, however, when the Chinese military high command will become involved in serious budget negotiations with departments of the party Central Committee and the State Council, such as when it asks for special appropriations for the production of military equipment. According to a Hong Kong press report, this type of request was made in May 1993, when the GSD and the M N D urged immediate attention to starting a project to manufacture a new model fighter plane. The GSDMND request formulated the navy and air force equipment development plans for 1993-1994, 1994-1995, and 1995-1996, and asked the central authorities to approve a special appropriation for each fiscal year, totaling Y31.5 billion. The decision was a tough one, and Deng Xiaoping was asked to intervene. He instructed the Central Committee and the State Council to study and decide the matter after taking the overall situation into consideration. He also asked the senior generals, Yang Dezhi, Xiao Ke, and Zhang Aiping, to use their influence on his behalf with lower authorities. The "study and overall consideration" reportedly resulted in approval of

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a Y8.5 billion increase in military expenditures, listed as special appropriations for the production of new fighters and transformation and upgrading of conventional submarines. 59 This suggests that the actual politics of military budgeting in China is quite complex, combining formal and informal lines of decisionmaking and both bureaucratic and veteran leaders. This same complexity and intermingling of lines of authority between party and state bureaus seem also to describe China's weapons acquisition process. Here again, the CMC shares final authority with the State Council. Actual coordination of funding for weapons research, development, and spending falls to the Commission on Science, Technology, and Industry for National Defense (COSTIND), whose domain also embraces the conversion of military industries (see Chapter 5). COSTIND has dual responsibility to the party CMC and the State Council, and specifically to the Finance Ministry for budget preparation and the appropriation and allocation of funds. 6 0 The funds COSTIND disburses fall into three categories: weapons and equipment development, applied and basic research, and basic technology. Whether COSTIND can exercise direct and indirect influence on the development and production of an item depends on the type of fund. The weapons and equipment development funds are disbursed to military user departments on the basis of the state economic plan, which COSTIND itself has a hand in formulating. Though priorities are dictated through this plan, COSTIND is likely to have strong influence on the setting of such priorities, and therefore on which weapons and technologies get developed. In the case of applied and basic research funds, COSTIND can exercise influence directly. It can allocate funds directly to developers instead of going through the military user departments. It then assigns a chief designer to the project to coordinate the work of the various developer units, presumably PLA institutes and factories. As for ordinary weapons and military technology acquisitions, the GSD, supported by the Equipment Bureau (Zhuangbeibu), initiates requests. 6 1 These are supposed to be approved by both the CMC, in terms of strategic necessity and priorities, and the State Council, in terms of budgetary affordability. Overarching these mundane considerations, as we bring out in later chapters, are at least three sets of macroissues. The first concerns China's economic development and military modernization. In this area, there are choices to be made, such as between arms procurement and economic investments, and technology transfers between the military and civilian sectors. 62 The second set revolves around the principle of selfreliance. 6 3 China is said to be less interested in purchasing large quantities of finished weapons systems from abroad than in obtaining production technology and licensing agreements. Thus, the stress is on localizing imported military technology where possible and carefully studying the adaptability of imported arms to Chinese conditions. 64 Third is the matter of cost. Since China cannot afford to rely extensively on imported arms,

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their production should be supported by domestic production facilities, technology, and materials; production of parts or components of the imported equipment should be localized in a given time; and the technology should be advanced, but reasonably priced. 65 In acquiring new technology from abroad, a difference exists between the interests of the PLA and those of the defense industries, which are run, not by the services, but by civilians who are ultimately responsible to the State Council (see Chapter 5). The G S D prefers to purchase finished weapons for direct military use, without delay in the deployment schedule of the armed services. For example, in 1984, it purchased twenty-four Blackhawk helicopters directly from Sikorsky Industries in the United States. 6 6 The purchases of Kilo diesel submarines and SU-27 jets from Russia in the 1990s are more recent cases. In contrast, the defense industries are interested in purchasing high technology. Their priority is shared by most of the arms-trading firms (also discussed in Chapters 5 and 7), which, as commercial ventures, seek technology that has industrial applications and strengthens their competitiveness in the international arms market. The PLA would therefore seem to be at a serious disadvantage when it enters negotiations with the defense industrial ministries and COSTIND on arms acquisitions. Not only do China's economic constraints and an emphasis on self-reliance in procurement policy favor the position of the defense industries, but the PLA's influence is also limited by its position as a captive customer of a state-run system and by the absence in the Chinese system (as further discussed later) of flexibility and coordination that would facilitate the flow upward of the military's preferences. 6 7 Although COSTIND has intervened in disputes between the PLA and the defense industrial ministries over such issues as the type of weapon to be produced, the price of equipment, or the necessity of meeting a production quota, it has usually taken the defense industries' position. COSTIND's senior personnel are mainly technicians who are unfamiliar with the demands of the operating forces. In contrast, officers of the PLA may know about the operational parameters of new weapon systems, but they are not qualified to debate the technical minutiae of design and construction. Nor can the PLA expect much help from the MND, which, on resource allocation matters, shares equal power with the defense industrial ministries.

The Military's Voice in Policymaking The Military as Pressure Group Michael Swaine suggested in 1996 that on the assumption Deng Xiaoping was no longer actively engaged in decisionmaking, ultimate authority over fundamental national strategic objectives rested with an informal collective

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leadership of four individuals: Jiang Zemin as party general secretary, head of the CMC, and senior member of the politburo standing committee; Li Peng as premier and politburo member responsible for state affairs and the foreign-policy system; and Liu Huaqing and Zhang Zhen, two powerful PL A elders. The remaining four members of the politburo standing committee—Qiao Shi, Li Ruihuan, Zhu Rongji, and Hu Jintao—no doubt express their views on national strategic issues in the committee's deliberations. But their role is probably largely advisory and only occasionally advocatory; they are not the key decisionmakers who exercise ultimate power on vital matters of state. 68 The PLA has at least one representative on the CCP Central Committee's Foreign Affairs Leading Small Group (FALSG), whose head is Premier Li. The group functions as the key policy coordination, communication, supervision, and consultation mechanism between the politburo standing committee and the foreign-affairs system of functionally associated state and party organs at the commission and ministry levels. 6 9 The PLA's representation came about during the 1980s, when lack of coordination and a conflict of views between the MFA and the GSD came to light over PRC arms sales abroad. The Beijing leadership apparently found it necessary to insist on more effective oversight of the PLA on issues that impinged on foreign relations. 7 0 Since the late 1980s, that representative has come from the GSD, as shown in Table 2.1. 71 The PLA also has representatives in the Central Committee General Office (CCGO), which seems to coordinate routine information flows between the defense and foreign-policy sectors (i.e., through the CMC and the FALSG systems). The CCGO also may facilitate higher-level contacts among senior members of both systems, since they are members of the politburo standing committee. Heading the CCGO is Zeng Qinghong, the political commissar of the Central Guard Unit responsible for the personal security of all senior party officials, as well as of Jiang Zemin's close aides. General Wang Ruilin, deputy director of the GPD, member of the CMC, and senior secretary to Deng Xiaoping, is deputy head of the CCGO. 7 2

Table 2.1 Period

PLA Representation o n the FALSG PLA Representative

Mid-1980s Late 1980s

Qin Jiwei Xu Xin

Early 1990s

Xu Huizi

Mid-1990s

Xiong Guangkai

Source: Swaine, The Role of the Chinese Military, p. 32.

Position Minister of Defense Deputy Chief of GSD Intelligence/Foreign Deputy Chief of GSD Intelligence/Foreign Deputy Chief of GSD Intelligence/Foreign

for Affairs for Affairs for Affairs

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When it comes to making its case on critical foreign-policy issues, the Chinese high command probably does so at the level of the politburo standing committee, not the FALSG. The chief line of contact would be among Li Peng, Jiang Zemin, and Liu Huaqing, with some ex officio participation by Zhang Zhen. Decision-oriented contacts of a more routine nature might take place in the CCGO or through personal communications between PLA officers and politburo standing committee members. 7 3 Informally, the Chinese military has used at least two ways to call for the party center to revise or reconsider existing domestic and foreign policy. One is through fora such as seminars and symposia organized by military institutes, policy reports, and the official PLA newspaper, Jiefangjun bao. Cutbacks in military spending and military-industrial conversion early in the economic reforms provided occasions for military cadres to express concern. At a symposium in January 1989, many army cadres reportedly questioned the party leadership's theses that economic construction should come before national defense and that once economic construction improved, national defense would "naturally" be enhanced. 7 4 Criticism of the changes in military-industrial policy came out in the army newspaper, among other places. The new stress on civilian production and profitability, in competition with civilian enterprises and with relatively less concern about increasing the army's technological level in preparation for war, did not sit well with PLA officers. 7 5 The military has been especially vocal on foreign-policy issues. At a May 1994 conference sponsored jointly by the NDU and the Academy of Military Science, for example, the participants reportedly attacked "rightist" tendencies in the Foreign Ministry's handling of such issues as the U.S. interference in China's internal affairs, U.S. sales of sophisticated naval and air weapons to Taiwan, the resurgence of militarism in Japan, and Britain's political challenges to China on the Hong Kong question. In all, the conference listed over thirty mistakes made by the MFA. The question was raised whether the mistakes were rooted in the foreign policy of the Central Committee or were due to the Foreign Ministry's deviations from the policies of the Central Committee. In the name of its participants, the conference prepared a letter to the CCP Central Committee and State Council; but it was withheld at the last minute on orders from the CMC. 7 6 Another instance of the military's assertiveness is the 1993 book Can China's Armed Forces Win the Next War? It was probably written by a Chinese naval officer or by civilian analysts to promote the navy's interests. It called for China to develop at least two aircraft carrier task forces, an interest long denied by official PRC spokespersons. 7 7 In later chapters, we will see other evidence of the military pushing its policy preferences with respect to arms sales, the South China Sea, and the Taiwan Strait. The second method of expressing the professional military's opinion is by letters, reports, or other writings directed to the party center and authored

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by the most senior generals. In the 1990s, they have been quite prepared to criticize the party center's position on important national-security issues. Several such instances concerning policy toward the United States have come to light since 1992 as Sino-U.S. relations intensified over arms sales, Taiwan, and other matters perceived by Chinese leaders as encroaching on China's sovereignty. One particularly large and vigorous military protest came in early September 1993. Eight new and veteran generals, including Qin Jiwei, Chi Haotian, and Zhang Wannian, were reported to have drafted a petition to both Jiang Zemin and Deng Xiaoping. Indignant over the Yinhe incident, the generals submitted the petition with the additional signatures of 180 other generals. It demanded that the Chinese government insist that the United States make an open apology as well as reasonable compensation. The petition is also said to have demanded that China adopt appropriate measures for dealing with Washington's hegemonic behavior. 78 Several months later, a Hong Kong journal carried a report that indicated a step-up of the military's pressure on the central leadership to counteract the United States. In a meeting called by the Secretariat of the CCP Central Committee in April 1994, co-chaired by two politburo members, the GSD and the Policy Research Office of the CMC submitted a report that urged the politburo's standing committee, its highest decisionmaking body, to consider establishing a global united front against hegemonism. 7 9

Regionalism and the PLA Regionalism

and

Discontent

Deng's reforms have profoundly affected regional development in China, with implications for the unity of the PLA. Many changes in military structure, process, and personnel transfers have contributed to controlling the growth of regional loyalty in the PLA. But economic decentralization, deemphasis of communist ideology in favor of pragmatism and market reforms, greater functional separation within ruling institutions, expansion of the PLA's economic activities, and the disabilities of old age among China's elder statesmen all have impeded central control over the regions. One feature of regionalism that directly affects the PLA is the growing discontent of ethnic minorities. Encouraged by the disintegration of the Soviet Union and abetted by ethnic and religious forces from abroad, Chinese minorities are becoming more activist than ever before. Some, as in Tibet and Taiwan, are believed to be trying to set up an independent state. In parts of Xinjiang and Inner Mongolia, ethnic groups are seeking integration in a so-called greater nation. From Beijing's perspective, these activities are national-security problems: They endanger the integrity of China's territory and destabilize its borders. Is there any linkage among

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the growth of regionalism in Chinese society, internal separatist movements, and prospects of disunity in the PLA? For China analysts, regionalism in China presents a conceptual problem. It may indicate economic regionalism (incipient federalism), warlordism (military-run fiefdoms), greater autonomy from central control (what the Chinese call shantou zhuyi, "mountaintopism"), a quest for supreme power (in the historical sense of zhengqu tianxia, "competing for the mandate of heaven"), or breaking away for the purpose of ultimate independence. 8 0 Ellis Joffe defines regionalism, "not as every departure from central directives, but only as open and prolonged defiance of the central government by local leaders who have the capacity to act autonomously on major issues which hitherto had been the unquestioned prerogative of the center." 81 According to June T. Dreyer, regionalism is "the predilection of areas and institutions that are theoretically under the jurisdiction of, or subordinate to, a central government." This results in policies that deviate, either openly or tacitly, from those set by the central government and without its permission. Control over the goods and services produced by an area is a crucial factor in the establishment and maintenance of regionalism, as is control over military power with which to defend one's economic prerogatives. 8 2 Despite the legacy of warlordism in the late Qing dynasty and the 1930s, 83 there is considerable evidence that the fused party-army structure of communist power greatly disciplined the Chinese regional forces. These consist of local police, border defense, militia, and reserve units—in fact, all organized military or internal security units deployed in China's provinces, whether under formal central or regional control. The Chinese party-army structure did not entirely eliminate tendencies toward regionalism in the PLA, however. Historically, two cases illustrate the potential for military regionalism, but also its limits, as neither one directly involved the PLA. One is the so-called Gao-Rao affair. Gao Gang, head of the Northeast China Military Affairs Committee in the early years of the PRC, was accused in 1955 of trying to create an "independent kingdom" by becoming premier of the State Council and general secretary of the party's Central Committee. Rao Shushi, head of the East China Administrative Committee, as well as an important member of the 3rd Field Army, allegedly tried to start a struggle on Gao's behalf in order to "split the party." 8 4 One interpretation is that Gao and Rao wanted to create a military-economic base in their respective areas that could make decisions independently of Beijing. But their attempt at regionalism failed, mainly because of the vigilance of the central government. 8 5 Another interpretation is that the essence of the Gao-Rao affair was not a struggle between the center and a powerful region, but "a power struggle at the center" in which Gao apparently tried to displace the top two leaders after Mao, Liu Shaoqi and Zhou Enlai, and become Mao's second in command. The military

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played no direct role in the Gao-Rao affair; but it deeply unsettled the central leadership, which worried that the five-field army system left the high command vulnerable to regional forces. 8 6 After the affair, organizational changes were made. The Chinese high command abolished the five field armies in 1956 and established thirteen military regions, soon after the dissolution of the administrative committee. 87 In the so-called Wuhan incident of July 1967, during the chaos of the Cultural Revolution, the commander of the Wuhan Military Region, Chen Caidao, backed by the conservative party organization, defied the radical Cultural Revolution Small Group in Beijing and detained two of its members who tried to mediate between Chen's forces and Red Guards. This was not a matter of regionalism to establish an independent kingdom; the event was motivated by ephemeral circumstances. The Beijing leadership was itself split, and Chen acted alone. Like many other leaders who protested radical actions during the Cultural Revolution, Chen was rehabilitated when the party line changed. 88 Economic

Regionalism

Since the era of economic reforms began, regionalism has been largely shaped by new economic forces. In the process of decentralization of Chinese economic decisionmaking, the central government has retained control over the macroeconomy in critical areas such as top-level personnel selection, legislation and regulation, information dissemination, and administrative skills. But both provinces and municipalities have been able to assert their own economic interests and increasingly seek to deflect the intent of major central economic reforms, such as fiscal decentralization and increased enterprise autonomy, when they are adverse to those interests. 89 They have also engaged in various forms of economic protectionism to improve their bargaining power. These developments can have military implications. For instance, Guangdong Province has a high growth rate, is independent of Beijing in capital investment, and is greatly dependent on Hong Kong for access to skilled labor and international trade. The people of Guangdong have a tradition of nationalism and of perceiving themselves as being the central authority that goes back about a hundred years. Guangdong's economic power may one day lead its authorities to defy Beijing. Guangdong is also a major focus of PLA activity, due mainly to its strategic position relative to Hong Kong, Taiwan, the South China Sea, and Vietnam. Guangdong's potential for separatism also seems to color its relationships with other provinces, as in the extreme example of the "rice war" with Hunan Province during 1990 and 1991, when local military forces of both provinces apparently were mobilized. 90

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47

Xinjiang is another locale where economic forces, in combination with ethnic differences, weaken ties to China's political center and raise military issues. In a nutshell, the factors at work include local peoples' perception that Xinjiang's large oil reserves and other mineral resources could make the province economically self-sufficient, and possibly even wealthy; increased access by the Xinjiang population to Turkic, Islamic, and other foreign influences due to better cross-border rail and highway connections; and a lengthy list of ethnic minority grievances concerning (among other things) self-rule, ending nuclear testing in the province, and stopping the practice of sending Han criminals to Xinjiang. 91 Prospects for Regional Military Separatism and Army Defiance of Central Authority Could ethnic or economic separatism lead to, or bring with it, regional military separatism? One study has analyzed the potential for Chinese regional military separatism from the perspective of a regional military commander. It suggests the difficulties of a large-scale breakaway; but military separatism might be possible in poor, backward, and remote areas, a socalled no-man's land such as in Qinghai, Gansu, and Ningxia Provinces. Even then, military separatism is likely to be weak and its scale no larger than a county—a scattered effort that would not be able to bring about the demise of the PRC. 9 2 For the most part, regional commanders share strong attachments to Han Chinese nationalism and remain firmly in support of central authority. The general consensus among China analysts seems to be that any tendency toward regional separatism will probably result from economic and political protests, rather than from a military decision. So long as the Beijing leadership has a firm hold on the central sources of authority, it should be able to cope with local people's grievances and social unrest, and with any increase in the number of regional officers who are unresponsive to its authority. But that social and political fragmentation in localities will increase as a consequence of economic decentralization seems safe to predict. From a military point of view, there is no plausible link between the PLA's structure and function and the rise of regionalism. It remains a centrally controlled army. Military region commanders have no authority independently to order main force units into action. In both operational matters and logistics, there is very little evidence that the autonomy or powers of the regional commander have increased. Articles in one PRC defense journal did call for a reduction of command levels, simplification of command procedures, and an acceleration of command tempo, thereby extending a regional or local commander's control right down to the battlefield, passing over all intermediary echelons. 93 But the central Chinese military

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media have been cautious on reform of command structure. One article in Jiefangjun bao charged that "[military] leaders have inadequate understanding of the specific characteristics of army reform and copy local reform methods blindly and indiscriminately, thus affecting the army's centralized and unified leadership." 9 4 Actually, recent changes in the command structure and personnel policies should make it much easier for the Chinese high command to keep local military leaders from bypassing intermediary echelons. No provincial party secretary has simultaneously served as a provincial military district political commissar since 1988. This means that in the areas of personnel and organization, the local military and party organizations have a more distant relationship than previously, so that the center now exercises more direct control over the local military. 95 In addition, as a result of reforms in the management of operational expenses since 1989, their allocation is handled by unified logistics financial departments. The reform is meant to limit the discretionary power of military regions, services, and armies to use extrabudgetary expenses and goods in stock. 96 The transformation of the local military units, which protect local party and government organs, factories, and enterprises, into the People's Armed Police (PAP) under the Ministry of Public Security has removed one former organizational basis for local military-government cooperation. Daily operational command of PAP forces at the provincial to the township level now resides primarily with corresponding public-security organs at each level. Reserve and militia forces, however, are controlled mainly by departments within the military district and the PAP department at each level, from province to county government. Thus, the military regions' authority to issue commands to these regional forces has been confined to emergency or wartime conditions in response to orders issued by the CMC. PAP has concurrently been strengthened and given primary responsibility for the maintenance of public order, with support from specially trained ready reserve units and militia forces. The intention is to make PAP a buffer between society and the regular military, particularly the group army. 9 7 Nevertheless, even as PAP is slated to be expanded—from approximately 2.2 million personnel to over 3 million by 2000, with a commensurate increase in training academies and budget (in 1995, around $1 billion)—it reportedly has run into serious problems. Besides internal problems, such as poor administration, corruption, and insufficient attention to party leadership, PAP is said to have become involved in numerous disputes with local authorities and the public, some of which led to bloodshed. 9 8 Changes in personnel selection policies will tend to undermine the ability of military regions and group army commands to mobilize troops for political ends. In contrast to the practice of limited lateral exchanges of regional heads before and during the Cultural Revolution, the Chinese high

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command has regularized an extensive process of PLA leadership rotation, promotion, and dismissal or retirement. Since 1980, at least seven shifts have taken place. Four readjustments of the high-level military hierarchy occurred in November 1992, December 1993, November 1994, and July 1995. The so-called law of avoidance characterizes these PLA leadership shifts: Nonnatives are placed in leading posts in the military regions, so that commanders include a mixture of officers from different regions. The headquarters of an individual group army will often include officers from different group armies. Such an intensified application of the "law of avoidance" contributes to undermining senior military leaders' ability to establish geographically or unit-based political f a c t i o n s . " Central control over regional units has also been strengthened since 1978 by the three-tiered organizational system composed of the party committee, the GPD-run political commissar, and the party discipline inspection committee. All three systems are well entrenched down to the regiment level. At the battalion level and below, representatives of all three systems exist, but apparently in a more ad hoc fashion. The GPD since 1991 has had eleven functional departments that are responsible for ideological education, dissemination of the party line, pro-PLA propagandizing among the civilian masses, party building and youth work in the PLA, and management of GPD personnel. The political commissar at all levels holds equal status to the military commander or senior officer (shouzhang). 100 The CCP's party committee system has a separate chain of command from the GPD's political commissar system. The party committee representatives have two responsibilities: to watch for signs of "independent kingdoms," military corporateness, or general restiveness in the ranks; and to serve as the party's transmission belt for propagating its official policies, principles, and directives throughout the military system. 101 The discipline inspection committee system is a subsystem of the CCP in the military. Its principal function is to monitor the performance of party members in the military, but it also joins with the political commissar and the party committee in implementing campaigns. In the mid-1980s, for instance, discipline inspection committees carried out the party's rectification campaign. They even monitored the implementation of party directives by the GPD political system. In the 1990s, the three-tiered system conducted political campaigns in the PLA with themes such as maintaining the party's authority over the army, combating the "new enemies" of "peaceful evolution" and "bourgeois liberalization," and improving the quality of basic-level political work in the armed forces. 1 0 2 As previously mentioned, the inspection system has been deeply involved in dealing with corruption in the armed forces, a campaign, however, that has not gone well and has put pressure on party committee leaders to improve their performance. 1 0 3 Thus, the three systems should not be regarded as parallel and separate, but rather as interlocking and reinforcing. 1 0 4

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Summary The PLA's role in relation to political authority in China depends most of all on domestic political circumstances, the growth of military professionalism, and the persistence of the revolutionary legacy. As both a professional army and an army of a party-state, the PLA is a legitimate actor in the political process. In normal political circumstances, the growth of professionalism should contribute to the PLA's adherence to the party's absolute authority. At the same time, we can expect the PLA to be more assertive than ever before on behalf of its parochial interests. In a conflict-ridden situation, the army will probably again be called upon by the party to intervene in politics. That will create a tenuous condition that neither the party nor the military will find comfortable. Military intervention might signal the failure of the communist party-state political system. If intraparty elite conflicts over power and policy erupt after Deng Xiaoping's death, the PLA may be required to intervene and take sides despite the desires of senior officers. This may occur if contending groups appeal to it or if the longevity of the conflict endangers national security. In such an eventuality, military action might take the form of limited and rapid intervention, including the use of political pressure and troop movements. In any event, the military will probably support the legitimate group or the group whose policies conform most closely to its corporate interests. The possibility that the military might support a party faction with links to one of the military's own factions cannot be ruled out. This reflects a fundamental difference between the Chinese principle of party control and the Western professional ethic of civilian control over the military. So far as a succession struggle, if any, is concerned, it will not be a party-army problem, but a party problem that must be politically solved within the party. And should that happen, China's political development will either face gridlock or be forced to make a great leap forward into genuine competition. In the post-Deng period, the more vulnerable the Beijing leadership feels to "peaceful evolution" and "bourgeois liberalization," the more absolute the party's control over the army is likely to be. The more diffuse Chinese society is as the consequence of ongoing economic decentralization and internationalization, the more will the Chinese national-security policymaking process tend to be decentralized too. It may also be true, however, that if the formal organs of Chinese security policy become less effective and lack someone or some group that can function as a final arbiter of power, the PLA will become more vocal on security issues in both formal and informal ways.

Notes 1. Joffe, "The PLA and the Succession Question," pp. 150-151.

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2. Ibid, p. 152. 3. See, for example, a Xinhua (New Chinese News Agency) domestic broadcast on army building of March 13, 1993, which, citing as authority Deng Xiaoping and CMC chairman Jiang Zemin, gives equal attention to the army's military, ideological, and social work (FBIS-CHI 93-051, March 18, 1993, pp. 40-41). "Revolutionization" refers to dedication to the PLA's "spiritual" heritage, which includes self-sacrifice, selflessness, discipline, and optimism. The notion here, similar to the old view that humans always prevail over weapons, is that in battle, a fine revolutionary spirit will be of greater value to soldiers than firepower. (See "Carry Forward the Five Revolutionary Spirits," Jiefangjun bao, March 9, 1993, and Commentator, "Carry Out Modernization with the Five Types of Revolutionary Spirit," Jiefangjun bao, March 10, 1993, both in FBIS-CHI 93-051, March 18, 1993, pp. 41^12 and 42^13, respectively.) 4. For example, Jiefangjun bao, August 19, 1992, in FBIS-CHI 92-173, September 4, 1992, in which leftism is attacked as being even more dangerous than rightism (which opposed socialism and CCP leadership). Such a view is perfectly in line with that of the party leadership. 5. Cheng Hsiao-shih, Party-Military Relations, p. 5. 6. Latham, "China's Party-Army Relations," pp. 118-119. 7. Paltiel, "PLA Allegiance," pp. 797-798. 8. Shambaugh, "The Soldier and the State," p. 568. 9. Latham, "China's Party-Army Relations," pp. 107-108. 10. Ibid, p. 109. 11. "Is anyone here under sixty?" Deng asked his audience of CMC cadres in 1982. "The matter [of selecting and placing young professionals] can't keep being put o f f ' (Deng Xiaoping, p. 170). 12. To give a few examples, by 1983, the proportion of military technical officers among all military officers was 35.3 percent, compared with 11.4 percent in 1955 (Wang Qingrong et al., "Influence of High Technology on National Defense Development Strategy and Measures for Dealing with It," in Beijing Association of Defense Economics, Guofang jingji fazhan, pp. 399-400). By 1985, 82 percent of army group leaders had education above senior middle school, and 60 percent of first-grade leading cadres in military regions and the service arms had education beyond college (including 75 percent who had been through college or university training) (Deng Xiaoping, p. 172). 13. Text in FBIS-CHI 88-174, September 8, 1988, pp. 37-41. 14. Chang Hsiu-fen, "Major Reshuffle of China's Military Hierarchy: Fourth Generation of Military Officers Take Over Important Posts," Kuang Chiao Ching (Wide-Angle Lens; Hong Kong), September 16, 1995, in FBIS-CHI 95-198, September 29, 1995, pp. 31-32. 15. Editorial, "The Aspiration of the Army," Jiefangjun bao, July 4, 1988, in FBIS-CHI 88-138, July 19, 1988, pp. 29-30. 16. The date of the survey and the organization surveyed are not given (Li Kaicheng et al., "Three Kinds of Contradictory Mentalities on Army Reform," Jiefangjun bao, March 14, 1989, in FBIS-CHI 89-058, March 28, 1989, pp. 35-36). 17. Li and White, "The Army in the Succession," pp. 760-761. 18. Ibid., pp. 779-780; Lewis and Xue, China's Strategic Seapower, p. 122. 19. On the N D U ' s mission and graduates, see Liaowang (Outlook; Hong Kong) overseas ed„ no. 51 (December 21, 1992), in FBIS-CHI 93-018, January 29, 1993, pp. 21-25. 20. Jiefangjun bao, November 19, 1988, in FBIS-CHI 88-238, December 12, 1988, pp. 27-28; emphasis added. 21. Chi Haotian, "Strengthen National Defense Education and Increase the Sense of National Defense," Qiushi (Beijing), no. 3 (August 1, 1988), in FBIS-CHI 88-156, August 12, 1988, pp. 4 7 - 4 8 .

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22. Jing Shengzhi, "Give Correct Guidance to Interpersonal Relationships in Barracks Under Conditions of a Market Economy," Jiefangjun bao, July 14, 1993, in FBIS-CHI 93-149, August 5, 1993, pp. 29-31. 23. Li Chu, "Chi Haotian Personally Handles Smuggling Cases in the Military," Cheng Ming (Contend; Hong Kong), no. 191 (September 1, 1993), in FBISCHI 93-174, September 10, 1993, pp. 35-36. 24. Cheung, "Profits over Professionalism," p. 99. 25. See, for example, David Holley, "China Completes Its Biggest Shake-up of Military Chiefs," Los Angeles Times, December 16, 1992; Swaine, China, p. 15; and New York Times, January 28, 1993, p. 8. 26. Swaine, The Military and Political Succession, pp. 13-118. 27. Dreyer, ed., China's Strategic View, pp. 4 - 5 . 28. Tseng Hui-yen, "China's Military Power Gradually Falls into Hands of 'Shandong Faction,'" Lien Ho Pao (United Daily; Hong Kong), October 21, 1994, in FBIS-CHI 94-204, October 21, 1994, pp. 34-35; Yen Hua, "Jiangsu Shandong Factions Carve Up Military Power: Inside Story of Unusual PLA Top-Level Changes," Chien Shao (Hong Kong), February 1, 1996, in FBIS-CHI 96-036, February 22, 1996, pp. 25-28. 29. Swaine, China, p. 25. 30. Joffe, "The PLA and the Succession Question," pp. 154-155. 31. Ibid. 32. Ibid., pp. 156-157. 33. Li and White, "The Army in the Succession," pp. 758-759. 34. Ibid. 35. See Ostrov, Conquering Resources, pp. 9 7 - 1 0 0 . Ostrov mentions a Chinese source that claims the party CMC is larger than the state CMC, but the source has low credibility. 36. Wang Zhao, "The Significance of Setting Up the State Central Military Commission," Zhongguo Qingnian bao (Chinese Youth; Beijing), July 31, 1982, in U.S. Consulate-General, Hong Kong, Joint Publications Research Service, China (hereafter JPRS-CAR), November 15, 1982, pp. 23-25; and Zhao Qi's report, "Interview with Yang Dezhi and Other NPC Deputies on the Occasion of the Birth of the State CMC," Liaowang, no. 7 (July 20, 1983), in FBIS-CHI, August 23, 1983, pp. K10-K13. 37. Pollack, "Structure and Process," pp. 160-161. 38. Yan Shankui, Dang dui jundui, p. 175. 39. Zhou Yingru, "Inside Story of Personnel Reshuffle in Central Military Commission," Ching Pao, November 1, 1995, in FBIS-CHI 96-002, January 3, 1996, pp. 31-33. 40. Ibid. 41. On Jiang's frontline visits, sometimes to remote posts, see Patrick E. Tyler, "Control of Army Is Crucial Issue for China Rulers," New York Times, online ed., February 23, 1997. Concerning the promotions, see China News Digest, online ed., January 12, 1966, citing a report in the South China Morning Post (Hong Kong). 42. Yan Shankui, Dang dui jundui, p. 175. 43. See Lewis, Hua, and Xue, "Beijing's Defense Establishment," pp. 90-91. 44. Pollack, "Structure and Process," pp. 163-164, 167. 45. Swaine, The Role of the Chinese Military, pp. 41, 43. 46. Ibid., p. 44. 47. Ibid., pp. 52-53. 48. Xinhua broadcast, June 11, 1985, in FBIS-CHI 85-113, June 12, 1985, pp. K1-K2.

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49. Pollack, "Structure and Process," pp. 178-180. 50. Kuan Chuan, "Factional Fighting in the Military Intensifying," Cheng Ming, no. 186 (April 1993), in FBIS-CHI 93-066, April 8, 1993, pp. 21-22. 51. Liu Hsiao-hua, "Can Jiang Zemin Firmly Control the Military?" Kuang Chiao Ching, no. 254 (November 16, 1993), in FBIS-CHI 93-220, November 17, 1993, pp. 4 2 - 4 5 . See also Hsin Pao (Hong Kong), December 11, 1992, in FBISCHI 92-240, December 14, 1992, pp. 28-29. 52. Hsin Pao, December 11, 1992, in FBIS-CHI 92-240, December 14, 1992, pp. 28-29. 53. Zhu, "Political Work in the Military," p. 121. 54. Ibid. 55. Ibid., p. 122; Latham, "China's Party-Army Relations," pp. 112-113. 56. Lo Ping and Li Tzu-ching, "Jiang Zemin Enhances Political Standing of the Generals, Now Numbering 10," Cheng Ming, no. 191 (September 1, 1993), in FBIS-CHI 93-171, September 7, 1993, pp. 4 6 - 4 8 . 57. Ibid. 58. Cheung, "Profits over Professionalism," pp. 88-89. 59. Lo Ping and Li Tzu-ching, "Jiang Zemin Enhances Political Standing." 60. The information here and in the remainder of the paragraph relies on Ostrov, Conquering Resources, pp. 68-70. 61. So far as funding and managing most weapons development programs are concerned, the Equipment Bureau takes the lead in cooperation with relevant defense industrial factories and the supervisory office within the State Council (Swaine, The Role of the Chinese Military, p. 49, esp. note 35). 62. Han Huaizhi, China Today, pp. 121-122. 63. Luo Fengbiao, "Development of Defense Science," pp. 12-13; Yan Xuetong, "Balance Between Military and Economic Modernization," pp. 10-11. 64. According to the above sources (ibid.), a feasibility analysis of arms imports is required. Joint groups are formed of experts from military, industrial, and research institutions. These joint groups, under the supervision of COSTIND, are to study the technical performance, specifications, quality, scope of supply, training, and software of the imported items. They also make field surveys abroad that may entail visits to the United Kingdom, the United States, Germany, and Sweden. 65. Yan Xuetong, "Balance Between Military and Economic Modernization," pp. 12-13. 66. Gallagher, "China's Military Industrial Complex," p. 997. 67. Ibid., pp. 998-1000. 68. Swaine, The Role of the Chinese Military, pp. 14-15. 69. Ibid., p. 32. 70. Hamrin, "Elite Politics," pp. 89-90. 71. The GSD currently has five deputy chiefs, with responsibilities in the following areas: regular troop and militia training and equipment; operations; administration; intelligence and foreign affairs; and political work (Swaine, The Role of the Chinese Military, p. 32 and note 33). 72. Ibid., pp. 29, 33. 73. Ibid., pp. 33-34. 74. Zhang Yining, "An Inquiry into Peacetime National Defense Buildup: Roundup on the Discussion by the Military Theory Group at the Symposium Marking the 10th Anniversary of the 3rd Plenary Session of the 11th CPC Central Committee," Jiefangjun bao, January 31, 1989, in FBIS-CHI 89-032, February 17, 1989, pp. 34-35. 75. Cheng Kuaile and Zhao Meike, "Debate on the 'Value-Added-Type' National Defense," Jiefangjun bao, September 4, 1987, in FBIS-CHI 87-182, September 21, 1987, pp. 26-27.

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76. Lo Ping, "CPC Military Attacks Ministry of Foreign Affairs," Cheng Ming, no. 201 (July 1, 1994), in FBIS-CHI 94-143, July 26, 1994, pp. 32-36. 77. For an excellent analysis of the book, see Munro, "Eavesdropping on the Chinese Military," pp. 355-372. 78. Men Lin, "Generals Jointly Sign Petition on Yinhe Incident," Ching Pao, no. 10 (October 5, 1993), in FBIS-CHI, October 13, 1983, pp. 41-42. 79. Lo Ping, "CPC Military Attacks Ministry of Foreign Affairs." 80. Yang, "Preface," in Yang et al., eds., Chinese Regionalism, p. viii. 81. Joffe, in Yang, "Regionalism in China," p. 45. 82. Dreyer, "Regionalism in the People's Liberation Army," p. 2. 83. The central features of Chinese warlordism in the 1920s and 1930s are described as follows: (1) The warlord forces often controlled specific territory, from which they obtained the bulk of their recruits. (2) They worked together primarily on the basis of informal patron-client ties between officers and ordinary soldiers, rather than through loyalty to abstract political principles or professional concepts of military discipline and institutionalized authority. (3) They relied upon locally raised taxes, transit fees, or simple confiscation at gunpoint for material substance, rather than upon revenues received from central or local government (see Swaine, "Chinese Regional Forces," p. 61). 84. Dreyer, "Regionalism in the People's Liberation Army," p. 5. 85. Ibid., p. 6. 86. Joffe, "Regionalism in China," p. 46. 87. According to William Whitson's analysis, during the twenty-year development of the communist movement prior to 1949, only 68 among nearly 500 members of the PLA leadership shifted from one field army system to another. Such long service together within a single unit or field army, and the bonds of comradeship produced by shared combat experiences against warlords, Japanese troops, and the Chinese Nationalists, provided the basis for strong personal loyalties and factional affiliations (Whitson, The Chinese High Command, p. 505; see also Swaine, "Chinese Regional Forces," p. 62). 88. Dreyer, "Regionalism in the People's Liberation Army," pp. 7 - 8 ; Joffe, "Regionalism in China," pp. 4 9 - 5 0 . Similar to Chen Caidao's action was Lin Biao's attempt to reinvigorate the PLA's revolutionary traditions after the Cultural Revolution. This was mainly a case of "court conspiracy" rather than an assertion of regional power. See Womack, "Warlordism," p. 35. 89. Swaine, China, pp. 62-63. 90. Throughout the 1980s, Guangdong Province faced a shortage of sufficient staple crops and tried to buy rice from Hunan. But the Hunan authorities refused to supply Guangdong at the market price. Guangdong provincial authorities retaliated by trying to circumvent the Hunan government, offering higher prices directly to local producers and arranging for their own transport. The Hunan government is said to have responded by positioning troops along its borders in an attempt to forbid the movement of rice, a move that was purportedly countered by the mobilization of Guangdong troops (Goodman, "The PLA in Guangdong Province," pp. 209-210). 91. Dreyer, "The PLA and Regionalism," pp. 263, 271. 92. Yu Kien-Hong, "Potential Areas of Chinese Regional Military Separatism," pp. 464-498. 93. Jiao Wu and Xiao Hui, "Modern Limited War Calls for Reform of Traditional Military Principles," Guofang Daxue xuebao (National Defense University Journal), n o . l l (November 1987), in JPRS-CAR 88-037, July 12, 1988, pp. 49-51.

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94. Li Kaicheng et al., "Three Kinds of Contradictory Mentalities on Army Reform," Jiefangjun bao, March 14, 1989, in FBIS-CHI 89-058, March 28, 1989, p. 35. 95. Hong and Jacobs, "The PLA and Regionalism," p. 169. 96. Guo Chungsheng, "Three Changes in the Logistics Work of the Chinese Army," Liaowang, overseas ed., no. 35 (August 29, 1988), in FBIS-CHI 88-175, September 9, 1988, pp. 4 0 - 4 2 . 97. Swaine, "Chinese Regional Forces," pp. 64-65. 98. Dongxiang (Trend; Hong Kong), August 1996, reprinted in translation in Inside China Mainland, vol. 18, no. 11 (November 1996): 39-41. 99. Swaine, "Chinese Regional Forces," p. 66. 100. Shambaugh, "Soldier and State," pp. 544-556. 101. Ibid., p. 549. 102. Ibid., p. 553. 103. See the speech at the All-Army Discipline Inspection Conference in January 1995 of Yu Yongbo, chief of the GPD, who pointed out that "if a serious problem occurs in a unit, not only parties involved should be investigated and punished, the responsibility of the party committee leaders should also be affixed" (Jiefangjun bao, January 25, 1995, p. 1, in FBIS-CHI 95-035, February 22, 1995, pp. 28-29). 104. Shambaugh, "Soldier and State," p. 550.

3 Security Policy Since 1980: An Overview

Distinctive Features of the New Foreign-Policy and Security Perspective China's rise as a trading state, rapid economic development, increasing military budget, and importance in international fora raise questions about its international objectives. What is China up to? Analysts of PRC security policy range widely in their assessments. Some see China as an ambitious power out to acquire the capabilities to dominate Asia. Others consider China a weak state with relatively benign intentions, determined to gain acceptance as a regional power but mainly absorbed with domestic problems. Across the spectrum, analysts face the common challenge to interpret seemingly contradictory foreign-policy behavior, where China is at once conciliatory and militaristic. Rather than see the contradictions as a "calculated ambiguity to mask [China's] ambitions," 1 we suggest that the dual characteristic in PRC national-security policy of nationalism and internationalism, both of which are rooted in domestic political priorities (in a word, the historic dilemma of how to build a strong, stable China), offers a more appropriate framework. That framework enables us to see that while Chinese internationalists and nationalists share certain norms and perspectives in foreign and military affairs, they differ in their policy preferences with respect to the fundamental question, What is the optimum strategic environment that will enable socialist modernization to succeed in China?2 In exploring some major themes of the PRC's world outlook and security policy from 1980 to 1997, we emphasize events and issues that bear on the PLA's mission. Chinese

Realism

The outlook and content of PRC foreign policy are based on traditional realism. 3 The prospects for advancing Chinese interests against those of rival states and in partnership with others are central to their work. The classic working concepts of realism—the national interest, power politics, and

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g e o p o l i t i c s — d o m i n a t e these analyses. In the r e f o r m period, a n u m b e r of P R C analysts have begun using p o s t - C o l d War concepts such as interdependence, geonomics, global norms, and international c o m m u n i t y . 4 Even so, their assessments m a k e clear that national sovereignty, in particular the principle of sovereign equality, r e m a i n s the cardinal e l e m e n t of international affairs; that state-to-state relations is the m a i n arena of u s e f u l foreign-policy activity; and that while regional and global m e c h a n i s m s , and international law, h a v e key roles to play in conflict resolution and rule building among states, the international system is still one of states w h o s e national interests are p r i m a r y and w h o s e internal c o n d u c t m u s t be respected. 5 Moreover, as one senior and well-traveled P R C analyst has written, a country's size counts, and the concept of sovereign equality should not omit that "big countries a s s u m e special responsibilities in world affairs." 6 T h e important qualification that Samuel S. K i m adds, however, is that in China's n e w international order, such responsibilities extend outward but not inward, to include h o w the state treats its o w n citizens. In that area, the insistence on sovereignty provides a defense against "foreign interference." 7 P o s t - C o l d War Chinese realism may be seen in B e i j i n g ' s approach to Asia Pacific regional cooperation, which heavily favors bilateral over multilateral f r a m e w o r k s . Self-interest dictates an active C h i n e s e role in the e i g h t e e n - m e m b e r A P E C , e v e n to the extent of allowing H o n g K o n g and Taiwan (as "Chinese Taipei") places at the table. But as Jiang Zemin said at the 1993 Seattle c o n f e r e n c e of A P E C leaders, China wants to cooperate only in "an open, flexible and pragmatic f o r u m and consultative body, instead of a close[d], institutionalized economic group." A P E C fits that bill p e r f e c t l y : It has no leader, no f o r m a l structure, and thus has less c h a n c e of the United States "dictating" or the Japanese " d o m i n a t i n g " the agenda. 8 Otherwise, China is very cautious about e c o n o m i c cooperation and even m o r e so about security cooperation, in both cases p r e f e r r i n g bilateral diplomacy, which o f f e r s C h i n a the best p r o s p e c t f o r p r o m o t i n g its influence. Neither Chinese realism nor nationalism can allow decisions affecting the P R C ' s security to be entrusted to multilateral organizations, where not only might C h i n a ' s influence be diluted, but also its internal scars possibly exposed to international examination. For example, Foreign Minister Qian, speaking in Singapore in 1993, noted p r o p o s a l s to establish multilateral m e c h a n i s m s f o r strengthening regional-security cooperation and reducing disputes. C h i n a ' s alternative, he said, was to "start off with bilateral and regional security dialogues of various f o r m s " to build confidence. 9 Consistent with that approach, China has resisted multilateral negotiations concerning sovereignty over the disputed Spratly Islands in the South China Sea and rejected representation for Taiwan in regional bodies that have political and security agendas, such as the prime ministerial conferences under the nine-member Association of

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Southeast Asian Nations (ASEAN: Indonesia, Thailand, Philippines, Singapore, Malaysia, Brunei, Vietnam, Laos, and Myanmar). Likewise, as mentioned earlier, China's policy during the nuclear standoff on the Korean peninsula was pragmatic and largely self-interested: China rejected a multilateral approach in favor of maintaining a "two-Koreas" policy—a lucrative commercial relationship with South Korea and political ties with North Korea. China concluded a number of agreements with neighboring countries to strengthen border security (see below); but these successes for its "five principles of peaceful coexistence" have not extended to territory considered Chinese. China has suppressed Buddhist opposition to Chinese rule in Tibet, has overturned British concessions to democratic rule and social pluralism in Hong Kong, and has maintained a sovereign right to use force to regain Taiwan. Nevertheless, Chinese leaders have increasingly come to accept the benefits of regional and global cooperation for promoting the national interest, as will be seen below and in later chapters. In arms control, Beijing has withdrawn its opposition to the NPT and the CTBT on nuclear weapons. It has accepted some kinds of confidence-building measures (CBMs) that promote border and maritime security. Regional economic development is a second example. China's economic reforms, Gaye Christoffersen has shown, paved the way for creating a new network of trade and investment linkages connecting its northeast region with the Russian far east, South Korea, and Japan. Strategically, this put China in a pivotal position to promote economic interdependence as an alternative to traditional balance-of-power politics. 10 Third, China has become an important player in the ASEAN-led process of open regionalism and political dialogue. None of these examples detracts from the general observation that the national interest is China's guiding light; China is no different from any other state in thinking nationally before acting globally. Nonetheless, multilateralism has a place in the PRC's foreign policy as Chinese leaders find that it is necessary to being an influential power. No War The second distinctive characteristic of China's national-security policies is that they stem from periodic reappraisals of the "epoch." Since 1978, reappraisals seem to have occurred on three occasions. The first took place at the time the economic reforms began. It revolved around Deng Xiaoping's fundamental judgment, evidently made even before he was restored to his top-level political posts in 1977, that a major war was not going to break out. War with either of the superpowers was now "avoidable" and no longer, as in Mao's time, "unavoidable" or (later) unavoidable but "postponable." 1 1 Hence, the external situation was favorable to proceeding with his plans for rapid economic change. 1 2 It may be that Deng deliberately

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devalued the Soviet threat, with its implications for diverting resources to weapons modernization, in order to press ahead with his economic program. China's frequent calls between 1978 and 1982 for an "international united front" against Soviet hegemonism that would include the United States (with which China had normalized relations in 1978) probably reflected the military-industrial complex's evaluation, not Deng's. But that did not keep him from playing the Soviet threat card. Having visited the United States early in 1979, Deng saw opportunities for obtaining U.S. economic and technical assistance by talking up China as an ally. 13 In fact, the new party leadership under Deng quietly reevaluated its one-sided antiSoviet position, even though China publicly continued to cite "three major obstacles" to normalization of relations: Soviet intervention in Afghanistan, Vietnam's occupation of Cambodia, and Soviet troops deployed along the Sino-Soviet border. 14 Relations between the PRC and the United States, while occasionally disrupted by disputes over Taiwan, trade, and multilateral aid to China, continued to develop on the economic and military sides, but not enough to justify considering Washington a strategic partner. In September 1982, Beijing began emphasizing an independent foreign policy and, still later, the aforementioned "peace and development line" in world affairs. 1 5 Among the key elements of the new outlook were steps to reduce tensions with the Soviet Union (but without alienating the United States) and a reevaluation of the Cold War and China's revolutionary line. Beginning in 1981, Sino-Soviet diplomatic and nongovernmental contacts gradually increased even as the polemical war continued. 16 Sino-Soviet trade, although very small, began to rise in the first half of the 1980s. 17 Gorbachev's Vladivostok speech in mid-1986 capitalized on China's openness—in fact, it may even have been at China's initiative18—to suggest further steps to normalize relations, leading eventually to his trip to Beijing in May 1989 and the resumption of relations between the two communist parties. 19 The resulting redirection of Chinese foreign policy was toward having normal relations with all governments and social systems, even "hegemonist" ones. 2 0 Strategically, the two superpowers were said to be in a standoff; nuclear war had become unthinkable. The large-scale U.S. program of modernizing strategic forces must have further reduced China's sense of vulnerability, for by 1983, its analysts were already suggesting that the superpowers were militarily in relative balance. 2 1 Economically, they were said to be in decline. The superpowers therefore needed to focus on domestic problems, helping create relative international tranquillity and opportunities for new interdependencies. China should capitalize on these changes and the emerging global multipolarity to step up the pace of economic reform. 2 2 Party leaders formally concluded in 1984 that "no major world war would occur in the coming 10-15 years and that the PL A would have ten or more years for improving its first-generation strategic weapons

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and developing the second generation." 2 3 Again, the expectation of "no war" dictated full speed ahead on the economy: We hope [said Deng] that for at least twenty years there will not be a war, and hope even more for no war in the next seventy years. Then w e can have time calmly to carry out our socialist four modernizations. . . . If w e truly have twenty years, thirty years without war, no war in fifty years, then this war has the possibility of being avoided. 2 4

On at least two other occasions in 1985, Deng repeated this message. He told a visiting Japanese group that "although there is still the danger of war, the forces that can deter it are growing." And to the CMC, he said: "As long as the forces for peace continue to expand, it is possible that world war will not break out for a fairly long time to come, and there is hope of maintaining world peace." 2 5 The second reappraisal occurred during and after three major gatherings of scholars and specialists between December 1986 and May 1988. The question whether or not fundamental change in the world order had occurred—and if so, what were its chief characteristics—was fully aired. 26 The majority view was that the era of peace and development had already arrived—in fact, could be dated from the successes of revolutionary movements in the 1970s. As Deng had said in 1985, the "globally strategic issues" now were peace and economic development—the first, an East-West matter; the second, a South-North matter. "In summary, it is the four words, East-West-South-North. The South-North question is the central one." 2 7 In contrast with the previous epoch, various specialists said, the key struggle now would be "energetically to raise each country's levels of economy, science and technology in a peaceful international environment." 2 8 The old view of the "supplant-ists"—that is, those who had for so long argued that socialism would soon supplant capitalism—now would itself have to be supplanted by "peaceful coexistence-ism," namely, the view that the two systems will coexist for a long time, competing while further developing along their own paths. The majority view fits with our description of internationalism; but it was not the only such view. Others at the conferences who accepted the "peace and development" future ranged from more to less optimistic about the "struggle" and competition that would be required to get there. On the crucial question of the likelihood of a new world war, however, there was general agreement. Economic multipolarity and other forces were increasing the prospects for peace; nuclear war was now universally recognized as being utterly destructive and unwinnable, and therefore would not be launched. The nationalist view, represented mainly by the military scholars at these conferences, was that peace and development would not come about

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naturally. They argued that "peace can only be won through struggle," hence the attentiveness to factors of world instability and the threat posed by hegemonism. 2 9 The international situation still contained important tensions in the Third World, in North-South relations, and in the capitalist countries. Many "preconditions" of war were also present, including conflicts over resources and ethnic and religious conflicts in addition to the superpowers' competition and their continued possession of huge arsenals. A major war was avoidable but remained a possibility, and "people" (meaning the internationalists) should not speak only of how a world war cannot be fought {da buqilai).30 The military scholars therefore concluded: "The [CCP] center and the CMC did not eliminate and could not have eliminated the danger of a new world war, nor did they declare [as the other school put it] that 'world war has long since disappeared from the world stage.'" 3 1 The mid-to-late 1980s were also notable for analyses that cut to the heart of a new approach to world affairs. A number of sacred cows in Mao's foreign policy were abandoned, though without ever mentioning the chairman directly. Not until the late 1980s did the key elements of the réévaluation become public: criticizing of various dogma on the collapse of capitalism, inevitable war among capitalist states, and the ultimate triumph of socialism; questioning the role of revolution in promoting global change; questioning also specific Cold War policies; and discarding the conviction that a new world war might soon occur. 32 Huan Xiang, one of the main crafters of these views in the State Council, wrote that China had a breathing space of about ten years in which to catch up with its neighbors. It must not waste time; otherwise, it will "fall very far behind." 3 3 A major gathering of top foreign-affairs specialists in Beijing at the end of 1990 endorsed these reassessments. Their key recommendations were to make economic development, with technology and education as the catalysts, the core of a new external outlook; to emphasize zhoubian (literally, "omnidirectional") diplomacy and South-South relations; to promote friendly ties with Taiwan while being alert to "the plotting behind [Taiwan's] 'flexible foreign policy'"; to foster economic cooperation with the industrialized world while guarding against its "peaceful evolution" schemes; and to upgrade military rapid-response and naval forces. 3 4 It seems fairly certain that the internationalist and nationalist assessments made on these occasions significantly influenced official PRC policy in the 1990s. Top Chinese leaders embraced a number of the presentations, even down to the precise wording, and incorporated them in public statements at home and abroad. To be sure, the impetus for the conferences, and the conceptual framework of discussions, emanated from Deng Xiaoping's (and perhaps other top leaders') own reappraisal of war and peace. 3 5 According to Chinese sources, it was Deng who, following an enlarged meeting of the CMC in June 1985, put forth the requirement of

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policy changes in international and military affairs. The shift, he reportedly said, means that military construction should change from preparing to fight a war at any time, which was [Mao's] leading idea of the past, to the track of peacetime construction. Concretely speaking, we must fully utilize this peacetime period in which wars cannot be fought and, f o l l o w i n g the premises of the overall situation of national economic construction, seize the time to perform well all the basic tasks of the troops, energetically reorganize the armed forces, improve weapons and equipment, train the cadres well, establish and strengthen the entire system of regulations, and put right all relationships in the armed f o r c e s . 3 6

As we discuss in Chapter 4, Deng's strategic shift also encompassed new CMC defense guidelines for the PLA, from preparation for large-scale war to local and regional conflicts. The strategic specialists refined and gave substance to Deng's prospectus, as when Huan Xiang said that the prospects for a long-term period of peace remain good (the internationalists' idea), but (quoting Deng) the world is now in "an era of struggling for peace and development" (the nationalists' view). Consequently, while the chances of a war breaking out are "practically nonexistent" (the internationalists), peace and development have not arrived yet (the nationalists). "Competition and coexistence" will be the chief characteristics of the era, Huan concluded. 37 Of course, strategic theory had to pass the test of practice, which in China's case was provided by the Soviet collapse and the Gulf War. The third stage of strategic reappraisal followed those events.

The Soviet Collapse and the Gulf War The Collapse of the Soviet Union The collapse of the USSR in 1991 was bittersweet for the PRC leadership. On one side, it boosted China's standing as the only remaining major socialist state. It seemed to demonstrate the truth of the CCP's warnings to China's "liberals" as well as to foreign socialists that Mikhail Gorbachev's reforms, combining perestroika (restructuring of the economy) and glasnost (opening of the political system), had gone too far and that anarchy, not development, awaited China if it should take that path. In fact, the Soviet collapse may even have enhanced Chinese pride, to the point of arrogance, about their way of achieving socialist modernization—and if so, not for the first time—inasmuch as Gorbachev's last visit to Beijing, in May 1989, coincided with the student and worker demonstrations, causing the Chinese leadership immense embarrassment. It was widely known that Beijing initially reacted with elation when Gorbachev was briefly overthrown

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in August 1991; there were even rumors that certain Chinese officials had connived with the coup leaders. Gorbachev's restoration to power did nothing to dim Chinese hopes of his final rejection, which came before the end of the year over his plan (which, again, Beijing leaders must have regarded very critically) to conclude a new treaty with the republics that would have radically decentralized political and economic power. 38 Yet Gorbachev's passing, and Yeltsin's accession, hardly constituted a Chinese victory. International socialism had already suffered a devastating defeat in Central Europe as the result of the Soviet reforms. In Romania, the violent overthrow of communist authority and China's longtime ally, Nicolai Ceau§escu, shook the Beijing elite especially hard. Now, with the disembodiment of the Union itself, China was dealt a still-deeper blow. There was little left of socialism to lead. Moreover, China's border and internal security were menaced by new forces that Gorbachev's glasnost had unleashed. It had four new Islamic neighbors with which to contend (see below), all potential sources of ethnic unrest; and Mongolia was showing signs of embracing political reform. 3 9 Most urgently, China could no longer count on the USSR to deter U.S. hegemonism on behalf of the socialist community. To the contrary, as the Gulf War showed, the new Russia was likely to join forces with the United States on international issues precisely in order to ingratiate itself with the West. In all, the Soviet collapse looked to be a short-term victory for Chinese nationalism but a longterm defeat for internationalism. The demise of the USSR had one other important meaning for China's world outlook, and this had to do with the failure of Gorbachev's experiment with glasnost. At least some Chinese analysts had argued, prior to the Tiananmen crackdown, that democratization was a necessary feature of the drive for economic and scientific development, and therefore of strengthening national power. 40 One analyst specifically attributed the reduction in U.S.-USSR tension to Gorbachev's "new thinking" about Stalinist policies and his promotion of democracy with economic development. 4 1 Such an analysis naturally could not be sustained after mid-1989, for Gorbachev's "model" had officially become a negative one for China. The Soviet Union still received credit for ending the Cold War; but this was attributed to its reductions and withdrawals of military forces in Europe, and not to democratization. 4 2 Peace and development would have to take place without democratization. The Gulf War was an opportunity for the Beijing leadership to shake off criticisms of the Tiananmen crackdown and strengthen China's image as a great power and responsible member of the international community. 43 By consistently stating, and voting, its opposition to Iraq's invasion of Kuwait, China was able to demonstrate its importance in international security. And by abstaining on, and therefore neither obstructing nor approving, the Security Council's resolution backing "Desert Storm's" attack

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on Iraq, Beijing simultaneously accomplished two things. It earned positive marks from the Western coalition that, along with China's promise to sign the NPT, resulted in termination of Japanese and Western sanctions (except for U.S. military aid) against China and resumption of diplomatic intercourse. Second, China's independent behavior at the UN probably also earned credits from the more radical parts of the Arab world, since China could hope to show it was not merely a "tool" of the West. The conduct of the war clearly made its mark on Chinese strategists and military planners, mostly, but not entirely, in a negative way. Much more will be said about this subject in later chapters. For now, we can make a few brief observations. First, it showed that the "new world order," far from signaling the onset of a long peace, would more probably result in the further regionalization and destabilization of international conflict. The war would also no doubt inspire the United States to operate audaciously as the solitary superpower. Second, the war's quick and decisive nature, featuring high-technology warfare, was surely a devastating blow to Maoist notions of "man over weapons." But it provided additional ammunition to those in the PLA, especially the air force and navy, who had for some time been arguing for creating a more high-technology, regionally capable armed forces. We quoted Deng himself as saying, in 1991, that China would have to rely on advanced military capabilities as well as on a strong economy to fend off the "hegemonists." This did not hand the PLA a blank check; but it did pave the way for special appropriations to procure improved air, naval, and nuclear weapons. Third, the war showed the new importance of the United Nations in Chinese thinking. A pessimistic reading for China is that the UN was solidly in the Americans' camp. Possibly, Beijing strategists considered that the UN Security Council's willingness to sanction operations to protect the Kurdish minority in Iraq might be applied one day to Tibet and Hong Kong. (Subsequent UN operations in Bosnia and Somalia underscored the greatly increased "new world order" role of the UN in intervening in what were once the internal affairs of states.) More positively from China's perspective, the war was a unique event, in that the combination of circumstances present in the Gulf were unlikely to recur—a baldfaced aggression across internationally accepted frontiers; a threat to a basic resource on which the industrialized world depended; and the Security Council's quick consent to forming a broad-based international coalition in support of the United States. The war was very costly too, and even the United States had to look to allies to finance it. Hence, China might actually have greater latitude than before to act in pursuit of its regional interests. Doubtless spurred by the Gulf War and the Soviet collapse, China's leaders were forced to modify the strategic assessments of the 1980s to

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take account of at least three new considerations. First, world affairs was going to be much less predictable and stable than during the Cold War. Second, absent the Soviet factor and puffed up with victory in the Gulf War, the United States was likely to play world policeman with a new vengeance. Third, China could no longer hope to take advantage of the strategic triangle and would have to discover different mechanisms for advancing its interests. None of these factors, however, need reshape or reprioritize China's domestic agenda; in fact, it appears, they provided further inducement to accelerate the timetable of modernization, military as well as industrial and scientific.

The Revised Outlook of the 1990s The New (International)

Order

The Chinese believe in a "new international order." It is not the new world order of President George Bush, which they see as "a barely concealed strategy for retaining American dominance." 4 4 To accept such an order would be to yield to U.S. triumphalism about a unipolar world, of the sort that was commonly heard in post-Gulf War Washington. In the Chinese version, world politics in the 1990s is in transition. The post-Cold War world political "pattern" (geju) has yet to take shape; the overall "international situation is tumultuous and unstable." 4 5 "Contradictions" still abound, but they are now among and within regions, increasing the likelihood of smaller and larger regional wars; between the developed and underdeveloped countries (North and South); between competing economies and economic systems (among the major capitalist countries and between East and West); and between great and smaller powers 4 6 As Li Peng said in 1991, just after Iraq's defeat, "the world has become even more turbulent," and the main international tension is between global relaxation on one hand and hegemonism and power politics on the other. 47 Yet, he and others also said that increasing multipolarity still characterizes world affairs. In fact, the one superpower is in decline, its Gulf War victory notwithstanding, and new poles of international power are emerging. 48 For some PRC analysts, China is among the poles, usually the fourth or fifth behind the United States, the European Union (EU), Japan, and possibly Russia. China's value to world order thus has greatly increased in this view, as have its opportunities to exploit opponents' contradictions (the nationalists' domain) and promote economic development (the internationalists' domain). 49 In such unstable but promising times, what should China's mission be? First, China must accelerate socialist modernization, relying on forces of global and regional economic integration and on foreign assistance, but

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without allowing foreign control. Second, China must put forth its own ideas about a new international order. The five principles of peaceful coexistence are proposed as its "foundation." Third, at a time when world socialism is in retreat and PRC-U.S. relations have taken a turn for the worse (see below), China must secure its own neighborhood. Fences need to be mended with Asian countries; but at the same time, China should not flinch from using military instruments to assert its regional interests. Fourth, China must continue to speak out on behalf of that portion of the Third World that has not experienced a new order at all. As in the past, the poorest countries are likely to be the most sympathetic to China's stances on regional and global issues. Third World debt, poverty, and conflicts make world peace elusive. The international community is obliged to provide greatly increased assistance, but on the basis of equal exchange, mutual benefit, and respect for ideological and cultural diversity. 50 Good-Neighborliness As foreign-policy specialists had urged, PRC leaders gave attention to China's periphery, whose security was essential to having breathing space for economic development. Zhoubian diplomacy in the 1990s amounted to a highly active and visible diplomatic offensive to recover China's international standing and capitalize on its relatively successful fence-sitting during the Gulf War. 51 Aside from numerous high-level visits by Li Peng and other leaders throughout Asia, China established diplomatic relations with Singapore (1990), Brunei (1991), South Korea (1992), and the four Central Asian states of the former U S S R (Kazakhstan, Kyrgyzstan, Tajikistan, and Turkmenistan; 1 9 9 2 - 1 9 9 3 ) . Beijing also normalized relations with Mongolia and Laos (1990) and with Vietnam (1991); signed a boundary agreement with Laos and agreed with Vietnam to settle border disputes peacefully (1992); and restored relations with Indonesia (in 1990, after a suspension of twenty-three years). Ties with India, so badly hurt by the unresolved issues of the 1962 border war, India's close relations with the Soviet Union, and Sino-Pakistan nuclear and missile cooperation also improved. This took place over the course of three official visits by prime ministers in 1988 (when Rajiv Gandhi visited Beijing), 1991 (when Li Peng made the first visit in thirty-one years by a top Chinese leader to New Delhi), and 1993. The two countries signed agreements to put a variety of C B M s in place relating to border security (such as reduction of border forces and prior notice of military exercises), to establish principles for a border settlement, and to improve trade and telecommunications. In November 1996, these exchanges culminated in the first visit to India by a Chinese president. Jiang Zemin signed a preliminary border agreement that strengthened the Sino-Indian C B M s with mutual assurances against the use of force and troop withdrawals along the border. 52

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Chinese diplomacy was particularly active in Northeast Asia. Reaching modus vivendi with Japan and Russia became crucial as relations with the United States became more embittered. With Japan, trade and investment leaped ahead in the early 1990s. Two-way trade in 1989 came to over $16.5 billion. After a drop-off due to the Tiananmen "incident," trade rebounded to $29 billion in 1992. By that time also, large Japanese loans and development aid to China resumed. 5 3 Japanese investment in China, which had only totaled around $2.2 billion from 1985 to 1989, rose to nearly $9 billion by 1994. 54 In diplomacy, the highlight was Beijing's hosting of a historic visit by Japan's Emperor Akahata in 1992, the first ever by a Japanese emperor. The emperor's offer of an apology for the World War II aggression against China was widely anticipated. Officially, Beijing was pleased with Akahata's words and did not raise the issue (as the two Koreas did) of compensation for the victims and their families. China and Russia took a number of unilateral and bilateral steps to diminish any near-term sense of threat by either country. These included demilitarizing the border areas under agreements reached in 1990, 1992, and later on troop pullbacks; Russia's dismantling of intermediate-range missiles under the 1987 Intermediate-Range Nuclear Forces (INF) Treaty; sharp cutbacks by Russia of its nuclear warheads under the 1993 Strategic Arms Reduction Treaty (START II) with the United States; agreement on CBMs based on exchanges of military information; and an agreement between Jiang Zemin and Boris Yeltsin in 1994 on no-first-use (NFU) of nuclear weapons and the ending of nuclear targeting of each other's country. Military cooperation between Russia and China reached new heights in the 1990s (see Chapter 7). Russia and China also cooperated to make possible the simultaneous entry into the UN of the two Koreas in September 1991. This development could have been possible only through their combined pressure on North Korea, which had fervently opposed such a step in the past. The revitalized connection with Russia is a classic example of realist diplomacy and geopolitics. Their historic conflicts and mutual suspicions have not prevented them from seeking, and finding, common ground on the basis of shared interests. Both have internal conflicts with ethnic minorities that they want to insulate from outside interference. Both resist outside (mainly, U.S.) influence over their domestic political systems and economies. Both have strong military-industrial complexes that have considerable impact on arms-control issues. Russia needs Chinese consumer goods and hard currency, while China needs Russia's military technology. 55 When Yeltsin traveled to China in 1996, the new relationship was elevated to a "strategic partnership of equality, mutual confidence and mutual coordination directed towards the 21st century." It will include regular summit meetings, cooperation in a wide range of areas (nuclear energy, interdiction of drug smuggling, and intellectual property rights were mentioned),

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ambitious plans to triple trade volume from around $7 billion a year, and agreement to support each other's policies on Taiwan, Chechnya, and Tibet. 5 6 Jiang Zemin paid a return visit to Yeltsin in April 1997 that not only led to new purchases of Russian arms and promoted border trade but also enabled the two leaders to take a joint public stance against Washington's excessive influence in world affairs. 5 7 One Chinese military publication, in agreement with Jiang, described the strategic importance as promoting global multipolarity and making the West pay more attention to Chinese and Russian interests, not forming an alliance. 58 China also began a major expansion of trade and diplomatic activities in 1990 with ASEAN. 5 9 Despite concerns about U.S. and Japanese domination of East Asia, key Chinese internationalists such as Zhao Ziyang and many intellectuals had begun talking up the virtues of the Pacific century as early as 1984, simultaneously with Deng Xiaoping's endorsement of Special Economic Zones (SEZs). 6 0 Within two years, China became a member of the Asian Development Bank and the Pacific Economic Cooperation Council, then largely a business group and a forerunner of APEC, which China formally joined in 1991. China approached Asia Pacific regional cooperation very cautiously, looking mainly to take advantage of the economic opportunities it afforded. 6 1 (Cambodia was an exception: In October 1991, China played an important role in cooperation with ASEAN and the UN to restore an elected Cambodian government under the Paris Agreement.) China initially joined sessions of the ASEAN Post Ministerial Conference as an observer after ASEAN instituted regular political and security "dialogue" sessions in 1992, only becoming a full "dialogue partner" in 1996. Finally, there was the explosive growth of the Greater China triangle. Hong Kong became a Special Administrative Region of China on July 1, 1997. With over $100 billion invested in the PRC, which is nearly 60 percent of total foreign investment, Hong Kong businesses are a key factor in China's growth—and key supporters of the new Beijing-appointed administration. Taiwan by the mid-1990s had become one of the PRC's major trade and investment partners, with Hong Kong as the principal conduit due to Taiwan's official policy of "no contact" with the PRC. Taiwan investors representing around 30,000 companies had funneled perhaps $20-25 billion into China (mainly, Fujian Province directly across the Taiwan Strait, but more recently Shanghai and Jiangsu Province to the north) by the mid-1990s, and two-way trade had risen to a similar amount annually. 62 Though still far apart politically, Beijing and Taipei were able to agree to set up "nongovernmental" organizations to conduct talks on hijackings, fishing disputes, and other matters of common concern. This triangle, which has also become known as the Chinese Economic Area (CEA), has become the engine of China's rise as a major trading state. Southeast coastal China is the favored place for "foreign" (i.e., overseas

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Chinese) investment. 63 Yet such regional prosperity has its costs, for it obstructs as much as advances the PRC's fundamental objective of full national integration. Local leaders in Guangdong are probably determined to keep as much as possible of their regional identity and revenues in southern China; Hong Kong's social pluralism and booming business may spread the gospel of laissez-faire to Guangdong and beyond; and Taiwan's strides in world trade and democratization have emboldened its leaders to claim consideration for the island as a separate country, and not merely a part of China that has an autonomous political-economic system.

External Threats to China and the China Threat By the start of 1991, Foreign Minister Qian was already proclaiming that "today China enjoys its best relations with its neighbouring nations since the founding of New China in 1949." 6 4 Officially, China has no assumed enemies and has not even "decided which threats are greatest." 65 Unofficially, that same year and afterward, the Chinese press and foreign-affairs specialists said enough to make plain that Beijing leaders consider China to be in a confrontation with the West, which seeks to undermine socialism, even as it needs to cooperate with the West. 66 The notions of enemy states and a hierarchy of external threats have therefore been fixtures in Chinese thinking throughout the 1990s. Besides, Chinese authorities, like political and military leaders everywhere, are not comfortable with relatively favorable security circumstances. Common bureaucratic practice is to look for, expect, and plan for the worst. Those analysts of more "nationalistic" leanings are even more inclined not to accept that a threat that has diminished has therefore disappeared, since to do so would probably result in reduced military preparedness and budgets. 67 And since such worst-case planning is reciprocated by other leaderships, threats are always mutual.

The U.S. Threat As 2000 approaches, the United States has become China's principal external security concern. Now that the U S S R is gone, the United States is the only foreign power capable of directly threatening China's security, blocking the PRC's projection of its power, preventing unification with Taiwan, and even undermining the "fortress" of Chinese socialism from within just as Soviet revisionism once was perceived as attempting to do. Only the United States has the network of forward-deployed military forces, alliances, and weapons recipients in East Asia that can contain China; the information and financial resources with which to press its human-rights agenda on China; 68 the ability to impose major sanctions on China; and the worldwide influence to whip up a "China threat" fever. 69

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Whether or not the United States will consistently pressure China in each of those ways, and so leave little room for compromise and mutually advantageous relations, is a matter of ongoing debate among China's America-watchers. 70 But clearly, a number of senior PRC analysts and key leaders believe the U.S. threat to China's political system and security is real and enduring; that at least some prominent U.S. figures want to contain China; that U.S.-China differences are fundamental and likely to grow in part because of increased engagement; and that "resurgent crises without total rupture are likely to become the normalcy [sic] of Sino-American relations." 71 PLA leaders seem to be a large proportion of these pessimists. 7 2 Things were not always this way. Prior to the Gulf War and the collapse of the Soviet Union, Chinese analyses revealed a qualified optimism about the ability to constrain the United States. To be sure, the United States was persisting in its historic efforts to use the human-rights issue to interfere in China's internal affairs, such as Tibet. 73 Still, Chinese analysts insisted that multipolarity reduced the potential for U.S. hegemonic behavior. Contradictions among the United States, Europe, and Japan, for example, would continue to disrupt efforts to harmonize their interests. 74 National interests, especially economic interests, would have primacy over ideological considerations, and multipolarity offered opportunities to offset a world dominated by the United States, Japan, and Western Europe. 7 5 Countries would be struggling to preserve or expand their political influence, but mainly by nonmilitary means, and to defend against new security threats posed by drugs, terrorism, and environmental problems. 7 6 Another global crisis was hard to imagine, notwithstanding the intensification of regional conflicts. The general world tendency was still peace and development. 77 The end of the Cold War competition and the pursuit of national economic and technological strength made possible a return to the primacy of domestic affairs and peaceful coexistence in foreign policy. 78 Some analysts attributed great potential to the United Nations system, not only for bigpower cooperation in peacekeeping, but also for restraining the ambitions of major and minor powers alike. 79 This was precisely what gave rise to Huan Xiang's forecast of breathing room for China to move rapidly ahead with economic reforms and catch up with the other "little dragons" of East Asia. The Tiananmen crackdown, the Gulf War, and the Soviet collapse pushed an erosion of the relationship—setting the stage, we believe, for China's accusations, in the mid-1990s, of a U.S. strategy to contain it. In the West, these three events dashed hopes that the Chinese leadership intended to allow political reforms to take place alongside economic reforms. In Beijing, they raised the specter of renewed U.S. attempts to bring about "peaceful evolution" away from socialism; demonstrated the U.S. political will and military capability to pursue its overseas interests, based on unipolarity but with international support; 8 0 and ended Chinese opportunities to use the strategic triangle to their advantage.

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Chinese analyses of the world situation in 1990 were basically optimistic, but they pointed to some ill omens for China. One was the changed relationship between the United States and the Soviet Union. U.S.-Soviet détente, these analyses conceded, would lower the intensity of the arms race and possibly lead to settlement of some local conflicts. Nevertheless, they observed that Soviet weakness presented the United States with "a golden opportunity [for Washington] to carry out its policy of 'beyond containment' toward the Soviet Union more boldly than its predecessors." "In fact," said this commentary, "while continuing to contain the Soviet Union, Washington is enchancing its measures of 'peaceful evolution' and encouraging Moscow to evolve into an 'open society,'" thus compelling its "integration into the international community." 8 1 Was this not precisely what China feared from the United States, now that the strategic triangle was gone? U.S. sanctions against China after Tiananmen were a second bad sign. They moved even the ardent internationalist Qian Qichen to remark that China would resist U.S. efforts to "impose its will." He recalled twenty-three years of U.S. sanctions on China prior to the Nixon visit in 1972 and declared: "We will by no means yield to foreign pressure, nor can we be isolated." "Instead of calling for an improvement in Sino-U.S. relations," said Qian, "some Americans advocate exerting pressure on and isolating China." 8 2 When Chinese foreign-policy experts held their previously mentioned symposium in late 1990, the pessimists' analysis received more coverage than the optimists' on the subject of U.S. policy. They concluded that the demise of the strategic triangle and its replacement by a U.S.-Japan-Europe economic triangle meant that "from now on China will become the main target of the West's peaceful evolution strategy, causing an even greater sharpening of the struggle between infiltration and counter-infiltration." 8 3 Thereafter, as previously noted, human rights, Chinese ballistic-missile and other arms sales, the Yinhe incident, and a number of other issues were allowed to overwhelm the positive side of the relationship, to the point where one popular Chinese book of uncertain authorship (which appeared in 1993 under the title Can the Chinese Army Win the Next War?) explicitly portrayed the United States as China's number one current and future enemy. It was widely commented that the book reflected the militant nationalism of some PLA commanders and, indeed, could not otherwise have found its way onto bookstore shelves. 84 The book was later banned by the CCP and recalled; but other harsh critiques of the United States, usually by young writers, subsequently appeared and became best-sellers. 85 Chinese and U.S. leaders well recognize that, from an internationalist perspective, the two countries need each other. Among other things, China needs a robust direct and (via Hong Kong) indirect trade with the United States, U.S. investment capital and technology, the U.S. military presence that effectively contains Japanese nationalism, and perhaps the U.S. presence

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that preserves K o r e a ' s division and shields North Korea f r o m precipitate collapse and absorption. T h e United States needs Chinese cooperation on global issues such as nuclear nonproliferation, e n v i r o n m e n t a l protection, and labor migration. C h i n a ' s continued progress in economic development, in the U.S. political perspective, keeps the country together, creates new local a n d regional sources of political p o w e r to o f f s e t the C o m m u n i s t Party, and plants the seeds of civil society that may one day propel political pluralism to the top of the national agenda. But in the years since 1991, these s e e m i n g l y o v e r w h e l m i n g a r g u m e n t s f o r a stable U . S . - C h i n a relationship h a v e given way to p r e s s u r e tactics and mutual p e r c e p t i o n s of threat. For e x a m p l e , C h i n a in f r i e n d l i e r times regarded the U.S. military presence in East Asia as a positive force, one with which Beijing could literally do business. B u t since the early 1990s, the U.S. p r e s e n c e , e x c e p t possibly in Japan and South Korea, has been considered undesirable. T h e " C h i n a threat" is being used to j u s t i f y U.S. forces in Asia, some P R C analysts say, while others see t h e m as helping the c a u s e of Taiwan independence or even being aimed at China itself. 8 6 Incidents have occurred at sea involving U.S. and Chinese forces that probably would not have occurred, or b e e n regarded as o m i n o u s , in the 1980s. 8 7 U.S. naval-stationing rights in S i n g a p o r e , n o r m a l i z a t i o n of relations with Vietnam, and u p g r a d i n g of ties with Taiwan have at various times been viewed f r o m Beijing as part of a new U.S. encirclement strategy. As a result, w r o t e a senior A m e r i c a - w a t c h e r in B e i j i n g , " n o w [in 1993] the U.S. is the only Western country which h a s n ' t restored its normal relations with China." 8 8 In fact, President Bill Clinton did restore contacts with the P L A that very N o v e m b e r as part of a n e w strategy of "eng a g e m e n t " with China. A n d some kinds of military c o o p e r a t i o n went on with little fanfare, notably sales to China of dual-use high technology (see Chapter 7) and perhaps even intelligence sharing f r o m electronic listening posts that the t w o g o v e r n m e n t s h a d set up in C h i n a in the m i d - 1 9 8 0 s . 8 9 But n o n e of these factors softened either Chinese criticisms of U.S. interf e r e n c e or congressional frustration with Clinton's China policy. 9 0

The Japanese

Threat

W h e r e a s the U n i t e d States has the ability to contain C h i n e s e p o w e r and u n d e r m i n e Chinese socialism, Japan is C h i n a ' s principal rival for regional leadership. Japan was at the top of C h i n a ' s list of external threats until the early 1990s, w h e n relations with the U n i t e d States hit rock b o t t o m and Japan quickly restored full relations with Beijing. At that point, P R C analysts tried playing the China card with Japan. They asserted that p o s t - C o l d War J a p a n f a c e d increasingly acute " c o n t r a d i c t i o n s " with the U n i t e d States. In contrast with the past, Japan "no longer seeks Washington's approval b e f o r e taking steps and adopts an active attitude" at the U N , in Asia

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Pacific regional cooperation, and in international peacekeeping. 9 1 But Japan needs China "to cope with the American pressure" as well as to strengthen its position in the new international order vis-à-vis the United States and Europe. 9 2 Various Chinese commentaries expressed high hopes for greater levels of trade and investment with Japan "at a time when its trade with the United States is in trouble." 9 3 While taking full account of the U.S.-Japan alliance and Japan's junior position in it, China saw opportunities to use Japan as a source of "diplomatic leverage over the United States" and a means of upsetting U.S. hegemonical ambitions. In Beijing's view, Japan needs China's support for taking on larger regional and global responsibilities, such as contributing to UN peacekeeping missions and acquiring a permanent Japanese seat in the UN Security Council. 9 4 In fact, one Chinese analysis suggested that Beijing regards its support as indispensable to these Japanese goals. 95 As essential as Japan is to China's modernization and to undercutting U.S. hegemony in Asia, Sino-Japanese rivalry is a fixture in East Asia. Beijing still loses no opportunity to attack any sign of Japanese nationalism, especially Japan's persistent failure to make an unqualified apology for atrocities committed during World War II. A number of Chinese analysts remain convinced that the U.S.-Japan alliance must endure as a barrier to Japan's becoming an independent military power. The consensus among them seems to be, however, that Japan will use its economic strength in the Asia Pacific region to "secure its position of a big political power." As evidence of this intention, they cite Japan's high military spending, which, even at only around 1 percent of the GNP, ranks third in the world; Japanese arms acquisitions and changing defense doctrine during the 1990s, especially its naval capabilities and "active defense" at sea; the potential revision of Japan's constitution in the wake of Japan's firstever deployment of its Self-Defense Forces (SDF) overseas under the UN peacekeeping operation in Cambodia in 1992; and Japan's reluctance to share advanced technology with its neighbors. 9 6 Chinese authorities reportedly also worry over Japan's claim to the Senkaku (Diaoyutai) Islands, northeast of Taiwan and south of Okinawa, which China regards as its territory. And they are concerned about the future economic competition between the two countries for Asian markets, once Greater China has become a political reality. 97 In the Mao era, China's typical charge was that the "revival of Japanese militarism" at the behest of its senior partner, the United States, threatened China. Later, at the height of fervor against Soviet hegemonism, Beijing quietly supported the U.S.-Japan military alliance. Today, Chinese analysts seem uncertain about the potential "Japan threat" and about whether Japan is more or less dangerous tied to the United States or on its own. Looking well into the next century, some of them see Japan breaking with the United States and becoming an independent military power,

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either out of still-greater economic strength or, to the contrary, out of econ o m i c decline leading to a return to militarism. T h e s e scenarios sound alarm bells in Beijing, since Japan would then pose a direct challenge to a rising China. Japan might then disavow its nonnuclear policy, the Chinese believe, in response to the development or acquisition of nuclear weapons by other Asian states. 9 8 Other P R C analysts, particularly those affiliated with the PLA, are more concerned about the potential for a U.S.-Japan alliance to "gang up" on China in a c r i s i s . " One assessment specifically cited U.S. nuclear cooperation with Japan that had enabled Japan to amass the technical resources, including missile delivery capability, quickly to go nuclear. "Japan had secretly developed atomic bombs during World War II," the article rather incredibly maintained, and its reluctance to support an indefinite extension of the N P T during international discussions in 1996 only proved its desire to keep open the nuclear option. 1 0 0 Another article raised the question of whether Japan can actually be considered a nonnuclear state. It argued that Japan's long-standing cooperation with U.S. nuclear policy, such as by allowing U.S. nuclear submarines secretly to enter its ports, violated J a p a n ' s policy since the 1960s not to introduce nuclear weapons on its territory. Moreover, Japan's advanced capability to process nuclear waste, its technical capacity to produce long-range missiles, and its acceptance of U.S. nuclear protection m a k e hypocritical J a p a n ' s protests of P R C nuclear testing. 1 0 1 Still another threat scenario materialized for China when President Clinton visited Tokyo in April 1996 and, together with Prime Minister Hashimoto Ryutaro, signed a "Joint Declaration on Security" that suggested a regional security role for the SDF, probably as logistical backup for U.S. military operations. Beijing was quick to caution Tokyo about converting the bilateral U.S.-Japan security treaty into a regional policing mechanism. 1 0 2 With C h i n a ' s missile tests near Taiwan very m u c h in mind, the army newspaper was even m o r e pointed in accusing the United States of "finding another strategic opponent"—namely, C h i n a — t o replace the U S S R as the focal point of U.S.Japan military cooperation. 1 0 3

The Russian

Threat

Russia's ranking on China's list of potential threats has fallen dramatically. In retrospect, the Soviet collapse did have positive implications for Chinese security. It helped demilitarize Sino-Russian relations in several ways: by reducing the number of Russian troops along China's frontier, including those in Mongolia; by " r e l e a s i n g ] China f r o m military encirclement by the former Soviet Union and countries it supported," as a Chinese analyst put it; 1 0 4 and by making M o s c o w ' s influential ties with Mongolia, Vietnam, and India a thing of the past. Now, China has normalized

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relations with all three of those countries. Mongolia signed a "Treaty of Friendship and Cooperation" with China in 1994 that specifically enjoined the parties from making a hostile agreement with a third party, meaning Russia. 1 0 5 Vietnam has started down the road of Chinese-style market socialism. And India and China, as mentioned, have defused border tensions and seem to be edging their way toward a new border treaty. In Central Asia, China had to deal with four new Islamic neighbors out of the former Soviet republics, three of which border on the PRC. Beijing early on granted them diplomatic recognition and, during a trip by Li Peng in 1994, concluded agreements on trade and aid. These clearly were undertaken (and accepted) in hopes of containing Islamic nationalism by offering economic development help instead. 106 Like the friendship treaty with Mongolia, the agreements with the Central Asian republics contain clauses that amount to pledges of mutual nonaggression and their refrainment from security ties with Russia. 1 0 7 The trust-building dimension of relations with the republics, and with Russia, was cemented in talks (during 1996) and a five-state treaty (including Tajikistan, Kazakhstan, and Kyrgyzstan) in April 1997 that will reduce the risk of war through such measures as reductions of border forces and antiaircraft defenses, mutual inspections of military exercises, and exchanges of military information. 108 To some Chinese analysts, the "strategic partnership" with Russia is no grounds for complacency about the future. A nationalistic leadership in Moscow might be expansionist, possibly in Central Asia, as might an economically reinvigorated Russia. After all, in recent years some senior Russian officials have openly talked about a Chinese threat. 109 PRC leaders were alarmed about Russian "great-power chauvinism" in the 1960s; they could become so again. 1 1 0 Such fears probably account for the friendship treaty and economic agreements with Mongolia. These not only may effectively ease Russia out of any influential role there; they may also enhance China's influence and presence in Mongolia at a time when Mongolia is marketizing its economy and experimenting with democratic practices. The last thing China wants to see is a spillover of Mongolian democracy into Inner Mongolia. Meanwhile, according to one wellinformed observer, the PLA's force deployment remains heavily concentrated in the north. "Almost 7 5 % of the PLA's 24 group armies are deployed facing Russia," he wrote in 1993. 1 1 1 The Korean Dilemma The ongoing conflict on the Korean peninsula poses a different set of security concerns for China. The nuclear standoff in the early 1990s brought out the PRC's concerns about being drawn into war by the actions of a longtime strategic and political ally that had its back to the wall. 1 1 2 Though

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the likelihood of another Korean war was slim then, the ensuing famine in North Korea, amid general economic deterioriation, raised other security issues for China. A sudden collapse of North Korean authority could, for example, lead to civil war, a refugee crisis, and foreign intervention. Consequently, Beijing frowned upon provocative moves by Pyongyang that might spark open conflict between the two Koreas. 1 1 3 When Clinton and South Korea's president Kim Young Sam proposed in mid-1996 that fourparty talks, to include China, be held on a peace treaty between the two Koreas, China agreed. Other possible threats are more speculative, since they relate to a time when Korea reunifies, presumably under Seoul's aegis. A unified Korea could become another competitor, even a nuclear one under some circumstances. Having a powerful, dynamically capitalist state at China's doorstep today brings substantial Korean investment funds and technology to Shandong and Liaoning Provinces. In the future, such activities might be looked upon differently, particularly if China itself is fragmented: a Korean sphere of economic influence in Shandong and Liaoning, solidified by ethnic ties between the ROK and Korean Chinese in those provinces. 114 Central

Asia

A fifth potential security problem is the Muslim populations of Central Asia. 1 1 5 A number of violent incidents have occurred in China's far west since 1990, notably in Xinjiang Province, that reflected ethnic tensions. Ethnic uprisings in the region have a long history; and in the 1960s, they contributed to Sino-Soviet hostility, since the same ethnic groups (the Uighurs and Kazakhs) inhabit both sides of the border. In the new era of ethnic nationalism today, local and national Chinese leaders are intensely concerned about the separatist influences of pan-Turkism and Islamic fundamentalism. In Xinjiang Province, for example, separatist groups have periodically engaged in violent protests against Chinese rule, leading to crackdowns by local and PLA units. Chinese analysts also worry about the potential for a neighboring state to acquire an "Islamic bomb." 1 1 6 Beijing's aims are to prevent ethnically rooted incidents within China from reaching civil war proportions and to work with neighboring governments, including Russia, to contain violence, which might provoke PLA intervention. As one authority has written in evidence of Chinese concern: "Much of the current doctrinal, equipment, and force development [meaning rapidreaction units] for limited and regional war seems to be pointed toward China's Inner-Asian borders." 1 1 7 China's current emphasis, however, seems more on preventive steps, such as the aforementioned multilateral treaty on border confidence-building measures and a substantial ($4 billion) investment in Kazakhstan oil. 118

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South and Southeast Asian

Threats

Lastly in terms of the Asia security picture, the security situation to China's south is far from settled, normalized relations with the ASEAN states and India notwithstanding. The Spratly and Paracel Islands disputes will require more earnest diplomacy, and greater military restraint, than Beijing has so far been inclined to show. Concerning India, the unresolved boundary, its harboring of the Dalai Lama (who remains quite outspoken on behalf of Tibetan autonomy, if not independence), and India's nuclear capability outside the NPT are among China's concerns. Indonesia has been among the more public critics in Southeast Asia of China's activities in the South China Sea, though Djakarta has also taken the lead in bringing China to the bargaining table (via "workshops" on CBMs) with the other ASEAN delegates. And Vietnam, with its historic interests and interventions in Laos and Cambodia, represents what it has represented ever since its independence from France: a competitor for influence on the Southeast Asia mainland. With Vietnam joining ASEAN in 1995, the competition might become keener, particularly over the South China Sea islands, where Vietnam is among the claimants. China's attitude toward ASEAN and Pacific multilateral cooperation generally will be sorely tested. China as a Threat China's security is a regional matter. Just as China's internal disintegration would almost certainly have destabilizing consequences outside the country, 119 China's strengthened security from external threat, including the overall success of the economic reforms, also seems to make its neighbors less secure. Talk of China's "filling the vacuum" of power left by the end of the bipolar competition is commonplace in Asia, not to mention in the United States. 1 2 0 The tables have turned: Whereas the United States has long had to refute charges of imperialism and hegemonism in its actual behavior, such as in the Vietnam War, now it is China that has to refute suspicions of hegemonist intentions. Some of the suspicion is really a product, perhaps inescapably, of China's own making, such as its annual large increases in military spending since 1989 and the PLA's doctrinal shift to "limited and regional wars." Less easy to explain away is China's nonnegotiable territorial claims and its large number of territorial disputes, which to one scholar justifies calling China an "irredentist regional military power." 121 Other factors border on the psychological. There is, for instance, the question of China's depth of commitment to regional peace— its "awkward regional identity . . . and its inability to maintain any deep and enduring friendship with any Asian state, including North Korea." 1 2 2 And there is the related question of whether or not Beijing will ever be truly able to adapt the historic search for national greatness to the demands of a global community immersed in interdependence. 1 2 3

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Beijing, of course, is quick to disclaim hegemonic ambitions. It emphasizes that military modernization is a sovereign right. It points, correctly, to the double standards of its accusers on such matters as arms sales and acquisitions and on nuclear proliferation. And Beijing spokespersons note the PRC's low military spending relative to other major countries, its military-industrial conversion program, and its lack of troops or bases outside Chinese territory. 124 In regional perspective, China's arms acquisitions "can be seen as an effort trying to catch up," since most countries in East Asia, including Japan and Taiwan, have been acquiring advanced weapons that are superior to China's. 1 2 5 All such arms-modernization programs can be viewed, in fact, as part of a regional phenomenon in which the fastestgrowing economies are busily buying weapons they can now afford. 1 2 6

The Security Issue in Summary By the mid-1990s, Chinese political and military leaders could feel well satisfied with the country's overall security. Virtually all Chinese foreignpolicy authorities, civilian and military, accept that China enjoys unprecedented security from external threat. A rather adroit use of diplomacy to establish and reestablish relations, promote trade and investment, and implant military CBMs not only enabled China to refurbish its image rather quickly after Tiananmen. More than that, diplomacy also secured the frontiers with three states the PLA had fought—Russia, India, and Vietnam— and in Central Asia, gave China influential new footholds. By establishing the basis for longterm friendly relations around its rim, China's essential aim may be to neutralize its two most likely sources of threat, the United States and Japan. Though speculation is rife in the West that Beijing has even more ambitious aims, such as some new kind of alliance with Russia, that does not seem to be what the "strategic partnership" between Beijing and Moscow is all about. Mistrust of Russia is sufficiently strong, and the chances of the restoration of a "czarist nationalism" are sufficiently large, as to rule out an alliance. By having a positive, mutually beneficial relationship with Russia, for however long it lasts, China has the backing of the only major power that shares with it a strategic concern about excessive U.S. or Japanese dominance in Asia Pacific. Hence, the post-Cold War security picture in Asia has many sources of satisfaction for China, but it also is replete with uncertainties—even more uncertainties than were predicted by the PRC strategists who met in Beijing in the mid- and late 1980s. These uncertainties stem from the Soviet collapse, the Gulf War, the reduced but still imposing U.S. military presence in Asia, and Japan's potential. Some PRC authorities, especially those who lean toward the nationalist school, worry about new security threats from within the region, as well as the revival of older problems. Meanwhile, analysts in China's neighboring countries, including Japan and

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the ASEAN states, sometimes openly fret about China's future intentions and increasing military capabilities that could one day threaten them. Yet perhaps none of these external security variables is as important as the internal one: China's own vulnerabilities. As Marxists, the Chinese leaders would be the last to dispute this conclusion, inasmuch as, according to the theory of contradictions that lies at the heart of Maoist analysis, internal factors are the principal sources of change. The decisions and consequences, intended or otherwise, of the economic reforms have created a long list of actually or potentially destabilizing conditions within China. These include the decentralization of economic decisionmaking power to the provinces and lower levels, exacerbating long-standing central-local tensions over revenue sharing and local nationalism; the unequal development of China's regions, with resulting large income, technology, and growth gaps; social problems brought on or enlarged by contradictions between central planning and the market, such as double-digit inflation and unemployed urban workers in debt-ridden state-run enterprises; large-scale environmental problems; at least 130 million unemployed or underemployed peasants who are clogging townships and major cities; and increasing corruption, crime, and social disorder. Ultimately if not immediately, all these problems have broad political implications for the stability of China's party-state system. Here is not the place to explore internal-security problems of these kinds. 1 2 7 But since some of them might evolve into major sources of regime instability and civil unrest, to the point of requiring the PLA's intervention, they anticipate later discussion. Nor are they the only potential security issues that might involve the PLA. The succession to Deng Xiaoping, ethnic unrest and potential separatism, provincial warlordism, and the military's own descent into corruption and crime round out the list. How the PLA might react in response to these threats to China depends on factors such as its loyalty to the party center, its internal discipline, its readiness, and its central-regional command relations. These are addressed in the following chapters.

Notes 1. Robert A. Manning and James J. Przystup, "China's Syndrome: Ambiguity," Washington Post, March 19, 1995. 2. As one interviewee, a senior foreign-affairs specialist, said with reference to Westerners who believe that a China threat is certain to emerge out of its rapid economic development: "What we are defending is China's economy, not creating an expansionist capability" (authors' interview at the CIISS, August 1994). 3. This theme emerges from our reading of the major Chinese think-tank journals, principally Xiandai guoji guanxi (Contemporary International Relations, produced by the China Institute of International Relations in Beijing), Waiguo wenti

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yanjiu (Foreign Affairs, by the Foreign Studies Institute of the Beijing Foreign Studies Association, Beijing Academy of Social Science), Guoji wenti yanjiu (International Studies, by the China Institute of International Studies in Beijing), Guoji zhanlue yanjiu (International Strategic Studies, by the CUSS), and Yatai yanjiu (Asia-Pacific Studies, by the Asia-Pacific Studies Institute of the Chinese Academy of Social Sciences, Beijing). See also Wang Jisi, "International Relations Theory," p. 498; and Kim, "China," pp. 115-116. 4. In addition to the sources in note 3, see Armstrong, "Chinese Perspectives." 5. Armstrong, "Chinese Perspectives," esp. pp. 471-479. 6. Wan Guang, "Challenges Facing the World Today and the Establishment of the New International Order," September 1991 symposium paper, cited in ibid., pp. 471-772. Hu Sheng, "On the Establishment of a New International Order," p. 11, makes exactly the same claim. 7. Kim, "China," p. 117. 8. Wang Yizhou, "The Asia-Pacific Economic Cooperation," pp. 4 6 - 4 7 . 9. "China Ready to Take Part in Asian Security Dialogues," Beijing Review, no. 36 (August 9 - 1 5 , 1993): 8 - 9 . 10. Christoffersen, "Economic Reforms," pp. 1245-1263. 11. For a summary of the evidence on Deng's thinking, see Sheng Lijun, "China's View of the War Threat," pp. 52-53. 12. Samuel S. Kim ("Chinese World Policy," pp. 6 2 3 - 6 2 4 ) argues that domestic political considerations—namely, the need to clarify (and try to dispose of) the Mao legacy, as happened in a major party history issued in 1981—underlay the strategic reassessment of this period. 13. Sheng Lijun, "China's View of the War Threat," pp. 58-62. 14. See Chi Su, "Sino-Soviet Relations," p. 117. 15. Levine, "Sino-American Relations," pp. 9 1 - 9 2 ; Deng, Fundamental Issues, pp. 4, 4 6 - 4 7 ; Deng Xiaoping, speech of January 16, 1980, quoted in Barnett, China's Economy, p. 72; Sheng Lijun, "China's View of the War Threat," pp. 63-65; Kim, "Chinese World Policy," pp. 603-633. 16. The period of gradual Sino-Soviet rapprochement is roughly framed by two diplomatic events: the visit to China of I. M. Kapitsa, head of the Far Eastern Section of the Soviet Foreign Ministry, in 1981; and the visit to China of the first deputy chairman of the Soviet Council of Ministers, I. V. Arkhipov, at the end of 1984. See Medvedev, China and the Superpowers, pp. 156-168; and Levine, "Chinese Foreign Policy," pp. 70-72. 17. Total trade was $0.2 billion in 1981 and $1.2 billion in 1984 (Riskin, China's Political Economy, table 13.5, p. 324). 18. Christoffersen, "Economic Reforms," p. 1263. 19. Chi Su, "Sino-Soviet Relations," pp. 112-118; Gelman, "Gorbachev and Sino-Soviet Normalization," pp. 90-126. 20. An early statement of this position was Premier Zhao Ziyang's "Report on the Work of the Government" (May 15, 1984), Beijing Review, no. 24 (June 11, 1984): x-xii. 21. Xing Shugang, Li Yunhua, and Liu Yingna, "Changing Balance of SovietU.S. Power," Beijing Review, no. 19 (May 9, 1983): 14-19. This analysis further proposed that although the superpowers' competition would continue to endanger world peace, their actual power and influence would decline in the 1980s. 22. See, for example, Huan Xiang's essay, "The Future International Environment," pp. 6 - 2 6 ; "Concentrate on the Four Modernizations," Hongqi (Red Flag), no. 3 (February 1, 1980), in JPRS 75425, April 2, 1980, pp. 12-16; Xue Mouhong, "The New Situation," pp. 19-24; Huan Xiang in Renmin ribao, January 2, 1988, p.

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6 (mainland ed.); Qian Qichen, "A Year in Which the International Situation Seems to Have Improved," Renmin ribao, December 17, 1988, p. 2 (mainland ed.). 23. Lewis and Hua, "China's Ballistic Missile Programs," p. 26. 24. "Deng Xiaoping Discusses the Domestic and International Situation," Jiefangjun bao, September 18, 1985, in Deng Xiaoping, p. 43. 25. Deng, Fundamental Issues, pp. 98, 116. 26. Hu and Xiao, Yingxiangdao 21-shiji, pp. 4 0 - 4 8 . The conferences were sponsored by the Chinese Academy of Social Sciences, the influential periodical Shijie zhishi (World Knowledge), and the Military Science University. 27. Ibid., p. 43. 28. Ibid. 29. A clear example of such a blending emerged soon after the conferences: Qian Qichen, "A Year in Which the International Situation Seems to Have Improved," p. 2. Several key descriptive phrases about the international situation still appear in official speeches today. 30. Hu and Xiao, Yingxiangdao 21-shiji, pp. 4 5 - 4 6 . 31. Ibid., pp. 54-61. 32. See Huan Xiang, "On Sino-U.S. Relations," p. 47; Yang Dezhi, "A Strategic Decision on Strengthening the Building of Our Army in the New Period," Hongqi, no. 15 (August 1, 1985), in JPRS-CRF, 85-020, September 17, 1985, p. 4; and Yang Dezhi, Huan Xiang, et al., Guofang fazhan zhanlue sikao. 33. Huan Xiang, "A Year of Turmoil, Transformation, Disquiet," Renmin ribao, January 2, 1988, p. 6. Since Huan worked in the State Council, it has been suggested that Zhao Ziyang was the originator of the new outlook. 34. "Symposium of International Affairs Specialists," pp. 1-5. 35. The centrality of Deng's role is also emphasized by a former research associate at the China Institute of Contemporary International Relations in the mid1980s. See Chu, "The PRC Girds for War," pp. 177-178. 36. Jiefangjun bao, December 28, 1985; quoted in Deng Xiaoping, p. 25. 37. Huan Xiang, "A Year of Turmoil"; emphasis added. 38. On Beijing's dissatisfaction with Gorbachev and its interferences in Soviet affairs before his overthrow, see Gelman, "Gorbachev and Sino-Soviet Normalization," pp. 116-119. 39. Ibid., p. 119. 40. Wang Shu, "Study the New Changes," Guojiwenti yanjiu, no. 4 (1988): 1-4. 41. Jin Junhui, "On the Diminution of Tension," pp. 5 - 8 . 42. Yang Xiu, "Recall and Expectation of the Cold War," Waiguo wenti yanjiu, no. 3 (1990): 51-53. 43. These paragraphs on China's policy during and after the Gulf War have been much informed by Joffe, "China After the Gulf War." 44. Armstrong, "Chinese Perspectives," p. 459. Pan Tongwen (in "New World Order—According to Mr. Bush," Beijing Review, no. 43 [October 28-November 3, 1991]: 12-14) states: "Obviously, Bush's proposal is to create a structure and world order that can maintain the U.S. dominant position and promote U.S. interests in the world." That objective, Pan says, amounts to a vain attempt to "impose" the U.S. values and political model on other countries. 45. Jiang Zemin's speech in Moscow, in Renmin ribao, May 18, 1991, p. 1. 46. Jin Dexiang, "The World in 1990s," pp. 1 - 1 1 ; Chen Xiaogong, "The World in Transition," pp. 13-15. 47. Cited by Chu, "The PRC Girds for War," p. 178. 48. Armstrong, "Chinese Perspectives," p. 461.

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49. On multipolarity, see Zhao, "Beijing's Perception of the International System," pp. 74-76. Concerning China's value, the various international policy journals we examined typically measured it in terms of China's size and resources, its friendship with the United States as a deterrent against Japan, and its "check-andbalance function" among the three major power centers. (Interestingly, none of the analyses mentioned a positive factor often stated in U.S. analyses: the need for China's cooperation on global issues such as the environment and arms control.) Analysts also mention some negative factors, such as China's underdevelopment (hence, its weakness) and its troubled relations with the United States. See the sources in note 3 above. 50. Among the numerous sources for this view, see "Qian Qichen on Major International Issues," Beijing Review, no. 41 (October 11-17, 1993): 8-11. 51. Yahuda, "Deng Xiaoping," p. 565. 52. John F. Burns, "China and India Pledge to Withdraw Troops on Disputed Border," New York Times, online ed., November 30, 1996. The agreements did not resolve the border issue itself, nor (apparently) China's missile assistance to Pakistan. However, shortly after Jiang's visit, India announced it was suspending work on an intermediate-range missile that would be capable of reaching major eastcoast Chinese cities, leading to speculation that other Chinese concessions to New Delhi had been made. See Kenneth J. Cooper, "India Halts Development of Medium-Range Missile," Washington Post, December 6, 1996. 53. Suh, ed., Northeast Asian Economic Cooperation, table 1, p. 222; Lincoln, Japan's New Global Role, p. 190. 54. Suh, ed., Northeast Asian Economic Cooperation, table 2, p. 223; Maehara, "The Role of Foreign Direct Investment," table 4, p. 80. 55. See Steven Mufson, "Bridging a Frosty Frontier," Washington Post, February 11, 1996. 56. China Daily, April 26, 1996; NAPSNet online, May 7, 1996. On the visit and the underlying Russian suspicions of China, notwithstanding the agreements reached, see Lee Hockstader, "Russia, China Affirm 'Strategic Partnership,'" Washington Post, December 28, 1996. High-level diplomacy continued into 1997 nevertheless. Jiang Zemin paid a visit to Moscow in April 1997 that yielded endorsement of "a new multipolar world," thus presumably satisfying nationalist elements in both countries. Jiang, however, would only characterize the Sino-Russian relationship as one of "bilateral cooperation and friendship," "not an alliance" (Lee Hockstader, "Russia, China Sign New Friendship Pact," Washington Post, April 24, 1997). 57. See the joint statement, "On the Multipolarization of the World and the Establishment of a New International Order" in Beijing Review, no. 19 (May 12-18, 1997): 7 - 8 . China's foreign minister, however, sought to soften the rhetoric on a "global partnership" with Russia, saying: "We have tried alliance and we have tried confrontation. Neither work, and now we must find something else." New York Times, April 25, 1997, p. A4. 58. See Li Wen, "Establishing Strategic Cooperation Between the PRC and Russia Conducive to Stabilized Relations Among Major Powers," Jiefangjun bao, April 20, 1997, NAPSNet online, April 28, 1997; and Lee Hockstader, "Russia, China Sign New Friendship Pact," Washington Post, April 24, 1997. 59. The commonalities mentioned include a rejection of Western notions of human rights, opposition to power politics, a desire to modernize defenses and moderately increase military budgets, and priority to economic growth and cooperation. See Bai Yulin, "Post-Cold War China-Southeast Asia Political Cooperation," pp. 11-18.

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60. A Japanese diplomat in China, Akira Chiba, has recounted China's turn to Pacific cooperation in "Pacific Co-operation and China," pp. 4 4 - 5 6 . 61. Shi Min, "The Economic Development Strategies," pp. 87-102. 62. Sandra Sugawara, "Taiwan Opens the Taps on Investment in China," Washington Post, online ed., December 27, 1996. 63. An excellent review of the Greater China (or CEA) phenomenon is Harry Harding's The Evolution of Greater China and What It Means for America. Two World Bank economists have projected that by 2002, the CEA's gross domestic product (GDP) will rank fourth in the world, ahead of all the EU economies except Germany's. Its extraregional trade "will amount to an estimated two-thirds that of all East Asian economies except Japan," making it one of the most powerful regional economic blocs (Armington and Dadush, "The Fourth Growth Pole," pp. 2, 9-10). 64. "Foreign Minister Qian on World Issues," Beijing Review, no. 34 (January 7 - 1 3 , 1991): 13-14. 65. Authors' interview at the CIISS, June 1994. 66. See Nicholas D. Kristof, "China Takes on the Role of Enemy No. 1 to the West," New York Times, September 22, 1991, sec. 4, p. 2. 67. Wang Pufeng et al., Xiandai guofang lun, pp. 79-80. 68. Besides criticisms of China's human-rights record in various public arenas, U.S. resources include propaganda, such as Radio Free Asia broadcasts and Internet links to China, and funneling money to Chinese dissident groups. 69. For a good overview of these Chinese perceptions, see Shambaugh, "The Insecurity of Security," pp. 6 - 1 0 . 70. Two writers portray this hostile Chinese perspective of the United States as belonging to an ideological camp (we would say, nationalist) within the PRC leadership. Standing in contrast with the ideologists are two kinds of Chinese realists: those who also see the post—Cold War United States as likely to push its weight around, but on the basis of power and interests; and those who take a fairly positive or respectful view of the United States from the standpoint of global interdependence. See Jianwei Wang and Zhimin Lin, "Chinese Perceptions," pp. 902-917; and Qimao Chen (chairman of the Academic Council of the Shanghai Institute for International Studies), "New Approaches," pp. 237-251. 71. Wang Jisi, "U.S. Policy Toward China," pp. 24-39. Wang is director of the Institute of American Studies, Chinese Academy of Social Sciences, Beijing. 72. A good example by a PLA think-tank researcher is Yang Chaoying, "On the Major Issues," pp. 25-31. The article is not unrelievedly pessimistic and voices the hope that common interests in cooperation may yet bring the relationship back on track. 73. The United States was said to have a policy of promoting human rights ever since the administration of Franklin D. Roosevelt. Under George Bush, however, Washington aimed specifically at China: It was "making use of the human rights issue to set up a world order based on Western values," and, as demonstrated in Tibet, it was seeking "to interfere with other countries' internal affairs and force them to accept [the United States'] own principles and standards." See Zhang Mingqian, "Human-Rights Diplomacy," pp. 66-75; and Sun Zhengda, "The Issue of Tibet," pp. 76-81. 74. Xi Runchang, "Analysis of the Three-Pole Structure of the United States, Japan, and Europe, and the Trend Toward Global Multipolarity" Xiandai guoji guanxi, no. 1 (1991): 3 - 8 . 75. Xi Runchang, "The Trend in the 1990s," pp. 12-17. The author, in the Chinese Academy of Social Sciences, opines that such a tripolar structure, to be in place by 1995, will cause China's international political position to decline greatly.

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76. Zhang Huanwen, "The Present International Situation," pp. 4 3 - 4 8 . 77. Deng, Fundamental Issues, pp. 9 7 - 1 0 0 ; Xia Liping, "Some New Features," pp. 5 4 - 5 5 (Xia is on the staff of the NDU). 78. Jin Junhui, "On the Diminution of Tension." 79. See, for example, Zhang Jinrui, "An Estimation of the New World Structure," pp. 18-19. 80. For this perspective of U.S. "unipolarism," see, for example, Wang Pufeng et al., Xiandai guofang lun, pp. 61-62. Even before Iraq's aggression, at least some circles in China expressed concern about U.S. "hegemonism" based on its invasion of Panama and seizure of General Manuel Noriega. See Rui Chang, "U.S. Invasion of Panama a Glaring Act of Hegemonism," Beijing Review, no. 2 (January 8 - 1 4 , 1990): 14. 81. Wang Lin, "Looking Towards the 1990s," Beijing Review, no. 1 (January 1 - 7 , 1990): 15. 82. Speech before the Council on Foreign Relations in New York, October 4, 1990, in Beijing Review, no. 42 (October 15-21, 1990): 33-35. 83. "Symposium of International Affairs Specialists," p. 4. 84. Patrick E. Tyler, "China's Military Regards U.S. as Main Enemy in Future," New York Times, November 16, 1993, p. A5. 85. The two best-known examples are the conservative tract allegedly written by a German but actually by the book's supposed translator: Wang Shan, Disan zhi yanjing kan Zhongguo, and Song Qiang et al., Zhongguo keyi shuo bu. 86. Glaser, "China's Security Perceptions," pp. 260-261. 87. For example, in July 1993, the U.S. Navy stopped and boarded the Yinhe, a Chinese freighter, in the Gulf on suspicion of transporting weapons parts to Iran. Nothing was found, and the incident drew a stinging rebuke from Beijing. Later, a Chinese nuclear submarine operating in international waters off the China coast was tracked for three days by U.S. Navy antisubmarine planes. China sent up three jet fighters to confront the U.S. planes. See Washington Post, December 15, 1994. 88. Sun Zhengao, "The Security Situation in Northeast Asia," p. 164. 89. The electronic listening stations were built between 1984 and 1987, mainly to keep tabs on Soviet missile tests. Whether or not such U.S.-China cooperation continued after Tiananmen is not known. See George Lardner Jr. and R. Jeffrey Smith, "Intelligence Ties Endure Despite U.S.-China Strain," Washington Post, June 25, 1989. 90. Daniel Williams and R. Jeffrey Smith, "U.S. to Renew Contact with Chinese Military," Washington Post, November 1, 1993. 91. Lin Xiaoguang, "Japan Seeks Greater Role in the World," Beijing Review, no. 5 - 6 (February 3 - 1 6 , 1992): 10-12. 92. Xu Dan and Xu Zhixian, "Sino-Japanese Relations," pp. 14-15. 93. Liu Jiangyong, "Sino-Japanese Co-operation in a Changed Situation," Beijing Review, no. 14 (April 6 - 1 2 , 1992): 16-17. See also Xue Mouhong, "The Development of Japanese-American Economic Problems," pp. 13-18; and Shi Min and Lu Jianren, "Japan's Role in the Asia-Pacific Region," pp. 26-32. 94. Xue Mouhong, "Development of Japanese-American Economic Problems," pp. 13-16; and Yang Bojiang, "Gulf War Challenges Japan's Foreign Policy," Beijing Review, no. 16 (April 22-28, 1991): 9-11, which is a notably uncritical view of post-Gulf War Japan's search for a wider international role. See also Whiting, "China and Japan," pp. 39-51. In fact, some Japanese observers have directly criticized Chinese (and U.S.) bilateralism, pointing out how this policy approach runs against Japan's multilateralist preferences. "With the two major powers [the United States and China] predisposed to disassociate themselves f r o m

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multilateral efforts, establishing regional stability will not be easy" (Kosaka, "Stop the Panic," p. 8). 95. Xu Dan and Xu Zhixian, "Sino-Japanese Relations," p. 15. 96. Sun Zhengao, "The Security Situation in Northeast Asia," pp. 157, 164165; and Guo Zhenyuan, "The Related Factors and Prospects," pp. 179-180. 97. "China's Economic Strategy," p. 5, reporting comments by Huang Fanzhang, deputy director of the Economic Research Center under the State Planning Commission of the PRC. 98. Glaser, "Chinese Security Perceptions," pp. 256-257. 99. Jencks, "The PRC's Military," pp. 67, 81-82; Pollack, "The Sino-Japanese Relationship," pp. 714-729. 100. "American Nuclear Umbrella and Japan's Nuclear Tendency," Renmin ribao, June 20, 1996; NAPSNet online, June 26, 1996. 101. Renmin ribao, June 20, 1996; summarized in "Chinese Newspaper Alleges Japan Has Nuclear Ambitions," Japan Times Weekly, July 1 - 7 , 1996. 102. See New York Times, April 19, 1996, p. 3. 103. "Japan, U.S. Urgent to Remedy Outdated Security Regime," Jiefangjun bao, April 18, 1996; NAPSNet online, April 26, 1996. See also Zhou Jihua, "A New Starting Point," pp. 2 4 - 3 0 . Here, the author took the position that if China was indeed the target of the Clinton-Hashimoto agreement, Asian states would line up with China on the basis of a shared nationalism that abhors foreign intervention in regional affairs. 104. Yan Xuetong, "China's Security After the Cold War," p. 2. 105. On these and related developments, see various issues of Beijing Review for the years under discussion. On Mongolia, see Jencks, "The PRC's Military," pp. 7 6 - 7 7 . A useful background and overview of PRC diplomacy is provided by Sutter, "China in World Affairs." 106. Ahmed Rashid, "Chinese Challenge," Far Eastern Economic Review, May 12, 1994, p. 30. Two Chinese Central Asia specialists state plainly that national interests mainly drive PRC policy, specifically "assuring a peaceful surrounding environment" of neighboring states during modernization and coordinating with Russia in "containing" pan-Turkism and pan-Islamism (Zhang Wenwu and Li Jingjie, "The Sino-Russian and Sino-Central Asian Relations," pp. 5 - 8 ) . 107. Zhang Wenwu and Li Jingjie, ibid., p. 3. The clause pledges the parties not to join in any way with a third party such as would injure the other party's sovereignty or security. 108. China Daily, April 27, 1996; NAPSNet online, May 6, 1996; Washington Post, April 24, 1997. 109. In December 1996, for example, the defense minister, Igor Rodionov, referred to the "potential threat from China." Such language disappeared by the time of Jiang's visit to Moscow in April 1997; by then Moscow needed China's support for its overt hostility to the eastward expansion of NATO. 110. Glaser, "Chinese Security Perceptions," p. 256; Chu, "The PRC Girds for War," pp. 181-182. 111. Tai Ming Cheung, "Quick Response," Far Eastern Economic Review, January 14, 1993, pp. 19-21. 112. Jencks, "The PRC's Military," pp. 84-87. 113. For example, in September 1996 a North Korean submarine foundered off the South Korean coast, and its crew of twenty-six soldiers, presumably infiltrators, was forced to disembark and attempt an escape. South Korean forces hunted down and killed almost all of them and, in October brought the matter before the UN Security Council as a threat to the peace. The Council, with PRC

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support, issued a statement that criticized North Korea and, contrary to North Korea's position, urged that the 1953 armistice agreement be preserved until such time as a permanent peace could be negotiated. 114. The economic complementarities and bureaucratic interests behind China-South Korean ties are explored by Chung, "Sino-South Korean Economic Cooperation," pp. 59-79. 115. For a concise overview, see Yang, "China and the Central Asian Nightmare," pp. 88-95. 116. Glaser, "Chinese Security Perceptions," pp. 254-255. 117. Ibid., p. 78. 118. The oil agreement will also mean building a pipeline f r o m Xinjiang through Kazakhstan. See Steven Mufson, "China Deals with Foreign Suppliers to Double Oil Imports," Washington Post, June 9, 1997. 119. A China with weakening central authority, unable to control its borders or its economy and possibly beset by civil war (a scenario favored by a number of China-watchers), would certainly be a source of great insecurity to the rest of Asia. In that case, huge problems of out-migration, security of investments, and ethnicnationalist border wars would have to be anticipated—so too might China's deliberate exaggeration of an external threat in order to divert attention from its internal weaknesses. (On this last point, see Shambaugh, "China's Security Policy," p. 89.) A weak China, in fact, might be of even greater concern to Asia than a strong one. 120. Illustrative Asian comments are in Nicholas D. Kristof, "China Builds Its Military Muscle, Making Some Neighbors Nervous," New York Times, January 11, 1993, p. A l . 121. Samuel Kim avers that China has more territorial disputes "than any other major or middle-ranking power in the world" ("China as a Regional Power," p. 107). 122. Ibid., p. 106. 123. Besides ibid., see Shambaugh, "China's Security Policy," pp. 88-106. 124. See, for example, Huai Chengbo, "Behind the Fear of a 'China Threat,'" Beijing Review, no. 9 (March 1 - 7 , 1993): 10; and the statement at the United Nations of Foreign Minister Qian Qichen, in Beijing Review, no. 41 (October 11-17, 1993): 11. 125. Sutter and Kan, "China as a Security Concern," p. 18. 126. Klare, "The Next Great Arms Race," pp. 136-152. 127. Among the many sources that do are Segal, "China Changes Shape," pp. 6 - 3 4 ; and Gurtov, "The Future of China's Rise," pp. 109-128.

4 Military Doctrine and China's National Military Strategy

In the new era of reform and "opening to the outside world," Chinese military thinking and strategic concepts have been critically reviewed and redefined, resulting in the transformation of traditional doctrine. A clearer distinction between national security and national defense is one result. Their new geostrategic thinking is also reflected in the redefinition of China's strategic frontier and the concept of border defense. In this chapter, we present a detailed overview of China's strategic and nuclear doctrines, as well as the specific doctrines of the land, sea, and air forces. We shall explore the effects of doctrinal change on the PLA's structure, weapons, and education. And we shall spell out the implications for Chinese strategic posture and foreign policy. The analytical focus is on the interplay between "people's war" doctrine and military technology.

Redefining the Defense Concept and the Strategic Frontier Chinese political leaders continue to perceive the world political system as turbulent in nature. Facing threats and challenges from all sides, they feel perplexed: Where, in fact, is their defense line? Can traditional concepts of national defense reflect the reality of comprehensive global competition? What does it mean to have a modern national defense? In order to gain a clear perspective on these problems, the Chinese leadership evidently believes it is necessary first to establish a new, modern concept of national defense. "Comprehensive

National Strength" for "Strategic

Borders"

For Beijing leaders, national defense today is a comprehensive concept. The military's mission is not limited to defending borders and territory; it also includes fighting nonmilitary threats, from economic and technological wars to the insinuation of "peaceful evolution." A "comprehensive" national defense based on "comprehensive national strength" is the PLA's

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answer. 1 In a report produced by the Academy of Military Science's Department of Strategic Studies, modern warfare is described as a test of comprehensive national strength, from which the nation's war-fighting capabilities cannot be divorced. The report emphasizes that in order to strengthen and coordinate the various elements of comprehensive national power, the Chinese leadership should consider science and technology as the leading factors, the economy as the backbone, the military as the guardian, and diplomacy as the supporting factor. 2 Chinese defense literature points out that China's defense thinking had been a victim of its traditional geostrategic thinking. In the middle of the nineteenth century, just before the intrusion of the Western powers, feudal China, which had maintained a unified nation, operated on the assumption that internal rather than external threats posed the greatest danger to the celestial court. The core belief of the Chinese leadership at that time was that the court should primarily work to stabilize internal turbulence in order to repel the intervention of foreign powers. This is described as a closed concept of national security. 3 China's defense focused on its Central Plains hinterland, rather than on naval or air power. China relied on two means in order to resolve geopolitical conflicts. One was politicaldiplomatic: conferring feudal titles on vassal states and attempting to cement relations with rulers of minority nationalities in the border areas by marrying daughters of the Han imperial family to them. The other method was military: building defensive works along the border between the northern nomadic nationalities and the Han. Its objectives were to segregate the Han nation from the northern nomadic and seminomadic nationalities and to defend against attacks from the north on the Central Plains. This "Great Wall psychology" was the beginning of the Chinese military tradition of passive defense. However, it could only isolate, not eliminate, conflict. 4 Chinese defense literature reveals an effort to redefine the strategic frontier and update the concept of border defense. Two articles published in Jiefangjun bao in January and April 1987, part of a series titled "Strategic Studies on Development of National Defense," outlined the new strategic arena the Chinese now emphasize. 5 The authors argue that outer space and the oceans will become new strategic resources due to the scientific and technological revolution and the ever-increasing demands on land and energy resources. In the future, with the development of space technology, states will control land, air, and sea routes via outer space (the sea routes being most important). The Chinese military expects that the total amount of trade via sea transportation will increase by several times in the new millennium. In particular, its analysts cite an announcement of the U.S. Navy about wanting to control the sixteen sea-lanes throughout the world. For the Chinese, such an ambition not only has direct strategic significance; it also provides backstopping for U.S. global trade and marine

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transportation. From a still-larger view, they see the strategic perspective as requiring training of soldiers in the use of high technology to meet the demands of scientific and technological advances. 6 In the view of some Chinese strategists, space-weapons systems will be a specific reflection of the third weapons revolution, following on conventional and nuclear weapons. They think it entirely plausible that in the future a new generation of space weapons might succeed nuclear weapons as the principal strategic devices. The fierce arguments between the United States and the Soviet Union over the "Star Wars" plan in their disarmament talks point to such a conclusion. A powerful country can use space technology to monitor its adversary's territory and ballistic or cruise-type strategic-weapons systems. Future weapons systems will also be more reliant on carrier vehicles in the ocean depths than they are at the present time. One article indicated that as of the late 1980s, 36.3 percent of the total number of U.S. strategic nuclear weapons and over 70 percent of its warheads were deployed in submarines, as compared to over 40 percent of Soviet strategic nuclear weapons carried by its submarines. Such strategic capabilities have implications for international politics, since they give a state the ability to reach well beyond its geographic boundaries. 7 The country in possession of a large number of advanced military capabilities will be strong and prosperous in terms of total national power, Chinese sources maintain. It most likely will be able to defeat another state either having smaller strategic boundaries or using outmoded weapons. Moreover, rivalry over strategic boundaries will become intense; the tendency will be for states to try to fill a vacuum. Timeliness is another important attribute. Since competition will occur on the relatively empty high seas and in space, the race is to the swiftest; to lose time is to lose opportunity. Thus, the ability to "seize the hour" will directly affect the strategic outcome of the competition for space. A third factor is that there is the common tendency of advanced countries to try to maintain their monopoly in the development of outer space and the oceans. It can be argued that hegemonist countries seek global strategic boundaries, and expansionist countries seek regional strategic boundaries. Peace-loving countries, such as China, seek legal strategic boundaries. 8 Consequently, China's national defense forces should break the monopolies of outer space and the oceans as early as possible, just as they broke the monopoly of nuclear weapons in 1964. 9 The authors of the above strategic arguments suggest that the Chinese leadership expand its strategic thinking from traditional geographic borders to strategic boundaries and devise military forces accordingly. Moreover, the authors believe it is necessary to supplement certain traditional concepts about active defense. They are critical of the "national gate" concept, which China formerly supported. The concept emphasized the protection of Chinese territory and territorial waters out to 12 nautical miles,

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which was identified as the national gateway in resisting the enemy. 10 The analysts further stressed that in view of the current and potential threats that the nation faces, as well as the new trends of development in the world's oceans and in space, only by pushing the national gateway to the 3 million square-kilometer zone of ocean jurisdiction, by maintaining the same geographic borders on land, and by entering a high frontier in space is it possible to gain the needed total space to ensure the country's security and development. 11

If China intends to lay the basis for the twenty-first-century takeoff (tengfei) and join the ranks of the great powers, it must have a threedimensional frontier. That would enable China to establish and maintain the necessary conditions for preserving the national interest: security space, survival space, scientific exploration and technological development space, and economic activities space. 12 Emerging battlefield concepts will necessitate a gradual expansion of military forces, these analysts believe. Equally important is that corresponding changes will need to take place in the makeup of those forces. Purely defensive forces located near the continental territory would have difficulty in meeting the needs of so-called three-dimensional strategic boundaries (land, ocean, and space). For this purpose, China needs to build a force that is able to operate on a battlefield removed from China. One author illustrates what such a force would look like: a force able to move rapidly over great distance, and able to carry out land warfare on different scales . . . and strategic defensive and offensive weapons systems for carrying out prompt counterattack in space, on land, and at sea . . . [and] a crack combat force able to fight at sea anywhere to protect the shoreline, to seize coastal water, or to fight in the open sea. 13

These articles evidently were influential, because after they were published in the military newspaper, the Chinese high command announced, as part of official naval strategy, that offshore defense would encompass 3 million square kilometers of waters, including the Xisha (Paracel) and Nansha (Spratly) archipelagoes. That decision came on the heels of another, the 863 Project (named for March 1986), by which the Chinese government set up a ten-year plan to develop advanced science and high technology. The aerospace industry would continue to be the centerpiece of China's high technology, with a focus on developing advanced satellites, missile systems, and rockets. Together, these decisions are further indications of China's long-term goal to develop and expand its strategic capabilities in the ocean and outer space. It is unclear, however, how soon and to what extent China can or will reach the goal. As later chapters will argue, China has major weaknesses in the management and military application of

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science and technology, and the central leadership is not likely to be able to appropriate large sums to the PLA for research and development (R&D) for the foreseeable future. Furthermore, most military leaders have not changed their perception that the m a j o r threats to China come f r o m land, namely, neighboring states. For these reasons, C h i n a ' s acquisition of the military capabilities suitable for meeting the needs of three-dimensional strategic boundaries remains questionable. Land

Borders

In recent years, Chinese defense analysts have called for putting modern border defense in the strategic status. In the era of a socialist market economy, they say, the object of modern border defense is not just to pursue the overall security of the land, river, sea, and air defenses. A further object is to pursue the overall peaceful political, economic, military, and social development of the border regions. Besides the military's function to guard the borders, diplomacy must function to develop good-neighborly relations, and police must function to maintain law and order in borderland societies. There are still other functions: the social one of strengthening unity between the military and civilians and unity among nationalities, the economic function of promoting the development of border-region productivity, and the educational function of raising national spirits. 1 4 The political, military, and economic f u n c t i o n s are considered the most important. Making the border areas politically stable and preserving social order are important prerequisites for military security and economic prosperity. One analyst notes: Antagonistic forces inside and outside the country are working together to intensify infiltration, subversion, and separatist activities against us. They constantly employ religion, race, and human rights to pressure us in a vain effort to force changes. Therefore, one of the basic tasks in border defense work during the new era is real intensification of the battle against infiltration, subversion, and separatism. 15

Border regions are now and will continue to be the strategic forward positions for winning f u t u r e local high-technology wars. F r o m the perspective of C h i n e s e strategic analysts, the outbreak of local high-technology wars ( f u e l e d by territorial or i s l a n d - o w n e r s h i p disputes) on C h i n a ' s borders or at sea remains a possibility. T h e C h i n e s e high c o m m a n d has resolved to strengthen militarily "hot spots" and improve the rapid-reaction and i n d e p e n d e n t c o m b a t capability of border d e f e n s e troops. This, the high c o m m a n d believes, will enable the border troops to deal effectively with emergency situations that may arise in f u t u r e smallor m e d i u m - s i z e d local wars without adversely affecting C h i n a ' s overall strategic position.

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Development of Doctrine and Operational Strategy In China, military doctrine is determined at the highest level of the political and military leadership. Military doctrine reflects the CCP's views on global strategy and the nature of war, and the military follows these in preparing the armed forces for war. 16 The doctrine of people's war developed through the wartime experience of the CCP. While it has changed in the reform era in accordance with changes in China's strategic and political environments, some key tenets of the doctrine in Mao's time remain. These enduring elements include the primacy of politics, the primacy of people over weapons, the strategy for using a weak force against a strong force, the mobilization of the masses to fight a protracted war against invasion, and the multiple roles of the PLA. 1 7 The military doctrine of the Deng leadership continues to evolve, from the concept of "people's war under modern conditions" in the early 1980s, to local, limited war from 1985 to 1991, and to "high-technology limited war" in the mid-1990s. The adaptation of the PLA to modern, high-tech conditions has become the main preoccupation of the Chinese military high command. "People's War Under Modern

Conditions"

The Maoist people's war doctrine may initially have been revised at an enlarged meeting of the CMC in 1958, when Mao himself said that the ten basic principles of guerrilla warfare should be supplemented and developed in accordance with actual conditions in future wars. Mao is said to have constantly abandoned his outdated conclusions and replaced them with new ones in response to changes of objective conditions. 18 But it was not until 1979, when Su Yu, a leading member of the CMC, introduced the term people's war under modern conditions that PRC leaders took a close look at how, while using Mao's military thought as a guide, laws might be developed to operationalize such a strategy. 19 Since, in the Chinese view, a future war against aggression toward China would still be met by a people's war under modern conditions, military commentators continued to insist that Mao's epistemology and methodology for studying war remained relevant. But the PLA leadership faced two analytical dilemmas: How to define modern conditions, and how far and in what direction to change the people's war doctrine. In studying the guiding role played by Mao's military thinking on the issue of future wars, PLA leaders asserted that military cadres should guard against two tendencies. The first was copying mechanically—disregarding specific circumstances or modern conditions—and rigidly applying Mao's thinking as though it were a religious doctrine. The second

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tendency was the nihilist attitude that Mao's military thinking was outdated and no longer effective. 2 0 Of the two tendencies, PLA leaders were most vigorously opposed to the first, the viewpoint that ignores actual conditions and substitutes for them "whatever Mao said and wrote." The wellknown PLA leader Yang Yong, in an article to commemorate the fiftyfourth anniversary of the PLA's founding, argued that in studying Mao's military thinking, "we must adhere to a scientific attitude of seeking truth from facts" and "distinguish the scientific system of Mao Zedong's thought from certain mistakes of Comrade Mao Zedong, and continue to eliminate the influence of leftist guiding ideology." He added: "This calls on us to strengthen the study of military theory with the realities of our army and the demands of modern warfare in mind." 2 1 An authoritative article in Jiefangjun bao in June 1979 made a similar observation, pointing out two other erroneous tendencies: S o m e [comrades] feel that if we are to shift the emphasis of [military] work, we should bring in a whole new formula; otherwise, this would be nothing like modernization. Others feel that if w e are to modernize, w e must have modern weapons and equipment, for if equipment is not improved, the emphasis will not be shifted well. Thus, they view modernization as purely the replacing of weapons and equipment. 2 2

The article critically noted that the problem common to both of these onesided perceptions was their discarding of the existing foundations and failure to start from the real conditions of China. It strongly suggested that an evolution of the people's war doctrine should be based on existing weapons and equipment, which in turn would be conditioned by the foundation of existing material and technical strength. In the midst of these controversial arguments, PLA leaders also had to focus on tenets of modern conditions in warfare. Articles in Jiefangjun bao tried to define modernized warfare, distinguishing it from modern warfare. For the PLA leadership, modern warfare refers to the time during which war occurs. Modernized warfare, also called "warfare under modern conditions," refers to the application of the most advanced science and technology in battle, including military equipment, combat commanding, and combat methods. The Korean War and the Middle East wars in the 1960s and 1970s could be categorized as modernized wars. China's war with Vietnam in 1979 contained certain features of war under modern conditions; but it was not a typical modernized war and was referred to as a "special war within a special war." 23 The reasons include the limited scope and battlefield characteristics of the war, the use of only conventional weaponry, and the absence of a three-dimensional character to the war. Still, the Chinese military leadership considers that the war with Vietnam provides a very good basis for its exploration of the rules guiding warfare under modern conditions.

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The question arises, What are the aspects of a modern people's war that differ from the Maoist people's war? Chinese strategists discussed this question in the fall of 1981. Deng Xiaoping agreed to drop the last four characters (youdi shenru, "luring the enemy in deep") from the eight characters of the "active defense" strategic guideline. 2 4 Several decisions flowed from this revision. First, the PLA's strategic guideline would remain active defense, which means preparing to meet the enemy at the gate. Second, in adhering to the armed forces system of integrating field armies, local armies, and militias, China should establish garrison forces and reserve forces adequate for the fighting tasks. Third, the PLA should be both fighting forces and production units. Fourth, since the idea of largeformation warfare without a rear was unimaginable in a modernized army, the Chinese logistics system should be restructured. The focus should be on solving problems in wartime of organizational command, logistics, communications, and liaison, as well as protection of logistics safety, to insure the uninterrupted flow of large amounts of material to the front. Fifth, the theory of strategic offensive, the theory of coordinated fighting among different types of armed forces and services, and the military principles of people's war under modern conditions, especially the principles of campaigns and tactical principles, are all subjects that need to be studied systematically, developed, and updated. 2 5 The next major development in people's war doctrine came at the time of the previously discussed CMC meetings in mid-1985, when China's leaders announced the strategic decision to reduce the armed forces by 1 million. Deng Xiaoping, as CMC chairman, talked then about the necessity of reforming the PLA's structure, since the guiding ideology of the past for army building—based on preparing for "an early war, a major war, and a nuclear war"—was no longer applicable. 2 6 Under the influence of that guiding ideology, the PLA ever since the 1950s had attached great weight to large-scale strategic battles such as was fought at Stalingrad, in which several hundred thousand to a million soldiers were engaged. This thinking lasted until the 1970s, so an independent theory of local war could not emerge during that time. 27 But at the end of 1986, the Academy of Military Science, under instructions from the CMC, began research on a systematic study of "China's National Defense in the Year 2000." The study covered twenty-nine aspects of national defense in over a hundred reports. 28 Now it was possible to address new themes in future military strategy. Characteristics for the Conduct of Modern Limited

War

The first of the three new themes was to develop a strategy for deterring war. PLA leaders argued that in peacetime, China's center of gravity should switch from waging a war to checking and opposing a war. According to this position, policies should be studied and developed to make

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China's position of strength the cardinal element for preventing the outbreak of a war. 29 Traditionally, the notion of deterrence had been rejected on a number of grounds. 3 0 But in the age of reform, new functions such as strategic deterrence and regional deterrence have been formulated to supplement "real war." Regional deterrence in threatened border regions is considered particularly effective. As a consequence of the réévaluation of deterrence theory, military training, exercises, and weapon tests are not just practices for war (lianweizhan)\ they are practices for watching (lianweikan), for deterring war by demonstrating military might. 3 1 A second theme was the role of the oceans and outer space in terms of economic and military strategy. This theme underlined a gradual expansion of battlefield concepts from the traditional active defense of land to naval warfare, blue-ocean warfare, and space warfare, with corresponding changes in the military's structure and future weapon systems. The third theme was devising a theory of limited warfare in the new historical period. Those emphasizing the doctrinal requirements of modern limited warfare criticized the past tendency to neglect the study of guiding principles of military operations of the more than 100 limited wars fought since World War II. Growing Chinese interest in limited-war theory was reflected in strategic forums on local war, as well as in numerous articles and discussions in China's military literature. In particular, Chinese military leaders showed great concern about the way in which universal characteristics or regularities of modern warfare could be related to the exploration of the special rules of China's future limited war. Research materials on the Middle East war in October 1973, the Falklands war in 1982, and Israel's invasion of Lebanon in 1982 contributed to the Introduction to National Defense Modernization, which became required reading for all army cadres and soldiers. The Introduction and articles in leading military journals of the time (the late 1980s, before the collapse of the USSR) typically dwelled on five characteristics of modern wars, all having to do with their greatly increased scale, cost, and complexity. 32 We may therefore see these characteristics as representing the consensus of Chinese military thinking on the subject. 33 1. Limited strategic objectives and decisive combat actions in the initial phase of war. Past wars proceeded in initial, middle, and final phases. Victory or defeat in the initial phase did not decide the final outcome. Because the objective in modern limited war is no longer what it was in the past (i.e., completely destroying the opponent's capability and will to resist), modern limited wars exhibit a clear distinction among the three phases. 2. High technology, low intensity, and the complete replacement of traditional time and space concepts. Both parties in combat try to apply the results of sophisticated science and technology to the entire process of warfare, thereby producing a qualitative gap in combat operations.

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Aircraft, heavy artillery, and tanks will be superseded primarily by hightechnology weapons, such as tactical missiles and electronic-warfare weapons. Large-unit warfare will give way to aerial warfare, missile warfare, and electronic warfare. Traditional warfare time and space concepts will be replaced by the development of multidimensional battlefields. 3. Increased importance of the surprise factor. The utilization of advanced-technology weapons and modern war methods has become a principal element in the enhancement of the surprise factor in contemporary limited warfare, making it more blitzkrieg-like. The use of sophisticated weapons by units, the replacement of conventional weapons, the improvements of transport means in battle, and the increase in mobility have greatly increased the speed of military operations. Thus, the time frame of the battle will be shortened, forcing quick decisions. 4. Three-dimensional and combined-arms warfare. Modern penetrations will be carried out at multiple levels and in all directions simultaneously, so that there will be very little difference between the front and the rear. With tanks and infantry battle vehicles as the main force, the ground units will start a large-scale offensive in the main strategic direction. Aircraft will simultaneously initiate aerial combat against positioned targets at high, medium, low, and minimum altitudes. Besides using tactical guided missiles to attack land targets, the navy's air arm, surface warships, submarines, and sea weapons will engage in combat above, on, and under the sea. The Falkland Islands War exemplifies a fairly typical three-dimensional war. The so-called combined-arms warfare developed from the single-service arms operation on a small-scale. For example, a Soviet motorized division is made up of motorized infantry, tank, artillery engineering, air defense, chemical-warfare defense, and signal communication units. A U.S. Army division is made up not only of the above-mentioned service units, but also of helicopter units. In this way, from large campaigns to small battles, they are combined operations using all branches and arms. In addition, well-equipped, well-trained, small, compact contingents will become the main force in battle groups. By relying on special combat techniques, these miniaturized and highly effective combat troops will change the single stylized course of warfare. 5. Organization and command are more complex. The scale of modern warfare is very large. The battlefield has expanded, and more service arms take part in war than ever before. In particular, with the appearance of guided missile warfare and electronic warfare, the distance at which the two sides will engage in war is greater, and with expansion of the concepts of terrain and surface features, even the earth's curvature is used for cover. These changes require that all combatants correspondingly improve their organizational capability and set up battlefield automated systems suited to modern weapons and equipment. Currently, both the United States and the

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Soviet Union use the most advanced electronic transmitting and sensing reconnaissance, and automated data-processing equipment, in the command organizations of their armed forces. These enable the command systems of the two countries to react flexibly and to continue their work in an environment of strong electronic confrontation. Limited War and Active

Defense

In Western war theory, limited war is generally defined as a war fought with limited objectives, in a limited geographical space, for a limited duration, and by limited means. 3 4 In Chinese defense literature, this interpretation has been generally accepted. But their viewpoint is also that the theory of limited war is a defensive strategic policy to be applied in a national or border context, rather than in an international or intermediate-zone (third-area) context, as it is with the United States. First, Chinese analysts insist that their theory of modern limited war is based on the strategic guidance of active defense, in particular, the strategic guidance that in a limited war, one adheres to the principle of "gaining mastery by striking only after the enemy has struck." This principle is equivalent to Mao Zedong's idea that "we will not attack unless we are attacked, but if we are attacked, we will certainly counterattack." The strategy further insists on the principle of fighting to promote talks—fighting being in the interest of peace, rather than being an attempt to occupy another country's territory. Thus, say Chinese analysts, the strategy is reasonable and restrained, a backup for and instrument of the PRC's peaceful foreign policy. 35 Second, the Chinese military leadership has never understood the defense-oriented local-war theory to be a tool for pursuing a policy of strength. Nor does the current state of China's national and military capabilities leave it with many combat options. Indeed, the limited wars that China has fought since the founding of the PRC have basically been conventional conflicts, primarily involving ground forces and using a limited array of weaponry. The tenets of the people's war in fact were grounded in the idea of a poorly equipped force defeating a superiorly equipped enemy. 36 Third, the Chinese limited-war theory adheres to the principle of flexible strategy, typified by Mao's notion, "you fight your battles, and I will fight mine" (ni da nide, wo da wode). But the Chinese frankly recognize that since the terms of modern limited war—its features, objectives, combat means, and so on—are complex and varied, they need to adhere even more strongly to initiative and planning in their war guidance, striving for combat dominance through the flexible use of force and varying tactics. Finally, the Chinese leadership is determined to demonstrate that China has been highly successful in using military forces to defend its national interests and raise its prestige. No countries on China's borders

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should fail to underestimate China's military or fail to ponder the political and military consequences of antagonizing China. Even the superpowers, though harboring evil designs toward China's military might, genuinely respect it. 37 Indeed, what the Chinese leadership mostly seems to desire is to be free from outside pressure and blackmail and to ensure that if China is ever again subjected to subversion and invasion, it will be able to strike back with devastating effectiveness. The Chinese military leadership also believes that studying the features of local war clarifies the difference between local war and all-out war in terms of operational theories. The leadership acknowledges, however, that because the manifestations of local war vary according to time, location, and other conditions, all army units must explore future local war in light of Chinese conditions. Military leaders believe there are two important factors above all others that affect the formulation of China's localwar strategy. The first is China's complex environment. It has a diverse geography, huge population, and vast territory. China shares borders with fourteen countries, has mainland frontiers that extend over 20,000 kilometers, and has a seacoast that is 18,000 kilometers long. Territorial disputes around China's periphery have a long history that is likely to extend well into the future. The other factor is the technological level of the future military threat. Although the Chinese cannot altogether preclude high-tech warfare, as well as supraconventional warfare, as the major developmental trend in modern limited wars, they believe that China may face conventional wars of medium and low intensity in the next ten to twenty years. Looking at the military strength of most of its neighbors, PRC authorities initially predicted that although some of them might show progress by the end of the century, there would be no breakthrough changes in their armament and equipment, making it impossible for them to fight a so-called high-tech war. 38 But that prediction faded following the Gulf War. It is evident that the Chinese military leadership is developing a new local war strategy to meet various contingencies under different conditions. For what specific types of wars or contingencies are the Chinese preparing? This matter is discussed in the next section.

Wartime Contingencies Chinese military research journals have, for the first time, begun to discuss the potential wartime contingencies that China might face. An article titled "A Tentative Discussion of Special Principles of a Future Chinese Limited War" was published in Gufang Daxue xuebao (National Defense University Journal) in November 1987. The authors, four military students of the NDU, proposed five types of limited war China could face: border conflicts, contention for territorial seas and islands, surprise air attacks, resistance

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against partial intrusions, and punitive counterattacks against a neighboring country. 39 (The authors did not say a word about any wartime contingency directed against Taiwan, presumably for political reasons, though contingency plans surely exist for this scenario as well.) Six years later, the NDU's press published a book on high-tech limited wars that contained the same five contingencies. Perhaps just as important as the contingencies is the authors' stress on the fundamentally political purpose and aims of limited wars, thus (as mentioned earlier) distinguishing them from fullscale wars of annihilation of the past. 40 In addition, the Chinese military has been concerned about so-called political contingencies, including political turmoil, riots, national minority conflicts, and religious conflicts. In the Chinese view, to cope with political contingencies is merely a manifestation and application of military forces. This has been the case particularly since the spring 1989 Tibetan movement for separation and the student demonstration in Beijing in June 1989. In the case of Tibet, the PLA was forced to rely on civilian aircraft for military airlifts. 4 1 Soon after the crackdown on students and workers, the Chinese military media spoke of the necessity to study the pattern of army involvement in political contingencies, not because they occur so frequently, but because their complexities are even greater than military contingencies. 42 Border

Conflicts

China has been involved in a number of small-scale border clashes with neighboring countries, including India, the Soviet Union, and Vietnam. The Chinese high command characterizes these small-scale border skirmishes as being fought along relatively stable lines with small military forces, for short durations, and with limited objectives. Contingencies for such actions will be tactically oriented. For example, the PLA has focused on training troops in border regions to operate under their specific local conditions. 43 The leadership has been concerned with improving existing weaponry and equipment to adapt to temperature changes and mountainous conditions. The PLA has improved light weapons such as grenades and mines, as well as the communications equipment of infantry units, so that they may operate in low temperature and high altitude. 4 4 The PLA has also strengthened air mobility by deploying a greater number of helicopters in the mountainous area bordering Vietnam. In addition, China has made efforts to solve logistics problems in border and coastal defense. 4 5 As a result, the Chengdu Military Region and relevant departments of Yunnan Province cooperated to improve road transportation. Reportedly, 80 percent of border defense points on the Tibetan plateau can be reached by road. 4 6 PLA officers are also concerned about the ability of rapid-deployment units to carry out combat tasks in the border area, once emergency

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incidents or limited wars occur. 47 They evidently take into account not only geographical conditions in the border areas that may hinder the deployment of large numbers of troops. They also realize that in local conflicts, advanced weapons and equipment are likely to be thrown into the battle. Hence, the past idea that quantity will subdue the enemy must be replaced by an emphasis on quality. Accordingly, one PLA army airborne force is reported to have formed a rapid-reaction "fist battalion." A June 1988 article noted that without any prior preparation, the fist battalion can reach any location in China within twelve hours to launch combat operations. If there is no exaggeration in the words "any location," then it must include Tibet and Xinjiang in the far west and the South China Sea islands. The Chinese high command intends to make the fist battalion small, highly mobile, and multifunctional in order to be better suited to modern warfare. 48 The fist battalion is supposed to focus on training soldiers in rapid reaction; but it has yet to develop into a crack fighting force. 4 9 Rapiddevelopment units are supposed to get ample air transport support or be provided with helicopters in order to reach operational sites in the shortest possible time. It is a well-known fact, however, that the PLA Air Force (PLAAF) has medium-range transport planes and medium-range helicopters, but still does not possess long-range transport planes. Nevertheless, since the early 1990s, the PLA has strengthened its rapid-reaction units and rapid-deployment troops, as we discuss later. China's border defense has been supported and reinforced by the creation of a new reserve system in the early 1980s. Although the exact number of the reserve divisions is unknown, it has been confirmed that as of the end of 1988, a significant force had been set up: about thirty divisions, including army, garrison, border, air force artillery, and naval artillery divisions; and a few special arms regiments, including signal, chemical defense, tank, and infantry regiments. As Table 4.1 indicates, more than onethird of the reserve divisions have been formed in the Beijing and Shenyang Military Regions (MRs), indicating the importance of these two MRs to China's security against external attack from the north. To the south, the six army reserve divisions already formed in the Guangzhou MR reflect Chinese concern about the possibility of another military conflict with Vietnam. In contrast, in the Lanzhou MR, only two antiaircraft artillery divisions and one army division are identified as reserve forces. The few reserve divisions in the northwest region imply that the Chinese consider this area less important than the northeast region. Details have not been disclosed as to the organization and operation of the reserve divisions, but it seems that the army reserve divisions have been organized in the same way as regular divisions, being composed of three infantry divisions, one artillery regiment, and a tank unit. The number of reserve officers and men assigned to a reserve division is reportedly a little over 10,000, with a skeleton crew of about 1,000 headquarters staff

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and technical specialists. 50 Priority in recruitment of reserve officers appears to belong to Communist Party members. For instance, in the Daxian Army Reserve Infantry Division in Sichuan Province, 100 percent of the reserve officers as of January 1987 were party members, and 60 percent of them had been former cadres in party and political organizations at various levels. 51 A number of Beijing's motives and objectives to create the reserve system can be surmised. The new system is based on the idea that China will maintain smaller troop strength in peacetime and larger troop strength in wartime so that the government can save on outlays of manpower and financial resources. The reserves are thus intended to make up for the gap left by the 1985 demobilization of 1 million soldiers, not only by maintaining a well-trained force in peacetime, but also by establishing a mobi-

Table 4.1

The Situation of the PLA's Reserve Units

Military Region

Provincial District

Subdistrict

Shenyang

Liaoning (13) a Jilin (18) Heilongjiang (14) Hebei (11) Shanxi (10) Neimonggol (12) Shandong (14) Henan (15) Jiangsu (11) Zhejiang (11) Anhui (15) Fujian (9) Jiangxi (11) Hubei (14) Hunan (13) Guangdong (12) Guangxi (9) Hainan (2) Sichuan (20) Guizhou (9) Yunnan(17) Xizang (8) Gansu (14) Shaanxi (10) Qinghai (8) Ningxia (14) Xinjiang (15)

Jinzhou (AD); Dalian (AAD); Dalian (AD) B aicheng (AD) Suihua (AD) Langfang (AD) Xinzhou (AD) Hohhot (AD)

Beijing

Jinan Nanjing

Guangzhou

Chengdu

Lanzhou

Zhengzhou (AD); Kaifeng (AD) Yangzhou (AD); Gaoyou (AD) Hangzhou (AD) Chuxian (AD) Nanchang (AD) Wuhan (AD) Zhuzhou (AD) Guangzhou (AD); Shenzen-Shantou (BD) Guangxi Zhuang (AD); Liuzhou (AD) Daxian (AD) Qiannan (AD); Xingyi (AD) Kunming (SR) Lanzhou (AAD) Xi'an (AAD); Xianyang (AD)

Source: Table has been prepared on the basis of the Chinese media. Notes: AD = army division; AAD = antiaircraft artillery division; AR = artillery regiment; BD = border division; SR = signal regiment. a. Figures in parentheses indicate number of subdistricts. Other garrison divisions are: Tianjin Army Reserve Division; Beijing Army Reserve 1st Division and 2nd Division; and Army Reserve Garrison Division in Lianoning.

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lization system to bring the reserve force up to its full strength in times of emergency. 52 Furthermore, combining the militia and the reserves has also become necessary, since the militia cannot meet the requirements of modern warfare. Asked by a Xinhua (New China News Agency) reporter to explain this move, the leading group for revising the Military Service Law answered as follows: The militia system of our country is a good military system formed in the course of long revolutionary war. However, a war under present conditions will make higher demands than in the past with regard to the mobilization of servicemen. The militia system alone cannot meet the need for large numbers of technical soldiers and officers that must be mobilized in wartime, nor is it sufficient to satisfy the demand for quick mobilization in the organized way according to the requirement of combined armed units in case a war suddenly breaks out. We must institute a reserve service system and try to make it perfect. 5 3

Resistance Against Partial Hostile

Intrusions

China has considered this contingency with Vietnam, India, the Soviet Union/Russia, and the United States in mind. Prior to 1991, the principal concern in Beijing was a limited Soviet thrust into Chinese territory. According to Chinese accounts in the 1980s, the Soviets, using their sizable mobile and mechanized group armies supported by air and naval power, might conduct raids in Xinjiang, the Beijing-Tianjin corridor, or Manchuria. 54 The Soviet invasion would be a blitzkrieg-type assault, utilizing methods of strategic and tactical surprise. The Chinese believe that the pattern of fighting may be strategic fighting in the combat area. When China drew up campaign plans to fight the enemy invaders, a debate over the selection of campaign targets appears to have taken place among the military leaders. Some military leaders espoused an in-depth attack theory. They maintained that attacks on targets deep behind the enemy's troops (or in-depth targets), such as the command system, firepower system, electronic-warfare system, and rear-area support system, should be paramount. The main objectives of attack on in-depth targets are to disrupt the enemy army's timing, to destroy its operational disposition, and to smash its whole campaign performance. In order successfully to conduct in-depth attacks, China should have military capabilities superior to the enemy's in terms of airpower, mobile ground forces, and reconnaissance. 55 In contrast, other military leaders often argued that attacks on combat troops deployed on the front line (or close-range targets) should have highest priority. They pointed out that since the enemy's (i.e., the Soviet Union's) weapons will be superior to China's, there are greater disadvantages and that unless China is able to overcome the difficulties derived from military technology, it will be impossible to attack in-depth

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enemy targets. In the view of these leaders, China would be better served by concentrating superior forces to form an attacking fist that can deliver powerful blows against the enemy at times and places of China's choosing. A close-range attack would also be best suited to the level of C h i n a ' s weapons technology. 5 6 In the end, the weakness of Chinese military capabilities relative to its most likely enemies was among the factors that moved the leadership to favor conducting a defense-oriented campaign, primarily attacking the close-range targets of the enemy army in order to neutralize a powerful invading force before it penetrated too deeply into rear areas of Chinese territory. The PLA will rely on an active defense, using the combined-arms units to defend the most likely avenues of enemy attack and using small units capable of waging mobile warfare to weaken the enemy's logistical lines. The Chinese also believe that a further advantage of active defense is to delay and slow down the speed of the enemy offensive, gaining time for completion of reserve mobilization and for gradually changing the balance of strength. This debate over campaign tactics seems to have at least three implications for future Chinese contingency planning. The first implication is that the PLA is seeking to catch up with most advanced theories of military campaigns and is being influenced by both the U.S. air-land battle theory and the Russian army's greater-in-depth, three-dimensional campaign theory. Since China's military might is not yet suitable for implementing a new campaign theory, the debate has implications only for China's longterm contingency planning. The second implication, implied in the discussion of campaign target selection, is that the Chinese are likely to proceed f r o m realities, constructing a campaign theory that mainly takes their actual capabilities into account. In this respect, it is evident that Chinese def e n s e doctrine still bears M a o ' s imprint. A month after the March 1969 border clashes with the Soviet Union, Mao reminded the party leadership of his view that tit-for-tat struggle depends upon the situation. He said that "if [the attack] is on a small scale, we will fight on the border, [and] if it is on a larger scale, then I am in favor of yielding some ground." 5 7 The final and most significant implication, therefore, is that future Chinese application of various campaign theories to actual contingencies will vary according to different campaign objectives, opponents, and battlefield conditions.

Punitive

Warfare

China has f o u g h t a n u m b e r of punitive wars with neighboring countries since the founding of the PRC, most recently with Vietnam. The aim of such punitive wars was not, in the end, completely attained by military actions alone, but was resolved by coordinating military actions with political and diplomatic measures. These wars had special characteristics that

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included the relatively large scale of the fighting, the involvement of several branches of the military, and the extended space of conflict—on or beyond the Chinese border, rather than being confined to China's interior. 58 The PLA made ample preparations for these conflicts, including the establishment of ad hoc frontier combat units, most of which were composed of traditional field armies and local troops. 5 9 Notable, however, is the fact that, as shown in China's wars with India in 1962 and with Vietnam in 1979, a single service—namely, the ground army—conducted the operation without the meaningful combat support of China's air units. The military leaders of China believe that in a future punitive war, the motto of the operation will be: "If fighting is not intended, abstain from action; if you intend on fighting, be sure to win, fight to hurt the enemy, and make it a short fight with a quick, decisive ending." 6 0 The very nature of such a conflict also implies that the main operational means should be the offensive, either in the form of a frontal attack or attack on in-depth targets to attain coercive objectives. The operation requires the military high command to make war objectives clear, act resolutely, constantly employ troops with the most modern weapons, and utilize an attack pattern of the surgical type, rather than frontal attack by massive ground forces such as was conducted in the past. To meet these requirements, fairly high demands are imposed on the quality, scale, and adaptability of the army units thrown into the conflict. In particular, the Chinese need to overcome disadvantages in their military capabilities to conduct in-depth attacks, especially in terms of airpower, firepower, and mobility, as discussed above. Except for the case of a surgical air strike, the key troops, such as airborne units, cannot alone carry out a punitive war against the enemy without the support of strong regular corps. 61 And since local conflict cannot be separated from the need to coordinate with the forces that might be required in a full-scale war, regular forces should be strong enough to appear threatening to the hostile country, especially to the supporting forces behind them. This threat can prevent the escalation of the conflict. In this respect, whether China will employ either an attack pattern of the surgical type or a massive frontal attack depends primarily on China's military capability, relative to the enemy's, to carry out an in-depth attack. A new structure in China's ground force field organization emerged soon after all original field armies of the ground forces were reorganized into ground armies (jituanjun). In April 1983, the Chinese high command established the first group army in the Beijing Military Region, and by the end of 1985, it completed the work to turn all field armies into group armies. A group army is reportedly composed of armored and infantry units as its ground assault force; artillery, air defense, and army aviation units as its fire support force; meteorological, signals, engineering, chemicaldefense, and electronic countermeasure units as its combat support force; and transport, medical, and linemen's units as its logistics support force. 6 2

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This suggests that a group army is a combined-arms army probably composed of 50,000 to 60,000 soldiers. But it is not clear how many of these group armies are operationally ready and to what extent. According to The Military Balance, 1988-1989, only three of the total twenty-four group armies have been fully equipped. 63 This includes the 38th and 39th Armies, with six divisions, incorporating three infantry divisions, one tank division, one AAA (antiaircraft artillery) division, and one artillery division. Each army is believed to have more than 1,000 tanks and more than 1,200 armored personnel carriers. 64 According to a Taiwan source, twenty-four group armies have been formed and deployed, with eleven being concentrated in the Beijing and Shenyang MRs. Thus, priority in fully equipping group armies has been given to those two in the northern military regions. 65 In November 1986, three years after the pilot project to form the group armies was executed, a mechanized group army of the Beijing MR conducted a major tactical exercise in a certain part of North China for the first time. The objectives of the exercise were to appraise the capabilities of the first new-type operational (zhanyi) group army and to set a model for the further development of other group armies. 66 As noted previously, an additional exercise was conducted in the Lanzhou MR in October 1988. The two group armies, which included rapid-deployment forces composed of helicopter groups and paratroops, participated in the exercise. The aim of the exercise was to test the PLA's new strategies and its theory of war.

Helicopters

or Tanks?

It is evident that after forming the group armies, the Chinese have had to meet higher organizational demands in order to prepare them for modern warfare. A debate ensued as the Chinese high command confronted the problem of choosing a weapons system for the development of the Chinese group army. The issue was whether the group army should develop with a focus on helicopters or on tanks. 67 The military group that preferred helicopters probably advocated that in the future China's ground forces should be deployed from helicopter bases. This group reasoned that when helicopters appear, not only do they affect the modes of ground warfare, providing fire support and mobility, but they also impel a change in the modes of command, opening up a way for airborne command of ground warfare. The helicopter supporters downgraded the role of tanks in future battlefields, pointing to the development of antitank weapons and the low mobility of tanks. They said: "Crawling on the ground will soon become history, and future battlefields will be dominated by helicopters." They further stressed that the military should directly bring about the use of helicopters by boldly bypassing the development stage of the army's mechanization. 68

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In contrast, military leaders who prefer tanks and armored vehicles recognize the important role of helicopters in battle, but oppose committing too many resources to them. In the above debate, they presented several reasons for their position. First, helicopters have their advantages, but they also have combat limitations in terms of combat radius, combat hours, antihelicopter missiles, and manufacturing costs. Second, the new generation of tanks not only can effectively deal with all types of antitanks weapons, they also can avoid the pernicious inflation of weight and bulk. Third, judging from the current ratio of helicopter units to combat units in the U.S. and Soviet organizational systems, as well as from the short- and medium-term equipment development plans of ground combat vehicles, the trend is against helicopters taking the place of ground combat vehicles. Finally, given China's inability to divert more funds to developing military equipment, the role of existing tanks and armored vehicles should be stressed. The tank-supporting group advocated helicopter development as a component of the relevant program: "In a planned and systematic manner, we must stimulate the building of the army's air force units, and gradually form a single entity of combined air and ground forces, with the ground force as the core, opening up a road to the development of mechanized and armored equipment." 69 This debate, as well as China's subsequent decisions, suggests that the military high command considers both helicopters and tanks as core components of the group armies. Hence, in January 1988, the first helicopter group was activated by a group army in the Beijing MR. 70 It is uncertain if the unit is a brigade or a squadron, but more helicopter units are reportedly being added to other group armies. The personnel and equipment of the helicopter group were transferred from the air force. In addition, the Chinese government has plans for a considerable expansion of the helicopter industry in the future. In October 1988, it approved establishing the China Helicopter Technology Development Corporation (CHTDC) and raising the economic efficiency of research funds for helicopters by 20 percent. A report in Renmin ribao (People's Daily) expressed the hope that the founding of CHTDC would contribute to remedying the drawbacks of China's helicopter industry, which in the past had uneven research, a weak technological basis, inadequate experimental facilities, and insufficient production capacity to meet civilian and military demand.71 The Rapid-Reaction

Forces

The PLA has been enlarging the rapid-reaction and rapid-development units since 1994. According to the account of a Japanese analyst, the Chinese have made up the rapid-reaction units and the rapid-deployment units from among the six key group armies and the 15th Airborne Army. The units to be assigned the rapid-reaction mission include the 162nd Division in the 54th Group Army of the Jinan MR, the 63rd Division in the 21st

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Group Army of the Lanzhou M R , and the 149th Division in the 13th Group Army of the Chengdu MR. The 43rd, 44th, and 45th Brigades in the 15th Airborne Army have been enlarged into divisions for rapid-reaction units. The 38th and 39th Group Armies have been strengthened to carry out the mission of the rapid-deployment units. The 38th, 39th, 42nd, and 54th Group Armies have ground airborne units along with the most modern tanks (T-79s, T-80s, T-85s, and T-90s). They also have tactical groundto-ground missile brigades or battalions equipped with M - l l missiles. 7 2 The rapid-reaction forces ( R R F ) and rapid-deployment forces (RDF) number about 258,000, which comprises approximately 11 percent of the total 2,300,000 ground forces. 7 3 The Chinese R R F is composed of airborne units and light infantry units. It is equipped with light weapons and depends entirely upon air transportation. The R R F is expected to react rapidly to border disputes, minority rebellions, and political violence. In contrast, the Chinese R D F is equipped with heavy weapons and will quickly deploy to deal with any contingencies, only after its R R F reacts. Two strategic decisions guide the R R F ' s role in response to border conflicts. One is that the R R F will be sent to the conflict area at the initial stage of the conflict, thereby building the in-depth line of defense to repel invaders from China's frontier. This leads the Chinese leadership to have a more flexible intermilitary regional defense system beyond the traditional M R defense system, thus reinforcing the military doctrine of active defense. Second, and of equal importance, the creation of China's R R F and R D F may increase China's ability to carry out active defense in such foreign environments as the Korean peninsula, the Indochina peninsula, the South Asian subcontinent, and Taiwan. As a recent example, during the "Express 60 Troop Movement Exercise" in the spring of 1996, the 38th Army's 112th Division, the 39th Army's 116th Division's rapid-response regiment, and two special army units from the 20th Army's 58th Division were reportedly transferred to Fujian's strategic area. 74

After the Gulf War: Active Defense Under High-Technological Conditions High-Tech

Warfare

Shortly after the outbreak of the Gulf War, Jiang Zemin said: "The Gulf War let us further realize the importance of technology in a modern war. Although we believe that the decisive factor in winning a war is human power not firepower, advanced weaponry is very important and we cannot neglect [the impact of] science and technology [in a modern war]." 7 5 The Chinese military went to work drawing conclusions from the war. 76 A circular by the CMC pointed out that local war and the widespread application of high technology in the military field were having a major impact on many

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countries' military strategies and operational principles. The National Defense University conducted a study of the impact of the Gulf War on world strategy. Its scholars recommended giving PLA technological superiority the highest priority and elevating those military commanders knowledgeable about the political goals that usually accompany high-tech wars. 7 7 A Jiefangjun bao report outlined the seven characteristics of modern war revealed by the Gulf War. 78 Among them, the report emphasized that the Gulf War set higher demands on military buildup (meaning conventional combat), the formation of elite units, the application of high technology, and quick-response operations. A military academy under the General Staff Department was reported to have given specific attention to air raids, night combat, mechanized troops, electronic warfare, long-distance supply, and personnel training. A "Hi-Tech War Series" was published by the China Military Science Publishing House, with titles such as Modern Hi-Tech Wars, Modern High Technology in the Military, High Science and Technology: Present Situation and Trends, Questions and Answers on Knowledge of Hi-Tech Wars, Dictionary of High-Tech Weaponry, and High Technology and Air Forces. The series focused on battlefield characteristics, troop flexibility, war formations, military command, and operational theory. 79 In Chinese defense literature published soon after the Gulf War, the term high-tech limited (local) war (gao jishu youxian [jubu] zhanzheng) was used, rather than limited war under modern conditions. What will an active defense strategy under high-tech conditions look like? Is it required that when technology changes, corresponding changes in Chinese military doctrine take place? To meet the requirements of high-tech limited war, what kinds of military preparations do Chinese strategists propose? Chinese defense literature published in the 1990s suggests that, generally speaking, three strategic views are competing. All of them recognize the significant technological gap that exists between the PLA and the enemy that needs to be overcome. They differ, however, in the strategies and weapons China will have to develop to accomplish this. One view is concerned with the relationship between the people's war doctrine and high-tech war operations. Some military strategists argue that although the armed forces of the developed countries are superior to the PLA in high-tech operations, the problem the Chinese military has faced is that "some comrades always betray a sense of inferiority and a lack of confidence when they talk about high-tech warfare." To overcome the enemy, one must first overcome oneself. 8 0 These strategists proposed at least nine strategies to minimize the high-tech edge of an enemy: 1. develop long-range interception weapons for targeting enemy transport ships; 2. keep communication lines open in order to prevent disruption of China's command and control in using the communications facilities of a nonbelligerent or civilian radio and TV broadcasting;

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3. 4. 5. 6. 7.

prevent the enemy from stealing secrets; obtain intelligence through commercial channels; use saturation strikes with tactical ballistic missiles; use inferior forces to defeat superior forces; employ passive resistance and scattered actions, including camouflage, deception, and separation; 8. use flexible methods of operation; and 9. enhance the mobility of existing weapons and further establish and perfect a rapid-response mobilization system. 81

These strategies are basically defensive and do not seriously depart from the tenets of people's war under modern conditions. But the second view is much more offense-minded and even argues for innovations in the active defense doctrine at an initial stage of the war. In an article titled "China's Strategic Plan for Active Defense," one writer pointed out that China has made coping with local wars, particularly high-technology local wars, "the starting point for military combat preparations." Planning and directing a successful outcome of a local war under high-technology conditions has become a new and important component of the strategic policy of active defense in the modern era. 82 Hence, some Chinese strategists believe that a fundamental way for the weak to overpower the strong is to make a preemptive strike during the early phase of a war or in the preparations leading to an offensive. This advice stems from a lesson learned in the Gulf War, namely, that Iraq suffered from passive strategic guidance and overlooked the importance of seizing the initiative and launching a preemptive attack. As a result, Iraq missed a good opportunity to turn the war around and change its outcome. A preemptive strike is a prime expression of active defense strategic thinking at a tactical level, the argument goes; moreover, it is compatible with the principle of "striking only after the enemy has struck": In China's anti-aggression wars in the future, all military activities conducted by the enemy and aimed at breaking up China territorially and violating its sovereignty de facto constitute the first shot in strategic terms. The actual combat that follows is merely a continuation and expansion on the strategic level of the first shot. For this reason, when a point is reached at which the enemy is amassing troops or engaged in other military activities targeting this nation and war has b e c o m e inevitable, w e must lose no time in launching a preemptive attack, [which is] an important example of active defense strategic thinking at the start of a limited high tech war. 8 3

By the year 2000 or so, the weapons gap between China and its enemies will worsen, one analyst has written. China might have to consider taking advantage of the window of opportunity presented before an enemy acquires a high-tech edge or develops a full-fledged combat capability in the war zone to launch a preemptive strike. 84

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For Chinese strategists, theories and capabilities of joint operations in high-tech limited wars have become a growing concern. 85 The creation of a three-dimensional, in-depth forward attack zone must be a precondition for launching a preemptive attack and seizing the initiative in a war, they believe. Given the overriding importance of reunification with Taiwan, Chinese strategists assume that the major operational areas are mainly in the coastal and border areas, and may therefore involve an island landing, border counterattacks, and mobile warfare. They argue that victory in such operations depends more than ever on joint operations by several services fighting in tandem against the enemy on land, sea, airspace, and electronic fronts. Joint operations naturally have their own characteristics and laws. 8 6 For air force strategists, the classical air domination theory is no longer relevant to high-tech limited wars. The role of airpower now must be extended to combined air, ground, sea, space, and electronic operations. This sets new requirements for the modern air force, including acquisition of air-to-ground weapons, marine monitoring, control, domination capabilities, space-based offensive and defensive capabilities, and the number of specialized aircraft for early warning, reconnaissance, and electronic warfare. 8 7 PLAAF strategists have shown great interest in fighter-attack aircraft survivability and extension of its operational range outside China's gate. The main reason is that high-tech limited war is nonlocal war; longrange weaponry can be used not only for all-out, in-depth battle and even strategic strikes against the enemy, but also for precision hits on any enemy position. 88 Chinese naval strategists anticipate that in the future, naval-warfare developments will tend toward greater depth—more multidimensional operations are going to develop in a battlefield climate of land-sea, land-air, surface-undersea, sea-space integration, and full-space electromagnetism. They argue for preparedness to fight small-scale, high-tech, low-force maritime conflicts, as well as large-scale engagements. 8 9 The strategists predict that the sudden appearance of new weapons in great numbers will speed up change in, but also renew, traditional naval combat forms, with long-range warfare becoming the key one. Six features of the new navalwarfare weaponry are presented for PRC decisionmakers to consider in the process of naval force modernization: reconnaissance and observation equipment, antipersonnel force of arms, mobile and expanded naval combat forces for wider-ranging operations, improved protective and survival capabilities for naval arms, improved electronic jamming and attack systems, and all-dimensional space-based weapons. 9 0 The third strategic viewpoint on high-tech warfare is heavily influenced by information-warfare theory and operational format. In the aftermath of the Gulf War, Chinese military leaders noted the decisive role that electronic-warfare systems played in determining the initiative and achieving

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battlefield victories early on and at low cost. 91 Since the mid-1990s, Chinese analysts have stressed that while the Gulf War was a great victory of manpower and material, it was most crucially a victory of information, particularly information from the air and space. Chinese specialists define information warfare as combat operations in a high-tech battlefield environment in which both sides use informationtechnology means, equipment, or systems in a rivalry over the power to obtain, control, and use information. In the narrow sense, information warfare refers to the U.S. military's so-called battlefield information on warfare, the crux of which is command and control. It is defined as the comprehensive use, with intelligence support, of military deception, operational secrecy, psychological warfare, electronic warfare, and substantive destruction to assault the enemy's whole information system and disrupt the enemy's information flow. The objectives are to weaken and destroy the enemy's command-and-control capability, while keeping one's own command control capability intact, and protection against similar enemy actions. 92 Major General Wang Pufeng points out: "High-tech warfare has already developed from an emphasis on guided missiles to an emphasis on information." Firepower superiority depends on information superiority. He further suggests that it is very difficult to conduct a people's war in the context of information warfare: The people's war of the past was conducted in tangible space, but information warfare, in addition to occurring in tangible space, on the ground, on the sea, and in the air, is conducted e v e n more in intangible space, such as electromagnetic fields. It is not only a battlefield in which guns and bombs proliferate, but also a computer battlefield in sheltered laboratories and control rooms. 9 3

Writers in Jiefangjun bao have emphasized that command of information is the primary target of high-tech warfare, and they stress the need to optimize China's information confrontation forces by setting up the best systems suited to information-warfare needs. The PLA needs to expand its ratios of information-related arms and personnel, 9 4 set up a capable information systems command agency, pay attention to better coordination of information network establishment systems, and cultivate talent suited to information warfare. 9 5 What will be the outlook for twenty-first-century information warfare? A Chinese expert believes that both weapons and military units will be information intensive in the twenty-first century. Information acquisition will be the main feature distinguishing military forces of the next century from those of the present. Military battles of the future will unfold around the use and counteruse of information for military and political goals and at many different levels. 96

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Naval Doctrine The Shift to Active Defense at Sea In response to a growing Soviet naval capability, Mao authorized a major naval expansion program in 1975. The "ultraleft," or Gang of Four, faction headed by his wife, Jiang Qing, obstructed it on the grounds that China was a continental power, making a large navy unnecessary. After the purge of the radicals, naval strategic thought was able to proceed beyond coastal defense and to a redefinition of the offshore perimeter. 97 In the late 1980s, according to China's senior naval officers, the PLA high command reached the consensus that PLAN should adopt offshore active defense as a strategic concept. 98 "Offshore" not only encompasses all the sea areas under Chinese jurisdiction, as acknowledged by the Convention on the Law of the Sea, but also all the Chinese territories scattered in these waters, such as the Spratly and Paracel Islands. (See the map on p. 115.) The navy's mission is to protect not only the coastline of more than 18,000 kilometers, but also the legal rights and resources of 3 million square kilometers of water, an area equivalent to one-third the size of the Chinese mainland. In an interview, navy commander Zhang Lianzhong stated that the navy's defense strategy is based on the concept of defensive depth at sea in order to fight a local war and in order to deter and guard against invasion from the sea. 99 Offshore active defense departs from PLAN'S previous role in the doctrine of people's war. Then, the navy was defined as a coastal extension of the ground forces, oriented to coastal defense and avoiding blue-water operations. The Soviets' small-battle theory, resting on warfare by torpedo boats, missile boats, shore-based planes, and submarines, also played a key role in the formation of the navy's essentially guerrilla strategy of those formative years. Consequently, PLAN remained "light" for a good part of its history. 100 In 1982, Liu Huaqing, then the CMC vice chairman, who had studied at the Voroshilov Academy of the Soviet Union in the mid-1950s, was appointed as the navy's commander. He contributed to the formation of the navy's new maritime strategy, which is officially characterized as "active offshore defense strategy" (jijide jinhai fangyu zhanlue). The strategy differs considerably from naval strategy in Mao's time. In the protection of major coastal cities, active defense has to be deployed far from inshore waters and requires a large maneuvering space. Thus, one distinction between current and past naval doctrine is that the latter allowed the enemy access deep into Chinese territorial waters and then waged a subsequent people's guerrilla war against it. Under the new strategy, the navy confronts the enemy in the outer approaches and stops any advance before an incursion into coastal waters occurs. 101 The basic tenets of the offshore active defense strategy can be characterized as follows. 1 0 2 First, offshore defense can effectively cover offshore

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islands such as Taiwan and the Paracels. It may also enlarge China's maritime defense in terms of area and depth by pushing forward and deepening protection in coastal areas. Second, offshore defense will facilitate ocean exploration projects during peacetime, can more effectively protect maritime interests, and will aid in the expansion of the P R C ' s political influence, particularly in the Asia Pacific region. Third, the strategy can effectively prevent and/or break an enemy naval blockade and will make it easier to interdict enemy sea-lanes of communications in depth. It can assure the safety of coastal and offshore sea-lanes and shield ocean passages in key areas. Fourth, offshore defense will facilitate mobile warfare on a larger scale and can accordingly be effective in preserving China's military

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strength by combining combat operations on both interior and exterior lines, with the purpose of destroying or delaying a potential enemy. Fifth, the strategy will facilitate mobile formations at sea so as to be better coordinated with coastal defense operations. It will also facilitate the mobilization of forces in various strategic waterways and make coordinated operations more efficacious. 1 0 3

The Offshore Strategic Environment and Naval Capabilities As the Chinese high command views its strategic environment, the importance of naval power rests especially on perceptions of threat from three directions: a Taiwanese movement toward independence, territorial conflicts in the South China Sea, and a sea-based invasion. In one internal document, China analysts observed that a proclamation of independence by Taiwan may be the spark for recovery of the island by military force, and if this is the case, the contest in the Taiwan Strait is likely to be a modern battle of extremely high intensity. They calculated that, if Taiwan deployed 80 percent of its warplanes, China would need to use 40 percent of its warplanes (out of a total of 6,000) in order to strive for air superiority. In the case of naval power, China would have to mobilize the North Sea Fleet, South Sea Fleet, and the independent Submarine Fleet. That would comprise 7 5 0 warships, more than 100 landing craft, and 100,000 landing troops. Regarding strategic deployment, these analysts said China should consider a pincer attack to block the U.S. 7th Fleet from supporting Taiwan. They noted that the key to winning the battle of the Strait was to exploit China's advantage in conventionally propelled submarines (China has over sixty), including a few nuclear-propelled ones. They also suggested that the situation would be more favorable if China had an aircraft carrier. 104 As for the South China Sea, Chinese strategic analysts believe that, given its oil potential, as well as the possibility of war, the area is very likely to become a second Persian Gulf. Three major options present themselves. The first is resolution of the problem by diplomatic means, which hardly seems possible. The second option is recovery by military force, which looks simple, but is actually complicated. A third option is to use diplomatic pressure, backed up by military might, to force China's adversaries to capitulate. The disadvantage of this alternative is that it may lead to a new cold war era in Southeast Asia. 1 0 5 Judging solely by relative military strength, China would be in an easy position to expel the occupiers of the Spratlys with a medium-sized task force, the nucleus of which would be guided missile destroyers, with their powerful penetrating capability. In carrying out a powerful sea blockade, China needs at least ten to fifteen submarines and three to five long-range bomber squadrons. The landing operation on the Spratlys is far easier than on Taiwan. 1 0 6 But the big question mark relates to defending the Spratlys

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after China recovers them. The flotilla cannot stay and defend them. Powerful air support is absent. Nor is it realistic to post more troops on the islands, which are surrounded by the various countries that also claim them. Chinese strategists even worry that the ASEAN countries may stay clear of China's main force and strike at its weak points, engaging in a prolonged seesaw battle with China. Thus, some Western analysts maintain that China's hope is to acquire an aircraft carrier to offset uncertainty. 107 Chinese strategists estimate that the PRC will face a real danger of surprise attack from the East and South China Seas early in the twentyfirst century. The dangers would come within the sea area bounded by what the military calls diyi daolian, the first chain of islands: Japan, Taiwan, the Philippines, and Borneo. The introduction of sea-launched cruise missiles by the United States and other countries' fleets has already led the Chinese to extend the depth of their defenses to encompass the "second island chain" (dier daolian), which includes the Marianas, Guam, and the Carolines. 108 In the early 1990s, two factions within PLAN apparently were seeking priority under its long-term modernization plan. One argued for upgrading the submarine fleet, while the other stressed the urgency of creating China's first carrier-based battle group. Indications at that time suggested a victory for proponents of the submarine force. But by 1994, both lobbies seemed to have won. Submarines would mainly provide defensive and sea denial, while a carrier force would provide a power projection capability. 109 The Chinese strategic submarine fleet (nicknamed the "09 unit"), composed of five nuclear submarines (SSNs), has acquired submarinelaunched ballistic missile (SLBM) capability and ranks third in this area in the world. But much of this capability can only be translated into power projection just beyond Chinese shores, near Japan and Korea, and not into the Western Pacific. A good illustration of this limitation occurred during the nuclear standoff in the Korean peninsula in late October 1994. A PRC Han-class nuclear attack submarine operated in the Yellow Sea, about 450 miles northwest (and therefore well clear) of the U.S. aircraft carrier Kitty Hawk.x10 Although long-term development gives priority to nuclear attack submarines, the short-term focus is on acquiring new models of conventional ships and upgrading the existing Ming and Song classes. In late 1994, China was determined to buy four Kilo-class diesel-electric patrol boats. Some reports contend that China may ultimately obtain up to twenty-two Kilos, but sources in Beijing with a closer knowledge of the program dismiss this. So far, China has obtained two Kilos, mainly for access to their technology and for use of their limited operational capability pending development of the navy's Song (Wuhan-C) class. 111 China is upgrading the Ming-class (patrol-type 935) conventional submarines, nine of which are active. Because its operational performance was considered unsatisfactory in terms of underwater maneuverability,

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speed, and noise, the Ming class will not remain a key component of China's submarine fleet. China is eager to start the Song-class program with the support of technology from both the Kilo and the Israelis. Songs are expected eventually to replace Romeo-class (type 033) patrol vessels and, at a later stage to replace the Ming-class boats as well. Until the early twenty-first century, Ming- and Wuhan-class submarines may be granted oceangoing missions. In addition, with the development of more Han-class SSNs, China will be in a position adequately to provide a second echelon of attack submarines to support its patrol submarines. 112 The Chinese well know that should war break out in the South China Sea, the navy would have to do without powerful air support. The March 1988 confrontation with Vietnam at Chiqua Jiao in the Spratlys sounded the alarm for the Chinese military in this regard. Two options seem to be under consideration. One is to acquire or build aircraft carriers. The other calls for the development of air force strength on Hainan Island and in the Xishas (Paracels), south of Hainan. According to a Western source, China purchased the Australian aircraft carrier Melbourne for scrap in 1985 after it was decommissioned. Chinese engineers then studied how to operate an aircraft carrier. 113 The pro-aircraft carrier view, expressed in a March 1989 article in the military press and probably representing PLAN'S position, is that as a maritime nation, China needs the power to control the sea. Especially since the emergence of ship-based air units, sea power is also crucial to controlling territorial airspace. The article ridicules people who believe that, because China is a socialist country without aggressive intentions, it has no need of aircraft carriers, which tend to be offensive by nature. The author gives the following rationale for China's acquisition of a carrier: Whether to develop aircraft carriers or not is a question of whether to keep the power to control air space and a question of whether to keep sea power. This question has an important bearing on whether China is to fundamentally improve its sea combat capacity. If it can do so, it will prevent foreign powers from carving out China's territorial waters. 1 1 4

China reportedly has met its standards for building aircraft carriers of 40,000 tons, and it is capable of building airborne fighters and earlywarning aircraft. But it would have to be willing to import key technologies. 115 In this manner, aircraft carriers could be built for far less cost than purchasing them from abroad. Even so, large amounts of foreign exchange that are quite beyond China's means would still be needed. In the interim, China decided to upgrade the F-8, which is roughly equivalent in performance to the MIG-21MF for interception and ground attack. It has so far also acquired forty-eight SU-27 fighters from Russia. 116 These are deployed at Wuhu Air Base, about 150 miles from Shanghai, and at Suixi Air Base in southern China. Even the SU-27 equivalent of the F-15C is not

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capable of completely extending Chinese air cover over the South China Sea, however, without aerial refueling and airborne warning and control systems. 117 For that reason, the Chinese high command apparently also plans to build two 48,000-ton vessels, similar to the Russian Kiev class, that would lead two task fleets by the year 2005. The plan calls for up to twenty-eight fixed-wing aircraft on each carrier. 118 PLAN is already running flight captain classes and planned to have over a hundred people trained to fly fixedwing aircraft from warships by 1997. 119 The cost for the two aircraft carrier task forces is estimated to be Y70 billion (U.S.$8-12 billion, depending on the exchange rate used). 1 2 0 Funding reportedly will start during the five-year development plan that began in 1996. 121 Even if the PRC leadership were willing to shoulder the cost, China would still need to master three key technologies for building aircraft carriers: takeoff and landing systems, antisubmarine warfare technology, and antiaircraft radar technology. China has been contacting several Western countries in its search for ways to solve its antisubmarine technology problem. 1 2 2 Should China acquire its first aircraft carrier, it may follow the Russian example. Russia now uses either STOVL (short takeoff vertical landing) aircraft like the Yak-38, or a version of the SU-27 (called the SU-33), as the principal combat aircraft for its sole aircraft carrier, the Admiral Kuznetzov. Unlike the basic version of the SU-27, the SU-33 is equipped for air-to-air refueling, both to receive fuel and to carry a modified fuel tank that can perform in-flight refueling. The SU-33's engines generate enough thrust to allow the use of a ski j u m p to get airborne, eliminating the need for complex steam-driven catapults used on U.S. Navy carriers. 123 In sum, China's offshore active defense strategy has important international implications. The strategy demonstrates China's ambition to assert itself as a regional maritime power in the Asia Pacific, thus enhancing PLAN'S mission and its role as an instrument of Chinese foreign policy. Under the guidance of its "Go East" strategy, China may move from the first island chain, defined by the Kurils and the Ryukyus, to the second chain in the East China Sea (as far as 1,200 miles from Shanghai) by around 2000, and it may have a blue-water navy (yunyang haijun) operating by 2050. China would thereby cross the line formed by the Bering Sea, Japan, Taiwan, the Philippines, Brunei, and Indonesia's Lombok Strait. There is considerable evidence that in the Indian Ocean, China plans to set up a naval advance base on Mergui Island through military cooperation with Rangoon. 1 2 4 In October 1992, India extended invitations to a few ASEAN states and Australia—but not to China—to carry out a multilateral naval exercise in the Indian Ocean. The potential for Chinese naval activism in these waters has been one factor prompting a naval arms buildup by some of the PRC's neighbors. 1 2 5 The Chinese leadership's preference is to resolve disagreements over the sovereignty of maritime territory through political arrangements and

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diplomatic negotiations. Nevertheless, the Beijing leadership probably considers a strengthened navy to be the ultimate guarantor of its claims. Of particular importance is that China's offshore active defense strategy bears directly on its behavior in the two unresolved sovereignty issues that we deal with in Chapter 8: Taiwan unification and the Spratly Islands.

The Quest for Air Doctrine Internal Debate Over Air Force Doctrine According to an authoritative Chinese account, the PLA Air Force, which was formally established in 1949, is an independent service that evolved from being an adjunct of the ground forces. Today's Chinese air force is already fairly modernized, so that its missions go beyond just supporting the ground force and navy. It can carry out its own combat missions over land and at sea. This capability will be especially important in any future air-land battles, where a combined campaign is expected to have different phases, battlefields, and times, and where the three services can conduct operations in their own spheres. 126 Yet PLAAF still does not have a formal air defense strategy. The air force is hampered by an inadequate command-and-control system, obsolete air defense systems, and, seemingly, an inability to improve the situation in the near future. 1 2 7 In 1982, PLAAF provided a written doctrine regarding its ground support role; but it has been searching for an air defense strategy that would include different air combat missions—such as strategic air defense, close air support, interdiction, and strategic bombing— since the mid-1980s. 1 2 8 According to an internal document prepared by the National Defense University Library, controversies emerged among Chinese air force analysts regarding the terminology and content of air force strategy and even the notion of having an independent air force strategy. What is the proper expression for and content of China's air force strategy? One view is that it should be termed a comprehensive strike indepth strategy. According to its adherents, China should organize a comprehensive force from the various arms of the air force and militia, and demonstrate fully the effects of combining the operational capabilities of various air defense arms and weapons. The space of operations under this strategy should include both Chinese and enemy territory. If an enemy's aircraft intrudes into Chinese airspace, PLAAF will not only use all its air defense assets; it will carry out a counterattack deep inside the enemy's territory. 129 A second view calls for crafting a rapid-reaction strategy, for two reasons. One is that the main characteristics of modern warfare demand it. The second reason is that a rapid-reaction strategy conforms with China's

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active defense strategy guidance, which speaks of strategic defense, strategic stalemate, and strategic counterattack. 130 The primary military requirements for rapid-reaction strategy are to strengthen intelligence and command and communications, and to organize rapid-reaction units equivalent to those of foreign countries for coping with sudden, high-intensity warfare. Supporters of rapid reaction further argue that in order to implement the strategy, it is necessary to change air force structure, aircraft, and training. Various service arms require enhancement of rapid-reaction capabilities. PLAAF needs interceptors, fighters, and bombers, as well as earlywarning, reconnaissance, refueling, and transport aircraft. It is imperative that the weapons, survivability, and sortie-generation capabilities of the aircraft be made to correspond with real-time needs. In peacetime, pilots should be trained and the air force reserve system should be well-established in preparation for increasing need during wartime. 1 3 1 The third view on China's air force strategy is defined in terms of limited-space flexible response (youxian kongjian linghuo fanying). The "response" is intended to be active, not passive, and there are many possible kinds of responses. "Limited space" here means the ability to control flexible response in terms of a certain operational area, probably to ensure that military action conforms with the political and strategic objectives set by China's leaders. 132 PLAAF leaders claim that although different views and terminologies exist among Chinese air force analysts, an acceptable air force strategy must accent defense, activism, flexibility, and limitations. They also say that in implementing strategy, PLAAF should have well-defined operational missions. Yet within the air force academic community, debate has also gone on about whether or not PLAAF should have an independent strategy. Some analysts contended it should not, mainly for three reasons. First, in a defined theater of conflict, such as a military region, the air force's capability is part of the armed forces' total capability, thereby limiting organizational autonomy to carry out its theater strategy. Second, the principal pattern of future warfare may be combined warfare carried out by various services and arms. PLAAF can function as part of the services, but it cannot command and control all phases of war. Third, as Soviet military science recognized, a country's service arms should not have an independent military theory, but rather a unified military theory. In the United States, there was a school of thought within the air force that for a long time maintained its own air deterrence and nuclear air deterrence theories. But although the U.S. Air Force had a strategic concept relevant to its service interests, it took many years before it was officially recognized by the U.S. government. 1 3 3 The contrary view, that PLAAF should have its own strategy, rests on the fact that the air force has a long and distinctive history. In December 1950, soon after Mao Zedong expressed his desire to create a strong air

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force, the PLAAF party committee proposed that the ground forces should be the key to the air force's development. This proposal contained the strategic objectives and guidelines to build up PLAAF on the basis of both active defense and counterattack principles. In the new era after World War II, there was an increasing tendency for powerful nations to use airpower on a major scale in local military conflicts. A modern air force has become the key to possessing relative strategic autonomy. The tendency of science and technology is to stimulate rapid advances in the accuracy, destructive power, and long-range strike capabilities of weapons. Foreign powers like the United States, Great Britain, and Italy have a long tradition of service strategies (junzhong zhanlue). PLAAF should have a strategy "with Chinese characteristics." 134 Deploying Air Power In the new era of slow decline in the deterrent value of nuclear weapons, the status of conventional forces in strategic deterrent forces has risen. Among conventional capabilities, airpower is the most flexible and mobile; it has the greatest ability to cross borders and continents. Recognizing this change, PLAAF has devoted increasing attention to air deterrence. 1 3 5 A case in point occurred in mid-March 1996. The naval and air forces of the PLA, as well as the 2nd Artillery Corps, successively conducted joint-service exercises in the eastern and southern oceans in order to send a warning signal to the Taiwan authorities about their presumed movement toward Taiwan independence (see Chapter 8). During the exercise, China deployed F-7II, F-8I, F-8II, and B-6 bombers; A-5 ground attack aircraft; and SU-27s. The F-7, F-8, and SU-27 fighters reportedly launched infrared guided missiles. 1 3 6 The exercises also demonstrated China's interest in using airpower for political and psychological effect. But deterrence of superior adversaries such as the U.S. or Russian forces presents problems for PLAAF. It will have difficulty shooting down enemy bombers armed with advanced self-defense capabilities and flying at altitudes of 6,000 to 8,000 meters at speeds of Mach 0.8 to 0.9. The plan for PLAAF fighters is to intercept the enemy's aircraft before they can drop their bombs, or to at least force them to drop their bombs early in order to protect themselves. 1 3 7 As part of the rapid-reaction strategy, the Chinese air force has embraced the concept of deploying air defense forces according to the principles of qian qing hou zhong ("light front, heavy rear") and deploying in three rings. The PLAAF plans to establish a rapid-reaction force within each theater of operations, with one fighter aviation division in each battle area. 1 3 8 The air force also postulates dividing the battle area into three tiers, using the front line of enemy airfields as the baseline. 1 3 9 Under the principle of deploying in three rings, the air force is supposed to organize

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a small quantity of its interceptors, AAA, and surface-to-air missiles (SAMs) as a combined air defense force that will have three-dimensional, in-depth, overlapping firepower rings. 140 P L A A F has been concerned about its ground and naval support. A 1990 article in Jiefangjun bao stated that the air force is an indispensable partner to the army and navy in coordinated battles. The final definition and central characteristic of modern integrated warfare is the coordination of air combat units with land and sea units. 1 4 1 After the Gulf War, PLAAF's support of the ground forces became a sensitive issue in the forming of its strategy and in air force modernization. Looking at the international air show of recent years, many countries are paying great attention to the development of the ground combat capability of their fighter planes and even of their trainer aircraft. . . . The fighter planes that will emerge in the 1990s are expected to have even more formidable combat capability. They will be able not only to intercept in the air but also launch sudden strikes deep into enemy territory. 142

Entering the mid-1990s, China strategic analysts tended to emphasize ground domination as the key feature of air force modernization, downgrading the air domination theory that prevailed during the previous seventy-odd years. One contributor to Jiefangjun bao in late 1995 indicated that although combined ground and air operations played a key role, all wars finally ended on the ground. This is why in the course of air force modernization by the major military powers, no effort has been spared to develop air-to-ground weapons, including bombers, attack planes, and airborne ammunition. To illustrate, the author writes that over 70 percent of the U.S. Air Force's combat planes, and over 50 percent of India's, are capable of air-to-ground attacks, and it is suggested that China's future air force modernization should be pursued in a way that secures ground domination as the basis of air domination. 1 4 3 Future

Trends

Considering trends in both PLAAF's doctrinal development and force structure, one may assume that its modernization program will focus on six combat capabilities: air superiority ground attack, transporting of troops and supplies, airborne early warning (AEW) and reconnaissance, electronic countermeasures, maintenance, and logistics. 1 4 4 It should be noted, however, that mainly due to the traditional policy of self-reliance and financial and technical constraints, the Chinese government is now attaching great importance to research, manufacturing new weapons, renovating models, and developing key projects. 145 With regard to the key projects, China has already decided to make the aerospace industry its high-tech strategic centerpiece for the immediate future. Aerospace industries will

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focus on developing new fighter planes, new helicopter models, satellites, and various types of missiles and rockets. 1 4 6 As is well known, with the exception of the forty-eight SU-27s that China has thus far received f r o m Russia, China's key jet fighters (the F-6 and F-7) lack all-weather or night-intercept capability. The jets are also limited by poor radar coverage and vulnerability of radar and c o m m u n i cations to electronic interference. China is reportedly planning to produce FC-1 lightweight jet fighters with Pakistan. These jets are slightly less maneuverable than the U.S. F-16s and French Mirage 2000s. The F C - l s are slated gradually to replace the F-6s and F-7s. 1 4 7 China has also been seeking for some time to develop the J-10 advanced fighter aircraft, modeled on Israel's Lavi fighter and using Israeli technical assistance. The U.S. Office of Naval Intelligence estimates that the J-10 may be more maneuverable than the F/A-18E/F, but it will have less sophisticated radar and countermeasures. 1 4 8 It is likely, however, that cost and technology (among other factors) will greatly slow the pace at which modernization of the weapons and equipment of Chinese aircraft takes place. As a result, a large gap between P L A A F strategy and capability is likely to exist for some time. At the onset of the twenty-first century, P L A A F will probably remain a homeland air defense force with a very limited power-projection capability against a credible foe. Only gradually is it likely to emerge as a decisive factor in the regional airpower equation. 1 4 9

Nuclear Deterrence The Search for

Doctrine

Since its first nuclear experiment in 1964, the Chinese government has declared time and again that China was compelled to develop nuclear weapons and that its purposes in doing so were to break the nuclear monopoly, to oppose nuclear blackmail, to strive for the final elimination of nuclear weapons, to defend its independence and security, and to safeguard world peace. Official policy is that under no circumstances will China be the first to use nuclear weapons. Neither the government statements nor articles by Chinese military analysts have discussed China's nuclear deterrence theories, however. In fact, they closely resemble those of the United States and Russia. Two aspects of Chinese attitudes toward nuclear weapons in the 1960s are worth noting. First, Chinese politicians and strategists agreed that in addition to buying self-esteem and status, nuclear weapons have a general military utility. 150 Second, Chinese strategists were unable to reconcile nuclear weapons and Mao's doctrine of people's war. Technology, not strategy, determined the direction and pace of China's nuclear-weapons development

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program. 1 5 1 Until the early 1980s, it can be argued that there was no serious strategic research in China and no detailed linkage of nuclear weapons to foreign policy. 152 Earnest efforts to come up with a nuclear strategy suitable to China, a medium-sized nuclear power like that of Britain and France, began in the mid-1980s. 1 5 3 China's nuclear capacity is quantitatively and qualitatively small, making it vulnerable to either a U.S. or a Russian first strike. Most Chinese strategists nevertheless believe their limited nuclear capacity has a deterrent effect on the superpowers. They base their thinking on two interconnected strategic ideas of Western theory. One is that when the United States put forward the Strategic Defense Initiative (SDI) in the 1980s, with its promise of being able to shoot incoming missiles out of the skies, many people doubted the usefulness for medium-sized nuclear powers to possess a small, technologically limited nuclear arsenal. The stability and balance of the present world power structure, these people said, would be destroyed. But practical experience during several years of SDI research has proven that the relevant critical technologies for strategic missile defense have not yet been discovered. It has thus seemed to Chinese military leaders that nuclear deterrence theory based on some form of nuclear retaliation—and thus in keeping with the doctrine of mutual assured destruction that evolved during the U.S.-Soviet nuclear standoff—will remain valid in global strategy for the immediate future. The second idea is that China's nuclear-weapons capability, though limited, provokes uncertainty among nuclear superpowers. They are in a position to destroy medium-sized nuclear weapons, but they themselves could not withstand a retaliatory blow of dozens, let alone hundreds, of nuclear weapons dealt by medium-sized nuclear powers. This kind of uncertainty preserves a kind of balance of nuclear forces. In addition, the Chinese believe that their nuclear deterrence is further helped by research results on the phenomenon known as nuclear winter, and by the relative parity of nuclearweapons capabilities that emerged out of the years of U.S.-Soviet confrontation. All these elements of uncertainty derive, Chinese strategists emphasize, not from people's war, but from the nuclear weapons China has. There is no assertion in recent military literature or by Chinese leaders that a people's war will eventually win a nuclear war, since theoretically, an enemy could invade China after a nuclear strike. By implication, the nuclear deterrent theories the Chinese are elaborating tend to depart from the supplementary status of people's war. 154 This departure is presumably caused by China's growing confidence in its ability to counterattack and deter.

Minimum

Versus Limited

Deterrence

Over time, Chinese analysts have refined descriptions of China's deterrent strategy, variously calling it "defensive," "counterattack," "minimum,"

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"eclectic," and "limited." Most revealing are the differences among these analysts between the use of "minimum" deterrence and "limited" deterrence. 1 5 5 Civilian analysts and strategists such as Wu Zhan and He Zuoxiu argue that China's nuclear strategy is defensive and limited in nature and that its nuclear threat is based on offering minimum nuclear retaliation against the soft targets of an enemy who threatens China with nuclear weapons. 1 5 6 What would be a reasonable number of nuclear warheads for China to keep ready? He Zuoxiu, in an interview held in June 1993, said the answer depends on the survival rate of nuclear missiles, the percentage of hits by China's nuclear missiles, and their penetration rate after China has possibly suffered a nuclear first strike. He also emphasized that China has always pursued a policy of "minimum nuclear security." 157 There is considerable evidence, however, that a number of Chinese strategists explicitly reject minimum deterrence as a viable option for China, arguing that minimum-deterrence capabilities are in practice too vulnerable to a disarming first strike, and thus have little deterrent value. 1 5 8 These strategists claim that a limited deterrent, by contrast, means having enough capabilities to deter conventional, theater, and strategic nuclear war, and to control and suppress escalation during a nuclear war, thereby being able to respond to any level or type of attack, from tactical to strategic. 1 5 9 Indeed, for limited-deterrence strategists, a valid Chinese deterrent should be able to hit a range of military, industrial, and other targets. Implementing a limited-deterrence strategy is said to require the following weapons: 1 6 0 1. a greater number of smaller, more accurate, survivable, and penetrable intercontinental ballistic missiles (ICBMs); 2. SLBMs to serve as retaliatory forces; 3. tactical and theater nuclear weapons to hit battlefield and theater military targets and to suppress escalation; 4. ballistic missile defense to improve the survivability of the limited deterrent, as well as to defend key military command centers and national facilities; 161 5. space-based early-warning and command-and-control systems; and 6. antisatellite weapons to hit enemy military satellites. China's pledge of no-first-use of nuclear weapons is relevant here. It implies Chinese recognition that it would be suicidal to provoke a nuclear war, since China is incapable of eliminating a nuclear-armed enemy's weapons even if China were to carry out a nuclear first strike. The NFU pledge also implies that China would not use nuclear weapons in the event it were attacked by far superior conventional forces. It can be argued that there is no country in the world that can easily overcome China using a

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conventional military force and that China, with its vast territory and numerous military personnel, does not have to fear an attack by conventional forces. This strategy differs f r o m that of France and Britain, which are reluctant to make a similar c o m m i t m e n t to NFU. The Chinese assume that these two countries want to reserve the right to use nuclear weapons if they find themselves incapable of stopping an attack by an e n e m y ' s conventional forces. 1 6 2 Does the Chinese high c o m m a n d perceive any incompatibility between limited deterrence and China's official NFU pledge? Continuing to promote the pledge might be perceived as weakening China's limited deterrent. But, in fact, China has utilized the N F U to assist its deterrent. In September 1994, the leaders of China and Russia issued a joint statement rejecting the first use of nuclear weapons against each other and agreeing not to target their strategic nuclear weapons at each other. Chinese hopes for securing a bilateral NFU pledge f r o m the United States were not realized, however, when the U.S. government officially rejected the Chinese proposal in September 1994. 1 6 3 On the other hand, Chinese defense literature contains growing hints of interest in launch on warning of nuclear weapons, or launch under early attack, both of which would scrap the pledge. 1 6 4 In a book compiled by the Strategy Department of the Chinese Academy of Military Science, the authors note: On the basis of the general policy of second strike, the nuclear counterattack of the future will be implemented through a nuclear counterattack campaign after the enemy's nuclear surprise attack. The first nuclear counterattack must strive to be an immediate retaliation, that is, react quickly, and rapidly implement a nuclear counterattack after determining the enemy's missiles are coming, but before they have exploded. 165

Nuclear Weapons in War Besides the question of nuclear counterattack, in recent years Chinese military leaders have also expressed concern about the threat of limited nuclear wars. A number of articles in military publications take the position that such a threat is real and argue that researching combat theory under nuclear conditions should be an important aspect of China's military construction. 1 6 6 One writer discusses the possibility of nuclear weapons being used in combat in the following manner: The microminiaturization and controllability of nuclear weapons have greatly increased in the past 20 years. As a result the quality of nuclear weapons has improved; the smallest nuclear weapon is now equivalent to 10 kilotons of TNT, and various types of missiles like nuclear guided missiles, cruise missiles as well as various types of nuclear weapons like nuclear shells, nuclear land mines, nuclear sea mines, and nuclear torpedoes

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are produced and equipped in great quantity. At the same time, the third generation nuclear weapons are at the stage of intensified research and development. The neutron bomb and the electromagnetic bomb plus bombs under development effectively attack selected targets while not causing greater damage to non-attacked targets and do not hinder subsequent combat action. 1 6 7

During the Cold War, Chinese analysts expressed concerns about how the strategic environment may encourage limited nuclear war. They argued that the persistence of a nuclear gap between the great powers is ideal soil for nurturing limited nuclear wars and that while the balance of terror may keep the United States and the Soviet Union from direct confrontation, it may not stop either of them from attacking nonnuclear-weapon states. The analysts also cited a publication of the Brookings Institution in Washington, D.C., in the early 1980s, according to which, of the 215 military incidents in which U.S. forces participated since the end of World War II, the use of nuclear weapons was discussed in at least 33 cases. By the year 2010, moreover, the nuclear-weapon situation will be vastly more complicated. Membership in the nuclear club, Chinese analysts predicted in 1987 (before, of course, China joined the nuclear nonproliferation and test ban regimes), will increase to twenty-three states, including Brazil, Iraq, Libya, Pakistan, Japan, Vietnam, and South Korea. 1 6 8 Discussion in this vein continued into the post-Cold War period. PLA Major General Wu Jianguo argued, for instance, that the emergence of high-tech weaponry has not replaced the position and role of nuclear weapons. Especially after the Gulf War, some military powers stepped up their research and production of new-type nuclear weapons geared to local-war conditions. General Wu noted that though these smaller nuclear weapons have considerable destructive power, the possibility of using them will not be negated because their equivalent weights are not too big and the destruction they cause would not be too disastrous. 169 Complementing their analysis of the threat of limited nuclear wars, the Chinese have paid attention to the role of tactical nuclear weapons to assist the conventional forces. For instance, one writer, in a discussion of the strategic functions of nuclear weapons, assigned a significant role to tactical nuclear weapons: When manpower, firepower, and military equipment of conventional troops are short, or when they are reduced to inferiority, deployment or use of tactical or war-zone nuclear weapons can make up [for] and readjust conventional forces. In terms of the positive-defensive strategy, medium- and short-range missiles with nuclear warheads and tactical nuclear weapons that have actual combat capacity can serve as an actual threat to the enemy's heavy massing of forces and preparations for a large-scale offensive. 1 7 0

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In developing nuclear weapons, the writer went on, "China only wants to pursue a principle . . . to have what others have," hinting that China might develop third-generation nuclear weapons for battlefield use. 1 7 1 In contrast, China's civilian strategists have opposed deployment or use of battlefield nuclear weapons to assist inferior Chinese conventional forces. One such article insisted that China should not entertain any notion of a limited nuclear war, that is, a war in which the two sides limit themselves to attacking or counterattacking targets or limit themselves to the so-called tactical nuclear weapons. 1 7 2 In the 1980s, the PLA frequently conducted military exercises under conditions of nuclear war. These included live or simulated exercises conducted by the group army, the naval fleet, and the Antichemical Corps Department under the General Staff Headquarters. 1 7 3 There is no evidence that China has deployed tactical nuclear weapons, although tests of lowfission devices either for tactical purposes or for triggering larger fusion explosions have been conducted. Data published in the Nuclear Weapons Databook indicate that China has conducted at least twelve underground or atmospheric nuclear tests with a yield below 20 kilotons, and the PLA may have developed a tactical nuclear capability in its large-caliber (273-mm and 425-mm) multiple rocket systems, as well as in its new 203-mm (8inch) gun. 1 7 4 To date, neither the Chinese government nor the PLA has acknowledged the existence of these tactical nuclear weapons. Whether China will follow the U.S. pattern in deploying battlefield nuclear weapons in the future depends upon, inter alia, Chinese evaluation of the utility of thirdgeneration nuclear weapons, China's nuclear-weapons development principles, and the Chinese perception of the threat posed by Russia and the United States. 175 If China does deploy such weapons, it may have to scrap NFU. Tactical nuclear weapons will also make China's defense system more capital intensive, which may cause a further reduction of its military forces and renewed efforts to create a leaner, more diverse and sophisticated armed forces. There is a mismatch between China's limited-deterrence doctrine and its actual nuclear capability. This is why He Zuoxiu, a well-known physicist and strategist, has emphasized that without altering minimum nuclear security, China's nuclear deterrent should be based on limited nuclear retaliation against the soft targets of an enemy. He claimed support for his view from numerous specialists in many fields whose views were solicited by the top party leaders. 1 7 6 In all likelihood, despite the call of Chinese strategists for nuclear doctrinal innovation, nuclear strategic doctrine will remain minimum deterrence until the requirements for limited deterrence can be met, probably early in the twenty-first century. But what would a credible force structure for limited deterrence look like?

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Toward Building a Limited-Deterrence

Force

According to the analysis of one group of Western nuclear-weapons specialists, China by the turn of the century will have a nuclear force approaching 350 weapons against enemies in Asia, but it will have only a handful of ICBMs for possible use against the United States. About half of these weapons would be carried by bombers (mainly Hong 6). One-third of the warheads would be carried by intermediate-range missiles like the DF (Dongfeng)-2 (fifty warheads) and DF-3 (sixty warheads) against targets in the Russian far east. Twenty warheads could be launched by DF-4 and DF-5 ICBMs, including 30 JL-1 SLBMs. These forces would no longer be matched by Russian theater nuclear forces, as the Russians withdrew their SS-20s under the terms of the INF treaty of 1987. 177 In terms of the total number of warheads, China is not expected to reach a rough parity with the level to which the United States and Russia had agreed in START II (3,500 and 3,000, respectively, by 2003). China would like to see a START III agreement that would bring U.S.-Russian nuclear weapons down even lower, to 1,000 or even a few hundred warheads each. The "1,000 warheads or less" condition is reportedly now standard in Chinese strategic analyses. 178 The Chinese have certainly concluded that their current nuclear capabilities are not enough for credible limited deterrence. Quantitative and qualitative improvements of nuclear weapons are required. The current modernization program focuses on solid-fuel propellant technology, in order to enhance operational flexibility (reduced launch preparation time) and safety. Ongoing development and production programs exist to improve land-based and submarine-launched missiles, as well as the bomber force. The overall objectives are to improve the survivability of the strategic forces, develop less vulnerable basing modes, and make general improvements in accuracy, range, guidance, and control. 1 7 9 China has been developing two new types of ICBMs. The DF-31 will be a three-stage missile capable of carrying a 700-kilogram payload over 8,000 kilometers, making it able to reach Europe or Alaska (but not the continental United States) if launched from Chinese soil. It is expected to be operationally deployed sometime during the mid-to-late 1990s. The DF-41 is reportedly a three-stage missile with a range of 12,000 kilometers. It will replace the DF-5A, which is scheduled to remain in service through 2010. Like the DF-31, the DF-41 will probably be stored in caves during peacetime and moved to its presurveyed firing location during a crisis. 180 In addition, China has been improving the offensive capacity of its strategic weapons. In 1989, Major General Yang Heng, then deputy commander of the 2nd Artillery, pointed out that in order to increase the credibility of the minimum-deterrence force, it would be necessary to improve missile accuracy rate so that the next generation of Chinese strategic weapons will have greater offensive capacity. 181

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In the 1980s, debates centered on the development of second-generation nuclear submarines (Project 09-4) and their missiles, the Julang-2. Some PLA planners deplored the costs of the submarine system, compared with mobile land-based missiles like the follow-on DF-31. They argued that deploying missile-equipped submarines in distant oceans was not compatible with China's coastal defense strategy. They also questioned the long-term survivability of the 09-4, given advances in antisubmarine warfare. 1 8 2 PLA veterans, who supported SLBM development, made the contrary case for possessing sea-based nuclear strike forces, which they said would signify that PLAN is a strategic armed service. They argued that for reasons of survivability, maneuverability, and penetrability, China could not abandon submarine projects in favor of a total reliance on mobile landbased missiles. The uncertainties of China's future security needs, the revolution in global power relations, and even cost-effectiveness (since the cruising range of the submarine can transform an 8,000-kilometer SLBM into a 13,000-kilometer-range missile) were cited as evidence for the superiority of sea-based over land-based strategic missiles. The debate ended with the future of sea-based programs apparently assured. 183 At sea, China has reportedly constructed one ballistic-missile submarine (SSBN). It may have plans in the next century for a fleet of four to eight vessels as the second generation of SLBMs. Plans call for the installation of sixteen Julang-2 type (CSS-N-4), 8,000-kilometer-range missiles on modified Xia-class vessels. When these vessels are completed, the Northern, Eastern, and Southern Sea Fleets will each be equipped with two to three modified Xia-class vessels, ideally enabling PLAN to place one ship on patrol at all times. 1 8 4 The aviation element of the strategic triad will not be improved through the development of a new strategic bomber. 1 8 5 Nor can Chinese nuclear strategists reconsider the relative balance between its land-based and seaborne systems until such time as China has more operational SSBNs and can overcome weaknesses in surveillance and targeting techniques. At that point, the PRC's nuclear missile force would have a much higher survivability than at present, which would give it a reliable secondstrike capability. 186 These advances, as well as U.S.-Russia nuclear-arms agreements, have positively influenced China's approach to arms control, as discussed in Chapter 7. Here we may note that China's need to improve warhead design, survivability, accuracy, targeting flexibility, and response time obviously complicates its arms-control strategy, as could be seen during the 1996 negotiations on the CTBT. Some Chinese arms-control experts were nevertheless said to have argued in favor of joining a CTBT regime. Within the military, some experts desired finally to end nuclear testing. For others, it was a matter of China maintaining its lead over India in nuclear weapons and preventing the gap between China and the other nuclear-weapon states, especially the United States and Russia, from growing even wider. 187

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Other more dramatic constraints on a limited Chinese deterrent would be a fissile material control regime that would limit or reduce existing stockpiles, not just future production, and multilateral agreements that would place restrictions on ballistic-missile testing and deployment and on all forms of ballistic-missile defense and antisatellite missile systems. 1 8 8 China opposes revision of the Anti-Ballistic Missile (ABM) Treaty to allow for expanded U.S. and Russian theater missile defense (TMD) systems or ballistic missile defense (BMD) in Asia, revealing its sensitivity to changes in the U.S.-Russia-PRC balance of theater nuclear forces. China regards TMD deployment in Japan as part of a U.S.-Japan collaborative effort to contain China militarily and politically. Chinese strategists warn that if BMD systems are built, China's response will be to develop methods to defeat them or increase the number of warheads, hinting that China would deploy multiple independently targetable reentry vehicles (MIRVs) or maneuverable reentry vehicles (MARVs) to overwhelm the system. 1 8 9

Some Conclusions In general, Chinese military doctrine has been interactive between people's war strategy and technology; but the impact of technology seems greater since the Gulf War. In the future, we may count on China's having an evolving military doctrine that will be pushed by technology, rather than pulled by strategy. It is also evident that there will be an unbalanced development among the three factors of military doctrine, structure, and weapons and equipment. In other words, the new defense doctrine does not fully conform with the reform of the force structure and the modernization of weapons and equipment. We see this lack of fit most clearly in the land campaign plan, naval doctrine, and nuclear-deterrence theories. Whether in the future the PLA continues to possess a reliable deterrent and fighting force under hightech conditions will depend upon the extent to which China makes the new doctrine conform with its weapons capabilities and force structure. The changing military doctrine of the PRC has four strategic and international implications. First, to meet the enemy at or beyond China's borders under "active defense" suggests that in future conflicts, the PRC will be willing and prepared to use PLA forces outside China proper. Such a strategy would be most evident in the case of a punitive war. Second, Chinese leaders will probably regard active defense as central to preventing foreign "bullying," "intervention" in PRC affairs, and "containment" of China. It may be that the stronger the PLA becomes in its active defense capabilities, the more assertive Chinese foreign policy will become. Third, China is determined to extract benefits from the INF and START agreements for the time being, until the level of PRC nuclear forces reaches a relatively stable point in comparison with U.S. and Russian forces. Such

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a C h i n e s e attitude p o s e s the problem o f h o w to bring China into nucleardisarmament negotiations with the major p o w e r s , a point addressed at the end o f Chapter 7. Fourth, China's o f f s h o r e active d e f e n s e strategy d e m o n strates its ambition to be a regional maritime power. T h e P L A N a v y thus b e c o m e s an important n e w instrument o f P R C f o r e i g n p o l i c y . C h i n a ' s naval buildup, a l o n g with m o d e r n i z a t i o n o f the air f o r c e , w i l l of c o u r s e h a v e an impact o n its A s i a P a c i f i c n e i g h b o r s — n e g a t i v e l y , by further stimulating the naval and air buildups o f other military e s t a b l i s h m e n t s ; p o s i tively, perhaps, by e n c o u r a g i n g regional states to d i s c u s s bilateral and multilateral naval c o n f i d e n c e - b u i l d i n g measures.

Notes 1. Fang Min et al., "Concept of National Defense in Border Areas and Development Trends of Modern National Defense," Jiefangjun bao, May 10, 1991, in FBIS-CHI 91-107, June 4, 1991, pp. 43-44; Wang Pufeng et al., Xiandai guofang lun, pp. 327-342. 2. Renmin ribao, February 26, 1990, p. 2. 3. Sun Mingming and Cai Xiaohong, Dongdtangzhongde guojia anquan, pp. 21-27. 4. Major Yu Guangning (assistant researcher of the Strategy Department, Academy of Military Science), "A Comparison of Chinese and Western Geostrategic Thinking," Zhongguo junshi kexue (Chinese Military Science), no. 4 (November 20, 1995), in FBIS-CHI 96-076, April 18, 1996, pp. 4 4 - 5 0 . 5. Cai Xiaohong et al., "Strategic Competition Has Been Extended to Outer Space and the Oceans," Jiefangjun bao, January 2, 1987, in FBIS-CHI 87-021, February 2, 1987, pp. A 1 - A 6 ; and Xu Guangyu, "Pursuit of Equitable ThreeDimensional Boundaries," Jiefangjun bao, April 3, 1987, in JPRS-CAR, March 29, 1988, pp. 35-38. 6. These advances in information-based military technology are being referred to in Chinese writings as the "revolution in military affairs." As this book went to press, a valuable collection of articles by Chinese military affairs specialists on that "revolution" was translated and published. See Michael Pillsbury, ed., Chinese Views of Future Warfare (Washington, D.C.: National Defense University Press, 1997). 7. According to Xu's article ("Pursuit of Equitable Three-Dimensional Boundaries," p. 35), the geographic border refers to territorial land, territorial waters, and corresponding territorial air. The strategic boundary refers to the limits of geography and space related to a country's interests that its military forces are actually able to control. In the real world, some country's strategic boundaries are smaller than their geographic borders. Other countries, like the United States and the USSR/Russia, have strategic boundaries that are far greater than their geographic borders. 8. Ibid., p. 37. 9. Cai Xiaohong et al., "Strategic Competition Has Been Extended," p. A6. 10. For other military leaders' arguments for an ocean outlook, see Chen Fangyou et al., "Need for an Ocean Outlook Among Military Personnel," Jiefangjun bao, May 29, 1987, in JPRS-CAR, October 7, 1987, pp. 89-92; and Cai Weni, "Reefs Islands, Oceans, and the Future of a Nation," Jiefangjun bao, March 11, 1988, in JPRS-CAR, April 12, 1988, pp. 33-34.

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11. Xu Guangyu, "Pursuit of Equitable Three-Dimensional Boundaries," p. 38; emphasis added. 12. Ibid.; Shambaugh, "The Insecurity of Security," pp. 14-16; Li, "The PLA's Evolving Warfighting Doctrine," p. 450. 13. Xu Guangyu, "Pursuit of Equitable Three-Dimensional Boundaries," p. 38. 14. Special Correspondents Bateer, Huai Qingli, and Han Guoquan, "New Approach to the Building of Border Defense in the New Era: Interview with Peng Cuifeng, Inner Mongolia Military Region Commander, and Political Commissar Zhang Zhen," Guofang (National Defense), no. 6 (June 15, 1995), in FBIS-CHI 95165, August 25, 1995, pp. 36-38; Mao Zhenfa and Lin Zhipei, "The Strategic Studies of Modern Border Defense," Guofang, no. 7 (July 15, 1995), in FBIS-CHI 95188, October 3, 1995, pp. 25-28. 15. Bateer et al., "New Approach to the Building of Border Defense," p. 37. 16. Bok, "Strategic Doctrine," p. 7. 17. Joffe, The Chinese Army After Mao, pp. 71-77; Godwin, "Changing Concepts of Doctrine," pp. 572-573. 18. Song Shilun, "Mao Zedong's Military Thinking Is the Guide to Our Army's Victories," Junshi kexue (Military Science), no. 7 (1981); reprinted in Hongqi, No.16 (August 16, 1981), in FBIS-CHI, September 17, 1981, pp. K10-K23, esp. K20. 19. Xinhua domestic service, January 19, 1979, in FBIS-CHI, January 22, 1979, pp. E 9 - E 1 0 . For discussion by Chinese military leaders of people's war under modern conditions in 1979-1980, see Joffe, The Chinese Army After Mao, pp. 78-79. 20. Song Shilun, "Mao Zedong's Military Thinking," p. K19. 21. Yang Yong, "Uphold the Scientific Attitude of Seeking Truth from Facts," Renmin ribao, August 1, 1981, in FBIS-CHI, August 5, 1981, pp. K 1 - K 4 . 22. Commentator, "Speed Up Modernization of Our Armed Forces on the Basis of Existing Weapons and Equipment," Jiefangjun bao, June 15, 1979, in JPRS-CR, August 28, 1981, pp. 11-15. 23. Jin Yan and Ye Xing, "A Dialogue on Modern Warfare and Modernized Warfare," Jiefangjun bao, June 21, 1979, in JPRS-CR, October 8, 1981, pp. 31-32; Staff Commentator, "Transform the Experience of the War of the Self-Defensive Counterattack into Wealth for the Whole Army," Jiefangjun bao, April 11,1979, in JPRS-CR, October 8, 1981, pp. 10-15. 24. Xinshiqi Mao Zedong junshi sixiang, pp. 161-162. 25. Song Shilun, "Mao Zedong's Military Thinking," pp. K21-K23; Gu Deru, "Modern Warfare and Logistics Defense," Jeifangjun bao, July 10, 1979, in JPRSCR, December 8, 1981, pp. 26-28; Yang Shangkun, "Build a Strong Modern Revolutionary Army: In Commemoration of the 55th Anniversary of the Founding of the Chinese PLA," Hongqi, no. 15 (August 1, 1985), in FBIS-CHI 85-165, August 25, 1985, pp. K20-K27. 26. Xinhua broadcast, June 11, 1985, in FBIS-CHI 85-113, June 12, 1985, pp. K1-K2. 27. Zhang Lin with Zang Shiming, "Let Us Pursue the Study of Operations Theory Research," Guofang Daxue xuebao, no. 12 (December 1987), in JPRSCAR, August 5, 1988, pp. 69-73. 28. The study included information on the international environment, domestic conditions, state strategy, military strategy, the defense leadership structure, the army leadership structure, defense economy, defense mobilization, defense education, defense diplomacy, and defense legislation (Xu Jingjiao's report in Xinhua [Beijing], December 4, 1987, in FBIS-CHI, December 7, 1987, p. 29).

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29. Zhang Guoyu, "Grasping the New Themes in Military Strategy," Jiefangjun bao, July 8, 1988, in JPRS-CAR, November 29, 1988, pp. 39-41; and Zhou Zongjiu and Gao Yinkun, "The Art of Using the Sword: The Science of Forging the Sword—A Discussion of the Grand Strategy," Guoji zhanwang (World Outlook; Shanghai), no. 18, in JPRS-CAR, December 22, 1988, pp. 5 - 7 . 30. To Chinese strategists, deterrence meant brandishing violent force, glorifying the domination of the strong over the weak, and therefore supporting unjust wars. In addition, deterrence was associated with aggression and expansion by imperialist countries. Finally, deterrence was considered to be an empty threat if it was not backed by tangible power. See Li, "The PLA's Evolving Warfighting Doctrine," pp. 451-452. 31. Ibid., p. 452. 32. The five characteristics are: (1) three-dimensional warfare, combined-arms warfare, and total warfare; (2) increase in surprise; (3) colossal expenditures and burden of supply task increased; (4) greatly increased destructiveness; and (5) more complex organization and command (JPRS-CPS, February 4, 1985, pp. 11-15). 33. In addition to Introduction to National Defense Modernization, see Liang Yanning and Zhang Hong, "Be on Guard Against Sub-Nuclear, Super-Conventional Warfare," Jiefangjun bao, April 24, 1987, in JPRS-CAR, October 7, 1987, pp. 93-94; Lei Huajin, "Comparison of the Main Themes in the Study of American and Soviet Naval Operations Theory," Guofang Daxue xuebao, no. 12 (December 1, 1987), in JPRS-CAR, August 5, 1988, pp. 6 0 - 6 1 ; and Peng Weixin, "Elementary Discussion of Several Points of Change in the Surprise Factor in Contemporary Limited Warfare," Guoji zhanwang, no. 1 (January 1 - 1 4 , 1989), in JPRS-CAR, April 12, 1989, pp. 4 1 - 3 4 . 34. The term jubu zhanzheng means "partial war" or "local war." The term limited war is translated into Chinese as youxian zhanzheng, which covers almost the same range of military activities in the conflict spectrum as the Chinese jubu zhanzheng (Tian, Xiandai youxian zhanzheng de lilun yu zhanlue; Yao Yunzhi, "The Evolution of Military Doctrine," pp. 71-73). 35. Wang Pufeng et al., Xiandai guofang lun, pp. 361-362. 36. Ibid. 37. Chen Zhou (assistant researcher of the Strategy Department, Academy of Military Sciences), "The Differences Between the Chinese Theory of Modern Local War and the U.S. Concept of Limited War," Zhongguo junshi kexue, no. 4 (November 20, 1995), in FBIS-CHI 96-063, April 1, 1996, p. 54. 38. Zhao Tianziang, "Militia Reform and the Strategy of Theater Development," Jiefangjun bao, June 10, 1988, in JPRS-CAR, November 4, 1988, pp. 29-30. 39. Jia Wenxian, Zhang Shouqi, Guo Weimin, and Long Zhuoqun, "A Tentative Discussion of Special Principles of a Future Chinese Limited War," Gufang Daxue xuebao, no. 11 (November 1, 1987), in JPRS-CAR, July 12, 1988, pp. 47-48. 40. National Defense University Research Division, Focus on Military Issues; cited in Lai, "Preparation for High-Tech Regional Wars," p. 3. 41. PLA airborne units reportedly started rapid-development exercises in the summer of 1988. But the units lacked the long-distance transport capacity necessary for a large number of soldiers. See Zhongguo xinwen she (China News Agency), July 31, 1988, in FBIS-CHI 88-149, August 3, 1988, p. 32; and "Report: Chinese Army Relies on Civil Aviation to Unfold Military Airlift," Zhongguo tongxun she (China Bulletin; Hong Kong), July 27, 1989, in FBIS-CHI 89-147, August 2, 1989, pp. 31-32.

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42. Yang Zhihua, "How to Cope with Political Contingencies: A New Subject Meriting Attention in the Military Academic Sphere," Jiefangjun bao, July 21, 1989, in FBIS-CHI 89-146, August 1, 1989, pp. 3 4 - 3 5 . This article suggests the patterns to cope with political contingencies as the following: Besiege the enemy and support, with a strong deterrent, PAP and the public security personnel; impose martial law in some areas and coordinate with PAP; and put down rebellion, crack down on a handful of rioters, and restore normal order. 43. Kong Deyang, "Elevating Experience to the Level of Theory: Brief Commentary on Research of Operations in Tropical Mountain Jungles," Jiefangjun bao, June 19, 1987, in JPRS-CAR, October 7, 1987, pp. 105-106. 44. For instance, it has been reported that it is a painful reminder for some military leaders to recall the dumb grenades that failed during a border battle in the 1960s. Technical tests performed later proved that the reason the grenades did not explode was because of the low temperature at the border. But for a long time, a shortage of laboratories to test the ability of light weapons to adapt to temperature changes affected the quality of China's weapons. Later, a laboratory for conducting high- and low-temperature tests for light weapons, now the most advanced in China, was completed in Huailai county, Hebei Province (see China Daily, April 18, 1989, in FBIS-CHI 89-073, April 18, 1989, pp. 32-33). As a result of the improvement of communications equipment, the PLA units were reported no longer to be using signal machines that were apt to be jammed during the Chinese-Vietnamese war (see Mu Chi, "New State of Weaponry in China's Three Armed Services," Ta Kung Pao [Hong Kong], February 15, 1986, in FBIS-CHI 86-034, February 20, 1986, pp. W 3 - W 4 ) . 45. According to a GLD account, thanks to the efforts exerted over a threeyear span (1983-1985), 21,211 border and coastal defense projects were completed with a total investment of 670 million yuan (Ming Pao [Hong Kong], November 19, 1985, in FBIS-CHI 85-224, November 20, 1985, p. W l ) . 46. Jiefangjun bao, April 17, 1988, in JPRS-CAR, May 31, 1989, p. 27. 47. Zhang Taiheng, "Local Conflicts and Special Troops," Jiefangjun bao, March 14, 1986, in JPRS-CAR, November 3, 1987, pp. 37-38; and Dong Fangtie, "What We Can Learn f r o m Other Countries' Practice of Strengthening Troops," Jiefangjun bao, March 19, 1988, in FBIS-CHI 88-074, April 16, 1988, pp. 39-40. 48. "A Fist Battalion of a Certain PLA Airborne Unit," Jiefangjun bao, June 14, 1988, in JPRS-CAR, August 9, 1988, pp. 59-60. It is not clear whether China's rapid-deployment unit is a battalion or a platoon. The Jiefangjun bao article characterizes it as a battalion, but China Daily and the foreign press said it was a platoon. See China Daily, June 15, 1988, in FBIS-CHI 88-115, June 15, 1988, p. 34; and Yang Chu, "China Organizes a Rapid Response Unit," Hsin Wan Pao (New Evening News; Hong Kong), June 15, 1988, in FBIS-CHI 88-116, June 16, 1988, pp. 37-38. 49. Yang Chu, ibid., p. 38. 50. Yuan Shengjiang and Gao Minsheng, "The Rise of China's Reserve Units," Dongbei minbing (Northeast Militia), no. 6 (June 4, 1988), in JPRS-CAR, November 7, 1988, p. 22; and Sankei Shimbun (Sankei Newspaper; Tokyo), evening ed., June 3, 1985, p. 1. 51. Ren Yinglai (Provincial Military Regions chief of staff), "Buttress the Reserves," Sichuan ribao (Sichuan Daily; Chengdu), January 26, 1987, in JPRSCAR, May 26, 1987, pp. 97-98. 52. For those accounts, see "Explanations on the PRC Military Service Law (Revised Draft): Given by Yang Dezhi, Chief of the General Staff of the PLA, at the Second Session of the Sixth NPC," in FBIS-CHI 84-110, June 6, 1984, pp. K14-K21, esp. K17-K18.

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53. Xinhua broadcast, June 10, 1984, in FBIS-CHI 84-117, June 15, 1984, p. K l l ; emphasis added. 54. According to a Western observer's account, if the Soviets were to initiate a Beijing-Tianjin attack, a naval force would attempt to enter the Gulf of Bohai and put troops ashore near Tianjin. A Soviet thrust into Manchuria would also be accompanied by a Soviet amphibious landing on the Liaodong peninsula (Swanson, "Naval Forces," p. 91). 55. Zheng Shouzeng, "My Thought on the Selection of Campaign Targets," Guofang Daxue xuebao, no. 12 (December 1, 1987), in JPRS-CAR, June 28, 1988, pp. 14-16. 56. Ibid., p. 17. 57. Quoted in Gurtov and Hwang, China Under Threat, p. 231. 58. Regarding the PLA's practice of extending the space of fighting to enemy territory in case of punitive wars, see ibid., chaps. 4 and 6. 59. Segal, Defending China, pp. 63-77. 60. Jia Wenxian et al., "A Tentative Discussion," p. 48. 61. Zhang, "Local Conflicts and Special Troops," p. 38. 62. Xinhua broadcast, July 21, 1987, in JPRS-CAR, August 18, 1987, pp. 88-89. 63. IISS, The Military Balance, p. 146. 64. This is the account by Yu Pin, a former officer of both the 38th and 27th Armies of the PLA. See Lien Ho Pao (United Daily; Taipei), June 9, 1989, in JPRS-CAR, July 27, 1989, p. 63. 65. This account derives from Byong-Moo H w a n g ' s interview with a PLA officer. 66. Zhao Su, "The Story of the Birth of a Certain Mechanized Group Army," Liaowang (Beijing), no. 30 (July 27, 1987), in JPRS-CAR, October 8, 1987, p. 38. 67. This account is based on the article by Tie Jun, "A Discussion on the Road to the Development of the Chinese Army," Jiefangjun bao, August 19, 1988, in FBIS-CHI 88-173, September 7, 1988, pp. 35-38. 68. Ibid., p. 37. 69. Ibid., p. 38. 70. Xinhua report, January 8, 1988, in FBIS-CHI 88-006, January 11, 1988, p. 38. 71. "Report: China Makes Relatively Big Development in Scientific Research on Helicopter," Renmin ribao, June 6, 1989, in FBIS-CHI 89-113, June 14, 1989, p. 40. 72. Taira, "China's Rapid Reaction Forces," pp. 7 8 - 8 5 . 73. Ibid. By contrast, the French R R F constitutes 16 percent of France's total ground forces. In terms of theory and structure, though, there is a similarity between the Chinese and Russian RRF and RDF. 74. Lo Ping, "Three Military Regions Move Ground, Air, and Naval Forces to Fujian and Jiangxi: Inside Story on 'Express 60' Troop Movement Exercise," Cheng Ming, March 1, 1996, in FBIS-CHI 96-051, March 14, 1996, pp. 23-24. 75. "Highly Value and Develop Science and Technology," Economic Daily (Beijing), August 8, 1991; quoted in Lai, "Preparation for High-Tech Regional Wars," p. 3. 76. The discussion below is from Ho Po-shih, "The Chinese Military Is Worried About Lagging Behind in Armament," Tangtai, no. 66 (March 9, 1991), in FBIS-CHI 91-050, March 14, 1991, pp. 30-33. 77. Lai, "Preparation for High-Tech Regional Wars," p. 5, citing a 1993 NDU study titled High-Tech Wars and the Quality of the Armed Forces. 78. Ho Po-shih, "The Chinese Military Is Worried," p. 30.

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79. An article in Jiefangjun bao argued that the series would be extremely helpful to the vast numbers of officers and soldiers who are trying to understand the general idea of high-tech war and enhance their combat performance (Jiang Wenming, "Study and Anticipate the Enemy Beforehand Series on Hi-Tech War Has Been Published," Jiefangjun bao, December 6, 1993, in FBIS-CHI 93-243, December 21, 1993, pp. 34-35). 80. Yang Wei et al., "Military Forum Column Sponsored Open Meeting on Tactical Studies," Jiefangjun bao, May 28, 1993, in FBIS-CHI 93-123, July 2, 1993, pp. 22-26. 81. Sun Jian, "Strategies to Minimize High-Tech Edge of Enemy," Beijing xiandai bingqi (Modern Weaponry), no. 8 (August 8, 1995), in FBIS-CHI, February 22, 1996, pp. 29-33; Liu Yuming, "On Persistently Exploring People's War on High-Tech Terms," Guofang, no. 10 (October 15, 1994), in FBIS-CHI 95-180, September 18, 1995, pp. 19-20. 82. Min Zhenyu, "China's Strategic Plan for Active Defense," Zhongguo guoqing guoli (China's National Conditions and Power), no. 11 (November 28, 1995), in FBIS-CHI 96-034, February 20, 1996, pp. 24-27. 83. Lu Linzhi, "Preemptive Strike Crucial in Limited High-Tech Wars," Jiefangjun bao, February 14, 1995, in FBIS-CHI 96-025, February 6, 1996, p. 20. 84. Ibid., p. 21. 85. Among Chinese military analysts, there has been some confusion of the concept of joint operations with that of combined-arms operations, which have had a long and brilliant track record in the history of warfare. The latter have lost their glamour following the widespread application of high-tech weapons on the battlefield (Cui Changqi, Hu Siyuan, Liu Shenru, and Yuan Jingwei, "On Joint Operations," Jiefangjun bao, March 12, 1996, in FBIS-CHI 96-073, April 15, 1996, pp. 45^17). 86. Ibid. 87. Min Zengfu, "Transcend Air Domination Theory," Jiefangjun bao, December 12, 1995, in FBIS-CHI 96-010, January 16, 1996, pp. 30-32. 88. Zhu Xiaobiao, "Combat Survivability Design of Attack Aircraft," Guoji hangkong (International Aviation; Beijing), no. 2 (February 5, 1995), in FBIS-CHI 95122, June 26, 1995, pp. 43^16; Chu Ying-tsai, "Thoughts on the Nonlocal Phenomena of High-Tech Local Warfare," Xiandai junshi (Conmilit), no. 223 (August 11, 1995), in FBIS-CHI 95-187, September 25, 1995, pp. 31-34; Mao Zhenfa and Wang Xuhe, "Establish an Air Defense Concept Characterized by a Strong Frontier in the Air," Jiefangjun bao, April 7, 1996, in FBIS-CHI 96-073, April 15, 1996, pp. 4 0 ^ 1 . 89. Li Yaqiang, "Will Large-Scale Naval Warfare Recur?" Jianchuan zhishi (Naval and Merchant Ships; Beijing), no. 8 (August 8, 1995), in FBIS-CHI 96-020, January 30, 1996, pp. 24-27; "Nuclear Submarines, the Decisive Force in Gaining Sea Supremacy," Jianchuan zhishi, no. 9 (September 8, 1995), in FBIS-CHI 96019, January 29, 1996, pp. 27-29. 90. Shen Zhongchang (senior colonel, PLAN, and director, Navy Military Academy Research Institute) et al., "Rudimentary Exploration of 21st Century Naval Warfare," Zhongguo junshi kexue, no. 1 (February 20, 1995), in FBIS-CHI 95-113, June 13, 1995, pp. 26-32. 91. Kang Xiangzhen, "Electromagnetic Domination and Initiative in War," Jiefangjun bao, April 26, 1991, in FBIS-CHI 91-096, May 17, 1991, pp. 37-39. 92. Wang Bao Cun and Li Fei, "An Informal Discussion of Information Warfare," Jiefangjun bao, June 13, 1995, in FBIS-CHI 95-165, August 25, 1995, pp. 39^11. 93. Wang Pufeng "Meeting the Challenge of Information Warfare," Zhongguo junshi kexue, no. 1 (February 20, 1995), in FBIS-CHI 95-129, July 6, 1995, pp. 29-33, esp. p. 30.

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94. China's strategists particularly note that according to U.S. military data, information technology and devices account for a growing ratio of the total cost of particular weapons systems: 35 percent for aircraft (55 percent of which is for the B-2 alone), 40 percent for ships, 45 percent for guided missiles, 65 percent for satellites, and 80 percent for command-and-control communication systems (Niu Li, Tan Haitao, and Liu Jianguo, "Information Warfare Is Coming at Us," Jiefangjun bao, March 28, 1995, in FBIS-CHI 95-124, June 28, 1995, pp. 5 4 - 5 5 ; Xue Lianfang and Wei Yuejiang, "Digitized Forces Killer Has Come into Being," Jiefangjun bao, April 30, 1996, in FBIS-CHI 96-097, May 17, 1996, pp. 54-55). 95. Niu Li, Tan Haitao, and Liu Jianguo, "Information Warfare," p. 55. 96. Chang Mengxiong, "Information Intensified, a Mark of 21st-century Weapons and Military Units," Guoji hangkong, no. 3 (March 5, 1995), in FBISCHI 95-114, June 14, 1995, pp. 26-32. 97. See Muller, China as a Maritime Power, pp. 168-172. 98. Huang Caihong, "The Strategy for Development of the Chinese Navy: An Interview with Zhang Xusan, Deputy Commander of the Chinese Navy," Liaowang, Hong Kong ed., no. 13 (March 27, 1989), in FBIS-CHI 89-079, April 26, 1989, pp. 4 1 - 4 3 . 99. Chen Shungen, "The Capability for Long-Distance Navigation Is an Important Indicator of Seagoing Combat Effectiveness: Interview with People's Navy Commander Zhang Lianzhong," Renmin ribao, August 1, 1988, in JPRS-CAR, October 19, 1988, p. 48. According to one account, Admiral Liu Huaqing was told to interpret "offshore" (jinhai) to mean the vast sea waters within the second island chain. The first island chain comprises the Aleutians, the Kurils, the Japanese archipelago, the Ryukyus, Taiwan, the Philippine archipelago, and the Greater Sunda Islands. The second island chain is composed of the Bonins, the Marianas, Guam, and the Palau group (Huang, "The Chinese Navy's Offshore Active Defense Strategy," pp. 18-19). 100. Muller, China as a Maritime Power, pp. 44-56; You Ji and You Xu, "In Search of Blue Water Power," p. 139. 101. You Ji and You Xu, ibid., pp. 139-140. 102. The offshore defense strategy is based on a PLAN classified document. See Wen-Chung Liao, "China's Blue Waters Strategy," pp. 6 - 7 . 103. The Handbook of the Chinese People's Liberation Army published by the U.S. Defense Intelligence Agency in 1984 indicates that PLAN is believed to deploy in three defensive rings. The first line of defense would be guarded by a growing fleet of diesel-powered attack submarines. The second defensive ring would involve coordinated interdiction strikes by destroyer-type units and landbased aircraft. The third line of defense would be protected by coastal defense units mainly composed of fast missile boats, torpedo boats, and gunboats, as well as by patrol and minelaying craft ( H a n d b o o k , p. 57). 104. Munro, "Eavesdropping on the Chinese Military," pp. 364-367. 105. Ibid., pp. 368-369. 106. Ibid., pp. 370-371. 107. Ibid. 108. Lewis and Xue, China's Strategic Seapower, p. 299. 109. Sae-Liu, "Submarine Force Priority," p. 18. 110. John F. Harris and Thomas W. Lippman, "Chinese Watched as U.S. Navy Tracked Sub," Washington Post, December 15, 1994. 111. Sae-Liu, "Submarine Force Priority," p. 18. 112. You Ji and You Xu, "In Search of Blue Water Power," p. 143.

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113. Kyodo broadcast (London), April 17, 1989, in FBIS-CHI 89-073, April 18, 1989, p. 31. 114. Yang Zhiben, "The Chinese Nation Needs Sea Power," Jiefangjun bao, March 17, 1989, in FBIS-CHI 89-058, March 28, 1989, pp. 37-39. 115. Wen Po, "Controversy over China's Building Aircraft Carriers," Hsin Wan Pao, November 30, 1988, in FBIS-CHI 88-231, December 1, 1988, p. 13. 116. Zhang, "China Heads Toward Blue Waters," pp. 879-880. 117. Fisher, "China's Purchase of Russian Fighters," p. 2. 118. Paul Beaver, "Carriers Key to Chinese Air Power," Jane's Defense Weekly, September 25, 1993, pp. 23-24. 119. Ibid. 120. Munro, "Eavesdropping on the Chinese Military," p. 367. 121. Sae-Liu, "Submarine Force Priority," p. 18. 122. Munro, "Eavesdropping on the Chinese Military," p. 367. 123. Fisher, "China's Purchase of Russian Fighters," p. 6. 124. Huang, "The Chinese Navy's Offshore Active Defense Strategy," pp. 22-23; Liao, "China's Blue Waters Strategy," p. 23. 125. Roy-Chaudhury, Sea Power, pp. 201-202. 126. Deng Lianfu and Jiang Fusheng, eds., Kongjun zuozhan yanjiu, p. 147. 127. Allen, Krumel, and Pollack, China's Air Force, pp. 109-110. 128. Latham and Allen, "Defense Reform in China," p. 40. 129. China National Defense University Library, ed., Guanyu jianli wojun kongjun zhanlue haijun zhanlue lilun de taolun qingkuang gaishu, p. 2. 130. Ibid. 131. Ibid., p.3. 132. Ibid., p. 4. 133. Ibid., pp. 7-8. 134. Ibid., pp. 5-6. 135. Dong Weuxian, "Strengthen the Concept of Air Battlefields," Jiefangjun bao, February 2, 1990, in FBIS-CHI, March 9, 1990, pp. 29-30; Sun Hongwei, "New Developments in Use of Air Power," Jiefangjun bao, March 22, 1991, in FBIS-CHI 91-072, April 15, 1991, pp. 55-57; Liao Zhiyang, "New High Technology Poses Challenge to People's Air Defense," Jiefangjun bao, October 25, 1991, in FBIS-CHI 91-225, November 21, 1991, pp. 32-33. 136. Huang Tung, "M Series Missiles and New Navy Equipment: New Weapons in Taiwan Strait Exercises," Kuang Chiao Ching, April 16, 1996, in FBIS-CHI 96-097, May 17, 1996, p. 31. 137. Allen et al., China's Air Force, p. 119. 138. Each division may have three fighter regiments dispersed along the main attack routes, plus one ground attack regiment, one bomber regiment, one airborne early-warning aircraft, one electronic countermeasures aircraft, and reconnaissance aircraft special troops (ibid., p. 112). 139. The first tier extends to a radius of 500 kilometers from the baseline, within which the enemy's fighters and fighter bombers may be used. The second tier extends another 500 kilometers, where the enemy's fighter bombers and bombers will be used. The third tier extends beyond 1,000 kilometers, where the enemy's long-range strategic bombers will be used (ibid., pp. 114-115). 140. Ibid., p. 116. 141. Dong Wenxian, "Strengthen the Concept of Air Battlefields," p. 31. 142. Chen Bojiang, "Formulate a Guiding Ideology on Active Air Defense," Jiefangjun bao, February 22, 1991, in FBIS-CHI 91-048, March 12, 1991, pp. 37-38.

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143. Min Zengfu, "Transcend Air Domination Theory," Jiefangjun bao, December 12, 1995, in FBIS-CHI 96-010, January 16, 1996, pp. 30-32. 144. Allen et al., China's Air Force, p. 122. 145. Xu Gangyu, "Quality Should Be Borne in Mind in Armed Forces Modernization," Jiefangjun bao, February 12, 1988, in JPRS-CAR, June 3, 1988, pp. 35-37. 146. "Ministry of Aviation and Astronautics Industries Outlines Its Development Direction for the Next Decade," Renmin ribao, December 7, 1988, in FBISCHI 88-237, December 9, 1988, p. 26. 147. "China to Produce FC-1 Fighters, Their Performance Equal to U.S. F16s," Ping Kuo Jih Pao (Apple Daily; Hong Kong), February 10, 1996, in FBISCHI 96-029, February 12, 1996, p. 25. 148. Fisher, "China's Purchase of Russian Fighters," p. 6. 149. Allen et al., China's Air Force, pp. 179, 188. 150. Lin, China's Nuclear Weapons Strategy, pp. 105-136. 151. Lewis and Hua, "China's Ballistic Missile Programs," pp. 19-20. 152. Ibid. 153. Zhang Jianzhi, "Views on Medium-Sized Nuclear Powers Nuclear Strategy," Jiefangjun bao, March 20, 1987, in FBIS-CHI 87-062, April 1, 1987, pp. K29-K33; Wu Zhan (deputy director, Institute of American Studies), "Nuclear Deterrence," Meiguo yanjiu (American Studies), no. 1 (February 1988), in JPRSCAR, June 8, 1988, pp. 1 - 8 ; He Zuoxiu, "On China's No First Use of Nuclear Weapons Strategy," Ziran bianzhengfa tongxun (Journal of Natural Dialectics), no. 1 (February 10, 1989), in JPRS-CAR, May 25, 1989, pp. 53-57; and Liu Jijian et al., Guofang fazhan zhanlue gailun, chap. 11. 154. Different views are seen in Johnson, "China's Nuclear Forces," pp. 67-96; and in Jencks, "PRC Nuclear and Space Programs," pp. 105-123. 155. According to Western nuclear-deterrence theorists, deterrence manifests itself in two ways: deterrence by punishment and deterrence by denial. Minimum deterrence is predicated on the former. The distinction between the two modes lies in the nature of the threat. For deterrence by punishment, the threat is that the enemy will suffer unacceptable levels of damage and pain, a higher price than the achieved objective of aggression is worth. Its targeting posture is typically countervalue, and it is employed in a second strike. In an extreme form of deterrence by punishment—assured destruction—strategic stability is sought through mutual vulnerability. Deterrence by denial, in contrast, threatens to frustrate the enemy by targeting its military forces. It requires, not deliberate maintenance of vulnerability, but damage-limiting measures. This type of deterrence does not preclude a first use of nuclear weapons on the battlefield (Snyder, Deterrence and Defense, pp. 8 - 9 ; Lin, China's Nuclear Weapons Strategy, pp. 115-116). 156. Wu Zhan, "Nuclear Deterrence," p. 4; He Zuoxiu, "On China's No First Use," p. 55. 157. Interview of He Zuoxiu (a member of the Scientific Division of the Chinese Academy of Sciences, who was engaged in the most advanced national defense research and participated in nuclear strategy decisions with the higher echelons of the CPC leadership), in Hsi Tzu, "China's Nuclear Threat Aimed at Enemy Soft Targets," Kuang Chiao Ching, no. 249 (June 16, 1993), in FBIS-CHI 93-136, July 19, 1993, pp. 2 2 - 2 4 . 158. Johnston, "China's New Old Thinking," pp. 17-18. 159. Ibid., p. 19. 160. Ibid., p. 20.

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161. The Chinese reportedly plan to take six steps to defend the Three Gorges Project on the Yangzi River, which is expected to be completed in 2008. The six steps include an antiballistic guided missile defense system and a three-dimensional interception system. These two lines of defense also suggest that China's nuclear doctrine is evolving toward limited deterrence (Wang Yung-Kui, "Can the Chinese Armed Forces Successfully Protect the Three Gorges Dam?" Tangtai, no. 31 [October 15, 1993], in FBIS-CHI 93-208, October 29, 1993, pp. 16-21). 162. Such an argument is made only by China's civilian strategists. See Wu Zhan, "Nuclear Deterrence," pp. 5 - 6 ; and He Zuoxiu, "On China's No First Use," pp. 53-54. 163. R. Jeffrey Smith, "Clinton Decides to Retain Bush Nuclear Arms Policy," Washington Post, September 22, 1994. 164. Johnston, "China's New Old Thinking," p. 21. 165. Academy of Military Science, Junshi zhanlue, pp. 115-116; emphasis added. 166. Zhang Jian, "It Is Still Necessary to Base Our Plans on Fighting a Major War," Jiefangjun bao, April 24, 1987, in FBIS-CHI 87-085, May 4, 1987, pp. A 2 - A 3 ; Zhai Zhigang and Guo Yuqian, "We Should Not Overlook the Threat of Limited Nuclear Wars," Jiefangjun bao, September 11, 1987, p. 22; and Wang Zhidong, "Some Reflections on the Probability of Using Nuclear Weapons in Actual Combat," Guofang Daxue xuebao, no. 11 (November 1, 1987), in JPRS-CAR, July 1988, pp. 51-52. 167. Wang, "Some Reflections on the Probability," p. 52. 168. Zhai and Guo, "We Should Not Overlook," p. 22. 169. Major General Wu Jianguo, "The Nuclear Shadow in High-Tech Warfare Cannot Be Ignored," Zhongguo junshi kexue, no. 4 (November 20, 1995), in FBISCHI 96-076, April 18, 1996, pp. 37-41. 170. Zhang, "Views on Medium-Sized Nuclear Powers," p. 31. 171. Ibid. 172. He Zuoxiu, "On China's No First Use," p. 55. There was debate among China's analysts on whether it was necessary to develop neutron bombs. Those with an affirmative view held that China would have no technical difficulties developing them. They would be useful in coping with a large-scale offensive, with little radioactive effect on the battlefield, and China could save the expense of building thousands of tanks. But those on the opposing side held that developing neutron bombs would incur a huge expense. Once used, they would probably lead to all-out nuclear war (Lin Yu, "The Expansion of China's Nuclear Forces," Kuang Chiao Ching, no. 206 [November 16, 1989], in FBIS-CHI 89-228, November 28, 1989, p. 29). 173. Xinhua broadcast, December 4, 1987, in FBIS-CHI, December 8, 1987, p. 21; Jiefangjun bao, July 19, 1988, in FBIS-CHI 88-144, July 27, 1988, pp. 18-19; Xinhua broadcast, October 22, 1988, in FBIS-CHI 88-205, October 24, 1988, pp. 31-32. 174. Norris, Burrows, and Fieldhouse, eds., Nuclear Weapons Databook, pp. 372, 420-421. 175. General Wu also noted that the Clinton and Yeltsin governments still regarded nuclear deterrence as a strategic pillar of their national security. The 1993 U.S. Defense Department report to Congress proposed that a global defense system based on strategic nuclear deterrence and the prevention of limited nuclear attacks should be established. Russian military doctrine officially abandoned the commitment made by the Kremlin in the Soviet period of not being the first to use nuclear weapons (Wu Jianguo, "The Nuclear Shadow in High-Tech Warfare," p. 40).

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176. Hsi Tzu, "China's Nuclear Threat," p. 23. 177. Prados, "China's New Thinking," p. 34. A Japanese analyst also said that assuming a total Chinese inventory of 350 nuclear warheads, 180 to 200 warheads may be operated by the 2nd Artillery Corps, suggesting that land-based ballistic missiles will remain the foundation of China's strategic forces (Hisashi Fujii, "Facts Concerning China's Nuclear Forces, 2nd Artillery Corps and 09 Submarine Fleet," Gunji Kenkyu [Military Affairs Research; Tokyo], November 1995, in FBIS-CHI 96-036, February 22, 1996, pp. 33-39). 178. Johnston, "China's New Old Thinking," p. 37. 179. Norris et al., Nuclear Weapons Databook, p. 372; Caldwell and Lennon, "China's Nuclear Modernization Program," pp. 30-31. 180. Lin Yu, "Latest Development of CPC Missiles and Nuclear Weapons," Kuang Chiao Ching, no. 254 (November 16, 1993), in FBIS-CHI 93-221, November 18, 1993, pp. 4 8 - 5 0 . 181. Ibid., p. 49. 182. Lewis and Xue, China's Strategic Seapower, p. 236. 183. Ibid., pp. 236-237. 184. Hisashi Fujii, "Facts Concerning China's Nuclear Forces," p. 36. 185. Chiu Chi, "Secret of CPC Nuclear Weapons Command Revealed," Cheng Ming, no. 188 (June 1993), in FBIS-CHI 93-115, June 17, 1993, p. 25. 186. Chinese strategists evidently debated the relative priority between the two systems for limited deterrence. Some argued that most of the new missiles should be placed on submarines. Others claimed that a limited deterrent should rely on mobile land-base systems, making use of smaller warheads and improved reaction times (Johnston, "China's New Old Thinking," p. 20, esp. note 51). 187. China also faced strong political pressure to halt nuclear testing, especially from nonnuclear developing countries. Many of them demanded that the nuclear-weapon states sign a C T B T as a prerequisite for the extension of the NPT. Neighboring Kazakhstan expressed concerns about the medical, biological, and environmental impact of Chinese nuclear tests (Garrett and Glaser, "Chinese Perspectives," pp. 58-59). 188. Johnston, "China's New Old Thinking," p. 39. 189. Garrett and Glaser, "Chinese Perspectives," pp. 7 3 - 7 4 .

5 The New Military Economy

The Defense Industries and the PLA's Economic Roles Ever since the end of the Korean War, those in charge of China's national security have periodically debated three sets of issues concerning the military's roles and missions. First is threats to China: What is the PLA's national-security mission given the overall strategic situation? What is the likelihood of war, and for what kinds of conflicts should the PLA prepare? Second is the priority attached to economic development at a time of scarce resources. Here, the key questions have been: Should economic development take precedence over weapons production and defense industrialization in general? What part should the PLA play in national development planning and fulfillment of economic programs? Third is political priorities within the military establishment: How important should political training and controls be in comparison with the professional training of soldiers in order to fulfill national-security responsibilities? 1 These three sets of issues have raised all sorts of additional ones, such as the means of and priority for acquiring advanced technology, military strategy and battlefield tactics, and budgeting for national defense. The significance of all these issues for our study is that they are politically interlocked: The strategic, economic, and organizational questions they raise can be addressed only by political authority. One of those questions is familiar to all students of bureaucracy: How much of the country's scarce resources should be devoted to the armed forces? As a vast, highconsumption bureaucracy, the PLA, like military establishments virtually everywhere, must compete with other agencies for resources. Its unique and primary mission, national defense, is not guaranteed full funding. In fact, as we have argued in a previous work, in Mao's time the central leadership was always reluctant to let security threats divert the PLA from what he regarded as its higher-priority domestic political functions, which included the military's loyalty to Mao's vision. Except in the Korean War, Mao opted for military strategies tailored to low-cost, low-risk uses of the PLA. As we observed in Chapter 3, since 1978, and especially since the end of the Cold War, China's modernization has had highest priority. Deng officially buried the threat of a big war in 1984. He and numerous strategic

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analysts judged that China's external-security situation was largely positive, all the more so with the collapse of the USSR. This circumstance again brought the resource and mission questions to a head: How much for defense? What does the shift to rapid economic development mean for national defense? How can the armed forces be kept politically reliable at a time when China is being besieged by capitalism? We have already seen that the PLA and China's defense community in the mid-1980s took the nationalist position in the debate over nationalsecurity strategy. From a bureaucratic perspective, perhaps it was inevitable that defense scholars argued that the danger of a new war could not be dismissed and that there remained many sources of instability close to China. (Similarly, in the United States after the Gulf War, "new dangers" was the theme of the Central Intelligence Agency [CIA] and the Defense Department in their arguments to justify continued high levels of funding for intelligence work and advanced weapons.) By then, PLA leaders were fighting a rearguard action: They already knew they would have to adjust to peacetime instead of war-fighting missions. 2 While it would be an exaggeration to say that the military was left out in the cold as a consequence of the economic reforms simply because it was last in importance of the "four modernizations," initially it would have to sacrifice in some areas: funding, manpower, and weapons acquisitions. 3 The militaryindustrial complex as a whole would have to undergo a substantial reorganization of leadership and orientation. PRC defense leaders voiced their support for these measures, though not without some grumbling. After all, they were being asked to make major "transformations" (zhuanbian) for the sake of economic advance and to postpone the weapons modernizations they believed were clearly called for by changes in the conduct of war and the global strategic situation. Our focus in this chapter and parts of the next is on the expanded role in China's economy of the defense establishment since the early 1980s. For the military, performing economic functions has been routine since its revolutionary beginnings. Whether as a guerrilla force needing to support itself and establish close ties with villagers, or after 1949, when austerity required it to produce for itself, or during the Great Leap Forward, when it managed large tracts of farmland, the PLA has always been heavily involved in the economy. The defense industries that support the military through weapons research and production rapidly developed into a farflung scientific-industrial empire in the 1950s and 1960s. China's militaryindustrial complex took shape at that time in response to strategic threats, developing a large arsenal of conventional and strategic weapons at enormous economic cost. The economic activities of both these institutions, the PLA and the defense industries, have been profoundly altered by the economic reforms. They are entrepreneurial, international, and technology oriented. Encouraged by the political leadership to contribute to China's

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economic growth, rather than to merely take their budgetary allocations and concern themselves with defense preparedness, they turned to ways to profit, politically as well as financially. Over the course of the reforms, the new military economy has developed in four ways. First is military-industrial conversion, the partial or total conversion of many state-run military production and research facilities to produce consumer goods for the Chinese and international markets. Second is the PLA- and state-run trading companies that export and import weapons. Like the converted weapons plants, these companies seek to acquire foreign technology for both civilian and military purposes. All plants and firms are subordinate (at least on paper) to central authority, either to the CMC or to the State Council. Third is for-profit businesses run by PLA offices and units at every level, in addition to the farms, factories, and mines the military has always operated. These businesses exist outside the military-industrial system. The PLA may be owner or investor, sometimes jointly with foreign firms. Fourth is use of the PLA to perform public services such as military-run construction, engineering, and emergency work (such as natural disasters). These tasks seem to occur both under contract and "voluntarily." We will refer to the first pursuit as industries or enterprises, the second as trading firms, the third as PLA businesses, and the fourth as services. Military-industrial conversion is covered in this chapter; PLA-run businesses, arms sales, and services are dealt with in Chapter 6.

The Difficult Road of Defense Industrialization Unlike the former USSR's military-industrial complex, China's has been characterized by wide dispersal of both military forces and industries, poor quality of armaments, and low funding. The military economy was never a central part of the national economy during Mao's time, even though it absorbed a large proportion of state resources. Defense of China was, of course, a constant concern of Mao's; but how much for defense would always be determined from the standpoint of "politics in command": keeping the military out of a controlling role in political life, which he succeeded in doing until the destructiveness of the Cultural Revolution got out of hand; preventing precious state resources from being monopolized by the military; and sheltering the military-industrial base from external attack. Defensive industrialization from the very beginning of the PRC had high priority. Virtually any research, construction, and manufacturing of military value was run by the military. 4 Production of conventional weapons, nuclear energy and weapons (beginning in 1955), defense science and technology, and research institutes all were favored with large numbers of technical workers, R&D funding, faculty, and the best facilities.

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High-level backing also meant that the resources of other ministries and the factories and personnel under them could be mobilized on behalf of strategic programs, such as nuclear weapons. But such efforts were constantly being stalled and disrupted by political decisions and external events. Mao's decision in the mid-1950s to reduce military spending for the sake of the economy, the Great Leap Forward (1958-1962), the withdrawal of Soviet aid and advisers from China in 1959 and 1960, the "thirdline" relocation of defense industries (discussed below), and especially the Cultural Revolution all put pressure on military industrialization and caused havoc among technical personnel. Attacks on scientists as "rightists" and "bourgeois elements," frequent calls for "all-out effort" to produce, and the politicization of the PLA made for chaotic planning and enormously inefficient production. Production of military equipment went through periodic sharp rises and falls. Only the PLA's high-priority strategic programs enjoyed political support sufficient to enable managers to accomplish some specific missions, such as test an H-bomb in 1967, launch China's first satellite in 1970, and continue nuclear-weapons and missile development. 5

The Third Line The "third-line project" deserves special mention in light of its unique strengths and shortcomings, which are relevant to military-industrial conversion years later. In 1964, Mao, fearing an attack on China's industrial heartland in the northeast region as a fallout of the Vietnam War and war with the Soviet Union, ordered military industries—the heart and soul of China's science and technology resources—moved deep into the interior. The project represented a huge reallocation of human and economic resources into a secure rear area, decentralized so that each industrial sector (electronics, machine building, etc.) was self-contained. 6 The high tide of third-line construction lasted about a decade, driven by Mao's determination to build a credible strategic-weapons program and by his warnings to prepare for "an early war, an all-out war, and a nuclear war." 7 Not until the Soviet threat was reassessed in the early 1970s did the fervor die down, though the third-line project outlived Mao's death in 1976. Third-line military industries account for roughly one-fourth of China's total military firms and over one-third of their workers. There are 483 plants and 92 research institutes, together employing 1,350,000 engineers and workers. 8 Though these facilities were responsible for a large proportion of China's weapons R&D, as the economic reforms got under way, the PRC leadership recognized that they were a serious drag on the state's resources. They represented an enormous outlay of money— roughly Y200 billion over a twenty-year period, 9 or 52.7 percent of total capital construction in China during the 3rd Five-Year Plan (1966-1970) 1 0 —

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that may have significantly held back economic development in other regions. 1 1 Like most other state-run enterprises, in or outside the third line, these military enterprises had severe problems, including inefficiency in production, management, and labor; waste of funds; and lax accounting. 12 Unlike most others, third-line factories and workshops were also plagued by inappropriate siting: "deep in mountains, widely scattered and hidden in mountain caves, some projects even dispersed in a radius of several hundred kilometers." Far from lines of transportation and communication, these industries were disconnected from the rest of the economy and from scientific and educational resources that might have supported them. 13 Yet, because of their importance to defense and the economy, third-line plants were frequent objects of political manipulation (now called "leftist interference"). Enterprise managers, backed by powerful patrons, knew the state could always be relied on to bail out unprofitable industries ("eating from a big pot"); and workers knew they had permanent employment regardless of their efforts (the "iron rice bowl"). 1 4

Defense Modernization

on Hold

Modernization of China's military industries, weapons, and forces did not begin in earnest until the defeat of the Gang of Four in 1976 and official endorsement of the four modernizations. Even then, when political interference in Chinese military industrialization ended and the soldiers returned to their barracks, the new era meant limited resources available for military modernization. With the end of the 1979 conflict with Vietnam, orders for military goods were greatly reduced, and many workers in military industries were idled. The PLA was clearly told by the defense minister that it would have to bow to economic priorities in light industry and agriculture in order to meet civilian needs. It could not "blindly pursu[e] large-scale and high-speed development in building national defense." 1 5 This decision, favored by Deng Xiaoping, 1 6 helped resolve a high-level debate over the larger question of "whether the defense industries should lead industrial development or vice versa." According to a Western authority, the first round of that debate ended with the decision to put military science and technology at the service of the three other modernizations, while also continuing to upgrade conventional and nuclear weapons. 17 The same issue of priorities came up again in the mid-1980s, the period of the second strategic reappraisal during which war was determined to be avoidable. Deng reaffirmed his belief in putting the economy first. Since military modernization depended on a strong material base, it could come about only as a consequence of success in the overall economy. We must think of a million ways to develop the economy. When it's developing, then [military] things can be accomplished. When the overall

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situation has come around, and national strength has greatly increased, then we can make some more atomic bombs, missiles, more modern equipment. In space, at sea, on land, it's all fine, by that time it will be easy. 1 8

Deng made specific suggestions for diverting underutilized military resources, such as airports, navy ports, and technical personnel, to civilian use—the concept of junmin heyong (joint use of military resources by the military and civilian sectors). In June 1985, at the enlarged CMC meeting that formally put the military into a peacetime mission, Deng sought to reassure PLA leaders that the "overall goal of national economic construction . . . was not to discard defense modernization" or "wait for the other three modernizations to be realized." 1 9 But his decisions amounted to putting defense modernization on hold for four years. One rough illustration of what official policy meant in practice is provided by defense procurement in the late 1970s and early 1980s, which remained fairly constant at the same time as overall industrial production was increasing rapidly. 20 More telling were weaknesses in recruiting technical personnel, the design (and therefore also the level) of technology, and a limited R&D base. 21 PLA leaders recognized, particularly after analyzing the role of high-technology weapons in the 1973 Arab-Israeli War and the Vietnam War, that it was folly to continue producing outmoded weapons. But moving to a new industrial-scientific base would take some time, since China could hardly afford to buy its way to a modern military. 22 The prevailing Western view as the economic reforms began was that if PRC leaders hoped to establish a durable and comprehensive program of defense industrialization, they would have to implement major changes, such as professionalizing its leadership and management, actively seeking and assimilating foreign technology, and conforming to a practical, costeffective standard. These notions seem to have been embraced by the central leadership, even though they required overcoming resistance from political cadres and military officers whose careers depended on party authority and control of resources and whose point of view on such matters as the military budget, strategy, and a strict construction of selfreliance was out of sync with that of the top leaders. 23 As some of the new defense economists were saying, China could not afford to keep its huge defense industrial base languishing like some overstuffed horse, well fed but underutilized and therefore inefficient. These modernization choices did not simply have to blend with other aspects of strategic planning; they would play a critical part in determining them. 24 China's strategic doctrine, based on "active defense" and minimum deterrence; its weapons production, emphasizing high-technology electronics, a smaller force structure, and intelligence; 2 5 its weaponsprocurement policies, such as making selected purchases of weapons systems

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from abroad and coproducing weapons while seeking licensing of them; 2 6 military-industrial conversion; and its foreign policy of "independence" itself, which justified acquiring Western technologies and selling low-cost weapons 2 7 while avoiding dependence on outsiders—all these flowed from the basic political decision to modernize defense industries on a new basis. The overall lesson would later be captured in the expression "two bombs and one satellite": Rely for innovation in defense science and technology mainly on Chinese efforts, but don't close the door to foreign technology and ideas. 2 8 China did reduce the technology gap with the West in the 1980s, when it was able to develop a variety of exportable weapons, such as main battle tanks, combat aircraft of various kinds, and antishipping, surface-to-air, air-to-air, and surface-to-surface missiles. 2 9 Indigenous research resulted in the successful flight-testing of an ICBM in 1980 and an SLBM in 1982, as well as the launching of a communications satellite in 1984. But many military R&D projects were canceled. 30

Military-Industrial Conversion Conversion in China involves an economic strategy of military integration that brings military-industrial technologies, facilities, and skilled labor into the overall reforms. 3 1 The strategy, according to an official source, aims "gradually to reform and convert the past unified military product system into an integrated military-civilian national defense scientific research and military-industrial production system." 3 2 The Chinese approach does not conform with standard definitions of conversion, since the process is reversible and has always provided for using research, technologies, and sales from the civilian sector to support the arms industries. Nor, to state the obvious, does conversion in China aim at making all swords into plowshares. Its military industries, after all, produce and export more weapons than ever before; and the budget of the PLA has risen substantially in the 1990s, partly to modernize its arsenal. Nevertheless, China has now had over a decade of conversion experience that has yielded some impressive economic results, even though some claims require better substantiation. Military resources have to a significant degree been used for civilian production. For example, in 1990-1991, it was officially claimed that over 65 percent of the output by value of military industries is in civilian products and that in certain sectors, such as electronics, the civilian share of total military production is nearly 100 percent. 3 3 By the mid-1990s, 80 percent of output was the usual figure given for civilian production. Put another way, the production of military industries has greatly increased, but only because of consumer goods production. (According to one source, their overall output doubled in the 1980s, but production of military goods declined by one-half.) 3 4 A great

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diversity of new and spin-off products of varying technological intensity has been developed because of conversion. Economic development in the SEZs, including products for domestic consumption and export, and retraining of demobilized officers and soldiers have also been promoted by conversion. Conversion has been assisted by reforms such as the streamlining of military-industrial organization and military budget and force reductions during the 1980s. Both the military reforms and conversion were pushed by Deng Xiaoping and other top leaders at the political center and in the military-industrial hierarchy. But, this chapter points out, military conversion has been limited by structural problems common to most state-run industries, including low labor productivity, idle plant capacity, weakness in management and marketing, and the political obstacles that confront any effort in a nonmarket system to close down inefficient state-run enterprises. Nevertheless, conversion in China has made significant headway and deserves study by rich and poor states alike. 35 Origins China after Mao is fundamentally the story of a leadership determined to accomplish two things: change the focus and raise the targets of modernization, and take advantage of a significant decline in international tensions to accelerate modernization. These two powerful forces combined between the end of the 1970s and the early 1980s to prompt China's commitment to military conversion. The economic reforms were the first and most important force. Out of them emerged kaifang, the "opening to the outside world" to acquire advanced technology and scientific information and to promote exports. The second force, discussed in Chapter 3, was a change in strategic thinking about the prospects for war, the balance of power, and threats to China, particularly from the Soviet Union. Our primary interest here is the implications of conversion for economic development and the PLA. China's military-industrial complex is said to number nearly 1,000 enterprises that specialize in the production of weapons and military equipment, over 200 research institutes, over 300,000 engineers and technical personnel, and nearly 3 million staff and workers. 3 6 Early on in the reforms, it was recognized that both facilities and workers were excessive and that their unique attributes were not being effectively utilized. Hence, the principle was adopted of "combining military production with civilian production" (junmin jiehe), meaning (in the words of two Chinese defense economists) "to link organically the defence building with national economic development and to use military industrial technologies for the development of the cause of peace and for the benefit of mankind." 3 7 Comparing U.S. and Soviet development of high technology, three PRC defense scholars concluded that U.S. world leadership

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resulted from its emphasis on the integration of military-civilian technological research, a flexible approach that contrasted with the Soviets' overemphasis on the military. China, they said, should learn from the Soviets' error. 38 For all their shortcomings, third-line military plants were recognized by central and local leaders as having uncommon assets. They were large in scale, formed autonomous conglomerates that combined heavy industries with research institutes and transportation networks, and had more advanced technology and skilled personnel than most civilian industries in China. 3 9 Many of these resources, it was realized, could be shifted to produce for and, through technology transfer, directly support the civilian economy. Rather than dismantle military industries (although some later were dismantled), the various ministries responsible for them were told by Deng in 1978 to plan on employing one-half, and eventually two-thirds, of their workers in producing civilian goods. 4 0 This approach intended to do more than satisfy pent-up consumer demand. At a time of reduced military spending, a transfer of resources to civilian production was designed to keep millions of workers productively employed, make use of idle plant capacity, and earn funds for the military establishment. 41 Another early motive of conversion was to achieve independence from foreign technology and capital as soon as possible. As one authority put it, China is "about 15 to 20 years" behind advanced world levels in the technical quality of high-techology products from defense industries. Until it can meet world standards, it will have to depend on technology imports from abroad that "always are subject to limitations by the developed countries." 4 2 Conversion was seen as a method of promoting import substitution, in high-technology military items as well as civilian products. In the chemical industry, for example, it was observed how spin-offs from weapons research found applications in commercial satellite components, airtight materials, glass, and other civilian products that previously were imported. 4 3 But conversion was also viewed as a way to acquire foreign technologies with dual (military and civilian) applications. These acquisitions, along with selling weapons and other militaryuse items, are the main objectives of the trading companies (depicted in Figure 5.1) established under the State Council ministries and the PLA in the 1980s. 44 Defense industries in China also aim to be "a national model for parallel reforms in the larger industrial and defense sectors." 4 5 To the extent that the defense industries can effectively transfer technologies, efficiently use resources, and operate profitably and with increased autonomy, they are supposed to promote the overall reform process. Inasmuch as many of the reforms and weaknesses of military industries are common to nonmilitary enterprises, the objective of modeling future reforms on the superior resources of military industries is understandable.

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Implementing

Conversion:

Technology

155

Turnover

Once the key political decisions had been made, the essential question was how most efficiently and effectively to organize and use military-industrial assets to serve the civilian sector and the defense sector itself. The Chinese approach has had several components, listed in what seems to be the leadership's order of importance: promotion of military-industrial exports of civilian products; relocation of military-industrial assets; reorganization of military-industrial bureaucracies; qualitative changes in military-industrial leadership; military budget and m a n p o w e r reductions; and the establishment and use of defense economics. Each component will now be briefly explored. First has been the redirection of military resources to civilian needs and international markets. Many of China's defense intellectuals have underscored the market potential of converted products, provided there has been a turnover of military technology (or information) to civilian production. Based on studies of military industries in several cities, they f o u n d consistently large economic benefits f r o m military-to-civilian technology turnover. The key to effectiveness is "first and f o r e m o s t to develop the technology and commercialize it." 4 6 Their attention has been drawn to developments in high technology, such as microelectronics, nuclear energy, aerospace, lasers, and nautical science; to the shift f r o m materials-based to information-based production; and to investment in advanced industrial countries in technology industry clusters (chun) or conglomerates, especially in electronics. 4 7 Investments in these fields promise high profits and hardcurrency earnings, these analysts believe. They also expect that advances in technology will occur, with some "spin-on" to new military applications. Of course, only already technologically advanced enterprises are actually positioned to move in these directions. Aerospace, for example, has the advantage of having the highest concentration of scientific and technical researchers, above the national average in the defense industry of 10 percent of all personnel. 4 8 Shortly after military-industrial conversion began, aerospace was designated the "center" of national high-technology development. 4 9 The 7th Ministry of M a c h i n e Building b e c a m e the Ministry of Space Industry in 1982. Overall, civilian products increased f r o m 16 percent of the industry's output value in 1980 to 75 percent in 1988. 5 0 China contracted with several Third World countries (such as Laos, Sri Lanka, and Bangladesh) to produce planes and with sixteen companies abroad to produce a hundred different aircraft parts, such as tail fins and aircraft doors. The industry then had a total workforce of around 800,000. It made record sales abroad in 1990—an estimated Y1.4 billion (U.S. $294 million)—via three of the export-promoting corporations in Figure 5.1: CATIC, GWIC, and the CPMIEC. Besides medium-sized commercial and trunk-line aircraft and helicopters, the aerospace industry has made its

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mark in the civilian sector with Long March rockets to launch communications satellites, such as AsiaSat in 1990. 51 As one observer noted in 1990, "Since 1970, China has launched 25 satellites: 4 telecommunication, 11 retrievable, 1 meteorological and 9 for photographic and reconnaissance functions." R&D from these efforts "will have important implications for the country's nuclear weapons modernization programs." 5 2 For all these seeming successes, aerospace did not actually fare well in earning hard currency until it began selling tactical ballistic missiles to the Middle East, as noted in Chapter 7. 5 3 By contrast, satellite launchings (by GWIC) experienced a number of disasters in the mid-1990s as the Chinese-made rockets exploded, setting back the launch schedules of the contracting firms. 5 4 China's nuclear industry is an example of more complete conversion to civilian use. It employs about 300,000 people in over 200 enterprises. The shift from overwhelmingly military to civilian production is reflected in how the industry has reorganized. The nuclear industry once was part of the top-secret cluster of numbered ministries of machine building, with responsibility for atomic bomb construction. Then, reflecting the advent of civilian nuclear power, it became the Ministry of Nuclear Industry in 1982, was renamed the China Nuclear Energy Industry Corporation in 1988 and was placed under the Ministry of Energy Resources, and in 1993 became the China National Nuclear Corporation (CNNC). 5 5 The CNNC has responsibility for both civilian and military aspects of nuclear power. The nuclear industry moved rapidly into commercial activities. A high official reported increasing profits and a nearly fourfold leap in the value of production between 1984 and 1986. He attributed these increases mainly to development of nuclear power at China's two plants (Qinshan in Zhejiang Province, which came on line in 1992, and Daya Bay in Guangdong Province, whose two units began operations in 1994). 56 The nuclear industry also produces six other categories of products: nuclear technology and radioisotope products, fire alarms, rare-earth products, nonferrous and precious metal products, metallurgical-chemical products, and machinery instruments. About 1,000 items from these groups have been put on the market. 5 7 By value, 42 percent of the nuclear industry's output in 1989 was in civilian products, a consequence of diminished weapons production. 5 8 By 1996, 80 percent of the industry's output value was civilian, with reported annual growth of 20 percent and an active research program in nuclear fusion and larger reactors. 59 From the PRC leadership's point of view, the great virtue of the nuclear industry is its large export and domestic market, and therefore the potential both to enter the international competition in nuclear energy and to attract advanced technology and capital that will help China meet its huge energy needs. 6 0 Indeed, nuclear conversion to meet domestic and international demand for fuel seems to be accounting for virtually all of

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China's estimated enrichment capacity, contributing to the conclusion that China has stopped producing enriched uranium or plutonium for weapons. 6 1 The domestic market continues to grow: Nuclear power accounted for around 1.2 percent of China's total electricity output in 1995; but the figure is expected to climb to 6 percent by 2020. 6 2 From eight to a dozen or so more nuclear-power plants are planned to come on line by the end of the century, including one in Guangdong Province that will be entirely funded from foreign sources. 6 3 Developing countries are the particular target of China's nuclear exports. In 1992, the industry achieved a coup by signing a contract with Pakistan to construct a nuclear-power plant after the United States had terminated all assistance to Pakistan due to questions about its nuclear-weapon plans. (The possibility that the CNNC's nuclear exports to Pakistan have included weapon-making technology and uranium is taken up in Chapter 7.) Pakistan is a large potential market for additional reactors. 64 Algeria, to which China has exported a heavy-water research reactor, Iran, and Thailand are other customers. For technologically limited military enterprises, manufacturing and marketing products require far more resourcefulness than in the nuclear, aerospace, and other large-scale industries. A tank factory, for example, can fairly easily adapt to produce tractors, and aircraft engine plants can switch to manufacture gas turbines. Moreover, enterprises with large assembly lines and a skilled workforce can respond fairly quickly to profitable opportunities. Small- and medium-sized plants, however, not only lack the basic ingredients of large-scale plants (technology, capital, and skilled labor); they also do not have the network of contacts, research support, managerial know-how, reputation, and international marketing representation that the large firms have or can acquire. These comparative disadvantages make for difficulties in acquiring local or foreign partners, developing competitive products, and stimulating production. As a result, many smaller firms must be content to produce light industrial and household goods—televisions, cameras, bicycles, refrigerators—that are already in abundance and are technologically inferior to what is available on the international (and in some cases also the local) market. From the Third Line to

"Windows"

Intimately linked with the redirection of military resources is the second component of conversion: the reorganization and in some cases relocation of third-line industries. Whether in Shaanxi, Sichuan, or any other thirdline province, the problem of what to do with military-industrial assets that were in economic trouble or could not effectively convert to civilian production became acute in the post-Mao period. Between 1986 and 1990, under the 7th Five-Year Plan, 121 industries or "projects" (xiangmu) were "closed down, halted, merged, transformed, or moved" closer to cities, at

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considerable cost. 6 5 Under the 8th Five-Year Plan that began in 1991, the State Council and the CMC are said to have authorized a ten-year-long "strategic shift" of third-line industries. The announced purposes were to modernize management, increase output and profits, and open new channels for exports and technology acquisitions. 6 6 Accordingly, 115 enterprises were "scheduled to be adjusted." "Some 70 enterprises have been wholly or partly relocated, and 800 enterprises have established 1,200 'windows' in the open coastal regions." 6 7 "Windows" are perhaps the key breakthrough for interior military industries. These are outlet factories or partner enterprises that, since the mid-1980s, have been established in or nearby coastal cities. The reasons for creating windows were explained by a Shaanxi Province official in a personal interview. Referring to the restructuring or relocation of twentytwo military industries in the province, she said that directors of some enterprises, usually small- and medium-sized ones, were reluctant to think beyond their own military production. Additionally, enterprises were isolated from energy sources and transportation, lacked capital and advanced technology, and were in need of managers who are market-oriented and know what it takes to develop competitive products. 68 Moving in whole or in part made sense. As described by a leading third-line official in Sichuan Province, party and state officials met in 1986 to ponder the fate of military industries. Taking into account that 50 percent of the country's third-line productive capacity was located in remote parts of Sichuan, the officials decided that the "patient" had to be saved. A policy of "leading the tiger down the mountain," or "putting wings on the tiger," was instituted. The tasks would be to determine which of the third-line enterprises could most effectively be linked with local or first-line (coastal region) plants and to decide which other plants should be closed or absorbed. 6 9 Some specific experiences of enterprises in other provinces that relocated are recounted later in this chapter. Reorganizing for

Conversion

The third crucial element in conversion was the reorganization of the bureaucracies concerned with military research and production. Pressed to stay ahead of the R & D curve, China's defense industries went through a bewildering array of organizational changes beginning in the 1950s. In the early 1960s, China's industries were under eight ministries (numbered for secrecy) of machine building, six of which were charged with specific armaments production. Coordination of weapons production was vested in the National Defense Industrial Commission until 1963. It was then joined to the National Defense Industry Office (NDIO), which coordinated R & D for weapons and military equipment. Military research, including funding, training, and weapons testing, rested with the National Defense Science

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and Technology Commission (NDSTC). Both the NDIO and the NDSTC were responsible to the CMC as well as to the State Council. 7 0 As the result of various reorganizations (the most important of which occurred in May 1982), the ministries were named, reduced to seven, and all placed under civilian leadership. But the military-industrial system still operated like "independent kingdoms." Each ministry's industrial network was "extremely self-contained, with their own equipment for processing raw materials and manufacturing components, their own schools, and their own research institutes." 7 1 Each ministry had its own set of plants, some exclusively making weapons, others only civilian goods, still others both. This vertically integrated system, isolated from the rest of the economy, worked well in the 1960s and 1970s in those areas—nuclear weapons and aerospace (missiles)—that had high technical theoretical value and political priority. But for the other sectors, it appears that isolation was detrimental to developing local sources of supplies and other inputs that could have promoted efficiency, innovation, and lower prices. 72 The key organizational policy decision occurred in August 1982 when the NDSTC and the NDIO were merged to form COSTIND (Chinese abbreviated as Guofang kegongwei).73 COSTIND, as reflected in Figure 5.1, is the chief body responsible for coordinating military R&D, conversion, and production of new weapons and technologies. It acts as a bridge between the CMC and State Council networks of defense scientific, research, and production capabilities, including charge of military industries under the State Council. 7 4 Such broad responsibilities puts COSTIND in the arms-exporting business, and probably arms imports as well. 75 COSTIND's director reports to leading party and state bodies: the CMC and the State Planning Commission (SPC) under the State Council. 76 It thus appears that COSTIND was strategically created to overcome "the longstanding conflict between the military research and development sector and production sector." 7 7 To the extent it can do this and avoid succumbing to the pressures of military modernizers for funds, COSTIND may be able to accelerate military-industrial involvement in economic development. 7 8 Various sources indicate that COSTIND's authority in fact goes beyond mere coordination. Benjamin Ostrov maintains that COSTIND has "direct control over the ministries and factories relevant to its mission." 7 9 In 1988, a further consolidation of military-industrial leadership took place that may reflect this effort to centralize control. The seven ministries were reduced to three—the MMBEI, MAS, and MER—plus the CSTC. Since 1993, however, and therefore subsequent to the charted information in Figure 5.1, the MMBEI has been separated into two ministries, and MAS and MER have been broken up with the creation of ministerial-level "general corporations." The Chinese government's aim is to transform the corporations into Boeing-like semiprivate "economic entities engaging in research, production and business." 8 0 The aforementioned CNNC was created from

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MER, NORINCO from MMBEI, and the Aviation Industries of China and China Aerospace Corporation (CASC) from MAS. The China State Shipbuilding Corporation (CSSC) is the new, corporatized incarnation of the CSTC. The process is constantly evolving, with new ministerial-level corporations, as well as trading companies, being formed or renamed and developing subsidiaries all the time. 8 1 (As Figure 5.1 shows, COSTIND itself has trading companies under it.) All these entities, including their numerous local-level counterparts, are still supposed to be subject to COSTIND's coordination and the ultimate authority of the CMC. That is likely to prove increasingly difficult; with such a proliferation of businesses, the full network cannot readily be depicted on a chart, let alone kept under control. With specific reference to conversion, according to Beijing sources interviewed by one of the authors between 1989 and 1991, COSTIND is directly responsible to the premier of the State Council (Li Peng, until 1998) and provides overall financial and administrative supervision of conversion R&D. COSTIND must accept or reject the conversion of individual enterprises to nonmilitary production. In the critical area of transfer of military technology to the civilian sector, COSTIND is part of a three-way division of labor (with the SPC and the State Science Commission). COSTIND's responsibilities are to facilitate "declassification of militaryindustrial technology, exchange of information," and coordination of technology turnover. 8 2 It also plays a leading role in directing technical research priorities. 83 COSTIND's activities extend to facilitating the proper functioning of military-industrial conversion. It provides technical assistance to enterprises on planning, equipment, product development, and worker training, drawing upon thousands of technical personnel from military plants and defense universities. 8 4 As one of the case studies below will note, COSTIND may also allocate funds to military industries as start-up grants or loans. Its province-level offices, as in the case of the Shaanxi COSTIND office, guide conversion efforts throughout the province, from production planning to marketing. 85 Assisting in technology transfers, such as by bringing together military factories, local governments, and commercial firms, is one such liaison function. The nationwide economic reforms have also had an impact on COSTIND's conversion activities by introducing the contract system to military industries in 1986. COSTIND's defense intellectuals had long urged adoption of the system as a crucial way to rationalize weapons production and conversion. According to a press report, "nearly 1,000 models of weapons and equipment" were brought under the contract system, so that by 1988, 80 percent of this production was performed under contract, some by competitive bidding. 8 6

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Professionalization The fourth component of conversion was leadership: placing more professional and younger people in leadership positions over and within military industries, just as Deng Xiaoping had insisted be accomplished within the PLA's officer corps. This step was also linked to the broader economic reforms and to regularization within the national-security bureaucracy generally. 87 Within COSTIND, professionalization began in 1985 following instructions from the CMC. The average age of the new leaders in COSTIND was reduced by 10.6 years compared with the early 1980s. Also unprecedented in Chinese bureaucratic politics, all of the new heads of offices were college graduates, including two who finished graduate studies. General Ding Henggao, COSTIND's director from 1985 to 1996, graduated from Nanjing University in 1952 and studied abroad between 1957 and 1961. He had been the deputy head of COSTIND's Science and Technology Section before being promoted to the top position. 88 Defense Economics and the Cracking of the "Big Pot" The fifth component was something of an intellectual revolution: the establishment of defense economics as a separate field of study. Just as a more scientific approach to strategic planning began to take hold in think tanks, and military science in the service academies, defense economics made its mark on the managerial side of conversion. In each case, developments in the West after World War II proved highly influential. 8 9 The operations of defense departments and military-civilian industrial relations there and in the USSR were carefully studied. This task included examining other countries' conversion experiments and the role of economists in defense planning and budgeting. 9 0 A new cadre of Chinese defense intellectuals urged a more rigorous and, by implication, free-flowing, farsighted approach to military issues. Between 1986 and 1991, numerous books and series were published on future planning (information, system science, alternative futures), strategy and tactics (the science of warfare), national defense theory and practice (including threat analysis, limited war, and comprehensive national strength), and defense economics. This last specialization led directly to the réévaluation of militaryindustrial goods as commodities (although commodities "with special characteristics") subject to market forces of supply and demand. Such a major shift in thinking was prerequisite to civil-military integration. Among the implications of this shift, which is spelled out in numerous Chinese studies, 9 1 are a critique of the third-line strategy; recognition of the need for a more scientific, nonpolitical approach to military budgeting and planning; 92 cost-effective evaluation of a military enterprise's operations,

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in order to assess its relative potential contributions to the civilian and military economies; reconsideration of the role of value, pricing, and profit in military production; and reorganization of the military-industrial system so that its products, including weapons as well as civilian goods, would be made under contract and enterprises themselves would be subject to market forces. One can see why, as two Chinese specialists have argued, this new view of defense economics "came as a shock" to traditionalists. 9 3 It meant that the usual treatment of the military-industrial system as a closed system, cut off f r o m internal oversight and f r o m the Chinese and world economies, would have to end. "For the first time," writes a U.S. analyst, "the [PRC] defense establishment feels the need to justify itself economically." 9 4 The new view meant subjecting military production to new standards that might compel greater efficiency and "economic linkages" (jingji niudai) with other parts of the economy and with the world. 9 5 For example, military-industrial cost-effectiveness generated a debate over quickening the pace of military-to-civilian technology turnover. Some PLA officers expressed concern that focusing on "multiplicative national defense" (zengzhixing guofang) would displace weapons modernization as an objective. Others doubted the civilian economy could make efficient use of a higher rate of technology turnover. Others said the multiplier theory exaggerated the possibilities for conversion to civilian use; in some technologies, such as tube-launched, optically sighted, wire-guided (TOW) missiles and biological warfare, conversion had already occurred, while in other areas, such as the nuclear industry, the market was saturated. Still others feared that the military budget would be raided if national defense b e c a m e a profitable industry: It would then also b e c o m e a source of loans. 9 6 Inevitably, a relaxation of internal censorship and secrecy would also occur, since these were handicaps to exchanges of experience and technology and to the financial success of enterprises. 9 7 The "shock" extended to forcing military-industrial managers to become entrepreneurs. They would have to find new ways to earn money in a period of austerity. Among other things, due recognition would have to be made of the true market value of their civilian products—based, for instance, on demand, technological inputs, capital investment, and actual cost of production—and of the profit that could be earned f r o m them. "Military enterprises always felt that the fixed profit of five percent was too small, that it was 'eating from the same big pot.'" 9 8 It was pointed out, for example, that 5 percent was far lower than profit margins in other industries. 9 9

Reducing

Costs

The final component of China's conversion was cutbacks in military budget and manpower and the institution of a retraining program for demobilized

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soldiers and cadres. The cutbacks followed on a speech Deng Xiaoping is supposed to have delivered as early as 1975 about "restructuring" the Chinese military to make it less "bloated" than it traditionally was. 1 0 0 Arguments are almost inevitable over official statistics on military spending in China (or anywhere else). According to official PRC statistics, military spending before the reforms had risen from Y14.25 billion in 1975 to Y22.27 billion in 1979. By 1981, however, official military spending had dropped to Y16.8 billion, which was approximately the average annual spending over the previous six years. Official military spending rose in 1986, but it was still only Y20.08 billion. 1 0 1 A significant new trend upward in real (inflation-adjusted) military spending did not occur until 1990 (Y29 billion), for reasons that will be discussed in the next chapter. Expressed as a percentage of the state budget, the drop-off of official military spending during the 1980s is perhaps more meaningful. Military spending had been 17.4 percent of the state budget in 1975 and 17.5 percent in 1979. But in 1981, following the China-Vietnam war, it dropped down to 15.1 percent, and then to 8.6 percent in 1986. 102 As a percentage of GNP, China's military spending in 1986 was 6 percent by one estimate, ranking it sixth in the world in military spending. 103 Yet the percentage of GNP also represents a considerable decline; it was over 10 percent in 1980 and 7.5 percent in 1984. 104 These Chinese statistics, however, significantly understate actual military spending by the central government, although the trends they indicate appear to be accurate. The U.S. CIA, for example, estimated that PRC military spending was twice the amount Beijing reported from 1965 to 1979. 105 The reasons have not changed since then; if anything, actual military spending annually is probably triple or more the official total. Chinese figures do not include spending for a large portion of military R&D; weapons procurement; military-industrial construction, maintenance, and relocation; subsidies for conversion; military pensions and care for veterans, which must be quite costly with large-scale demobilizations (discussed below); upkeep of militia and reserve forces; and maintenance costs of the People's Armed Police. 1 0 6 Some portion of the budgets of other ministries, besides defense, as well as of the state corporations in the defense field, must be allocated to help pay the actual military expenditures. 107 Nor do official figures, as a report of the authoritative Stockholm International Peace Research Institute (SIPRI) comments, mention additional funds that are available to the PLA and defense industries. These include earnings from converted industries and facilities, which, if not returned to the state in taxes or loan repayments, are evidently plowed back into further conversion and outside activities that are discussed in the next chapter: running commercial enterprises, PLA farms and mines, and selling arms abroad. Chinese sources counter that actual military spending has been devalued by 20 to 30 percent due to the PLA's social and economic responsibilities

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and by inflation. 1 0 8 Paul Folta's research supports the last point, noting that China's "defense budget, when adjusted for inflation, actually shrank in the 1980s." 109 But that still leaves unresolved the amount of off-budget funds that the military-industrial complex either was given by the central leadership or earned on its own. We therefore cannot say with accuracy what the PRC's actual revenues and expenditures, on defense or nondefense items, were during (or since) the 1980s. What we feel reasonably confident about is that during most of the decade, the PLA was funded at lower levels than normal as the spending priorities of China's leadership changed and the military reforms, including conversion, took hold. As we mention later, we can only theorize about whether or not this reduced funding amounted to a genuine peace dividend, consistent with some definitions of conversion, since we do not know how any money saved was actually spent. One reason budget cuts were possible is that Deng Xiaoping was determined to reduce the size of the armed forces. Demobilization of army soldiers and cadres began on Deng's instruction in March 1980. In this stage, however, while some specialized army engineering corps were abolished and oversized units were cut back, far more troops were transferred (around 800,000), perhaps due to resistance within the PLA. 1 1 0 A more ambitious effort was announced by Deng on June 4, 1985: The PLA would be reduced by one-quarter, or about 1 million soldiers. This goal, said to have been achieved in mid-1987, was designed not only to save money, but also to help regularize and professionalize the armed services. 111 It occurred simultaneously with other changes in the PRC military, including the retirement of about 300,000 old cadres and officers, reduction in the number of military regions from eleven to seven, formal establishment of group armies to replace the old field armies, emphasis on higher education for army officers, and the reestablishment of ranks in October 1988. 112 Whether or not the force reduction actually amounted to 1 million, it seems to have mainly accomplished a trimming of military bureaucracy that effectively increased the number of combat forces. 1 1 3 (A further cut of 500,000 soldiers that would reduce China's army to 2.5 million was indicated in early 1996. The reduction would take place over several years, and was officially linked to cost considerations.) 114 The leadership's hope was that regularization and professionalization would make the PLA more attractive to educated younger people while offering demobilized soldiers and cadres opportunities for retraining. Over forty training centers were reported to have been established by 1987 for cadre retraining. 115 For ordinary soldiers, PLA units and local authorities set up classes in civilian-use technology, with the aim of having each soldier spend at least 100 days a year in them. The emphasis in training demobilized soldiers has been on developing "dual-use talent," that is, skills in both military and civilian life. Early in 1987, it was claimed that over

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430,000 soldiers had undergone such training. 1 1 6 Far greater numbers of retired servicemen f r o m rural areas were reported to have been recommended for civilian employment. 1 1 7 But problems have been reported. Press reports reveal that finding jobs, schooling, and housing for so many demobilized soldiers puts great pressure on the social system, particularly on the retraining centers. 1 1 8 Some factory managers resent having to absorb demobilized soldiers, who add to already excessive workforces. 1 1 9 An official publication adds that unlike retired Western officers, PLA officers usually leave the service without either retirement funds or an education. M a n y lack the motivation to work in other than urban bureaucracies that are already bloated with personnel. 1 2 0 We can best see these six components of conversion-related change at work by examining actual cases. Two conversion histories have been selected based on interviews in China over a three-year period: a large aircraft c o m p a n y in the interior and electronics f i r m s that have moved to the coast.

Conversion at Work Case 1: Xian Aircraft

Company

Xian Aircraft Company (XAC), located on the outskirts of Xian in Shaanxi Province, is a very large third-line enterprise, but one not built deep in the mountains. 1 2 1 It has about 17,000 workers. At the time of the site visit, it was under M A S . Beginning in the early 1960s, the company produced only b o m b e r s ; civilian aircraft had to be imported f r o m the U S S R and other countries. But in the 1970s, X A C began developing the capability to copy the Boeing 707; and by 1984, it had produced the first of these, the Y (Yun)-7. Now, besides mass-producing the Y-7 and other aircraft, X A C also produces radar equipment, satellite and microwave antennae, diving boards, Ferris wheels, hot food carts for commercial firms, and aluminum doors and windows. The company, whose leadership looks to Boeing Aircraft in Seattle as something of a conversion model, is headed by engineering and management professionals. Very few former PLA officers are employed. 1 2 2 In fact, about one-fourth of its workers are categorized as "professional," a much higher figure than the usual 10 percent in other military industries. All the senior-level people interviewed in X A C had traveled abroad, which is also unusual. X A C ' s leadership is pleased with the shift to civilian production. It meets a national need and creates new challenges, they said. As an example, they cited the hot food carts. Production was based on existing technology and human resources, requests f r o m institutions needing the product,

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success in a competition run by the province, and market research. "All we need is a contract to go ahead," they said. The contract, however, involves other organizations besides the producer and customer. XAC works closely with the Shaanxi COSTIND office, which acts as coordinator and overseer of all conversion activities. Its permission is apparently required before contracts and production can begin. 1 2 3 In addition, other firms and research organizations may be involved in a particular task. The Xian Aircraft Design Research Center, next door to XAC, does all flight-testing. The province office's coordinating function would comprehend the involvement of other units such as that one. In the early 1990s, 70 percent of XAC's production was for the domestic civilian market, which was roughly the aerospace industry average. 124 Twenty percent of production was still for the military (the Hong6 bomber and repairs), and 10 percent was of components and assembly work under joint ventures with foreign firms (such as access doors and vertical fins for the Boeing 737, and airbus doors for the French and Italian A-626). The work remains highly labor intensive despite access to foreign designs, labor-saving technology and training (in the United States by Boeing), and some foreign capital, as well as a 16-20 percent profit margin on overall sales. Unlike many third-line firms in Shaanxi, Xian Aircraft has been able to move away from reliance on significant government funding. XAC calls upon government aid only when it wants to launch a new project that requires more personnel or technology. About 90 percent of its financing comes from bank loans at interest. Profits are heavily taxed, moreover: Real estate, income, and other taxes take about one-half of profits after expenses. Such funds are likely to be allocated by the government to less successful firms. Despite the strengths and sales successes of XAC, it acknowledges some problems. One is the weakness of overseas sales, which account for only about 3 - 4 percent of total sales. It has yet to conclude a joint venture with foreign firms, and its leaders express disappointment with the lack of technology turnover by those firms (a common complaint by Chinese state officials about doing business with other countries). In these respects, XAC is no different than China's other major aviation firms, all of which build parts of foreign aircraft but are dependent on Western technology. 125 Thus, revenue from conversion for export has so far been limited. But conversion is still beneficial: Production of aircraft components earns foreign currency that enables the import of the technologies used in making them, and it also enables Chinese factories and materials to be certified abroad. 126 XAC's capabilities are still not used to the fullest, its managers said. A large domestic demand is not being satisfied. The firm is looking ahead to production of long-range aircraft for domestic flights, which would be a breakthrough from dependence on foreign companies. Walking through the

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assembly lines, it is apparent to the outside observer that XAC could indeed accommodate more aircraft projects. Though XAC leaders worry about the firmness of the aerospace market, the future seems reasonably bright. Case 2: Shenzhen's

Electronics

Firms

The city of Shenzhen is a rapidly growing SEZ situated near Hong Kong. It is one of the "windows" often chosen by military electronics industries that have shifted research and production to the coastal region. More than 500 military-run enterprises reportedly operate in Shenzhen, accounting for 10 percent of the zone's total output. 1 2 7 Since being declared a SEZ in 1980, Shenzhen's higher wages and better working conditions have attracted many of China's skilled (and degreed) younger people, senior engineers and administrators, and older professionals from the north and interior. Population, construction, communication, and transportation have all boomed in the last decade. Shenzhen's city government has offered reduced fees and paperwork to military enterprises wanting to relocate. The proximity to Hong Kong is a major advantage for research and capital. In all, Shenzhen has provided a near-perfect locale for export-minded military industries in the interior. Most electronics firms are now under the Ministry of Electronics Industry, which reorganized in 1993. (At the time of this site visit, the firms were still under that ministry's previous incarnation, the MMBEI.) In view of their technical levels and export potential, it made sense to move electronics projects and many of their professional staff to Shenzhen and other coastal cities. There, they could become linked to the world economy as well as to one another in enterprise "groups" (jituan)—the nonmilitary face of China's military-industrial complex. One sees here a socialist version of the South Korean export conglomerates, such as Hyundai and LG Group (Lucky-Gold Star). In Shenzhen, electronics firms have the incentive to create new consumer products in response to market conditions and to develop or refine dual-use and strictly military products. They can also take advantage of modern communications and improved transportation, such as a new international airport and a high-speed highway linking Shenzhen with Guangzhou (Canton). By 1991, Shenzhen-based companies, many of them military owned, were leading the country in sales of seven of ten electrical product categories, including color television sets, personal computers, and watches. Electronics accounts for about 40 percent of the SEZ's industrial output by value. 1 2 8 H u a f a Electronics Corporation belongs to the Zhenhua electronics group. 1 2 9 It was originally part of a third-line conglomerate founded in 1970 and located in the southern junction of Guizhou, Yunnan, and Sichuan Provinces. When the conversion decision was made in 1979, the

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company leadership (then composed of economists, managers, and a few retired PLA officers) decided to change its production line from electrical relays for the military to washing machines. This proved quite successful and required no new technology. Subsequently, Huafa moved into color TVs and into Shenzhen. It set up two factories in Hong Kong, on which it relies for technical expertise, to join with the one in Shenzhen (which employs about 1,400 workers). These factories mainly produce for the export market (about 70 percent of sales), since the domestic market is considered too limited for high-quality TVs. Polychlorinated biphenyl (PCBs) and injected plastic parts are the main products for the Chinese market. Huafa's leadership considers the company very competitive in a crowded electronics industry in Shenzhen. There are several hundred such firms there already, of which more than ten specialize in color television sets. Though lacking brand recognition, Huafa products (under the brand name "Happy") have nevertheless found an export niche in the third tier of television exporters, behind the United States and Japan (tier one) and Taiwan and South Korea (tier two). Another member of the Zhenhua group is the Zhenhua Electronics Industry Corporation. 1 3 0 Zhenhua Electronics was established in 1966 in Guizhou Province, which ranks third behind Sichuan and Shaanxi in thirdline defense production. 131 Zhenhua's job was to produce satellites, instruments for aircraft, and other high-technology electronic products for the military. It was one of some thirty companies in the province under the Ministry of Electronics, as it was then known. These companies employed several thousand technical personnel from some of China's best universities. Long before Zhenhua moved to Shenzhen, its general manager said in an interview, it had suggested and begun planning for conversion to take advantage of its superior technology and personnel. When the move finally was made in 1981, about 1,000 technicians went along, leaving the Guizhou plants to continue military production. Now Zhenhua Electronics is established in over twenty coastal cities. It is an "export network," meaning it has branches in nearly all the specially designated economic and development zones. Zhenhua executives say it makes its own investment and management decisions. Total personnel in the enterprise group, including R&D, testing, and marketing, number over 30,000, of whom over 8,000 are considered technical. In 1987, Zhenhua Electronics began developing advanced telecommunication products for the China Telephone and Telegraph Bureau. This set a pattern. Zhenhua now produces about $1.5 million in nonmilitary products—over 80 percent by value of total production—and claims to be making a large profit that contrasts with many money-losing firms in Shenzhen. The city planning bureau has helped by cutting red tape and eliminating certain fees, while local banks have assisted Zhenhua with loans.

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Zhenhua's production falls into three categories. The major product is ground satellite stations for outlying provinces to receive television signals via fifty-two relay stations. This line of work was implemented very rapidly and was widely reported in Chinese newspapers. Second is integrated circuits and other telecommunication parts to replace imports from Japan and elsewhere. (Integrated circuits are the only product said to have received state support—about $1 million.) Within a year of production, in 1990, Zhenhua circuits were being exported to Southeast Asia and other Third World regions. Some types of circuits are now used widely by staterun electrical machinery plants. Computer software and accessories fill out the list of product lines. Another Shenzhen electronics firm, not affiliated with the Zhenhua group, is Languang Electronics Company, Ltd. Its experience further illustrates conversion by shifting production. 1 3 2 Languang was established in Gansu Province as Gansu Electrical Industry General Corporation. It then had over thirty plants, almost all military, manufacturing radar, telecommunications, missile technology, and military-use software. The decision to shift to civilian production was designed to maximize use of the technology and equipment. It also was spurred by the fact that workers were underemployed ("people had nothing to do," the general manager said). There were no market incentives in demand or rewards to warrant producing new or higher-quality products. Beginning in 1982, twenty enterprises moved to the coastal region, leaving the rest behind to continue military R&D. A number of technical personnel who had initially trained in the United States or elsewhere abroad, and who had returned to do military work in Gansu only to find none, were tapped to go to Shenzhen. Once again, the basic idea behind the move was to make Languang and its sister coastal firms (such as Lantian, Lanhua, and Lanhai) "windows" for the interior parent company— new settings for testing, training, concentrating technical capabilities, and attracting foreign technology to spur exports. Languang Electronics is China's first company to produce stereo sets. Starting in 1983 with a total state investment of Y l . l million, the company is now worth Y54 million (not including taxes on profits turned over to the state). Its products are sold about equally to domestic and international markets. Products are of five kinds: high-level electronics, such as stereos; electronic instruments; computers and office equipment; computer keyboards; and plastic covers for computers. Languang boasts high efficiency and sales ($40 million in 1990), and it acknowledges the role of state support in getting started by reducing taxes and fees. Like Zhenhua, Languang reflects China's emerging strategy of rationalizing and concentrating technological assets. Its general manager is also chief executive officer of two other electronics firms (Guangda and

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Lanyun) that in turn are part of a nine-company group, each of which specializes in electronics products. Evidently, PRC leaders are pleased with the results. In 1991, they decided that four cities—Shenzhen; Baoji, Shaanxi Province; Xiangfan, Hubei Province; and Mianyang, Sichuan Province—would become test sites (shidian) for the application of military technology to local economic development. Military resources, including operational resources and software, will be concentrated in these areas to push growth forward. Some sixty xian (counties) have also been designated for similar plans. 133 A companion decision is to have military industries represented in high-tech "industrial estates" (i.e., firms geographically clustered together) in Yantai and Qingdao. These smaller estate firms, assisted with preferential tax and labor policies, would follow the lead of Shenzhen and Xiamen, Fujian Province, in becoming windows to international markets for exports and acquisition of foreign technologies. 134

Assessing Conversion in China China's military-industrial complex, like that of other countries, consists not only of a nationwide network of weapons plants and a nationalsecurity bureaucracy. It also embraces the political and financial support of party and state leaders and the plans and rules that guide the complex's activities. The noteworthy aspect of conversion in China is that in the shift of the military-industrial complex to military-civilian integration, system and process have largely worked in unison. This is quite unlike the situation in post-Gorbachev Russia, where conversion has lacked planning and has faced problems similar to China's defense industries, but with markedly different results: the downfall of many defense firms and a gradual disintegration of that country's greatest concentration of scientific and technical resources. 1 3 5 Only sales of arms and nuclear technology have seemed to save Russia's military-industrial complex from collapse. Achievements Conversion in China has taken place in a strategic context. That is, it has gone forward on the basis of a fairly comprehensive and balanced critique of the role of military industries in the economy; and it has taken advantage of favorable international circumstances (a "peaceful international environment"). Military resources have to a significant degree been integrated with civilian production simultaneously with a streamlining of the military establishment. Bureaucracy, budgets, workforces, and military-industrial firms have all undergone reorganization and reduction to facilitate integration. What are the concrete results of these efforts thus far? Production of civilian products by military industry has significantly increased, helping

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satisfy consumer demand and increasing the amount and quality of exports. According to a senior PLA official, between 1979 and 1988, "the output value of civilian products [by military industries] increased eight times." 1 3 6 By 1990, 80 percent of the total output of the aerospace, machine-building, nuclear, and ordnance industries was in civilian goods. 1 3 7 The variety of new and spin-off products is very large, ranging, as we have noted, from low technology to high technology. On the low end, the defense industries were already producing "60 percent of China's washing machines, motorcycles, and electric fans" by 19 85. 138 Military enterprises also now are said to produce one-fifth of the country's cameras, three-fourths of the private yellow cabs, and one-quarter of the minicars. 1 3 9 The quality of these items varies widely. On the high-technology side, Chinese sources list and display hundreds of new products developed by the nuclear, chemical, and aerospace industries that have application in medicine, metallurgy, communications, and transportation. And there is more. According to China's first official defense white paper, released in November 1995, conversion accomplished the following: • • • • •

"approximately 450 production lines are now operating in the defence industry . . . producing civilian consumer goods"; "the output value of civilian consumer goods produced by defence industry departments has been increasing 20 percent per annum"; about 80 percent of the total output value of converted military industries is civilian goods, as compared with 8 percent in 1979; 15,000 different civilian products come from converted facilities; and "more than 2,500 defence technologies have been released for civilian use." 1 4 0

Some qualifications of these accomplishments should be noted. For one thing, what is counted as a "converted" military product may be disputed, such as in the case of helicopters and other dual-use products. 1 4 1 Second, while Chinese defense economists are rather infatuated with spinoffs from military industries, a closer analysis seems called for of the actual economic benefits from spin-offs when matched against the level of expenditure to produce them and investments in nonstate enterprises to produce the same (or alternative) civilian products. 1 4 2 Also left unclear is how efficiently the gains from spin-offs are being obtained: the costs to the state of investing in and subsidizing military industries, as against the benefits achieved (including taxes paid and loans repaid); and the social costs and benefits (e.g., in employment, environmental protection, and actual product) of alternative forms of output and investment. A final consideration, stressed by students of military technology, is that for China's military, spin-offs are less important than "spin-ons," the transfer of civilian

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R & D to the military sector. Here, the apparently limited extent of communication and collaboration within the military-industrial complex, a lingering effect of the "Soviet style" of management, is a significant barrier to the full use of technological achievements. 143 China's conversion strategy has promoted economic development in other ways besides production. Clearly, some military enterprises have been saved from bankruptcy by the opportunity to reorganize for and profit from civilian production. For these and other military plants, the end of total dependence on the state for funds, direction, and marketing has come as a blessing. For the state, use of idle military plant capacity has negated the need to build new enterprises. 1 4 4 Overseas sales of civilian products are earning modest foreign exchange and, due mainly to aircraft and nuclearpower plant exports and contracts for satellite launchings, are said to be increasing by about 30 percent a year. 145 Conversion has also contributed to regional development, not only in the coastal areas such as Shenzhen, where military-owned industries may account for as much as $2 billion a year in exports, 146 but also (though to a much lesser extent) in some interior provinces. 147 The relocation of firms, or parts of them, from third-line areas to the coastal region is still in an early stage. By 2003, the state's plan is for most third-line industries to have established windows for absorbing new technologies, set up branch factories, or moved outright. 148 Furthermore, economic development may come from savings. Reductions of the (official) military budget probably saved money—theoretically, as much as Y 2 6 billion through 1991. 1 4 9 No doubt some significant portion of the savings was applied to new development projects in the civilian sector, as well as plowed back into actual military-industrial conversion. Technical training for many demobilized soldiers, the professionalization of military-industrial management, and new standards for judging the performance of individual enterprises are other contributions to economic development.

The Politics of Conversion The long-term nature of conversion planning indicates the important role of political and intellectual leadership. Breaking down the protective walls surrounding China's (or any country's) military-industrial complex takes a sustained political commitment. In China, it has required discarding a number of taboos regarding state-run enterprises, going against the tide of traditional military interests, and creating a new set of economic rules (such as contracts) and incentives (such as more than 5 percent profit). Three sources of leadership have made possible these major changes in the way military industries do business. First is Deng Xiaoping himself: He led the charge for a more streamlined and productive military establishment for over fifteen years. Second is the military-industrial complex itself, including the heads of defense industry ministries and COSTIND,

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which has been directly involved in conversion efforts at national and local levels. Third is support for the top party and state leaders from many executives of local defense enterprises—in striking contrast, it might be noted, with the Russian defense industries' response to Gorbachev's reform plans, which was to support his overthrow. 150 Behind all three groups is China's new breed of defense intellectuals. Although these people, mainly military and civilian analysts responsible to COSTIND, typically make their case in the context of Marxism and China's national interests, their analyses are fairly independent and sensitive to post-Cold War trends. Their books and papers have proven instrumental in disseminating "new thinking" (xinsiwei) about the economics and management of national defense, thus providing the important background research and rationale for many of the reforms discussed in this chapter. Taken together, these sources have made the case for state support of military conversion. Precisely how strong that support is, is not easy to decipher; the official figures are hard to come by and are not systematic, though what we have does not suggest heavy state subsidization. State support has mainly taken two forms. One is start-up and R&D loans: Jin Zhude of the China Association for Peaceful Use of Military-Industrial Technology (CAPUMIT) tells us that during the 7th Five-Year Plan, the state "raised funds for the [technological] updating and construction of some 300 key production lines . . . with an investment of over 1.8 billion yuan (mainly in the form of loans)." But another Chinese source provides a figure of Y4 billion in loans during the same period, which included money for product development. 1 5 1 In the 8th Five-Year Plan period (1991-1995), the state increased its loans to Y6.3 billion, mainly for turnover of military technology to produce "new and high-tech products that expanded exports, replaced imports, or were urgently required by the state." 1 5 2 Thus, we are told, total state investment in military-industrial conversion from 1985 to 1995 was Y10.3 billion (U.S.$1.24 billion at the 1995 exchange rate). 153 A second kind of state support seems to be in revenue foregone: taxes and profits not turned over to the state. The details are skimpy. Tai Ming Cheung writes that "taxes paid by the [military] industry between 1979 and 1989 totalled Rmb [yuan] 1.6 billion, a tiny sum given the industry's civilian output of roughly [Y]60 billion in the same period." 1 5 4 Chinese sources maintain that untaxed profits are plowed back into the civilian side of production: in plant modernization, maintenance, and personnel and administration. 155

Problems Conversion in China is limited by several factors, however, starting with the inadequacy of state support, which is a frequent complaint of militaryindustrial managers. If their firms are going to be (or remain) competitive,

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they want a larger state investment in technology; and they don't want to give profits away by having to subsidize the military side of their operations. 156 Other problems are the small size and limited technical capabilities of many enterprises, the lack of managerial (including marketing) expertise, the low technical level and quality of many goods, need of foreign partners, unadaptable product structures, and the inadequacy of research staffs. 1 5 7 So long as the civilian economy continues to boom and regulations on labor movement are liberalized, military industries are going to lose their best scientists and engineers to high-paying civilian jobs in the major cities. 158 Low labor productivity is also an issue. In comparison with nonmilitary plants, military industries on average have much lower perperson productivity by value (Y13,000, compared with Y17,000 in machinery enterprises nationwide) and lower average profits (about 50 percent lower in military and civilian enterprises of the same type). 1 5 9 Only about one-third to one-half of the productive capacity of military industries is being utilized, Chinese sources maintain, though a Western source claims only one-tenth. 1 6 0 Perhaps one-half of the state firms currently in financial difficulty are military enterprises. 1 6 1 Finally, it seems clear that military-industrial conversion generally fails to take the environment into account, either with respect to the pollution these enterprises create or to developing and marketing environmental protection technologies. 1 6 2 It seems fair to predict that the shakeout of noncompetitive, uneconomical firms will continue. The surviving firms, according to one Chinese specialist, will be those that not only find a niche in the market for their products, but that are capable of making long-term investments in new technologies that are the basis of new product creation. 1 6 3 And here, the state favors those industries, such as aerospace, nuclear power, and electronics, that have already developed exports, contracted with foreign firms, and used high technology. 164 The further restructuring of military industries, while clearly called for, is likely to proceed very slowly for essentially political reasons. As state-run industries, they cannot be allowed to fail in great numbers without destabilizing and delegitimizing the socialist system. 165 Because military firms constitute such a large state investment, play a significant part in total civilian output of high-technology products, employ large numbers of people (including workers of all skills), and remain critical to China's defense planning, they must either convert or simply continue to be underutilized and inefficient rather than be allowed to go under. Moreover, personal and career ties help protect the military-industrial complex from radical restructuring while also promoting its political power and autonomy. The relatives of several top political leaders or former leaders, including Deng Xiaoping and Yang Shangkun, occupy high positions in the major arms-exporting firms, Polytechnologies, Inc. (Baoli), under the PLA's GSD, and China Xinshidai Corporation under COSTIND. 1 6 6 The

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former longtime director of COSTIND, Ding Henggao, is the son-in-law of the late Marshal Nie Rongzhen, the leader of China's strategic weapons program and first chairman of the NDSTC (COSTIND's predecessor); and Ding's wife, Lieutenant General Nie Li, was for a time the deputy director of COSTIND.'67 Conversion

and Military

Modernization

To the balance sheet on China's conversion should be added two other aspects: its contribution to military modernization and its impetus to PLA entrepreneurial activities. It should not be thought that conversion implies an abandonment or slighting of China's quest for better weapons. The two commonly used Chinese terms for conversion, junzhuanmin, which simply indicates a turning over of military resources to civilian use, and junmin jiehe, meaning military-civilian integration, correctly convey the objective of fully involving military industries in the civilian economy. But the terms are not meant to suggest that conversion is one-way and irreversible. Quite the contrary: Civilian resources should be transferable to military industries for weapons production, just as military resources are convertible to civilian-sector production—hence the slogan "stressing economic production in peacetime and military production in wartime" and "use the civilian sector to support the military" (yimin yangjun). Chinese authorities seem to have at least two things in mind when they use these expressions. One is to prepare for the possibility that international tensions might lead to war, which means preserving the option of stepping up military production and therefore maintaining the vertical (i.e., hierarchical and centralized) integration of the military-industrial complex itself. Second is to use "civilian sales to foster military R&D."]6S Trading firms such as NORINCO and GWIC, and enterprises that have undergone conversion, such as aircraft plants, should be used to acquire foreign technologies for military as well as economic modernization. 1 6 9 Indeed, our impression is that for some PRC defense leaders and specialists, military-industrial conversion's main appeal now is precisely civilian-to-military technology transfers—that is, the belief that conversion will strengthen national defense science and technology and thus elevate the technology level of China's weapons, which they view as central to modern warfare. 1 7 0 As we have mentioned, however, the view of some Western specialists is that Chinese military R&D is not effectively organized for absorbing civilian technology; and as the study of arms imports in Chapter 7 will suggest, China's options for attracting, much less being able to absorb, foreign military technology seem to be narrowing. Some specialists have gone so far as to suggest, therefore, that military conversion in China may actually be harming national defense by causing converted industries to devote so much (and increasing) productive capacity

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and human resources to commercial activities. 171 No doubt there are plenty of Chinese military professionals who agree with that view. Integration of the military and civilian economies has also put pressure on the PLA and the defense establishment to make money. Insofar as conversion put military industries (or parts of them) on a commercial basis, sought to make use of idle plant and labor power, and was part of an effort to reduce direct military outlays, it spurred PLA offices, units, and industries at every level to think entrepreneurially. The low priority given military needs early in the reforms, the impact of inflation on soldiers' cost of living, and perhaps the military-industrial complex's need to regain a sense of mission 1 7 2 also seem to have prompted PLA businesses to form, as we discuss in the next chapter. As also explained there, conversion influenced increased arms sales, and for the same general reasons that Chinese supporters of converting military enterprises used: to earn hard currency and acquire foreign technology. The future of military-industrial conversion appears bright. It has created a powerful constituency: the large and growing importance of military-industrial production to the civilian economy and the economic reforms, the strength of political and industrial leaders who favor conversion, and the ability of many PLA and defense industry officials to profit from conversion. Political restrictions on the PLA that would result in a change of direction in the military economy are hard to imagine. Rather, the central leadership's willingness by 1991 to give PLA modernization a higher priority, 1 7 3 its subsequent emphasis on marrying high techology to national strategy (under the slogan of "building a prosperous country and a strong army"), 1 7 4 and its toleration of the PLA's business dealings are likely to strengthen the military's loyalty and thus its willingness to accept further steps of military-civilian integration.

Notes 1. For the early debates, see Hsieh, Communist China's Strategy, pp. 3 7 - 4 9 . 2. Sheng Lijun, "China's View of the War Threat," pp. 5 3 - 5 4 . 3. Jonathan Pollack (in "Structure and Process," p. 171) portrays the PLA's circumstances more positively than we do, arguing that "the PLA [was] still able to exert considerable influence" in two of the other three domains of modernization, namely, industry and science/technology. The effect of the military cutbacks was to position the PLA for taking better advantage of new technologies in weapons production, rather than relying on imports. 4. "The military dominated large plant construction, mineral and chemical processing from mines to finished product, the manufacture of fine machine tools and optics, the entire electronics and instrumentation industry, all aviation, most shipbuilding, most of the automotive industry, and virtually all research (including that in the Chinese Academy of Sciences) that had any military significance" (Lewis and Xue, China's Strategic Seapower, p. 74).

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5. See Jammes, "Military Industry," pp. 117-120; Shambaugh, "China's Defense Industries," pp. 44-50; and Lewis and Xue, China's Strategic Seapower, pp. 79-88. 6. The interior development strategy and its economic costs are examined by Naughton, "The Third Front," pp. 351-386, and by Lewis and Xue, China's Strategic Seapower, pp. 88-99. "Third-line," or "third-front" (sanxian), industries are located in all or parts of ten provinces in China's west and southwest, the main ones being Sichuan and Shaanxi. For a brief look at recent conditions in the latter area, see Patrick E. Tyler, "China's Hidden Army of Workers Strives to Adapt," New York Times, December 11, 1994, p. A3. 7. See Lewis and Xue, China's Strategic Seapower, chap. 9, and, more generally, Lewis and Xue, China Builds the Bomb. 8. "Defence Industries in Hinterland Areas Need Restructuring," China Daily, July 26, 1989, p. 4. 9. Based on an interview of Zhou Changqing, deputy director of the Third Front Office of the State Council, in Renmin ribao, June 8, 1987, p. 3. 10. Yabuki, China's New Political Economy, p. 40. 11. Naughton calculates that "China's annual industrial output is currently 10-15 per cent below what it would have been if the Third Front had never been undertaken" ("The Third Front," p. 379). 12. "Official investigations conducted in Sichuan and Shaanxi by 1989 revealed that almost half the enterprises operated below capacity or had not even begun production. More than 18 percent of the Third-Line investment between 1966 and 1978, totaling over 30 billion yuan, was reportedly squandered" (Lewis and Xue, China's Strategic Seapower, p. 94). 13. Yu Dajiang, "On Third-Line Construction," pp. 64-67; He Shanchang, ed., Guofang jingjixue, p. 162; "Defence Industries in Hinterland." 14. Yu Dajiang, "On Third-Line Construction"; He Shanchang, ed., Guofang jingjixue, p. 162. 15. Xu Xiangqian, in an October 1, 1979, article in Hongqi, the party's theoretical journal; quoted by Shambaugh, "China's Defense Industries," p. 51. 16. See Deng's speech to the CCP's Central Military Commission in December 1977, in Deng, Selected Works, p. 94. In the speech, Deng emphasized budget limitations and said: "Our national defence can be modernized only on the basis of the industrial and agricultural development of the country as a whole. However, if we do our work well, we can speed up the improvement of our military equipment within the country's present capabilities." 17. Shambaugh, "China's Defense Industries," pp. 50-51. 18. Speech of November 1, 1984, in Deng Xiaoping, p. 47. 19. Deng Xiaoping, p. 41. 20. Jammes, "Military Industry," p. 121. 21. There were strong points: machine-tool production and electronics (ibid., pp. 122-123). 22. Robinson, "Chinese Military Modernization," pp. 238-239. "It is impractical to desire everything new or Western or to rely on the state for large sums of investments and foreign exchange whenever the word 'modernization' is mentioned," said a senior national defense official in 1979 (cited by Shambaugh, "China's Defense Industries," p. 68). 23. "The Interplay of Science and Technology," pp. 15-34. On the military's resistance, see Robinson, "Chinese Military Modernization," pp. 241-245. 24. As Richard J. Latham commented at the time, domestic political priorities, especially with respect to resource allocation issues, would have to have played a

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critical role in China's national-security planning, just as they do in other countries (see Latham, "Implications of the Post-Mao Reforms," pp. 35-49). 25. See Robinson, "China's Military Modernization," pp. 249-250. 26. Shambaugh, "China's Defense Industries," p. 70. 27. Latham, "Implications of the Post-Mao Reforms," p. 45. 28. "Drawing a Blueprint for Development in Defense Science and Technology: Sidelights on National Conference for Directors of Offices for Defense Science, Technology, and Industry," Jiefangjun bao, January 15, 1996, in FBIS-CHI 96-051, March 14, 1996, p. 26. 29. See Bitzinger, Chinese Arms Production, pp. 20-23. 30. Arnett, "Military Technology," p. 362. 31. This section reproduces, with some modifications and updating, Mel Gurtov's "Swords into Market Shares," pp. 213-241. 32. COSTIND, ed., Shijie junshi, p. 107. 33. Miggiano et al., "Arms Production," table 9.5, p. 375. 34. Arnett, "Military Technology," p. 373. 35. While some Western acounts exaggerate China's conversion program by omitting the expanding production of armaments, others do worse by failing to mention Chinese efforts at all. An example of the latter is Adelman (former director of the U.S. Arms Control and Disarmament Agency) and Augustine (chairman and chief executive officer of Martin Marietta), "Defense Conversion," pp. 2 6 47. 36. Jin Zhude and Guo Tiejun, "An Exploration of the Multiplier Effect," p. 46. A figure of 2,000 military-industrial plants is given by Nie Li and Huai Guomo, eds., Huigu yu zhanwang, p. 125. (I am indebted to an anonymous China Quarterly reviewer for providing this source.) Lewis and Xue (China's Strategic Seapower, p. 102) also use the figure of 2,000, "and more than 1,000 other [supporting] enterprises" in 1989. For comparison's sake, the typical estimate of military enterprises in the former USSR is around 5,000. Whether China has 1,000 or 2,000 military industries, they constitute only a small proportion of all state-run enterprises, which today number roughly 110,000, and of all industrial enterprises, which (in 1983) was given as 393,000. See Lu Dong, "Uphold and Speed Up Reform, Attain Better Economic Results," Hongqi, no. 19 (October 1, 1984): 25-28, in JPRS-CRF 84022, December 4, 1984, p. 3. Lu, formerly minister of the Ministry of Aviation Industry, was minister of the State Economic Commission at the time of the article's appearance in Hongqi. 37. Jin Zhude and Chai Benliang, "China's Experience." Other phrases that came into use after 1978 in military-industrial reform are pingzhan jiehe (combining peacetime and wartime production), junpin youxian (giving priority to military production), and yimin yangjun (using civilian production to support military industry). See Sheng Lijun, "China's View of the War Threat," p. 55. 38. Zhao Yiming, Yu Dehui, and Yin Weiguo, "The Special Characteristics of the Ordinary Technology Era," pp. 33-38. 39. Jin and Guo, "An Exploration of the Multiplier Effect," p. 46. See also Goodman's introduction to his edited volume China's Regional Development (pp. 9 - 1 0 ) on the Panzhihua iron and steel works in Sichuan, which was one of the third-line success stories. 40. He Shanchang, ed., Guofang jingjixue, p. 162. 41. See New York Times, August 27, 1981, sec. I-B, p. 2. Deng told a forum of the CMC in November 1984: "Our national defense industry, which is well equipped and has a huge contingent of technicians, should be put to full use in every aspect of national development to help boost civilian production. If these

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things are done, they can have only good results" (Xinhua [Beijing] domestic broadcast, August 4, 1995, in FBIS-CHI 95-156, August 14, 1995, p. 46). 42. Wang Luyeh, "The Purpose of National Defense Technology Industries in the National Economy," Renmin ribao, December 29, 1989, p. 2. 43. Renmin ribao, December 7, 1990, p. 1. 44. Gillespie, "The Military's New Muscle," pp. 30-31. 45. Folta, From Swords to Plowshares? pp. 3 - 4 . 46. Jin and Guo, "An Exploration of the Multiplier Effect," pp. 52-62. 47. See, for example, He Shanchang, ed., Guofang jingjixue, pp. 139-142. Recognition of the commercial value of scientific data accumulated by the military services also comes into play here. PLAN, for instance, set up a center to market scientific and technological information (Xinhua [Beijing] broadcast, December 8, 1992, in FBIS-CHI 92-239, December 11, 1992, pp. 27-28). 48. Sun Guangyun, "A Look at National Defense Industries," pp. 323-324. 49. Renmin ribao, December 9, 1988, p. 5. 50. SPC and COSTIND, eds., Zhongguo guofang gongye junminjiehe shizhounian zhuanji, p. 13. 51. China Daily, August 11, 1990, p. 1; Renmin ribao, October 16, 1991, p. 1. 52. Malik, "Chinese Debate on Military Strategy," p. 8. During the first half of the 1990s, however, China's satellite program suffered a number of costly and embarrassing failures, notably the launch failure of the Apstar-2 satellite in early 1995 in which six people were killed. Nevertheless, Beijing officials plan to launch thirty-five satellites and a manned spacecraft by 2000 ("China's Aerospace Industry Faces Difficult Time," China News Digest, online ed., February 3, 1995). 53. Lewis and Hua, "China's Ballistic Missile Programs," p. 34. 54. Besides the launch explosion in 1995 mentioned in note 52 above, failures also occurred in 1994 and 1996, in the last instance killing four persons (see China News Digest, online ed., February 21, 1996). 55. Regarding the organizational changes that accompanied strategic-weapons research and development, see Lewis and Xue, China Builds the Bomb, pp. 54-59, 263 n56, and 269 n20. 56. China Daily, July 31, 1988, p. 1. 57. Jiang Xinxiong, president of the CNNC, in SPC and COSTIND, eds., Zhongguo guofang, p. 20. 58. Li Dingfang, vice chairman of the CNNC, in China Daily, August 8, 1990, p. 1. Mr. Li's greatest concern was whether civilian output could be developed fast enough to create jobs for 40,000 industry workers idled by reduced military production. 59. Xinhua (Beijing) domestic broadcast, January 10, 1996, in FBIS-CHI 96016, January 24, 1996, pp. 23-24. 60. See the comments of Vice Premier Zou Jihua in Beijing Review, no. 4 (January 23-29, 1995): 6, as well as Suttmeier and Evans, "China Goes Nuclear," pp. 16-21. 61. Gronlund, Wright, and Yong Liu, "China and a Fissile Material Production Cut-Off," p. 150. 62. "Nuclear Power Plays Important Electricity Role," China Daily, January 6, 1996, N A P S N e t online, January 11, 1996. The president of the CNNC, Jiang Xinxiong, is quoted as saying in this report that the corporation will become a holding company solely owned by the state. 63. This is the Lingao nuclear-power plant, which was scheduled to be started in mid-1996 and completed by 2000 (China Daily, May 7, 1996; NAPSNet online, May 9, 1996).

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64. Tai Ming Cheung and Salamat Ali, "Nuclear Ambitions," Far Eastern Economic Review, January 23, 1992, p. 12. 65. See China Daily, August 19, 1989, p. 2 (which refers to 121 military "industries"), and Renmin ribao, December 4, 1991, p. 1 (which refers to the same number of "projects"). The cost of this relocation is given at over Y3 billion by Tai Ming Cheung, "On Civvy Street," Far Eastern Economic Review, February 6, 1992, p. 43. 66. "Strategic Shift of PLA Third-Line Enterprises Gains Sweeping Momentum," Jiefangjun bao, January 6, 1993, p. 1, in FBIS-CHI 93-010, January 15, 1993, p. 26. 67. Xinhua (Beijing) domestic broadcast, December 6, 1993, in FBIS-CHI 93239, December 15, 1993, p. 29. 68. Interview of a member of the Shaanxi Province Office of Science, Technology, and Industry for National Defense, Department of Civilian Products, August 6, 1989. For similar conclusions based on the Sichuan Province experience, see Renmin ribao, July 9, 1987, p. 3. 69. Interview of Zhou Changqing, deputy director of the third-front office of the State Council, in Renmin ribao, June 8, 1987, p. 3. 70. Lewis and Xue, China's Strategic Seapower, p. 77; Shambaugh, "China's Defense Industries," p. 46. 71. Frieman, "China's Military R&D System," p. 256. 72. Ibid., p. 266. 73. The premier source on the background and activities of the COSTIND is Ostrov, Conquering Resources. 74. In the mid-1980s, COSTIND "became both the leading organ in the work of the C M C ' s unified leadership of national defense science and technology, and the leading organ of scientific research and national defense industries for all military-industrial bureaux under the State Council" (Deng Xiaoping, p. 170). 75. Gill and Kim, China's Arms Acquisitions, p. 109. 76. The 1990 C O S T I N D publication cited in note 32 above states that the CMC works "through COSTIND . . . in exercising leadership and management of R&D on the armed forces' weapons and equipment, and of testing" (pp. 101, 107). On the government side, as the result of a joint decision of the State Council and the CMC in July 1986, COSTIND is "also a comprehensive office [zonghe bumen] of the State Council to manage the work of all industrial offices in national defense scientific research, military production (including aerospace), and military exports." Since 1983, according to interviews with C O S T I N D officials conducted by Gurtov in 1990, the role of the SPC has been to designate the products to be manufactured by converted enterprises and to referee conflicts between military and civilian industries over production of civilian goods. A Chinese source informed Gurtov in early 1992 that a new directive puts all military industries under the State Council, with the SPC responsible for day-to-day matters such as budgeting and manpower. 77. Ostrov, Conquering Resources, pp. 63-64. 78. Formation of COSTIND seems clearly to be linked to resistance by some senior defense establishment officials in 1981 and 1982 to Deng Xiaoping's position giving priority to national economic reforms over military modernization (see the discussion in Folta, From Swords to Plowshares? pp. 31-33). 79. This includes a direct role, he writes, in budget formulation, allocations, and monitoring in areas such as weapons procurement and basic and applied research (Ostrov, Conquering Resources, pp. 67-68).

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80. China State Council Information Office, "China: Arms Control and Disarmament," in Beijing Review, no. 48, p. 16. 81. See Frankenstein and Gill, "Current and Future Challenges," table 1, p. 400. 82. COSTIND, ed., Shijie junshi, p. 109. 83. On this last point, see Renmin ribao, June 21, 1987, p. 4. The article reports that COSTIND for the first time issued a planning document, called the "Planning Directory" (jihua zhinan), which specified the main items of technological research to be carried out by military industries. The areas covered were said to include lasers, computers, man and machine environments, the atmosphere, and water power. 84. Renmin ribao, April 21, 1987, p. 1. 85. From interviews with the Shaanxi Province COSTIND office. See the case study below on Xian Aircraft Company. Province-level PLA offices under the General Staff Headquarters also assist military-industrial firms in developing and marketing civilian goods. One report cites the work of the Xian Military Representative Department (Xinhua [Beijing] domestic broadcast, October 1, 1994, in FBIS-CHI 94-193, October 5, 1994, p. 29). 86. Renmin ribao, December 12, 1988, p. 4. 87. Shambaugh, "China's National Security Research Bureaucracy," pp. 282-285. 88. Zhang Chunting, "The Youth Movement in the Top Leadership of the Chinese Military," Liaowang overseas ed., no. 43 (October 28, 1985): 27. 89. See Yang Dezhi, "Raise Strategic Research," pp. 4 - 5 . (Yang, formerly chief of staff of the PLA, said that the old view that "strategic research is the special province of decisionmakers" should be put to rest.) Also illustrative of the impact of Western strategists, think tanks, and futurologists is Hua Hua, Guihua weilai di yishu. 90. For example, see He Shanchang, ed., Guofang jingjixue, p. 13. 91. See, for example, Song and Ku, Guofang jingjixue gailun, pp. 141-142, 166-167; He Shanchang, ed., Guofang jingjixue, pp. 139-142; and Jin and Chen, "Several Issues," pp. 30-39. 92. Note, for example, the following remark: "To put it a bit unkindly, socalled planning and programming in fact was simply a matter of increasing or reducing figures sent forward by the various departments" (Jin and Chen, "Several Issues," p. 31). 93. Song and Ku, Guofang jingjixue gailun, p. 141. 94. Frieman, "China's Military R&D System," p. 268. 95. Jin and Chen, "Several Issues," p. 39. 96. Hu and Xiao, Yingxiangdao 21-shiji, pp. 241-243. 97. Liu Yongen and Sang Zili, "Some of China's Military-Industrial Technology Secrets Are Turned Over to Civilian Use," Liaowang overseas ed., no. 10 (March 7, 1988): 14-15. According to this article, the basic decision on reducing excessive secrecy to facilitate conversion was made by COSTIND in March 1987. Establishment of the newspaper Jungong jishu minyongbao (Military to Civilian Weekly) and of the semiofficial CAPUMIT (China Association for Peaceful Use of Military-Industrial Technology), which is attached to COSTIND, were among the vehicles chosen by COSTIND to speed up the application of military technology to civilian production. 98. Song and Ku, Guofang jingjixue gailun, p. 141. 99. For petroleum, the profit margin was about 75 percent; for electricity, 72 percent; and for machinery, 21 percent. The year is not given (Ye Zitong, "On the Commodity Character of Military Products," pp. 243, 246).

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100. Deng, Selected Works, p. 154. He pinpointed five problems within the army—"bloating, laxity, conceit, extravagance and inertia"—and emphasized the need to "streamline the army establishment, and restructure it as a whole." 101. Jiang Yuqi, ed., Zhongguo guofang jingji, table 1, p. 31. 102. Ibid., table 2, p. 35. 103. Sivard, ed., World Military and Social Expenditures, p. 52. The Chinese prefer to calculate on the basis of national income. Accordingly, official defense spending, which was over 6 percent of national income during all the years from 1950 to 1979, dropped precipitously in the 1980s and was only 2.29 percent in 1987 (Jiang Yuqi, ed., Zhongguo guofang jingji, p. 39). 104. U.S. Arms Control and Disarmament Agency, World Military Expenditures, table 1, p. 70. 105. U.S. CIA, Chinese Defense Spending. 106. We are indebted to Milton Leitenberg of the Center for International Strategic Studies, University of Maryland, for having originally brought this matter to our attention. Weapons procurement alone, for example, is said to have averaged from 25 to 33 percent of the total official military budget between 1978 and 1986 (Folta, From Swords to Plowshares? pp. 21, 218). On the various categories of off-budget expenses, see Shambaugh, "China's Military," p. 21; and, for the CIA's view, see Harris et al., "Interpreting Trends in Chinese Defense Spending," pp. 676-684. 107. Lewis, Hua, and Xue note that "unspecified block grants" from the State Council to the CMC for dual civilian-military use are also outside the regular defense budget ("Beijing's Defense Establishment," p. 90n3). 108. Jiang Yuqi, ed., Zhongguo guofang jingji, p. 40; Xu Xin, "China Defence Strategy," p. 5. 109. Folta, From Swords to Plowshares? p. 20. 110. Ding, "The Streamlining of the PLA," pp. 88-90; Dreyer, "The Demobilization of PLA Servicemen," pp. 304-319. 111. See Deng, Selected Works, p. 373. In the P R C ' s first and thus far only white paper on military affairs, the 1987 force reduction is reported to have been f r o m 4.238 million soldiers to 3.235 million, followed by a further reduction in 1990 down to 3.199 million. "The 1.039 million demobilized soldiers represented 24.5 percent of the army's original strength," the white paper says. See "China: Arms Control and Disarmament," p. 14. 112. See, for example, Ding, "The Streamlining of the PLA," p. 91; Renmin ribao, April 3, 1986, p. 1 and April 5, 1987, p. 1. 113. According to Deng Xiaoping (p. 170), the manpower cuts in 1985 affected "over 50 percent" of the soldiers serving in the PLA's three general headquarters, railway and capital construction engineering troops, and various specially detached soldiers belonging to the CMC, military regions, and other commands. As this source also indicates, a number of the above troops were simply reassigned as part of a larger effort to reduce the layers of military bureaucracy. SIPRI estimates actual demobilization since 1987 at about 650,000, of whom around 10 percent were officers (SIPRI, ed., SIPRI Yearbook, 1994, p. 447). 114. Kyodo (Beijing) broadcast, January 15, 1996, in FBIS-CHI 96-010, January 16, 1996, p. 32. 115. Renmin ribao, July 24, 1987, p. 1. 116. Renmin ribao, February 10, 1987, p. 4. 117. Folta, From Swords to Plowshares? p. 27. 118. Renmin ribao, August 5, 1987, p. 2. 119. See Sheila Tefft, "China's Military Grapples with Conversion," Christian Science Monitor, February 7, 1994, p. 4.

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120. State Council Office, ed., Jundui zhuanye ganbu anzhi gongzuo yanjiu, p. 11. Still other problems are recounted by Dreyer, "The Demobilization of PLA Servicemen," pp. 321-323. Dreyer also raises questions about the claim that the 1 million target actually was reached. 121. The information in this section is based on Gurtov's visit in August 1989 and his interviews with the executive vice president and chief engineer of XAC. 122. Only a few older PLA cadres have been retrained, X A C ' s production manager said. Retraining is a difficult task in light of their age, prior training, and educational level. 123. The lack of genuine autonomy is borne out by interviews at another major aircraft company that has undergone significant conversion, Harbin Aircraft Company in Heilongjiang Province. Although the plant manager would not speak in detail, he did allow that state intervention in the firm's decisionmaking since commercial production began in 1979 was extensive. Interviews conducted August 12, 1991. 124. According to Minister Lin Zongtang, civilian products increased from 16 percent in 1980 to 75 percent in 1988 as a proportion of output value (SPC and COSTIND, eds., Zhongguo guofang, p. 13). 125. See Patrick E. Tyler, "Western Lift for China's Air Plans," New York Times, February 25, 1995, p. B17. In the case of Harbin Aircraft (see note 123 above), a joint venture has occurred, but not in aviation; it is with Suzuki Motors for production of medium- and small-sized trucks. 126. Bret D. Johnson, "The Modernization of China's Aerospace Industry," in School of Hawaiian, Asia, and Pacific Studies, Asia and the Pacific, pp. 11-12. 127. Lena H. Sun, "China Turns Guns to Plows to Obtain Better Guns," Washington Post, March 17, 1993. The source of the figures, Chen Dazhi, planning director of COSTIND, also said that one-third of these military enterprises are operating at a loss. 128. Based on interviews in 1990 and 1991 with Shenzhen city officials and numerous enterprise heads. 129. Interview of the vice general engineer, August 24, 1990. 130. Information from interviews in Shenzhen, August 22, 1991. 131. Military conversion by Guizhou Province industries, notably ordnance enterprises, is recounted in "Guizhou's Ordnance Industry Turns Civil," Beijing Review, no. 41 (October 11-17, 1993): 12-15. 132. Based on interviews of the Languang general manager and senior staff in Shenzhen, August 20, 1991. 133. Interviews in Beijing, August 1991, with COSTIND officials. 134. Huai Guomo (vice minister of COSTIND), "Open Up New Areas of Conversion." 135. Daniel Sneider, "Defense Industry Shift in Russia Is Stalled," The Oregonian (from the Christian Science Monitor), November 26, 1992; Building Industrial Partnerships in the Former Soviet Union: Proceedings (Washington, D.C.: Industrial College of the Armed Forces, April 19, 1995), pp. 235-283, based on an opinion survey of defense enterprises in the Kaluga oblast region. 136. Zhang Bin (vice head of the PLA GLD), in SPC and COSTIND, eds., Zhongguo guofang, p. 22. 137. The comparable figure for the output of the electronics and shipbuilding industries was an estimated 17.4 percent (in 1988) (Folta, From Swords to Plowshares? table 3, p. 120). 138. Ibid., p. 119. 139. Xinhua (Beijing) broadcast, December 6, 1993, in FBIS-CHI 93-239, December 15, 1993, p. 27; Renmin ribao, February 18, 1993, p. 1.

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140. China State Council Information Office, "China: Arms Control and Disarmament," p. 16. 141. Whether dual-use products count as "civilian" or "military" depends, according to some Chinese managers who were interviewed, on the end use of the product. But other enterprise officials said it depended on the funding source. 142. Military technology spin-offs is one of the areas of Western experience to which Chinese specialists have paid considerable attention. See, for example, the discussion of the Reagan-Bush SDI program by Jin and Guo, "An Exploration of the Multiplier Effect," pp. 51-52. The view here is that Chinese analyses exaggerate the importance of spin-offs, perhaps in order to lend further support to the value of military conversion. For critical discussions of the military spin-offs issue in the U.S. context, see Rosenberg, "Civilian 'Spillovers' f r o m Military R & D Spending"; and DeGrasse, "The Military Economy," pp. 12-15. 143. Arnett, "Military Technology," p. 371. 144. Jin Zhude and Chai Benliang, "China's Experience," p. 8. 145. Exports of civilian products by weapon manufacturers (thus omitting the aerospace and nuclear industries) amounted to only about $20 million in 1993 (Xinhua [Beijing] broadcast, February 2, 1994, in FBIS-CHI 94-023, February 3, 1994, p. 50). On export growth, see Xinhua (Beijing) broadcast, November 2, 1994, in FBIS-CHI 94-213, November 3, 1994, p. 31. Besides nuclear-power plants, China's launch vehicles for communications satellites are probably the biggest money earners. There have been some notable failures, such as the Long March rocket that blew up in January 1995 with the Hughes Corporation's ApstarII payload. Long March rockets are a product of GW1C; the satellite broadcast system is owned by APT Satellite Co., Ltd., of Hong Kong. See China Daily, June 1, 1995, as reported by NAPSNet online, June 6, 1995. 146. Private communication. 147. For example, military-industrial enterprises in Guizhou Province produce about 80 percent civilian goods by output value and are reported to account for 20 percent of the total output value of civilian products in the province (Xinhua [Beijing] broadcast, August 29, 1994, in FBIS-CHI 94-182, September 20, 1994, pp. 25-26). In Heilongjiang Province, civilian production by military industries accounted for a reported 75 percent of output value, led by aviation enterprises such as Harbin Aircraft that produce a variety of vehicles. Military-industrial enterprises for the first time opened guest rooms, hospitals, and other facilities to paid use by civilians, creating new employment opportunities (Heilongjiang People's Radio Network [Harbin], January 20, 1994, in FBIS-CHI 94-018, January 27, 1994, pp. 41-42). And in Sichuan Province, a few arms-manufacturing plants have turned to producing motorcycles in cooperation with the leading Japanese firms of Yamaha and Honda (Kyodo [Tokyo] broadcast, May 2, 1994, in FBIS-CHI 94-084, May 2, 1994, p. 45). 148. Jiefangjun bao, January 6, 1993, in FBIS-CHI 93-010, January 15, 1993, p. 26. 149. To obtain this figure, we have taken the average of 1978-1980 official military spending (Y19.47 billion) as a benchmark and simply compared that average over a twelve-year period (1980-1991) with the actual total of official military spending for the same period (Y259.71 billion). (Figures for 1979-1986 are from Jiang Yuqi, ed., Zhongguo guofang jingji, table 1, p. 31; and for 1987-1991, from Folta, From Swords to Plowshares? graph 1, p. 19.) The theoretical savings is the difference in the totals. In fact, however, we do not know (among many other things) how much money actually was saved, how much was used to subsidize military industries not engaged in conversion, and how much actually went to productive nonmilitary purposes.

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150. Carey Goldberg and John Broder, "Putting Ax to Soviet Military," Los Angeles Times, September 10, 1991, p. A l . 151. Jin Zhude, "Study on China's Policies of Conversion"; Xinhua (Beijing) broadcast, October 17, 1994, in FBIS-CHI 94-204, October 21, 1994, p. 35. 152. Xinhua (Beijing) broadcast, ibid. 153. Kyodo (Beijing) broadcast, May 25, 1995, citing Jinrong shibao (Financial Times), in FBIS-CHI 95-101, May 25, 1995, p. 42. The PRC white paper, however, says that government investment in conversion was Y10 billion f r o m 1991 to 1995, compared with Y4 billion during the previous two five-year plans (China State Council Information Office, "China: Arms Control and Disarmament, p. 16). 154. Tai Ming Cheung, "On Civvy Street," p. 42. 155. See, for example, Gill and Henley, China and the Revolution, p. 20; China Daily, January 26, 1993, p. 2, in FBIS-CHI 93-018, January 29, 1993, pp. 27-28; Xu Xin, "China's Defence Strategy," p. 5; and the PRC white paper, which asserts that profits not returned to the government or taxed "will be mostly used to boost production of [civilian] goods and improve the lives of those working for the enterprises" (cited in note 153 above, p. 16). 156. On this point, see Tefft, "China's Military Grapples with Conversion." 157. These conclusions are based on personal observation in China; but most of them are also recited by Chinese enterprise managers in interviews. In addition, see similar remarks by the general director of NORINCO, Jin Lailie, interviewed in Jungong jishu minyongbao, May 16, 1989, p. 3; and Li Tao, "Outline on the Development of Civilian Products." 158. Arnett, "Military Technology," p. 371. 159. Speech by Huai Guomo in Jungong jishu minyongbao, August 22, 1989, p. 1. The comparative profit margins of civilian and military goods produced in the same converted enterprise seem to vary quite a bit; see Folta, From Swords to Plowshares? pp. 187-188. 160. Chinese sources are interviews of COSTIND researchers in Beijing, August 1988. The Western source is Jane's Defense Weekly, February 19, 1994, p. 28, cited by Gill and Kim, China's Arms Acquisitions, p. 101. 161. Tai Ming Cheung, "On Civvy Street," p. 40, citing Vice Premier Zhu Rongji. See also Frankenstein and Gill, "Current and Future Challenges," pp. 419^420, who quote a NORINCO official dismissing the reported successes of conversion as exaggerations and emphasizing instead the high number of near bankruptcies. 162. Based, again, on personal observation and interviews during site visits. One particular manifestation of military-industrial pollution is the nuclear industry's uranium mining and waste disposal in Tibet, an aspect of the CNNC's activities that rarely receives media attention (see ICT, Nuclear Tibet). The Chinese government maintains that the town of Xihai, in Qinghai Province, where the first atomic and hydrogen bombs were tested, has been thoroughly cleansed and is now the capital of the Haibei Tibetan Autonomous Prefecture. Environmental monitoring is being done by the CNNC (Xinhua [Beijing] broadcast, December 29, 1995, in FBIS-CHI 96-001, January 2, 1996. 163. Jin Zhude, "Prospect on the Peaceful Use of Military Industrial Technologies in China," p. 8. 164. Interview with Chen Dazhi, COSTIND's planning director, China Daily, December 13, 1992, in FBIS-CHI 92-240, December 14, 1992, p. 28. 165. One senior figure involved in China's conversion made this point indirectly by contrasting circumstances there and in the West. In the West, he said, military factories can be closed down and unemployed workers put on welfare in response to economic conditions. But "China is a socialist country. It tends to resolve

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the problem from within the military enterprise." China cannot afford such welfare funds. Moreover, its third-line industries, which have no parallel in the West, pose special difficulties that can be resolved only through gradual conversion to civilian production, rather than by bailing them out with state funds (interview in Beijing, 1990). 166. Lewis, Hua, and Xue, "Beijing's Defense Establishment," pp. 91-92; Tai Ming Cheung, "Unguided Missile," Far Eastern Economic Review, February 6, 1992, pp. 42-43; Nicholas D. Kristof, "Potent Office Weaves Web in China Arms," New York Times, August 21, 1991, p. A16. On the importance and variety of socalled guanxi networks in national-security bureaucracy generally, see Shambaugh, "China's National Security Research Bureaucracy," pp. 280-282. 167. Gill and Kim, China's Arms Acquisitions, pp. 109-111. Ding was replaced at the end of 1996 by Lieutenant General Cao Gangchuan, a deputy chief of the General Staff who was a key commander in the PLA missile exercises off Taiwan earlier in the year (China News Daily, online ed., December 27, 1996). 168. Lewis and Hua, "China's Ballistic Missile Programs," p. 33. 169. See Frieman, "China's Military R&D System," pp. 272-273. CAPUMIT, the think tank attached to COSTIND, indicates in its official publications that international cooperation to promote the "peaceful use of military industrial technologies"—which we interpret to mean increased contact with foreign military and civilian organizations to facilitate the acquisition of technology—is among its objectives. In a paper by two of CAPUMIT's scholars, in fact, conversion is referred to as a "transition" of military resources to use in both economic and military modernization (Jin and Chai, "China's Experience," p. 2). 170. See, for example, Wang Pufeng et al., Xiandai guofang lun, chap. 17; and Gill and Henley, China and the Revolution, pp. 12-13, quoting Huai Guomo, COSTIND's vice minister, and General Liu Huaqing. 171. Gill and Kim, China's Arms Acquisitions, p. 101. 172. Lewis, Hua, and Xue, "Beijing's Defense Establishment," pp. 101-103. 173. Military modernization was specifically called for by Li Peng in his 1991 report on government work. He said the defense funding increase of around 12 percent should focus on "research in and manufacture of new weapons and equipment to modernize our army's armaments," as well as continue defense conversion (Beijing Review, no. 15 [April 15-21, 1991]: xiii). 174. See, for example, "Liu Huaqing Stresses Need to Further Raise Overall Level of Science, Technology, and Industry for National Defense at National Conference of Directors of Offices of Science, Technology, and Industry for National Defense," Jiefangjun bao (Beijing), December 23, 1995, in FBIS-CHI 96-008, January 11, 1996, pp. 35-36.

6 The PLA as Entrepreneur

In the previous chapter, we observed how military-industrial conversion became part of the drive to modernize. Heads of military-industrial enterprises were pushed to enter the market, make competitive goods, and earn profits that would offset the state's reduced official budgetary support. The economic reforms also created incentives for military officers and weapons industry heads to engage in commercial ventures for a profit, including arms sales, acquiring funds that could be used either to support their units or supplement military R & D . We turn in this chapter to these ventures and their significance for the military establishment, for the military budget, and for domestic political and foreign relations.

The PLA in Business Ever since the central leadership adopted the "one military, two systems" concept in the late 1980s, PLA military and administrative units at every level have become heavily involved in business. 1 Military-owned and operated businesses comprise PLA-run factories, farms, and mines, domestic investments, and foreign trading firms. 2 In form, these activities range from collectives to enterprise groups, at least 200 joint ventures with foreign companies, and one multinational corporation. 3 Every conceivable kind of business is going on—from electronics to ice cream, from horse farms to agribusiness, from transportation to massage parlors, from an airline (China United, run by the air force) to more than ten grand hotels, even investment in commodity futures. Military ambulances, trucks, hostels, and hospital beds are now available to civilians on a fee basis. In Shanghai, military units are simultaneously major property owners, managers, and renters of construction equipment. 4 In fact, the army itself is a tourist option: It operates shooting ranges and inspection tours, for instance; and the Xichang Satellite Launching Center in Sichuan Province has plans to create a space-science park. 5 Estimates of the numbers of such ventures may be wildly off the mark, but typically sources give 10,000 as the number run by the PLA general departments (principally, the General Logistics Department), the three service headquarters, field armies, and

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local units down to regimental level 6 and perhaps another 10,000 run by all other lower-level units, in some cases illegally. 7 Western media tend to give attention to the quaint smaller PLA businesses, such as karaoke bars and hotels, to military property used for criminal purposes, and to PLAinvested companies involved in illegal manufacturing, such as those in Guangdong that were charged by the United States with making "pirate" copies of compact discs and computer software. Actually, the main trend in PLA entrepreneurship is large-scale operations, such as export-minded conglomerates, of which there are at least twenty, and multipurpose farming. 8 The military also performs extensive public services, some of which bring in revenue. Services usually entail use of surplus manpower and equipment. They also often seem to be motivated by political considerations, such as to build goodwill, essentially winning back the hearts and minds of the local populace; to maintain social order; and to help create a favorable investment climate. By emphasizing the voluntary nature of many development projects, including some in poor and border areas, the evident hope is to reestablish the army's reputation for following the mass line. 9 After Deng Xiaoping made his now-famous southern inspection trip in January-February 1992, the CMC dispatched four high-level military groups to Shenzhen and other locations for briefings. 1 0 A flood of news reports during and after this period extolled the contributions of PLA units in all the services to the economic reforms. In early 1993, the PLA leadership reported contributing "more than 400 million man-days of labor . . . building more than 80,000 key construction projects," and by 1997, these figures were raised to 480 million days and 120,000 construction projects. 11 Among the projects are some of China's most visible big-ticket development ventures such as the Three Gorges dam, the Qinshan nuclear-power plant, the Pudong (Shanghai) highway bridge, and the Shenzhen international airport. In Pudong, "more than 150,000 soldiers and 40,000-plus vehicles" were involved in ten major projects over a two-year period, such as highway construction, water diversion, and aerial surveys. 1 2 Surplus heavy equipment has been used extensively. Unused or underutilized military facilities, such as 71 airports, 25 wharves and docks, 300 rail lines, even scenic sites, have been lent or transferred to local authorities. 13 Every service has been made to contribute. Army units have been involved in the large-scale construction projects, such as water diversion, flood control, and highways. 1 4 During the first half of 1992, for instance, the navy is said to have undertaken six projects. Two involved recycling of unused assets: refitting mothballed ships for "emergency transportation assignments" in coastal economic zones and turning over military piers, airports, and warehouses for local use. Two projects involved sales of services: construction of facilities such as ports, wharves, and highways; and repair of fishing and other craft. A fifth project was to survey "naval

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control points" (haikongdian) and the East China Sea continental shelf, allegedly for scientific and commercial purposes. The sixth project was to assist coastal authorities in preventing smuggling. 15 The air force's service projects included conducting "remote-sensing aerial surveys for over 10 major state scientific and construction projects"; sending "nearly 10,000 officers and men to take part in the construction of nearly 100 major state and local projects"; creating artificial rain to relieve drought; and participating in airfield construction, such as in Shenyang and Shenzhen. 1 6 Military units sometimes provide labor for joint ventures. Working directly with local foreign trade offices, for instance, one military unit dug an artificial lake in Suifenhe, Heilongjiang Province, as part of a Sino-Russian project, while another performed engineering mapping for a joint venture to create the Chinese International Yacht Club near Dalian. 1 7 Profits for

What?

Two political issues that emerge from the above discussion command our attention. First, where are the profits from PLA-invested businesses going? Second, and contrary to the above reports of PLA public spiritedness, what impact are business activities having on the PLA's national-security mission? Accounting for the amount and destination of these kinds of PLA businesses may not be possible. We know earnings and profits are growing, just as they are for most other commercial ventures outside the state sector. But reliable and meaningful figures are hard to come by, since the Chinese do not publish figures consistently. 18 Western estimates of profits vary widely, though the amounts are substantial in relation to official military spending: Y30 billion (about $3.5 billion) in 1992, about the same as the 1990 official military budget; 1 9 $5 billion in 1993; 20 an average of $1.2-1.5 billion a year since private PLA businesses started. 2 1 Whatever the amount, Chinese and some Western sources agree that PLA business earnings overwhelmingly stay in the units that run them, mostly to be reinvested in business or used for the troops' welfare and training. Very little money is returned to central administration for weapons procurement or military R&D. 2 2 This is important when it comes to assessing China's military capability. Since each Chinese soldier is said to cost the equivalent of U.S.$2,000 a year, 23 the roughly 3 million soldiers under arms would alone nearly consume the official military budget. Those outside observers who contend that PLA business profits really amount to "plowshares back into swords" greatly overstate reality. 24 In fact, one of the main reasons for the party leadership's complaints about the military's overzealous economic activity might be that not enough business profits are being returned to the center. 25 That would put the PLA in the same category as the more prosperous province and local governments: recipients of central government funds who do not return a proper share of their revenue back to Beijing.

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Corruption in the army's ranks may play a major part in understanding "plowshares." To say that PLA units keep the money they earn does not mean it goes entirely to support the living standards, welfare, and other basic expenses of soldiers, their dependents, reservists, and demobilized soldiers. There is good reason to believe the senior officers siphon off a substantial share of the profits. Early in 1996, a Hong Kong publication reported on figures released by the CMC that revealed extraordinary amounts of money "squandered" by PLA officers since 1992, over Y33 billion in all. The money was spent on personal entertainment, with the result that only a small percentage (one-quarter to one-third) of revenue from all kinds of business pursuits, including converted military industries, was turned over to the state. 26 If this report is even remotely true, it further suggests that the real problems of PLA entrepreneurship lie at least as much within the military as in international-security affairs.

Profits and

Preparedness

The most important political issue may not be where the profits go anyway. Rather, it may be the effects of PLA involvement in entrepreneurial activities on PLA discipline and preparedness. Party and military heads of the PLA have periodically warned about the army's excessive involvement in commercial activities, which took away from training time and undermined devotion to duty. 27 The party center faced the dilemma that the army could not disengage itself from production and economic activities, but neither could it continue to carry out economic activities as in the past. After an all-army meeting in 1988, the CMC issued orders that production units and economic undertakings inside the army should be organized into a system separate from the combat units. Units below the army level should not run enterprises, enterprise cadres should not be included in the military establistment, and such cadres should not be paid from the military budget. But the objective of "separating the enterprises from the military units" was not achieved then or later. One reason cited is the selfish departmentalist mentality of leaders at various levels of the military. 28 As one example, in 1989, numerous business practices in which the PLA was engaged were declared illegal. These included unauthorized use of military equipment, hiring out of vehicles, and setting up of businesses without permission, all of which can be considered to arise from the self-interested behavior of Chinese Sergeant Bilkos. 29 The PLA's involvement in business activities has forced some military units to devote most of their time and efforts to moneymaking activities at the expense of their professional duties, in particular training. This has apparently weakened the military's institutional identity. Local units often pay less attention to instructions from the center, especially if they concern noneconomic matters. 30 Unfair and unequal distribution of earnings is also

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said to be weakening the troops' morale. The image of the army is being damaged, especially when some military units use code names when doing business. 3 1 By 1993, the situation evidently had not improved. Economic disputes among military units were becoming commonplace. 3 2 New CMC regulations were directed at the PLA's financial practices, such as currency and property speculation and depositing of funds in private accounts. The GLD took charge of a wide-ranging inspection of military units' account books to check for tax evasion, diversion of funds, and other possible malfeasances to protect their businesses. 33 Military businesses then became a subject of top-level CCP intervention. The theme of the criticism was the army's failure to "take the situation as a whole into consideration," code words for the tendency of many units to put profits above national and local interests. In between the lines, the party's clear message was that the PLA's behavior bordered on insubordination, requiring reaffirmation of party authority over the military. 34 Among the top military leaders who voiced concerns were Liu Huaqing and Zhang Zhen, chairman and vice chairman of the CMC and both wellknown advocates of military professionalization. They said that "many armies in China and abroad have lost their fighting capacity and been defeated by peace or by themselves." 35 The implication seemed to be that lack of discipline raised questions about the political reliability of the PLA. Such questions extend to relations between the PLA and localities. PLA leaders always pride themselves on the mutually supportive character of the relationship. Local governments and citizens support the military in many ways, such as by carrying out national defense education, sending their children to perform military service, and allocating funds to help house and educate military dependents and care for wounded and handicapped revolutionary soldiers. In return, troops participate in local economic development projects. They typically are active in mass propaganda work to promote patriotism, party loyalty, and "building a socialist spiritual civilization." Local military-civilian ties seem to be suffering under marketization, however, as self-interested behavior on both sides intrudes into the traditional mutuality. For instance, when implementing domestic contracts, some civilian enterprises are unaware that they must comply with regulations that accord preferential treatment to dependents of military personnel. Disputes between troops and local authority that once could be settled through negotiation now must give priority to military law. 36 At the end of 1993, the CMC supposedly decided on strong action. It suspended or turned over to civilian control a number of businesses and facilities run by army units below the military regional level. The CMC also sought to separate military businesses from their units by setting up new administrative bureaux directly under military regions to oversee military "production and operational management." 3 7 Resistance to the CMC's ruling was reportedly widespread, however, even as top leaders of the army

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and party continued to inveigh against corruption and illegal business activities, which was what they meant by emphasizing "management work." 3 8 Many practical obstacles stand in the way of bringing excesses to a stop. The major PLA businesses are above the military regional level and therefore were not affected by the ruling, as the initial CMC report said. Many of them are interlocked with other conglomerates, and their chief executives are relatives of China's political elite—the so-called princelings (taizidang). Polytechnologies, Inc., the arms-trading firm, is an example. 3 9 Tracking some PLA businesses is very difficult, since they reportedly engage in illegal or questionable kinds of trade and may be shell operations registered offshore. 4 0 It soon became apparent that the military businesses were getting completely out of hand. As 1995 began, the PLA's general department leaders announced establishment of another new auditing system. "Maintaining probity and freedom from corruption" were mentioned as objectives of the system. 41 Then, at year's end, the CMC reportedly released a sixteen-point notification in the name of the same General Staff heads that cited widespread irregularities in the running of all kinds of military enterprises—PLA-run, joint military-civilian, converted industries, trading companies, and military farms. Here was the most blanket indictment yet by high-level authority: such violations as misappropriation of public funds, embezzlement, and bribery; squandering of revenues for personal enjoyment; loose bookkeeping; unauthorized use of funds to establish enterprises in China, Hong Kong, and Macao; setting up of private accounts abroad; and involvement in prostitution and smuggling. The CMC and the CCP Central Committee appointed Liu Huaqing head of a high-level, fiveperson team (which also included General Chi Haotian, the defense minister) to investigate. 42 Such efforts to stem the tide may be a classic case of too little, too late. The system itself is by now so far-flung, so profitable to well-placed higher-ups, and so crucial to the well-being of military units within the larger national economic plan that proposals for directly curtailing military businesses, centralizing them, or changing the structure for financing the military seem very unlikely to be approved, or implemented even if approved. 4 3 Besides the practical obstacles to serious reform mentioned above, there is the reality that as China's foreign military sales go down (which is the case in the 1990s), the importance of military businesses as a source of revenue is likely to go up. 4 4 Moreover, some kinds of businesses, such as state farms and construction, are evidently relied on by their military managers for self-sufficiency and will not readily be given up to a new authority. To return to the central question, the actual impact of the PLA's economic activities on military preparedness can only be a matter of speculation. It is reasonable to suppose, as Ellis Joffe does, that the PLA's elite

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combat units have not yet been affected by all the moneymaking activity, but that units in distant provinces may be. As he writes, training and discipline are probably the key areas that will suffer, perhaps most of all in the more specialized aspects of military work that demand dedication and in command relationships between officers and soldiers. Here, preoccupation with business can only detract from military tasks and professionalism. 4 5 In the absence of more detailed information about how military units experience involvement in business, such general notions cannot be substantiated. But corruption in a military establishment is serious business; and it is clear that by the mid-1990s, the central leadership of China, even while extolling the virtues of the PLA, had a problem of broad and deep dimensions on its hands. Despite these serious problems, it is highly unlikely that they will lead to mass defections of local PLA forces and the formation of local politicalmilitary compacts or alliances. Although the PLA's involvement in economic activities will affect its overall cohesiveness, individual units probably will not be in a position to challenge the control of the party center for the foreseeable future. The regional armies are under strict central control. Militia and reserve forces, which are under the dual control of local government and military units, do not have the capacity to develop into the modern-day equivalent of warlord satraps. Any conspiracy between local military and government officials would be easily checked by a unified central government.

The Arms Business Organizing for

Selling

To promote its international and domestic political interests, the central political leadership authorizes various and substantial forms of financial support of the PLA that are outside the usual budget of the Ministry of National Defense. In the previous chapter, we mentioned some of these offbudget items, such as hard currency to finance weapons purchases abroad; a portion of military R&D; funds from other ministries' budgets for research, retraining, and maintenance of reserve and other nonregular forces; and grants and loans to subsidize the costs of military conversion. Profits from arms exports are another source of support for the military, though the discussion below suggests these profits are declining. In this section, we confine discussion of China's arms trade to its entrepreneurial dimensions. The next section addresses the military budget. We leave to Chapter 7 an examination of China's motives, specific interests, and partners in exporting and importing arms. China's aggressive marketing of weapons coincided with the basic decision to move from wartime to peacetime military planning and to reduce

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direct central-government outlays to the PLA. As the 1980s went on, two things became apparent to defense-establishment leaders: Military-industrial conversion by itself could not earn money quickly enough to be selfsupporting, and the international arms market offered opportunities for Chinese weapons, political as much as pricewise, that the PRC ought to j u m p on. The days (under Mao) of simply giving away weapons to revolutionary groups and friendly governments were over. Many of the same defense economists who used the commodity nature of military production as an argument for conversion also used it to urge stepping up arms sales abroad. 4 6 They observed that the global arms competition had become more diverse, with a number of Third World states (e.g., Brazil) entering and profiting from it during the 1980s. China should join the competition, they said. They had ready allies in the defense industries. According to John Lewis and Hua Di, "although [the defense industries] converted part of their capacity to civilian production, [they] looked to the international arms market for their true salvation." 47 Arms sales offered a more reliable source of hard currency to supplement the PLA's research budget. Deng himself provided the clearest clue to the change in approach when, in 1987, he is said to have dismissed the Foreign Ministry's objections to a sale of missiles to Saudi Arabia. Deng asked an official of Polytechnologies, "How much money did you make?" When the answer was $2 billion, he said no more. 48 NORINCO, the first arms-trading company, was set up by the Ordnance Ministry in 1979. The following year, all other industrial ministries and the PLA were given the green light to form commercial trading companies that could sell or import arms on their own, including the right to set up branch offices in military regions and abroad. 4 9 The trading firms (shown previously in Figure 5.1) thus became an extension of the military-industrial complex, a means of promoting, and globalizing, its production of military and civilian goods. They are responsible for sales abroad of weapons and military-related equipment and technology, including weapons not used by the PLA as well as surplus stocks. With the 1993 reorganization of the military-industrial complex into two industrial ministries and numerous corporations, the State Council and the CMC preside over an ever-increasing number of enterprises engaged in military sales and imports (see Table 6.1). Under the State Council, military sales and services are mainly handled by the ministry-level corporations, such as NORINCO, GWIC, CATIC, the CNNC, CPMIEC, CSSC, and CEIEC. Among their exports are aircraft, missiles, electronic-warfare systems, command-and-control systems, warships, nuclear technology, satellites, and conventional weapons. The PLA's arms-exporting (and importing) activities are carried out under the CMC and COSTIND's Xinshidai (New Era) group, which includes the corporations attached to the military's headquarters departments, most importantly Polytechnologies, which is under the GSD; Kaili Corporation (a.k.a. Carrie Enterprises),

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under the GDP; and China Xinxing Corporation, under the GLD. Like the corporatized state companies, those under the PLA (most often, Polytechnologies) handle big-ticket items such as missile and jet-fighter sales. But PLA companies, including most of the others shown in Table 6.1, are able to draw on excess equipment stockpiles, and they thus also deal extensively in small arms, logistical equipment, and military training. 50 PRC Arms

Exports:

An

Overview

Since the economic reforms began, China has become one of the world's leading exporters of major conventional weapons. One reliable U.S. source puts the total value of PRC arms deliveries to developing countries from 1987 to 1994 at $13.1 billion, which ranks fourth in the world among arms suppliers. 51 SIPRI's calculation, for the first half of the 1990s, is that China was the world's sixth-largest weapons exporter, with nearly $6 billion in total exports of major conventional weapons from 1990 to 1994. This placed China less than $1 billion behind Britain and France, but far behind the United States ($62.3 billion), USSR/Russia ($21.9 billion), and Germany ($10.5 billion). 52 For reasons discussed in Chapter 7, it now appears that the mid-1980s was the high-water mark in the volume of PRC arms sales. As one specialist concludes, China signed "no major new [arms] contracts . . . with key clients" in the 1990s. 53 On this score, PRC defense economists may have been guilty of excessive optimism. They had proposed that China aim to step up arms exports to the point where "the export volume of nationaldefense commodities and technology accounts for about ten percent of our country's total exports." "When the river rises, all boats go up": China's arms exports should increase in proportion to foreign trade. That means

Table 6.1

Principal Chinese Corporations Engaged in Military Exports and Imports

State Council-Administered Corporations

COSTIND- and PLA-Administered Corporations

NORINCO GWIC CNNC CATIC CPMIEC

Polytechnologies, Inc. (Baoli) (GSD) Kaili Corporation (Carrie Enterprises) (GPD) Xinxing (GLD)

esse

CEIEC Beijing Wan Yuan Industry Corporation (CASC) CAST Beijing China Chang Feng Industry Corporation Sources: Frankenstein and Gill, "Current and Future Challenges," table 2, pp. 401^102; The Risk Report, pp. 6-7.

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China in 1982, for example, ought to have sold double the arms it actually did—over $2 billion worth, instead of only about $1 billion. 54 Such a huge leap in arms exports was a tall order, first, in view of the competitiveness of the arms-sales business, and second, because of the very rapid growth of PRC exports overall ($90 billion in 1993, around $150 billion in 1996). In fact, exports of arms as a percentage of total PRC exports rose to 6.7 percent in 1984, but fell to less than 1.5 percent in 1991. 55 Actual deliveries of weapons dropped from $1.5 billion in 1991 to $950 million in 1993, which also meant a decline of arms exports relative to total exports—from 2.1 percent of deliveries to 1 percent. 56 With Chinese arms exports having declined still further, to about $800 million in 1994, that percentage is even lower. 57 Various sources estimate that between 17 and 25 percent of PLA profits from arms sales have been used to make up for cuts in the military budget. 5 8 In 1993, that came to an estimated $1.5 billion, according to SIPRI. 5 9 The attractiveness of cheap weapons has greatly diminished, however, even to the Chinese military, as the Gulf War displayed what high-technology warfare can do to run-of-the-mill equipment. (A good deal of that equipment, it should be recalled, was made in China and sold to Iraq.) Consequently, it appears that profits from arms sales—and their transfer to support military R&D, for example—have declined significantly in the 1990s. 60 Unless the PLA is using profits from military conversion or its nonmilitary exports to support R&D, which seems unlikely and is denied by the Chinese, support for military research is going to stay at a fairly low level. One U.S. specialist is probably correct to contend that arms exports have a life of their own, separate from any commercial possibilities. Each defense industrial trading firm probably wants to maximize its potential to acquire technology from weapons deals, regardless of their profitability. 61 Furthermore, the firms compete with one another, and some of them, as previously mentioned, have powerful backing due to personal ties between their senior officers and China's elite. Nor does there appear to be a strong institutional counterweight that systematically monitors the armsexport and import process. In the late 1980s, an interagency group known as the State Commission for Arms Export Administration was established to review major arms sales and, on approval from the CMC and the State Council, issue export licenses. The commission's members are drawn from the MFA, MOFTEC, the PLA General Staff, and COSTIND. 6 2 How often this group meets and how it functions in practice are not known; but the history of PRC arms exports since then suggests that the trading companies make most of their own decisions, either from headquarters or (in the manner of multinational firms) because their subsidiaries have considerable autonomy. The Ministry of Foreign Affairs, which has tried to block some politically sensitive arms transactions, usually has not succeeded. 6 3

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The top central leaders in the C M C and State Council may in fact only intervene on the rare occasion when an arms deal gets in the way of larger PRC interests. Promising the United States to end certain kinds of Chinese nuclear assistance to Pakistan, reviewed in the next chapter, may have been one such instance. In seeking additional funds, the PLA has the advantage of being able to send and receive military missions. These have b e c o m e more frequent than ever in the 1990s. 6 4 Again, the reasons can be traced to the general economic reform and defense industrialization objectives of acquiring foreign technologies and ideas, not only for producing weapons, but also for improving military organization, logistics, academies, and training. All these considerations necessitated ending the military's old habit of closeddoorism. 6 5 No doubt, promoting Chinese military sales is also a high priority of such visits. As China's military affairs becomes more "privatized" in the hands of high-level entrepreneurs, arms may indeed be what the defense intellectuals said they should be: commodities, to be used to promote economic development and national d e f e n s e (or, it also appears, to further corruption).

China's Elusive Military Budget From the discussion thus far about P L A profits f r o m businesses, services, and arms sales, it is apparent that China's actual military spending is considerably higher than its officially announced figures. How much money the Chinese government actually allocates for defense, and where the m o n e y originates, cannot be k n o w n with m u c h precision. Not only does China, like all governments, hide military spending in budget categories outside the M N D ; it also is highly selective in what it publicizes about military spending. And China allows no investigative j o u r n a l i s m when it comes to the military-industrial complex. Nevertheless, we need to make some attempt to quantify Chinese military spending in order to better understand the linkages between the military's entrepreneurial roles and the financial resources at its disposal.

The Official

Budget

Table 6.2 shows China's official military budget from 1986 to 1995. In the first three years after Tiananmen, China's official defense budget rose about 18, 14, and 14.5 percent, pushing the PLA's share of the state budget back up to 12 percent by 1992. 66 The official defense budget increased by still-larger percentages thereafter, reaching Y75 billion in 1996. In all, China's official military budget more than doubled (158 percent) between 1990 and 1996, and it more than tripled (a 275 percent increase) between 1986 and 1996.

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Table 6.2 Year

Entrepreneur

China's O f f i c i a l Military S p e n d i n g , 1986-1995 Amount (in billions of yuan)

1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996

20.1 21.0 21.8 24.5 29.0 33.0 37.8 42.6 52.4 63.1 75.0

Sources: For 1986-1994, SIPRI, éd., SIPRI Yearbook, 1995, app. 12A.1, p. 436; for 1995, newspaper accounts; for 1996, authors' personal communication with SIPRI.

Chinese sources frequently cite the military's shortage of funds as the principal reason for the budget increases and as a reason for its involvement in economic activities. The argument is essentially twofold, based, first, on the PLA's need of funds and, second, on its right to have them. 67 As for need, according to these sources, since 1980, state support of the PLA as a percentage of the state budget has not kept pace with inflation or with changing international circumstances. Thus, "between 1979 and 1994 defence spending increased 6.22 percent annually in absolute terms. Over that same period, the general retail price index of commodities increased 7.7 percent annually." 68 As a consequence, ordinary soldiers have been seeing their salaries and therefore living conditions eroded by inflation, while the common person's life has been constantly improving. A military career has become unattractive; wage increases for soldiers have fallen well short of those for other government workers. 69 PLA recruitment was therefore well down early in the 1990s. Soldiers living in the interior and the northeast military regions, which have not benefited from the economic reforms the way the coastal region has, were especially anxious to find their fortunes in civilian life. In support of its argument, and in response to international pressure, the Chinese government's previously mentioned 1995 white paper on arms control made a rare public accounting of how official military spending breaks down. Beijing said its 1994 military budget of Y58.77 billion (which includes social-welfare spending not usually reported) was spent as follows: • • •

Y18.774 billion for soldiers' living expenses (salaries, food, uniforms); Y18.845 billion for operations and maintenance, including training; Y17.452 billion for military equipment research, storage, and testing; and

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•

199

Y3.7 billion for social welfare for military personnel, including retirees. 70

The gist of the Chinese argument, clearly, is that ordinary upkeep of soldiers and equipment accounts for an overwhelming share of military expenditures. Nothing is mentioned in these figures, of course, about spending for weapons development and acquisitions. This omission accentuates the further Chinese claim that the PLA's weapons modernization has fallen behind that of other armies, including some in East Asia. The air force and navy have been neglected for many years in receiving new equipment, since purchases of foreign arms with hard currency were cut back sharply by Deng. Changing these circumstances, therefore, must fall to the military itself. The military budget increases are also regarded as an entitlement. The PLA, having suffered through budget cuts in the 1980s, should now receive its fair share of the country's prosperity from the reforms, Chinese officials say. An official publication in 1990 proposed, for example, that if the GNP were to rise by 7 percent a year (to the year 2000), China's military spending should rise by 2 to 2.2 percent of the GNP a year. This increase, it was noted, would still be below the average increases of the mid1980s. 71 As it stands, China's GNP in the first half of the 1990s rose by well over 10 percent a year, whereas (Chinese authorities say) military spending, as a percentage of GNP, actually fell, to around 1.5 percent, and much less after inflation. 7 2 Hence, the PLA is still behind the curve. Furthermore, China has legitimate national defense needs, just like other states. As is obvious to all, in a post-Cold War climate of international uncertainty and considerable instability, the PLA must be prepared for more contingencies than before. Yet, China's total military spending is well behind that of other countries—for example, about 22 percent of Japan's and 76 percent of India's in 1994, as seen in Table 6.3. As a percentage of the GDP, China's military spending dropped from 5.6 percent in 1979 to 1.3 percent in 1994; and as a percentage of total government spending, from 18.5 percent to 9.5 percent in the same years. Again, the PRC maintains, these figures compare favorably with those of other countries. 73 These rationales are not without foundation, though it is crucial to count off-budget contributions to the PLA from the central government and PLA income. By one measure, a high one by SIPRI, PLA revenue from all sources was $44.6 billion in 1993, over six times the official budget. 74 Other estimates range from three to eight times the official budget, giving China the third- to fourth-largest actual military budget in the world. Considering China's and the PLA's size, military spending in the range of $35-50 billion a year is not excessive. As Table 6.4 shows, moreover, China's real official defense spending increases since the mid-1980s have been among the smallest in Asia Pacific. It is certainly also true that

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Table 6.3

Comparative (Official) Military Spending: China, India, Japan (in $U.S. millions)

China India Japan

1986

1990

1994

$6,497 $7,727 $24,161

$6,069 $8,607 $28,313

$6,648 $8,680 $29,877

Source: SIPRI, ed„ SlPRl Yearbook, 1995, table 12A.2, p. 442. Note: These figures are in 1990 prices and exchange rates.

the average Chinese soldier's living conditions are often abominable and soak up a considerable portion of the official budget. Inflation indisputably has been a key factor in the budget increases too, at least until the mid1990s when the central government brought it under control. Real official military spending—that is, adjusted for inflation—rose only 4 percent between 1986 and 1994, or (as in Table 6.4) 6.4 percent between 1987 and 199 3. 7 5 In agreement with Chinese calculations, a number of Western scholars maintain that China's military budget as a percentage of G N P and central government expenditures has held steady or even gone down since the mid-1980s. 7 6 By 1996, official PRC military spending of $9.7 billion was about 1.5 percent of G N P and 10 percent of total state spending, right around the average during the preceding decade. 7 7 But again, such figures reflect only what the military spent f r o m the official central budget, which could not possibly support all the regular, PAP, and reserve forces under the PLA and still provide for weapons acquisitions, R&D, and other spending. 7 8 The Budget and

Politics

Comparisons of year-to-year budget figures are not very useful, however. Besides leaving out the complicating (and distorting) factors of exchange rates and actual purchasing power, 7 9 they create the dubious image of a passive P L A and a neglectful Chinese government. In fact, the PLA has turned its fortunes around, thanks to its own economic activism, as discussed above, but also due to political circumstances inside China. The political factors are the kind that Chinese analysts cannot mention. One is the party center's need to reward the PLA for its loyalty during and since the student and worker demonstrations of M a y - J u n e 1989. As we have discussed, the CCP leadership has stressed ideological work in the armed forces in order to prevent C h i n a ' s "peaceful evolution" to a bourgeois democracy. Political loyalty reemerged after Tiananmen as the primary factor in assessing leadership, and stability and public order as the sine qua non of further economic reforms. Deng Xiaoping made certain to keep the C M C in the hands of loyalists such as Jiang Zemin. With a transition to the post-Deng era at hand, it was crucial that PLA commanders

The PLA as Entrepreneur

Table 6.4

201

Percentage Changes in China and Asia Pacific Official Defense Budgets, 1987-1993 (adjusted for inflation)

Country

Percentage Change +6.4 +89.6 +53.6 +35.9 +34.5 +27.1 +24.1 +16.8 +10.6 +1.9 -10.6

China Malaysia Singapore South Korea Thailand Pakistan Taiwan Japan Indonesia Australia India

Source: U.S. General Accounting Office, National Security, fig. 3.2, p. 31.

near to Beijing and far away be kept reasonably content. Jiang's use of the appointment power probably did just that. Increased high-level political representation and a new strategic importance in the post-Cold War period have also put the P L A in an unusually strong bargaining position with respect to funding. 8 0 As we explain in Chapter 8, moreover, China's behavior in the Taiwan Strait in 1995 and 1996 suggests a powerful role for the P L A in matters of state sovereignty as well. It may also be that as P R C arms sales have fallen off since 1991, the central leadership has felt compelled to increase the official military budget to compensate. 8 1 An official U.S. estimate is that revenues from arms sales "fell from a peak of about $ 2 billion annually in the late 1980s to less than $1 billion in 1 9 9 1 . " 8 2 The specific compensation would most likely be in military acquisitions from Russia, which probably amounted to several billion dollars in the first half o f the 1990s. This amount includes not only China's purchases of advanced aircraft, missiles, and nuclear technology, but also recruitment and exchanges of military-scientific talent. 8 3

Some Longer-Term Implications Domestic

Politics

Looking further ahead, trends in P L A entrepreneurship toward more diverse and lucrative undertakings, many of which are difficult (if not impossible) to monitor, will have important domestic and international implications. In terms o f domestic politics, the PLA's business activities increase its stake in the economic reforms, and therefore in a political leadership loyal to Deng's ideas, particularly as so many of the leading

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The PLA as Entrepreneur

entrepreneurs are princelings. The PLA's ventures benefit from, and in turn provide benefits for, the rapidly growing commercialism in China. Without them, life in the PLA would be much harder and less attractive for potential recruits. It would also strain the central government's budget. On the other hand, excessive business involvement has had corrupting effects on the armed forces and created army-party tensions. As mentioned above, there is concern at the highest political levels about the party's authority in the armed forces, the loyalty of some commanders and ordinary soldiers, and ultimately, the reliability and professionalism of the PLA should it again need to be called upon to quell large-scale unrest. How far is the central leadership (i.e., the CMC headed by Jiang Zemin) prepared to go to bring PLA businesses, including the arms-trading companies, under some kind of control? It probably needs the PLA's support too much to risk offending and undermining a great many military officers. Too many of them, high and low, already depend on the opportunities for self-enrichment before retirement; and their business activities may tie them to regional and local political and business leaders. Exercising control may not be easy, since the political reality of the military-industrial complex seems to be one of dispersed, not centralized, budgeting and policymaking authority. 84 Moreover, as Gerald Segal points out, PLA business graft is greatest in the richest provinces, starting with Guangdong. 8 5 The party center may not want to create further incentives there for province leaders to distance themselves from Beijing or to drift toward separatism. At the moment, the evidence from around China is that the PLA remains loyal to the center and dependent on it logistically; only a dramatic breakdown of central authority might disrupt that loyalty. 8 6 The top leaders may have to be content with taking occasional "supervisory" actions, such as audits, and making power plays, such as the removal of the "Yang family clique," rather than insist upon an all-out campaign to impose the center's authority. The post-Deng leaders must also consider that they will probably not have the degree of support in the PLA that Deng had. 8 7 Jiang Zemin has certainly tried to curry favor with PLA leaders through the appointment process; but that is no guarantee that the military will throw support to him, if he asks for it, in a succession battle. If Chinese politics comes to that, the military may well simply stay on the sidelines, since making a commitment to any one leader might be needlessly risky or even impossible. But such neutrality might just intensify the conflict. 8 8 Another longer-term issue that militates against the party's authority is the growing international role of PLA-run or -invested businesses. As increasingly attractive sources of foreign investment, they create a new international tie for the military. Central authorities have consistently encouraged military businesses to seek out joint-venture partners. 8 9 The PLA's higher echelons offer foreign partners advantages few other Chinese

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203

businesses have: a powerful guanxi network of well-connected businesspeople and bankers, a wealth of resources (including extensive landholdings and technology), financial privileges (such as low taxes on profits, local tax exemptions, and duty-free importing), and access to senior political leaders at home and abroad. 9 0 There are also some disadvantages, however, that could spell trouble between the PLA and the CCP (and within the PLA, between older and younger leaders). Foreign investors may not want to establish joint ventures with the military for political reasons. Some PLA businesses have poor relationships with local leaders and entrepreneurs, who resent the PLA's privileges and do not benefit from its profits or employment. 9 1 PLA activities that skirt the law or otherwise abuse its privileged status augment public concern about corruption, tarnish the PLA's image, and anger local populations and officials. Foreign

Policy

On the foreign-policy side, PLA entrepreneurship also raises some thorny questions. One concerns Hong Kong, which was designated a Special Administrative Region when the PRC assumed sovereignty over it on July 1, 1997. PLA-invested firms represented by princelings in Hong Kong have established a sizable financial and physical presence. Some of these firms, like other mainland holdings in Hong Kong, have apparently engaged in backdoor listings to hide their actual ownership and in insider stock trading. 92 A 1996 draft PRC law on the Hong Kong garrison, which will number several thousand soldiers, bans PLA-run businesses in the new Hong Kong; but it has loopholes that may allow them to operate so long as the profits are plowed back into the military. 93 And by now there are so many affiliates of PLA-run corporations that keeping track of them may prove impossible. 9 4 Such a formidable presence has the potential to undermine Hong Kong's economic, political, and legal autonomy. PRC authorities have said the PLA will "not [be] allowed to interfere in Hong Kong's local affairs" and must abide by its laws. Chinese self-interest would also dictate the PLA's restraint, since any significant interference in Hong Kong affairs would send shock waves through the international business community, including Chinese and other entrepreneurs who have heavily invested (many with PLA partners) in next-door Shenzhen. In fact, Hong Kong could easily be turned into a PLA channel for acquiring U.S. military technology that is not available during periods of U.S.-PRC tensions. 95 The territory is already a conduit for illegal Chinese and North Korean shipments of weapons and other military goods apparently destined for the Middle East, suggesting confidence in the ability to hide transactions in such a busy port. 9 6 Also, the PLA has sizable landholdings in Hong Kong, worth billions of dollars. Whether or not it disposes of these lands will have important meaning for the colony's future.

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Its announced policy (in 1994) was to turn over land to the new local government after the PRC takeover so long as the military no longer needed it. 97 For the United States, PLA entrepreneurship adds to the mounting list of nettlesome issues in U.S.-PRC relations. U.S. criticism of China's policies on human rights and arms sales, as well as its efforts (in 1995 and 1996) to put some competitor PLA-invested firms out of business, 98 surely antagonizes Chinese military leaders. Yet some U.S. international businesses will continue to seek partnerships with PLA-invested firms. Though such deals risk transferring sensitive civilian technology to the Chinese military, the potential profits are evidently high enough to warrant making them. 9 9 The long-apparent conflict in U.S. policy toward China between its economic and political interests is likely to be intensified by the growing PLA role in the Chinese economy. Most important, the PLA's business activities raise questions about its combat capability, hence its potential as a regional-security threat. To the extent that PLA involvement in business detracts from its military preparedness, governments such as the United States that worry about the PRC's intentions in East Asia might want to support some kinds of PLAbacked enterprises. These would include military industries that have converted to civilian production and smaller, regionally based businesses. For example, U.S. aviation companies, with a huge Chinese commercial aircraft market looming before them, are reportedly anxiously awaiting the PLA's turnover of some 300 airports to civilian use. 100 Cultivating such business relationships might help to take some of the edge off the PLA's anti-Westernism. On the other hand, the national-security bureaucracies of those same governments would not want to do business with PLA-invested firms and trading companies that might be conduits for military technology or weapons procurement. The difficulty here lies in discovering the real identities and controlling interests of Chinese businesses and syndicates.

Notes 1. The "one military, two systems" concept (i.e., creation of a two-track system in the PLA that would separate normal defense functions from the military's "public side" that produces economic benefits) was apparently first proposed by scholar Chen Fang of the Academy of Military Science in a 1988 article in Junshi jingji yanjiu (Military Economic Research), reprinted in translation in Inside China Mainland, vol. 15, no. 5 (May 1993): 69-73. Its purpose was to create some kind of regulatory device that would head off eroding military performance and growing corruption as making money took priority over training in many PLA units. 2. Good overviews of these activities are provided by Bickford, "The Chinese Military," pp. 460-474; Ding, "The Nature and Impact of the PLA's Business Activities," pp. 85-100; and Joffe, "The PLA and the Chinese Economy," pp. 31-33. 3. Some figures are provided by Jiefangjun bao, February 18, 1993, in FBISCHI 93-039, March 2, 1993, p. 27, and in a Xinhua (Beijing) broadcast of June 26,

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1995, in FBIS-CHI 95-123, June 27, 1995, p. 59. The multinational corporation is the Sanjiu Enterprise Group, which was founded in 1992. It consists of six foreign subsidiaries, of which Nanfang Pharmaceutical Factory is the main one. At the end of 1992, it reportedly generated Y157 million in profits and taxes (Xinhua [Beijing] broadcast, November 2, 1992, in FBIS-CHI 92-233, December 3, 1992, p. 38). 4. See Russell Leigh Moses's letter to the New York Times, July 2, 1995; Moses was a U.S. exchange professor in Nanjing. 5. The authors visited one such shooting range in Guilin, Guangxi Province. The prospect of touring an army base (in Tianjin) was reported in the Wall Street Journal, August 13, 1993. On the space-science park, see Xinhua (Beijing) broadcast of December 19, 1992, in FBIS-CHI 92-245, December 21, 1992, p. 36. 6. Bickford, "The Chinese Military," p. 461. 7. Only China's twenty-four group armies may set up companies for nationwide business; below that level, ordinary military units may produce goods for themselves or for the local civilian market only (Ding, "The Nature and Impact of the PLA's Business Activities," p. 94.) On some of the illegal activities, see Kathy Chen, "Chinese Army Fashions Major Role for Itself as a Business Empire," Wall Street Journal, May 24, 1994. 8. On conglomerates, see Joffe, "The PLA and the Chinese Economy," p. 32. On agriculture, see, for example, Xinhua (Beijing) broadcast, December 29, 1994, in FBIS-CHI 94-006, January 10, 1995, pp. 3 5 - 3 6 , reporting the G L D ' s and C M C ' s call for increased farm production and efficiency and for "two-thirds of companies in all branches of the armed forces [to] achieve self-sufficiency in meat and vegetables." 9. See, for example, Xinhua (Beijing) broadcast, May 23, 1992, in FBIS-CHI 92-102, May 27, 1992, pp. 3 1 - 3 2 . Concerning social order, at least one Beijing broadcast quoted the mayor of Zhuhai as saying: "Army garrisons in the city have played a major role in setting the people's mind at ease and in stabilizing social order" (Xinhua broadcast, June 2, 1992, in FBIS-CHI 92-109, June 3, 1992, pp. 30-31). 10. Hsin Wan Pao (Hong Kong), June 11, 1992, in FBIS-CHI 92-116, June 16, 1992, pp. 32-33. 11. Xinhua (Beijing) broadcast, January 10, 1993, in FBIS-CHI 93-006, January 11, 1993, pp. 2 0 - 2 1 ; "Chinese Troops Fully Display Superiority, Energetically Support Local Economic Development," Renmin ribao, mainland ed., July 31, 1997. 12. Xinhua (Beijing) broadcast, June 3, 1992, in FBIS-CHI 92-109, June 5, 1992, p. 30. 13. Xinhua (Beijing) broadcast, June 2, 1992, in FBIS-CHI 92-109, June 3, 1992, pp. 30-31. The broadcast does not make clear whether any of these transactions were made under contract with the PLA. Renmin ribao, July 31, 1997, p. 1. 14. Jiefangjun bao, December 2, 1991, in FBIS-CHI 92-008, pp. 39-41. 15. Xinhua (Beijing) broadcast, July 7, 1992, in FBIS-CHI 92-132, July 9, 1992, p. 29. 16. Ibid. 17. Xinhua (Beijing) broadcast, June 5, 1992, in FBIS-CHI 92-113, June 11, 1992, pp. 28-29. 18. See Bickford, "The Chinese Military," pp. 4 6 7 - 4 6 8 , which presents a rather confusing array of figures. 19. South China Morning Post (Hong Kong), March 9, 1993, citing Chinese army officers, in FBIS-CHI 93-045, March 10, 1993, p. 33.

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20. SIPRI, e n ^ 00 n \o r-* w oo o0 Q\ o en vo cJ