Janes - 2009 - China

2009
NERINT
JANE’S
[CHINA – COUNTRY PROFILE]

Trabalho elaborado a partir de www.janes.com
JANE’S – China – Country Profile
TABLE OF CONTENTS
1. Executive Summary
2. Political Leadership
3. Security
4. Hong Kong
5. Macau
6. External Affairs
7. Internal Affairs
8. Defence Production And R & D
9. Procurement
10. Navy
11. Air Force
12. Army
13. Armed Forces
14. Defence Budget
15. Non-state Armed Groups
16. Security And Foreign Forces
17. Infrastructure
18. Demography
19. Natural Resources
20. Geography
21. Economy
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EXECUTIVE SUMMARY
CHINA AT A GLANCE
RISK POINTERS
National Overview
Economic inequality and corruption
Taiwan
Regional rivalry
Territorial disputes
Nuclear proliferation
Fragmentation
Defence
Military overview
Military expenditure
Military modernisation
Politics
Political overview
Party reform
Party factionalism
Economy
Economic overview
Excessive growth
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Rural poverty
CHINA AT A GLANCE
Area: 9,596,960 km2
Language: Mandarin (official), and many ethnic languages.
Religion: Atheist (official); Confucianism; Buddhism; Daoism; Islam; Roman Catholicism

and Protestantism.
Time Zone: GMT +8
Population: 1,321,290,000 (China National Bureau of Statistics 2007).
Neighbours: Afghanistan, Bhutan, India, Kazakhstan, Kyrgyzstan, Laos, Mongolia, Myanmar,

Nepal, North Korea, Pakistan, Russia, Tajikistan and Vietnam.
Capital City: Beijing
Primary Port: Shanghai
Primary Beijing Capital International, Shanghai International

Airports:
Currency: Chinese yuan renminbi (CNY)
RISK POINTERS
National Overview
Although ostensibly still a communist country, the People's Republic of China has,
since Deng Xiaoping's economic reforms were initiated in the late 1970s, embraced
capitalist economic theory and transformed itself into the world's fourth largest
economy. Internally, this economic growth has created a growing income disparity
between wealthy coastal provinces and poorer inland regions, rural unemployment,
and encouraged high levels of corruption, all of which undermine the authority of the
Chinese Communist Party (CCP) and fragment the unity of China. This is further
exacerbated by the presence of restive minority populations in outlying provinces
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such as Tibet and Xinjiang, with continuing separatist movements, and increasing
demands for democracy in Hong Kong. Although none of these concerns pose a threat
to the cohesion of China alone, together they present a number of decentralising
forces that could lead to widespread civil unrest. The possibility of such unrest
escalating rapidly was amply proven by the Cultural Revolution of the late 1960s and
the student protests in 1989 that culminated in the Tiananmen Square massacre.
Externally, as the country has become an economic giant it has also gained confidence
in international politics. China is attempting to develop as the regional hegemon,
expanding its sphere of influence and vying with India and Japan for dominance in
Southeast and East Asia. The US has attempted to counter China's regional ambitions
by supplying arms to India, while Japan has begun to discuss a reform of its militarily
constrictive constitution. Although China's territory is not at risk, given its burgeoning
military capabilities and secure, second-strike nuclear capability, the possibility of
military tension remains. This is particularly true owing to the long-standing Chinese
claim to the island of Taiwan. A US alliance with Taiwan poses Beijing's greatest and
most immediate external threat. China also has a long history of territorial disputes.
While disputes with Russia and India have greatly diminished over recent years, China
continues to claim territory in the South and East China Seas. In particular, disputes
over the potentially resource-rich Spratly and Diaoyu (Senkaku) Islands have the
greatest possibility of inciting limited clashes. Finally, in the very long term China's
economic growth could lead to increased global competition for resources, and
although conflict is not inevitable, the possibility remains.
Economic inequality and corruption
Economic growth has caused a number of internal security problems, which taken
together pose the greatest risk to the CCP. Large regional differentials have seen rural
areas lag behind urban areas in wealth, heightening resentment, and driving
migration to the cities. Unless the CCP can succeed in implementing President Hu
Jintao's programme of moderating the rate of China's economic growth, which in 2007
remained at 11.9 per cent, and spreading its benefits to the poorer segments of
Chinese society, dissatisfaction with CCP rule, especially in poorer rural regions,
threatens to become a chronic problem. Corruption has damaged the party's
relationship with the population, particularly in the countryside where land seizures
and embezzlement have had a critical effect on rural incomes. Tens of thousands of
public protests take place each year according to the Ministry of Public Security, and
these protests have escalated in scale and violence. The killing of one villager
(according to official figures; eye witnesses claimed two were killed and 20 injured) by
security forces during a protest in Malipo country, Yunnan was a rare incidence of
shooting, but indicative of the unrest likely owing to dissatisfaction over corruption
and poverty. Rural poverty is also a driving force behind China's rural-urban migration
problem, which has led to large-scale urban unemployment (already a problem owing
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to elimination of many industrial state-owned enterprises), threatening the social

stability of a number of Chinese cities, while the migrant population is also a source of
crime and drug use. Efforts to control this by encouraging rural development have
been of limited effect. Similarly, efforts to reduce the social impact of migrant
workers (historically treated as second-class citizens) by providing them with some
legal rights have not eliminated the basic pressures created by China's urban
unemployed population. Urban protests in China, in particular in the industrial
northeast, have increased dramatically, and this trend is set to continue during the
transition from a command to a market-driven economy.
Taiwan
Taiwan remains the primary external security concern for Beijing, which views the
island as a renegade province and a part of 'greater China'. Relations between the two
vacillate between military brinkmanship and political tension, and are framed by two
previous 'crises' in the 1950s involving the bombardment of offshore islands by the
mainland. At present, relations across the Taiwan Strait continue to reflect a balance
between the strength of cross-strait trade and investment links, and the potential for
serious moves towards Taiwanese independence to provoke a (potentially military)
reaction from Beijing. Furthermore, overt US commitment to Taiwanese military
modernisation, under the terms of the Taiwan Relations Act of 1979 and extending to
large-scale military hardware sales to Taiwan, widens the number of possible
participants in any violence. Cross-strait relations were coloured by the use of pro-
independence rhetoric by Taipei during President Chen Shui-bian's two terms
between 2000 and 2008. However, the victory of the Kuomintang in legislative
elections in January 2008 and presidential elections in March 2008 should presage a
slight easing of tension, with expected, enhanced cross-strait dialogue and economic
opportunities fostering an aura of engagement. Nonetheless, tensions between the
two entities remain and have the potential to periodically escalate, for instance
following the passing of a long-discussed 'anti-secession' law by China in March 2005
and the decision by then-president Chen to abolish a council formed to facilitate
eventual peaceful unification in February 2006.
Regional rivalry
The burgeoning military and economic power of China is creating strategic

competition in Asia, with China vying with India and Japan for dominance of the
region. Historical animosity and mistrust between these countries lends an air of
tension to the struggle for hegemony, underlined by territorial disputes. Further, the
rapidly growing economies of China and India and the developed economy of Japan
are also driving competition for natural resources, particularly oil and gas. This
increased competition has begun to manifest itself, in some circumstances in gunboat
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diplomacy. As such, a struggle to rapidly develop a modern and effective military has
developed between India and China, while Japan has increasingly moved towards a
constitutional amendment to remove restrictions on military action. The rivalry is
complicated by the involvement of the US, which is eager to contain China, a potential
strategic competitor. The US has therefore made strides towards improving its
relationship with India, drawing up a 10-year defence agreement in June 2005, and
allowing sales of military equipment previously denied to China by the US. Japan
remains the primary ally of the US in East Asia, with the two countries reaffirming
their shared security concerns towards China in a February 2005 statement that listed
the Taiwan Strait as a 'common strategic objective'. China is also developing a greater
sphere of influence in Central Asia, which has placed the country in indirect
competition with the US. Although in the near term this Asian rivalry is relatively
benign and focused on securing overseas suppliers for energy, in the long term the
scarcity of such sources and the desire to gain hegemony in East and South Asia may
drive further tension, exacerbated by US interference.
Territorial disputes
China is involved in a variety of territorial disputes, the most controversial of which is

its claim to the Spratly and Paracel Islands in the South China Sea. Six countries and
territories claim all or part of this potentially resource-rich area, with five of them
retaining a military presence in the region. Elsewhere, although India and China de
facto recognised each other's rights to Sikkim and Tibet respectively, there are still
areas along the Kashmir and Arunachal Pradesh borders that are disputed. Continuing
disagreement over the Diaoyu (Senkaku) Islands and Okinotori reefs with Japan
colours relations between the two countries, and suffered from increasingly
belligerent rhetoric in 2005/06. Tokyo's declaration that it was assuming control of a
lighthouse built on Diaoyu Island in early 2005 alarmed Beijing, while reinforced
claims to Okinotori were made in May and June and a solar-powered lighthouse
completed on the reefs in February 2007. Nonetheless, neither the Japanese nor
Indian disagreements are likely to result in conflict, given effective military deterrence
and warming relations. In the South China Sea, by contrast, although the chances of
full-scale conflict are remote, limited naval clashes are a distinct possibility. Despite a
2002 Code of Conduct signed between the Association of Southeast Asian Nations and
China, tension in the South China Sea remains, with the continued potential for
infrequent and small-scale clashes.
Nuclear proliferation
Although China has previously been accused of aiding nuclear and missile technology
proliferation to developing countries, the spread of nuclear weapons within Asia is a
concern for Beijing. In particular, the nuclear test by North Korea on 9 October 2006
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on China's northeast border is a security issue. The fragility of North Korea's Stalinist
regime, with massive poverty and famine in the 1990s and harsh conditions, make
state collapse on China's borders an unpalatable possibility. The outcome of such a
scenario is impossible to predict, with at the very least a large influx of refugees
causing a security dilemma for China. The worst-case scenario would be an unstable,
nuclear neighbour involved in bellicose behaviour to direct the population's attention
away from internal problems. Further, North Korea's nuclear test and any future
advances in its capability may encourage further proliferation of nuclear weapons as a
deterrent, namely to Japan, Taiwan and South Korea. The presence of the US nuclear
umbrella and sizeable domestic opposition in these countries to such a move
currently makes this highly unlikely, although public and governmental opinion may
shift should North Korea develop a weaponised and deliverable nuclear capability.
Fragmentation
Internally, a currently improbable threat to China is the possibility of fragmentation of

the landmass. In such a vast and varied country, centrifugal forces are inevitable. This
factor has been exacerbated since the introduction of capitalist reforms, which have
robbed the Chinese Communist Party of its defining legitimacy and a unifying force for
the population. As such, the inequality of China's rapid economic development has
detracted from the unity of China and authority of the CCP, with the central
government renouncing control of the economy and increasing autonomy in fast-
developing eastern provinces. As these regions strain to advance further and at a
faster rate than central and western areas, it will become increasingly difficult for the
CCP to prevent increasing regional autonomy. In a bid to unite the country and
legitimise its rule, the CCP has furthered Chinese nationalism. Yet this policy has failed
to take effect in regions which consider themselves ethnically and culturally different
from the majority Han Chinese. Thus, separatist movements in Xinjiang and Tibet are
ongoing. Although violence has been effectively prevented in Xinjiang by a security
clampdown, the intense suppression of ethnic minorities, in particular the Turkic-
speaking Uighurs, has greatly alienated the population and increased anti-Beijing
sentiment. The same is true in Tibet, although the March 2008 riots and subsequent
suppression that killed 19 people, according to official figures (and up to 150
according to government-in-exile) demonstrated that dissatisfaction with the central
government can spill over into overt civil unrest. Further protests and attempted
terrorist or insurgent attacks are likely in the run-up to, and during, the Olympic
Games in August-September 2008, although this should not threaten the central
government.
Defence
Military overview
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Although the People's Liberation Army (PLA) has not yet developed the ability to project
force against an advanced opponent, an extensive programme of military
modernisation has ensured that the country is now competing ably for regional military
dominance. The situation is in stark contrast to the era before the 1990s, when China
concentrated on a personnel-intensive, defensive people's war doctrine that relied on
attrition of forces and utilised China's cheapest resource - its population. Since the
1990s, however, a strategic doctrinal shift has been under way from territorial defence
and people's war to "local war under high-tech conditions," emphasising greater power
projection and sophisticated weaponry. As such, the size of the military has been
decreasing from over three million troops in 1990 to approximately 2,050,000 in 2007,
with the rationalisation programme ongoing. Furthermore, the traditional dominance of
the army is being weakened, with particular emphasis placed on the navy by former
president Jiang Zemin. Naval modernisation is leading to significant improvements in
force-on-force capabilities, especially compared to China's neighbours. The country is
headed toward a force of approximately 50 effective nuclear and conventional attack
submarines and new warships that stress stealth, modern radar, and anti-air and anti-
ship weapons. Despite this modernisation programme, there remains doubt over the
PLA's ability to wage a rapid, joint-service operation with no combat experience having
tested this capability. Furthermore, there are still questions over the ability of the PLA
to achieve one of its primary potential objectives, namely the invasion of Taiwan, which
benefits from imposing cliff faces and slow-moving tidal flats.
Military expenditure
Hu Jintao has followed Jiang Zemin's focus on military modernisation, fuelled by rapid
advances in defence expenditure. Official defence spending increased 300 per cent from
1996 to 2005, and China's official defence budget for 2007 reached USD45 billion. The
real figure is believed by the US to be two to three times higher than this. The
expenditure increases are paying for large numbers of modern foreign and domestic
weapons. China is on its way to acquiring over 300 Sukhoi fighters, 12 Kilo-class
submarines, four Sovremenny-class destroyers and hundreds of S-300 anti-aircraft
missiles from Russia. New indigenous systems include over 20 intercontinental ballistic
missiles (ICBM), over 500 short-range ballistic missiles, two second-generation nuclear
attack submarines, four air-defence destroyers and over 1,000 modern main battle
tanks.
Military modernisation
An extensive hardware and software modernisation effort is challenging previous views

that China's PLA is and will remain 20 years behind the US military. China is investing
heavily in professional military personnel, to include a large non-commissioned officer
corps, professional military education, and new benefits to attract better-educated
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soldiers. Doctrine now stresses the importance of gaining and maintaining the
offensive, and training is increasingly realistic and makes use of modern simulation
technology. As it builds up modern conventional capabilities, China is devoting greater
resources to developing next-generation capabilities such as information, energy and
space weapons. Defence modernisation is being propelled by broad reforms in the
defence industries that have seen extensive equipment modernisation, greater reliance
on market forces, and improved abilities to exploit advances in civilian high-tech
sectors.
Politics
Political overview
China is currently ruled by a single party, the Chinese Communist Party (CCP), which has
outlawed any party political competition (the eight other political parties are all closely
aligned with the CCP) and maintains control over all areas of policy. In a bid to prevent
rural dissatisfaction with the CCP, direct democracy has been introduced at the village
level, with over 800,000 rural villages able to elect their own committee. In essence,
however, real power remains in the hands of the CCP, which is able to vet all candidates
for the indirect elections to the parliament, the National People's Congress. Given the
lack of political competition, promotions and advancement within the party have
historically been made on the basis of guanxì (nepotistic connections) rather than on
merit.
Party reform
The Chinese political arena, despite being dominated by just one party, is complex.
Perhaps most divisive is the in-fighting that is a constant feature of the CCP. At present,
Hu Jintao seems to be overseeing a set of changes to transform the political elite, which
he terms 'inner-party democracy', emphasising intra-party accountability and process.
Measures including 'more candidates than places' for internal party elections, and term
limits, are aimed at establishing a meritocracy within the CCP. Effective implementation
of 'inner-party democracy' has the potential to strengthen Beijing's control over
provincial government by denying local politicians the ability to develop personal
authority, but in reality few changes to party politicking have occurred.
Party factionalism
The CCP is dominated by a small number of factions. The 17th National Party Congress in
October 2007 further consolidated the strength of the Communist Youth League (CYL)
faction of President Hu Jintao, at the expense of former president Jiang Zemin's
Shanghai faction. Hu was able to appoint his own CYL allies to key positions, and the
10
CCP confirmed Hu's ongoing programme of economic reform. However, factional

compromise ensured that Hu's protegé was not installed as heir apparent, with Xi
Jinping, a 'princeling', assuming the role of vice-president and therefore likely next
president of the country after the 18th National Party Congress in 2012. Xi's rapid
promotion reflects the fact that negotiation and consensus remain central to inner-
party decision making.
Economy
Economic overview
China's economic might should not be underestimated. It has access to a vast pool of
labour without comparison in the Western world, which is proving flexible enough to
adapt to shifting economic circumstances and is becoming increasingly capable of more
skilled work. At the same time, the size of the country and the poverty of inland regions
have provided China with a definitive cost advantage in labour-intensive industry.
China's competitiveness as a manufacturing base is further compounded by the influx of
foreign investment, which is drawn not only to low manufacturing costs, but also to the
prospect of access to the vast domestic market. Although China's promise as a market
has yet to be fully realised, owing to poverty and significant income differentials, the
fates of many global firms are increasingly bound up with China's as they move
investment and manufacturing there.
Excessive growth
China's economy has continued to grow rapidly since the late 1970s. China's GDP in
2007 is estimated by the National Bureau of Statistics to have grown by 11.9 per cent,
compared with 10.7 per cent in 2006 and 10.4 per cent in 2005. The Chinese economy
now faces the problems caused by excessive growth, including the dangers of excess
capacity, infrastructure bottlenecks and inflation. This compounds the problems which
it has inherited from its economic development in the 1990s, namely non-performing
debt and regional growth differentials. This is in spite of efforts on the part of the
government since early 2004 to moderate growth. Despite regulatory barriers imposed
on lending and new fixed asset investment, and increased interest rates aimed at
controlling credit markets, the Chinese economy is still growing faster than desired,
driven by the influx of foreign capital and domestic private lending. As a result, although
growth in 2008 is likely to be marginally moderated by the slowdown in the US,
problems associated with excessive economic growth are likely to remain in the short
term.
Rural poverty
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Rural incomes have stagnated since the Asian financial crisis. While previously they
were growing at double-digit rates and official figures still indicate substantial growth,
actual disposable income remains low. Rural society in many provinces is beginning to
experience severe stress that is only being assuaged by remittances from migrant
workers in the cities. A combination of factors appears responsible. The rural labour
force is still greatly in excess of requirements, pushing migration into the cities. The
collapse of competitiveness between the famous township and village enterprises
(xiang zhèn qi yè) that powered the first wave of GDP growth in the 1980s and early
1990s has placed great fiscal stress on local governments in rural areas, which in turn
have increased taxation, often beyond what is bearable for farmers. In March 2004 Wen
Jiabao announced a plan to abolish agricultural tax, which was implemented by 1
January 2006. While this may diminish the burden placed on farmers, it will not
dramatically reduce the difference in wealth between rural and urban areas. The
concern for the CCP is that this widening wealth differential between urban and rural
areas will incite unrest, particularly as prices for foodstuffs and energy rise in 2008.
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POLITICAL LEADERSHIP
Political Overview
CCP Politburo
CCP Secretariat
State Council
Politburo Standing Committee Profiles
Hu Jintao
Wu Bangguo
Wen Jiabao
Jia Qinglin
Li Changchun
Xi Jinping
Li Keqiang
He Guoqiang
Zhou Yongkang
Party elder profiles
Jiang Zemin
Zeng Qinghong
Wu Guanzheng
Luo Gan
State Council profiles
13
Hu Jintao, president
Zeng Qinghong, vice-president
Wen Jiabao, premier
Wu Yi, vice premier
Zeng Peiyan, vice premier
Hui Langyu, vice premier
Cao Gangchuan, minister of national defence
Political Overview
Official Name: People's Republic of China
Political System: Communist one-party system
Declaration of Independence: 1949 (declaration of the People's Republic of China)
Head of State: Hu Jintao
Next Election: None planned
President: Hu Jintao
Vice President: Xi Jinping
CCP Politburo
The Political Bureau (Politburo) is tasked with devising the long-term strategy of the
Chinese Communist Party (CCP). The organisation's tasks are differentiated from the
Secretariat, which has responsibility for the day-to-day running of the party, particularly
involving personnel decisions. Members of the Politburo are often concurrently
members of the Secretariat. Executive power within the Politburo is concentrated in the
Standing Committee, which is therefore the most powerful party organ. (The over
1,500-member National Party Congress is theoretically the highest party body, but its
meetings are too infrequent and unwieldy and its powers too limited for it to be of
14
relevance). The CCP Central Committee ostensibly nominates Politburo members (who
are also all members of the Central Committee), although in reality the body is self-
perpetuating.
Standing Member: Hu Jintao
Standing Member: Wu Bangguo
Standing Member: Wen Jiabao
Standing Member: Jia Qinglin
Standing Member: Li Changchun
Standing Member: Xi Jinping
Standing Member: Li Keqiang
Standing Member: He Guoqiang
Standing Member: Zhou Yongkang
Member: Wang Lequan
Member: Wang Zhaoguo
Member: Wang Qishan
Member: Wang Gang
Member: Hui Liangyu
Member: Liu Qi
Member: Liu Yunshan
Member: Liu Yandong
Member: Li Yuanchao
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Member: Wang Yang
Member: Zhang Gaoli
Member: Xu Caihou
Member: Zhang Dejiang
Member: Yu Zhengsheng
Member: General Guo Boxiong
Member: Bo Xilai
CCP Secretariat
The Secretariat is the principal administrative organ of the Chinese Communist Party,
tasked with the day-to-day running of the CCP and supervision of its actions. In essence,
the Secretariat ensures that the CCP is acting according to the Politburo's broader aims.
The overlap between Secretariat members and Politburo members allows effective
control over CCP policy implementation. Secretariat members are elected by the CCP
Central Committee (of which they are also members).
General Secretary: Hu Jintao
Member: Liu Yunshan
Member: Xi Jinping
Member: Wan Huning
Member: Ling Jihua
Member: Li Yuanchao
Member: He Yong
State Council
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The State Council is the effective cabinet of China's government, and the most effective
state administrative body. Its tasks comprise the management of the country's
ministries, although its policy-making capabilities are restricted by the control held by
the CCP over the state. The premier appoints the members of the State Council, while
the premier himself is appointed by the president. The National People's Congress
ratifies the appointments and therefore nominally holds higher power, but in effect
never disagrees with the premier or presidential decisions.
President: Hu Jintao
Vice President: Xi Jinping
Premier, State Council: Wen Jiabao
Executive Vice Premier, State Council: Li Keqiang
Vice Premier, State Council: Wang Oishan
Vice Premier, State Council: Zeng Peiyan
Vice Premier, State Council: Hui Liangyu
Secretary General, State Council and State Councillor, State Ma Kai

Council:
State Councillor, State Council: Liu Yandong
State Councillor, State Council: Liang Guanglie
State Councillor, State Council: Meng Jianzhu
State Councillor, State Council: Dai Bingguo
Minister of Agriculture: Sun Zhengcai
Minister of Civil Affairs: Li Xueju
Minister of Commerce: Chen Deming
Minister of Construction: Wang Guangtao
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Minister of Culture: Cai Wu
Minister of Education: Zhou Ji
Minister of Environmental Protection: Zhou Shengxian
Minister of Finance: Xie Xuren
Minister of Foreign Affairs: Yang Jiechi
Minister of Health: Chen Zhu
Minister of Information and Industry: Li Yizhong
Minister of Justice: Wu Aiying
Minister of Human Resources and Social Security: Yin Weimin
Minister of Land and Natural Resources: Xu Shaoshi
Minister of Environmental Protection: Zhou Shengxian
Minister of National Defence: Liang Guanglie
Minister of Public Security: Meng Jianzhu
Minister of Railways: Liu Zhijun
Minister of Science and Technology: Wuang Gang
Minister of State Security: Geng Huichang
Minister of Supervision: Ma Wen
Minister of Transport: Li Shenglin
Minister of Water Resources: Chen Lei
Cabinet-Rank Officials
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Minister in Charge of the State Development and Reform Zhang Ping

Commission:
Minister in Charge of the State Ethnic Affairs Commission: Yang Jing
Minister in Charge of the State Commission for Population and Li Bin

Family Planning:
Minister in Charge of the Commission of Science, Technology and Zhang Qingwei

Industry for National Defence:
Chairman of the CCP Central Military Commission: Hu Jintao

(concurrently)
Governor, People's Bank of China: Zhou Xiaochuan
Auditor-General, National Audit Office: Liu Jiayi
Politburo Standing Committee Profiles
Hu Jintao
Date Event
1942 Born in Taizhou, Jiangsu Province (December) and registered native of Jixi, Anhui
province.
1964 Joined the CCP (April). Graduated from Qinghua University with a degree in hydraulic
engineering.
1965- Postgraduate researcher in Qinghua hydro-engineering department; political

68 instructor until outbreak of Cultural Revolution (1966).
1975 Deputy director, Gansu Provincial Construction Commission's design and construction
department.
1980 Deputy director, Gansu Provincial Construction Commission.
1982 Secretary of the Communist Youth League (CYL), Central Committee Secretariat;
19
chairman of the All-China Youth Federation.
1984 First secretary of the CYL Central Committee.
1985- Secretary of the Guizhou Provincial CCP Committee.

88
1988- Secretary of the CCP Committee of Tibet Autonomous Region.

92
1990 First secretary, Tibet Military Region CCP Committee.
1992 Elected member of the Standing Committee of the Political Bureau of the CCP.
Promoted to the CCP Secretariat.
1993 President of the Central Party School.
1997 re-elected member of the Standing Committee of the CCP Central Committee
(September).
1998 Elected vice-president of China (March).
1999 Elected vice-chairman of the People's Republic of China Central Military Commission
(September).
2002 Elected general secretary of the CCP and re-elected vice-chairman of the People's
Republic of China Central Military Commission (November).
2003 Elected state president and re-elected vice-chairman chairman of the People's
Republic of China Central Military Commission (March).
2004 Succeeded Jiang Zemin as chairman of the CCP Central Military Commission
(September).
2005 Elected to succeed Jiang Zemin as chairman of the People's Republic of China Central
Military Commission (March).
Hu holds the 'holy trinity' of posts - general secretary of the Chinese Communist Party,
president of the People's Republic of China, and chairman of the two Central Military
Commissions, giving him official control over the party, state and military apparatus
20
respectively. As such, Hu is the most powerful man within the CCP, although Jiang
Zemin retains influence and allies within the party and state apparatus. He is the
youngest party chief since Chairman Mao (Hu was aged 59 when he became party chief
in November 2002 and 60 when he was elected to the state presidency in March 2003).
He is considered a protégé of the late reformist party chief Hu Yaobang (the CCP
officially commemorated Hu Yaobang's 90th birthday on 20 November 2005, the first
time an official celebration of the late general secretary of the CCP had been held, while
Hu Yaobang's daughter was allowed to publish memoirs of her father at the same time)
and heads a looser coalition of party cadres unaffiliated to Jiang Zemin's 'Shanghai
faction', with roots in the younger generation of provincial CCP leaders in China's poorer
provinces, reflecting his career in China's west and the party's Youth League. This has
made him popular in the broader party, which is at times sceptical if not envious of the
image-focused and more cartel-like power of the Shanghai region-dominated pro-Jiang
faction. However, this position as an alternative power centre has also reduced his
opportunities for top-level political experience.
A Qinghua graduate in hydro-engineering born in Jiangsu province and registered as a

native of Anhui province, Hu was Deng Xiaoping's unchallengeable choice to succeed
Jiang. He was recommended to Deng by party elder Song Ping in 1992, when Jiang's
tenure as CCP chief briefly became vulnerable (Jiang's initially leftist economic policies
were implicitly criticised by Deng during his second 'southern tour'). However, despite a
decade on the Politburo Standing Committee Hu, until 2002, was unable to gain
substantial operational experience of issues surrounding either security or foreign
affairs thanks to discreet blocking by the rival Jiang Zemin-Zeng Qinghong political axis.
Hu concentrated instead on domestic policy and party affairs.
Since his appointment as party chief in late 2002, Hu has moved away from a prior
strategy of avoiding all except the most uncontroversial policy statements. A variety of
statements and visits have been interpreted as marking out a distinct ideological
territory, including his December 2002 pilgrimage to the revolutionary shrine of Xibaipo;
comments made in favour of "plain living and hard struggle" in contrast to "the flattery
of the bourgeoisie" and "the weak-willed among our ranks"; much-publicised visits to
the needy in remote areas; and new aphorisms surrounding the need to serve the cause
of popular welfare (such as his "New Three Principles of the People").
Hu may have a vested interest in appealing to various traditional revolutionary themes

which have not been emphasised by the pro-Jiang faction in order to place them on the
ideological defensive. His rhetorical tapping of the original revolution should be seen
alongside his commitment to modernisation of the party along alternative lines from
the 'machine politics' style of the Jiang faction.
Hu is known to have asked his wife to resign from office when he became a Politburo
21
Standing Committee member in 1992, in order to prevent complications arising, a clear

difference in political style from that of the group surrounding Jiang Zemin. In his last
two years as head of the Central Party School in 2001-02, in collaboration with the rest
of the leadership, he is thought to have sent up to 2,000 high-level cadres to Eastern
Europe to study the evolution of post-reform communist parties there. Hu was also
tasked with implementing the July 1998 Central Committee decision to steer the
country's armed forces, armed police and law-enforcement authorities out of business
activities.
Wu Bangguo
Date Event
1941 Born and registered as a native of Feidong, Anhui province.
1964 Joined CCP.
1967 Graduated from Qinghua University from the Department of Radio Electronics.
1967- Worker and technician of Shanghai No. 3 Electronic Tube Factory, deputy chief and
76 chief of its technical section.
1976- Deputy secretary of the CCP Committee of Shanghai No. 3 Electronic Tube Factory,
78 deputy director of its revolutionary committee, deputy factory director, deputy
secretary of the party committee of the factory, and director of the factory.
1978- Deputy manager of Shanghai Electronic Elements Company.

79
1979- Deputy manager of Shanghai Electronic Tube Company.

81
1981- Deputy secretary of the party committee of Shanghai Meters, Instruments and
83 Telecommunications Bureau.
1983- Member of the Standing Committee of the CCP Shanghai Municipal Committee and
85 secretary of the CCP Municipal Committee in Charge of Science and Technology.
1985- Deputy secretary of the CCP Shanghai Municipal Committee.
22
91
1991- Secretary of the CCP Shanghai Municipal Committee.

92
1992 Elected member of the Political Bureau of the CCP Central Committee.
1994 Appointed member of the Secretariat of the CCP Central Committee.
1995 Appointed vice-premier of the State Council.
1998 Appointed secretary of the Work Committee of Large Enterprises of CCP Central
Committee.
1999 Appointed member of the CCP Leading Party Member Group and secretary of the
Central Work Committee of Large Enterprises.
2003 Elected chairman of the Standing Committee of the National People's Congress
(March).
2007 Re-elected to the Standing Committee of the Political Bureau of the CCP (October).
Although officially ranked number two in the Politburo Standing Committee after Hu
Jintao, Wu's position is not as influential as other committee members such as Zeng
Qinghong or Wen Jiabao who benefit from their state as well as party appointments. A
native of Anhui province, born in 1941, Wu is another Qinghua-educated engineer who
became chairman of the National People's Congress in March 2003, succeeding Li Peng.
He is also of the Jiang faction, having graduated to politics at the national level via
Shanghai. Wu moved from the party organisation of the Shanghai electronics company
into the Shanghai municipal party while Jiang Zemin was mayor. He gained his seat on
the Central Committee Politburo in 1992, a position as vice-premier in central
government in 1995 and a place on the Politburo Standing Committee in November
2002. Wu was granted responsibility for the reform of state-owned industries in the
mid-1990s, potentially a poisoned chalice as he could be scapegoated for any future
major reverse (such as social unrest) caused by China's industrial policy in this regard.
The rise in demonstrations, with some three million people protesting in 2006 according
to official figures, could prove limiting on Wu's future career.
23
Wen Jiabao
Date Event
1942 Born in Tianjin (September).
1960-65 Majored in geological surveying and prospecting of the No. 1 Department of

Geology and Minerals at Beijing Institute of Geology.
1965 Joined CCP (April).
1965-68 Postgraduate in geological structure at Beijing Institute of Geology.
1968-78 Technician and political instructor of the Geomechanics Survey Team under Gansu
Provincial Geological Bureau and head of its political section.
1978-79 Member of the Standing Committee of the CCP Committee of the Geomechanics
Survey Team under Gansu Provincial Geological Bureau and deputy head of the
team.
1979-81 Deputy section head and engineer of Gansu Provincial Geological Bureau.
1981-82 Deputy director-general of Gansu Provincial Geological Board.
1982-83 Director of the Policy, and Law Research Office of the Ministry of Geology and
Mineral Resources.
1983-85 Vice minister of Geology and Mineral Resources and director of the ministry's
political department.
1985-86 Deputy director of the General Office of the CCP Central Committee.
1986-87 Director of the General Office of the CCP Central Committee.
1987-92 Alternate member of the Secretariat of the CCP Central Committee and director of
the General Office of the CCP Central Committee.
1992-93 Alternate member of the Political Bureau of the CCP Central Committee, member
of the Secretariat of the CCP Central Committee, director of the General Office of
24
the CCP Central Committee.
1993-97 Alternate member of the Political Bureau of the CCP Central Committee and
member of the Secretariat of the CCP Central Committee.
1997-98 Member of the Political Bureau of the CCP Central Committee and member of the
Secretariat of the CCP Central Committee.
1998- Member of the Political Bureau of the CCP Central Committee, member of the
2002 Secretariat of the CCP Central Committee, vice premier of the State Council.
2002 Elected to the Standing Committee of the Political Bureau of the CCP (November).
2003- Premier of the State Council.

present
2007 Re-elected to the Standing Committee of the Political Bureau of the CCP (October).
A quickly rising Politburo member (he is formerly third in the Politburo hierarchy), Wen,
born in 1943, also holds the influential position of premier of the State Council. His well-
respected administrative skills have enabled him to be promoted without major debts
to his political patrons, and to survive his past association with the former party general
secretary, Zhao Ziyang, ousted in 1989, with whom he was photographed visiting
students on hunger strike in Tiananmen Square. He served very different political
leaders through the 1980s and early 1990s, as party chief of staff, and has since held
crucial portfolios. Apart from agriculture and finance (he was secretary of the CCP
Central Committee Financial and Economic Leading Group from 1992-2002), he helped
to develop the Western Development programme and draft the 10th Five Year Plan
(2001-05).
Wen enjoys a deft touch for genuinely unscripted photo opportunities with ordinary
members of the public, allowing him to cultivate a reputation for being accessible. This
has granted him a positive public relations profile - prior to his appointment as premier
in March 2003, an online poll ranked him the most popular member of the Politburo.
Although Zhu Rongji was Wen's most recent political patron, Wen evidently has a
different political style. While Zhu was famously abrasive, and a favourite with foreign
investors who admired his political brand, Wen has a more consensual approach.
Jia Qinglin
25
Date Event
1940 Born and registered as a native of Botou, Hebei province.
1958 Graduated from Shijiazhuang Industrial Management School in industrial enterprise

planning.
1959 Joined the CCP.
1962 Graduated from Hebei Engineering College in electric motor and appliance
engineering
1962- Technician of the Complete Plant Bureau of the First machine-building Industry
69 Ministry and deputy secretary of its Communist Youth League Committee
organisation.
1969- Manual work in the May 7th Cadre School of the First machine-building Industry
71 Ministry in Fengxin County, Jiangxi Province.
1971- Technician of the Policy Research Office of the General Office of the First machine-
73 building Industry Ministry.
1973- Chief of the Product Management Bureau of the First Ministry of machine-building
78 Industry.
1978- General manager of China National Machinery and Equipment Import and Export
1983 Corporation.
1983- Director of Taiyuan Heavy Machinery Plant and secretary of its CCP committee.
85
1985- Member of the Standing Committee of the CCP Fujian Provincial Committee and its
86 deputy secretary.
1986- Deputy secretary of the CCP Fujian Provincial Committee and head of the
88 Organisation Department of the CCP Fujian Provincial Committee.
1988- President of the party school of the CCP Fujian Provincial Committee and secretary of
90 the Work Committee of Departments under the CCP Fujian Provincial Committee.
26
1990- Deputy secretary of the CCP Fujian Provincial Committee, deputy governor and acting
91 governor of Fujian Province.
1991- Deputy secretary of the CCP Fujian Provincial Committee and governor of Fujian
93 Province.
1993- Secretary of the CCP Fujian Provincial Committee and governor of Fujian Province.
94
1994- Chairman of the Standing Committee of the Fujian Provincial People's Congress.
96
1996- Deputy secretary of the CCP Beijing Municipal Committee, vice-mayor, acting mayor
97 and mayor of Beijing.
1997- Appointed member of the Political Bureau of the CCP Central Committee and
99 secretary of the CCP Beijing Municipal Committee.
2003 Elected chairman of the 10th National Committee of the Chinese People's Political
Consultative Conference (March).
2005 Attended funeral of Zhao Ziyang (January).
2007 Hu's theory of 'harmonious society' was incorporated into the constitution (October).
Jia is formally the fourth-ranking member of the Politburo Standing Commitee, although
he retains less influence in state bodies than fifth-ranking Zeng Qinghong. He was
appointed chairman of the Chinese People's Political Consultative Conference (CPPCC),
a purely consultative body meant to provide a forum for non-communist, civil society
and overseas Chinese elements, in March 2003.
Jia was born in 1940 in Qingdao in Shandong province but is registered as a native of
Hebei province. Another Qinghua-educated engineer (specialising in electrical
machinery), he worked in the engineering industry for many years, moving into party
work in the industry. A close friend of Jiang Zemin since the 1970s, he rose through the
party ranks in the Fujian provincial organisation, becoming party secretary and
provincial governor. He moved to the Beijing municipal government in 1996 and
became mayor in 1997, opening the road to the national party hierarchy as he became
a member of the Politburo.
27
Jia owes his political survival since 1999-2000 to Jiang Zemin, who appeared on Chinese
state television side by side with Jia, then Beijing mayor, after Jia's wife was directly
implicated in the multi-billion dollar Xiamen smuggling scandal. This effectively
immunised Jia from criticism and therein saved him.
Jia was the most senior Chinese official to attend the funeral of former premier and
reformer Zhao Ziyang in January 2005 and appears to have assumed the role of co-
ordinating policy on Taiwan under Hu.
Li Changchun
Li Changchun was born in 1944 in Dalian, Liaoning province. He joined the CCP in 1965,
and graduated in 1966 from the Department of Electrical Machinery, Harbin Institute of
Technology specialising in the automation of industrial enterprise. From 1968 to 1980,
he held technical and management posts in the field of electrical machinery in
Shenyang, and played a strong role in the factory's party affairs. Through the 1980s, he
held party posts of growing importance, becoming secretary of the CCP Municipal
Committee of Shenyang in 1983, and later mayor of the city. From 1987, he was
governor of Liaoning province, but three years later he moved to Henan province,
where he held gubernatorial posts, and eventually became secretary of the CCP Henan
Provincial Committee.
Li has been a CCP Central Committee member since 1987, and a Politburo member
since 1997. The gradual advancement of Li's CCP career, from factory level to senior
ranks, as well as his technical background, are characteristic of many members of the
CCP's 'fourth generation' of leadership. Before Hu Jintao succeeded Jiang Zemin, Li was
also considered by many an outside candidate for higher office. Li's appointment as
party secretary of Guangdong province in 1997, replacing Xie Fei, a Guangdong native,
proved unpopular with Cantonese local officials.
Xi Jinping
Xi Jinping is officially the sixth-ranked member of the Politburo, but this position belies
the fact that he is potentially the next president of China.
Xi is one of the leading members of the 'fifth generation' (party members in their late
40s to mid-50s), and the most powerful member of the 'princeling' faction (comprising
the children of revolutionary CCP members). As the son of Xi Zhongxun, a former
deputy prime minister and active participant in the Chinese civil war, Xi has excellent
revolutionary and political credentials, despite his father having been purged during the
28
Cultural Revolution. Xi Zhongxun was also a firm proponent of market liberalisation

when Deng Xiaoping returned to power in the late 1970s. He was the governor of
Guangdong between 1979 and 1981, the province that hosted the country's first special
economic zone in Shenzhen in 1980.
Xi Jinping was born in June 1953 in Beijing, but is a native of Fuping county, Shaanxi
province. After serving from the age of 16 as a manual labourer during the Cultural
Revolution following his father's purge, Xi was educated in chemical engineering at
Beijing's Tsinghua University from 1975. He began his professional political career at the
General Office of the Central Military Commission in 1979, before joining the Zhengding
county CCP committee in Hebei province in 1982. Xi moved to Fujian province in 1985,
rising to governor by 2000. From there, Xi's rise was rapid, becoming deputy secretary
and then secretary of Zhejiang's CCP provincial committee in 2002. In March 2007, he
was promoted to secretary of the Shanghai municipality committee, one of the most
powerful positions outside of the Politburo in the country. In October of the same year,
just seven months after his promotion to the Shanghai position, he was appointed to
the Politburo Standing Committee and subsequently assumed the presidency of the
Central Party School from Zeng Qinghong, reflecting his likely future promotion to vice-
president.
Partly owing to the meticulously arranged pecking order of the Politburo Standing
Committee, Xi replaced 68-year old Zeng Qinghong as president of the party Secretariat
and secretary of the Central Party School, suggesting that Xi will in the near future be
designated vice-president (Zeng became vice-president within a year of assuming the
Central Party School presidency). Zeng retired from the Politburo in October 2007
having passed the retirement age of 67. This effectively means that Xi will take over
from Hu as party chief at the 18th CCP Congress in 2012 and is in line to be the next
president of China, unless a significant change occurs.
Xi's rise is largely attributable to his status within the 'princeling' faction. While
President Hu Jintao was forced to negotiate with the 'Shanghai' faction for promotion of
his Communist Youth League allies, Xi represented a suitable, competent and neutral
choice as potential successor. The primary challenge for Xi now is to remain detached
from factional struggles that may harm his progress.
Li Keqiang
Li Keqiang, the other member of the 'fifth generation', alongside Xi Jingping, in the
Politburo Standing Committee is viewed as a protegé and firm ally of President Hu
Jintao. Li was a first secretary of the Communist Youth League (CYL) Central Committee,
a position previously held by Hu eight years previously, and as such is regarded as one
29
of Hu's CYL faction.
Born in July 1955, Li was active in CCP politics from a young age. After serving as a
manual labourer during the Cultural Revolution from 1974, he joined the CCP in 1976
and participated in university politics while studying law at Beijing University from 1978,
becoming president of the university's CCP organisation. Upon graduation in 1982, he
became secretary general of the All-China Students' Federation, effectively a students'
union. His involvement with the CCP's youth organisations was further entrenched in
1983, when he became an alternate member of the CYL Central Committee, and
subsequently a full member in 1985. After serving as vice-chairman of the All-China
Youth Federation, a federated body of youth organisations centred upon the CYL, Li
became the first secretary of the CYL Central Committee in 1993.
Li graduated to provincial politics in 1998, when he assumed the position of deputy

secretary in Henan's provincial committee, before being promoted to secretary in 2002.
He became Liaoning provincial secretary in 2004, until his eventual elevation to the
Politburo Standing Committee in October 2007.
Although initially viewed as a potential successor to Hu Jintao given his CYL background
and technocratic reformism, the political horse trading that accompanied the 17th CCP
Congress meant that Xi Jinping was favoured ahead of Li for his neutrality. Nonetheless,
Li stands in a strong position to be promoted to premier once the Hu generation steps
down in 2012.
He Guoqiang
He Guoqiang is the eighth-ranked member of the Politburo Standing Committee, having

been elevated to the committee in October 2007.
Born in October 1943, He is a native of Xiangxiang in Hunan province. After graduating

from Beijing University with a degree in chemical engineering, He joined the CCP in
1966, and the Lunan chemical fertiliser plant the following year, working his way from
being a technician to being the deputy director by 1978. In 1980, He joined party politics
becoming the director of the People's Government in Shandong province, before
working for the Department of Chemical and Petroleum Industry between 1982 and
1986.
He's career continued to encompass CCP political positions, as deputy secretary and
then secretary of Jinan city CCP committee between 1986 and 1991, and employment
related to his chemical engineering background, as demonstrated by his elevation to
vice-minister of chemical industry between 1991 and 1996.
30
He's period of provincial politics was concentrated in China's economically dynamic

Fujian province and one of its largest cities, Chongqing. The politician was acting
governor and then governor of the former from 1996, and secretary of the municipal
committee of Chongqing for three years from 1999 (there are four directly controlled
municipalities in China, equivalent in the administrative hierarchy to provinces; Beijing,
Shanghai, Tianjin and Chongqing).
He Guoqiang's promotion to national CCP politics came at the 16th CCP Congress in
October 2002, when he became a member of the Politburo (ranked 21st in the
hierarchy) and the CCP Secretariat, given his position as director of the Organisation
Department, the body responsible for personnel within the party. He was reaffirmed as
a member of the Politburo and rose to the ranks of the Standing Committee in October
2007, at which point he also became secretary of the Central Commission for Discipline
Inspection, the counter-corruption body for the CCP.
Zhou Yongkang
Zhou was born in 1942 and is a native of Jiangsu province. He became minister in this
key public order portfolio in the 1998 government and retained his post at the 10th
National People's Congress in March 2003.
Besides being on the Politburo, Zhou is a member of the CCP Secretariat. These
positions could lead him to have influence over China's internal security establishment
to parallel that of Luo Gan, the Politburo Standing Committee member tasked with law
and order for the past decade. Prior to taking cabinet rank, Zhou was first political
commissar of the paramilitary People's Armed Police (PAP). Zhou is Zeng Qinghong's
brother-in-law and thought to be close to the vice-president.
Party elder profiles
Jiang Zemin
Date Event
1926 Born in Yangzhou, Jiangsu province (August).
1946 Joined the Chinese Communist Party (April).
31
1947 Graduated from Jiaotong University in Shanghai.
1950- Shanghai Yimin Food Product Factory, assistant engineer; chief of the Labour Affairs
54 Division and the Power Workshop, party secretary and deputy director of the factory.
Shanghai Soap factory, first deputy director. Shanghai Second Design Branch Bureau
under First Ministry of Machine Building, chief of the Electric Division.
1955 Stalin Automobile Plant in Moscow, Soviet Union, trainee.
1956- Number I Changchun Automobile Plant, deputy chief of the Power Division; deputy
61 chief electrical engineer and director of the Power Branch Factory.
1962- Desputy director of Shanghai Electrical Science Research Institute under the First
79 Ministry of Machine Building; director and acting party secretary of the ministry's Heat-
Processing Mechanics Research Institute. Deputy director and director of the ministry's
Foreign Liaison Department.
1980- State Commission for the Administration of Imports and Exports, State Commission for
82 the Administration of Foreign Investment, vice-chairman, secretary-general and
member of leading party group.
1982 Elected member of the CCP Central Committee at the party's 12th National Congress.
1982- Ministry of Electronics, first vice-minister, deputy secretary of leading party group,
85 minister and party secretary.
1985- Shanghai mayor, deputy secretary and secretary of the Municipal Party Committee.
89
1987 Elected member of the Political Bureau of the CCP Central Committee (November).
1989 Elected member of the Political Bureau's Standing Committee and general secretary of
the CCP Central Committee to replace Zhao Ziyang (June).
Elected chairman of the CCP Central Military Commission (November).
1990 Elected chairman of the PRC Central Military Commission (March).
1992 re-elected general secretary of the CCP Central Committee and chairman of the CCP
Central Military Commission (October).
32
1993 Elected president of China and re-elected chairman of the PRC Central Military
Commission (March).
1997 re-elected general secretary of the CCP Central Committee and chairman and general
secretary of the CCP Central Military Commission (September).
1998 re-elected president of China and chairman of the PRC Central Military Commission
(March).
2002 re-elected chairman of the CCP Central Military Commission (November).

Resigned as CCP general secretary (November).
2003 re-elected chairman of the CCP Central Military Commission (March).

Resigned state presidency (March).
2004 Resigned as chairman of the CCP Central Military Commission (September).
2005 Resigned as chairman of the PRC Central Military Commission (March).
Jiang renounced his final official post at the meeting of the National People's
Conference in March 2005, six months after his resignation from the CCP Central
Military Commission. The difference in timing between the two resignations is because
the CCP Central Committee, which met in September 2004, can nominally only make
decisions regarding party leadership, while the National People's Congress and its
Standing Committee, which met in March 2005, can make decisions regarding state
positions.
Despite the lack of any official role, it is likely that Jiang will continue to influence policy
on the basis of his personal reputation and his position as a party elder. Hu Jintao has
publicly affirmed that the 'Three Represents' and 'Jiang Zemin Thought' are bases for
Chinese communism. However, there is also evidence that Hu Jintao has been able to
guide Chinese policy in the direction of his own choosing - for example, in his emphasis
on 'inner-party democracy' and on the widening of the impact of Chinese economic
growth. Although decision making within the CCP elite continues to take place behind
closed doors, there is no evidence that Jiang's resignations have changed the current
pattern of Chinese policy making, which is the product of negotiation between different
interest groups, including Jiang's own 'Shanghai faction'.
Zeng Qinghong
33
Date Event
1939 Born native of Jian, Jiangxi province (July).
1960 Joined CCP (April).
1963 Graduated from the Automatic Control Department of the Beijing Institute of
Technology.
1963- Technician in People's Liberation Army (PLA) unit no.743.

65
1965- Technician of No. 6 office, No. 2 department of the 2nd Academy, the Seventh
69 machine-building Industry Ministry.
1969- Manual work at Chikan base of Guangzhou PLA and in Xihu production centre in
70 Hunan province during Great Proletarian Cultural Revolution.
1970- Technician of No. 2 Department of the 2nd Academy, the Seventh machine-building
73 Industry Ministry.
1973- Technician of Production Division and Science and Technology Division, Beijing Office
79 of National Defence Industry.
1979- Secretary of the General Office of the State Planning Commission.

81
1981- Deputy division director of the General Office of the State Energy Commission.
83
1983- Deputy manager of the Liaison Department of China National Offshore Oil Corporation
84 (CNOOC); deputy director of the Foreign Affairs Bureau of the Ministry of Petroleum
Industry; secretary of the CCP Committee of the South and Yellow Seas Petroleum
Corporation
1984- Deputy head and head of the Organisation Department, and member of the Standing
86 Committee of and secretary-general of the CCP Shanghai Municipal Committee.
1986- Deputy secretary of the CCP Shanghai Municipal Committee
34
89
1989- Deputy director of the General Office of the CCP Central Committee.
93
1993- Director of the General Office of the CCP Central Committee; secretary of the Work
97 Committee for Offices Directly Under the CCP Central Committee.
1997 Elected alternate member of the Political Bureau of the CCP Central Committee;
member of the Secretariat of the CCP Central Committee (September).
1999- Head of the Organisation Department of the CCP Central Committee.

2002
2002 Elected to the Standing Committee of the CCP Political Bureau and re-elected member
of the CCP Secretariat (November).
President of the CCP Central Committee Party School (December).
2003 Elected vice-president of China at the First Session of the Ninth National People's
Congress (March).
2007 Resigned from the CCP Politburo and was replaced as president of the Central Party
School (October).
Formerly the fifth highest-ranking member of the Standing Committee, Vice-President

Zeng Qinghong is more influential throughout the party and state apparatus than this
classification suggests. He is understood to be the organisational eminence grise and
intellect responsible for many of Jiang Zemin's key political decisions during the latter
half of his premiership. He has cultivated and fulfilled a reputation as an exceptionally
astute political operator, although this has come at the expense of his popularity within
the broader party and contributed to his notoriety. His political relationship with Jiang
began in Shanghai and the two are extremely close by all accounts.
During the 1990s Zeng performed the vital role of moving Jiang's opponents out of the
way - notably former president Yang Shangkun and his brother Yang Baibing, prominent
on the Central Military Commission. Zeng is also a CCP 'princeling' as the son of the
revolutionary hero of the 1930s, Zeng Shan. Zeng Shan began working life as a rickshaw
runner - endowing his son with an impeccable revolutionary pedigree. Zeng Shan was
vice mayor of Shanghai in 1949 and minister of internal affairs in 1960.
35
Zeng has frequently been of invaluable assistance to Jiang Zemin, to the extent that he
has faced opposition within the party as a result of this support. This fact may have
explained his delay in gaining full Politburo status (in November 2002), when his
meteoric rise from alternate status to Standing Committee member was notable. In
turn, his work as director of the party's organisation department from 1999 gave him
control of party employment. For example, in July 2002, the CCP Central Committee
promulgated its Regulations of the Work of Selecting and Appointing Leading Cadres for
the Party and Government - modification of these regulations was 'sponsored' by Zeng.
Although Zeng had no formal position in China's military command structure, he has
served as Jiang's liaison with top army commanders, granting him considerable informal
influence in the PLA. However, he appears to be more than a mere superb tactician of
the status quo or 'machine politician'. Zeng is held to favour incremental political reform
and must harbour his own vision of the likely evolution of the CCP over the longer term.
Zeng officially retired from the Politburo on 22 October 2007, and became secretary-
general of the 17th CCP Congress. His roles as secretary of the Central Party School and
president of the Secretariat were assumed by Xi Jinping, reflecting the fact that Xi is
likely to take the vice-presidential role in the near future and be installed as the heir
apparent to Hu Jintao.
Wu Guanzheng
Born in 1938, Wu Guanzheng was ranked seventh in the Politburo Standing Committee.
A native of Yugan in Jiangxi province, Wu joined the CCP in 1962, and graduated with
postgraduate qualifications in thermal measurements and automatic controls from the
Power Department of Qinghua University. He began work as a technician in 1968,
spending his early career in Wuhan, Hubei province. In 1982, Wu became secretary of
the Wuhan Municipal Committee, where he eventually held the post of mayor. Four
years later he moved to his native Jiangxi province, where he served as secretary of the
CCP Municipal Committee, as well as holding the post of provincial governor.
Wu joined the CCP Central Committee in 1987, and the Politburo Standing Committee in
2002. He also held the post of secretary of the Central Committee for Discipline
Inspection. Wu's rise followed a typical pattern for Qinghua graduates. He acted as
'Political Counsellor', a sign of future importance in the party. Since his rise to higher
office, Wu has apparently, in a manner characteristic of the patronage networks at the
heart of Chinese elite politics, promoted the careers of former subordinates (mìshu) in
Jiangxi, including Shu Shengyou, Shu Huiguo, Huang Zhiquan and Cheng Andong. Wu
officially retired from the Politburo Standing Committee on 22 October 2007.
36
Luo Gan
Luo Gan was the oldest member of the Politburo Standing Committee until his
retirement on 22 October 2007. Luo was born in 1935 in Jinian, Shandong province, and
joined the CCP in 1960. He studied at the Beijing Institute of Iron and Steel Engineering,
and then at Karl Marx University, Leipzig, east Germany in 1955. He graduated in 1962
from the Freiburg Institute of Mining and Metallurgy, Leipzig, specialising in machine
casting. From 1962, he held a series of technical and management posts at the 1st
Ministry of Machinery Building.
In 1980, Luo was posted to Henan province as vice-governor, and, from 1983, played a
senior role in the All-China Federation of Trade Unions. He became a CCP Central
Committee member in 1987, and a Politburo Standing Committee member ten years
later. Luo was also secretary of the CCP Political and Legislative Affairs Committee.
State Council profiles
Hu Jintao, president
Hu Jintao retains the most powerful position within the state apparatus, as president of
the State Council. His appointment in March 2003, succeeding Jiang Zemin, was one
step in the process of assuming control of the party, state and military from Jiang.
Zeng Qinghong, vice-president
Zeng's position as vice-president demonstrates the influence held by Jiang Zemin's ally
within the state body, belying his official fifth-ranking in the CCP's executive body.
Wen Jiabao, premier
Wen replaced Zhu Rongji as premier of the State Council at the 10th National People's
Congress in March 2003.
Wu Yi, vice premier
Wu was born in 1938, a native of Wuhan, Hubei province. She is vice-premier in charge
of foreign trade and foreign affairs. A graduate (1962) of the Beijing Petroleum Institute
majoring in oil refinery engineering, her early career was in the petroleum industry. She
rose to cabinet level in the 1990s with roles in foreign trade: she was minister of foreign
economic relations and trade 1993-97 and state councillor from 1998-2002. She is a
37
rare protégé of former premier Zhu Rongji and the only vice-premier not to be plucked
from the Jiang Zemin faction, meaning she has built her career on policy expertise
rather than political affiliation.
Wu has been a useful international diplomat in her role as vice-premier, visiting Japan in
May 2005 soon after anti-Japan riots in China. She has also been adept at informally
enunciating Chinese foreign policy, criticising the US in June 2005 for its heavy-handed
approach to Chinese textile exports. In November 2007, Wu announced her intention to
retire at some point during 2008. Although rumours had persisted that she might take a
post in an official party body after her retirement from the cabinet, she stated clearly
that this would not be the case.
Zeng Peiyan, vice premier
Zeng, vice-premier in charge of industry, was born in 1938 and is a native of Shaoxing,
Zhejiang province. He joined the party at the age of 39, later than most senior cadres.
His career profile is that of an engineer technocrat. He graduated from the Radio and
Electronics Department of Qinhua University in 1962. Between 1982 and 1984, he was
second and then first secretary of the commercial office of the Chinese Embassy in
Washington, DC. He rose to State Council level in the 1990s with responsibility for the
machine-building and electronics industry and in the Economic and Financial Leading
Group. Since 2001 his responsibilities have included the Three Gorges dam project and
the Western China Development programme. He is understood to be linked to the
Shanghai faction.
Hui Langyu, vice premier
Hui, born in 1944, is a native of Yushu, Jilin province. A member of China's highly
assimilated Hui minority, he graduated with a junior college education from the
Agricultural School of Jilin Province in 1964. After a brief spell of manual labour in his
home county in 1968-69 he subsequently rose to governor of Anhui province in the late
1990s via a succession of posts with mostly rural responsibilities. He was party secretary
of Jiangsu province in 1999-2002 before being promoted to the Politburo by the
National Party Congress in November 2002. He is vice premier with responsibility for
agriculture and is linked to Jiang Zemin's Shanghai faction.
Cao Gangchuan, minister of national defence
General Cao holds the largely honorific post of national defence minister within the
State Council, but is also one of the three vice-chairmen of the CCP and PRC Central
38
Military Commissions, providing Cao with a strong voice in military affairs. Cao, an
expert on missiles and missile operations with a background in procurement rather than
direct military command, was born in Wugang, Henan province, in 1935. He joined the
People's Liberation Army (PLA) at the age of 19 and the CCP at the age of 20. He was
sent to the Soviet Union in 1957 where he graduated from the Soviet Army Artillery
Academy in 1963.
Rising via the General Logistics and General Staff Departments in the 1970s and 1980s,
Cao gained experience in military trade with Russia and Europe. In 1992, he became
deputy chief of the PLA general staff. In 1998, he became head of the newly formed PLA
General Equipment Department and has encouraged the policy of large-scale weapons
purchases from Russia. He was elected vice-chair of the CCP Central Military
Commission by the 16th National Party Congress in November 2002. During the March
2003 National People's Congress he was also elected state councillor and vice chair of
the PRC Central Military Commission.
39
SECURITY
State stability
Political stability
Economy
Separatism
Environment
Social stability
International Relations
Bilateral
Multilateral/Regional
Proliferation and Procurement
State illegal
Terrorism and Insurgency
National Separatist
Organised Crime
Organised crime groups
Trafficking
Human
State stability
• The diversity and size of the People's Republic of China presents various problems
for the Chinese Communist Party (CCP) in attempting to sustain the unity and
cohesion of the country and its own authority and role as the sole political party.
40
• Of most concern in the medium term is the prolonged period of rapid economic
growth that the country is undergoing. Despite government efforts to balance
growth and promote rural development there is a significant wealth gap between
China's rural and urban population. This has created social tension, causing
discontent in the countryside and driving a tide of rural-urban migration. Moreover,
excessive growth and high levels of inflation, which have been the product of years
of easy credit, a poor regulatory culture and a high level of foreign direct
investment, exacerbate this discontent. Rising prices for foodstuffs and heating
materials are becoming perhaps the most significant security threat to the CCP.
• Discontent over the economic situation has been exacerbated by corruption within
the CCP, especially among local officials. Rampant corruption, particularly land
confiscation, has resulted in a series of public protests across the country that may
erode the legitimacy of the CCP as a whole. Although President Hu Jintao has for the
moment been able to utilise local protests to support economic and CCP reform, this
remains a concern.
• China also suffers from a range of lower-level but destabilising problems, including
already alarming HIV infection rates and demographic imbalances. The one-child
policy has resulted in a significant gender disparity: as a result, a generation of
enforced bachelors has been created, which could lead to social problems. The
increasing longevity of the population could increase social disorder, and poses a
direct threat to the country's prosperity.
Political stability
To counterbalance the various centrifugal forces threatening Chinese stability, the CCP
has attempted to reinforce its legitimacy through Chinese nationalism, with the party
no longer able to rely on communism or revolutionary principles. Specifically, China's
rise in prosperity, and growing reputation as a key international power is presented as
justification for the CCP's authoritarian regime. Consequently, domestic factors that
threaten the CCP's claim to have brought strength and prosperity to the country may
directly threaten regime security. In particular, a potential economic crisis, manifest
party corruption, and widening rural-urban wealth could directly jeopardise regime
security, by destroying popular faith in the CCP. The speed and degree to which
nationalism can drive popular sentiment was demonstrated by the scale of the anti-
Japanese protests that took place in April 2005. At present, nationalist sentiment
remains strongly pro-CCP. However, the CCP's legitimacy now depends on satisfying the
broad needs of Chinese nationalism, particularly through economic growth and robust
international policy, and this is likely to remain a key parameter constraining policy
choices for the foreseeable future.
Societal
41
There are currently no organised anti-CCP groups capable of launching a revolution

against the CCP, as such a movement would require large-scale organisation co-
ordination and communication on a national level, making it vulnerable to repression.
Localised uprisings are therefore currently the greatest short-term threat to China's
internal stability. Traditionally, attention has focused on pro-democracy activists,
particularly following the 1989 Tiananmen Square massacre, but the most pressing
problem for the CCP actually arises from rural uprisings over party corruption and the
rural-urban wealth divide.
Rural discontent
The legitimacy of the CCP is a particular concern in rural areas, where the gap between
rural and urban incomes, and widespread corruption among rural officials, have left
relations between peasants and party cadres heavily soured. As a result, the number of
localised protests has increased recently, on occasion in direct conflict with CCP rule.
According to the Ministry of Public Security, public protests rose 6.6 per cent in 2005,
for a total of 87,000 cases compared to 2004's 74,000 protests and 2003's 58,000. These
figures are unverifiable, and indeed may be exploited by the government simply to
highlight an issue and subsequently demonstrate the government's effective response.
Hence, Vice-Minister for Public Security Liu Jinguo claimed in April 2007 that mass
incidents handled in 2006 was down 16.5 per cent on the year before, while provinces
in April 2007 began to report a decline in the number of 'mass incidents', with Shaanxi
province reporting a 27 per cent decline, Henan a 36 per cent fall, Zhejiang over 30 per
cent decease, and Jiangsu a 44 per cent reduction. These figures contrast with estimates
from City University of Hong Kong, which claimed that 94,000 mass protests occurred in
2006.
Despite doubt over official figures, reports of protests have become more common.
These protests have also become increasingly violent, and such unrest has become one
of the primary threats to CCP legitimacy and China's internal stability. This is further
amplified by the lack of any well-regulated legal structure for dealing with disputes
between local officials and the population at large (beyond the antiquated tradition of
'petitioning'), leaving public protest as one of the only options available to aggrieved
parties.
Although often incited by individual cases of perceived corruption, in reality the

underlying issue behind these protests is simply the extreme poverty of China's rural
population. Poverty makes the rural population particularly sensitive to price
fluctuations and other hardships, which easily spill over into social discontent.
Anything that affects the lot of rural labourers is therefore liable to excite localised
unrest. For example, one of the foremost catalysts for protests is the confiscation of
42
land for development. Some estimates put the number of farmers whose land has been
requisitioned since the mid-1990s in excess of 66 million. While some of these
requisitions took place as part of large, state-sponsored projects like the Three Gorges
Dam or preparations for the 2008 Olympic Games in Beijing, the majority of requisitions
were the work of local officials looking to profit from China's development boom. The
introduction of new legislation in March 2007 that guarantees private property
ownership from illegal requisition, looting and destruction, the first such property law
enacted in the country and a significant demonstration of the move away from
socialism, will benefit urban homeowners but will likely do little to protect rural
labourers. All land is still owned by the state, and rural labourers enjoy land-usage
rights, but no title deeds (in contrast, urban housing can be leased for a period between
50 and 70 years).
A significant example of the potential for unrest from land requisition was provided in
December 2005, when People's Armed Police officers opened fire on a crowd of
protestors in Dongzhou village, near Shanwei in the southern Guangdong province.
Authorities claimed that three people were killed in the violence, while demonstrators
stated that the figure was closer to 20. The protest was attempting to prevent further
land seizures for the construction of a power plant near the village. The incident, which
occurred in the prosperous province of Guangdong, undergoing large-scale property
development, provided the first example of deaths caused by shooting on a
demonstration since the Tiananmen Square repression in 1989.
A similar example was provided in April 2005 when the town of Huaxi in the eastern
Zhejiang province revolted and forced the 1,000-strong police force to retreat from the
town. The 20,000-strong uprising was motivated by the seizure of 66 ha of land by party
officials, who then sold the land to private and state-owned chemical firms. However,
the Huaxi event also highlighted one of the various other motivations for discontent,
namely pollution. Dissatisfaction at the perception of corruption was heightened by
fears of chemical spills and latent poisoning after illnesses were reported by members
of the population.
Alongside land requisitions, pollution, especially industrial pollution has become one of
the main complaints leading to public unrest. A statement given at the October 2004
Central Committee meeting in Shanghai identified pollution as one of four issues
causing social disorder, owing to its effects on increasing poverty and hardship for rural
citizens.
Any factors that have an impact on the income of rural labourers can incite unrest. For
example, in May 2005 thousands of Tibetan farmers in Qinghai stormed and burnt
down government buildings in Zaduo to protest increased taxation. In March 2007, an
estimated 20,000 people rioted and clashed with 1,000 People's Armed Police
43
personnel in the village of Zhushan, Hunan province, over rising public transport costs
and perceived corruption.
Given this fact, inflation has become one of the primary security concerns for the CCP.
By early 2008, inflation had become a serious problem: despite efforts to control
lending by raising interest rates and increasing bank reserve requirements, the money
supply rose quickly in 2007 (M2 rose 16.7 per cent year-on-year by the end of 2007). To
compound this, total foreign direct investment rose 13.8 per cent in 2007, to a record
high of USD82.7 billion. This combined with rising global raw material and fuel costs,
and domestic crises like blue ear pig disease in 2007 and severe blizzards early in 2008
to bring a worrying level of inflation. The consumer price index was up 8.3 per cent
year-on-year in March 2008.
The government has imposed price caps to limit over the short term the immediate
social impact of inflation. However, longer-term measures have had limited success to
date: despite increases in interest rates, real rates remained negative in February 2008,
and regulatory measures to cap lending did not prevent bank lending growth figures
from reaching 16.7 per cent, and M2 growth from reaching 18.9 per cent by the end of
January.
Such trends are obviously a concern for the CCP, but although rural protests have
affected almost all areas of China, demonstrations remain isolated for the moment, and
often incited by specific issues such as corrupt local officials, forced eviction and
pollution, rather than the central authority of the CCP. Moreover, protests targeting
corrupt local officials can serve to consolidate Beijing's control over the provinces, and
perhaps also business interest groups, and act as further justification for President Hu
Jintao's reform programme. This could explain why the CCP has been willing to release
statistics detailing the scope of rural unrest, rather than concealing the problem.
Nonetheless, if the CCP were to fail completely to address the concerns driving local
protests, it is still possible that Beijing itself could become the target of further protests.
Should protests continue to grow in scale and frequency over time, the government
could begin to face a serious security threat. Public protests are mobilising a growing
number of people in China, and should these groups begin to join together, or adopt an
anti-CCP or pro-democracy agenda, a major threat to regime security could develop in a
very short time. Consequently, the CCP's ability to support rural incomes, stymie the
corruption of local officials and prevent further hardship through increasing food prices
may become a determining factor for regime security.
Urban unemployment
44
In addition to rural protests, China's uneven economic growth has driven a serious
demographic trend: massive rural-urban migration. Without real prospects in China's
hinterland, an estimated 120 million migrant workers have come to China's cities and a
further 80 million to the country's towns, according to 2007 estimates in government-
run media, and a further 300 million are expected to migrate over the course of the
next two decades (according to the Office of the Central Leading Group of Financial and
Economic Affairs in March 2006). Although the migrant population serves a valuable
role in keeping labour prices low, migrant workers live under poor conditions and are
considered by the government a potential source of crime or even civil unrest.
Part of the problems is the lack of employment available for rural-urban migrants. While
the CCP has set a target of keeping the urban registered unemployment rate to 4.5 per
cent in 2008 and below five per cent until 2010, the real unemployment rate including
laid off (xiàgang) workers is in the high single digits (official figures in March 2008
claimed the urban unemployment rate at four per cent in 2007, but these remain
unreliable in a sector extremely difficult to quantify). Furthermore, continued bank
lending to failing state-owned enterprises (SOEs) may be holding off potentially much
higher levels of unemployment. The result of this lending is that banks, despite the
large-scale infusion of capital, are still left with higher levels of non-performing debt
than would be acceptable for equivalent Western institutions. If China ever implements
a genuinely market-driven credit system, the resulting bankruptcies could lead to even
greater levels of unemployment.
At least 30 million workers are estimated to be surplus to requirements in state-run

firms, in addition to the 100 million to 150 million surplus workers in China's over-
manned agriculture. Industrial cities in northeast and central China are already seriously
affected by frequent but small-sized worker demonstrations, many over working
conditions or unemployment.
The lack of adequate social welfare has worsened the social impact of China's
unemployment and underemployment. Migrants workers have also suffered from
institutionalised discrimination. Under the traditional hùkou residence system, they are
still legally treated as farmers, and, until recently, they were subject to deportation to
the countryside under the 1982 Regulation for Internment and Deportation of Urban
Vagrants. There are some signs that the CCP is now paying more attention to the status
of migrants. The 1982 regulation was abolished by the State Council in October 2003 (in
response to the public outcry at the death of a migrant worker, Sun Zhigang, in
Guangzhou in March 2003), and corporate and government debts were ordered to be
paid to migrant workers. Despite these government efforts to improve social justice for
migrant workers, the underlying problem remains: China's rural-urban income
differential will likely continue to drive migration. Efforts to improve the status of
migrant workers can neither address the factors driving their movement, nor provide
45
enough employment to address their needs. Social justice measures, while important
from a political and a humanitarian perspective, ultimately play a secondary role when
compared to the government's effort to improve rural prosperity.
The problem of urban unemployment has few solutions other than a more equal
distribution of wealth and job creation at the national level, by increasing rural
prosperity to reduce the migration rate, and at the urban level, by creating jobs and
reducing the unemployment level in China's cities.
In 2007, efforts to increase urban employment created over 10 million new jobs in
urban areas, according to the Ministry of Labour and Social Security. However, not only
is it impossible to verify these government figures, but the current Ministry of Labour
and Social Security estimates place the required rate of employment to prevent future
rises in urban unemployment at 13 million. As such, urban unemployment, fuelled by
migration from rural areas, is highly unlikely to be significantly reduced and will, at the
least, continue to absorb policing resources and stimulate levels of crime, and possibly
lead to large pockets of unrest among former employees of SOEs, particularly in the
industrial heartland of the northeast (Heilongjiang, Jilin and Liaoning provinces in
particular).
Democratisation
A far lesser risk for the unity of China, although still a direct threat to the rule of the
CCP, is that a more affluent population will begin to demand political liberalisation
alongside economic liberalisation. The concern arises from the experience of Western
countries, where the historical pattern has often been of economic development
leading to the rise of the middle class and pressure for political and social liberalisation.
The effect of greater democratisation would not only be a direct menace for the CCP,
but in the party's view would also give increased voice to 'splittist' ideologies, including
separatists in the far west. The example of Indonesia after 1998, when the fall of
authoritarian President Suharto and rapid democratisation coincided with ethnic,
religious and separatist unrest across the archipelago, still acts as a warning to the CCP.
It should be noted that in China the middle classes in the coastal regions in particular
seem far more interested in the short term in continued prosperity than political
involvement. This phenomenon is mirrored in other Asian countries, such as Singapore,
where an affluent middle class seems more interested in a strong government that
brings prosperity, than in representative politics.
Nonetheless, domestic pressure for some degree of democratisation, or at least greater

political involvement, certainly exists, and the ideology has been rife within sections of
46
the society, as demonstrated by the Tiananmen Square demonstrations in 1989. The

delicate balance, which the CCP still sees itself facing, between concessions towards the
democratisation movement and the requirement to retain control of power was
illustrated by the official response to the death of Zhao Ziyang in January 2005.
Although Zhao died 15 years after the events that led to his ostracism from power (he
opposed the military crackdown at Tiananmen Square), the party displayed great
circumspection in announcing and commemorating his death. This delicacy is not
surprising given both the difficulties of ruling without a direct popular mandate, and
also the public unrest associated with the deaths of Zhou Enlai (1976) and Hu Yaobang
(1989).
One effort to alleviate pro-democratic pressure (or potential pressure) in China has
been in the form of an increased emphasis on political participation at the grassroots
level. This takes different forms in different areas, but the general trend is towards an
increase in public participation in administrative institutions at the local level,
particularly in rural areas. One form of this has been the increase in influence of local
civil and community organisations. Local administrative structures, such as at the village
level, also seem to be moving towards a more participatory format. It remains to be
seen whether this trend will be successful, and whether it will be effective in allowing
the CCP to retain its authority over the country, while satisfying local desires for greater
political involvement.
Overall, however, the appeal of democratisation in China does not seem to have been
great since Tiananmen. Although mass protests have taken place, in particular in rural
regions, where they occur with some regularity, these have been focused on more
specific issues such as party corruption and land seizure. In contrast to the Western
model, where increased prosperity and the rise of the middle classes led to pressure for
political involvement, in China prosperity seems to bolster the legitimacy of the CCP.
Admittedly, if the currently thriving urban middle classes were to lose their prosperity,
perhaps in the event of an economic collapse, it is likely that they would quickly become
dissatisfied with the CCP, leading to greater support for political change. For the
moment, though, although democratisation is a possibility, the CCP currently regards it
as little more than a minor medium-term threat, as the party faces greater challenges in
the difference in development between eastern and western provinces, between rich
and poor, and between urban and rural populations.
Corruption
Corruption has become a serious problem for the CCP central leadership, and is
colouring the relationship between party cadres and the poorer elements of rural China.
Former president Jiang Zemin even remarked that mainland corruption in the legal
system is now worse than in 1949, when the communists came to power. While the
47
post-Jiang political leadership in place since March 2003 convincingly signalled its
departure from the more laissez-faire philosophy of the Jiang era, the problem of
official corruption is now more deeply entrenched and even more extensive. Not only
could corruption threaten the country's economic development, but visible corruption
on the part of party officials may also undermine the CCP's public legitimacy. In recent
years, the requisitioning of farmland by local officials for development projects has led
to large-scale unrest in many rural areas.
Within the CCP, the corruption of lower-level officials weakens the ability of central
government to extract revenue from, and exercise authority over, the provinces.
Corruption within China has been exacerbated by the traditional Chinese emphasis on
personal influence and contacts (guanxì) rather than institutionalised norms in politics
and business. The personal relationships underlying the guanxì system are difficult to
formalise within the context of the law, and result in extensive 'off the record' dealings.
In response, Hu Jintao, in the context of his programme of 'inner-party democracy', has

made dealing with corruption and increasing accountability a key part of his mandate.
However, the motivation for this policy is not purely related to public perception of the
CCP; the party remains heavily factionalised, with different groups, like Jiang's 'Shanghai
faction' and the 'princelings', holding significant influence, and Hu's anti-corruption
campaign has allowed for the removal of Jiang loyalists from positions of power.
Corruption has become endemic in official circles because of low salaries, poor internal
supervisory controls, the rise of an increasingly money-oriented culture and the
expansion in economic activity and money in circulation. Gambling and a lavish lifestyle
have become common among senior party intellectuals and executives. In 2007, nearly
35,000 cases were investigated for corruption and bribery involving over CNY100,000 or
embezzlement of over CNY1,000,000.
While the central government has historically failed to take effective measures to
uncover corruption at all levels, it has very publicly prosecuted several prominent
individuals, both to demonstrate to the general public its intention to deal with
corruption seriously, and also as a high-profile deterrent to other officials.
A recent example of such high-profile anti-corruption investigations was the suspension

of Shanghai party secretary and Politburo member Chen Liangyu in September 2006.
Chen was dismissed for alleged misappropriation of approximately CNY3 billion
(USD380 million) within Shanghai's social security fund. He was convicted to 18 years'
imprisonment in April 2008 for bribery and abuse of power. The position of Chen as a
significant actor in Jiang Zemin's Shanghai faction led to speculation that his dismissal
was driven as much by Hu's anti-corruption campaign as a desire to remove a Jiang
loyalist from an influential position in China's most economically powerful city.
48
Chen was the most senior official to suffer from anti-corruption investigations since
former minister of land and resources Tian Fengshan, sacked for 'discipline violations' in
October 2003 and sentenced to life imprisonment in December 2005 for accepting
bribes of CNY4.36 million (USD538,270). Former Beijing mayor and Politburo member
Chen Xitong, a rival of President Jiang, was jailed for 16 years in 1998 over a USD2.2
billion corruption scam.
Economy
Beyond rural-urban migration and rural discontent, the remarkable economic growth
witnessed in China over the last three decades has also created a more fundamental
challenge for the CCP in its reliance on this growth to legitimise its continued
domination of the political sphere. The economy has grown at an average rate of over
9.7 per cent per annum (GDP) between 1979 and 2007, and hence China has been
perceived both domestically and internationally as a rising economic juggernaut. While
there is much truth in this assessment, the concern for Beijing is that an overheated or
structurally weak economy will lead to an investor backlash, or economic crisis, and
hence greatly undermine the authority of the CCP.
Access to electricity and raw materials has become a limiting factor for Chinese
industrial development. Energy shortages have been common over the past years, and
infrastructure has also proven unable to develop at the same pace as the overall
economy. Although improvements have been made, and extensive infrastructure
development is planned, this remains a constraint on Chinese growth. Despite a five per
cent increase in generating capacity, power shortages occurred in mid-2005, and factory
closures may be necessary in the future to conserve power, particularly in winter.
Furthermore, owing in particular to attempts to preserve failing SOEs in the late 1990s,
Chinese banks have accumulated significant amounts of non-performing debt. Attempts
to regulate lending, inject capital into the banks, and sell distressed debt have benefited
the banks, with non-performing loans owed to China's commercial banks in comparison
to total loans falling to 7.51 per cent in 2006 from 13.2 per cent in 2004, levels of bad
debt remain a hazard to the long-term prospects of Chinese banks. As of early 2008, the
non-performing loan ratio for major commercial banks in China was 6.72 per cent, and
8.05 per cent for state-owned banks. Although reformed bankruptcy laws have reduced
the burden of failing SOEs, the lack of a comprehensive social security system makes the
consequences of large-scale bankruptcies unpleasant. Stock market declines and falling
housing prices could also worsen the situation.
Chinese stock markets have also varied in their performance. Between 2001 and mid-
49
2005, the Shanghai and Shenzhen stock exchanges dropped to eight-year lows. This
discrepancy between GDP growth and market growth remained a concern as it
damaged the savings of the middle class Chinese population. Since their eight-year low
in 2005, the performance of China's stock markets has improved, in part due to
restrictions on private companies and citizens limiting investment in foreign equities (an
attempt to mobilise China's estimated USD3 trillion dollars in household savings),
increasing by some 300 per cent between mid-2005 and early 2007. The CCP announced
in April 2006 that restrictions on foreign currency purchases would be lifted from the
beginning of May 2006. This shift, aimed at reducing pressure on the yuan to
appreciate, suggested that the CCP is now confident enough in the prospects of its
equity markets that it can risk a reduction in the levels of domestic investment.
However, the volatility of these markets was again amply demonstrated in late February
2007, when the Shanghai and Shenzhen markets fell almost nine per cent owing to fears
over possible limitations on foreign ownership of shares and concern over the
probability of a bubble in the markets.
It is also not clear to what extent China's economic growth depends on the continued
flow of foreign direct investment (FDI). Certainly, China's industrial growth has been
significantly driven by foreign investors lured by low-cost labour and the prospect of
access to China's enormous population as a market. Consequently, where failing state-
owned enterprises depend on bank loans, most of China's successful private enterprises
have been privately financed, to a large extent through FDI. According to the Ministry of
Commerce, as of January 2006, accumulated direct FDI in China totalled some USD600
billion, approximately 35 per cent of GDP. Foreign investments in 2005 alone totalled
USD60 billion. However, foreign investors may have been optimistic. Labour costs have
risen in China's main industrial regions, and much of China's population has proved too
poor to be a useful market. There is at present no sign of (nor a particular reason for) a
withdrawal of FDI, but, if it were to happen, the consequences would likely be traumatic
for the Chinese economy.
In response to excessive growth, the Chinese government has attempted to moderate

growth rates, both through monetary measures (especially small interest rate increases)
and regulatory measures (especially restrictions on lending). These seem to have had
little effect on the overall rate of growth: high levels of FDI, the lack of a truly market-
based credit system, and the lack of concern for regulatory measures in China's business
culture have all limited the effectiveness of the government's measures.
As of early 2008, growth rates remain a concern. GDP grew by 11.4 per cent in 2007, as
compared with an official target of eight per cent announced in March 2007. By early
2008, inflation had become a serious problem: despite efforts to control lending by
raising interest rates and increasing bank reserve requirements, the money supply rose
quickly in 2007 (M2 rose 16.7 per cent year-on-year by the end of 2007). To compound
50
this, total FDI rose 13.8 per cent in 2007, to a record high of USD82.7 billion. This
combined with rising global raw material and fuel costs, and domestic crises like blue
ear pig disease in 2007 and severe blizzards early in 2008 to bring a worrying level of
inflation. The consumer price index was up 7.1 per cent year-on-year in January 2008.
Although it would be too much to suggest that China is heading for an economic
collapse, or even that such a collapse is likely, it remains to be seen how much of
China's recent growth has been structural, and how much has been cyclical. Unless
Beijing succeeds in moderating growth, improving banking regulations, and bringing
China's infrastructure up to par, China may face an economic crisis which could threaten
the popular legitimacy of the CCP.
Separatism
China's economic growth, despite improving communication infrastructure, has also

weakened central control over the provinces. Growing disparities in incomes underline
the possible regionalisation and fragmentation of China, with resentment and
dissatisfaction within rural areas as economic development fails to reach the
countryside. The broader problem is that China's rich-poor income gap has become so
large and capital has become so concentrated that there are state security implications.
President Hu Jintao has repeatedly called for measures to balance Chinese economic
development and bring the benefits of China's growing GDP to poorer regions since
coming to power in 2003. In particular, in contrast to Jiang Zemin's policy, Hu has set
relatively conservative GDP growth targets of between seven and eight per cent, and
promised fiscal measures to stimulate the rural economy. However, these figures have
consistently been proven unrealistic, with growth in 2007 of approximately 11.4 per
cent, and increasing discrepancies between rural and urban incomes.
The uneven nature of China's economic development has seen urban incomes,
particularly in the prosperous coastal provinces of Guangdong, Fujian, Shanghai, Jiangsu
and Zhejiang, significantly exceed those of rural areas. Furthermore, the disparity is
worsening, despite CCP efforts to improve rural prosperity (especially by reducing the
tax burden on farmers). In January 2008, the National Bureau of Statistics estimated
that urban incomes grew at the real rate of 12.2 per cent in 2007 to leave them at
CNY13,786, in comparison to 9.4 per cent in rural areas (to CNY4,140). This two-speed
economy not only drives rural poverty, but the relative economic freedom allowed by
Beijing has led to a desire for wealthy regions to increase their autonomy and
undermine central power.
Other regions suffer from more overt separatist, as opposed to regionalist autonomous,
sentiment, in particular the provinces in China's far west. Separatist sentiment in
51
outlying provinces and Draconian security measures, particularly in the west (Xinjiang
Uighur Autonomous Region) and southwest (Tibet Autonomous Region) of the country,
reflects a lack of allegiance to Beijing or the CCP. Beijing labels these avowedly pro-
autonomy movements as 'splittism'. Although the most obvious threat to Chinese unity,
the likelihood of any region actually seceding is extremely low given a lack of organised
resistance to Chinese presence, and hence 'splittism' poses less of a medium-term
threat than other socioeconomic factors. Furthermore, 'splittist' movements like Uighur
or Tibetan separatists are region-specific, and there is no likely mechanism by which
their concerns would spread to the Han Chinese population at large. China's policy of
encouraging the migration of Han Chinese to regions like Xinjiang and Tibet may also
help to reduce the likelihood of secession in the long term, both by diluting the
indigenous population itself, and by eroding their cultural and linguistic differences
(although in the short term, resentment at this policy increases the possibility of
separatist sentiment).
In addition, Hu Jintao, who has a strong loyalty base in the western and northeastern
provinces, has increased attention to the development of these regions. The president
has appointed several former officials of the Chinese Communist Youth League (CYL; a
central element in his faction) to posts as provincial chiefs in western and northeastern
provinces, such as Zhang Qingli, a former CYL Central Committee member, appointed
CCP secretary of Tibet Autonomous Region in May 2006. The pattern seems to be that
Hu is planning not only to establish a base of support in the Politburo (with his protegé
Li Keqiang promoted to the Politburo Standing Committee in October 2007, diluting the
previous domination by the Jiang Zemin/Zeng Qinghong faction), but also to ensure that
the next generation of CCP elite leadership has stronger ties to currently
underdeveloped provinces. While this has done little to alleviate the income
differentials and resentment at perceived Han or Hui Chinese cultural-linguistic
domination, it should ensure attention in Beijing is focused on these regions.
Finally, the autonomy enjoyed by Hong Kong Special Administrative Region and Macau
Special Administrative Region on China's southern coast demonstrate the limits to the
CCP's control. Nonetheless, no significant independence movements exist in these
regions, and despite periodic demonstrations bridling at Beijing's interference in the
political process, the pro-Beijing nature of both the HKSAR's and MSAR's political
leadership will limit any threat to the CCP for at least a decade.
Regionalisation in the southeast
Regionalism could be the largest problem facing the regime over the long term,
although with the exceptions of ethnic minority populations in outlying autonomous
regions such as Tibet and Xinjiang, none of the provinces actually demand absolute
autonomy from the central government. The social and economic difference between
52
the prosperous coastal provinces and poorer provinces, both inland and in the still-
depressed industrial northeast remains great, despite Hu Jintao's efforts to promote
rural growth. At the same time, the prosperous coastal provinces, which receive the
vast majority of foreign direct investment, have developed a degree of de facto
economic autonomy.
The central government's control over the provinces was steadily eroded by the
economic reforms after 1978. While Beijing retains firm control of the political and
coercive levers of power, its economic authority over the provinces has waned. Rising
corruption has also compromised CCP control over regional administration.
Prosperous, export-oriented coastal regions, many of which now have stronger trade
ties with foreign export partners than with the rest of China, have already built up
significant levels of de facto economic autonomy. In particular, despite fiscal reform
under Zhu Rongji in 1994, the central government's ability to share in provincial revenue
has remained limited. This, in turn, has limited the poorer provinces of China from
sharing in China's overall GDP growth.
In June 2004, the Pan-Pearl River Delta Regional Co-operation and Development Forum
was established, joining Hong Kong, Macau, Yunnan, Guizhou, Guangdong, Fujian,
Jiangxi, Hunan, Guangxi, Hainan and Sichuan into a single economic bloc. Such a move
primarily indicates the Pearl River Delta region's need to be more competitive with the
Shanghai region which, under the influence of Jiang Zemin's 'Shanghai faction' during
the 1990s, received the bulk of investments and loans from state-owned banks. This left
the Pearl River Delta area reliant on private loans and investments.
The establishment of the Pearl River Delta bloc also indicated an increased willingness
on the part of central government to tolerate the establishment of regional alliances.
While this tolerance may be indicative of a change in personal preference among the
CCP elite under Hu Jintao, it may also indicate that Zhu Rongji's reforms were successful
enough that regional economic alliances no longer threaten central fiscal control over
the provinces.
Separatism in the southwest
While separatist sentiment is rife in both Xinjiang and Tibet, the movement in Xinjiang
has been more greatly suppressed by Han migration: the Uighur population, as a
proportion of total population, has dropped from 94 per cent in 1950 to roughly 45 per
cent in 2000. As a result, Xinjiang discontent is less likely to manifest itself in protest and
unrest, although more liable to incite terrorist or insurgent attacks.
In contrast to Xinjiang, the primary threat to the CCP from the Tibetan separatist
53
movement remains unrest, demonstrated by the March 2008 rioting in Lhasa that left
19 people dead, according to official figures, or up to 150 dead according to the Tibetan
government-in-exile.
The Tibetan separatist movement has gained wide international recognition, largely
owing to the international profile of the Dalai Lama, the spiritual leader of Tibetan
Buddhism and world Lamaism. The CCP has therefore been eager to stress the
autonomy delegated to the province, in particular with Tibetans assuming roles in the
local government. However, in reality power rests with the party and those Tibetans in
government are avowedly pro-Beijing.
As with Xinjiang, anti-Beijing resentment is rife, but the moderating influence of the
Dalai Lama, who espouses an ideology of peaceful negotiation, has lessened the
potential for non-state violence. The installation of a new administration in Beijing has
eased relations with the Dalai Lama and a self-appointed government-in-exile in
Dharamsala, northern India, and led to a renewal of negotiations in 2003. Although an
independent state remains the goal for some Tibetans, a realisation that this objective is
unfeasible has led to the Dalai Lama offering a 'middle way' that envisages a highly
autonomous Tibet within a greater China, a position he reiterated in March 2005 in a
bid to reassure Beijing of his intentions. The Dalai Lama subsequently stated in October
2005 that he would not pursue independence for Tibet if Beijing were to grant the
province 'meaningful autonomy'. However, the CCP still views Tibet as an important
buffer state between interior China and India, and there may be large, untapped
resources within the province which would be vital for the burgeoning Chinese
economy. As such, Beijing is reticent to loosen its grip on the region, and discussions are
slow moving (a sixth round of informal negotiations took place in July 2007), with little
chance of change in the near future.
In the longer term, there is evidence that the Tibetan population is generally dissatisfied
with the Dalai Lama's 'middle way', which does not satisfy the demands of some
Tibetans. Despite decades of political campaigning, there has been no significant
improvement in the autonomy of the region, and the Han Chinese immigration has
affected both the demographics and the culture of the region. Beijing has adopted a
similar transmigration policy in Tibet than that in Xinjiang, leading to the Han Chinese
becoming the majority ethnic group in the province's capital city, Lhasa, and creating
social friction. The completion of a Lhasa-Qinghai railway link in July 2006 has reinforced
the Chinese transmigration policy (tourist arrivals to the TAR increased by 64 per cent in
2007, with the railway carrying 37 per cent of these 4.02 million visitors). Consequently,
although no organised insurgency has existed in Tibet since the mid-1970s, as funding
and support from overseas, primarily the US Central Intelligence Agency, was
withdrawn in the wake of improved Sino-US relations, the death of the Dalai Lama could
lead to renewed separatist violence in Tibet. This would be exacerbated if a clear leader
54
in Dharamsala should fail to emerge and continue his moderate policies. Although such
an eventuality is not currently expected, the Dalai Lama is currently 72-years-old and
hence the possibility must be foreseen.
In the meantime, separatist sentiment in Tibet will continue unabated, and may
periodically lead to unrest in Lhasa, or even low-level protest elsewhere in China in the
run-up to, and during, the Olympic Games in August-September 2008. However,
following the experience of March 2008, when monk-led protests descended into
ethnically targeted and anti-CCP violence after several days, the security force presence
in the region has been expanded and any unrest will be effectively suppressed without
diminishing Beijing's control over the region.
Autonomy in the special administrative regions
Beyond Tibet, one region that is particularly prone to public expressions of

dissatisfaction with the CCP is the Hong Kong Special Administrative Region (HKSAR).
Popular protests have on occasion become sufficiently large to be of concern to the
CCP. Protests have been aimed more at particular policies (and particular leaders like
former chief executive Tung Chee-hwa) than at the CCP itself, and the people of Hong
Kong have displayed no desire for real independence from China. Although it is clear
that some sizeable portions of the population are interested in more involvement in
local government, it is not clear whether this in fact represents widespread popular
opinion.
Since its assumption of control of Hong Kong in 1997 from the UK, Beijing has
attempted to prevent public protest and unrest through the development of the 'one
country, two systems' policy. This attempts to stymie dissatisfaction by allowing a
limited form of representative democracy, and a large amount of autonomy for the
region through its own government.
However, a variety of events have clearly demonstrated a lack of intent in Beijing to

allow this autonomy within HKSAR. In 2003, the government proposed the
implementation of a strengthened Article 23 of the Basic Law, which it was feared
would increase repression of certain groups and journalists. In April 2004, decisions
taken by the supreme judiciary authorities in Hong Kong were overruled by the
mainland's National People's Congress, while former chief executive Tung Chee-hwa
stated in the same month that HKSAR would not implement universal suffrage in 2007
and 2008 as previously intended. In December 2007, following a report by Chief
Executive Donald Tsang, the Standing Committee of China's National People's Congress
(NPCSC) released a decision that universal suffrage would not be possible before 2017
at the earliest for chief executive, and 2020 for Legislative Council members. This
disappointed pro-democracy groups who hoped for full democracy by 2012.
55
The population has reacted through peaceful demonstrations. In July 2003, some
500,000 residents of Hong Kong demonstrated against the proposed implementation of
Article 23, forcing amendments to the legislation within a week. Further protests
followed in April and July 2004 for greater democracy in the territory. In March 2005,
Tung Chee-hwa resigned, apparently over ill health, although it is more likely that
Beijing pressured the chief executive to step down. Tung's replacement by his former
deputy Donald Tsang, a career civil servant, removed one of the main excuses for
popular discontent, namely Tung's reputation for mismanagement. However, protests
have continued. Some 45,000 marched in Hong Kong in July 2005 to commemorate
Hong Kong's handover and demand democracy, and a further 100,000 people
(estimated to be 250,000 by organisers, and 63,000 by the police) marched on 4
December 2005 to increase pressure for universal suffrage in the March 2007 chief
executive election. By July 2006, the numbers involved in the annual demonstration had
fallen to approximately 50,000, while protests in January 2008 over the NPCSC decision
in December 2007 were even smaller in scale: organisers claimed a turnout of 22,000,
while police claimed a turnout of 6,800. These demonstrations represent a greatly
reduced turnout when compared with the half-million strong crowds that marched in
2003 and 2004, but the earlier demonstrations were sufficient to reflect widespread
dissatisfaction with the slow pace of democratisation in the region and wariness over
Beijing's involvement in Hong Kong.
The risk for Beijing is that its reluctance to allow greater democracy within HKSAR will
lead to increasing protests and lend weight to currently redundant independence
movements. Yet while these protests are defined by their wish to prevent
overwhelming mainland involvement in Hong Kong affairs, there exists no credible pro-
independence movement in Hong Kong that could extend to the mainland.
Demonstrations in Hong Kong are largely concerned with the implementation of the
Basic Law (Hong Kong's mini-constitution), and with involvement in local government.
The threat to Beijing from Hong Kong is therefore low at present, but if further
constraints are made on Hong Kong's self-government, demonstrations are likely to
continue.
Environment
Natural resources
One further effect of China's rapid economic growth has been a stretching of available
resources, particularly water for agriculture. Throughout 2000 China was blighted by a
drought that decimated the Yellow River and turned massive tracts of farmland into dry
waste. Much of the drought was due to irresponsible misuse of resources as China's
new consumer society and industrial expansion demanded more water. Large-scale
56
changes in the country's hydrology, driven by both official policy and population
expansion, have also had wide-ranging ecological consequences. Since 1949, China has
built 80,000 dams across the majority of its key rivers, with approximately 40 million
people undergoing a forced relocation to make way for the burgeoning infrastructure.
Approximately two thirds of China's cities faced severe water shortages by June 2000.
The northern province of Hebei was worst hit - approximately 12,000 m2 of farmland
bore no summer fruit. By June 2000 3.2 million people in Shandong province were short
of water.
In August 2002, Minister of Science And Technology Xu Guanhua warned that: "The
water resources crisis even threatens the future survival of the Chinese nation."
Although this referred to longer-term challenges, by September 2002, Shandong was
again facing severe drought, the worst in a century after the province's rainfall in the
year to date reached only half of normal levels. Along the Yangzi River, typically plagued
by a dangerous surfeit of water, close to 30 cities were reported to be facing "serious"
shortages, despite flooding earlier in the year; while among cities in the more
egregiously afflicted Yellow River (húang hé) floodplain, per capita water resources had
fallen to one third of internationally recognised danger levels. According to figures
released in November 2005, 400 of China's 669 cities suffer dry spells every year, while
136 suffer severe shortages. By early 2007, approximately five million people were
estimated to be suffering drinking water shortages.
Further large-scale engineering appears to be the official response to the problem. The
2000 drought led to a revival of plans initially outlined by Chairman Mao in 1952 to
divert billions of tonnes of water from the south of the country to the north via a
massive canal and pipeline network. In November 2005 Ran Lingqi, head of the policy
research office of the Beijing Municipal Water Affairs Administration, stated that 300
million cubic metres of water would be diverted from the Yellow River in 2006 to offset
expected shortages. Water from the Yangzi River will also be diverted to Beijing from
2008 in a CNY200 billion (USD25 billion) project in order to alleviate water shortages.
Beijing's per capita quota of water is less than 300 cubic metres, one eighth of the
national average. Diverting water has been a cause of popular discontent in China, as it
often leaves the 'donor' population without enough water for agriculture. For example,
the government's plan to divert an extra 300 million cubic metres of water from Hebei
to Beijing to supply extra demand during the 2008 Olympics caused resentment in
Hebei, where pre-existing water shortages already disrupted agriculture and the supply
of drinking water.
Water diversion is nevertheless only a limited solution to supply-demand imbalances in

water resources and ecological degradation in China. The problem has revealed itself in
changing land quality and official policy responses. In February 2001, an anti-
desertification law was drafted in an attempt to halt the rapid expansion of desert land
57
throughout China. Approximately 100,000 km2 of China has become desert since the
1950s with the annual expansion in desert land increasing from 2,460 km2 in 1985-95 to
10,400 km2 in recent years. Both land degradation causing wasteland to arise
(huangmò) and outright desertification (shamò) are cause for official concern.
The problem is encouraged by excessive use of subterranean water in both China's

economic frontier in the west and northwest and the heavily urbanised north and
northeast. Sources suggest groundwater in Xinjiang's capital Urumqi may not last longer
than 2010; while a funnel-shaped depression 65,000 km2 in size is forming in northern
China due in part to unsustainably high demand for subterranean water from the
Tianjin-Beijing urban conurbation.
Elsewhere, in areas such as Qinghai province, home to the headwaters of China's three
major river systems, over-herding and over-farming have been critical in reducing the
water table and leading to the mass disappearance of freshwater lakes. Northwestern
provinces with major grasslands, such as Gansu (with a population of 25 million) and
Shaanxi (40 million), face similar challenges. Animal husbandry is widespread in these
provinces, in spite of the limited ecological niche provided for such activities by their
rangeland, grassland and desert ecosystems.
While flocks often exceed sustainable limits by 50-150 per cent, the problem is
exacerbated by tree-cutting, highway and railroad construction. Policy responses are
often inappropriate, such as tree planting, which often fails to check desertification and
only creates an artificial, unsustainable monoculture, requiring further resources to
maintain. Analysts warn that the social dislocation caused by environmental
degradation in China's western and mid-western grasslands and elsewhere could be
tremendous over the medium-to-long term, spurring migration and social stress
comparable to that engendered by America's own "Dust Bowl" experience in the 1930s.
As desertification and water shortage have the greatest impact on rural farmers, this in
turn further increases China's already intolerable rural-urban migration problem.
The effects of desertification are not limited to directly afflicted provinces. In June 2002,
Chinese scientists revealed that the dust storms which have afflicted urban centres in
northeast China with increasing severity in recent years owe mostly to man-made
desertification in China. Particulate analysis of dust deposited during such storms
showed that 52 per cent came from desertified grasslands and 30 per cent from barren
farm fields elsewhere in China. In the same month, it was estimated that desertification
and river floodplain soil erosion were costing 0.6-0.9 per cent of GDP annually.
Environmental degradation
Aside from natural resource shortages arising from rapid economic growth, a lack of
58
effective restrictions on industry and consumers has led to a severe pollution problem
in China that threatens the health of the population and the availability of resources. A
great increase in demand for energy, which has been met mainly by burning indigenous
low-quality coal, is one of the primary reasons for the trend. Oil imports can barely
meet rising fuel demands; and it would be both costly, and probably impractical to
transfer entirely to natural gas, as new power plant construction can barely match the
growth of energy needs.
Air pollution arising from the excessive use of coal as a fuel has caused acid rain, which
is badly damaging China's forests and affecting the urban environment. Deforestation
has also resulted from economic development. Water pollution has been caused by
industrial effluents, most notably in November 2005 when water to the northeastern
city of Harbin was cut off for four days following an explosion at a chemical factory
upriver that increased benzene levels in the Songhua River to 100 times over the safe
level. Nonetheless, such events are merely the most ostensible occurrences of
pollution, which now poses a grave threat to the health and wellbeing of millions of
Chinese people. Approximately 70 per cent of China's rivers suffer from pollution
(mainly industrial), while the deputy director of the State Environmental Protection
Administration claimed in December 2005 that 90 per cent of China's underground
water supplies were polluted. Of the top 20 polluted cities in the world, 16 are within
China.
As well as direct social consequences, environmental damage affects the Chinese

economy. Conservative World Bank estimates put the economic cost of air and water
pollution in China at 5.8 per cent of GDP in 2007, potentially jeopardising one of the
main sources of CCP legitimacy, namely economic prosperity.
Social stability
Although less of a threat to the CCP than societal unrest from the wide range of
centrifugal forces in China, crime, drugs, health and demography all have an impact on
the wellbeing of the population, and if perceived as beyond the control of the central
government, undermine the CCP's legitimacy. For the present, such issues remain mere
irritants to the central government, although harmful to sections of the population, but
in the long term demographic imbalances and health issues could pose a more
significant threat to the CCP.
Crime
According to official statistics, 4.75 million criminal cases were registered in 2007,
staying within the same broad range as 2005 and 2006, but rates for serious crime
59
dropped during the period. Homicide rates fell 13.7 per cent in 2006 and 10.3 per cent
in 2007; arson fell 12.8 per cent in 2006 and 11.3 in 2007. Levels of theft, robbery, and
burglary remain high, with some 3.7 million cases in 2007 representing the majority of
China's crime rate. Rural-urban migration has contributed greatly to China's high level of
street crime, as the wealth gap between city dweller and migrant worker (or
unemployed migrant) grows.
Lawlessness fuelled by the availability of small arms is said to be so rampant in some

rural and border areas such as Yunnan province that the out-gunned public security
forces have in the past called in heavily armed security forces to restore order.
White-collar crime
White-collar crime by former SOE managers and other officials may present an equal or
greater threat to social and even economic stability as organised crime, as cadres
accustomed to an austere lifestyle seek to profit in the new China. The spectacular theft
of USD725 million by provincial Bank of China managers, uncovered in 2002, was one
such example. Such crimes are closely linked to asset flight; in aggregate corrupt
officials may remove billions of US dollars overseas annually, many sending their
families to safety overseas beforehand. Official figures claimed that between January
2003 and August 2004 over 25,000 SOE personnel had been found to have committed
corruption and bribery, while more than 40 per cent of cases of corruption and bribery
involved SOE personnel.
In response, the CCP's effort to control corruption of bank officials has been on a large
scale. By December 2004, China's Banking Regulatory Commission had taken action
against 1,841 officials at 157 branches of China's four largest state-owned banks. These
moves are necessary not only to limit capital losses, but also to reduce banks'
accumulation of bad debt, which has flourished against a background of official
corruption, poor enforcement of regulations, and poor corporate governance. However,
given the massive economic restructuring underway and the vast opportunities for
corruption in the country, white-collar crime should be expected to increase.
Drugs
China suffers from a firmly entrenched illegal drug industry. Many addicts are members
of China's ever-growing migrant population in its cities. Living mainly in dormitories, in
poverty, and far from their families, migrant workers have shown themselves vulnerable
to the temptation of narcotics. Measures taken by the Ministry of Public Security, which
came into force in 1995, mean that narcotics addicts are compelled to give up drugs,
but many have entered a cycle of rehabilitation and recriminalisation as in other
countries. In 1992 there were officially estimated to be only 250,000 drug addicts in
60
China; the numbers peaked in 2005, with 1.16 million registered addicts alone, although
independent estimates have suggested a far higher figure, perhaps as many as 10
million in early 2007.
In 2003, the government opened methadone clinics to reduce drug-related crime and
disease, especially among the migrant population. However, despite continued
expansion of the scheme in the worst-affected areas (a further 14 methadone clinics
were created in Yunnan in 2007, for example, bringing the total to 67 clinics) the scale
remains small compared to the overall addict population. In April 2005, the government
launched a 'people's war' on drugs. The government has claimed limited success, and
the number of registered addicts has fallen, but without reliable statistics it is
impossible to judge the actual efficacy of the policy.
Health
As a result of poor education, official negligence, an increasing number of intravenous

drug users, and a burgeoning commercial sex trade, China is experiencing one of the
fastest growth rates of HIV/AIDS infection in the world. Although the overall rate
remains low, at approximately 0.1 per cent of the adult population, since 1999 there
has been an approximate 30 per cent annual rate of increase in reported HIV infections,
with an official estimate of 700,000 HIV-positive cases (including 75,000 AIDS patients)
by November 2007, although the real figure may be higher. The number of reported
cases increased by approximately 45 per cent in 2007, according to the Chinese Ministry
of Health, although it is unclear whether this is the result of improved screening or an
increase in infection rates. The World Health Organisation has claimed the number of
infected cases could reach 10 million by 2010 if measures to prevent the spread of the
disease are not improved, although in November 2005 the health minister, Gao Qiang,
stated that the number would remain below 1.5 million by 2010.
In 2001, Beijing began to display greater willingness to publicise the HIV problem than it
had previously, issuing various statements through state media and directly from the
government that accepted the problem. This slow process of acceptance accelerated in
2005, and in August 2005, the first of six state-run HIV/AIDS training centre was opened
in Yunnan, with a further five expected in Beijing, Shanghai, Liaoning, Hubei and
Sichuan. A prevention and control bureau was also created in Yunnan in March 2007,
which continues to be the worst-affected province, comprising over 25 per cent of the
country's registered HIV/AIDS cases.
Nonetheless, HIV rates continue to rise. Although China has attempted to control the
spread of HIV through poorly regulated blood transfusions, this particular method of
infection continues to be a problem. This is compounded by China's migrant worker
population, which has contributed to the spread of the disease through its mobility:
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migrant workers are often also users of injected narcotics or prostitutes. Rural, poor
areas in central China (Anhui, Hubei and Henan provinces) are worst affected, where
knowledge of the disease is almost non-existent, as are border areas (Yunnan, Guangxi
and Xinjiang provinces), which suffer from the largest number of intravenous drug
users.
Although public acknowledgement of the problem has increased, the clandestine

workings of many local party organs prevents effective counter-infection policies or
even accurate estimates of the scale of the problem. CCP officials have an overt
motivation to prevent information on HIV rates in their regions from becoming public,
as it would demonstrate a failure to combat the problem. Thus, false accounting is rife,
and the need for greater governmental action is downplayed. Unless this culture is
changed in the near term, HIV rates will continue to climb despite greater appreciation
of the epidemic by Beijing.
Demography
In 1979, China adopted its one-child policy, which attempted to limit couples to one
child through punitive fines and measures, with the aim of keeping the national
population below 1.6 billion until 2050. The policy had limited impact in rural areas, but
was highly effective in urban areas. China's strict family planning policy has likely
prevented resource-related problems that a more fecund population may have brought,
but it has created its own demographic problems.
First, stemming from Chinese cultural preference for male offspring, a serious gender
disparity has emerged. Official statistics indicate a ratio of 118 boys per 100 girls, with
some contending that the real ratio is likely closer to 122 boys per 100 girls. By 2020, if
the current rate of divergence continues, China will have some 30 to 40 million males
who will be unable to marry. Although plans announced in January 2005 to criminalise
sex-selective abortion (with a subsequent pledge in January 2007 that such activities
will be heavily punished) may improve this ratio somewhat, problems of enforcement,
and the already large surplus of males suggest that this may take time to yield
significant improvements. The impact of such a surplus of enforced bachelors is difficult
to predict, with theories projecting greater levels of crime and/or a higher propensity
for violence.
Social problems involving prostitution and the abduction of women are already being
felt in China: in 2001-02, Chinese police freed more than 42,000 kidnapped women and
children, many of whom were likely destined for the sex trade. No more recent figures
have been released, but prostitution continues in major urban centres. Furthermore,
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the one-child policy is resulting in the ageing of the Chinese population. While in 1999
there were 10 workers per retiree, this ratio will likely approach six workers per retiree
in 2020, and three workers per retiree by 2050. The macro-economic consequences of
such a reduction in China's labour pool, combined with the need to support its elderly
population, are likely to be severe.
International Relations
• China's growing military and economic power have removed any immediate external
threat to its existence. As a result, China's claims to the 'renegade province' of
Taiwan currently dictates much of its security policy. Clear lines are being drawn
over this issue, and in Asia more broadly, between an emergent and increasingly
powerful China, which is improving relations with regional countries, and the US
with its traditional allies but waning influence. However, strong international and
cross-strait economic ties make outright aggression unlikely, while the election of
Taiwanese President Ma Ying-jeou in March 2008 will reduce tension for at least the
next four-year term, ensuring a continuation of the current status quo.
• Perhaps the most significant regional threat from this increasing bipolarity in Asia is
the growing tension between China and Japan. Despite increasing economic
interdependence between the two, growing Japanese nationalism and
militarisation, encouraged by a nuclear North Korea and a gradual withdrawal of US
forces from Northeast Asia, as well as China's own long-term nationalist policies,
have all affected relations. China's historical animosity towards Japan, exemplified
by Beijing's recurring protests over former prime minister Koizumi's visits to the
Yasukuni war shrine and anti-Japanese public protests in 2005, hinder closer
diplomatic relations. The two also compete for access to regional suppliers of
energy, and have an ongoing dispute over the Diaoyu (Senkaku) islands and the
Okinotori reefs (also ostensibly disputed with Taiwan). Outright violence is
improbable, given economic interdependence, and appears even more remote with
the more emollient policies of Japanese Prime Minister Yasuo Fukuda. However, the
possibility of a deterioration in the fragile relations under a different Japanese prime
minister remains significant given the traditional lack of Japanese longevity in
premiers.
• In South Asia a similar bipolarity is growing, with the US building a closer
relationship with India, while China remains a historical ally of Pakistan and has
cultivated relations with countries like Myanmar, Nepal and Bangladesh. Although
China's relations with India have improved greatly in recent years, growing Chinese
and Indian energy needs may place the two in competition over fuel exporters
globally in the future.
• China continues to be involved in several territorial disputes in the South China Sea,
owing to its claim to the Spratly Islands and Paracel Islands, which puts it at
loggerheads with a number of Southeast Asian states. Although large-scale violence
remains unlikely, China's growing influence has allowed it to be more forceful in its
claims to the Spratly Islands, including building a significant naval base in Hainan
63
Island, and clashes remain possible.

• Potential regime failure in North Korea could also cause problems for China, which
already suffers from the influx of North Korean refugees.
Bilateral
Bilateral security threats focus upon the territory of Taiwan, which is regarded by China
as a 'renegade province' that split from the mainland with the flight of the nationalist
Kuomintang (gúomíndang: KMT) government in 1949. Re-uniting the territory with the
rest of China remains one of the primary foreign policy objectives in Beijing, and
probably the most immediate external security concern for the Chinese Communist
Party (CCP). Relations between Beijing and Taipei fluctuate between hostile suspicion to
military brinkmanship, with two Taiwan Strait 'crises' (tantamount to a unilateral,
limited military operation on Taiwanese territory) in the 1950s and a heightened period
of tension in 1995-1996 when China test-fired short-range missiles in the strait, framing
the relationship.
Beijing is also involved in a number of bilateral territorial disputes with Japan, although
China's increasing power, self-assuredness and strategic diplomacy allowed the country
to settle or downgrade territorial disputes with historically hostile regional countries
such as India and Russia.
Sovereignty
Taiwanese independence
The tone of cross-strait relations is determined as much by Taiwanese policy as it is by

Beijing. Certain changes in Taiwan (such as a serious move towards Taiwanese
independence) would prove politically unacceptable for the CCP. Under these
circumstances, regardless of the preferences of the CCP elite, some sort of action would
be necessary, as the CCP's legitimacy, in a strongly nationalistic political environment,
could not survive the loss of 'sovereign' territory. Historically, China (as well as Taiwan
and other international actors) has relied on systematic ambiguity to avoid having to
recognise any state of affairs that would require action.
However, this ambiguous position was temporarily abrogated following the election of
President Chen Shui-bian of Taiwan in March 2000, and his re-election in 2004. Chen's
often bombastic pro-independence rhetoric encouraged more stringent policy positions
from the two political entities. For instance, in perhaps Chen's most inflammatory
statement in his second term, the then-president outlined his 'four wants' in March
2007, declaring that the Taiwanese population desired independence, a new
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constitution, further development and a change to the country's official designation

(namely, adoption of Taiwan as the official name rather than the Republic of China). It
has long been China's policy that it will not tolerate Taiwanese independence, and the
CCP would suffer a severe public backlash if it were to allow the motherland to become
'split', and hence it is unsurprising that Beijing reacts adversely to all such statements. It
is in this context that China's March 2005 'anti-secession' law should be judged.
Although it may have aggravated relations with Taiwan and created fears in Taipei that
the legislation would legitimise Chinese military action, the law did not represent a
change in policy, but rather a reminder to Taiwan, and perhaps more importantly to the
Chinese public, that the CCP remained committed to its long-term policy of preventing
dissolution of China.
This temporary aggravation of relations eased somewhat following the overwhelming

victory of the KMT in legislative elections in January 2008 and the comfortable victory of
the KMT's Ma Ying-jeou in presidential elections in March 2008. The KMT has followed a
policy of gradual rapprochement with China since mid-2005, when the party's honorary
chairman Lien Chan visited the mainland. Since then, the KMT has effectively portrayed
itself as the only party capable of engaging with China, encouraged by Beijing's support.
Since Ma's election, the KMT has rapidly attempted to further cross-strait engagement,
with another visit by Lien Chan in April 2008 and avowed policies by Ma to reach
agreement on cross-strait weekend charter flights by July 2008, and weekday charter
flights by end-2008. Ma also aims to increase the limit on Chinese tourists visiting the
island per day from 1,000 to 3,000 by July 2008. While such linkages increase the
possibility of future Chinese economic domination of the island, in the short to medium
term they will also effectively reduce tensions between the two sides and increase the
opportunity cost of any deterioration in relations or conflict.
Possibility of conflict
The KMT's 2008 election victories should diminish cross-strait tension, and the
possibility of conflict is further reduced by the military deterrence across the strait. The
scope of any potential conflict is widened by security links established between the US
and Taipei in the 1979 Taiwan Relations Act, which seems to preclude any simple
military solution to the Taiwan issue for China. This security commitment may have
contributed to evident US discomfort in the run up to the 2004 Legislative Yuan
elections, when the Bush administration clearly warned Taiwan against taking further
steps towards independence. Similar warnings or expressions of discontent have been
forthcoming from Washington since, after any statement by President Chen deemed to
be provocative. For instance, on 3 May 2006 the US, in response to Chen's lunar new
year speech suggesting an abolition of the National Unification Council, denied the
Taiwanese president an overnight stay in the US and refused to grant permission for a
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refuelling stop in continental US, offering only Alaska or Hawaii rather than Chen's
preferred New York or Miami.
Despite these occasional rebuffs, the US policy of 'strategic ambiguity' appears to offer
the prospect of a US commitment to Taiwan's security in the case of instability or
conflict. As such, China has been steadily increasing its military capabilities and
alternatives. Its battery of short-range missiles in Fujian province opposite Taiwan has
been regularly expanded, and now has roughly 1,300 short-range ballistic missiles,
according to Taiwan's Ministry of National Defence (MND). In March 2006, Taiwan's
MND estimated that a 10-hour, five-wave missile attack by China in the event of conflict
would cost approximately 20,000 military casualties, almost 7 per cent of the active
armed forces. China's arsenal of deep-sea mines and its small but growing collection of
Russian-made submarines are also extending Beijing's options to include blockade as
well as outright amphibious invasions, while in the skies, its air-to-air, air-to-ground and
anti-radar offensive capabilities are set to grow in line with its procurement
programme.
However, China's burgeoning military power does not indicate that the threat of conflict
is growing. Logistical limitations, as well as the potential for US or Japanese
involvement, makes a military invasion of Taiwan a virtual impossibility for the moment.
Militarily, the PLA remains slow at adopting new, more advanced technologies and
hence it remains perhaps two decades from being confident of being able to launch a
successful invasion of Taiwan. Meanwhile, the technological balance in the Taiwan
Strait (in terms of potential threat) will continue to register a complex relationship with
the political balance (in terms of actual threat). Force modernisation on each side will
still be geared to increasing implicit bargaining power over the other in the political
arena, rather than preparation for imminent conflict. Chinese defence hardware
acquisitions may in effect function as much to test the Taiwan-US relationship and to
discourage Taiwanese independence as to build the means to 'recover' Taiwan.
Borders
Despite completely resolving border disputes its western and northern border disputes
with Kazakhstan (1998), Tajikistan (2002), Kyrgyzstan (2004), Mongolia (2005) and
Russia (2008), China retains a number of border disputes with countries to its south and
east. The disputes are all legacies of either the Japan's imperial expansion and the
Second World War, or China's occupation of Tibet in 1950. Although these are long-
running disputes, and in the case of India has motivated conflict in the past, none of the
current bilateral territorial disagreements are likely to descend into violence.
Diaoyu Islands
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Despite profound feelings of antipathy between China and Japan over their shared
history, and in particular Japan's actions in a fractured China during the 1930s and the
Second World War, the possibility of conflict over the disputed Diaoyu (known as
Senkaku in Japan, and Tiaoyu in Taiwan) islands or areas of the East China Sea is
tempered by the deterrence of a sophisticated Japanese navy, and increasing trade
links. A pacific Japanese constitution also currently restrains belligerency, although
Chinese perceptions of increasing nationalism in Japan, particularly under former prime
minister Junichiro Koizumi, and an ongoing debate over the continued validity of Article
9 of the constitution (which renounces the right to aggression) suggest that this
condition may not be permanent. For the moment, relations between the two are
cordial, having improved since Koizumi's resignation in 2006 and given the increasing
economic interdependence. Nonetheless, contested maritime territory, of potential
economic value, and the history of conflict between the two serve as focal points for
hostility and future deteriorations in relations are likely.
As a result, tension periodically arises over the five small volcanic islands and three
rocky outcrops of Diaoyu/Senkaku. Although only measuring 7 km2, sovereignty of the
islands adds some 40,000 km2 to either country's exclusive economic zone (EEZ) and
reinforces control of major shipping lanes. Japan claims that, when it occupied the
islands in 1895, they were terra nullius (unpeopled). On the other hand, China and
Taiwan claim that the islands were not free for the taking in 1895, but had rather been
discovered by China by 1403.
Japan's decision in February 2005 to take over ownership of a lighthouse built by

Japanese nationalists in 1988 on Diaoyu (Uotsuri) Island, the largest of the five islands,
angered Beijing, which labelled the move a "serious provocation and violation of China's
territorial sovereignty." The lighthouse is now maintained by the Japanese Coast Guard
(JCG), which is somewhat provocative as the JCG remains an armed paramilitary force.
In June 2005, China supported Taiwan's deployment of a frigate to the area in a political
gesture to underline its rights to fishing near the islands, while in October 2006, a fleet
involving 22 activists set sail from Hong Kong to land on the islands, but was intercepted
by the JCG. These developments followed the arrest of seven Chinese activists in March
2004 for landing in the Diaoyu/Senkaku Islands, a clear demonstration of Japan's
sovereignty over the territory. Diplomatic wrangling continues between the countries,
with Beijing lodging a protest over government revisions to private textbooks over the
Diaoyu/Senkaku issue, demonstrating the negative effect the issue has on bilateral
relations.
East China Sea
The Diaoyu islands are within a wider area of overlapping maritime claims from China
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and Japan based upon their EEZs. The claims remained largely dormant and less crucial
than the specific Diaoyu dispute until the first half of 2005 when China's gas exploration
close to the Sino-Japanese median line in the East China Sea angered Tokyo. In
particular, the Japanese government announced in April 2005 that two Chinese fields,
Chunxiao and Duanqiao, were linked to Japanese fields. In mid-April 2005, Tokyo
initiated procedures to grant rights for the drilling of oil and gas close to the median line
(although actual concessions would take a further two to three months). The move by
Japan followed the granting of rights to China National Offshore Oil Corporation by
Beijing close to the disputed region, with drilling apparently beginning in August 2005.
Naval vessels and aircraft are also engaged in a game of brinkmanship, as each side tries
to assert its claim to the disputed fields. In September 2005, China admitted to creating
an East China Sea reserve fleet, comprising one Sovremenny-class destroyer, two
Jianghu I-class (Type 053H) frigates, a replenishment vessel, and an observation support
ship. The following month, Tokyo claimed that it had tracked the reserve fleet twice
within the disputed area.
Negotiations over the issue, begun in May 2005, have produced at best mixed results. In
September 2005, during the second round of negotiations, Japan proposed joint
exploration and development of the fields. The next round of meetings, scheduled for
October, was cancelled by Beijing in protest against then-prime minister Koizumi's visit
to the Yasukuni Shrine. In January 2006, Chinese and Japanese officials came to an
agreement in principle to develop the East China Sea gas reserves jointly, although the
fourth meeting in March 2006 led to a lack of agreement on a Chinese proposal of joint
exploration. The seventh round, held in Beijing in February 2008, also ended without
agreement. Currently, given the importance of the issue to both countries in terms of
nationalism and potential energy reserves, the prognosis for the negotiations, despite
an ostensible improvement in relations following Prime Minister Shinzo Abe's visit to
China in October 2006 and the appointment of Prime Minister Yasuo Fukuda in
September 2007, is poor.
Okinotori
A further disagreement between China and Japan remains over the two tiny reefs of
Okinotori in the Pacific Ocean. Although approximately 1,700 km to the south of Japan,
Tokyo claims the partly submerged islet as its own territory, while Beijing claims they
are rocks and do not qualify for international claims. Japan has attempted to support its
claim to the uninhabited reef by installing a titanium plate on Okinotori in June 2005,
labelled 1 Okinotori Island, Ogasawara Village, Tokyo, while the nationalist Tokyo
governor, Shintaro Ishihara, visited Okinotori in May 2005 to strengthen the Japanese
case. The isles are so small that Japan has reinforced them with concrete to make the
claim more viable, while in March 2007 Japan completed a solar-powered lighthouse on
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Okinotori to further augment its claim to the islets as its own territory.
The various disputes over territory are indicative of ongoing mistrust between the two
states, with other issues including historical textbooks and anti-Japan demonstrations
held throughout China in April 2005 further alienating the two countries. As such,
although the territorial disagreements are minor threats and often involve isolated
events, they have highlighted the enmity that exists between the two countries.
Sino-Indian border
China's land borders with India remain in dispute, particularly its frontiers with Kashmir
and northeastern India (along the Line of Actual Control). The two countries fought a
brief border war in 1962 that ended in humiliating defeat for India and military tension
remained high for decades, although recent agreements and high-level meetings have
greatly eased the friction.
China has kept the pressure on India over these areas by a number of means, including
improving its security infrastructure in Tibet, staging border manoeuvres emphasising
its claim to operational superiority and failing to contribute towards the suppression of
the multitude of separatist movements which have undermined India's security in
regions such as Assam (and indeed Kashmir). India claims that over 140 incursions
across the LAC had occurred in 2007, primarily in Arunachal Pradesh and Sikkim.
However, over recent years Sino-Indian relations have warmed with shared security
threats, such as the incidence of terrorism in Kashmir and Xinjiang, providing grounds
for co-operation. This has facilitated slow progress towards resolution of the border
dispute, with China providing de facto (if not de jure) acceptance of India's claim to the
state of Sikkim, and India reciprocating with acknowledgement of China's control of
Tibet in June 2003. In April 2005 during a visit to India, Premier Wen Jiabao and Indian
Prime Minister Manmohan Singh signed an agreement to work towards the resolution
of the border dispute, and China de jure referred to Sikkim state of the Republic of
India. No formal Sino-Indian treaty has been concluded formalising the LAC, but there is
no serious dispute over the existing boundaries. Given the already difficult status of
Indo-Pakistan tensions and the obvious benefits to be gained through economic co-
operation, it is unlikely that either China or India would see advantage in outright
confrontation on either of these sensitive borders.
Threat of conflict
From China's perspective, North Korea is proving a nuisance diplomatically through its
intransigence and blustering rhetoric. However, of more concern is the possibility of
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state collapse in China's neighbour. Regime failure in North Korea could well prove far
more damaging for Chinese security than North Korea's acquisition of nuclear weapons.
A dire economic situation, which saw the economy contract by 50 per cent in the 1990s
and mass famine, has led to speculation that the situation in North Korea is
unsustainable. In order to prevent further degradation, Pyongyang introduced limited
economic reforms in 2002, largely at China's behest, but these have not proven
successful as prices of fuel and rice have risen faster than those of wages. The resulting
flow of North Korean refugees into northeast China has been perceived as a law and
order problem by Beijing. China is also facing international pressure for its handling of
the refugees, who are generally sent back to North Korea.
It remains difficult to judge the likelihood of regime failure in North Korea. Although the
country clearly suffers from widespread poverty and famine, particularly following the
mid-2007 floods that reduced the country's harvest for 2008, this has been true since
the 1990s, and the government has not fallen. Furthermore, there is little insight into
the inner workings of policy making in Pyongyang, which might indicate whether any
faction existed that might try to overthrow Kim Jong-il. Many observers were surprised
by the successful father-to-son transfer of power after Kim Il-Sung's death in 1994,
which may suggest a stronger support basis within Pyongyang's elite than was
previously assumed. Hence, although regime collapse in North Korea would result in a
destabilising vacuum on China's border, and an inevitable influx of refugees that would
require deployment of more troops in the area, the likelihood of such an eventuality is
currently low.
Multilateral/Regional
As China has grown militarily, economically and politically, its influence in East, South
and Southeast Asia has increased. Unsurprisingly, this has caused resentment among
other regional countries over the hegemony for which Beijing now strives, and
consternation in the US, which has been the dominant political and military force in the
region since the end of the Second World War.
Alongside this competition for power is a natural competition for energy resources,
which the dynamic economies of Asia are eager to secure. With high global oil prices
and limited passages for fuel, the issue of energy security is becoming a more important
policy consideration for Beijing.
Finally, China's improving ability and willingness to project power has been amply
demonstrated in its construction of military bases in the disputed Spratly and Paracel
Islands in the South China Sea. Although little more than reefs, the possible presence of
oil and gas in the area has made the archipelagoes a possible source of limited conflict.
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Threat of conflict
China's ability to project power, although still quite limited, has enhanced significantly
over the past two decades. The improvement in China's blue-water, sub-surface and
amphibious navy, air force and missile resources has caused concern for other
territories in the region, primarily Taiwan, Japan, and India, who are all wary of China's
intentions to economically and militarily dominate East Asia. China's test in June 2005 of
the JL-2 submarine-launched ballistic missile (a variant of the DF-31 land based system),
designed to be launched from the new Type 094 submarine, is also indicative of China's
ongoing efforts to increase its ability to project power. The result is a military rivalry,
with all three states supported by imports of sophisticated arms from the US, which is
aiming to contain the growth of Chinese influence. The Association of Southeast Asian
Nations (ASEAN), meanwhile, is also wary of China's power projection, with China
becoming more eager to assert itself in the disputed region of the South China Sea.
For the moment, the People's Liberation Army Navy (PLAN) modernisation seems
focused on the ability to protect sea lines of communication and chokepoints for trade
and resources, rather than developing the ability to project power globally. The focus of
PLAN modernisation is on smaller surface combatants (especially the 052B and 052C
guided missile destroyers), and on conventional and nuclear submarines (with the
Russian Kilo-class diesel-electric submarine, the domestic type 039 and 039A diesel-
electric submarine, and the Type 93 and Type 94 nuclear submarine). In other words,
instead of attempting to match the US' ability to project power with carrier groups, the
PLAN appears to have focused on platforms which will either serve to protect regional
naval lines of communication (like the new destroyers), or deter a US carrier group from
becoming involved in a local dispute (like the new submarine classes).
Regional hegemony
The countries of Southeast Asia have been particularly affected by the rise of China,
with the strategic balance between ASEAN and China shifting drastically. Several navies,
including those of Singapore, Malaysia and Indonesia, during the 1980s had a qualitative
advantage over China in terms of more modern ships, equipped with Harpoon and
Exocet anti-ship missiles. As China's force modernisation continued throughout the
1990s - while ASEAN states first enjoyed the Cold War peace dividend and then suffered
the regional financial crisis - this military balance has been reversed. Navies facing
funding problems, such as Indonesia's, are having marked difficulties in maintaining
even a basic ship-to-ship missile capability.
Japan presents a different picture. Its highly competent navy has modern ships
equipped with state-of-the-art weaponry and is staffed by well-educated officers and
troops. The Japanese navy has twice the underway-replenishment capacity of China.
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However, Article Nine of the Japanese constitution forbids the use of force to solve
international disputes. Despite popular support for Japan's pacifism, there have been
ongoing efforts to re-interpret it, and Japan has arguably moved away from the
absolute pacifism that it originally followed. In 1999, Japanese ships opened fire for the
first time, on suspected North Korean spy ships. In January 2004, Japanese troops
entered Iraq in support of US troops, the first time that Japanese military forces have
entered a war zone since the Second World War. Discussions of the potential re-
militarisation of Japan started under former prime minister Junichiro Koizumi and
reached a head when then-prime minister Shinzo Abe called for an overhaul of the
constitution. Abe's retirement from politics in September 2006, and his replacement by
the more moderate Fukuda suggests that constitutional reform is currently in abeyance
as the prime minister has explicitly opposed abandoning Japan's commitment to
pacifism.
Nonetheless, long-term prospects for Japanese pacifism given the country's increasing
willingness and ability to participate in international peacekeeping efforts are in
question. North Korea's (albeit failed) intercontinental ballistic missile test in July 2006
and the country's first nuclear test in October 2006 have heightened the sense of
vulnerability in Japan to such threats, and hence will likely serve as further justification
for remilitarisation. In response, Japan moved forward its plans to install PAC-3 Patriot
anti-ballistic missile systems from March 2008 to March 2007. Over the longer term, the
government plans a total of 11 Patriot missile bases by March 2011. Such a trend will
continue should Tokyo continue to perceive regional threats that can only be matched
by military means.
For its part, India retains a nuclear arsenal with a secure second-strike capability, but is
unable to rival China's military capabilities. An impressive economic growth rate still
lags behind China's, and without a major economic slowdown in China it is unlikely India
will be able to keep up with China's modernisation. The US has therefore begun to
support India militarily, with increasingly large-scale joint defence exercises since 2002,
and diplomatically, with aid for its civilian nuclear and space programmes announced in
July 2005 (although the final agreement has yet to be ratified by India's parliament).
Central Asia has also become important in China's geo-strategic calculations, as both
China and Russia have extended their influence in the region. Although China's Central
Asian neighbours are no match economically or politically, they play a major role in
China's efforts to develop access to petrochemical exporters, both as exporters
themselves, and as conduits to transport fuel from further afield. However, this has
brought Beijing into competition with the US, which has also become a major figure in
Central Asia. For the moment, China has relied on building ties with its Central Asian
neighbours under the multilateral umbrella of the Shanghai Co-operation Organisation,
while the US has relied on developing bilateral relations with individual states, leasing
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parts of the Manas international airport near Bishkek in Kyrgyzstan for approximately
40 transport and combat aircraft. For the moment, China remains a more dominant
influence in Central Asia than the US (although less influential than Russia), particularly
following the December 2005 request for the US to vacate the Karshi-Khanabad air base
in Uzbekistan, but the continued presence of US troops so close to its western border in
Kyrgyzstan and Afghanistan remains a concern for Beijing.
Barriers to conflict
The result of this intra-regional competition has been a web of intricate alliances,
security ties and military co-operation across Asia in line with military modernisation
that have increased the stakes of any potential conflict. In the short term, China is
effectively deterred from pursuing its hegemonic aims by force in the East China Sea
and on its southern borders, but its rapidly modernising military could within two
decades surpass all regional challengers, including Japan, through technological
sophistication and sheer size. The only restraining factor for China would subsequently
be its fear of losing export markets, energy and raw materials, and the damage to its
economy.
It should be noted that a large-scale conflict in Asia is highly unlikely, given the massive
casualties and damage that would result, particularly if global powers in North America
and Europe were drawn in. However, the doctrinal shift within the People's Liberation
Army (PLA) to waging high-technology, local wars demonstrates the thinking in Beijing
that over the medium to long term, China could begin to flex its military muscle to
achieve foreign policy objectives, particularly the control of disputed territories.
Borders
China's military modernisation is of particular concern to many observers because China

remains involved in several territorial disputes. Since the turn of the century, most of
these disputes have disappeared, or decreased in importance, as China has pursued
more diplomatic and co-operative solutions. However, several multilateral disputes
remain, which have both come to play an important role in the ideological language of
Chinese nationalism, and also may be of long-term economic value. These disputes
could become more fractious as energy resources become increasingly contested.
South China Sea
Chinese territorial claims and their central place in Chinese nationalist ideology are
visible in Beijing's attitude towards the South China Sea region. The 1992 Territorial
Waters Act controversially extended Chinese claims deep into the South China Sea,
encompassing the entirety of the unpopulated Spratly and Paracel islands. Several Asian
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countries and territories retain conflicting claims over parts of the Spratly Islands,
including Taiwan, Malaysia, the Philippines, Vietnam and Brunei. All of the claimants bar
Brunei retain a military presence in the islands, which are themselves little more than
reefs, often submerged. The perceived value of the islands is the possibility of oil and
gas reserves in the surrounding waters, along with their strategic location in the South
China Sea near shipping lanes and fishing areas.
Although military asymmetry allows China to enjoy an advantage in the size of its
surface and submarine fleet over any of the other claimants, hostility in the region has
occasionally erupted into brief military clashes. A Chinese-Vietnamese confrontation in
1988 led to the sinking of two Vietnamese gunboats and 70 deaths. In 1999 and the first
half of 2001, China was accused of expanding its military presence around the islands
after having protested against reports of Vietnam establishing 'administrative units' on
the Spratlys earlier in the year. Most recently, in July 2007 one Vietnamese fisherman
was killed and several injured when Chinese vessels fired upon them, prompting the
deployment of two Vietnamese fast attack craft.
Concern over the rapid modernisation of regional armed forces and the possibility of
conflict over the Spratly Islands led to the establishment by ASEAN and China of a 'code
of conduct' in 2002 that calls for self-restraint. However, the agreement has failed to
prevent the upgrading of military facilities in the region. In February 2008, Taiwan
completed a 1,150 m airstrip on Itu Aba, its only occupied island, which followed the
Vietnamese renovation of a 600 m airstrip in 2004. China, meanwhile, has developed its
facilities, including the construction of a 350 m pier and new towers that could support
satellite communication or radar equipment on Woody Island, home to China's largest
deployment in the Paracel Islands and a 2,600 m airstrip. The continued military
presence in the area and the dubious enforceability of the code suggest that the long-
term strategic picture remains uncertain.
A positive sign of co-operation occurred in March 2005, when China National Offshore
Oil Corporation, Vietnam Oil and Gas Corporation, and Philippine National Oil Company
signed an agreement to conduct joint seismic surveys of the Spratly area to determine
the probability of energy reserves. The agreement was a significant improvement on
tension created by the previous September 2004 agreement between China and the
Philippines which caused consternation in Vietnam. These agreements were followed by
the meeting in November 2006 of Chinese and ASEAN delegates to discuss a further,
more rigorous, code of conduct, although nothing was agreed. As such, the longer-term
prognosis for the South China Sea remains unclear, as even the effects of the March
2005 joint exploration agreement could prove to be negative. With no agreement on
revenue sharing yet discussed, any reserves discovered by the survey could just
entrench disagreement over the area.
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In addition, the 2005 agreement could easily be ignored or sidelined by other

agreements. In March 2007, Vietnam announced a USD2 billion joint gas exploration
project between British Petroleum, PetroVietnam, and the US firm ConocoPhillips.
China protested in April, and BP, which led the project, called a halt to it in June.
Despite the political agreements, therefore, all parties continue to reinforce their
military structures and maintain their claims. In December, China announced the
creation of the Sansha administrative region, headquartered in Hainan Island, to
manage the Paracel, Spratly and Macclesfield Bank islands, thereby further cementing
its claim over the region. As a result, while significant conflict is highly unlikely, sporadic
clashes in the region are a possibility and little progress in resolving the dispute is likely
in the medium term.
Resources
As China's economy expands rapidly, the country's need for reliable sources of energy,
water and food are increasing apace. This situation has ensured that such factors are
becoming more important within China's foreign policy, and a significant security issue
for the People's Liberation Army.
Energy security
Dependence upon imports of industrial raw materials and fuel is a key constituent of
the country's economy. In the past, China has depended on regional sources of raw
materials, and mainly on the Middle East - especially Saudia Arabia and Iran - for its fuel
needs. Presently, China is becoming more of a global commodity importer, as it builds
up a sphere of influence as far afield as Latin America, and diversifies its oil sources,
especially in Africa. Since Hu Jintao became president, access to oil has become an
increasing foreign policy priority, as China both cultivates its relationships with oil
suppliers like Iran and Russia, and also takes steps to ensure secure transport of oil. This
has increased tension with regional countries, in particular India and Japan, who are
both major energy importers. In the medium term, a short oil market may also create
friction between China and the US, although the two at present rely on different
geographical regions for their fuel supplies.
Aside from competition over energy sources, security concerns have arisen over China's
dependence on the Strait of Malacca running between Malaysia and Indonesia, through
which approximately 80 per cent of China's oil is transported. Schemes to alleviate this
dependence and vulnerability through alternative suppliers in South America, land
pipelines across Asia (including an oil pipeline transiting the Malay peninsula that is
expected to be completed by 2011), stockpiling of oil, and even a canal through the Kra
isthmus in Thailand have all been proposed, but most will take years to come to fruition
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(the Kra isthmus proposal is unlikely to ever be pursued). Similarly, a strategic port
being built in Pakistan with Chinese funding, Gwadar, which was inaugurated in March
2007 and a February 2006 agreement to upgrade the Karakoram highway running
between the two countries will allow Pakistan to become a major transit route for
Chinese energy. In the meantime, China has expressed anxiety over US and Japanese
presences in Southeast Asia and the strait (which is also crucial to Japan as it receives 90
per cent of its oil imports through the passage). Offers by the US to assist in patrolling
the strait made in mid-2004 (subsequently rejected by littoral states) and Japanese
attempts to increase naval activity and regional co-operation, such as the November
2006 launch of the Regional Co-operation Agreement on Anti-Piracy, all on the basis of
anti-piracy measures, have been of particular concern. Cultivation of Southeast Asian
allies has therefore become a large factor within China's foreign policy partly in order to
ensure no foreign power could dominate the lifeline.
In the long term, energy security could become a major security concern for all regional
countries, which would greatly increase the propensity to wage conflict in order to
secure those resources. The economic growth of both China and India, as well as the
ongoing needs of Japan and South Korea suggest that the region's thirst for energy is
likely to grow. According to the International Energy Agency's 2004 World Energy
Outlook, Chinese oil imports are projected to reach 500 million tonnes in 2030,
equalling the level of US imports. Possible confrontations would likely take one of three
forms: first, over access to disputed offshore oil or gas fields (like the East China Sea
fields), second, over access to foreign energy exporters (like China's and Japan's
competition over Russia's Far East oil pipeline project), or third, over China's cultivation
of relationships with energy exporters who are under diplomatic pressure in the
international arena (like Iran or Sudan). However, for the moment China's main
suppliers are either too powerful (Russia) or too far away (the Middle East) for military
action to be a useful part of China's energy policy. This might change if regional demand
continues to increase, and particularly if sizeable reserves were found in the East or
South China Seas.
Alternative fuel projects such as the construction of nuclear reactors and hydroelectric
power dams are necessary to prevent long-term problems for China. China has become
a world leader in using alternative energy, especially hydropower. Renewable energy
satisfied seven per cent of Chinese energy needs in 2005, and the government aims,
under the Renewable Energy Law passed in 2005, to increase this to 10 per cent by
2010, and 20 per cent by 2020, a target that currently appears likely to be met. China is
also investing heavily in nuclear power generation. Nonetheless, for the foreseeable
future the quest for reliable sources of oil and gas is likely to be a core constituent of
Chinese foreign policy.
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River resources
The 'Mekong Cascade', a series of dams being built along the Mekong river (shared by
six countries: Cambodia, China, Laos, Myanmar, Thailand, and Vietnam) has the
potential to lead to instability, and even conflict, in the region.
Proponents claim that these developments will bring benefits such as electricity,
infrastructure and increased investment in industries such as tourism. However,
countries lower down the river, like Vietnam and Cambodia, have expressed concerns
about the impact on water flow, bio-diversity and agriculture, of China's grandiose
hydro-electric plans in the upper reaches of the Mekong. These will impact especially on
the natural rhythm of the dry season flow of the Mekong between November and May
(when it is fed mainly by melting glacial waters from China) and that in the rest of the
year (when the southwestern monsoon cycle drives flows much higher).
One of the main reasons for potential strife is the lack of consultation with local
communities whose lives are intertwined with the river's flow and who will probably
receive few of the expected benefits, yet pay heavily in terms of loss of land and
livelihood. Some 60 per cent of the people in the Lower Mekong region - especially
those in Myanmar, Laos, Cambodia and Vietnam - are poor, and human development
indices across the board are very low.
Plans for Mekong regional development represent the desires of many bordering
countries to harness the economic potential of Vietnam, Cambodia and Laos. These
plans date back over 50 years when US aid planners surmised that the best use for the
region's considerable water resources would be to harness the rivers, mainly for their
hydro-electric power potential, but also for agriculture, industry, transport,
communication and tourism.
The negative impacts of these plans are likely to be enormous. These include
displacement of people from flooded areas, and related compensation and
resettlement issues. This is especially relevant for Cambodia, where over 50 per cent of
the population live and work within 5 km of the Mekong, its tributaries and other rivers.
Cambodia's food security may also be grievously afflicted if its Tonle Sap lake is affected
by developments upstream; however, the nation faces a choice between accepting this
risk and foregoing Chinese economic aid for power generation and infrastructure
projects, essential for boosting living standards and its GDP.
The issue of post-submersion resettlement alone is a pressing one. Social problems may
arise if new jobs are not found, and if adequate, timely and appropriate compensation
and resettlement is not provided. Corruption in allocation of resettlement land would
77
make things more difficult for the poor, and promises of new infrastructure and land
might remain just that. The loss of cultural heritage, such as important religious and
archeological sites and the possible flooding of ancestral graves, are other concerns.
• Manwan (completed 1996);

• Dachaoshan (completed 1997);
• Jinghong (under construction);
• Xiaowan (2010 completion expected);
• Nouzhadu (post-2010);
• Mengson;
• Gongguoqiao.
Proliferation and Procurement
• Although India and China have possessed nuclear capabilities for over three
decades, and the often fractious East Asia has experienced rapid economic
modernisation that has brought high-technology knowledge, nuclear proliferation in
the region has been slow.
• North Korea's nuclear test in October 2006 created the world's ninth nuclear state,
following Pakistan's nuclear test in May 1998. The effect this will have in
encouraging other countries and territories in the area to either produce nuclear
weapons or arm themselves with conventional weapons is increasingly disquieting
for regional governments.
• Beijing has been under pressure from the US and elsewhere to coerce North Korea
into renouncing its nuclear ambitions. Although a moderate degree of success has
been achieved under the format of the six-party talks, China's options are limited by
the need to avoid regime collapse in North Korea (arguably a more serious problem
for Beijing than a nuclear neighbour).
State illegal
North Korea
For China, North Korea's nuclear programme is problematic. Not only is it likely to
perceive a nuclear North Korea as a potential threat (especially in the event of regime
failure), but it is also under pressure from the international community, particularly the
US, to ensure the current six-party mechanism proves a success.
North Korea has been developing nuclear weapons since 1964, when its Soviet-supplied
2 MW IRT-2000 research reactor became operational. North Korea, despite severe
economic hardship during the 1990s, has continued to pursue its weapons programme,
in order to counterbalance a perceived threat from South Korea and have a suitable
78
deterrent to intervention by the US, which has twice warned that it might employ
nuclear weapons on the peninsula. Current estimates place North Korea's potential
arsenal at between five and ten nuclear devices, although there is no evidence of any
weaponisation. The October 2006 nuclear test had a yield of less than one kilotonne (in
comparison the US bombs dropped on Japan in 1945 were of a magnitude of 12.5 and
15 kilotonnes). This low yield suggested more probably a partially failed test, or
alternatively an extremely small nuclear device, designed to draw international
attention rather than demonstrate a significant nuclear capability.
The nuclear test itself encouraged a return to six-party negotiations in December 2006
following a 13-month hiatus inspired by the imposition of sanctions on North Korea by
the US. The seventh round of negotiations ended on 13 February 2007 with a joint
statement in which North Korea agreed to suspend activity at its Yongbyon reactor in
return for one billion tonnes of heavy fuel oil, and five working groups working towards
normalisation of ties with Japan and the US, a peace and security mechanism in
Northeast Asia, denuclearisation of the Korean peninsula, and economy and energy co-
operation.
North Korea subsequently agreed to disable five facilities at Yongbyon and completely
and correctly declare all of its nuclear activities by the end of December 2007 (which the
US believes should entail all plutonium production and weaponisation, a suspected
uranium enrichment programme and suspected proliferation of nuclear technology and
know-how). However, while North Korea claims it met the deadline and declared its
plutonium programme (although concerns remain over the size of its plutonium
stockpile compared to its declared amount), no declaration of its suspected uranium
enrichment programme or its suspected proliferation to Syria has been forthcoming
from Pyongyang. A CIA briefing and media release on 24 April 2008 outlined the US'
allegations that a site destroyed by Israeli aircraft in September 2007 in Syria was a gas-
cooled, graphite-moderated reactor being constructed with extensive North Korean
assistance and modelled after Yongbyon.
Nonetheless, the six-party process appears secure for the present. North Korea
continues to benefit from fuel aid and hard currency from joint industrial projects with
South Korea (with, for example, over 25,000 North Koreans employed at the Kaesong
industrial zone by early 2008), and therefore is unwilling to end the six-party process.
Moreover, its continued procrastination on disablement and declaration has not only
allowed this aid to flow, but provided 15 more months of possible ballistic missile and
nuclear weapons research. As a result, continued but stilted co-operation from
Pyongyang is likely in the medium term. A failure to declare its suspected uranium
enrichment programme or an unwillingness to cede its nuclear devices could undermine
the entire process in late 2008. However, continued North Korean procrastination in an
attempt to stall the process until after the US presidential elections is more likely,
79
thereby creating several more months' delay as administrations change and possibly
ushering in a more emollient US government. For China, this means that a nuclear
North Korea will remain on its border for the medium term, with probable expansion of
its nuclear arsenal and expertise amid its procrastination.
Regional nuclear proliferation
A security issue for China as a consequence of the increasing nuclear arsenal of North
Korea, although one that is unlikely to occur, is the effect the Korean situation might
have on security perceptions elsewhere in the region. There has been little incentive for
regional powers to develop nuclear weapons to date. However, the establishment of a
nuclear deterrent could become more appealing for countries within range of North
Korea's missile systems (in 1998, North Korea tested a Taepodong 1 missile over Japan
with a 2,500 km range).
Although both entities have denounced the possibility of developing nuclear weapons,
both Japan and Taiwan have been mentioned as possible proliferant risks. In truth,
Japan's development of nuclear weapons remains highly unlikely given Japan's unique
experience as the only country to have suffered as a victim of nuclear bombs used in
aggression. Taiwan previously pursued a covert nuclear weapons programme in the
1970s but was forced to abandon it in the 1980s by the US. Both entities remain
securely under the US nuclear umbrella, which further mitigates against their
developing nuclear weapons.
Following the removal of US nuclear weapons from the Korean peninsula in the early
1990s in support of the Joint Agreement for the De-Nuclearisation of the Korean
Peninsula, South Korea's motivations to develop nuclear weapons have increased. In
August 2004, South Korea informed the International Atomic Energy Agency (IAEA) that
it had enriched nuclear material in the course of atomic vapour laser isotope separation
(AVLIS) experiments that had not been declared to the IAEA. These experiments had
been on a laboratory scale and involved the production of only milligramme quantities
of enriched uranium. According to Seoul, these activities were carried out without the
government´s knowledge at a nuclear site in South Korea in 2000, and the activities
have since been terminated. Nonetheless, the admission raised concerns over possible
South Korean experimentation into nuclear weapons, particularly as one third of US
troops are being withdrawn from the country by 2008 and North Korea has
demonstrated its own possession of nuclear devices. Once again, however, it is unlikely
that South Korea will develop nuclear weapons given the remaining US military
presence and the damaging effect such a development would have on inter-Korean
relations.
Terrorism and Insurgency

80
• Although well contained, the most evident threats to Chinese unity are the
outbreaks of ethnic disturbances, attacks by separatist groups and large-scale
protests that occur regularly in outlying minority areas such as Xinjiang, Qinghai and
Tibet.
• These incidents tend to be isolated geographically, small in scale and without
support among the wider Chinese population, but they occasionally escalate into
serious rioting and China would be hard pressed to maintain order in its far western
regions without the People's Liberation Army (PLA), People's Armed Police (PAP)
and paramilitary groups such as the Xinjiang Production and Construction Corps
(XPCC).
• The strong presence of security forces in these regions makes it difficult for
separatist movements to increase the scale and co-ordination of their actions
beyond their current level. Unless a broader, national crisis were to affect the CCP's
authority, regional separatist movements are unlikely in the immediate future to be
able to take decisive action to achieve independence.
• The disposition of its Central Asian neighbours plays an important part in controlling
Islamic separatist movement in China's western provinces. Beijing has played an
active role, especially under the framework of the Shanghai Co-operation
Organisation, in obtaining the co-operation of its neighbours to the west. China's
concern is not only that its neighbours do not support separatist movements in
China, but also that they actively suppress local Islamic movements that might
otherwise co-operate with Islamic groups in China.
National Separatist
Xinjiang Uighur Autonomous Region (XUAR)
Following the collapse of the Soviet Union and subsequent disorder in its former Central
Asian republics, ethnic Uighur separatism and related violence became a substantial
concern for Beijing. As such, the Chinese authorities increased their heavy security
presence in the minority-populated region and designated its effort to contain
separatism in Xinjiang an anti-terrorist as well as an anti-separatist campaign, to signal
to external observers the gravity with which it views the matter and the intensity with
which it will be prosecuted. Since September 2001, Beijing has attempted to align its
counter-Uighur operations with the US-led 'war on terrorism', and has claimed linkages
between Uighur groups and Islamist fundamentalism. Beijing has also relied on its
influence in the SCO to control foreign support for Islamic groups in the XUAR.
The CCP's suppression of the Uighur movement has been effective in preventing
assassinations and bombings, and insurgent activity is rare. However, with the 2008
Olympic Games in Beijing forthcoming, a spate of Chinese allegations of terrorist activity
has occurred. In January 2007 state-run media described the destruction of an apparent
81
separatist 'base', during which 18 Uighurs (the official Chinese news agency described
them as 'terrorists') were killed, along with one policeman, and 17 other Uighurs were
arrested. Apparently, during the raid, 22 hand grenades were seized, along with enough
material to construct a further 1,500. Almost exactly a year later, another similar raid
occurred on an alleged terrorist training camp in Xinjiang that killed two and led to 15
arrests. According to the state-run Global Times, this latter operation also disrupted a
plan to execute bombings on 5 February, just prior to the lunar new year holiday.
Subsequently, on 7 March a China Airlines flight from Urumqi to Beijing landed
prematurely in Lanzhou, apparently because a Uighur woman had attempted to light a
can of diesel in the aircraft's toilet in an alleged suicide terrorist attack.
Finally, on 10 April, Wu Heping, a spokesperson for the Ministry of Public Security,

claimed 45 individuals had been arrested between January and April for planning to
launch attacks to further Uighur separatism in the western Xinjiang Uighur Autonomous
Region. The first group of 10 people was detained between 4 and 11 January, and 18
explosive devices, 4 kg of explosives and seven detonators were allegedly seized. Wu
claimed the group planned to detonate 13 devices in remote areas of the country,
possibly for experimentation and testing, before attacking targets in Beijing and
Shanghai from May. A second group of 35 people was arrested in Urumqi between 26
March and 6 April. According to Wu they planned to launch human-borne, suicide
improvised explosive device attacks and to kidnap foreign athletes at the Olympic
Games.
Although impossible to verify such claims, the allegations demonstrate China's

continued desire to vilify separatists and justify suppression of separatist sentiment and
movements. Moreover, although such claims have become more frequent in 2008, no
successful attacks have yet occurred, reflecting the highly effective prevention of non-
state violence in the region. This has come at a price: repression of the Uighur culture
and language (Uighur publications were banned in 2002) has been aggravated by a
transmigration policy which has seen the Han Chinese become the largest and
wealthiest ethnic group in the XUAR.
While an organised insurgency is therefore not a direct threat to the CCP, given the lack
of significant external support, widespread dissatisfaction of a lack of autonomy and the
dominance of the Han Chinese could create social unrest. The particular geography of
Xinjiang is a barrier to spontaneous province-wide demonstrations, with 90 per cent of
Uighurs living in remote, rural locations with poor communications, but a history of
uprisings in the XUAR (Kargilik and Paysawat, 1981; Baren, 1990; Gulja, 1996) and
recent protests (Hotan, 1999; Qomul, 2002; Ili, 2003) reflect the possibility of instability
in Xinjiang. The fear of instability was heightened by the revolution in neighbouring
Kyrgyzstan in late March 2005, which incited concern over the possibility of similar
uprisings in Xinjiang. However, unrest in the XUAR is currently at a very low level, and in
82
future is more likely to stem from domestic repression than the influence of democratic
or religious movements elsewhere.
Organised Crime
• As China has developed economically, crime, especially violent and organised crime,
has been rapidly increasing as greater wealth creates criminal opportunities, with
84,000 economic crimes reported in 2007, an annual increase of 4.2 per cent.
• Chinese criminal organisations now engage in a wide range of activities worldwide,
including narcotics trafficking (especially methamphetamine and heroin from the
Golden Triangle), human trafficking (run by so-called 'Snakeheads'), prostitution,
gambling, violent crime and extortion, intellectual property piracy, and financial
fraud including counterfeiting, credit card fraud, and money laundering.
Organised crime groups
Chinese organised crime syndicates have become prevalent worldwide, wherever there
is a significant expatriate Chinese community. For decades these groups were primarily
affiliated with the 'Triads'. These criminal societies are descended from revolutionary
groups in the 17th Century aimed at expelling the Manchu Qing dynasty and reinstating
the Han Chinese Ming dynasty, and retain many of their rituals and traditions. Although
Triads, based largely in Hong Kong, Macau, and Taiwan, remain powerful worldwide
(the two largest groups - the Sun Yee On and the 14k - are believed to have between
them some 80,000 members worldwide), gangs based in mainland China have become
an ever growing global threat.
Mainland Chinese criminal groups, often collectively termed 'Big Circle Boys', originated
as Red Guard members who were purged from the PLA and sent to prison camps in
Guangzhou. Although less centralised than the Hong Kong-, Macau- and Taiwan-based
Triads, mainland Chinese groups (Big Circle Boys) now rival the Triads in the
sophistication of their operations, both within China and internationally. The Big Circle
Boys seem to have extensive freedom of operation within China, and have established
networks and contacts globally.
Through their extensive national and international network (including contacts in other
organised crime groups such as Russian and Eastern European Mafia), flexible structure,
sophistication of organisation, financial strength, and sheer ruthlessness, mainland
Chinese groups have become a problem for law enforcement worldwide.
Trafficking
83
Drug
Trafficking of drugs has not only brought higher levels of crime to China's border
provinces, particularly Yunnan, but also fuelled alarming rates of HIV infection within
these areas. Revenues from the Golden Triangle as a whole (the area along the
Myanmar-Thai-Laos border), throughout which both an entrenched methamphetamine
and heroin trade is spread, also fund organised crime within China in a manner that
directly challenges the social order and central authority there.
Beijing takes drug trafficking seriously but has had little success in preventing dangerous
substances, particularly heroin and methamphetamine, from entering the country.
Close to half of the heroin output of the Golden Triangle is thought to pass through
China. Approximately one quarter of the heroin entering China is believed to be for
domestic consumption and a further 15 per cent of that consumed in China derives
from domestic opium production (from provinces such as Gansu), suggesting an
alarming rise in use.
In addition to manufacturing the psychotropic drug themselves, Chinese producers are

also known to export chemical precursors to Myanmar for manufacture into
methamphetamines there. As Japan has cracked down on shipments of
methamphetamines and other drugs from North Korea, China may be becoming a more
important conduit/source for the Japanese market. Methamphetamine producion in
Myanmar has soared in recent years as a government-supported opium eradication
scheme has forced producers to look for other markets. China, along with Thailand, has
been the primary destination for these narcotics. The increasing importance of
methamphetamines in the regional trafficking market has been demonstrated in the
number of seizures. According to figures available in March 2008, since 2005 China has
seized 19.7 tonnes of "ice" (crystal methamphetamine) and related tablets, 5,000,000
capsules of ecstasy, 10.5 tons of ketamine and 4,456 tonnes of precursor chemicals.
Yunnan has been the main entry point into China for narcotics smugglers, via the
'Burma Road', across the Kambaiti pass or through Loije. Trafficking has also spread to
other border provinces, including Guangxi and neighbouring provinces like Guizhou.
Once in China, much of the trade goes to Hong Kong and the eastern coastal provinces,
whence it can be shipped to Australia and the United States. Within China, known
trafficking routes include Myanmar-Yunnan-Sichuan-Gansu-Qinghai-Xinjiang, with
another leg running Gansu-Ningxia-Shaanxi-Beijing, and Yunnan-Guangxi-Guangdong-
Shanghai. China also serves as a gateway to the Southeast Asian market, with drugs
crossing the border through the provinces of Luong Namtha and Phongsaly in Laos.
The export of narcotics from the Golden Triangle into China is not only a domestic
security concern, but also allows funding for transnational crime groups and large non-
84
state groups which destabilise China's border regions, particularly in Myanmar. For
instance, although the People's Liberation Army is reported to have trained elements
within the United Wa State Army (UWSA) in Myanmar, which is made up of ethnic Wa
but has ethnic Chinese leaders, their involvement in narcotics production is a concern
for Beijing.
Given the relative power of the UWSA, and the autonomy of ethnic regions from central
control, production of narcotics is unlikely to disapear. The UWSA, which has strong, if
not guaranteed, links to the ruling State Peace and Development Council (SPDC) in
Yangon, enjoys its own zones of authority on the Chinese border (and, since a
government resettlement programme began, largely believed to be at the behest of
Beijing) also in a separate area on the Thai border. Its relative autonomy makes it a
potential problem for both Yangon and Beijing, as although it currently fights for the
SPDC against its various ethnic insurgencies, any estrangement between the two sides
could result in serious instability in China's neighbour. Certain regions have benefited
greatly from integration in relation to organised crime, for example Macau. Further,
increased co-operation between municipal police forces in the south is an encouraging
sign of a more comprehensive policy towards the problem. Outside of this limited area
in the south, however, little cohesive policy exists in dealing with the problem. On the
mainland, therefore, organised crime is likely to increase as crime syndicates are
growing in sophistication and becoming increasingly motivated by the wealth evident in
China.
Human
China faces significant internal human trafficking. According to the US State

Department's 2006 Trafficking in Persons Report, between 10,000 and 20,000 people
are trafficked internally each year, and in December 2007, the Ministry of Public
Security claimed to have recorded 2,500 human trafficking-related crimes in 2006.
Within China, demographic pressures (namely a gender imbalance) have resulted in the
trafficking of women and children to be used for labour, in the sex trade, or for forced
marriage. Women from Myanmar, North Korea, Russia, Vietnam and Mongolia are also
smuggled into China for the sex trade or marriage.
China also plays a key role internationally as a source, conduit, and destination for
human trafficking and smuggling. Although 'human trafficking' and 'people smuggling'
are in theory different activities (the former being involuntary), in this case the
distinctions are blurred, as Chinese migrants often find themselves on arrival forced into
labour. Generally, in exchange for a high initial fee, migrant workers hoping for a higher
income abroad are transported by 'Snakeheads' (who use their resources and contacts
to arrange the process, sometimes, although not always, including organised criminal
contacts) to countries in North and South America, Europe, Africa, and the Middle East.
85
On arrival, in order to pay off their financial obligations to the 'Snakehead', they are
either placed into forced labour or, more commonly, given unskilled, low-income jobs.
Women are also sometimes forced into the sex trade. Generally, Snakeheads will
continue to control the lives of migrants after arrival, and compel them to work, until
their debt has been paid off. As the average fee is in the tens of thousands of dollars,
this period of labour may last a very long time.
In response to this problem, the Chinese government initiated in 2008 a four-year 'zero
tolerance' crackdown on human trafficking. In 2002, China also undertook to co-operate
with ASEAN countries in order to crackdown on international crime, including human
trafficking. Bilateral projects have also been initiated between China and Thailand, and
between China and Vietnam. In 2005, the Greater Mekong Sub-Region forum
(Cambodia, China, Laos, Burma, Thailand and Vietnam) agreed to co-operate on the
prosecution of traffickers and the repatriation of victims.
Despite these measures, the level of human trafficking and people smuggling is unlikely
to diminish given the perceived financial rewards involved for both the traffickers and,
in the case of smuggling, the migrants.
86
Tibet
Risk Pointers
Regional overview
Social unrest
Insurgency
Political succession
Profile
Security
Political stability
Separatism
Social stability
Borders
Organised crime
Internal Affairs
Political System
Political leadership
Zhang Qingli
Legqog (Lieque)
Jampa Phuntsog (Qiangba Puncog)
Dalai Lama Tenzin Gyatso
Panchen Lama Erdini Qoigyijabu
87
Kalon Tripa Lobsang Tenzin (Samdhong Rinpoche)
External Affairs
EU and Tibet
India and Tibet
Nepal and Tibet
US and Tibet
Historical Background
Negotiations with Beijing
Security Forces
Police forces
Military forces
Non-state Armed Groups
Tibetan separatists
Foreign Forces
Geography
Climate
Environmental Factors
Natural Resources
Oil and gas
Minerals
Land Use
88
Energy
Food and water supply
Demography
Births and deaths
Ethnic groups
Language
Density of population
Population growth rate
Infrastructure
Roads
Rail
Airports
Ports
Pipeline
Economic Overview
Sectoral assessment
Risk Pointers
Regional overview
Tibet is an internationally recognised autonomous region of the People's Republic of

China, with a local government that is firmly under Beijing's control. However, the
legitimacy of that rule is disputed by many Tibetans, both inside and outside the Tibet
Autonomous Region (xizàng zìzhu qu: TAR). This is in large part owing to Tibet's
history as an independent country remote from Chinese concerns and a long-standing
Tibetan sense of nationhood. There was resistance to the Chinese invasion in 1950,
89
and there have been serious uprisings against Chinese rule since that time, notably in
1959, 1989 and 2008. As the latest bout of violent unrest demonstrated, the potential
for upsurges of resistance to Beijing's reign exist given continued Chinese oppression
of the Buddhist religion and ongoing attempts to dilute the Tibetan culture and
population with Han Chinese migrants. The religious leader of Tibetan Buddhism and
world Lamaism, the Dalai Lama, fled to India in 1959 and set up a government-in-exile
to represent Tibetan interests and publicise Chinese human rights abuses in Tibet.
This has been very successful in generating international sympathy for the Tibetans'
cause, and thus China has a high-profile rival claimant to its legitimacy as the
territory's ruler, a situation that poses a risk for social and political stability in the
region. China has also created security problems in Tibet by a policy of encouraging
settlers from other provinces. Ongoing Han Chinese settlement in Tibet is
exacerbating the sense of dispossession felt by many Tibetans in the TAR, leading to
further resentment of authorities and potential communal violence as occurred in
March 2008. Equally, as in the rest of China, the huge economic strides that are
undoubtedly being made in the TAR are disproportionately felt in the cities, leading to
large disparities between urban and rural standards of living. These income
inequalities could lead to social unrest, especially since, due to the demographics, this
implies an increasing wealth-gap between Han and Tibetan, although significant and
sustained organised unrest remains a distant possibility.
Social unrest
The possibility of social unrest in Tibet exists, although it is unlikely to lead to a

provincial revolution given the geographically dispersed Tibetan population.
Continued suppression of religious freedom is a particularly sensitive issue, with the
human rights organisation, Free Tibet, estimating that 80 per cent of political
prisoners in Tibet are monks or nuns. The commuting of a death sentence of a
prominent Tibetan Monk, Tenzin Deleg Rinpoche, to life imprisonment for alleged
involvement in bomb attacks in Sichuan province and the early release of his
supposed aide Tashi Phuntsog in January 2005 were viewed as concessions to
international demands for clemency amid questions over the legitimacy of Tenzin
Deleg's trial. However, Beijing's desire to control Tibetan Buddhism is unlikely to
diminish given the political influence invested in the province's religious leaders. As
such, China continues to detain the Dalai Lama's choice for the 11th Panchen Lama
(the second most important monk in Tibetan Buddhism), Gyancain Norbu, and has
supported the selection of an alternate Panchen Lama, Gedhun Choekyi Nyima. Such
policies lessen open criticism of Beijing's rule, but ensure continued dissatisfaction
among Tibetans, and hence the likelihood of sporadic and easily contained unrest
remains. The monk-led protests and ensuing ethnic violence and suppression in March
2008, which left 19 people dead according to official figures, and up to 150 dead
according to figures from the government-in-exile, were a stark reminder of the
90
possibility of violence surrounding both resentment at religious oppression and

Han/Hui migration. However, while sporadic unrest is to be expected in the run-up to
the 2008 Olympics in August, such events are historically infrequent and inevitably
suppressed by the authorities,
Insurgency
Despite widespread anti-Beijing sentiment among Tibetans in the TAR, an indigenous

insurgency against Chinese rule has faded to almost non-existence. Initially supported
by overseas powers, namely the CIA in the 1950s, this backing receded as the US
developed its international relations with China. By the mid-1970s, no organised
resistance existed. Currently, a few armed separatists remain, and Beijing continues
to claim that ethnic Tibetans throughout the country have access to small arms. In
April 2008, Beijing claimed that weapons and explosives had been discovered at 11
monasteries in ethnic Tibetan areas of Gansu province, although the scant details
released suggested the weapons were rudimentary and few in number. As a result,
the well-armed and numerous People's Liberation Army (PLA) is firmly in control of
the region. Continued sporadic violence is likely, given the resentment at China's
occupation of the TAR, particularly among Tibet's younger population, who have
become disillusioned with the Dalai Lama's 'middle way' of non-violent negotiation
towards greater autonomy and not independence. It is possible that secessionist
groups in Tibet might renew their claim to full Tibetan independence, or return to the
use of organised violence, supported by migrant Tibetans resident in north India,
following the 72-year-old Dalai Lama's death. This scenario will continue to be a
remote possibility for the near future, but may represent a medium-term threat to
Beijing's authority in the TAR.
Political succession
A particular aspect of the risk to the social order in Tibet lies in the problem of the
succession in the religious leadership: the Dalai Lama was born in 1935, and his age
has raised questions as to what will happen after his death. After his departure from
the political scene, there may be problems finding someone who can negotiate with
authority on Tibetans' behalf whether inside or outside Tibet. Should the traditional
succession according to reincarnation occur, the new Dalai Lama, even when
discovered (and there will be a gap between the present incumbent's death and the
installation of his successor), will be a child, and will take years to develop into the
role and acquire the same sort of standing as his predecessor. Moreover, the Panchen
Lama plays a significant role in the selection of the new Dalai Lama, making the issue
of China's replacement Panchen Lama a politically significant one. The 2001 election
of a prime minister to take the Dalai Lama's place as the secular head of the Tibetan
91
exile community is intended to obviate this problem. Without the Dalai Lama's
moderating influence it is likely that radical anti-Chinese opinion among the Tibetans
will grow more vocal. This may lead to factionalism and the formation of extremist
groups, and will be exacerbated if Beijing attempts to takes any role in the selection
of a new Dalai Lama, including offering its own candidate. Any such Chinese choice of
a rival Dalai Lama is unlikely to be acceptable to Tibetans whether inside or outside
Tibet. In an attempt to forestall this possibility the Dalai Lama has suggested that he
may not be reincarnated, or will be reincarnated while living, although any attempt to
interfere with the traditional process poses a slight risk of undermining his successor's
legitimacy, whether in the eyes of his people, or of Beijing.
Profile
Area: 1.2 million km2
Language: Tibetan, Tibetan dialects and Mandarin
Religion: Tibetan Buddhism
Time Zone: GMT +8
Population: 2,840,000 (2007, Chinese National Bureau of Statistics)
Neighbours: International: Bhutan, India, Myanmar, Nepal; Chinese provinces: Qinghai,

Sichuan, Xinjiang Uighur Autonomous Region, Yunnan
Capital City: Lhasa
Primary Port: None (landlocked). Primary land port is Zham, in Xigaze prefecture on the
Nepalese border.
Primary Lhasa Gonggar Airport

Airport:
Currency: Chinese Yuan (CNY)
Security
Political stability
92
There is little probability that Beijing will loosen its grip on Tibet in the near future. A
major role of Tibet in Chinese political culture is symbolic - the Chinese nationalism that
plays a major role in legitimising the authority of the ruling Chinese Communist Party
(CCP) depends on notions like the 'preservation of national unity' and 'recovering "lost"
territory' for part of its force. This nationalism is critical to the CCP's efforts to maintain
national unity in a China where communism has lost relevance as a national ideology,
and where growing income differentials between various parts of China, as well as
greater regional autonomy, may threaten unity. Any apparent tolerance for 'splittism'
on the part of the CCP would therefore jeopardise the CCP's claim to have restored
China to its historic greatness, and endanger the CCP's political legitimacy. To allow
Tibet to become separated would consequently threaten the regime security of the
CCP. As a result, calls for Tibetan independence on the part of the Tibetan government-
in-exile at Dharamsala or even 'true autonomy' by the Dalai Lama are taken very
seriously by the CCP as a threat to its long-term control of China.
As well as its symbolic force with regard to the absolute nature of China's borders and
legitimacy of the CCP, Tibet also serves as a strategic buffer between China and
neighbours in South Asia. In particular, India has been a historical rival of China, and the
significant costs for Beijing of controlling Tibet are preferable to an Indian military
presence or influence in the region. Although significant Sino-Indian rapprochement in
recent years has diminished the risks of a military conflict with India for the foreseeable
future, while closer ties and joint interests suggest that India is unlikely to challenge
China's claim to Tibet, the history of Sino-Indian ties will encourage China to retain its
control of Tibet in the long term.
Tibet also shows potential as a source of resources for China. Tibet boasts significant
mineral and water resources and the region's geography also gives it great potential for
hydropower and geothermal power. In a statement in December 2005, Zhang Hongtao,
deputy director of China's Geological Survey Bureau, revealed that the Tibet-Qinghai
plateau also held large oil reserves, with an estimated potential of over 10 billion
tonnes. Currently, the inaccessibility of Tibet has limited its role in the overall Chinese
economy, but as China's demand for energy and raw materials grows, and as
infrastructure and development improve, it may come to play a bigger role in that
respect.
Separatism
Given Tibet's geostrategic significance, and the ideological need for national unity, any
separatist or Tibetan nationalist sentiment is unlikely to persuade Beijing of the
legitimacy of calls for independence. Similarly, although public resentment of Chinese
authority is widespread, organised resistance is minimal, and the restraining rhetoric of
the Dalai Lama usually prevents any direct violent threat to the provincial government.
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Independence for Tibet, therefore, is currently unlikely, although internal and external
pressures are encouraging Beijing to at least superficially increase autonomy for the
region.
In a bid to stymie international and domestic criticism of its authority over Tibet, the
Chinese leadership has attempted to publicly highlight the province's self-government.
The TAR government is increasingly administered by ethnic Tibetans, although the party
secretary of the Tibet Autonomous Region Committee and real power in the province
remains Han Chinese. Beijing has introduced laws to protect the Tibetan language and
culture, although Tibetan organisations complain it has not done much in practical
terms to implement those laws effectively.
Beijing's concerns with its image has also driven the recently re-opened talks with the
government-in-exile, which is a major breakthrough in itself. However, moving on to the
next stage of substantive talks will be difficult. Negotiations have been extremely slow
moving since late 2004, with the sixth and most recent round of low-key talks being in
July 2007.
The violence in the TAR and neighbouring provinces in March 2008 could encourage
Beijing to highlight its talks with Dharamsala to demonstrate its willingness to negotiate
and soften its public image ahead of the 2008 Olympic Games. A window of opportunity
is therefore currently open for improving relations with the exiled Tibetan leadership,
and perhaps reaching some sort of long-term settlement. This is also encouraged by the
fact that the current administration in Beijing has some understanding of west China,
with President Hu Jintao himself being CCP secretary of the TAR between 1988 and
1992, although his introduction of martial law in the face of the protests of 1989 did not
endear him to the local populace. Moreover, the Chinese government is very aware that
the Dalai Lama's age and possible confusion over his successor means that window may
not stay open for long, and they are concerned that whatever situation follows may not
be as suitable for negotiations. The Dalai Lama has signalled his flexibility on various
occasions since the 1980s by reiterating his 'middle way' and the fact that he is seeking
"genuine autonomy for his country and not independence." Such language has
encouraged continued negotiations with Beijing, but progress is unlikely to be
forthcoming, and a large disparity still exists between the Tibetan government-in-exile's
desires and China's security perceptions.
The situation in Tibet should therefore be seen as relatively stable. Beijing will not
renounce its sovereignty over Tibet, seeing any threat to its continued rule there as a
threat to the geographical integrity of China itself, and Beijing is unlikely to lose control
over the region. However, there are signs that anti-Chinese movements both within
Tibet and abroad have grown disillusioned with the failure of the Dalai Lama's 'middle
way'. It is possible that after his death, especially if a leadership vacuum in Dharamsala
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is created, separatist groups may return to the use of organised violence and shift from
a goal of autonomy to outright independence. Unless there is some sign of success for
the 'middle way' policy (and this seems improbable at present), some groups are likely
to resort to violence both ahead of the Olympic Games to highlight the movement and
after the Dalai Lama dies (especially if there is no clear successor).
Social stability
With Beijing remaining in control of Tibet and little chance of independence, the
Chinese government needs to address other security concerns within the province. Like
the rest of China, the province is booming economically, but like the rest of China this
boom is not evenly distributed, with a significant wealth gap between urban and rural
inhabitants (although rural income growth registered 13.1 per cent in 2006, higher than
that of urban areas, rural monthly income remains low at CNY2,788 in 2007). Since the
Han immigrants are disproportionately represented in the towns, and
disproportionately in charge of the new businesses, this economic development has the
potential to exacerbate inter-ethnic rivalry, and resentment against Chinese rule.
This potential was amply demonstrated in March 2008, when days of protests in Lhasa
descended into ethnic violence, with Han and Hui migrants, citizens and businesses
specifically targeted. Monk-led protests began on 9 March, the eve of the 49th
anniversary of the 10 March 1959 unsuccessful protests against Chinese rule that led to
violence in Lhasa, suppression by Beijing and the flight of the Dalai Lama to India, but
expanded and became violent on 14 March with shops and police cars torched by
monks and laypeople. The situation subsequently deteriorated with the ethnic violence
killing an unknown number of Han and Hui Chinese at the hands of Tibetans carrying
bladed and rudimentary weapons (Beijing claims 18 civilian deaths and 382 injuries,
alongside one security force death and 241 injuries) and the subsequent repression by
the Chinese security forces arresting thousands and killing an unknown number of
Tibetans (the government-in-exile claims up to 150 deaths).
Although the motivations for the rioting were multiple, including suppression of Tibetan
culture, language and particularly religious freedom, the ethnically targeted violence
demonstrated that Han and Hui migration to Tibetan urban areas remains at the very
least unpopular among Tibetans as an icon of Chinese occupation of the TAR. As a
result, despite Beijing emphasising social harmony in its policies, it has struggled to
temper ethnic tensions, exacerbated by economic growth or wealth differentials, raising
the possibility of further ethnic violence in the future. The fact that ethnic Chinese
citizens and businesses are far easier targets than security forces further heightens this
probability.
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Borders
Internationally, China is also concerned by the resentment caused in India by its

continued administration of Tibet. Although de jure border disputes still exist around
Arunachal Pradesh in Qinghai and Aksai Chin in Tibet, these disagreements shows no
signs of descending into violence. India has modified its stance towards Tibet, and a
June 2003 declaration saw India recognise the Tibet Autonomous Region as part of
China, while in return the Chinese offered de facto recognition of Indian sovereignty
over Sikkim, by agreeing to start border trade through the state. In April 2005 Prime
Minister Singh and Chinese Premier Wen Jiabao signed a declaration to resolve all
border disputes along the 3,550 km border, although the details have not been
finalised. The agreement amounted to de jure recognition of Indian sovereignty over
Sikkim, a major step on the way to resolution of the border dispute. Furthermore,
recent exchanges of high-level visits have been amicable and the Indian reaction to the
Tibetan uprising in 2008, arresting 60 ethnic Tibetans during the Olympic torch relay in
New Delhi in mid-April, demonstrated its more emollient attitude towards China and
unwillingness to anger Beijing. While the potential for conflict remains in the very long
term, therefore, it seems an increasingly unlikely prospect for the near future.
Organised crime
Crime remains a minor concern in the security considerations of the Chinese authorities
in Tibet. The region's geography makes it an unlikely trafficking route for any criminal
organisation, while the low level of disposable income of the population stifles demand
for criminal products. Nonetheless, occasional and unverifiable reports infrequently
appear in the state-run media of criminal activities in the TAR. For instance, a
September 2007 report recorded the sentencing to 18 years' imprisonment of Long
Desheng, the apparent leader of a 12-member organised criminal organisation that
focused on gambling. The same report claimed that in 2006 142 people had been
arrested in 711 criminal cases in the TAR. This figure likely increased in 2007, following
the detention of 64 alleged gang members in mid-July in Xigaze alone, but the opaque
nature of China's judicial system prevents independent analysis of criminal figures.
Internal Affairs
Political System
Official Name: xizàng zìzhu qu; Tibet Autonomous Region (TAR)
Political System: Autonomous region of the People's Republic of China, governed by the
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Chinese Communist Party.
Head of State: President Hu Jintao
Administrative Under the provincial government there are two more administrative tiers
structure: including one city government, Xigaze, and six prefectures, further
subdivided into 73 counties. The capital Lhasa is governed directly by the
regional administration.
Government in Set up by the Dalai Lama soon after he fled Tibet in 1959. Popularly elected
exile: by the Tibetan diaspora, there is an assembly of 45 Tibetan People's
Deputies based in Dharamsala in northern India which elects a Council of
Ministers led by a popularly elected chairman, currently Samdhong
Rinpoche.
Next Election: Not Applicable
There is no real internal political process in Tibet other than that manifest inside the
Chinese Communist Party (CCP), whose rule is absolute in the TAR. However, the
actions and statements of the Tibetan government-in-exile in Dharamsala have an
effect on Tibetan public opinion and the Dalai Lama remains popular in Tibet.
As elsewhere in China the TAR administration has two parallel streams: the regional
People's Congress (parliament) and government that hold overt authority, and the party
apparatus, which is actually dominant. Individuals may hold positions in both, however,
making the structure more organic than it appears. For example, Zhang Qingli is
secretary of the Tibet Autonomous Regional Committee of the CCP, while his Tibetan
deputies in the party, Jampa Phuntsog (Qiangba Puncog) and Legqog, also hold the top
posts on the TAR's government and the Tibetan People's Congress' standing committee.
All three are also among the 198 members of the Central Committee of the Chinese
Communist Party, placing them near the top tier of Chinese government.
In the meantime, in a move aimed at making the Tibetan government-in-exile more

democratic and the Dalai Lama less vulnerable to Chinese criticism of the feudal nature
of traditional Tibetan society, a new office was added to the government apparatus in
Dharamsala. On 29 July 2001, 38,000 exiled Tibetans out of the 60,000 worldwide who
were eligible voted to elect their first 'prime minister' to head the parliament based in
northern India. The government-in-exile avoids the controversial title of prime minister,
instead labelling the office 'Kalon Tripa' or chairman of the cabinet. Lobsang Tenzin (also
known as Samdhong Rinpoche), born in 1939, was elected for a five-year term as the
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new leader of the exiles' government, and subsequently re-elected in July 2006, in a
process of democratisation that the Dalai Lama says he has introduced "to offer a
smooth transition and to remove any possible confusion over the issue of leadership
while I am alive". The Dalai Lama has said that he would take no part in any possible
future government of Tibet, and that his place would be taken by a president.
Political leadership
Secretary, TAR Party Committee: Zhang Qingli
Deputy Secretary, TAR Party Committee: Zhang Yijong
Chairman, TAR regional government: Jampa Phuntsog

(Qiangba Puncog)
Chairman, TAR Standing Committee of the People's Congress and Legqog (Lieque)
Deputy Secretary, TAR Party Committee:
Member, TAR Standing Commitee of the People's Congress and Major-General Meng
Commander, PLA Tibet Military Region: Jinxi
Zhang Qingli
Party secretary Zhang Qingli was born in 1951. A Han Chinese native of Dongping,
Shandong province, he joined the CCP in 1973 at the age of 22. He graduated while
working for the party in a variety of party posts in Shandong. A close ally of President Hu
Jintao, Zhang was promoted from the position of deputy party secretary of the Xinjiang
Uighur Autonomous Region to his current position in the TAR after his predecessor,
Yang Chuantang, suffered a stroke in September 2005 just nine months after his
appointment. Zhang assumed the post of acting party secretary of TAR in November
2005 and he was subsequently confirmed in May 2006. Zhang's appointment reflects
President Hu's desire to keep tight control over the border provinces through allies with
a similar background: both Hu and Zhang rose through the Communist Youth League.
Given his political connections and his past postings, Zhang is considered to be a rising
star within the CCP and is therefore viewed as a member of the post-Hu 'fifth
generation' of CCP leaders, raising the possibility of his elevation to higher national
policy-making bodies such as the Politburo in 2012 or beyond.
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Legqog (Lieque)
Previously chairman of the TAR Party Committee, Legqog (Lieque in Mandarin) was
appointed chairman of the TAR People's Congress in May 2003. He is also a deputy
party secretary. Born in 1944, Legqog, who is an ethnic Tibetan from Gyantse in the
TAR, has close links to former deputy party secretary Ragdi, although he remains very
much the junior figure in the relationship. He joined the CCP in 1971. Prior to that he
had worked for seven years as a primary and middle school teacher in Gyanze
(Gyantse). Most of that time was during the Cultural Revolution, when colleges were
closed. Although schools were still open, almost the only subject taught between 1966
and 1976 was political studies.
From 1973 to 1975 Legqog served as secretary of the Gyanze division of the Communist
Youth League of China. His two key promotions came in 1975, when he was appointed
secretary of the supervisory division of the organisation department of the Tibet Party
Committee, and in 1980 when he took over as deputy chief of the organisation division
within the same department. From 1986 to 1991 his job title was executive deputy head
of the organisation department of the TAR Party Committee and he was secretary of the
Lhasa City Party Committee from 1991-94. He is a member of the Central Committee of
the CCP.
Jampa Phuntsog (Qiangba Puncog)
Born in 1947 in Changdu, TAR, Jampa Phuntsog (known as Qiangba Puncog in Mandarin)
joined the CCP in 1974 having graduated from Chongqing University. He spent six years
at the Changdu District Farming Machinery Factory, before becoming more directly
involved in provincial politics as county secretary for the People's Military Department
in Bomi, TAR. Jampa worked his way through a number of district-level appointments
until he was chosen as a member of the Standing Committee of the TAR People's
Congress in 1998. His allegiance to the party was rewarded in 2002 with membership of
the CCP Central Committee, and finally the chair of the TAR regional government in
mid-2003. Jampa is thought to be loyal to the CCP, and often represents the party and
government overseas.
Dalai Lama Tenzin Gyatso
The 14th Dalai Lama Tenzin Gyatso, believed by Tibetan lamaists to be the reincarnated
chief of the Gelukba reformed sect, is the head of state of the Tibetan exiles, and
spiritual leader of the Tibetan Buddhists, although his authority is not recognised by all
Tibetan sects. He was born to a peasant family as Lhamo Dhondrub on 6 July 1935, in a
small village called Taktser in northeastern Tibet. His status was recognised at the age of
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two, in accordance with Tibetan tradition, as the reincarnation of his predecessor the
13th Dalai Lama, and thus an incarnation of the Buddha of Compassion.
The ceremony recognising his position took place on 22 February 1940 in Lhasa, and he
was enthroned on 17 November 1950 (a regent handles all affairs of state during a dalai
lama's youth). His enthronement occurred one month after the invasion of Tibet by
China.
The Dalai Lama fled Lhasa on 17 March 1959 with an entourage of 20 men and six
cabinet ministers and arrived in India on 31 March following several weeks of a failed
Tibetan uprising. Since then, the Dalai Lama has been based in Dharamsala and has not
returned to China.
The Dalai Lama was a 1989 recipient of the Nobel Peace Prize.
Panchen Lama Erdini Qoigyijabu
The Panchen Lama is the second highest ranking tulku, or reincarnation lineage, in
Gelukba Buddhism. There is controversy over the identity of the current (11th) Panchen
Lama. After the death of the 10th Panchen Lama in 1989, the Dalai Lama, in secret
communication with Chadrel Rinpoche, who was in charge of choosing his successor,
announced Gedhun Choekyi Nyima as the 11th Panchen Lama in 1995. However,
Gedhun, who was born in April 1989, subsequently disappeared, with the Tibetan
government-in-exile claiming he and his family had been abducted by China and were
held as political prisoners.
After Gedhun's disappearance, Chadrel Rinpoche was arrested and replaced by

Sengchen Lobsang Gyaltsen. A new Panchen Lama was selected by lot six months later
in November 1995, leading to the appointment of Gyancain Norbu, given the Buddhist
name Erdini Qoigyijabu, as Panchen Lama.
Gyancain Norbu was born on 13 February 1990 in Lhari County, Tibet . Little is known of
his upbringing, except that he is currently being raised (presumably in a carefully
controlled manner) in Beijing, and has assumed his duties at the Tashilhunpo Monastery
in Xigaze. It is not known where the 11th Panchan Lama lives officially, but reports have
indicated that he usually resides in Beijing where he is being tutored by four senior
Tibetan monks and shuttles between Xigaze and Beijing.
Erdini Qoigyijabu first performed the Buddhist rituals in 1999 at the Tashilunpo
monastery in the city of Xigaze. In an interview with Xinhua in December 2005, he
talked about his decade growing up as Panchen Lama and he also spoke, not
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unexpectedly, extremely favourably about Chinese rule in Tibet, claiming that the CCP
had brought "wealth, harmony, and stability" to the region. He appeared at the first
World Buddhist Congress in Hangzhou in April 2006 and made a visit to Lhasa to visit
the newly opened railway station and made a stop to Tashilunpo Monastery in
September 2006. His alliance to Beijing was perhaps most amply demonstrated in his
condemnation of Tibetan rioters in March 2008, when he stated that the rioting
"harmed the interests of the nation and the people," and that he resolutely opposed
"all activities to split the country and undermine ethnic unity."
The choice of Erdini Qoigyijabu as Panchen Lama has been accompanied by controversy.
First, the overruling of the Dalai Lama's choice of Panchen Lama caused outrage in the
Tibetan Buddhist community, and has been seen as an effort by the CCP to place itself
at the heart of the religious traditions that have historically governed Tibetan politics
(although the Chinese government attempted to justify its actions by referring to an
18th century precedent). Second, the whereabouts of Gedhun Choekyi Nyima remain
unknown - the CCP claims that he has been raised normally, while other reports claim
that he has been kept as a prisoner by the Chinese government. Third, China's
involvement in the choice of Panchen Lama, as well as their role in his education and
upbringing, may be seen as an attempt to place their own 'puppet' in the Tibetan
Buddhist leadership. This may become particularly important after the death of the
Dalai Lama, as the Panchen Lama has traditionally played a central role in the selection
of his successor.
Kalon Tripa Lobsang Tenzin (Samdhong Rinpoche)
Lobsang Tenzin is effectively the prime minister of the Tibetan government-in-exile.

Born into a farming family in a remote village in Jol in southeastern Tibet, he entered a
monastery at the age of four, and a year later he was recognised as a Samdhong (a
reincarnation of the fourth Samdhong Rinpoche).
Tenzin moved to Lhasa by the age of 12 for further studies, but this was disrupted in
1959 when he had to escape to India due to, in his own words, "Chinese repression". In
July 1960, Tenzin was commissioned by the Dalai Lama to Dharamsala and since then he
has worked for the government-in-exile in various capacities.
From 1960 onwards Tenzin worked as a teacher in Tibetan religious schools in India,
first in Simla, then Darjeeling. Between 1965 and 1970 he was the principal of Dalhousie
Tibetan School; from 1971 to 1988 he was the principal of the Central Institute of
Higher Tibetan Studies (CIHTS) at Varanasi, and from 1988 to 2001 he was the director.
Tenzin is regarded as one of the leading Tibetan scholars of Buddhism and on the
teachings of Mohandas Gandhi. In 1991, Lobsang Tenzin was appointed by the Dalai
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Lama as a member of the Assembly of Tibetan People's Deputies, and later was
unanimously elected as its chairman. In 2000, the Dalai Lama decided that the Tibetan
people in exile should elect their own head of government, and in July 2001 Lobsang
Tenzin was elected with about 29,000 votes, or about 84 per cent of the votes cast. He
was re-elected in July 2006 with a similar number of votes (90.7 per cent of the total
votes cast). The election of the Kalon Tripa is in part to deflect criticisms by the Chinese
government that the Dalai Lama's system of governance has kept the Tibet people
trapped in a semi-feudal political situation.
External Affairs
Tibet's foreign relations are the responsibility of the Ministry of Foreign Affairs in
Beijing. However, TAR officials do travel overseas promoting Tibet to bodies such as the
European Parliament, and the provincial government maintains a Foreign Affairs Office
for dealing with overseas visits and visitors.
The Tibet government-in-exile has a Ministry of Information and International Relations

led by Samdhong Lobsang Tenzin.
EU and Tibet
The EU is primarily concerned with human rights in Tibet. It has as yet been unable to
put as effective pressure on the Chinese as the US, largely because its member states
still carry the main weight of their international relations. The EU was criticised by
Tibetan organisations in 2003 for not sponsoring a motion criticising China on its human
rights record in Tibet at the United Nations High Commission on Refugees in the
absence of the US. However, the EU parliament and presidency have issued statements
criticising the Chinese legal process in its dealings with Lobsang Dhondup, a Tibetan
accused of a bomb attack in Ganzi, Chengdu province, who was executed in February
2003. Tenzin Deleg Rinpoche, a monk accused of aiding the same attacks, was originally
sentenced to death but had his sentence commuted to life imprisonment in January
2005. Tashi Phuntsog, a Tibetan monk initially accused of being Tenzin Deleg's 'right-
hand man', was released early in the same month with no explanation. Human rights
organisations raised concerns over the treatment of both Tashi Phuntsog and Deleg
Rinpoche, and questioned the fairness of Tenzin Deleg's trial.
In an early 2003 visit to Beijing the then-EU external affairs commissioner Chris Patten
called on Chinese officials to intensify the dialogue with the exiled Tibetan spiritual
leader, the Dalai Lama. According to Patten, the EU does not dispute that Tibet is a
province and a part of China, but there were concerns that Tibetan linguistic and
cultural traditions were not being preserved. This view was supported by a 10 April
2008 resolution passed by the European Parliament that supported a boycott of the
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Olympic Games by its members. However, concerns over human rights abuses in Tibet
have played at most a minor role in shaping EU policy, especially trade policy towards
China.
India and Tibet
The Indian government has essentially acknowledged Tibet as a de facto and de jure
autonomous region of the People's Republic of China, although while June 2003 and
April 2005 agreements recognised Tibet as a part of China, no formal treaty formalising
the Line of Actual Control has been signed. However, the Chinese annexation of Tibet in
1950 is seen as having produced India's chief security problem, removing a buffer zone
between the two regional superpowers. The two countries engaged in a brief border
war in 1962, and an ongoing border dispute over areas along the Tibetan and Yunnan
borders force India to substantially defend a long and difficult frontier. India shelters
the Dalai Lama and the Tibetan exiles, while seeking to maintain a distance between
their claims and India's own position. Nevertheless, fulfilment of the Dalai Lama's wish
for a demilitarised wholly autonomous Tibet under overall Chinese sovereignty would
be very much in India's interests. The exiles know they depend on India for their
existence and seek to avoid embarrassing New Delhi, but occasional high-profile
protests place the Indian government in a difficult position. The most recent example,
protests by ethnic Tibetans in India over the Chinese suppression of the March 2008
riots and to commemorate the anniversary of the Dalai Lama's flight from Tibet,
reflected this dilemma. More than 80 ethnic Tibetans were arrested in New Delhi and
more than 100 in Dharamsala at the beginning of a March from Indian-administered
Kashmir to the capital. The Indian government, meanwhile, remained muted on the
unrest in the TAR.
This conciliatory policy from New Delhi is a result of the great improvements in Sino-
Indian relations over recent years, as exemplified by the joint declaration signed in
Beijing in June 2003 and a similar agreement in April 2005 in New Delhi. With India and
China inclined for the moment to address joint interests, in particular the mutual
benefits both economies are gaining from trade, it is unlikely that the Indian
government will oppose China's possession of Tibet, whether politically or militarily,
over the coming years.
Nepal and Tibet
Nepal, another former feudal society in the Himalayas, borders the TAR to its south.
Despite being a majority Hindu country, Nepal has a sizeable Buddhist minority of over
10 per cent of the population, and is historically relevant in the development of
Buddhism, with the birth place of Gautama Siddartha being in Lumbini. In addition, at
least 20,000, and perhaps up to 60,000, ethnic Tibetans reside in Nepal, the second
103
largest diaspora after India. The country and its population therefore maintains close
cultural, religious and ethnic links to the TAR.
Traditionally, Nepal's external affairs have been dominated by India, as reflected in the
1950 Treaty of Peace and Friendship, and hence its policy on the issue of Tibet has
closely resembled that of New Delhi, despite periodic attempts to mitigate Indian
dominance of Nepalese economic and foreign affairs. Ironically, the current trend in
Nepalese relations to more effectively balance Chinese and Indian influence in the
country means that its policy shift on Tibet, namely to support more vociferously the
'one-China' policy, still mirrors India's delicate shift in rhetoric to appease Beijing while
not angering its population. However, Nepal may face a more significant challenge than
India in undertaking such a policy change. The arrests of hundreds of pro-Tibet
protesters in March and April amid often violent demonstrations reflected this
difficulty.
Perhaps the most significant motivation for Kathmandu's policy shift is its awareness of
the economic benefits to be gained from greater engagement with China. For this
reason Nepal is eager to overcome the geographical barrier to trade of the Himalayas
and the Tibetan plateau, and hence views the Qinghai-Tibet railway as a possible route
for trade between Nepal and the Chinese interior. Nepalese Prime Minister Girija Prasad
Koirala reiterated a request to extend the railway to the Nepalese border on 3 March.
Although Beijing has not yet confirmed that such an extension will proceed, the planned
extension to Xigaze (Shigatse) by 2010, which is southwest of Lhasa and hence en route
to Nepal, could presage a longer extension connecting to Nepal.
US and Tibet
US relations with China are marked by a concern for human rights and nowhere is this
more acute than Tibet. The US Department of State's annual global report on human
rights highlights perceived abuses by the Chinese government every year, with the most
recent report in 2007 proclaiming that authorities in ethnic Tibetan areas committed
various abuses, "including torture, arbitrary arrest and detention, and house arrest and
surveillance of dissidents." The Dalai Lama and the Tibetan government-in-exile have
been very effective in keeping the issue of Tibet's autonomy alive internationally and
especially in the US through Lobsang Tenzin (who is also chairman of the cabinet). As a
result, a number of strongly pro-Tibetan resolutions have been passed by the US
legislature over the past decade, and US officials often delicately reprimand Beijing for
its Tibetan policy, most recently in April 2008 when after a meeting with the Dalai Lama,
the US Undersecretary of State for Global Affairs and Special Co-ordinator for Tibet
Paula Dobriansky described how the "Bush administration has expressed concern about
the situation in Tibet and has urged restraint."
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Such language is evidently couched in language designed to avoid confrontation with

Beijing. Nonetheless, the US humanitarian-driven military intervention in Kosovo and
subsequent US-led invasions of Afghanistan and Iraq greatly disturbed the Chinese
authorities, who saw a possible model for interference in China's internal affairs.
However, there is little possibility of any current diplomatic or military intervention by
the US, given its foreign policy priorities in the Middle East, and the contradictions in its
widely publicised but poorly defined 'war on terrorism' that legitimises China's labelling
of Tibetan separatism as a form of terrorism. Furthermore, burgeoning economic ties
are increasingly hampering the US' ability to influence China's internal affairs. As a
result, while the US will continue to annually decry perceived Chinese human rights
abuses in Tibet and occasionally advocate moderation in Beijing's Tibetan policy, in
reality the opportunity cost of losing Chinese trade is too great to encourage any more
concrete policies than might harm relations.
Date Event
1911 Chinese revolution led to formation of the Republic of China. President Yuan Shikai
declared Tibet, Xinjiang and Mongolia to be Chinese provinces. In an uprising, Tibetan
troops drove Chinese troops and officials out of much of Kham
1912 Chinese President Yuan Shikai sent troops into Kham; Tibetan army victorious in
battle. Talks between the Chinese and the Dalai Lama lead to Chinese troops leaving
via India.
1913- The Simla conference was held between the UK, China and Tibet. Tibet and the UK
14 signed an accord, although China merely initialled the agreement. This ushered in a
period of de facto independence, although this was not accepted by China.
1923 The Panchen Lama disputed taxes with Tibetan government and fled to China leading
to the ongoing division between the two senior figures in Tibetan buddhism.
1941- Tibet remained neutral in the Second World War despite pressure from the US, UK
44 and China.
1949 Communist victory over the Nationalists led to the proclamation of the People's
Republic of China.
1950 The Chinese People's Liberation Army invaded and took control of Tibet.
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The 14th Dalai Lama took over the Tibetan government at the age of 15.
1951 Tibet signed the 17-point agreement renouncing independence in return for cultural
and religious autonomy.
1956 Preparatory Committee for the Tibet Autonomous Region established in Lhasa, with
the 14th Dalai Lama as the chairman and the 10th Panchen Lama vice-chairman.
1959 Tibetan uprising: thousands fought Chinese troops. Dalai Lama fled to India with
100,000 Tibetans following the resulting crackdown.
1965- Cultural Revolution began, leading to the mass destruction of monasteries, and
1975 imprisonment of tens of thousands of Tibetans. U'sang Province in central Tibet
became the Tibet Autonomous Region (TAR).
1979 Chinese policy of economic liberalisation began under Deng Xiaoping. The Chinese
government invited the Dalai Lama to return, although it was required that he stay in
Beijing.
1988 The year of the 'Strasbourg Proposals' in which the Dalai Lama offered to accept
Chinese control of Tibet's foreign relations and defence if they would grant full
internal autonomy.
1989 On 5 March, police shot pro-independence demonstrators in Lhasa. Under Hu Jintao's

leadership martial law was declared. Thousands were arrested and there were reports
of up to 256 killed by security forces.
1995 Gedhun Choekyi Nyima recognised by the Dalai Lama as the reincarnated 11th
Panchen Lama. He disappeared at the age of six (May).
Beijing appointed Gyaltsen Norbu as Panchen Lama, although this was not recognised
by the Dalai Lama (November).
1995- At least eight bombs were detonated in Lhasa by anti-Chinese activists. No one was
2000 injured.
2000 Chief Karmapa Lama, the third in Tibet's religious hierarchy, fled to India (December).
2001 Lobsang Tenzin (Somdhang Rinpoche) elected Kalon Tripa of the Tibetan government-
in-exile (July).
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2002 Envoys of the Dalai Lama visited Lhasa for meetings with Legqog (Lieque), chairman of
the TAR government in the highest-level meeting between the two side in two
decades (September).
2003 Changes in TAR government and party leadership suggested continuity.

Lobsang Dhondup executed for bomb attacks in TAR and Sichuan province (February).
Second meeting of envoys with officials in Beijing (May).
India and China settled some long-term border disputes and re-opened cross-border
trade. India de facto recognised Tibet as part of China (June).
2004 China relaunched 'strike hard' campaign in TAR to counter 'splittists' and others.
Guo Jinlong transferred from secretary of the Tibet Autonomous Regional Party
Committee to secretary of the Anhui Provincial Committee. Yang Chuantang,
previously his deputy, assumed the role (December).
2005 Death sentence of Tenzin Deleg Rinpoche commuted to life imprisonment for the
bombings in Chengdu, while Tashi Phuntsog, his alleged aide, was released
prematurely (January).
Yang Ghuantang suffered a stroke (September).
Zhang Qingli, a Hu Jintao ally, was appointed party secretary (November).
UN special rapporteur on torture visited Tibet for the first time (November).
2006 Tibetan envoys of the government-in-exile arrived in Beijing, apparently to conduct a

fifth round of informal talks with the CCP (February).
US State Department report claimed the number of political prisoners in 'Tibetan

areas' (including parts of Sichuan, Qinghai and Gansu provinces) fell from 145 in 2004
to 117 in 2005 (March).
Lobsang Tenzin (Samdhong Rinpoche) re-elected Kalon Tripa for another five-year
term (July).
2007 Qinghai-Tibet railway entered service (July).
Sixth round of informal talks between Beijing and Dharamsala (July).
The Dalai Lama received the US Congressional Gold Medal (October).
Four Tibetans were jailed for separatist activities for terms ranging from three to 10
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years (November).
2008 Commemorations of the Dalai Lama's flight to India became violent and led to rioting,
ethnically targeted violence and suppression by Chinese authorities. China claimed 19
people died in the violence, while the government-in-exile claimed up to 150 deaths
(March).
Under Chinese rule, the key events have been the 1951 17-point agreement,
determining the degree of Tibetan autonomy, and the 1959 uprising and subsequent
crackdown which led to the Dalai Lama's exile. Since the 1979 beginning of Chinese
reform Sino-Tibetan relations have vacillated along with the degree of autonomy
afforded, with much more tolerance of Tibetan culture and the involvement of Tibetans
in government, but periodic crackdowns on signs of 'splittism', notably in 1989 and
2008.
Negotiations with Beijing
Since the election of Samdhong Rinpoche as Kalon Tripa in July 2001, there has been
something of a thaw in relations between Dharamsala and Beijing. In May 2002, Gyalo
Thondup, the Dalai Lama's brother, visited Lhasa and Beijing as an unofficial envoy. This
followed the release of six prominent dissident Tibetans from Chinese prisons earlier in
the year and in September 2002, in a potentially highly significant development, official
envoys of the Dalai Lama including Lodi Gyari and Kalsang Gyaltsen, visited Tibet and
China in the highest-level meeting between the two sides in two decades, making the
first formal contact between the Dalai Lama and the Chinese authorities since 1993. The
mission was described as an attempt to "create a conducive atmosphere enabling direct
face-to-face meeting on a regular basis in the future" which "will lead to a mutually
acceptable solution". This would seem to indicate that the delegation was pushing the
so-called "middle way approach" preferred by the Dalai Lama, aimed at giving real
autonomy to Tibet rather than continued direct rule from Beijing, or the complete
independence sought by many among the Tibetan exiles.
Lodi Gyari was said to be impressed by the much greater flexibility displayed by Chinese
officials as compared to his previous official visit in the 1980s. Present at the meeting
were Raidi and Legqog, the two senior Tibetan officials in the TAR, although the most
senior official, then-party secretary Guo Jinlong, did not attend. They were also able to
meet a senior official from Sichuan province, suggesting that the previously forbidden
topic of the Tibetan areas outside the TAR may have been broached. He suggested that
negotiations between the two sides could start as early as July 2003 and indeed a
further round of low-key talks, albeit again with no official status as such, did
subsequently take place in May 2003. Several further rounds have taken place since
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then, but no formal negotiations have been held.
Security Forces
China has substantial numbers of both PLA troops and People's Armed Police (PAP)
based in Tibet. The actual numbers and tasks of these armed forces are unavailable; the
Tibetan government-in-exile estimates a total of approximately 400,000, although these
numbers fluctuate according to the perceived need. The numbers of PLA troops are
likely falling in the long term (in line with the total fall in the PLA's numbers), but
periodic bouts of unrest, such as that experienced in March 2008, lead to
redeployments. In addition, the numbers of PAP are rising to compensate, with reports
of new PAP stations being established in most towns. The military presence in and
around Lhasa is substantial and obvious with many facilities, including a key military
airbase at Gongkar, and an estimated total of around 60,000 troops.
Police forces
The civilian Public Security Bureau (PSB) represents the normal police force, under the
Ministry of Public Security. To deal with more serious civil disturbances they can call on
the paramilitary People's Armed Police (PAP), who fall under the joint control of the
Central Military Commission and the State Council (cabinet).
Military forces
The heavy PLA presence in the TAR is there in part to maintain control over the Tibetan
population as well as to defend the national borders. In case of emergency the
authorities can call on further PLA resources in Chengdu in Sichuan province. In addition
all Chinese citizens between 18 and 35 are organised into reserve militia units.
The TAR forms a military district falling under the auspices of the Southwest Military
Region (MR) with its headquarters at Chengdu in Sichuan province. The senior military
officer in the TAR is Major-General Meng Jinxi, who is also deputy commander of the
Chengdu Military Region, reflecting the importance of the Tibet District.
China regularly deploys the Sichuan-based 149 Airborne Division in the TAR, as it did
following demonstrations in Lhasa in 1987. Also the 31st Infantry Division (Chengdu
MR), a rapid deployment'Regional Ready Unit' combat formation, is available for
contingency operations in Tibet
As is the case in other critical areas controlled by China, the quality of local forces is
improving and new bases continue to be built. However, it is unclear whether the
motivation behind these facilities is to counter any potential Indian conflict or to
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suppress a potential insurgency.
Role and deployment
Tibet Military District Deployment
Unit Location
52nd Mountain Infantry Brigade Linzhi
53rd Mountain Infantry Brigade n/a
Artillery Brigade n/a
Anti-aircraft Artillery Brigade n/a
Engineer Regiment n/a
There has not been an organised insurgency in Tibet since 1969 when the US Central
Intelligence Agency (CIA) ceased to support Tibetan guerrillas in their war against the
Chinese. The campaign began in the late 1950s, with the CIA-backed operation initially
dropping arms and Tibetan fighters trained in the US Rocky Mountains into southern
Tibet. When the Dalai Lama escaped to India, most of the rebels left too, and the CIA
switched their emphasis to supporting cross-border operations from a camp established
in a remote area of Nepal. The last organised rebels surrendered to the Nepalese forces
following a request from the Dalai Lama in 1974. An extremely low-level insurgency
continues, although there is no single identifiable group of separatists and the Chinese
government has not still identified specific "terrorist" groups by name.
The apparent discovery of weapons in March 2008 by Chinese security forces of

weapons in Tibetan monasteries and ethnic Tibetan monasteries in provinces
neighbouring the TAR suggested possible armed resistance, but in reality the veracity of
the Chinese reports could not be verified, while the intent behind such rudimentary and
sparse weapons being kept does not suggest any significant organised insurgency.
Tibetan separatists
• Group name: Tibetan separatists. There is no single identifiable group of separatists
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and the Chinese government has not still identified specific "terrorist" groups by
name. In general, non-violent opposition is loosely co-ordinated, sometimes by
Buddhist monks, and receives some support from the self-proclaimed Tibetan
government-in-exile at Dharamsala in India. China claims Tibetan exile youth groups,
such as the Tibetan Youth Congress, retain the desire, if not the capabilities, for violent
unrest. At various times between 1954 and the late 1970s, there were groups
associated with the Khampas in eastern Tibet, and with the so-called Special Frontier
Forces, which had links to the CIA, in the remote Tibetan part of Nepal, the valley of
Mustang. Such groups no longer exist as active entities.
• Level of threat: In-country, the present level of threat from organised militancy is very
low. Separatists or those dissatisfied with Han Chinese encroachment or rule from
Beijing have only been able to stage limited resistance and are thought to be little
more than a nuisance to Chinese security forces. Out of country, attempts to persuade
or pressure China are certainly an irritant for Beijing but, historically, have achieved
little.
• Status: Politically active; virtually no organised violent activities have been attributed
to Tibetan separatists, although infrequent uprisings can create temporary instability.
• Date of founding: No formal date. Tension and unrest goes back as far as 1954, and
possibly as far as 1951, the year after China's annexation of Tibet.
• Group type: National Separatist.
• Aims and objectives: Since the 1950s, the objectives of Tibetan separatist groups have
been political independence for Tibet and religious freedom for its citizens. However,
since the late 1980s, the Dalai Lama, the Tibetan spiritual leader, has advocated a
"middle-way approach" giving "genuine autonomy" to Tibet, as opposed to either
continued direct rule from Beijing or total independence as desired by many Tibetans
either at home or in exile. This approach was formally outlined in 1987 in his Five-
Point Peace Plan, delivered to the US Congress, and in his Strasbourg Proposal of
1988.
• Leaders: Leadership on the ground in Tibet remains unknown. Spiritual leadership and
inspiration for all Tibetans is provided by the exiled Dalai Lama. There is a Tibetan
government-in-exile, headed by Kalon Tripa Lobsang Tenzin (also known as Samdhong
Rinpoche), located at Dharamsala in India.
Foreign Forces
There are no foreign forces based in Tibet
Geography
The 1,220,000 km2 Tibet Autonomous Region (TAR) comprises Usang, just one of the
three ancient provinces of Tibet. Following Tibet's incorporation into post-revolutionary
China, the second province, Amdo, was largely incorporated into Qinghai province, and
the third, Kham was dissolved into parts of Sichuan, Gansu and Yunnan provinces,
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where many ethnic Tibetans still live. When the Tibetan government-in-exile refers to
Tibet, it means all three provinces. This is a hurdle that any agreement between the two
sides on Tibet's future will have to overcome. Some other areas, in northern Pakistan
and in the Himalayas, such as the Aksai Chin plateau, have also formerly been part of
Tibet, fuelling Chinese claims to these areas.
At an average elevation of over 4,000 m, the TAR forms the main part of the Qinghai-
Tibet plateau. It falls into three main zones: the North Tibet Plateau, making up two
thirds of the area, is encircled by mountains of the Kunlun, Tanggula, Kangdese and
Nyainqentanglha ranges; in the south stretches the Tibet Valley, running along the
Yarlung-Zangbo River and its tributaries, on the north bank of one of which, the Lhasa
River, lie the 51 km2 of Lhasa city; in the east lies a zone of high mountains and deep
valleys including part of the Hangchan Mountains. The multiple ranges of the Himalayan
mountains run east-west on the southern edge of the Tibetan plateau through Nepal.
Oomalangma (Everest) on the Chinese/Nepalese border is the highest peak in the world
at 8,848 m. The highlands and snows of Tibet are the source of many of Asia's great
rivers including the Ganges (Ganga), the Indus, the Brahmaputra (the headwaters of
which are the Yarlung-Zangbo), the Mekong, and the Irrawaddy. The area contains over
1,500 lakes, mostly saline, three of which, Narn Co, Siling Co, and Zhaxi Narnco exceed
1,000 km2.
Climate
Average annual temperature: 2.9°C
Average annual rainfall: 1,100 mm
Tibet is dry, and 90 per cent of the rainfall comes with the monsoon between May and
September. However, the mountains mostly shut out the moisture-bearing winds, and
the average rainfall is only around 1,100 mm/year, although it varies from 5,000 mm in
the southeast to a mere 50 mm in the northwest.
In Lhasa, temperatures range from a low of -10°C in winter to highs of 20°C in summer.
Tibet plays a crucial part in the Asian monsoon cycle. Its delicate ecology, already
feeling the impact of the expansion of the Han and Tibetan population and of China's
ambitious development plans, make it a sensor for climate change. Shifts in its many
bands of permafrost that could result from changes in mean temperatures and annual
weather patterns might in the future impose an unpredictable impact on the integrity of
infrastructure, on economic activities in the TAR, on Tibetan society and on China's
national security.
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Environmental Factors
Pollution, including growing industrial pollution of various sorts, is causing

environmental changes in Tibet, while pollution on Mount Everest is providing
anecdotal evidence of deterrence of tourists.
The 11th five-year plan announced by Beijing in March 2006 allocated CNY6 billion
(USD750 million) to environmental protection in the TAR, including protection of the 38
natural reserves in the country. However, given the continued economic and industrial
development of the TAR, such funds, although welcome, will largely fail to prevent
further environmental degradation.
Natural Resources
Oil and gas
Tibet has limited proven hydrocarbon reserves, although in 2001 it was reported in the
Chinese press that scientists had discovered an oil-bearing belt extending for 100 km in
northern Tibet, which could contain significant quantities of oil. In 2005, a
representative of the China Geological Survey Bureau announced the existence of a
potential oil reserve in the Qinghai-Tibet plateau estimated at some 100 million tonnes.
Although reliable information is still scant, recent reports suggest oil production in Tibet
may begin before 2010.
Minerals
Approximately 40 per cent of China's mineral resources are estimated to be in TAR,

including gold, coal and what are estimated to be the world's largest uranium deposits.
More than 126 industrially useful minerals lie under Tibetan soil. At present, Tibet's
output of chromite makes up 80 per cent of China's total. Prospecting also shows that
lead, zinc, gold, petroleum, iron and other minerals possess rich reserves.
Other mineral deposits include prospective deposits of lithium among the richest in the
world, the second richest reserves of copper and gypsum in China, three iron-ore
deposits discovered in the Qinghai-Tibet plateau in a survey that ended in 2005, and
significant deposits of boron, magnesite, barite, arsenic, China clay and peat..
In 2001 it was reported that Chinese scientists using remote sensing discovered a
corridor of gold, copper and antimony in the northern TAR. The corridor, stretching
some 1,800 km from east to west and covering 330,000 km2 is estimated to hold CNY6
trillion (approximately USD723 billion) worth of minerals. No information on
exploitation of these minerals has since been forthcoming.
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Land Use
The high altitude within Tibet and extreme temperatures have restricted the areas
viable for crop growth to the south and east of the country. As such, forests and
cropland take up only 10 per cent of the country. Rangeland and pasture comprise
approximately 70 per cent of the surface area, varying from alpine meadows to
mountain scrub.
Energy
The TAR is provided with the conditions for significant geothermal, hydroelectric, solar
and wind energy. Tibet is estimated to have a total of 56.59 million kilowatts of
potential hydroenergy, especially along the Yarlung Zangbo River, which may have in
excess of 47 million kilowatts in exploitable capacity. Over 600 potential geothermal
sites have also been located in the Nujiang-Jinshajiang-Lancanjiang tectonic zone, the
Yarlung Zangbo rift zone, and the Nagqu-Nyemo rift zone. The total heat produced by
these sites is equivalent to some 2.4 million tons of coal.
Food and water supply
Since the 1950s, the CCP has found it exceedingly hard to maintain a large strategic
presence in TAR. One of the main reasons is the logistics of moving enough food and
water to provide for the presence of a sizeable force without having to rely on taxing
the local economy.
Although national statistics show that there is an abundance of food in Tibet, the
question remains if the distribution mechanism enables everyone in Tibet to have
access to these supplies. In winter, many nomadic Tibetans and those in rural areas
suffer from a shortage of food.
The provision of clean water for both drinking and sanitation is an even greater
problem. Most water in rural communities is not treated, and usually contains parasites.
Due to the arid climate and poor water supply system, a total of 550,000 people in rural
and pastoral areas in Tibet have difficulty in gaining access to clean drinking water. In
2003, the Tibetan government decided to invest CNY800 million in building and
completing 143 water conservancy and drinking water projects. However, given the
geographical difficulties of water supply, the situation is unlikely to improve significantly
for the rural population in the short term.
Demography
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Population: 2,840,000 (2007)
Following the November 2000 census, the total population of Tibet stood at 2,616,000,
although it was estimated at 2,840,000 in 2007. This figure does not include the floating
Han population of migrant workers and other short-term residents. At least 100,000
Tibetans live in India and there are ethnic Tibetans in Nepal (about 20,000) and Bhutan.
Births and deaths
Little information is available on the fertility and mortality rates of Tibetans. However, it
is estimated that average life expectancy stands at 67 years, while maternal mortality
was five per thousand births, in comparison to 0.9 per thousand in the rest of China.
Ethnic groups
Population (2000 Census)
Ethnic Group Number % of total
Tibetans 2,411,000 92.2
Han Chinese 155,300 5.9
Other 49,900 1.9
A more recent 2005 estimate made by the National Bureau of Statistics and regional
government places the ethnic Tibetan proportion as 95.3 per cent The population in the
regional capital, Lhasa, stands at approximately 230,000, of which more than half are
ethnic Han. The Tibet government-in-exile estimates the total ethnic Tibetan population
across the three traditional provinces of Tibet at over 6 million. The figures for ethnic
Han do not include the security forces.
Language
Although Tibetan remains widely spoken and is the first language for the majority of the
population, Mandarin Chinese has become an official language and is taught in schools.
Density of population
Three people per km2.

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Population growth rate
The 2007 estimate by the National Bureau of Statistics estimated the annual population
growth at 1.13 per cent. Between 1990-2000, the population of Tibet increased by
314,400, or 15 per cent, largely attributable to official permanent migration, and not
including temporary migrants.
Infrastructure
While infrastructure development in Tibet, particularly surface transport, may be seen

as a civilian issue of economic development, the projects sponsored by the state in the
TAR also have a military dimension. Major projects such as the Qinghai-Tibet railway
and further road building within Tibet are certainly designed to bring the TAR more
firmly into China's national transport network and raise its economic potential, but they
will also benefit PLA deployment. The most prominent projects are long-distance links,
with little direct benefit to the local economy at county level and below. The investment
for infrastructural development in 2008 is budgeted at CNY28 billion (USD3.7 billion).
Roads
The Tibet Communications Department estimates that over CNY100 billion (about
USD12.5 billion) needs to be invested to enhance the roads in Tibet. Today, the total
mileage in Tibet amounts to about 40,000 km. In the 11th Five Year Plan period (2007-
2011), CNY30 billion (about USD3.75 billion) has been committed to highway promotion
in Tibet. The Tibetan government also plans to invest CNY70 billion (USD8.75 billion US
dollars) in highway construction by 2017.
There are a total of 15 trunk roads in Tibet. The 2,413 km Sichuan-Tibet highway and
the 2,122 km Qinghai-Tibet highway are the main road arteries, with other links to
Yunnan and Xinjiang, as well as one international route: the China-Nepal highway,
which crosses the border at the Friendship bridge in Zham. The last Chinese county
inaccessible by road, Medog, was connected to the road system in 1994, which had
reached a total length of 35,538 km by the end of 2002.
Rail
A major piece of infrastructure development, the 1,956 km Qinghai-Tibet railway line

was completed in October 2005. The railway entered service in 2007, despite
tremendous difficulties in constructing such a rail link in remote areas at high altitude.
The final cost was approximately USD3.2 billion.
There was an existing railway line from the Qinghai provincial capital Xining, to Golmud
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in western Qinghai, and the new section runs on from Golmud to Lhasa, the 554 km of
track to be laid in Tibet being the first railway in the TAR. The extremely technically
challenging route reaches a height of 5,047 m and includes 1 km rail bridge over Lhasa's
river.
An extension to the railway is currently under development, with construction to begin

in 2008 and be completed by 2010. The 254 km extension is the first feeder line for the
railway, and will connect Tibet's second largest city, Xigaze, with Lhasa and the rest of
China. The project is estimated to cost CNY11 billion (USD1.42 billion).
Airports
Lhasa's Gonggar airport, originally built in 1966, was expanded in 1993 to enable it to
receive wide-bodied commercial jets such as Boeing 747s. Currently five domestic
destinations are served: Beijing, Chengdu, Chongqing, Shanghai and Guangzhou, as well
as Kathmandu in Nepal. The airport is currently 96 km away from Lhasa by road, but a
new road is being constructed on a more direct route, which will almost halve that
distance. A new 14,000 m2 terminal was completed in December 2003 at a cost of
USD38.69 million. It is expected to allow an annual throughput of 1.1 million passengers
by 2010.
Gonggar International Airport
Maximum runway length 3,600 m (11,810 ft)
Runway surface Asphalt
Elevation 3,540 m (11,615 ft)
Nearest town/city Lhasa (96 km)
Tibet has another airport at Chamdo Bamda, the highest in the world.
Nyingchi Airport, the third airport in Tibet, became operational in July 2007. With a total
investment of CNY780 million (about USD97.5 million), Nyingchi Airport plans to carry
12,000 passengers every year. Located 2,954 m above the sea level, Nyingchi Airport is
the lowest airport located in central Tibet. Air China operates a flight between Chengdu
and Nyingchi.
Ports
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Tibet is landlocked, and therefore has no sea ports.
Pipeline
The 1,080 km Golmud-Lhasa pipeline has supplied the TAR with oil since it was
completed in 1976.
Economic Overview
The Tibetan economy has shared in China's rapid overall growth in GDP, with an
average growth rate of 10.9 per cent over a five-year period up to the end of 2002. A
report by the Canada Tibet Committee published in August 2002 stressed the way in
which that growth is located in the largely Han cities, being disproportionately related
to government activity and construction, especially large-scale infrastructure projects,
whereas most ethnic Tibetans work in agriculture and animal husbandry in rural areas
and have seen limited benefit, although official statistics indicate that rural incomes of
farmers and herdsmen also grew at a double digit pace in recent years.
The economy is characterised by having an unusually small secondary sector in

comparison to other Chinese provinces. The economic focus in Tibet has shifted from
agriculture and animal husbandry to a growing tertiary sector, especially tourism.
According to official statistics, the tertiary sector accounted for 57 per cent of GDP in
2005. Tourism income over this period totalled CNY1.93 billion (USD241 million).
Tibet's GDP has grown at a low double digit pace since 2000. In 2007, the TUAR GDP
amounted to CNY34.2 billion (USD billion), an increase of 14 per cent over the previous
year. Government investment, especially in infrastructure projects, has played a
significant role in Tibet's economic development. Out of a total CNY68.9 billion (USD8.6
billion) invested in fixed asset projects in 2005, CNY50.8 billion (USD6.3 billion) came
from the central government.
Sectoral assessment
Agriculture
In 2005, the cultivated area in Tibet comprised 230,000 hectares. Main crops in Tibet
include highland barley, wheat, pea, broad bean, potato and beet. Some areas also
grow rice, corn, soybean, green bean, peanut, tobacco, Chinese cabbage, spinach,
turnip, buckwheat and garlic. By 2005, farmland sown to cereals reached 179,790
hectares, some 6,330 hectares less than the previous year. Of this, farmland sown to
qingke barley reached 120,110 hectares, a decrease of 5,600 hectares; wheat 40,640
hectares, a fall of 1,740 hectares; and vegetables 15,150 hectares, an increase of 1,040
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hectares. Grain production in 2004 reached 960,000 tonnes, a fall of 0.6 per cent from
the previous year; production of vegetables was 299,800 tonnes, an increase of 6.4 per
cent. The agricultural output value was CNY2.656 billion in 2004 according to local
government statistics, up 2 per cent from the previous year
Tibet is one of the five major areas of pasture in China. Natural grasslands total 82
million hectares, or 23 per cent of the national total. The livestock in Tibet mainly
comprise yak, cattle, pien niu (offspring of a bull and a female yak), horses, donkeys,
sheep and pigs. In 2004, Tibet had 25.09 million heads of domestic animals in stock, an
increase of 58,000 heads over the previous year. They include 6.13 million cows (an
increase of 220,000), and 18.15 million sheep (an increase of 360,000). In the same
year, the output of pork, beef and mutton reached 208,200 tonnes, an increase of 9.5
per cent, while milk production reached 262,000 tonnes, an increase of 4.3 per cent.
The output value of Tibet's animal husbandry was CNY2.912 billion, according to local
government figures, an increase of 4.2 percent.
Mining extraction
Despite the region's evidently rich mineral resources, Tibet's isolation has ensured that
the number of mines being operated remains modest. As at 2005, there were 63 large
and medium-sized mines. Four large copper mines and one medium-sized mine have
been discovered in the Qamdo area, and their reserves are highly likely to reach more
than 10 million tonnes. Efforts are being made to survey the prospective lead and zinc
mines in Lhanorma and Youri areas. The Yulung Copper Mine went into production in
2005 and is expected to boast an annual production capacity of 100,000 tonnes of
electrolytic copper.
Power generation
The development of the TAR has always been hampered by the lack of communication
and basic infrastructure. As a result, the state built China's largest megawatt-class
geothermal power station at Yangbajain in Tibet. More recently, construction began on
two additional power facilities - the Yamzhog Yumco Pumped-Storage Power Station
and the Chalung Power Station. The former, involving CNY2.014 billion of state
investment, was completed and began to generate electricity in 1997.
The hydroelectric projects are causing concerns among environmentalists and

neighbouring countries, especially over the effects of damming. There are discussions
underway and approximately eight major dams are planned in the immediate future.
For one, there are feasibility studies of diverting the Brahmaputra River northwards to
irrigate north China's deserts and even of using explosives to cut through the
intervening mountain ranges. One such project, the Yamdrok hydro-electric project, a
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pump-storage system involved the drilling 5.9 km of tunnels to drop water from
Yamdrok Yumtso, a lake about 100 km southwest of Lhasa, down to the Yarlung
Tsangpo river (the Brahmaputra) 840 metres below. The project is planned to produce
an annual yield of 200 million kilowatt hours by the time all four turbines are in
operation.
Despite these concerns, hydro-electric power projects continue apace, with the region's
largest hydro-electric plant, Zhikong, starting operation in September 2007 with an
annual generation capacity of 407 million kW h.
Tourism
Given that Tibet was restricted for foreigners for a number of years after 1949, its
tourism industry is relatively nascent. However, it is witnessing rapid growth owing to
growing disposable incomes in China and greater international awareness of the
possibility. In 2007, 4.02 million tourists from inside and outside China visited Tibet,
representing an increase of 64 per cent over the previous year. The massive increase in
tourists, amounting to 141 per cent of the region's estimated population, is largely
attributable to the Qinghai-Tibet railway, which carried 1.5 million tourists in its first full
year of operation. The regional government estimated that tourism generated income
of CNY2.77 billion, or 9.6 per cent of the TAR's GDP in 2006.
By 2005, the TAR had over 88 large hotels receiving foreign guests. In addition, Tibet has
more than 65 smaller hotels (hostels) which also accommodate foreign visitors. Most of
them are found in Lhasa and Xigaze, with the others scattered in Bayi, Qamdo, Zetang,
Shiquanhe and Burang.
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Xinjiang
Risk Pointers
Regional overview
Insurgency
Social division
Health
Drug trafficking
Profile
Security
Energy security
Political stability
Prospects
Internal Affairs
Political System
Leadership
Political Parties
World Uighur Congress (WUC)
External Affairs
Relations with Central Asia
Relations with the European Union (EU)
Relations with Kazakhstan
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Relations with Kyrgyzstan
Relations with Russia
Relations with the United States
Trade and External Assistance
Consolidation of Chinese Rule
Security Forces
Police forces
Military forces
Uighur Separatists
Foreign Forces
Geography
Climate
Natural Resources
Oil and gas
Minerals
Demography
Ethnic groups
Religion
Language
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Health and medical
Regional distribution
Infrastructure
Roads
Rail
Airports
Ports
Telecommunications
Economic Overview
Risk Pointers
Regional overview
The Xinjiang (xinjiang: lit. new boundary) Uighur Autonomous Region (XUAR) in the
far west of China is both a geostrategic asset and a drain on Beijing's resources. The
province is an important source of mineral resources, particularly oil and natural gas,
commodities which China no longer produces in adequate quantities to meet growing
needs given rapid economic growth. The XUAR also serves as a geographical link to
even more oil and gas located along and in the Caspian (a new oil pipeline through
Kazakhstan was completed in December 2005) and as a strategically vital advanced
Chinese position in the west. However, proportions of the indigenous populations of
the area, principally Uighurs but also other Turkic groups such as Kazakhs, feel more
affiliated to the Islamic west than Beijing, and hence regard the Han Chinese as
occupiers. Anti-Beijing sentiment is widespread, and has manifested itself in a low-
level secessionist insurgency demanding a separate state of East Turkistan, which
requires a disproportionately large military presence for the population. In a bid to
dampen separatist tendencies within the province, Beijing has instituted a
transmigration policy in the XUAR that has seen Han Chinese become the largest
single ethnic group, fuelling further resentment over Chinese rule. Xinjiang is also one
of the poorest provinces in China, and massive infrastructure and direct investment by
the central government is largely directed towards the Han Chinese immigrants and
not indigenous Uighurs. Economic growth in the region, as reflected throughout
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China, is highly uneven, leading to large income inequalities between the Turkics and
Han Chinese and the possibility of social unrest.
Insurgency
The threat most readily perceived in Beijing to its rule in Xinjiang is that of the ethnic
separatist movement in the XUAR. Following the 1991 dissolution of the Soviet Union,
Uighur nationalism experienced a significant degree of resurgence, prompting alarm
in Beijing. The Chinese Communist Party (CCP) views the Uighur movement not
merely as an ethnic uprising, but also as a potentially fertile breeding ground for
Islamist extremism within the province. Although the Chinese government has long
claimed links between Xinjiang groups and Islamist organisations in Pakistan and
Afghanistan, Beijing has in particular made use of the US-led 'war on terrorism' to
effectively launch a crackdown on Uighur insurgents. Beijing has also relied on
cultivating ties with its Central Asian neighbours as a means to reduce external
support for Muslim separatism in Xinjiang. The Shanghai Co-operation Organisation is
a key tool in reducing support for Uighur groups in Central Asia, and the
establishment of an SCO counter-terrorism centre in Tashkent, as well as joint
counter-terrorist exercises in Xinjiang, most recently in August 2007, highlight this
policy. Given the heavy security presence in Xinjiang, limited external support for
Uighur groups owing to the SCO, and the dilution of the indigenous population by Han
Chinese migration, Uighur or Islamist separatist movements are very unlikely to
achieve outright independence from China, or to escalate the conflict from small-scale
unrest to outright rebellion.
Social division
Despite the emphasis placed on Uighur nationalism by the central government, social
unrest may represent the most viable threat to Beijing's control of Xinjiang. Social
tensions between Han Chinese and indigenous Turkic groups are increasing, largely
owing to a policy of Han migration, and a heavy-handed approach to security that has
increased suppression of Islam in the region, the Uighur language (now officially
downplayed in schools), and Uighur culture. In particular, the growing Han
population, although it has reduced the likelihood of Uighur independence (Uighurs
are now a minority in Xinjiang), has created social pressure, as Turkic groups have
resented the erosion of their culture, and what they perceive as discrimination (for
example, favouring workers who speak Mandarin). Chinese development in the area
has largely benefited Han migrants, who are based in urban areas, unlike the rural
Uighur population. Although this rural isolation diminishes the possibility of a large,
spontaneous uprising, it deepens misunderstanding and antipathy between the two
ethnic groups. At the same time, anti-separatist activities in Xinjiang (especially the
'Strike Hard' campaign), do not distinguish between terrorist groups, non-violent pro-
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Uighur groups, and cultural organisations. As such, although some Uighurs have
sought to compromise with the Han for the sake of their own survival and prosperity,
the threat of ethnic instability is rife.
Health
A major threat to the Uighurs and even their survival as a people is a high HIV and
AIDS rate, largely due to widespread intravenous drug use. The number of officially
registered cases (17,209 in November 2006; considered to be a very low estimate as
the local health department estimates approximately 60,000 carriers of the virus in
XUAR) remains small but is likely to balloon rapidly in the near future, along with
HIV/AIDS cases in China in general. The AIDS rate among intravenous drug users in
Xinjiang is estimated at around 70 per cent, showing the scope of the problem. China
has not published reliable estimates of the total number of drug users but this
number is likely to be high and increasing. The XUAR is second in China in heroin
consumption (after Yunnan province). Uighurs constitute 80 per cent of users in
Xinjiang.
Drug trafficking
Little is known about criminal activities across China's western frontiers, but illicit
drug trafficking does exist, apparently moving in both directions. The involvement of
organised crime is assumed but little information is available. Much of it is centred in
the Turkic republics of the former Soviet Union. All are characterised by substantial
corruption, but there is Chinese organised crime active as well. The Ürümqi
authorities seem more interested in combating 'terrorists' than they do in stopping
drug traffic, but laws are draconian for anyone involved in trafficking who is caught.
Profile
Area: 1,646,800 km2
Languages: Chinese, Dungan, Kazakh, Mongolian, Uighur
Religion: Sunni Islam and atheist
Time Zone: GMT +8
Population: 19,630,000 (2004 estimate)
Neighbours: International: India, Kazakhstan, Kyrgyzstan, Mongolia, Pakistan, Russia and
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Tajikistan; provincial: Gansu, Qinghai and Tibet Autonomous Region
Capital: Ürümqi
Primary Port: None (landlocked)
Primary Ürümqi
Airport:
Currency: Chinese yuan (CNY)
Security
Energy security
Xinjiang provides several strategic benefits for China. At present, the most significant is
Xinjiang's role in China's overall energy security, a major policy imperative for the CCP.
Historically, China's energy production, especially oil, has been focused in the northeast,
but with production in northeastern fields starting to fall, and with a growing emphasis
on energy suppliers abroad and in China's western provinces, Xinjiang has become
significant as a source of energy, as a conduit to foreign suppliers, and as a refining site.
This augments the resilience of China's overall energy security strategy as China seeks to
diversify its energy acquisition sources to states such as Sudan and potentially
Venezuela, reducing its dependence on the Middle East. A further benefit of Central
Asian routes for energy, passing through XUAR, is that they are less prone to US
interdiction in the event of Sino-US confrontation.
China's primary natural gas resources are in Xinjiang (as well as Inner Mongolia), and
Xinjiang also boasts sizeable petroleum reserves - the province is estimated to have 38
per cent of national coal reserves, and 25 per cent of total oil and gas reserves. China is
also developing relationships with energy exporters in Central Asia (evidenced by, for
example, the 2005 acquisition of Canadian firm Petrokazakhstan by China National
Petroleum Corporation (CNPC), which owns significant reserves in Kazakhstan), and
Xinjiang has become important as a conduit for imports from Central Asia.
As a consequence of this westward shift in emphasis in the CCP's energy policy, Xinjiang
has become important in recent energy infrastructure projects. China's CNPC is working
to boost refining capacity in Dushanzi in Xinjiang, and pipeline projects have both been
completed in recent years and are also underway. These projects serve both to join
Xinjiang with energy consumers further east (like the Xinjiang-Shanghai gas pipeline
completed in 2005, and a Xinjiang-Guangzhou pipeline planned for 2020), and also to
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provide access to producers in Central Asia (like the Atasu-Xinjiang pipeline which was
completed in 2005, and will be augmented by 2010). Xinijiang's role in China's overall
energy strategy as a supplier in its own right, and as a venue to refine Central Asian oil
before it is distributed to consumers further east is therefore increasingly important.
Projects have also been announced to improve Xinjiang's railway network, at present
the main means of transporting Xinjiang's resources to the rest of China.
The XUAR is also a substantial area of empty and inhospitable land that is viewed by
China as a strategic buffer zone. The physical presence of the US military across the
border in Central Asian states, particularly Kyrgyzstan and Afghanistan, and the
influence of Russia in the region have both been concerns for China, with Xinjiang
reassuring Beijing as to its territorial defences.
The unique geographical location of Xinjiang also allows China to partake in Central
Asian affairs, and allows China to exert an influence in an area which had until the late
20th century been part of the Soviet Union. Most crucially, China is able to collaborate
with its neighbours under the auspices of the Shanghai Co-operation Organisation. In
particular, ties with Kazakhstan and Kyrgyzstan, both of which have comparatively large
and restive Uighur minorities, remain vital. Without support from China's neighbours,
Uighur separatists in Xinjiang are unlikely to be able to develop the resources to
challenge the CCP's control of the region. With support and bases in neighbouring
countries, however, they would become much harder for Chinese security forces to
suppress, and could grow in scale and organisation. China's engagement with its Central
Asian neighbours, as seen in joint military manoeuvres and security exchanges such as
the Peace Mission exercises in 2005 and 2007, is likely to remain a key tool in
controlling Islamist separatism in China. In addition, Xinjiang's fast growing trade with
its neighbours to the west, importing fuel and base metals and exporting manufactured
goods, serves to cement their dependence on China.
Political stability
Secure control of the XUAR is a priority for the CCP, given the region's role in overall
energy security policy and in relations with Central Asia. At present, resistance to Beijing
is disorganised and scattered, with a history of small-scale attacks in Xinjiang and
elsewhere in China (particularly Beijing), but very little recent activity. While
inconvenient, this resistance at present poses no real threat to the CCP's authority in
the region, nor is it likely to develop into a more widespread movement. With greater
organisation, and perhaps given more external support, these groups could become a
political nuisance for Beijing, in particular by more systematically targeting energy
production and transportation. However, even were this currently unlikely scenario to
arise, given the minority status of the Turkic groups and the strong security presence in
the region, this would be unlikely to lead to outright secession.
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China has responded to separatist movements in two ways: by a security clampdown,

and by diluting the social influence of Turkic minorities by the development of urban
areas and the immigration of a sizeable Han population. The former factor, especially
through the 'Strike Hard' campaign, has been successful in preventing major
secessionist violence since 2001. Although this has reduced the level of outright
violence, the concomitant dilution of Turkic culture and influence has also soured
relations between Han Chinese and indigenous Turkic populations, and created greater
social tension. Han migrants, development, and growing prosperity have all focused
predominately on urban areas. As a result, cities have become relatively prosperous
Han-majority pockets, while much of the XUAR is still Uighur/Islamic and rural in
character. Rural Uighur communities have thus grown to resent the prosperity of the
Han-dominated urban areas, fuelling social tension in the region. This has led to
dissatisfaction among Turkic minorities (whether motivated by ethnic or religious
nationalism), who resent China's 'occupation' of Xinjiang, the influx and favoured status
of Han workers, and the government's suppression of their culture and organisations.
Further penetration by Han migrants is very likely to incite greater resentment and
possibly violence.
Prospects
Beijing's security clampdown and policy of cultural assimilation have been unsuccessful
in dampening separatist sentiment in the XUAR. Although a strong security presence
and the dilution of the area's Uighur population have made it unlikely that separatist
movements could effectively challenge Beijing's control of the region, this has fuelled
ethnic nationalist sentiment further. Obviously, a political settlement with Uighur
separatists would weaken Beijing's control of the region, and would be politically
unpalatable for the CCP, which continues to depend on Chinese nationalism for much of
its legitimacy. With Uighur communities across the border, the complete pacification of
the region by force is also impractical, and would have repercussions for China's
international reputation.
As neither a further crackdown nor a relaxation of control are likely to bring a complete
end to the problem of Uighur/Islamic secession movements in the region, Beijing seems
to have taken a longer-term approach to the problem. Over the shorter term,
insurgents are very unlikely to be able to take effective action against China's control of
the XUAR. At the same time, by ensuring that the Central Asian governments and by
extension Russia is sensitive to the Uighur problem that Beijing faces, and in ensuring
that these governments would not tolerate any presence of these groups in their
territory contiguous to Xinjiang nor support these movements in any way, Beijing has
largely isolated these groups and prevented their growth or the development of new
groups. At the same time, by introducing a large and ever-growing Han population to
the region, and by promoting (successfully so far) prosperity in the region through
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development, the CCP is likely to be able to create a very different social landscape over
the next few decades. With the rise of prosperous, Han-dominated, urban centres,
future generations of Uighurs will be left with the choice of migration and assimilation
into Han-dominated prosperous urban centres, or becoming an increasingly isolated
and irrelevant rural movement. This policy, as long as the shorter-term resentment
generated can be controlled, fits with the Chinese tendency towards longer-term
planning.
Internal Affairs
Political System
Official Name: Xinjiang Uygur Zizhiqu (Xinjiang Uighur Autonomous Region)
Political System: Province of the People's Republic of China
Head of Province: Wang Lequan
Next Election: Not Applicable
The XUAR is totally dominated by the Chinese Communist Party (CCP) and no other
political parties are allowed to exist legally. While the party in other parts of China may
be becoming more autonomous, this is not the case in the XUAR where the party
structure remains strictly subordinated to Beijing. The political system has parallel civil
and party structures, the latter controlling the former. The Xinjiang Autonomous
Regional Government represents the civil governmental institution, while the Xinjiang
Autonomous Regional Party Committee is the CCP's primary governmental institution in
the province, and effectively controls policy.
The local party structure is largely dominated by Wang Lequan, a doctrinaire

conservative who strictly follows the Beijing line, and whom Beijing has trusted to carry
out its crackdown against the Uighurs and other opponents of the local and national
regime. The vast majority of office holders in the XUAR are Han Chinese. Although the
governor (Ismail Tiliwaldi) and the chair of the Xinjiang Region's People Congress
(Abdurehim Amet) are ethnic Uighurs, in reality Uighur cadres have little effective
power, which is a source of considerable friction. Those few Uighurs and other
nationalities holding office are usually among the most assimilated and considered loyal
to the regime.
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Leadership
Xinjiang Autonomous Regional Party Commitee
Secretary: Wang Lequan (Han)
Deputy Secretary: Ismail Tiliwaldi (Uighur)
Deputy Secretary: Zhou Shengtao (Han)
Deputy Secretary: Ashat Kenmbay (Aisihaiti Kelimubai, Kazakh)
Xinjiang Autonomous Regional Government
Chairman: Ismail Tiliwaldi (Uighur)
Vice-chairman: Liu Yi (Han)
Vice-chairman: Aman Haji (Uighur)
Vice-chairman: Arken Imarbaki (Uighur)
Vice-chairman: Hu Wei (Han)
Vice-chairman: Kurax Mahesut (Uighur)
Vice-chairman: Nuerlan Abudumanjin (Kazakh)
Standing Committee of the Xinjiang People's Congress:
Chairman: Abdurehim Amet (Uighur)
Vice-chairman: Zhang Guoliang (Han)
Deputy Director: Song Ruhao (Han)
Deputy Director: Dalielihan Mamir (Kazakh)
Deputy Director: Ashanbaike Turdi (Kyrgyz)
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Deputy Director: Hailiqiemu Slamu (Uighur)
Deputy Director: Hu Jihan Hakemofu (Uighur)
Wang Lequan
Wang Lequan, a Han, is the CCP Secretary of the XUAR Party Committee. He is described
as a traditional communist and a generalist. Wang was born in Shandong in December
1944 and joined the CCP in March 1966. He served for some years in his native
Shandong, starting in his home district of Shuguan, and later becoming deputy chairman
of the Shandong provincial government. In 1990 he was appointed deputy chief of the
XUAR and later became deputy chairman of the CCP committee for the XUAR. In 1995,
he became XUAR party chairman and was appointed a candidate to the 14th plenum of
the Central Committee of the CCP. He has since acquired a reputation for his ideological
purity and ruthlessness.
His influence has continued to grow as Beijing's crackdown in the XUAR has become
more and more severe. He was appointed to the Politburo by the 16th CCP Congress in
November 2002 and granted responsibilities for preventing 'infiltration' by separatist
cells into western China. He was re-appointed to the Politburo in October 2007 at the
17th CCP Congress. It is unusual for the Xinjiang party secretary to reach Politburo level
and the move reflected Beijing's desire to grant anti-separatist operations a high profile
at the national level. Wang is also seen as a political ally of President Hu Jintao.
Ismail Tiliwaldi
The current governor of the region was born in November 1944 in Shufu County,
Kashgar Prefecture, Xinjiang. Tiliwaldi graduated from Xinjiang University with a
bachelor's degree in mathematics and started his career in September 1967, although
he only joined the CCP in May 1973. Much of his early political career was spent as a
political officer for Xinjiang, starting out as deputy political commissar in the local
government in 1983 before becoming deputy party secretary in 1998 and being elected
chairman in 2003. In 2002, he was appointed an alternate member of 16th Central
Committee of the CCP, and in October 2007 became a full member of the 17th Central
Committee.
Political Parties
Although the CCP is the only legal political party in XUAR, there are a number of
organisations and groups promoting Uighur interests located outside of Xinjiang. None
of these parties are recognised by either the central government or the regional
government. The most notable are:
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• World Uighur Congress (Munich, Germany)

• East Turkistan Information Centre (based in Germany)
• East Turkistan Union in Europe (based in Germany)
• Nozugum Foundation (based in Kazakhstan)
• Kazakhstan Regional Uighur Organisation
• Uighurstan Freedom Association (based in Kazakhstan)
• Uighur Youth Union in Kazakhstan
• Ittipak ('Unity') (based in Kazakhstan and Kyrgyzstan)
• Bishkek Human Rights Committee (based in Kyrgyzstan)
• East Turkistan Foundation (based in Turkey)
• East Turkistan Solidarity (based in Turkey)
• Uighur-American Association (based in the US)
• Uighur Human Rights Project (based in the US)
World Uighur Congress (WUC)
The WUC was created in April 2004 by delegates from 13 countries by combining the
East Turkistan National Congress and the World Uighur Youth Congress, which was
branded a "terrorist" organisation by the Chinese government. Based in Munich,
Germany, the group's president is Erkin Alptekin, son of a distinguished Uighur émigré
involved in the short-lived East Turkistan Republic of the 1940s.
According to its official statements, the WUC is devoted to non-violent resistance and
information dissemination (lobbying). Alptekin is attempting to establish himself as a
spokesperson for all Uighurs living abroad. Although past divisiveness and the many
Uighur organisations existing throughout the world will make this a difficult task,
Alptekin may well possess the prestige to achieve his goal.
The organisation's structure is not yet clear. The WUC will presumably follow the
general organisation of the East Turkistan National Congress that it replaced in its
relationship to overseas Uighurs and other Uighur groups. There is no evidence that the
WUC has branches within Xinjiang and it probably will not attempt to establish them
given current conditions. The group has previously renounced violent activities, most
recently after the January 2007 incident in which 17 Uighurs were arrested and 18 killed
in a clash with police.
In September 2005, the WUC issued a statement from Taipei that strongly criticised
Beijing on the eve of the 50th anniversary of the creation of the XUAR. The WUC stated
that "China's crushing campaign of religious oppression and cultural assimilation against
its Muslim Uighur minority, in the name of terror-combat and anti-separatism, risks
turn[ing] the region into a 'time bomb'." The statement did not lead to any easing of
restrictions against Uighur groups in Xinjiang. At the same time, Alptekin claimed that
Beijing had arrested 3,000 Uighurs, executed 200 and sentenced a further 15 to death
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during its 'Strike Hard' campaign since 2001.
External Affairs
The XUAR maintains no independent foreign relations, although the region has
developed strong trade links with Central Asian countries. However, many XUAR-based
Uighur opposition groups have links across the border and beyond. Most of the major
opposition groups have headquarters outside the region, including in Germany, the US
and Turkey. The larger Uighur bodies maintain an active political machinery and
attempt to bring about intervention of the US Congress and other significant political
entities, such as the EU parliament.
In some states, Uighur organisations have been subject to violence. In Kazakhstan and
Kyrgyzstan, for example, there have been several assassinations of local Uighur leaders,
including the March 2000 killing of Nigmat Bazakov, chairman of Ittipak ('Unity').
However, some of the most prominent assassinations of recent years of leading Uighurs
have been as a result of internal feuds within the Uighur community. Bazakov, for
example, died at the hands of the now largely defunct Uighur Liberation Organisation
for his refusal to co-operate with them.
In dealing with Uighur separatism, Beijing has depended on its increased influence in
Central Asia and, before 11 September 2001, was able to influence Kazakhstan and
Kyrgyzstan in particular. Its efforts in this direction continue and a number of Uighurs
have been extradited by Kazakhstan and Kyrgyzstan to China where such individuals
almost certainly face the death sentence. Both of these states have substantial Uighur
minorities and Beijing is keen to prevent them from supporting the aspirations of the
Uighurs in XUAR in any way.
The physical presence of the US military since late 2001 in Central Asia has temporarily
slowed down further consolidation of Chinese political leverage in the region but China
has recently reasserted pressure on neighbouring states. A major geopolitical concern
for Beijing is the possibility of the establishment of one or more pro-Uighur
governments in Central Asia, which would have serious implications in the way Beijing
treats the issue of Uighur separatism. Thus far the post-communist regimes have shared
Beijing's opposition to Uighur separatism, with even the Uighur Kazakh Prime Minister
Karim Masimov supporting China's Uighur policy, as any concrete advance on this front
could bring further instability. A number of opposition movements throughout Central
Asia, but particularly in Uzbekistan, have indicated sympathy toward the Uighurs living
inside the borders of China.
Relations with Central Asia
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In order for Xinjiang to benefit from the economic growth of Central Asia, the Chinese
government has posited Xinjiang as a gateway to facilitate foreign companies wanting
to expand into the Central Asian markets. To date, the region has developed 28 trade
ports along its border, which has become a long commercial corridor with the
neighbouring countries.
As a result of this focus on trade, the central Asian countries have become an important
Chinese investment destination. Chinese enterprises, mainly from Xinjiang, have so far
invested over USD2 billion in Central Asia. As part of efforts to develop trade with the
west, a new railway link may be developed along the Kashi-Osh-Andijan line to link the
XUAR more effectively with Kyrgyzstan and Uzbekistan and other neighbouring
countries. Moreover, a Central Asian highway is expected to be completed by 2010,
running from Ürümqi to Tashkent in Uzbekistan, with Beijing donating CNY1.5 billion
towards the total CNY4.02 billion (USD503 million) costs. Construction on the Xinjiang
section of the freeway between Korla and Kuqa began in September 2007. In addition, a
Sino-Kazakh gas pipeline agreed in 2003, that would run alongside the Sino-Kazakh oil
pipeline, is now conceived to extend beyond Kazakhstan into Uzbekistan and
Turkmenistan to utilise that latter two countries' resources. Construction is expected to
start in 2008, but it is as yet unclear if agreement has been reached on the pipeline.
Other than the economic linkages of the possibility of making the Xinjiang more
prosperous economically, the Chinese government is concerned by the role of the
Uighur diaspora in the Central Asian republics and Turkey. There are presently
approximately 1,000,000 Uighurs living in Kazakhstan, Kyrgyzstan, Uzbekistan,
Turkmenistan and Tajikistan.
Relations with the European Union (EU)
Although no province has external policy links with other countries, outside of economic
co-operation, Xinjiang remains important to Sino-EU relations as the region is often
mentioned on the agenda of Sino-EU talks. At the 9th EU-China summit in September
2006, the EU welcomed China's commitment to ratify its adherence to the International
Convention on Civil and Political Rights (ICCPR) and towards safeguarding the UN
Human Rights instrument, in particular those for the protection of minority rights.
However, such declarations have done little to affect Beijing's policy towards XUAR.
While the Uighurs have been quite successful in lobbying for Uighur rights in Europe,
they have in general been less successful than the Tibetans in raising the profile of their
region, lacking as they do a charismatic figurehead such as the Dalai Lama. As a result,
despite continued EU comments on the issue of the Uighurs in Xinjiang, Sino-EU
relations will continue to be dominated by trade and few policy changes should be
expected.
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Although Kazakhstan remains wary of excessive Chinese influence in Central Asia, and
Moscow's reaction to this possibility, the potential and actual trade between the two
countries have ensured stable relations. Xinjiang has played a key role in this trade
relationship.
Perhaps most importantly, China and Kazakhstan have set up an international trade co-
operation centre in Horgos (Korgas) bordering the two countries, with each side of the
border assigning about 14.3 km2 for the joint venture. In September 2004, China and
Kazakhstan agreed that this trading centre will be developed into a free port with free
trade and investment, facilitating the conduct of international trade within Central Asia
along with multiple functions of processing, manufacturing, trade, merchandise
procurement, finance services, tourism and entertainment. In addition, the Alataw Pass
Port in Xinjiang on the Sino-Kazakh border, which opened in June 1992, has become
China's second largest trading land "port", with cargo transport volume exceeding 11
million tonnes in 2005. The port is supported by a prototype economic zone integrating
trade, processing, storage and transportation facilities, with over 150 facilities within
the 155 km2 of the port.
Kazakhstan also plays a crucial role in China's quest for alternative sources of energy.
The completion of the Atasu-Xinjiang pipeline late in 2005, the proposed Sino-Kazah gas
pipeline and China's growing use of Kazakh petroleum is expected to further bolster
Xinjiang's trade. Xinjiang itself is not a major oil or gas importer, and is in fact an oil
exporting region, but serves as a transit region for energy supplies heading towards
China's major consuming markets in the east.
As a result of this growing trade and energy co-operation, Xinjiang will increase in
importance as both a bridge between China and Central Asia, with Beijing able to utilise
common ethnic characteristics in XUAR's population to foster communication and
security co-operation, and a buffer on China's west. Although Kazakhstan's significant
Uighur population, numbering approximately 250,000 people, is of concern to China, in
reality Almaty allows few incidents to occur in its territory and hence the possibility of
anti-Chinese violence is relatively low.
As with Kazakhstan, Sino-Kyrgyz relations are dominated by trade. However, given a

history of minor incidents, the Uighur issue is of more importance in the Sino-Kyrgyz
relationship. In May and June 1998, two explosions on or near buses in Osh oblast,
Kyrgyzstan, killed five people, with two Uighurs (and one Turk and one Russian)
sentenced for the bombing. In March 2000, Nigmat Bazakov, the second president of
135
Uighur cultural organisation Ittipaq, was shot dead. Four Uighurs and an Uzbek were
sentenced for the death, which Bishkek blamed on the East Turkistan Liberation
Organisation. In May 2000, a Chinese delegation sent to investigate a fire at a Bishkek
market specialising in Chinese goods was attacked, with one Chinese citizen killed and
two wounded. Beijing blamed the Uighur Liberation Organisation, with four Uighurs
sentenced to death for the murder.
Perhaps most significantly, in June 2002 Wang Jianping, first secretary at the Chinese
embassy in Bishkek, was shot dead. Two ethnic Uighurs (one Kyrgyz and one Turkish)
were deported to China in August 2002 for the crime, with the government claiming
them to be members of the East Turkistan Liberation Organisation (ETLO). Uighur
separatists were also blamed for an explosion atr the Dordoi bazaar in Bishkek in
December 2002 and an explosion at a currency exchange office in Osh on May 2003.
Finally, the deaths of 22 people, including 19 Chinese citizens, in a bus 60 km outside
the town of Kochkorka in the Naryn region of eastern Kyrgyzstan in March 2003 were
again blamed on ETLO by Bishkek.
Such events ensure that Uighur issues maintain a high profile in Sino-Kyrgyz relations.
Periodic arrests of Kyrgyz nationals on suspicion of Uighur separatism, such as occurred
in February 2007, reassures Beijing of Bishkek's determination to suppress separatist
activities.
Relations with Russia
Xinjiang is crucial to China's Central Asia strategy, given that historically Russia and
other imperial powers have attempted to influence the region, and with it Xinjiang's
domestic politics. As such, one of the core goals of the Chinese government towards the
region is to ensure that Xinjiang falls firmly within the CCP's jurisdiction. Nonetheless,
the shared goal of both Moscow and Beijing to prevent Islamic extremism in Central
Asia and minimise US influence has also ensured that the two countries have pursued
complementary policies.
This common goal has benefited Beijing in allowing it to pursue its anti-separatist
campaign in Xinjiang unfettered by Russian influence. Xinjiang has also proven useful for
Beijing. The region was the site of the Peace Mission 207 exercises held under the
auspices of the Shanghai Co-operation Organisation in August 2007. Although ostensibly
multilateral exercises, in reality they were dominated by 1,700 Chinese and 2,000
Russian troops. Held in the name of counter-terrorism exercises, Peace Mission 2007
demonstrated both Sino-Russian commitment to Central Asia (Peace Mission 2005 was
held in the Russian Far East and off China's Shandong peninsula - very different terrain
and operational conditions to those found in Central Asia) and also afforded Beijing the
opportunity to demonstrate its willingness and ability to forcibly suppress any separatist
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activity in the region.
With Sino-Russian relations currently cordial, and with shared aims in Central Asia,
Xinjiang will likely continue to play a role in demonstrating both countries' commitment
to Central Asia and their eagerness to prevent the growth of Islamic extremism in the
region.
Relations with the United States
Xinjiang's role in Sino-US relations has changed since the 11 September 2001 attacks on
the US. Prior to this event, the concerns of the US in Xinjiang pertained mainly to
minority rights. However, with the inauguration of the Bush administration and the
subsequent attacks on US territory, counter-terrorism and suppression of potentially
violent Islamic or Islamist movements became paramount in US foreign policy.
Beijing has utilised this foreign policy focus to support its own anti-separatist campaign
in Xinjiang. In 2002, after a party conference, the Ismail Tiliwaldi announced that Beijing
believed that Uighur separatists have received material and financial assistance abroad,
and Chinese police had seized Uighurs who had trained in Afghanistan. China alleged
that from the 1990s to early 2001, Uighur separatists were responsible for over 200
incidents in Xinjiang resulting in the deaths of 162 people, and the injuries of more than
440 others. Washington, in turn, supported Beijing's purported counter-terrorist policy,
particularly as China deployed greater numbers of security forces near its Afghanistan
and Pakistan borders to prevent the movement of militants fleeing the US-led invasion
of Afghanistan, and 22 Uighurs were detained by the US and held at Camp X-ray in
Guantanamo Bay from 2001 (five of these Uighurs were deported to Albania in May
2006, with the remainder now incarcerated at Camp Six in Guantanamo Bay). The US
Department of State designated the East Turkistan Islamic Movement as a terrorist
organisation in August 2002.
Since then, US policy has changed little, with Xinjiang remaining a low priority for
Washington, particularly given burgeoning trade ties with China. Although the end of
the Bush administration in 2009 may presage a more nuanced policy towards non-state
armed groups, and a Democrat president would be more likely to favour supporting
minority rights, this trade relationship will prevent any overt action by Washington over
XUAR.
Trade and External Assistance
The XUAR has for centuries been vital for China's trade as the route of the northern Silk
Road, which stretched for 6,000 km between China and Europe. Although its
importance declined in the early to mid-20th century as trade with China became less
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important globally owing to a lack of industrialisation, civil war, and an isolated

communist regime, Xinjiang is once again emerging as a vital trade route between China
and the rest of the Eurasian continent.
Reflecting this, Xinjiang's total trade in 2006 grew over USD9 billion, a 13 per cent rise
on the previous year, with a trade surplus of USD5.17 billion. Given these figures,
exports comprised approximately USD8.09 billion, especially textiles and manufactured
goods, and imports approximately USD1.92 billion, primarily oil and base metals.
Although this is minimal when compared to China's overall trade, with China's growing
economic co-operation with Central Asia, and in particular with rising use of Kazakh
petroleum, Xinjiang's trade is likely to continue to grow.
Cheap Chinese goods continue to be in demand in the former Soviet Union, and the five
Central Asian states are primary recipients of trade from Xinjiang. There is also an active
Xinjiang trade with Mongolia, via several minor roads. Among commodities travelling
along them is Mongolian oil, which is produced too remotely from Mongolian major
centres to be of much use to the Mongols, but which is urgently needed in adjacent
areas of the XUAR.
Date Event
1933 First East Turkistan Republic.
1933- The region falls under the control of warlords.

1944
1944 Second East Turkistan Republic.
1944- East Turkistan mainly under the control of local warlords and Chinese Nationalists.
1949
1949 The region is conquered by the communist forces of the People's Republic of China.
East Turkistan leadership killed in mysterious plane crash on the way to negotiate with
Beijing.
1955 Contemporary XUAR created.
1964 First Chinese nuclear weapon tested at Lop Nor in the XUAR.
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1981 Karghilik uprising.
Paysawat uprising.
1985 Committee formed to co-ordinate resistance against the Chinese occupation of East
Turkistan, Tibet, and Inner Mongolia.
1989 XUAR Communist Party headquarters in Ürümqi attacked by rioters.
1990 Baren uprising.
1996 Beijing begins 'Strike Hard' campaign of intervention in XUAR.
1997 Yining (Gulja) uprising.
Xinjiang separatists plant three bombs on buses in Ürümqi, killing nine people and
injuring 74.
Pakistan agrees to extradite 12 Uighurs associated with bomb explosions.
1998 Sporadic armed clashes continue.
1999 Beijing sends 1,000 additional paramilitary police to Ili County.
Protests in Khotan Economic 'Developing the West' campaign announced by Beijing.
2000 Bomb explosion kills 60 people in Ürümqi.
Nigmat Bazakov, the second president of Uighur cultural organisation Ittipaq, was shot
dead in Kyrgyzstan (March).
A Chinese delegation sent to investigate a fire at a Bishkek market specialising in

Chinese goods was attacked, with one Chinese citizen killed and two wounded. Beijing
blamed the Uighur Liberation Organisation, with four Uighurs sentenced to death for
the murder (May).
2001 China further reinforced crackdown against Xinjiang separatists.
2002 Uighur publications banned.
End to instruction in Uighur at Xinjiang University.
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Forced relocation of Uighurs from Qomul city leads to protests.
Wang Jianping, first secretary at the Chinese embassy in Bishkek, was shot dead.
Two Uighurs were subsequently deported to China for the murder (June-August).
The US government declared East Turkistan Islamic Party (ETIM) to be a 'terrorist'

organisation, a gesture highly welcomed by Beijing (August).
2003 Hundreds of arrests in Ili on anniversary of 1997 Gulja uprising (February).

China opened Xinjiang airspace to international flights temporarily, during Iraq conflict.
(March) .
Twenty-two people, including 19 Chinese citizens, were killed in a bus 60 km outside

the town of Kochkorka in the Naryn region of eastern Kyrgyzstan. ETLO was blamed by
Bishkek (March).
The East Turkistan Liberation Movement, the East Turkistan Islamic Movement, World
Uighur Youth Congress, and the East Turkistan Information Centre officially labelled
terrorist organisations by China (November).
Hasan Mahsum, leader of the East Turkistan Islamic Movement, killed in a gun battle
with Pakistani authorities (December).
2004 Eight-year prison term of Uighur political prisoner Rabiya Kadeer reduced by one year
(March).
World Uighur Congress established in Munich, Germany under the presidency of Erkin
Alptekin (April).
More than 50 people were sentenced to death during the first eight months of the
year (August).
4,000 km, USD5.7 billion Xinjiang-Shanghai pipeline completed, allowing annual gas
transmission of 12 billion m3 (October).
2005 World Uighur Congress issued statement criticising Chinese control of the XUAR
(September).
50th anniversary celebrations of the XUAR passed without incident amid tight security
(October).
1,300 km, USD 3 billion Atasu-Xinjiang pipeline completed (December).
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2006 Mandarin Chinese was introduced to nursery schools in Xinjiang (February).
11th five-year plan suggests a second pipeline from Xinjiang to the east, although
route, length and cost are not announced (March).
Five Uighurs held at Guantanamo Bay by the US since 2001 were deported to Albania,
despite Beijing's objections (May).
2007 17 Uighurs were arrested and 18 killed in a clash with police in the Pamir region near
the Kyrgyz border. Police claimed to have destroyed a separatist training base and
seized 1,500 improvised grenades (January).
The multilateral Peace Mission 2007 military exercises were held in XUAR under the
auspices of the Shanghai Co-operation Organisation (August).
Construction on the Xinjiang section of a Central Asian highway stretching from

Ürümqi to Tashken began (September).
Wang Lequan was appointed a member of the CCP Politburo (October).
Three Uighurs were sentenced to death, a further two received suspended death
sentences and another life imprisonment for recruitment and training of terrorists and
the production and storage of 16 g of explosives and 67 grenades. The six were
arrested in January during the clash with police in Pamir. The court claimed that all six
had recruited and trained personnel between August 2005 and January 2007
(November).
Consolidation of Chinese Rule
Although nominally a part of China after the Chinese revolution of 1911, Xinjiang
remained largely independent of the central authorities until 1949. During much of the
period, Xinjiang was dominated by local warlords, but from 1944, with Soviet
encouragement, there was briefly an independent East Turkistan Republic, later
suppressed by communist forces. The present XUAR dates from 1955, but control
remained somewhat loose until recent times with considerable toleration of local
Uighur autonomy. Only with the rise of Central Asian nationalism after 1991, and
China's increased dependence on foreign oil and natural gas supplies, has Beijing sought
to control the region more effectively. Since 1996, this policy has been reinforced
through the official 'strike hard' campaign to tolerate no local resistance or 'splittism.'
The campaign was renewed in 2001 and continues strongly today.
The campaign has resulted in repeated violent incidents and uprisings of the Uighurs
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against Chinese rule, although such events have characterised the entire period of
Chinese rule. Recent major uprisings include the Baren uprising of 1990, in which
thousands of armed Uighurs fought against Chinese air and ground units (Chinese
special forces were brought in from Gansu Province as a result). The Yining (Gulja)
Uprising began as a Uighur street protest against arbitrary police actions, although the
heavy-handed Chinese reaction to it resulted in the protest becoming a period of
intense unrest. According to one estimate, 57,000 Uighurs were arrested in connection
with the uprising.
Altogether it is estimated that total arrests between 1994 and 1997 were 560,000.
During late 1996 and 1997, some 1,000 Uighurs are believed to have been executed.
Many others have died in prison. According to one estimate, there were 2,000
executions between 1990 and 2000, while the Chinese authorities continue to detain
thousands of Uighurs. Since 2002, China has reported no major incidents but arrests
continue to be made and executions continue.
Security Forces
All police and other security forces are strictly under the control of Ürümqi and Beijing.
Police forces
Formed in October 1954, the Xinjiang Production and Construction Corps (xinjiang
shengchan jiànshè bingtuán: XPCC) has become one of the primary organisations within
Xinjiang. A state-owned agricultural and industrial conglomerate, the XPCC is also a
paramilitary organisation, and maintains a parallel administration within the XUAR.
Initially founded with just 175,000 personnel in 1954 (who had already been
redesignated from the People's Liberation Army (PLA) the year before), the group grew
exponentially, to number some 1.5 million by 1966, largely owing to its success in
settling Han migrants and developing sparsely populated areas.
The size and influence of the XPCC may have influenced the decision to abolish the
orgasination in 1975 (although the Cultural Revolution also took its toll on the group),
but the imprtance of the XPCC was underlined when it was restored shortly afterwards
in 1981. Currently, the XPCC numbers some 2.5 million personnel, mostly agricultural
and industrial rather than paramilitary, although the corps is still comprised of large
numbers of demobilised PLA personnel.
Organisation
The XPCC is subordinate to the Chinese Communist Party at both the central and
regional level. Headquartered in Ürümqi, the organisation is divided into 14 divisions
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and sub-divided into 185 regiment-level entities.
The XPCC is under the command of a first political commissar (concurrently the
secretary of the Xinjiang Autonomous Regional Party Commitee), a political commissar
and a commander. Each division maintains a similar chain of command.
Role and deployment
The XPCC has a variety of roles. As an economic and paramilitary organisation, the
group has been integral to the development of some of the remoter areas of Xinjiang.
Officially, the corps is tasked with development of frontier regions, economic
development, social stability and ethnic harmony, and counter-insurgency. However,
within this broad remit the XPCC has managed to build and administer six cities and
towns, and maintains healthcare and education responsibilities within areas under its
jurisdiction. During its history the XPCC has managed to build Kuitun, Shihezi, Alar,
Tumushuke, Wujiaqu and Beitun, and currently administers all six population centres
bar Kuitun (the 7th agricultural division previously administered Kuitun prior to the
organisation's disbandment in 1975, and now administers an area within Kuitun).
Currently, with little military threat from external sources, and a faltering insurgency,
the XPCC is primarily engaged in development of economic resources, particularly
agricultural industries.
Chain of command
Position Name
First Political Commissar: Wang Lequan
Political Commissar: Nie Weiguo
Commander: Hua Shifei
Bases
Xinjiang Production and Construction Corps Divisions
Name Headquarters Founded
1st Agricultural Aksu 1953
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2nd Agricultural Korla 1953
3rd Agricultural Kashi 1966
4th Agricultural Yining 1953
5th Agricultural Bortala 1953
6th Agricultural Wujiaqu 1953
7th Agricultural Kuitun 1953
8th Agricultural Shihezi 1953
9th Agricultural Dorbiljin 1962
10th Agricultural Beitun 1959
Construction Engineering Ürümqi 1953
12th Agricultural Ürümqi 1982
13th Agricultural Kumul 1982
14th Agricultural Hotan 1982
Military forces
The People's Liberation Army (PLA) maintains a substantial presence in the XUAR,
although it is not as large as often claimed and the cited figures for Xinjiang forces
include substantial numbers of second-line and reserve forces, some of them quite ill
adapted to frontline actions, as well as purely security personnel. Nonetheless, the
quality, if not the numbers of PLA forces in the area continues to be enhanced, including
new air bases created to counter the possibility of a build-up of US long-distance air
forces in Uzbekistan, Kyrgyzstan and Kazakhstan. Although the US has yet to enhance its
air capacity in place in the region since 2001, Russia has improved its force projection in
the area, including the rebuilding of a major air base in Kyrgyzstan.
A major new Chinese airbase is also being established at Hotan aimed primarily at
containing India. This is one of eight airbases newly built or reconstructed in the XUAR.
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Development of Xinjiang's southern railway network also serves a potential military

purpose.
Organisation
As with all other military deployments, the PLA forces deployed in Xinjiang are
ultimately controlled by the CCP Central Military Commission (CMC). In peacetime, the
CMC administers the various divisions of the PLA through four general departments: the
General Staff Department (GSD), the General Political Department (GPD), the General
Logistics Department (GLD), and the General Armament Department (GAD). In time of
crisis, the CMC commands the conventional field units across the country through the
GSD and seven military region headquarters.
The Xinjiang Military District is one of five districts subordinate to the Lanzhou Military
Region.
Role and deployment
Xinjiang Military District Units
Unit Location
4th Motorised Infantry Division Kashi
6th Motorised Infantry Division Hetian
8th Motorised Infantry Division Shawan
11th Motorised Infantry Division (Highland) Ürümqi
Army Aviation Regiment (Helicopter) Ürümqi
Anti-Aircraft Artillery Brigade n/a
Engineer Regiment n/a
Information is scare, but there may be small groups of insurgents operating in the
XUAR. They are likely to be primarily based along the region's boundaries where they
can hide in the mountains found in many frontier areas. This possibility was reinforced
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by the January clash between police and what Beijing have termed terrorists in the
Pamir region on Xinjiang's borders. The relative hostility of Kazakhstan and Kyrgyzstan
to Uighur aspirations limits their cross-border operational effectiveness. However, the
Ferghana valley along the Uzbek/Kyrgyz/Tajik border area could act as a safe haven for
Uighur activists.
Outside the XUAR, it is conceivable that Uighurs could be active in other non-state
armed groups, although the detention of 22 Uighurs in Afghanistan led to no charges
being brought against them for militancy. Refusal of the US to return the Uighurs
captured in Afghanistan has created tension in Sino-US relations, although Chinese
representatives were provided access to two Uighurs detained in Guantanamo Bay in
2002/03. President Bush declared one Uighur opposition group, the East Turkistan
Islamic Movement, as a 'terrorist' organisation in August 2002. China considers all
Uighur groups to be 'terrorist' organisations and has sought to use the US-led 'war on
terrorism' against them.
Uighur Separatists
• Group name: There is no single, dominant group fighting for independence in Xinjiang
Uighur Autonomous Region (XUAR), in large part because of the lack of unity within
the region itself. The main groups identified by the Chinese government as actively
engaged in guerrilla warfare in XUAR include the Organisation for the Liberation of
East Turkistan, the East Turkistan Islamic Movement, the East Turkistan Liberation
Front, and the Turkistan Islamic Party. Other groups that have been mentioned
include: the United Revolutionary Front of Eastern Turkistan; the Organisation for the
Liberation of Uighurstan; the Xinjiang Liberation Organisation; the Islamic Reformist
Party "Shock Brigade"; the East Turkistan Islamic Party; the East Turkistanian
Opposition Party; the East Turkistan Islamic Party of Allah; the Islamic Holy Warriors;
East Turkistan International Committee; the Uighur Liberation Organisation; the Home
of East Turkistan Youth; the Free Turkistan Movement; the East Turkistan Party (Tengri
Tag), a pan-Turkic movement; the East Turkistan People's Party; the East Turkistan
National Congress; and the Regional Uighur Organisation.
• Level of threat: Uighur separatists pose no immediate threat to Chinese rule, but
intermittent small-scale attacks on government buildings occur.
• Status: China reported raids on alleged Uighur separatists in January 2006 and January
2007, but no attacks were reported until early 2008. With the Olympic Games acting
as a focal point for international attention, a rash of attacks or attempted attacks
between March and August 2008 occurred, highlighting continued violent activity.
• Date of founding: Low-intensity rebellion has been ongoing since the PRC takeover in
1949.
• Aims and objectives: To establish an independent Turkic state of East Turkistan
(sometimes referred to as Uighurstan) under ethnic Uighur control. Uighur identity,
unlike other minority groups in China, owes almost nothing to Chinese culture,
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although the influences helping Uighurs to define themselves as a people did come
from China (including communist nationality policy). In terms of language, religion,
culture and diet, they are unlike any other minority group in the country. As such,
Islamic and Turkic culture have been greater influences on the Uighur identity than
Chinese; and Uighurs look more to the west culturally than the east.
• Leaders: Hasan Mahsum, allegedly the founder of ETIM, was killed in a
counter-terrorism operation in South Waziristan, Pakistan on 2 October 2003.
Since then, no military leader has been identified for ETIM or Uighur
separatism, although a self-styled Commander Seyfullah released a video in
2008 claiming to represent the Turkistan Islamic Party. However, his
importance in a marginal group is unclear.
There has been no political figure as widely recognisable as the Dalai Lama in
Tibet to represent Uighur issues. Political group leaders have included Modan
Mikhilisi and Ashir Vakhdid, but since the death of Yusuf Alptekin, a former
senior East Turkistan Republic official, in 1995, the main leaders have been
embroiled in personal rivalries. The emergence of his son, Erkin Alptekin as
president of the World Uighur Congress may change this if he can establish
himself as the recognised leader of Uighur exiles. Rebiya Kadeer is a Uighur
businesswoman and activist for Uighur separatism, who lives in exile in the US
having been detained between 1999 and 2005.
Foreign Forces
FOREIGN FORCES
None
There are no foreign forces in the XUAR, but Beijing recently allowed the US to open an
FBI office there.
Geography
AREA: 1,646,800 km2
ELEVATION: 155 m below sea level - 8,611 m
LAND International: Afghanistan, India, Kazakhstan, Kyrgyzstan, Mongolia, Pakistan,

BORDERS: Russia, Tajikistan.
Provincial: Gansu province, Qinghai province, Tibet Autonomous Region
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The XUAR, with Tibet, forms the extreme west of China. It is an enormous region of
great diversity. One of China's largest provinces, comprising one sixth of its territory, it
is potentially one of the richest of the provinces in terms of resources with substantial
mineral and hydrological resources in the form of 320 rivers, some 100 lakes, more than
10,000 glaciers, and 25 billion m3 of subsurface water. The XUAR is bordered on the
west by Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan, Pakistan and India, in the north
by Russia and Mongolia, in the south by the Tibet Autonomous Region, and in the east
by other Chinese provinces (Gansu and Qinghai).
The XUAR is mostly desert and semi-desert. While some of the region's ecologically
sensitive dry areas are usable for animal husbandry most of the region's rich agricultural
productivity is concentrated in well-watered oases where intensive cultivation has
existed for centuries. The cities, except for industrial centres such as Karamay, are also
located in these oases where urban sprawl competes with agriculture and will
ultimately prove a limiting factor in further population growth. Due to the need to base
population around oases, which occupy 4.2 per cent of the total area, Xinjiang's
population is extremely unevenly distributed: 95 per cent of the population occupies
some 3.5 per cent of the total area of the XUAR.
Xinjiang is dominated by two great basins, the Tarim Basin in the central XUAR, which is
mostly wasteland, and the Dzungarian Basin in the west, bordering on Kazakhstan,
where much of the animal husbandry practised by the region's ethnic Kazakhs and
others takes place. The cities are generally located along two crescents of oases,
demarcating the former 'northern' and 'southern' routes of the Silk Road that once
passed directly through the region. Forests are sparse. Scrub and dry grassland are more
typical and only the oases are well watered, leaving much of the XUAR extremely dry.
Mountains include the Altay in the north, the Kunlun along the Tibetan border and the
Tianshan in the centre of the region. The highest point in the XUAR is Qogir peak at
8,611 m. By contrast, parts of the Turpan Depression are 155 m below sea level. The
great Taklamakan Desert is located south of the Tianshan. The longest river in the XUAR
is the Tarim, stretching 2,137 km. Also important are the Ili and the Ertish. Bosten Lake
is the largest deposit of open fresh water in Xinjiang.
The major cities of the XUAR are: Ürümqi, Kashi (originally Kashgar), Yining (Gulja),
Hotan (Khotan), Yarkend, Aksu, Kuchar, Korla, Turpan (Turfan), Tacheng (Qoqek) and
Karamay. According to China's census results for 2000, Ürümqi's population exceeded
two million people.
Climate
The average temperature is -20 to -5°C in January, and 22 to 26°C in July. Average
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rainfall is 150 mm, with much of this falling in the north.
Natural Resources
The XUAR is rich in natural resources, principally natural gas and oil but also coal (some
2,200 billion tonnes) and a range of ferrous and non-ferrous metals and other mineral
resources including manganese, chromium, lead, beryllium, lithium, copper, tin,
uranium, platinum, silver, and gold. There are also deposits of sulfur, emeralds, white
mica, asbestos and rock crystal.
Oil and gas
Chinese energy policy has increasingly focused on Xinjiang and offshore sources of oil,
now that production in China's historically most productive fields in the northeast has
begun to drop. As of the beginning of 2006, Xinjiang's crude output grew by an average
of 1.14 million tonnes per annum since 1990. In 2005, Xinjiang produced 24.1 million
tons of crude, and 10.2 billion cubic metres of natural gas. Total oil and gas reserves in
Xinjiang are estimated at an equivalence of 30 billion tonnes of oil. The largest gas
reserve yet discovered was announced in May 2007 by PetroChina, with the southern
edge of the Junggar Basin estimated to have a 30 billion cubic metre reserve.
Xinjiang seems set to continue its rise to a key position in China's overall energy strategy
- both CNPC and Sinopec hope to bring the XUAR's total output to 30 million tonnes of
oil and 18 billion cubic metres of gas by 2010, not including the 20 million tonnes of oil
that are to come from Kazakhstan via pipelines.
Xinjiang is also vital as a transhipment point for energy products as China seeks to
diversify its energy supply routes and sources. With oil and gas increasingly arriving
from Central Asia, particularly given the completion of the Sino-Kazakh pipeline in 2005
and the expected completion of the Central Asian gas pipeline in 2010, Xinjiang is
becoming a hub for energy transport. As a result, China plans to construct a second
west-east pipeline from Horgos in Xinjiang to Guangdong province, expected to be
completed by 2010. The first west-east gas pipeline was completed in 2004, running
from the Tarim basin in Xinjiang to Shanghai.Beijing expects to invest USD1.2 billion in
two pipelines running east, with construction set to start simultaneously with the
Kazakh project.
Minerals
Exploitation of other mineral resources is limited by the remoteness of some deposits.

Beijing hopes to overcome this problem in the future by infrastructure development,
but habitable settlements for workers will continue to be a problem in very dry areas.
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Demography
In 2004, it was estimated that the total population of the XUAR was 19.63 million,
compared to 18.5 million at the time of the 2000 census.
Ethnic groups
The XUAR is multi-ethnic and diverse, although two large ethnic groups dominate. The
most numerous is the region's Han population, mostly comprised of recent immigrants
from elsewhere in China, but some Chinese have lived in the XUAR since the area's
conquest under the Qing dynasty in the 18th century. The floating Han population of
migrant workers considerably inflates the official estimates for Han Chinese in Xinjiang.
The second important ethnic group in Xinjiang are the native Uighurs, speaking a Turkic
language closely related to Uzbek, and some other Turkic dialects. There are also
approximately 1.2 million Kazakhs. Taken together with the Uighurs and some other
small groups, this means there is still a majority population of native peoples in Xinjiang,
although this situation is likely to change soon.
There is a substantial gap in per capita income between the indigenous and immigrant
population of the area. Han immigrants also tend to benefit more from the region's
exports than the locals. As a result, some 80 per cent of XUAR Uighurs live below the
official poverty line. In 2007, the average income of urban inhabitants, mostly Han, was
nearly CNY9,600 (USD1,230), but only CNY2,737 (USD330) for rural people, mostly
Uighur or other minorities.
Perhaps 1,000,000 Uighurs live outside the XUAR. All of the Turkic republics of Central
Asia include some Uighurs with the largest numbers in Uzbekistan (perhaps 500,000),
Kyrgyzstan (47,000) and Kazakhstan (210,000). In the latter two republics they often
face repressive measures and are inherently viewed with suspicion by the ruling
regimes.
Despite official claims by Beijing, there has been no continuous Han occupation of the
area and many of the region's Han populations have been assimilated to local cultural
patterns. This is especially true of the 800,000-strong Chinese Muslim (Hui) community,
although these by no means form a homogenous community. In fact about the only
thing the group as a whole shares in common is an Islamic culture. The Hui are
identified with the Han Chinese by the Uighurs, but this may change in the future due to
increasing friction between Chinese and Hui outside of the XUAR.
Also present in the XUAR are more than 150,000 Kyrgyz, closely related to the Kazakhs,
a range of other Turkic groups, some Mongols, Manchus, left behind from the 18th
century Manchu occupation of the area, Farsi-speaking Tajiks, Tibetans, and even a
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small number of Russians.
Xinjiang population by ethnic group (2000)
Ethnic group Population Percentage
Uighur 8,345,622 45.21
Han 7,489,919 40.58
Kazakh 1,245,023 6.74
Hui 839,837 4.55
Kyrgyz 158,775 0.86
Mongol 149,857 0.81
Dongxiang 55,841 0.30
Tajik 39,493 0.21
Xibe 34,566 0.19
Manchu 19,493 0.11
Tujia 15,787 0.086
Uzbek 12,096 0.066
Russian 8,935 0.048
Miao 7,006 0.038
Tibetan 6,153 0.033
Zhuang 5,642 0.031
Daur 5,541 0.03
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Tatar 4,501 0.024
Salar 3,762 0.02
Source: Census 2000
Since 2000, continued Han migration into Xinjiang may have led to the Uighurs becoming the
second largest ethnic group in the region.
Religion
Although Islam is the dominant religion in the XUAR, Xinjiang's geographical position
and location on the Silk Road has ensured that the region has been historically
influenced by a number of religions. Zoroastrianism was perhaps the first organised
religion to arrive in the region, from Persia, in the 4th century BCE, assuming greater
influence than the scattered animistic beliefs that previously characterised Xinjiang's
residents, particularly in the Turpan area. Buddhism's influence expanded rapidly from
the 1st century BCE, introduced into Xinjiang through Kashmir from India. Yutian, Shule,
Qiuci and Gaochang were all centres of Buddhism. Around the 5th century, Daoism was
introduced into Xinjiang from inland China by Han migrants, although Daoism's
influence was limited mainly to the Turpan and Hami areas, where Han people were
concentrated. Around the 6th century, Manichaeism reached Xinjiang from Persia
through Central Asia.
Islam, now the most influential religion in Xinjiang, arrived in the late 9th and early 10th
centuries. The victory of the Islamic Karahan kingdom over the Buddhist Yutian kingdom
in a four-decade war in the late 10th and early 11th centuries cemented Islam's influence
over southern Xinjiang, which then expanded through the region to become the most
influential religion by the 16th century.
Although Christianity became more popular in approximately the 18th century, Islam's
dominance remained unchallenged. Islam has become a hallmark of ethnic identity in
the region as it is the de facto national religion of the Turkic-speaking people. It remains
the most influential religion in Xinjiang, although the migration of Hans into the XUAR is
diluting its cultural and religious significance among the urban population.
Islam
Given concern in Beijing that Islamic, Turkic culture distinguishes the Turkic population
from the rest of China, underlining their autonomy rather than their assimilation into
greater China, attempts have been made to limit the development of specific cultural
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influences. For example, the Sufi Muslim movement, Sala, was prohibited by the the Ili-
Kazakh Autonomous Prefecture in Xinjiang in August 2005. Although official publications
made no mention of any arrests, the World Uighur Congress later reported that 179
practitioners had been arrested. Sala adherents are largely ethnic Hui, rather than
Uighur, and this prohibition may have been in order to prevent the Islamicisation of
non-Turkic populations (the Hui are ethnically similar to the Han).
Language
Mandarin Chinese is the official language in Xinjiang, although Uighur is widely spoken
among the ethnic population. Since the early 1990s, the central government has
removed Uighur from educational syllabi and official correspondence.
Although Kazakh is related to Uighur, it belongs to a different branch of the Turkic

family and there is not the degree of intercommunication possible that exists between
Kazakhs and Kyrgyz, or Kazakhs and Tatars, for example. Nonetheless, the Kazakh of the
XUAR is heavily assimilated to Uighur and uses the same Arabic script.
Health and medical
Given the wealth differentials between Han migrants and indigenous Turkic
populations, the availability of social services often differs by ethnic group. For example,
nearly a quarter of the largely Muslim population of Kashi lacks running water. Access to
healthcare also differs substantially by ethnic group as do educational levels.
Another difference between the Uighur and the Han population is in age. The Uighur
population is younger than the Chinese, in part due to a high Uighur natural growth rate
in the past. As a result, the Uighurs account for most of the natural population increase
in Xinjiang, while Han Chinese comprise the majority of the larger migrant increases in
population.
Regional distribution
Some 95 per cent of the XUAR's population lives in the oases, which comprise less than
5 per cent of the total land area of the XUAR, but this percentage is dropping owing to
desertification and other environmental changes, including mineralisation of irrigated
lands. This has led to severe population pressures aggravated by a Chinese tendency to
evict Uighurs when land is needed for military or commercial use, or urban expansion.
The proposal to direct waters from the Yaluzangbu into the Tarim via a tunnel could
reverse this, but the project has first to prove feasible and be built.
According to official XUAR sources, 98 per cent of the region's Han live in cities and
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towns while 90 per cent of the Uighurs are rural. The largest single concentrations of
Han are in Ürümqi, Shihenzi and Karamay, cities that are nearly 95 per cent Han
Chinese. The region's Kazakhs also mostly live in rural areas, with the majority still
practising pastoralism, although no longer nomadic.
Infrastructure
The XUAR is poorly connected to the rest of China pwing to environmental barriers and
distance. Roads and railways are limited and the most convenient method of
communication is by air. The rail link to Beijing takes approximately 48 hours, although
this time is falling as more investment becomes available. Beijing is endeavouring to
tackle this infrastructural shortcoming, but the XUAR remains more accessible to the
five independent Central Asian states than to the eastern regions in China. Economic
development programmes, aimed to link the Caspian region with its hydrocarbon
resources more firmly with energy-hungry China, may only exacerbate this disparity.
Ürümqi is the XUAR's main economic centre, which not only has much of the area's
major industry but co-ordinates regional trade.
Roads
Altogether, there were 87,000 km of roads and highways in 2005, although doubts
remains over the quality of the majority of these roads (the government claims that 90
per cent of the region's roads are in a good condition). Beijing has apparently spent
CNY33.4 billion (USD4.2 billion) in road construction and maintenance between 2001
and 2005. According to the government, the region's roads have expanded from a base
of some 30,000 km in the mid-1990s, and in 2005 a total of 5,746 km of highways was
built.
Eight major highways and 67 trunk roads connect Ürümqi with interior China. Severe
environmental conditions limit expansion of roads in many areas so that some of them
may never be linked effectively with the centre. There also may never be effective
connections with Tibet to the south due to the remoteness of northern Tibet from the
population centres. In addition, many border areas with the west are highly
mountainous. Nonetheless, in November 2007, a second highway was opened in the
XUAR, running for 424 km from Aral to Hotan, at a cost of CNY800 million (USD100
million), demonstrating continued investment in roads.
Thus far, 75 highways for passenger and cargo have been built leading from the XUAR to
Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan, Pakistan and Mongolia. A further 12
highways are to be built by 2010 from Ürümqi to Central Asian states.
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Rail
Xinjiang is not well served by rail lines, although a southern line connecting Ürümqi with
Korla was extended in 1999 by a 1,451 km railway between Turpan and Kashi. In the
westward extension project of the southern Xinjiang railway, the Korla-Aksu-Kashi
section, which required an investment of CNY2.4 billion, has been completed. A
northern line connects Ürümqi to the Sino-Kazakh border and continues to Alatau,
completed in 1990. This connects China's Alashankou railway station to Kazakhstan's
Dostyk station and forms the Eurasian Continental Bridge which extends from eastern
China to Western Europe.
A new 295 km Jinghe-Ili-Horgos rail line is now in the planning stage. Further rail
feasibility studies have been undertaken on the feasibility of linking Xinjiang to
Tajikistan, Uzbekistan and Kyrgyzstan.
Airports
Ürümqi International Airport is one of China's six gateway airports, and serves 59
international and domestic destinations.
Ürümqi International Airport (Diwopu)
Reference point N43 54.43, E087 28.45
Runway surface Concrete
Elevation 648 m (2,126 ft)
Nearest town/city Ürümqi (17 km)
Ports
As a landlocked province, Xinjiang does not contain any sea ports. However, teamers
and barges can sail on the Ili and Ertix rivers.
Telecommunications
Communications in the XUAR are best along the railway and main highway lines,
bisecting the region. In 2004, Xinjiang had 5.22 million fixed line subscribers, and 4.89
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million mobile telephone subscribers, according to government figures. The region has
35,000 km of optical fibre cables and 10 satellite ground receiving stations.
Economic Overview
Xinjiang's GDP for 2005 is estimated to have reached USD32 billion, an increase of 10.5
per cent over the preceding year. The industrial sector has come to play an increasing
role in the XUAR economy's. In the first eleven months of 2005, the value-added output
of the XUAR industrial sector was USD1.03 billion, a 17.5 per cent year-on-year increase.
Until recently, the focal point of XUAR economic activity lay in a highly productive
agricultural sector based upon intensively cultivated oases. Agriculture remains
important, but there are now many new industries and resource exploitation, primarily
petroleum and natural gas, has become increasingly important. Agriculture now suffers
from the effects of urban sprawl that is directing scarce oasis lands to other purposes.
Animal husbandry has been little affected by these developments and continues to be a
major source of livelihood, but any expansion of farming into environmentally fragile
areas used by herdsmen could create major problems. The Beijing government
considers such lands as available for agricultural use, which is not strictly the case.
Pasture depletion is a major issue throughout Xinjiang.
Major XUAR industries include textiles, food processing, leather goods, carpets,
machinery, chemicals, building materials, aas well as oil refining, iron, steel and other
metallurgy, and various consumer goods production. The vast majority of local industry
products are exported, including to other parts of China.
Major crops are wheat, rice, corn, sorghum, and millet; also rape, sesame seed, sugar
beets and peanuts. Among the great variety of local agricultural products are many
XUAR specialities such as grapes, melons, pomegranates, apricots, apples, figs, pears,
peaches and various nuts, such as walnuts and almonds.
Most of the agricultural and other products of the XUAR, including more than 70 per
cent of the region's cotton, are shipped to the rest of China but there is some cross-
border trade with Kyrgyzstan, Kazakhstan and Mongolia.
The completion of a railway link with Kazakhstan has greatly facilitated exchanges in
that direction, but planned oil and natural pipelines will be the primary media for
Chinese trade with the west in the future. Such is likely to be Chinese demand that its
trade with Kazakhstan, in particular, will probably be run at a deficit for China. Unlike
Mongolia, where Chinese consumer goods are of major importance, China faces a
number of competitors in the Turkic republics. The major industrial centres are Ürümqi,
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Karamay, Korla and Turpan.
The XUAR has 10 development zones focusing on Ürümqi, Shihezi, Yining, Bole, Tacheng
and Kuitun. Major investment is now taking place in these and other areas in
connection with China's 'Exploring the West' programme of economic development.
Foreign direct investment in XUAR totalled USD360 million in 2006, a 34 per cent
increase on the previous year, according to government figures, with utilisation of
foreign direct investment comprising USD103 million.
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HONG KONG
Overview
Territorial overview
Autonomy
Profile
Security
Political stability
Organised crime
Corruption
Internal Affairs
Political System
Elections
Political Parties
Human Rights
PLA-HKSAR Relations
Donald Tsang
Alan Leong
External Affairs
First elections to the Legislative Council (May 1998)
China extends its influence
158
Second elections to the Legislative Council (September 2000)
"Ministerial accountability" system (June 2002)
Prelude to protest: Beijing's security agenda
The July 2003 Protests
Security Forces
Police
Identification Bureau
Chain of Command
Role and Deployment
Bases
Assessment
Customs
Chain of Command
Inventory
Other Security Forces
Armed Forces
Insurgent Forces
Foreign Forces
Geography
Climate
Natural Resources
159
Demography
Infrastructure
Roads
Railways
Airports
Ports
Telecommunications
Economic Overview
Overview
On 1 July 1997, Hong Kong became a Special Administrative Region (SAR) within the
People's Republic of China (PRC). The division of responsibilities for security between
the People's Liberation Army (external) and the Hong Kong Police Force (internal) is
enshrined in the Basic Law and the Joint Declaration. There are no external threats to
the territorial integrity or sovereignty of China over Hong Kong, as there is no dispute
over the former British colony. Internally, the primary concern is political stability and
the mandate of the territory's chief executive. The population often bridles at the
perception of excessive interference from Beijing and prefers an independent chief
executive willing to forego certain restrictive policies favoured by the mainland for a
more open political system. This proved fatal for former chief executive Tung Chee-
Hwa's reputation, already damaged by a collapse in property prices, economic
weakness and mis-management of the 2003 Severe Acute Respiratory Syndrome
epidemic, Tung resigned the position in March 2005 and was transferred to Beijing to
take up a role as vice-chairman of the powerful Chinese People's Political Consultative
Conference (CPPCC). The future of the newly appointed chief executive Donald Tsang,
and the possibility of unrest in the region, will depend upon Tsang's ability to
maintain good relations with Beijing while appearing able to resist the mainland's
more draconian policies. Hong Kong also suffers from a well-developed and
sophisticated organised criminal sector that has benefited from the region's
incorporation into China to become a primary trafficking hub.
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Autonomy
Although under the terms of Hong Kong's Basic Law, HKSAR is supposed to retain a
significant degree of autonomy from China, recent events have suggested a growing
tendency for the Chinese Communist Party (CCP) to manage affairs in the SAR.
Beijing's plans for the imposition of a new anti-subversion law by the end of July 2003,
as provided for by Article 23 of the Basic Law, led many to fear erosion rather than a
consolidation of basic liberties. Orderly mass demonstrations occurred in the period
before its implementation, including the spontaneous turnout of half a million Hong
Kong citizenry in the streets on the sixth anniversary of the handover on 1 July 2003.
Similarly, the NPC's interpretation of the Basic Law prompted demonstrators,
numbering some 15,000, to take to the streets in protest. Beijing has argued in
response that public disaffection in Hong Kong is mainly a product of unemployment,
deflation and associated economic problems. This may be the case; indeed, public
anger in the HKSAR is mainly directed at the HKSAR government, not at Beijing, where
figures such as state premier Wen Jiabao remain extremely popular among the
population of Hong Kong. There is no organised movement for secession from the
mainland, although a growing body of opinion calling for universal suffrage in chief
executive elections may lead to further demands for autonomy, and so the problem
for the CCP is whether it is able to impose its will as often as it would like. However,
whether or not Beijing is ultimately granted the police powers it believes sufficient,
the de facto plutocracy that, through the various representation bodies in
government, rules Hong Kong should be able to countenance criticism and ensure a
relatively open cultural and political life for the foreseeable future.
Profile
Area: 1,101 km2
Language: Mandarin (official), Cantonese and English
Religion: Buddhism; Catholicism
Time Zone: GMT +8
Population: 6,900,700 (Hong Kong Census and Statistics Department, December 2006)
Neighbours: No international land borders. Provincial border with Guangdong.
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Capital City: Victoria City
Primary Port: Hong Kong
Primary Airport: Chek Lap Kok
Security
Hong Kong's internal security situation is stable, but has been greatly politicised by
events since 2003 and incurred periods of flux. Under the impact of a wave of agitation
and strikes led by CCP-linked trade unions and proxies in that year, property prices
dipped and building activity halved in a boom town, as pro-Beijing citizens
manufactured incidents of confrontation with the authorities.
The orderly, often middle-class protests of July 2003 against the proposed
implementation of Article 23 of the Basic Law, swept many voters sympathetic to
Beijing into the pro-democracy camp, and was clearly an upset for the authorities both
in the HKSAR and Beijing.
Political stability
The most significant, if not immediate, threat to the government of Hong Kong is the
possibility of large demonstrations and civil unrest. This outcome has been a concern
since the demonstration on 1 July 2003 that involved approximately 500,000 people, a
remarkable seven per cent of the population. These protests revolved around the
planned implementation of Article 23 of Hong Kong's Basic Law, which states that the
SAR will enact laws to protect its own sovereign security. Initially intended to protect
Hong Kong civil rights by preventing this legislation from being entirely in the hands of
Beijing, concerns were highlighted by the vague wording of many parts of the
document, which intended to subdue "treason, sedition and subversion." The political
pressure was so intense that two cabinet ministers resigned within two weeks at the
administration's insistence that it would implement the law. Eventually, in September
2003, then-chief executive Tung Chee-Hwa announced that Article 23 legislation would
be withdrawn, which although nullifying protest on the issue demonstrated the power
the population held over the administration, despite Beijing's interference.
April 2004 brought further protests against Tung Chee-Hwa. Earlier in the year, Beijing
had made references to Deng Xiaoping's 1984 speech in which he claimed that Hong
Kong should be governed by 'patriots' - namely, people approved by Beijing. China's
National People's Congress (NPC) subsequently claimed the right to interpret Hong
Kong's Basic Law - this was originally to remain the prerogative of local courts.
162
Furthermore, then-chief executive Tung's decision not to implement universal suffrage

in elections scheduled for 2007 was upheld by the NPC. The result of all three seemingly
restrictive policies was a demonstration involving aproximately 15,000 people to protest
against mainland interference in Hong Kong's internal autonomy. Interestingly, as in
2003, the protests were largely carried out by members of Hong Kong's middle classes,
and mainly targeted Tung himself, rather than China.
These protests were also notably calm and orderly, a far cry from Hong Kong's worst
riots in 1967, when a curfew was imposed on Hong Kong Island for the first time since
the Second World War. Similarly, the unrest in Hong Kong in 2003 pales in comparison
to either Jakarta in 1998 or Manila in 2001, when national governments collapsed.
Two conclusions may be drawn from Hong Kong's protests: first, the protesters did not
seem to constitute a genuine internal security threat to Hong Kong; second, then-chief
executive Tung was the main target for protesters. While many protesters employ pro-
Chinese rhetoric, it is clear that Tung's perceived mishandling of Hong Kong's property
crash and Severe Acute Respiratory Syndrome epidemic left him an obvious target for
public dissatisfaction.
Eventually, Tung's position became untenable as his popularity rating dropped to record
lows and he lost all credibility within Hong Kong. In March 2005, amid much
speculation, he announced his retirement owing to ill health, a decision supported and
possibly initiated by Beijing (although Tung maintained the decision was his own). In a
sign of Beijing's acceptance, Tung was given the position of vice-chairman of the CPPCC,
a body analogous to a second legislative house, although marginal in party affairs.
The protests, therefore, despite falling far short of being a movement for secession or a
'people's revolution', politicised the population and acted as a temporary check on the
CCP's influence in the SAR. In the medium term, little is likely to change: Beijing will
remain the most powerful broker in Hong Kong's politics and the internal situation will
remain stable. Yet the protests were a salutary lesson to the CCP in its handling of the
territory.
The primary long-term threat to stability is the possibility that Beijing will enter into a
protracted blocking of demands for greater representative democracy in the SAR,
perhaps using Singaporean-style 'soft-authoritarian' methods of population and political
control. A growing movement supported by pro-democracy members of the Legislative
Council and high-profile public figures, campaigning for the introduction of universal
suffrage by the 2012 chief executive elections and a wholly or majority directly elected
legislature by the 2008 Legislative Council elections is currently the most likely vehicle
for any organised dissent against Chief Executive Tsang and Beijing. Indeed, the March
2007 chief executive election included two unprecedented broadcast debates held
163
between Tsang and opposition, pro-democracy candidate Alan Leong, further

enhancing the democratic culture of Hong Kong.
However, while democratic sentiment is rife among the population, the security
situation may well depend closely on the economic situation. As long as Hong Kong is
prosperous and autonomous, its population will most likely continue to feel proud to be
part of a greater, and powerful China. However, double-digit unemployment rates,
depressed property prices and continued deflation could sour the political atmosphere.
The outlook is uncertain and Hong Kong citizens themselves are probably undecided as
to how far they wish to press any claim for greater representative democracy.
Nevertheless, Hong Kong has been politicised and the popular mood changed, at least
temporarily and possibly for a longer duration, in favour of a sudden keen interest in
civic and political affairs. While unlikely to lead to a secessionist movement, this
politicisation will continue to pressure for democratic reform, and hence a weakening of
Beijing's control.
Organised crime
Hong Kong suffers from extensive and endemic organised crime. The Triads, criminal
groups whose name dates back to the 17th century underground societies that
attempted to remove the Ming dynasty in China, involve a variety of gangs and
organisations that are involved in narcotics trafficking, human trafficking, prostitution,
gambling, violent crime and extortion, piracy, and a variety of financial crimes.
Estimates of the size of Triad gangs vary widely, although the largest (such as the 14k,
Sun Yee On and Wo Shing Wo) are thought to involve up to 80,000 people.
The Triads are not just well established in Hong Kong, but also maintain extensive
international contacts, supply routes, and financial accounts. The groups are particularly
active in Macau, Taiwan, southern China, and among Chinese communities globally.
This dispersed nature of the groups makes any crackdown difficult, as national and
international co-operation is needed. However, a positive sign of such collaboration was
provided in June 2005 when more than 1,600 people were arrested in Hong Kong,
Guangdong and Macau. An 11-day swoop upon the Triads, named Operation Glaring
Sun, was notable not only for its scale, but also for the increasing co-ordination
between the Hong Kong Police Force, Security Forces of Macau and Guangdong Public
Security Bureau.
Notable successes during the raid included the seizure of 4.5 million contraband
cigarettes, the freezing of USD90 million in assets, and the closure of 31 brothels, which
will prove difficult revenue streams to recover. However, the operation, which aimed to
damage organised crime's fund-raising capabilities in the administrative regions and
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province, is unlikely to have a long-lasting effect in other areas, particularly the raiding
of 30 unidentified gambling dens and 61 pirate disc centres. Both activities are endemic
within Hong Kong, and are easy to recreate in another location following a raid.
Triads are also involved in the lucrative trafficking in the region. Hong Kong is a major
staging post in the several methamphetamine and heroin supply routes out of Asia to
regional and Western markets and in the past has been a covert transit point for small
arms and heavier weaponry. The seizure of approximately 550kg of ketamine in
September 2006, in one of the world's largest seizures of the drug, followed other
seizures measuring 150kg and 200 kg in January and February 2006 respectively. The
fact that the later seizure was, according to Hong kong police, to be distributed in
southern China demonstrates that the territory's relatively open ports make it easier to
move goods through the SAR than mainland China, and that China's burgeoning
economic growth will continue to create a vibrant market for the supply of synthetic
drugs. As such, despite improved international co-operation, drug trafficking is likely to
increase in the SAR.
Financial crime
The government of Hong Kong is extremely concerned about maintaining the HKSAR's
position as the foremost financial capital of East Asia. In order to do so, and ensure faith
in the territory's financial system, the government aims to keep financial crimes to a
minimum. As such, in line with all other international financial centres, the HKSAR
government has implemented a series of measures to stymie money laundering in the
HKSAR.
The current international focus on terrorism has further envigorated the Hong Kong
government in order to prevent money laundering being linked to terrorist financing.
The government has therefore sought to establish a comprehensive regime to tackle
the problem by establishing cross-functional co-ordination among government
departments, private organisations and international bodies.
Hong Kong has effective legal and financial systems in place to counter money
laundering. The Drug Trafficking (Recovery of Proceeds) Ordinance is the main piece of
legislation designed to trace, restrain and confiscate proceeds of drug trafficking and to
stop drug traffickers from retaining their illicit profits. This piece of legislation has
similar aims to the UK's Proceeds of Crime Act 2002, which aims to target the main aim
of crime, namely profit. Both the Drug Trafficking Ordinance and the Organised and
Serious Crimes Ordinance were significantly strengthened in 1995 to make it more
difficult for drug traffickers and other criminals to launder or retain their illicit profits.
Under the Organised and Serious Crimes Ordinance, amoney changers and remittance
165
agents are required to register their businesses with the police and keep records of
transactions of HKD20,000 (approximately USD2,500) or above. This figure was reduced
to HKD8,000 (USD1,000) in January 2007 owing to standards laid down by the Financial
Action Task Force on Money Laundering (FATF).
In July 2002, the anti-money laundering provisions in the Drug Trafficking (Recovery of
Proceeds) Ordinance and the Organised and Serious Crime Ordinance were further
strengthened through the enactment of the Drug Trafficking and Organised Crimes
(Amendment) Ordinance 2002. One major amendment effected through this ordinance
is to allow for restraint of the property of a person who has been arrested for a drug-
trafficking offence, and released on bail or refused bail. This helps forestall the
defendant from disposing of, or concealing, his properties during the period when
further investigation is in progress. The Drug Trafficking (Recovery of Proceeds)
Ordinance currently gives the court the power to assume all properties held by the
defendant if the properties were gained through the funds garnered by drug trafficking.
Hong Kong has therefore demonstrated its eagerness in legislation to ensure

accountability of its financial system. However, the difficulty for the government is not
in passing the legislation, but in preventing breaches of the law. Given the
sophistication of organised criminal groups in the territory, the geography of the
territory with its 230 islands and growing economic co-operation with mainland China,
with the resultant flows of money, the prevention of money laundering becomes
extremely difficult. Thus, while Hong Kong will continue to enact legislation to reassure
investors and speculators, money laundering will remain a problem for the territory as
organised criminal activity persists.
Corruption
The greatest threat to Hong Kong's first-rate business and legal environment is probably
not the formal imposition of greater political control from Beijing at the expense of local
democratic structures and individual rights per se. Rather it is the possibility that the
extensive corruption and criminal activities, increasingly rife on the mainland, could spill
uncontrollably into Hong Kong in the future, via less official channels.
Until the creation of the Independent Commission Against Corruption (ICAC) in 1974,
Hong Kong suffered from such severe corruption that it had become not merely a legal
problem, but a genuine social problem. Even a chief police superintendent, Peter
Godber, fled Hong Kong with HKD4.3 million in unexplained wealth in 1973. In response
to this event, ICAC was founded, and the investigation of this case was among its first
tasks. Godber was extradited from the UK and eventually imprisoned for four years. By
the time of Hong Kong's reversion to China, official corruption was much improved, and
its clean business environment came to be a major attraction for foreign companies
166
contemplating business in the Asia-Pacific region. If official corruption were once again
to take root in Hong Kong, perhaps from the mainland, then one of the remaining
reasons for doing business in Hong Kong rather than, for example, Shanghai, would be
lost.
Internal Affairs
Official Name: Hong Kong Special Administrative Region
Political System: Special Administrative Region of the People's Republic of China. Unicameral
government, with ostensible autonomy over most areas of governance.
Head of Donald Tsang

Government:
Next Election: 2008 (Legislative Council)

2012 (chief executive)
Political System
Hong Kong's special administrative region status means that the territory is 'a local
administrative region of China, which shall enjoy a high degree of autonomy and come
directly under the Central People's Government', as the Basic Law states in Article 12.
Despite Article 68 of the Basic Law stating that the ultimate aim is the election of all
members of the Legislative Council by universal suffrage by 2007, this was ruled out by
the administration. In the 2004 election, half of the 60 members were elected directly
by universal suffrage, and the other half elected from functional constituencies
(professional and special interest groups). The two-tier system ensured that pro-China
business and professional elements retained a dominant role.
The 180,000-strong civil service provides a crucial element in governance and is headed
by the chief secretary who acts as principal adviser to the chief executive.
Constitution
The Basic Law, enacted on 1 July 1997, acts as the effective constitution of HKSAR.
Although the Basic Law provides for a balance of powers within Hong Kong and
autonomy over almost all areas of governance bar defence (and to some extent
167
international affairs), and also supports the introduction of universal suffrage over an
indefinite timeframe, in reality ultimate power rests with Beijing and any changes to the
Basic Law and political system will require Beijing's consent. Current proposals for
constitutional change include direct election by universal suffrage of the chief executive,
expansion of the 60-strong Legislative Council to 90 seats (incorporating 30
geographical constituencies), or the conversion of the 30 functional constituencies to
geographical constituencies.
Executive
The executive branch of government in Hong Kong is centred upon the chief executive
and the Executive Council. Article 43 of the HKSAR Basic law stipulates that the chief
executive of the Hong Kong SAR shall be the head of the Hong Kong Special
Administrative Region and shall represent the region of Hong Kong in China. The chief
executive is be accountable to the central government in Beijing and the HKSAR in
accordance with the provisions of the Basic Law.
Although Article 45 stipulates that the chief executive of the Hong Kong Special
Administrative Region shall be selected by election or through consultations held
locally, thus far all elections for the post have been held by the 800-member Election
Commission that is itself elected by approximately three per cent of the population. As
such, given that the Election Commission often comprises pro-Beijing candidates, and
both Tung and Tsang have had the covert support of the central government. The chief
executive's term of office is five years and he or she may serve for not more than two
consecutive terms.
The chief executive's role involves the introduction of bills tot he Legislative Council as
well as the signing of bills and budgets passed by the Legislative Council and reporting
the budgets and final accounts to the central government for the record. In addition,
the chief executive has significant influence over government policies and can issue
executive orders. The chief executive has the power to appoint and dismiss cabinet
secretaries, senior civil service appointments as well as judges.
If the chief executive considers that a bill passed by the Legislative Council is not
compatible with the overall interests of the territory, he or she may return it to the
Legislative Council within three months for reconsideration. However, if the Legislative
Council passes the original bill again by not less than a two-thirds majority of all the
members, the chief executive must sign and promulgate it within one month, or act in
accordance with the provisions of Article 50 of the Basic Law, which allows for the
dissolution of the Legislative Council should a consensus not be reached after
consultations. This dissolution may only occur once in the chief executive's term of
office.
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The Executive Council is an organ for assisting the Chief Executive in policy-making and
normally meets once a week, presided over by the chief executive. Aside from
emergencies, the chief executive must consult the Executive Council before introducing
bills to or dissolving the Legislative Council.
Legislature
Under the Basic Law, the Hong Kong Special Administrative Region is vested with
legislative power, with the Legislative Council the designated unicameral legislature.
The Legislative Council of the HKSAR has 60 members, with 30 members returned by
geographical constituencies through direct elections, and 30 members by functional
constituencies. The election for the third term of the Legislative Council of the HKSAR
was held on 12 September 2004. The president of the Legislative Council is elected by
and from among members of the council.
The main functions of the Legislative Council are to enact laws; examine and approve
budgets, taxation and public expenditure, and scrutinise the work of the government. In
addition, the Legislative Council of the HKSAR is also given the power to endorse the
appointment and removal of the judges of the Court of Final Appeal and the Chief Judge
of the High Court, as well as the power to impeach the chief executive.
The extent of autonomy of the HKSAR in making its own laws is also described in the
Basic Law. Under Article 17 of the Basic Law, laws enacted by the legislature of the
territory must be reported to the Standing Committee of the National People's Congress
for the record. If the Standing Committee, after consulting the Committee for the Basic
Law of the HKSAR under it, considers that any such law is not in conformity with the
provisions of the Basic Law or regarding the relationship between the central
government and the region, the Standing Committee may return the law in question
but shall not amend it. Any law returned is immediately invalidated, but the invalidation
has no retroactive effect. Beijng is therefore implicitly mandated to reject any
legislation it deems may weaken its control, although the effect on popular opinion in
Hong Kong could counteract any benefit gained.
Judiciary
While Hong Kong's legal system was previously based upon English common law, the
incorporation of the territory into China fundamentally changed the legal situation, with
the Basic Law becoming the primary legislation. The Basic Law provides for Hong Kong
to have its own Court of Final Appeal of five judges, replacing the Privy Council in
London as the highest appellate court. The Basic Law also provides for the continued
independence of the public prosecution authority, headed by the secretary of justice,
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who replaced the attorney general after the handover. The judiciary is independent
from the executive and legislative arms of government. It is responsible for the
administration of justice in civil and criminal cases, as well as disputes between
individuals and the government. Judges are appointed by the HKSAR chief executive on
the recommendations of the Judicial Officers Recommendation Commission, an
independent commission composed of local judges, legal professionals and other
eminent persons.
Although the judiciary is theoretically completely independent of the executive and

legislative branches of the government, this independence has been tested by various
cases - notably over the handling of politically sensitive cases, such as those pertaining
to the rights of children born to mainland mothers in Hong Kong, and of Falun Dafa
members (notably a May 2005 overturning by the Court of Final Appeal of convictions
for eight Falun Dafa members for wilful obstruction and assault following a 2002
demonstration outside the Chinese government's Liaison Office).
The Court of Final Appeal is the highest appellate court in Hong Kong, hearing appeals
from the High Court. The Court of Appeal hears appeals on all civil and criminal matters
from the Court of First Instance and the District Court. It also hears appeals from Lands
Tribunal and various tribunals and statutory bodies.
The Court of First Instance has unlimited jurisdiction in both civil and criminal matters. It
also hears appeals from Magistrates' Courts, the Small Claims Tribunal, the Obscene
Articles Tribunal, the Labour Tribunal and the Minor Employment Claims Adjudication
Board. For criminal trials, judges of the Court of First Instance sit with a jury of seven
(nine on the special direction of the judge).
The District Court hears civil disputes of a value over HKD50,000 but not more than
HKD1 million. Its criminal jurisdiction is limited to seven years' imprisonment. The
Family Court deals mainly with divorce cases and related matters such as maintenance
and the welfare of children.
There are seven Magistrates' Courts. They exercise criminal jurisdiction over a wide
range of indictable and summary offences meriting up to two years' imprisonment and
a fine of HKD100,000. However, a growing number of ordinances give magistrates the
power to impose sentences of up to three years' imprisonment and substantially larger
fines (for some offences up to HKD5 million).
The Lands Tribunal deals with cases arising from tenancy disputes and matters in
relation to building management. The tribunal also hears applications for the
determination of compensations caused by land resumption, appeal against the
assessment of rateable value/ government rent or market value of property under the
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Housing Ordinance.
The Labour Tribunal hears cases where the amount of claim exceeds HKD8,000 for at
least one of the claimants in a claim or where the number of claimants in the claim
exceeds 10. Hearings are informal and no representation by lawyers is allowed.
The Small Claims Tribunal hears civil claims within its jurisdiction of up to HKD50,000.
Hearings are informal and no representation by lawyers is allowed. The Obscene
Articles Tribunal determines and classifies whether or not an article or other matter
publicly displayed is obscene or indecent. The Coroner's Court conducts investigations
and sometimes inquests into the cause of death. The Juvenile Court hears charges
against children and young persons under the age of 16, except in cases of homicide. It
also has the jurisdiction to make care and protection orders in respect of young persons
under the age of 18. It sits in the Eastern, Kowloon City, Tsuen Wan, Fanling and Tuen
Mun Magistrates' Courts.
Elections
Most Hong Kong citizens were unable to vote in the March 2007 chief executive
election, which involved only the 800-strong Election Commission. Nonetheless, the
election provided a number of developments. While it was a significant relief for both
Beijing (and for Donald Tsang) that high-profile candidates like Martin Lee, the chairman
of the Democratic Party and Anson Chan, Hong Kong's chief secretary under Chris
Patten had previously declined to run, Tsang still faced a tough opponent in Alan Leong,
chairman of the Hong Kong Bar Association. Leong actively advocated the embracing of
democracy, garnering significant support. This compelled Tsang (as well as Beijing) to
admit that issue of universal suffrage will be on his agenda on his next term in office, set
to expire on 2012. In an interview, Tsang claimed that he wanted to introduce a
democracy plan in the next five years that would satisfy the 60 per cent of Hong Kong's
people who consistently tell pollsters that they want a system of one person, one vote,
but he declined to provide details. However, the Department of Constitutional Affairs
announced that the government would issue a report "by the middle of this year
[2007]" on possible approaches to universal suffrage and would then solicit public
comment over several months before channelling the views to Beijing.
The election included two broadcast debates between Tsang and Leong, a first for Hong
Kong. The debate was carried live and it grew sufficiently contentious that the Chinese
authorities temporarily blocked broadcast signals from CNN when Tsang articulated his
position on eventual democracy in Hong Kong. Tsang won the election but given that
Beijing had thrown its weight behind him, the results were still far from ideal, as Leong
gathered 123 of the 800 votes, with 16 invalid votes cast.
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Political Parties
Registered political parties with representation in the HKSAR Legislative Council include:
the Citizens Party, the pro-Beijing Democratic Alliance for the Betterment of Hong Kong,
the Democratic Party, the Hong Kong Progressive Alliance, the Frontier Party and the
pro-Beijing Liberal Party. Non-governmental organisations and lobby groups with a
political profile include Civic Exchange and the Hong Kong Alliance in Support of
Patriotic Democratic Movements of China.
Democratic Party
The Democratic Party was born in 1994 out of a merger between the two largest pro-
democracy political groups in the 1980s - Meeting Point (formed in 1983) and the
United Democrats of Hong Kong (formed 1990). The Democratic Party was very
successful in the Legislative Council election, where the party won 19 seats in the 1995
election in a large part due to the position it held during the 1989 Tiananmen Square
massacre. In the run-up to the 1997 handover, the party supported the controversial
package of political reform bought about by the British colonial government headed by
Chris Patten. The party has also been at the forefront of protests against Japanese
claims over the disputed Senkaku islands.
Given the pro-democracy policies of the party, its agenda and tactics are in direct
conflict with Beijing, which both aids the party in garnering support for the population,
but also hinders the party's operations. For example, in protest at the Chinese
government's plans, the party refused to join the provisional Legislative Council in 1996,
and lost all its seats. Today, the party has declined in its popularity, notably because of
the factionalism and infighting between the senior and the younger members within the
party. In May 1998, the party won 12 out of the 60 seats in the elections, although this
figure fell to nine seats (seven geographic and two functional constituencies) in the
2004 elections.
Civic Party
The manifesto of the Civic Party clearly articulates its mission: to work towards universal
suffrage for the election of the chief executive and the Legislative Council.
The party's origins lie in the opposition to the controversial Article 23 of the Basic Law, a
proposed security law which inspired the July 2003 demonstrations. The Civic Party was
formed by members of the Article 45 Concern Group (born out of the group that
opposed Article 23), student leaders and pro-democracy citizens primarily from the
legal and academic professions. A preparatory and founding meeting was held on 19
February 2006, at which the the name of the party was decided. All the members were
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former chairmen of the Hong Kong Bar Council. Although the CivilcParty holds no
legislative seats, it remains an influential party given support for its policies, and the
standing of Alan Leong, a Civic Party member and opposition candidate in the 2007
chief executive elections.
Human Rights
Sino-British discussions following the 1984 Joint Declaration focused on the need to
ensure that human rights and freedom continue to be protected. The Joint Declaration
and the Basic Law have both provided that the International Covenant on Civil and
Political Rights and the International Covenant on Economic, Social and Cultural Rights
as applied to Hong Kong remained in force after 30 June 1997. Agreement has also been
reached on the application to Hong Kong of other human-rights treaties such as the UN
Convention Against Torture and the UN Covenant on the Rights of the Child. Labour
rights, religious freedoms and voting suffrage are all issues that are not open for public
debate in the mainland, unlike in the SAR, an asymmetry which makes Beijing
understandably nervous.
The anti-subversion law, to have been passed in July 2003, would have had an adverse
impact on the HKSAR's human rights environment, probably to a somewhat greater
extent than similar anti-terrorism ordinances enforced in the US since 2001, but in
many ways comparable to the emergency legislation inherited from British colonial rule
in Southeast Asia. Although indefinitely shelved following unprecedented protests in
Hong Kong, the statue may still be passed. In whatever form it eventually reaches the
statute books, it will probably constitute an improvement on what appears to have
been an ill-conceived and hasty drive to please the leadership in Beijing and bypass
opposition in the SAR before the latter could organise itself.
PLA-HKSAR Relations
A perceived weakening of Hong Kong's rule of law since July 1997 came from Beijing's
decision to exempt its garrison in Hong Kong from local law. Such immunity is in
contrast to pre-existing practice, with British soldiers who broke the law being tried
before Hong Kong courts. China's intentions in this regard, revealed in a September
1996 statement, is a contravention of the Basic Law, China's mini-constitution for the
territory after handover. The Basic Law stipulates that members of the garrison shall
abide by the laws of the Hong Kong SAR. During late December 1996 further clauses to
the Garrison Law were passed, such that on-duty PLA personnel and vehicles cannot be
inspected by Hong Kong police. PLA members come under the jurisdiction of China's
Supreme People's Court if they commit civil offences.
The PLA provides for the protection of the SAR's borders and the maintenance of
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territorial integrity. This role is primarily undertaken by patrol craft of the PLA Navy but
also by vessels of the Hong Kong Police. The PLA is confined to barracks in Hong Kong.
Chief Executive: Donald Tsang
Chief Secretary for Administration: Henry Tang
Secretary for the Civil Service: Denise Yue Chung-yee
Secretary for Commerce, Industry and Technology: Joseph Wong
Secretary for Constitutional and Chinese Mainland Affairs: Stephen Lam Sui-lung
Secretary for Development: Carrie Lam
Secretary for Economic Development and Labour: Stephen Ip Shu-kwan
Secretary for Education and Manpower: Michael Suen
Secretary for the Environment: Edward Yau
Secretary for Finance: John Tsang
Secretary for Financial Services and the Treasury: K C Chan
Secretary for Commerce and Economic Development: Frederick Ma Si-hang
Secretary for Health, Welfare and Food: Dr York Chow Yat-ngok
Secretary for Home Affairs: Tsang Tak-sing
Secretary for Housing, Planning and Lands: Michael Suen Ming-yueng
Secretary for Justice: Wong Yan Lung
Secretary for Labour and Welfare: Matthew Cheung
Secretary for Security: Ambrose Lee Siu-kwong
Secretary for Transport and Housing: Eva Cheng
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Commissioner of Police: Tang King Shing
Director of Immigration: Lai Tung-kwok
Commissioner of Customs and Excise: Richard Yuen
Commissioner, Independent Commission Against Corruption: Timothy Tong
Director, Audit Commission: Benjamin Tang
Donald Tsang
The current chief executive, Donald Tsang (Tsang Yam Kuen), was born in Hong Kong in
1944 and has spent almost his entire career within Hong Kong's civil service. He was
educated in Hong Kong and after graduation in 1964 worked briefly as a salesman
before joining the civil service in 1967. Following various positions in departments
including finance and trade, he was seconded to the Asian Development Bank in 1977 to
work on developmental infrastructure projects. Tsang interrupted his smooth career to
undertake a Master's degree in public administration from Harvard University in 1981.
After two years as director-general of trade, he became secretary of the treasury in
1993 and the first ethnic Chinese financial secretary in 1995. Following reversion to
China, Tsang was challenged by the task of guiding Hong Kong through the Asian
financial crisis of 1997-98, which was achieved with moderate success. His rise to power
continued in May 2001 when he was appointed chief secretary by then-chief executive
Tung Chee-Hwa, where he enjoyed continually high popularity ratings for a cabinet
member. Upon Tung's resignation on 12 March 2005 Tsang assumed the position of
chief executive, and managed to secure over 700 supporters among the 800-member
Election Committee, thereby preventing an electoral competition to confirm his
permanent role as chief executive (candidates for the election must receive 100
supporters from the committee). The result was never really in doubt, as Tsang had
strong support from Beijing. He was offically appointed chief executive on 21 June 2005
by the CCP State Council, and will hold the position for the remainder of the term until
30 June 2012.
Donald Tsang was created a Knight Commander in the Order of the British Empire (KBE)
in 1997 owing to his service to Hong Kong as a civil servant.
Alan Leong
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Alan Leong was born on 22 February 1958, and attended La Salle Primary School (1965-
71) and Wah Yan College in Kowloon (1971-78). Leong earned a bachelor of law at the
University of Hong Kong in 1982 and a master of law from the Cambridge University in
1984. Leong was called to the Hong Kong Bar in 1983, and was called to the Inner Bar,
the first to be appointed after the establishment of the HKSAR, in 1998.
Leong is a member of the Legislative Council of Hong Kong, representing the Kowloon
East geographical constituency and the vice-chairperson of the Independent Police
Complaints Council. Until 2003, Leong was also the chairman of the Hong Kong Bar
Association, having served on various government bodies.
Invigorated by the Article 23 controversy, Leong founded the Article 23 Concern Group
in 2003, which later developed into the Article 45 Concern Group and the Civic Party. As
chairperson of Hong Kong Bar Association, he mobilised many barristers to participate
in the 1 July 2003 protests. He won a seat in the Legislative Council in the subsequent
election.
He was nominated by the Civic Party as its party candidate for the chief executive
election in 2007 and was supported by the pan-democratic group, including the
Democratic Party. Leong later secured 132 nominations and became the first pro-
democratic candidate to successfully join the chief executive election. Despite knowing
that he would lose the election without the backing of Beijing, Leong lobbied hard to
have issues heard. His public debate with Tsang on Hong Kong Television was watched
by over three million viewers and the debate was very well received. Even though Leong
lost to Donald Tsang in the election on, he is still credited to have brought a lot of
credibility to the election as he has managed to force Tsang to address a wide variety of
issues which would otherwise have gone unaddressed.
While Leong might have lost on this occasion, the election has boosted his popularity.
The campaign has raised his profile among not only Hong Kong citizens, but in Beijing
and the wider audience abroad. Moreover, given that Tsang probably had Beijing's
backing before agreeing to "eventual democracy" in Hong Kong, many analysts credited
this in a large part to Leong. Third, in the event that Beijing does indeed allow direct
universal suffrage in 2012, Leong would have a chance of succeeding should he run
again because of his popularity.
External Affairs
Hong Kong's international affairs lie strictly within the remit of the Beijing government,
as governed by Article 13 of the Basic Law. Hong Kong does retain certain partnerships
and conventions which have resulted from its former status; many of these have still to
be fully redefined. Hong Kong's status as a special administrative region of China means
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the region can no longer sign or undertake alliances and alignments independent of the
Beijing government.
Date Event
1841 First British occupation.
1842 Treaty of Nanking ceded Hong Kong island to Britain.
1860 Kowloon annexed (Peking Convention).
1898 New Territories acquired under 99-year lease.
1941 Japanese occupation began.
1945 Liberated from Japanese rule.
1956 Nationalist riots in Hong Kong lead to military intervention.
1966 Star Ferry Riots.
1967 Communist riots last through the summer.
1984 Agreement to surrender sovereignty to China.
1989 UK granted citizenship to 225,000 residents.
1990 Basic Law agreed.
1993 British Army helicopter unit disbanded.
1994 Closure of HMS Tamar, primary naval base.
1994 Anti-Chinese Democracy Alliance won the largest number of seats on Hong Kong's 18
district boards.
1995 Last Hong Kong legislative elections before Chinese rule.
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1996 Beijing selected Tung Chee-Hwa as Hong Kong's first post-colonial governor (chief
executive).
Chinese Provisional Legislative Council established to run in tandem with Hong Kong
legislature.
1997 Special administrative region created (midnight 30 June).
1998 First Legislative Council elections since handover. Turnout was high and pro-democracy
candidates performed well (May).
1999 Hong Kong's highest court ruled that the Chinese government had the authority to
overturn its landmark decision earlier in the year that granted residency to more than a
million people from mainland China. The decision sparked protests and ended in
protestors clashing with riot police (December).
2000 LegCo elections were held, with a poor voter turnout of 43.6 per cent. The pro-
democracy Democratic Party saw its share of the popular vote fall from 43 per cent in
the 1998 elections to less than 35 per cent (September).
2001 Anson Chan resigned following the deterioration of relations between her and Chief
Executive Tung (January).
Hong Kong's Court of Final Appeal deliberated over whether to deport 5,000 people
back to mainland China despite them having parents in HK (June).
LegCo endorsed Beijing's right to dismiss the chief executive - a contravention of the
Basic Law, according to the Democratic Party, but in effect codifying powers Beijing
already had (July).
2002 Hong Kong's Court of Final Appeal ruled that all but 200 of more than 5,000 mainland
Chinese migrants suing for the right to stay in the territory must leave (January).
New ministerial accountability system passed into law; new government line-up (June).
Tung Chee-Hwa sworn in for a second term after an uncontested nomination; fifth
anniversary of 1 July 1997 hand-over; passage of anti-terror bill into law (July).
Consultations on anti-subversion law began (September).
100,000 took to the streets to demand additional white paper (December).
2003 SARS crisis struck Hong Kong after Chinese New Year (March). It is contained by June.
Half a million demonstrated against anti-subversion bill; after concessions are made, the
passage of the bill was halted, the financial and security secretaries resigned and Tung
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was called to Beijing for consultations (July).
2004 China's National People's Congress interpreted Hong Kong's Basic Law, in violation of the
autonomy of Hong Kong's courts, and ruling out universal suffrage for Hong Kong in
2007. 15,000 demonstrators took to the streets in protest (April).
LegCo elections returned 30 directly elected candidates, of whom 25 were pro-

democracy (September).
2005 Chief Executive Tung Chee-Hwa resigned,citing ill health, amid political pressure
following the 2003 and 2004 elections (March).
Court of Final Appeal quashed the convictions of eight Falun Dafa members in a case
seen to be a test of judicial independence (May).
Former chief secretary of the administration and career civil servant Donald Tsang is
appointed chief executive without the need for an election (June).
2006 Tsang was criticised for his handling of a variety of issues including food safety (80 per
cent of fish imported from Guangzhou has malachite green), political reforms, the
introduction of Goods and Services Tax and the level of air pollution in Hong Kong.
2007 Tsang re-elected as chief executive (March).
In 1982 Sino-British talks began on the future of Hong Kong after 1997. On 19 December
1984 the two countries signed a Joint Declaration, enforced on 27 May 1985, whereby
China resumed the exercise of sovereignty over Hong Kong (comprising Hong Kong,
Kowloon and the New Territories) on 1 July 1997.
Hong Kong became a Special Administrative Region (SAR) of China in the summer of
1997, although it still enjoys a high degree of autonomy. Hong Kong is vested with
executive, legislative and independent judicial power. The social and economic systems
are expected to remain unchanged for 50 years according to the Basic Law, which
embodies the 'one country, two systems' principle. The Basic Law was enacted by the
National People's Congress in 1990 and serves as Hong Kong's constitution.
Much of the groundwork was quickly laid for the transition. However, progress was not
easy. Britain and China disagreed over numerous issues, including the future of Hong
Kong's Legislative Council and Beijing's insistence that the Bill of Rights lose much of its
power. The Preparatory Committee, which was formed by China in January 1996, was
responsible to the Chinese National People's Congress for preparing the establishment
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of the Hong Kong SAR. It had a joint membership from Hong Kong and mainland China
and had responsibility for establishing the selection committee (400 members, all from
Hong Kong) who nominated Tung Chee-Hwa as the SAR's first chief executive.
After 1 July 1997 the principal forum for discussions between Britain and China became
the Joint Liaison Group (JLG). Before July 1997 it met at least three times a year in
plenary session. Despite British protests, a 400-strong committee met in the border
town of Shenzhen in December 1996 to select members of a Chinese Provisional
Legislative Council. This operated in parallel to Hong Kong's elected legislature in the
period after colonial rule ended on 30 June 1997.
First elections to the Legislative Council (May 1998)
The first elections following the handover attracted a 53 per cent turnout of the 1.49
million electorate, a very high proportion compared to the 39 per cent turnout in 1991.
The Democratic Party, led by Martin Lee, which has a policy of pressing Beijing for a
greater degree of democracy, performed well in the polls.
The Democratic Party took nine of the 20 seats for which there was direct election. Lee,
who was expelled from the assembly by China within hours of the takeover, won back
his seat. He pledged to press not only for more democracy but also for improving the
economy and tackling unemployment, which had reached a 14-year high.
The remaining 40 seats were filled in elections by professions in which fewer than
140,000 people were eligible to vote and by an 800-member election committee. Of the
40 seats, five went to pro-democracy candidates and the other 35 were taken by pro-
Beijing candidates. In all, it is understood that pro-democracy groups controlled 15
seats, providing them with the capability of becoming a vocal minority.
China extends its influence
During the summer of 1999 concern began to rise in Hong Kong that the semi-
autonomous status of the territory, which was supposed to last for 50 years after the
handover to China, was being eroded. The concerns were triggered by Beijing's decision
on 26 June to overrule a landmark immigration ruling by a Hong Kong court which had
decided that mainland residents with at least one Hong Kong parent should be given
residency rights in the territory. In overturning the decision, Beijing was acting at the
behest of the Hong Kong executive branch, which feared an uncontrollable influx of
immigrants from the mainland. However, Beijing's move gave rise to fears among
lawyers and pro-democracy supporters that the policy could set a precedent for Beijing
to overturn any ruling that was not to its liking.
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Some analysts saw the Beijing decision as the first overt interference by Beijing in the
Hong Kong legal system, although others pointed to the mainland trial and execution of
the 'Big Money Spender' kidnapper Cheung Tze Keung in 1998, for extensive crimes
carried out within the SAR. For the first year after the handover, China largely stayed
out of Hong Kong's affairs, letting the territory's government concentrate on the task of
fighting rising unemployment, countering currency speculation and reviving the stock
market. But as the economy began to recover, in halting fashion after the Asian
financial crisis, there were already fears that Hong Kong's rule of law and semi-
autonomous status were being undermined.
Second elections to the Legislative Council (September 2000)
There was a low voter-turnout for the second elections for the Legislative Council
(LegCo) - a mere 43.6 per cent of the electorate went to the polls, as opposed to a figure
of 53 per cent for the 1998 election. Of the 60 seats available, 24 were filled by direct
suffrage, 30 were elected by 'Functional Constituencies' (FCs) made up of
representatives of various business and professional sectors, and six were appointed by
the Election Committee (EC), comprising a small circle of pro-Beijing professional and
business elite.
The pro-democracy Democratic Party (DP) suffered a setback in the elections. Its share
of the popular vote slipped to 34.7 per cent, from 42.6 per cent in the 1998 poll. The DP
got a total of 12 seats, with three of these from the FCs - it had 13 seats in the previous
LegCo.
The pro-Beijing Democratic Alliance for the Betterment of Hong Kong (DAB) saw its total
vote grow from 25.2 per cent in 1998 to 29.7 per cent. The DAB got seven directly
elected seats, plus four from the FCs making a total of 11 seats.
Outside of the DP and the DAB, the remaining seats were distributed mainly among
smaller parties and independents, most of them pro-government. The fact that 30
legislators were elected by the FCs and six by the EC meant that the LegCo, which never
had a great deal of power, continued to be controlled by conservative elements
subservient to Beijing and the Hong Kong government.
The aftermath granted both Beijing and its supporters in the Hong Kong government
greater confidence. In November 2000 Chinese President Jiang Zemin gave an angry
warning to the Hong Kong media, telling them to be "more responsible". The Chinese
leader was reacting to media reports suggesting that the Chinese leadership was
backing the re-election of Hong Kong Chief Executive Tung Chee-Hwa in a future poll.
The speculation led to renewed claims that Beijing was meddling in the territory's
affairs.
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In January 2001 Hong Kong's leading civil servant Anson Chan resigned from her post as
chief secretary for administration. Chan was widely regarded as Hong Kong's toughest
internal critic and her departure fuelled concern that the authorities were growing
increasingly intolerant of independent thinking. Beijing publicly rebuked Chan over her
differences with the territory's chief executive, Tung Chee-Hwa, after they repeatedly
clashed over the pace at which Hong Kong had moved towards democracy.
"Ministerial accountability" system (June 2002)
No sooner had Tung Chee-Hwa been re-elected as chief executive unopposed in March
2002 he unveiled, in April, the biggest shake-up to Hong Kong's constitution since the
handover in 1997. Under the 'ministerial accountability' system, the chief executive
gains the right to appoint business people and professionals to top civil service posts
over the heads of senior (and often British-trained) civil servants, as well as enhanced
powers of dismissal. With the backing of pro-Beijing and business groups in LegCo, the
necessary legislation was passed in June 2002, after which the new cabinet was
announced.
Tung hailed the new system as the "dawning of a new era for the governance of Hong
Kong" and said he looked forward to "a government which is more accountable to the
people of Hong Kong ... open, enlightened and progressive". However, critics, decried
the move to create a new tier of 14 policy secretaries directly answerable to Tung as
merely another manifestation of a tendency to firm up the power of the pro-Beijing
constituency to compensate for lukewarm popular support.
Prelude to protest: Beijing's security agenda
Within three days of the new cabinet line-up being unveiled, Vice-Premier Qian Qichen
warned against any sudden moves towards representative democracy and a popularly
elected chief executive in Hong Kong. Within a week a senior mainland parliamentary
official had called for Hong Kong to enact an anti-subversion law, prompting Secretary
for Justice Elsie Leung, one of the few senior civil servants to survive into the new
ministerial system, to deny that any law would specifically target either the esoteric
Falun Dafa spiritual movement (banned in China but not in Hong Kong) or the Hong
Kong Alliance in Support of the Patriotic Democratic Movement in China (originating
with exiles from the 1989 student protests in the mainland).
Within two weeks Hong Kong had passed into law a new UN-modelled anti-terrorism
bill empowering the chief executive to declare individuals or groups to be terrorists and
a debate had opened in Hong Kong as to whether the separate anti-subversion law
encouraged by Beijing was necessary. The SAR's Bar Council, together with pro-
democracy and human rights groups, argued that existing Hong Kong legislation already
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provided sufficient prohibition against acts of "treason, sedition and subversion" as

outlined in Article 23 of the Basic Law.
Reflecting awareness of the sensitivities to a step whereby Beijing would essentially be

able to dictate which groups or individuals would be tolerated in Hong Kong, the
government initiated a three-month consultation programme in September 2002. Tung
declared that the proposals would "not undermine in any way, the existing human
rights and civil liberties enjoyed by the people of Hong Kong", while Secretary for
Security Regina Ip insisted that the new legislation was not "against any particular
groups or individuals". The government sought to reassure the media that it would not
be affected, as the expression of views or reports on commentaries or views on acts
would not be criminalised.
However, the government's consultation paper suggested it would legislate life

imprisonment for a new range of crimes against national security. These included
treason, extended to encompass co-operating with foreign forces to overturn the
central government or instigate a foreign invasion; a new crime of secession, outlawing
any efforts to separate Hong Kong from the mainland or use of force or other means to
forestall the exercise of central government authority in Hong Kong; and a new crime of
subversion, defined as use or threat of use of force, or other means, to overthrow the
government. The law would also criminalise the distribution of literature or material
inciting actions deemed punishable under these categories, in an extended definition of
sedition. It moreover created a further new offence of making unauthorised disclosure
of protected information obtained by unauthorised means, presenting a potential
clampdown on media freedoms. Indeed, the New York-based Committee to Protect
Journalists warned against such measures, pointing to the routine use of anti-
subversion legislation in mainland China to muzzle the press.
Police searches without warrants were also authorised in the draft legislation. Finally,
the possibility of Hong Kong's losing any independent definition of internal threats
loomed, after it emerged that the Secretary for Security would be empowered to
proscribe a group if "the organisation is affiliated with a mainland organisation which
has been proscribed by the central authorities [in Beijing] in accordance with national
law" - leaving open the possibility that Falun Dafa or the Hong Kong Alliance could be
directly targeted. These measures, however they compared to British-era controls,
garnered the anti-subversion bill a poor public relations profile and contributed to a
perception that an incompetent government was pandering unnecessarily to Beijing
without any institutional check from public opinion in the territory.
In turn, this was followed by the crisis surrounding Severe Acute Respiratory Syndrome
(SARS), which peaked in March 2003. The relatively severe shock to local economic
activity from the disease as normal civic life was abruptly halted for a period of weeks
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was a further black mark against the HKSAR government, which carried out an
ultimately successful but initially halting response that compared poorly to that of
Singapore, with its penchant for handling emergency. Beijing's silence on the issue until
major outbreaks had occurred in the both the HKSAR and the mainland may have been
eclipsed by the suspicion that the Tung government had again revealed its
incompetence in graphic fashion. It was of little help that in mid-July 2003, it was
revealed that the unemployment rate had risen to a record high 8.6 per cent during the
past three months.
The July 2003 Protests
In the days leading up to the second reading of the anti-subversion bill, the White
House commented that the legislation "as currently drafted, could harm local freedoms
and autonomy over time". It noted, "especially worrisome are provisions mandating the
proscription of certain kinds of popular organisation and the absence of a 'public
interest' defence to protect freedom of expression and the press". The EU expressed
similar reservations, while prominent figures from the Hong Kong banking industry
concurred that the restrictions on freedom of information could injure a key sector.
With international opinion clearly sympathetic, business divided, and the HKSAR
government's arguments in favour falling flat, the stage was set for a high turnout of
close to half a million on July 1, with protesters demanding the abolition of Article 23
and Tung's resignation and the crowd chanting in Cantonese, "Return Hong Kong to the
people".
Beijing's Hong Kong and Macau Affairs Office as well as China's liaison body in the SAR
appeared to have gravely underestimated both the likely extent of the turnout and its
social diversity. The leadership in Beijing was thus caught by surprise. State premier
Wen Jiabao, who had only left the HKSAR on the morning of 1 July, was forced to make
a bland statement that the bill would in no way injure the rights of HKSAR residents,
"including reporters", from neighbouring Shenzhen, the same afternoon, while Chinese
state media were required to ignore the story or, as with the international broadcaster
CCTV-9, feature confused interviews with pro-Beijing politicians and business leaders in
the SAR who were themselves re-evaluating a situation in flux.
The insistence of the Tung administration that the bill would be passed crumbled swiftly
in the following few days. First, three controversial measures were removed. A
provision allowing bans on organisations illegal in the mainland was scrapped, together
with a section allowing police searches without warrants; protection in the form of a
'public interest' defence for journalists publishing the loosely defined category of 'state
secrets' was also re-instated.
The bill was then shelved after the pro-Beijing Liberal Party chairman James Tien
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resigned from the cabinet, following private consultations in Beijing, citing the need for
more time to address the public's anxieties. This presented the chance that the bill
would not be passed even if forced to a second reading. The resignations of the
Secretary for Security Regina Ip, and of Financial Secretary Antony Leung, who had only
narrowly survived a financial scandal, followed as Beijing played for time. Tung returned
for consultation with eight senior Central Committee officials in Beijing on 19 July,
including President Hu Jintao, Wen Jiabao and Vice-President Zeng Qinghong,
highlighting the gravity of the situation.
Security Forces
TOTAL STRENGTH
Police 30,000 (2007 estimated)
Customs 5,000 (estimated)
Other forces 11,000+
Police
The Hong Kong Police Force (HKPF) headquarters consists of five departments - Crime
and Security; Operations; Personnel and Training; Management Services; and Finance,
Administration and Planning (FAP).
Crime and Security is the major department. Commanded by an assistant commissioner,

the Crime and Security Wing comprises a Headquarters Group, a Support Group and
seven bureaux. The latter consist of the Commercial Crime Bureau, the Narcotics
Bureau, the Criminal Records Bureau, the Organised Crime and Triad Bureau, the
Criminal Intelligence Bureau, the Forensic Firearms Examination Bureau and the
Identification Bureau (dealing with fingerprints and other means of identifying
individuals). The Security Wing deals with a range of security matters, including VIP
protection, counter-terrorism and security co-ordination.
The Operations Department consists of the Operations Bureau, the Police Tactical Unit
(PTU) and the Explosive Ordnance Disposal Bureau. The Operations Bureau has under
its control the Operations Division, the Counter-Terrorism and Internal Security Division,
and the Key Points and Search Division, which includes the Dog Unit.
The police force is organised on the basis of five regions. There are also marine regions
which come under the Marine Police, an important component of the HKPF.
185
In addition to the regular police, there is voluntary, part-time force known as the Hong
Kong Auxiliary Police Force (HKAPF), whose history goes back to 1973.
Following the handover of Hong Kong to China in 1997, the HKPF remained a member
of INTERPOL, but it has operated as a sub-bureau of the China National Central Bureau,
rather than as a sub-bureau of the UK police force.
The strength of the police force is around 30,000.
As outlined above, the seven bureaux that come under the aegis of the crime sector of
the Crime and Security Wing cover a wide range of anti-crime activities:
Police Tactical Unit (PTU)
One of the key units that comes under the aegis of the Operations Department is the
PTU, an elite unit with an anti-terrorism role. The PTU, which is organised into 12
companies, is deployed to enforce cordons, maintain security and carry out crowd
control duties during major public events. The PTU can also be called in by the
Correctional Services Department to help quell disorder in detention centres.
Commercial Crime Bureau
A particularly active unit in view of the fact that Hong Kong is one of the major
commercial centres of the region. This bureau specialises in the investigation of serious
and complex commercial fraud and computer crime. It also investigates the
counterfeiting or forgery of currency, coinage, credit cards and other commercial
instruments, as well as travel and identity documents.
Narcotics Bureau
Headed by a Chief Superintendent of Police (CSP) who specialises in gathering

intelligence on drug traffickers and their activities, and liaises with Chinese and overseas
law enforcement agencies. The bureau takes direct enforcement action against those
involved in the manufacture, smuggling and sale of illicit drugs. Part of its role is to trace
and ultimately seize assets of convicted drug traffickers. The bureau also has the duty of
storing and ultimately disposing of drugs and equipment seized by local law
enforcement agencies.
Criminal Records Bureau (CRB)
Stores all criminal records in Hong Kong. Headed by a Superintendent, the bureau also
maintains comprehensive files on convicted criminals, persons being sought by the
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police and those suspected of criminal activities. The CRB also maintains files on missing
persons, outstanding warrants, stolen property and missing vehicles.
Organised Crime and Triad Bureau (OCTB)
Has the task of tackling the activities of the international and well-organised ethnic
Chinese criminal gangs known as Triads, who are active not only in Hong Kong, Macau
and mainland China, but also across Europe and the US. The bureau, commanded by a
CSP, also investigates other manifestations of organised crime, and in the course of its
work brings together resources and expertise from a range of sources. The OCTB liaises
regularly with Chinese and overseas law enforcement agencies, and exchanges
intelligence with these bodies.
Criminal Intelligence Bureau (CIB)
Gathers information on criminal activities especially in the areas of organised crime,

triad gangs and smuggling. Headed by a CSP, the CIB liaises closely with the OCTB. The
CIB produces intelligence reports both on the strategic and tactical level, thus assisting
enforcement action by the OCTB or regional anti-crime units of the police. The CIB has a
specialist role in tackling kidnapping and terrorist incidents.
Forensic Firearms Examination Bureau (FFEB)
The sole agency in Hong Kong charged with the forensic examination of arms and
ammunition. It stores weapons, spent bullets and other firearm-related materials from
crime scenes, for checking against other recovered arms or crime-related fired
ammunition. The FFEB has other non-crime related roles, including the evaluation of
firearms and ammunition on behalf of the police force, and the testing of bullet-proof
vests for police force members.
Identification Bureau
Responsible for matters relating to fingerprint examination and comparison, and to the
positive identification of individuals appearing in court.
Chain of Command
The Hong Kong Police Force (HKPF) is one of a number of agencies (including Customs
and the Government Flying Service) that come under the jurisdiction of the Security
Bureau - the Hong Kong equivalent of an Interior Ministry.
The commissioner is answerable directly to the chief executive of the HKSAR for the
187
administration and operational efficiency of the force. The commissioner is assisted by a

deputy commissioner (operations) and a deputy commissioner (management).
Role and Deployment
Apart from undertaking normal police duties, the HKPF is tasked with maintaining
internal security. It has a major role in guarding the borders of the territory and in the
prevention of illegal immigration. Other tasks include combating of the Chinese
underworld Triad gangs. It also has the de facto role of establishing an effective working
relationship with the Chinese military garrison in Hong Kong. There is close liaison
between the police and the PLA contingent in the territory, through an established
liaison channel. There have also been familiarisation visits undertaken by both sides,
and hundreds of PLA officers have been given a seminar on the structure and role of the
police force and the law and order situation in Hong Kong.
In territorial terms, the HKPF is organised on the basis of five regional commands,
covering Hong Kong Island, Kowloon East, Kowloon West, New Territories North and
New Territories South. The marine regions are overseen by the Marine Police, which
comprises a regional HQ and two sea districts. The role of the Marine Police is to
maintain the integrity of the sea boundary and territorial waters of Hong Kong. It has
the task of preventing illegal immigration by sea, carrying out search and rescue
operations in territorial waters and casualty evacuation. The Marine Police, which was
not affected by the change of sovereignty, has a fleet of 66 police launches and 90
police vessels; it is responsible for 1,850 km2 and some 240 outlying islands.
Bases
Marine Police Regional HQ is located at Sai Won Ho. There are other bases at Ma Liu
Shui, Tui Min Hoi, Tai Lam Chung and Aberdeen.
Assessment
The Hong Kong Police Force is an efficient, organised body which makes use of the
latest information technology to enhance its effectiveness. Despite concerns over the
possible effects on the force of Hong Kong's return to Chinese sovereignty in 1997,
morale appears to be high.
The maritime section, the Marine Police, is a well-equipped, disciplined force which,
after 1990, increasingly took over the security and anti-smuggling role from the British
armed forces and developed its own specialised units. The force remains well-educated
and motivated.
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Inventory: Marine Police
Type Role Quantity
Sea Panther, Sea Horse Command Vessel 2
Protector (ASI 315) Command/Patrol Craft 6
Damen Mk III Patrol Craft 14
Damen Mk I/II Patrol Craft 11
Petrel Harbour Patrol Craft 7
Jet Shallow Water Patrol Craft 3
Seaspray Logistic Craft 4
Seaspray Inshore Patrol Craft 11
Boston Whaler Inshore Patrol Craft 9
PV 30-37 High Speed Interceptor 8
Customs
The Hong Kong Customs and Excise Department (C&ED) is organised into five branches.
These are the Administration and Excise Branch (A Branch), the Border and Drugs
Branch (B&DB - B Branch), the Control and Intellectual Property Branch (C Branch), the
Trade Controls Branch and the Civil Secretariat.
The C&ED liaises closely with customs on the Chinese mainland. There is also liaison
with customs services in other countries, especially in regard to the suppression of
drugs smuggling. The latter role is the particular responsibility of the B&DB, which
monitors traffic through Hong Kong's airport and container sea port (among the busiest
in the world). Under the aegis of the B&DB are the Airport Command, the Control Points
Command and the Customs Drugs Investigation Bureau.
Chain of Command
189
The Hong Kong Customs and Excise Department is headed by a commissioner. Each of
the five branches of the service is headed by a directorate officer.
Inventory
Among other craft operated, three Damen Sector 26 m command launches were
completed in 1986 by Chung Wah SB & Co Ltd, Kowloon. In all essentials, these vessels
are sisters of those operated by the Royal Hong Kong Police, with the exception of the
latter's slow-speed waterjet. A Damen Mk I craft was transferred from the RHKP in
1995.
Other Security Forces
Anti-Smuggling Task Force
The Anti-Smuggling Task Force is a joint police/customs unit which carries out
operations against organised smuggling rings. The unit places an emphasis on the
gathering of intelligence about such rings. Since the hand-over of Hong Kong to China in
1997, it is believed that there has been increased liaison and co-ordination with the
mainland authorities.
Inventory: Anti-Smuggling Task Force
Type Role Quantity
Various Patrol Craft 50
Note
 Patrol craft used include captured smuggling boats.
Government Flying Service
The Government Flying Service (GFS) was known formerly as the Royal Hong Kong
Auxiliary Air Force. With a full-time staff of 250 the GFS provides helicopter transport
for government officials and government tasks, including anti-smuggling and Search
And Rescue (SAR). There is a fixed-wing flight which operates anti-smuggling, anti-
pollution, SAR and other similar tasks. In June 1998 the GFS was relocated from Kai Tak
to Chek Lap Kok.
The GFS is headed by the controller who reports to Hong Kong's secretary of security.
The controller is supported by a number of sections: Helicopter Section, Aeroplane
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Section, Aircrew Section, Operations Section, Engineering Section, Quality Section and
Administration Section.
The core of the GFS consists of the Helicopter, Aeroplane, Aircrew and Operations
Sections, which provide the flying services. The provision of SAR services is a major
function of the GFS, whose area of responsibility generally lies within the 400 mile
radius of the Hong Kong Flight Information Region (FIR). Besides serving Hong Kong, the
unit also assists in missions originated from the Civil Aviation Department and the
Maritime Rescue and Coordination Centre (MRCC).
Inventory: Government Flying Service
Type Role Quantity
AS 332 L2 Super Puma Transport/Search and Rescue Helicopter 3
EC 155 B1 Transport/Utility 5
Notes
 All aircraft are civil-registered.
Correctional Services Department (CSD)
The CSD has responsibility for prisons in Hong Kong, and employs aproximately 7,000
staff. The CSD operates 23 correctional institutions, accommodating about 12,000
inmates. The institutions include minimum, medium and maximum security prisons, a
psychiatric centre and training, detention and drug addiction treatment centres. There
is also a staff training institute, an Emergency Support Group and four halfway houses.
Armed Forces
Force Strength
Army 4,000
Air Force 150
Navy 2,600
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Total Armed Forces 6,750
The role of the PLA Garrison in the Hong Kong SAR is governed by the Basic Law, which
under Article 14 provides for the defence of the HKSAR by the PLA. Troops in the HKSAR
are assigned to provide for the territorial defence of the SAR, including sea approaches.
Naval forces are administered by the South Sea Fleet Headquarters at Zhanjiang. Air
defence and airspace management are directed from the Guangzhou Military Air Region
Headquarters at Guangzhou.
Commander, Xian Go Garrison Major General Liu Zhenwu
Deputy Commander, Xian Go Garrison Major General Zhou Borong
Political Commissar, Guangzhou Military Region Major General Shi Yuxiao
Army
PLA forces in Hong Kong operate under the direct command of the Shenzhen Garrison
Command, itself part of the Guangzhou Military Region.
In Hong Kong the PLA is based at 14 sites, all former British Army, air force or naval
locations. There are three infantry battalions, one motor rifle battalion, one mortar
artillery battalion, a combat engineer regiment (with less than battalion strength) and a
helicopter squadron based at Sek Kong, the former British Army barracks and airfield.
Assessment
Chinese PLA troops are responsible for military duties in the defence of the HKSAR. The
troops are said by official Chinese statements to be elite, well-educated soldiers who
have studied and been tested on local law, language, culture and customs. Each sub-
unit will spend three months in Hong Kong but access to the civilian areas of the former
colony will be severely limited.
The land forces' equipment in place includes 21 WZ523 armoured personnel/internal

security vehicles, six Z-9A armed helicopters and about 474 trucks and buses. There is
no indication of fixed artillery but there are, according to some sources, 82 mm mortar
systems available.
Training Areas and Bases
192
Range facilities include Tai Ling and San Wai. There is also a new mortar range under
construction in the New Territories, opposite the new Chek Lap Kok airport.
The following former British military establishments contain major sub-units of the
HKSAR Garrison Command:
Base Sub-unit
Central Barracks Headquarters
Stanley Fort Infantry battalion
Tam Li Infantry battalion
Sek Kong Engineer Regiment, helicopter squadron
Tai Ling Infantry sub-unit, artillery sub-unit
San Wai Infantry sub-unit
Osborn Barracks Infantry battalion
Gun Club Hill Infantry sub-unit
Stonecutters Infantry sub-unit, artillery sub-unit
Inventory: Infantry Weapons
Type Role
7.62 mm Type 51, 54 Pistol
7.62 mm Type 64 Pistol
9 mm Type 59 Pistol
7.62 mm Type 53 Carbine
5.56 mm Type 86 Rifle
193
7.62 mm Type 43 Sub-Machine Gun
7.62 mm Type 53 Light Machine Gun
7.62 mm Type 56 Machine Gun
7.62 mm Type 58 Company Machine Gun
12.7 mm Type 57 Heavy Machine Gun
35 mm W87 Grenade Launcher
30 mm AGS-17 Grenade Launcher
Airforce
Traditional air force and air defence roles are carried out by the assets of the
Guangzhou Military Air Region. There are no PLAAF aircraft permanently deployed in
Hong Kong. Helicopter forces in the SAR operate under the command of the garrison's
deputy commander and that the only PLAAF connection is liaison and the occasional Z-
9A based at Sek Kong for VIP transport. There is no air defence centre in Hong Kong and
all air activity is monitored from the Guangzhou Military Air District Headquarters.
There is a small People's Liberation Army Air Force (PLAAF) contingent in Hong Kong. A
few staff liaison officers have been noted at the Garrison Command Headquarters in
Central and several other personnel are stationed at the Sek Kong base.
Inventory: Rotary Wing
Type Role Quantity In Service
194
Z-9A VIP Transport Helicopter 1 1
Navy
PLA Navy (PLAN) forces in Hong Kong form part of the South Sea Fleet, which is
responsible for the sea area from the Vietnam border to Dongshan; it is the maritime
equivalent of the Guangzhou Military Region. The PLAN element is organised into two
patrol boat squadrons, an amphibious squadron and a support unit. The naval forces are
subordinate to the military commander.
China has chosen to increase the naval presence in HKSAR waters by stationing four fast
missile craft of the Type 037/2 Houjian class at Stonecutters. These craft are missile-
armed and supported by four patrol boats, two landing craft and about three support
vessels. The Houjian class vessels are ideal for patrolling the waters around Hong Kong
and should be well supported by the naval facilities at Stonecutters.
Naval forces are based at Stonecutters, where the British and Hong Kong governments
built a new naval facility on the southern side immediately before hand-over. The
former Royal Navy base at Stonecutters, on the northeast side, has been made over to
the HKSAR government for police, customs and other public service craft.
Chinese warships are now being deployed to patrol the maritime boundary with China
proper as part of 'one nation, two systems' and to prevent illegal entry. The Hong Kong
Police Marine Branch units remain in control of domestic stop and search, and other
anti-smuggling operations.
The Houjian class boats are armed with six C-801 Eagle Strike anti-ship missiles, two 37
mm dual-purpose cannon and four 30 mm cannon. The craft have an operational range
of 2,000 n miles at 18 kt, making them ideal for Hong Kong waters. The four inshore
patrol craft are used for, daylight only, calmer water patrols. The landing ships
mechanised can carry 60 troops or three main battle tanks and are thought to be
available for land force exercises and as a strategic reserve force in case of PLA
intervention.
Standard Chinese PLAN doctrine is for regular patrols to be mounted on an irregular

basis by at least two warships, usually the Houjian class fast missile craft. HKSAR craft
are also responsible for search and rescue tasks in the ICAO-administered Hong Kong
Flight Information Region.
Inventory: Surface Fleet
195
Type Role Quantity Delivered
Houjian Fast Missile Craft 4 1991/5
n/a Command vessels 2 1987-1988
Protector (ASI 315) class Command/Patrol Craft 6 1991-1993
Damen Mk I/II class Patrol Craft 11 1980-1981
Damen Mk III class Patrol Craft 14 n/a
Petrel class Harbour Patrol Craft 7 1986-1987
Sea Stalker 1500 class Harbour Patrol Class 0(+5) 1999-2000
Jet class Shallow Water Patrol Class 3 1986
Seaspray class Logistic Craft 4 1992-
Seaspray class Inshore Patrol Craft 11 1992-1993
Inshore Patrol class Patrol Boat 9 1997
Inventory: Land-based Maritime Aircraft
Type Role Quantity Delivered
Sikorsky S-76 A/C Coastal surveillance 4 1993-1995
Black Hawk S-70A Transport/Search and Rescue 3 n/a
Jetstream J41 Transport/Search and Rescue 2 n/a
Insurgent Forces
There are no insurgent forces active in Hong Kong.
Foreign Forces
196
There are no foreign forces in Hong Kong. For details of Chinese military forces in Hong
Kong, see the Army, Air Force and Navy sections.
Geography
Much of Hong Kong is urbanised, although the majority of the SAR's 230 small islands
are uninhabited. The capital and cultural centre of Hong Kong is Victoria City, which lies
on the northern shore of Hong Kong Island. Also of major importance are Kowloon and
New Kowloon, extending from the Kowloon Peninsula into the New Territories.
Kowloon and Victoria are separated from each other by Victoria Bay.
The SAR can be divided into three main regions - Hong Kong Island and nearby islets;
the mainland Kowloon Peninsula and Stonecutters Island; and the New Territories,
made up principally of a large area on the mainland and Lantau island. The SAR is partly
situated in the Zhu Jiang, or Pearl River Delta, and the Sham Chun Shenzhen river forms
the border with China. Much of Hong Kong is hilly and substantial areas of the low-lying
terrain are made up of land reclaimed from the sea. Only about 12 per cent of the land
is forested but small tropical and sub-tropical plants are abundant. Hong Kong's small
amount of fertile soil is concentrated in the mainland portion of the New Territories,
near Deep Bay.
The coastline around Hong Kong is 735 km long, and there are no significant rivers in
the SAR.
Climate
Hong Kong has a very similar monsoonal climate to that of eastern China. It is situated
just within the tropics.
Rainfall is heaviest between May and September but snow and frost are virtually
unknown. The period from October to March is characterised by warm and dry weather.
Humidity is highest during the Summer and the air can be sultry and oppressive during
these months. Typhoons are an occasional feature of the July to September months.
Hours of sunshine average six to eight between July and December but only three to
four between February and April.
Hong Kong (elevation 33 m)
Av Temperature (°C) Av Humidity (%) Rainfall
min Max 0630 h 1230 h (mm)
197
Jan-Mar 14 18 81 70 155
Apr-Jun 23 27 87 77 820
Jul-Sep 26 30 85 74 970
Oct-Dec 19 23 74 62 200
Natural Resources
There are no gas, oil or mineral deposits in Hong Kong.
Demography
POPULATION
6,900,700 (December 2006 estimate)
The population of Hong Kong is about 97 per cent Chinese; minorities in the territory
include Filipinos, British, Indians, Portuguese and Americans. Chinese (Cantonese) and
English are official languages. Putonghua (Mandarin) is also widely understood. Most
people adhere to a version of the Chinese folk religion, which combines elements of
Buddhism, Confucianism, Taoism and other beliefs. About 8 per cent of the population
are Christian.
About 94 per cent of Hong Kong's population is urbanised. The average density across
the SAR is 6,253 per km2, making Hong Kong one of the most densely populated regions
in the world.
Births and Deaths
Birth rate per 1,000 population 7.8
Death rate per 1,000 population 5.0
Life expectancy (Female) 84.6
Life expectancy (Male) 78.4
198
Note
 Figures are from 2001.
Infrastructure
SURFACED ROADS
1,830 km
RAILWAYS
34 km
GAUGE
1,435 mm
Roads
Hong Kong has almost 1,830 km of road network, the vast majority of which is paved.
Major bus services are provided on Hong Kong Island, Kowloon and the New Territories,
including Lantau, by six large government-franchised private companies. General
transport policies are formulated by the secretary for transport, who is assisted by the
Transport Advisory Committee. The commissioner for transport is the regulatory
authority responsible for all transport operations other than railways and their
responsibilities include strategic transport planning, road traffic management,
government road tunnels and waterborne transport.
Railways
The KCR Corporation is a statutory body wholly owned by the government but required
to operate on full commercial principles. In 1990, following some controversy, the
government decided to exercise greater control. The full-time chairman and chief
executive reports to the Hong Kong transport secretary.
Airports
Hong Kong International (Chek Lap Kok) is the busiest freight airport in China, and the
second busiest passenger airport. Annual passengers handled totalled 44.5 million in
2006, an increase of 9.1 per cent over 2005, and total freight handled was 3.58 million
tonnes, an increase of 5.2 per cent, and over 65 per cent more than the next largest
199
freight airport in Shanghai.
Currently, a number of improvements totalling approximately USD4.5 billion are being

undertaken to increase passenger capacity at the two-terminal airport.
Ports
The port of Hong Kong is located at 22° 18' north, 114° 10' east. This free port, which
boasts one of the best natural harbours in the world, is fundamental to the island's
economy. The port is the busiest in the world.
Port and related industries generate about 15 per cent of Hong Kong's GDP. They
provide over 300,000 jobs and keep over 15 per cent of all local companies in business.
The Hong Kong Shipowners Association has a fleet of more than 1,300 ocean-going
vessels. The Hong Kong Shipping Register has a fleet of 592 vessels, amounting to eight
million Gross Registered Tonnes (GRT). The Hong Kong shipping industry controls about
eight per cent of the world's shipping tonnage.
Victoria Harbour can be approached from both the east and the west. It covers an area
of 4,900 ha and can accommodate vessels of up to 305 m load and 14.6 m draft. The 75
moorings in the harbour are all government-owned and there are 56 special typhoon
buoys, located to provide shelter during the severest storms. Some 48 of the standard
berths can accept vessels of up to 183 m length, the remainder vessels of up to 137 m.
Approximately 2,000 privately owned lighters can be used for loading and discharging
cargo. Most container freight is handled at the Kwai Chung Container Port. With 14
berths, this port covers an area of 157.7 ha.
Telecommunications
Hong Kong's modern facilities provide excellent domestic and international services.
There are microwave transmission links and there is an extensive optical fibre
transmission network. Hong Kong is served by one Pacific Ocean INTELSAT and two
Indian Ocean INTELSATs. There is a coaxial cable to Guangzhou, China, and there are
links to five international submarine cables providing access to Association of Southeast
Asian Nations (ASEAN) member nations, Japan, Taiwan, Australia, the Middle East and
Western Europe.
Economic Overview
Economically, Hong Kong suffered from the Asian financial crisis of 1997, but the
economy has recovered remarkably, registering growth of 6.8 per cent in 2006, albeit
down on 2005's figure of 7.5 per cent and 2004's figure of 8.6 per cent. The outlook for
200
2007 is more subdued, but still healthy with economic expansion expected to total
between 4.5 and 5.5 per cent (growth in the first quarter of 2007 was 5.6 per cent).
The economic situation has therefore improved markedly since 2003. The bankruptcy
rate has fallen significantly since a peak of 3,193 in January 2003, and consumer
spending has risen. Deflation has been eradicated, although property prices are still
subdued, and consumer prices returned to positive growth in 2004, reflecting greater
consumer confidence. However, the government still faces a longer-term structural
fiscal problem. With a relatively narrow revenue base focused on property taxes,
property prices that are still far lower than their high before the 1997 crisis, and a
growing range of government expenditure, the government is on the road to a sizeable
fiscal deficit.
Over the long term, Hong Kong also faces trade marginalisation. Hong Kong has relied
on its well-regulated financial system, low taxes and excellent container port facilities to
attract investors. China's entry into the WTO has eliminated many tariff barriers and
encourages companies to export directly from the mainland, while the development of
large-scale port facilities in Shanghai and the Pearl River Delta will detract from Hong
Kong's competitive advantage.
Before China's accession to the WTO, Hong Kong had a trade advantage over the
mainland, and many mainland products, especially textiles, were transshipped through
Hong Kong to evade quotas placed on Chinese exports. Since China's WTO entry, many
quota limits have been removed from the mainland, removing a major competitive
advantage. Furthermore, excellent container ports have been and continue to be built
in China, especially in Shanghai and the Pearl River Delta area of southern China.
Shanghai, in particular, is better suited than Hong Kong for shipping to the United
States, while labour is significantly cheaper in Mainland China than in Hong Kong.
Although in the short term greater access to China's markets has proven beneficial for
Hong Kong's transshipment, high-technology and service sectors, therefore, it is likely
that over time growing direct access to China under WTO rules, shorter direct shipping
routes to the US, and cheaper labour will all lead to a relative decrease in Hong Kong's
importance to international trade.
Nonetheless, Hong Kong remains one of the most important entrepots for the Chinese
mainland. If re-exports to and from the Chinese mainland are included, about 21 per
cent of the mainland's foreign trade was handled via Hong Kong in 2006. This figure will
be even higher if transhipment of goods to and from the mainland via Hong Kong is also
included. As reflected in Hong Kong's merchandise trade statistics, in 2006 63 per cent
of re-exports were of Chinese origin and 48 per cent were destined for the Chinese
mainland.
201
Furthermore, at present Hong Kong's relatively trustworthy legal and financial

structures still make it a tempting choice for companies wishing to do business with
China without losing the security of a 'Western' business environment. However, it
remains to be seen whether Hong Kong keeps this role over the long term, or whether
cost advantages or regulatory reforms tempt foreign business away from Hong Kong
and to Shanghai.
Hong Kong still acts as a separate customs territory, manages its own financial affairs,
has its own currency and has an independent representation in many international
financial and economic organisations. Hong Kong's legal and judicial systems, including
common law and legal precedents, have been maintained for all except the highest
matters of state, and the SAR retains the status of a free port. There are no exchange
controls and the Hong Kong dollar continues to be pegged to the US dollar (at
HK7.8:USD1) and is freely convertible.
Statistical Overview
2001 2002 2003 2004 2005
GDP (current USD billion) 166.54 163.71 158.47 165.84 177.70
GDP growth (annual %) 0.64 1.84 3.2 8.6 7.27
GDP per capita (constant 2000 USD) 25,253.8 25,482.82 26,235.94 28,162.74 29,944.97
FDI net inflows (BoP current USD billion) 23.77 9.68 13.62 34.03 35.90
Inflation (annual %) -1.58 -3.12 -2.54 -0.4 0.91
Exports (current USD billion) 232.06 244.90 271.21 315.42 351.75
Imports (current USD billion) 224.16 231.32 256.56 300.71 329.59
Source
World Bank, World Development Indicators
202
MACAU
Profile
Security
Organised criminal gangs
Internal Affairs
Political System
Elections
Political Parties
Human Rights
Politics
Chief Executive Edmund Ho Hau-wah
President of the Legislative Council Susana Chou
Secretary of Adminstration and Justice Florinda da Rosa Silva Chan
External affairs
Relations with Taiwan
Handover to China
Security Forces
People's Liberation Army
Police
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Maritime Police
Non-State Armed Groups
Foreign Forces
Geography
Natural Resources
Demography
Ethnic groups
Religious groups
Languages
Density and growth
Health and medical
Infrastructure
Roads
Airports
Civil Airlines
Ports
Telecommunications
Economy
• Macau became a special administrative region within the People's Republic of China
in 1999, but retains a significant Portuguese influence from the territory's 150 years of
colonisation. This situation benefits the territory as China's military capabilities
guarantee that no external security threats exist to Macau, while financial autonomy,
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a legacy of trade with external powers and Macau's development as a port have
ensured a relatively high level of per capita income. However, the territory's position
within China, relative wealth and autonomy over issues such as the legalisation of
gambling have helped create the most significant threat to Macau, namely organised
crime. The problem became most acute just prior to the 1999 handover and the 2002
end of the gambling monopoly in Macau. During the 2001 bidding process for
gambling franchises, bombings and inter-gang warfare became commonplace ,
partially motivating Beijing's decision to station troops in Macau. Chinese courts have
passed heavy sentences (including death) on Macau gangsters convicted in their own
jurisdiction, most notably just prior to the handover in 1999. Although the situation
has improved somewhat since 2001, particularly given three new gambling franchises,
one local and two franchises with partners from the US, although the influence of
organised criminal gangs remains pervasive.
Profile
Area: 26.8 km2
Languages: Mandarin (official); Cantonese (official); Portuguese; English
Religions: Buddhism; Roman Catholicism; Protestantism
Time Zone: GMT +8
Population: 513,427 (December 2006, China Statistics and Census Service)
Neighbours: No international land neighbours. Provincial neighbour is Guangdong.
Capital City: Macau
Primary Port: Macau
Primary Airport: Macau
Currency: Macanese pataca (MOP)
Security
China is anxious to stamp out organised crime in Macau, a problem which has been
posing a significant threat to the territory's internal security, as well as having the (as
yet unrealised) potential to undermine the territory's lucrative tourism industry, and
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hence Macau's economic viability. Towards the end of Portuguese rule, the island's
image was badly damaged by clashes between organised crime groups. Organised crime
in Macau has revolved around control over the profitable VIP rooms which generate
approximately half of all gambling revenues. While the dominant criminal organisations
in Macau for much of the 1990s were the 14K and 'Sui Fong' Triad groups, the late
1990s saw the influx of the 'Big Circle Boys' from mainland China. This group was found
to be particularly hard to control, having mainland connections which were difficult for
the Portuguese authorities to pursue.
The post-colonial regional government came under greater pressure from Beijing to
address the problem following the handover. Beijing recognised the fundamental root
to all the problems was related to the control of the casinos, and that whoever had
control of the casinos would wield extreme political and economic power in addition to
the command of underground activities. Beijing saw the dissolution of the monopoly to
gaming as key to not only resolving most problems, but also to holding onto political
power and therefore wanted to enables the government to be more effective in its
regulation of the casinos. As such, the 40-year monopoly on gambling, previously held
by the Sociedade De Turismo e Diversoes De Macau, was ended in 2002. The first
foreign-operated casino, the Sands Macau, opened in 2004.
Macau is also reportedly the money laundering haven for criminal elements operating
out of the mainland. Most recently, the US accused Banco Delta Asia, a family bank
based in Macau, as a financial institution that has laundered money involving North
Korea. The US imposed sanctions on the bank in September 2005, and as of May 2007
Macau retains restrictions on Banco Delta Asia's operations.
Triad-related crimes have fallen notably since Beijing took the territory back in 1999 and
particularly after the end of the bidding process for gambling franchises in 2001, but
remains prevalent in the territory owing to its position as a port and ease of trading
with mainland China.
Organised criminal gangs
The 14K Society is the leading Triad organisation in Macau. It was previously headed by
Wan Kuok-Kuoi, alias Broken Tooth. Wan was sentenced to 15 years' imprisonment in
1999 for criminal activity. Prior to this, in the decade leading up to the handover, the
14K group actively intervened to prevent the infiltration of Hong Kong Triads into
Macau, most notably Hong Kong's largest group, the Sun Yee On. In 1993, 14K ordered
the assassination one of Sun Yee On's leaders, which brought open conflict to the
streets of Macau between 14K, Sun Yee On and 14K's rival gang in Macau, Soi Fong.
In order to prevent a deterioration in the security situation after the handover, Beijing
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acknowledged that years before 1999 the Ministry of State Security and the Ministry of
Public Security, together with the Guangdong provincial government, had sent agents to
infiltrate all strata of Macau's organised criminal gangs to collate intelligence and help
the post-colonial regional government. In 1999, a Guangdong court arrested and
sentenced Ip Shing-kin, leader of Macau's Big Circle Boys gang, to death and in a series
of high-profile arrests, Soi Fong's various logistical bases (such as arms caches in Foshan
and Zhuhai) and operations in Guangdong province were destroyed. This had a
tremendous impact on the criminal gangs and reportedly many of the organisations
abandoned their weapon caches to the People's Liberation Army and Macau police after
the handover.
Since the handover, the level of cross-border co-operation between security forces has
increased. However, the widespread scale of corruption in Macau has not subsided in
any meaningful degree and this has proven to be the dominant obstacle to the effective
limiting of the activities of organised crime.
It is also acknowledged by various officials that it is difficult to regulate the activities of

these gangs fully as they fulfil functions that cannot be met by legitimate
representatives of the state in order for such an economy like Macau's to thrive.
Loansharking and prostitution are activities that add to Macau's attraction as a tourist
destination, complementing gambling to offer tourists entertainment. As such, despite
the inroads made in to the activity of organised criminal gangs since the handover, and
in particular since the 2002 end of the monopoly on gambling, organised crime remains
in Macau and will continue to prosper in an economy heavily reliant on cash industries.
Internal Affairs
Official Name: Macau Special Administrative Region
Political System: Special Administrative Region of the People's Republic of China
Head of Government: Edmund Ho Hau-wah
Next Election: 2009 (Legislative Council)
Political System
The Macau Special Administrative Region (MSAR), while directly subordinate to the
Chinese central government, is highly autonomous, with its own executive, legislative
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and independent judicial powers.
Constitution
The region's government is supported by a Basic Law. This is, in effect, a constitution
that will remain in force until 2049 (50 years after the handover). It covers all policies
and fundamental guarantees enshrined in the Joint Declaration on the Question of
Macau agreed by Portugal and China in April 1987.
Executive
As with Hong Kong's political system, Macau's highest authority is the chief executive.
Again, in a process similar to Hong Kong, the Macanese chief executive is indirectly
elected through a 300-strong appointed Election Committee, which sits for five years.
The chief executive is empowered to define and direct policy, to approve bills and order
the publication of laws, to prepare and order the publication of executive orders and
administrative regulations, to propose the nomination of some members to political
bodies and to nominate and dismiss holders of public office within the civil service. He
or she may also dissolve the legislative body. Although the chief executive has the
power to promulgate and must sign legislation, the Legislative Council can refuse to
pass legislation submitted by the chief executive. In such a situation, the chief executive
can dissolve the council, although if the re-elected council again refuses to pass the bill,
the chief executive would resign.
Before taking important decisions, the chief executive must hear the advice of the
Executive Council. This is a consultative body, which may have anywhere between
seven and 11 members. The chief executive must also consult the Executive Council
when bills are presented and when administrative regulations are approved. The chief
executive also heads the executive body or civil service, which is composed of residents
of Macau.
Legislature
There are no political parties in Macau. However, there are open elections for some
seats in the Legislative Council. The Legislative Council is composed of permanent
residents elected by majority for terms of four years, except in the case of the first
assembly elected in 1996.
The first assembly (elected in 2001) had 23 deputies, the current assembly (elected in
2005) has 27 and the third and subsequent assemblies (from 2009 onwards) will have
29, 12 of which will be directly elected, 10 indirectly and seven appointed by the chief
executive. It is the Legislative Council's duty to alter, suspend or revoke laws, examine
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and approve the budget and budgetary reports, define the essential elements of the tax
system, authorise the government to raise loans, hear and debate governmental actions
and to debate issues of public interest.
Judiciary
Macau's judiciary remains constitutionally independent and is based largely on

Portuguese civil law. A seven-person committee, appointed by the chief executive,
recommend judicial appointees, who are then also appointed by the chief executive.
Three tiers of courts exist: the Court of First Instance, the Court of Second Instance and
the Court of Final Appeal.
Elections
The first Legislative Council elections to be held since the handover of the territory to
China took place in September 2001. Pro-democracy candidates did well in the
elections. Lawmaker Ng Kuok-cheong and his New Democratic Macau Association
secured 16,666 votes, or 21.06 per cent of the total. His colleague, Au Kam-san, also
won a seat. The other eight directly elected seats went to various social and pro-China
groups.
In 2005, the results were roughly similar. The New Democratic Macau Association
garnered 23,472 votes, which was 18.8 per cent of the total and the United Citizens'
Association of Macau came in second, garnering a total of 20,695, or 16.58 per cent.
They both won two seats each.
Political Parties
There are no formal political parties in Macau. However, associations representing

interests of unions, business or political ideologies are active and have been
represented within the local Legislative Council since 2001. Pro-Beijing political entities
dominate the Legislative Council, owing to the number of appointed or indirectly
elected representatives.
Human Rights
There are no government-imposed limits on internet access and the government does
not restrict academic freedom or freedom of peaceful assembly and association. Locally
based human rights groups generally function without government restriction,
investigating and publishing their findings on human rights. Local human rights groups,
such as the Macau Association for the Rights of Labourers, and the New Democratic
Macau Association, continue to operate.
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Politics
Chief Executive: Edmund Ho Hau-wah
Secretary for Administration and Justice: Florinda Da Rosa Silva Chan
Secretary for Economy and Finance: Francis Tam Pak-yuen
Secretary for Security: Cheong Kuoc Va
Secretary for Social Affairs and Culture: Fernando Chui Sai-on
Secretary for Transportation and Public Works: Lau Si Io
Commissioner, Audit: Fatima Choi Mei-lei
Commissioner General of the Unitary Police Service: Jose Proença Branco
Commissioner, Independent Commission Against Corruption: Cheong U
Director-General, Macau Customs: Choi Lai Hang
President, Court of Final Appeal: Sam Hou Fai
President, Legislative Council: Susana Chou
Prosecutor General of the Public Prosecutions Office: Ho Chio Meng
Chief Executive Edmund Ho Hau-wah
Edmund Ho was born in Macau in March 1955. Following his primary education, he
went to study in Canada in 1969. He graduated with a degree in Business Administration
from York University and in 1978 qualified as a chartered accountant.
Ho was back in Macau by 1983 and began pursuing an entrepreneurial career, with his
business interests ranging from accounting, finance and banking to insurance, public
transportation and mass media. In 1986, Ho became a member of the Chinese People's
Political Consultative Conference (CPPCC). Two years later, he was elected deputy to the
National People's Congress (NPC), subsequently being elected to the Standing
Committee of both the 8th and 9th NPC. Ho joined the local legislature in 1988, and was
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vice-president of the Legislative Assembly of Macau for 11 consecutive years (1988-

1999). In 1989, he became vice-president of the Consultative Committee of the Basic
Law of the Macau Special Administrative Region (MSAR). He was appointed vice-
president of the Preparatory Committee of the MSAR in 1998. Upon Macau's handover
to China, Ho was appointed chief executive on 20 December 1999 by the Selection
Committee for MSAR. He was elected for a second term on 29 August 2004, and was
formally appointed by the central government on 20 September 2004.
Ho is married with a son and daughter.
President of the Legislative Council Susana Chou
Susana Chou, born in China in December 1941, obtained her bachelor's degree in
physics at the University of Anhui, China before studying French in Paris. In 1976, Chou
was successfully elected to the first Legislative Assembly of Macau by direct election.
She was subsequently a member of the assembly from 1984 to 1999.
In 1999, Chou was elected president of the first Legislative Council of the MSAR. She
had previously been a member of the 8th, 9th and 10th National Committee of the
Chinese People's Political Consultative Conference, a member of the Drafting
Committee of the Basic Law of the MSAR, vice-president of the Basic Law Promotional
Association of Macau, vice-president of the Preparatory Committee of the MSAR, a
member of the Economic Council of the Macau government, president of the Board of
Directors of World Trade Centre Macau, and the Honorary Consul of France in Macau.
Secretary of Adminstration and Justice Florinda da Rosa Silva Chan
Florinda da Rosa Silva Chan was born in Macau in June 1954. She was educated in
Macau, gaining a master's degree in Business Administration. In July 1993, she attended
a one-year programme in Chinese Language and Public Administration in Beijing.
Chan joined the public service of Macau in 1974. She had worked in the government as
chief of the Textile Negotiations Section, chief of the Quotas Control Section and deputy
director of the Economy Services. During her public service career, Chan represented
the government in a number of functions: as general secretary and vice-chairman of the
Economy Council, president of the General Council of Productivity and Technology
Transfer Centre of Macau, secretary of the General Assembly of the World Trade Centre
of Macau and assistant co-ordinator of the Standing Committee of Social Co-ordination
Council.
During the drafting process of the Macau Basic Law, Chan was an executive member of
the Consultative Committee of the Basic Law of the MSAR. In August 1999, Chan was
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appointed by the Central People's Government as the secretary for administration and
justice of the MSAR government. On 4 December 2004, Chan was reappointed by the
central government as secretary for administration and justice for a second term.
External affairs
Under Chinese rule, both Beijing and the Macau local government hope that the
territory will become an economic interface between a vigorous Chinese economy and
movements within the world economy. They also hope to project Macau as an open
and cosmopolitan city ideally suited to a role as a cultural meeting point. Macau is seen
as providing China with an important point of contact with a European state (Portugal)
and hence also the European Union.
International agreements entered into by Macau as a Portuguese colony will continue

to be applicable under China's hegemony. In talks prior to the handover, the Sino-
Portuguese Joint Liaison Group agreed on the continued application of 141 international
agreements in the MSAR. For example, the Basic Law of the MSAR provided for the
application, after the 1999 handover, of the UN Pact on Civil and Political Rights and on
Economic, Social and Cultural Rights. In addition, Macau is a signatory to a number of
other human rights treaties and conventions that remain in force. Other treaties and
conventions cover a range of matters, from civil aviation to drug enforcement.
Macau is a member of a range of international organisations, including the United

Nations Educational, Scientific and Cultural Organisation (UNESCO), the World Trade
Organisation, the International Maritime Organisation, the World Tourism Organisation,
the World Health Organisation, the World Meteorological Organisation, the World
Customs Organisation, the Economic and Social Committee for Asia and the Pacific and
the International Union for the Family.
Major conventions applicable in Macau include the Convention on the International

Maritime Organisation, the Vienna Convention on the Ozone Layer and the 1992 Trade
Agreement between Macau and the European Community.
Macau maintains representative offices in Brussels, the seat of the European Union, and
in Lisbon, Portugal. Some 50 countries have established consular services in Macau.
Taiwan has maintained a representative office in Macau since 1999, known as the Taipei
Trade and Tourism Office (TTTO). This office continued in operation after the handover
of Macau to China in December 1999. The Beijing-based Association for Relations
Across the Taiwan Straits (ARATS), the official body that handles relations with Taiwan,
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stated prior to the handover that the mainland authorities would allow non-
governmental exchanges between Macau and Taiwan to continue after the handover,
so long as they did not violate the 'one-China' principle.
In January 2002, Macau announced that the Taiwan representative office in the
territory would be allowed to issue visas for Taiwan-bound visitors, including Macau
residents, Chinese citizens and foreign travellers. Macau said that the move would make
it easier for people who wished to travel to Taiwan, and was in line with Beijing's policy
towards Taiwan. Previously, the most convenient way for Macau residents to gain a visa
to visit Taiwan was to apply to Taipei's office in Hong Kong.
Macau and Taiwan have continued to maintain close commercial and cultural ties.
Taiwan is the third largest source of external visitors to the special administrative
region, behind Hong Kong and mainland China, with the number of Taiwanese visiting
Macau increasing by 1.5 per cent in the first three months of 2007. Visitors from
mainland China and Taiwan can enter Macau as tourists without a visa for an initial
period of 20 days.
There are important trade and tourism links between Macau and Taiwan which neither
side would wish to jeopardise. Taiwan is one of Macau's largest trading partners and
bilateral trade was USD69.88 million in the first three months of 2007, the vast majority
being exports from Taiwan (USD65.19 million). Trade in 2006 as a whole was USD288.1
million, of which USD262.5 million was exports from Taiwan. Macau is also an important
base for Taiwanese businessmen with investments in mainland China, especially in the
areas of leisure and transportation. A pragmatic Beijing sees the benefits that Taiwan
can bring to Macau's future economic development.
The fact that Macau has continued to be an entry point into China for significant
numbers of Taiwanese businesspeople may have been one of the factors behind a
decision by China to establish in Macau a branch office of its quasi-official ARATS, which
has the role of engaging in talks and non-governmental exchanges with its Taiwanese
counterpart, the Straits Exchange Foundation (SEF). The office was formally established
in February 2002 and, according to a senior Chinese official, it was intended that the
office would work closely with the ARATS headquarters in Beijing in facilitating
interaction with Taiwan.
Date Event
1557 First Portuguese settlement.
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1849 Portugal annexed Macau.
1887 Beijing recognised annexation by treaty.
1941- Following the Japanese occupation of Guangzhou and Hong Kong, Macau remained
1943 the only neutral major port in southern China.
1943- Japanese control over Macau increased, ending with the defeat of Japan in the Pacific
1945 War.
1951 Portugal declared Macau an overseas territory.
1966 Chinese Cultural Revolution crisis in Macau. Eight people died in riots
1967 Portugal offered to abandon Macau; China declined the offer.
1974 Portuguese government tried to relinquish sovereignty of Macau to China following

its Carnation Revolution. China refused.
1979 Portugal and China established diplomatic relations.
1985 Negotiations started on the return of Macau.
1987 Joint declaration on future of Macau.
1993 Future of Macau ratified by National People's Congress.
1994 Visit of governor to Beijing strained bilateral relations (September).
1995 Opening of Macau airport allowed easier access to mainland (December).
1996 Last Legislative Assembly election under Portuguese rule.
1998 Double bomb blast injured 10 journalists and four policemen; the attack was
attributed by police to organised criminals (September).
1999 Edmund Ho Hau-wah was formally endorsed as Macau's first chief executive (May).
Macau became a special administrative region of China (December).
2000 Police suppressed demonstrations against foreign workers by indigenous workers.
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2001 Prominent Portuguese lawyer Neto Valente kidnapped (February).
MSAR Chief Executive Ho received the support of then Chinese president Jiang Zemin
for the liberalisation of the gaming industry (March).
First Legislative Council elections held since handover to China (September).
2002 Monopoly of gambling business by tycoon Stanley Ho Hung-sun ended with the
granting of casino licences to two US concerns (February).
2004 The MSAR Executive Council was reappointed for another term by Beijing
(December).
2005 Second Legislative Council elections held (September).
Approximately USD25 million held in 52 accounts in Macau-based Banco Delta Asia

was frozen by the Macau monetary authority after the US alleged the money was
being laundered for North Korea (September).
2006 Macanese casino revenues reached an estimated USD6.8 billion, overtaking Las Vegas
for the first time (October).
2007 An agreement reached in six-party talks pledged to resolve the Banco Delta Asia
funding issue (13 February).
Macau unfroze Banco Delta Asia funds, although release of the funds was delayed
(April).
A rare protest over corruption and illegal labour became violent, although no injuries
were reported (May).
The first Portuguese traders visited Macau in 1513, and in 1557 Macau officially became
a Portuguese colony. In the centuries that followed the colony maintained harmonious
relations with China and Macau was the first entrepôt centre bridging west and east.
Macau was primarily a commercial centre during the earlier years of Portuguese
colonisation, but over time its own individual cultural and religious characteristics
evolved. Attracted by its prosperity, other European countries attempted to seize this
Portuguese trading outpost on a number of occasions during the 17th century, although
Portuguese sovereignty was always maintained.
In 1841, the UK occupied Hong Kong (the Treaty of Nanking a year later officially ceded
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control of the region to the UK), located only 40 miles from Macau. Hong Kong's strong
commercial development and the island's close proximity led to a decline in Macau's
prosperity. In the Sino-Portuguese Treaty signed in 1887, China recognised Portugal's
sovereignty over Macau. Macau became an official overseas territory of Portugal in
1951, retaining this status until 1974, when Portugal relinquished sovereignty over
Macau but was invited by Beijing to retain administrative control until the mutu ally
agreed official handover date in 1999. On 20 December 1999, Macau finally became a
special administrative region of China.
While Macau's status as under Article 31 of the Chinese constitution is similar to that of
Hong Kong, there are a few differences in the way in which the two territories came
under Chinese rule.
First, while Hong Kong only came under British rule with the Treaty of Nanking, Macau
has been under Portuguese control since the mid-sixteenth century. This is reflected in
the policy of granting citizenship to the residents of the two territories. The British
government only conferred the status of British National (Overseas) or British
Dependent Territories Citizen to Hong Kong residents, with passports that are only
travel documents and do not grant the bearer right of abode in the United Kingdom.
Portuguese authorities, prior to the handover, offered full Portuguese citizenship to all
residents of Macau, although Chinese authorities deny that Portugal has the right to
offer consular protection to ethnically Chinese citizens of Macau.
Second, while Sino-British negotiations over the reversion of Hong Kong temporarily
stalled over the UK's wish to retain sovereignty over the region, while returning it to
Chinese administration, Portugal had been willing to relinquish sovereignty over Macau
as far back as 1974.
Handover to China
The handover of the former Portuguese colony of Macau to China took place on 20
December 1999, after 442 years of rule from Lisbon. The period of transition began in
earnest in April 1987, with the signing of the Sino-Portuguese Joint Declaration on
Macau. China and Portugal guaranteed 'to ensure the total and peaceful handover of
sovereignty'.
It was agreed that MSAR would maintain a liberal market economic system within the
Chinese framework of 'one country, two systems' for a period of 50 years. On the day of
the handover, China asserted its sovereignty by moving a contingent of troops into
Macau. The Chinese government has subsequently decided to maintain troops in the
territory.
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There was a mixed reaction to the Chinese decision to station troops in Macau. It was
seen as a reversal of a long-stated Beijing policy that a military garrison was
unnecessary in the territory. The Portuguese governor of Macau, General Vasco
Joachim Vieira, said that China was putting a 'new interpretation' on the 1987 joint
declaration setting out the terms for a Chinese takeover of the enclave.
Some community leaders in Macau welcomed the deployment, including Edmund Ho

Hau-wah, then head of Macau's Association of Banks, and later Macau's first chief
executive under Chinese rule. Macau's Basic Law, which operates under Chinese rule,
stated that the local government would be responsible for 'maintaining public order'.
However, China claimed that it has a right to deploy troops in the territory because,
according to the Basic Law, it would be responsible for Macau's national security and its
defence.
The Basic Law did not include a specific article on the stationing of troops in the
territory, unlike the Basic Law of Hong Kong, the former British colony has been
occupied by People's Liberation of Army troops since the UK handed back the enclave to
China in 1997. At the same time, the Macanese Basic Law did not prohibit the stationing
of Chinese troops in Macau.
Security Forces
TOTAL STRENGTH
1,000 (PLA) (2007 estimate)
People's Liberation Army
In the lead-up to the handover of Macau to China in December 1999, a force of about
1,000 members of the PLA was raised to garrison the territory. The force was assembled
at a PLA logistics base across the border in China at Nanping, 10 km northwest of
Macau, in the Zhuhai Special Economic Zone.
In choosing personnel for the Macau garrison, senior PLA officers were at pains to pick
'high quality' officers and men - some of those chosen had previous experience with the
Hong Kong garrison and such experience was obviously judged an advantage when it
came to selecting personnel for Macau. Education appears also to have been taken into
account. Eighty-six per cent of the officers chosen were university or college graduates,
while most of the soldiers were high school graduates. Approximately half of the troops
are based in Macau at any time, with the rest barracked in Zhuhai. Rotation is biennial.
217
Although the vast majority of the Macau garrison members are infantry troops, there is
also a small number of naval and air force officers. This could be seen as a symbolic
gesture or possibly an indication that China plans at some time in the future to deploy
military aircraft and/or naval vessels in Macau. Two companies from the Hong Kong
garrison have been organised into the First Motorised Infantry Company and the First
Armoured Infantry Company of the Macau garrison. During their deployment in Hong
Kong, these two companies won extensive praise because of their image as a 'mighty
and civilised military unit.' The Fourth Company has been reorganised into the Second
Motorised Infantry Company of the Macau garrison.
The Third Company became the Second Armoured Company of the Macau garrison. The
company has performed meritorious service in supporting local economic construction,
in laying optical cables for national defence and in combating floods and dealing with
emergencies. Among the Early Warning and Reconnaissance Company are personnel
from a unit from the Guangzhou Military Region, which is dubbed 'South China's Sharp
Sword'.
It is believed that the garrison is equipped with a total of about 20 Norinco WZ 551
armoured personnel carriers, each armed with a 7.62 mm machine gun. The vehicle can
carry a crew of three plus nine personnel, and can be used for riot control purposes.
Apart from the vehicles, the garrison is armed with light weapons. The standard assault
rifle is the bullpup Type 86, a weapon also seen with PLA troops in Hong Kong.
The strength of the Chinese garrison is officially given at 1,000 troops.
Legal status of troops
The Law on Stationing Troops in the Macau Special Administrative Region is an

important legal foundation for the garrisoning of troops in Macau. The law follows the
guidance of the basic principle of 'one country, two systems' and is in accordance with
the constitution and the Basic Law of Macau. The 10th session of the Standing
Committee of the Ninth National People's Congress (NPC) passed the law on 28 June
1999. Then Chinese president Jiang Zemin signed a decree approving the promulgation
of the law.
The law contains 30 articles in six sections and clearly states the defence duties of the
troops, including resisting aggression, guarding the safety of Macau and administering
military facilities. The law states that the central Chinese government is responsible for
defence matters of the MSAR. Macau Chief Executive Edmund Ho said after the
handover that under normal circumstances the government would not use the PLA
garrison to maintain law and order. He asserted that the administration will only ask the
PLA's assistance if it is unable to deal with an 'extraordinarily severe' public security
218
situation. The Macau government provides accommodation for the troops, but Beijing
pays all other costs of maintaining the garrison.
Chain of command
The PLA garrison in Macau operates under the aegis of the PLA's Guangzhou Military
Region for administrative purposes; however, the garrison command reports directly to
the Central Military Commission in Beijing, whose chairman is President Hu Jintao.
The commander of the Macau garrison is General Liu Lianhua.
Role and deployment
The primary role of the PLA's Macau garrison is to assert Beijing's sovereignty over the
territory.
China unilaterally announced in September 1998 that it would station troops in Macau
as 'an affirmation of its recovered sovereignty' over the territory. Portugal objected,
terming the one-sided move 'unnecessary and unjustified'. The issue was resolved
during a visit by then-president Jiang to Lisbon in October 1999, when the two sides
agreed that a Chinese military 'technical team' would be allowed in Macau to prepare
for the 20 December entry of a Chinese garrison.
As well as asserting Beijing's sovereignty, the garrison also has the role of assisting in
the maintenance of public security and public order, if called upon to provide such
assistance by the Macau government; the garrison also assisting with disaster relief
work if needed.
Police
The umbrella body that controls various sections of the police is known as the Security
Forces of Macau (Forças de Segurança de Macau: FSM), which in turn comes under the
aegis of the General Secretariat of Security - the equivalent of a Ministry of the Interior
in other jurisdictions. The FSM comprises the Public Security Police (which handles a
wide range of law enforcement duties, including immigration control), the Marine and
Customs Police, the Judiciary Police (which handles major criminal investigations), the
Municipal Police, the Fire Brigade and the Macau police academy, known as the Macau
Security Forces Higher School. Macau Prison is also the responsibility of the FSM.
The Public Security Police have a number of important subsidiary units. One of these is
the Intelligence Unit, which has been active in monitoring the activities of the criminal
Triad gangs which pose a major threat to Macau's security. There is also an elite unit
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known as the Tactical Police Intervention Unit, comprising about 400 officers highly
trained for special duties. The unit comprises a special operations group, a riot squad, a
bodyguard unit specialising in VIP protection, a bomb disposal squad and a police dog
unit.
Maritime Police
Although Macau has no navy, the police force maintains a maritime section equipped
with patrol boats. There is close co-ordination between the Macau Marine and Customs
Police and Chinese naval forces based both on the mainland and in Hong Kong. This co-
ordination existed even before the handover of Macau to China.
Chinese naval forces control the sea approaches to Macau.
Non-State Armed Groups
There are no insurgent forces in Macau.
Foreign Forces
No foreign troops are deployed in Macau.
Geography
Macau has a total area of 26.8 km2.
Macau peninsula 8.5 km2
Coloane Island 7.6 km2
Taipa Island 6.2 km2
Cotai 4.5 km2
Macau has a sub-tropical climate. Winters are cool and summers are warm and wet. In
April, the humidity starts to increase and from May to September the climate is hot and
humid with rain and occasional tropical storms (typhoons).
Natural Resources
Macau has no oil reserves or natural gas deposits, and only negligible quantities of
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mineral deposits.
Demography
POPULATION
513,427 (December 2006, China Statistics and Census Service)
Ethnic groups
The Chinese community comprises 95 per cent of the population, the Portuguese two
per cent and other nationalities three per cent.
Religious groups
The majority of the Chinese residents profess Buddhism and there are numerous
Chinese places of worship. Daoism and Confucianism are also widely practised. Roman
Catholicism is the religion of the Portuguese minority. Religious freedom is enshrined in
the Basic Law.
Languages
Cantonese is most widely spoken (by about 86 per cent of the population). Portuguese
is understood by many and English is Macau's third language; it is generally used in
trade, tourism and commerce.
Density and growth
Macau's population density is approximately 19,157 per km2 (December 2006),

approximately three times denser than Hong Kong. The population is currently growing
at an estimated rate of six per cent per year, augmented by migration from mainland
China.
Births and Deaths
Death rate per 1,000 population 1.32
Infant mortality per 1,000 births 0.003
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Life expectancy (female) n/a
Life expectancy (male) n/a
Source
 Macau Census and Statistics Bureau (2006 figures)
Health and medical
In 2005, there were 473 residents per doctor (excluding dentists), a slight increase on
the 454 in 2005, but a decrease from 502 in 2000 and a high of 762 in 1993, while there
were 430 residents per nurse, a historical low, but 496 people per hospital bed, a figure
that has increased steadily from 341 in 1991.
There are no endemic diseases, with diseases of the circulatory system registering the
highest number of deaths in the region, approximately 32 per cent in 2005, followed by
neoplasm at 28 per cent and respiratory disease at 16.5 per cent. The water supply is
clean and drinkable direct from the tap. Medical care is free for children up to 17 years,
pregnant women, the handicapped and people over 65 years of age. A universal health
insurance programme is being promoted.
Infrastructure
Roads
Macau has 368 km of road network. By the end of 2006, there was a total of 77,506
automobiles and 85,368 motorcycles in circulation, a total of 162,874 vehicles, or 317
vehicles (151 automobiles and 166.3 motorcycles) per 1,000 inhabitants. Vehicle density
is 442.6 vehicles per road km.
Airports
Macau International Airport was built at a cost of USD1.1 billion on reconstructed land,
and opened on 9 November 1995. The airport, which features a 3,360 m (11,024 ft)
runway, can handle long-distance direct flights, and has the capacity to cope with six
million passengers and 160,000 tonnes of freight a year. There is capacity for further
expansion of the airport facilities. In 2006, Macau International Airport handled 113,228
tonnes of cargo, a decrease of 8.9 per cent on the previous year and 16.35 per cent on
2004, although higher than any year prior to or including 2003. The total number of
passengers handled in the first three months of 2007 was 1,251,743, an increase of 17
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per cent on the same period in 2006. In total, 4,976,093 passengers were carried in
2006, a 17 per cent increase on the previous year.
Civil Airlines
Air Macau is a scheduled regional carrier. It operates scheduled flights to Bangkok

(Thailand), Beijing, Changsha, Chengdu, Guilin, Guiyang, Haikou, Hangzhou, Kaohsiung
(Taiwan), Kunming, Manila (Philippines), Nanjing, Shanghai, Shenzhen, Seoul (South
Korea), Taipei (Taiwan), and Xiamen.
Ports
Macau port is located at 22° 12' north, 113° 33' east.
Macau port is an oil terminal with an area of 8 ha and a container area of 4.5 ha. The
container terminal has a berthing length of 135 m in length in a controlling depth of 4
m, with a container stacking area of 20,400 m2 and a container freight station of area
1,200 m2. Equipment available includes a mobile crane of 40-tonne lifting capacity. In
2006, Macau handled 257,408 tonnes of cargo, an increase of 23.4 per cent over the
previous year. The vast majority (approximately 78 per cent) of cargo is inbound.
In addition, a new passenger ferry port has been built in Macau to accommodate the
improved ferry services that run between the various ports in the Pearl River Delta and
Hong Kong International Airport. Passengers can now travel directly from Hong Kong
International Airport to Macau or other Pearl River Delta ports with expedited customs
and immigration procedures.
Telecommunications
Macau has a relatively sophisticated telecommunication network geared for both

domestic and international communication. By the end of 2006, there were 176,665
landlines in the region (approximately 344 lines per 1,000 people) with a further
636,347 mobile telephones (a penetration rate of 123.9 per cent). Internet usage has
expanded rapidly since its introduction in 1997, with an estimated 105,283 users by the
end of 2006, an increase of 18.8 per cent over the previous year.
Economy
Macau is in many respects a success story. Throughout the 1980s and 1990s it enjoyed
political stability while co-operating closely with the Beijing authorities to ensure a
smooth handover of administrative and political control in December 1999. This stability
was and continues to be an important factor in attracting foreign capital and tourists to
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the territory. In the process of its development, Macau's economic and social
infrastructure has been strengthened and its economy has diversified and expanded.
Nonetheless, Macau's economic performance has exhibited some volatility as the

economy is vulnerable to external forces owing to its small size and open nature. In
particular, Macau's economy is linked to that of neighbouring mainland China and Hong
Kong, both of which are major trading partners. Other major trading partners are the
US, Germany, the UK, Taiwan and France.
Macau's reliance on gambling as its main source of revenue leaves it dependent on the
general prosperity of the region, as seen in the 15.4 per cent drop in government
revenue from gambling in 1997, as the Asian financial crisis reduced tourist flows and
liquidity). Similarly, high crime rates in the 1990s cut into gambling revenues by
deterring some gambler-tourists. However, since the handover Macau's gambling
revenue has resurged, reaching USD6.8 billion in 2006. This boom is being fuelled by the
influx of mainland Chinese.
The economy of Macau also proved relatively resilient against Severe Acute Respiratory
Syndrome (SARS) which affected neighbouring regions. The epidemic did, however,
result in a periodic drop in the number of tourist arrivals, but it has since recovered.
Macau has a very small agricultural sector, involving rice and vegetable cultivation. The
industrial manufacturing sector is also very small. Textile and firework manufacturing is
of some importance and economic diversification has spawned other industries, such as
the production of garments, toys, artificial flowers and electronic goods. Most of the
associated companies are owned and operated by mainland Chinese.
While Macau imports almost everything that it consumes, it exports just about all that it
manufactures.
The government's continued investments in the construction sector also had a

significant impact on growth.
Main economic indicators
2001 2002 2003 2004 2005
GDP (current USD billion) 5.95 6.66 n/a n/a n/a
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FDI net inflows (BoP current USD n/a 0.42 0.52 0.78 n/a
billion)
Inflation (annual %) -1.99 -2.64 -1.56 0.98 4.4
Exports (current USD billion) n/a 7.12 8.19 10.88 n/a
Imports (current USD billion) n/a 4.35 4.85 5.99 n/a
Source
World Bank, World Development Indicators
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EXTERNAL AFFAIRS
Foreign Policy Overview
Foreign policy under Hu Jintao: increased flexibility
Foreign policy consistency
Energy diplomacy
Trade diplomacy
Defence diplomacy
Multilateral Relations
Association of Southeast Asian Nations (ASEAN)
European Union (EU)
Shanghai Co-operation Organisation (SCO)
South Asian Association for Regional Co-operation (SAARC)
United Nations (UN)
World Trade Organisation (WTO)
Relations with Bhutan
Relations with India
Rapprochement since the 1990s
Strategic encirclement
Relations with Iran
Relations with Israel
Relations with Japan
226
Energy rivalry
Japanese wariness
Chinese fears
Japan's militarisation
Ballistic missile defence
Relations with Mongolia
Relations with Myanmar
Relations with Nepal
Historical relations
Long-term prospects
Relations with North Korea
An expensive ally
The refugee problem
Six-party talks
Relations with Pakistan
Military assistance
Relations with the Russian Federation
Historical animosity
Arms transfers
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Oil and gas
Strategic similarities?
Strategic differences
Relations with South Korea
Military options
Taiwanese politics under Chen Shui-bian
Economic and transport links
US involvement
Relations with the US
Historical relations under Bush: before 11 September 2001
Historical relations under Bush: the 'war on terror'
The Iraq campaign: 2003
Economic and trade relations
US security commitment: Taiwan
Long-term prospects
Relations with Vietnam
South China Sea
Rapprochement after the Spratlys
Trade and External Relations
Exports
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Imports
Revolutionary struggle
Sino-Soviet split and its aftermath
After the fall of the Soviet Union
Jiang's Theory of Great Power Diplomacy (1999-2002)
Foreign Policy Overview
Under President Hu Jintao, Chinese foreign policy has continued in the direction set by
his predecessors Jiang Zemin and Deng Xiaoping, a general pursuit of global 'great
power' status. Chinese foreign relations under Hu have become more flexible and
nuanced compared to the more robust rhetoric favoured by Jiang. Without any
immediate foreign security threat, Chinese policy has also become closely adapted to
the needs created by China's economic growth (especially its need for energy and raw
materials), and to China's ever-increasing regional and global influence.
Chinese foreign policy tends to favour a multi-polar global arena, broadly distributed
around the US, EU and China. Within its immediate region, China's growing economic
and diplomatic influence, especially over its neighbours in Central and Southeast Asia,
mean China is already becoming a regional hegemon. In line with this, Chinese foreign
policy has tended to oppose the growth of regional rivals. For example, Beijing has
opposed Indian and Japanese efforts to gain permanent membership of the UN Security
Council, and, at the first East Asia Summit in Kuala Lumpur in 2005, China opposed an
increased role for India in East Asia, while subsequently criticising the increasing US
engagement with the South Asian power. China has also used its own multilateral,
regional forum, the Shanghai Co-operation Organisation (SCO) in response to the US'
growing influence in Central Asia since 2001.
Globally, China has favoured bilateral relations (especially economic ties) with individual
partners. Over the past few years, this approach has been remarkably successful, and
Beijing has developed its influence, especially in Africa, Latin America and the Middle
East. A contributing factor to this success has been China's diplomatic style. While US
diplomacy has since the Cold War had a strong ideological component, focused upon
democratisation and human rights, Chinese diplomacy has a relatively small ideological
component, beyond a requirement that partners support the 'one-China policy' (that
229
states that mainland China and Taiwan are an inalienable and sovereign state). China
has instead supported non-interference in the domestic affairs of sovereign states and
has also been willing to invest in the economic and infrastructure development of less
developed countries. As a consequence, and aided by the recent US focus on the Middle
East and Central Asia, China has built up extensive ties with countries that US (and, to a
lesser extent, EU) diplomacy has bypassed.
Arguably the main driver behind Chinese foreign policy under Hu has been the need to
access energy to support China's rapid economic growth. Historically, in addition to
domestic sources, China's fuel needs have been filled by the Middle East, especially
Saudi Arabia and Iran. More recently, the growth of these requirements has expanded
the scope of China's international activities. The need to develop and maintain access to
energy exporters, both regional and local, has become increasingly evident in Chinese
foreign policy.
China remains reluctant to become involved in any comprehensive arms-control

agreements. During the 1990s, it notably did not answer repeated requests from the UN
to complete the Register of Conventional Arms transfers. The stated reason for this
reluctance was that China was especially sensitive to measures that it perceived as
infringing upon its rights as a sovereign state. However, China seems prepared to
pursue opportunities of arms sales it deems appropriate wherever they present
themselves. Despite its low-key participation in maritime measures that could
contribute to the US Proliferation Security Initiative, China appears reluctant to commit
itself indefinitely to any arms-control regime that would undermine its ability to market
military items or technology that are especially attractive to its prospective buyers in
developing states. Such opportunistic sales aside, long-term foreign policy goals (such as
maintaining Pakistan's nuclear deterrent) will also contribute to this stance.
Foreign policy under Hu Jintao: increased flexibility
Chinese foreign policy since the appointment of Hu Jintao has become noticeably more
pragmatic. Compared to the regularly forceful rhetoric of the Jiang Zemin era, China's
international relations under Hu display a greater degree of flexibility and negotiation.
The recognition that concession and co-operation do not necessarily constitute
capitulation of sovereignty marks a move from some of the rhetoric used by Jiang Zemin
regarding subjects like foreign complaints over Chinese human rights abuses. In
particular, Jiang's presentation of China as a 'victim' of history and the international
system seems largely absent from current Chinese rhetoric. For example, China's role in
hosting talks aimed at defusing the North Korea situation displays a level of interest in
multilateral solutions to international problems that would have been rare under Jiang
Zemin's government.
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While there are few signs that China's basic agenda regarding, for example, its territorial
claims to Taiwan, have changed, Hu's priority seems to have shifted somewhat towards
enhancing China's international status through dialogue while continuing to ensure
access to export markets and resources. This is not to say that Hu is necessarily 'doveish'
where Jiang was 'hawkish'. Rather, Hu has displayed his skill at institutional negotiation
and consensus building within the Chinese Communist Party (CCP), and it is natural for
him to bring these abilities to the international arena.
Foreign policy consistency
As a permanent member of the UN Security Council, China has the potential to be a

major force in international relations, although it is notably without great influence on
issues seen by fellow members as the preserve of the mainstream international
community; such as the Middle East. Its need for foreign markets, resources and capital
in the context of internal economic regeneration have further made the rhetoric of co-
operation and peaceful co-existence prominent in public Chinese diplomacy. It has also
notably acted as a conduit for states with widely differing views to communicate; for
example, the EU and the US tend to pass diplomatic messages to North Korea via
Beijing.
China has in the past stumbled to assert a coherent foreign policy doctrine since the
Cold War. Under Hu Jintao, the key themes have been an emphasis on sovereignty and
a resistance to unilateral intervention into the domestic affairs of sovereign states.
China has also emphasised the need to act within established international structures
like the UN, rather than unilaterally. It remains to be seen whether this is not simply a
reflection of China's desire to avoid interference in its own domestic issues (which, by
China's logic, include the status of Taiwan) or a desire to promote a multi-polar world
order.
Given that China's economic success has in part been founded on economic ties with
the US, and core allies of the US, China's efforts in support of 'anti-hegemonism' may
prove embarrassing. China maintains close relations with a growing number of states
which the US considers of concern, or even hostile. Moreover, in some cases the ties
are not only trade and investment, but also the exchange of military technology and
equipment. As China's 'shadow network' of states plays a major role in its economic
development (through access to markets, fuel and raw materials), as well as its security
strategy, it may be left in an embarrassing situation if the US continues to put pressure
on such states. For example, under the Bush administration, Chinese companies have
faced sanctions for exporting weapons technologies to 'states of concern'.
China's ongoing emphasis on a 'multi-polar' international order, and its need to

preserve relationships with allies or trade partners that the US considers questionable
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will likely lead to continued differences in Sino-US approaches to diplomatic issues. At

present, this mainly concerns China's relationship with Iran and North Korea, both of
which face US pressure over their nuclear programmes. With China and Russia pressing
for a more moderate approach to diplomacy with such countries (as compared with US
threats of force or sanctions) there is likely to be further diplomatic friction. There is
also the potential for longer-term Sino-US tension over potential US support for the re-
militarisation of Japan, Taiwan and signs of a growing relationship between the US and
China's regional rival, India.
Energy diplomacy
Chinese desire for forward bases of influence among the scattered fringe of states
which, for whatever historic or domestic reasons have not acquiesced to the 'new world
order', has not simply been to gain leverage over the US in other arenas, or to
guarantee it some diplomatic support outside the immediate Asian region. Its desire for
internal security, for instance, has led it to cultivate relations with Central Asia, to
forestall territorial disputes and safeguard its sensitive (ethnically non-Han)
'autonomous regions' of Tibet and Xinjiang. More importantly, China has recognised the
importance of cultivating diplomatic, economic and occasionally military links with oil-
producing states.
China displays an ever-growing demand for petroleum imports to fuel its economic
growth. Since domestic measures to diversify power generation will not come online on
a large scale over the next few years, and since, even when they do, they may not be
able to keep pace with Chinese fuel needs, securing access to foreign sources of fuel has
become one of the main goals of Chinese foreign policy.
Beijing's approach to this policy is multifaceted. At a diplomatic or governmental level

the CCP cultivates its relationship with oil-producing states, for example by supporting
their interests in the UN, through treaties, or through arms sales. At the same time,
state-owned energy companies invest in oil exploration and production projects within
the country. China has in particular developed ties with oil suppliers in the Middle East
and, increasingly, Africa. China has also offered soft credit and extensive infrastructure
and development aid to prospective energy partners.
While the cultivation of these ties is necessary to ensure a consistent supply of fuel, this
policy may also prove embarrassing for China. For example, Iran is China's second
largest supplier of oil, and other international outcasts like Sudan are also suppliers. The
need to maintain good relations with countries like these has forced China to support
them both at the UN level and through arms sales. For instance, in November 2004
China used its influence at the UN to oppose calls for sanctions or intervention in Sudan.
China, with the backing of Russia, also opposed UN sanctions against four Sudanese
232
individuals in April 2006. China imports 60 per cent of Sudanese oil output (accounting
for 5.2 per cent of Chinese imports in 2005), as well as being a major exporter of
armaments to the country. Beijing also expressed opposition to the prospect of UN
sanctions against Iran over its nuclear programme. As the United States increasingly
becomes more hawkish towards countries like Iran, China's support for them may
become awkward.
Trade diplomacy
China has solidly established itself as a key exporter of manufactured goods in the
international arena. With an extremely cheap yet increasingly skilled labour pool
(although labour costs are now rising), China is unmatched in its competitiveness in
exporting manufactured goods. This has been at the heart of China's economic
development, both by increasing the volume of its exports, and in attracting foreign
capital from investors wishing to move or outsource manufacturing to China. At the
same time, China's growth has made it a major importer of fuel, raw materials, food,
and, to a lesser degree, low-cost manufactured goods. While this has been of benefit to
China, it leaves the country with several problems, including dependence on access to
foreign export markets and sources of raw materials. China has also come under heavy
criticism from several trading partners, especially the United States, on the grounds that
local jobs cannot compete with cheap Chinese imports. Consequently, the US and EU,
among others, have complained that Beijing has manipulated the prices of their
exports, especially given the relatively weak yuan, and that it continues to bar foreign
companies from freely accessing the Chinese market.
These complaints are likely to continue. Currently, charges of currency manipulation,

price fixing and dumping are arguably the most serious complaint about China in the US,
especially from the now Democratically controlled Congress. China lacks the economic
levers to address the issue (if it wished to) without jeopardising its overall economic
health. A consequence of China's policy of currency control is that it has accumulated
and will likely continue to accumulate, a vast reserve of US securities. This has two
interesting implications: first, China is effectively supporting the US deficit by buying its
debt. Second, China now holds such a large reserve of US securities that selling them en
masse would have disastrous consequences for the US dollar, and probably the US
economy as well.
Since the appointment of Hu, China has also increased the number of free-trade
agreements which it has signed, or is negotiating to sign, not only with its immediate
Asian neighbours, but also as far afield as Latin America. These are to a large extent
aimed at securing access to raw materials and markets, but, over time, they may serve
to increase China's policy influence, at the expense of rivals such as South Korea and
Japan.
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At the same time, China's vast population and sizeable government expenditure have
also proved tantalising to foreign exporters, who hope to secure China as a market.
China has proved adept in using this in negotiations. The US has argued, for instance,
that current EU plans to eliminate its arms embargo on China have been driven by the
desire to secure export contracts for companies like Airbus.
Defence diplomacy
Beijing has often utilised arms transfers and military diplomacy, rather than formal ties,
to increase its international influence. The practice, encouraged when General Chi
Haotian gained the external affairs portfolio in the Central Military Commission in 1995,
has since continued, often involving countries broadly outside China's limited zone of
influence, such as in Eastern Europe or the Middle East, or states otherwise considered
'pariah' by the international community, such as Cuba, Myanmar and North Korea.
According to the October 2000 national defence white paper, China handles its military
relations independently, and conducts military exchanges and co-operation with other
countries on the basis of the Five Principles of Peaceful Co-existence. Military diplomacy
should serve the state's overall diplomacy and the modernisation of national defence
and the armed forces. In pursuance of this purpose the PLA has actively engaged in
external contacts and exchanges in a flexible and practical manner, and made sustained
efforts for enhanced mutual trust, friendship and co-operation with armed forces of
other countries, and for regional and world peace, stability and development.
The desire for countries to maintain a proper relationship with China is reflected in an
increasing number of military exchanges the PLA has been involved in over the past 25
years. Since reform began in 1978, senior PLA officers have led thousands of delegations
to over 100 countries. The PLA has also welcomed thousands of military delegations
from five continents, involving tens of thousands of people, of which more than half of
the delegations were led by defence ministers, joint service commanders, chiefs of the
general staff, and service commanders.
While most PLA visits in the 1980s were confined to the senior officers from Beijing,
during the 1990s the PLA began allowing military region commanders, deputy
commanders, or political commissars and fleet commanders to lead delegations abroad.
There have been PLA naval squadron visits to the US, Russia, Europe, India, Latin
America, Southeast Asia, Australia and North Korea. The PLA Navy has conducted simple
exercises with the US, Russian, Indian and French navies, while it has also participated in
multinational exercises hosted by Singapore and Pakistan. In 2002 the PLA Army
conducted its first foreign exercise, an anti-terror exercise in neighbouring Kazakhstan.
PLA Army Special Forces units have participated in the Estonian ERNA competitions and
have sent soldiers to train in Venezuela. The PLA has also conducted joint triservice
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exercises with Russian troops in Shandong province in 2005, the first exercises held with
an overseas power in Chinese territory, while the PLA Air Force held its first foreign
exercises in bilateral counter-terrorism exercises in Pakistan in December 2006. Military
exercises therefore continue to form a key component of China's diplomacy.
Multilateral Relations
Outside of the United Nations, China is not a member of any meaningful political or
military organisation and prefers to remain an autonomous, yet powerful, actor in the
international arena. The organisation in which China has invested hopes for more than
mere bilateral co-operation has been the Shanghai Co-operation Organisation (SCO),
previously called the Shanghai Five.
Association of Southeast Asian Nations (ASEAN)
China's relations with the members of ASEAN (Brunei, Cambodia, Indonesia, Laos,
Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam) have
traditionally focused on China's military and territorial ambitions, overshadowed by a
history of domination by imperial China within the region. However, in recent years
they have begun to reflect the growing economic prominence China has over the sub-
region; economic diplomacy between Beijing and ASEAN states has thus come to the
fore. Following the regional financial crisis of 1997-1998, in which China prevented
further intense financial and social turmoil by refusing to devalue the renminbi, its
weight in economic diplomacy was increased substantially. Chinese exports and
competition for foreign direct investment have since contributed to ASEAN fears of
becoming economically eclipsed by China.
Plans to create a China-ASEAN Free Trade Area (FTA) by 2010, ultimately to include
Japan and South Korea, were set in motion at the Vientiane ASEAN meeting in
November 2004. As part of the phased plan to introduce the FTA, tariffs on the trade of
industrial goods fell in July 2005, and zero tariffs were introduced for over 100 'early
harvests' products from January 2006. The establishment of such a trading bloc is
expected not only to strengthen trade links within the region, but also to create an
international rival to bodies like the EU.
There are fears within ASEAN that the free trade agreement will flood their markets
with cheap Chinese products and undermine domestic industries. There are therefore
likely to be a number of protected industries and a delay to the liberalisation of certain
markets (in particular the automobile industry for Malaysia and the petrochemical
industry for Thailand and Singapore). For this reason, the first stage of the agreement
will involve only the non-sensitive industries of agriculture, livestock and fishery, as well
as a unilateral reduction of customs duties by China on imports from ASEAN to reassure
235
the Southeast Asian countries as to the potential advantages to be gained by greater

access to the Chinese market (which imported USD47 billion of ASEAN goods in 2003,
an increase of 50 per cent over the previous year).
Trade with China has been a double-edged sword for ASEAN countries. China's low
labour costs and increasingly skilled labour pool have proved impossible for its
Southeast Asian neighbours to match. At the same time, China's growing need for food,
fuel and raw materials has developed into a market that its neighbours are finding
profitable to supply.
As a result of improving trade, the infrastructure needed for the movement of goods
and people between China and ASEAN is due to deepen over the next decade. The first
section of a 'trans-Asia' road link that should eventually reach from Yunnan province to
Singapore saw construction of its Chinese section completed in December 2005 with a
180 km long, eight-lane expressway between Nanning in China's southern province of
Guangxi to the Friendship Pass on the Sino-Vietnamese border. A planned 263 km road
link through Laos to Thailand, to be funded in part by the Asian Development Bank, will
also directly lift the volume of traffic with Thailand and the rest of ASEAN in general
(construction began in 2003).
European Union (EU)
Europe is primarily perceived by China as an important trading partner. China has

accordingly tried to maintain good relations with EU members and the European
Commission despite EU concern over the human rights environment in China. However,
the European body is also viewed by Beijing as a potential counterweight to US power,
in line with China's desire to create a multi-polar international order.
Below the commission level, Germany has traditionally maintained close relations with
China (German engineers and technicians have been active in China since the 1800s),
while France has been involved in technology transfers to China, especially of
helicopters and their weapon systems. In the 1970s and 1980s this involved the licensed
production of naval and battlefield types, although France was also a major arms
supplier to Taiwan. European states have notably been more willing to bow to Chinese
pressure on issues related to Taiwan. Neither Germany nor the Netherlands, for
example, agreed to support US plans to construct diesel-powered submarines for
Taiwan in 2001, for fear of offending Beijing.
Exchanges on security also take place, at a level insulated from politics - such as the
high-level defence and security meeting between senior officers of the People's
Liberation Army General Staff and the German Federal Defence Forces in May 2002.
France even carried out joint naval exercises with the PLAN in the run-up to Taiwan's
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2004 presidential elections, while France, Italy and the UK (among other ex-European
states) were involved in the Pakistan-hosted Aman 07 multilateral naval exercises with
China in March 2007.
One of the primary barriers to closer co-operation with China is an EU-wide arms
embargo. In January 2005, British Foreign Secretary Jack Straw announced, despite
strong objections from the US and Japan, EU intentions to lift a 15-year embargo on
arms exports to China, established after the Tiananmen incident in 1989. As of March
2007, this was still under discussion, with an EU delegation to Beijing stating a human
rights prerequisite in May 2005 before the ban could be lifted. Although countries such
as France support lifting the embargo, others, notably Germany and perhaps the UK,
are more ambivalent. If the embargo is eventually lifted, China is likely to relish the
opportunity to have an alternative to Russia as the backbone of its military
modernisation programme. However, relations with European countries focus more
naturally on bilateral or multilateral trade diplomacy, and Chinese WTO commitments
than on defence-oriented ties. In June 2005, China and the EU set forth a trade accord
aimed at limiting the rise in Chinese textile exports to the EU until 2008. Both the US
and the EU faced dramatically increased textile imports from China during the first part
of 2005, and Chinese officials praised the EU's negotiated solution in comparison with
the quotas that the US imposed on Chinese textiles. Despite this, trade disputes remain
in the foreground of relations between China and the EU. During early 2006, the EU and
US complained about Chinese tariffs on imported automobile parts, and China
protested EU plans to impose anti-dumping duties on Chinese shoe exports.
Shanghai Co-operation Organisation (SCO)
Originally seen as a means of resolving Soviet-era border disputes, the SCO

subsequently began to acquire the status of a forum for co-operating on anti-terrorism
issues. The first presidential summit (of the Shanghai Five as it was then known) was
held in 1996 between the heads of state of China, Kazakhstan, Kyrgyzstan, Russia and
Tajikistan. In June 2001, Uzbekistan was admitted and the group changed its name.
Further expansion of the SCO has since been undertaken, with Mongolia assuming
observer status in June 2004 and India, Iran and Pakistan doing the same in early July
2005. China has also hinted at the prospect of offering membership or observer status
to Afghanistan, while President Hu Jintao suggested in March 2007 that the group
would further expand its membership, most probably at the June 2007 summit.
The group has legalised for the first time the projection of Chinese troops beyond
China's borders on the request of the signatories. However, despite its explicit anti-
terrorism and security mandate the nascent SCO failed to react in the aftermath of the
11 September 2001 attacks, raising questions over its relevance as an organisation.
Further, following the US-led invasion of Afghanistan in October-November 2001, the
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US' influence increased with the basing of troops in Kyrgyzstan and (until 2005)
Uzbekistan. As such, China is eager to maintain the grouping, seeing it not only as a
possible balance to the Western collective defence of NATO, but also a means through
which China and Russia can counter US influence in Central Asia. Indeed, the large Sino-
Russian military exercises in August 2005 were held under the auspices of the SCO, at
which India was an observer. Russia's defence minister suggested in October 2005 the
possibility of joint Sino-Russo-Indian exercises under the SCO.
Sino-Russian attempts to balance US influence in Central Asia through the SCO have
witnessed some success. In July 2005, SCO member states called on the US to provide a
timeline to vacate its bases in Kyrgyzstan and Uzbekistan (the US also has fly-over rights
in Tajikistan) once military operations in Afghanistan finished. Relations between
Uzbekistan and the US have subsequently soured in the wake of President Karimov's
suppression of the 'Orange Revolution'. Karimov susbequently demanded that the US
vacate its K2 base in Uzbekistan, with the US forces leaving by 1 December 2005. The US
has responded by working on building bilateral ties, especially with Kyrgyzstan and
Tajikistan. In July 2006, the US secured an agreement from the Kyrgyz government to
extend its use of the Manas Air Base (in exchange for assistance and compensation)
despite President Bakiyev's threat in May to expel the US.
The SCO's remit has also expanded beyond merely security as China in particular
attempts to broaden the organisation's scope, with a meeting between the members'
trade ministers in 2002 pledging greater economic integration. To further co-operation
a secretariat was inaugurated in Beijing in January 2004 and an anti-terrorism centre in
Bishkek was created in the same year. China is likely to press for greater integration in
order to further its interest in the region and counterbalance the growing influence of
the US in Central Asia.
South Asian Association for Regional Co-operation (SAARC)
The South Asian Association for Regional Cooperation (SAARC) was founded in the early
1980s, largely owing to the efforts of Bangladesh, as a forum for the promotion of South
Asian economic interests. Due in part to historical rivalries between India and Pakistan,
neither India (the region's dominant economic power) nor Pakistan assumed clear
leadership of the organisation. Consequently, and also because many regional powers
are either economically very weak or direct competitors, the forum has had only limited
success in pursuing its economic mandate. Perhaps the SAARC's greatest achievement
was the creation of the South Asian Free Trade Agreement (SAFTA) in January 2006,
which aims to reduce tariffs among members states to between zero and five per cent
by 2016, although whether implementation of the SAFTA will be successful is currently
difficult to gauge.
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In November 2005, the SAARC agreed to grant observer status to China as well as Japan.
With India pushing for SAARC membership to be granted to Afghanistan, Nepal, with
the support of Pakistan, Bangladesh, and Sri Lanka, set China's observer status (which
India opposed) as a prerequisite for Afghanistan's acceptance. Two points are
noteworthy: first, India's neighbours appear to be bringing China in to counterbalance
India's regional predominance. Second, India secured SAARC observer status for Japan
at the same time as China's entry. Early in 2006, the SAARC also came to an agreement
to give observer status to the US and South Korea. This leaves the question of whether
China's observer status will in fact increase its influence in South Asia, if so many other
states are also being accepted as observers.
United Nations (UN)
In 1971, China replaced Taiwan as a UN member state. China's accession to UN

membership and the UN's recognition of China as a sovereign state set the stage for
China's growing international role. The US recognised Chinese sovereignty in 1979, and
now fewer than 25 states still recognise Taiwan. The 'one-China' policy is still a
cornerstone of Chinese diplomacy: one of the few requirements that China has of its
international partners is that they support China's sovereignty and deny any claim by
Taipei to sovereignty. Beijing also maintains that Taiwan has no right to membership in
any international forum for which statehood is a requirement, including the UN.
Although UN membership has allowed China to develop an extensive network of

diplomatic ties worldwide, it has made relatively little use of its status as a permanent
member of the UN Security Council. Contrary to the expectations of the developing
countries that supported China's entry into the UN, Beijing did not significantly support
the agenda of the Non-Aligned Movement. During the Cold War, Chinese diplomacy
focused mainly on controlling the influence of its rival, the Soviet Union. Since the end
of the Cold War, China has played a somewhat larger role in international fora like the
UN, but it has notably not relied on its veto in the UN Security Council to oppose US
'hegemonism', as has arguably been seen in the cases of Russia and France. Rather,
China has used its own veto very judiciously, and in support of its own clear interests.
Since 1971, China has used its Security Council veto just four times: in 1972, it vetoed
plans to grant UN status to Bangladesh; in 1973, alongside the Soviet Union, Beijing
vetoed a resolution on the Yom Kippur War ceasefire; and in 1997 and 1999 it vetoed
plans to put observers in Guatemala and Macedonia respectively. Of note is the failure
of China to utilise its veto in the wake of the North Korean July 2006 missile test
(resolution 1695( and October 2006 nuclear test (resolution 1718), although Chinese
efforts to modify the resolutions, possibly supported by a threat to use its veto, ensured
that neither resolution sanctioned the use of lethal force (1718 was passed under
Chapter VII, which could allow military means, but also under Article 41, which forbids
such usage).
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China appears to oppose the addition of any other Asian powers as permanent
members of the Security Council. China formally opposes Japan as a permanent
member (it expressed this firmly in April 2005) and, despite a statement to the contrary
in January 2006, it appears reluctant to accept India as a permanent member as well.
World Trade Organisation (WTO)
China's entry into the WTO in December 2001 has helped access to valuable export
markets. Numerous grievances with China's compliance with the terms of WTO entry
have been noted, especially by the US, whose trade deficit with China reached
USD232.5 billion in 2006. Not only have complaints been raised about barriers to free
trade in China, but also regarding continued problems with counterfeit goods and
intellectual property.
In addition to regulatory obstacles to foreign exports to China, complaints have been

made (particularly by US officials) about China's fixed exchange rate, on the grounds
that it has unfairly reduced the cost of Chinese exports. In July 2005, following
international pressure, Beijing revalued the currency for the first time in a decade,
allowing the yuan to float against a basket of currencies. However, the measure failed
to prevent further criticism over the minor shifts in value, and indeed such criticism has
increased since the Democratic party assumed a majority of seats in both houses of the
US Congress November 2006. At the same time, China's trade in counterfeit goods has
affected a range of foreign producers. This counterfeit market is estimated by the
Chinese State Council at some USD19 billion to USD24 billion per annum.
China's long-term status in the WTO remains to be seen. While Chinese exports have
benefited from China's entry, foreign trading partners, including the US and the EU,
have protested continued non-tariff barriers to foreign companies wishing to export to
China or operate manufacturing facilities there. The US, in early 2004, formally
complained to the WTO that China discriminated against foreign agricultural imports,
and also complained over restrictions on imports from the optical fibre manufacturer
Corning. In response, the US imposed anti-dumping tariffs on Chinese exports of
wooden furniture of up to 198 per cent in June 2004. In January 2005, with the abolition
of textile import quotas, Chinese textile exports to the US jumped 75 per cent, leading
to US anti-dumping limits being imposed by Washington on certain textile exports. In
February 2007, the US lodged another formal complaint at the WTO over Chinese
subsidies in the steel, paper, information technology and other industries. It therefore
seems probable that the terms of China's entry into the WTO will remain contentious
for some years to come. Beijing still has obligations to allow foreign companies,
including banks, more freedom to operate within China.
Given the high levels of corruption still present in Chinese regulatory bodies, and the
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problems facing a number of Chinese businesses, like failing state-owned enterprises

and insolvent banks, it is difficult to see how China can operate with the degree of
openness that its WTO obligations demand. At present, the CCP depends more on direct
regulatory intervention like the lending restrictions imposed during the first half of
2004. It is therefore challenged to phase in regulatory changes in order to prepare for a
more market-oriented structure of economic control, without upsetting economic
development in the interim due to overly abrupt transitions.
Relations with Bhutan
Although Beijing maintains friendly relations with Bhutan, as of March 2007 China had
still not established formal diplomatic ties with the Himalayan kingdom. This is in the
interest of India, which still considers that it has a 'special relationship' with Bhutan, as
established in the 1949 Indo-Bhutan Treaty of Friendship that stipulates that Bhutan is
required to consult India before making significant foreign policy decisions. This
relationship plays a significant role for India's security in the eastern Himalayas.
An Agreement to Maintain Peace and Tranquillity on the Bhutan-China border was

signed in 1998. However, border issues remain outstanding despite shrinkage of the
area of dispute. Since 1984, there have been annual rounds of negotiations on the
matter, with the 18th and latest occurring in July 2006. The 2005 talks, which discussed
the disagreement that has existed since the Chinese invasion of Tibet in 1951, led to a
statement from Thimphu that it had "agreed to change the claim line". No details were
provided, but the statement led to concern from India that Bhutan would cede territory
to China, particularly the strategically important Chumbi valley. The issue was regarded
as important enough by India to encourage Prime Minister Manmohan Singh to visit in
early August 2005 to discuss this among other matters.
Nonetheless, as of March 2007 no agreement over the border had been reached and
there seemed little probability of Bhutan ceding its territory. Aside from a disagreement
in 2005 over Chinese road construction in a disputed area, outright conflict seems higly
improbable. China has pushed for the normalisation of its relationship with Bhutan,
offering a 'generous' settlement of their border dispute in exchange for trade and
diplomatic ties with Bhutan. The opening of the Nathu La pass between India and China
in June 2006, near the Bhutanese border, may facilitate the development of Sino-
Bhutanese relations. At the very least, Bhutan is likely to need to co-operate further
with its neighbours India, Nepal and China in the future, to monitor, via satellite, the
problem of glacial melting, which could destabilise the hydrology of this geo-politically
sensitive area over the medium to long term.
Relations with India
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Sino-Indian relations have improved dramatically since the 1990s. After more than
three decades of border disputes (including a minor war over the Himalayan border in
1962 and disputes over the status of Tibet Autonomous Region, the Indian state of
Sikkim, and parts of Kashmir) and diplomatic hostility, relations began to improve in
1993. With the visit of then-Indian prime minister Atal Behari Vajpayee in 2003, China
de facto recognised Sikkim as part of India, and India de jure recognised Tibet as part of
China.
Ongoing Sino-Indian dialogue has also shown favourable signs. These dialogues,
originally aimed at settling the remaining border dispute, have moved since 2005
towards addressing shared strategic interests at the global level. In particular, at a
summit in April 2005, Chinese Premier Wen Jiabao and Indian Prime Minister
Manomohan Singh signed eleven social and economic accords and an agreement to lay
the foundations for a final resolution to demarcate their 3,500 km border. In January
2006, Chinese and Indian officials also established a framework for joint bidding and
joint exploration for oil and gas. Growing economic interdependence also suggest that
relations between China and India may remain favourable: bilateral trade more than
quintupled between 2000 and 2005, for example.
However, China's and India's strong economic growth may itself lead to rivalry. There is
a very real prospect that two of the fastest growing economies in the world, with the
largest populations, will become true economic rivals by 2020. Over the shorter term
this may be beneficial. While Indian economic growth focuses on computers and
information technology, the Chinese economy emphasises manufacturing. India could
grow into a major market for Chinese consumer goods, while Chinese resource
shortages, especially food, could be filled by Indian exports. Over the longer term,
though, competition may intensify and become detrimental for either country Already,
since the end of Multifibre Agreement quotas at the beginning of 2005, Indian textile
exports have been unable to compete with Chinese exports.
Similarly, while a January 2006 framework for joint energy bidding, exploration and
development is promising for Sino-Indian relations over the shorter term, it is possible
that over the longer term the energy needs of the two powers may grow to the point
where the international market becomes very short. The two countries rely in part on
the same fuel suppliers, in particular, competition over Iranian and Russian fuel may
become problematic. India and China could therefore find themselves competing
intensely to secure overseas energy sources in order to ensure continued dynamic
economic growth.
For this reason, India remains wary of China's 'strategic encirclement' policy in South
Asia, whereby Beijing forges and maintains close relationships with India's neighbours.
Although Pakistan is China's primary ally in the region, both Bangladesh and Myanmar
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favour China over India. China also utilised the one-year rule of Nepal's King Gyanendra
to cultivate closer ties with another traditional Indian ally, even delivering USD1.1
million of military equipment in late 2005. This growing Chinese influence in South Asia,
and in particular in the Himalayan region, is also being enhanced by the opening of the
Qinghai-Lhasa railway in July 2006, with plans to extend the railway to Nepal's border in
the future. India, for its part, has developed an increasingly close relationship with the
US, with Washington eager to utilise New Delhi as a strategic counterweight to Beijing.
Over the shorter term, therefore, the Sino-Indian relationship continues to look
promising. Over the longer term, however, there are still complications. In addition to
their historical conflict and ongoing territorial disputes, it remains to be seen how they
will be able to accommodate their growing spheres of influence and energy needs.
Rapprochement since the 1990s
The early 1990s saw moves towards Sino-Indian rapprochement, as expressed in the
1993 "Maintenance of Peace and Tranquillity Agreement", which indicated neither
power would develop further defence installations in areas whose ownership was under
contest. However, in May 1998, as both India and Pakistan conducted nuclear fission
test detonations, then-Indian defence minister George Fernandes breached a
longstanding taboo by declaring publicly that China, not Pakistan, was India's "potential
threat number one". He said that India should awaken to the fact that Chinese military
activities and alliances, notably those involving Pakistan, Myanmar and Bangladesh, had
begun to "encircle" India.
Following a meeting between the countries' two heads of state in mid-2000, there were
signs of another rapprochement. China and India had already marked the 50th
anniversary of the establishment of diplomatic relations between the two countries in
April 2000. During the subsequent meeting (which marked the end of the acrimony
following India's nuclear test) the two countries went out of their way to stress issues in
which they held shared views. They subsequently side-stepped matters such as the
nuclearisation of the region, instead concentrating on combating terrorism and their
mutual desire of a multipolar world.
High-level diplomatic meetings in 2001 and 2002 set a definite timetable for resolution
of the Line of Actual Control never demarcated since the 1962 conflict, with the two
sides swapping border maps staking their claims once more in April 2002. Diplomacy
continued with Atal Behari Vajpayee's visit to Beijing in June 2003, the first by an Indian
prime minister since the early 1990s.
The subsequent summit produced a Joint Declaration in which India recognised "Tibet
Autonomous Region as part of the territory of the People's Republic of China", an
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advance on the formulations of 1988 and 1991, in which Tibet was acknowledged
merely as an "autonomous region of China". In what was immediately criticised as an
unequal concession, China agreed to the opening of the Nathu La pass into "Sikkim
state" in a separate memorandum on border trade, to the consternation of many in the
Indian military who feared the opening of a border trade route could provide
opportunities for infiltration. This pass, closed since 1962, is the shortest route between
the two countries. The Indian government's national security advisor and the
"seniormost" vice-minister in China's Ministry of Foreign Affairs were appointed as
special representatives to the border question. The Nathu La Pass was eventually
opened to border trade in June 2006.
It is likely that a domestic political rationale, the desire for India's then-ruling Bharatiya
Janatha Party to create the impression of a diplomatic breakthrough, worked in China's
favour. However, since India's strategy with regard to China has long remained
relatively inchoate, Vajpayee's government could have perhaps only been accused of
pragmatism and appreciating the strategic logic of the situation. In any case, despite
defence minister Fernandes' famous comment (and Vajpayee's citing of China to the US
president in 1998 as a reason for India's nuclear tests), much of India's intelligence
community has, since the reorganisation of 2000, been oriented more exclusively to
Pakistan.
Strategic encirclement
The high-profile diplomacy that has taken place between India and China since 2003
belies deep strategic mistrust. Although the potential gains from co-operation are clear
to both countries, both sides fear hostile encirclement. China fears a US-India entente,
with tacit Russian acceptance (via Russian ties to NATO and large-scale Russian arms
sales to India, a longer-standing customer than China). Meanwhile, India fears
encirclement at a regional level, via China's potential reach through Myanmar into the
Bay of Bengal and through Pakistan into the Arabian Sea, and China's cultivation of less
influential countries disaffected with India's sway in South Asian affairs, namely
Bangladesh, Nepal and Sri Lanka.
China has financed the USD3 billion development of the port of Gwadar in Pakistan,
opened in March 2007, expanded road links between Yunnan province and Myanmar,
and development of naval bases in Myanmar and Bangladesh along the Bay of Bengal.
This may be intended to lessen Chinese dependence on the Pacific and South China Sea
for access to shipping lanes and energy imports, and simultaneously increase China's
presence along the crucial shipping lines from the Middle East, through the Arabian Sea,
Bay of Bengal and Strait of Malacca.
China's large-scale investment in transport links into and within Tibet, and between
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Xinjiang and Tibet and Yunnan and Tibet, up to the border with India, may be seen as a
separate effort on the land frontier. Indian sources believe China has stationed at least
25 nuclear-tipped medium-range ballistic missiles in Tibet. This has been accompanied
by constant probing of the LAC, via unscheduled border crossings by PLA military units,
in a manner designed to test Indian border intelligence and psychology. Meanwhile,
China's avowed interest in joining regional fora such as the South Asian Association for
Regional Co-operation (SAARC) and the Mekong-Ganga (Ganges) Co-operation (MGC)
group should be seen as the public face of its hopes of extending influence regionally.
The MGC is India's creation.
Indian diplomacy with ASEAN states such as Thailand, Malaysia, Vietnam, Cambodia and
Myanmar, intended to outflank China, has so far proven relatively unsuccessful, in
comparison to China's positive engagement with the region. However, India's progress
in expanding co-operation with the US has been notable, especially since September
2001. This has included an expanded Indian naval blue-water presence in the areas in
which China is seeking to expand its reach in the near term. Joint US-Indian naval
patrols up to the Strait of Malacca (the world's busiest shipping lane, through which the
crude oil transported each day is equivalent to daily US import demand) have increased
to over 150, compared to 25 in 1998 as a whole.
Moreover, US sanctions imposed on India since the 1998 nuclear testing have been
lifted. Sale of high-powered mainframe computers (ostensibly for India'a space
programme) have taken place, in addition to joint land exercises and speculation that
India will buy US defence hardware. In June 2005, the US signed a deal with India to
supply the South Asian country with civilian nuclear technology.
All of these developments are likely to make China cleave more tightly to its regional
strategy of expanding influence in South Asia, while seeking to engage India at the
highest diplomatic levels. China notably seeks long-term settlement of its Himalayan
border to shore up its energy security. Without this, plans for a pipeline from Central
Asia via Tibet will not be on a secure basis.
In the background at all times is China's long-standing support for Pakistan. China has
indicated that Pakistan holds a place in its strategic matrix equivalent to the position
enjoyed by Israel in that of the US. This makes it determined both to prevent war or any
other sequence of events which might, in the worst-case scenario, result in an internal
collapse of authority in Pakistan. In turn, China's development of Pakistan's military
arsenal is clearly disruptive to Indo-Chinese relations, although improving Indo-Pakistan
relations may mitigate this factor.
Relations with Iran
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China has established extensive trade and diplomatic relations with Iran. Iran is China's
second largest supplier of oil after Saudi Arabia (accounting for approximately 13 per
cent of China's total oil imports) and Chinese companies have become heavily involved
in projects in Iran, especially in the fields of natural resources and infrastructure. China
has also been accused of having provided significant military assistance to Iran. Bilateral
trade is also strong and totalled USD9.5 billion in 2005. Against this background, current
pressure, especially from the US and EU, on Iran to cease its nuclear activities have
become diplomatically awkward for China. Given significant international competition
for access to Iranian oil, China cannot alienate the country. As a result, China, as well as
Russia, have emphasised the need to deal with the problem of Iran's nuclear activities
through established international fora and with negotiations, rather than relying on
unilateral activities or sanctions.
China appears to be balancing the need not to oppose outright international pressure
on Iran, while still maintaining its economic and diplomatic links with the country. For
example, at the end of January 2006 China's International Atomic Energy Agency (IAEA)
representative did not block a vote to report the issue to the UN Security Council.
Nonetheless, in February 2006 at the height of international pressure on Iran's nuclear
programme, China and Iran agreed that Sinopec would participate in developing Iran's
Yadavaran oil field, and that China would begin buying 10 million tonnes of Iranian
liquefied natural gas per year from 2009.
In its handling of Iran's nuclear programme, China has shown care in following
established international processes, while diluting US and European attempts to
threaten sanctions or even the use of force. For example, in mid-June 2006 China (and
Russia) refused to join the US and the 'EU 3' (France, Germany and the UK) in issuing a
statement against Iran. Nonetheless, with no further progress under the IAEA
framework, China and Russia agreed to pass the matter back to the UN Security Council,
and did not use their veto with the passing of UN Security Council Resolution 1737 in
December 2006 and resolution 1747 in March 2007, which imposed limited sanctions.
As well as receiving criticism for its occasional failure to censure Iran, China has also
been criticised specifically for its weapons technology transfers to the country. Missile
component sales to Iran are thought to have taken place from the late 1980s, while the
sale of Iran's short-range ballistic missile systems reflects transfers of Chinese know-
how in guidance systems, fuel and computerised machine tools. Transfers of telemetry
equipment for medium-range missiles may also have taken place, in contravention to
the Missile Technology Control Regime (MTCR), by which China has made only a verbal
agreement to abide. However, such commitments, associated US pressure and probably
incentives from Israel have controlled the trade in the past. Iran has been forced to pay
up front for missile systems in order to fund China's considerable research and
development costs. Iran is also believed to receive various missile sub-systems and
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production technologies rather than direct sales of integrated weapons systems, and
this is often under the guise of other types of technical assistance not covered by the
MTCR. In December 2005 the US placed sanctions on six Chinese military technology
companies for allegedly transferring sensitive missile technology to Iran.
In June 2004, US Congress' US-China Economic and Security Review Commission

accused Beijing of supplying equipment and expertise in support of Iran's nuclear
programme. The Chinese foreign ministry denied the report, but, given China's growing
fuel shortage, this sort of relationship with an oil-rich state might not be entirely
unexpected.
Relations with Israel
China's relationship with Israel is driven by its need to diversify its arms procurement
and modernise its military capability, especially in fields such as avionics. Consequently,
Israel is, after Russia, China's main supplier of weapons. Israel also potentially functions
as a conduit for US-derived military technologies to make their way into China, although
the volume and intensity of US-Israel technology transfer makes any specific claims of
sales to third parties difficult to verify. In turn, Israel has historically hoped to put
pressure on China to persuade it to stop supplying 'sensitive material' to Iran, in
particular special steel for ballistic missiles. Although the relationship is clearly mutually
beneficial, the interaction with the US, which attempts to limit sales of sophisticated
arms to China, complicates Sino-Israeli dealings and has led to periodic diplomatic
problems.
The first Sino-Israeli secret weapons agreement dates back to 1979, long before the two
countries opened diplomatic relations in 1992, by which time Israel had already sold
some USD4 billion worth of arms to China. China was keen to obtain the sophisticated
technology that the West refused to supply and it was a time when Israel saw itself as
the counter-balance to the Soviet Union. Israel has sold China numerous military items,
including radar systems, optical and telecommunications equipment, drones and flight
simulators, and even their Lavi fighter aircraft, which formed much of the basis of
China's own Jian-10 fighter.
Relations faltered in 2000 when Israel was forced to cancel a contract to sell China its
own (Phalcon) version of the US airborne warning and control system (AWACS) radar
mounted by Israel Aircraft Industries (IAI) on a Russian-made Ilyushin Il-76 transport
aircraft. China had agreed to pay USD250 million for a single Phalcon system, with an
option to buy three to eight more. Although China's ability to integrate these into its
flight-borne early warning radar systems in sensitive areas such as the Taiwan Strait and
Bay of Bengal was doubtful, the US feared that any greater number of such systems
could over time lead to superior Chinese aerial surveillance capabilities in key theatres.
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This was to the intense regret of the Israeli government and parties such as IAI, as the
deal was potentially valued at over USD1 billion.
Revelations that the US would permit Israeli sales of three Phalcon systems to India as
compensation further cooled Israeli-Chinese relations. In August 2001, Israel signed a
USD2 billion defence sales agreement with India, of which the systems were thought to
have been a part. Then-president Jiang Zemin in December 2001 subsequently warned
unspecified 'countries' not to carry out actions detrimental to peace and stability in
South Asia, a comment aimed at Israel. In March 2002, in response to Israeli Defence
Force actions in the West Bank, the Chinese Ministry of Foreign Affairs announced that
it considered "Israel's actions [would] lead to no solution but further deterioration of
the situation". However, in the same month China's ambassador Pan Zhanlin expressed
optimism that the difficulties in the relationship would be overcome and military Co-
operation continue.
Despite some continued animosity over the Phalcon controversy in 2000, Sino-Israeli
rapprochement seemed to be moving forward in 2002. Given increased trade, which
grew by some 20 per cent in 2003, and increased business co-operation between
Chinese and Israeli companies, relations between the two countries seemed promising.
Yet the issue of arms sales continues to hamper the association. In December 2004,
Israel found itself caught between China and the United States after Beijing requested
that Israel upgrade Harpy-type drone aircraft, sold during the 1990s. In May 2005, the
Pentagon cancelled several joint projects with Israel, protesting Israel's sales of high-
technology armaments to China. In response to these US sanctions, Israel cancelled its
Harpy deal with China in June 2005, and confiscated components of the drone. With
relations between China and Israel still coloured by the Phalcon controversy, this is
likely to sour relations between the two for the near future.
Relations with Japan
Sino-Japanese relations are coloured by a history of antipathy following the actions of

the Imperial Japanese Army in China before and during the Second World War. This
hostility has led to a large amount of mistrust, compounded by territorial disputes over
the Diaoyu/Senkaku islands, Okinotori reefs, and areas of the East China Sea, an
extremely close Japan-US alliance, competing strategic objectives, and Japanese fears of
a 'rising' China expanding its military capabilities each year and threatening Japan
economically as well as militarily. Nationalist sentiment in Japan continues to grow and,
alongside the long-term tendency towards nationalism in China, this suggests that the
relationship between the two will remain cool.
Although the Abe government, inaugurated in October 2006, has made rapprochement
with China a priority, with Abe becoming the first Japanese prime minister to make
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China his first overseas visit, mistrust remains in the relationship. Prime Minister Abe's
March 2007 statement that no evidence of the use of 'comfort women' (foreign women
used as sex slaves) by the Imperial Japanese Army in the Second World War caused
consternation in China, although an apology issued later in the same month
demonstrated the more placatory policy of the Abe government.
On a cultural rather than governmental level, Sino-Japanese relations remain poor. Both
the Japanese occupation and the subsequent domination of East Asia by a more
technologically proficient and economically powerful Japan have led to resentment and
enmity among the Chinese population. The decision by Tokyo to approve historical
textbooks in April 2005 which the Chinese claimed, with justification, made light of
Japan's involvement in China in the 1930s and 1940s led to widespread protests
throughout China on several weekends. Although Tokyo alleged complicity by Beijing in
the protests, with little done to prevent the demonstration, there is little doubt that
anti-Japanese sentiment in China runs high even without such provocation. At the
diplomatic level, China's opposition to Japan's bid to join the UN Security Council also
reflects the poor relations between the two countries.
The possibility of conflict is limited by trade and investment ties between the countries,
which are strong. In 2005, bilateral trade rose 12.7 per cent, to almost USD190 billion.
Unlike trade with the US, which has led to diplomatic friction, Sino-Japanese trade is
nearly balanced, although the rate of growth for Chinese imports is slowing. Japanese
foreign direct investment in China rose 12 per cent in 2005, to USD6.6 billion. Although
the strength of trade ties, and common concerns regarding North Korea give the two
countries common interests, the relationship is not currently promising. The resurgence
of nationalist sentiment in Japan (as well as talks of Japanese remilitarisation), Japan's
increased closeness with the US regarding Taiwan, increasing competition over access
to Russian oil, and anti-Japanese sentiment in China, all point towards further friction, if
not open conflict, in the long term.
Energy rivalry
Increasingly, China and Japan, the second and third largest importers of oil and gas in
the world, have experienced tension over access to fuel supplies. Both have been
negotiating for a larger share of Russian oil exports, although Japan seems to have had
the upper hand in negotiations. Of more long-term concern are tensions over natural
gas deposits under the East China Sea.
Towards the end of 2004, Japan protested China's construction of offshore drilling
platforms near the median line between the two countries in the East China Sea. In April
2005, the Japanese government claimed that two Chinese gas fields, Chunxiao and
Duanqiao, were linked to Japanese fields. In response, Tokyo granted exploration rights
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to a Japanese company, Teikoku Oil, in July 2005 on its side of the median line. The
beginning of gas production at the Chunxiao field in September 2005 increased
resentment over the dispute, and has meant that with the issue escalating, relations are
set to deteriorate further over this issue. Seven rounds of negotiations have failed to
improve the situation, with a meeting in January 2006 in particular being undermined
by tension and the issue of a Japanese diplomat's suicide in May 2004 in China, and
both sides have used military vessels or aircraft to intimidate the other side.
While there is little danger of this particular dispute growing into conflict for the
moment, it seems likely that, as Chinese energy needs grow greater, further territorial
disputes may arise in the region, especially over potential oil and gas reserves in
disputed maritime Exclusive Economic Zones. These disputes, if not tackled
collaboratively, could lead to increasing military tension.
Japanese wariness
Although specific disputes could act as flashpoints for conflict, its is a mutual mistrust of
military development that most significantly frames Sino-Japanese fears. Tokyo has long
been concerned about Chinese rearmament programmes, with its annual white paper
on defence in July 1996 stated that China needed to be "watched with caution in terms
of promotion of nuclear weapons and modernisation of the navy and air forces,
expansion of naval activity and heightened tension in the Taiwan Strait as seen in the
military drill near Taiwan." Further evolution of the US-Japan defence relationship in the
post-Cold War context in turn stoked Chinese fears.
Despite confidence-building measures in the late 1990s, such as the 1998 bilateral
dialogue on security issues, China's force modernisation continues to worry Japan, while
Japanese efforts to normalise its military stance and identity worry China. In December
2005, Japanese Minister of Foreign Affairs Taro Aso stated that: "[China is] a
neighbouring country with nuclear bombs, and its military expenditure has been on the
rise for 17 years. It's beginning to pose a considerable threat". The increase in China's
defence budget of 17.6 per cent for 2007 will do little to allay these concerns.
Moreover, contemporary Japanese views of China also encompass other fears. China's
economic advantage at Japan's expense is one theme, as Japanese manufacturers are
forced to relocate to China or face more competitive Chinese imports.
Chinese fears
On the Chinese side, where the Japanese wartime occupation record is almost
inevitably seen as the central issue of the relationship, the words and deeds of Japanese
politicians are closely watched. The 'textbook' controversy, which resurfaces every four
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years as the Ministry of Education approves new historical textbooks for the school
curriculum, inevitably elicits direct criticism from Beijing, and ire from the Chinese
population. A historical primer for schools (the Atarahii Rekishi Kyokasho or 'New
History Textbook') approved by the Ministry of Education in April 2005, described the
Nanjing massacres of 1937-38 as an 'incident' and the occupation of areas of China as
driven by self-preservation. In 2001 the same textbook described the Japanese advance
into Asia in muted terms, as, for example, driven by a need "to strengthen military
control of the occupied areas in order to carry out the war effort".
Koizumi offered his "heartfelt apology" for Japan's actions during this time in April 2005
in order to defuse the row, but the fact that the same phrase had been used in 2001
following the textbook disagreement greatly detracted from its effect.
A further issue that incites disagreement are the regular visits by Japanese political
figures to the Yasukuni war shrine. Following a visit by former prime minister Junichiro
Koizumi in August 2001, coming one day after the anniversary of Japan's unconditional
surrender, the heads of governments did not visit each others' countries until Abe's visit
to China in October 2006 (as of March 2007, Hu Jintao has still not reciprocated this
visit). Annual visits by Koizumi to Yasukuni following 2001 ensured perennial strong
Chinese reactions. Should Prime Minister Abe decide to also visit the shrine, a possibility
given his visit chief cabinet secretary in April 2006, then Sino-Japanese relations would
continue to stagnate. As such, given the Abe administration's focus on improving
relations with China, the prime minister may seek some compromise over the Yasukuni
issue that would allow him to appease Japanese nationalists, while avoiding
confrontation with Beijing, perhaps by removing the 14 Class A war criminals from the
shrine. Whether this policy is feasible remains to be seen.
Japan's militarisation
For China, unease at Japan's apparent loosening of its regime of self-imposed military
controls in the course of co-operation with the US in the 'war on terror' is also a
concern. The realignment of Japan's pacific constitution is a particular sign of both
Japanese fears of China's growing military might and China's concerns over a renewed
conflict with Japan. Currently, Japan is restricted by Article Nine of its constitution which
renounces war and states that the "right of belligerency of the state will not be
recognised". The constitution thereby prevents the Japanese Self-Defence Forces (so
named as the country is constitutionally bound not to maintain war-making forces) from
engaging in aggressive operations. However, this position has been under debate for
some time, and is gradually being relaxed.
In late 2001, Japan's Diet approved changes allowing Japanese forces to carry out
logistical activities in zones of military operations. This led to the appearance of
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Japanese military transport aircraft in Afghanistan and Japanese naval vessels in the
Indian Ocean, in support of the US effort in Afghanistan. China is likely to have viewed
these developments as a bid for a creeping normalisation of Japan's military posture.
This suspicion will have been encouraged by reports that the Japanese Maritime Self-
Defence Forces (MSDF) discreetly pressured the US navy to request deployment of an
Aegis-class MSDF vessel in early 2002.
War preparedness legislation put before the Diet in 2002 - to set a framework for
military-civilian relations if Japan were attacked - also raised unease in Beijing. Similarly,
China will not have taken a sanguine view of comments in early 2002 by an extremely
senior Liberal Democratic Party (LDP) official that Japan could nuclearise in the future.
Even if the LDP was quick to distance itself from such sentiments, they were
subsequently echoed by the controversial opposition figure, former LDP leader and now
Democratic Party of Japan member Ichiro Ozawa, in April 2002, although Ozawa
indicated this would be a "tragic" outcome. Minister of Foreign Affairs Taro Aso also
opened the debate about Japan's nuclear status following North Korea's nuclear test in
October 2006.
In late November 2005 came further evidence of the steady progress towards
constitutional revision, with a proposed draft revision published by the ruling LDP,
which suggested that the renunciation of war in Clause One, Article Nine should be
kept, but would legalise "efforts to maintain international peace and security under
international co-operation." Prime Minister Abe has vowed to continue the policy of
constitutional revision laid out by the Koizumi administration, which may cause further
friction with China in the future.
Ballistic missile defence
The long-term strategic uncertainties facing China and Japan are also well reflected in
current thinking regarding missile defence, an uncertain and unproved technology that
would only be developed and implemented over the long term. China fears that any
Japanese acquisition of functioning ballistic missile defence (BMD) technology,
specifically defence provided by the US programme, especially a mobile naval platform,
would reduce its leverage over Taiwan and Japan, support Japanese efforts to re-
establish influence over Taiwan, permit Japanese re-militarisation and deepen Japan's
integration into the US regional military structure. However, it may be that these fears
are exaggerated on the part of China in order to deter Japan from investing in BMD.
Japanese policymakers are crucially divided on how to deal with the issue. The defence
establishment probably favours Japanese involvement in BMD to guard against Chinese
and North Korean missile capability. In this scenario, it is feared that a Chinese missile
threat to Japan could become an outright instrument of Chinese policy in the event of a
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rapidly internationalising crisis over Taiwan or North Korea could utilise its ballistic
missiles (a Taepodong-1 medium-range missile was testfired over Japanese waters in
1998) in the event of external aggression or internal collapse. Civilian politicians and
bureaucrats are by contrast thought to fear BMD will limit Japan's foreign policy options
in Asia by rendering it too dependent on US policy and force structures. However, some
may favour strategic ambiguity on the question of Japan acquiring BMD, in order to gain
crucial concessions from China in the security arena. Yet Japanese involvement in the
BMD programme appears to be inevitable; in September 2005 Japanese news agency
Kyodo reported that Tokyo would design the nose cone for the interceptor missiles
within the BMD system. In March 2007, Japan deployed its first Patriot PAC-3 anti-
ballistic missile system, brought forward one year following the North Korean (failed)
test of its Taepodong-2 inter-continental ballistic missile in July 2006. The deployment
clearly demonstrates Japan's desire to pursue an anti-ballistic missile system, and hence
the probability of Tokyo pursuing participation in the BMD programme is high.
Officially, there are no longer any Sino-Kazakh border disputes and China was by 2003
Kazakhstan's second largest trading partner. Major Chinese investments in Kazakhstan
include the involvement of state oil company China National Petroleum Corporation
(CNPC), the largest oil company in China, in the northwestern Aktyubinsk region and the
Kenkiyak-Atyrau pipeline. China, through CNPC, has also taken steps to acquire a stake
in Kazakhstan's oil production. CNPC successfully bid USD4.18 billion for Canadian-
registered PetroKazakhstan in August 2005. In response to initial fears that the Kazakh
government would block the sale (special legislation was passed for this purpose), the
Chinese company undertook to sell a 33 per cent stake in PetroKazakhstan to Kazakh
state oil company KazMunaiGaz. CNPC subsequently purchased a 65 per cent stake in
Kazakhstan's North Buzachi oil field, located in Mangistau province in the west, from
ChevronTexaco to become the field's sole owner, having already purchased a Saudi
Arabian firm's 35 per cent stake.
A possible source of tension in the future may be access to water. Kazakhstan depends
on two rivers, the Ili and Irtysh, for a portion of its water needs. These rivers, which
originate in the western Xinjiang Uighur Autonomous Region of China, are becoming
increasingly depleted as they supply growing infrastructure and industry in Xinjiang.
Kazakh concerns have also been increased by a Chinese project to build a 300 km canal
diverting water from the Irtysh river. It is feared that this canal, set to become
operational around 2020, will dramatically reduce the amount of water that will reach
Kazakhstan. For the meantime, however, Kazakhstan remains eager to maintain Chinese
investment in the country and is unlikely to provoke Beijing.
Chinese influence in Kazakhstan naturally trails after that of the Russian Federation.
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Nevertheless, China pays close attention to Kazakh affairs. The country was the third
foreign destination of Hu Jintao following his installation as state president in March
2003, after France and Russia. Besides interest in Kazakhstan's energy resources, China
is keen to ensure that the Kazakh government does not allow Uighur groups in
Kazakhstan to establish training camps and support bases for the ethnic Uighurs in the
western Xinjiang province (which abuts Kazakhstan), who wish to secede from China. In
September 2003, a senior Kazakh security official noted that 170 "new reconnaissance
radioelectronic subdivisions, transmitters with a big range of operation which make it
possible to intercept information from satellites and relay channels" were being
installed on the Sino-Kazakh border, "with a range of operation up to 6,000 km". In
November 2006, Astana formally prohibited the East Turkistan Liberation Organisation
(ETLO), already officially labelled a terrorist organisation by China, in a further
demonstration of Kazakhstan's policy of placating Chinese concern over the issue.
Since then, plans have been made for the expansion of oil pipeline capabilities between
China and Kazakhstan, with the final pipeline to carry 20 million tons of oil over 3,000
km per annum. Construction of this pipeline began in September 2004, with the first
stage completed in December 2005 and crude oil flowing for the first time in 2006. The
USD700 million pipeline, operated by a joint venture between KazMunaiGaz and CNPC,
should carry eight million tonnes of Kazakh oil in 2007. The development of oil import
pipelines is aimed at reducing Chinese dependence on the approximately 80 per cent of
its total oil imports which are shipped via the Strait of Malacca from primarily the
Middle East. China has also discussed plans to build a petrochemical refinery in Xinjiang
province to process Kazakh oil, and to reopen negotiations to build a costly natural gas
pipeline alongside the oil line, possibly to be completed by 2010.
As Kyrgyzstan is the weakest of the former Soviet Central Asian republics, there is little
concern in Beijing about mutual relations. However, China is concerned by the US
presence in Kyrgyzstan. With the expulsion of US forces from their K2 base in
Uzbekistan in December 2005, the US has made strong efforts to cultivate bilateral
relations with Kyrgyzstan, and, during US Secretary of State Rice's visit to the country in
mid-2005, Kyrgyz President Bakiyev confirmed that Kyrgyzstan would for the moment
allow the US to maintain its base at Manas. In May 2006 Bakiyev threatened to expel
the US from Manas, but in July of the same year, with the promise of an eightfold
increase in the annual rent of the base to USD20 million, he relented and allowed a
continued US presence. The US' presence as regional patron potentially threatens
Chinese leverage over Kyrgyzstan, which China's growing economic influence in Central
Asia would otherwise promote unabated. Beijing is likely to see generous US contracts
for jet fuel and the use of the Manas airbase near Bishkek in this light. On the other
hand, in 2004 Kyrgyzstan joined New Zealand, Singapore and Malaysia (and was
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followed by Thailand) in choosing to recognise China as a full market economy. This

seems to confirm signs of growing economic co-operation between the two countries,
with annual trade turnover estimated at USD200 million.
In 2002 the government's transfer of 95,000 hectares of Kyrgyz land to China (almost
0.5 per cent of Kyrgyz territory) created civil unrest and may have heightened anti-
Chinese sentiment among the Kyrgryz population, but is unlikely to concern Beijing.
Rather, China will be more concerned that Kyrgyzstan remains loyal to its policy of
suppressing any potential Uighur separatism in Xinjiang. As such, the arrest of a
convicted Chinese national in southern Kyrgyzstan on suspicion of furthering separatist
activity in February 2007 will encourage Beijing.
Relations with Mongolia
In the wake of Mongolia's newly found independence from the communist bloc,
relations between Beijing and Ulaanbaatar have remained friendly, but wary. A formal
treaty of friendship and co-operation was signed in 1994, and Mongolia has expressed
interest in joining the Shanghai Co-operation Organisation, with which it has observer
status. Although several issues maintain tension between the two countries, the
asymmetry of Mongolian and Chinese economic and military power effectively deters
any conflict. Chinese trade and economic ties with Mongolia have grown rapidly in
recent years, and China's influence has increased accordingly.
Chinese concerns over Mongolia are multiple but minor. The close language and
religious ties between Mongolia and Tibet is viewed in Beijing with some alarm,
especially as the Dalai Lama visited Mongolia on several occasions during the 1990s and
again in late 2002. Further, China has accused unspecified foreign countries of inciting
trouble in Inner Mongolia and this has often been thought to have been a tacit threat to
Mongolia not to become involved in local rebellions and unrest in China. Several ethnic
groups in China share close bonds with those in Mongolia.
Mongolia, in turn, has in the past protested against Chinese nuclear tests in Inner
Mongolia and the Gobi Desert region. Further, concerns over Chinese dominance of the
Mongolian economy have created mistrust from Ulaanbaatar. Despite political mistrust
of Chinese intentions, China's de facto influence in Mongolia has been on the rise.
Chinese trade and investment in Mongolia has risen to a level such that Beijing now has
the potential to wield significant economic influence in Mongolia.
Relations with Myanmar
China has developed a long-term relationship with Myanmar in order to improve its
economic and military access to the Indian Ocean and the Strait of Malacca and further
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encircle India with its allies. China has access to the Coco and Victoria Point naval
installations on Myannmar territory in the Andaman Sea, as well as to Ramree on the
Bay of Bengal coast. The Chinese intelligence gathering station at Coco was first spotted
in November 1992. Indeed, since the collapse of the Chinese-backed Communist Party
of Burma (CPB) in 1989, the Sino-Myanmar military relationship has thrived.
Combat aircraft, including F-7 and A-5M jets, were among the first arms to be delivered
by China - the first batch of 12 in May 1991, a second squadron in May 1993 and the
third in September 1994 - as defence links grew in the early 1990s amid Myanmar's
international isolation. Myanmar is thought to have acquired USD1.2 billion worth of
equipment between 1990 and 1994 and the total has by some accounts grown to more
than USD2 billion since, with an emphasis on helicopters, assault rifles, patrol boats and
armoured vehicles.
However, Chinese economic influence in the north is growing and could be a future
source of resentment or friction in domestic Myanmar politics. Bilateral trade exceeded
USD1 billion in 2003, primarily Chinese exports, and, in March 2004, a package of co-
operation agreements was signed between China and Myanmar. Chinese investment in
Myanmar companies is also growing - in June 2005, an agreement was signed with a
Chinese company to invest in a hydropower project north of Yangon. Nonetheless,
Myanmar is anxious not to be completely dependent on China, with which it had an
ambivalent relationship before 1989.
Other potential partners for Myanmar include India, with which some elements of the
Myanmar army leadership have cultivated links since New Delhi reversed its strategy of
supporting the opposition leader Aung San Suu Kyi. The visit by Senior General Than
Shwe, the highest ranking official in the ruling State Peace and Development Council
(SPDC), in October 2004 following the removal of the moderate, pro-China prime
minister General Khin Nyunt, was a clear sign of a shift in Naypyidaw's diplomacy
towards New Delhi. In 2006, New Delhi sold Myanmar two British-made BN-2 Islander
maritime surveillance aircraft. This was followed by the sale of an unspecified number
of T-55 tanks and 105mm light artillery guns. In addition, during a visit to Myanmar in
November 2006, Indian Chief of Air Staff Air Chief Marshal S P Tyagi offered a
multimillion dollar military hardware to Naypyidaw. The package includes helicopters,
technical upgrades of Myanmar's Russian and Chinese-made fighter planes, naval
surveillance aircraft and radar, and Indian-made advanced light helicopters.
Russia has also been a rival source of defence hardware, with the sale of 10 MiG-29
aircraft to Myanmar in 2001 eclipsing earlier Chinese sales of the K-8 trainer and light
ground-attack aircraft in the late 1990s. Although Beijing is not duly concerned about
growing Russian influence, a shift in Myanmar relations towards India is potentially
damaging to Chinese efforts to encircle its rival, and could harm China's regional
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security strategy if access to the Andaman Sea was restricted as a result. Beijing is
therefore likely to be eager to prevent any further improvement in India-Myanmar
relations.
Myanmar is playing a growing role in China's efforts to fulfil its need for oil. Onshore
and offshore reserves are estimated at a total of 3.2 billion barrels of oil and 2.46 trillion
cubic metres of gas, and Chinese oil companies have shown a strong interest in
investing in oil projects in Myanmar. In September 2004, for example, Sinopec signed an
agreement with a state-run oil company in Myanmar for oil exploration. However, even
in this arena rivalry with India is growing. In early April 2005, a consortium of foreign
companies including ONGC Videsh Ltd of India and Gas Authority of India Ltd (GAIL)
discovered a new natural gas field off Myanmar's western Rakhine coast, with an
estimated 141.5 billion cubic metres of gas. Discussions are being held between both
China and Myanmar and China and India regarding the prospect of building pipelines,
the former linking the port of Akyab to China's Yunnan province, to carry Middle Eastern
and African oil, and the latter to carry gas from offshore Myanmar sites through
Bangladesh and India's restive northeast states. However, the signing of a
Memorandum of Understanding with Beijing in December 2006 for the construction of
Sittwe-Yunnan pipeline suggests not only that China will be favoured for delivery of
natural resources, but also that Myanmar remains a firmer ally of Beijing than New
Delhi despite recent policy shifts.
The long-running ethnic insurgencies, narcotics production and lawlessness in

Myanmar's ethnic border regions has been a factor in bilateral relations with China,
although in the short term the strategic necessities of maintaining good relations with
Naypyidaw in the face of increased Indian competition will prevent the issue from
disrupting Chinese engagement.
Relations with Nepal
China's relations with Nepal were altered in the short term at least by the self-coup
launched by Nepal's King Gyanendra in February 2005. The alienation of Nepal's
traditional ally, India, following the assumption of power by the monarch allowed China
to develop its relations with the Himalayan kingdom. In particular, India's decision to
withhold lethal military supplies from Nepal in the wake of the self-coup forced Nepal to
begin searching elsewhere for its much-needed equipment. Beijing subsequently
granted USD1.1 million in military aid to Kathmandu in October 2005, with deliveries of
assault rifles, explosive grenades and ammunition occurring the following month, a
significant boon to Sino-Nepalese relations. King Gyanendra reciprocated by supporting
China's stance on Tibet, by keeping closed the Dalai Lama's offices in Kathmandu, and
denying travel documents to Tibetan refugees. .
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However, King Gyanendra's resignation in April 2006 has left China's relationship with
Nepal ambiguous. Although China granted the new Koirala administration an exemption
on tariffs on many Nepalese imports in June 2006 and the opening of China's Qinghai-
Lhasa rail link will likely improve trade and tourism ties between the two countries,
post-Gyanendra Nepal appears to have returned to its previous pro-India policy.
Historical relations
Despite the 1950 India-Nepal Peace and Friendship Treaty and a dominance of Nepal's
foreign relations by India, Kathmandu's tensions with New Delhi over trade, water
resources and boundary issues, have periodically driven it to draw on the support of
China. In spite of the common ideological ancestry of the CCP and Nepal's own Maoist
rebel movement, China has accordingly been a valued balance factor in Nepal's
relations with India, which are probably the more important - traditionally a new prime
minister of Nepal visits China soon after a first diplomatic visit to India.
China has historically put pressure on the Nepalese government to ensure that Tibetan
groups living there in exile will not develop a strong base for insurgency against the
Chinese authorities. Nepal has responded to Chinese requests with the government's
closure in 2005 of two organisations, the office of the Dalai Lama's representative in
Nepal and the Tibetan Refugee Welfare Office, demonstrating Kathmandu's willingness
to listen to Beijing. Aid for Nepal's infrastructure during the 1990s (such as on the main
Pokhara-Baglung highway) has been a further occasional incentive. Between 2001 and
2006, the surge in Maoist violence that caused a state of emergency to be declared in
Nepal has elicited high-level support for the government from Beijing. China has
distanced itself from Nepal's Maoist rebels (the Communist Party of Nepal-Maoist):
although the rebels have access to Chinese small arms, these are not supplied by China,
but are obtained through links with other extremist groups in South Asia.
Long-term prospects
China is likely to continue to see Nepal as a relatively trusted buffer state with which it
has a secure land border. For its part, Nepal has expressed a desire to become a transit
route between China and India, and between China and South Asia. A feasibility study is
currently under way to determine whether the Syfrubesi-Rasuwgadi project, which
would form the second major road link between the countries, is possible. The
completion in October 2005 of a direct rail link between Qinghai and Lhasa is also aimed
at enhancing the trade relationship between the two countries, with a possibility of an
extension of the vertiginous railway to Nepal's border currently under discussion.
Relations with North Korea
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China and North Korea signed a mutual security pact agreed in 1961 which stated that
"...should either of the treaty powers come under an armed attack and go to war, the
other treaty power with all its force without delay will extend assistance in not only the
military area but also other areas." China maintains that it is "a consistent position" of
the Chinese government and CCP to consolidate and develop the friendship between
the two countries. Both countries frequently exchange delegations, particularly groups
from the respective ministries of foreign affairs and armed forces. Indeed, Beijing
officially describes its relationship with Pyongyang as "sealed in blood".
However, warm top-level diplomacy aside, relations between the two are more
ambivalent. Recently, China's alliance with North Korea has largely proved to be an
embarrassment, particularly given the country's 9 October 2006 nuclear test. Although
this has afforded Beijing the possibility of demonstrating its regional diplomatic skills, it
has also reflected China's limited influence over Pyongyang. China has also been for its
repatriation of North Korean refugees, while North Korea's often antagonistic relations
with Japan, South Korea and the US have proved embarrassing for China. Over the
longer term, the possibility of regime failure in North Korea could create more serious
security concerns for China.
An expensive ally
Bouts of mass starvation following the simultaneous food and energy crises of the mid-
1990s led to North Korea becoming a burden requiring unconditional support at times.
Although the risk of a collapse of the North Korean state has receded since the late
1990s, this would threaten a humanitarian crisis in northeast China and present a
dangerously fluid security situation on the Korean peninsula. Furthermore, North Korea
has a range of policies which are decidedly unpopular in Beijing. These include failing to
return rolling stock used to deliver Chinese food aid; basing of underground missile
storage sites by the northern border with China; and development and storage of
chemical and biological weapons, again in the northern border region (around the cities
of Chongjin, Manpo and Sinuiju).
North Korea's nuclear programme, and its inconsistent responses to international

efforts at negotiation have proved both embarrassing and potentially dangerous for
China. Although China was integral in persuading Pyongyang to return to six-party talks
in December 2006 after a 14-month hiatus, which eventually led to a vague agreement
on 13 February 2007, Beijing has previously lost 'face' from its inability or unwillingness
to apply the necessary pressure. Should the February 2007 agreement collapse amid
mutual failure to accede to fulfil obligations, China will once again have been shown to
be incapable of restraining North Korea. Moreover, the presence of a nuclear power on
China's border, especially given the possibility of regime failure in North Korea, could
prove regionally destabilising. China is left in the uncomfortable position of having to
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balance international pressure against North Korea's nuclear ambitions with the need to
avoid regime failure in its neighbour.
The refugee problem
North Korea also presents China with a serious refugee problem, indicating the risks of
an overspill of problems from North Korea even when the latter has seen a return to
relative political stability and nutritional security. Hundreds of thousands of North
Korean illegal immigrants, whether from hunger, political persecution or rational
opportunism, are thought to have crossed into China, preferring a marginal, clandestine
existence in China over life in North Korea. They are beginning to cause a nation-wide
search-and-detection challenge as they seek to travel overland through China to third
countries such as Cambodia, where they can seek asylum unimpeded by the Chinese
authorities.
The situation is placing Beijing in an awkward position, as it is forced to arrest and

deport refugees in successive crackdowns, often in close co-operation with the North
Korean security services, while treating high-profile cases where the international
media become involved differently. North Korean refugees who have stormed foreign
embassy compounds demanding asylum are often allowed to proceed to South Korea
via third countries such as the Philippines or Thailand in order to protect China's own
fragile human rights reputation.
Six-party talks
Despite these difficulties, North Korea's diplomatic isolation have afforded China the
opportunity to act as international broker for discussions with the hermitic state. In
particular, the six-party negotiations, brokered by Beijing, have allowed China to
become a regional power in discussions in Northeast Asia. All six round of talks have
been held in Beijing, with the most recent in February 2007 leading to a joint statement
in which Pyongyang pledged to suspend activities at its Yongbyon nuclear facilities
within 60 days (a deadline North Korea missed). Whether this deal will prove successful
is yet to be seen, with the failure of the 1994 Agreed Framework and the 2005 joint
declaration ensuring that the current process is undermined by pessimism.
Nonetheless, these talks raised two main points of interest: first, they underline how
severe a regional problem a starving, nuclear North Korea is given that even traditional
rivals like China and Japan find a shared interest. Second, they highlight the
predicament that China's allegiance to North Korea has brought to Beijing. On the one
hand, China wishes to prevent any form of state collapse or significant instability in
North Korea, while on the other Beijing wishes to participate in multilateral diplomacy
with states such as the US and Japan, which favour a much stronger policy against
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Pyongyang. The result has been a balanced policy with China unable to prevent UN
Security Council resolutions against North Korea in July and October 2006, but able to
mitigate the force of the resolutions with the threat of a veto. At the same time, while
continuing to support North Korea through food and fuel aid, China utilises this political
lever infrequently to attempt (albeit often unsuccessfully) to restrain North Korean
belligerence.
Relations with Pakistan
China enjoys an extremely close relationship with Pakistan, which Beijing has used to
underpin its safeguarding of its hold on Tibet and Xinjiang, as well as containing Indian
ambitions in general through its strategic encirclement. Pakistan meanwhile has
benefited from substantial Chinese economic and military aid, as well as Chinese
support for its observer status within the SCO, with Islamabad aiming to utilise Beijing's
backing to gain full member status in 2007.
The mutually beneficial relationship was launched in earnest in 1963, one year after
China's conflict with India in the northeast, when Pakistan and China settled their
border and agreed for the defence of contiguous areas under the actual control of
Pakistan. Although not reaching an explicit commitment to mutual security such as that
between China and North Korea, the relationship subsequently gained strength from
concurrent Sino-Indian and Indo-Pakistani tensions and been a defining feature of
Chinese foreign policy. The Indo-Pakistan rapprochement since April 2003 and
improving Sino-Indian ties have complicated China's relations in the region, but it is
likely that China will retain its strong ties with Pakistan.
However, China's trust in Pakistan naturally has some limits. Previous support for
Islamist groups in Afghanistan and Kashmir by Pakistan's Directorate of Inter-Services
Intelligence concerned Beijing, which believes the 'East Turkistan' separatism in Xinjiang
could internationalise. Although this appears a distant and unlikely threat, Pakistan is
clearly a potential conduit for such dangers after the US campaign in Afghanistan which
uprooted large numbers of jihadis. As such, China closed the Khunjerab customs point
on the Sino-Pakistan border between October 2001 and April 2002 for fear of
infiltration.
Military assistance
According to the US government, China has not only been involved in the transfer of
conventional weapons and technology, including joint aircraft manufacturing
programmes, but has also allowed Pakistan to acquire tactical ballistic missiles. It is also
widely believed that China has provided Pakistan with access to nuclear test results,
designs of warheads and other technology.
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In the late 1980s Beijing and Islamabad signed several contracts for the provision of M-
11 tactical ballistic missiles and further components were transferred between March
1992 and August 1993, despite China's agreement to abide by the Missile Technology
Control Regime. Further missile transfers were undertaken, according to US Defence
Intelligence Agency reports, in early 1995. Beijing has denied transferring complete
medium-range ballistic missiles as the reports suggest.
However, China is thought to have provided assistance to various Pakistani ballistic

missile programmes such as the short-range Hatf-2 and Hatf-3 (with similarities to the
Chinese DF-15/M-9), possibly the Shaheen-1 (similar to the Chinese DF-11/M-11) as well
as the medium-range Shaheen-2. Assistance may have extended to missile guidance
(including gyroscopes, accelerometers and on-board computer technology), while the
national defence complex in Fatehgarh 40 km west of Islamabad is thought to host a
missile production factory with Chinese components.
China has moreover provided Pakistan's navy with ship-borne cruise missiles and
surface-to-surface missiles and its air force with F-6 and F-7 fighter aircraft. Further
acquisitions are likely to include the lower-cost joint production JF-17 "Thunder" fighter
aircraft, the first two of which were deployed to Pakistan's air force in March 2007.
Pakistan is aiming to build 250 of the aircraft indigenously, the first 15 with Chinese
assistance, by 2015. A defence agreement was also signed on April 2005 for the delivery
of four F22P frigates, based on the Jiangwei II-class Chinese frigate.
Relations with the Russian Federation
Sino-Russian relations have since the collapse of the Soviet Union enjoyed a period of
entente, founded on a similar mistrust of US hegemony, military transfers, and trade in
natural resources. Trade between the two is also an important factor, reaching USD29.1
billion in 2005. Russia is China's eighth largest trading partner, and China is Russia's
fourth largest trading partner. Chinese companies also invest heavily in Russian
projects. Following the Russian Duma's ratifications of a Sino-Russian agreement to
officially end the remaining border disputes between the two powers and a subsequent
agreement to conduct joint surveys of oil and gas reserves in the border region, both in
June 2005, there is a basis for co-operation between the neighbours.
This alliance is likely to remain firm in the medium term, given China's need for oil and
gas suppliers and its current reliance on Russian arms sales for military modernisation.
However, the longer term remains more uncertain. Russian concerns such as Chinese
immigration in its far east and trade imbalances may have to be addressed. In
particular, the structure of trade is becoming disadvantageous for Russia: Russian
exports of manufactured goods and technology dropped by almost 50 per cent in 2005.
Russia now mainly exports fuel, energy and raw materials to China, and imports
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manufactured goods. Although it is certainly profitable for Russian industry to sell arms
and fuel to China, it is not clear whether or not Russia is willing to create as a neighbour
not merely an economic rival but a military one as well.
Historical animosity
The current Sino-Russian relationship stands in sharp contrast to Russian territorial

gains made in the 18th and 19th century, which saw some 2.9 million km2 ceded to
Tsarist Russia, and the often hostile association during the Cold War. Despite relying on
the Soviet Union immediately after the creation of communist China, Chairman Mao
soon proclaimed the USSR as having abandoned its ideology of global revolution,
leading to a Sino-Soviet split, and as China gained independence through its own
nuclear arsenal, eventually several border clashes in 1969.
Since then, a Sino-Russian agreement signed in 1991 demarcated 98 per cent of the
border between the two states. In October 2004, Presidents Putin and Hu agreed to the
demarcation of the final sections of the border, which was subsequently ratified in June
2005. Although it is likely to take several years to decide where precisely the length of
the border as yet unresolved is to lie, this contrasts with the period after the Sino-Soviet
split when hundreds of thousands of Chinese were relocated nationwide, by the Maoist
state, in order to guarantee a residual industrial base in the event of a Soviet nuclear
strike.
Arms transfers
China and its formerly hostile neighbour have undergone a series of important treaty
and memoranda exchanges since the creation of the Russian Federation in 1991.
Important events during the 1990s included the signing of the first treaties or
memoranda on trade and border co-operation, in January 1994; and arms transfers,
especially the sale of Russian high technology combat equipment to China including Su-
27 long-range interceptor jet aircraft, in-flight refuelling tankers and conventional
submarines.
China has since been permitted to produce a number of Russian military equipment
systems under licence, including the Kilo-class submarine, the Su-27 combat aircraft and
the Il-76 transport aircraft. As of early 2007, China remained one of Russia's primary
recipients of military hardware (vying with India). Although the prospect has been
raised of China being able to purchase arms from EU exporters (an embargo placed on
such transfers in 1989 after the Tiananmen Square massacre remains in place, but EU
members such as France are eager to lift the ban), Russia is likely to remain for the
immediate future China's main source for military modernisation, with Beijing currently
importing roughly USD2 billion worth of defence-related equipment and technology
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from Russia annually. The two countries have also underlined their military relationship
by holding their first joint military exercise, Peace Mission 2005, in August 2005, near
Vladivostock and on the Shandong peninsula, with the 2007 return expected to be
China's largest ever military exercise on foreign soil.
Oil and gas
The transfer of oil and gas is also a major factor in current warm Sino-Russian relations.
The Russian gas company, Gazprom, is an investor in the Xinjiang-Shanghai gas pipeline,
and also provided technology for the challenging Tibet-Qinghai railway, using the
lessons gained in Siberia. In May 2003, the prospect of a 2,400 km pipeline to transport
oil from Siberia to China was offered, following Hu Jintao's visit to Moscow to sign a
declaration of co-operation with Russian President Vladimir Putin. Since then, and
despite an offer of USD12 billion by Premier Wen Jiabao in September 2004, Russia's
interests have moved away from a single oil pipeline to China, to building a pipeline to
the Pacific coast to supply the Japanese market. In January 2005, the head of Russian
pipeline company Transneft announced that plans had been made to construct a
pipeline from Siberia's Irkutsk region to the Pacific port of Perevoznaya (and eventually
the port of Nakhodka), with the first section to be completed by 2008, supplying the
Japanese market. Although a side branch could still be built from Skovorodino to the
Chinese border , this would still leave China bidding in competition with Japan for
access to Russian oil supplies.
Nonetheless, China's economic growth and growing energy need promises to provide a
long-term, stable market for Russian oil, gas and power. China has also increasingly
bought electricity directly from Russia, whose far eastern region enjoys an electricity
surplus. In 2004, China bought 300 million kWh of electricity, and this figure is expected
to grow over the next few years. In September 2005, Gazprom announced its
negotiations with China National Petroleum Corporation for a possible gas pipeline
through the northeastern Heilongjiang province, or northwestern Xinjiang Uighur
Autonomour Region. Both pipelines, which would transport between 20 and 30 billion
cubic metres annually, are being assessed for feasibility. In March 2006, Russia also
suggested the construction of two gas pipelines to China from western and eastern
Siberia, which would supply China with some 60-80 bcm of gas by 2011.
Strategic similarities?
This economic and military co-operation has been conducted against a background of
similar strategic aims, most notably the common goal to contain Islamic
fundamentalism and revisionism in the former Soviet Central Asian republics. The pro-
Moscow governments in these states that border China were encouraged to sign
treaties with Beijing and for the most part they have now agreed to recognise each
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other's borders. Russia, through its Collective Security Treaty Organisation (CSTO) and
China, through the Shanghai Co-operation Organisation (SCO) have strengthened their
relationships with the Central Asian republics.
This attempt to form a power bloc in Central Asia reflects a common international
position asserted by both China and Russia since the 1990s, highlighting each country's
eagerness to promote a 'multi-polar' world. US abrogation of the 1972 Anti-Ballistic
Missile (ABM) was criticised at the signing of the July 2001 Sino-Russian Friendship
Treaty as attacking a "cornerstone of strategic stability"; China and Russia made sure
they harmonised their positions and "stood together" during the negotiations over
North Korea at the six-party talks in Beijing in August 2003, as well as subsequent UN
resolutions on North Korea and Iran in 2006 and 2007.
However, Russia and China have struggled to realise their ambition of creating a multi-
polar global security environment, hampered by the potential for either to outflank the
other by cultivating Washington. Indeed, Russia and China monitor each other's
engagements with the US carefully. Russian concessions to the US on missile defence
and NATO eastward expansion, and the constitution of a joint NATO-Russian council on
security matters, highlighted China's weakness in cultivating Russia as a partner. In turn,
Russia's support of France and Germany, attempting to check the unilateralism of the
US position in Iraq in March 2003, advanced China's cause in Washington counsels and
worked to undo Chinese paranoia about Beijing's usefulness to Washington despite
officially taking an anti-war line.
As these events demonstrated, there is always a danger that a third party or

international political event will highlight weaknesses in any Sino-Russian entente.
Given that the relationship is founded on opportunistic energy and weapons sales, the
durability of the alliance is often called into question.
Strategic differences
The inherent fragility to the Sino-Russian entente is highlighted by their diverse

interests, ancient suspicions and the relatively young nature of the alliance in itself.
Minor irritations, such as the extent of poaching by impoverished Chinese in the Russian
far east's maritime territory, or the abuse of tourism visas by Chinese shuttle traders,
hint at broader distrust on the Russian side over a resource-hungry China allowing its
population to spill over into Siberia. An estimated one million Chinese migrants
currently work in the Far East. In response, Moscow implemented new migrant quotas
on 15 January 2007 that limited the number of immigrants into the country and set
strict quotas on the number of non-Russian citizens who can work in Russian markets.
Even in energy sales, where a natural harmony of interests might be thought to arise,
the Russian establishment is torn between China and satisfying another Asian customer
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- Japan.
Relations with South Korea
The prospects for China-South Korean co-operation appear bright. Both share a direct
interest in improving matters in North Korea, with the Sino-South Korean policy of
engagement similar in its difference to the US-Japanese policy of confrontation,
although China's handling of the North Korean refugee problem may well become an
increasing issue between the two countries. Despite this, the enormous bilateral trade
opportunities are cementing Sino-Korean relations.
Formal relations between China and South Korea were initiated in 1992. The result of
this political thaw and new economic and industrial complementarities has been an
accelerating volume of trade, valued at over USD90 billion in 2004, a 42 per cent
increase on the previous year. South Korean interests in Chinese prosperity may also be
driven by the high levels of foreign direct investment into China. In 2004, China became
the largest recipient of South Korean foreign direct investment, at USD3.6 billion. South
Korean corporations can enjoy a large market, a convenient production base (in
logistical and geographic terms) and China's low-cost labour supply, while building on
the heavy-industrial base of China's northeast (originally laid during the period of
Japanese invasion).
The growing relationship is also not marred by perceived historical injusticies, despite
China's influence and control on the Korean peninsula during the imperial period, as
Korean-Japanese or Sino-Japanese interaction have been. South Korea has even joined
China in protesting the visits to the Yasukuni Shrine of Japanese politicians, and anti-
Japanese demonstrations were held in South Korea in April 2005, although these were
less virulent than those in China at the same time.
Beijing claims Taiwan is an integral part of China, and the often tense relationship
between the island and the mainland underline regional security strategies. Two
previous crises across the Taiwan Strait in the 1950s and the mobilisation of large
military resources in 1999 are examples of the propensity to conflict over the issue.
It is the stated policy of China that it reserves the right to use military force in the event
of a move by Taiwan towards independence. Furthermore, if Taiwan were to declare
independence without incurring a military response from Beijing, it is probable that the
CCP, and Hu Jintao in particular, would face a massive backlash of public opinion on the
grounds that it had allowed the 'motherland' to become divided. This is particularly true
given the CCP's move to substitute communist ideology for nationalism as its basis for
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political legitimacy since the late 1970s economic liberalisation.
Since the election of President Chen Shui-bian in 2000, Taiwanese politics have
increasingly addressed issues of Taiwanese identity and sovereignty. This rhetoric came
to a peak with the re-election of Chen in 2004, and following the passing of the March
2005 'anti-secession' law . The legislation formalised the CCP's long-stated position that
it reserves the right to use military force in the event that Taiwan should declare
independence, or abandon any prospect of re-unification. However, its insistence on
the preference for reunification through non-military means demonstrated that is was
more of an 'anti-secession' rather than a 'unification' law. Further, the motivations for
the legislation are not only to deter pro-independence politics in Taiwan, but also to
reassure the domestic population that the CCP would not allow the motherland to be
'split'.
However, deepening economic ties, including the presence of as much as USD280

billion in Taiwanese foreign direct investment (FDI) in mainland China, and the presence
of as many as 400,000 Taiwanese businesspeople and their (mainland and Taiwanese)
families on the mainland, especially in greater Shanghai and the Yangzi delta, moderate
the security situation and ameliorate the risks of armed confrontation. The direct effect
of bilateral tensions on these links was amply demonstrated by the 6.57 per cent fall in
Taiwanese government-approved FDI in China in the first quarter of 2005 amid
disagreements over the 'anti-secession' law. Although the situation remains precarious,
both countries are eager to extend these links, which will hamper the possibility of
conflict. China is therefore likely to attempt to develop a non-military source of
influence over Taiwan, without interrupting the flow of money across the Taiwan Strait.
Military options
Despite the restraining effects of economic links, China retains a number of military
options. Although much Chinese rhetoric on the issue of Taiwan is overtly bellicose to
satisfy and encourage nationalistic sentiment among the mainland population, the scale
of the war games that China carried out in June and July 2004 on Dongshan Island,
Fujian province, suggests the ease with which posturing can escalate into a full-scale
crisis.
China may be looking beyond its existing approach of relying on a threat of short-range
ballistic missile attack or submarine/mine blockade to dissuade Taiwan from declaring
independence. Although China still lacks the ability to carry out a large-scale amphibious
occupation of Taiwan, Taiwan's offshore islands of Kinmen (previously Quemoy) and
Matsu may be within its reach. A large-scale bombardment using ballistic missiles
stationed in China's coastal provinces also remains a real threat.
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In order to expand its military options, China has been building up its naval and air
forces on the Taiwan Strait, encompassing silent-technology Project 636 Kilo-class
Russian submarines, Russian air-to-air missiles, first deliveries of the Russian Su-30
multirole aircraft and (according to US intelligence sources) Israeli-developed anti-radar
drones. However, acquisition of these platforms mostly represents an incomplete drive
to bring PLA forces facing Taiwan up to equality with the Taiwanese military's
capabilities and is in any case increasingly focused on an ability to mount a naval
blockade and credibly threaten shipping, rather than amphibious invasion.
Taiwanese politics under Chen Shui-bian
The election of Chen Shui-bian in 2000 came after a period of increasing belligerence
from China with regards Taiwan in the late 1990s. In 1998, China published its national
defence strategy, which stated that "the Chinese government seeks to achieve the
reunification of the country by peaceful means, but will not commit itself not to resort
to force." In July 1999, then-Taiwanese president Lee Teng-hui claimed that China-
Taiwan relations could take place on a 'state-by-state' basis. In August 1999 sections of
the People's Liberation Army stationed on the coast facing Taiwan were put on the
highest level military alert. As part of a Chinese campaign of intimidation, the People's
Liberation Army Air Force (PLAAF) launched more than 100 sorties across the strait,
keeping Taiwan's air force on a constant state of alert. The Chinese air force flew as
many as 30 sorties a day in the strait, notably by Jian-7 and Jian-8 fighters. These
incidents overlapped with the test of a new Chinese long-range surface-to-surface
missile on Chinese territory.
The victory of Chen Shui-bian, therefore, caused concern on both sides of the strait.
Despite the new president claiming that Taiwan would not declare independence,
Beijing did not relax its rhetoric and accused Chen of insincerity. Chen's politics
continued to incorporate strong themes of Taiwanese identity and sovereignty. Beijing-
Taipei tension increased in November 2003 after Taiwan's parliament approved a bill
which followed proposals from President Chen for a referendum in 2006, with a view to
implementing a new constitution in 2008.
The 2004 re-election of Chen was closely watched in Beijing, amid abundant rhetoric on
the issue of independence. Prior to the vote, Chen had suggested a number of pro-
independence policies, including amendment of Taiwan passports.
This rise in pro-independence pressure was eventually checked by the poor

performance of the pan-green alliance (between Chen's Democratic Progressive Party,
and Lee Teng-hui's Taiwan Solidarity Union). The failure of this campaign, which focused
on issues of Taiwanese identity, to secure a parliamentary majority not only denied
Chen the ability to push forward pro-independence legislation, but also indicated that
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Chen's focus on Taiwanese independence (and a potential Chinese reaction) might

finally have begun to concern the Taiwanese electorate. This did not stop Chen's pro-
independence party winning a narrow majority in Taiwan's National Assembly elections
in May 2005, although the voter turnout was only 23.3 per cent. In June 2005, the
National Assembly ratified constitutional amendments which make it unlikely that Chen
will be able to pass any pro-independence constitutional revision. Not only would any
amendment need a three-quarters majority in the Legislative Yuan (which at present
has an opposition majority), but it would also need to be ratified by popular
referendum. As any pro-independence constitutional amendment would be seen as
highly inflammatory by Beijing, this may serve to calm relations across the strait, and
force Chen to adopt more centrist politics, although Chen's New Year's message on 1
January 2006 once again underlined his desire for a constitutional referendum.
The future of the cross-straits relationship will likely depend in part on the outcome of
Taiwan's presidential election in 2008. Chen himself cannot run for a third term, but the
election of a DPP candidate would likely herald continued tensions between Taiwan and
China. Such an outcome would also indicate strong pro-independence popular
sentiment on the island. However, currently prospects for the DPP are poor: Chen,
implicated in a number of corruption scandals, faced an (unsuccessful) parliamentary
vote to oust him from power in June 2006, while an opposition candidate, Ma Ying-jeou,
is favourite among voters as of April 2007. Ma, the former mayor of Taipei, has publicly
advocated closer ties with the mainland, and is unlikely to advocate the sort of
inflammatory policies that Chen has seemed to favour. Nonetheless, the period prior to
the election will indubitably be fraught, with Chen's March 2007 speech declaring a
Taiwanese desire for independence reflective of the rhetoric to be expected in the
election campaign.
Economic and transport links
There is much pressure on both sides of the strait to normalise business relations,
especially in Taiwan, a fact Beijing exploits. Taiwanese businesses have been keen for
Chen to improve economic ties across the strait and increase tourism. Economic
integration has proceeded to a high level, indicating the degree of complementarity
between Taiwan's economy and the mainland. The situation has become anomalous;
the embargo on direct links has been made a mockery of by the deepening business
environment in 21st century 'Greater China'. It therefore seems a question of how
rather than when this normalisation of trade relations will occur.
"Direct" chartered flights that touched down in Hong Kong before flying back to
Shanghai were only permitted - for the first time by Taiwan - in February 2003, for the
lunar new year. Meanwhile, proposals for domestic airlines to operate "direct"
chartered flights (again flying via foreign airspace such as Okinawa) were put forward in
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September 2003 by Taiwan's Mainland Affairs Council, after negotiations between the
two sides' airlines (advised by transport ministry officials) provided a cover for what
remained an essentially political question. As of April 2007, the 'three links' (direct
trade, transport and postal links between China and Taiwan) have not been established,
although 'mini direct links' in trade and transport between Fujian province and Taiwan's
outlying islands of Kinmen and Matsu, which were established in 2001, are still active.
For the lunar new year holiday of 2005, direct charter flights were for the first time
permitted between China and Taiwan.
US involvement
China-Taiwan relations are complicated by the involvement of the US. Despite

recognising 'one China' in the 1970s, the US remains a guarantor of Taiwanese
soveriegnty. The US is still bound by the terms of the Taiwan Relations Act to treat any
danger to the security of Taiwan as a danger to US interests. President Bush has also on
several occasions explicitly pledged US support in the event of unilateral military action
on the part of China against Taiwan. The proposal entertained by the Bush
administration to extend missile defence systems to allies in the North Asian region -
including Taiwan - has further diminished the credibility of the potential for direct
Chinese military action against Taiwan.
The mainland's perception of US policy with regards Taiwan has been amply expressed.
In its 1998 White Paper, Beijing stated that "the Chinese government opposes any
country selling arms to Taiwan" and "the issue of Taiwan is entirely an internal affair of
China. Directly or indirectly incorporating the Taiwan Strait into the security and Co-
operation sphere of any country or any military alliance is an infringement upon and
interference in China's sovereignty."
The triangular relationship between China, the US and Taiwan continues to create bouts
of strong language and posturing from China. The US Department of Defence's annual
Taiwan Strait balance report in 2004 generated a strong response from China, while
negotiations over prospective arms sales totalling some USD18 billion also prompted
protests from Beijing over interference in its "sovereign affairs".
Relations with the US
Chinese relations with the US are complex, with evident grounds for economic and even
security co-operation, but a background of resentment and mistrust.
On the Chinese side, there is a resentment of the United States' generally accepted
status as superpower, compounded by a keen awareness of the historical domination of
China by overseas powers in the last three centuries of the last millennium and a
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mistrust of what is perceived as a US tendency to dictate the internal affairs of

sovereign states over issues like human rights and democratisation. Beijing is
particularly wary of any US interest in Xinjiang and Tibet (where there exists pro-
separatist sentiment) and Taiwan.
The US, for its part, remains concerned that China's potential as a regional, and
eventually global, power will economically and militarily rival the US. Perhaps the
earliest and most ostensible demonstration of this potential has been China's growing
sphere of influence in Latin America, which has resulted in a reduction in US influence in
the region, thereby encouraging unease in Washington. Moreover, the US is concerned
that the one-party state of China could threaten the democratic entity of Taiwan, and
the Bush administration has proven more willing than the Clinton administration to
keep US commitments to Taiwanese security under the terms of the Taiwan Relations
Act. Washington is also aware that China maintains an ideologically neutral diplomacy
and has thus established strong trade ties (especially energy imports) with a number of
states including Iran and some African countries, on which the Bush administration has
begun to place significant diplomatic pressure. China's economic growth, while clearly
beneficial for the US economy, has also caused concern owing to the growing trade
imbalance between the two countries, which has led to complaints against unfair
pricing, currency manipulation and allegations that China has not fully opened its
markets to foreign companies as required under the terms of its entry into the WTO.
Nonetheless, China and the US also share common interests. In the six-party talks over
North Korea, Sino-US interests clearly coincide, and China has played a pivotal role
alongside the US in the negotiations. Similarly, China has an interest in the US' focus on
counter-terrorism policies since 11 September 2001, as it has legitimised Beijing's
suppression of Uighur and Tibetan separatism in the country's western provinces.
Overall, therefore, the outlook for Sino-US relations remains mixed. Shared interests,
particularly in global economic prosperity, are balanced against mutual suspicion,
China's growing trade surplus with the US, and China's close ties with what the Bush
administration considers to be 'states of concern'. In addition to these longer-term
factors, there are ongoing issues that could become a point of confrontation, like
relations between Taiwan and China. Nonetheless, economic interdependence alone
suggests that it would be for the moment in the interests of both sides for any conflict
to remain at the diplomatic level.
Historical relations under Bush: before 11 September 2001
The arrival of a Republican administration closed a whole era in US-Chinese relations.

Allegations of Chinese nuclear espionage, or Democratic Party campaign fund
manipulation, were in retrospect historic pieces rather than living politics, redolent of
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the Clinton period of the mid-1990s. As the foreign policy of President George W. Bush
began to take shape via the return of Reagan-era figures to his team, the nadir of the
Clinton-era US-China relationship (the bombing of the Chinese embassy in Belgrade in
1999) threatened to compare unfavourably with the new strategic uncertainties China
faced in the US.
Indeed, President Bush almost immediately replaced Clinton's view of China as a

"strategic partner" with one of a "strategic competitor". Although he also maintained
the traditional "one-China" policy, he continued to denounce Chinese human rights
violations by sponsoring a UN resolution condemning these abuses, and oversaw a
House of Representatives bill opposing the Chinese bid for the 2008 Olympics.
The first major complication in diplomatic relations occurred on 1 April 2001 when a US
EP-3 surveillance plane on a routine reconnaissance mission collided with a Chinese J-8
fighter jet with the loss of a pilot. The 24-member US crew were forced to land the
badly damaged aircraft on the Chinese island of Hainan.
The US subsequently requested the return of the crew, but the Chinese government
insisted that they had a right to detain them in order to perform a full investigation.
Chinese officials also claimed that the EP-3 was not over international waters but
Chinese maritime territory and placed full blame for the loss of their pilot on the US.
Although China demanded that the US apologise, both President Bush and Secretary of
State Powell avoided accepting responsibility for the collision and instead expressed
regret over the pilot's death. They refused to make a formal apology for an incident
they claim was the fault of China's pilot.
The rhetorical exchange between the two veered between overt bellicosity and subtle
persuasion, but the fact that the two sides found a diplomatic solution reflected the
importance both countries place upon the maintenance of cordial relations. The
impasse was not quite resolved when Bush sent a letter to the wife of the Chinese pilot
expressing sorrow at his loss, although this fell short of an overt apology. It was left to
other members of the Bush team to express regret via translators in the Chinese term
'bàoqiàn', one step short of the term 'dàoqiàn' (a formal apology).
Bush faced another tough decision in April 2001 regarding whether to sell a large
request for military equipment to Taiwan, including an upgraded Patriot anti-missile
system and warships with the Aegis battle-management radar system. Ultimately it was
decided that sale of Aegis systems would not be worthwhile, given the damage that
would be done to US-China relations and the fact that it was unclear how Taiwan would
pay for such expensive hardware and whether it could incorporate such sophisticated
systems into its armed forces. Four Kidd-class destroyers originally built for the Shah of
Iran were ultimately allocated to Taiwan, as well as several diesel-powered submarines,
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although it remained unclear where these were to be built, production in the US having
ceased.
Historical relations under Bush: the 'war on terror'
In October 2001 China and the US agreed to set up an anti-terrorism co-operative

mechanism following high-level negotiations. Jiang Zemin stressed that China
consistently opposed all forms of international terrorism and supported the crackdown
on terrorist activities while stressing the importance of avoiding civilian casualties. Jiang
also emphasised the importance of the UN Security Council in the fight against
terrorism. The window for a world-historical alliance of the US with China, alongside
Russia and India, against terrorist threats appeared open, with some surmising an end
to these traditional political rivalries as the era of the 'non-state' threat loomed.
Respected voices in Chinese foreign policy circles surmised a new multipolar era as the
US was forced to depend heavily on new allies for human intelligence and diplomatic
support.
However, this did not materialise. China expected US recognition of its problem of
'terrorism' (namely separatism) in Xinjiang as a parallel threat to be granted equal
weight. By December 2001, with the US campaign in Afghanistan at the end of a
successful first phase (and China's policy of expanding its influence in Central Asia in
tatters), it was becoming clear that no such quid pro quo would be immediately
forthcoming from Washington. Indeed, a senior US counter-terrorism special envoy
went so far as to refer to the "legitimate economic and social issues that confront
people in northwestern China", which were "not necessarily counter-terrorist issues".
By the beginning of 2002, the episode seemed to have developed into a decisive reverse
for China. Although one potential danger regarding the situation in Xinjiang, in the form
of the Taliban, had been lessened, the entire ethnic Pashtun area of Afghanistan and
Northwest Frontier Province of Pakistan had become a refuge for militant Islamists that
might be directed against Chinese interests in the future. Indeed, China had been
building unofficial links with the Taliban in the summer of 2001, via channels such as
construction contracts, before events in Central Asia moved sharply beyond its control.
Now, with Pakistan-US relations firming, China was potentially prey to the vagaries of
US policy on its western flank - a prospect that few forecasters of international politics
in Beijing had ever expected.
As the balance of power in Central Asia and on China's west experienced flux after
September 2001, China was granted Permanent Normal Trade Relations by Congress
and acceded to the World Trade Organisation in December 2001. China had negotiated
with the US the right to subsidise farmers to the value of 8.5 per cent of agricultural
output value - a key provision to guard against future social instability in China's rural
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hinterland (and demographic heartland). WTO membership had been sought by the
Chinese leadership as the only way to lock China into a path of pro-growth structural
reform and guarantee long-term prosperity and stability. While the 'low politics' of
WTO-mediated trade diplomacy and investment liberalisation appeared insulated from
the 'high politics' of the new 'great game' in Central Asia, the contrast was illustrative of
the uncertainties facing Beijing in its relations with Washington. While economic
relations expanded, political wariness couched the relationship. In particular, Beijing is
wary of a persistent US presence in Central Asia, however limited at present, which
could impact upon China's strategy of seeking channels into the region to guarantee its
future energy security.
China has adopted a pragmatic approach to such new realities. Following meetings with
General Taylor in December 2001, Chinese officials extended permission for the
establishment of a US Federal Bureau of Investigation legal attaché position in Beijing.
While there was Chinese scepticism regarding US plans for Iraq in late 2002, this was
markedly less vocal than that of either Russia or France. In turn, this approach won it
minor concessions from Washington. In an apparent volte face by the Bush
administration, US Deputy Secretary of State Richard Armitage announced in August
2002 that the East Turkistan Islamic Movement (ETIM), an ethnic Uighur separatist
group from Xinjiang, would be included on the US list of terrorist organisations. The
Chinese government welcomed the move, a long-standing goal in Beijing's campaign to
delegitimise ethnic separatism in the autonomous region.
The Iraq campaign: 2003
With a new leadership in place in Beijing in March 2003 and the US forcing regime
change in Iraq in April 2003, Sino-US relations remained stable. During the initial phase
of the US campaign in Iraq in April-June 2003, China made sure that its official media
coverage of the war was muted. There was no mass mobilisation of popular opinion
against the US, nor any threat of veto use, in contrast to the positions taken by UN
Security Council members France and Russia, with support from council chair Germany.
In the months that followed as China watched the spectacle of the US attempting to
reconstitute state authority and welfare provision for Iraqis in 2003, officials drew
attention to China's readiness to aid the United Nations (rather than the US) in pacifying
and rebuilding Iraq, but in general did not focus pointedly on the controversy brewed by
the war.
Chinese diplomacy vis-à-vis North Korea also proved useful to the US in a situation
where brinkmanship could cause embarrassment for Washington, given its existing
difficulties in Iraq. Other gestures, such as a commitment of USD150 million towards the
embattled Afghan government of Hamed Karzai, were also appreciated, as was the
unofficial stationing of American customs personnel to Chinese ports as an extension of
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the Container Security Initiative (CSI). By September 2003, Beijing was reported to be so
emboldened as to hope that US sales to Taiwan could be suspended or controlled in
exchange for further help in managing the North Korean problem. This compared to a
less attractive offer of reducing the number of short-range missiles opposite Taiwan (in
exchange for reduced arms sales) extended by then-president Jiang Zemin in Crawford
in October 2002. Whether or not such a quid pro quo could be extracted, military-to-
military links resumed in 2003 after their freezing in early 2001.
Economic and trade relations
At a rhetorical level, US pressure on China continued. As the debate over China's

renminbi currency began to take hold on Capitol Hill, a resolution imposing higher tariffs
on China if it did not take a more flexible approach appeared in Congress. The annual
Pentagon report on China's military power again pointed to dangers. Other lobbies such
as the National Association of Manufacturers pointed to China's "unfair" capacity to
flood the US market. The anticipated rise in Chinese exports to the US, especially after
China's full WTO entry in 2006, led to the use of strong rhetoric over the outsourcing of
'American' jobs.
Washington has protested that the yuan's formerly fixed exchange rate with the dollar
gave China an unfair price advantage, that China has not properly opened its markets to
foreign trade, that China abets the infringement of copyright, and that the dramatic
increase in Chinese textile imports during the first half of 2005 constituted dumping.
The floating of the yuan against a basket of currencies in July 2005 was welcomed by
the US, but seen as too minor to greatly affect the trade relationship. China's trade
surplus with the US has also become a crucial issue in US relations, especially with policy
makers on Capitol Hill. The US trade deficit has risen from USD30 billion in 1994 to
USD162 billion in 2004. The US also responded with concern in June 2005 at two highly
publicised bids by Chinese companies to buy US companies: the Chinese Lenovo Group
offered USD1.28 billion for the US manufacturer Maytag, and the China National
Offshore Oil Company offered USD18.5 billion for the US oil company Unocal.
These issues are unlikely to result in an outright break between the two countries, but
they have played a major part in the background of dialogue since the late 1990s.
Structurally speaking, the US trade deficit indicates that the US economy's production is
far smaller than spending, and that therefore foreign financing supports US
expenditure. In fact, China's purchase of vast amounts of US dollars in order to support
the yuan peg, and the investment of this dollar reserve in US securities, is financing US
expenditure. In this case, US calls on China to revalue the yuan may prove harmful both
to the US economy, and to the health of the dollar in the long run. In the shorter term,
US efforts to curtail Chinese imports by imposing textile quotas have damaged relations.
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US security commitment: Taiwan
While the Bush administration's stated commitment to Taiwanese security and the
cross-strait balance of power remains in line with the terms of the Taiwan Relations Act
of 1979, the situation may look rather different from the Chinese side. The arms
transfers which have already been approved by the Bush administration must look from
the Chinese side like an unpleasant shock to the cross-strait balance of power which had
been moving steadily in their favour. Similarly, although it showed noticeable
discomfort at the rise in pro-independence rhetoric from Chen Shui-bian in the run up
to the Legislative Yuan elections of 2004, the Bush administration was quick to censure
China's 'anti-secession' law, which was passed in March 2005.
More threatening, from a Chinese point of view, is the Bush administration's present
plans to extend a missile defence shield, involving Aegis destroyers and PAC-3 (Patriot)
missiles, to its allies in Northeast Asia, including Taiwan and Japan (Tokyo deployed its
first two batteries of PAC-3s in March 2007, a year ahead of schedule, encouraged by
North Korea's nuclear and missile tests in 2006). From a Chinese perspective, such a
move, ostensibly aimed at dealing with a nuclear and autonomous North Korea, would
look like a return to a Cold War approach to the region.
Long-term prospects
Throughout recent periods, from the 1990s up until the 'spy-plane' drama of early 2001,
episodes of Sino-US confrontation have taken place in an overall positive framework.
Jiang Zemin inherited from Deng Xiaoping what from a Chinese perspective was a
definitively pro-US foreign policy, designed to win US acceptance at both a personal
level for Jiang and at a national level for China. The broadening of bilateral economic
ties post-WTO accession is in any case set to see a new phase as US business comes to
depend on stable Sino-US relations. In regional politics, too, China and the US have
come to a degree of co-operation on some issues, such as North Korea, although other
issues, such as Taiwan and Chinese human rights, remain points of conflict.
There is accordingly something of a perceptions gap. Anticipation of long-term 'strategic

competition' coexist with views of a broadly co-operative relationship, apparent in trade
and investment ties, on both sides. In turn, this means the US has not seen what a
decisively anti-US Chinese foreign policy would look like since perhaps the Cultural
Revolution. With links between the southern and eastern export-oriented 'Gold Coast'
of China and the US (especially the west coast and California, the 'Gold Peak' to Chinese
immigrants in the 19th century) burgeoning, it will take a decisive change in the tenor of
economic relations to see more confrontational foreign policy postures exert an impact
on the broader relationship. It is highly unlikely that US calls for textile quotas, on the
grounds that Chinese textile goods are unfairly cheap, or complaints over trade barriers
276
would lead to a severance of relations or immediate tension between the two

countries.
Relations with Vietnam
Although relations between China and Vietnam were officially normalised in 1991, and
a series of border negotiations have resolved long-standing land boundary disputes,
relations remain fraught by competing claims over the Spratly and Paracel Islands in the
South China Sea. China and Vietnam have infrequently clashed in the South China Sea,
where both claim substantial or overall control of economic resources. Although no
natural resources have been discovered in the area, there are hopes that oil and gas
reserves could be found near the low-lying archipelago. The relationship is also coloured
by a historical animosity stemming from competition between China and Vietnam
further inland. Battle-hardened Vietnamese troops severely embarrassed China in 1979
when the PLA tried to 'punish' Vietnam for invading Cambodia.
A rapprochement since late 2001 and a burgeoning trade between the two countries
has improved relations, but the apprehension of manoeuvres in the South China Sea
remains close to the surface. This was amply demonstrated in January 2005, when nine
Vietnamese nationals were killed by a Chinese patrol in the Gulf of Tonkin, amid China's
accusations of piracy, although Vietnam maintains the men were fishermen. The
likelihood of a resolution of the competing claims in the South China Sea is remote,
although the direction of negotiation is positive.
South China Sea
At sea, in 1974, a Chinese naval task group, with naval infantry, invaded and secured an
occupation of the Paracel Islands. The Vietnamese garrison and a community of
fishermen were removed. Over a decade later, over 70 Vietnamese sailors were killed in
a naval engagement between the Chinese PLA Navy and Vietnamese warships off Fiery
Cross Reef (Yongshu) in the Spratly Islands in 1988. China claims that Vietnam had been
trying to occupy a number of reefs since 1986 but it was only in 1987 that Beijing began
to take an interest in the islands, using Vietnamese and Malaysian expansion into the
region as the excuse for involvement.
By 1992 China had placed on record its claims to the rest of the islands and shoals in the
South China Sea, including the Spratly Islands. In January 1995 Beijing warned Hanoi to
stop all geological survey work in the South China Sea, with China alleging that such
activity was infringing on its sovereign territory. Vietnam's decision to acquire Russian
Su-27 long-range fighter aircraft and possibly missile-armed patrol craft, first identified
in June 1995, also led China to express concern about the future relations between the
two neighbours.
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China remains wary of the integration of the Vietnamese-controlled Spratlys into

Vietnamese administrative structures, while Vietnam similarly worries about Chinese
naval encroachments in the disputed area. However, in late 1999 the two countries
agreed on demarcation of the land border, and in 2000 on the marine boundary and
fishing rights in the Gulf of Tonkin. According to Vietnamese officials, the land border
agreement settled claim overlaps in 227 km2 along the 1,350 km border. Boundary
stone laying ceremonies on the land border continued in 2002.
Rapprochement after the Spratlys
In December 2001, a joint communiqué was issued saying the two sides agreed to put
aside the matter of the Spratlys for the time being and concentrate on developing
burgeoning trade relations.
Chinese President Jiang Zemin paid an official state visit to Vietnam in February 2002,
the strongest signal yet that Sino-Vietnamese relations had fully recovered from over
two decades of animosity and mutual suspicion. Jiang, accompanied by a delegation
that included CCP Central Committee member and then-State Council vice premier Qian
Qichen, met with senior Vietnamese politicians including Communist Party of Vietnam
General Secretary Nong Duc Manh, then-president Tran Duc Luong and then-prime
minister Phan Van Khai during what was described as a "family visit".
In a visit rich with symbolism, the two sides agreed preferential loans packages to
Vietnam during talks aimed at boosting bilateral political and economic ties. The talks
skirted the outstanding issue of both countries' territorial claims in the South China
Seas, although long-standing land border disputes were formally concluded with the
laying of the first of 1,500 border markers in July 2002. In July 2005, a boundary tablet
was also set up at the juncture between China, Vietnam, and Laos, based on the
decisions of the second round of border talks, and both sides subsequently agreed to
complete the demarcation by 2008. Ongoing surveys of the Sino-Vietnamese border are
timed to meet this deadline.
Relations, therefore, are far warmer than prior to 2002, but a resolution of the Spratly
Islands claims is not expected in the near term. The possibility of co-operation in the
area has increased, as in March 2005 state oil companies of China, Vietnam, and the
Philippines signed an agreement to conduct joint seismic surveying of possible undersea
oil and gas reserves in a 143,000 km2 region around the islands. This agreement,
conceived as a purely commercial venture, with no implications for claims to
sovereignty, was hailed as a breakthrough for the implementation of the ASEAN South
China Sea code of conduct signed in 2002. If reserves are actually found, it remains to
be seen whether this 'spirit of co-operation' can actually be maintained, when the time
comes to share in profit.
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Trade and External Relations
Exports
The US import sover one fifth of China's total exports. Exports to all regions of the world
have grown rapidly in recent years. Countries experiencing a second, expanded phase of
trade integration with China on top of existing developed bilateral trade flows include
South Korea and several of the ASEAN states. Guangdong province remains China's chief
gateway for international trade, emphasising the importance of the Pearl River Delta
and Hong Kong to China's growing economic interdependence with the rest of the
world.
According to the WTO, the vast majority of goods exported from China in 2005 by
commodity group (90.7 per cent) were manufactured goods. In contrast, agricultural
products comprised 5.1 per cent, and mining products 4.1 per cent.
Exports by destination (2005)
Country/territory Value (USD billion) Per cent of total
United States 162.89 21.38
Hong Kong 124.47 16.34
South Korea 35.11 4.61
Germany 32.53 4.27
The Netherlands 25.86 3.39
United Kingdom 18.98 2.49
Singapore 16.63 2.18
Taiwan 16.55 2.17
Russia 13.21 1.73
Italy 11.69 1.53
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Canada 11.65 1.53
France 11.64 1.53
Other 281.04 37.85
Total 761.95 100
Source
China Statistical Yearbook, 2006
Figures are for exports from mainland China and exclude Hong Kong, Macau and Taiwan.
Imports
Trade with Russia, including energy imports from Russia, is growing rapidly, partly in
reflection of China's desire to diversify its energy import requirements, given its rising
dependence on Middle Eastern crude oil, as domestic demand grows. China's rapidly
growing industrial sector has also led to an increased demand for foreign raw materials,
especially base metals.
Imports into China are largely manufactured goods (79.5 per cent), with agricultural
products comprising 7.4 per cent and mining products 12.7 per cent.
Imports by origin (2005)
Country/territory Value (USD billion) Per cent of total
Japan 100.41 15.21
South Korea 76.82 11.64
Taiwan 74.68 11.32
United States 48.62 7.37
Germany 30.72 4.65
Malaysia 20.09 3.04
280
Singapore 16.51 2.50
Australia 16.19 2.45
Russia 15.89 2.41
Thailand 13.99 2.12
Philippines 12.87 1.95
Saudi Arabia 12.25 1.86
Other 220.91 33.47
Total 659.95 100
Source
China Statistical Yearbook, 2006
Figures are for imports to mainland China and exclude Hong Kong, Macau and Taiwan.
Date Event
1945 Republic of China helped found UN.
1950 PLA troops crossed Yalu river to aid North Korea.
China and India established diplomatic relations (April).
1953 Truce declared on Korean peninsula (27 July).
1954 First Taiwan Strait Crisis - Chinese attack on Kinmen (previously Quemoy) led to calls for
the US to use nuclear weapons.
China and India signed the Panchshil Treaty which outlined five principles of non-
aggression, sovereignty, non-interference, equality, and peaceful co-existence (June).
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1958 Second Taiwan Strait Crisis.
1959 Border skirmishes with India.
Sino-Soviet Treaty signed.
Chinese troops sent to Tibet, leading to the flight of the Dalai Lama.
1960 China broke off relations with USSR.
1962 Brief border war with India ended in victory for China.
1963 China and Pakistan agreed border.
1964 China tested the atomic bomb.
1967 China tested the hydrogen bomb.
1969 Chinese and Soviet troops clashed over the Ussuri River (March).
Talks took place between China and the USSR to settle border disputes (October).
1971 The United Nations voted for China to replace Taiwan in UN bodies.
1972 President Nixon visited China and signed the Shanghai Communiqué.
1976 Resumption of ambassadorial links between India and China.
1979 China attempted small-scale, temporary invasion of Vietnam to punish its southern
neighbour for its invasion of Cambodia. The invasion was an embarassment for the PLA,
which suffered heavy defeats against battle-hardened Vietnamese troops.
1980 First PLA Navy deployments to South Pacific.
Sino-US trade agreement signed.
China was admitted to the IMF and World Bank.
1984 Britain and China agreed on the handover of Hong Kong.
1988 China and Vietnam engaged in naval battles in the South China Sea. Over 70 Vietnamese
282
naval personnel were killed.
1989 Tiananmen Square massacre led to international condemnation and European and US
arms embargoes.
Indian Prime Minister Rajiv Ghandhi visited China (December).
1992 Sino-Russian declaration restoring friendly relations signed.
1994 Trade war with US.
1995 China and the Philippines disputed Spratly Islands.
Defence co-operation agreement signed with Russia (May).
Nuclear weapons tested and inter-continental ballistic missile fired (May).
China accused of supplying missiles to Pakistan (July).
China conducted missile tests near Taiwan (21-26 July).
1996 China fired three unarmed missiles into the East China Sea near Taiwan's two largest
ports (March).
US accused China of supplying Iran with poison gas-producing facilities (March).
President Jiang Zemin's visit to India strengthened a 1993 accord to establish a mutually
agreed Line of Actual Control (LAC) (November).
1997 China briefly stalled a UN Security Council vote condemning the nuclear tests carried out
in Pakistan (May).
Hong Kong handed over by the UK and became a Special Administrative Region of China
(July).
iang Zemin made an official visit to the US, the first visit to the US by a Chinese head of
state since 1985 (October).
Russian President Boris Yeltsin visited China for talks with Jiang Zemin, signing a trade
agreement and a pact defining the Sino-Russian border (November).
1999 China conducted troop movements in the western sector of the LAC and called for a
ceasefire after Pakistani advances during the Indo-Pakistan Kargil conflict (May).
283
NATO bombed the Chinese embassy in Belgrade in error, further worsening US-Chinese
relations (May).
Significant deterioration in Chinese-Taiwanese relations in wake of Lee Teng-hui's 'two-

state' declaration (July/August).
Macau reverted from Portuguese to Chinese rule and became the country's second
Special Administrative Region (December).
2000 Chen Shui-bian elected president of Taiwan; there is an according increase in hostile
rhetoric (March).
Indian President KR Narayanan's visit to China formally marked the end of their
countries' post-Pokhran nuclear test bitterness (June).
US Senate ratified China's entry into the WTO (September).
2001 US EP-3 spy plane crashlanded on Hainan Island after colliding with a Chinese J-8 fighter
(April).
Uzbekistan joined the Shanghai Five, which became the Shanghai Co-operation
Organisation (July).
Jiang Zemin met Russian President Vladimir Putin and signed first friendship treaty
between China and Russia for 50 years (July).
China formally acceded to the World Trade Organisation after over a decade of
negotiations (December).
2002 Premier Zhu Rongji's visit to India was the first by a Chinese premier since the time of
Rajiv Ghandi. Emphasis was placed on economic ties (January).
President George W Bush visited China (February).
Taiwanese defence minister made 'private visit' to Los Angeles (March).
Vice-President Hu Jintao visited Washington (April/May).
President Jiang Zemin made official visit to Crawford, Texas residence of US President
George W. Bush (October).
China backed UN Security Council resolution 1441 warning Iraq of "serious

consequences" if it did not comply with UN weapons inspectors (November).
284
2003 China refrained from explicitly threatening to veto a second UN Security Council
resolution authorising the use of force against Iraq, unlike France and Russia (March).
China hosted three-way talks with US and North Korea in Beijing; they ended in
disagreement (April).
On the first visit to Beijing by an Indian prime minister in 10 years, Atal Behari Vajpayee
explicitly acknowledged Tibet as part of China in return for a de facto recognition of
Sikkim as Indian (June).
Six-way talks with US, North Korea, Russia, South Korea and Japan in Beijing set a further
precedent for multi-party dialogue, hitherto rejected by Pyongyang (August).
2004 The re-election of President Chen of Taiwan prompted strong rhetoric from China
(March).
Both the US and the EU protested continued barriers to foreign trade to China, despite
conditions of WTO entry.
Two further rounds of six-party talks took place over North Korean disarmament. China
planned extensive war games in Fujian province (June).
India and China announced a 'new phase' in their bilateral relations beginning with
moves to fully resolve their long-standing border dispute (October).
Free trade agreement with the Association of Southeast Asian Nations agreed
(November).
2005 Nine Vietnamese nationals killed in the Gulf of Tonkin by Chinese patrol boats, who
claimed they were maritime criminals (January).
First direct flights between mainland China and Taiwan since 1949 took place (February).
National People's Congress passed controversial 'anti-secession' legislation which
further soured political relations with Taiwan (March).
Indian Prime Minister Manmohan Singh and Premier Wen Jiabao signed an agreement
to work towards resolution of border disputes. The agreement included recognition of
Sikkim as part of the Indian union and Tibet as part of China (April).
Japan initiated procedures to grant rights for the drilling of oil and gas within the
disputed East China Sea region. Large anti-Japan demonstrations followed in China
(April).
Taiwanese Kuomintang chairman, Lien Chan, became the first KMT chairman to visit
China since 1949. Further visits to the mainland involved opposition People's First Party
285
leader James Soong, and pro-reunification New Party delegation. (April-July).
Tokyo governor, Shintaro Ishihara, visited the disputed Okinotori islet (May).
Japan installed a titanium plate on Okinotori labelled 1 Okinotori Island, Tokyo, Japan
(June).
Bilateral discussions with Bhutan over a disputed border area led to an agreement to
revise claims, although no details were provided (July).
First Sino-Russian military exercises held on the Shandong peninsula and near
Vladivostock (August).
Gas production began at the offshore Chunxiao gas field, heigthening tension with Japan
(September).
Japanese then-prime minister Junichiro Koizumi visited the Yasukuni shrine, further
worsening bilateral relations (October).
China granted observer status to the South Asian Association of Regional Co-operation
(November).
The US placed sanctions on six Chinese firms for transferring dual-use items to Iran
(December).
Taiwan announced its intention to build a 1,150 m runway on Itu Aba, its one occupied
islet in the Spratly Islands. The island subsequently admitted the runway would be used
for military purposes, despite an earlier denial (December).
2006 Myanmar announced a deal reached the previous month to supply China with 6.5 trillion
cubic feet of gas from its offshore A-1 block over 30 years. The deal seems to scupper
India's intention to exploit the same block (January).
Japanese then-prime minister Junichiro Koizumi visited the Yasukuni shrine, further
worsening bilateral relations (October).
Taiwanese President Chen Shui-bian's lunar new year speech announced the abolition of
the island's unification council, drawing sharp criticism from Beijing (February).
Holy See chargé d'affaires Monsignor Ambrose Madtha stated that the papal state was
ready to enter official dialogue with Beijing, suggesting that the last European state to
recognise Taiwan may switch allegiance in the near future (March).
Nathu La trade pass in the Himalayas between India and China reopened for the first
time since unofficial closure in 1962 (June).
286
India, Pakistan, Iran and Mongolia gained observer status to the Shanghai Co-operation
Organisation. China strongly backed Pakistan and Iran's accession (June).
First trilateral meeting between the heads of government of India, China and Russia held
(July).
A visit by Venezuelan President Hugo Chávez to China ended with an agreement to

increase oil exports to one million barrels per day by 2016 (August).
Prime Minister Shinzo Abe was inaugurated in Japan, becoming the first Japanese prime
minister in the following month to make China his first overseas visit in a sign of his
rapprochement policy (September).
North Korea conducted its first nuclear test (October).
A cross-strait agricultural forum organised by Taiwan's Kuomintang and the CCP was
held in Shanghai (October).
Japan interdicted protestors sailing from Hong Kong to the disputed Senkaku/Diaoyu
islands (October).
The Beijing Summit of the Forum on China-Africa Co-operation focused on energy issues
and underlined China's growing influence on the continent, with 48 countries attending
(November).
Friendship 2006 bilateral counter-terrorism exercises held in Pakistan was the country's
largest foreign deployment to exercises overseas (December).
Six-party negotiations on North Korea's nuclear programme restarted after a 13-month

hiatus in Beijing (December).
2007 China conducted its first test of an anti-satellite kinetic impact weapons, destroying its
Fengyun 1C meteorological satellite in low Earth orbit (January).
A joint statement was reached offering fuel aid and other concessions to North Korea in
return for a suspension of its nuclear facility within 60 days (February).
Seventh round of bilateral negotiations with Japan over the East China Sea dispute
ended without success (March).
North Korea missed its deadline to suspend and seal the Yongbyon nuclear facility
(April).
Premier Wen Jiabao became the first Chinese premier in seven years to visit Japan in a
287
confidence-building trip (April).
Revolutionary struggle
Several trends and shifts have characterised Chinese foreign policy since 1949. In its first
decade of existence (1949-59), China regarded the US, acting in collaboration with
Japan, as a serious threat and the Soviet Union as its only effective ally and source of
aid. During this period, the developing world (including Asia) was regarded essentially as
a testing ground for the Maoist revolutionary strategy and a field of manoeuvre against
the US.
A strategy of revolutionary armed struggle played a major role in China's Asian policy.
Primary targets of this strategy included former colonial countries in Southeast Asia.
Chinese influence and support played a role in the communist insurgencies that broke
out in Myanmar, Malaya (now Malaysia), Indonesia and the Philippines in the 1940s and
1950s.
Sino-Soviet split and its aftermath
It was not until the late 1950s that China was forced to re-examine its worldview in light
of the Sino-Soviet split. After Stalin's death in 1953, Mao increasingly felt and displayed
a sense of seniority and superiority to the former Soviet leader's quarrelling successors.
The Soviet Union's condescending criticism of China's Great Leap Forward in 1958, its
cautious detachment in the Sino-US conflict during the Kinmen (then Quemoy) crisis,
and the Chinese feeling that the Soviet Union restricted its aid to their economic and
military development further aggravated the Sino-Soviet relationship at the end of the
1950s. The Soviet cancellation in June 1959 of the Sino-Soviet agreement on nuclear Co-
operation, followed by Khrushchev's visit to the US, seemed to confirm China's charges
that the Soviet Union sought accommodation rather than revolutionary confrontation
with the US.
Mao Zedong was forced to devise a Marxist-Leninist theory of foreign policy that
accorded with the realities of the international system and the imperatives of China's
national security. The 'two camp view' of the world was replaced by the 'three world
theory', which divided the world into super powers, the developed countries and the
developing countries.
However, as the 1980s progressed, China began to reassess the strategic triangle and its
own foreign policy. As a result, it began to retreat from the single-minded efforts of the
1970s to build a matrix of strategic relations focused on confrontation with the Soviet
288
Union. This meant moving to an international posture more critical of and detached
from the US, closer to the developing countries and less hostile toward the Soviet
Union.
After the fall of the Soviet Union
In the post-Cold War era, China reassessed the security environment. Instead of
focusing exclusively on the strategic triangle, China concentrated much of its foreign
policy on the Asian theatre. The security environment in Asia was characterised as
stable and peaceful, with economic development the priority for most countries.
However, Chinese analysts pointed to several factors of uncertainty and sources of
instability, highlighted by 1997's economic crisis in the region, political and social unrest
in a number of countries, and unresolved territorial disputes.
Within this context, the establishment of a new regional political order required the
following:
• resolving existing conflicts and preventing new ones;

• promoting regional arms control and disarmament;
• establishing state-to-state relations based on the Five Principles of Peaceful
Coexistence;
• respecting each country's right to decide its own course of democratisation conducive
to political stability;
• promoting regional economic Co-operation and prosperity;
• setting up regional security dialogues based on regional specifications.
While Chinese policymakers downplayed the role of the strategic triangle, the balance
of power continued to feature prominently in Chinese thinking about the post-Cold War
order. There was a marked emphasis on great power relations and how they may have
affected the contour of regional security arrangement. Such concepts as the "new
trilateral relationship" (Japan, China, and the US) replaced the Cold War strategic
triangle. The quadrangular power relationships (China, Japan, Russia, and the US) and
the five-force interactions (the four powers plus the Association of Southeast Asian
Nations) also became prominent features of Chinese foreign policy.
The Chinese model pre-supposed that the future security of the region would primarily
depend on maintaining a balance of power in which no one country played a dominant
role. That is, stability in the region would be largely affected by the co-ordination and
changes of relationships among the five centres of force in the region - the US, China,
Japan, Russia, and ASEAN. Indeed, China's emphasis on major power relations is based
on the principle of global multi-polarisation in which it will gradually assume a
progressively more important place in regional affairs.
289
This assumption and philosophy were being radically challenged in 2002 following
extensive US intervention in Central and Southwest Asia, often in states bordering
China's west, and increased US overtures, supported in some cases be military Co-
operation and inspired by the perceived need for greater counter-terrorism initiatives,
among ASEAN states such as the Philippines, Thailand and Indonesia. From a Chinese
perspective, these new or renewed theatres of US involvement added to the
established US presence in Northeast Asia, contributing to a sense of encirclement.
Nevertheless, given the Chinese leadership's prioritisation of China's economic

development, from what is still a low base, essentially good relations with the US (not
least in trade and investment) constitute a matter of national security and are a
precondition for internal stability. Positively for China, there are also opportunities for
Co-operation with the US in counter-terrorism and the promotion of peace and security
in the Korean peninsula. China should in this context be able to trade its vote on the UN
Security Council in exchange for stable external relations and benefit in the process.
Jiang's Theory of Great Power Diplomacy (1999-2002)
Jiang's foreign policy theory was meant to mirror his public stature as the great Chinese
statesman of the age, heir of Mao Zedong and Deng Xiaoping. Early in 1999 Jiang Zemin
made a number of statements which suggested that he was grappling with a new
concept of security with a view to making a definitive contribution to China's philosophy
of international relations. He first enunciated the new security view in a speech entitled
Push Ahead with Disarmament and Protect International Security that he delivered at a
disarmament conference in Geneva in March 1999 (shortly before the bombing of
China's Belgrade embassy). This statement was Jiang's response to the evolving
international situation. According to Jiang, multi-polarisation and the intensification of
the trend toward economic globalisation helped ease world tension and furthered the
development of world peace. However, Jiang argued that the Cold War mentality still
existed in the periodic appearance of hegemonism and power politics, the growing
trend to strengthen military alliances, the use of 'gunboat diplomacy' and the endless
occurrence of regional conflicts.
NATO's military action against Kosovo and other parts of Yugoslavia, he contended,
represented a violation of the established rules of international relations and would do
nothing to promote peace in the Balkan peninsula. Meanwhile, instead of being scaled
down, the high-tech arsenal under the control of the military powers was actually
expanding and international effort to prevent the proliferation of nuclear weapons
severely strained. Under these circumstances, Jiang claimed, disarmament and
international security were manifestly challenged. These views expressed in 1999 were
subsequently developed into Jiang's much-touted 'Theory of Great Power Diplomacy'.
290
The stated aim of overcoming Cold War-era hegemonism and military escalation, as a
basic theme of the emerging official Chinese security philosophy, always had an
ambivalent emphasis. On the one hand, it represented a potential challenge to a US-
dominated post-Cold War order, should the US be implicated as responsible for such
ills. On the other, it represented an example of Jiang's continuation of the pro-US line
inherited from his predecessor, Deng Xiaoping, emphasising peaceful coexistence with
the US, supporting a strategy of prioritising economic modernisation over military
modernisation or foreign policy adventures. In retrospect, this tension rendered China's
publicly stated security philosophy vulnerable to events in the international arena.
Should the US call China's bluff by extending its global security remit on the basis of a
generally agreed international principles, for example, that of combating international
terrorism, it is not certain how Jiang's 'Theory of Great Power Diplomacy' would
respond.
Accordingly, the changes in the regional balance of Chinese influence from 2001,
following the extension of the US 'war on terrorism' to Central and Southwest Asia,
rendered Jiang vulnerable to domestic critics of his foreign policy and cast doubts over
the relevance of Jiang's 'Theory of Great Power Diplomacy', as elaborated in his
Selected Works.
China's long-term strategy clearly lies in gaining freedom from radical security
challenges in order to fund economic modernisation unimpeded. In this analysis, its
longer-term goal is eventually to reach equal power status with the leading powers of
the G7, and over the extreme long term, with the US. The covert strategy that
accompanied the high-minded anti-hegemony rhetoric of Jiang was, by various
accounts, either to secure China's western borders through a strategy of engagement
and consensus-building via the Shanghai Co-operation Organisation (SCO) - as for the
first time since the Sino-Soviet split China might then concentrate on its defence
perimeter along its maritime frontiers - or alternatively, to build a zone of influence in
Central, South and Southeast Asia while keeping the US distracted on Pacific theatre
issues such as Taiwan. Provided China is pragmatic regarding its influence in
international affairs, its basic position - that of a major regional power enjoying a long-
term recovery in economic prospects and relative political normalisation - has the
potential for continued consolidation.
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INTERNAL AFFAIRS
Political Summary
Political System
Constitution
Executive
Legislature
Judiciary
Political Parties
Chinese Communist Party
Civil Society
Human rights
Religion
Civil-military relations
Non-governmental organisations (NGOs)
Mao Zedong creates the PRC (1949-1976)
Power struggle following Mao's death (1977-1980)
Deng's modernisation programme (1980-1986)
The rise and fall of Zhao (1987-1989)
Jiang comes to prominence (1996)
Transition to the 'fourth generation'
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Hu Jintao comes to the fore
Political Summary
TYPE OF GOVERNMENT
One-party state
HEAD OF STATE
President Hu Jintao
RULING PARTY
Chinese Communist Party (CCP)

OPPOSITION
None allowed
NEXT ELECTIONS
Party elections in 2008
Political System
Constitution
Since the founding of the People's Republic of China in 1949, four constitutions have
been formulated in 1954, 1975, 1978 and 1982. Revisions and amendments to some
articles in the present constitution, promulgated on 4 December 1982, were made and
adopted by the National People's Congress in 1988, 1993 and 1999. The constitution
guarantees the basic rights and interests of citizens including freedom of speech, the
press, religious beliefs, and the right to vote and stand for election. Citizens are also
entitled to receive education, material assistance from the state and society when they
are old, ill or disabled and have the right to demonstrate and form processions, and
criticise or make suggestions to state organs or functionaries.
The 2004 session of the National People's Congress (NPC), which supervises the
enforcement and amendment of the constitution, further revised the constitution.
Former president Jiang Zemin's 'Three Represents' policy was added, which legitimises
the presence of entrepreneurs within the Chinese Communist Party (CCP). Clauses
protecting human rights and private property were also added to the constitution.
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Executive
A president, who is head of state, and vice president are elected by the NPC for a term
of five years and are limited to serving no more than two consecutive terms. The most
important administrative organ of power of central government is the State Council,
comprising the head of government (premier), a variable number of vice premiers, five
state councillors, a secretary-general and various ministers. The State Council draws up
the national budget and economic plans, in accordance with the policy of the CCP, and,
together with the premier and vice premiers, co-ordinates the work of ministries and
commissions. The Chinese government has always been subordinate to the CCP, the
central organisations of which make the key policy decisions concerning economic
development strategy, foreign policy, and military affairs. The CCP Politburo Standing
Committee is the most influential organisation within the party, and formulates
medium-term and long-term strategies for the party. The CCP Secretariat handles the
day-to-day administration of the party.
Legislature
The National People's Congress (NPC) is China's unicameral legislative body or

parliament. It comprises nearly 3,000 deputies, elected every five years by Provincial
People's Congresses and the People's Liberation Army. The NPC meets for two weeks
once a year to review and approve major new policy directions, laws, the budget, and
key changes in personnel and elects a standing committee that convenes regularly and
exercises state power when the NPC is not in session. In addition, the NPC has the
power to make amendments to the constitution and appoint and remove the president
and vice-president, the premier and vice premiers of the State Council, the procurator
and president of the Supreme People's Court and the chairman and members of the
state's military commission. However, the NPC is little more than a rubber stamp for
policies and legislation that have been devised by the CCP Politburo. The NPC is entirely
separate from the National Party Congress, which is a five-yearly body that meets
largely to confirm party strategy devised by the CCP Politburo and affirm party positions
within the Politburo. The next (17th) National Party Congress is expected in late 2007.
Judiciary
China's legal system includes seven categories: the constitution and related laws, civil
and commercial laws, administrative laws, economic laws, social laws, criminal laws,
and litigation and non-litigation procedural laws. The people's courts are the judicial
organs of the state and are composed of a president, vice-president, judges and
'people's assessors', the equivalent of jurors.
The Supreme People's Court is the highest court and operates at state level. It is
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responsible to the NPC and its standing committee and supervises the judicial work of
the local people's courts, military courts and other special courts. Additionally there are
higher people's courts in the provinces, autonomous regions and municipalities, and
intermediate and basic people's courts at lower levels which try all cases publicly,
except those involving state secrets, individual privacy or minors. The accused has the
right to be defended either by themselves, a lawyer or close relatives or guardians.
Procuratorial powers and functions are exercised by the Supreme People's
Procuratorate, local people's procuratorates and special people's procuratorates.
Political Parties
The only political party with any genuine influence or power is the Chinese Communist
Party (CCP). Although eight other minor parties are legally recognised (all are members
of the United Front, led by the CCP and the Chinese People's Political Consultative
Conference), in reality these parties are organisations with their roots in socialism or
trade unionism whose existence is granted by their failure to deviate from CCP policy.
The eight parties are:
• Chinese Association for Promoting Democracy (zhongguó mínzhu cùjìn huì);

• Chinese Democratic League (zhongguó mínzhu tóngméng);
• Chinese Democratic National Construction Association (zhongguó mínzhu jiànguó huì) ;
• China Party for Public Interest (zhongguó zhí gong dang);
• Chinese Peasants' and Workers' Democratic Party (zhongguó nónggong mínzhu dang);
• Revolutionary Committee of the Kuomintang (zhongguó gúomíndang gémìng
weiyuánhuì);
• September 3 Society (jiu san xuéshè); and
• Taiwan Democratic Self-Government League (táiwan mínzhu zìzhì tóngméng).
Chinese Communist Party
Although communism remains the official ideology of China, the de facto market
economy and changes to the constitution in 2004 (admitting entrepreneurs to the CCP
and legitimising private property), as well as various legislation such as the March 2007
property law passed by the NPC, have challenged the continued relevance of
communism as a national ideology, and as the basis of the CCP's legitimacy.
At the Fourth Plenum of the 16th Communist Party Central Committee in September
2004, a party document was issued discussing possibilities for the CCP to enhance its
'ruling capability'. The document underlined the realisation that economic growth alone
is not sufficient to secure political legitimacy. While specific policy changes were not
outlined in this document, promoting 'inner-party democracy' and controlling party
corruption were identified as key areas for ensuring regime strength.
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If successfully implemented, this process will prevent the regular recurrence of some
traditional problems within the CCP elite. Most notably, the formation of dominant
power groupings like the Gang of Four (a former group of CCP leaders including Mao
Zedong's widow) or Jiang Zemin's 'Shanghai faction' should be curtailed, while
succession problems like those seen after the death of Mao would be eradicated. The
internal stability of the CCP should in turn help create a more stable environment for
Chinese economic and social development.
Historically, CCP elite decision making has been difficult for outsiders to follow. The
mechanics of decision-making processes within the Great Hall of the People are not
generally discussed within the Chinese media. More importantly, influence, both within
the CCP and China at large, has traditionally depended more on an individual's personal
influence and network of contacts (the guanxì system) than it has depended on his
official titles and posts.
Understanding the roles played by particular individuals depends as much on the

relationships that they have developed, especially during their academic background
and provincial postings as on their current official posts. For example, former president
Jiang Zemin's key subordinates tended to be members of his 'Shanghai faction' -
individuals who had attended Shanghai University, rather than Qinghua University, the
traditional breeding ground for members of the CCP elite. This situation is complicated
by the fact that, for the first time, CCP leadership is not solely focused around a clear
'paramount leader' like Deng Xiaoping or Jiang Zemin.
CCP Leadership under Hu Jintao
Since becoming president, Hu Jintao has implemented a programme of 'inner-party

democracy', which is intended to reduce the role played by patronage and nepotism
within the CCP elite, by increasing the relevance of an individual's official post rather
than his guanxì-based network of personal influence. This programme has in particular
involved regulatory measures to set term limits on major posts and increase the
importance of intra-party elections. The immediate goal has been to reduce party
corruption, which has limited the authority of Beijing over the provinces.
With the arrival of Hu's programme of 'inner-party democracy', the CCP has entered a
transitional phase, although the role of traditional patronage networks and personal
influence is unlikely ever to be completely eliminated. Jiang Zemin himself has resigned
from all of his official posts, including the chair of the CCP Central Military Committee,
the traditional marker of supreme authority within the CCP. Nonetheless, members of
his 'Shanghai faction' retain key posts within the CCP elite, especially the Standing
Committee of the Politburo, and are likely to have retained some of his preferences.
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It is difficult to judge Hu's overall authority within the CCP. He holds all the most
powerful positions, including that of chairman of the Central Military Committee,
normally associated with authority in the CCP. He has also succeeded in implementing
policies that significantly diverge from Jiang's legacy, especially in his handling of the
economy. On the other hand, the majority of key senior posts are still held by party
members who are loyal to Jiang or to Zeng Qinghong. With the 17th National Party
Congress in 2007 approaching, when changes in the Politburo will likely be announced,
Hu must work to develop support within the party. Significantly, Hu has appointed
former Chinese Communist Youth League (CCYL) officials, one of his main loyalty bases,
to top provincial and ministerial positions. Similarly, Hu has cultivated the support of
officials with backgrounds in the western and northern provinces that were left behind
in development under Jiang. Hu's programme of 'inner-party democracy' may also serve
to strengthen his position within the CCP as a whole. Although many top posts are still
held by officials grouped with Jiang and Zeng, Hu's reforms should reduce the influence
of top-level cronyism, and increase the power of mid-level officials, where Hu has many
supporters.
One sign that Hu may be on track to asserting his influence over the CCP is that Jiang's
protégé Zeng Qinghong was not appointed to CCP CMC vice-chairman when Jiang
resigned, as many had anticipated. On the other hand, Hu is unlikely to be able for the
moment to depart too far from Jiang's legacy when it comes to key issues like Taiwan,
and, with supporters in many of the top party positions, Jiang's opinions are likely to
remain a crucial parameter for the assessment of intra-party policy.
Civil Society
Interests groups in China have, since the 'revolutionary' period, traditionally been tied
to the political leadership and did not exist as independent, identifiable entities.
However, this has now changed with economic liberalisation. Provincial elites and
officials at all levels are arguably obsessed with the spoils of office. Holding an official
position alone does not guarantee security; corruption substitutes accordingly.
Problems with a significant criminal and judicial dimension have thus arisen. Parallel
changes have also meant the formation of new political and economic interests,
typically at the sub-national level.
Entrepreneurs that flourished as heads of rapidly expanding collective or private-sector

entities from the 1980s or 1990s are now major taxpayers to whom the local
authorities, judiciary and police are beholden, funding from central government having
become scarcer and less secure. Such figures are now able to command local or higher
elements of the authority structure against threats or rivals. At the highest level, the
ties between business and politicians are also growing fast. Since 2002's 16th National
Party Congress, entrepreneurs have even been able to hold positions within the CCP
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itself, although some resistance exists to the trend towards economic liberalisation. The
rise of wealthy entrepreneurs, widespread corruption, and, recently, the sale to
foreigners of shares in major Chinese entities like state banks have created resentment
in some circles. While China's current economic policy seems largely unaffected, this
trend may result in greater nationalism or a backlash against private individuals and
businessmen in the future.
Human rights
A lack of human rights discourse in China can be attributed not only to the lack of
autonomous media outlets, and the stringent penalties for subversion, but also the
deployment of Chinese nationalism by the CCP as a countervailing force against
international calls for social and political liberalisation. Both Jiang and Hu have
portrayed calls for liberalisation or human rights reforms as 'interference' in Chinese
sovereignty. By pointing to the involvement of foreign, colonial powers in Chinese
history, Jiang and Hu have drawn a modern parallel, claiming that foreign calls for
liberalisation and human rights improvements are a similar, more subtle, attempt at
economic and social 'colonisation' by interfering in Chinese sovereignty and
'Westernising' Chinese culture. This view seems at present popular with many segments
of the Chinese population.
China has been criticised in particular for media censorship and lack of freedom of
speech, the holding of political prisoners, a lack of fair trial, the use of torture, and its
treatment of ethnic minorities, particularly in Tibet and Xinjiang. These were all
common under Jiang Zemin, and it was initially hoped that Hu Jintao would pursue a
more liberal approach to relations between the CCP and the population at large.
However, Hu seems to be continuing Jiang's policy in the form of a campaign against
'neo-liberalism'. Both Jiang and Hu have explicitly rejected the Western notion that
economic progress must be accompanied by political liberalisation. In the autumn of
2004, the Fourth Plenary Session of the 16th Central Committee passed a decision to
strengthen the 'governing ability' of the party. While this was largely aimed at
eliminating party corruption and improving the transparency of internal party decision-
making, it also recommended the 'guidance' of public opinion, especially through
control of the media. Controls over Chinese media, increasingly including the internet,
remain strong.
Religion
The Chinese government officially recognises five religions (Buddhism, Daoism, Islam,
Catholicism and Protestanism). Article 36 of the constitution states that Chinese citizens
"enjoy freedom of religious belief" and religious discrimination is outlawed. However,
clauses (3) and (4) of the article also proclaim that "no one may make use of religion to
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engage in activities that disrupt public order, impair the health of citizens or interfere
with the educational system of the state" and religious bodies are not "subject to any
foreign domination". In effect, this allows the government to repress certain activities
or groups that it considers a threat to itself or society.
The growth of unregistered churches, for instance, continues to cause concern among
many government and CCP officials, who perceive unregulated religious gatherings as a
potential challenge to their authority, a threat to public order, and an alternative to
communist dogma. In areas where considerable unofficial and unregistered religious
activity takes place, local regulations call for strict governmental oversight of religion
and authorities have closed unregistered churches.
Security authorities have used threats, the demolition of unregistered property,

extortion, interrogation, detention and physical abuse to harass religious figures and
followers. Implementing regulations, provincial work reports, and other government
and party documents continued to exhort officials to enforce vigorously government
policy regarding unregistered churches.
Arrests of religious adherents are commonplace, particularly for those that worship
outside of the state-sponsored sector. Religion is only permitted within mosques,
temples and cathedrals approved by Beijing, and denominations or areas of worship
outside of these narrow limits incur oppression. Organisations of which Beijing
disapproves are often labelled 'cults' and outlawed. The South China Church, for
instance, a Christian evangelical denomination, was prohibited in 1995 and its founder,
Gong Shengliang, imprisoned for life. Arrests since then have infrequently occurred.
Some house church members maintained that authorities had renewed efforts to
register house churches and to harass or to detain those who resist, especially in Henan
and Shandong provinces.
Religious groups that preach beliefs outside the bounds of officially approved doctrine
are often singled out for particularly severe harassment. For example, police efforts to
close down underground evangelical group the "Shouters" (an offshoot of a pre-1949
indigenous Protestant group) continue. The group has been deemed an anti-
government, counter-revolutionary "cult". Since the early 1980s, authorities have
repeatedly detained, fined, or imprisoned its members.
The State Council's Religious Affairs Bureau (RAB) is responsible for monitoring and
judging the legitimacy of religious activity. The RAB and the CCP United Front Work
Department, both of which are staffed by officials who are rarely religious adherents,
provide policy "guidance and supervision" over implementation of government
regulations on religious activity, as well as the role of foreigners in religious activity.
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Official religious organisations administer local Bible schools, nearly two dozen Catholic
and Protestant seminaries, nine institutes to train imams and Islamic scholars, and
institutes to train Buddhist monks. Students who attend these institutes must
demonstrate "political reliability" and all graduates must pass an examination on their
theological and political knowledge to qualify for the clergy.
The government has permitted some Catholic and Protestant seminarians, Muslim
clerics, and Buddhist clergy to go abroad for additional religious studies. In most cases,
funding for these training programmes is provided by foreign organisations. Both official
and unofficial Christian churches have met with problems in training adequate numbers
of clergy to meet the needs of their growing congregations. However, due to
government prohibitions unofficial churches have particularly significant problems
training clergy or sending students to study overseas, and many receive only limited and
inadequate preparation.
Since the 1990s the government has intensified a national campaign to enforce 1994
State Council regulations (and later provincial regulations) that require all places of
worship to register with government religious affairs bureaus and to come under the
supervision of official "patriotic" religious organisations. The government officially
permits only those Christian churches affiliated with either the Catholic Patriotic
Association/Catholic Bishops Conference or the (Protestant) Three-Self Patriotic
Movement/Chinese Christian Council to operate openly.
There are six requirements for the registration of venues for religious activity:
• possession of a meeting place;

• citizens who are religious believers and who regularly take part in religious activity;
• an organised governing board;
• a minimum number of followers;
• a set of operating rules; and
• a legal source of income.
There are some 85,000 approved venues for religious activities. Unofficial groups
claimed that authorities often refuse them registration without explanation. The
government contended that these refusals were mainly the result of inadequate
facilities and meeting spaces.
Many religious groups have been reluctant to comply with the regulations out of
principled opposition to state control of religion or due to fear of adverse consequences
if they reveal, as required, the names and addresses of church leaders. In some areas,
efforts to register unauthorised groups are carried out by religious leaders and civil
affairs officials. In other regions, registration is performed by police and RAB officials
alongside other law enforcement actions.
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Falun Dafa
Falun Dafa ('The Great Law of the Wheel of Dharma'), also referred to as Falun Gong
('The Practice of the Wheel of Dharma') was founded in 1992 by Li Hongzhi, and banned
in 1999 by the CCP. This organisation is an offshoot of traditional Chinese qìgong
practices of physical culture (centred upon breathing techniques), and claims that its
teachings and exercises will allow the practitioner to cultivate his or her health and
spiritual energy, while promoting the traditional Confucian virtues of truthfulness,
benevolence and forbearance (zhen, shàn, ren). There does not seem to be any
encouragement to worship the founder. The movement was banned on the grounds
that Falun Dafa was an 'evil cult', was harmful to the Chinese social fabric, and that
adherents were encouraged to harm or kill themselves. Since Falun Dafa was banned in
July 1999, the government has arrested and harassed practitioners, although
membership is still believed to number in the tens of millions.
Many traditional forms of physical culture and martial arts in China resemble the
practices of Falun Dafa, and yet are permitted or even encouraged by the CCP.
Moreover, the organisation has no overt political aims. This raises the question of why
the government chose to suppress Falun Dafa in particular. The popularity of Falun Dafa
is probably one factor - the group claimed up to 70 million members in 1999;
practitioners apparently included CCP and military officials. Moreover, the group was
able to mobilise mass gatherings of members very quickly. In 1999, for example, 10,000
Falun Dafa practitioners gathered outside the CCP headquarters for a 12-hour peaceful
demonstration. Although the group claimed that the demonstration was 'spontaneous',
the government pointed out that its scale suggested that the group was reasonably
organised.
In addition to being disturbed about the presence of a very large and potentially well-
organised group, the CCP was likely also concerned by the ideology of Falun Dafa, which
presents a set of ideals other than those espoused by the CCP. Deification of the sect's
founder and leader, Li Hongzhi, who left China in 1997 to live in the US, was also a
concern to Beijing as a cult of personality could be formed around a person wholly
separate from the CCP. Finally, the government may well have been disturbed by
parallels throughout Chinese history, where many revolutions began as 'spiritual'
movements (including the Daoist Yellow Turban revolt in 184 BC, the Buddhist White
Lotus sects of the 14th, 18th, and 19th centuries, and the quasi-Christian ideology of the
Taiping revolutionaries of the mid-19th century).
The founder of Falun Dafa, Li Hongzhi was born in Changchun, in the northeastern
province Jilin. Li Hongzhi asserts that his birthday is 13 May 1951 (supposedly the
anniversary of the birth of Siddhartha Gautama, the Buddha). Chinese government
records contest this, listing his birthday as 7 July 1952. The government claims that he
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changed his birth date in order to resemble the Buddha. Li Hongzhi maintains that the
government records are a misprint, and disavows the importance of the Buddha's
birthday. He founded Falun Dafa in 1992, and wrote both of its sacred texts (Zhuan
Falun (Revolving the Law Wheel), and China Falun Gong). Li defected to the US in 1997.
Religion and public office
The law does not prohibit religious believers from holding public office. However, most
influential positions in government are reserved for party members, and CCP officials
state that party membership and religious belief are incompatible. Party membership is
also required for almost all high-level positions in government and state-owned
businesses.
The CCP reportedly issued a circular in 1997 ordering party members not to adhere to
religious beliefs. This followed a 1995 document circulated to party organisations at the
provincial level ordering the expulsion of party members belonging to religious
organisations, whether open or clandestine. A government circular of 1999 reminded
party cadres that religion was incompatible with party membership, a theme reflected
in authoritative media in the summer of 1999.
The People's Liberation Army's "Routine Service Regulations" explicitly state that
servicemen "may not take part in religious or superstitious activities".
Religious figures, who are not members of the CCP, are included in national-level
government organisations. The National People's Congress (NPC) includes several
religious leaders, including Pagbalha Geleg Namgyai, a Tibetan "living Buddha", who is a
vice chairman of the Chinese People's Political Consultative Conference. Religious
groups also are represented in the Chinese People's Political Consultative Conference, a
forum for multiparty co-operation and consultation led by the CCP.
Civil-military relations
The opinions and political role of the PLA, although difficult to gauge, are fundamental
to regime security. Although the CCP elite no longer depends on military or
'revolutionary' credentials for legitimacy, the PLA's loyalty to the CCP remains the
ultimate guarantor of the party's control. Historically, the Chinese military viewed itself
firstly and foremost as the protectors of Chinese communism. By the early 1990s, the
role of communism in China's market economy had diminished, and the military itself
was deeply involved in private enterprise. The increased professionalisation of the
Chinese officer corps has reduced its 'revolutionary' role. Similarly, senior party
members of the 'third generation' and later are more likely to have a technical
background than one based on military experience.
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This leaves the relations between the PLA and the CCP unclear. Chinese military
rhetoric, like Chinese political rhetoric as a whole, has tended to display an increasingly
nationalistic tone. It is reasonable to suppose that the 'elite nucleus' of the Chinese
military sees itself as much as a guarantor of China's international prestige as guardians
of Mao's communist legacy. This may not be entirely to the CCP's satisfaction. There are
signs of decay in the relationship between party and military, in particular rhetoric that
has become increasingly focused on the need to ensure the military's absolute loyalty to
the party, and avoid the pernicious influence of calls for 'depoliticisation'
(fèizhèngzhìhuà), 'de-partification' (fèidanghuà), and 'nationalisation' (gúojiahuà). This
implies a background of disagreement between the party and, at least, some members
of the military's elite over the role of the CCP within the social and political structure of
the country as a whole. The party seems to be becoming concerned over a trend
towards an apolitical military loyal to China as a whole, instead of a military specifically
loyal to the CCP.
Another potential cause for friction in civil-military relations is the state's perceived
failure to provide employment or care for retired military personnel. This grievance was
highlighted in April and August 2005, when former members of the military gathered in
Beijing to protest their treatment.
Non-governmental organisations (NGOs)
NGOs have proliferated in China since the early 1980s. According to statistics from the
Ministry of Civil Affairs, there were in 2006 350,000 officially registered non-
governmental organisations, although these figures may not be comprehensive. This
compared with 133,000 social organisations in 2002, an increase of 167 per cent. The
CCP has in recent years demonstrated a high level of tolerance, and even support, for
(non-political) Chinese NGOs. With the liberalisation of the Chinese economy, state-
owned enterprises can no longer play the role they did prior to China's economic
reforms, when schooling, housing, healthcare and pensions were all focused around
state-run employment. NGOs have proved helpful in assuming tasks in Chinese society
that emerged with the decline of true communism in China, and there are now NGOs in
a wide range of fields, satisfying a range of needs from legal assistance and healthcare
to environmental awareness. It is likely, though, that should it display an outright
political agenda, a Chinese NGO would soon find itself shut down.
Foreign NGOs operating in China faced increased difficulties in the second half of 2005.
The CCP displayed an increased concern that human rights NGOs in particular were
attempting to influence Chinese politics by promoting democracy, perhaps under the
direction of Western governments. As a consequence, new regulations making it easier
for foreign NGOs to register in China, proposed in 2004, were cancelled, and foreign
NGOs found themselves under government scrutiny. Chinese NGOs receiving funding
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from foreign NGOs have also been affected.
Date Event
1911 The Wuchang Uprising among the modernised New Army led to the abdication of the
Qing emperor and began a process that would end 5,000 years of imperial rule in
China. leading to the southern provinces declaring independence from the Qing
dynasty.
1912 On New Year's Day Sun Yat-sen, the "Father of Modern China" was elected provisional
president of the Republic of China.
In March, Yuan Shikai, the "Father of the Warlords" and the commander of the largest
military organisation in China, the Beiyuan Army, forced a compromise from the
southern revolutionaries and became president.
The Kuomintang (KMT) was founded by Sun Yat-sen and Sung Chiao-jen.
1915 Yuan Shikai reinstated the monarchy and proclaimed himself emperor.
1916 Yuan Shikai died of kidney failure several months after dissolving the monarchy.
The lack of a central authority and dominant military plunged China into warlordism.
1919 Gathering of students at Tiananmen (Beijing).
1921 Sun Yat-sen inaugurated president of a self-proclaimed national government in

Guangzhou.
The Chinese Communist Party (CCP) was founded by Chen Duxiu and Li Dazhao.
1925 Sun Yat-sen died.
1926 General Chiang Kai-Shek assumed control of the KMT, and launched the Northern
Expedition against the warlord government in Beijing.
1927 Chiang Kai-Shek purged the KMT of left-wing members and allied communists, and the
rivalry between the CCP and the KMT led to the Chinese Civil War.
1928 KMT forces took Beijing.
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1934 The Long March (a 6,000 km retreat) by the communists from Jiangxi to the interior of
Shaanxi allowed Mao Zedong to assume control of the faction and solidified support
among the rural population.
1945 Following the unconditional surrender of the Japanese, the communists and the KMT
signed an uneasy truce.
1946 The KMT-communist truce fell apart.
1949 Following the taking of Beijing by the communists and the fall of several major cities,
Mao Zedong proclaimed the creation of the People's Republic of China (1 October).
Chiang Kai-Shek fled to Taiwan (December).
1950 Tibet annexed (October).
1953 First five-year plan launched.
1955 Xinjiang Uighur Autonomous Region proclaimed.
1956- 'Hundred Flowers' campaign (bai hua yùndòng) permitted open debate before an
1957 ideological crackdown.
1958 Start of Great Leap Forward (dà yùe jìn), an attempt to rapidly industrialise the
country, which led to massive famine.
1964 China tested first atomic bomb.
1966 Beginning of the "Great Proletarian Cultural Revolution" (wúchan jiejí wénhuà dà
gémìng) and the purge of intellectuals and CCP enemies by students and Red Guards.
1967 China tested hydrogen bomb.
1969 Mao declared the Cultural Revolution over, although with little effect.
1973 Gang of Four (sì rén bang) entered the Politburo.
1976 Premier Zhou Enlai died. Hua Guofeng succeeded him (January).
Tiananmen Square incident occurred as tens, and possibly hundreds, of thousands of

Beijing residents mourned the death of Zhou Enlai. Mao Zedong authorised the use of
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non-lethal force to clear the square, and several thousand people were arrested (4-5
April).
Death of Mao Zedong (9 September).
Gang of Four arrested. Unofficial end of Cultural Revolution (October).
1978 Third Plenum of the 11th Central Committee endorsed Deng Xiaoping's programme of
economic reform. 'Democracy Wall' movement encouraged criticism of the Gang of
Four and previous CCP governments.
1979 One-child policy encouraged
1980 Shenzhen, Zhuhai, Shantou, and Xiamen were designated as 'Special Economic Zones'
(May).
Hua Guofeng replaced as premier with Zhao Ziyang, consolidating Deng Ziaoping's
control over the state structure (1980)
1981 Hua Guofeng replaced as CCP chairman by Hu Yaobang, another supporter of Deng.
1986 First Chinese stock market opened in Shanghai.
1988 Hyperinflation by year-end, consumer prices up 36 per cent.
1989 Tiananmen Square massacre followed a month of large protests in Beijing and
elsewhere (4 June).
1995 Jiang Zemin appointed to succeed Deng Xiaoping (April).
Crackdown in Tibet (May-July).
1996 NPC reformed legal code (March).
China announced it would adopt new civil service rotation system to weed out
corruption.
1997 Death of Deng Xiaoping (February).
Hong Kong reverted to Chinese sovereignty (1 July).
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1998 Li Peng stepped down as premier, replaced by Zhu Rongji.
1999 Portugal handed Macau over to China (February).
Jiang Zemin announced his 'Three Represents' theory.
2000 200 officials were implicated in a multi-billion dollar smuggling scandal in Xiamen,
Fuijan province (August).
2002 16th CCP Congress: Hu Jintao replaced Jiang Zemin as general secretary. Jiang retained
chair of the PRC and CCP CMCs. Constitutional amendments allowed entrepreneurs
into party membership. (November).
2003 Hu replaced Jiang as president (March).
First SARS epidemic controlled; flow of Yangzi halted (June).
500,000 people marched in Hong Kong to demonstrate against the implementation of

Article 23 of the Basic Law (July).
China's first manned space vehicle placed in orbit (October).
2004 The NPC amended constitution, adding the 'Three Represents' (san gè dàibiao), and
including clauses protecting human rights and private property (March).
The NPC supported Chief Executive Tung Chee-Hwa's decision to prevent suffrage in
Hong Kong elections in 2007 (April).
Jiang Zemin retired from the CCP CMC (September).
2005 Zhoa Ziyang, a prominent reformist who failed to support the Tiananmen crackdown,
died amid muted CCP statements (January).
The 2005 National People's Congress was held, during which Jiang Zemin retired from
the PRC CMC (March).
Hong Kong Chief Executive Tung Chee-Hwa resigned and was replaced by career civil
servant Donald Tsang (March-June).
A village in Zhejiang province revolted over allegations of local corruption and forced
the police to withdraw (April).
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First of six state-run HIV/AIDS centres opened in Yunnan (August).
45,000 people marched in Hong Kong to commemmorate the July 2003 protest (July).
11th Five-year Plan adopted by the Central Committee (October).
Former general secretary of the CCP and reformer Hu Yaobang's 90th birthday was
officially celebrated by the CCP. Hu's death in 1989 had been one of the motivations
for the student demonstrations of 1989, two years after he was forced to resign for
failing to crack down on demonstrations in 1986. Hu Yaobang was a mentor of Hu
Jintao, both of whom were first secretaries of the Communist Youth League
(November).
Beijing claimed that just three people died following the police shooting at a
demonstration in Guangdong province. Witnesses stated that the figure was closer to
twenty (December).
Approximately 100,000 people marched in Hong Kong, demanding universal suffrage

in chief executive elections (December).
2006 Zhang Qingli, former department vice head of the Communist Youth League and Hu
Jintao loyalist, was officially appointed CCP secretary of the Tibet Autonomous Region
after being acting secretary since November (May).
Chen Liangyu, Shanghai party secretary and perceived to be a member of Jiang's

'Shanghai faction' was removed from his post on corruption charges during an
investigation into misappropriation of social security funds in the city (September).
Zhang Rongkun, chairman of Fuxi Investment Holdings and the 16th richest person in
China was arrested during the Shanghai social security fund investigation (October).
2007 A clash between Chinese security forces and what official news sources described as
'terrorists' in Xinjiang Uighur Autonomous region left 18 Uighurs and one police officer
dead, and 17 arrested (5 January).
China tested its first anti-satellite, surface-to-surface missile test following three
previous unsuccessful attempts (11 January).
The 17th National People's Congress was held in Beijing, passing the country's first
property law since the establishment of the People's Republic of China, guaranteeing
certain property rights (March).
Mao Zedong creates the PRC (1949-1976)
308
In 1949, following the defeat of the KMT forces in the Second Chinese Revolution, Mao
Zedong declared the creation of the People's Republic of China on 1 October 1949,
standing high above Tiananmen Square.
Immediately after the revolution, Mao began a series of reforms, based on Soviet
communist dogma, modified according to the dictates of the Chinese situation. For
example, land reform was instituted with painful results. It is estimated that over a
million landlords were executed in the early 1950s as a result of the decisions of
peasants' courts throughout China.
CCP membership continued to grow and Mao's ideology began to dominate more and
more aspects of everyday life. There is no doubt that for many Chinese, the party
improved the quality of life considerably but there was also hardship and death. Chief
among the campaigns which brought great suffering was the 'Great Leap Forward',
which was initiated in 1958 and attempted to rapidly industrialise the country through
the use of its cheap labour to produce steel (a symbolic and practical industrial material)
in abundance. However, with rural peasantry concentrated on steel production,
agricultural production plummeted as central quotas meant that farmers could not find
the time to harvest their crops and even agricultural tools were smelted to aid the steel
production process. During the following five years massive famine led to the deaths of
an estimated 20 million Chinese peasants.
The Great Leap Forward was followed by the Great Proletarian Cultural Revolution
(1966-76), which attempted to purge the CCP of anti-Mao members and 'imperialist'
intellectuals, however, the low-level violence soon spiralled out of central control and
descended into mob rule. In some isolated districts cannibalism became rife, while
tertiary educational institutions were closed nationwide until 1977.
Power struggle following Mao's death (1977-1980)
On 9 September 1976 Chairman Mao Zedong died. His death formally unleashed the
struggle for power which had been in gestation within the Chinese leadership for
several years between Premier Hua Guofeng and the 'Gang of Four', led by Jiang Qing,
Mao's third wife.
Hua Guofeng, a former minister of public security, moved quickly to form an alliance
with Marshal Ye Jianying, the chairman of the Standing Committee of the National
People's Congress and the most influential figure within the military. With the backing
of the high command, Hua engineered the arrest of the Gang of Four on 6 October 1976
on the pretext that it was plotting to 'usurp party and state power'. This cleared the way
for Hua to augment his power by adding the posts of party chairman, chairman of the
CCP Central Military Commission (CMC) and premier.
309
The 11th Congress of the CCP (12-18 August 1977) confirmed the status of the post-
Mao leadership and formally terminated the Cultural Revolution. China's modernisation
was designated the party's central priority. To meet this objective, Hua and the neo-
Maoists sought an alliance of convenience with Deng Xiaoping and his pragmatic faction
against the lingering leftist elements within the leadership. Deng was restored to the
posts he had held before his fall from power.
However, this alliance was short-lived. Hua was outmanoeuvred and eventually
overpowered by Deng and his pragmatic faction. The culmination of Deng Xiaoping's
restoration of power and the commencement of significant political, economic, social
and cultural reform were achieved at the Third Plenum of the CCP's 11th Central
Committee in December 1978. The Third Plenum is considered an important watershed
in post-Mao Chinese history. 'Leftist' mistakes committed before and during the Cultural
Revolution were 'corrected'.
Deng's modernisation programme (1980-1986)
The modernisation campaign begun by Deng not only exposed China to foreign capital
and technology, it also opened it up to foreign ideas and values. For a large segment of
the Chinese population, the influx of foreign goods portended a welcome change in
China's domestic fortunes.
At the same time that the party was attempting to discipline its own ranks, Deng
Xiaoping, sensing that a conservative sentiment within the party could be used against
him, co-opted the leadership of the campaign against 'spiritual pollution' in mid- to late-
1983. It was the first large-scale political campaign since the Cultural Revolution.
The spiritual pollution campaign effectively came to an end in 1984 as the pragmatic
wing of the CCP reasserted its dominance. Art, literature and culture were no longer
targets of repression as the party stressed that the campaign's energy would be strictly
confined to ideology.
Contacts with the outside world flourished as Premier Zhao Ziyang and General
Secretary Hu Yaobang stressed the importance of Western technology for China's
development. In order to implement these new policies, reformers were promoted to
key positions within the party and state apparatus as China's move toward a market
economy took a huge step.
The rise and fall of Zhao (1987-1989)
Hu Yaobang was removed from the post of party general secretary by Deng in 1987 for
a refusal to denounce demonstrators, a step taken by a unanimous decision at an
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extraordinary expanded Politburo meeting on 16 January 1987. Hu was replaced by

Zhao Ziyang, a reflection of Deng Xiaoping's effort to keep control over the situation
while continuing the course of reform and the open-door policy.
Ironically, it was Zhao's success in pushing forward the reform effort that eventually
brought about his downfall. Deng's strategy had been to balance liberalisation with
control in a cyclical pattern that ensured that Chinese politics did not lean too far to the
right or to the left. Zhao's refusal to subscribe to this strategy undermined his relations
with Deng.
In the latter half of 1987 and throughout 1988, Zhao's rivals (primarily the Chen-Yun
faction) acted to counter his growing power. Zhao encountered reverses over policy
that resulted in his losing control over the management of the economy. Premier Li
Peng took over much of the responsibility for economic reform in April 1988 when he
assumed control over the State Commission for Restructuring the Economy, replacing
Zhao's protégé, Li Tieying.
As Zhao's control over the economy weakened, accompanying the loss of the
premiership to Li Peng in late-1987 and the elimination in mid-1988 of the Central
Finance and Economics Leadership Group, the trend toward decentralisation ceased
and Beijing re-established its control. Throughout 1989 his position grew more
precarious. During the Tiananmen Square demonstrations, he tried to resurrect his
political fortunes by trying to reach an accommodation with the students. In doing so he
sealed his fate and was ousted from power on 24 June 1989.
Documents, which surfaced in the West in January 2001 in a volume entitled The
Tiananmen Papers: The Chinese Leadership's Decision to Use Force Against Their Own
People, revealed that Deng Xiaoping ordered a military crackdown to end the massive
student protest in the spring of 1989 because he felt it represented a serious threat to
communist rule. The papers contended that Deng defended the crackdown of 6 June
1989 (two days after troops opened fire) at a Politiburo Standing Committee meeting
with these words: "If we hadn't been firm with these counter-revolutionary riots - if we
hadn't come down hard - who knows what might have happened?"
Jiang comes to prominence (1996)
Following the events of 1989 in Tiananmen Square, Chinese politics entered a phase not
dominated by the old guard that could trace its lineage back to the revolution, but by a
new political class that emerged under the reforms of the 1980s. At the centre of this
new leadership was Jiang Zemin, who replaced Zhao as general secretary. In the first
five years of his reign, Jiang ruled in the shadow of his patron, Deng Xiaoping.
311
In 1996 Jiang began to dominate the front pages of the major daily newspapers in
Beijing, as well as state television's primetime programmes. This significant media
coverage was enforced by the Chinese leader himself. In a speech to the staff of the
People's Daily Jiang issued a stricter party line to the news media and propaganda
organs. It echoed speeches of the late chairman Mao Zedong, calling on people working
in the media to be "loyal to Marxism, loyal to the party and loyal to the people."
The leadership was apparently looking towards nationalism as their new source of
political legitimacy, as well as the ideological 'glue' to hold the country together. It
stressed patriotism, obedience, traditionalism and increasingly anti-foreign sentiments.
Regular campaigns to promote nationalism were noticeably aimed at party members,
government bureaucrats, soldiers and other key groups and organisations.
Transition to the 'fourth generation'
A reshuffle of China's top provincial leaders, including the resignation of Shanghai's

popular mayor in December 2001, showed that early political jostling had begun ahead
of a key change in the communist leadership. The shake up came ahead of the 2002
five-yearly National Party Congress, a crucial meeting that ushered in the so-called
'fourth generation' of leaders.
The Politburo that emerged in November 2002 heavily reflected Jiang's preferences. Of
the nine members of the expanded Standing Committee, five were of the Jiang faction.
Vice Premier Wu Bangguo was granted third rank after Hu Jintao; Jia Qinglin, the near-
disgraced ex-Beijing mayor and Jiang crony, the fourth rank; the crown prince of the
Shanghai faction, Zeng Qinghong took the fifth-ranked position; Huang Ju, another Jiang
protégé rescued by Jiang from various political shenanigans, was sixth-ranked; and Li
Changchun, formerly the Guangdong party boss, ranked eighth. Provincial party
secretaries were prominent in the new Politburo, reflecting a bias in favour of party
affairs specialists over figures with government experience.
Hu was made general secretary and retained his position as vice-chairman of the CCP
Central Military Commission. Jiang retired from the Politburo but stayed as the
chairman of both Central Military Commissions and his protégé, confidant and advisor
Zeng became the most senior member of the CCP Secretariat (the body tasked with
daily administration of CCP affairs at a national level). As all other members of the
Secretariat were new faces, this made it Zeng's organ. The CCP Central Committee
General Office also passed into the hands of a Jiang loyalist, Wang Gang, granting him a
position equivalent to chief of staff. In addition, Jiang was also to be consulted on all
matters of national importance.
Hu's successes were mainly defensive. He probably prevented Zeng from gaining the
312
civilian vice-chairman's post on the Central Military Commission, and he also saw up to
30 of his Communist Youth League faction enter the 150-strong Central Committee.
However, the result of the congress was that Hu and Zhu Rongji's candidate for the
premiership, Wen Jiabao (ranked third in the Politburo Standing Committee), gained the
offices they had long expected only to face a strong network of Jiang figures in almost
all the key party political organs.
With regard to the crucial preservation of his grip over the security apparatus, Jiang's
promotion of over 100 majors and lieutenant generals in mid-2002 may have paid off by
granting a critical weight of support in the military. Then vice-chairman of the Central
Military Commission General Zhang Wannian in July 2002 had notably urged his PLA
colleagues to "swear allegiance to the party central authorities and Chairman Jiang", in
somewhat explicit fashion - a call likely to have reflected expectations of further funding
for military modernisation.
Hu acted to consolidate his position in the weeks intervening between the CCP Congress
and the First Plenum of the 10th NPC in March 2003. Statements in the press lauding
Jiang Zemin and his theory of the 'Three Represents' were toned down in the aftermath.
Hu advanced several of his allies into key positions, including mayor of Beijing, mayor of
Shanghai and several provincial posts. In calculated photo opportunities, Hu visited the
needy and even put forward his own "New Three Principles of the People", paying lip
service to the achievements of his predecessor but implicitly criticising the Shanghai
faction's obsession with image and influence-building.
However, the 10th NPC saw further advances for the Jiang faction. The revised cabinet
saw the new premier, Wen Jiabao, surrounded by a host of Jiang loyalists; over 40 per
cent of the new top government body was made up of cadres from the greater
Shanghai area. Three of the four vice-premiers and Wen's deputy, executive vice-
premier Huang Ju were of Jiang's faction. Zeng Qinghong advanced to the vice-
presidency, a position with little power but signalling the possibility that despite being
three years older than Hu, he might succeed the new state president before 2007.
Only the fact that Hu and other non-Jiang faction cadres gained high ratios of the NPC
vote (typically near to 100 per cent) compared to Zeng Qinghong's 87.5 per cent, hinted
at a hope in the broader CCP that the power of the Shanghai faction might be relaxed.
Hu Jintao comes to the fore
With the continuing influence of Jiang and his Shanghai faction in the Politburo in 2002
and 2003, it was some time before Hu Jintao was able to emerge from Jiang's shadow.
However, the Third Plenary Session of the 16th Central Committee, in October 2003,
and 2004's NPC meeting indicated that Hu had begun to place his own shape on CCP
313
policy. His 'inner-party democracy' reforms, aimed at limiting the personal authority of
party members at various levels, should in time weaken the individual factions which
have caused tension within the party leadership. These changes, building on reforms
introduced in the 1990s, may well establish a degree of transparency and accountability
in intra-party dealings. For example, with the introduction of the rule there are to be
more candidates than seats in elections, while the power of the 'princeling' and
Shanghai graduate factions within the party has diminished.
Hu Jintao and Wen Jiabao have further moved markedly from Jiang's precedent in
several key matters, both through their 'inner party' reforms and the more balanced
approach to China's economic development. However, at the same time they have
largely continued Jiang's approach to relations with Taiwan, and Jiang's commitment to
military modernisation. Although this is mainly owing to popular support to
reunification with Taiwan, it also reflects the fact that many members of the CCP elite
remain loyal to Jiang. Six out of the nine members of the Standing Committee of the
Politburo have strong ties to Jiang (Zeng Qinghong, Wu Bangguo, Huang Ju, Jia Qinglin,
Luo Gan, and Li Changchun).
At the Fifth Central Members' Assembly of the CCP's 16th Party Congress, in September
2004, Jiang Zemin announced his retirement as chairman of the CCP Central Military
Committee, and offered his resignation of the PRC CMC in December 2004 in a
traditional and largely ceremonial handing over of power. Hu replaced him as head of
the PRC CMC in March 2005. (The separation of the two resignations is unlikely to be
significant due to the fact that the National Party Congress does not have the authority
to make appointments to state posts). Jiang's failure to secure the vice chair of the CCP
CMC for his associate Zeng Qinghong demonstrated that his influence in the party may
slowly be on the wane.
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DEFENCE PRODUCTION AND R & D

Summary
Assessment
Exports and markets
Summary
Key Figures (millions)
2008 (USD) 2007 (USD)
Total defence expenditure 58,700 44,060
Total procurement expenditure 19,740 11,020
Total defence exports n/a n/a
Total defence imports n/a 1,250
Figures for total defence expenditure and procurement expenditure are China's own
figures and are widely disputed. (Estimates from the West frequently state that real
Chinese spending is up to three times higher than these figures.) The total defence
import is calculated by Jane's Defence Forecasts.
Key Companies
Company Description Revenue
NORINCO NORINCO has a wide range of business enterprises. From its USD17.4
defence unit, NORINCO provides to the China Armed Forces and billion
for export a wide range of equipment including systems in the (FY07)
following areas: precision strike, amphibious assault, long-range
suppression, anti-aircraft and anti-missile, information and
night vision, high-effect destruction, anti-terrorism and anti-
riot, and small arms.
315
Poly The defence side of Poly Technologies deals in everything from n/a
Technologies Inc air, land and sea vehicles to missile and electronic equipment,
police anti-riot equipment, military logistics supplies, small and
large guns/artillery and industrial explosives.
China Aviation AVIC I is a conglomerate that comprises about 100 companies USD14.5
Industry and institutes that develop and manufacture fighters, fighter billion
Corporation I bombers, bombers, transport aircraft, reconnaissance aircraft, (FY07)
turbojet engines, turbo fan engines, air-to-air missile and
ground-to-air missiles.
China Aviation AVIC II is the second of the two consortiums of aircraft USD4.6
Industry manufacturers, which was created in1999 when China Aviation billion
Corporation II Industry Corporation was split in 1999. AVIC II is mainly focused (FY07)
on smaller aircraft, such as trainer (JL-8, L-15, and CJ-6), small
passenger airliner (Harbin Y-12), medium-range transport
aircraft (Y-8), and helicopters (Z-8, Z-9, WZ-10 and Z-11).
China State CSSC is a conglomerate of 60 enterprises engaged in n/a

Shipbuilding shipbuilding, ship-repair, shipboard equipment manufacturing,
Corporation marine design and research. Major enterprises include Jiangnan
(CSSC) Shipyard, Hudong Shipbuilding, Guangzhou Shipyard and China
Shipbuilding Trading Company.
China Another conglomerate, CSIC consists of 96 enterprises located USD8.7

Shipbuilding in northern China. Its assets include shipbuilding and industrial billion
Industry enterprises in Dalian, Tianjin, Wuhan, Xi'ian, Chongqing and
Corporation Kunming. CSIC has interests in shipbuilding, marine engineering,
(CSIC) diesel engines, storage batteries, large steel structure
fabrications, port machinery, turbochargers, tobacco
machinery, gas metres and automation distribution systems.
Assessment
With unprecedented financial support from Beijing and a continuation of reforms since
the 1990s, China's defence industries - of which there are approximately 10,000 - are
now on the brink of major reform and modernisation. Over the past several years, many
steps have been made towards this modernisation - however, the next decade or so will
likely see even bigger strides with the country's massive economic power as a
316
backbone. Recent reforms that will allow foreign and domestic companies to invest in
defence-related companies in China will only strengthen the industries' position.
However, defence industries in China still need to either develop or gain access to the
high-technology that the leaders of People's Liberation Army (PLA) crave in its efforts to
modernise. The embargoes imposed by the US and Europe show no signs of being lifted
- indeed Washington strengthened its own position in 2007 by closing a possible
loophole regarding the export of dual-use items. However, flexible interpretation of the
embargo within the EU has meant that Chinese defence industries are gaining access to
some dual-use high technology, particularly from the UK and France. This technology
could prove significant as Beijing continues its efforts to gain access to technologies
related to networking and information-based warfare.
Exports and markets
There is little doubt that the improving efficiency of Chinese defence industries - and
the government reforms intended to make further improvements - are intended to
increase capabilities for equipment destined to be used by the People's Liberation
Army. Exports are a secondary concern.
State-run Chinese defence industries' primary concern is equipping the PLA with the
platforms that will enable Beijing to reach its modernisation goals. These goals are spelt
out in the 2006 defence White Paper. "China pursues a three-step development
strategy in modernising its national defense and armed forces, in accordance with the
state's over-all plan to realise modernisation," says the White Paper. "The first step is to
lay a solid foundation by 2010, the second is to make major progress around 2020, and
the third is to basically reach the strategic goal of building informationised armed forces
and being capable of winning informationised wars by the mid-21st century."
Nevertheless, as China continues to grow in stature over the next decade, its fuel
requirements will become even bigger - and fuel is likely to play an important part of
China's military export policy. In 2008 China completed several export deals to African
nations and was looking to further deals with other Asian nations, such as Indonesia, all
of which have substantial oil deposits.
In the past, Pakistan has been by far the biggest procurer of Chinese equipment,
followed by Iran and a handful of other Asian and Middle East countries (most of which
produce crude oil). Pakistan is known to have bought in the past few years fighter
aircraft (F-7MG and JF-17 Thunder), anti-ship missiles, radars, weaponry, helicopters,
Type-90 tanks, trainer aircraft (K-8 Karakorum-8) and four Jiangwei frigates. Iran has
purchased radars, missile and anti-missile systems, while Myanmar, Indonesia, Thailand,
Sri Lanka, Jordan, Saudi Arabia and Sudan have also procured a number of arms. In
317
addition, the West has repeatedly claimed that China has been supporting missile
technology and finished-product transfer to Iraq, North Korea, Libya, and Syria.
In July 2007 Washington claimed that the US military had found Chinese-made arms,
including missiles, which were smuggled to insurgents in Iraq through Iran. To this
though, Beijing responded forcefully and typically and said: "The Chinese government
always adopts a prudent and responsible attitude towards its arms export and manages
its arms export in strict accordance with its international obligations and domestic laws
and regulations...The Chinese government practices a strict arms-sale policy. Arms can
only be exported to the governments of sovereign states. The receiving states are
required to provide guarantee for end-user and destination, and assurance of not to
transfer them to any third party. China never sells arms to any non-state entities or
individuals." Nevertheless, China also operates a policy of not interfering with the
internal affairs of potential customers.
Despite Beijing's response, Washington remains jittery about China's increasing ability
to sell its weapons abroad and the possibility of that technology falling into the wrong
hands. These fears are summed up by a 2005 Congressional Research Service report,
which stated: "China has taken some steps to mollify US concerns about its role in
weapons proliferation. Nonetheless, supplies from China have aggravated trends that
result in ambiguous technical aid, more indigenous capabilities, longer-range missiles,
and secondary (retransferred) proliferation. As the Director of Central Intelligence (DCI)
reported to Congress, China remains a 'key supplier' of weapons technology -
particularly missile or chemical technology."
It remains the case though that as the quality of Chinese military products improve
countries will begin increasingly to look to Beijing to procure military equipment,
especially within Asia, Africa and the Middle East. An example is Indonesia, which stated
in June 2007 that it would start considering purchases from China as long as "the prices
are really more affordable [and] purchases more easily made under co-operation deals,
and the goods are of good quality".
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PROCUREMENT
Assessment
The Drive to Modernise
998 State Security Project
Creating a Balance
Army procurement
Armoured Vehicles
Assault Forces
Artillery
Air Defence
Infantry Weapons
Communications
Army Aviation
Unmanned Vehicles (UAV)
Trucks
Logistics
Air Force procurement
Requirements
Navy procurement
Requirements
Major Foreign Conventional Military Procurement
319
Assessment
From 1949 the PLA has relied on foreign technology, either as grant aid, via
procurement, or via espionage, to propel its military modernisation. During the first
Sino-Soviet alliance from the late 1940s to the early 1960s, Russia transferred or sold
the basis for China's missile, aircraft, military electronics, naval and army equipment
industries. Russia also provided early nuclear technology assistance. After the Sino-
Soviet split, China continued to rely on new Russian technology, either stolen from
shipments to Vietnam, or given by Egypt, to propel weapons development. This
changed starting in the mid-1970s when European, then Israeli and then American
military technology began to flow in as part of nascent anti-Soviet cooperation.
However, by the end of the 1980s two events caused another reversal: China's crushing
of a democracy movement caused an American and European arms embargo; and the
collapse of the Soviet regime created an immediate requirement by its military-
industrial complex for a wealthy customer. Once more Beijing would turn to Moscow to
propel a two to three generation leap in military technology. But starting in the mid-
1980s China would not just acquire weapons, but more importantly, sought their
underlying technology. China's deeper objective is to become militarily self-sufficient
and become an eventual military innovator. By the next decade the PLA will increasingly
reveal new weapons that will have received their initial impetus from China massive
investments in basic science, technology and personnel that started in the mid-1980s.
China's reliance on Russian technology in the current period remains substantial, even
though annual purchases are now a fraction of their previous USD2 billion in annual
sales. Beginning with initial purchases of Su-27 fighters and then Su-30MKK fighter
bombers, perhaps the most important current Chinese fighter program is Shenyang's J-
11B, an indigenised copy of the Su-27 that should initially have a performance slightly
better than the upgraded Su-27SMK. This program uses substantial Russian technology
as the basis for its progress in developing the WS-10A turbofan engine, its fighter radar,
and for the PL-12 medium range AAM. Likewise, early purchases of Sovremenniy class
destroyers have given way to the Type 052B Luyang I destroyer that uses Russian
weapons, electronics and engines, as ongoing purchases of the S-300 SAM family have
led to the indigenous HQ-9 SAM largely based on Russian technology. China's
absorption of Russian space technology has been faster. The Chinese Shenzhou is a
modified Soyuz manned space ship and China's first "space station" appears heavily
influenced by Russia's Salyut series. A foundering deal to purchase 34-38 new Il-76
transports and Il-78M tankers marks another turning point: China declining interest in
this major purchase is propelled by a powerful lobby to build China's own similarly
capable transport. However, this program, plus future Chinese aircraft carriers and
space programs remain candidates for substantial Russian inputs.
320
From the early 1980s to the end of the 1990s, Israel was perhaps the second most
important seller of military technology to China. While Israel did not achieve sales of
large numbers of actual weapon systems, it did meet the growing Chinese demand for
military technology. Israel sold the technology for China to co-produce the Python-3
AAM as the PL-9 and the MAPATS anti-tank missile as the HJ-9. Israel has also provided
technical assistance for the Chengdu J-10 fighter and the Type 039 diesel submarine. In
July 2000 Israel cancelled a USD250 million contract to sell a state of the art phased-
array AWACS radar system to China after pressure from the US, who expressed
concerns that the equipment could be used to track US jets in the region. In late 2004,
the US accused Israel of receiving HARPY anti-radar drones sold to China had been
returned to Israel for maintenance, or upgrade, which Washington pressed not to be
returned. Asian sources indicated that the Chinese YJ-91 supersonic ARM combines an
Israeli broad frequency seeker with a co-produced ramjet engine for the Kh-31 missile.
By this point the Bush Administration was applying substantial pressures to convince
Israel to curtail most, if not all, significant defence co-operation programs with China.
Israel, however, remains interested in resuming some level of military technology sales
to China, such as counter-terror systems. But Washington insisted upon and received a
bilateral agreement that would limit the sale of dangerous military technology to China
and other countries of similar concern appears aimed at preventing Israel from skirting
any informal agreements.
As a result of the Tiananmen Square incident, the EU and the US governments forbade
the formation of new military and defence equipment contracts with China. European
firms like Eurocopter and Thales have continued relationships in dual use technologies,
but the integration of Western equipment in the J-8II, for example, ceased. While the
US retained a strict embargo in the mid-1990s most European states reinterpreted the
1989 EU ban to permit the sale of non-deadly defence technology. Under this guise
Europe continued to sell some military electronic products and proceeded with the sale
of helicopter technology to China. Then, in 2003, China was able to convince France and
Germany to openly support the lifting of the 1989 EU arms ban. In the face of gathering
momentum in the EU to lift the ban in early 2004, Washington replied with high-level
lobbying against the move and by May 2005 had convinced enough EU members not to
proceed. However, some US officials accept that the ban will be lifted in the future.
While it is not likely that Europe will gain many major weapon system sales once the
embargo is lifted, what is expected is that many European and Chinese defence
concerns will enter into co-operative or investor relationships. The October 2003 move
by European aerospace concern, EADS, to buy stock in a company owned by China's
AVIC-2 aerospace concern, offers a preview of this kind of co-operation. The prospect of
a significant deepening of EU-China defence industry co-operation would serve to
advance their goals, to include an acceleration of high-technology weapons
development to remain competitive with the US and to increase their respective
321
independence from US policy demands. By early 2005, this issue had emerged as a
major obstacle toward the revival of US-European relations post-Iraqi invasion. The
Bush Administration even enlisted the US Congress to threaten new legislation that
could reduce European defence business with the US.
It is unlikely that the US will revive the sale of defence technologies to the PLA in the
immediate future. Chinese nuclear and missile technology espionage scandals in the
mid-1990s, plus growing strategic competition and the possibility of war over Taiwan
auger against the US ending Tiananmen weapons embargoes. Nevertheless,
Washington has permitted an increasing sale of "dual use" items like the Humvee light
truck and civil transport helicopters. Through the 1990s the Ukraine became an
increasingly important source of foreign technology, to include systems, like the Kh-55
land-attack cruise missile, passive detection technology and naval active phased array
radar.
What is less discernable is China's progress in developing a basis for creating its own
innovative military technologies and the mature and efficient systems for their
production and maintenance. Starting with efforts like the "863 Program," and other
similar successive efforts, China has devoted great resources toward making advances
in basic science which can then form the basis for future military innovations. China's
technical universities are well integrated into military research efforts and a large
number of students are sent to US, European and Russian universities to learn cutting
edge technologies. However, in the current period China remains in a transition. It can
develop a fourth generation military turbofan engine that may be slightly better than its
Russian counterpart, but cannot yet achieve Western levels of engine efficiency.
However, in other areas like energy weapons, cyberwarfare and space weapons, China
could prove to be an early innovator.
The Drive to Modernise
The real catalyst for a rapid process of modernisation came in the 1990s with the US
unexpectedly (to the People's Liberation Army - PLA) swift successes in the 1991 Gulf
War and subsequent conflicts, demonstrating the reality and efficacy of the 'Revolution
in Military Affairs' (RMA). In response, the PLA's emphasis changed in around 1994 from
mass mobilisation to fighting limited wars in high-technology conditions according to a
doctrine termed the 'War-Zone Campaign', which is aimed at securing a political victory
rather than gaining territory. This emphasis on political over military ends is a common
thread in Chinese strategic thinking: questionable military actions such as Korea and
Vietnam are regarded as successes in China because they achieved the desired political
goals. To put the enemy decision-makers under pressure to back down, the War-Zone
Campaign concept emphasises the use of special forces to disrupt enemy build up, the
gaining of the initiative through pre-emptive strikes and fighting a quick battle with
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mobile formations to force a rapid solution.
Another key factor in inducing change was the 1996 missile crisis in the Taiwan Strait,
during which the US sent two carrier battle groups into the area. Together with the
RMA, this demonstrated both that the PLA should expect to deal with the US military in
any operation to regain the island and that it would not be able to. This galvanised the
PLA into its current emphasis on technological catch-up, and the process was given a
certain assurance of progress by the decision to purchase major armaments systems
from Russia. These included Sovremenny destroyers with their Sunburn anti-ship
missiles; 194 imported Su-27/30 'Flanker' fighter aircraft (with 100-200 licensed for
domestic production); the S-300 anti-aircraft missile; and Kilo-class submarines. A PLA
source described these Russian systems as a "stop-gap", and these purchases have been
backed up by the development of new domestic systems in each field. These include the
four Luyang (052B/C-class) air defence destroyers, the J-10 fighter aircraft, and the
Song-A-class submarines. Many of the key systems, even on this domestic equipment,
are imported and China's defence industry has had problems in developing many key
military technologies. This, however, is viewed as a step towards the ability to make
complete and innovative military systems. Nonetheless, China is now showing greater
competence in making essential high-tech subsystems like turbofan engines, many
variety of radar and new self-guiding weapons.
Such developments are seen as retrograde by some within the PLA, who feel this path
to modernisation dooms the PLA to playing catch-up with a target that has already
shifted. The alternative approach stresses the importance of the RMA and demands
attention be paid to more radical approaches. It suggests that China both needs to, and
has the opportunity to, leap-frog such intermediate solutions by emphasising battlefield
networking; information warfare, such as computer viruses; 'acupuncture warfare'
through the acquisition of precision strike capacity for attacks on an enemy's C4I; and
other means of combating a more powerful foe. Unrestricted Warfare, an influential
study by two PLA senior colonels published in 1999 warned of the danger of the "hi-tech
weapons trap" that the US finds itself in, as systems grow arithmetically more
expensive. They argued that the only escape is the development of "new concept
weapons", such as the engineering of stock-market crashes and other ways in which
"people will awake to find quite few gentle and kind things have begun to have
offensive and lethal characteristics".
Key to the PLA's ability to use its new sophisticated weapons has been a series of
doctrinal, organisational and personnel policy changes. In the 1990s PLA doctrine
rapidly evolved from a largely defensive "People's War" construct, to consideration of
new offensive doctrines and tactics under the rubric of "Active Defence," to the current
stage of devising doctrines for "Joint Warfare" under the goals of "Informatisation and
Mechanisation." While the Military Region remains the basis for peacetime
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organisation, the PLA is now able to constitute "War Zones" or mixed formations uniting
units from multiple services and regions to focus on the objective. Jointness has also
been institutionalised in the traditionally army-centric high command. From 2004, the
Central Military Commission (CMC) has included the commanders of the Second
Artillery, PLA Navy (PLAN) and PLA Air Force (PLAAF). The critical General Staff
Department started including PLAN and PLAAF officers among its top commanders, and
coastal Military Regions now include PLAN and PLAAF deputy commanders.
PLA doctrine uses complex deception to achieve shock and surprise in order to secure
and maintain the offensive in all operations. It is also leveraging new information
technologies, especially broadband and wireless communication networks, satellite
communication networks and automatic command systems, to achieve more intimate
co-ordination among its services-a work that is still in progress but which exceeds that
of many of its neighbours. Like the US and many of its allies, the PLA is working hard to
reduce the "kill chain" by linking sensors and shooters to appropriate command
authorities. In the next few years it will make significant progress in this direction when
new surveillance satellites are launched, new long-range and short range UAVs come
into more common use, and the ability to conduct precision strikes is shared by missiles,
artillery rockets, artillery and air-delivered bombs.
998 State Security Project
But such aspirations may be more than rhetoric. Following the shock of the May 1999
US bombing of the Chinese Embassy in Belgrade, combined with the deteriorating
political relationship with Washington over spy scandals and then tough rhetoric by the
Administration of George W Bush, former president Jiang Zemin began to call for the
"transformation" of the PLA. In connection with this, Jiang and then other military
leaders began to call for "shashaojian" weapons, or new secret weapons that when
used with innovative tactics, and directed against specific weaknesses, can accelerate
the enemy's capitulation. After 1995 this ambition was turned into a new high-tech
weapons development programme, known as the 998 State Security Project. This was
modelled after the successful "863 Programme" military high-technology development
programme. While very secret by design, the 998 Project is said by some sources to be
used for funding weapons programmes ranging from new missiles to cyber, rail-gun,
energy and space weapons.
It is also possible these represent the development of multiple and competing strands
of opinion within the military establishment. There remain factions in favour of each of
these basic positions of People's War, Local War and innovative hi-tech conflict. The
question remains whether there is any sense in which these positions can be reconciled
or whether they actually conflict. Certainly, if there is a belief that an enemy needs to
be kept out of China with hi-tech pre-emptive strikes, diverting resources into
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equipment and planning to fight a People's War in China's vast hinterland will
undermine the potential of that capacity, and vice versa. However, if in practical terms
China cannot afford to fully modernise all of its military, and the prospect of
demobilising vast parts of the PLA is politically unacceptable, then maintaining a
capacity to fight a People's War does retain a deterrent effect. In practice, the PLA is
developing an elite core of more modern units to give it the flexibility and experience to
act in a range of more likely circumstances, but whether this 'core' idea is acceptable
within the PLA is another matter. Senior PLA officers have indicated that the idea is to
develop "pockets of excellence", best practices in selected units that will migrate to the
rest of China's armed forces. However, the Chinese economy is still closer in size to
second tier NATO countries such as the UK and Germany in dollar terms, than to the US.
It therefore seems more rational and likely to see China developing a core modernised
military of that scale in the short to medium term, and to judge its progress on that
level rather than on the whole of the PLA.
However, as long as the issue of Taiwan persists, Beijing will have to prepare to fight a
possible conflict with the US and in many ways this distorts PLA planning. Taiwan is a
special case, and the planning is aimed more at acquiring credible capabilities that
would deter a Taiwan declaration of "independence" and dissuade US intervention. But
increasingly Beijing also realised that credible deterrence requires the ability to invade
Taiwan, and has devoted greater resources to building Army Amphibious, Marine and
Airborne units. While the prospect of invading Taiwan remains daunting, Beijing also
has many options short of invasion, from the retaking of Taipei-controlled islands just
off the mainland coast, to different levels of blockade, to missile-strikes. Taiwan's
geography, with shallow tidal flats on the accessible western side and cliffs to the east
adds to an invader's problems, as does the wide and stormy strait itself. Taiwan's
powerful military would make the successful establishment of a beachhead very
difficult, even without US support. Tensions were heightened in 2003 over Taiwan's
referendum on China's deployment of 496 ballistic missiles in range of the island. Lin
Chong-ping, Taiwan's Deputy Minister of National Defence said, on 9 January 2003 that
the PLA may surpass the Taiwan military between 2005 and 2008, but that it would not
have sufficient edge to be confident of success until 2010 to 2015. He said that Taiwan's
military could still deliver a body-blow to invading troops.
Nevertheless, China is making a serious investment in new amphibious capabilities, such

as its new Type 071 LPD launched in December 2006. Some sources indicate that the
PLA is very interested in novel invasion techniques such as specialised temporary
landing docks designed to overcome Taiwan's unique terrain obstacles. China is also
expected to rapidly mobilise many civilian assets to assist an invasion, ranging from
hundreds of civil fast ferries to large Roll-On-Roll-Off cargo ships. The army is improving
the ability of many of its Nanjing and Guangzhou based amphibious mission divisions by
producing hundreds of Type 63A 105 mm gun and gun-launched missile armed
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amphibious tanks and new Type 63C amphibious APCs. A second generation
amphibious assault vehicle that uses water-jet planning to achieve high speeds is now
being introduced to some army and marine units. The PLAN is now building up to 15
new LST/LSMs and may build up to six Type 071 LPD large amphibious assault ships,
complete with a new US LCAC-style transport hovercraft.
Creating a Balance
Traditionally, the PLA has been dominated by its land forces and part of the goal of
modernisation is to adjust the ratio between the three services by enhancing the PLAN
and the PLAAF. A PLAN source said that the modernisation process includes updating
the nuclear strategic deterrent to maintain an effective minimal and purely retaliatory
strike capacity, but that the main goal was to achieve a "balanced conventional
operational capability". The 2004 ascension of the commanders of the PLAN, PLAAF and
the Second Artillery to the CMC make clear the PLA's new commitment to such a
balance.
The most profound new direction in both PLA doctrine and procurement has been the
drive for "informationalisation," or, simply put, the intense application of all manner of
information technology to leverage better capabilities across the PLA. This is seen in the
PLA's purchase of at least two military-dedicated communication satellites, the
development of new electro-optical and radar surveillance satellites and its intention to
launch a Chinese navigation satellite network in the next decade, despite having paid
dearly to join the European Galileo navsat system. There is intense research into all
manner of radar technologies, with the development of large active phased arrays for
naval use and the recent revealing of new passive radar similar to the Ukrainian
Kolchuga. There are several AWACS, ELINT/SIGINT and command/control aircraft
programs, while the PLAN is building new ELINT/SIGINT ships. There has been an
intense effort to intimately link the PLA via broadband internet and new redundant
high-frequency communication systems. Digital communication and image transfer
systems are also being developed for soldiers.
The PLAN is developing the ability to support amphibious projection to Taiwan and to
be able to operate at the far reaches of China's South China Sea claims. Production of
Type 093 SSNs is underway, while new "Yuan" class SSKs have joined about a dozen
Song-A SSK, in addition to Kilo SSKs purchased from Russia. China has invested in
Russian Sukhoi Su-30 strike fighters that can be refuelled for long endurance and has
increased the self-defence capability of its fleet. New ships, either in service or to be
commissioned in the next couple of years, include four new air-defence destroyers (the
Luyang II's have a phased array radar and new vertically launched SAMs); four
Sovremennys; three Luhu/Luhai destroyers; and series production of the 054 class
stealthy frigates. While 2005 saw China take more active steps toward the acquisition of
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aircraft carriers. Toward the end of the decade a limited non-nuclear naval power
projection capability will be enabled by new long-range land-attack cruise missiles on
the Type 093 SSN.
The PLAAF has also been slimming down, with the number of fighter aircraft falling
substantially in the last decade. It appears that most of the older MiG-17/19-based J-6s
have been retired, leaving a frontline fleet of around 170 Su-27/30 and approximately
1,000 units of the more recent versions of J-7s and J-8s. There are about 300 Chengdu J-
7Es, the latest generation MiG-21 derived fighter, and the latest helmet sighted AAM
equipped J-7G is entering service. Approximately 250 Shenyang J-8IIs are in use, and the
latest J-8H features new radar, engines and weapons.
There are now five regiments, about 100 of the JH-7 (known as the FBC-1 for export)
fighter bombers, with PLA Naval Aviation in the anti-ship strike role. The JH-7A,
enhanced with new radar and engines, entered production in 2003 to 2004 and will be
used by the PLA navy and the Air Force. The 400 examples of the Q5 are optimised for
ground attack/close-air support: they are aged, but have been the subject of ongoing
development and upgrades, including laser-targeting ability. A twin-seat Q-5, called the
Q-5J, was revealed in late 2004 and is believed to form the basis for a new PGM-armed
version of the Q-5. Though woefully obsolete, the H-6 has resumed production, with
most assumed to carry new cruise missiles and perhaps PGMs, and 10 examples have
been converted to the tanker role. The Chinese aircraft industry has recently developed
two similar lightweight fighters, the F-7MF and (with Pakistan) the Super-7/FC-1. It is
growing more likely that the PLA will purchase some number of the latter. There are
also two, maybe three, fifth generation fighter programmes, an F-15-sized stealthy
fighter by Shenyang, a large twin-engine canard delta by Chengdu, and perhaps a F-35
class fighter by Chengdu.
Despite their political importance, Taiwan and North Korea scenarios are not the only
focus for the military modernisation process; other missions on China's borders or
involving Tibet and Xinjiang, which are less dependent on hi-tech military equipment,
are more the kinds of scenarios driving the planning for Local Wars. The emphasis here
is on the development of Rapid Reaction Units (RRU) which will account for around 10
to 15 per cent of the PLA's strength. The War-Zone Campaign concept requires mobility,
which remains a PLA weakness, but steps are being taken to address this. One of these
is the loosening of the existing Military Region structure, with the best units from each
region being made available for trans-regional support operations and falling under the
military commander of the war zone rather than the regional command. In order to
generate this degree of mobility there is a process of adjustment of the basic unit size
within the PLA. Some RRUs are divisional in scale, but increasingly they are brigade
(around 6,000 men) or even battalion size. The aim is to give such units organic self-
sufficiency in all the arms they need.
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Unconfirmed sources has given the make-up of such independent brigades as follows:
four tank battalions with 31 tanks each; one mechanised infantry battalion with 40
armoured personal carriers; one artillery battalion with 18 self-propelled guns; and one
anti-aircraft battalion with 18 self-propelled anti-aircraft guns. There are also specialist
artillery and anti-aircraft RRU brigades. Also key to the War-Zone Campaign concept is
the PLAAF's 15th airborne corps, with three divisions numbering 35,000 troops. This
strategic force would be used for the kind of disruptive deep strikes the War-Zone
Campaign doctrine calls for.
In March 2007, a spokesman for the National People's Congress stated that China's
defence budget in 2007 would increase by 17.8 per cent, continuing a 15 year trend of
double-digit defence spending increases. The official figure of approximately USD44.06
billion is more than double the official figure of 2000. However, most analysts contend
the official Chinese figure vastly under-reports the real level of defence spending. The
11th Five Year Plan (2006-2010) will see the acceleration of the indigenous weaponry
and modernisation programme and Jane's forecasts that there is a requirement for
helicopters fulfilling naval assault, heavy lift and Airborne Early Warning roles, transport
aircraft and naval fighters in the coming years.
Army procurement
China has redressed the 1990s emphasis away from army modernisation with a new
focus on producing tanks, IFVs, a range of lighter armoured vehicles for amphibious,
airborne and Special Forces, while steadily upgrading helicopter, air defence and army
logistics equipment. While much of the army's equipment remains dated, after this new
emphasis during the 10th Five Year Plan, the 11th FYP (2006-2010) is expected to see
greater emphasis on building smaller but more powerful mechanised and motorised
infantry units. There is also a steady emphasis on seeking to apply new information
technologies to upgrade older equipment, while spreading new digital and satellite C3I
connectivity though the force. This emphasis, not to mention the necessary personnel
and training investments will be expensive for the PLA, but it appears there is sufficient
funding.
Armoured Vehicles
Main Battle Tanks
In late 2003 it was revealed that a new version of the Type 98 tank had entered
production. Called the Type 99, details were released in a recent issue of 'Modern
Weaponry', issued by the Chinese No 201 Institute of China North Industries
Corporation (NORINCO), which claims that this is a "Chinese Third-Generation MBT".
The Type 99A2 MBT has been enhanced in a number of key areas including the
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installation of explosive reactive armour (ERA) on the glacis, turret front and turret
sides. The baseline Type 99 MBT's chassis armour is constructed of steel to which
advanced passive armour has been added over the frontal arc. By adding ERA, the Type
99A2 MBT has a very high level of protection against anti-tank weapons fitted with a
tandem HEAT (High Explosive Anti-Tank) warhead. The hull rear of the latest Type 99A2
appears to be different to earlier versions of this vehicle and bears some resemblance
to that of the previously revealed MBT 2000. This is believed to encompass a 1,500 hp
powerpack, consisting of engine, transmission, cooling system and fuel tanks, which is
similar in concept to the very compact US Advanced Integrated Propulsion System
(AIPS) that was developed to be installed in the US general Dynamics Land Systems M1
Abrams series MBT. It is understood the PLA are testing a prototype version of the Type
99 designated Type 99A2 - which, it is understood, will soon enter production with a
possible in service date of 2008/2009.
By late 2005, a slightly modified version of the Type 99, without the reloader bulge on
the turret and slightly different turret armour began to appear signalling the possibility
that production has expanded to a second factory. This new version reportedly
incorporates a new fire control system and a new 1,500 hp engine. This adds to the
already impressive capabilities of the Type 98, which features a 125 mm main gun that
fires co-produced Russian Reflex laser-guided missiles. The Type 98 also uses a unique
laser device that serves to find enemy optics and attack them with laser pulses, or direct
immediate main gun fire on to the target. Chinese sources confirm that the emergence
of the modified version means that the Type 98/99 is entering a significant level of new
production.
Revealed in 1999, the PLA is now estimated to have 1,200 of the less expensive Type
98/88C main battle tank. Similar in configuration to the Type 98, this tank emerged
from co-operative tank development programmes with Pakistan in the early 1990s. It is
forming the backbone of many newly modernised mechanised and motorised infantry
units. In late 2006 a new version of the T-96 emerged which appears to incorporate
many of the turret armour improvements of the T-99. This newly modified tank is
sometimes called the MBT-2000 or the T-96 Gai (improved). At the 2007 IDEX show the
Chinese exhibited a model of this new turret on an older T-59 hull, indicating it is being
offered as an upgrade programme.
In 2005 it was revealed that China is testing a modified Type 98/99 main battle tank
(MBT) fitted with a 140 mm smoothbore gun. If fielded, the latter would constitute the
largest MBT armament currently deployed. It is not known whether it has an automatic
or manual loading system. If the latter is true, then it will have a crew of four.
In early 2004 it was reported that the PLA has been upgrading part of its large fleet of
Type 59 Main Battle Tanks (MBTs) to enhance their firepower and battlefield
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survivability. The latest version, the Type 59D (or WZ 120C), is the most ambitious
upgrade to date. Based on the Soviet T-54 design, the Type 59 is estimated to still make
up 70 per cent of the PLA's tank fleet, with about 5,000 in service. China North
Industries Corporation (NORINCO) has over the years developed a number of upgrades
for the Type 59, including the installation of a 105 mm NATO-standard rifled tank gun
and a computerised Fire-Control System (FCS). The baseline upgrade was subsequently
improved with a thermal sleeve for the 105 mm gun, improved passive armour,
automatic fire-detection and -suppression system and a new smoke-generating system.
The Type 59D also features explosive-reactive armour (ERA) and is armed with a co-
produced version of the 105 mm Russian Bastion gun-launched laser-guided missile.
In mid-2006, Russian sources disclosed that China's Norinco was interested in the
Engineering Design Bureau (KBM) ARENA-E active tank defence system. ARENA-E uses a
small radar to detect incoming anti-tank rockets and automatically destroys them with
shotgun like shells. It appears that the PLA Army has had a long interest in active tank
defences and is likely more interested in purchasing this technology to produce a copy
or modified analogue for PLA main battle tanks and new IFVs. China is also conducting
research in the use of electromagnetically propelled amour plates to defeat attacking
gun or missile rounds. In addition, in 2006 Russian sources disclosed China's interest in
the KBM's Khrizantema supersonic 6 km range radar/laser guided anti-tank and anti-
aircraft missile. This unique missile overcomes the weakness of most current generation
guided anti-tank missiles: their subsonic speed makes them vulnerable to a range of
new tank defences.
Light Tanks
In 2004 it was reported that the PLA had upgraded some of its Type 63A amphibious
light tanks with the addition of an active laser defence system, according to Beijing-
based sources. The system uses a low-powered laser beam to locate any hostile optics.
Once discovered, the laser's energy is greatly increased to neutralise these hostile optics
and so blind the threat vehicle. It may be the same system as fitted on the Type 98 MBT.
The PLA is believed to have upgraded about 100 Type 63As and some reports indicate
that up to 500 could eventually be upgraded.
Armoured Personnel Carriers (APC)
It is increasingly apparent that the PLA is on a path to complementing its tank-armour

heavy armoured and mechanised units with new light-to-medium weight units which
emphasise lighter, faster, less expensive, though less well armoured wheeled fighting
vehicles. This decade began with a competition between two factories making families
of prototype 4 × and 8 × wheeled armoured fighting vehicles; one company offering
tank-like rear engine armed vehicles and another offering conventional mid-hull engine
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vehicle retaining the rear door. By 2003 it was becoming clear that the PLA's choice was
to build new generation of mid-hull engine vehicles. The first new vehicle to be adopted
was a version PTL-05, or "Assaulter," a 105 mm or 100 mm gun armed version of the
WZ551. It was revealed in 2003, and was known to equip three army units by 2006. This
light wheeled tank is able to launch Chinese-produced versions of the Russian "Bastion"
gun-launched anti-tank missile. A version has been tested with a turret based on that of
the T-63A, but apparently has not been accepted.
Then, in mid-2006, it was revealed that the PLA was at least testing a new family of 8 ×
wheeled armoured vehicles called the VN-1. This development was confirmed by
Chinese sources at the 2007 IDEX show. According to some reports the basic vehicle
weighs 18 tons, has a maximum speed of 100 k/h and a range of 1,000 km. One version
is armed with a 105 gun and is similar in shape to the French VEXTRA. A second version
is armed with a 122 mm howitzer and a third version is designed as a APC. Chinese
sources indicate that a fourth version may be armed with a twin-barrel mortar similar to
the Finish-Swedish AMOS. Finally in mid-2007 a command version of this 8 × wheeled
family of vehicles was revealed. It is not clear whether these vehicles will be acquired in
great numbers, but do indicate a new PLA interest in more "airmobile" medium-weight
armour. It is expected they will enter service in 2009 to coincide with the 60th
anniversary of the founding of the People's Republic of China.
The army is deploying and developing three new amphibious tracked APCs. For several
years a radical modification of the 1960s vintage Type 63 APC, the Type 63C, has been
entering Army Amphibious and Marine units. It is simply a Type 63 with two buoyant
sections, fore and aft, powered by an outboard motor. Two more formal amphibious
APCs include one derived from the hull of the Type 63A, and an even larger APC
revealed in early 2004, which is a more ambitious modification of the Type 63 hull. The
latter was first revealed as an amphibious combat refuelling vehicle.
The PLA is now using its well-established WZ 551 (6 × 6) amphibious APC in a number of
highly specialised reconnaissance roles. A number of WZ 551 vehicles have been
modified for the reconnaissance role and fitted with extensive communications
equipment as well as a mast-mounted sensor pod. The additional systems include
day/night observation equipment, a laser rangefinder and laser designator to provide a
long-range surveillance and target acquisition capability under day and night conditions.
The sensor pod is mounted on a raised plinth situated on the roof of the vehicle, but at
this stage it is not known whether it can be elevated for improved coverage. Mounted
to the rear of the sensor pod is a telescopic arm that retracts into the vehicle when not
required and on top of this is a radar antenna. Information obtained by the sensors is
displayed on flat screens inside the modified WZ 551 and can be relayed up the chain of
command in real time. A battle management system is also understood to be integrated
into this version of the WZ 551. An auxiliary power unit is installed to allow all of the
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onboard equipment to be run with the main diesel engine switched off.
Such WZ 551 variants have been referred to as wheeled Reconnaissance Armoured

Vehicles (RAVs) and are normally issued to reconnaissance battalions. They may lack
any amphibious capability due to the increased weight of the installed equipment.
Examples of the type were recently observed in service with the PLA 127th Light
Mechanised Infantry Division, which forms part of the PLA's strategic mobile troops.
New Infantry Fighting Vehicle (IFV) - Type 97 (also known as ZBD-97)
In mid-2003 the PLA began to reveal what has grown into a new family of amphibious
IFVs, sometimes called the ZBD-97. In early 2007 it was revealed that the ZBD-97
emerged from a competition, with the losing design showing a larger hull for greater
buoyancy, but also using a larger 105 mm gun turret. Both this design and the ZBD-97,
however, feature much larger water jet propulsors for water speed. Yet another design
featured what appears to have been a 122 mm howitzer turret, but this model
apparently was not selected for further development. Larger and taller than previous
PLA tracked APCs, the ZBD-97 is distinguished in that it uses a licence-produced version
of the 100 mm and 30 mm gun armed turret found on the Russian KBP Instrument
Design Bureau's BMP-3. The layout of the ZBD-97 is similar to Western vehicles of this
type with the driver seated front left, power pack to the right, turret in the centre and
troop compartment at the rear. The troop compartment at the rear has roof hatches
and a rapid means of entry and exit. There does not appear to be provision for troops to
use weapons from within the vehicle. The hull is of all-welded armour construction and
it is considered probable that an additional layer of passive armour can be added for a
higher level of battlefield survivability. In 2004 the PLA revealed an amphibious fuel
carrying vehicle that can be judged to have been based on the ZBD-97. In mid 2006
Chinese television coverage revealed that the ZBD-97 has started to enter some
Guangzhou based army amphibious units.
ZBD-2000
The ZBD-2000 is similar to the US Expeditionary Fighting Vehicle and has three variants -
a 105 mm armed light tank, a 30 mm IFV and an armoured logistics vehicle. It is likely
that these vehicles will be in service with the China's Marines to replace the amphibious
Type 63 armoured personnel carrier and this would require the procurement of around
800 vehicles.
WZ 501 Infantry Fighting Vehicle Upgrade
In July 2006, the ship-to-shore capabilities of the WZ 501 tracked infantry fighting
vehicle (IFV), which is a reversed-engineered copy of the Soviet-designed BMP-1 were
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upgraded. The new version's amphibious characteristics have been considerably

improved with the integration of a large outboard motor at the rear of the hull,
operated from within the vehicle. The original Russian-designed trim vane on the front
of the hull has also been replaced with a more substantial one that is retracted under
the nose of the vehicle when not required. These upgrades give the WZ 501 an
increased maximum water speed of 12 km/h and now allow the vehicle to be launched
from landing craft offshore in good weather conditions, whereas the original version
was limited to crossing slow-flowing rivers and lakes. In early 2007 an additional
modification emerged: placement of a new type 30 mm turret on a WZ 501. This turret
has previously been seen on the new Norinco 8 × wheeled APC.
Light Utility and Combat Vehicles
In August 2007 Beijing Automobile Works (BAW) announced that the PLA will buy 2,100
BJ2022JC 'Brave Warrior' light utility vehicles. Sources said that half will go to the Fujian
military district, opposite Taiwan.
Brave Warrior is the successor to the BJ212 series of light wheeled vehicles, in use for
more than 40 years, which was copied from the Soviet UAZ469B. Tenders were invited
in 1999. Two models of the new vehicle are being produced: one with a 1,000 kg
payload and a larger version with a 1,500 kg payload. Motive power is provided by a 3.2
litre turbocharged and intercooled diesel engine, developing 101.5 kW at 3,600 rpm and
313 Nm torque at 2,000 rpm. BAW noted that it performs well in low temperatures.
Each of the two driven beam-type axles (4 × 4) are coil-sprung and fitted with self-
locking differentials. The design also features a dual fuel tank, the main one with a
capacity of 85 litres and the auxiliary tank holding 18 litres. Fuel efficiency is given at
around 6 litres per 100 km and the range is some 1,000 km. Testing of Brave Warrior
was conducted in the high-altitude conditions of Hei Longjiang province and Tibet, high-
humidity conditions of Yunnan province and dry conditions of Gansu province. The
vehicle was also evaluated for airborne operations through air drops. The BJ2022JC is
manufactured in the Shunyi district factory owned by Beijing Benz-Daimler Chrysler
Automobile Co Ltd: a joint venture between BAW and Daimler-Chrysler. By late 2007
the BJ2022JC could be seen in service in the Beijing Military Region and in Xinjiang.
Since the late 1990s the Shenyang Aircraft Company and Dong Feng Motors have been
manufacturing copies of the US AM General HMMWV light utility vehicle. Originally sold
to China in the late 1980s under the guise of anti-drug cooperation, by the mid-1990s
the US had approved AM General's sale of co-production rights to Dong Feng Motors
and to the Shenyang Aircraft Co. One US source estimates that 2,000 have been
produced for PLA and Chinese police customers and the export license was affirmed in
2005. Both companies have developed utility/cargo as well as armed versions. In late
2006 Chinese television reported that Dong Feng Motor's versions was to be considered
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a "domestic" version in which it owned the "intellectual property" of the vehicle. The
Shenyang version has been seen at Zhuhai Airshows armed with eight Louyang TY-90
anti-aircraft missiles. Another version is marketed by Poly Technologies as the FB-6A,
armed with FN-6 MANPADS in a turret clearly copied from the Boeing Avenger. While
having been offered for foreign sale for since early in this decade, it is not clear that the
PLA has adopted either HMMWV versions in significant numbers. However, in late 2007
there were indications that Dong Feng Motors had produced a large batch of utility
models for some customer. Chinese imagery from December 2007 indicates a version of
the HMMWV equips a Special Force unit in the Guangzhou MR.
At the 2007 IDEX show Norinco revealed its VN3 4 × 4 "wheeled armoured vehicle." It
has a combat weight of about 5.3 tons, a power-to-weight ratio of 22KW/t and a
cruising range of about 600km. The VN3 can carry up to five crew members and one
version is armed with a 12.5mm machine gun turret. Disclosures in late 2007 reveal the
VN3 chassis will form the basis for other utility versions that can carry up to eight
soldiers. In addition, the original VN3 chassis has been used to for an additional
unnamed version which is armed with the 30mm cannon turret seen on the ZLC-2000
airborne IFV, leading to speculation this version may be intended for the Airborne
forces as well. However, as the end of 2007 there was no indication that the PLA had
decided to adopt any version of the VN3.
Assault Forces
Army Amphibious Forces
In 2006 the Pentagon reported that the PLA "has conducted 11 amphibious exercises
featuring a Taiwan scenario in the last six years." The PLA envisions a "Joint Island
Campaign" to fuse electronic, missile and air strikes to enable army forces to break
shore defences, establish a beach head, to enable follow-on attacks. Up to eight Group
Armies or over half a million army personnel may be dedicated to amphibious missions.
The 1st GA in the Nanjing MR and the 41st GA in the Guangzhou MR are dedicated
almost entirely to amphibious missions, while much of 12th, 31st, 26th, 67th, 39th and
40th GAs are also dedicated to amphibious missions. Like the Marines, they will benefit
from the PLA Navy's recent investment in new armour and troop lift ships like the new
Type 071 LPD. Pending the outcome of negotiations the PLA may purchase up to six of
the unique Russian 550 ton, 60kt speed Almaz Zubr large hovercraft.
Army amphibious forces have been upgraded with the new Type-63A/Type 99 105 mm
gun-armed amphibious tank. The T-63A succeeds the older T-63 and about 600 have
been built. Chinese sources confirm this tank is armed with a co-produced version of
the 5 km range Russian Bastion laser-guided gun-launched missile. Army amphibious
units have also received hundreds of new tracked APCs, a radical modification of the old
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Type-63, often called the Type-63C, with two new buoyant sections, powered by an
outboard motor. The T-63C appears to come in APC, command and medical versions.
PLA Army amphibious units are also receiving new specialised equipment to ease
beach-assaults, like trucks with rolled mats to help vehicles traverse the difficult mud
flats encountered on Taiwan's West coast. In addition the army's specialised naval
forces now include small LCUs fitted with multiple rocket launchers to fire specialised
mine-clearance rockets. The PLA has also developed smaller amphibious jeep vehicles.
In early 2007 it revealed an amphibious version of its new VN-3 four-wheel vehicle
family, depicted armed with a HJ-8 anti-tank missile. It is not yet known whether army
amphibious units will adopt this vehicle.
New Amphibious Assault Vehicle Family
Since late 2005 there have been a series of photos of a new PLA amphibious assault
vehicle family that appears to be a development of the ZBD-97. It is apparent these
vehicles may supplant or replace the T-63A amphibious tank and the T-63C amphibious
APC. The hallmark of the new vehicle family is its ability to achieve high speeds so as to
allow the new Type 071 LPD assault ships, or subsequent LHA style amphibious ships, to
conduct amphibious operations from beyond the horizon.
These vehicles have been photographed in Marine camouflage and mid-2007 Chinese
television coverage indicates they have entered service with at least one Nanjing MR
based army unit.
While the PLA designator for this new family of vehicles has not been released, it is clear
they were inspired by the new US Expeditionary Fighting Vehicle (EFV) for the US
Marine Corps, which has suffered from a troubled development and program cutbacks.
Like the EFV, the new PLA vehicles use fore and aft planning surfaces and large motors
to power large water jets to allow the vehicle to "plane" above the water at high
speeds. At the 2007 IDEX show Chinese sources disclosed that the new vehicle could
achieve a speed of "at least" 25 kts. This would appear to be much faster than even the
ZBD-97. There have been no photos released showing the vehicle at high speeds at sea,
so there is little data to determine whether the Chinese encountered the balance and
vibration challenges faced by the EFV. While the EFV is only being built in a IFV version
with a 30 mm cannon and a command version, the Chinese so far are building an IFV
version with a 100 mm tank gun, an APC version with a 30 mm cannon and what
appears to be a command/logistic support version. The IFV version will likely use a laser
guided anti-tank missile also used by the ZBD-97. The 30 mm cannon armed version
may also use HJ-73 guided anti-tank missile mounted on rails. While the US intends the
EFV to provide longer reach for its amphibious assault operations, it is not intended to
bear the brunt of the battle, merely to secure ground for heavier follow on forces. In
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contrast, it appears that the PLA intends for its new "EFV" family to carry the battle
much further but still depend on heavier follow on forces.
Special Forces
Army Special Forces are also receiving a substantial investment, with at least one
dedicated unit assigned to each MR. Airborne and Marine forces also appear to have
their own Special Forces contingents. Special Forces will be used extensively in the early
stages of a conflict to attack key personnel and infrastructure targets, and to secure air
and naval facilities to allow for follow-on forces. Chosen for their stamina, Special
Forces troops are trained in many skills, and are able to operate a wide range of Chinese
and foreign weapons. Some specialised weapons for Special Force include a range of
cross-bows for silent attack. The PLA has also revealed a new rifle-size laser device,
which can be used to cue laser-guided bombs or for non-lethal anti-personnel purposes.
In addition, a Special Forces unit in the Chengdu MR appears to be taking the lead in
developing a new kind of light mechanised army unit. In 2004 and 2005 this Chengdu-
based unit revealed new 4-wheel personal all-terrain vehicles new 8-wheel small ATVs,
plus both small and medium size "jeep" vehicles. There is also a new 5-wheel ATV that is
used to carry a 107 mm rocket launcher. Press reports in 2006 revealed new jeep-size
vehicles armed with small "mini-gun" style gattling guns, twin 23 mm AAA and
automatic 82 mm mortors. This new equipment is designed to be transportable by
medium-weight helicopters. PLA Special Forces train for helicopter and sea deployment,
have trained in Venezuela and have competed in the Estonian ERNA Special Forces
games.
Artillery
The PLA places great emphasis on artillery, being credited with having an inventory
greater than 17,000. The PLA is now developing more mobile and more accurate rocket
propelled and tube artillery.
A more recent trend appears to be an effort to morph cheaper artillery rockets into
accurate short range ballistic missiles (SRBMs). The PLA is interested in increasing their
accuracy with satellite navigation and UAV target cuing, and in arming them with
modern fused-sensor munitions. The doctrinal and inter-service impact of this
development is to give the army a new tool with which to challenge the reach of the
Second Artillery and the accuracy of the PLAAF's new navigation satellite guided bombs.
Some army units are receiving the A-100 300 mm MLRS based on the Russian Smersh
system. The PLA is also producing its larger WS-1 and WS-1B artillery rockets, the later
having a range of 180 km. In 2004 it revealed a 200 km range WS-2. But in early 2007,
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Chinese sources revealed that the PLA may be developing the 300 km Range WS-2C, the
400 km range WS-2D and the 500 km range WS-1F. Inasmuch as the WS-2 incorporates
satellite navigation guidance it is likely these longer range rocket do so as well.
Interestingly, the 200 km range WS-2B and the 300 km range WS-2C are said to target
"radar," potentially indicating they are equipped with passive guidance seekers that
would enable targeting a range of electronic emitters, such communication nodes or
ships at sea. Artillery rockets can be produced far more cheaply than DF-15 SRBMs,
which are said to cost about USD1 million apiece, and thus the PLA potentially can
rapidly increase the number of missiles aimed at Taiwan, which had exceeded 1,000 in
2008.
The 2007 IDEX show also provided new details about the B-611M and P-12 SRBMs first
revealed at the 2006 Zhuhai show, but without any supporting information. For the first
time Chinese sources at the show indicated that the PLA would purchase both new
SRBMs. The range of these missiles indicates that the likely user will be the army. The
Chinese confirmed previous information from Asian sources that the B-611M would be
an extended 260 km range version of the B-611 first revealed in 2004. In early 2005
Turkish sources confirmed that the B-611 was a product of a Turkish-Chinese co-
development program. With GLONASS navsat guidance, it is maneuverable to evade
interception, and can loft a 480 kg warhead to a 50 m CEP. Two missiles are carried on a
truck based TEL, and it may not be readily air-transportable, a likely feature for the
competing P-12. This missile uses a purpose built six-wheel amphibious TEL which also
carries two missiles, but which may fit inside a large transport like the Il-76. Though it
only has a 150 km range, it also uses satnav guidance to confer maneuverability and loft
its 450 kg warhead to an accuracy of 30 m to 50 m CEP. Its size and mobility indicates
the P-12 is meant to compete with the Russian Iskander SRBM.
New tube artillery is being produced in more popular 155 mm size and the PLA is now
producing a unique 155 mm version of the Russian Kitolov laser-guided artillery shell. In
late 2005 the PLA revealed that it has developed a near copy of the Russian MSTA-2S19
large self propelled gun turret, but on a hull based on that used by the PLZ-45.
Marketed as the PLZ05 it is armed with a 155 mm gun. It also appears that the PLA is
purchasing some WZ511 hulls equipped with a Chinese version of the Russian Nona-SVK
100 mm automatic mortar.
At IDEX 2007, China revealed their new SH1 and SH2 truck mounted artillery systems. It
is not known whether the PLA will be adopting these but that would be consistent with
its drive toward increasing mechanisation. The SH1 is a 155 mm gun system on a 6 × 6
wheel truck comparable to the French CAESAR. It is highly automated and can shoot
rocket assisted shells out to 50 km or can use laser guided round based on the Russian
Krasnopol. The SH2 offers the same mobility and automation but for a 122 mm cannon.
It is small enough to fit inside an Il-76 transport and can fire rocket assisted rounds out
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to 27 km. The 122 mm cannon is also used on another unidentified truck chassis
different from that used by the SH2.
Air Defence
Army air defence units consist of anti aircraft guns (AAA), self propelled gun (SPAAG),
self propelled gun-missile (SPAAGM) or missile (SAM) systems. The PLA Army is credited
with over 7,000 gun systems in 23 mm, 25 mm, 35 mm, 37 mm, and 85 mm sizes. The
PLA has placed greater emphasis on building up indigenous air defence systems,
sponsoring several companies to often produce competing systems. Despite this
plethora of offerings it is not clear which are supported by PLA purchases. Nevertheless,
the PLA is anxious to develop effective defences against US, Japanese and potential
Taiwanese precision guided weapons. It has often taken older AAA systems and
upgraded them with new digital information systems like new radar, optical systems
and digital command connectivity.
During the 1999 large military parade, the PLA revealed its Type 95 tracked SPAAGM,
which used four 25 mm cannon plus four QW-2 MANPADs, targeted by a combination
of radar and optical guidance systems, to provide an initial sophisticated mobile air
defence system. While it reportedly has been long in development, in 2006 Chinese
internet imagery began to reveal a new tracked SPAAGM, this time with a new twin 35
mm gun system and an unknown missile. It was also revealed that this SPAAG is similar
in configuration to the Polish Lora and the German Gepard, with a combined
radar/optical targeting system for the 35mm guns. Chinese sources at the 2007 IDEX
show confirmed this new SPAAG would use a type of advanced precision fused shell
similar to the Swiss Orelikon AHEAD, which uses special inductors at the end of the gun
barrel to signal to the shell when to explode in order to disburse 158 tungsten
supprojectiles in front of an incoming PGM. A 25 round burst can put over 3,000
projectiles into this path. While the PLA has co-produced a small number of Type 90 35
mm AAA, a copy of the Swiss 35 mm gun, it did not obtain AHEAD technology from the
Swiss. It turns out, as confirmed by South African sources, the PLA obtained this
technology from Denel, when it purchased a 35 mm AAA gun originally intended for
naval defence. It is not yet known whether the new tracked SPAAGM has entered PLA
service.
It is likely that the radar/optical guidance system for this SPAAGM forms the basis for a
new 30 mm SPAAG introduced at IDEX 2007, which so far, appears to use an early
prototype version of the new 8-wheeled APC mentioned above. This new SPAAG was
revealed at the 2007 IDEX show by the China Xinshidai trading firm. It is not known
whether the PLA has acquired this SPAAG. The PLA is now marketing two semi-mobile
SPAAG systems. In 2005, it started marketing the Norinco LD-2000, which uses the naval
Type 730 30 mm gattling gun on a flat-bed truck with a radar/optical director. The LD-
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2000 must be stationary in order to fire. At the 2007 IDEX show the Zhengzhou
Electromechanical Engineering Research Institute was marketing two concept SPAAGs.
Its Hailstorm A-2 uses a similar large flatbed truck like the LD-2000, but with their copy
of the Russian AK-630 30 mm gattling gun in a purpose built turret with a radar/optical
targeting system. A second concept is called the Hailstorm A-1, a smaller turret with the
same gun on a WZ501 size APC.
The PLA has developed a range of self propelled SAM systems but the extent of their
use by the PLA is not known. At the 2005 IDEX show Norinco revealed its "Yitian," which
uses a WZ501 hull to carry four TY-90 SAMs and a radar/optical guidance system. At the
2002 Zhuhai airshow missile maker Louyang showed its TY-90 SAM simply carried on the
back of a Shenyang-build copy of the US AM General HMMWV. This HMMWV copy is
also used at the basis for another SAM carrier called the FB-6A, which uses eight FN-6
MANPADS and an optical director. The FB-6 can be networked with central targeting
command post that uses a small radar carried by the same HMMWV. The 2002 Zhuhai
show also saw the introduction of the FLV-1, which combined four QW series MANPADS
with a new radar/optical targeting system, on a new four-wheel TEL. This is now called
the TD-2000(V1). The TD-2000(V2) uses a flat bed IVECO truck to mount a pedestal with
four QW SAMs and a small optical tracker.
For SAMs the PLA uses about 200 units of the HQ-7, a copy of the French Crotale. The
latest version, called the FM-90, is mounted on a new 6× wheel TEL and can engage
aircraft out to 12 km. During the 1990s and then early this decade the PLA also acquired
about 60 units of the Russian TOR-M1, a modern radar/optical guided SAM on a tracked
TEL that is also capable of intercepting PGMs. Inasmuch as Louyang has noted its
intention to build a SAM version of its 50 km range PL-12 AAM, it is an open question
whether it will be acquired by the PLA Army or the PLA Air Force.
As the PLA updates its fixed AAA by introducing more capable digital sensors and
command and control to create greater massed fire, it is also developing new AAA/SAM
combinations. In 2002 China introduced the FLG-1, which put the FLV-1 in the middle of
an emplacement of medium caliber AAA. The Giant Bow II combines twin 23 mm gun
emplacements with the TY-90 SAM. The TD-2000B combines 57 mm gun emplacements
with a 4 × QW SAM emplacement on a flat bed truck, and another truck with a short-
range radar. Furthermore, NORICO offers a fixed AAA network based on its twin 35 mm
gun and its AF902 radar/optical fire control, which it offers to pair with the TY-90 or the
PL-9 SAM.
Infantry Weapons
In addition, the PLA is upgrading the firepower and equipment of its soldiers. Increasing
numbers of units are receiving the new Type-95 bullpup-style assault rifle with integral
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grenade launcher. This rifle fires a unique 5.8 mm round designed to better penetrate
personal armour, and is made in carbine and sniper versions. There is also a 9 mm
submachine gun version of this rifle, but it is not clear it has been adopted by the PLA. In
addition. China has also developed a new large-capacity submachine gun similar to the
top-feeding FN-90. Though seen increasingly throughout the ground forces, the Type-95
has not displaced the 7.62 mm round Type-56 or the less numerous Type-85 assault rifle
families. Starting in 2004 the PLA revealed new types of sniper and 12.7 mm anti-
material rifles. Modern lightweight bolt-action sniper rifles with highly adjustable stocks
now compliment the older Type-79 Dragonov, and at least two companies have
revealed several new 12.7 mm anti-material rifles. Some AMRs are automatic, while
others are lightweight and bolt-action. New personal artillery included the W87
automatic grenade launcher, the PF-87 tube-launched anti-tank rocket, two new tube-
launched thermobaric missiles patterned on the Russian Shmel, and the PF-89, a 120
mm lightweight recoilless round launcher. At the 2007 IDEX show Chinese companies
revealed a new thermobaric round for the old RPG and a new 9 kg QLZ878 35 mm
grenade launching rifle. Soldiers are increasingly shown in better lightweight clothing,
equipped with better personal armour, to include Kevlar vests and helmets.
Communications
A key enabler for the PLA Army has been a consistent investment in information
systems, especially over the last 15 years. The PLA has led China's massive investment in
its national fibre-optic cable network, which has enabled the widespread use of
broadband computer networks for command, logistics and training purposes. Computer
networks are complemented by use of satellite communications as well has high-
frequency radio. There is also a greater trend toward combining video, voice and data,
not only at high-command levels, but also for the individual soldier. Initial personal
video-voice-data headsets were introduced for select Special Forces units in 2002 and
these are being improved. Some Special Forces have been depicted using gun-mounted
video camera/helmet projectors to enable non-line-of-sight gun use. There is some
evidence that the PLA Army is following US and European "digital soldier" developments
and is going to apply similar concepts tailored to its needs.
The PLA Army is also investing in information superiority, to include new information
warfare and intelligence capabilities. The PLA hopes to apply "People's War" strategies
to information warfare by mobilising many units from its growing computer technology
sector, that will specialise in computer network attack. At the tactical level there is also
a greater investment in ELINT and SIGINT capabilities, as well as fixed and mobile radar
that can support artillery, SAM/AAA, and infantry units.
The PLA is also producing a larger variety of UAVs; medium sizes to support company
sized units, and even hand-launched UAVs to support Special Forces or other smaller
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units. Companies like NRIST produce a range of medium-endurance tactical UAVs that
resemble Israel's IAI Hunter series and this company features both vehicle and personal
digital command systems. At the 2004 Zhuhai Airshow a company affiliated with the
China Aerospace Corporation featured a very small bungee-launched UAV designed to
be carried in a back-pack. In late 2005, reports on a new APC outfitted with post-
mounted sensors and low-light/IR sensors, indicated that it was also equipped to
receive video imaging from a small hand-launched delta-wing UAV. In 2006 Chinese
media coverage revealed a Special Forces six-wheel ATV outfitted to carry and deploy
small hand-launched UAVs.
Army Aviation
Army Aviation is also being steadily built up, with 9 Regiments and 4 Special Units now
in place. At least two GAs have helicopter regiments while every MR has at least one
helicopter regiment. Army Aviation regiments vary in content. In early 2006 Chinese
television covered an exercise that involved the combined use of Mi-17 and Z-8A
transport helicopters, with WZ-9 and WZ-9G attack helicopters providing fire support. In
March 2006 the PLA Daily reported that a dedicated attack helicopter regiment was
working up in the Jinan MR. It has been expected that the PLA would eventually build a
far greater Army Aviation capability. However, the experience of heavy usage of PLA
and civil helicopters in response to the May 12, 2008 Sichuan earthquake is expected to
even further accelerate the PLA's acquisition of new helicopters.
Utility and Transport Helicopters
In early 2006, 24 Mi-17I were ordered from the Ude Ulan factory while in previous years
the PLA has made repeated orders of the Mi-17V5/7 series from the Kazan factory. By
2007 there was a Russian-Chinese joint venture in Chengdu to repair Mi-17 helicopters
amid reports of a Chinese intention to co-produce this helicopter, but by early May
2008 Russian reports noted this venture would produce 20 kit-based Mi-17s a year, with
the capacity to increase to 80 annually. It is not clear whether the PLA will continue to
purchase Mi-17s from Russia and the Russian decision to enter into the kit assembly
arrangement is likely an attempt to remain competitive with Europe's export of
helicopter technology to China. The centerpiece of China-European cooperation is a six-
ton helicopter program. This design will be called "EC-175" by Eurocopter and the Z-15
by the Chinese side and resembles the Agusta A-139. Development of this helicopter
started in 2006, a prototype is expected by 2009 and deliveries are expected by 2011.
This programme will very likely succeed the transport version of what was called the
Chinese Medium Helicopter (CMH), which was being developed in co-operation with
Eurocopter and Agusta. European sources insist the EC-175/Z-15 will not be produced
for the PLA, however, that would contradict the precedent of every previous co-
produced Eurocopter design having been used by the PLA.
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After the May 2008 earthquake Chinese officials advocating additional helicopter
purchases also promoted the development of a Chinese ten-ton helicopter. During the
2006 Zhuhai Airshow a concept ten-ton helicopter very similar to the Sikorsky S-70 was
displayed in model form. Internet sources also indicate a possible Chinese interest in
developing a larger tandem rotor helicopter.
In addition, limited production of the Eurocopter AS-321/ Change Z-8 has resumed in
the form of the Z-8A for the PLA Army and the Eurocopter AS-360/Harbin Z-9 utility
version remains in production.
In 2006 Russia's Rostervertol made a greater push to market its advanced heavylift Mil
Mi-26 helicopter to both military and civil users in China. By early 2007 one of these 20-
ton payload helicopters had been delivered to a private Chinese company. Russia's
dispatch of one Mi-26 to assist with May 2008 earthquake relief will likely advance
Rostervertol's sales effort. At the 2007 Beijing Airshow Russia's Mil was marketing a
smaller 12-ton capacity version of the Mi-26, which was actually a preceding design, but
it does not appear to have harnessed Chinese interest.
Attack Helicopter
The long awaited heavy attack helicopter called the WZ-10, began flying in April 2003.
Clear images of this helicopter released in 2005 and 2006 confirm the influence of the
Agusta A-129 and the Eurocopter Tiger tandem-seat attack helicopters on this design,
which will feature a five-blade main rotor, advanced V-shaped fuselage to help deflect
ground blasts, a nose-mounted sensor suite, chin-mounted 23 mm gun, plus missile and
rocket armament. It is expected that a new ATGM, new AAMs plus unguided missiles
will arm this helicopter. Images of a new ATGM confirm that it is laser guided and in the
same class as the US Hellfire. Imagery released in 2007 indicates this new ATGM was
influenced by the South African Mokopa, while Chinese sources indicate it may have a
10km range and that its laser seeker may be as sensitive as that on the US Hellfire II.
The WZ-10 may also eventually feature a mast-mounted radar, which has been tested
on a Z-9.
This attack helicopter will be proceeded in service by the Change WZ-11, a scout/attack
version of the Z-11 training/utility helicopter, a copy of the Eurocopter AS-350. The
prototype armed Z-11 began flying in late December 2004. It features a roof-mounted
low-light/auto-tracking targeting sensor and can be armed with up to four ATGMs or
pods for unguided rockets and cannon. Some sources expect the Z-11 will perform the
mission of scout and attack, similar to the US OH-58.
In addition, a new version of the Harbin WZ-9, the WZ-9G, first revealed in 2004, is now
entering PLA Army Aviation regiments. The WZ-9G features a more powerful engine and
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a nose-mounted sensor ball that provides much greater lower-hemisphere coverage.

The Z-9 configuration does not permit chin-mounted cannon, but the WZ-9G likely can
carry a greater compliment of missiles, plus rocket and gun pods.
Training helicopter numbers have also grown. PLA Army helicopter training regiments
fly the Change Z-11 and in 2005 starting using the HC-120 (EC-120) Colibri, the product
of a 2004 co-production agreement between Eurocopter and the Hafei Aviation
Industry Group in Harbin.
Unmanned Vehicles (UAV)
The PLA Army has a significant interest in UAVs and operates numerous company and
squad level UAV systems that feature programmed flight via laptop control. In the early
1990s the PLA developed the AS-206, a twin boom tail pusher UAV similar in size to the
Israeli Searcher. The UAV company NRIET has since developed a series of medium size
UAVs for surveillance and aerial target missions. It remains to be see whether the army
or air force will control new Predator-1 size UAVs being developed by the Guizhou Co.
and one other Chinese company. In late 2004 China Aerospace revealed a new soldier-
carried micro-UAV system that weighs a total of 20 kg for the aircraft, computer and
bungee-cord launcher. In late 2006, Chinese military press coverage indicated the PLA
was also experimenting with small hand-launched UAV based on a commercial toy
model. PLA Army interest in helicopter UAVs was revealed following 2005 Japanese
press revelations that China had copied the capable Yamaha small helicopter used in
Japan for surveillance and agricultural missions. At the 2006 Zhuhai show China
revealed that it is also working on ducted-fan driven vertical UAVs similar to those now
under development for the US Army Future Combat System programme. In addition,
the PLA appears to be investing in the necessary mobile control and command facilities
to receive and disseminate UAV-obtained data. The PLA has also experimented with
unmanned armoured vehicles, developing a digital remote control system for a tracked
APC.
Trucks
As per doctrinal goals, the Ground Forces are becoming increasingly "mechanised" with
the addition of thousands of newer and more capable heavy transport trucks, and new
varieties of light trucks. There are far more trucks for transporting tanks, and newly
designed trucks that load or off-load supply pallets, part of the PLA's move toward
"precision logistics". Two Chinese companies are making copies of the US AM General
HMMWV and these companies are beginning to market them for diverse missions.
At the same time, the PLA is buying hundreds of new co-produced Italian IVECO light
trucks. These serve in roles ranging from Airborne ATGM carrier to mobile lethal-
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injection execution vehicles for the PAP. A number have been bought for use as troop
transports by the 600-strong Chinese contingent operating with the United Nations
(UN) peacekeeping force in Liberia. Each is equipped with an HF-90 50W HF SSB
transceiver coupled to an ML-90 magnetic-loop vehicle antenna, produced by Q-MAC
Electronics of Australia.
In addition the PLA has devoted considerable resources over the last decade to
developing new heavy trucks for a range of missions. At a late 2007 trade show it was
revealed that the China had developed a new heavy truck similar in shape and size to
the US M-977 HEMT. It has an empty weight of 15,000 kgs, a useful load of 10,000 kgs, a
105 km/h speed and a 600 km range.
Logistics
The 1998 reforms that saw the elimination of most non-military business also saw the
consolidation of key functions like redundant hospitals for individual services. There has
also been a greater trend toward contracting services like canteens and laundry to the
civilian sector.
In addition, especially at the MR level, there is a growing trend toward joint-service

logistic service, combining the purchase storage and distribution of common items.
There is also evidence of greater use of computer technology like bar-codes to track
usage and rate of consumption. The PLA is also showing greater interest in precision
logistics. The PLA now markets specialised trucks designed to load/offload palletised
cargo. As per doctrinal goals, the Ground Forces are becoming increasingly
"mechanised" with the addition of thousands of newer and more capable heavy
transport trucks, and new varieties of light trucks. There are far more trucks for
transporting tanks, and newly designed trucks that load or off-load supply pallets, part
of the PLA's move toward "precision logistics".
Air Force procurement
Requirements
Even before the first Gulf War, PLAAF commanders were well aware that China's air arm
lagged behind when viewed against developed world standards. Stigmatised by
involvement in the Lin Biao incident and sidelined during the 1979 Vietnam incursion,
the PLAAF started the 1990s with very ambitious modernisation goals. Taking the US Air
Force's performance during the first Gulf War as an example, the PLAAF sought to
become an offensive/defensive all-weather combat force. During the 1990s came the
added requirement to be increasingly able to conduct air operations both
independently and within the context of complex joint-service operations. Most of the
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1990s was spent introducing new advanced Russian fourth generation fighters,
developing new doctrine, tactics, training and logistic support methods and removing
thousands of 1950s-vintage Shenyang J-6 fighters from the inventory. Looking beyond
2010, the PLAAF is seeking to fund long-term production of fourth generation fighters
as well as move ahead with development of indigenous fifth generation designs.
Another expensive requirement that is looming is the development of large transport
aircraft. In this regard, China is reportedly looking to Antonov and perhaps Ilyushin to
help develop military transports.
Bombers
In the mid-1990s, the PLAAF made a decision to procure updated versions of the 1950s
era H-6, following Russia's refusal to provide the Tupolev Tu-22M3 'Backfire'. In 2002, it
was revealed that production of the H-6 had been re-started, with the H-6M for Naval
Air Force units. Subsequently, in January 2007, internet imagery revealed a new version
of the bomber known as the H-6K. This differs from previous models by featuring larger
engine intakes, indicative of a new engine, and also has six wing-mounted hardpoints
carrying a new land attack cruise missile (LACM). Subsequent imagery showed that the
H-6K had dispensed with its 'World War Two' features, specifically a glazed nose section
for and a tail gun turret. Chinese sources report that the cockpit has been updated with
multi-function displays, indicating the possibility that the H-6K could in future be
equipped to carry new laser- or satellite-guided munitions. Chinese sources also
indicate the new engine may be the Russian D-30K which powers the Il-76, potentially
giving the H-6 a 3,000 km radius of action, which is more than enough to reach Guam.
Asian military sources speculate that as many as 50 H-6Ks will be procured, although
purchases of D-30K engines in 2005-06 appear to only support the construction of
about 30. In the late 1990s, an unknown number of H-6 bombers were converted to
carry the YJ-63, a 200 km to 300 km range cruise missile derived from the C-601 family
that uses an optical terminal guidance system, for which the H-6 carries a new data-link.
In addition, at least 10 aircraft have emerged as H-6U refuelling platforms, these being
deployed in the Guangzhou Military Region to support J-8D fighters.
There has also been considerable speculation that Russia may have had second
thoughts about supplying bombers to China, including examples of the Tu-95 'Bear'; its
ASW/Anti-ship/maritime patrol variant, the Tu-142; and the Tu-22M3 'Backfire'. In late
2005, some Asian sources reported that negotiations were at an advanced stage, but
they remain unrealised at the end of 2007. Previously, in late 2004, Russia announced it
was to de-activate two regiments of Tu-22M3s as a cost cutting measure and offer them
for sale. Russian sources also indicate that there are enough de-activated Tu-95s to
support a sale to China. Both of these types could easily be upgraded to support
precision bombing strikes or to carry new Russian or Chinese land-attack or anti-ship
cruise missiles and such a purchase would also mark the ascendance of the PLAAF as a
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truly strategic force.
Occasionally, there are reports that China is considering the purchase of new Sukhoi
heavy fighter-bombers like the Su-34 to replace H-6 bombers. Such speculation was
encouraged by Chinese leader Hu Jintao's high-profile visit to the Sukhoi factory in
Novosibirsk in July 2005, but apparently there has been no progress toward a sale. In
addition, there are occasional unconfirmed reports of a new large manned penetrating
bomber based on Russian technology inputs, perhaps from the Sukhoi T-60 stealth
bomber programme. At the 2004 Zhuhai Airshow, aeronautical universities displayed a
delta-shaped flying model that could possibly provide a basis for future medium stealth
bomber designs. Then, at the 2006 Zhuhai show, a side-profile of what appeared to be a
new stealth strike fighter design was revealed. This evidently featured scalloped over-
wing air intakes consistent with stealth designs. It is not known whether this represents
an experimental project or if it has been developed into a heretofore secret operational
aircraft. It is also possible that new large transport designs now being considered by
AVIC-1 could culminate in a new large non-stealthy penetrating bomber later in the next
decade.
Fighters
The PLAAF has been aggressively pursuing both foreign purchase and indigenous fighter
programmes for more than a decade. Foreign programmes included direct procurement
of the Sukhoi Su-27SK/UBK and Su-30MKK, as well as co-production of the Su-27 as the
SAC (Shenyang) J-11. Current indigenous programmes include the XAC JH-7A, CAC J-10
and J-7G and the SAC (Shenyang) J-8. CAC is also pressing the PLAAF to purchase its new
FC-1 fighter. In addition, both CAC and SAC (Shenyang) have fifth generation fighter
programmes under way.
About 500 models of the J-7 are believed to remain in service, with limited production
of the latest J-7G version apparently continuing. While most are early models, there are
about 250 examples of the J-7C, J-7D and J-7E that feature more powerful engines and
better radar and avionics, with the latter derivative introducing a unique cranked delta
wing that confers greater range and manoeuvrability. The newest J-7G version features
KLJ-6E Falcon fire-control radar, PL-8 IR-homing missiles and an updated cockpit with a
new HUD unit. Chengdu asserts the J-7G is also armed with a helmet-sighted AAM,
giving a new level of lethality to this old design. Chinese sources indicate that other
versions of the J-7 may be similarly armed. Close to 50 examples of the J-7G have
apparently been produced to date, with this version having been delivered to the 34th
Air Regiment at Jinan.
While it is assumed that the PLAAF will continue its commitment to lightweight fighters
for some time to come, it is not yet clear that it will select the CAC FC-1 Xiaolong to
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provide a multi-role replacement for the J-7. While cost considerations could prompt
renewed PLA interest in continued procurement of the J-7, the purchase of 100 Klimov
RD-93 engines in mid-2005 (coupled with reports indicating this could grow to 500), it
appears that the newer FC-1 may in fact be the PLA's choice. By late 2005, in response
to problems detected after flight testing commenced in August 2003, the FC-1 design
was modified to include diverter-less supersonic intakes, new wing leading-edge
extensions and a new vertical stabiliser housing for combat electronics. These
improvements increased maximum speed to M 1.8 and increased range to 1,800 km.
Also, a recently redesigned cockpit makes use of larger multi-function displays and a
new HUD.
Long in development, the Chengdu J-10 was the subject of a major Chinese government
'coming out' party at the end of December 2006. With at least 60 J-10s having been
produced by early 2007, some sources feel that lifetime production of this type could
reach at least 1,200, representing a real reversal in fortune for a programme thought to
be almost defunct in the mid-1990s. Derived from the 1960s origin J-9 programme,
which bore a resemblance to the Swedish Viggen fighter, the final J-10 design combines
aspects of the Lavi, F-16, Mirage 2000 and Eurofighter Typhoon. While there was early
belief that the J-10 would depend heavily on foreign radar systems and the Russian
Saturn AL-31FN turbofan engine, it is now apparent that it features a largely domestic
radar, albeit one that is influenced by foreign technology, and will soon use the
domestic WS-10A turbofan engine. However, as a hedge against delays in WS-10A
development, in mid-2005 the PLA ordered 100 more AL-31FN engines, with Russian
reports indicating this number could reach 250. Chinese officials note that the J-10's
radar meets a requirement for a detection range of 125 km and it is perceived to have
begun its service life with a capability comparable to that of the F-16 Block 30, meaning
it will be able to fire active-guided PL-12 AAMs and deliver PGMs. Photos of the J-10
show it to be equipped with five fuselage hardpoints for the carriage of targeting pods
and ordnance. In December 2006, AVIC-1 revealed a model of the J-10 equipped with
chin-mounted targeting pods and also confirmed that at least one aircraft had been
modified with an in-flight refuelling probe.
In December 2003, Chengdu produced the first twin-seat J-10 prototype. This version is
being developed into a dedicated attack variant and was being marketed in Southeast
Asia in early 2007. Chengdu officials call the twin-seat training version the J-10S and
note that even more advanced versions of the J-10 are now in development. Russian
and Chinese sources have also disclosed that one advanced version will incorporate a
thrust-vectoring nozzle for an uprated AL-31FN engine and, perhaps, a new active
electronically scanned array (AESA) radar.
More than 200 SAC J-8 twin-engine fighters are presently in PLAAF service. The early
single annular-intake J-8I has been upgraded to J-8E standard with new radar and
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defensive electronics. There is also at least one J-8D regiment equipped for aerial
refuelling. It is possible that a significant number of J-8Bs have been upgraded with a
helmet-aiming system that combines a co-produced Ukrainian Arsenel helmet with the
PL-8 (Python-3) or PL-9 air-to-air missiles. The latest J-8F production model features a
new Chinese-designed radar, what may be an infrared search and tracking sensor (IRST)
under the nose, and a new engine, possibly the Kunlun II turbojet. It may also be armed
with the new Luoyang PL-12 active-guided AAM.
After spending most of the 1990s integrating the Sukhoi Su-27 into its force, by early in
the present decade there had been significant acceleration in the acquisition of Russian-
made and Shenyang co-produced examples of this formidable warplane. By the end of
2006, the PLAAF and Navy air arms are believed to possess about 300 examples of the
Su-27, J-11 and Su-30MKK in service, with Sukhoi reporting large business in supplying
spare parts for this fleet, while the PLA is also purchasing substantial numbers of new
Al-31FN engines.
After initial troubles that saw Russian technicians reconstruct the first two examples of
the co-produced J-11 variation on the 'Flanker' theme, Shenyang imported advanced
design software and production machinery, giving the locally-assembled J-11 fighters a
better production finish than KnAAPO-built Su-27s.
Since 2001, Shenyang has indicated a desire to upgrade the J-11 into a multi-role
capable fighter, first using Russian R-77 active guided AAMs and Kh-31 ASMs, but later
to employ Chinese Luoyang PL-12 active-guided AAMs, which would imply adoption of
an indigenous radar and fire control system. In 2002, it was also revealed that the J-11
has served as a test bed for the indigenous WS-10A turbofan, signalling the intention to
further 'indigenise' this fighter. Sukhoi apparently tried hard to sustain the dominant
role in the J-11 programme by offering an array of upgrade technologies that enable far
greater performance than the PLA can expect from its domestic factories. Despite this,
at the November 2006 Zhuhai Airshow, AVIC-1 revealed that a 'J-11B' with indigenous
Chinese radar, engines and PL-12 missiles had flown, which was confirmed by
subsequent internet-released photos of prototype aircraft in testing. However, this shift
to reliance on indigenous components has not been easy and reports in early 2006
indicated that delays in the production of the WS-10A and a new indigenous fighter
radar prompted the PLAAF to resume J-11 assembly mainly with Russian parts, with
production of 17 aircraft apparently intended for 2006.
Subsequently, by June 2007, internet images began appearing, first depicting a model
and then an early production image of the twin-seat J-11BS. It is not yet known whether
the J-11BS is intended to fulfill training or attack missions, although concurrent
development of the J-10S suggests that both applications are possible.
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China is already well advanced with two and possibly three fifth generation fighter
programmes. One of China's goals has been to develop a fifth generation fighter
incorporating as many indigenous components as possible, including engine, electronics
systems and weaponry. This goal would appear to have been altered for Chengdu's fifth
generation proposal, which was shown in early 2003 to bear a great resemblance to
Mikoyan's now defunct 1.44 fifth generation fighter project. This design may be
evolving with significant Russian assistance from the SibNIA design bureau, but does
retains its basic canard-delta layout. Chengdu sources have confirmed that in 2004 they
began investigating the development of a F-35 class fighter, or a lightweight fifth
generation design. This indicates that Chengdu may be responding to PLA requests for a
lower-cost advanced fighter design and that China intends to compete for foreign sales
in this aircraft sector.
At the 2006 Zhuhai show, Shenyang unveiled two new advanced fighter concepts. One
was a single-pilot, single-engine, stealthy forward-swept wing design with a largely flat
fuselage. This appears to emphasise extreme manoeuvrability and stealth shaping in a
lower-cost single-engine configuration. It may be Shenyang's attempt to compete with
Chengdu's 'lower cost' F-35 design, possibly indicating that the PLAAF may have a
requirement for such a lower cost fighter to compliment heavier twin-engine designs. A
decade earlier, in 1997, the US Office of Naval Intelligence speculated that Shenyang's
'F-12' would be a twin-engine, tailed-delta, design similar in size to the Boeing F-15. To
date, however, Shenyang has not released any open data on the configuration of its
heavy fifth generation design.
Attack Aircraft
The PLAAF's most important attack aircraft are its Su-30MKKs, which are deployed in
two operational regiments in the Nanjing and Guangzhou Military Regions, closest to
Taiwan. However, its range also makes it a threat to US forces stationed on Okinawa. All
Su-30MKKs are capable of being refuelled in flight, which further increases their strike
range and loiter time. The Su-30MKK gave the PLAAF its first all-weather attack aircraft
capable of delivering PGMs and is also the first PLAAF fighter to be armed with the
Vympel R-77 self-guided AAM.
In 2004, it was revealed that the PLAAF would also purchase the updated JH-7A fighter-
bomber, with initial deliveries subsequently being made to a regiment in the Nanjing
Military Region. The JH-7A had previously been a purely navy programme, but
acquisition is now reportedly a priority for the PLAAF. While lighter than the Su-30MKK
and less capable, the JH-7A has the advantage of being a largely domestic programme
and was made possible by co-operation with Britain's Rolls Royce, to allow for the full
co-production of an upgraded version of the Spey 202 turbofan called the QinLing. The
JH-7A features fly-by-wire controls, an advanced multi-function display cockpit, an
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external sensor and designator pod and can be armed with laser-guided bombs, a range
of free-fall weapons and wing-tip mounted AAMs. The manufacturer has indicated that
it will ultimately be armed with guided ASMs like the Kh-31/YJ-91. In 2006, it was also
disclosed that the JH-7 had been tested with the new FT-1 satellite-guided bomb. Early
2006 reports indicate that China wishes to double production of the QinLing engine to
60 units per year, which would enable a potential output of 30 JH-7As per annum.
The PLAAF does, however, lack a modern dedicated close-support aircraft, though in
2005 some sources suggested that China was showing interest in the very capable
Sukhoi Su-25 'Frogfoot'. In the meantime, the PLAAF has upgraded some Q-5 attack
fighters, with the Q-5D reportedly able to deliver laser-guided bombs (LGBs),
transforming this otherwise obsolete fighter into a modern PGM truck.
In early 2007, Hongdu revealed another version of the Q-5, which has been referred to
as the Q-5E by some, although this may not be a correct designation. It features an
extended under-fuselage fuel tank and a small ball on the nose that could be associated
with an optical/low-light targeting system. This possibility was further indicated by
conspicuous carriage of LT-2 laser-guided bombs. By early 2008 internet-source images
showed Q-5s with new laser/low-light targeting pods, appearing to confirm that some
Q-5s are being upgraded as a low-cost close-air-support platform.
At the 2006 Zhuhai show, AVIC-1 may have provided a hint regarding possible
development of a dedicated stealth attack aircraft. The aircraft in question uses over-
wing engine intakes with what appear to be scalloped edges, which are consistent with
a stealth objective. It appears to be similar in size to the US F-117 and China is known to
have produced stealth coatings that could be used by such an aircraft. However, it
cannot be definitively concluded that such a stealth fighter programme exists.
Another new possible attack aircraft is the LFC-16 single-engine, single-seat, canard
fighter. First revealed at the 2002 Airshow China as the CY-1 attack fighter, this
programme began as a privately-financed venture. By 2004, Guizhou had adopted the
programme and was claiming that it had financial support from the military, adding that
it would begin production of two prototypes in the next two years. Derived from the
FTC-2000 supersonic trainer, the LFC-16 features a canard/delta planform and novel
'side-plate' surfaces to obviate the need for expensive fly-by-wire controls. As of mid
2008, however, there has been no evidence to suggest that this project has reached the
prototype stage.
Transports
During a visit to Moscow in December 2003, Chinese Defence Minister Cao Gangchuan
is reported to have sought to purchase 34 more Ilyushin Il-76 'Candid' heavy transport
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aircraft, with a contract for these having been signed in September 2005. Following
Chinese complaints in 2006 about delivery delays, Russia's Rosoboronexport chose to
split production, taking 19 from the Tashkent Chkalov plant and moving the rest to the
Aviastar factory in Ulyanovsk. When deliveries are completed, this purchase will
increase the Il-76 inventory to about 50, significantly enhancing airlift capability.
About 48 domestically produced copies of the Antonov An-12, the Shaanxi Y-8, are
presently in PLAAF service and it appears feasible that additional examples of new
derivatives could be obtained in the future. These are most likely to be of the radically
revamped Y-9 variant, which was first unveiled to Western eyes as the Y8-X in 2002. At
that time, it featured high lift wings and more powerful turboprops, and was claimed to
have performance similar to that of the C-130J Super Hercules. Subsequently, at the
September 2005 Beijing Airshow, Shaanxi revealed that the Y8-X had further evolved
into the Y-9 design, with new YJ-6C turboprop engines, Chinese-made JL-4 six-blade
composites propellers and a redesigned fuselage. The Y-9 is advertised as being able to
carry a payload of up to 20 tons or one of the PLA's new ZLC-2000 tanks.
In 2006-07, Ukrainian sources confirmed the existence of a competition between AVIC-1

and AVIC-2 to determine who will develop China's next-generation turbofan-powered
military transport. The AVIC-2 proposal was shown in early 2006 to be a redesigned
turbofan-powered version of the Antonov An-70, with an increased capability to lift
between 50 and 60 tons. In early 2007, Ukrainian sources also confirmed that internet-
source images of another four-engine transport concept portrayed the AVIC-1 proposal.
Unconfirmed Chinese sources later indicated that this transport would also have a 60
ton capacity, a range of 4,000 km and a speed of M.07. The AVIC-1 proposal bears a
close resemblance to the Ilyushin-India Multirole Transport Aircraft, albeit with four
engines. It was also reported that AVIC-1 would be canvassing Tupolev, Ilyushin and
Airbus for potential large transport technology co-operation. Previously, Shaanxi and
Antonov are known to have discussed the possibility of co-producing an upgraded
version of the An-124 Ruslan. China is currently trying to determine how best to
participate in a new company that Antonov is helping to establish to support a
resumption of An-124 production. If China does decide to join or invest in this company,
it appears conceivable that it may subsequently purchase this 150-ton capacity
transport.
By late March 2007, AVIC-1 was ready to begin component assembly of its first ARJ-21
regional transport. This transport saw a formal "roll-out" in December 2007. Started in
2002 as China's second serious attempt to build an indigenous civil jet transport after
the failed Y-10 programme of the 1970s, the ARJ-21 constitutes China's effort to absorb
many new foreign transport technologies, design concepts and manufacturing methods.
In early 2006, Chinese officials stated that the development of large transport aircraft
would be a feature of the Five Year Plan that began in that year. One programme will
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entail development of a 150-seat narrow-body airliner, while in early 2007, it was

revealed that China may also be planning larger wide-body civil transports, perhaps
comparable in size to the four-engine Airbus A340 or twin-engine A330. During a late
December 2007 visit by Premier Wen Jiabao, the Xian Aircraft Company revealed a
model of its new 150-seat airliner, which showed a broad similarity to the Airbus A320
and the Boeing 737. This new airliner is expected to fly before 2020. By May 2008,
China's ambition to produce world-class airliners had led to significant industrial reform,
most notably the creation of the new Commercial Aircraft Corporation of China (CACC).
Both the smaller 150-seat and larger wide body airliners would then be candidates for
adaptation to serve as patrol and surveillance aircraft, electronic warfare and AWACS
platforms or as in-flight refuelling tankers.
Periodic PLA use of civilian transports to join transport exercises highlights the need to
monitor China's civil air fleet. The PLA used civil transports to move troops and material
in response to the May 12 2008 Sichuan earthquake, and used civil heavy cargolifters
such as a Boeing 747F and a MD-11F during a June 2008 transport exercise. Chinese and
Hong Kong based airlines currently use about 31 Boeing 747F-200/400/Combi and 9
MD-11F cargo transports. In addition, China Southern has on order 6 Boeing 777F cargo
transports.
Tankers
While the PLAAF has only a limited aerial refuelling capability at the present time, this
may well be markedly increased in the near future. The current tanker force consists of
about 10 H-6U tankers which are understood to be based at Leiyang in the Guangzhou
Military Region, from where they are available to support a regiment of J-8D fighters. In
December 2003, Chinese Defence Minister Cao Gangchuan requested the supply of Il-
78M 'Midas' tankers during a visit to Russia, with a contract for four to six aircraft being
signed in early September 2005. This deal, however, is on hold pending resolution of
larger issues connected to the purchase of Il-76 transports. Acquisition of these
dedicated tankers would allow PLAAF Su-30s to serve as regional strike aircraft or to
maintain long-endurance patrols over distant regions of the South China Sea, although
production problems similar to those that have affected the Il-76 order placed at the
same time appear to have caused delay in delivery.
Unmanned Aerial Vehicles (UAVs)
China has long had an interest in unmanned aircraft, using some as targets for live-fire
exercises, while also developing a series of long-range reconnaissance UAVs based on
US Firebee drones captured during the Vietnam War. The PLA has also converted some
J-5, J-6 and J-7 fighters into UAVs for use as targets and for experimental purposes.
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At the 2000 Zhuhai Airshow, Guizhou revealed the first iteration of its WZ-2000 long-
range UAV, a twin-engine delta design. By the time of the 2002 Zhuhai show, this had
evolved into a V-tail design with a bulbous nose similar to the US Global Hawk. The 2004
Zhuhai show also saw the revelation of two piston-powered UAVs similar in size to the
US Predator, although no other details were made available. In 2005 and 2006,
Taiwanese sources expressed concern about the conversion of 200 or more J-6 fighters
into UCAVs, for unknown missions, with speculation regarding their purpose ranging
from acting as decoys to absorb SAMs to being armed 'cruise missiles' for use against
high value and high risk targets.
The PLA used the 2006 Zhuhai Airshow to unveil a major effort toward world-class
UAVs, with Shenyang, Chengdu and Guizhou all displaying new and far-reaching UAV
concept models. Perhaps most radical of these was Shenyang's Anjian, or 'Dark Star'
concept, a sharp featured stealthy supersonic UCAV designed, according to its placard,
for anti-air missions. While Chinese officials offered no additional details, the Anjian
featured a single engine with a raked underslung intake, delta wings and twin
stabilisers. No data has been disclosed about its performance, radar, weapons or
control system. While interest in UCAVs has declined in the US and Europe due to a host
of situational awareness and control issues, it is not known whether China has made
breakthroughs that would allow realisation of the Anjian anti-air UCAV. The possibility
remains that Shenyang has encountered similar challenges and that the Anjian design
will evolve more toward less demanding interdiction missions.
China's interest in developing a UCAV may have been indicated by an AVIC-1 aircraft
development timeline brochure. This contained a side-profile image of what appeared
to be a UCAV technology demonstrator similar in size to the EADS Barracuda and
featuring an over-fuselage air intake. Such a programme would be consistent with
development of a UCAV for interdiction or future air superiority missions.
Chengdu and Guizhou both disclosed the existence of new long-range surveillance UAV
concepts. The Chengdu design most resembled the US Global Hawk, with its rear
fuselage turbofan engine located between a V-tail plus long high aspect ratio wings.
Depending upon its engine performance, this UAV could approach the endurance of
Global Hawk, potentially giving the PLAAF a strategic UAV capability. The Guizhou 'Soar
Dragon' concept marked a departure from the WS-2000 designs by utilising a 'box wing'
with a span of 25 m. This 7,500-kg UAV has an advertised range of 7,000-km and the
model at Zhuhai appeared to indicate that it was equipped with a synthetic aperture
radar. The 2006 show also provided a brief video glimpse of a piston-engined, twin-
boom, UAV taxiing down an airstrip, whereas in 2004 this was only seen in a picture
provided by a model-making company.
Air Defence
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The PLAAF provides most of the long-range ground-based air defences for China. As
with the Army, Reserves and Militia, the PLA has placed great emphasis during the last
two five-year plans on building up air defence capabilities for the PLAAF. Doctrinal
justifications for increasing air defences include the goal of better defending the
primary military bases and infrastructure needed by the PLA to sustain offensive
operations. A secondary goal is to increase defences for populated areas, but this too is
receiving greater attention. Currently, PLAAF SAMs and AAA are spread among three
SAM Divisions, one mixed SAM/AAA division and 10 other air defence Brigades. The
greatest concentration is in the Beijing MR, which hosts three SAM and one mixed
SAM/AAA Divisions. However, the mobility of newer Russian SAM systems means that
some of these units could be quickly shifted to other priority areas.
The most important upgrade for PLAAF air defence forces has been the acquisition of
hundreds of Russian S-300PMU/S-300PMU-1/S-300PMU-2 SAMs. It is very difficult to
jam these modern high-speed track-via-missile (TVM) guided weapons and thus escape
interception. They were featured in 1996 exercises near Taiwan and reports circulating
in 2000 indicated that the PLA intended to establish three S-300 bases opposite Taiwan,
while in early 2007, Asian sources spoke of this having been increased to four. The
ability of these SAMs to cover most of the Strait would deeply complicate efforts by the
Taiwan Air Force to carry a battle to China's airspace. They would also pose a serious
threat to any US aircraft coming to Taiwan's assistance.
By 2004, the PLAAF had acquired 12 battalions of S-300PMU and S-300PMU-1 SAMs;
with each battalion possessing 12 launchers and each launcher containing having four
weapons, this gives a potential total of up to 576 missiles. The S-300PMU-1 uses the
105-km range 48N6E missile. In August of the same year, it was reported that the PLAAF
was to obtain either four or eight more battalions of the more advanced S-300PMU-2
SAM system, giving a potential total inventory of 240 launchers and close to 1,000
missiles. This upgraded system uses either the 150-km range 48N62E or 200-km range
48N6E2 missile, further extending the already formidable threat posed by SAM
coverage of the Taiwan Strait.
Reports also indicate that the PLA is a major investor in the S-400 SAM project, which
would seem to confirm that the PLA will be a key customer for this system and potential
future longer-range Russian weapons. Eventually, the S-400 will include short-range
SAMs and missiles with ranges of up to 400-km, and they may combine both TVM and
active-guidance systems, plus new hemispheric phased array guidance radar.
In early 2003, reports provided the first indication that China had succeeded in
developing an active-guided version of its FT-2000 SAM, first revealed in 1998 as a
passive-guided SAM to target AWACS and other electronic warfare aircraft. The FT-2000
now utilises a ground-based phased array radar similar to the US Patriot missile system.
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In late 2004, Chinese sources revealed that the active guided version would employ
radar, contradicting earlier reports that it would use TVM guidance. Chinese sources
have revealed that the FT-2000 would eventually have an ATBM capability. The FT-2000
is reported to incorporate both Russian and US technology influences. The most
numerous SAM in the PLAAF inventory remains the HQ-2 (SAM-2), fired from fixed and
truck-towed launchers. In PLA service, this has been steadily upgraded, to include better
radar and optical guidance options. There is also an anti-radar version.
Just as important is the fact that the PLAAF has been upgrading radar units. While the
PLA has purchased a number of Russian radars, especially to support S-300 deployment,
the PLA has also demonstrated a considerable domestic capacity to develop modern
active, phased array, over-the-horizon (OTH) and passive radar systems. According to
Asian sources, by mid-2008 the PLA had three to four large sky-wave technology long-
range OTH radar facilities in operation, which allows the PLA for the first time to
continuously monitor US Navy movements in the Western Pacific. One OTH site maybe
in Hainan Island. The PLA has acquired at least six of Ukraine's highly effective Kolchuga
passive radars. In 2004, China was blocked by the US from acquiring the Czech
Republic's Vera passive radar, though in 2005 it was again trying to acquire this system
following its sale to the US. Nevertheless, China has absorbed passive detection
technology, confirmation coming at the 2005 IDEX show when it revealed its own three-
vehicle passive detection system. This is claimed to have only a 300-km detection range,
which is more than sufficient for most Taiwan scenarios.
ELINT/EW/Reconnaissance Aircraft
In early 1995, China modified two Tu-154M 'Careless' transports into experimental
electronic warfare (EW) platforms. Each was fitted with ventral radomes and what was
reported to be a 'very basic' EW suite. Both of these Tu-154M/Ds are based at Nan Yuan
airfield, south of Beijing, where they have since been joined by another pair of Tu-154s
that are also devoted to ELINT/SIGINT missions. In addition, the PLA is developing
versions of the Y-8 for ELINT/SIGINT missions, with at least two modified aircraft in
PLAAF service. Reports indicate that the PLAAF is in the process of acquiring up to eight
Y-8 transports outfitted for electronic warfare missions, these possibly employing an
ELINT pod and associated ELINT suite for a larger transport aircraft that was revealed by
the Chinese in 1998. Turning to consider combat aircraft, the PLAAF has the Russian
Sorbitsya EW pod system for its Sukhoi fighters and has also developed an ELINT pod for
the J-8 fighter.
In mid-2007 China also began revealing new electronic warfare pods, first shown being
employed by the Xian JH-7 and JH-7A fighter-bomber. The new pods were depicted in at
least three variants, and their configuration suggested ELINT and jamming missions. It is
likely that this modified version of the JH-7 is intended to perform missions similar to
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that of the US EA-6 and newer F/A-18G electronic warfare aircraft.
The PLAAF maintains a declining number of dedicated reconnaissance aircraft, but

examples of the JZ-6 and JZ-8 are in service, these being modified versions of the J-6
and J-8 fighters. In the future, a reconnaissance version of the JH-7 is expected to
appear and this could well be suitable for adoption by the PLAAF.
Airborne Early Warning and Control System (AWACS)
The PLAAF has at least two AWACS programmes underway. In April 2004, Chinese
sources revealed that at least two modified Russian Il-76 airframes were in China. Called
by some the KLJ-2000 programme, one of these was an 'empty' Beriev A-50 that was
obtained from Israel in 2002, in the wake of the US-forced cancellation of the Israeli IAI-
Beriev deal to provide A-50Is with the IAI Phalcon phased array radar. This aircraft is
now assigned to the China Flight Test Establishment (CFTE) and is reportedly equipped
with indigenous phased array radar that is very likely being made with substantial
Russian assistance. Two other examples of the Il-76 have been modified with a fixed
AWACS-type rotodome in China. These aircraft exhibit slight differences to their
predecessor and may indicate an upgraded developmental version. Asian sources report
that radar emissions from these aircraft are consistent with those of the Phalcon
system, even though co-operation with Israel terminated in 2000. When fully
operational, this AWACS is expected to substantially increase the ability to conduct
aerial surveillance and direct offensive and defensive air and naval operations.
In 2002, another AWACS programme was revealed. Known as the KLJ-200 'Balance
Beam', this features a phased array radar similar in configuration to Sweden's Erieye
system installed atop a Shaanxi Y-8-200 transport. Clearer photographs of this aircraft
that appeared in late 2004 confirm that the radar array is much larger than the Swedish
system. In 2005, this radar appeared on a new undesignated version of the Y-8
transport featuring a redesigned rampless empennage that makes extensive use of
composite materials. Such a system would almost certainly be less expensive than the
A-50 and could be produced in larger numbers, offering economies of scale. It is also
conceivable that it could be modified for installation on smaller platforms such as the Y-
7 twin-turboprop transport. While there is some speculation that this programme may
be in competition with the KLJ-2000, it appears likely that China will purchase both
systems as complimentary platforms. Unfortunately, one of the Y-8 prototypes is
believed to be the aircraft involved in a crash on 3 June 2006 that claimed the lives of
about 40 personnel, including many important engineers associated with the project.
Also in 2005, the PLA revealed two other Y-8 variants that also use the new rampless
empennage. One retains the older glazed nose configuration, but with an apparent
satcom antennae atop the fuselage, plus enough high frequency communications
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antennae to support 10 operators for what may be a new command and control (C2)
aircraft. A second variant features the new solid nose configuration but is equipped with
large cheek antennae mounted on both sides of the front fuselage. There is some
speculation this is a new ELINT/SIGINT version, but the smooth contours of the
antennae may also mean it is a radar, perhaps a derivation of the Phalcon but optimised
for ground-mapping.
New Weapons
The PLAAF has also been introducing a variety of air-to-air and air-to-ground weapons,
including new families of precision guided munitions (PGMs) and associated targeting
systems. In development since the late 1990s, by late 2005, China revealed that it was
working on two or three different types of laser/low-light targeting pod. One, shown
fitted to a Q-5 'Fantan' fighter-bomber, is thought to have been developed with the
assistance of Russia's Ural Optical and Electrical Plant (UOMZ), which specialises in
development and production of targeting pod systems. This same pod has also been
photographed on a JH-7A and models of it have appeared on depictions of the FC-1 and
J-10 multirole fighters. China is also expected to purchase the UOMZ Sapsan targeting
pod once development has been completed.
At the 2006 Zhuhai show, China revealed two families of new satellite- and laser-guided
bombs. Missile maker Luoyang unveiled the LS-6, a 440-kg satellite-guided bomb that is
equipped with folding strap-on wings, which can extend its range to 60 km when
released at 11,000 m altitude at high speed. It is credited with a CEP of 15 m but in the
future may feature a terminal guidance seeker head and datalink to enable moving
target engagement, and perhaps a small engine to extend range. Luoyang also revealed
the LT-2, a 496-kg laser-guided bomb that can employ different types of laser seeker.
One version that features a flat non-gimballed imaging infrared (IIR) seeker developed
by the Sicong Group is called the GB-1. A reported source for this technology may be
the Ukraine. China could also be developing precision bomb guidance systems based on
new laser radar imaging technology. At the Zhuhai show, the LS-6 and LT-2 were shown
fitted to models of the J-8 and a photograph has also appeared depicting a single LS-6
being carried by a J-8 fighter. The J-10 apparently can carry up to two LT-2 or GB-2
PGMs.
In addition, the Zhuhai show saw the debut of the China Aerospace Science and
Technology Corporation's 500-kg FT-1 and 250-kg FT-3 satellite-guided bombs. The FT-1
resembles the US GBU-31/32 Joint Direct Attack Munition (JDAM) and reports on this
weapon claim a CEP of 30 m. Like JDAM, it features a 'strap-on' guidance section,
indicating a potential flexibility to upgrade existing bombs. An FT-1 brochure shows it
under test from a JH-7 fighter-bomber and both the FT-1 and FT-3 are claimed to be in
PLAAF service.
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An early 2007 video of the China Flight Test Establishment provided confirmation of the
development of at least two versions of a new ground attack missile known as the KD-
88. This is apparently a development of the turbojet-powered C-802, one version being
equipped with a radar guidance system, while the other appears to embody an optical
guidance system.
Since 2002, Russian PGMs acquired by the PLAAF have included the 10-km range Kh-29
ASM, 110- to 200-km range Kh-31P ARM, the 115-km range Kh-59ME ASM and the KAB-
1500kr self-guided bomb. The PLAAF has had the Vympel R-73 since 1991, which
remains the only helmet-sighted AAM on the Taiwan Strait. In 2002, Luoyang revealed it
was developing a new lightweight helmet-display sighted AAM similar to the British
ASRAAM and South African Darter. In that same year, Luoyang also revealed the PL-9C,
a helmet-sighted version of the Israeli Python-3, which has been co-produced as the PL-
8. The latter weapon may also benefit from upgrades to enable helmet sighting.
The early 2007 image that confirmed the existence of the H-6K bomber also revealed
the PLAAF's first modern land attack cruise missile (LACM). This appears similar in size
to the Russian Kh-55 and the US Tomahawk. Asian sources indicate it is a possible
development of the YJ-62/C-602 naval cruise missile which China has been marketing
since 2005. The H-6K can carry six of these cruise missiles on wing pylons and it is likely
that additional weapons are contained in the bomb bay.
Trainers
The PLAAF may soon find itself in the happy position of having to choose between three
new modern multi-role capable lead-in fighter trainers. The first to fly, in December
2003, was the Guizhou FTC-2000, or JL-9 as it would be known in PLAAF service. First
revealed in model form in 2000 and then as a full-scale mock-up in 2002, the JL-9
combines aspects of the FC-1 fighter with a new wing planform and a single WP-13
turbojet engine. The cockpit, however, is very modern, relying on multi-function
displays that may be used to perform or simulate air-to-air or ground attack missions. It
will also have an in-flight refuelling probe. By November 2004, two JL-9 prototypes had
completed close to 200 test flights.
The second potential candidate to fly is the twin-seat CAC J-10S fighter. While some will
almost certainly be acquired to support the J-10 fleet, the two-seat model may prove to
be a more economical choice to meet training requirements, in so far as it would appear
to be a suitable platform for the lead-in training role for Sukhoi fighters, as well as for
the J-10 itself. It is also far more readily adaptable as a combat aircraft, with one
potentially useful application concerning 'Wild Weasel' defence suppression operations.
Competition also comes from the ambitious HAIC L-15 twin turbofan trainer. Revealed
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in 2001, this underwent major redesign after 2002 in co-operation with the Russian
Yakovlev bureau, resulting in adoption of design elements of the Yak-130 trainer.
However, unlike the Yak-130, the L-15 will be supersonic and incorporate fly-by-wire
controls in addition to featuring an advanced cockpit. The first L-15 prototype emerged
in September 2005, making its maiden flight on 13 March 2006. In early 2006, Ukrainian
sources announced an order for 200 Al-222 engines for the L-15, indicating that the
PLAAF is looking to purchase this trainer in significant numbers.
Navy procurement
Requirements
At the mid-point of the 11th Five Year Plan the PLA Navy is moving toward
complementing its investment in new nuclear and conventional submarines, plus new
classes of major surface combatants, with a new investment in distant power projection
capabilities. Second generation SSNs and SSBNs are now in production and it is likely
that development of third generation designs are underway, perhaps with new Russian
assistance. Production of surface warships is resuming with a new version of the Type
054 frigate and it can be expected that the PLAN will either choose one of its three new
air defence destroyers for further development and production, or move toward new
designs. The new emphasis for the 11th and the 12th FYP periods, however, will shift to
building the aircraft carrier Varyag, plus its new air wing, into a platform that will
adequately aid the development of an indigenous Chinese aircraft carrier to be built
later in the next decade. It can also be expected that the PLAN will start building new
larger ships for amphibious force projection, these may include several Type 071 LPDs, a
future helicopter carrier design, and a new, large hovercraft based on the Russian ZUBR
design.
Recent ship and submarine acquisitions also highlight the degree to which China's
shipbuilding sector is modernising and is increasingly capable of producing modern
systems. The Luyang I / Luyang II destroyers and Jiangkai (Type 054) frigates represent a
clear advance in hull, propulsion, weapon and combat system design over the Luhu
destroyers and Jiangwei frigates. The rapid simultaneous production of the new
destroyers, and the fact that the Jiangkai frigates are being built modularly in two
shipyards, Hudong in Shanghai and Huangpu in Guangzhou, indicates that China has
absorbed foreign shipbuilding technology and applied it to military programmes. China's
launching of two new SSNs before the first is commissioned also indicates growing
confidence in their design and production capabilities.
PLAN weapons are being improved with foreign and new domestic systems. The 120 km
range Raduga 3M-80E Moskit SSM is being improved, reportedly with Chinese financing,
to the 200 km range 3M-80MBE version on the two new Sovremenny destroyers. The
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additional range is achieved by altering the flight profile versus any addition to the
missile's size. The 220 km range Novator 3M-54E, expected to arm new Kilo 636M SSKs,
features a supersonic second stage to defeat ship defences. These Kilos will also be
armed with Novator's 300 km range 3M-14E land attack cruise missile and its 35 to 50
km range 91RE1 rocket-lofted torpedo. In 2004 the PLAN revealed a new type SSM
launcher on an experimental ship that also featured a prototype of the No 170 class
phased array radar. By May 2004 this new missile was indeed placed on No 170. Called
the YJ-62, or by its C-602 export designator, it has a range of 280 km. It would have to
be modified with a folding air intake in order to be submarine compatible, but its swept
wings indicate a potential for high sub-mach speeds.
Submarines
The PLAN's modernisation resources reflect a consistent priority on its submarine force.
By 2010, the PLAN will be operating about 50 to 60 modern to near-modern
submarines, including three to six new second generation nuclear powered submarines.
First to enter service will be the Type 093 SSN, two of which had been launched by early
2004. A third was launched in 2006. Asian sources indicate that after the third is
launched there will be a hiatus as new design or a modified version of the Type 093 is
put into production. The first Type 093 was commissioned in 2006. Photos of the 093
revealed at the PLA's 80th anniversary exhibit in Beijing and then on the internet,
indicate this submarine may have been built in two versions: one with sail planes and
one without. There is speculation that production may transition to an evolved Type
095 design with sail planes appears to be slightly larger than the 091 Han class, but with
a similar bow with torpedoes on top, sonar on the bottom. This version also appears to
have been the basis for the Type 094 SSBN. The second version is about the same size
but so far photos do not reveal bow details, though its slightly flat top hull indicates the
possibility it may incorporate a double hull design similar to the Yuan class. The 093 is
also expected to be armed with new Chinese-designed Tomahawk-class LACMs, giving
this platform a limited global non-nuclear power-projection capability. They will also be
able to compliment regional LACM strikes by other PLA services. In the meantime, older
Type 091 Han-class SSNs have been undergoing refits and upgrades. About three are
expected to remain in service.
The first Type 094 SSBN was launched in July 2004 and a second was launched in 2006.
In late 2006 the US Office of Naval Intelligence estimated eventual production to reach
five, though other sources indicate six will be built. This marks the emergence of the
PRC's first reliable nuclear "second strike" capability. Pictures taken of the Type 094
revealed in mid-2006 shows it to be an evolutionary development of the Type 092, and
confirms earlier reports that it will be armed with only 12 JL-2 SLBMs. The Type 094 is
also expected to benefit from the Type 093's Russian technology and assistance. The
range of the JL-2 is said to be about 6,000 n miles (9,656 km), which may allow the 094
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to strike the US from protected areas within the Bohai Gulf and Yellow Seas. However,
the most likely future base for the Type 094 may be Hainan Island, meaning they may
have to transit to Taiwan-Luzon area in order to reach US targets, barring the
development of longer range versions. The JL-2 is also expected to be armed with
multiple warheads, a conclusion bolstered by late 2007 imagery showing this missile
may have a blunt nose. Asian military sources have told Jane's the JL-2 may carry up to
four warheads. In 2002 the solitary Xia emerged from a refit that reportedly saw
upgrades to the ships nuclear powerplant and combat systems. In 2003 the US
Department of Defense for the first time described the status of the PLAN's single Type
092 Xia SSBN as operational.
PLAN conventional attack submarine capabilities are being expanded with the
acquisition of two modern types. In May 2004 the Wuhan shipyard launched the first of
a new class of submarine, dubbed the Yuan class by the US Navy. A report published in
early 2007 in an edition of the Chinese state-owned Science and Technology Daily
reported this submarine was fitted with a Stirling type air independent propulsion (AIP)
system. This new submarine is believed to have benefited from Russian technologies
associated with the new Rubin Amur-class conventional submarine. This feature signals
the onset of a more important development: the beginning of design competition
within the PLA submarine development community, which may serve to spur innovation
in other submarines. In late 2006 Asian sources indicated that after a period of
development and modification, a second Yuan is in production, and production of this
submarine could be increased to include a Shanghai shipyard. Other reports indicate
that German designed diesel engines have been purchased to support a new production
run.
In June 2002, former President Jiang Zemin reached an agreement with Russia on
purchasing eight Type 636M Kilo class conventional submarines worth USD1.6 billion.
Four were delivered in 2005 and all were thought to have been delivered by 2007.
These are expected to be equipped with anti-ship, anti-submarine and land attack
versions of the Club missile series. With the purchase, the number of the Kilo-class
submarines that China has will increase to 12. China's purchase of the Kilo-class attack
submarines is aimed politically at deterring Taiwan's independence forces, as well as
making it operationally more difficult for US forces to come to the aid of Taiwan. This
purchase was to some degree retaliation for the US April 2001 announcement that it
would sell Taiwan eight diesel submarines, a purchase that is staunchly opposed by the
opposition.
The PLAN, also by early 2006, launched about 13 improved versions of the Type 039
Song-A SSK. In addition to Wuhan the Type 039 Song-A was built in Jiangnan Yard in
Shanghai; two were launched there on 28 August and 2 December 2004. Type 039
production halted in 2005 with an expected transition to YUAN SSKs. The Type 039
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represents significant improvement over the Type 035 Ming class, and at least
outwardly is very similar to the French Agosta class. However, at the 2007 price of
USD230 million, the Type 039 is cheaper than the Agosta by about USD100 million.
The Science and Technology Dailyreported that the PLAN had fitted a Stirling type air
independent propulsion (AIP) system on its first Yuan class SSK launched in 2004. This
engine reportedly was developed in the late 1990s. But the PLAN has also developed
fuel cells based on German technology, similar in performance to those used in the
Type 212 SSK. The PLA may also have access to Russian fuel cell or Walther-type AIR
technology.
Aircraft Carriers
Since 2005 Russian, Chinese and US statements began to lift a veil of confusion and
speculation surrounding China's well known ambitions to build aircraft carriers. It is now
increasingly clear that China does intend to build indigenously designed aircraft carriers
following the refit and a period of experimentation with the former Russian carrier
Varyag. In March 2006 General Armaments Department member Lt General Wang
Zhiyuan was quoted in Hong Kong's Wen Wei Po saying, "The Chinese army will conduct
research and build an aircraft carrier and develop our own aircraft carrier fleet".
Following the 2007 National People's Congress Chinese reports quoted officials as
stating China would have an aircraft carrier by 2010, while other reports noted that
China has started training crews for aircraft carriers. In late 2007 a PLAN source
informally indicated that China may eventually build four to six aircraft carriers.
Previously, Chinese officials had usually denied such ambitions, even in the face of
previous moves to acquire retired aircraft carriers sold for scrap, to include the British-
built Australian Melbourne (1985), plus the Soviet Kiev class vertical take-off and landing
(VTOL) ASW carriers Minsk (2000) and Kiev (2001). The Melbourne's deck reportedly
was placed on land to facilitate aircraft training, while the Soviet carriers were studied
but then turned into tourist attractions. In its 2006 PLA report, the Pentagon reversed a
2002 estimate that China appeared to have indefinitely set aside its plans to build
carriers, to a new assertion that: "Some analysts in and out of government predict that
China could have an operational carrier by the end of the 12th Five Year Plan (2011-
2015)". Others note this will not happen until 2020.
In 2002 a PLAN front company succeeded in purchasing from the Ukraine and towing
the uncompleted Project 11435 carrier Varyag to Dalian harbour. While the Varyag
remained in Dalian with signs of work being done to it, and its outward appearance
improving somewhat, no major work was apparent until early 2005. A potential
indicator for the carrier surfaced in August 2003. For the 50th anniversary of the
formerly named Harbin Technical University, students and future PLA engineers
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produced a large model of a Varyag-like carrier modified with SAMs and ASMs that then
appeared for real on the Luyang II class DDG. In May 2005 the Varyag entered a large
drydock in Dalian, to emerge in early August painted in PLA Navy grey. There are reports
that the Varyag's steam-turbine engines were not installed when purchased, or at US
request, Ukraine had dismantled the engines. It is judged that there is a high probability
that Chinese engineers could install an engine in the Varyag if such was required.
Anti-Ship Ballistic Missiles
Since 2004 US intelligence, especially naval intelligence, has expressed concerns about
China's potential development of a revolutionary anti-ship capability based on a
medium range ballistic missile equipped with a manoeuvrable and terminally guided
warhead capable of attacking large combatants. The operational requirement to
develop such a missile likely grew out of the Taiwan crises of 1995 and 1996, when the
PLA lacked the means to decisively deter US aircraft carriers. China first revealed its
development of a terminally guided version of the DF-21 MRBM in 1996, and by 2006
was reported by some sources as having tested an anti-ship version of this missile.
Chinese sources have noted that the technologies it developed to intercept satellites
could also be used to intercept ships. A DF-21 based anti-ship ballistic missile may have
a range of more than 2,000 km. Given the extreme speed of the warhead, the US or
Japan would have little chance to defend their warships, even with current SM-3 level
anti-missile interceptors, and thus would have to keep aircraft carriers beyond the strike
range of its F/A-18E/F fighter-bombers. Asian sources note this system may not be
ready for deployment until 2009 or so, when China is expected to have lofted its initial
constellation of Russian technology based radar and optical surveillance satellites. It is
believed that China would seek to collate data from satellites, UAVs, active and passive
radar, in addition to ships at sea, to provide targeting for anti-ship ballistic missiles. It is
also possible that China could equip DF-15 or DF-11 class SRBMs, or newer P-12 or B-
611M SRBMs with smaller anti-ship warheads, to be able to sell such a capability to its
clients and friends. Chinese sources indicate that the WS-2 family of army artillery
rockets is being developed to include 200 km and 300 km range SRBMs with passive
radar seekers, which may also be useful in targeting ships.
New Large Surface Combatants
While the PLAN had tried with some success to build modern warships with Western
technical help in the 1980s, its inability to do so forced the purchase of two Russian
Project 956E Sovremenny missile destroyers in 1996 in response to its inability to
confront the US Navy during tensions early that year over Taiwan. These were followed
by two improved Project 956EMs, delivered in September 2006, both having been
launched in 2005. They feature an improved 200 km range version of the Raduga Moskit
supersonic anti-ship missile and better Kashtan CIWS.
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By 2002, however, the PLAN was demonstrating an impressive improvement in its

domestic combat ship building capability. That year saw the launch of two new air-
defence destroyers based on a common hull and propulsion system, when two Luyang I
(Guangzhou) class destroyers were built in succession in Shanghai. These stealthy hulled
ships are powered by Ukrainian gas turbines and armed with Russian SA-N-12 SAMs,
Fregat search radar, Mineral-ME search and targeting radar and a Kamov Ka-28 ASW
and targeting helicopter. Perhaps more impressive are the two new Luyang II class air-
defence destroyers which feature the PLAN's first planar array, very likely phased-array
long-range search radar, a new Chinese-developed vertically launched SAM and a new
large YJ-62 ASM. The new radar is very likely an active phased array made by the
Ukrainian Kvant Company but also incorporating technology from the US Aegis radar
obtained via espionage.
In 2004 the PLAN started building two new TYPE 051C class 7,000 ton destroyers in
Dalian. Both hulls were launched by September 2005 and look like a slightly larger
Luhai, the first ship (No 115) has been photographed equipped with a Russian FREGAT-
style search radar. It is expected that these will be armed with the Russian SA-N-20 "Rif-
M" naval SAM systems, two of which were purchased in 2002. It is possible these
destroyers will be equipped with a modified version of the Rif-M that incorporates the
new smaller 9M96E 40 km active-guided SAM to compliment the 150 km range 48N6E.
If armed with the latter it can carry 48 SAMs, or up to 192 9M96E SAMs. Both vessels
had been delivered by 2007.
Asian sources assess that the PLAN will evaluate these three classes of new Chinese-
designed destroyers for a period before deciding whether a new larger class of
destroyer is to be developed, incorporating some new combination of Russian and
indigenous weapons systems, or decide to build more of a single class. In the meantime,
some of the 15 older Luda class destroyers have been modernised this decade with new
electronics and YJ-82 or YJ-83 SSMs.
Also of significance has been a concerted effort to upgrade existing surface combatants.
The most visible of these upgrades has been to the main guns and fire-control systems
of the Luhai, Luhu and Luda class destroyers and the Jiangwei and Jianghu class frigates.
These upgrades involve replacing older 130 mm guns with a new twin-100 mm gun
turret. At a minimum this would better enable these ships to support landing
operations. Some Jianghu frigates are receiving new twin-100 mm gun turrets, sets of
122 mm artillery rocket launchers and 180 km range 300 mm artillery rockets. This
modification moves these ships into a dedicated amphibious landing fire support role. In
late 2007 the PLAN decommissioned two Luda class destroyers.
Frigates
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The PLAN maintains a force of about 44 frigates, that will soon expand in size and
capability now that the Type 054A frigate is being produced in two shipyards. This force
now includes 27 older Jianghu, four Jiangwei-1 and one Jiangwei-2 class frigates. In 2003
the PLAN launched the first two of its Jiangkai (Type 054) class, a ship that resembles
the French Lafayette class frigate, a prospect made real by Taiwanese reports that
France had shared extensive technical details with China as part of the deal that allowed
their sale to Taiwan. While impressive in their very stealthy shape and new electronics,
the Type 054 is less impressive in terms of weapons outfit, relying on old HQ-7 SAMs
and C-802 SSMs, with the possibility of one improvement: a Kamov Ka-28 ASW and
targeting helicopter. In early 2004 a model of a new version of the Jiangkai was revealed
to be equipped with Russian vertically launched SAMs and Russian search and guidance
radar.
In mid-2006 production resumed in Shanghai's Hudong and Huangpu shipyards, for the
upgraded Type 054A. As was indicated in model revealed during a 2003 naval exhibit in
China, the upgraded frigate is equipped with Russian origin Fregat search radar and the
guidance radar associated with the Shtil series of naval SAMs. The Type 054A is the first
ship to be equipped with a version of the new vertical-launched 9M317ME Shtil-1, with
a bay for 32 missiles. In addition, the Type 054A is armed with two Type 730 gattling
CIWS instead of four of the Type 630s on the Type 054. The anti-ship missile for the
Type 054A had not been revealed by early 2008. As of early 2007, two Type 054As had
been launched by Huangpu, and a second was being completed in Hudong.
In May 2007, a European source indicated that Chinese co-production of French diesel
engines indicated that up to 12 Type 054As would be built. These sources also noted
that a new yet undisclosed frigate would use German designed diesels and gas turbine
engines. The design or mission of this new frigate has not yet been disclosed.
There is also a programme to enhance anti-surface target engagement capability of the

Type 053H3 (Jiangwei II) frigates by retrofitting them with new Type 99 turret. The
seven turrets are expected to be in service between 2008 and 2012. The two new units
are also expected to be equipped with the turret from build.
Patrol Forces
Fast Attack Craft (FAC) are receiving renewed attention. In early 2004 the PLAN
completed the first of a new class of stealthy, high-speed fast attack craft (FAC), called
the Type 022 or "Houbei" class. It is expected that the PLAN will build up to 70 of these
and is continuing apace at at least six shipyards. It is based on a wave-piercing
catamaran hull derived from Australian technology for the AMD 150 civilian fast ferry
made by the Hang Tong Company. The new FAC features a low profile, water-jet
propulsion and stern-mounted ASMs on a hull that utilises stealth shaping and stealth
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coatings. More than 40 have entered service since the first unit, Houbei 2208, was first
reported in 2004.
Construction is expect to total at least 80 craft, with further units likely so as to replace
at least part of the vast inventory of ageing patrol boats, including the Hainan Type 037
(delivered 1963-1995), Huchan Type 025/026 (delivered 1966-1994) and the Shanghai II
Type 062 (delivered 1961-1995) - numbering 208 in total. The contract value of
USD1,200 million and USD2,100 million (2007) has been estimated based on
comparable programmes, and assumes a unit cost of around USD30 million to USD40
million. This innovative use of fast ferry technology indicates the PLA may envision
larger hulls that could carry troops or aircraft. This design marks a significant departure
from previous monohull FACs, about 90 of which remain in PLAN service.
In early 2006 a dedicated PLAN "fast ferry" based on the AMD design was revealed,
indicating that the PLAN may, like the US Navy, envisage using fast ferry technology for
wider combat missions. In late 2007 Taiwanese military sources noted that China was
developing a larger 500 ton "fast ferry" combat ship. In mid-2008 the Chinese magazine
Shipbourne Weapons featured a concept for a larger Type-022 craft with a hanger for a
small helicopter or helicopter UAV, which could perform surveillance, targeting or
defensive missions.
Mine Warfare Forces
While the PLAN is credited with about 68 mine warfare ships, about 42 may be in
reserve status. Nevertheless, the PLAN places great emphasis on offensive and
defensive mine warfare. The last two years have also seen the first introduction of new
mines sweepers in a long while. Since 2004 the PLAN has introduced the Wozang and
Wochi classes of minesweepers, which are thought to be the successor to the Soviet
designed T-43, of which the PLAN still operates 14. The Wozang was featured in early
2007 Chinese television coverage of anti-mine exercises, and this ship employs a new
remote-controlled mine detecting device.
Far more important is the PLAN's build up of the world's largest offensive mine force, to
include tens of thousands of mines in a large variety. Use of mines will also figure
significantly in the PLAN's anti-submarine strategy. The PLA views this mine forces as
one of its "Assassin's Mace" weapons to assist the potential blockade of Taiwan, or to
employ as one of many weapons that would seek to interdict US or Japanese naval
forces seeking to assist Taiwan. The PLAN is a significant investor in large fast rising
mines, like the EM-52, believed to be powerful enough to break the keel of an aircraft
carrier. China is also marketing its EM-55, which is a small enough to be laid from a
submarine tube. China is also marketing its EM-56 large torpedo shaped self propelled
mine, its EM-57 remote controlled bottom laying mine and its EM-11 multi-purpose
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ground laying mine. The PLAN is also believed to have a very large stock of older
moored mines. China aggressively seeks foreign mine technology and is believed to
have done considerable business acquiring advanced Russian mine technologies.
Mine Countermeasures Vessel
There is also a programme to procure between two to 10 Wochi class mine

countermeasures vessels (MCMVs) to replace the Type 010 / T 43 class and other ageing
MCM assets. The contract is valued at USD60 million to USD300 million (2007). One new
vessel (identified as 804) undertook sea trials in 2005. Since then there have also been
reports of another new class under construction. Two vessels have been reported to
date, sporting hull numbers 328 and 438, while additional units are expected. The
programme has in service dates of between 2007 to 2015. The programme value has
been estimated, taking into account programme costs for comparable vessels.
Amphibious Forces
China is continuing to improve its capabilities to conduct amphibious operations within

the region but may also be building for extra-regional amphibious projection. On 21
December 2006 Shanghai's Hudong shipyard launched the first Type-071 LPD style large
amphibious assault ship. The Type-071 displaces 17,600 tons and reportedly can carry
up to 800 troops for a brief period and has space for 30 to 50 combat vehicles. It also
features a large helicopter deck that can accommodate two Z-8 size assault helicopters,
seen in model form on the aft deck, and a well deck that can accommodate four LCAC
style hovercraft. This ship allows the PLAN to initiate beyond-the-horizon amphibious
operations and to participate in distant military, military-diplomatic, peacekeeping and
humanitarian operations. Asian sources indicate the PLAN may build several Type 071
LPDs. In December 2007 the first Type 071 moved to the South Sea Fleet.
At the May 2007 IMDEX show in Singapore, a Chinese source confirmed that they are
developing a helicopter assault ship, or LHD. One Asian source has identified this as the
Type 081, similar in size to the 071, weighing approximately 20,000 tons, but with a flat
helicopter deck. This source also notes that China may build up to three of this ship.
Since the mid-1990s China has consulted with European amphibious ship and small
carrier builders. The advent of the Type 071 LPD and a potential Type 081 LHD signifies
that the PLA may soon have a much greater capability to participate in humanitarian
missions and to project PLA Marines to regions far from China.
In the last two years its fleet of about 60 medium-sized LSTs and LSMs has been
supplemented by two new classes of LST/LSMs. About 20 new LST/LSM ships were built
from 2001 to 2004. In addition, the PLAN is producing its new Yubei LCU in multiple
shipyards. This LCU is credited with being able to carry ten tanks. Mid-2006 Russian
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reports indicated that the Almaz shipyard will produce up to four to six of the unique
large ZUBR assault hovercraft for the PLAN. As of late 2006 negotiations were still
proceeding. The 60 kt-speed ZUBR can carry 3 medium tanks, or 10 tracked or wheeled
APCs, or 140 troops and 130 tons of cargo. The ZUBR will be able to overcome much of
the difficult beach environment on Taiwan's East Coast, increasing PLA amphibious
attack options. For many years China has experimented with hovercraft and two types
are seen used in Marine exercises.
Should the projected number of LPDs be realised, it is possible that by early in the next
decade the PLAN will possess a formal first wave amphibious lift potential of over 1,000
tanks or up to 30,000 troops. This estimate could increase should the PLAN begin
building LHA style amphibious ships or if it should scrap many of its older and smaller
LCU types. This estimate does not include the lift potential from "civilian" ships that the
PLA likely is able to mobilise for emergencies such as an all-out assault on Taiwan.
Taiwan's Ministry of Defense estimates the PLAN could mobilise 200 to 300 additional
large ships. This number may or may not include the nearly 150 "fast ferries" operating
from Hong Kong and other ports.
Marine Forces
Starting in the late 1990s the PLA Marine amphibious armour and infantry units have
been re-equipped with new Type-63A amphibious tanks and the new Type-63C
amphibious APCs. The Type-63A features a new hull with composite armour enhanced
turret, a 730 or 1,000 hp diesel engine, and is armed with a 105 mm gun. Chinese
sources confirm it can fire co-produced Russian "Bastion" laser-guided gun-launched
missiles. The latter's 5 km range means the Type-63A will immediately be able to out-
range the 105 mm guns on Taiwan's M-60 and M-48 tanks. During an April 2004
exhibition it was revealed that the chassis of the T-63A tank formed the basis of a new
amphibious APC with a large passenger chamber in place of the turret. It is expected to
be used as a medivac or command vehicle.
The Type-63C is a radically modified Type-63 APC with the addition to two buoyant
chambers and an outboard motor for propulsion. Though lacking in elegance it appears
to be effective and in large-scale production. The Type-63C comes in two versions so
far, one that emphasises infantry carriage and one better suited for command or
medivac missions. Marine units are also receiving a new version of the Type WZ 501,
based on the Soviet BMP-1, equipped with a wave cutter and an outboard motor.
Marine and army amphibious units are also making increasing use of new specialised
light amphibious jeeps and light truck transports. Early in this decade the PLA Marines
also acquired a small number of Russian PTS-M wheeled amphibious troop carriers. The
Type 63A tank, Type-63C were featured in the amphibious assault portion of "Peace
Mission 2005." Once shore positions are secured, LSTs can then land Type-83 122 mm
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self-propelled howitzers. Marine infantry are also seen increasingly with new Type-95
"bullpup" 5.8 mm assault rifles.
While internet images of a new family of amphibious assault vehicle have been available
since late 2005, it was not until early 2007 that images of troops dressed in Marine
camouflage uniforms emerging from this vehicle appeared, indicating the Marines will
be receiving this new vehicle in addition to army amphibious units. Based on the ZBD-97
IFV, they are now entering some PLA Army units and have been identified as the "ZBD-
2000" by some Chinese sources. Its salient features are the use of powerful water jets
plus bow and aft planes to enable the vehicle, according to Chinese sources, to travel at
least 25 kts through the water. More recent internet images indicate this vehicle, similar
in concept to the troubled US Advanced Amphibious Assault Vehicle, is being produced
in three versions: IFV armed with a 100 mm gun; APC-IFV with a 30 mm cannon; and a
logistics support version. Marine units equipped with this family of assault vehicles will
likely deploy from the new Type 071 LPD or potential future Type 081 LHD.
The PLA has also increased its investment in specialized amphibious assault equipment.
For many years China has experimented with hovercraft and two types are seen used in
Marine exercises. In January 2008 Chinese internet imagery revealed a new nearly
completed hovercraft about the same size and configuration as the U.S. LCAC, intended
for use on the Type 071 LPD. In addition, the PLA has developed special trucks to roll
down surfacing for successive vehicles, a means of overcoming mud flats and other
difficult landing terrain on Taiwan's west coast. The PLA has also developed several
types of smaller amphibious jeeps and trucks which could be used to ferry supplies and
personnel. The Marines lack of naval fire support is also being addressed. Some Jianghu
frigates are receiving new twin-100 mm gun turrets, and sets of 122 mm artillery rocket
launchers. It is also possible that the Type 022 stealthy FAC could be armed with
130mm or 122mm GPS-guided artillery rockets to provide additional fire support. Also,
the single Shichang class helicopter support ship has been seen with an experimental
navalised 300 mm artillery rocket launcher. This size artillery rocket would allow for
beyond-the-horizon strikes, potentially with navigation satellite guided warheads.
Currently the PLA Marines lack organic air support but this may change in the future. In
2005 Z-8 helicopters in naval grey colours were photographed off-loading troops,
presumably Marines. In July 2007 China revealed a new full scale model of a Z-8 with
folding rotors, indicating a dedicated shipboard version is being developed. The
introduction of the Type-071 LPD assault ship with its large aft helicopter deck may
mean that the PLAN may invest in both assault and attack type helicopters in the future.
This becomes attractive as China proceeds in the development of its "Z-10" attack
helicopter, the EC-175 medium transport helicopter and the smaller WZ-11 attack
helicopter. The latter would already be suited for operating from the rear platform of
some medium-size LSTs. Additional confirmation of Marine interest in air transport
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comes from reports in April 2006 that the PLANAF would purchase up to 40 Ka-29 naval
assault helicopters. For heavy air support the Marines will have to rely on supporting
strikes from PLANAF attack aircraft and bombers, as well as from PLAAF strike fighters.
Naval Aviation
With the reported patronage of former CMC Chairmain Jiang Zemin, the PLA Naval Air
Force (PLANAF) has received greater attention beginning early in this decade. The PLA
have received 24 Sukhoi Su-30MKK2 attack fighters for the PLANAF. These feature an
improved radar for naval engagements and will be armed with the Zvezda Kh-31A
supersonic anti-ship missile. In the future they may also carry the 300 km range
subsonic Kh-59MK anti-ship missile, a new Chinese supersonic anti-ship missile or
maybe fitted with a Kh-35 missile in due course. They will also carry the M400 SAR that
will allow one Su-30MKK2 to operate as a mini-AWACS, directing up to 10 other
fighters. It was expected that PLAN would order a second and even a third batch of 24
Su-30MKK2s, but these orders have not materialised. With the purchase of Ilyushin Il-
78M tankers by the PLAAF, the PLANAF's Sukhois have the potential for significantly
expanding PLAN airstrike capability.
In addition, the PLANAF is being improved with the purchase of the upgraded Xian JH-
7A fighter bomber. With the help of Rolls Royce, China has finally mastered the Spey
turbofan, now in production as the "QinLing", which is enabling the JH-7A. It will feature
improved radar and will be armed with Chinese anti-ship missiles and the Russian Kh-
31. Production is under way, and some sources indicate that up to three to four
operational regiments of JH-7s will be acquired by the PLAN. Chinese sources note that
enough JH-7s for two regiments have been produced - one for training and one
operational unit. There is also to be a reconnaissance version of the JH-7. A new JH-7A
regiment has formed on Hainan Island.
In late 2004 it was also revealed that the Xian Aircraft Corporation had resumed
production of the H-6 (Tu-16) bomber. The decision to do so grew out of Russia's early
1990s refusal to sell China the Tupolev Tu-22M3 Backfire. Xian is building two new
versions of the H-6, the H-6M for the PLAN and the H-6K for the PLAAF. The H-6M is
identified by its four underwing hardpoints for a new anti-ship missile, which could be
based either or both the YJ-83 or the YJ-62. The H-6M is believed to be re-equipping
two PLAN bomber Divisions.
Some H-6D naval bombers have been converted to tanker aircraft and these support
the PLANAF's small number of Shenyang J-8D fighters. It is possible that there may be
more H-6D conversions if the PLAN opts for new J-10 or J-11B ground based fighters.
In the near term the PLAN will upgrade its ground-based fighter force. Its choices may
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be influenced by the type or types of fighters being considered for future aircraft
carriers, so as to provide a pool of pilots for transition to carrier training. Report of
Chinese interest in purchasing anywhere from 2 to 100 Su-33 and/or Su-33KUB fighters,
largely from Russian sources beginning in 2005, had not materialized as of early 2008.
Speculation instead has shifted to China's possible development of the J-11B, with
indigenous engines, radar and weapons, as a naval fighter. China acquired one of the
early prototype airframes for the Su-33 from the Ukraine. However, Russian sources
have long doubted China's ability to sufficiently modify the Su-27 airframe for this
mission. As second choice would be the Chengdu J-10, which is also reportedly being
developed into a carrier fighter. In late 2006 the J-10 was revealed to have been tested
with a refueling probe, which would make it attractive for ground-based PLAN fighter
units. In 2005 press reports indicated the PLAN was also interested in the Chengdu FC-1
as a low-cost fighter to replace its J-7 fighters.
In the near term the PLAN will upgrade its ground-based fighter force. Its choices may
be influenced by the type or types of fighters being considered for future aircraft
carriers, so as to provide a pool of pilots for transition to carrier training. The first option
was to purchase a number of new Shenyang J-11B fighters, which are Su-27 based J-11s
with Chinese-build engines, radar and weapons. This would help initiate pilots to
potential Su-33 based carrier fighters. According to reports, the PLAN received 200 J-11
kits with 105 diverted for the production of J11B's in 2007. As second choice would be
the Chengdu J-10, which is also reportedly being developed into a carrier fighter. In late
2006 the J-10 was revealed to have been tested with a refueling probe, which would
make it attractive for ground-based PLAN fighter units. In 2005 press reports indicated
the PLAN was also interested in the Chengdu FC-1 as a low-cost fighter to replace its J-7
fighters.
PLANAF maritime patrol aircraft are currently limited to a small number of modified
Shaanxi Y-8 transports, eight of which have been modified with British Racal/Thales
Skymaster AEW radar. In 2000 the latter were reported to have participated in naval
exercises in which they helped target SSMs. This Y-8 also participated in the naval
portion of the "Peace Mission 2005" China-Russia exercises in August 2005. Another
new Y-8 in PLANAF service is outfitted with numerous antennae consistent with
jamming missions. In addition the PLANAF may yet receive new highly modified Y-8s
outfitted with a linear phased array radar similar to Swedish Ericsson PS-890 Erieye. In
April 2006, in connection with the visit of the Russian Defense Minister to Beijing, it was
reported that China would purchase 10 to 15 Beriev Be-200 amphibious turbofan
powered transports modified for maritime patrol missions, but this deal has not yet
been confirmed.
The PLANAF also wishes to procure 20 Kamov Ka-31 AEW helicopter which will assist
the targeting of new Russian and indigenous anti-ship missiles, as well as to assist fleet
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defence. This will be accompanied by a purchase of 40 Ka-29 naval assault helicopters

to aid the PLA Marines. The PLANAF has a requirement for more Ka-28 ASW helicopters,
or it could wait for an ASW version of the 6-8 ton helicopter being co-developed with
Eurocopter. Negotiations for the sale of the Tu-142 were said to be advanced by mid-
2005 and Kamov says that China is interested in up to 20 Ka-31s. The Tu-142 could
potentially enable the PLANAF to conduct ASW or anti-ship patrols out to the Persian
Gulf or the Eastern Pacific. The Ka-31 could provide over-the-horizon targeting for
Russian or Chinese anti-ship missiles on destroyers and submarines.
The major potential development for the PLANAF in 2005 was the prospect that it could
acquire a number of Tupolev Tu-142 Bear ASW/maritime patrol aircraft. Asian sources
contend that negotiations are underway for the PLA to purchase the Tu-142 along with
the Tu-95. With a radius of 6,400 km and a refuelling probe, the Tu-142 could handily
extend the PLA's presence into the "Second Island Chain" and well into the Indian
Ocean. With the potential for refuelling stops in Myanmar or Pakistan, the Tu-142 could
extend the PLA's presence to protect Chinese shipping as far as the Persian Gulf or West
Africa. As a combat system, the Tu-142 could carry anti-ship cruise missiles as well as
weapons to prosecute submarines and systems to help co-ordinate PLA submarines.
Mid-2006 reports indicate that long-reported Chinese interest in the Beriev Be-200
amphibious turbofan will lead to the purchase of 10 to 15, which will aid the PLA's
maritime patrol and island logistic support capabilities.
Auxiliaries
PLAN logistic support capabilities are also receiving much needed attention. In 2004 the
PLAN took delivery of two new Fuchi Class No 886 class large replenishment ships.
Based on the R-27 design sold to Thailand in the mid-1990s, the No 886 class is the most
modern replenishment ship in the PLAN. In late 2006 China has almost completed
construction of another large logistic support ship about the same size of the No. 886
class, but apparently equipped with a different underway replenishment system. Then,
in August 2007, the PLAN launched its first large hospital ship, apparently based on the
886 hull design.
Coastal Defence
The PLAN has been upgrading its coastal defence units with a new version of the YJ-62
long-range anti-ship missile called the YJ-62C. First unveiled in 2005, the YJ-62 is the
PLAN's counterpart to the C-602 export version, which has an advertised range of 280
km. The range of the YJ-62 is said to be considerably longer than that of the C-602. This
cruise missile bears a strong resemblance to the US BGM-109 Tomahawk Land-Attack
Cruise Missile (LACM): development of the YJ-62 is believed to have benefited from
Tomahawk parts captured in Afghanistan and Iraq and from China's acquisition of
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Russian Kh-55 LACMs via Ukraine. It is believed that the PLAN has deployed about 120
new YJ-62C anti-ship missiles at bases in Fujian province, which is opposite Taiwan.
Major Foreign Conventional Military Procurement
Type Manufacturer Role Quantity Origin First

Delivery
E/O and NPO Kondor n/a Russia 1997

Radarsat Machinostroyenia Satellite
Technology
LACM Novator Kh-55 6 Russia/Ukraine 2001
Diesel Submarine Rubin 'Kilo' 887/636 4 Russia 1995
Diesel Submarine Rubin 'Kilo' 636M 8 Russia 2005
Anti-ship missile Novator 3M54E CLUB-S n/a Russia n/a
LACM Novator 3M-14 CLUB-S n/a Russia n/a
ASW missile Novator 91RE1 CLUB-S n/a Russia n/a
Missile Destroyer n/a Sovremenny 2 Russia 1998

956E
Missile Destroyer n/a Sovremenny 2 Russia 2007

956EM
Fast Attack Craft n/a Molnya 10 Russia 2005
Anti-ship missile Raduga Moskit n/a Russia 1998
Main Battle Tank Russian Army T-80 6 Russia 1994
Surface-to-Air Antey S-300/S- 12 1 Russia 1994

Missile 300PMU-1
Surface-to-Air n/a S-300PMU-2 41 Russia 2005
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Missile
Naval SAM n/a Shtil n/a Russia 2000
Surface-to-Air Antey TOR-M1 60 Russia 1997

Missile/Air TELs/480+
Defence System missiles
Anti-Radar Drone IAI Harpy n/a Israel 2002
Combat Aircraft Sukhoi Su-27/SK 36 Russia 1993
Combat Trainer Sukhoi Su-27UB 40 Russia 1993
Strike Fighter Sukhoi Su-30MKK 76 Russia 1999
Strike Fighter Sukhoi Su-30MKK2 48 Russia 2002
Combat Aircraft Shenyang/Sukhoi J-11/Su-27SK 200 Russia/China 1998
Combat Aircraft Israeli Aircraft Lavi technology n/a Israel 1990

technology Industries
Air-to-Air Missile Vympel R-27 1,860 Russia 1995
Air-to-Air Missile Vympel R-77 200 Russia 2002
Air-to-Air Missile Vympel R-73 3,720 Russia 1995
Air-to-Surface Molniya Kh-29 2,000 Russia 2002

Missile
Air-to-Surface Zvezda-Strela Kh-31P 200 Russia n/a

Missile
Air-to-Surface Raduga Kh-59ME n/a Russia n/a

Missile
Guided Bomb Region KAB-1500kr n/a Russia 2002
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AWACS Beriev A-50 1 Russia 2002
Transport Ilyushin Il-76 34 Russia 2005

Aircraft
Helicopter Ulan Ude Mi-17 200 Russia 1993
Helicopter Kamov Ka-28 6 Russia 1997
Note:
1. Number of battalions where the Surface-to-Air Missiles have been deployed
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NAVY
Summary
Assessment
Modernisation Plan
Deployments, tasks and operations
Role and Deployment
Recent and Current Operations
Command and control
East Sea Fleet
North Sea Fleet
South Sea Fleet
Organisation
Coastal Defence
Submarine Fleet
PLA Marines
Navy Intelligence
PLA Naval Air Force (PLANAF)
Naval Aviation Order of Battle
Operational Art and Tactical Doctrine
Bases
Training
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Training Areas
Military Exercises
Equipment in service
Submarines
Surface Fleet
Naval Infantry
Naval Aviation
Naval Aviation - Missiles
Coastal Regional Defence Forces
Summary
STRENGTH
255,000
BALLISTIC MISSILE SUBMARINES
NUCLEAR ATTACK SUBMARINES
ATTACK SUBMARINES
57
DESTROYERS
27
FRIGATES
48
FAST ATTACK CRAFT
377
230
Assessment
The People's Liberation Army Navy (PLAN) is in the midst of a concerted regeneration
that is turning this hitherto backward naval force into a leading regional naval power
able to secure maritime control against smaller opponents while striving to deter more
powerful foes. The PLAN is simultaneously being prepared for a possible near-term
range of joint-force missions, such as the conquest of democratic Taiwan and the
enforcement of regional territorial claims, while it also is being prepared, in the medium
term, to fulfil missions to defend China's rapidly expanding regional and even global
economic-political interests. That the PLAN is not able today to carry out such missions
with confidence is less important than the fact that China is now investing heavily in
PLAN hardware, training, logistics, modern production capacity and personnel to be
able to do so. Since 2004 the PLAN has gained new prominence within the top
leadership of the People's Liberation Army (PLA), and during the last decade it has
received special attention at times from China's top political leadership.
Nevertheless, today the navy is not ready to defeat a combined American and Japanese
naval operations to thwart an attack on Taiwan and formal PLAN amphibious forces are
insufficient to enable a Taiwan invasion of necessary scale. The PLAN's key strengths are
its massive and sophisticated mine warfare forces and its large attack submarine fleet.
The PLAN would be hard pressed to mount a successful combined submarine-air attack
against a US carrier task group and could not undertake distant operations in the face of
heavy US nuclear attack submarine (SSN) opposition. While the PLAN may be able to
dominate limited skirmishes with Japan's Navy in some scenarios, it would also be hard-
pressed to turn back a large Japanese naval force with air support, especially if assisted
by US naval forces. However, if unopposed by US or Japanese forces the PLAN could
today impose a blockade on Taiwan, assist in attacking Taiwan's naval and air forces,
and conduct amphibious operations in co-operation with large numbers of mobilised
"civil" ships.
In the next decade PLAN capabilities vis-à-vis the US and Japan will improve due to PLA
investments in C4ISR, space platforms and space denial, anti-ship ballistic missiles, long-
range cruise missiles, new submarines, aircraft carriers and new large amphibious
projection ships. There may also be an IOC for a revolutionary anti-ship ballistic missile
based initially on the DF-21 MRBM. In addition, two or three out of five to six ballistic
nuclear submarines (SSBNs) may be operating out of a new base on Hainan Island.
There is also the possibility that a revived carrier, Varyag which is now outfitting in
Dalian, is likely to be equipped initially with Russian Su-33 fighters, which will begin the
PLAN's transition to eventual indigenous aircraft carriers. PLAN carrier/amphibious
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groups may venture further abroad to assert China's interests in protecting sea line of
communications (SLOC) running through Southeast Asia and the Indian Ocean. By this
time a more capable modification of the Type 093 SSN may enter production. By early in
the next decade the navy could reach a significant level of amphibious projection for
Taiwan operations. Upon the completion of a reported six Type 071 landing platform
docks (LPDs), formal first wave lift capacity could exceed 1,000 tanks or over 30,000
troops.
Since the mid 1990s the PLAN has undertaken an increasingly active program of global
naval diplomacy. For the first time in February 2007, a PLAN combatant, a Jiangwei class
frigate, participated in a multinational naval exercise hosted by Pakistan, along with
French, British and US ships. While not considered on the PLAN's agenda until recently,
its acquisition of new underway support ships, submarine rescue ships and large
amphibious transports have rapidly increased its capacity to undertake military or
humanitarian multinational operations. While the PLAN was absent from late 2005
post-Asian tsunami operations, new ships like the Type 071 LPD or a potential Type 081
LHD would offer new opportunities for humanitarian or even peacekeeping
contributions. PLAN participation in simple combat exercises with Russian Navy forces
in August 2005 are likely to grow more complex in the future, though the PLAN remains
quite able to undertake simple rescue or "passex" exercises with US naval units and
those of many other navies.
Despite recent embarrassing scandals, the PLAN's increased funding and op-tempo
reflects a greater trust by the Chinese Communist Party (CPC) and PLA leaders. The
PLAN is recovering from its March 2003 low point when a likely crew error caused the
suffocation of 70 crew members aboard the Northern Fleet Type 035 SSK No. 361. In
September 2004 the PLAN commander for the first time was elevated to Vice Chairman
level of the Central Military Commission (CMC). The following October the PLAN was
given the task of sending a nuclear submarine to probe American defences near Guam
and monitor US and Japanese naval exercises. In September 2005 East Sea Fleet ships
were sent to affirm China's claims to East China Sea regions disputed with Japan. On 27
December 2006, CPC Secretary General and CMC Chairman Hu Jintao addressed Party
representatives of the PLAN and stated, "We should strive to build a powerful navy that
adapts to the needs of our military's historical mission in this new century and at this
new stage".
Modernisation Plan
Recent ship and submarine acquisitions also highlight the degree to which China's
shipbuilding sector is modernising and is increasingly capable of producing modern
systems. The Luyang I / Luyang II destroyers and Jiangkai (Type 054) frigates represent a
clear advance in hull, propulsion, weapon and combat system design over the Luhu
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destroyers and Jiangwei frigates. The rapid simultaneous production of the new
destroyers, and the fact that the Jiangkai frigates are being built modularly in two
shipyards, Hudong in Shanghai and Huangpu in Guangzhou, indicates that China has
absorbed foreign shipbuilding technology and applied it to military programmes. China's
launching of two new SSNs before the first is commissioned also indicates growing
confidence in their design and production capabilities.
The PLAN's modernisation resources reflect a consistent prioritisation of its submarine

force. By 2010, the PLAN will be operating about 50 modern to near-modern
submarines, including;
• Three to six new second generation nuclear powered submarines including the Type
093 SSN;
• Two or three type 094 SSBNs marking the emergence of the People's Republic of China's
(PRC) first reliable nuclear "second strike" capability;
• The expansion of PLAN conventional attack submarine capabilities with the acquisition
of the American-dubbed Yuan class signalling the beginning of design competition
within the PLA submarine development community, which may serve to spur innovation
in other submarines;
• The upgrading of eight Kilo 636M SSK's;
• 13 improved versions of the Type 039 Song-A SSK;
• Upgrades made to the 091 Han-class; and
• Possible modifications to the future Yuans and Songs for air-independent propulsion.
While the PLAN had tried with some success to build modern warships with Western
technical help in the 1980s, its inability to do so forced the purchase of two Russian
Project 956E Sovremenny missile destroyers in 1996 in response to its inability to
confront the US Navy during tensions early that year over Taiwan. These were followed
by two improved Project 956EMs delivered in 2006, both having been launched in 2004.
By 2002, however, the PLAN was demonstrating an impressive improvement in its

domestic combat ship building capability. That year saw the launch of two new air-
defence destroyers based on a common hull and propulsion system, when two Luyang I
(Guangzhou) class destroyers were built in succession in Shanghai.
In 2004 the PLAN started building two new TYPE 051C class 7,000 ton destroyers in
Dalian. Both hulls were launched by September 2005 and look like a slightly larger
Luhai, the first ship (No. 115) has been photographed equipped with a Russian FREGAT-
style search radar. By late 2007 both of these vessels had been launched.
In 2003 the PLAN also launched two new stealthy frigates. Referred to as the Jiangkai
(Type 054) class, they largely resemble the French Lafayette class frigate, a prospect
made real by Taiwanese reports that France had shared extensive technical details with
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China as part of the deal that allowed their sale to Taiwan. In early 2004 a model of a
new version of the Jiangkai was revealed to be equipped with Russian vertically
launched surface-to-air missiles (SAMs) and Russian search and guidance radar. The first
of these was launched in 2006 and European sources indicate up to twelve will be built.
Fast Attack Craft are also receiving renewed attention. In early 2004 the PLAN
completed the first of a new class of stealthy, high-speed fast attack craft (FAC). It is
expected that the PLAN will build up to 50 of these. The new FAC features a low profile,
water-jet propulsion and stern-mounted ASMs under a stealthy covering. This
innovative use of fast ferry technology indicates the PLA may envision larger hulls that
could carry troops or aircraft. This design marks a significant departure from previous
monohull FACs, about 90 of which remain in PLAN service. In early 2006 a dedicated
PLAN "fast ferry" based on the AMD design was revealed, indicating that the PLAN may,
like the US Navy, envisage using fast ferry technology for wider combat missions.
Also of significance has been a concerted effort to upgrade existing surface combatants.
PLAN logistic support capabilities are also receiving much needed attention. In 2004 the
PLAN took delivery of two new Fuchi Class No 886 class large replenishment ships.
Sources also indicate that the PLA's first landing dock amphibious assault ship is under
construction. This will carry a new US LCAC style hovercraft and can accommodate large
assault helicopters. To support this build-up the PLAN is also building five new bases.
Three of these bases will be for submarines, including a new underground base in
Hainan Island.
With the reported patronage of former CMC Chairman Jiang Zemin, the PLA Naval Air
Force (PLANAF) is also receiving much needed new resources including;
• 24 Sukhoi Su-30MKK2 attack fighters followed by a second batch of 24 Su-30MKK2s. The

second Su-30MKK2 regiment, is expected to be based on Hainan Island. With the
purchase of Ilyushin Il-78M tankers by the PLA Air Force (PLAAF), the PLANAF's Sukhois
have the potential for significantly expanding PLAN airstrike capability;
• Upgraded Xian JH-7A fighter bombers;
• New-production H-6 (Tu-16) bombers;
• Conversion of H-6D naval bombers into tanker aircraft to support the PLANAF's small
number of Shenyang J-8D fighters;
• Upgrades to its fighter force. This would include retiring remaining J-6 fighters and
acquiring new Chengdu J-10 multirole fighters and possibly, smaller Chengdu FC-1
multirole fighters. The latter would most likely be slated to replace early model J-7
lightweight fighters;
• Two additional Russian aircraft may enter PLANAF inventory, the Tupolev Tu-142 and
the Kamov Ka-31 AEW helicopter; and
• The potential purchase of Y-7MPA medium-size or Y-8 based maritime patrol aircraft.
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Role and Deployment
According to Vice Admiral Cheng Mingshang, then vice commander-in-chief of the fleet,
in 1991 the PLAN was tasked with the following peacetime missions:
• Projecting China's influence beyond its state boundaries; and

• Acting as a foreign policy pillar.
In war, its missions would be:
• The capture and defence of islands;

• The protection and blockade of sea lanes of communication; and
• The pursuit of other overseas operations.
The PLAN has a history of reacting to US naval deployments in areas it considers

sensitive. In October 1994 PLAN jet fighters intercepted a US S-3 Viking ASW from the
USS Independence, which was making a rare appearance in the Yellow Sea at the time.
In 1996 the PLA also sent a number of submarines to monitor US ships sent in reaction
to provocative PLA exercises designed to intimidate Taiwan. According to some sources
there was considerable tension as these submarines came close to US defensive zones.
The PLAN has also regularly sent J-8II and J-7 fighters to intercept US EP-3 ELINT/SIGINT
surveillance flights. On 1 April 2001 a J-8II interception from a PLAN airbase on Hainan
Island ended in tragedy when a J-8II collided with the EP-3, resulting in the loss of the
Chinese fighter and its pilot, and an emergency landing and 11 day incarceration on
Hainan for the EP-3 crew.
In late October 2004, the PLAN undertook a probe and monitoring mission, that
according to some sources, was under the direct command of former PLA Navy chief
Admiral Zhang Dingfa. It sent a single Northern Fleet Type 091 Han-class SSN, reportedly
No 405, the newest of the type, down to the area of Guam, site of a current US naval
and air build up, and then to monitor an ongoing US-Japan naval exercise. Another
suspected reason for this exercise was to test routes for the rapid deployment of PLAN
SSNs in the event of a Taiwan crisis. For a brief period the Han class submarine entered
Japanese waters and was chased by Japanese P-3 ASW patrol aircraft and ASW
destroyers - the first such brush with Japanese naval forces since the Second World
War. Despite recent upgrades, the submarine remains noisy and was not difficult to
track. This operation also saw the Northern Fleet send a Y-8 maritime patrol aircraft to
monitor the same exercise. Even though the Chinese government was forced to
apologise to the Japanese for this intrusion, it can be expected that the PLA Navy will
continue and expand such activities to affirm Chinese interests in controlling these
areas of concern.
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For the unprecedented China-Russia "Peace Mission 2005" exercises, the PLAN played a
significant role. This exercise represented the first ever 'combat' exercise by the PLAN
with an important naval power, and the first exercise to involve new PLAN technology
and tactics developed during the current period of PLA modernisation. While it likely did
not rise much beyond a "fire power" demonstration, it is likely that future China-Russia
combined exercises will feature more complex naval manoeuvres. Major PLAN units
included the Northern Fleet destroyer Harbin, the new South Sea Fleet destroyer
Luyang I, East Sea Fleet destroyer Sovremenny, three Jiangwei-class frigates and at least
one Type 039A Song-class submarine and Kilo-class submarine. Russian Pacific Fleet
forces included the Udalloy-class ASW destroyer Marshall Shaposhnikov and the
Sovremenny-class destroyer Burny.
In September 2005, China escalated a long-simmering resource-maritime territory

competition with Japan by deploying PLAN units to the East China Sea to support
China's claims to resource laden areas disputed with Japan. For several years the
Japanese have watched increasing numbers of Chinese survey ships enter areas of
Japanese concern to the north and east of Okinawa. The potential flash point is an area
north-east of Okinawa, a gas extraction rig in the Chunxiao field that China has built just
a few kilometres on its side of a 'mid-line' claimed by Japan. The PLAN deployment,
around 9 September, was in apparent reaction to Japan's granting rights to a company
to search for gas and oil in the same area. This deployment consisted of East Sea Fleet
vessels, including a Sovremenny DDG, new fleet replenishment ship Fuchi, an
intelligence/early warning/space event ship, and two Jianghu frigates. On 29
September, the eve of Chinese-Japanese diplomatic talks aimed at resolving this
dispute, China announced that it had formed a special "East Sea Fleet Reserve Force" to
respond to a range of territorial-related contingencies. Should diplomacy fail to resolve
this specific territorial dispute, then there may be additional naval deployments,
perhaps by both sides, with the inherent risk of incidents or even clashes.
In mid-November 2007 the PLA held combined air and naval maneuvers South of
Hainan Island and close to the disputed Paracel Islands, prompting protests from
Vietnam. This exercise featured maneuvers by a combined force of Sovremenniy,
Luyang 1and Luyang 2 destroyers, Jiangwei frigates, Type 022 FACs plus Kilo and
perhaps Song class submarines. Reports indicated that a Sunburn and a Club anti-ship
missile were fired, and the Type 022 was featured for the first time firing a C-802 anti-
ship missile. Another apparent part of this exercise was the transfer of the first and only
Type-094 SSBN to its new base near Sanya on Hainan Island. It is possible that this may
have been an early exercise to protect SSBN operations from Hainan. Near the same
time there were also aircraft operations closer to Taiwan.
As sensitive early 2008 elections approached in Taiwan, there were concerns that the
PLAN may be utilised to pressure the island. In December 2007 China moved to place a
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new air route near the mid-line of the Taiwan Strait, viewed as provocation in Taipei
and quietly protested by Washington. This concern was in part reflected in
Washington's decision to maintain two aircraft carrier battle groups in the region during
this period. However, the PLAN did not undertake any overt operations during this
period.
Present Role
In the mid-1980s the PLAN dispensed with the Maoist role of maritime guerrilla warfare,
acting as subordinate to the ground forces. As a result of studies into recent conflicts,
the CMC agreed, in the late 1980s, to qualitative improvement of naval, naval air and
nuclear forces.
At a 1992 meeting in Beijing, the CMC allocated a significantly higher proportion of the
defence budget to warship procurement to enable the PLAN to undertake the enhanced
role.
Since the mid-1990s, along with the rest of the PLA, a clear priority for modernisation
has been to prepare for a future war over Taiwan that could also involve combat against
US forces. The PLAN has stressed acquisition of systems that could assist in combat,
blockade and amphibious assault missions against Taiwan. As a consequence, the East
Sea Fleet and South Sea Fleet have been favoured for most new naval combat systems,
though the North Sea Fleet is now receiving new Type 093 SSNs. While the South and
East Sea Fleets have received the bulk of new Song-A class submarines, these appear to
be going to the North Sea Fleet too. New Russian Sovremenny destroyers and Kilo
submarines have been assigned to the East Sea Fleet. New Luyang I and Luyang II air-
defence destroyers will likely be divided between the East Sea Fleet and South Sea
Fleet. It appears that the East Sea Fleet and the South Sea Fleet will be receiving a
regiment each of new Su-30MKK2 attack fighters.
An ability to attack one or more US aircraft carrier battle groups is another clear goal of
the current PLAN build-up. There exists a great body of Chinese military literature
analysing the weaknesses of aircraft carriers, such as their thin hull bottoms, and the
most opportune times to attack them, such as when receiving supplies or landing
aircraft. Taking apparent inspiration from late Cold War Soviet counter-carrier
strategies, the PLAN clearly intends to co-ordinate mass strikes of anti-ship missiles
launched from strike aircraft and submarines against US carriers and their escorts. PLAN
efforts to achieve this goal were illustrated by the apparently co-ordinated launch of
anti-ship missiles from two Type 039 submarines during "Peace Mission 2005". Counter-
naval strikes could also come from air force strike platforms and from land-based
ballistic and cruise missiles. The PLA could use nuclear weapons or new non-nuclear
electromagnetic weapons against opposing naval forces. These could be delivered by
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aircraft, ballistic and cruise missiles. Search and tracking will be provided by new radar
satellites, AWACS aircraft, long-range OTH radar and less conventional means like large
numbers of fishing ships. When more of these systems enter the PLAN inventory after
2005 it can be expected that the PLA will begin to undertake more high-profile exercises
to perfect their doctrine and tactics.
For the present period, the Northern Fleet will host the PLAN's nuclear powered
submarines. For nuclear deterrence missions, it is likely that the JL-2 SLBM will have
sufficient range, about 12,000 km, to allow Type 094 SSBNs to remain in the protected
Bohai Sea or Yellow Sea. Type 091 and 093 SSNs will likely be deployed to intercept US
carrier task groups and US SSNs that may be sent to seek out 094s. They may also have
priority missions to monitor and counter US naval forces based in Japan and could,
when necessary, deploy to counter US SSNs now deployed to Guam. However, the
shallowness of the Bohai Sea may make PLAN SSBNs vulnerable to future space
detection systems, a matter which has led the PLA to seek a second nuclear submarine
base nearer to deep sea operating areas in the South China Sea. A potential SSBN base
on Taiwan's east coast would offer the PLAN immediate access to deep ocean operating
areas.
A potential region of greater interest for the PLAN will be the South China Sea and
Indian Oceans. New PLAN forces being assembled for a future Taiwan conflict could also
be used to enforce territorial claims in the South China Sea, or undertake missions to
protect Chinese merchant traffic to the increasingly critical oil sources of the Persian
Gulf. Early 2008 satellite imagery obtained by Jane's confirmed that China has nearly
completed a major new naval base near Sanya on Hainan Island. This base features a
large area enclosed by a sea wall, two sets of new large docks and a newly built shore
facility for loading heavy material like amphibious army forces or missiles. In addition,
these images confirm reports since 2002 that the PLA had built a new underground
facility to protect submarines. Imagery obtained by Jane's shows eight openings to this
facility on its North side, while it also shows advanced work on a main submarine
entrance on the South side. Asian military sources have previously suggested to Jane's
this facility might house up to eight submarines, but there is enough area for excavation
to eventually house 20 submarines. China's military relationship with Myanmar, to
include assistance in building shipyards, and China's development of the Pakistani port
of Gwadar, both point to a desire to deepen political-economic relationships that could
facilitate distant naval access during emergencies.
China intention to increase its naval presence in this region was signalled in February
2007 when a PLAN Jiangwei class frigate participated in a Pakistan sponsored naval
exercise with British, French and US ships.

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The PLAN has not contributed to the efforts of the UN. In the future, however, this
could change. China's contributions of PLA medical and construction teams to UN
missions in the Democratic Republic of Congo could someday lead to the deployment of
PLA Naval forces to assist logistical requirements.
Command and control
Senior Fleet Leadership
Commander-in-Chief of the Navy: Admiral Wu Shengli
Political Commissar of the Navy: Vice Admiral Liu Xiaojiang
Deputy Commanders-in-Chief of the Navy: Vice Admiral Wang Yucheng

Vice Admiral Zhao Xingfa
Vice Admiral Zhang Zhannan
Vice Admiral Zhang Yongyi
Vice Admiral Zheng Baohua
Rear Admiral Ding Yiping
Chief of Naval Staff: Rear Admiral Ding Yiping
Deputy Chiefs of Naval Staff: Rear Admiral Zhou Borong

Rear Admiral Yin Changzhi
Rear Admiral Zhang Deshun
Rear Admiral Zhang Leivu
Rear Admiral Liu Yi
Early 2006 reports that PLAN Commander Zhang Dingfa was in poor health were
confirmed in August 2006 with the announcement of his succession by former South
Sea Fleet Commander Vice Admiral Wu Shengli. Dingfa died on 14 December 2006. Wu
is considered an expert on anti-carrier warfare. Previously, he was the deputy
commander of the East China Sea Fleet, which means he brings a heavy Taiwan focus to
the PLAN command. Wu's exposure to the South Sea Fleet as commander, plus his
exposure to joint forces requirements and planning as the first PLAN officer to be
Deputy Chairman of the General Staff Department, all burnish his credentials as a
warfighter and to lead the PLAN through its next phase of growth. In September 2003
he accompanied Chief of the General Staff of the PLA General Liang Guanglie on a trip
to Pakistan, Brunei, and Malaysia. In early April 2007 Wu visited the United States,
where Chief of Naval Operation Admiral Mike Mullen asked him about "China's
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potential participation in global maritime partnership initiatives," or his "Thousand Ship

Navy" initiative. Wu did not decline but asked for more information. In early December
2007 former PLAN Deputy Commander Rear Admiral Zhang Baohua died after an illness.
East Sea Fleet
Commander: Rear Admiral Xu Hongmeng
Deputy Commander: Rear Admiral Wang Laiyou
Deputy Commander: Rear Admiral Hu Xiangui
Deputy Commander: Rear Admiral Li Xianghua
Deputy Commander: Rear Admiral Huang Jiang
Deputy Commander: Rear Admiral Li Julin
Deputy Commander: Rear Admiral Du Xiping
Political Commissar: Vice Admiral Xu Jianzhong
In January 2008 Rear Admiral Tian Zhong replaced Rear Admiral Xu Hongmeng as
Commander of the East Sea Fleet. As such he will also serve as the Deputy Commander
of the Nanjing Military Region and follow Zhao to become a military delegate to the
National People's Consultative Congress. Xu was previously a Deputy Chief of Staff for
the PLAN. His command is high profile for two reasons: the East Sea Fleet will bear the
brunt of initial naval combat operations against Taiwan and in opposition to Japan-
based US Naval forces. Secondly, the East Sea Fleet is often the host of visiting naval
units. In November 2003 the East Sea Fleet hosted the fourth visit by an Indian Navy
squadron to Shanghai.
North Sea Fleet
Commander: Rear Vice Admiral Su Shiliang
Deputy Commander: Rear Admiral Wang Fushan
Deputy Commander: Rear Admiral Chen Axi
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Deputy Commander: Rear Admiral Zhang Zhixin
Deputy Commander: Rear Admiral Jin Xiaoxiang
Deputy Commander: Rear Admiral Zhang Shiying
Deputy Commander: Rear Admiral Jin Xiaoxiang
Deputy Commander: Zhang Shiying
Political Commissar: Vice Admiral Li Guang
Vice Admiral Su Shiliang succeeded Vice Admiral Zhang Zhannan in mid-2006. Zhang
was appointed Northern Fleet Commander in June 2003 after the demotion of Vice
Admiral Ding Yiping in the wake of the Ming No. 361 disaster. Su had previously been
identified as a Deputy Chief of Staff of the Nanjing Military Region, Chief of Staff of the
Qingdao Naval Base, Deputy Chief of Staff of the North Sea Fleet and as President of the
Naval Command College. He has written a paper titled "Historical Experience In Solving
the Taiwan Straits Crisis," in which he applied the lessons of Sun Tzu.
The North Sea Fleet is critical due to its being the centre of the PLAN's nuclear fleet. All
current nuclear ballistic missile and nuclear attack submarines are based in Qingdao and
are built in nearby Huludao. This fleet would also render critical support to the army in
the event of a war on the Korean Peninsula. The North Sea Fleet is also active
diplomatically. In May 2006 Rear Admiral Su hosted the visiting Chief of Naval Staff of
the Pakistan Navy and in September 2006 Canada's frigate HMCS Regina visited
Qingdao base. That same month the North Sea Fleet DDG No. 113 Qingdao visited
Canada's Pacific naval headquarters at Esquimalt and the US Navy base in San Diego,
where it conducted rescue exercises with US ships.
South Sea Fleet
Commander: Vice Admiral Gu Wengen
Deputy Commander: Rear Admiral Xue Tianpei
Deputy Commander: Rear Admiral Den Minglin
Deputy Commander: Rear Admiral Zhang Zhicheng
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Deputy Commander: Rear Admiral Han Linzhi
Deputy Commander: Rear Admiral Su Zhiqian
Political Commissar: Vice Admiral Huang Jiaxiang
Vice Admiral Su Shiliang succeeded Vice Admiral Gu Wengen in January 2008. Su was
previously North Sea Fleet Commander.
Following the promotion of South Sea Fleet Commander Wu Shengli to PLAN

Commander, Vice Admiral Gu Wengen was appointed South Sea Fleet Commander. Gu
was previously a Deputy Commander of the East Sea Fleet, indicating that the resources
of the South Sea Fleet will be better marshalled for potential future Taiwan operations.
Gu also serves as Deputy Commander of the Guangzhou Military Region. While the
South Sea Fleet, which host most of the PLA's Marine forces, is slated to play a major
role in potential future Taiwan operations, it will also become the most important PLA
fleet when new SSBNs are transferred to new base on Hainan Island. Future aircraft
carriers are also likely to be stationed at Hainan, indicating a growing future role for this
fleet in distant SLOC protection or power projection missions. The South Sea Fleet also
plays an active diplomatic role: it sent DDG No. 167 to Guam in October 2003 and in
November 2006 Vice Admiral Wu hosted the third visit by the US Navy to the South Sea
Fleet HQ of Zhanjiang, where US and PLAN ships later conducted search and rescue
exercises.
Organisation
The senior institution of the PLAN is the Main Naval Headquarters located in Beijing. It is
the responsibility of the commander, together with a political commissar and three
deputy commanders. The current commander of the PLAN is Admiral Wu Shengli.
Additionally, there are several deputy political commissars, a chief of the Main Naval
Staff and his deputies, other functional managers and a variety of supervisors. Together,
these senior navy personnel are responsible for directing and monitoring planning,
operational proficiency, co-ordination, training and the readiness of the fleets.
It is through this headquarters that the navy is directly subordinated to the CMC via the
general department structure. However, the strict subordination of the navy to the
army-dominated CMC was significantly altered in September 2004 when former
commander Zhang Dingfa became the first Navy Commander to be elevated to the
CMC. This occurred simultaneously with the elevation of the air force and Second
Artillery commanders to the CMC, giving these technical services a greater voice in
leadership and resource allocation issues. About two months before Admiral Zhang's
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elevation to the CMC, former Guangzhou MR Deputy Commander Wu Shengli, was

made Deputy to the PLA's main "operator," General Liang Guanglie, Chairman of the
General Staff Department of the CMC. However, as of late-2007, it does not appear that
another naval officer has replaced Wu after his promotion. Nevertheless, these changes
reflect the PLA's deepening commitment to creating a joint command structure that
reflects doctrinal commitments to greater joint-warfare capabilities.
The organisation and structure of the naval HQ is based to a large extent on that of the
PLA itself. The PLAN high command is comprised of the following departments: General
Staff, Headquarters, Political, and Logistics and Armament. These departments are the
guardians of the service's operational, political and logistical responsibilities. In addition,
there are some other first echelon organisations peculiar to the PLAN, such as Naval Air
Force Headquarters, the Engineering, Weapons and Oceanographic departments and an
Administration Office, which handles control of classified documents as well as
conscription/demobilisation work.
Below the high command level, the PLAN is divided into three fleets: North, East and
South. The fleets are divided into three-tiered organisations designed to support deep-
water operations, coastal defence activity and naval air operations. The major
combatants and submarine flotillas are directly subordinate to their respective fleet
headquarters for deep-water operations and offshore defence. The fleets' coastal
defence structures are controlled by fleet headquarters through subordinate district
and sector headquarters. Each of these echelons (fleet, district and sector) is an area
command with operational control over all activity within its geographic area. This
means that the fleets have operational control over vessels in their jurisdictions;
however, in wartime, operational command of naval forces in coastal defence functions
may be transferred to military regions. The forces afloat are sub-divided into divisions,
regiments and squadrons.
The North Sea Fleet, which is based in Shandong province and headquartered at
Qingdao, is responsible for the North Korean border to Lianyungang (Jiangsu province).
It is divided into nine coastal defence districts and has approximately 325 ships
deployed among one submarine flotilla, two escort groups, one mine warfare unit, one
amphibious unit and the Bohai Gulf training flotilla.
The East Sea Fleet, based in Shanghai, has an area of responsibility that stretches from
Lianyungang to Dongshan (Fujian province) and is divided into seven coastal defence
districts. Its complement of approximately 270 ships is divided between two submarine
units, two escort groups, one mine warfare unit and one amphibious unit. In addition, it
possesses one naval infantry division.
The South Sea Fleet, based at Zhanjiang (Guangdong province), is responsible for the
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area stretching from Dongshan to the Vietnam border. The fleet is divided into nine
coastal defence districts, with approximately 320 ships. It possesses two submarine
flotillas, two escort groups, one mine warfare unit, one amphibious unit and one naval
infantry brigade. The South Sea Fleet has been favoured by its gaining the Luyang I and
Luyang II air defence destroyers, giving it the largest number of destroyers among the
three fleets.
According to some sources, China recently reorganised its lower-level naval command
structure. Previously, the PLAN placed two or three naval districts under each of the
three fleet headquarters and 15 naval security areas (responsible for coastal security)
within each naval district. As a result of the latest reorganisation, it is thought that naval
base headquarters may have replaced the naval districts, and the 15 naval security
areas may have been integrated into seven maritime guard districts, resulting in the
dissolution of 43 squadrons.
Coastal Defence
Under naval command are the coastal regional defence forces responsible for each of
25 coastal defence districts. The order of battle is believed to include 35 independent
artillery and missile units. In early 2008 an Asian military source confirmed that the
PLAN had deployed a new version of the YJ-62 300km+ range anti-ship missile, called
the YJ-62C. About 120 of these long-range anti-ship missiles had been deployed at
facilities near Taiwan by early 2008. It is understood that these forces defend the naval
bases, anchorages and other important points on the coast.
Under naval command are the coastal regional defence forces responsible for each of
25 coastal defence districts. The order of battle is believed to include 35 independent
artillery and missile units. It is expected that coastal defence units will receive the new
300+ km range YJ-62 anti-ship cruise missile. It is understood that these forces defend
the naval bases, anchorages and other important points on the coast.
While nominally under the PLA, China has in recent years built up its Customs and Coast
Guard fleet. A new 3,500 ton patrol vessel, the Haixun 31, went into service in February
2005. It is lightly armed but equipped with a helicopter. In addition to rescue and
maritime security missions, it is likely these ships will also be used to assert China's
claims to sovereignty over the disputed regions of the South China Sea. Using such
ships, this mission is likely to prove less provocative to major powers but these ships will
still be sufficient to deter countries with insufficient naval forces like the Philippines.
Submarine Fleet
The PLAN has seven submarine flotillas deployed among the three fleets. Each flotilla
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(except the 1st and 62nd) is composed of two, four-boat squadrons. There are normally
two extra boats cycling through deep maintenance at any time. The numbers of flotillas
and the number of squadrons in each flotilla have fallen as the large 'Romeo' force has
declined. Recent reports indicate the PLAN is going to build three new submarine bases,
or expand on some existing bases. At least one base will be new, an underground base
on Hainan Island for nuclear submarines. While it can be reasonably projected that the
latter may host a new flotilla, it is less clear that the other two new bases will host new
units.
Fleet Unit Location Known Strength
North Sea 1st Submarine Qingdao 3 × Han, 1 × Xia, 4 × 093, 1 x 094

Fleet Base
UI Unit Qing Approximately 10 × Romeo (or some Song-A)

Dao
12th Unit Lu Shun Approximately 10 × Ming
Testing Base Huludao Experimental Development Unit: 1 × Golf, 1 × Romeo,

1 × Song, 1 x 093, 1 x 094
East Sea UI Unit Zhejiang 4 × Song, n/a × Romeo1

Fleet
UI Unit Zhejiang 10 × Kilo, 4 × Ming
South Sea 32nd Submarine Yulin 2+ × Song, n/a Ming, 1 x Kilo2

Fleet Unit
Notes:
1. Second squadron of Songs expected to replace Romeos.

2. Songs to replace Romeos, new base at Yulin under construction, possibly for 094 SSBN
or 093 SSN.
PLA Marines
All naval infantry, with the exception of a small cadre unit at Shanghai, are deployed to
the South Sea Fleet. The 1st and 164th Marine Brigades are deployed in Zhanjiang,
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along with a unit of amphibious landing ships. The leader of the 1st Brigade is
Commander Wang Gejun and the 164th is led by Commander Tan Taishan. In peacetime
this marine force is brigade sized and is equipped with amphibious tanks and armoured
personnel carriers for amphibious landings. In war, the reserve cadres would increase
fighting strength to eight divisions of 24 infantry, eight armoured, eight artillery and two
independent tank regiments. Like the PLA Army's three amphibious divisions, the
Marines are also benefiting from new weapons developments. However, in contrast to
the army's divisions, the Marines are not to the same degree benefiting from the
emphasis on "mechanisation". This follows from their emphasis on securing beachheads
for follow-on forces, or Special Operations in the South China Sea.
While both marine brigades are primarily prepared for a Taiwan contingency, they are
not assigned to the East Sea Fleet, which has operational responsibility for Taiwan,
because of the lack of training facilities. The combined strength of both brigades
apparently does not exceed 10,000.
Regarding new equipment, the Marines are now using the new Type-63A amphibious
tanks and the new Type-63C amphibious APCs. The Type-63A features a new hull with
composite armour enhanced turret, a 730 or 1,000 hp diesel engine and is armed with a
105 mm gun. According to some sources it can fire co-produced Russian "Bastion" laser-
guided gun-launched missiles. The latter's 5 km range means the Type-63A will
immediately be able to out-range the 105 mm guns on Taiwan's M-60 and M-48 tanks.
During an April 2004 exhibition it was revealed that the chassis of the T-63A tank
formed the basis of a new amphibious APC with a large passenger chamber in place of
the turret. It is expected to be used as a medivac or command vehicle.
The Type-63C is a radically modified Type-63 APC with the addition to two buoyant
chambers and an outboard motor for propulsion. Though lacking in elegance it appears
to be effective and in large-scale production. The Type-63C comes in two versions so
far, one that emphasises infantry carriage and one better suited for command or
medivac missions. Marine units are also receiving a new version of the Type WZ 501,
based on the Soviet BMP-1, equipped with a wave cutter and an outboard motor.
Marine and army amphibious units are also making increasing use of new specialised
light amphibious jeeps and light truck transports. Early in this decade the PLA Marines
also acquired a small number of Russian PTS-M wheeled amphibious troop carriers. The
Type 63A tank, Type-63C were featured in the amphibious assault portion of "Peace
Mission 2005". Once shore positions are secured, LSTs can then land Type-83 122 mm
self-propelled howitzers. Marine infantry are also seen increasingly with new Type-95
"bullpup" 5.8 mm assault rifles.
With the building of Type 071 LPDs, and possibility Type 081 LHDs, the PLA is now
deploying a new family of amphibious assault vehicles to exercise over-the-horizon
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strike capabilities. First seen in 2005, and then with gradually clearer internet source
images in 2006 and 2007, it is now clear that the PLA has developed not just one type of
vehicle similar to the US Expeditionary Fighting Vehicle (EFV), but a family of them. Like
the EFV the new PLA vehicle uses a powerful engine driving water pump jets that can
propel a flat-bottom hull with retracting track wheels, in a water-planning manner up to
25 kts, according to a Chinese source at the 2007 IDEX show. But the PLA "EFV" comes
in at least three version: one armed with a 100 mm main gun; one armed with a smaller
turret with a 30 mm cannon plus HJ-73 anti-tank missiles; and a version for logistic
support. A command and medical support version can also be expected. Internet
imagery available in early to mid-2008 indicates that PLA Marine units are receiving this
family of new fast amphibious vehicles.
China is continuing to improve its capabilities to conduct amphibious operations within

the region. In the last two years its fleet of about 60 medium-sized LSTs and LSMs has
been supplemented by two new classes of LST/LSMs. It is expected that 15 of the latter
will be built. Mid-2006 Russian reports indicated that the Almaz shipyard will produce
up to six of the unique large ZUBR assault hovercraft for the PLAN. The 60 kt-speed
ZUBR can carry three medium tanks, or 10 tracked or wheeled APCs, or 140 troops and
130 tons of cargo. The ZUBR will be able to overcome much of the difficult beach
environment on Taiwan's east coast, increasing PLA amphibious attack options. In
December 2006 the PLA launched its first 20,000 ton Type 071 LPD, with Asian sources
estimating total construction could range from two to eight. In May 2007 a Chinese
source confirmed earlier reports that China will build a helicopter carrier called the Type
081 LHD.
For many years China has experimented with hovercraft and two types are seen used in
Marine exercises. In addition, the PLA has developed special trucks to roll down
surfacing for successive vehicles, a means of overcoming mud flats and other difficult
landing terrain on Taiwan's west coast. Although China has little experience in
conducting large exercises with fully co-ordinated air support and airborne operations,
its amphibious force is believed capable of landing at least one division on a beach,
depending on the mix of equipment and stores for immediate re-supply.
But in the event of a near-term combat scenario, such as a need to attack Taiwan, the
Marines, like the army, will rely heavily on 'irregular' transport assets. These may
include some of the over 150 fast ferries that operate from Hong Kong and other
coastal cities, plus a wide range of slow ferries and civilian merchant ships, especially
roll-on/roll-off types. Some sources are also concerned that the PLA may be investing in
other novel transport methods, such as large temporary docks that would be towed
across the Strait, but allow the more rapid movement of heavy armour.
Currently the PLA Marines lack organic air support but this may change in the future. In
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2005 Z-8 helicopters in naval grey colours were photographed off-loading troops,
presumably Marines. Reports that the PLAN is building an LDH-type assault ship with a
large aft helicopter deck may mean that the PLAN may invest in both assault and attack
type helicopters in the future. This becomes attractive as China proceeds in the
development of its "Z-10" family of attack and medium transport helicopters and now
that the smaller WZ-11 attack helicopter has entered production. The latter would
already be suited for operating from the rear platform of some medium-size LSTs.
Additional confirmation of Marine interest in air transport comes from reports in April
2006 that the PLANAF would purchase up to 40 Ka-29 naval assault helicopters. The
development of the Type 071 LPD and possibly, the Type 081 LHD, increases the
chances that PLA Marines will have better organic air support. It can also be expected
that larger versions of both ships eventually will be developed, which raises the
possibility of future fixed wing support aircraft, especially if Chengdu's intention to build
a "F-35" class fighter also includes a V/STOL version. In 2007 a Z-8 mockup was seen on
the flight deck of this LPD, indicating it may become the PLAN's first troop carrying
helicopter.
Navy Intelligence
The GSD's Third Department and the Navy co-operate on shipborne intelligence
collection platforms.
PLA Naval Air Force (PLANAF)
The PLA Naval Air Force is organised into eight divisions whose assets favour the East
Sea and South Sea fleets, indicating their emphasis on potential Taiwan or South China
Sea operations. Until just after the turn of the decade, the PLANAF appeared to be
mired in old doctrine and equipment. Through most of the 1990s there appeared to be
little effort to operate jointly with the PLAAF, and apart from the mid-1990s
introduction of the Xian JH-7 fighter-bomber, this air arm was equipped mainly with
obsolete H-6D anti-ship bombers and J-6, J-7 and some J-8 fighters.
There is now a new priority being placed on modernising the PLANAF. Reportedly, this
sub service had the patronage of former CMC Chairman Jiang Zemin. This may have
been Jiang's reaction to a personal embarrassment he suffered from the PLA's relative
inability to respond to the US deployment of two aircraft carrier battle groups near
Taiwan in March 1996. This decade may see the retirement of J-6, early J-7 and early J-8
models, to be replaced by JH-7A, Su-30MKK2 and possibly J-10 fighters. The PLANAF is
now receiving two new types of naval strike fighters. In 2004-2005 the PLAAF acquired
one regiment of 24 Su-30MKK2 fighter bombers. Reports in 2006 of the purchase of a
second regiment have not materialised.
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There is now a new priority being placed on modernising the PLANAF. Reportedly, this
sub service had the patronage of former CMC Chairman Jiang Zemin. This may have
been Jiang's reaction to a personal embarrassment he suffered from the PLA's relative
inability to respond to the US deployment of two aircraft carrier battle groups near
Taiwan in March 1996. This decade may see the retirement of J-6, early J-7 and early J-8
models, to be replaced by JH-7A, Su-30MKK2 and possibly J-10 fighters. The PLANAF is
now receiving two new types of naval strike fighters. Up to 48 Su-30MKK2s are slated to
equip at least two new regiments, one of which will be based on Hainan Island. One
additional regiment of about 24 Su-30MKK2s may be acquired by about 2006. Radar
and weapons computer upgrades now being purchased for existing PLA Air Force J-11
fighters and Su-30MKK fighter bombers may eventually add over 200 more naval strike-
capable fighters to the inventory.
The second major PLANAF programme at this time is the Xian JH-7A fighter-bomber.
This programme received a major boost on 12 April 2004 when CPC Secretary General
Hu Jintao inspected its factory. Revealed in mock-up form in early 2003, the JH-7A will
have upgraded radar and weapons computers to allow carriage of C-801K and Kh-31
missiles, in addition to laser guided bombs. The JH-7 program received a major boost in
the late 1990s when China succeeded in inviting Rolls Royce back to complete a Spey
turbofan co-production programme aborted in the 1980s. This engine is now being
produced under the name "QinLing". So far about two regiments, or about 40 JH-7s
have been produced. Chinese sources note one regiment is for testing while one is
operational. Other sources estimate that the PLAN may acquire three to four
operational JH-7A regiments. The PLANAF may also operate a new dedicated
reconnaissance version of the JH-7. A new JH-7A regiment may be forming on Hainan
Island.
The PLANAF has been weak on maritime patrol and electronics aircraft, but this may
soon change. The PLANAF operates about four Shaanxi Y-8100 transports modified with
radar and other search systems. These have been featured prominently on Japanese
television in 2005 and 2006 flying in disputed maritime regions. The PLANAF operates a
small number of Y-8100s outfitted with Racal/Thales Skymaster AEW radar, one of
which participated in the August 2005 "Peace Mission" exercises with Russia. In 2005 a
new Y-8100 emerged with large radomes on the fuselage consistent with a
EW/Jamming mission. Then in April 2006 Russian reports indicated the PLA may
purchase up to 15 Be-200 turbofan powered amphibious patrol aircraft. These have a
potential 7 hour endurance for patrol missions but can also carry cargo and passengers
to greatly ease logistic support for garrisons in the Paracel and Spratly Islands.
The PLANAF operates a relatively small number of ASW and utility helicopters but this
could soon change. The most modern of these is the Russian Kamov Ka-28, capable of
anti-submarine operations and of providing over-the-horizon targeting cues for long-
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range missiles. First deployed on the two Russian-built Sovremenny destroyers, their
utility is limited by the small fuel allotment carried by these ships. But inasmuch at the
second two Sovremenny destroyers for the PLAN are slated to have a larger helicopter
hanger, they may also carry more fuel for extended operations. The PLAN apparently
intends to acquire more Ka-28s as the hangers on the Luyang I, Luyang II destroyers and
the Type 054 frigates have been sized for the Ka-28. However, Russian reports from
April 2006 indicate the PLANAF may acquire up to 20 Ka-31 AEW helicopters and 40 Ka-
29 naval assault helicopters. If completed, the Ka-31 purchase would significantly boost
the over-the-horizon targeting ability for PLAN surface warships, allowing better
exploitation of new long-range Moskit and YJ-62 ASMs. The Ka-29s would allow the
PLANAF to provide far greater organic support for the PLA Marines and to conduct
greater aerial at-sea logistic support.
Naval Aviation Order of Battle
North Sea Fleet, HQ: Qingdao
Unit Base Type Role
1st Bomber Aviation Division n/a
Bomber Aviation Regiment(1) Jiaoxian H-6M Bomber
Jiaoxian Q-5 Attack

Bomber Aviation Regiment(2)
2nd Bomber Aviation Division Qingdao
4th Bomber Aviation Regiment Tuchengzi H-6D Bomber
5th Bomber Aviation Regiment n/a HZ-5 Reconnaissance
6th Bomber Aviation Regiment Tuchengzi H-5 Attack
5th Fighter Aviation Division Qingdao
14th Fighter Aviation Regiment Yantai Laishan Q-5 Attack
15th Fighter Aviation Regiment Jiaozhou J-8 I Interceptor
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1st Independent Air Regiment Laiyang Y-8J AEW
1st Independent Air Regiment Laiyang Y-8(DZ) Electronic Intelligence
2nd Independent Air Regiment Liangxiang Y-7 Transport
2nd Independent Air Regiment Liangxiang Y-8 Transport
3rd Independent Air Regiment Tuan SH-5 Patrol / Surveillance
6th Independent Air Regiment Qingdao SA 321 ASW
6th Independent Air Regiment Qingdao Z-9 ASW
Naval Aviation Academy
1 Regiment Jinxi CJ-6 Training
2 Regiment Changzhi An-26 Crew Training
3 Regiment Xingcheng HJ-5 Training
4 Regiment Jiyuan n/a
Note:
Bracketed numbers are not part of the unit identity. They indicate that they are different
units.
East Sea Fleet, HQ: Ningbo
Unit Base Type Role
AEW Flight Dachang Y-8J AEW
4th Fighter Aviation Division Zeguo (Luqiao)
10th Fighter Aviation Regiment Ningbo Su-30MK2 Interceptor
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12th Fighter Aviation Regiment Zeguo (Luqiao) J-7E Air Defence / Attack
Independent Bomber Aviation Regiment Benniu H-6D Bomber
6th Bomber Aviation Division Dachang (Shanghai)
16th Bomber Aviation Regiment Dachang JH-7 Anti-Ship Attack
17th Bomber Aviation Regiment Yiwu JH-7 Anti-Ship Attack
4th Independent Aviation Regiment Ningbo Ka-28 ASW
4th Independent Aviation Regiment Ningbo Mi-8 ASW
Aviation Training Regiment Zhoushan JJ-5 Training
Aviation Training Regiment Zhoushan JJ-6 Training
South Sea Fleet, HQ: Zhanjiang
Unit Base Type Role
3rd Bomber Aviation Division Zhanjiang
8th Bomber Aviation Regiment n/a H-6D Bomber
8th Bomber Aviation Regiment n/a H-6U Tanker
9th Fighter Aviation Division Lingshui
25th Fighter Aviation Regiment Lingshui J-8 II Interceptor
25th Fighter Aviation Regiment Lingshui J-8 IV Interceptor
27th Fighter Aviation Regiment Ledong JH-7A Attack
8th Fighter Aviation Division Haikou, Hainan
22nd Fighter Aviation Regiment Haikou J-7 Air Defence / Attack
399
24th Fighter Aviation Regiment Jialaishi J-7 II Air Defence / Attack
Naval Helicopter Group Haikou, Hainan Z-8 ASW
Naval Helicopter Group Haikou, Hainan Z-9 ASW
Transport Aviation Regiment Haikou, Hainan several Transport / Communications
PLA naval doctrine used to involve what was known as an 'offshore active defence
strategy'. This strategy conformed to the Maoist belief that the PLAN's role and function
in war was a marginal one. It was Deng Xiaoping and his opening of China to the world
that provided the navy with an opportunity to inaugurate its own development agenda.
This led to changes in maritime doctrine, beginning in the 1980s and continuing until
today. The new doctrine has been labelled the 'green water active defence strategy'.
According to strategists, active defence strategy is defence exercised for anti-attack
purposes but it does not exclude the possibility of offensive strikes for the purpose of
self-defence or for offensive action after a period of defence. 'Green water' was defined
as reaching from Vladivostok in the north to the Strait of Malacca in the south and to
the 'first chain of islands' in the east. Plans involve the creation of a green water navy
for early in the 21st century. The Chinese define 'blue water' as reaching to the 'second
island chain'. The creation of a blue water navy is to be realised by 2050.
Naval strategy became more ambitious in the 1980s, when Commander-in-Chief Navy
Admiral Liu Huaqing (1982-87) began to outline the need for a blue water naval
presence. Naval strategy in this period stressed three points: preserving combat
capability and preventing early engagement with the Soviet Pacific Fleet in decisive sea
battles; dividing the PLAN into small groups, utilising fast attack craft and emphasising
manoeuvrability; and reliance on inshore and harbour minelaying, land-based artillery,
missiles and the Naval Air Arm in order to interdict Soviet sea lines of communication.
The definition of 'offshore active defence' underwent revision. Liu Huaqing defined it as
effective control of the seas within the first island chain (Aleutians, Kurils, Ryukyus,
Taiwan, the Philippines archipelago and the Greater Sunda Islands). Some have even
suggested that it refers to the second island chain (the Bonins, the Marianas, Guam and
the Palau group).
Changes in operational art and doctrine have necessitated defence modernisation. Four
concepts have arisen from that process. Extended strategic depth envisions the PLAN as
not only a tactical force but also a strategic force and the spearhead of the PRC's
national defence. In the post-Cold War era, a large-scale conflict has been replaced with
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the idea of local warfare at sea. Theoretically, the PLAN's offshore active defence
strategy is 'defensive'; however, on the operational and tactical levels, the navy would
be required to carry out offensive missions in order to guarantee the fulfilment of
strategic objectives set by the Chinese national defence authority. Finally,
modernisation has led to the emphasis of expertise over politics in command.
Offshore active defence strategy is intended to achieve a number of objectives: China

wants to assert an image of regional maritime power in post-Cold War Asia; it wants to
improve its naval capability in order to protect its flourishing coastal economic regions
and defend its maritime interests; it seeks to generate maritime technological
development in both economic and military applications through the navy
modernisation programme; and it wants to maximise the navy's strategic functions in
national defence planning and establish a sea-air-coast-island integrated defence
system.
The strategy rationalises the navy's case that its demand for high-technology, budget-
consuming combat and logistical systems is more pressing than similar requests from
other services.
Bases
East Sea Fleet
Headquarters: Shanghai (31° 06' N; 121° 22' E)
Dinghai (34° 30' N; 118° 48' E)
Hangzhou (30° 18' N; 120° 07' E)
Wusong (31° 23' N; 121° 30' E)
North Sea Fleet
Headquarters: Qingdao (36° 04' N; 120° 22' E)
Chengshan (37° 23' N; 122° 40' E)
Dalian (38° 53' N; 121° 37' E)
Huludao1 (40° 47' N; 121° E)
401
Weihai (37° 30' N; 122° 04' E)
South Sea Fleet
Headquarters: Zhanjiang (21° 10' N; 110° 20' E)
Beihai (21° 29' N; 109° 10' E)
Guangzhou (23° 08' N; 113° 20' E)
Haikou (20° 05' N; 110° 25' E)
Huangpu (23° 08' N; 113° 31' E)
Shantou (23° 23' N; 116° 39' E)
Yulin (22° 37' N; 110° 08' E)
Note:
1. Huludao was opened up to international commercial shipping in May 2000.
New Bases
According to informed sources the PLAN is now building five new naval bases to support
its ongoing fleet expansion. Chinese sources indicate some of these facilities are new
modern additions to existing bases. This investment in infrastructure is perhaps almost
as important as the development of new combat platforms, as it indicates the
willingness to invest in the necessary logistic support for naval operations. They are also
significant in that it requires considerable expenditure of government construction
resources and will divert scarce coastal land away from economic growth. Three of the
new bases are said to be devoted to new submarines. This is to be expected inasmuch
as the PLAN is now acquiring two new nuclear and two new non-nuclear submarine
types. It is likely that each of the three fleets will receive a new submarine base.
One of the new submarine bases is believed to be an underground base to be located

on Hainan Island, perhaps near the existing base at Yulin. There is speculation that this
base may be devoted to new nuclear submarines, putting them closer to southern areas
of strategic concern to the Chinese leadership. Putting new Type 093 SSNs in this new
base might indicate a Chinese intention to be able to interdict sea lanes in the South
China Sea, or to protect them as far away as the Persian Gulf. Basing new Type-094
402
SSBNs in Hainan would indicate a desire to ensure a nuclear "second strike" capability
against India.
Paracel and Spratly Islands
While China in recent years has sought to quiet fears in Southeast Asia regarding its
territorial ambitions in the South China Sea, it has also been quietly expanding its
capacity for military activities in this region. It is likely that China is preparing gradually
to be able to consolidate its claims in this region by the military turning these islands
into bases for naval, air or even missile operations. The strategic importance of these
island outposts will greatly increase should, as expected, the PLAN start deploying both
SSNs and SSBNs to Hainan Island. Furthermore, while China remains open to proposals
for joint exploitation of resources, it maintains its territorial claims to most of the South
China Sea. A special garrison has been built in the Paracel Islands group, including a
major command, control and intelligence (C3I) centre, a detachment of naval infantry
(including main battle tanks), anti-aircraft artillery and SAM batteries. Regular patrols by
missile strike craft are undertaken. There is a large operational airfield on Woody Island
in the Paracel group that can accommodate all combat aircraft types in the PLA.
Asian sources indicate China has recently completed a four to six year construction
program on many of its Paracel and Spratly islands. Some of the Spratly islets now have
new purpose-built towers to house large 3-D air/surface search radar. Additional naval
barracks have been built on selected islands in the Spratly Islands. Some of these, such
as the facility in Mischief Reef near the Philippines, could be expanded to include
helicopter pads. This raises the prospect of these bases being able to conduct both sea
and airborne Special Operations. The placement of new anti-ship ballistic missiles on
some of these islets would give the PLAN an interdiction capability that none of the
regional navies could counter. In addition, should the PLAN purchase new Russian
Beriev Be-200 large amphibious jet transport aircraft, its ability to sustain its South
China Sea outposts will improve markedly. Chinese military press reports have noted
that these island outposts have been given satellite broadband linkage which has
significantly improved command, entertainment, and even family communication
options for the garrisons.
Stonecutters Island
Soon after the hand-over of Hong Kong in 1997 China established a naval base at
Stonecutters Island. The base was built on a reclaimed plot along the southern shore of
the island, which is linked to the western part of the Kowloon peninsula. The PLAN
maintains between 10 and 15 missile patrol craft at the installation. According to a
number of sources the largest ship that can be berthed at this facility would probably be
one of frigate size.
403
Garrisons
The three fleet headquarters are naval garrisons and the main naval infantry base at
Zhanjiang also operates as a garrison. Since 1992 the PLAN has garrisoned Woody Island
(Yangxing) in the Paracels and in addition there are at least 35 coastal regional defence
forces bases, usually associated with naval bases and anchorage protection.
Training
There are numerous training establishments, schools and academies in the Chinese
military system.
According to reports from the PLA General Staff Headquarters, the PLAN has embarked
on a new programme of training. The main thrust appears to be the development of
tactics involving individual warships of different types, co-ordination with naval aircraft,
training personnel of onshore command posts and training to bring in new equipment.
During the China-Russia "Peace Mission 2005" exercises, Chinese and Russian units
practised blockade, anti-submarine, submarine strike, air support and missions. Russian
Ka-28 and PLAN Z-9EC ASW helicopters conducted ASW operations. Air support was
provided by a PLAN Y-8 AEW aircraft, a Russian A-50 AWACS, plus Russian Su-27 and
PLAAF Su-30MKK fighters. On 25 August 2005 a Jiangwei frigate provided fire support
for both PLAN and Russian landing craft transporting PLA Marine and army amphibious
units, together with Russian Marines, to a landing beach.
Submarine training continues apace, although plans are said by US experts to have been
adversely affected by an accident in 1993. It is alleged that a PLAN Romeo class
submarine was lost in the Yellow Sea with all hands. What made this incident
particularly tragic for China was the inference that the submarine was undertaking the
final examinations for a whole generation of future Chinese submarine skippers. It
seems that during a test evaluation one of the trainees crashed the boat into the sea
bottom. While this incident has not been publicly acknowledged by the Chinese
government, the April 2004 loss of the crew of Ming submarine No. 361 and the
resulting investigation was made very public. While it would not have been of any
assistance to this crew, the PLAN does maintain a deep-sea submarine rescue capability
and does have some DSRV-like rescue vehicles. The PLAN has participated in a rare
exercise with the US Navy to practice submarine rescue with Southeast Asian navies,
hosted by Singapore.
The PLAN's relatively rapid re-equipment with new submarine, surface-ship and attack
aircraft platforms is going to place a premium on intra-service combined-arms
operations and co-operation with other services, like the PLAAF. As the PLAN acquires
404
its new Club-armed Kilo 636M submarines and Su-30MKK2 strike fighters, it can be
expected that there will be an effort to practice co-ordinated anti-ship and anti-carrier
operations.
The Chinese and Indian navies conducted two rounds of day-long manoeuvres in 2003,
with another exercise held on 16 April 2007.
In September 2008, the first batch of 50 shipborne aviation pilot cadets began an
orientation course at the People's Liberation Army (PLA) Dalian Naval Academy in
Liaoning province, China. Under the inaugural programme, the cadets will receive a
four-year education in maritime aviation focusing on "the basic theories of surface ship
and flight".
Educating large numbers of pilot cadets in shipborne naval aviation theory and practices
raises the prospect of an operational PLAN aircraft carrier in the not-too-distant future.
The navy's major training centres are:
Dalian First Surface Vessel Academy; Political School
Canton Second Surface Vessel Academy
Qingdao Submarine Academy; Aviation School
Wuhan Engineering College
Nanjing Naval Staff College; Medical School; Electronic Engineering College
YanTai Aviation Engineering College
Training Areas
Each fleet has its own dedicated sea training areas which are marked on international
charts. The bulk of the PLAN's training is carried out on a day-running basis such that
the warships and supporting aircraft operate within coastal, usually territorial, waters.
Military Exercises
In mid-November 2007, the PLAN held a complex set of exercises which featured the
use of new ships and missiles. Located largely in the South China Sea near Hainan Island
and the Paracel Island group, this exercise was a rare joint South Sea Fleet and East Sea
405
Fleet endeavour. The exercise featured operations in a complex electronic environment

and co-operation between ships and land-based JH-7A fighter-bombers. It is possible
that PLAAF units participated near the end of the exercises, with some reports noting
KJ-2000 AWACS were employed. For the first time the Luyang-1 class destroyer was
used as were the new Type 022 FACs. The Luyang DDG fired a SA-N-7 SAM, while a Kilo
class submarine fired a Klub anti-ship cruise missile, a Sovremenny class destroyer fired
a Sunburn missile and a Type 022 fired a C-801 anti-ship missile. This exercise also
coincided with the first movement of the new Type 094 SSBN to its new base near
Sanya on Hainan Island, perhaps indicating that one of the goals of this exercise was to
develop doctrine and tactics to support SSBNs. Vietnam protested this exercise, which
also closely preceded China's unexpected decision to cancel the visit to Hong Kong of
the USS Independence aircraft carrier group.
Submarines
Class Manufacturer Role Original In Commissioned

Total Service
Xia (Type 092) Huludao Shipyard Ballistic Missile, 1 1 1987

Nuclear
Powered
Jin (Type 094) Huludao Shipyard Ballistic Missile, 4 1 2007

Nuclear
Powered
Golf (Type 031) Dalian Ballistic Missile 1 1 1966
Han (Type Huludao Shipyard Attack 4 4 1980

091/091G)
Shang (Type 093) Bohai Shipyard Attack 2 1 2006
Yuan (Type 041) Wuhan Shipyard Attack 2 1 2006
Song (Type Wuhan Shipyard / Attack 13 13 1999

039/039G) Jiangnan Shipyard
406
Kilo (Type Various Attack 12 12 1995

877EKM/636)
Ming (Type 035) Wuhan Shipyard Attack 19 19 1971
'Romeo' (Type Various Attack 71 7 1962

033)
Modified Romeo n/a Guided Missile 1 1 n/a

(Project 033G)
Note:
1. Number unclear but some expected to be held for reserve duties like mining or decoy
operations.
Surface Fleet
Class Manufacturer Role Original In Commissioned

Total Service
Luyang II (Type 052C) Jiangnan Destroyer 2 2 2004

Shipyard
Luyang I Jiangnan Destroyer 2 2 2004

Shipyard
Luzhou (Type 051C) Dalian Shipyard Destroyer 2 2 2006
Sovremenny North Yard Destroyer 6 4 1999
Luhu (Type 052) Jiangnan Destroyer 2 2 1994

Shipyard
Luda (Types Various Destroyer 16 10 1971

051/051D/051Z)
Luda class (Type Dalian Shipyard Destroyer 4 4 1991
407
051DT/051G/051G II)
Luhai (Type 051B) Dalian Shipyard Destroyer 1 1 1999
Jiangkai I (Type 054) Hudong Shipyard Frigate 2 2 2005

/ Huangpu
Shipyard
Jiangkai (Type 054A) Huangpu Frigate 4 1 2007

Shipyard /
Hudong Shipyard
Jianghu I/V (Type Various Frigate 27 27 n/a

053H)
Jianghu II (Type 053) Hudong Shipyard Frigate 10 1 1984
Jianghu III/IV (Type n/a Frigate 4 3 1986

053 H2)
Jiangwei I (Type 053 Hudong Shipyard Frigate 4 4 1991

H2G)
Jiangwei II (Type Huangpu Frigate 10 10 1998

053H3) Shipyard /
Hudong Shipyard
Houbei (Type 022) Various Fast Attack Craft - 55 40 2004

Missile
Houjian/Huang (Type Huangpu Fast Attack Craft - 7 7 1991

037/2) Shipyard Missile
Houxin (Type Various Fast Attack Craft - 22 16 1991

037/1G) Missile
Huangfen (Type 021, n/a Fast Attack Craft - 15 14 1985

Osa I) Missile
408
Hainan (Type 037) n/a Fast Attack Craft - 123 93 1963

Patrol
Haiqing (Type 037/1) Various Fast Attack Craft - 25 25 1992

Patrol
Shanghai II (Type Various Fast Attack Craft - 98 35 1961

062) Gun
Haijiu n/a Patrol Craft - Large 4 2 n/a
n/a n/a Patrol Craft - 4 4 1997

Harbour
Haizhui/Shanghai III n/a Patrol Craft - 19 19 1992

(Type 062/1) Coastal
T 43 (Type 010) Various Minesweeper - 40 14 1966

Ocean
Wosao n/a Minesweeper - 8 4 1988

Coastal
Futi (Type 312) n/a Minesweeper - 46 4 n/a

Drone
Wolei Dalian Shipyard Minelayer 1 1 1988
Wochi Qiuxin Shipyard Mine 5 5 n/a

Countermeasures
Wozang Qiuxin Shipyard Mine 1 1 2005

Countermeasures
Yuting I (Type 072 IV) Zhonghua Landing Ship Tank 10 10 1992

Shipyard
Yuting II Various Landing Ship Tank 10 10 2003
409
Yukan (Type 072) Wuhan Shipyard Landing Ship Tank 7 7 1980
Yuliang (Type 079) Various Landing Ship 32 32 1980

Medium
Yudeng (Type 073) Zhonghua Landing Ship 1 1 1994

Shipyard Medium
Yudao (Type 073) n/a Landing Ship 1 1 1980

Medium
Yunshu Various Landing Ship 10 10 2004

Medium
Yuhai (Wuhu-A) Various Landing Ship 13 13 1995

(Type 074) Medium
Yubei Various Landing Craft 10 10 2004

Utility
Yunnan (Type 067) n/a Landing Craft 120 120 1968

Utility
Yuch'in (Type n/a Landing Craft 28 20 1962

068/069) Utility
Type 271 n/a Landing Craft 25 25 1970

Utility
Jingsah II Dagu Hovercraft 10 10 1979
Naval Infantry
Type Manufacturer Role Original In First

Total Service Delivery
Type 63/63- NORINCO Amphibious Light Tank 150 150 n/a

1
410
Type 63A NORINCO Amphibious Light Tank 150 150 n/a
Type 63C NORINCO Amphibious Armoured n/a n/a n/a

Personnel Carrier
Type 77 NORINCO Amphibious Armoured n/a n/a n/a

Personnel Carrier
122 mm NORINCO Howitzer 100 100 n/a

Type 54
122 mm NORINCO Self-propelled Howitzer n/a n/a n/a

Type 83
Type 63 NORINCO Multiple Rocket Launcher n/a n/a n/a
Naval Aviation

JH-7 XAC Bomber 54 54 1998
JH-7A XAC Bomber 18 n/a 2004
H-6D (Tu-16 XAC Bomber 30 30 n/a

Badger).
H-6X (Tu-16 XAC Bomber 1 1 n/a

Badger)
H-5 (Il-28 Harbin Bomber 30 30 1967

Beagle)
J-8 I (Finback A) SAC Fighter - Interceptor / Air 70 70 1990

Defence
J-8 IV (Finback SAC Fighter - Interceptor / Air 20 20 1990
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D) Defence
J-7 II (J-7B) CAC Fighter - Multirole 70 40 1971
J-7 IV (J-7E) CAC Fighter - Multirole 30 29 1992
Q-5 'Fantan-A' Nanchang Fighter - Ground Attack / 70 35 1970

Strike
Su-30 MK 2 Sukhoi Fighter - Interceptor / Air 24 24 2004

Flanker Defence
Z-9C Haitun Hai Helicopter - Maritime / 25 11 1989

(Dauphin 2) Anti-Submarine
Ka-28PL 'Helix-A' Kamov Helicopter - Maritime / 8 6 1999

Anti-Submarine
Ka-28PS 'Helix- Kamov Helicopter - Maritime / 4 4 1999

A' Anti-Submarine
Z-8 Super Frelon Changhe Helicopter - Maritime / 20 15 1977

Anti-Submarine
SH-5 Harbin Maritime Patrol / Anti- 4 4 1986

Aubmarine Warfare
KJ-2000 n/a Airborne Warning And 3 2 2007

Control System
Y-8J SAC Airborne Early Warning and 2 2 1998

Control System
Y-8DZ SAC Electronic Intelligence 2 2 2004
Y-8X (Cub) SAC Transport 4 4 1985
Yak-42D Yakovlev Transport 21 n/a 1990
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H-6DU XAC Tanker 4 n/a 1998
Note:
1. Civil-registered.
Naval Aviation - Missiles
Type Manufacturer Role
PL-5 CATIC Air-to-Air
PL-9 Luoyang Air-to-Air
YJ-1 (C-801) CPMIEC Anti-Ship Attack
YJ-62C n/a Anti-Ship Attack
YJ-6 (CAS-1 'Kraken') CPMIEC Anti-Ship Attack
Coastal Regional Defence Forces
Type Role Original Total
C-201 Hai Ying Missile System n/a
C-101 Hai Ying 2 Missile System n/a
130 mm Coastal Artillery 250
413
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AIR FORCE
Summary
Assessment
Advancing Capabilities
Role and Deployment
Command and control
Organisation
Order of Battle
Bases
Training
Training Areas
Fixed Wing
Rotary Wing
Unmanned Aerial Vehicles
Air Defence Systems
Missiles
Summary
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STRENGTH
250,000
BOMBER
XAC H-6
MULTIROLE FIGHTER
Su-30MKK 'Flanker', SAC (Shenyang) J-8, CAC J-10
AIR DEFENCE/ATTACK FIGHTER
CAC J-7, NAMC Q-5, Su-27SK 'Flanker-B', SAC (Shenyang) J-11 (Su-27SK), XAC JH-7A
AIRBORNE EARLY WARNING
Beriev A-50 (KJ-2000), SAC (Shaanxi) Y-8 (KJ-200)
RECONNAISSANCE
SAC (Shenyang) JZ-6, SAC (Shenyang) JZ-8
ELINT
Tu-154M/D 'Careless'
TRANSPORT
An-24 'Coke', An-26 'Curl', An-30 'Clank', Il-76 'Candid', Tu-154M 'Careless', SAIC Y-5, XAC Y-7,
SAC (Shaanxi) Y-8, Boeing 737, Challenger
TANKER
XAC H-6U
TRAINER
HAIC CJ-6A, HAIC JL-8, SAC (Shenyang) JJ-6, GAIC JJ-7, Su-27UB 'Flanker-C'
Assessment
The People's Liberation Army Air Force (Zhongguo Renmin Jiefangjun Kongjun - PLAAF)
is in the midst of a major modernisation programme that started in the early 1990s but
did not gain serious momentum until late in that decade. The principal goal is to
facilitate conduct of modern, all-weather, offensive operations within the context of a
joint-forces campaign. Ongoing modernisation programmes encompass combat aircraft,
weaponry, support aircraft (including transports), air defence missiles and airborne
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troops. The PLAAF's aggressive import of Russian combat aircraft and weapons is now
giving way to acquisition of highly capable indigenous systems, all of which is shifting
the air balance of power in the Taiwan Strait and placing the PLAAF in a better position
to challenge US and Japanese regional airpower. While the PLAAF continues to face
challenges in implementing modernisation, it appears to be addressing doctrinal,
logistical and training obstacles. Furthermore, the domestic aerospace sector is showing
greater ability, all of which bodes well for future PLAAF requirements.
During the 1990s, the PLAAF learned some hard lessons from its own experience, while
also benefiting from US experience in honing the use of modern offensive air power.
During the tenure of commander Wang Hai, the PLAAF began to consider emerging
from its Cultural Revolution slump, a process given greater emphasis and impetus by
the first Gulf War. The loss of Western sources of technical knowledge and technology
in the aftermath of the ruthless suppression of demonstrations that culminated in the
Tiananmen Square massacre paved the way for renewal of broad military-technical ties
with post-Communist Russia. While the PLAAF began to import its first fourth-
generation fighter, the Sukhoi Su-27SK 'Flanker', in 1992, its full absorption took nearly
the remainder of the decade as the PLAAF sought to devise new doctrine, tactics,
logistic support capabilities and training programmes. These deficiencies were revealed
by lacklustre flying during exercises in 1995 and 1996 that were intended to intimidate
Taiwan. This process was made more difficult by the slow formulation of new broader
doctrines to create the basis for joint-service operations that could exploit newer
technologies. Progress in this direction was also impeded by the slow rise of more
future-oriented officers.
In early 2007, the PLAAF began to fuse sufficient numbers of fourth generation
multirole fighters plus AWACS aircraft and SAM systems to pose a real challenge to
Taiwan's air arm as well as any US or Japanese combat aircraft that might conceivably
come to Taiwan's aid in the event of conflict. China's Su-30MKK, J-11 and J-10 fighters
combine new beyond visual range (BVR) and helmet-sighted AAMs to present
capabilities equivalent to, or, in some cases, superior to those of US and Japanese
warplanes. Furthermore, the PLAAF is now producing competing families of laser- and
satellite-guided precision munitions (PGMs) to add to its considerable inventory of
Russian PGMs. These can be expected to be used by multirole fighters, attack aircraft
and new versions of the H-6 bomber. After a crash development programme - both
figuratively and literally speaking - the PLAAF is also on the verge of introducing two
types of AWACS system into service, along with a dedicated C3I aircraft and, possibly, a
ground-mapping radar aircraft. By the end of this decade, the PLAAF could theoretically
embark upon a sustained all-weather campaign to attack Taiwan and seize air
superiority, provided that missile strikes had sufficiently degraded Taiwanese air
defences.
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Looking to the future, China may have three indigenous fifth generation fighter
programmes underway that emphasise stealth attributes, super-cruise capable turbofan
engines, with modern phased array radar technology and internal weapons carriage;
one developed by Shenyang and two by Chengdu. The PLAAF is also intending to
introduce the H-6K bomber, which features land attack cruise missiles and possibly PGM
delivery capability, while it decides whether to purchase used Russian Tu-22M3
Backfires or develop a new indigenous heavy bomber. AVIC-1 and AVIC-2 are developing
contenders for a new C-17 size transport. The PLAAF also shows strong interest in HALE
UAVs, as well as supersonic UCAVs. While the Chinese government remains publicly
opposed to any kind of ballistic missile defence, the S-300PMU-1/2 SAMs, and future
active-guided FT-2000 SAMs, will confer a limited defence against SRBMs. Allied to this,
debate continues over whether the PLAAF or a new dedicated service should assume
overarching responsibility for military-space missions.
An area of weakness for the PLAAF was illustrated by the May 2008 earthquake in
Sichuan. The lack of heavy lift helicopters made it particularly difficult to transport the
large amounts of aid and heavy equipment to where it was needed in the absence of
adequate or undamaged infrastructure. The lack of commercially operated helicopters
in China serves to exacerbate the problem and increase the emphasis on the PLAAF's
need to rapidly build its own rotary wing transport capacity.
Another deficiency the PLAAF is now addressing is that of transport and tanker support.
While the PLAAF is expected to receive more than 30 new Il-76 transports by 2009,
bringing its total to about 50, they must still rely on extensive drafting of civil assets to
transport significant airborne forces to Taiwan. Additional Il-76s will help ease the
ability to participate in non-combat military, peacekeeping and humanitarian exercises.
In December 2006, for the first time, PLAAF Il-76s supported army deployments to a
foreign country, Pakistan, for anti terror exercises. In August 2007, an even larger
deployment occurred during Peace Mission 2007 exercises, when six Il-76s were used to
airlift an airborne company and its equipment to Russia.
The current Five Year Plan is now funding a competition to develop China's first
indigenous large transport aircraft, with an initial design goal to lift 60 tons of cargo.
This programme also includes the development of large narrow and wide-body civil
transport aircraft, which could also be employed for military missions. In the meantime,
China is also intending to buy new Il-78M tankers to supplement the small number of H-
6 bombers that are presently employed for air-to-air refuelling.
While the PLAAF suffered from suspicions about its political loyalty after its role in the
1971 defection attempt of former defence minister Lin Biao, the last 15 years have
witnessed an increase in PLAAF authority within the PLA and in its political standing vis-
à-vis the Communist Party of China (CPC) leadership. Growing appreciation of the role
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of airpower and the need to integrate Air Force professionals into its highest leadership
councils to fulfill new joint forces doctrines resulted in elevation of the PLAAF
commander to the Central Military Commission in 2004. Morale is high due to China's
air arm being given budgetary priority in recent years as well as increases in pay and
flying hours and a military career remains attractive to young Chinese seeking the status
and challenge of being a combat pilot.
As with the PLA, the main institutional threat appears to centre around the longevity of
the CPC. Were the party to succumb to its many challenges of legitimacy or corruption
or should it fail to prevail after a decision to attack Taiwan, the resulting political
uncertainty would undoubtedly affect the mission and funding of the PLAAF. While a
post-Communist China would certainly retain an air arm, there is no guarantee that it
would receive adequate funding to sustain increasing long-range offensive capabilities.
The PLAAF has sought to expand its roles and missions as technology has allowed it to
consider 'independent' offensive operations, but remains firmly wedded to the PLA's
'joint' future. Nevertheless, the PLAAF has sought to dominate future space warfare
missions and must look wryly at the advancing long-range precision strike capabilities of
the Second Artillery, and likely desires new long range bombers to match the growing
power projection capabilities of China's Navy.
Advancing Capabilities
The five-year-plan beginning in 2000 saw the emergence of new joint doctrines under
the larger "Peoples War Under High-Tech Conditions", as well as a strong commitment
to new multi-role fighters, modern weapons and modern support aircraft to include
AWACS, tankers, ELINT/SIGINT platforms and transports, new air-defence missiles and
the expansion of airborne troop units. There is growing evidence that the PLAAF is
expected to closely coordinate all-weather precision air strikes with Second Artillery and
Army missile strikes. Equipment commonality is also making better joint operations
with the PLA Naval Air Force possible. Like other services, the PLAAF is expected to
exploit imminent new space reconnaissance capabilities to better enable new precision
strike weapons. In addition, the PLAAF is devoting greater resources to modern air
defence systems and to airborne troops, all to better enable offensive operations.
In addition, by 2002-2003, reforms and upgrades within China's domestic aerospace

sector began to reveal new weapons development capabilities. By the late 1990s the
aerospace sector began to exhibit the benefits of broader PLA-industry reforms that
stressed greater competition and integration with the civil high-tech sector. With much
help from Russia, but also after absorbing much Western design and manufacturing
technology, Chinese companies have begun to produce competitive weapons like the
Chengdu J-10 multi-role fighter, the JH-7A attack fighter and the PL-12/SD-10 active-
guided AAM. China is also developing new AWACS, ELINT and tanker aircraft, in addition
419
to new modern SAMs. Just as important, Chinese firms are demonstrating increasing
competence in developing critical combat aircraft subsystems like turbofan engines and
radar.
The PLAAF also appears to have a strong interest in developing UAVs, for
reconnaissance and combat applications and debate continues within China's armed
services over whether the PLAAF or a new dedicated command agency should assume
responsibility for and control of military-space missions. Nevertheless, while the PLAAF
has now established considerable momentum in its modernisation programme, it will
still face some formidable obstacles in the years to come:
• Its numerous acquisition programmes have yet to reach the peak of their funding curve,
a condition all the PLA's services are facing along with increasing personnel costs
associated with the requirements to retain better personnel in a more competitive
labour market are likely to have some impact on retention rates;
• Integration of new Su-30s and upgraded J-11s with new BVR R-77s, PGMs, and new
support aircraft like the A-50 AWACS, and potentially the Il-78 tanker, are now at an
early stage;
• While logistic support is improving for some types, there is still plenty of scope for
improvement if the PLAAF is to be able to sustain the level of sortie rates associated
with the conduct of modern high-tempo warfare;
• Training, while receiving more investment, especially attempts to increase realism, still
lags behind Taiwan in terms of pilot capability and flight time; and
• Joint service training, especially with the PLA Navy, is still in its infancy, though this
requirement is receiving greater attention. Since 1996, there has been a focused effort
by the PLAAF and the PLA Navy to deploy appropriate equipment and develop the
operational expertise that is necessary to attack aircraft carriers.
Role and Deployment
PLAAF missions include air defence, medium-range nuclear weapon delivery, attack,
close air support, anti-aircraft missile and gun defence, and support for the Airborne
Army forces. These missions are evolving within the context of an overall doctrine which
in turn has stressed the need for surprise and the ability to conduct increasingly distant
offensive high-tech warfare. The PLAAF increasingly is also called upon to cooperate
with other services, especially the missile forces of the Second Artillery and the Army,
and also with the PLA Navy. Both equipment and deployment trends reflect these
requirements. In addition, it is believed that the PLAAF may also be preparing to
420
undertake a new mission: that of long-range strategic strike.
Operations Near Taiwan and Beyond
Since 1999, the PLA has embarked on a course of action designed to affirm its control of
half the Taiwan Strait while not appearing to be provocative. According to figures
released by Taiwan, the number of PLAAF sorties out to the 'mid-line' of the Strait
jumped from 464 in 1998 to 1,226 in 1999, while in August 2006 the Taiwan Ministry of
Defence stated that no fewer than 1,700 sorties had been flown over the Taiwan Strait
by the PLAAF in 2005. This translates to nearly five sorties per day, whereas before 1995
there were hardly any. Operations of this kind allow the PLAAF to acclimatise more
pilots to flying over the Strait, as well as serving to reduce the period of strategic
warning for Taiwan in case of attack by China.
In November 2002, the PLAAF started flying Anhui-based Su-30MKKs into the Strait. One
exercise in late 2003 featured a Su-30MKK with a new SAR that conducted electronic
reconnaissance of the length of western Taiwan. In early 2004, reports emerged that
the PLAAF was also flying A-50 AWACS missions to mirror those of Taiwan's E-2T
Hawkeye early warning and control aircraft. Since 1999, the Taiwan Air Force has been
quick to generate sorties in response to those of the PLAAF, while being cautious not to
provoke aerial incidents.
The dangers of a PLA-Taiwan aerial confrontation were apparent in late September and
early October 2004. On 27 September 2004, the Taiwan Air Force launched fighters to
escort President Chen Shui Bian's transport aircraft to Penghu Island in the Taiwan
Strait. In response, PLAAF fighters very quickly got airborne, prompting Taiwan to
dispatch more fighters. Eventually, the PLAAF sent 28 fighters up to the area near the
mid-line. In August 2006, reports emerged that PLAAF S-300 units in Fujian Province had
used their radar to 'paint' Taiwanese fighters that had been sent to ward off their PLAAF
counterparts. This SAM system is difficult to jam or evade, adding a new element of
danger to Taiwanese operations. Taiwan's Ministry of Defence also reported that in July
2006 the PLAAF began flying Su-27 fighters equipped with R-77/AA-12 'Adder' AAMs in
the Strait, posing an additional threat to Taiwan's fighters.
Exercise 'Peace Mission 2007' in August 2007 saw the PLAAF send eight JH-7A fighter-
bombers to Russia, marking the first ever deployment out-of-country by PLAAF combat
aircraft. The JH-7As undertook joint attack operations with Russian Su-25 'Frogfoot'
ground attack aircraft. In addition, six PLAAF Il-76 'Candid' transports carried a small
unit of PLA Airborne troops and their equipment for joint training exercises with a
similar size Russian Airborne unit.
It is a matter of reasonable speculation that the PLAAF will practice even more distant
421
missions in the future. The acquisition of A-50-like AWACS and Il-78M tankers will turn
the Su-30 force into one capable of long-range strike missions, potentially out to Guam,
or to support operations intended to enforce claims to disputed territories in the South
China or East China Seas. As the PLA Navy Air Force acquires more Su-30MKK2 multirole
fighters, and as PLAAF Sukhois are modified to fire Kh-31A anti-ship attack missiles, it is
likely that there will be even more intensive joint-service co-operation.
The potential acquisition of Tu-95 'Bear' and Tu-22M3 'Backfire' bombers would herald
a new level of capability. Combined with indications of China's intent to acquire aircraft
carriers, this would appear to point to a new and heightened level of PLA interest in
long-range, non-nuclear, power projection.
The May 2008 Sichuan earthquake provided an opportunity for the PLAAF to
demonstrate its capability to launch rapid operations, but also exposed the PLA's lack of
air transport resources. Within 24 hours after the May 12 earthquake the PLAAF was
also able to mobilise Il-76 and Y-8 transports to air-drop Airborne troops and equipment
for relief operations. However, the lack of heavy lift helicopters made it particularly
difficult to transport the large amounts of aid and heavy equipment to where it was
needed in the absence of adequate or undamaged infrastructure. The lack of
commercially operated helicopters in China serves to exacerbate the problem and
increase the emphasis on the PLA's need to rapidly build its own rotary wing transport
capacity. Currently the PLA possesses no heavy lift helicopters which are a vital logistical
element of modern armed forces. At present there are no known programmes to
acquire this capability although this again looks set to become a priority as the PLA
modernises. Rectifying these critical shortfalls is therefore likely to become a focus for
the Chinese aviation sector.
The PLAAF has not contributed to UN operations, but this could well change in the
future. China's commitment of small numbers of medical and logistic troops to the UN
operation in the Democratic Republic of Congo represents a start and could be the basis
for greater activity of this kind, should the Chinese government seek a higher profile. It
is possible that China could commit transport aircraft to fulfil logistic support
requirements in any future deployment in support of the UN.
Command and control
Commander: General Xu Qiliang
Political Commissar: Lt General Deng Changyou
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Deputy Commander: Lt General Jing Wenchun
Deputy Commander: Lt General Wang Chaoqun
Deputy Commander: Lt General Yang Dongming
Deputy Commander: Lt General He Weirong
Two key PLAAF appointments have served to raise the operational and leadership status
of this service, and confirm the PLA's continued commitment to implementing new Joint
Doctrines. In July 2004, Lt General Xu Qiliang, Shenyang MR Deputy Commander, and
concurrent Shenyang MR Air Forces Commander, was elevated to the position of
Deputy Chairman of the General Staff Department, the PLA's principle war fighting
command organ. Xu is reported to be an expert in anti-carrier operations. Xu then led
the PLA joint-force contingent to the August 2007 Peace Mission exercise in Russia,
before being elevated to PLAAF commander. A previous significant appointment
occurred in September 2004, when former PLAAF Commander Qiao Qingchen was
elevated to membership in the Central Military Commission of the People's Liberation
Army. This occurred simultaneously with the elevation of the navy and Second Artillery
commanders, giving these technical services a greater voice in leadership and resource
allocation issues.
Organisation
Since its founding, the PLAAF has been organised into four administrative and
operational levels: headquarters air force (HqAF); military region air forces (MRAF); air
corps, command posts and bases; and operational units. Depending on the type of unit,
operational units are organised into divisions, brigades, regiments, groups, squadrons,
battalions, companies, platoons, squads and flights. Operational units may be directly
subordinate to Air Force headquarters but are usually assigned to one of the seven
current Military Regions via a Divisional command structure that directs the operations
of two (sometimes three) subordinate Air Regiments.
The administrative structure of the PLAAF consists of four major departments

(headquarters, political, logistics and equipment) that reflect the organisational
structure of the four general departments (general staff, political, logistics and
armament). This structure is mirrored through the administrative and operational chain
of command from Air Force headquarters all the way down to the lowest operational
units. Besides the administrative elements, the core of the PLAAF consists of five
branches, plus various support elements, schools and research institutes.
423
Following the July 2003 announcement of further reductions in personnel numbers, yet
more reorganisation has occurred, with this witnessing elimination of the Air Corps
command structure. Henceforth, Divisional commanders report directly to Military
Region headquarters, thus simplifying the chain of command. Reforms of this nature are
viewed as necessary to better fulfil doctrinal aspirations for greater joint-service
command and operations within the context of an overall joint-service 'War Zone'
command structure.
Order of Battle
Air Divisions originally consisted of three Air Regiments, each possessing 72 to 120
fighters or 72 to 90 bombers, divided further into three squadrons. Today, the
Division/Regiment/Squadron organisation remains, albeit significantly reduced in size,
with most Divisions now having only two Air Regiments assigned. In addition, the
deployment of more modern and far more capable combat aircraft has inevitably been
accompanied by reductions in complement, with quality taking the place of quantity. As
a consequence, many Regiments now possess 36 or fewer examples of the primary
combat type.
Shenyang Military Region
Unit Base Type Role
1st Air Division
1st Air Regiment Anshan J-11 Air Superiority
2nd Air Regiment Chifeng J-7E AD/Attack
3rd Air Regiment Anshan J-8F Air Defence
11th Air Division
31st Air Regiment Siping Q-5D Attack
32nd Air Regiment Siping Q-5D Attack
21st Air Division
61st Air Regiment Mudanjiang-Hailang J-8H AD/Attack
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62nd Air Regiment Qiqihar J-7 AD/Attack
63rd Air Regiment Mudanjiang-Hailang J-7 AD/Attack
30th Air Division
Air Regiment Dandong J-8E AD/Attack
Air Regiment Dalian J-7E AD/Attack
4th Reconnaissance Air Regiment Shenyang-Yu Hung Tun JZ-8 Tactical Reconnaissance
Air Regiment Shenyang-Yu Hung Tun Y-8 Transport
Air Regiment Harbin-Shuang Yu Shu Y-5 Transport
Air Regiment Harbin-Shuang Yu Shu Y-7 Transport
1st Flying College
1st Air Regiment Harbin-Shuangcheng CJ-6 Training
2nd Air Regiment Harbin-Wanggang CJ-6 Training
3rd Air Regiment Harbin-Lalin Y-7 Training
3rd Air Regiment Harbin-Lalin An-26 Training
3rd Air Regiment Harbin-Lalin An-30 Training
3rd Flying College
1st Air Regiment Jinzhou North CJ-6 Training
2nd Air Regiment Jinzhou-Xiaolingzi JL-8 Training
Air Force Aviation University
1st Air Regiment Changchun-Dafang Shen CJ-6 Training
425
2nd Air Regiment Changchun-Datun CJ-6 Training
2nd Air Regiment Changchun-Datun Y-5 Training
3rd Air Regiment Changchun-Dafang Shen JL-8 Training
Guangzhou Military Region
Unit Base Type Role
Independent Air Regiment Hong Kong Z-9B Support
2nd Air Division
4th Air Regiment Suixi J-10 Multirole Fighter
5th Air Regiment Liuzhou J-7E AD/Attack
6th Air Regiment Suixi J-11 Air Superiority
8th Air Division
142nd (unconfirmed) Air Dangyang H-6A Bomber

Regiment
142nd (unconfirmed) Air Dangyang H-6E Bomber

Regiment
144th Air Regiment Leiyang H-6U Tanker
144th Air Regiment Leiyang H-6 Bomber
9th Air Division
25th Air Regiment Foshan J-8B Air Defence
25th Air Regiment Foshan J-8D Air Defence
26th Air Regiment Shaoguan J-7B AD/Attack
426
13th Air Division1
Air Regiment Yichang-T'u-men-wu n/a Transport
Air Regiment Dangyang Il-76 Transport
Air Regiment Wuhan-Wang Chia An-26 Transport

Tun
Air Regiment Wuhan-Wang Chia Y-7 Transport

Tun
Air Regiment Kaifeng Y-8 Transport
Air Regiment Kaifeng An-12 Transport
18th Air Division2
54th Air Regiment Changsha Su-30MKK Air Superiority
Air Regiment Shaodong J-7B AD/Attack

(unconfirmed)
Air Regiment Changsha J-8B Air Defence
42nd Air Division
124th Air Regiment Guilin-Li Chia Tsun J-7B AD/Attack
125th Air Regiment Nanning Wuxu J-7 AD/Attack
2nd Reconnaissance Air Taihe JZ-6 Tactical

Regiment (unconfirmed) Reconnaissance
Military Region Training Base Wudangshan J-7 Training
Military Region Training Base Wudangshan JJ-7 Training
1. Includes 37th, 38th and 39th Regiments; Kaifeng located in Jinan Military Region.
2. Comprises 52nd, 53rd and 54th Regiments.
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Nanjing Military Region
Unit Base Type Role
3rd Air Division
7th Air Regiment Wuhu J-7E AD/Attack
8th Air Regiment Changxing J-10 Multirole Fighter
9th Air Regiment Wuhu Su-30MKK Air Superiority
10th Air Division
EW Flight Nanjing- Y-8ECM Electronic Warfare

Dajiaochang
28th Air Regiment Anqing North H-61 Bomber
29th Air Regiment Nanjing- H-61 Bomber

Dajiaochang
14th Air Division
40th Air Regiment Nanchang-Xiantang J-11 Air Superiority
41st Air Regiment Zhangshu-Linjiang J-7E AD/Attack
26th Air Division
76th Air Regiment Wuxi-Shuofang A-50 Airborne Early Warning

(KJ2000)
28th Air Division
82nd Air Regiment Hangzhou-Jianqiao JH-7 Attack
83rd Air Regiment Hangzhou-Jianqiao Q-5D Attack
428
84th Air Regiment Jiaxing Q-5D Attack
29th Air Division2
Air Regiment Quzhou Su-30MKK Air Defence
Air Regiment n/a J-8D Air Defence
Air Regiment n/a J-7D AD/Attack
Military Region Training Base Rugao J-7 Training
Military Region Training Base Rugao JJ-7 Training
3rd Reconnaissance Air Suzhou JZ-6 Tactical

Regiment Reconnaissance
13th Flying College
1st Air Regiment Bengbu CJ-6 Flying Training
3rd Air Regiment Bengbu JL-8 Flying Training
1. Comprising 85th, 86th and, possibly, 87th Regiments.

2. H-6E and H-6H in use.
Lanzhou Military Region
Unit Base Type Role
Transport Regiment Lanzhou Y-5 Transport
Transport Regiment Lanzhou Y-7 Transport
6th Air Division
16th Air Regiment Lintao J-7 AD/Attack
140th Air Regiment Yinchuan Su-27 Air Defence
429
139th Air Regiment (unconfirmed) Tianshui J-7 AD/Attack
36th Air Division
107th Air Regiment Lintong H-6E Bomber
108th Air Regiment Wuqong H-6 Bomber
37th Air Division
109th Air Regiment Kuerle J-8F AD/Attack
110th Air Regiment Urumqi J-8F AD/Attack
111th Air Regiment Urumqi J-7E AD/Attack
5th Flying College
1st Air Regiment Wuwei CJ-6 Flying Training
2nd Air Regiment n/a CJ-6 Flying Training
3rd Air Regiment Wuwei JJ-5 Flying Training
Air Navigator School Hu Xian HJ-5 Training
Missile Test Centre Dingxin Various Weapons Trials
AEW Trials Unit Dingxin A-50 (KJ2000) AEW Testing
Beijing Military Region
Unit Base Type Role
7th Air Division
19th Air Regiment Zhangjiakou J-11 Air Superiority
15th Air Division
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43rd Air Regiment Huairen J-7C Night Fighter

(unconfirmed)
44th Air Regiment Lingqiu Q-5 Attack

(unconfirmed)
24th Air Division
70th Air Regiment Yangcun J-8E Air Defence
71st Air Regiment Zunhua J-8 Air Defence
72nd Air Regiment Yangcun J-8A Air Defence
72nd Air Regiment Yangcun J-8E Air Defence
1st August Aerial Demonstration Team Yangcun J-7GB Display Team

('Ba Yi')
Military Region Training Base Tangshan J-7B Training
Military Region Training Base Tangshan JJ-7 Training
Flight Test and Training Centre
1 Regiment Cangzhou J-7 Trials
2 Regiment Cangzhou J-7 Trials
3 Regiment Cangzhou J-8 Aggressor

Training
3 Regiment Cangzhou J-7 Aggressor

Training
Regiment Cangzhou J-11 Trials
Regiment Cangzhou Su- Trials

30MKK
431
13th Operational Trials Regiment Jiugucheng J-10 Trials
4th Flying College
1st Air Regiment Yuanshi CJ-6 Flying Training
3rd Air Regiment Shijiazhuang JL-8 Flying Training
Air Regiment Shijiazhuang Y-5 Flying Training
6th Flying College
1st Air Regiment Zhuo Xian CJ-6 Flying Training
2nd Air Regiment n/a CJ-6 Flying Training
3rd Air Regiment Zhuozhou JJ-5 Flying Training
Chengdu Military Region
Unit Base Type Role
4th Air Division
Air Regiment Qionglai Y-7 Transport
Air Regiment n/a Mi-17V Transport
33rd Air Division
97th Air Regiment Chongqing J-11 Air Defence
n/a Air Regiment Dazu J-7 AD/Attack
44th Air Division
130th Air Regiment Mengzi J-7B AD/Attack
131st Air Regiment Luliang J-10 Multirole Fighter
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2nd Flying College
1st Air Regiment Jiajiang CJ-6 Training
2nd Air Regiment Jiajiang JJ-5 (unconfirmed) Training
3rd Air Regiment Jiajiang HJ-5 Bomber Training
Air Navigator School n/a An-30 (unconfirmed) Training
Jinan Military Region1
Unit Base Type Role
5th Air Division
13th Air Regiment Weifang Q-5 Attack
14th Air Regiment Weifang JH-7A Attack
12th Air Division
34th Air Regiment Jinan J-7G AD/Attack
35th Air Regiment n/a J-7 AD/Attack
36th Air Regiment n/a J-7 AD/Attack
19th Air Division
55th Air Regiment Jining Su-27 Air Superiority
55th Air Regiment Jining J-11 Air Superiority
56th Air Regiment Zhengzhou J-7B AD/Attack
1st Reconnaissance Air Wendeng JZ-6 (unconfirmed) Tactical Reconnaissance

Regiment
433
Military Region Training Base Guozhuang JJ-6 Training
Military Region Training Base Guozhuang JJ-7 Training
Military Region Training Base Guozhuang J-7B Training
Air Regiment Jinan Y-5 Transport
Air Regiment Jinan Y-7 Transport
Air Regiment Jincheng Y-7 Transport
1. Jinan Military Region also includes airfield at Kaifeng with transport element
subordinate to 13th Air Division under Guangzhou Military Region
Autonomous Units
Unit Base Type Role
4th Air Regiment Wuqong Y-8E UAV Launcher
34th Air Division
100th Air Regiment Xiqiao Boeing 737 Transport
101st Air Regiment Xiqiao Canadair RJ Transport
102nd Air Regiment Beijing-Nanyuan Tu-154M Transport
102nd Air Regiment Beijing-Nanyuan Tu-154M/D Elint
203rd Air Regiment Beijing-Shahezhen Y-7 Transport
203rd Air Regiment Beijing-Shahezhen Super Puma Transport
15th Airborne Corps
Air Regiment1 Xiaogun Y-5 Transport
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Air Regiment1 Xiaogun Y-7 Transport
1. Air Regiment at Xiaogun is organic to 15th Airborne Corps and provides airdrop
training for troops assigned to three airborne divisions.
PLAAF doctrine has been evolving in concert with the rest of the PLA to embrace
modern high-tech warfare, in either an offensive or defensive capacity, with emphasis
on both joint and independent operations. This represents a significant change from the
early 1990s, when PLAAF doctrine and force structure was designed primarily for
defensive day-time operations under strict ground-control guidance.
Current doctrine is based on the theory of 'Air Campaigns', which are divided into
Offensive, Defensive and Air Blockade Campaigns, as well as campaigns conducted
independently and in concert with other elements of China's armed forces. The
development of offensive air campaigns is perhaps the most significant advance over
the last decade. Here, the PLAAF anticipates using attack, bomber, fighter, AWACS and
jamming aircraft to conduct strategic-level attacks that would destroy key military and
civilian infrastructure targets. The PLAAF also envisions offensive air interdiction
operations, in which fighters will be used mainly to first gain and then sustain air
superiority over the campaign zone. During interdiction campaigns, the PLAAF will place
priority on engaging and destroying enemy support aircraft like AWACS and tankers, as
well as countering enemy combat aircraft both in the air and on the ground.
Increasingly, the PLAAF seeks to co-ordinate offensive operations with other services. At
an operational level, air strikes will be precisely timed to commence moments after the
arrival of Second Artillery missile strikes, or just after naval strikes. Bombers and attack
aircraft will be supported by fighters, all in regiment-sized units, with further protection
provided by jamming aircraft. A typical offensive air campaign will begin in the pre-
dawn hours, followed by early morning and then late evening strikes. Such timing gives
PLA commanders the opportunity to digest satellite and other intelligence assessments
following the first two strikes and then set priorities for the third wave of attacks. The
initial number of surveillance satellites being procured will allow for twice-daily target
revisits, facilitating a 12-hour campaign cycle.
The overarching priority on sustaining an offensive as the surest path to victory has
meant that the PLAAF (and the PLA) places great importance on deception operations,
concealment, camouflage and dispersion. This is all the more necessary in any potential
Taiwan campaign, as both the US and Taiwan have space, air, ground and naval
intelligence gathering assets directed at the PLA. In recent years, the PLAAF has been
435
practicing dispersion and rapid assembly of forces, as well as the use of temporary
airfields in order to better mass forces near an objective. The PLAAF has also shown
evidence that it is prepared to use intimately detailed decoys in order to deceive very
high resolution US satellite cameras.
Doctrine for air defence, primarily involving use of ground-based SAMs and AAA, is also
evolving as another element to support an offensive. Since the mid-1990s, the PLA has
placed high priority on defeating cruise missiles and precision-guided munitions. The
PLAAF is also developing new methods for supporting Airborne Forces. These make
better use of new heavy transports such as the Ilyushin Il-76 and methods of delivering
heavier loads.
Bases
Baoding (38° 50' 20" N; 115° 31' 02" E)
Beijing-Nanyuan (39° 47' 31" N; 116° 23' 27" E)
Beijing-Shahezhen (40° 08' 43" N; 116° 19' 31" E)
Cangzhou (38° 23' 54" N; 116° 55' 36" E)
Gaocheng (37° 59' 49" N; 114° 46' 51" E)
Hohhot (40° 44' 17" N; 111° 13' 55" E)
Huairen (39° 43' 01" N; 113° 08' 12" E)
Jiugucheng (37° 29' 33" N; 116° 07' 16" E)
Lingqiu (39° 24' 20" N; 114° 09' 49" E)
Shijiazhuang (38° 04' 57" N; 114° 24' 52" E)
Suizhong (40° 17' 53" N; 120° 21' 29" E)
Tangshan (39° 39' 13" N; 118° 08' 39" E)
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Wenshui (37° 34' 32" N; 111° 58' 00" E)
Xiqiao (39° 57' 17" N; 116° 15' 15" E)
Yangcun (39° 22' 16" N; 117° 05' 46" E)
Yuanshi (37° 46' 45" N; 114° 34' 12" E)
Zhangjiakou (40° 44' 16" N; 114° 55' 51" E)
Zhuo Xian (39° 27' 27" N; 115° 59' 48" E)
Zunhua (40° 06' 02" N; 117° 53' 07" E)
Chongqing (29° 43' 09" N; 106° 38' 29" E)
Dazu (29° 38' 08" N; 105° 46' 17" E)
Jiajiang (29° 43' 55" N; 103° 36' 46" E)
Luliang (24° 59' 29" N; 103° 38' 33" E)
Mengzi (23° 23' 36" N; 103° 20' 19" E)
Qionglai (30° 29' 23" N; 103° 27' 54" E)
Changsha (28° 04' 11" N; 112° 57' 33" E)
Dangyang (30° 47' 54" N; 111° 48' 25" E)
Foshan (23° 05' 00" N; 113° 04' 02" E)
Guilin-Liangjiang (25° 13' 05" N; 110° 02' 22" E)
Guilin-Li Chia Tsun (25° 11' 42" N; 110° 19' 13" E)
437
Huiyang (23° 03' 00" N; 114° 36' 00" E)
Leiyang (26° 35' 14" N; 112° 53' 32" E)
Liuzhou (24° 12' 30" N; 109° 23' 40" E)
Nanning Wuxu (22° 36' 30" N; 108° 10' 21" E)
Shantou Northeast (23° 25' 30" N; 116° 45' 25" E)
Shaodong (27° 13' 35" N; 111° 40' 11" E)
Shaoguan (24° 58' 37" N; 113° 25' 22" E)
Suixi (21° 23' 33" N; 110° 12' 04" E)
Taihe (26° 51' 18" N; 114° 43' 55" E)
Wudangshan (32° 23' 08" N; 111° 41' 52" E)
Wuhan-Wang Chia Tun (30° 35' 52" N; 114° 14' 36" E)
Xiaogan (30° 57' 15" N; 113° 54' 42" E)
Yichang-T'u-men-wu (30° 40' 15" N; 111° 26' 25" E)
Jinan Military Region
Guozhuang (36° 00' 00" N; 117° 37' 32" E)
Jinan (36° 41' 00" N; 116° 55' 10" E)
Jincheng (36° 14' 55" N; 113° 07' 33" E)
Jining (35° 17' 34" N; 116° 20' 37" E)
Kaifeng (34° 45' 15" N; 114° 20' 31" E)
Luyang (33° 41' 02" N; 112° 53' 38" E)
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Weifang (36° 38' 25" N; 119° 06' 49" E)
Wendeng (37° 11' 03" N; 122° 13' 51" E)
Yancheng (33° 25' 20" N; 120° 11' 57" E)
Zhengzhou (34° 51'340" N; 113° 44' 11" E)
Dingxin (40° 24' 07" N; 99° 47' 28" E)
Hu Xian (34° 09' 17" N; 108° 35' 57" E)
Jiuquan (39° 33' 12" N; 98° 53' 11" E)
Kuerle (41° 41' 48" N; 86° 07' 54" E)
Lanzhou (35° 55' 10" N; 104° 13' 10" E)
Lintao (35° 18' 32" N; 103° 50' 15" E)
Lintong (34° 22' 30" N; 109° 07' 33" E)
Tianshui (34° 33' 31" N; 105° 51' 37" E)
Urumqi (43° 28' 01" N; 87° 31' 39" E)
Wuqong (34° 16' 21" N; 108° 15' 31" E)
Wuwei (37° 59' 24" N; 102° 33' 59" E)
Yinchuan (38° 28' 43" N; 106° 00' 26" E)
Anqing North (30° 34' 51" N; 117° 02' 55" E)
Bengbu (32° 50' 59" N; 117° 19' 15" E)
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Changxing (30° 57' 57" N; 119° 43' 16" E)
Hangzhou-Jianqiao (30° 20' 05" N; 120° 13' 51" E)
Jiaxing (30° 42' 05" N; 120° 40' 36" E)
Luocheng-Huian (25° 01' 37" N; 118° 48' 26" E)
Nanchang-Xiangtang (28° 25' 02" N; 115° 55' 39" E)
Nanjing-Dajiaochang (31° 59' 44" N; 118° 48' 48" E)
Quzhou (28° 58' 00" N; 118° 54' 00" E)
Rugao (32° 15' 32" N; 120° 29' 58" E)
Shanghai-Chongming Island (31° 39' 45" N; 121° 31' 00" E)
Suzhou (31° 15' 36" N; 120° 24' 04" E)
Wuhu (31° 23' 27" N; 118° 24' 05" E)
Wuxi-Shuofang (31° 29' 30" N; 120° 25' 33" E)
Xuzhou Daguozhang (34° 13' 55" N; 117° 14' 05" E)
Zhangshu (28° 01' 17" N; 115° 33' 27" E)
Zhangzhou (24° 33' 47" N; 117° 39' 54" E)
Anshan (41° 05' 57" N; 122° 51' 16" E)
Changchun-Dafang Shen (43° 54' 24" N; 125° 11' 51" E)
Changchun-Datun (43° 44' 08" N; 125° 14' 28" E)
Chifeng (42° 09' 50" N; 118° 50' 49" E)
440
Dalian (38° 57' 46" N; 121° 31' 48" E)
Dandong (40° 01' 55" N; 124° 16' 59" E)
Harbin-Lalin (45° 15' 37" N; 126° 53' 32" E)
Harbin-Shuangcheng (45° 24' 30" N; 126° 18' 38" E)
Harbin-Shuang Yu Shu (45° 39' 54" N; 126° 41' 29" E)
Harbin-Wanggang (45° 40' 00" N; 126° 31' 41" E)
Jinzhou North (41° 11' 15" N; 121° 10' 31" E)
Jinzhou-Xiaolingzi (41° 06' 02" N; 121° 03' 54" E)
Liaoyang (41° 16' 39" N; 123° 04' 51" E)
Mudanjiang-Hailang (44° 31' 27" N; 129° 34' 08" E)
Qiqihar (47° 14' 26" N; 123° 54' 53" E)
Pulandian (39° 26' 39" N; 122° 01' 09" E)
Shenyang-Yu Hung Tun (41° 49' 39" N; 123° 18' 08" E)
Siping (43° 09' 00" N; 124° 17' 00" E)
Yanji (42° 52' 50" N; 129° 27' 12" E)
Training
All aviation basic and primary training is carried out by the PLAAF. According to reports
from the General Staff Headquarters, PLAAF training has been developed to include
combat manoeuvres with aircraft of different types and to increase operational training
with live munitions. Other priorities are in-flight refuelling and long-range offensive air
and task force protection roles.
One of the most fundamental problems confronting the PLAAF is the lack of
experienced combat pilots. With a system that places a premium on combat
441
experience, China's air arm is rapidly losing active-duty pilots who have any combat
experience. For younger pilots, two factors weigh against them. The first is a rigid
system that places emphasis on ground control and discourages initiative. This
operational problem is not helped by a training regime that until recently has been
fraught with deficiencies, but conditions are improving. For example, bomber pilots fly
an average of 80 hours per year, while J-7 and J-8 fighter pilots fly 130 hours, with Su-27
and Su-30 pilots possibly accumulating as many as 180 hours a year. There are also
increasing reports that the PLAAF is seeking to improve realism by using 'Blue Team'
aggressor squadrons to provide opportunities for dissimilar aerial combat training. It
has also emerged that PLAAF units are conducting cross-region flights, as well as
deployments to unfamiliar airfields and undertaking operations at night and over
nearby seas. There is now the prospect that exercises with Russian air forces will
become a regular feature of PLAAF training, which will serve to convey a near war-like
experience that cannot be effectively replicated in exercises with their own forces.
The PLAAF is also making a greater effort to introduce aircraft simulators. For many
years, it has used simple fixed simulators that are either based on PCs or at least
reproduce the aircraft cockpit. Full-scale simulators have been produced for the J-7, J-8
and JH-7, though it is unclear how widely they are distributed. There are also reports
that the PLAAF has purchased Su-27 and Su-30 simulators from Russia. China has long
had the capability to produce multi-axis motion simulators but, once again, it is not
known whether these have been acquired in significant numbers.
Regarding training aircraft, one significant step has been procurement of the JL-8 basic
jet trainer to equip flying academies. When the JL-8 was being developed in the early
1990s, its success was in doubt as it was not approved by the PLA and was also reliant
on a foreign engine. In recent years, this attitude has changed and a number of flying
training establishments have relinquished the obsolete and poorly-equipped JJ-5 for the
JL-8 which provides basic airmanship training while also introducing pilots to modern
avionics like multi-function displays.
Training and education in the PLAAF is currently based on the '5-3' tier system. This
includes five tiers of specialised training and education for officers: secondary
specialised; specialised college or equivalent; university or equivalent; master's degree
programme; and doctoral programme. There is also a three-tier system of professional
military education for officers. Conscripts and volunteers are assigned to training units.
For the first time, new pilots are expected to graduate from PLAAF academies with
college degrees.
Important changes have been introduced in pilot training. Fighter and ground-attack
pilot training was traditionally a three-phase process: basic flight school (20 months),
flying academy (28 months) and operational unit training (4 to 5 years). In the mid-
442
1980s, the PLAAF began to experiment with an additional fourth phase. For graduates
of ground-attack flying programmes, phase three became a one-year aircraft
'conversion programme' at newly organised 'transition training bases'. In 1988, each
military region was authorised to establish a transition training base. The goal was the
eventual elimination of the need for operational fighter divisions to dedicate one of
their three regiments to training, a goal that has probably now been achieved, in view
of the fact that most divisions now appear to possess just two subordinate regiments.
Training Areas
PLAAF training areas are marked on international aeronautical charts and they are often
described as prohibited areas. There are a considerable number in the northwest and
northeast of the country but, increasingly, there are large exercises being carried out in
the south, near Hainan. Airborne forces are trained by the PLAAF, involving paradrop
instruction and use of major exercise areas.
Fixed Wing

H-6 XAC Bomber n/a 130 1968
JH-7A XAC Fighter - Ground Attack n/a 70 2004

/ Strike
J-8A/E SAC Fighter - Interceptor / n/a 50 1985

Air Defence
J-8B SAC Fighter - Interceptor / n/a 90 1988

Air Defence
J-8D SAC Fighter - Interceptor / n/a 80 1990

Air Defence
J-8F SAC Fighter - Interceptor / n/a 40 2003

Air Defence
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J-8H SAC Fighter - Interceptor / n/a 40 2002

Air Defence
Su-27SK 'Flanker-B' Sukhoi Fighter - Multirole n/a 36 1992
Su-30MKK 'Flanker' Sukhoi Fighter - Multirole n/a 100 2000
J-7B CAC Fighter - Multirole n/a 300 1980
J-7C CAC Fighter - Multirole n/a 60 1985
J-7D CAC Fighter - Multirole n/a 30 1992
J-7E CAC Fighter - Multirole n/a 70 1993
J-7G CAC Fighter - Multirole n/a 50 2003
J-10 CAC Fighter - Multirole n/a 80 2001
J-11B (Su-27SK) Shenyang Fighter - Multirole n/a 96 2001
Q-5 NAMC Fighter - Ground Attack n/a 200 1970

/ Strike
A-50 'Mainstay' Beriev Airborne Early Warning n/a 31 2004

(Kongjing 2000) and Control
JZ-6 SAC Reconnaissance / n/a 30 1976

Surveillance
JZ-8 SAC Reconnaissance / n/a 10 n/a

Surveillance
Tu-154M/D Tupolev Electronic Intelligence n/a 42 1998

'Careless'
An-24 'Coke' Antonov Transport n/a 10 n/a
An-26 'Curl' Antonov Transport n/a 12 n/a
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An-30 'Clank' Antonov Transport n/a 8 n/a
737-300 Boeing Transport n/a 82 1988
737-700 Boeing Transport n/a 2 2003
Il-76MD 'Candid' Ilyushin Transport n/a 142 1991
Y-8 SAC Transport n/a 25 1981
Tu-154M 'Careless' Tupolev Transport n/a 122 1986
Y-7 XAC Transport n/a 40 1984
H-6U XAC Tanker n/a 103 1998
Challenger 800 Bombardier Utility n/a 52 1997
Challenger 870 Bombardier Utility n/a 52 2005
Y-5 SAMC Utility n/a 200 1958
JL-8 Karakorum NAMC Trainer n/a 504 1998
Y-8 SAC Combat Support n/a 2 n/a
JJ-5 Chengdu Trainer n/a 1005 1966
JJ-7 GAIC Trainer n/a 100 1985
CJ-6 NAMC Trainer n/a 350 1963
JJ-6 SAC Trainer n/a 100 1970
Su-27UB 'Flanker-C' Sukhoi Trainer n/a 35 1992
An-30 'Clank' Antonov Trainer n/a 6 1975
1. Undisclosed number of additional aircraft to be modified.

2. Civil-registered
3. Procurement of several hundred reportedly abandoned in first quarter of 2000
445
because of large proportion of foreign components.

4. Being retired from service.
5. Not yet fully operational; further two required.
Rotary Wing
Type Manufacturer Role Original Total In Service First Delivery
Mi-17V-7 'Hip' Mil Utility n/a 20 n/a
Unmanned Aerial Vehicles
Type Manufacturer Role Original Total In Service First Delivery
Chang Hong 1 BUAA Multirole n/a n/a n/a
Y-8E SAC Drone Carrier n/a 4 1989
Air Defence Systems
Type Role
S-300/PMU-1/PMU-21 Air Defence System
FT-2000/2000A2 Air Defence System
KS-1A Air Defence System
HQ-61 Air Defence System
HQ-2J Air Defence System
HQ-2B Air Defence System
100 mm1 Anti-Aircraft Artillery
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14.5 mm1 Anti-Aircraft Artillery
12.7 mm1 Anti-Aircraft Artillery
Notes:
1. Eight regiments of S-300s thought to be in PLAAF, may increase to 20; 30-48 missiles
per regiment.
2. FT-2000A is active-guided version; reported to be in service in small numbers in 2003.
Missiles
PL-9 Luoyang Air-to-Air
PL-12 (SD-10) CATIC Air-to-Air
AA-10 'Alamo' Vympel Air-to-Air
AA-11 'Archer' Vympel Air-to-Air
AA-12 'Adder' Vympel Air-to-Air
447
YJ-63 CHETA Air-to-Surface
AS-13 'Kingbolt' (Kh-59) Raduga Air-to-Surface
AS-14 'Kedge' (Kh-29) Vympel Air-to-Surface
AS-17 'Krypton' (KR-1) Zvezda Air-to-Surface
448
ARMY
Summary
Assessment
Role and Deployment
Command and control
General Staff Department (GSD)
General Political Department (GPD)
General Logistics Department (GLD)
General Armament Department (GAD)
Territorial Command and Control
Command and Control Modernisation
Organisation
Modernisation
Reserve Forces
Order of Battle
Army Aviation Corps Order of Battle
Army Intelligence
Bases
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Training
Training Areas
Armour
Artillery
Anti-Tank Weapons
Air Defence Weapons
Infantry Weapons
Army Aviation
Missiles
Summary
STRENGTH
1,400,000
Reserves estimated at 500,000.
INFANTRY
Division × 15
Mechanised Division × 3
Motorised Division × 24
Amphibious Assault Division × 2
Mechanised Brigade × 1
Motorised Brigade × 22
ARMOUR
Division × 9
Brigade × 12
Anti-Tank Brigade × 1
ARTILLERY
Division × 7
450
Brigade × 14
ADA Brigade × 12
SAM/AAA Bde × 9
MISSILE
Brigade × 1
AVIATION
Regiment × 10
ENGINEER/BRIDGING
Brigade × 1
Regiment × 50
OTHER
Coastal Defence Division × 2
Coastal Defence Brigade × 4
Garrison Division × 12
Assessment
The People's Liberation Army (PLA) ground forces are making steady, if slow, progress
to recapitalise their combat capabilities in the face of limited acquisition funds and
sharply rising personnel welfare costs. Consequently, army chiefs have held back on
undertaking an extensive army-wide rearmament effort and are instead concentrating
on incremental improvements in selected areas, such as the development of special
operations forces and beefing up dedicated amphibious and army aviation units.
After lagging in modernisation funding behind the air force and navy during the 1990s,
this decade has seen the emergence of a new emphasis on army modernisation,
consistent with doctrinal changes stressing "high-tech local war", "joint warfare", and
"mechanisation and informatisation". The goal is to produce an army that is leaner,
more mobile, is better able to exploit information technologies, has greater high-tech
firepower and is better able to operate jointly with other services. Operational
emphasis points toward preparations for possible conflict on the Taiwan Strait and the
Korean Peninsula and top army leaders have increasing experience in these regions, as
well as in mobilising for high-tech warfare.
Nevertheless, while the PLA Army and its officer corps lacks the extensive real-world
experience, such as that gained by the US Army in Iraq or the Russian Army in
Chechnya, its capabilities, which are now just emerging, would have to be judged as
451
formidable, especially from the perspective of Taiwanese, South Korean, Indian or

Japanese Army commanders who also lack real-world experience. In a potential
continental confrontation with South Korean or Russian forces, PLA Army units, with the
benefit of surprise, could likely seize the initiative and carry out deep advances. Despite
tremendous investments in these areas, it cannot be determined whether new army
information networks could survive intensive attack, or whether they have developed
sufficient logistic resources to sustain both rapid and large scale armour/mechanised
advances.
Periodic PLA mobilisations in reactions to natural disasters, however, has offered some
insight into the PLA's ability to improve its logistic operations. In the days following the
May 12, 2008 Sichuan earthquake the PLA reportedly mobilized over 150,000 active and
reserve troops to aid disaster relief operations. Airborne troops were mobilised within
hours. PLA Army Aviation also committed over 100 helicopters to relief operations,
working in cooperation with civilian government helicopters.
Army forces, are also playing a growing diplomatic role for China through their
participation in increasing numbers of United Nations sponsored peacekeeping missions
and by increasing participation in foreign military exercises. China is doing so in
response to growing international suggestions that economic and political heft require a
greater bearing of this burden, but also to put a positive spin on its rapidly growing
military modernisation. As the PLA develops more airmobile mechanised forces, in
conjunction with new more capable air and sealift platforms, the PLA will increase its
options to participate in foreign military operations farther beyond the PLA's immediate
region.
Heavily influenced by the US experience during two Persian Gulf wars, PLA Army
modernisation encompasses organisational, doctrinal, equipment, logistic, training and
personal policy aspects. A special emphasis is being given to upgrading C4ISR
capabilities, as well as the "projection" capabilities of Special Forces, Army Amphibious
and Army Aviation units. Improved armour, mechanisation and missile systems are also
being deployed. In addition the PLA is showing greater interest in "airmobile" concepts
of both light and medium-weight forces intended for longer-range airborne projection.
The PLA in recent years has also placed much greater emphasis on building local reserve
and militia capabilities, to fill niche requirements and to mobilise local governments to
support future war efforts.
Under the twin doctrinal goals of "mechanisation and informatisation", the PLA Army is
beginning to broaden an equipment modernisation programme from one that
concentrated on select units marked for "Rapid Deployment" during the 1990s. Larger
numbers of Infantry Divisions are becoming either mechanised or motorised, by the
addition of newly developed tanks, new IFVs and new APCs. Mechanisation also
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involves production of thousands of new transport trucks, including new fast load/off-
load "precision logistics" vehicles, new families of light multi-purpose vehicles, and
experimentation with new wheeled combat vehicles and light mechanised units. A new
105 mm gun armed version of the 6-wheel WZ551 is entering service and a family of 8-
wheel IFVs was revealed in mid-2006, followed in early 2007 by three new truck-
mounted artillery systems. This may lead to the formation of medium-weight air mobile
units. In addition, a Special Force unit in Chengdu has grown into a new kind of light
mechanised army unit with several types of light fire-support vehicles all designed to be
transportable by helicopter.
In its 2008 report to the US Congress on PLA modernisation, the Pentagon noted that
440,000 troops are now stationed in the three military regions opposite Taiwan, an
increase of 40,000 since 2006. This follows a September 2003 to 2005 overall reduction
of 200,000 troops, which followed a 1997 reduction of 500,000, both of which were
designed to facilitate broad PLA modernisation. The 2003 reduction was decided during
a July 2003 meeting of the eight-member Central Military Commission (CMC), China's
senior military authority. Sources say alternative proposals were fiercely debated,
resulting in broader consultation involving the PLA's four departments and seven
military regions. Within the CMC, Beijing-based analysts say, Deputy Chairman Guo
Boxiong and former General Staff Department Chief Liang Guanglie were proponents of
radical reform. They reportedly favoured a cut in the strength of the armed forces by
around 500,000, together with extensive restructuring and accelerated force
modernisation. This view was countered effectively by Xu Caihou, who led the General
Political Department, and General Logistics Department (GLD) Chief Liao Xilong. A larger
demobilisation would have cost more in retirement benefits and increased pressure to
find new jobs amid already high unemployment in China. However, it now appears that
new CMC Chairman Hu Jintao favours additional troop reductions as a means of
financing continued hi-tech modernisation.
In terms of organisation, this latest reduction will see the elimination of the 24th and
36th Group Armies in the Beijing Military Region, reducing the number of Group Armies
from 21 to 18. The trend of reducing some divisions into better armed brigades is
continuing, with infantry divisions being upgraded into mechanised or motorised
brigades. In addition, a reduction in the Military Region (MR) command structure seeks
to reduce the number of officers. With the rapid absorption of new communication and
information technologies the PLA is seeking to build a "flatter" chain of command. The
PLA is not yet ready to do away with the MR structure in favour of two or three
strategic "zones". Eliminating the MR structure would require much more resources for
retiring so many high-level officers. Nevertheless, the MR structure becomes moot
during wartime, as the CMC would assemble mission-tailored army, navy, missile and air
force units under a unified War Zone command.
453
This organisation is now being facilitated in peacetime, by the formal promotion of a

navy admiral and an air force general to serve as deputy Chairman of the General Staff
Department, as well as the September 2004 elevation of the Navy, Air Force and Second
Artillery commanders to membership in the CMC. Overall army leadership remains
unquestioned, but there is also army recognition of the need to better exploit the
capabilities of the other services by better integrating their leaders into the top councils
of the PLA.
Other organisational changes include the implementation of successive reductions in

troops since the early 1990s, mainly army forces, while navy and air force numbers have
remained static, so as to better fund the equipment and other aspects of
modernisation. From 1985 to 2005 the PLA cut back 1.7 million troops including 170,000
officers. In 1998 significant logistics reforms were implemented, which required the PLA
to divest most its then extensive economic holdings, many of them lucrative non-
military enterprises. Many of these enterprises were legitimate to support troop
livelihood, like farms to raise food, but increasingly the PLA is outsourcing the provision
of these basic services in order to reduce the logistic burden upon and allow the PLA to
focus on military missions. Logistic support is also being rationalised by the formation of
Military Region based joint logistic support systems, which has allowed for a reduction
in redundancy in some services, and for the first time, a centralised ability to monitor
and control basic supply services. While the PLA is likely to remain a conscript-based
military for many years to come, it has also realised that it must attract increasing
numbers of higher educated troops in competition with a demanding civilian economy.
In the less developed areas of China the PLA remains a great opportunity for
advancement. It uses appeals to patriotism but increasingly it is using higher pay and
provision of greater job security. In the last decade it has created a new Non-
Commissioned Officer (NCO) Corp, mainly to staff an increasing number of high-tech
jobs, which entail higher pay rates and benefits. The PLA has also placed great emphasis
on Professional Military Education and is making greater education opportunities
available to troops; soldiers deployed to the far-off Spratly Islands can now take
correspondence classes via broadband satellite links.
Force reductions have been combined with profound personnel policy reforms intended
to increase professionalism and to allow the PLA to compete for younger, better-
educated talent. The most widely reported reform has been the divestiture of non-
military related PLA business starting in 1998. Divestment has also led to increasing
subcontracting or outsourcing for basic services such as housing, food services, laundry
and medical services. But perhaps more importantly has been the rapid expansion of
the Non-Commissioned Officer (NCO) corps to create a career path for technically
oriented personnel, who are required to operate new sophisticated equipment. Other
personnel policy reforms are designed to enable the PLA to better compete with a
growing civilian economy and include raised pay, housing, medical and family benefits.
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There is a greater recruitment from civilian universities and increasing educational

opportunities such as partial university scholarships, even online training, for officers
and NCOs. Such measures are made more necessary by shifting demographics. The pool
of recruits resides increasingly in urban areas where there is increasing demand for
higher education, which the PLA is trying to meet, and thus better compete with civilian
sector demand for the same talent.
For China's Communist Party (CPC) leadership, the PLA Army remains the most
important military institution due to its size. The PLA's main overall mission is to defend
the power position of the CPC, as well as the territory of China. It is also charged with
coming to the direct defence of the Party along with the People's Armed Police (PAP) if
necessary. During the 1989 Tiananmen Square crisis in Beijing the loyalty of the army
was tested and the leaders who immediately followed orders to crush the student and
citizen protesters were rewarded with rapid promotion. While one of the most
important institutional reforms to follow this crisis was the rapid build up of the PAP as
an immediate gendarme for the Party, the army's internal security role remains crucial
in the Party's eyes. The Party, however, remains on constant guard against the potential
that rogue elements within the army may rise against it. Earlier this decade, and
following the implementation of laws that depoliticised Taiwan's military, the Party led
a vigorous campaign against the notion of a "professional" army that would not be
under the direct control of the CPC.
In 2006, the Pentagon reported that the PLA "has conducted 11 amphibious exercises
featuring a Taiwan scenario in the last six years". The PLA envisions a "Joint Island
Campaign" to fuse electronic, missile and air strikes to enable army forces to break
shore defences, establish a beach head and to enable follow-on attacks. Up to eight
Group Armies (GA), or over half a million army personnel, may be dedicated to
amphibious missions. The 1st GA in the Nanjing MR and the 41st GA in the Guangzhou
MR are dedicated almost entirely to amphibious missions and much of 12th, 31st, 26th,
67th, 39th and 40th GAs are also dedicated. Like the Marines, they will benefit from the
PLA Navy's recent investment in new armour and troop lift ships. Pending the outcome
of negotiations that pit Ukrainian against Russian suppliers, PLA amphibious forces may
also benefit from Chinese-made copies of the unique 550 ton, 60 kt speed Zubr
hovercraft.
Role and Deployment
The PLA is tasked with defending national sovereignty and the people's revolution - in
other words, the Communist Party of China. Since 1988 the former field armies have
been reclassified as group armies, with integral artillery, engineer, aviation and other
455
support. They are deployed over seven military regions. For detailed locations, see the
Order of Battle.
In recent years the PLA has decided to contribute to United Nation's led peacekeeping
missions in order to bolster China's leadership credentials within the body, but also to
give its officers and soldiers increased international exposure.
As at September 2008, China was contributing 1,824 personnel to the following

missions:
• 13 military observers in the United Nations Mission for the Referendum in Western
Sahara (MINURSO);
• 218 troops and 16 military observers in the United Nations Organization Mission in the
Democratic Republic of the Congo (MONUC);
• 318 troops and one military observer in the African Union/United Nations Hybrid
operation in Darfur (UNAMID);
• 556 troops, 10 police and four military observers in the United Nations Mission in
Liberia (UNMIL);
• 439 troops, eight police and 14 military observers in the United Nations Mission in the
Sudan (UNMIS);
• 10 police and three military observers in the United Nations Integrated Mission in
Timor-Leste (UNMIT); and
• Four military observers in the United Nations Truce Supervision Organisation (Middle
East) (UNTSO).
Command and control
Central Military Commission
Chairman: Hu Jintao
Vice Chairman: Xu Caihou
Vice Chairman: Guo Boxiong
Vice Chairman (Minister of National Defence): Liang Guanglie
Member (Director, General Political Department): Li Jinai
Member (Director, General Logistics Department): Liao Xilong
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Member (Chief of the General Staff): Chen Bingde
Member (Navy Commander): Wu Shengli
Member (Air Force Commander): Xu Qiliang
Member (Commander SAC): Jing Zhiyuan
Member (Director, General Armaments Department): Chang Wanquan
The People's Liberation Army is controlled by the CPC Military Commission, usually
known as the Central Military Commission (CMC). The chairman of the CMC is selected
by the Standing Committee of the Politburo of the Chinese Communist Party and has in
recent history also been the Chairman of the Communist Party. This position is also
subject to a pro-forma election by National People's Congress (NPC).
The CMC is the principal deliberative and decision-making body for all major military
and strategic decisions that involve the armed forces in China, though the ultimate
decision-making concerning war, armed forces, and national defence is made by the
CPC's Central Committee Politburo. In addition to the decision-making concerning the
deployment of PLA, PAP and reserve troops, the CMC also has direct control over the
PLA Second Artillery Corps (SAC) (the Strategic Rocket Force) and two principle
educational institutes of the PLA, the National Defence University (NDU) and Academy
of Military Science (AMS).
In early 2004 it was revealed that three new positions would be created in the CMC for
the commanders of the Navy, Air Force and Second Artillery. This marks a significant
evolution for the CMC, diluting its traditional army dominance and elevating the
authority and prestige of these technology-intensive services.
In peacetime the CMC controls the PLA through the four general departments: General
Staff Department (GSD), General Political Department (GPD), General Logistic
Department (GLD) and General Armament Department (GAD). In times of crisis, the
CMC commands the conventional field units across the country through the GSD and
seven military region headquarters and issues orders directly to the SAC. The CMC is
supported by a fully automated multi-layer command, control, communications and
intelligence (C3I) system.
According to some unconfirmed reports, the CMC established the Central Emergency
War Command Centre in the Western Hills regions of Beijing in the late 1980s. The
centre is similar in its functions to the US National Military Command and Control
457
Centre (NMCC) in the Pentagon. The CMC is said to have also established five
alternative command and control centres in Wuwei, Mianyang, Taiyuan, Lushan and
Guizhou. In times of crisis, the centres will be responsible for collecting intelligence
from the frontline reports and issuing orders to military region commands and field
units. They can also be used for issuing nuclear weapon launch orders to the SAC bases
if China is under nuclear attack.
Ministry of National Defence: The Ministry of National Defence is under the joint
control of the CMC and the State Council. It has no operational control over the PLA, is
responsible for administrative planning, manpower, budget, foreign liaison and training
materials, but possesses no policy-making or implementation authority.
Commission for Science, Technology and Industry for National Defence (COSTIND):
Before 1998 COSTIND was the primary organisation responsible for military research
and development, weapons procurement and co-ordination of the defence and civilian
economic sectors. It also had a role in the import and export of military arms and
technology, and was the primary bureaucracy charged with technical intelligence
gathering overseas. In 1998 COSTIND was re-organised under the same title. Most of its
functions directly linked to the military were transferred to the newly established GAD.
It is now a purely civilian government agency led by the State Council, with its main
responsibilities including drafting long-term military scientific research plans and
strategy, making state policies, regulations and standards for military industry, directing
the transfer of military technology to civilian use, taking part in international co-
operations in the field of military science and technology, and partially controlling the
export of military equipment.
The GSD carries out the staff and operational functions of the PLA and has major
responsibility for implementing military modernisation plans. Within the defence
hierarchy it conveys policy directives downwards, translates national security and
defence policy into specific responsibilities for the various subordinate functional
departments of the PLA, oversees policy implementation on behalf of the CMC and
commands China's military force operations in wartime. Since 2004 the GSD's capacity
for "jointness" has been significantly improved with the addition of Vice Chairmen from
the Navy, Air Force and Second Artillery.
The GSD also performs important organisational functions such as procurement,

operational planning and intelligence. Headed by the chief of the GSD, the department
serves as the headquarters for the ground forces and contains directorates for the three
other armed services: air force, navy and strategic missile force. The GSD includes
functionally organised sub-departments for artillery, armoured units, engineering,
458
operations, training, intelligence, mobilisation, surveying, communications,

quartermaster services and education.
The GPD is responsible for ideological indoctrination, political loyalty, morale, personnel
records, cultural activities, discipline and military justice. Organisationally, the GPD
provides the PLA with its party structure. The director of the GPD oversees a system of
political commissars assigned to each echelon in the PLA. One of the primary tasks of
the political commissar is the supervision of the party organisation through party
committees at the battalion level and above, or through party branches at the company
level. It exerts an indirect but potentially major influence on defence policy through its
role as political and ideological watchdog at all levels of the military. Its control over
personnel selection at all levels of the PLA accords it respect within the high command.
The GLD is the least politically influential of the three general departments. Headed by a
director, the GLD is responsible for production, supply, transportation, housing, pay and
medical services. Historically, most of this support came from the civilian populace, and
before the establishment of the GLD, it was organised most frequently by commissars.
General Armament Department (GAD)
Established in 1998, the GAD's main role is to oversee the development, procurement,
supply, maintenance and the life-cycle management of the military's weapons systems.
To support these goals, the GAD has six sub-departments: comprehensive planning,
arms and services equipment, army equipment, general equipment support, electronic
information and technological groundwork and foreign affairs. The GAD is also
responsible for overseeing the PLA weapons testing and training bases. The GAD also
control China's space program, including its manned space programme.
Territorial Command and Control
Command and control below the GSD is exercised through seven Military Regions (MR):
Shenyang, Beijing, Lanzhou, Jinan, Nanjing, Guangzhou, Chengdu. These are sub-divided
into 28 provincial military districts, four garrison commands and further sub-divisions.
The MR HQs are responsible for all military activity within their region. The major
ground force formations subordinate to the MR HQ are Group Armies (GA) but some
specialist formations and units are directly subordinate to the MR.
In time of emergency, a temporary operational command headquarters known as a War

459
Zone would be established to deal with a specific threat. This is likely to be formed
around the structure of an MR headquarters, but could involve units from other MRs in
response to the specific situation.
Command and Control Modernisation
The 2004 report on Chinese military power by the US Department of Defense (DoD) to
Congress provided details on improvements in the country's command and control
systems. The PLA continues to upgrade its communication capabilities, which eventually
will rival the most modern civil networks. This is not a new development as command,
control, communications, computers, and intelligence (C4I) modernisation and
automation have been a PLA priority for nearly 25 years. According to the DoD report
China is steadily improving its C4I capabilities by using commercial information
technologies to advance ambitious plans to create a high-technology electronic
environment capable of supporting a modern military in both peace and wartime.
Organisation
The PLA ground forces are generally organised into a three-tiered structure: main
forces, local or regional forces, and reserve forces and militia. The main forces are
mainly composed of 18 Group Armies (GA) stationed across the country. They are
intended to be available whenever necessary for operations anywhere in China. The
local forces consist of active and reserve PLA units as well as the People's Armed Police
(PAP) units, which have a secondary mission of local defence against external enemies.
Local forces are responsible for defence of areas where they are stationed and also
share responsibility for internal security. The militia units would provide combat and
logistic support to main and local forces in local defence.
PLA ground forces are also categorised according to their readiness and manning levels.
Class-A units are at or near full manpower (over 80 per cent of personnel and
equipment) and capable of deploying without significant argumentation and training.
Class-B units are maintained at 60 to 80 per cent manning level, lack some organic units,
and require more training and more time to deploy than Class-A units. Sometimes
entire GAs may also be categorised as Class-A or -B, though the difference between
these is much less evident.
There are eight service arms, including infantry, artillery, armour, army aviation, air
defence missile, engineering, communications, chemical defence troops, plus other
specialised units such as electronic warfare, medical, reconnaissance and mapping.
Modernisation
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The PLA is currently in the middle of a fundamental restructuring programme, which has
reduced the number of GAs and is reducing some divisions to better-equipped brigades.
The field army organisation within GAs is equivalent to a NATO corps, but the actual
order of battle varies according to the military region and/or military district into which
the Group Army falls. A GA can consist of two to three mechanised or motorised
infantry divisions plus brigades, one or two armoured divisions or brigades, one or two
artillery divisions or brigades, one or more anti-aircraft brigades, an anti-tank brigade,
and increasingly, an aviation (helicopter) regiment. Engineer units, including amphibious
bridging units, are organised into independent units, which can be attached to group
armies as required. Minelaying and mine detection form important parts of the combat
engineer capability.
An emphasis is now being placed on developing capable Rapid Reaction Forces (RRF)
that can deploy in large numbers to areas outside China's borders. The Chinese RRF
include a variety of formations and units. The term 'RRF' itself is generic and refers to
units and formations in all three services that share common missions and tasks. They
all require a high level of readiness, mobility, training, maintenance standards, modern
equipment and, in some cases, technological sophistication. RRF formations are
assigned either general or specific contingency missions. The formations and units of
the RRF, in fact, represent 'a force within a force'.
The primary role of Contingency Mobile Combat Units (CMCUs) is combat. There are
three likely types of CMCUs: strategic, operational and tactical. Strategic CMCUs are not
assigned specific tasks; rather, as strategic assets, they are expected to be able to
respond to any crisis in the country. Six divisions have been assigned to the rapid
deployment role, each covering a designated geographic area. These units are primarily
composed of light infantry with some tactical transport (helicopter) capability, and are
able to reach anywhere in the mainland within 20 hours. Units currently assigned to the
rapid deployment force include: the 162nd Division of the 54th Group Army (Jinan
Military Region), covering the east coast and parts of the Korean peninsula; the 61st
Division of the 21st Group Army (Shaanxi province), covering the northwest frontier;
and the 149th Division of the 13th Group Army (Suchuan province), covering southwest
China. Other ground and air units that could be called upon to supplement the rapid
deployment units include: the 15th Group Army (airborne) (Taiyuan); the 38th Group
Army (Gubei province); and the 39th Group Army (Liaoning province). The latter two are
mechanised GAs that can supply heavy fire support. Each contains a mix of three tank
and infantry divisions.
Operational CMCUs consist of those assigned to Operational Directions. Operational

Directions appear to correspond to the Soviet concept of a Theatre of Military
Operations (TVD). The Chinese define a theatre of operations or an Operational
Direction as "a specific operational area designated as necessary for carrying out
461
strategic missions or achieving strategic plans". As such, an Operational Direction

probably encompasses two or more contiguous MRs. Each MR probably has designated
one ground force division for operations in one or two Operational Directions. The PLA
has identified four, possibly five, theatres or Operational Directions. These include the
China-India theatre; the South China Sea theatre; the China-Vietnam theatre; the China-
Russia theatre; and the Southeast Coast, or Taiwan, theatre.
Overall, RRF formations and units currently represent about 15 to 20 per cent of total
PLA ground strength. By 2010, RRF units may represent about one-third of total PLA
ground strength. In general, the bulk of RRF units are classified by the Chinese as either
Special Garrison Units or Contingency Mobile Combat Units (CMCUs). Special Garrison
Units are regimental-sized ground force units that probably exist in all seven military
regions. Their primary mission is internal security operations, probably in support of
People's Armed Police units. Special Garrison Units remain under the command of their
respective MR commander and probably would not deploy outside their respective MR
boundaries.
Tactical CMCUs are ground force divisions classified by the PLA as 'Regional Ready
Units', or RRUs. At least six of the seven MRs have one designated RRU division. Each
division is assigned a region-specific mission.
Some RRUs are brigade (around 6,000 men) or even battalion size. The aim is to give
such units organic self-sufficiency in all the arms they need. Unconfirmed information
has given the make-up of such independent brigades as follows: four tank battalions
with 31 tanks each; one mechanised infantry battalion with 40 armoured personal
carriers; one artillery battalion with 18 self-propelled guns; and one Anti-Aircraft
battalion with 18 self-propelled Anti-Aircraft guns. There are also specialist artillery and
Anti-Aircraft RRU brigades.
Reserve Forces
The PLA has substantial reserves of trained infantry and mechanised troops, with
estimates of 500,000 troops in 30 infantry divisions, 13 air defence divisions, three
artillery divisions and seven logistic support brigades. There has also been a notably
greater investment in the PLA's militia forces, which the Pentagon estimates may
account for 10 million organised members. In addition to serving as back up for
traditional armour, artillery and infantry units, reserves and militia units are also being
used to fill special niche requirements, such as information warfare/computer network
attack units (drawn from the civilian computer sector) and support units for amphibious
operations. Reserve and militia units are also increasingly being devoted to the air
defence and logistic support missions.
462
Order of Battle
Information on the PLA's Order of Battle is not available through any official channels.
The data in the following tables are collected from unofficial sources.
The Central Guard Unit, which is responsible for the security of senior government,
party and military leaders has some barracks in central Beijing and northwest Beijing
near Western Hills. It reports to the CMC through the GSD.
Rapid Reaction Forces
A number of formations are believed to be designated as rapid-reaction units, either

with national or regional responsibilities. These may include: 38, 39 Group Armies; 127,
149 Mechanised Infantry Division; seven Special Operations Forces groups.
Strategic Reserve
The 15th Airborne Corps, which is part of the PLA Air Force (PLAAF), consists of three
airborne divisions (43rd, 44th, and 45th), each with around 10,000 troops. As a part of
the PLA's strategic reserve the airborne force receive direct orders from the Central
Military Commission (CMC) through the GSD. Its strategic mobility by air is, however,
limited.
Beijing Garrison
Tianjin Garrison
Hebei Military District
Inner Mongolia Military District
Shanxi Military District
MR Special Operations Group, Beijing
MR Combined Arms Tactical Training Base, In Juhr, Inner Mongolia
MR Tank Training Base, Changzhi, Shanxi
2nd Chemical Defence Regiment, Beijing (Fangshan)
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Unit Location
27th Group Army Shijiangzhuang, Hebei
235 Mechanised Infantry Brigade Xingtai, Hebei
UI Mechanised Infantry Brigade Taiyuan, Shanxi
80th Motorised Infantry Brigade Luquan, Hebei
Artillery Brigade Handan, Hebei
UI Armoured Brigade Handan, Hebei
UI Armoured Brigade Datong, Shanxi
Air Defence Brigade (SAM/AAA) Shijiazhuang, Hebei
38th Group Army1 Baoding, Hebei
6th Armoured Division Beijing Changping
112th Mechanised Infantry Division Baoding, Hebei
113th Mechanised Infantry Division Baoding, Hebei
114th Motorised Infantry Division Taihangshan, Hebei
8th Army Aviation Group (Helicopter) Hebei, Baoding
6th Artillery Brigade Beijing (Pinggu County)
UI Mechanised Air Defence Brigade Shijiazhuang, Hebei
65th Group Army Zhangjiakou, Hebei
207th Motorised Infantry Brigade Wanquan, Hebei
193rd Motorised Infantry Division Xuanhua, Hebei
464
194th Motorised Infantry Brigade Huaian, Hebei
UI Motorised Infantry Brigade Chengdu, Hebei
UI Armoured Division Huailai, Hebei
UI Armoured Division Tangshan, Hebei
UI Armoured Division Zhangjiakou, Hebei
14th Artillery Brigade Huailai, Hebei
AAA Brigade Qinhuangdao, Hebei
Beijing Garrison
Garrison Division Beijing City
Reserve AAA Division Beijing City
Tianjin Garrison
Motorised Infantry Brigade Tianjin
196th Mechanised Brigade Tianjin (Yangcun)
Inner Mongolia Military District
205 Motorised Infantry Brigade Chifeng, Inner Mongolia
Border Defence Regiment
Note:
1. MR rapid reaction unit.
Heilongjiang Military District
Jilin Military District

465
Liaoning Military District
MR Special Operations Group, Beijing
MR Combined Arms Tactical Training Base, Zhaonan, Jilin
MR Tank Training Base, Dailian, Liaoning
UI Aviation Regiment
82nd Pontoon Bridge Regiment, Liaoning
MR Electronic Warfare Regiment
Engineer Regiment
Unit Location
16th Group Army Changchun, Jilin
UI Motorised Infantry Brigade Tonghua, Jilin
4th Armoured Division Jilin
46th Motorised Infantry Division Meihekou, Jilin
68th Motorised Infantry Brigade Qiqihar, Heilongjiang
69th Motorised Infantry Division Harbin, Heilongjiang
Artillery Brigade Yanbian, Jilin
AAA Brigade Changchun, Jilin
39th Mechanised Group Army1 Liaoyang, Liaoning
3rd Armoured Division Siping, Liaoning
115th Mechanised Infantry Division Yingkou,, Liaoning
466
116th Mechanised Infantry Division Haicheng, Liaoning
190th Mechanised Infantry Brigade Benxi, Liaoning
UI Army Aviation Regiment
Artillery Brigade Lioyang
Air Defence Brigade (SAM/AAA) Liaoning
40th Group Army Jinzhou, Liaoning
Motorised Infantry Brigade Yixian, Liaoning
UI Motorised Infantry Brigade Datong
UI Motorised Infantry Brigade Chifeng, Inner Mongolia
UI Armoured Brigade Fuxin, Liaoning
UI Artillery Brigade Jizhou, Liaoning
AAA Brigade Jinzhou, Liaoning
Liaoning Provincial Military District
191st Motorised Infantry Brigade Dandong, Liaoning
Shanghai Garrison
Anhui Military District
Fujian Military District
Jiangsu Military District
Jiangxi Military District

467
Zhejiang Military District
MR Special Operations Group
MR Army Aviation Regiment
MR Combined Arms Tactical Training Base
MR Tank Training Base
MR Service Arms Training Base, Zhenjiang, Jiangsu
UI Training Base, Zhangzhou, Fujian
Tactical Surface-to-Surface Missile Brigade**, Shangrao, Jiangxi
31st Pontoon Bridge Regiment, Nanjing, Jiangsu
14th Air Defence Brigade (SAM/AAA), Anhui
Tank Training Regiment
Unit Location
1st Group Army Xuzhou, Jiangsu
10th Armoured Division Suzhou, Jiangsu
1st Amphibious Mechanised Division Hangzhou, Zhejiang
3rd Motorised Infantry Brigade Jinhua, Jiangsu
9th Artillery Division Wuxi, Jiangsu
Air Defence Brigade (SAM/AAA) Zhenjiang, Jiangsu
12th Group Army
2nd Armoured Division Xuzhou, Jiangsu
468
34th Motorised Infantry Brigade Anhui
36th Motorised Infantry Brigade Xinqi, Jiangsu
179th Motorised Infantry Brigade Nanjing, Jiangsu
Artillery Brigade Xuzhou, Jiangsu
AAA Brigade Huaian, Jiangsu
31st Group Army Xiamen, Fujian
86th Motorised Infantry Division Fuzhou, Fujian
91st Motorised Infantry Division Zhangzhou, Fujian
92nd Motorised Infantry Brigade Nanping, Fujian
UI Armoured Brigade Zhangzhou, Fujian
Artillery Brigade Quanzhou, Fujian
Air Defence Brigade (SAM/AAA) Xiamen, Fujian
Shanghai Garrison
Coast Defence Brigade Shanghai (Baoshan)
Coast Defence Brigade Shanghai (Jinshan)
Fujian Provincial Military District
12th Coastal Defence Division Changle, Fujian
UI Coast Defence Division Jinjiang, Fujian
UI Coast Defence Division Shushi, Fujian
UI Coast Defence Brigade Fujian

469
Guizhou Military District
Sichuan Military District
Xizang (Tibet) Military District
Yunnan Military District
MR Army Aviation Regiment
MR Special Reconnaissance Unit
MR 1st Technical Reconnaissance Bureau, Chengdu, Sichuan
MR 2nd Technical Reconnaissance Bureau, Kunming, Yunnan
MR Chemical Warfare Unit
MR Combined Arms Tactical Training Unit, Xichang, Sichuan
MR Service Arms Training Base, Sichuan
Pontoon Bridge Regiment
Unit Location
13th Group Army Chongqing
Armoured Brigade Pengzhou, Sichuan
37th Division Chongqing
149th Mechanised Infantry Division1 Leshan, Sichuan
Artillery Brigade Chongqing
AAA Brigade Mianyang, Sichuan
470
14th Group Army Kunming, Yunnan
Armoured Brigade Kunming, Yunnan
40th Motorised Infantry Division (Jungle Warfare) Dali, Yunnan
49th Motorised Infantry Division Kaiyuan, Yunnan
Artillery Brigade Yunnan
AAA Brigade Yunnan
Tibet Military District
52nd Mountain Infantry Brigade Nyingchi, Xizang
53rd Mountain Infantry Brigade Nyingchi, Xizang
Reserve Mixed Brigade Xizang
Note:
Guangdong Military District
Guangxi Military District
Hainan Military District
Hubei Military District
Hunan Military District
MR Special Operations Group, Guangzhou
Army Aviation Regiment (Helicopter), Foshan, Guangdong
MR Technical Reconnaissance Bureau, Guangzhou, Guangdong
471
32nd Pontoon Bridge Brigade, Wuhan, Hubei
MR Service Arms Training Base
MR Combined Arms Tactical Training Base, Lusai, Guangxi
MR Comprehensive Training Base, Guilin, Guangxi
MR Service Arms Training Base, Guilin, Guangxi
Unit Location
41st Group Army Liuzhou, Guangxi
9th Armoured Brigade Guilin, Guangxi
121st Infantry Division Guilin, Guangxi
123rd Motorised Infantry Division Guiyang, Guangxi
Artillery Brigade Liuzhou, Guangxi
AAA Brigade Hengyang, Henan
42nd Group Army Huizhou, Guangdong
Armoured Brigade Guangdong
124 Amphibious Mechanised Infantry Division Boluo, Guangdong
132nd Motorised Infantry Division Huizhou, Guangdong
1st Artillery Division Quijiang, Guangdong
Air Defence Brigade (SAM/AAA) Guangzhou, Guangdong
UI Chemical Warfare Unit Shenzhen, Guangdong
472
Hong Kong Garrison
Logistic Base Shenzhen, Guangdong
Infantry Brigade Hong Kong
Naval Group (PLA Navy) Hong Kong
Helicopter Regiment (PLA Air Force) Hong Kong
Macao Garrison
Logistic Base Zhuhai, Guangdong
Infantry Unit Macao
Hainan Provincial Military District
UI Brigade Hainan
UI Reserve Division Hainan
Guangdong Provincial Military District
Guangzhou Garrison Division Guangzhou, Guangdong
Gansu Military District
Ningxia Military District
Qinghai Military District
Shaanxi Military District
Xinjiang Military District
MR Special Operations Group, Qingtongxia, Ningxia
473
MR Technical Reconnaissance Bureau, Lanzhou, Gansu
MR Training Base
MR Combined Arms Tactical Training Base
Unit Location
21st Group Army Baoji, Shaanxi
12th Armoured Division Jiuquan, Gansu
55 Motorised Infantry Brigade (Mountain) Zhangye, Gansu
61st Division Tianshui, Gansu
Artillery Brigade n/a
AAA Brigade Jiuquan, Gansu
47th Group Army Lintong, Shaanxi
Armoured Brigade Changcheng, Shaanxi
56th Motorised Infantry Brigade Wuwei, Gansu
139th Mechanised Infantry Brigade Weinan, Shaanxi
Artillery Brigade Gansu
AAA Brigade Lintong, Shaanxi
Xinjiang Military District
Armoured Division Nanjiang, Xinjiang
Motorised Infantry Division Xinjiang
6th Motorised Infantry Division Hetian, Xinjiang
474
8th Motorised Infantry Division Tacheng, Xinjiang
11th Motorised Infantry Division (Highland) Urumqi, Xinjiang
Army Aviation Regiment (Helicopter) Urumqi, Xinjiang
AAA Brigade Xinjiang
Artillery Brigade Xinjiang
Jinan Military Region
Subordinate Military Districts
Henan Military District
Shandong Military District
MR Electronic Warfare Regiment, Zibo, Shandong
MR 3rd Technical Reconnaissance Bureau, Jinan, Shandong
Pontoon Bridge Regiment, Pingyao, Shandong
Pontoon Bridge Regiment, Luoyang, Henan
Joint Logistics Base
Queshan Combined Arms Tactical Training Base
MR Tank Training Base
Unit Location
20th Group Army Kaifeng, Henan
Armoured Brigade Nanyang, Henan
58th Mechanised Infantry Brigade Xuchang, Henan
475
Motorised Infantry Brigade Xinyang, Henan
Artillery Brigade Queshan, Henan
AAA Brigade Shangqiu, Henan
26th Group Army Laiyang, Shandong
8th Armoured Division Weifang, Shandong
Motorised Infantry Brigade Haiyang, Shandong
138th Motorised Infantry Brigade Laiyang, Shandong
Motorised Infantry Brigade Zibo, Shandong
Motorised Infantry Brigade Tai'an, Shandong
Artillery Brigade Weifang, Shandong
54th Air Defence Brigade (SAM/AAA) Jinan, Shandong
Army Aviation Regiment Liaocheng, Shandong
54th Group Army Xinxiang, Henan
11th Armoured Division Xinyang, Henan
127th Light Mechanised Infantry Division1 Luoyang, Henan
Motorised Infantry Brigade n/a
162nd Motorised Infantry Division Anyang, Henan
Army Aviation Regiment n/a
Artillery Brigade Jiaozuo, Henan
Air Defence Brigade (SAM/AAA) Xingyang, Henan
476
Note:
Electronic Warfare
China also maintains a number of signals intelligence (SIGINT) and electronic

intelligence (ELINT) stations and detachments:
GSD 3rd Department (SIGINT) HQ - Xianghongqi (outside Beijing)
Technical Department SIGINT net control station - Xibeiwang (main SIGINT facility five
km northeast of Xianghongqi)
Kinghathu (major complex in northeast China)
Lanzhou (Russia)
Shenyang (Russia, Japan, South Korea)
Chengdu, Dayi (India, Pakistan, Tibet, Myanmar, Vietnam)
Nanjing (Taiwan)
Guangzhou (Southeast Asia, South China Sea)
Jilemutu (Russia)
Erilan (Mongolia, Russia)
Hami (Mongolia, Russia)
Urumqi, Zhaosu, Kashi, Lop Nor (Russia, Kazakstan, Central Asia)
Qitai, Korla, Xinjiang (Russia, Central Asia)
Kunming (Southeast Asia)
Hainan Island (South China Sea, Philippines)
Shanghai (Yellow Sea, East China Sea)
477
Fujian (Taiwan)
Shi-tao (also known as Rocky Islands, Paracels) (South China Sea)
Myanmar
Laos (three stations at Champasak, Laos (southeast), one in Khong)
Thailand
Cuba (North America)
Army Aviation Corps Order of Battle
Army Aviation Corps (Lu Jun Hang Kongbin) established 1988 with transfer of utility
helicopters from AFPLA specifically to undertake support of ground troops; force
presently numbers around 400 helicopters including limited anti-armour capability.
Aviation units reported attached to army groups at Baoding, Hebei (WZ-9, Z-9, Mi-8/17,
Z-11); Yingkou, Shenyang (Gazelle, Mi-8/17); Harbin; Muyang, Guandong (WZ-9); Baoji,
Lanzhou (Z-9); Chongoing, Chengdu; and Hong Kong and Shanghai garrisons. Regional
allocation is given in the table
Unit Base Attachment Region Type Role
1st Aviation Xinxiang 54th Group Jinan MR Mi-17 Assault/Transport

Regiment Army
2nd Aviation Lhasa 13th Group Chengdu MR Mi-171 Assault/Transport

Regiment Army
2nd Aviation Lhasa 13th Group Chengdu MR Mi-17V- Assault/Transport

Regiment Army 5
2nd Aviation Lhasa 13th Group Chengdu MR Black Utility

Regiment Army Hawk
3rd Aviation Lhasa 21st Group Lanzhou MR Mi-8 Assault/Transport

Regiment Army
3rd Aviation Lhasa 21st Group Lanzhou MR Mi-171 Assault/Transport
478
Regiment Army
3rd Aviation Lhasa 21st Group Lanzhou MR Mi-17V- Assault/Transport

Regiment Army 5
3rd Aviation Lhasa 21st Group Lanzhou MR Black Utility

Regiment Army Hawk
4th Aviation Luoyang 65th Group Beijing MR Y-7 Transport

Regiment Army
4th Aviation Luoyang 65th Group Beijing MR Y-8 Transport

Regiment Army
4th Aviation Luoyang 65th Group Beijing MR Mi-17 Assault/Transport

Regiment Army
4th Aviation Luoyang 65th Group Beijing MR Gazelle Liaison

Regiment Army
5th Aviation Huzhou 1st Group Nanjing MR Mi-17 Assault/Transport

Regiment Army
6th Aviation Sanshui 42nd Group Guangzhou Mi-171 Assault/Transport

Regiment Army MR
6th Aviation Sanshui 42nd Group Guangzhou Z-9C Utility

Regiment Army MR
7th Aviation Shangzhi 23rd Group Shenyang Z-8A Transport

Regiment Army MR
8th Aviation Baoding 38th Group Beijing MR Mi-17 Assault/Transport

Regiment Army
8th Aviation Baoding 38th Group Beijing MR Mi-171 Assault/Transport

Regiment Army
8th Aviation Baoding 38th Group Beijing MR Z-9 Utility
479
Regiment Army
8th Aviation Baoding 38th Group Beijing MR WZ-9 Attack

Regiment Army
8th Aviation Baoding 38th Group Beijing MR Z-9 Electronic

Regiment Army Warfare
9th Aviation Shenyang 39th Group Shenyang Mi-17 Assault/Transport

Regiment Army MR
9th Aviation Shenyang 39th Group Shenyang Z-9 Utility

Regiment Army MR
9th Aviation Shenuang 39th Group Shenyang WZ-9 Attack

Regiment Army MR
1st Special Sanshui Guangzhou Mi-17 Assault/Transport

Aviation Unit MR
1st Special Sanshui Guangzhou Z-5 Utility

Aviation Unit MR
2nd Special Nanjing Nanjing MR Mi-17 Assault/Transport

Aviation Unit
2nd Special Nanjing Nanjing MR Z-5 Utility

Aviation Unit
3rd Special Tianjin Beijing MR Mi-8 Assault/Transport

Aviation Unit
4th Special Huzhou Nanjing MR Mi-17 Assault/Transport

Aviation Unit (unconfirmed)
4th Special Huzhou Nanjing MR WZ-9 Attack

Aviation Unit (unconfirmed)
Training School Tongxian Beijing MR Mi-8 Transport
480
Training School Tongxian Beijing MR Gazelle Liaison
Training School Tongxian Beijing MR Z-9 Training
Training School Tongxian Beijing MR Z-11 Training
General Staff n/a Beijing MR Mi-17 Liaison

Flight
General Staff n/a Beijing MR Gazelle Liaison

Flight
Army Intelligence
The Second [Intelligence] Department of the PLA General Staff Headquarters is

responsible for collecting military information. Activities include military attachés at
Chinese embassies abroad, clandestine special agents sent to foreign countries to
collect military information and the analysis of information publicly available in foreign
countries.
The Second Department oversees military human intelligence (HUMINT) collection,

widely exploits open-source materials, fuses HUMINT, signals intelligence (SIGINT) and
imagery intelligence data, and disseminates finished intelligence products to the CMC
and other consumers. Preliminary fusion is carried out by the Second Department's
Analysis Bureau, which mans the National Watch Centre, the focal point for national-
level indications and warning. Extensive analysis is carried out by regional bureaux.
Although traditionally the Second Department of the General Staff Department was
responsible for military intelligence, it is beginning to focus increasingly on scientific and
technological intelligence in the military field, following the example of Russian agencies
in stepping up the work of collecting scientific and technological information from the
West.
The research institute under the Second Department of the General Staff Headquarters
is publicly known as the Institute for International Strategic Studies; its internal
classified publication Movement of Foreign Armies (Wai Jun Dongtai) is published every
10 days and transmitted to units at the division level.
The PLA Institute of International Relations at Nanjing comes under the Second
Department of the General Staff Department and is responsible for training military
attachés, assistant military attachés and associate military attachés as well as secret
481
agents to be posted abroad. It also supplies officers to the military intelligence sections
of various military regions and group armies. The Institute was formed from the PLA
'793' Foreign Language Institute, which moved from Zhangjiakou after the Cultural
Revolution and split into two institutions at Luoyang and Nanjing.
According to the US DoD's 2007 annual report to Congress on "The Military Power of
the People's Republic of China", China's acquisition of power projection assets indicate
that the PLA is generating a greater capacity for military pre-emption, while, in the US
DoD's 2005 annual report the PLA is transforming from a mass army designed to fight a
protracted war of attrition within its territory to a smaller, modern, professional force
capable of fighting high-intensity, local wars of short duration against high-tech
adversaries. PLA theorists and planners believe future campaigns will be conducted
simultaneously on land, at sea, in the air, in space and within the electronic sphere. The
PLA characterises these conflicts as "local wars under conditions of
informationalisation". In its December 2004 Defence White Paper, China authoritatively
used this term to describe the type of war the PLA must be prepared to fight and win.
By introducing this new term, the PLA effectively discarded "local wars under high-tech
conditions", the concept that has guided PLA force structure developments for the
better part of the last decade. This new concept sums up China's experiences and
assessments of the implications of the revolution in military affairs - primarily the
impact of information technology and knowledge-based warfare on the battlefield.
While appearing to reinforce many of the trends in China's force modernisation that
prevailed under "local wars under high-tech conditions", the implications of this new
concept are not yet known.
The PLA has intensified efforts to improve interoperability among its service arms
through the conduct of joint exercises and the establishment of joint logistics networks.
The lack of Western-style joint operations has been a serious weakness in the PLA's
war-fighting capabilities and PLA analysts have carefully studied the military campaigns
of the US and its allies in Iraq, the Middle East and the Balkans since the beginning of
the 1990s and incorporated the lessons learned into new doctrines and training
programmes. In 1999, the PLA issued a series of doctrinal publications incorporating
lessons learned from Desert Storm, Kosovo and other US military operations.
Operational units are gradually incorporating this doctrine, which emphasises joint
operations. In the past couple of years, PLA units have begun to participate in effective
multiservice exercises, which are called 'integrated joint operations' to distinguish them
from previous quasi-joint manoeuvres.
Of particular importance has been a significant expansion of amphibious force

capabilities. This has included the reorganisation of two motorised infantry divisions in
482
the Nanjing and Guangzhou Military Regions into amphibious infantry divisions and the
transfer of another infantry division to the navy to form a second marine brigade in the
late 1990s.
In June 2004 the PLA established its first triservice theatre joint logistics department in
the Jinan Military Region in eastern China, in which all previously separate service
logistics units and their support facilities were merged into a unified organisation.
Bases
There are hundreds of army bases throughout China; the principal military formations
are based in a garrison in the cities of each military region.
Training
The last decade has also seen a substantial improvement in military training. The 1996
joint forces exercises intended to intimidate Taiwan were anything but "joint," and
demonstrated in some cases poor military performance. The August 2005 "Peace
Mission" joint forces exercise with Russia provided a stunning contrast. The PLA
conducted real joint exercises with a foreign armed force encompassing air, sea and
ground operations. The PLA deployed a joint force to Russia for return exercises in mid-
2007 and, during October 2007, long-time rivals China and India also held their first joint
army exercise in an effort at further augmenting bilateral ties. PLA exercises now stress
increasing realism, especially fighting in adverse electronic environments, and make
greater use of OPFOR and Aggressor units to increase realism. There has been an added
emphasis on conducting difficult and complex amphibious assault exercises.
Under the 1985 Military Service Law, university and other further education students
are required to undergo studies of military science and history, as well as regular
military training. PLA General Staff Headquarters confirmed in 1995 that future military
training would continue to follow the teachings of Mao Zedong and Deng Xiaoping.
These include personal drill, detachment training and training in tactics co-ordination.
According to the US DoD's 2004 annual report to Congress on "The Military Power of
the People's Republic of China," the PLA is meeting its training objectives through the
professionalisation of its officer and NCO corps, standardisation of its training
programmes, increased realism of its exercises and improvements in training facilities.
The report said that the PLA has placed significant emphasis on training NCOs and
improving its professional military education (PME) programmes to develop a more
modern, professional military force. Following the reduction of compulsory service from
three to two years, the PLA's NCO system underwent a major reform, which included
483
efforts to improve training, recruit soldiers with specialised skills and improve pay and
benefits. The PLA views improving PME as critical to ensuring it has a professional,
properly trained leadership cadre.
In 2001, the PLA published the Military Training and Examination Programme (MTEP).
Developed and implemented along service lines, it provides standardised guidance for
all PLA military training. China is attempting to use this programme as a mechanism to
implement a more realistic training programme directed toward developing a force
capable of operating in a modern, high-technology combat environment. The MTEP
provided a departure from previous PLA training standards by dictating that tactical
training be tailored to a unit's specific operational tasks. Although early in its
implementation phase, the MTEP is quite different from previous PLA training norms
and could have a significant effect on developing military skills.
Training facilities and infrastructure have received increased resources. These facilities
and infrastructure include training aids, centres and ranges that offer access to more
realistic training, sometimes through use of simulations and other computer-based
technology. The PLA has emphasised the benefit of being able to evaluate training at
these facilities and encourages commanders to exchange roles for greater exposure to
the other services during training. Access to the more realistic training at these facilities
will become more important in the next several years as the PLA continues to take
delivery of and integrate advanced weapon systems into its inventory.
PLA training and exercises have focused increasingly on areas related to modernisation,
particularly development of new combat methods, operational experimentation, joint
operations, communications, amphibious operations and air defence. In recent years
the PLA appears to be trying to improve training realism by stressing adverse
conditions, diverse terrain, and night operations. In this vein, almost all Military Regions
have a "Tankmen Training Base" to promote much better armour proficiency.
Integrated joint exercises are now being held throughout the country in which select
units from all the services, as well as reserve forces, are making use of significantly
improved information technology (IT) capabilities to practice true joint operations. In a
major upgrade to joint training, all MRs have a "Combined Arms Tactical Training Base".
In August 2006 the PLA reportedly conducted its second "Northern Sword" exercise.
Reports indicated its included 20,000 troops, 1,000 tanks and participation from the PLA
Air Force, Second Artillery and the units of the People's Armed Police.
Amphibious training has received particular emphasis. These have included a prolonged
exercise cycle in 2001 in which nearly 100,000 troops were deployed and an even more
sophisticated exercise (involving 18,000 personnel) in mid-2004 in which the PLA Air
Force (PLAAF) and strategic missiles units performed major roles. Joint amphibious
484
training areas have been established around several islands off Fujian, Zhejiang and
Guangdong in the Nanjing and Guangzhou Military Regions and divisions and brigades
are regularly deployed to these sites for up to three months of joint training in
conjunction with air force and navy units. In addition, the 2006 Pentagon PLA report
noted that the PLA has conducted 11 exercises featuring a Taiwan scenario in the
previous 6 years.
The PLA Army is increasing its training for foreign contingencies. While the highest
priority is to train for a possible invasion of Taiwan, the PLA is also mindful that it must
be prepared for massive intervention to support a new regime in North Korea, as well as
to intervene in Central Asia to defend non-democratic regimes or to secure resource
goals. For the PLA Army, however, the unprecedented "Peace Mission 2005" exercises
with Russia helped to train for Taiwan, North Korean and Central Asian contingencies. In
this exercise, Army Amphibious Units were able to co-operate with PLA Marine and
Russian Marines in a beach assault. PLA Army units also participated in fire power
demonstrations. In early September 2005, units in the Guangzhou MR practised attacks
on an airfield located on an off-shore island. This training could be useful for capturing
the Penghu Islands strategically located in the middle of the Taiwan Strait.
In September 2005 a three-month training programme with Thailand began, involving

the clearance of anti-personnel landmines along the Thai-Cambodian border. The
training agreement also involved China supplying an unknown quantity of clearance
equipment.
Under a bold policy initiative yet to be made public, China is seeking to expand its
political and economic ties with the 10-member Association of Southeast Asian Nations
(ASEAN) through organising a first multilateral military exercise. Sources told Jane's that
the Chinese proposal, which is still at an early stage, involves a joint naval drill. Beijing
opened discussions at the start of 2007 with the aim of conducting the exercise around
mid-2008. The initiative appears to have been presented to ASEAN members
individually rather than collectively through the group's secretariat. The response is not
yet known, but sources indicate that the proposal remains under active consideration.
The ASEAN membership comprises Brunei, Cambodia, Indonesia, Laos, Malaysia,
Myanmar, Philippines, Singapore, Thailand and Vietnam.
Training Areas
There are designated training areas throughout China and vast uninhabited areas which
are not recognised as full-time training areas but which can be used for large-scale
operations. In time of need for an exercise the CMC can acquire land rights with no
notice required. There have been reports of villages being moved with as little as six
hours notice. It is likely that in recent years the PLA has also increased the total area of
485
land devoted to training as it has created new combined arms and tank training bases in
almost all of its military regions.
Armour

Type 59/Type 59 NORINCO Main Battle Tank 5,5001 5,500 n/a

II/Type 59D
Type 69 NORINCO Main Battle Tank 240 200 1982
Type 88A/B n/a Main Battle Tank 1,000 1,000 n/a
Type 96/Type NORINCO Main Battle Tank 800 450 1989

88C/Type 85-III
Type 98-1/Type NORINCO Main Battle Tank n/a n/a n/a

99/ZTZ-99
PTL-05 "Assaulter" NORINCO Light Tank n/a n/a n/a
N/A 8x8 wheel IFV n/a Light Tank n/a n/a n/a
Type 62/62-I/62-II NORINCO Light Tank 500 n/a 1962
Type 63/631 NORINCO Light Amphibious Tank 800 750 1963
Type 63A/ Type 99 NORINCO Amphibious Tank 600 600 n/a
Type 63C/YW 531 NORINCO Amphibious Armoured 800 800 n/a

Personnel Carrier
486
Type 77-I/77-II NORINCO Amphibious Armoured 400 400 n/a

Personnel Carrier
Type 55 n/a Armoured Personnel 500 500 n/a

Carrier
Type 56 n/a Armoured Personnel 1,000 1,000 n/a

Carrier
Type 63/63-I/63- NORINCO Armoured Personnel 1,000 1,000 n/a

II/YW 531 Carrier
Type 85/YW 531 H NORINCO Armoured Personnel 1,300 1,300 n/a

Carrier
Type WZ 523 NORINCO Armoured Personnel 50 50 1984

Carrier
Type YW 531 NORINCO Armoured Personnel 300 300 n/a

(various) Carrier
Type 93 n/a Armoured Recovery n/a n/a n/a

Vehicle

Vehicle
Type 76 KY-Q NORINCO Armoured Recovery n/a n/a n/a

Vehicle

Vehicle
WZ 501/551 NORINCO Infantry Fighting Vehicle 2,000 2,000 1986
YW-307 n/a Infantry Fighting Vehicle 1,500 1,500 n/a
YW 309/Type 85 n/a Infantry Fighting Vehicle 1,200 1,200 n/a
487
New Type IFV (ZBD- n/a Infantry Fighting Vehicle n/a n/a n/a
97)
New Type IFV (ZBD- n/a Refueling Vehicle n/a n/a n/a
97)
Note:
1. Large number being upgraded to Type-59D with 105 gun, gun-launched missiles and
ERA.
Artillery

155 mm PTL-05 NORINCO Self-propelled n/a n/a 2006

Howitzer
152 mm Type NORINCO Self-propelled 83 83 n/a

83 Howitzer
122 mm Type n/a Self-propelled n/a n/a n/a

54-I Howitzer
155 mm WA NORINCO Field Howitzer 36 36 1991

021 (WAC 21)
152 mm Type NORINCO Field Howitzer 6,000 6,000 n/a

54

66 (D-20)

59/59-1
122 mm Type NORINCO Field Howitzer n/a n/a n/a
488
54
122 mm Type n/a Field Howitzer n/a n/a n/a

60
122 mm Type NORINCO Field Howitzer n/a n/a 1984

83
122 mm D-30 NORINCO Field Howitzer 83 83 n/a
100 mm Type n/a Field Gun 1,000 1,000 n/a

86
400 mm WS-1 n/a Multiple Rocket n/a n/a n/a

System
302 mm WS-1 n/a Multiple Rocket n/a n/a n/a

System
302 mm WS-1B n/a Multiple Rocket n/a n/a n/a

System
300 mm A100 CPMIEC Multiple Rocket n/a n/a n/a

System
300 mm Splav Scientific Multiple Rocket n/a n/a 1987

Smerch Production Concern System
273 mm Type NORINCO Multiple Rocket n/a n/a n/a

83 System
140 mm BM-14 n/a Multiple Rocket n/a n/a n/a

System
140 mm BM-16 n/a Multiple Rocket n/a n/a n/a

System

63/70 System
489

82/85 System
122 mm Type NORINCO Multiple Rocket n/a n/a 1963

81/83 System
130 mm Type n/a Towed Multiple n/a n/a n/a

63 Rocket System
107 mm Type NORINCO Towed Multiple n/a n/a n/a

63/81 Rocket System
425 mm Type NORINCO Mine Disposal MRS 240 240 n/a

762
284 mm Type NORINCO Minelaying MRS 48 48 n/a

74
120 mm Type n/a Self-propelled n/a n/a n/a

55 Mortar
82 mm Type 53 n/a Self-propelled n/a n/a n/a

Mortar
82 mm W99 NORINCO Mortar-Automatic n/a n/a n/a
160 mm Type n/a Mortar n/a n/a n/a

56
120 mm Type n/a Mortar n/a n/a n/a

55
82 mm Type 53 n/a Mortar n/a n/a n/a
60 mm Type 31 n/a Mortar n/a n/a n/a
Anti-Tank Weapons
490

HJ-73 (Red Arrow NORINCO Anti-Tank Guided n/a n/a n/a

73) Missile
HJ-8 (Red Arrow 8) NORINCO Anti-Tank Guided n/a n/a 1991

Missile
HJ-9/9A (Red NORINCO Anti-Tank Guided n/a n/a 1992

Arrow 9/9A) Missile
100 mm Type 59 n/a Anti-Tank Gun 240 240 n/a
100 mm Type 86 NORINCO Anti-Tank Gun 240 240 n/a
120 mm PF98 n/a Recoilless Rifle n/a n/a n/a
82 mm Type 65 n/a Recoilless Rifle 500 500 n/a
75 mm Type 52 n/a Recoilless Rifle 2,500 2,500 n/a
75 mm Type 56 n/a Recoilless Rifle 1,000 1,000 n/a
PF 87 n/a Anti-Tank Rocket n/a n/a n/a

Launcher
93 mm PF 87-1 n/a Thermobaric Rocket n/a n/a n/a

Launcher
93 mm PF 97 n/a Thermobaric Rocket n/a n/a n/a

Launcher
491
90 mm Type 51 n/a Anti-Tank Rocket 400 400 n/a

Launcher
Air Defence Weapons

Tor-M1 (NATO SA-15 Antei Self-propelled n/a n/a n/a

'Gauntlet') SAM System
HQ-7/FM-80 CNPMIEC Self-propelled n/a n/a n/a

SAM System
FM-90 CNPMIEC Self-propelled n/a n/a n/a

SAM System
Type 95 NORINCO Self-propelled n/a n/a n/a

SAM/AAA
System
HQ-61/a CNPMIEC Towed SAM n/a n/a n/a

System
HQ-64/LY-60 CNPMIEC SAM n/a n/a n/a
PL-9C NORINCO SAM n/a n/a n/a
QW-3 China Aerospace Manportable n/a n/a n/a

Science and Industry SAM
Corporation
FN-6 CNPMIEC Manportable n/a n/a n/a

SAM
9K32/9K32M Strela- n/a SAM n/a n/a n/a

2/Strela-2M (NATO
SA-7a/b 'Grail')
492
HN-5a/HN-5b/HN-5c CNPMIEC Manportable n/a n/a n/a

(Hongying-5 / Red SAM
Tassel-5)
QW-1 (Vanguard)1 China Aerospace Manportable n/a n/a n/a

Science and Industry SAM
Corporation
QW-2 Liuzhou Changhong Manportable n/a n/a n/a

Machinery SAM
Manufacturing
57 mm Type 80 NORINCO Self-propelled n/a n/a n/a

AAG
37 mm Type 63 NORINCO Self-propelled n/a n/a n/a

AAG
100 mm Type 59 n/a Anti-Aircraft Gun n/a n/a n/a
57 mm Type 59 NORINCO Anti-Aircraft Gun n/a n/a n/a
37 mm Type 74/SD NORINCO Anti-Aircraft Gun n/a n/a n/a
23 mm unknown n/a Anti-Aircraft Gun n/a n/a n/a
Note:
1. China's marines have been equipped with the QW-1 man-portable SAM system.
Previously the marines only had access to the earlier HN-5A a copy of the original
Soviet Strela-2.
493
Infantry Weapons
Type Role
7.62 mm Type 51, 54 Pistol
7.62 mm Type 64 Pistol
9 mm Type 59 Pistol
7.62 mm Type 53 Carbine
5.8 mm Type 95/97 Carbine
7.62 mm Type 79/85 Rifle
12.7 mm Type JQ Rifle
7.62 mm Type 53 Light Machine Gun
7.62 mm Type 56 Machine Gun
7.62 mm Type 58 Company Machine Gun
494
35 mm W87/QLZ 87 Grenade Launcher
30 mm AGS-17 Grenade Launcher
160 mm M43 Mortar
120 mm Type 53 Mortar
100 mm PP 89 Mortar
75 mm RCL Types 52, 56 Mortar
PF 87 Anti-tank Rocket Launcher
93 mm PF 87-1 Thermobaric Rocket Launcher
93 mm PF 97 Thermobaric Rocket Launcher
120 mm PF98 Recoilless Rifle
Army Aviation

WZ-9 HAI Helicopter - Attack 50 50 n/a
Z-9G HAI Helicopter - Attack 40 40 2005
Z-8A Changhe Helicopter - Assault 20 20 2003
495
Mi-17 'Hip' Mil Helicopter - Assault 20 20 1991
Mi-171 'Hip' Mil Helicopter - Multirole 120 120 1997
Mi-17V-5 Mil Helicopter - Multirole 87 87 2001
AS 332L1 Super Eurocopter Helicopter - Transport 6 6 1985

Puma
Mi-6 'Hook-A' Mil Helicopter - Transport 3 3 1970
Mi-17l Mil Helicopter - Transport 1 1 2007
Mi-17I Mil Helicopter - Transport 24 23 2007
Y-7H XAC Transport 1 1 n/a
Y-8 SAC Electronic Intelligence 1 1 n/a
SA 342L1 Gazelle Aerospatiale Helicopter - Utility 8 8 1988
S-70C-II Black Sikorsky Helicopter - Utility 20 201 1984

Hawk
Z-5 HAMC Helicopter - Utility 20 20 1963
Z-9 Haitun HAI Helicopter - 25 25 1989

VIP/Transport
Z-9B Haitun HAI Helicopter - 50 50 1993

VIP/Transport
Z-9C Haitun HAI Helicopter - 5 5 2003

VIP/Transport
HC 120 Eurocopter Helicopter - Utility 8 8 2006
Z-11 CHAIG Helicopter - Trainer 40 40 1996
SA 316 Alouette III Aerospatiale Helicopter - Trainer 6 6 n/a
496
Note:
1. Low serviceability.
Missiles
HOT Euromissile Anti-Armour
HJ-10 NORINCO Anti-Armour
AT-2 'Swatter' Nudelman Anti-Armour
AT-3 'Sagger' Kolomna Anti-Armour
497
ARMED FORCES
Summary
Assessment
Doctrine and Strategy
War Zone Campaign Doctrine
2006 Defence White Paper
International Outreach
Defence structure
Ministry of Defence and Commission for Science, Technology and Industry for National
Defence (COSTIND)
General Equipment Department (GED)
Civil-Military Relations
Chain of command
General Guo Boxiong
General Cao Gangchuan
General Xu Caihou
General Liang Guanglie
General Chen Bingde
498
General Li Jinai
General Liao Xilong
General Chang Wanquan
General Wu Shengli
General Xu Qiliang
Strategic weapons
Declared Policy
Ballistic Missiles
Intercontinental Ballistic Missiles (ICBMs)
Submarine/Sea-Launched Ballistic Missiles (SLBMs)
Intermediate-Range Ballistic Missiles (IRBMs)
Anti-Ship Ballistic Missiles (ASBMs)
Short-Range Ballistic Missiles (SRBMs)
Land Attack Cruise Missiles (LACMs)
Missile defence
Basing
Proliferation
NBC Capabilities
Nuclear Weapons
Biological Weapons
Chemical Weapons
499
Information warfare capabilities
Training to Conduct IW
Space Programme
Satellite Programmes
Imaging Satellites
Navigation Satellites
Communication Satellites
Data Relay Satellites
Micro Satellites
Manned Programme
Anti-Satellite and Military Space Programmes
Lasers
Direct Ascent ASATs
Unmanned Space Combat Platforms
Manned Military Space
Summary
Total Strength Army Air Force Navy
1,905,000 1,400,000 250,000 255,000
Assessment
China's People's Liberation Army (PLA) is beginning to realise the joint forces synergies
and new capabilities from an aggressive and comprehensive modernisation program
that dates back to the 1980s. By the end of this decade the PLA will be able to start
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effectively implementing new joint forces doctrines devised at the end of the 1990s by
virtue of its absorption of a range of new information technologies, cyber attack
capabilities, new 4th generation level platforms, new precision strike systems and its
implementation of a range of personnel and training reforms. The highlight of this effort
will be the fielding of an array of new high- tech "anti-access" weapons like anti-satellite
systems, anti-ship ballistic missiles, new submarines, new cruise missiles and extensive
mine warfare forces, designed to inhibit or prevent US support for Taiwan. Early in the
next decade this capability will be complemented by a build up of Special Forces,
amphibious and airborne invasion forces and precision strike capable air and missile
forces.
In addition, the PLA has started building the foundations for power projection
capabilities that, by the end of the next decade, may allow the People's Republic of
China (PRA) to start defending its extra-regional and even global interests. The basis for
China's future power projection capabilities will be a far stronger nuclear weapon
complex that will feature multiple types of mobile intercontinental ballistic missiles
(ICBMs), at least five or six new ballistic missile submarine (SSBNs) and potential
programs to develop new long range manned penetrating bombers. While China has
the technology to do so, a critical decision would be whether China chooses to equip its
missiles with multiple warheads, giving it the potential to field many hundreds of
warheads. China is also expected to field an anti-ballistic missile system after 2020.
China's declared nuclear doctrines still stress longstanding concepts like "No First Use,"
"Strategic Counter-attack," and "Minimal" of "Lean" forces, but other evidence suggests
China has long considered more flexible "warfighting" operations that may include
taking the offensive.
By the turn of this decade China many also complete the rebuilding of the ex-
Soviet/Ukrainian carrier Varyag as its training and transition to an indigenous carrier
fleet to be built starting early in the next decade. Possible surface and SSN escorts for
this fleet, in addition to large amphibious forces transport ships, are now being built.
The current Five Year Plan also included a commitment to build new C-17 class military
transport aircraft and new wide-body airliners that could serve a number of military
missions. China is now developing new families of wheeled combat vehicles and new
high-speed amphibious vehicles that would be compatible with new transport aircraft
and amphibious assault ships. An additional and important element of future Chinese
power projection will be its ability to offer a wide range of world-class weapons systems
for sale to its clients and allies.
Key to the PLA's transformation have been a series of doctrinal, technical and personnel
reforms. Having just emerged from the turmoil of the Cultural Revolution, paramount
leader Deng Xiaoping responded to the US Strategic Defense Initiative (SDI) by agreeing
to the proposal of China's leading scientists forming the special "863 Program" to fund a
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broad range of basic high technology research primarily to support new weapons
development. Recent PLA advances in anti-satellite, laser, stealth and space
technologies have been the result.
By the end of the 1980s China had achieved economic and political stability and could
undertake a full comprehensive military reform and modernisation. Deng chose
technology expert and former PLA Navy (PLAN) commander Liu Huaqing to lead the PLA
through the beginning of this transformation. Liu and the PLA leadership also had to
respond to the twin-shocks of the 1989 Tiananmen Massacre and then the 1990-1991
American demonstration of high technology superiority during the first Gulf War.
The US and European arms embargoes that followed the Tiananmen Massacre
rekindled latent PRC hostility toward democracies while also spurring a redoubled effort
to secure badly needed high technology weapons and insights from Russia, which was
ready for a revived military relationship following the collapse of the Soviet Union.
China's goal was to purchase many new weapons, but more importantly, the
components or the knowledge to make their own. Initial purchases of Sukhoi Su-27 and
Su-30 fighters are being replaced by China's Su-27/J-11B with Chinese engines,
electronics and weapons. Russian help has been essential to China's realising its
manned space program, new space surveillance capabilities, second generation nuclear
powered submarines, Chengdu J-10 multi role fighter, new classes of anti-air destroyers
and advances in conventional submarines together with a range of new army systems.
Nevertheless, spurred by its absorption of much of Russia's offerings plus a deceleration
in Russia military innovation, China has mounted a strong push since 2003 to end the EU
arms embargo.
China's weapons production sector has also been rapidly modernised, benefiting from
enormous capital investments, a new generation of foreign and domestically trained
engineers, modern Western machine tooling and advanced 3-D design software and,
just as importantly, subsidised competition in almost all military design/production
sectors. China already had a weapons sector with high redundancy due to Mao era
People's War doctrines. But as part of sweeping military economic and logistics reforms
instituted in 1998, the PLA institutionalised more competition; nearly a decade later the
PLA can now begin to offer not just new world-class weapons, but a competing variety.
The result is now seen in a new array of armour and air defence systems, competing 4th
generation, and perhaps soon, 5th generation fighters, multiple short-range ballistic
missile (SRBM) offerings, and perhaps soon, very high tech anti-ship ballistic missiles
and direct-assent anti-satellite (ASAT) systems. It is likely that China will in the next
decade also be able to offer new unmanned combat air vehicles (UCAVs), laser and
railgun weapons.
The PLA's ability to use its new sophisticated weapons has been a series of doctrinal,
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organisational and personnel policy changes. In the 1990s PLA doctrine rapidly evolved
from a largely defensive "People's War" construct, to consideration of new offensive
doctrines and tactics under the rubric of "Active Defence," to the current stage of
devising doctrines for "Joint Warfare" under the goals of "Informatisation and
Mechanisation". While the Military Region remains the basis for peacetime
organisation, the PLA is now able to constitute "War Zones" or mixed formations uniting
units from multiple services and regions to focus on the objective. Jointness has also
been institutionalised in the traditionally army-centric high command. From 2004, the
Central Military Commission has included the commanders of the Second Artillery, Navy
and Air Force. The critical General Staff Department started including air force and navy
officers among its top commanders, and coastal Military Regions now include navy and
air force deputy commanders.
PLA doctrine uses complex deception to achieve shock and surprise in order to secure
and maintain the offensive in all operations. It is also leveraging new information
technologies, especially broadband and wireless communication networks, satellite
communication networks and automatic command systems, to achieve more intimate
co-ordination among its services - a work that is still in progress, but which exceeds that
of many of its neighbours. Like the US and many of its allies, the PLA is working hard to
reduce the "kill chain" by linking sensors and shooters to appropriate command
authorities. In the next few years it will make significant progress in this direction when
new surveillance satellites are launched, new long-range and short range UAVs come
into more common use and the ability to conduct precision strikes is shared by missiles,
artillery rockets, artillery and air-delivered bombs.
Other organisational changes include the implementation of successive reductions in

troops since the early 1990s, mainly army forces, while navy and air force numbers have
remained static, so as to better fund the equipment and other aspects of
modernisation. From 1985 to 2005 the PLA cut back 1.7 million troops, including
170,000 officers. In 1998 significant logistics reforms were implemented, which
required the PLA to divest most its then extensive economic holdings, many of them
lucrative non-military enterprises. Many of these enterprises were legitimate to support
troop livelihood, like farms to raise food, but increasingly the PLA is outsourcing the
provision of these basic services in order to reduce the logistic burden and allow the
PLA to focus on military missions. Logistic support is also being rationalised by the
formation of Military Region based joint logistic support systems, which has allowed for
a reduction in redundancy in some services and, for the first time, a centralised ability
to monitor and control basic supply services.
While the PLA is likely to remain a conscript-based military for many years to come, the
PLA has also realised that it must attract increasing numbers of higher educated troops
in competition with a demanding civilian economy. In the western, less developed areas
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of China, the PLA remains a great opportunity for advancement. The PLA uses appeals
to patriotism but increasingly it is using higher pay and provision of greater job security.
In the last decade the PLA has created a new Non-Commissioned Officer (NCO) Corp,
mainly to staff an increasing number of high-tech jobs, which entail higher pay rates and
benefits. In 2006 the PLA started hiring contract civilian employees. The PLA has also
placed great emphasis on Professional Military Education and is making greater
education opportunities available to troops; soldiers deployed to the Spratly Islands can
now take correspondence classes via broadband satellite links.
The last decade has also seen a substantial improvement in military training. The 1996
joint forces exercises intended to intimidate Taiwan were anything but "joint", and
demonstrated in some cases poor military performance. The August 2005 "Peace
Mission" joint forces exercise with Russia provided a stunning contrast. The PLA
conducted real joint exercises with a foreign armed force encompassing air, sea and
ground operations. The August 2007 "Peace Mission" exercise saw the first foreign
deployment for a joint PLA land-air force commanded by a PLA Air Force General. PLA
exercises now stress increasing realism, especially fighting in adverse electronic
environments, making use of innovation and surprise and make greater use of OPFOR
and Aggressor units to increase realism. There has been an added emphasis on
conducting difficult and complex amphibious assault exercises.
While increasingly sophisticated training and greater foreign deployment does not
approach the operational experience of US forces gained in near continual conflicts
since 1990, the PLA did undertake a crisis mobilisation in response to the May 12, 2008
Sichuan earthquake. Within 24 hours elements of the 15th Airborne Army were
deployed to hard hit regions. Eventually over 150,000 troops were mobilised, army
aviation and civilian helicopters saw heavy usage, and an AWACS was used to
coordinate air traffic.
All of this military progress has been expensive for China. The official 2008 defence
budget indicates that China is the fourth largest military spender globally and China's
official defence spending has been rapidly increasing over the past 15 years. The high-
technology equipment and significant wage pressures in a two million-strong army,
particularly as the PLA looks to recruit and train more highly skilled soldiers all requires
large amounts of investment.
Despite its great progress and reform, the PLA suffers from various threats. While it is
not known to what degree jobs are "sold", it appears that the PLA reflects the
government and Party's preference for the relations of former high officials. Military
disasters such as the loss of a submarine with all hands in May 2003, may be result of
intensified training, but they cannot be hidden.
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Perhaps the greatest threat to the PLA is its co-dependence with the Communist Party
(the Party). Born of their revolutionary history, military officers pervaded high positions
within the Party until the 1980s. The PLA's two main intelligence services, the Second
Department, which concentrates on foreign intelligence, and the ELINT/SIGINT specialist
Third Department, are essential guardians for the Party. The PLA is also prepared to join
the newly expanded People's Armed Police to quell large-scale protests, as they did at
Tiananmen Square. While there are currently no PLA officers in the Politburo's pinnacle
Standing Committee, they do make up about 20 per cent of the Central Committee. The
Party's dependence on the PLA to sustain its power position means that the PLA "lobby"
is well represented in Party policy and budgetary decisions. The Party seeks to enforce
strict loyalty to them within the PLA, but at times it appears that some PLA officers
understand their dilemma.
Earlier this decade the Party led a loud campaign within the PLA against the ideas of a
"professional" army and "DePartification," an indication that these notions may be
viewed seriously in some quarters, perhaps as a result of Taiwan implementing new
laws that placed its "Party-Army" under civilian control within a legal structure for the
first time. It is possible that some officers understand that the Party on which the PLA
depends may, in their lifetimes, face a crisis sparked by China's many economic, social
and even environmental challenges, which could become exacerbated by the Party's
pervasive corruption and fierce resistance to democratic reform. An unforeseen
economic crisis or perhaps a military exercises designed to bolster the Party's legitimacy
but ending in failure, might provide the spark for a "dynastic upheaval" as China has
experienced many times in its history.
The Party, however, believes it can forestall such a crisis by sustaining high economic
growth, high military budgets and strong nationalist propaganda bolstering the power
positions of the Party and the PLA. The latter has been aided by the PLA's high profile
responses to natural disasters, including the massive Yellow River flooding of 1998 and
the Sichuan earthquake of 2008. But continuous high economic growth will eventually
require freedoms the Party cannot now consider and there are suspicions that China's
announced intentions of a "Peaceful Rise" may mask not-so-peaceful motives. While the
PLA is adverse to Western democratic levels of "transparency," it is beginning to
understand the utility of greater openness and international military diplomacy, like
peacekeeping contributions.
Doctrine and Strategy
In Maoist China military doctrine was developed around the concept of the 'people's
war', the principles of which were forged through the experience of war and flavoured
by Mao's vision of the political nature of revolutionary warfare. People's war stressed
the mobilisation of the masses to fight a protracted war against invasion. It emphasised
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the primacy of politics and the primacy of men over weapons. Its key elements were
weak force against strong force, political mobilisation of the masses and multi-mission
armed forces.
China's military strategy under Mao was referred to as an 'active defence strategy' and
was developed in co-ordination with the military doctrine of people's war. According to
Mao, active defence is defined as offensive defence, or defence through decisive
engagements. It is a defence 'for the purpose of counterattacking and taking the
offensive', not unlike the Soviet Union's concept of the 'deep battle'. As a military
strategy, active defence embraces two concepts, namely strategic defence and tactical
offence and strategic protraction and tactical quick decision.
The active defence strategy has three attributes designed to lure the enemy deep
inland, wear down their strength through attrition and finally shift to the offensive,
namely strategic defence, defence in depth and triadic warfare (guerrilla, mobile and
positional).
The slogan 'people's war under modern conditions', which was developed after Mao's
death, aimed at fitting the old Maoist doctrine to new strategic and technological
environments. This new doctrine coincided with the advancement of military
technology in the late 1970s, which for all intents and purposes invalidated the concept
of a pure people's war. Three specific modern conditions require the people's war to
depart from Maoist doctrine:
• Defence modernisation and advancements in C3I, logistics systems, combined arms

training and rapid-response task forces;
• Local war instead of total war. By the mid-1980s (the 1985 CMC meeting), the concept
of China being involved in a large-scale nuclear war was replaced by a consensus that
China was facing a relatively peaceful international environment and future conflict
would probably involve a local war or low-intensity conflict; and
• Professional armed forces. Defence modernisation calls for the institutionalisation and
professionalisation of armed forces.
In terms of military strategy, the term 'new historical conditions' is synonymous with
'modern conditions' for people's war. These conditions require the PLA to abandon the
active defence strategy developed over 50 years ago. The revised active defence
strategy under new historical conditions has three key elements:
• Initial phase of war. Traditional strategic defence in the first stage of war is no longer a
viable option for China. The special economic zones and many large economically open
cities have become the new economic, financial and strategic centres, and all are
located along the Chinese coast or frontier. A strategic retreat would mean giving up
these centres to the enemy. The new military strategy stresses 'resolute defence' to
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hold key defence positions and prevent them from falling to the enemy;
• Extended strategic depth. Similar to the Western concept of forward defence, this
concept emphasises multi-layered defence lines or zones that can be extended beyond
China's territorial and maritime borders when the situation warrants; and
• Modernised military forces. The new strategy requires the PLA to engage the enemy
decisively at the forward defence lines in the initial phase of the war. To meet this
requirement, China needs to modernise fundamentally in order to upgrade its
weaponry and equipment, improve its education and training systems, cultivate a
qualified officer corps and emphasise the study of military science.
War Zone Campaign Doctrine
War Zone Campaign (WZC - zhanqu zhanyi) doctrine, a term used frequently by PLA
officers, is a doctrine that the PLA developed for its future wars and is more often
referred to as "limited war under high-tech conditions". It is similar to the NATO notion
of theatre of operation. The goal of WZC is to use PLA's selective Packet of Excellence
(POE), to offset an adversary's technological edge.
Deng Xiaoping first advocated the WZC concept. Instead of shifting priority resources
from civil infrastructure and economic reform programs to a complete PLA
modernisation, he chose to focus on programmes that would give China the most
effective means for exploiting critical vulnerabilities in defence.
The WZC concept was first recorded in 1979. Ad hoc operational area commands
(zhanqu) were formed during the first Sino-Vietnamese war. The Southern Command,
as it was known, actually directed the attack on Vietnam. In addition, there was a
Northern Command, formed out of three northern Military Regions (Shenyang, Beijing,
and Lanzhou) facing toward the Soviet Union. This concept was further developed in the
1980s to meet China's strategic and tactical needs. In the 1st quarter of 1996, when the
PLA was engaging in large-scale exercises and firing rockets across the Taiwan Strait, the
Fujian Front was established, rather than have the operations conducted from the
Nanjing Military Region.
The coalition victory in the 1991 Gulf War pushed the PLA to accelerate the
incorporation of the new doctrine. Limited war under hi-tech conditions calls for
modernisation of areas such as missile, air, and naval arms, plus rapid reaction and
deployment formations of the army. By creating pockets of excellence within the PLA,
the high command hopes to enable China to address many of its security issues.
The WZC's major feature is that it attempts to bridge the gap between a major or total
war involving partial or total national mobilisation and a more limited war requiring
special operations. The WZC can be divided into three phases:
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1. Elite forces and sharp arms (jingbing liqi): To use Special Operation Forces (SOF) to gain
first hand information of the battle, disrupt the enemy's build up, in addition to building
up a presence of Chinese forces make a political statement to the adversary. The WZC is
aiming at a political victory, not territorial gain.
2. Gaining initiative by striking first (xianji zhidi): Conducting pre-emptive strikes against
the enemy's most critical targets, often referred to as winning victory with one strike to
convince an enemy to desist without having to defeat his military forces.
3. Fighting a quick battle to force a quick resolution (suzhan sujue): Send in mobile
formations such as the armour and mechanised infantry divisions for a decisive victory,
and force a final political resolution.
WZC does not address total war. The scale of a total nation-state war will overwhelm
and diminish the relevance of these PLA pockets of excellence, because of the enemy's
likely superior capability in terms of technology where it can employ its most advanced
weapons simultaneously on all fronts and throughout the war process. WZC is more
limited and shorter than a total war and the goal of such limited wars is political rather
then territorial. The Sino-Indian war of 1962 and Sino-Vietnamese war of 1979 are
examples of the kind of situation to which WZC would apply.
Command and control within the WZC is centralised and is tied directly to the CMC
through a representative system similar to that of USSR during the Second World War.
The representative is directly responsible to the supreme command in Beijing,
commands and co-ordinates all PLA units in war zone and can issue direct orders to the
civilian government in the region.
The purpose of creating such a leadership structure is to bring all regional military units
and civilian supporting resources under more integrated command and control. Co-
ordinating fairly independent large-scale united campaigns by all four services is a key
aspect of the war zone concept. As a profound reform of the Chinese military system
this entails a long-term plan to establish joint command HQ that re-deploys the four
services under a united system. The reform is based on resolving four issues:
• Bridging the gap in C3I currently existing between the four services in the PLA;
• Removing the existing logistical barriers between the different services so as to facilitate
a unified supply system (sanjun lianqin);
• Laying down groundwork for joint exercises of all services, for the purpose of launching
united campaigns; and
• Placing the regional units under tighter central control.
The WZC calls for non-ground service forces stationed in a Military Region (MR) not to
answer to the MR commanding officers, but rather to service headquarters in Beijing.
The WZC will use the existing MR command structure as the foundation; the joint
command may consist of intelligence, decision control, communications and electronic
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warfare, and fire-control and co-ordination components. Rather than being dominated
by the ground force as in the old MR headquarters, this command will be truly joint,
with a higher proportion of both commanding and staff officers from non-ground force
services. It is even possible that the joint forces commander and chief of staff come
from services other than the ground forces. Under normal circumstances, however, the
commanders of WZC Air Force, Navy, and Second Artillery forces serve as the deputy
commanding officers of the joint command. Moreover, the decision control component
may be composed of staff teams headed by a deputy chief of staff from all service
commands. But most important, this command may become the operational
commanding power over all service commands and forces within the war zone.
2006 Defence White Paper
On 29 December, 2006 the PLA issued its sixth Defence White Paper (DWP) which
continued the evolution of this increasingly useful consensus Chinese government
statement on defence issues, especially security challenges, doctrine and modernisation
priorities. This DWP offers another small step forward in military transparency,
providing more numbers, a bit more on roles and missions, modernisation priorities and
a succinct statement on nuclear doctrine. But like its predecessors, this DWP offers no
data on deployments, orders of battle, weapon systems or specific military
modernisation programs. The sixth DWP contains 10 chapters, but unlike the fifth, does
not contain eight appendices. But in part to respond to American criticism about lack of
transparency, the DWP's release was timed with the "declassification" of the Chengdu J-
10, which featured extensive media coverage, but little in way of disclosure of data
about aircraft, system and weapon performance.
Chapter one on "The Security Environment" contains more upbeat language than some
previous issues but still offers a fairly realpolitic view of a world fraught with
"contending forces," the challenges of "globalisation" and "non-traditional threats".
While security in the Asia Pacific remains "stable" and China's "overall security
environment remains sound", there are challenges. The US is "accelerating" its
deployment of forces in Asia and increasing its security co-operation with Japan. For the
first time there is mention of North Korea's missile and nuclear tests. Taiwan is
mentioned in more serious terms, but without the threats to use force of previous
issues. Taiwan's "separatist forces" and attempts to create "de jure independence"
though constitutional reform pose a "grave threat to China's sovereignty and territorial
integrity". Continued US arms sales to Taiwan and its deepening military relationship
with Taiwan are also criticised. The DWP also gives the Chinese government credit for
having "taken a number of significant measures to improve relations across the Taiwan
Strait". Unlike the previous issue it does not detail how Taiwan can achieve peaceful
unification or endorse confidence building measures.
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This chapter also highlights in positive terms the new Greater Asian multilateral
organisations that China has helped to form, which excludes the US. The Shanghai
Cooperation Organisation "has entered a new stage of substantive growth". The ASEAN
+3 Channel (China, Japan and the ROK) has "expanded in scope and its institutional
building is improving constantly, continuing to play a major role in promoting peace,
stability and prosperity in the Asia-Pacific region". The East Asia Summit has "provided a
new platform for East Asian co-operation".
Chapters two on "National Defense Policy", three on "China Leadership and

Administration System for National Defense", and four on "The People's Liberation
Army" provide new data on China's military roles, missions and modernisation
priorities. The goals of China's national defence policy "includes guarding against and
resisting aggression, defending against violation of China's territorial sea and air space,
and borders; opposing and containing the separatist forces for "'Taiwan independence'"
and their activities, taking precautions against and cracking down on terrorism,
separatism and extremism in all forms". The final three goals are also in the charter of
the Shanghai Cooperation Organisation.
There is also an explicit declaration of the PLA's loyalty to the Communist Party of
China. "The People's Liberation Army (PLA) is dedicated to performing its historical
missions for the new stage in the new century, namely, providing an important source
of strength for consolidating the ruling position of the Communist Party of China (CPC)".
In contrast to the last DWP, the doctrinal mantra phrase "Informationalisation" is

mentioned less, but more light is shed on its meaning and relationship to the other
mantra phrase "mechanisation". "The PLA, taking mechanisation as the foundation and
informationisation as the driving force, promotes the composite development of
informationisation and mechanisation to achieve overall capability improvement in the
fields of firepower, assault, mobility, protection and information."
This DWP also provides some additional data on the respective services of the PLA, "The
army aims at moving from regional defence to trans-regional mobility, and improving its
capabilities in air-ground integrated operations, long-distance manoeuvres, rapid
assaults and special operations". It further notes, "the army has 18 combined corps,
which are mobile combat troops." As for restructuring, "the army has cut a number of
combined corps, divisions and regiments, increased the number of combined corps
whose order of battle is corps, brigade and battalion and set up units with new and
high-tech weaponry and equipment". As for modernisation, "priority is given to building
army aviation, light mechanised and information countermeasures units. The share of
the armoured component in the army combined combat forces has been further raised.
The artillery and air defence component has fielded new types of cannons, field anti-
aircraft missiles, reconnaissance early warning radars, fire-control systems, and
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intelligence and command systems, and increased the proportion of ground-to-air

missiles to anti-aircraft guns".
The DWP say "the navy aims at gradual extension of the strategic depth for offshore
defensive operations and enhancing its capabilities in integrated maritime operations
and nuclear counterattacks". This is the second year that stress has been given to the
mission of "nuclear counterattacks" and likely reflects the future deployment of second
generation SSBNs. As for restructuring, "the navy has cut the naval aviation department
and converted naval bases into support ones".
Regarding the air force, the DWP says, "the air force aims at speeding up its transition
from territorial air defence to both offensive and defensive operations, and increasing
its capabilities in the areas of air strike, air and missile defence, early warning and
reconnaissance, and strategic projection". This is the first time that "missile defence"
has been mentioned an air force mission. As for restructuring, "the air force has closed
corps (base) headquarters and set up regional command posts". The air force is also
"reducing the number of combat aircraft, giving priority to the development of new
fighters as well as air and missile defence weapons. It is working to enhance command
and control systems. It stresses mission-oriented and confrontational training,
increasing combined tactical training of different arms and aircraft types, and conducts
training in flying refitted new aircraft and using new weaponry and equipment in an
active and stable way."
As for missile forces, "the Second Artillery Force aims at progressively improving its
force structure of having both nuclear and conventional missiles, and raising its
capabilities in strategic deterrence and conventional strike under conditions of
informationisation". The DWP further states the Second Artillery "is quickening its steps
to raise the informationisation level of its weaponry and equipment systems, build an
agile and efficient operational command and control system, and increase its
capabilities of land-based strategic nuclear counter-strikes and precision strikes with
conventional missiles. It is improving the construction of its battlefield system, and
associated logistics and equipment, and raising the cost-effectiveness of integrated
support. It is deepening the reform of training, enhancing integrated training, using
scientific and technological achievements to raise training quality."
As with the previous issue, the 2006 DWP stresses the importance of ongoing PLA
logistic reform. It notes, "The joint logistical support system, based on military area
commands, has been expanded, and overlapping support organisations reduced. Apart
from special-purpose depots and general hospitals under the general
headquarters/departments, the navy, air force and Second Artillery Force, all the other
rear depots, hospitals and recuperation centers have been integrated and reorganised
into the joint logistical support system."
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Regarding personnel, the DWP noted that from 1985 to 2005 the PLA had been reduced
a total of 1.7 million troops, including 170,000 officers, and the elimination of 150
officer posts above the corp level. Furthermore, 70,000 posts formerly held by officers
are now held by new Non-Commissioned Officers. For the first time the PLA also began
hiring contract civilian employees in 2006.
International Outreach
China's aversion to military 'transparency', has come to clash with the Chinese
government's oft-stated desire to convey its 'peaceful rise' in international economic
and even military stature. In response to US pressure for such transparency, in the face
of a limited US opening to the PLA during the 1990s, as well as due to it own realisation
that it must undertake increasing 'peaceful' military interactions with other states, in
recent years the PLA has increased its level of international 'diplomatic' outreach.
Starting slowly over the last 15 years, this effort began with the PLA Navy undertaking
foreign deployments to "show the flag" and then hosting visiting naval forces,
increasingly for simple safety exercises. Then starting in 2003, with members of the
Shanghai Cooperation Organisation (SCO), the PLA has undertaken increasingly more
complex exercises involving the army, and then starting in late 2006, the PLAAF. The
May 2008 Sichuan earthquake also saw the PLA welcome significant military-disaster
relief assistance from several countries, an indication that the PLA may also become
increasing involved in humanitarian military operations.
The first major PLA exercise with foreign military forces was the 18-25 August "Peace
Mission 2005" (PM-05) held with Russia. The idea for this exercise was likely formed
during high-level meetings in 2004, but was not announced until December 2004. For
the PLA it was its most ambitious peaceful military endeavour with a foreign power in
its history. It was also the first time since the beginning of the most current period of
PLA modernisation that it has had an opportunity to test its new capabilities with a
foreign peer. While some analysts have downplayed the exercise as a large "firepower
demonstration" that combined usual annual Chinese and Russian exercises, this event
was significant for the PLA and China for military and political reasons. The advertised
scenario, one of intervening in a foreign country beset by military revolt, was flexible
enough to indicate a China-Russia intention to intervene into a post-Kim Jong-il North
Korea, a Central Asian republic beset by democratic revolution, or an invasion of
Taiwan.
For the PLA, PM-05 was an opportunity to test its new combined arms doctrine, and to
conduct operations in all spheres, in co-operation with modern Russian forces. First the
exercise was bracketed by Chinese satellite launches on 2 and 29 August 2005. The
formal exercise was then divided into three parts and involved about 10,000 troops,
with about 1,800 from Russia, with the bulk of the activity on the Weifang exercise
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range on the Shandong Peninsula. It began with military command and control exercises
in Vladivostok starting on 18 August. But the main military activities took place off the
Shandong Peninsula.
On 23 August 2005 there was one day of naval exercises, that included blockade, anti-
submarine, air defence and air escort operations. Russian forces consisted of an Udaloy-
class ASW destroyer and Sovremenniy-class missile destroyer, while the Chinese navy
contributed its new South Sea Fleet based Type 052B Destroyer No. 168, its East Sea
Fleet based Sovremenniy destroyer No. 136, the older Northern Fleet destroyer No. 112
Harbin, three Jiangwei-class frigates, plus a Kilo-class submarine and a Song-A class
submarine. The Russian Sovremenniy fired a Moskit supersonic anti-ship missile while
the PLAN Sovremenniy fired its SA-N-7 SAMs. A frigate and the Song-A submarine fired
anti-ship missiles. They practised anti-missile defence and jamming operations, and
ASW operations with Ka-28 and Z-9EC helicopters. J-8II fighters performed interception
missions while the Chinese air force's Su-27s and J-11s flew escort missions in co-
operation with Russian A-50 AWACS. The Chinese Air Force's Y-8AEW aircraft also made
its first pubic appearance.
There were two distinct ground force operations. First, there were combined Russian
and PLA Marine landings to capture a beachhead. Landings were preceded by simulated
strikes by Russian Tu-95 Bear and Tu-22M3 Backfire bombers, then by a PLA Air Force H-
6 bomber that fired the YJ-63 land attack cruise missile, followed by Russian Su-24 and
PLAAF Su-27 strikes. The Russian Marines deployed in BTR APCs while the PLA Marines
demonstrated their new T-63A amphibious tanks, plus their new T-63C and WZ501
amphibious APCs. A Jiangwei frigate provided naval fire support and WZ-9 combat
helicopters also provided fire support. The Marines were then followed by a PLA Army
Amphibious unit that used wheeled APCs. After the capturing of the beach by
amphibious armour forces, joint Special Forces operations sought to cut off the enemy's
air and sea-links. This phase also involved the use of T-96 medium tanks and new
"Assaulter" wheeled light tanks. There were some casualties when one PLA tank or APC
was swamped.
Soon after the landing there were airborne assault operations to capture an airfield.
These involved pre-landing strikes by PLA Air Force Sukhoi fighter, and then 10 Russian
and PLA Air Force Il-76 transports dropped 24 vehicles and paratroopers. PLA airborne
forces were able to feature their new ZLC-2000 light infantry fighting vehicle modelled
after the BMD vehicles used by the Russian Airborne troops. Of the 12 ZLC-2000s
dropped, one landed on its side. Electronic warfare aircraft reportedly accompanied the
Il-76s.
For the Russia-China military relationship, PM-05 marked a new stage in which the sale
of "software" compliments the already extensive "hardware" sales relationship. Russian
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reports indicate that it was China that paid for the participation of Russian forces.
Through this and successive exercises, the PLA will acquire a level of military experience
that is short of war, but is still far better than it can achieve through domestic exercise.
Both Russia and China have stated their desire for future exercises and it can be
expected they will be increasingly complex, and thus of greater value to the PLA. For
Russia, PM-05 was mainly an opportunity to enhance its ongoing weapon sales efforts
and a more problematic exercise in great-power politics. Russian President Putin
received some criticism at home for potentially linking Russia to future dangerous
Chinese military endeavours; Russia had earlier rejected China's wish to hold the
exercises in Nanjing, opposite Taiwan. But Putin is likely to have pushed for this exercise
in order to signal to the US that Russia could increase its global leverage by moving even
closer to China. In some quarters PM-05 was credited with helping push North Korea to
accept the 19 September statement of principles regarding Korean nuclear
disarmament, thereby demonstrating China's growing influence in Asia. But for Asian
countries, especially Japan and Taiwan, PM-05 serves to demonstrate China's rapidly
growing military threat.
Soon after PM-05 the PLA conducted and exercise called 'Northern Sword' and invited a
large number of observers from the military attaché community in Beijing. This exercise
featured airborne drops and use of light buggies for transporting airborne troops on the
ground. In August 2006 'Northern Sword 2006' took place, which reportedly featured up
to 20,000 troops. This exercise, however, was a demonstration of joint forces
capabilities in that air force, Second Artillery and People's Armed Police forces were
included.
In late 2006, the PLA began to undertake formal foreign deployment for its ground
forces. From December 11 to 18 2006 approximately 190 personnel were transported
on PLA Air Force Il-76 transports to the Abbottabad area of Pakistan to conduct
"Friendship 2006," a joint PLA-Pakistan anti-terrorism exercise that returned a Pakistani
anti-terrorist force that deployed to China in August 2004. The exercise marked the first
such foreign deployment by the PLA, and came at a time when Beijing was seeking to
assure Islamabad of support while at the same time it was quickly improving relations
with India. But Delhi has also been keen to improve formal relations with the PLA and in
December 2007 sent a small group of army troops to conduct physical training and
confidence exercises in Kunming,Yunnan, with plans for China to return a visit of a small
PLA Army group to India in October 2008. In early 2008 Indian sources indicated that
the Indian Air Force and the PLAAF could begin to exchange visits of their respective
aerobatic teams.
Though it did not involve naval or amphibious forces, the August 9-17, 2007 Peace
Mission-2007 (PM-07) gave the PLA its first opportunity to project a major combined
army/air force into a neighboring country, the Chelyabinsk region of Russia. Senior
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Colonel Lu Chuangang, chief of the command group for the exercises noted that Peace
Mission 2007 force included "one army task force, one air force task force and one
integrated support task force," indicating that future projection exercises would involve
service based units and perhaps a new joint logistics support unit. Lu also noted the
exercise would allow the PLA to test four key capabilities: "capability in long distance
mobility...capability in joint operations...capability in carrying out precision
engagement...[and] capability in long distance integrated support." The PLA deployed a
force of 1,600-1,700 troops from the 31st Group Army from the Nanjing Military Region
opposite Taiwan, the 36th Group Army near Beijing, the 15th Airborne Army, and air
force units. The Mechanised units were equipped with two new versions of the six-
wheel WZ-551 armoured personnel carrier. One version is armed with a 25mm
automatic cannon, and the other, armed with a 105mm gun, marketed as the
"Assaulter." These were transported by train over a distance of 10,300km. Their air
support was provided by 16 HAIG WZ-9 and WZ-9G attack helicopters, plus 16 Mil Mi-
8/17 transport helicopters, which deployed over 2,700km air route by air over two days.
Airborne forces consisted of about 120 troops and ten combat vehicles, including the
new ZLC-2000 airborne tank. These were transported on six Ilyushin Il-76MD transport
aircraft. Finally, a PLA Air Force regiment dispatched eight new Xian JH-7A fighter
bombers, each using three drop tanks to extend their range.
PM-07 was also significant in terms of regional politics and PLA doctrinal development.
The exercise was timed to coincide with a major summit of the SCO, and a firepower
demonstration was observed by Hu Jintao and former Defense Minister Cao
Gangchuan. In sharp contrast to 2005, the PLA took a small but decisive step toward
greater joint operations in the 2007 exercises by appointing as commander of the
deployed force an Air Force General, Xu Qiliang, who is also a Deputy Chief of the
General Staff Department. This may be the first time an Air Force General was given
such a high profile command opportunity and augurs well for greater PLA comfort with
"joint" commands. Xu assumed command of the PLA Air Force soon after the exercise.
In 2007 Asian sources also noted that China was proposing the idea of holding
multilateral military exercises with the members of the Association of Southeast Asian
Nations, an idea that reportedly was not supported by Vietnam. In May 2007 the PLA
Navy sent a Jiangwei-II class frigate to participate in a multilateral naval exercise hosted
by Singapore, and during that time Singapore government sources were open to the
idea of including Chinese forces in joint patrols to secure the Straits of Malacca.
Prompted by its inability to respond to the humanitarian relief demands of the late
2004 Asian tsunami, and then by its crisis response to the May 2008 Sichuan
earthquake, it is likely that the PLA may invest far more in disaster relief capabilities,
which may lead to greater involvement in humanitarian relief. In August 2007 China
launched its first Type 970 large hospital ship, which would enable more effective
humanitarian operations.
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Defence structure
At the apex of the Chinese military establishment stand two bodies, the state and
Central Military Commissions (CMC) Party. The 1982 constitution created the state CMC
as the organ subordinate to the National People's Congress (NPC) responsible for
'directing the country's armed forces'. It co-ordinates state military affairs and directs
and commands the armed forces. It consists of a chairman, who is also the commander-
in-chief of the armed forces, three vice chairmen and six members. In September 2004,
CMC membership was expanded by three, to include the commanding officers of the air
force, navy and Second Artillery, reflecting ongoing PLA efforts to better implement
new joint doctrines.
The CMC party, elected by the Central Committee, exercises de-facto, authoritative
policy-making and operational control over the military. The CMC party has the identical
membership as the state CMC, a result of the fact that the military has been under the
Party's control since its inception and its senior leaders have all been Party members.
Lest there be any confusion between the Party and State organs of military leadership,
the 2006 defence White Paper makes clear: "China's armed forces are under the
leadership of the Communist Party of China (CPC). The Central Military Commission
(CMC) of the CPC and that of the People's Republic of China (PRC) are completely the
same in their composition and in their function of exercising leadership over the armed
forces. The CMC chairman has overall responsibility for its work."
This small body facilitates and supervises personal interaction among the senior
members of the PLA leadership, manages the external activities of the Ministry of
National Defence, co-ordinates bureaucratic interactions among the core military
agencies and their subordinate systems, supervises the daily operations of the CMC
departments and oversees the CMC ad hoc sub-committees, which study specific policy
issues or problems. It also serves as the key co-ordination and evaluation point for
strategic research and assessments developed within the defence bureaucracy. In the
past, the General Office was directly subordinate to the CMC secretary general, a
position that was eliminated with the purge of Yang Baibing in the early 1990s.
Ministry of Defence and Commission for Science, Technology and Industry for
National Defence (COSTIND)
After the CMC, the next level of military bureaucracy includes the Ministry of National
Defence and COSTIND. Both exist within the state apparatus and operate formally
under the joint control of the CMC and the State Council. Neither has any operational
control over the PLA. The Ministry of National Defence is responsible for administrative
planning, manpower, budget, foreign liaison and training materials, but possesses no
policy-making or implementation authority. However, some overlap is possible
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depending on the national defence minister. The current Minister of National Defence,
Cao Gangchuan, spent most of his career in the General Equipment Department and
carries a great deal of authority with regards to modernisation issues to his new
position. It appears that he continues to exercise influence regarding foreign arms
acquisition.
Before 1998, COSTIND was the primary organisation responsible for military research
and development, weapons procurement and co-ordination of the defence and civilian
economic sectors. It also had a role in the import and export of military arms and
technology and was the primary bureaucracy charged with technical intelligence-
gathering overseas. Following the 1998 reforms, COSTIND lost its leadership position in
the PLA military-industry complex to the CMC's General Equipment Department.
COSTIND had been blamed for the slow progress in a range of indigenous military
development programmes.
The GSD is the most important of the PLA's general departments. It carries out staff and
operational functions of the PLA and holds significant responsibility for implementing
military modernisation plans. Within the defence hierarchy it conveys policy directives
downwards, translates national security and defence policy into specific responsibilities
for the various subordinate functional departments of the PLA, oversees policy
implementation on behalf of the CMC and commands China's military force operations
in wartime. In mid-2004 the GSD was made to conform to the PLA's new joint warfare
doctrines by the inclusion of a General-level officer from the air force and navy as
Deputy Chairman.
The GSD also performs important organisational functions such as procurement,

operational planning and intelligence. Headed by the chief of the GSD, the department
serves as the headquarters for the ground forces and contains directorates for the three
other armed services: air force, navy and Strategic Missile Force. The GSD includes
functionally organised sub-departments for artillery, armoured units, engineering,
operations, training, intelligence, mobilisation, surveying, communications,
quartermaster services and education.
The GSD's Second Department is a key centre for China's foreign intelligence, both
covert operations and analysis. The GSD's Third Department has long controlled
electronic and signals intelligence but more recently has helped develop and lead
China's Information Warfare/Computer Network Operations capabilities. The Third
Department also deploys assets to Myanmar and Cuba and conducts covert intelligence
gathering operations.
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The GPD is responsible for ideological indoctrination, political loyalty, morale, personnel
records, cultural activities, discipline and military justice. Organisationally, the GPD
provides the PLA with its party structure. The director of the GPD oversees a system of
political commissars assigned to each echelon in the PLA. One of the primary tasks of
the political commissar is the supervision of the party organisation through party
committees at the battalion level and above or through party branches at the company
level. In the late 1980s, under the guidance of Yang Baibing, the GPD was able to exert a
considerable amount of political influence throughout the defence establishment.
In the aftermath of Tiananmen Square, the GPD's role in elite politics was strengthened
when Yang was appointed secretary general of the CMC. Rumours of an institutional
rivalry between the GPD and the GSD remain prevalent. Following the purge of the Yang
family, the GPD's influence was significantly curtailed, but not eliminated. It still exerts
an indirect but potentially major influence on defence policy through its role as political
and ideological watchdog at all levels of the military. Moreover, its control over
personnel selection at all levels of the PLA accords it respect within the high command.
The GLD is the least politically influential of the three general departments. Headed by a
director, the GLD is responsible for production, supply, transportation, housing, pay and
medical services. Historically, most of this support came from the civilian populace and,
before the establishment of the GLD, it was organised most frequently by commissars.
In the mid-1980s, the GLD was downsized and any influence it had garnered within the
high command was dissipated. For this reason, Jiang Zemin used the GLD in the early
1990s to establish his foothold within the high command.
General Equipment Department (GED)
In April 1998 the CMC established the GED, also known as the General Armament
Department. This measure brought a new change to the system of 'three general
departments' of the PLA which had been in place for four decades.
Before the establishment of the GED, the PLA's weapons and equipment management
had also gone through change, from management by the General Staff Headquarters to
management by the GLD and then back to management by the General Staff
Headquarters. In May 1953 the CMC decided that a Weapons and Equipment Planning
Department be set up in the General Staff Headquarters (later renamed the Equipment
Planning Department). The first department head was Wan Yi. In October 1969 the
Equipment Planning Department of the General Staff Headquarters merged into the
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GLD. In April 1975 the Equipment Department of the General Staff Headquarters was
reinstituted.
Civil-Military Relations
PLA-Chinese Communist Party relations are a consequence of China's revolutionary

history and their complex symbiosis. In theory it is the "Party which commands the
gun," but in reality it may be whoever commands the military ultimately commands the
Party.
In contrast to the Soviet experience, the "Red Army," formed in 1927, later named
People's Liberation Army in 1948, existed long before the 1949 revolution that put the
CPC in power. As the top military leader during the revolution, the post 1949 PLA
accepted Mao's absolute leadership until his death in 1976. This personal symbiosis
declined appreciably during the 1990s as Deng Xiaoping and then Jiang Zemin ushered
in a technocratic leadership to achieve China's economic transformation. Deng was the
last "Paramount Leader" to have exercised military leadership during the Revolutionary
period, serving as a Political Commissar to the Red Army commander, achieving what
his daughter described as an equivalent four-star general's rank by 1949. So the PLA was
quick to accept his authority when he became leader of the CPC in 1978 and Chairman
of the CMC in 1981.
Subsequent Paramount Leaders and CMC Chairmen Jiang Zemin and Hu Jintao have
lacked military experience and, as a consequence, both have had to devote much time
to cultivating top PLA leaders, gaining loyalties via control of top promotions and
cultivating an image of being close to the PLA rank and file through frequent visits to
military units that are broadcast though the party-state propaganda machinery. This
lack of personal gravitas has led the PLA to prefer that its CMC Chairman also benefit
from the power of being Party leader. Whereas Deng's only formal post during most of
the 1980s was CMC Chairman, Jiang's attempt to wield power by retaining the CMC
Chairmanship only lasted two years after he was succeeded as Party Secretary General
by Hu Jintao in 2002. It was the PLA which was most uncomfortable with this period of
divided chains of command.
There are indications that despite his nearly 10 years on the CMC, first as Vice Chairman
starting in 1998 and then as Chairman beginning in 2004, there may still be tension
between top officers loyal to Hu Jintao and those who retain residual loyalty to Jiang
Zemin. Some Chinese reports indicated that the former Minister of defence, Cao
Gangchuan, led the "pro-Hu" faction in the top military leadership while principle CMC
Vice Chairman, Guo Boxiong, retains a residual loyalty to Jiang. While such friction poses
no threat to the fundamental CPC/-PLA relationship it does reflect the factional nature
of politics within China's essentially Leninist political structure.
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During the rule of Mao Tse Tung the PLA's leadership was heavily politicised and the PLA
was a key contributor to the "cult" of Mao; loyalty to Mao was the main criteria for high
leadership. Following Deng's ascension in 1978 the trend has been to sustain the PLA's
total loyalty to the Party while allowing the PLA to become more "professional" in the
sense that merit and achievement now play a much greater role in advancement than
political favour. To be sure, the Party demands and receives regular statements of
loyalty from the PLA but in return the Party is very careful to meet the material and
budgetary needs of the PLA, to give PLA leaders a key voice in major foreign policy
decisions and cultivate the image of Party leaders as caring leaders of the military.
But in many ways that stem from its dominant role during the Revolutionary period, the
PLA itself can be considered a distinct "power faction" even though in theory it is strictly
loyal to the Party. While the Party maintains control over high leadership appointments
the PLA has by and large existed as an authority onto itself, at times permitting gross
corruption, and even generating foreign policies over which "civilians" like the Foreign
Ministry, or perhaps even top Party leaders, have little control. For example, which CPC
leaders were likely well aware of the PLA's successive anti-satellite tests starting in
2005, which succeeded to great shock in early 2007, many sources suggest that top
Party leaders profit from PLA sales of missile and even nuclear technologies. This
creates incentives for counterproductive behaviour beyond the control of "civilians."
The PLA-CPC relationship experienced its most recent defining event during the 3-4 June
1989 Tiananmen Square massacre. In the face of growing and persistent protests for
political accountability and reform by students and others gathered in Beijing's
Tiananmen Square, Deng Xiaoping and other Party elders decided they posed a threat
to the continuation of Communist Party rule and ordered PLA and Police units to
violently suppress the assembly. Deng ordered military preparations starting on 25 April
and declared martial law on 20 May. By the time operations commenced the PLA had
gathered about 50,000 troops, from 14 of the PLA's then 20 army groups, plus to two
airborne brigades, but mainly from Beijing area units like the 38th and 27th group
armies. Chinese government sources place the number of deaths in the hundreds while
the International Red Cross estimated 2,700 civilian deaths, and a NATO Intelligence
later estimated 6,000 to 7,000 civilians and 1,000 soldiers died over several days of
fighting.
This event not only strengthened the CPC-PLA's alliance, it profoundly influenced
China's domestic and foreign political directions. PLA representation increased in the
Central Committee and in the Politburo. Political and military leaders who supported
the crackdown profited. Jiang Zemin's elevation from Shanghai Party boss was partially
due to his rapid support for the crackdown. Deng's decision to anoint Hu Jintao to be
Jiang's successor has been said to have been influenced by Hu's leadership in imposing
martial law and facilitating a similar military crackdown in Tibet in March 1989. General
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Chi Haotian, who led the military operations, would become Minister of Defence and
General Zhang Wannian, leader of the paratroopers who were particularly zealous,
would later rise to first Vice Chairman of the CMC.
Post Tiananmen Square, the CPC began to support an ambitious program of

transformation for the PLA as it broke with the West following the post-Tiananmen
arms embargoes by the US and EU, instead turning to post-Soviet Russia for most of the
military-technical resources to modernise the PLA. The CPC has also been attentive to
the PLA's nationalist political-military ambitions, be it eventual forcible unification with
Taiwan, increasing competition with the US and the building of strategic military
capabilities for more distant power projection.
Despite their intense mutual reliance the CPC has sought to assert its control over the
PLA. By the mid-1990s it became clear to the CPC that the PLA's large and growing non-
military related economic holdings were detracting from its primary military missions. In
1998 the PLA implemented far reaching logistic reforms which removed many to most
non-military firms from the ownership of the PLA or PLA officers. In many cases control
was shifted to spouses or relatives but the effect on the PLA was dramatic. This forced
the CPC to justify major increases in spending on salaries and standards of living for PLA
members, in part to compete for talent with the better salaried civilian economy. Pay
raises being suggested for later 2007 would double the salary for Colonels, for the first
time making their pay comparable with a government official of similar rank. In
addition, the PLA has "outsourced" many medical, laundry and canteen functions
formerly controlled by PLA officers. Food and housing allowances have been increased.
The CPC has also at times used disasters and corruption scandals to impose controls
over the PLA. The 2003 Northern Fleet submarine disaster which saw 70 crew members
die was used by Hu Jintao to assert his authority over the PLA by pressing for swift
removal of fleet commanders. In addition, the 2006 trial of former East Sea Fleet
Deputy Commander, and reported future PLAN commander, Vice Admiral Wang
Shouye, on charges of flagrant corruption (mistresses testifying against him), has been
viewed as an effort by Hu to wrest power in the PLA from Jiang Zemin, for whom Wang
was reportedly a protégé.
During his major 1 August 2007 speech marking the 80th Anniversary of the PLA, Hu
Jintao stated, "The PLA is forever at the Chinese Communist Party's command." This is
certainly the Party's desire but as far back as the Tiananmen protests, there have been
suggestions from some Chinese that the PLA's obedience not be to a political party and
its leader, but to the state in legally defined institutional structures. Early this decade,
perhaps in response to defence reforms in Taiwan which formally placed its military
under civilian leadership and loyalty to the state, the Party has led a high-profile
campaign against the ideas of "de-Partyfication" or "professionalisation" of the PLA. In a
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CPC journal in July 2007 Cao Gangchuan criticised these notions. While this campaign
serves the Party's purposes in exposing potential sympathisers, the fact it persists
indicates that some in the PLA remain attracted to these ideas, perhaps because they
do not view the CPC as the best or even as a permanent guarantor of the PLA's
interests.
Despite such rumbles there is little to suggest that the CPC-PLA alliance faces a
fundamental challenge. Should that occur it will most likely follow other sources of
rebellion against the CPC which are not out of the question, given the vast economic,
social and environmental challenges faced by the Party's leadership, amid a thin
legitimacy which rests primarily on sustaining breakneck economic growth and police
suppression. CPC weakness in the face of challenges to key PRC "sovereignty" issues
such as Taiwan could present another likely source of possible PLA dissent. Suggestions
that the PLA behaves in a "rogue" manner, such as testing anti-satellite weapons
without the knowledge of the Foreign Ministry, does not necessary mean top CPC
leaders were unaware of this PLA exercise. If reports are correct that the January 2007
ASAT demonstration was the PLA's third attempt, it stands to reason that CMC
Chairman Hu Jintao was fully informed.
Chain of command
China's military is unusual in that its existence predates the formation of the state; the
PLA was founded in 1927, more than 20 years before Mao declared the People's
Republic on the Tiananmen rostrum in 1949. As such, the PLA is in a sense the armed
wing of the Chinese Communist Party (CPC), controlled by the party's Central Military
Commission (CMC) rather than the ministry of defence, and has a political as well as a
military role. Therefore, a major party event, such as the NPC, is by definition a major
event for the PLA. The 16th National Party Congress in November 2002 elected a new
CMC, and in the weeks that followed, it appointed new personnel to key positions in the
PLA.
The transition in PLA leadership was completed in September 2004 at the 4th Plenary
Session of the 16th Chinese Communist Party Central Committee, when Hu Jintao
succeeded Jiang Zemin as Chairman of the CMC and Jiang finally retired fully. During his
time in Tibet Hu earned the respect of the PLA by demonstrating his ability to work with
them to advance the Party's goals for the autonomous region, which still harbours great
resentments against its forcible inclusion into China in 1954.
There were persistent reports of tensions between Jiang and new Secretary General Hu,
and of higher ambition by Jiang's closest protégé, Zeng Qinghong. This tension was
made evident during the April 2003 accident resulting in the loss of 70 crew members
on Ming-class submarine No. 361. It was Hu's intervention that led to a high-profile
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public investigation and the dismissal of the commanders of the navy and the Northern
Fleet. Jiang had also sought to affirm the support of subordinate officers to him, as
reports increased in 2003 and 2004 that Hu had become more involved in military
affairs in preparation for Jiang's retirement from the CMC. It is also significant that Zeng
Qinghong was not appointed to the CMC; Hu was able to demonstrate his ascendance
over a potential rival. In mid 2005, however, there was increasing indication that rivalry
had been replaced by increasing co-operation between the two, especially after Jiang's
formal retirement.
Central Military Commissions
Chairman: Hu Jintao
Vice Chairman: General Guo Boxiong
Vice Chairman: Xu Caihou
Member: Liang Guanglie
Member: Chen Bingde
Member: Li Jinai
Member: Liao Xilong
Member: General Chang Wanquan
Member: Jing Zhiyuan
Member: Wu Shengli
Member: Xu Qiliang
Membership of the CMC, the top military body, is dependent on membership of the
Central Committee of the CPC. The PLA holds 40 seats on the 198-seat CPC Central
Committee.
At the November 2002 National Party Congress, existing CMC member generals Guo
Boxiong and Cao Gangchuan were promoted to the two remaining vacant positions of
vice chairman, following the departure of Defence Minister General Chi Haotian and
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General Zhang Wannian, both of whom were well into their seventies. This represents
the end of the generation that began its military career in the revolution, and the
concurrent shift in attitude and emphasis, as well as in military approaches. The old
guard learned its trade when what is sometimes referred to as 'human wave' tactics of
the Korean War were in the ascendant. The current fourth generation is far more
attuned to the requirements of high-technology warfare and has busily led the PLA
through the initial stages of fundamental reforms in doctrine, training, logistics,
personnel professionalisation and modern equipment development and acquisition.
The CMC undertook a fundamental political and operational reform in September 2004
when it increased its membership to 11 by elevating the commanders of the navy, air
force and Second Artillery for the first time to member status in addition to the
commander of the army. The new members were Army General Chen Bingde, who
became director of the General Equipment Department, Navy commander
General/Admiral Zhang Dingfa, Air Force commander General Qiao Qingchen and
Second Artillery commander General Jing Zhiyuan. The final elevation of the high-tech
service commanders serves to formalise the PLA's shift from a traditionally army-
dominated military to one striving to fight modern high-technology wars. It is also
consistent with new joint-warfare doctrines conceived during the later 1990s.
The 17th Party Congress in October 2007 saw further evolution in the CMC. Following
the Party Congress the new CMC lineup included first Vice Chairman Guo Boxiong and
second Vice Chair Xu Caihou. Former Defence Minister Cao Gangchuan was retired from
the Politburo and Central Committee, but stayed on as Defence Minister until the
March 2008 National People's Congress, when he was succeeded by General Liang
Guanglie, who had emerged third in the CMC hierarchy. Succeeding Liang as Director of
the General Staff Department was General Chen Bingde. Succeeding Chen as director of
the General Armament's Department was General Chang Wanquan, former commander
of the Shenyang Military Region. PLA Air Force Commander Qiao Qinchen retired to be
succeeded by former Deputy General Staff Department Director Xu Qiliang.
Admiral/General Wu Shengli had previously succeeded Zhang Dingfa following his death
in early 2006.
Also of some significance, the 17th Party Congress did not see the appointment of a
civilian CMC Vice Chairman, a promotion that in 1999 had heralded Hu Jintao's position
as the successor to Jiang Zemin. Current Politburo Standing Committee Member and
Vice President Xi Jinping is widely reported as having been groomed to succeed Hu,
though an appointment as CMC Principle Vice Chairman would confirm that position.
The promotions since 2002 also show an increased outreach toward future war fighters
and experts on future war with Taiwan. Liang Guanglie was a commander during the
1979 Vietnam incursion and joined the CMC directly from command of the Nanjing
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Military Region. Chen Bingde and Jing Zhiyuan were key leaders during the 1995 to 1996
exercises that sought to intimidate Taiwan. General Chen, also a veteran of post-1979
fighting with Vietnam, commanded the 1st Group Army, one of the first army units that
would likely be used to invade Taiwan. Wu Shengli has also had recent commands in the
South Sea Fleet and East Sea Fleet, which are heavily focused on Taiwan. Xu Qiliang was
also once based in the Nanjing Military Region. Other PLA members of the Central
Committee with Taiwan-area related experience include Deputy Chief of Staff Ma
Xiaotian, General Political Department Deputy Director Liu Yongzhi, Nanjing Military
Region Commander Zhao Keshi and Political Commissar Chen Guoling, and Lanzhou
Military Region Political Commissar Li Changcai. That said, no CMC commander has had
the experience of leading a real major military campaign featuring modern combined
arms warfare, in stark contrast to most of their US counterparts.
General Guo Boxiong
Following on from Zhang Wannian, General Guo Boxiong has become the senior 'war-
fighting' PLA figure on the CMC, having assumed the role of the principal vice chairman
in September 2004. A former commander of the Lanzhou military district, which covers
the sensitive Xinjiang province, General Guo (born in 1945), is responsible for the
running of the CMC. A relatively young man, he has been promoted ahead of more
senior figures through Jiang's intervention. He is credited with introducing the 'blue
army' concept to the PLA to enable more realistic exercises designed to expose PLA
weaknesses. His most recent job was as the deputy to the chief of general staff. In July
2006 General Guo made a high-profile visit to the United States during which he met
with former Secretary of Defence Donald Rumsfeld and with President George W Bush.
General Cao Gangchuan
Following the October 2007 17th Party Congress General Cao Gangchuan was not
reinstated into the new Central Committee, meaning that he also did not retain his
Politburo position. But despite his loss of real-power Party positions it is likely he will
continue as Defence Minister under his "state" portfolio until the March 2008 National
People's Congress. Defence Minister Cao met with US Defense Secretary Robert Gates
in early November 2007 and travelled to Thailand in early December 2007. General Cao
(born in 1935), took over the office of defence minister at the NPC from March 2003. He
is a technocrat with a career in ordnance and procurement rather than direct military
command. Control over foreign arms purchase expenditures, as well as the sale of
nuclear and missile technologies to client states, allowed Cao to benefit from patronage
politics that accelerated his career. Both as GED director and as defence minister he has
maintained an active profile. In 2002 he was identified as the first director of China's
manned space program and during China's first manned space flight on 15 October
2003, astronaut Yang Liwei spoke to Cao, calling him "chief". During a December 2003
525
visit to Russia he took an active role, visiting shipyards and air bases and negotiating
future arms purchases. He was also very visible during the unprecedented August 2005
"Peace Mission 2005" China-Russia military exercises. While the defence minister has
been seen as a largely ceremonial position, Cao can be assumed to be actively involved
in the breadth of the PLA's modernisation.
General Xu Caihou
General Xu Caihou (born in 1943) became the third CMC vice chairman in September
2004. Thought to be close to both Hu Jintao and Jiang Zemin, Xu serves as an important
liaison between civilian and military leaderships, and between the party and the
military. Much of his career was spent in the Sheyang Military Region with a strong
emphasis on political work, including a 1985 appointment as Political Department
director of the 16th Group Army. In 1992 he was appointed as an assistant to the
Director of the CMC's General Political Department, for a brief period was director of
the Liberation Army Daily and was deputy director of the GPD in 1993. After then
moving to be Political Commissar of the Jinan MR, in 1997 he became a member of the
CMC, serving as executive deputy director of the GPD and the CMC's Discipline and
Inspection Commission. He took over leadership of the GPD in 2003.
General Liang Guanglie
Widely reported as the new Defence Minister following the 17th Party Congress in
October 2007, former General Staff Department Director General Liang Guanglie had
not received a formal appointment by the end of 2007, and had not yet been promoted
to CMC Vice Chairman. Liang gained excellent party loyalty credentials for having
commanded a unit in the 1989 Tiananmen Square crackdown. Liang has the distinction
of having actual combat experience, as well as being an expert on Taiwan, having been
elevated to the CMC in 2002 directly from being commander of the sensitive Nanjing
Military Region (MR) opposite Taiwan. Before that he commanded the sensitive
Shenyang MR on North Korea's border, and was deputy commander of the Beijing MR.
In 1979, during the PLA's punitive war against Vietnam, Liang was promoted to deputy
division command and then to division commander. When he commanded the 20th
Group Army he helped lead army reform from divisions to brigades and commanded
the army's first mechanised brigade. While in command of the Nanjing MR, he oversaw
the writing of a book titled Sea Crossings And Landing Operations. Liang's reputation
has been created in successive operational commands and through his focus on Taiwan.
China's late November 2007 decision to bar US warships from Hong Kong would have
been consistent with Liang's hard line on Taiwan. But as Defence Minister he would lack
the exposure to international relations and arms sales that made his predecessor
General Cao Gangchuan unique.
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General Chen Bingde
Army General Chen Bingde (born 1941) was elevated to Chief of the General Staff
Department following the 17th Party Congress in October 2007. As such, Chen would be
the primary operational commander of PLA forces during a major war. He served as
director of the General Armament Department during the September 2004 CPC plenum.
In this capacity Chen is also the overall commander of the Chinese manned space
program. Though this appointment surprised some observers, Chen has had a colourful
career and brings to his post both operational background from the Taiwan theatre and
a demonstrated interest in developing the high technology potential of the PLA. Chen
was appointed commander of the Nanjing military region in January 1996 and thus was
its commander during the March 1996 exercises to intimidate Taiwan. Before being
selected for the CMC, Chen was the commander of the Jinan MR. Some reports suggest
his promotion was due to the success of an experimental joint logistics programme in
the Jinan MR.
General Li Jinai
The director of the General Political Department is General Li Jinai, who took over in
2004 after the previous GPD Director General Xu Caihou was promoted to be one of the
three vice chairmen of the Central Military Commission. Li had served as the director of
the General Armament Department from 2002 and was previously the Political
Commissar of the General Armament Department under General Cao Gangchuan
starting in 1998. Li has extensive background in the Second Artillery starting from 1969,
rising to deputy political commissar of Base 54, which controls inter-continental ballistic
missiles directed against the US. From 1985 to 1990 he served in the General Political
Department, rising to deputy director. From 1992 to 1998 he served in COSTIND,
serving as Political Commissar from 1995.
General Liao Xilong
The director of the General Logistics Department is General Liao Xilong. In 1995 Liao
was appointed commander of the Chengdu Military Region, and in 1985, was appointed
as deputy commander of the Chengdu MR, at the time the youngest officer ever to be
appointed to that position. In 1984 he was appointed commander of the 11th Army,
again the youngest officer at that time to serve at that level. In 1979 Liao led with
distinction the 31st Division in the war against Vietnam, occupying Laoshan and
Zheyinshan.
General Chang Wanquan
General Chang Wanquan joined the CMC as the new Director of the General
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Armaments Department following the 17th Party Congress in October 2007. As such he
will also serve as Director of China's manned space program, a command first
acknowledged by former CMC Chairman Jiang Zemin in 2002. However, his
qualifications for this technology development and weapons purchasing department are
not apparent, with his having served in operational command positions for most of this
decade. From 2004 Lt. General Chang served as the commander of the Shenyang
Military Region. From 2003 to 2004 Lt. General Chang was Chief of Staff of the Beijing
Military Region and from 2002 to 2003 was Chief of Staff of the Lanzhou Military
Region. For 2001 Major General Chang commanded the 47th Group Army in the
Shenyang Military Region. In April 2006 he accompanied former Minister Cao
Gangchuan on a visit to Pyongyang.
General Wu Shengli
Early 2006 reports that PLAN Commander Zhang Dingfa was in poor health became
confirmed in August 2006 with the announcement of his succession by former South
Sea Fleet Commander Vice Admiral Wu Shengli. His "election" to the Central Military
Commission occurred during the October 2006 6th Plenary Session of the 16th
Communist Party Central Committee, and Hu Jintao promoted him to full General in July
2007. Shengli Wu is considered an expert on anti-carrier warfare. Previously, he was the
deputy commander of the East China Sea Fleet, which means he brings a heavy Taiwan
focus to the PLAN command. In 2004 he was the first PLA Navy officer to be elevated to
Deputy Chief of the General Staff Department, a key move toward "jointness." In
September 2003 he accompanied Chief of the General Staff of the PLA, General Liang
Guanglie, on a trip to Pakistan, Brunei, and Malaysia. In April 2007 Wu went to the US to
visit the US Naval Academy and to meet with US Navy leaders in Washington, where he
was asked whether China would be willing to join the US led "Thousand Ship"
international naval co-operative program.
General Xu Qiliang
General Xu Qiliang (born 1950) was appointed to the CMC during the 17th Party
Congress in October 2007, having been promoted to PLA Air Force Commander in
September 2007. From 2004 Lt. General Xu served as a Deputy Director of the General
Staff Department, the first PLA Air Force officer to do so. There he helped embody PLA
advances in joint force doctrines by leading the first ever foreign PLA joint forces
deployment as part of the Peace Mission 2007 exercises. From 1999 to 2004 Xu
commanded the air force of the Shenyang MR. Prior to 1999 he also served in the
Nanjing MR. Xu earned fame in the PLA for having earned the position of Chief of Staff
of the Air Force at the young age of 44. Xu joined the PLA and the CPC in 1967.
Strategic weapons
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China now maintains one of the world's most active strategic nuclear and missile
weapon modernisation programs that encompass land, sea and air launched weapons,
and China is researching and developing space technology. It is also increasingly likely
that China will field a missile defence system after 2020. While China has long
enunciated a public nuclear and space doctrine that embraces the concepts of "No First
Use" and "Minimal Deterrent," as well as "No Weapons In Space," its exact nuclear and
military space doctrines and the true disposition of its nuclear and space orders of
battle are among the most closely held secrets of the PLA. In contrast to the missile
forces of the US and Russia, China's Second Artillery also has very important and
increasing non-nuclear warfighting missions and capabilities.
The main missions for China's strategic and space forces include deterrent and
warfighting missions. But in the event of a major military campaign, such as an attack
against Taiwan, the PLA would seek to integrate non-nuclear missile and space strikes
by the Second Artillery and other services into a complex co-ordinated joint-forces
warplan.
To ensure that it can complete its missions, the PLA is now deploying three types of
land-based Intercontinental Ballistic Missiles (ICBMs), is about to deploy a second-
generation Submarine/Sea Launched Ballistic Missiles (SLBM), is in the process of
building up its Intermediate-Range Ballistic Missile (IRBM) and Short-Range Ballistic
Missiles (SRBM) missile forces, is now deploying new mobile long range Land Attack
Cruise Missiles (LACMs), and is testing and building new ground-launched direct ascent
anti-satellite interceptors. China's main missile deterrent-warfighting challenge comes
from the United States. China is hard pressed to maintain sufficient numbers and
sophistication to overcome anticipated US national and regional missiles defences. US
missile defence co-operation with Japan and Taiwan is of most concern to the utility of
the PLA non-nuclear missile forces, while Beijing is also very wary of the US extending
missile defence co-operation to India, South Korea and Australia. To overcome these
challenges China is gradually building up its missile numbers in all categories. But less is
known about whether China is going to place multiple warheads on its new DF-5 Mod 2
and DF-31A ICBMs, and JL-2 SLBMs, a move that could allow China to very quickly
increase its nuclear warhead numbers. To overcome Taiwan's missile defences it now
targets the island with over 1,000 SRBMs and over 200 LACMs, and is developing
cheaper artillery rockets into SRBMs. From late 2006 to mid 2007 China revealed a new
3,000km range version of the DF-21 with multiple warheads and two new versions of
the DF-15 SRBM.
China's successful destruction of a polar orbit weather satellite on 11 January 2007, on

its third attempt, caps a programme thought to go back three decades to develop anti-
satellite weapons. While China has been aggressive in leading diplomatic efforts to ban
space weapons, it is also clear that the PLA views military space capabilities as an
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essential component of China's larger space power ambitions, which include aggressive
military, civil and scientific programmes. Initial direct ascent interceptors based on the
DF-21 IRBM will in the future likely be joined by high orbit capable systems based on
new mobile solid fuel ICBMs and a new air launched space launch vehicle, as well as
high energy laser systems. China's Shenzhou manned space capsule program has set a
precedent for future Chinese manned military space programmes. China's direct ascent
ASAT program may have aided the development of its new anti-ship ballistic missiles,
which was tested in 2006.
While China has traditionally refused to expose and limit its nuclear forces by joining
arms control agreements, it protested vehemently when the US decided to withdraw
from the Anti-Ballistic Missile Treaty. China has joined the Nuclear Non Proliferation
Treaty, the Chemical Weapons Convention, the Comprehensive Nuclear Test Ban Treaty
and in 1996 China announced an end to its nuclear weapons testing programme. China
spent much of the 1980s and most of the 1990s vigorously opposing US missile defence
initiatives, especially in Asia. But this decade its opposition has been muted. One reason
may be that China is beginning to master many missile defence technologies.
While China has promised to adhere to the Missile Technology Control Regime, it has
also enabled Pakistan to build successive solid fuel SRBMs and MRBMs and also LACMs.
China also provided critical help to enable Pakistan to build nuclear weapons, and some
of this knowledge has been proliferated to Iran and Libya. China has also been accused
of helping North Korea obtain advanced missile staging technology and has helped
provide direct and indirect missile technology assistance to Iran. In 2006 and 2007 the
US has sanctioned Chinese companies for assisting Iran's missile programs. China and
Turkey have co-developed a SRBM. China is a partner in Europe's Galileo navigation
satellite program and European officials would like additional co-operative
programmes, while the US has yet to overcome fears that such co-operation would
accelerate Chinese military space capabilities.
Political control over the nuclear forces is exercised by the chairman of the CMC. The
Second Artillery Corps comes under the operational control of the military supreme
command or General Staff Department. Nuclear missile-equipped submarines, nuclear
equipped bombers and other tactical nuclear weapons are also placed under the direct
control of the CMC during wartime. The PLA's Second Artillery Corps retains operational
control of China's land-based nuclear missiles. The PLA Navy retains operational control
over sea-based nuclear missiles while the PLA Air Force maintains operational control
over some nuclear weapon. Control of non-nuclear missiles likely devolves to Joint
Force commanders. Like nuclear weapons, space weapons would also fall under the
direct control of the CMC, while operational control is likely exercises by the
organisations under the General Equipment Department (GED) that control space
activities. There has been some reporting that China will form a separate "Space Force"
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and that the GED, Second Artillery and PLA Air Force have been jockeying over who will
control military space.
The Communist Party leadership requires the complete loyalty of its nuclear force
leaders and the Second Artillery, in particular, has long had a reputation of being a
highly educated force. The Party has been careful to promote the Second Artillery as a
prestige organisation with a powerful mission. China's political leadership has also given
nuclear, missile and space forces a high priority for funding over the last 15 years. It is
not possible to ascertain PLA spending in this area, but the development of three new
ICBMS, one new SLBM, new IRBMs and SRBMs, new LACMs plus anti-satellite weapons
indicates a substantial resource commitment.
There has been no reported instance of foreign deployment for the Second Artillery.
While location of Second Artillery Bases has been relatively constant, the internal
deployments of Second Artillery forces are consistent with military requirement to
strike potential adversaries. For example, Base 52 in Tonghua would support potential
operations on the Korean Peninsula or against Japan. But the most important internal
deployments for the Second Artillery are its bases and units dedicated to potential
operations against Taiwan. This buildup began in earnest in the mid-1990s in part to
compensate for the PLA's lack of modern precision strike aircraft. But a decade later,
Second Artillery SRBMs are more accurate, but are also increasingly complemented by
PLA Air Force fighters and bombers carrying PGMs, and the PLA Navy and the air force
also have accurate LACMs. It is also likely that the PLA army will deploy increasing
numbers of new longer range satellite-guided artillery rockets like the 200 km range
WS-2 and even longer range variants, adding yet another layer of PGMs available to PLA
campaign commanders.
In March 2008 the Pentagon reported that China had 315 to 355 DF-15 SRBMs and 675
to 715 DF-11 Mod 1 SRBMs. The large number of DF-11s indicates that they too now
arm Second Artillery units. DF-15 Mod 1 SRBMs that are mainly armed with non-nuclear
warheads. A small number of DF-15s may carry tactical nuclear warheads or new radio
frequency warheads. DF-15s are stationed in two brigades in the Nanjing MR opposite
Taiwan and include some newer longer-range DF-15 Mod 1s capable of reaching
Okinawa. Their missions are to destroy high-value fixed military and civilian
infrastructure targets. The PLA intends to co-ordinate non-nuclear Second Artillery
missile strikes with follow-on precision PLA Air Force strikes.
The development of highly accurate SRBMs and, very soon, Land-based Cruise missiles
(LBCMs), has meant that the army, navy and air force can also conduct non-nuclear
strategic strikes. The army controls one or two brigades of DF-11 Mod 1 missiles based
in Fujian Province and a unit on Hainan Island. The air force has some C-601-derived YJ-
63 LACMs that are launched from modified H-6 bombers. It can be expected that the
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Second Artillery, navy and air force will operate new, smaller Tomahawk-like LACMs .
Asian sources note that navy and air force LACMs will be based on the YJ-62 anti-ship
missile, while the Second Artillery's LACM will be built by a second firm.
Declared Policy
China's state secrecy and cultural abhorrence of revealing what is considered to be

sensitive data mean that there is very little concrete information about the
government's policy towards weapons of mass destruction. China has repeatedly stated
it adheres to a "No First Use" (NFU) policy that its nuclear weapons would only be used
as second strike systems but that they would be capable of 'the destruction of cities'.
Under the nuclear Non-Proliferation Treaty (NPT), which China signed in 1992, Beijing
agreed to prohibit the first use of nuclear weapons and to promote the establishment
of nuclear-free zones. However, in recent years the level of discussion in military
academic journals has raised concern that China may be adjusting its NFU policy,
especially to include for the more aggressive use of nuclear weapons to win a possible
war over Taiwan.
China's commitment to its "No First Use" policy has been undermined by its willingness
to promote ambiguity over how it may or may not use nuclear weapons in struggle to
control Taiwan. For example, Chai Yuqiu, a vice principal with the Nanjing Army
Command College, told the Ta Kung Pao newspaper in January 2008 that China's no-
first-use nuclear policy is not unlimited, saying, "The policy of not to use nuclear
weapons first is not unlimited, without conditions, or without premises," Chai also
noted, "China will never use nuclear weapons first, especially not to use nuclear
weapons against non-nuclear countries...When big powers equipped with nuclear arms
disregard the completeness of sovereignty and territory of Chinese people and make
frequent moves that are unconventional and hurt the fundamental interests of Chinese
people, however, it is not impossible to break such a strategy on tactical issues."
China has not yet employed either its nuclear or non-nuclear missiles in actual combat.
The closest China has come to employing its missiles were missile "demonstrations" in
1995 and 1996 near Taiwan.
From 21 to 23 July, 1995, PLA Second Artillery units fired six DF-15 SRBMs into a circular
area northwest of Taipei. The impact area was on a circular target ring with Taipei.
Taiwanese officials noted that the PLA moved the missiles to firing positions from their
base in Leping in late January 1995, about the same time that the Chinese government
was announcing a major new policy toward Taiwan with conciliatory elements,
illustrating how China might use political deception to cover military attacks.
The second demonstration took place in conjunction with an early PLA joint forces
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exercise in early March 1996. In a clear escalation from the July demonstration, the
March 1996 demonstration used two impact zones outside Taiwan's major ports of
Kaohsiung and Keelung. On March 8 the Second Artillery fired three DF-15 SRBMs, two
into the Kaohsiung zone and one into the Keelung zone. A second DF-15 was fired into
the Kaohsiung zone on March 13. At the same time the PLA conducted one of its first
major "combined arms" exercises.
The entire period from early 1995 through the March 1996 exercises marked a rich
period in which the Chinese leadership combined political and military power moves,
plus subtle and not so subtle psychological warfare to try to influence political actors in
Taiwan and the US, as well as intimidate public opinion. The current build up of missile
forces facing Taiwan, the development of anti-ship ballistic missiles, anti-satellite
weapons and non-nuclear radio frequency weapons were likely all accelerated following
the 1995 to 1996 confrontation over Taiwan.
US sources have also reported that close to the time of the March 2008 Taiwan
presidential election, the PLA moved SRBMs out of their bases in a manner meant to be
conspicuous to US intelligence satellites. Though a more subtle show of force than
during the 1996 election, it still showed an inclination of hostility toward Taiwan even
though the more pro-China leaning Kuomintang Party was widely expected to win.
In early January 1995 China called for the banning of all atomic weapons but it gave no
details of how the dismantling mechanism would work.
In May 1996 China announced its commitment to the prevention of nuclear

proliferation. It followed with announcements to cease nuclear testing and join the
Nuclear Test Ban Treaty. Prior to this decision China had caused great consternation in
its relations with the US and its Asian neighbours by ignoring the voluntary test ban
which has functioned since 1992.
In October 1994 China pledged to the US to abide by the Missile Technology Control
Regime (MTCR) accord but was immediately in violation of its pledge by its assistance,
through the 1990s and currently, of Pakistan's solid-fuel missile programme. Chinese
missile technology and engineering assistance has been critical in the success of
Pakistan's Shaheen-1, Shaheen-2 and Ghaznavi solid-fuel missile programmes. The
latter is a copy of the DF-11 Mod 1 SRBM, while the Shaheen-1 is an extended range
modification of the DF-11 Mod 1. The Shaheen-2 is apparently a unique design. Some
sources indicate that China has sold non-nuclear radio frequency warhead technology
to Pakistan. Since 2000 in reports mandated by the US Congress, the CIA has noted
China's continued assistance to Pakistan's missile programmes. China has played a key
role in assisting North Korean missile developments based on purchased Russian missile
technology, to include the solid-fuelled third stage of the Taepodong-1 missile launched
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in 1998.
Ballistic Missiles
China is a world-class developer and producer of nuclear and non-nuclear armed

ballistic missiles, which are designed to help the PLA achieve strategic and regional
military goals. The PLA's missile inventory is dominated by SRBMs but it also relies on
MRBM/IRBMs and ICBMs. To modernise its missile fleet China has striven to make its
missiles smaller, more accurate and more survivable, primarily by making all missiles
mobile. Since the mid-1990s, China has perfected its solid fuel motors and has perfected
a new class of small warheads. Both programmes benefited from open and classified US
technologies according to US Congressional and Administration investigations
conducted during the late 1990s. China has also sought to develop penetration aids
(PENAIDS) to improve the ability of its warheads to reach their targets. It has tested
warhead decoys and has investigated other PENAIDS like false decoys, stealth coatings,
balloons and warhead manoeuvring.
Intercontinental Ballistic Missiles (ICBMs)
At the strategic level, the PLA is expected to complete the fielding of a new liquid-
fuelled ICBM. In 2002 the US reported that by 2005, approximately 20 DF-5 Mod 1
ICBMs would be replaced with a similar number of new DF-5 Mod 2 ICBMs with longer
range and, possibly, armed with multiple warheads. In mid-2007 an Asian military
source indicated the DF-5 Mod 2 may carry up to eight warheads. China has long
demonstrated that it can launch multiple satellites, indicating the potential to launch
multiple warheads. Its new class of small warheads was perfected in the early to mid
1990s. China's goal is to field this new ICBM by the time the US deploys its initial
National Missile Defence system, so that China can sustain its ability to conduct limited
nuclear strikes on the US. Producing a new model of the DF-5 allows the PLA to
incorporate improvements to this missile and to ensure a level of production that can
support non-military space launches.
In March 2008 the Pentagon reported that approximately ten DF-31 ICBMs were
deployed. In the October 1999 military parade, at least four mobile Team Electronic
Library Systems were produced by that year. A new photo of the DF-31 revealed in mid-
2007 shows that the TEL is now different from the version seen in 1999. Production has
been slow and some sources note about six to 12 are in service. According to Pentagon
figures released in July 2005 it has a range of more than 7,250 km and is armed with a
single new small warhead.
In early 2007 and in early 2008 there were Chinese internet images of what appeared to
be a new TEL for this missile, showing it to be more complex and larger than that used
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for the DF-31. This ICBM apparently has superseded the DF-41 ICBM programme due to
the latter's technical difficulties. Some sources indicate the DF-31A will be different
from the DF-31 in that it will use a lengthened second stage and, depending on the
version, the capacity to carry multiple warheads. It is reported that a shorter 10,000 km
range version has three to five MIRVs, while a potential 14,000 km version has a single
warhead.
In mid-2007 an Asian military source told Jane's that the DF-31A may carry three to four
warheads.
Submarine/Sea-Launched Ballistic Missiles (SLBMs)
China took a major step toward a continuous operational second strike nuclear delivery
system when it launched its first second generation Type 094 SSBN in late July 2004. It is
armed with 12 new JL-2 SLBMs with a range of 6,000 n miles (9,656 km) and may carry
multiple warheads. An image of a possible model of the JL-2 revealed in late 2007
shows the missile to have a blunt nose cone consistent with multiple warhead carriage,
while an Asian military source has suggested it will carry four warheads. While there
were reports that a JL-2 test during the summer of 2004 was unsuccessful, in early June
2005 it reportedly accomplished a successful test flight, launching from a modified Golf
II SSB. An additional JL-2 test from the Bohai Gulf occurred on May 29, 2008. Some
sources indicate the PLA will make at least four to six Type 094 SSBNs by 2015. Initially
the Type 094 may operate in the protected "bastion" of the Bohai Gulf, where its JL-2
SLBMs have sufficient range to cover the US West Coast. A second nuclear submarine
base is being built on Hainan Island near the existing base in Yulin. Commercial satellite
imagery suggests this base incorporates an underground shelter, which Asian sources
indicate may be able to hold up to eight submarines. However, the actual size of this
underground base in unknown, though this area is large enough to conceivably build a
supported underground structure that could hold up to 20 submarines. Should the PLA
deploy Type 094 SSBNs at this base it would allow for a survivable second-strike
capability to be sustained against India, as well as present possible Southern-
Hemisphere strike options against the US that would complicate the latter's missile
defences. For the longer term, the PLA likely values Taiwan as a SSBN base as its east
coast would offer immediate access to more secure deep water patrol areas. In 2002
the PLA's single Type 092 SSBN, with 12 JL-1 SLBMs, completed a refit and in 2003 was
described as 'operational' for the first time by the Pentagon.
Intermediate-Range Ballistic Missiles (IRBMs)
IRBMs, MRBMs and SRBMs perform both nuclear and non-nuclear strike missions for
the PLA. The Second Artillery has become skilled at extending the life of its reported 20
to 24 liquid fuelled DF-3 and 20 DF-4 missiles. Both are armed with nuclear warheads
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and are targeted against potential regional adversaries. Numbers of the DF-3 are
declining in favour of the DF-21 solid-fuelled and mobile MRBM. Derived from the JL-1
SLBM, it is produced in at least three versions; two nuclear armed and one non-nuclear
armed. The Pentagon notes that there are 19 to 23 DF-21 Mod 1 and 2 missiles, while
curiously it says there are 34 to 38 launchers for this missile. The non-nuclear armed DF-
21C uses a terminally guided warhead that either employs a radar or satellite guidance
system.
From late 2006 to July 2007 China released internet images of a new MRBM or IRBM.
Dubbed the "DF-25" by some, this was a programme first mentioned by researchers in
the early 1990s designed to lift heavy non-nuclear warheads. It uses a new ten-wheel
TEL plus a new launch tube that appears consistent with the "cold launch" method of
the DF-21 and DF-31. In early 2008 an Asian military source revealed to Jane's that this
missile is an upgraded version of the DF-21 that has a 3,000km range and carries
multiple warheads. These warheads may also be manoeuvrable and capable of
attacking ships.
Anti-Ship Ballistic Missiles (ASBMs)
The Pentagon and other US agencies contend that the PLA is working to perfect an anti-
ship ballistic missile that will most likely be based on an SRBM or MRBM. The most likely
candidates are the longer-range DF-15 and the DF-21. This missile may feature a
manoeuvrable warhead that also includes a seeker that incorporates both passive and
active radar that enable terminal guidance sufficient to hit a moving target like a ship.
Such a task poses steep missile and ISR technology challenges for China, not to mention
overcoming layers of US electronic and other defences. However, Russian sources
contend that a new optical seeker for the Iskander-E SRBM is able to hit moving targets,
and this is a potential technology source for the PLA. Chinese sources also indicate that
the seeker technology for the new SC-19 ASAT may also be useful for building anti-ship
warheads. In addition, China's launch of its first radar satellite in April 2006 and an
associated new electro-optical surveillance satellite in May 2007, can be added to
existing Over-the-Horizon radar, ELINT/SIGINT, aircraft and ship surveillance to gather a
composite data picture for targeting.
Such a capability would pose a significant threat to US forces that are likely unable to
defend against a manoeuvring ballistic missile. Asian sources indicate the DF-21 will be
the main missile for this mission, and that following the deployment of an initial satellite
surveillance capability this missile could be operational before 2010. In mid-2007 China
released imagery of a DF-15 with what appeared to be a new manoeuvrable warhead,
perhaps indicating that the DF-15 may also be used for anti-ship missions. Chinese
sources also indicate that a 200 km and a 300 km range version of the WS-2 artillery
rocket may be equipped with a passive seeking guidance system to target "radar,"
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meaning they too may useful against ships. When fully developed it is possible that
China might sell the new warhead, or complete missiles that are capable of intercepting
ships. This would potentially give its allies and clients new weapons with which to deter
US naval intervention.
Short-Range Ballistic Missiles (SRBMs)
China's most controversial missiles are its SRBMs, most of which are targeted against
Taiwan. The annual Pentagon report on PLA modernisation issued in March 2008 stated
there were 315 to 355 DF-15s and 675 to 715 DF-11s, making the potential total 1,070.
This would mean the Second Artillery operates the DF-11 Mod 2 as well as the army. In
January 2008 Taiwan's MND reported that China had 1,328 ballistic missiles aimed at
Taiwan. DF-15s are deployed in two brigades located in Leping and Ganzhou in Jiangxi
Province. DF-11s are deployed in four of the brigades located in Jinhua in Zhejiang
Province, Yungan and Xianyou in Fujian Province and Meizhou in Guangdong Province. It
is believed that the two brigades in Fujian Province are controlled by the PLA army. The
Taiwan MND also put SRBM production at 75 to 100 per year.
While similar in outward appearance, the DF-15 and DF-11 are quite different. Both
were originally intended for export but, by the early 1990s, as the Chinese leadership
became increasingly seized with its Taiwan problem, these missiles were adopted to
perform military and coercive missions. The 600 km range DF-15 was designed to evade
interception by US Patriot missiles through use of stealthy shaping and a slightly
manoeuvrable second stage. It is only armed with a 500 kg HE warhead, though a small
number are believed to be armed with a tactical nuclear warhead. The first reports of
the 1,000 km range DF-15 Mod 2 appeared in mid-2002. In early 2006 a DF-15 with an
elongated nose section appeared on Chinese internet pages, but it is not known if this is
the DF-15 Mod 2. Asian sources now indicate that the DF-15 may carry two type of
radiation warheads, one a non-nuclear radio frequency device designed to attack
electronic infrastructure and a second a very low yield nuclear device, most likely a
neutron warhead. In mid-2006 a new DF-15 with an elongated warhead was revealed,
subsequently called the "DF-15C" by an Asian military source, it is intended to strike
deep underground targets. In mid-2007 the Chinese released internet imagery of the
"DF-15B," which apparently carries a new manoeuvrable warhead.
The 500 to 600 km range DF-11 Mod 1 has a larger 800 kg payload designed to accept a
variety of warheads, including HE, FAE and cluster munitions. Later production models
of the DF-15 and the DF-11 Mod 1 are believed to incorporate some kind of satellite
guidance to ensure greater accuracy. Both the DF-15 and DF-11 are reported by the
Taiwan military to have an accuracy measured in 50 m CEP. This is due to new combined
modern inertial and navigation satellite based guidance systems.
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At the 2007 IDEX show, Chinese companies disclosed more information about the new
P-12 and B-611M SRBMs. Chinese and Asian military sources say these missiles are in
production for the PLA, but it is not clear whether the army or the Second Artillery will
use them. The P-12 places two 150 km range missile on a purpose built 6 × 6 wheel TEL
that may be transportable by an Il-76. The missile uses satellite guidance, is
manoeuvrable to evade defences and can be armed with HE or cluster munitions. The
B-611M is a 260 km range development of the B-611 revealed in 2004. It uses a larger
truck based TEL but the missile uses satellite guidance, is manoeuvrable and can be
armed with HE or cluster munitions. Asian military sources also confirmed that the PLA
is developing navigation-satellite guided 300km and longer range versions of the cheap
to produce WS-2A artillery rocket. Production of these new SRBM category missiles
could allow the PLA to rapidly double or even triple the number of accurate missiles
that can target Taiwan.
Land Attack Cruise Missiles (LACMs)
China is developing several new land attack cruise missiles. China's first LACM is called
the YJ-63, a 200 km to 300 km range missile with optical terminal guidance developed
from the C-601 family and launched on modified H-6 bombers with a special data link
system. The Chinese are also working on a more sophisticated, second-generation land
attack cruise missile that began deployment in 2006.
This programme dates back to the 1970s and has seen the acquisition of cruise missile
technology such as the Kh-55 from Russia/Ukraine; from Israel with DELILAH co-
development; and from US TOMAHAWK cruise missile parts obtained via Iraq and
Afghanistan. Asian sources note that there are two such LACMs in development; one for
the Second Artillery and a second that will be employed by the PLA Navy and air force.
Reportedly one of these missiles had 5 to 10 tests during 2003 and 2004, and some
sources expected an initial battalion of 200 LACMs could have been put in place by
2006. In March 2008 the Pentagon reported that "50-250" LACMs had been deployed.
This system will probably be deployed as a ground-launched cruise missile system and
may later be deployed as an air/ship/sub-launched cruise missile. The missile will be a
dual-capable nuclear/conventional system with a range in excess of 2,000 km with a
nuclear warhead and approximately 1,500 km with a conventional warhead. When
placed on new Type 093 SSNs, and used in conjunction with emerging satellite
surveillance and guidance systems, these new cruise missiles will give the PLA a limited
global power projection capability. The first picture of the "H-6K" seen in early 2007
featured the air-launched version of this LACM, which included a stealthy "lip" shape
nose similar to US Russian LACMs.
But China may also have this capability on a regional basis in that it reportedly has
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purchased the Russian Novator 3M-14E 285 km range land-attack cruise missile. These
will initially be fired from new KILO 636M conventional submarines, providing an
additional means for attacking Taiwan or US bases that may be used to help Taiwan.
Derived from the Kh-55 family of cruise missiles the 3M-14E is the latest version of the
3M-14 CLUB series of anti-ship cruise missile. It is guided by TERCOM, GLONASS/GPS
and radar for terminal guidance. It can also be launched from ships and aircraft - the
latter may also be attractive to the PLA. Novator is also marketing a mobile land TEL for
the 3M-14E.
Missile defence
Over the last few years, China has declassified information that in 1963 Mao Tse Tung
also ordered the start of an anti-ballistic missile programme, later called the 640
Project. Impeded by the turmoil of the Cultural Revolution, by the mid 1970s this
program yielded new long-range radar and the FJ-1, a short-range interceptor similar to
the US Sprint. While this missile was fired in 1979, it is not clear whether it was tested
against another missile or whether it used a nuclear warhead, like the Sprint. Chinese
engineers built a subscale version of the higher-altitude FJ-2 ABM. Radar developed for
this program successfully tracked the fall of the US Skylab in 1979. By the early 1980s
this program was abandoned.
By the 1990s, with its acquisition of advanced Russian S-300 SAMs, it appears that the
PLA gained a renewed interest in missile defences. At the 1998 Zhuhai Airshow Chinese
officials disclosed that their, at the time, new FT-2000 SAM would eventually feature
anti-tactical ballistic missile (ATBM) capabilities. In 2005 Pakistani sources indicated that
Pakistan was interested in purchasing this SAM when it was ready for export. Asian
sources indicate that in 2006 the PLA tested the ATBM capabilities of its new Russian S-
300PMU-2 SAMs against its DF-15 and DF-11 SRBMs. These sources note that the
Russian SAM was not able to intercept the Chinese SRBMs. However, if reports that
China is a key investor in Russia new S-400 program are correct, then the PLA may soon
have a more effective ATBM capable Russian SAM.
In mid-2007 an Asian military source indicated that China was developing a new 400 km
range SAM, which also raises the possibility this new system will have greater ATBM
capabilities. Such a missile would likely be deployed by the PLAAF and used to arm
future or current PLAN advanced air defence destroyers like the Luyang-2 or the Type
051C.
An Asian military source disclosed to Jane's in early 2008 that China is expected to field
a missile defence system before 2025. The technologies that would have allowed the
PLA's new SC-19 anti-satellite (ASAT) interceptor to destroy a satellite on 11 January
2007 would also form the basis for an anti-ballistic missile interceptor. Russia may also
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be a source for many ABM related technologies. In addition, a survey of Chinese military
technical literature reveals a significant Chinese interest in ABM and ASAT related
technologies such as Kinetic Kill Vehicles (KKVs), pulse jet motors to enable high missile
maneuverability in addition to ground and space-based early warning systems.
Arsenal and Inventory
Chinese US Designation No in Service Type

Designation
DF-5 CSS-4 Mod 2 19-23, in service by ICBM; range 12,000+ km,

2005 possible MIRV/MRV
DF-4 CSS-3 20-24 ICBM with single warhead;

range 4,750 km
DF-3 CSS-2 14-18 IRBM with single warhead;

range 2,000-3,000 km
JL-1 CSS-N-3 12 on 1 x Type 092 SLBM with single warhead,

SSBN range 2,150 km
JL-2 CSS-N-4 12 x per Type 094 SLBM under development,

SSBN, 4-6 x of which possible 9,656 km, 3-4
are expected by 2015 warheads
DF-15/M-9 CSS-6 275-315 SRBM, HE, radio frequency

and some nuclear warhead,
range 600 km
DF-15A CSS-6 Mod 1 n/a MRBM, range 1,000 km
DF-15B n/a n/a Apparent manoeuvrable

warhead, may be ASBM
DF-15C n/a n/a Deep penetrator warhead
DF-11/M-11 CSS-7 Mod 1 435-475 SRBM, HE, thermobaric,

cluster warheads, range 500-
600 km
540
DF-21 CSS-5 Mod 1 19-23 for Mod 1 and MRBM, range 2,150 km
2
DF-21 CSS-5 Mod 2 n/a MRBM, range 2,400-3,000 km
DF-21X n/a n/a MRBM for anti-ship missions
DF-21XX n/a n/a New IRBM version revealed in

November 2006, 3,000 km
range and multiple warheads.
DF-31 n/a 6-12 ICBM with single warhead ,

range 7,250+ km
DF-31A n/a Enter service 2007 Possible range 11,270+ km
DF-41 n/a 0 ICBM development curtailed

in favour of DF-31A
DF-61 n/a 0 IRBM development with North

Korea
DH-10 New Generation Land Enter service 2005 LACM, range 2,000 km
(unconfirmed) Attack Cruise Missile
for Second Artillery
n/a New Generation LACM n/a LACM, 1,000+ km

for PLAAF and PLAN
based on YJ-62
Novator 3M- Land Attack Cruise Purchased from LACM, range 300 km
14E Missile Russia in 2004 for
KILO SSKs
Key
ICBM: Inter-Continental Ballistic Missile
MIRV: Multiple, Independently-targeted Re-entry Vehicle
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IRBM: Intermediate Range Ballistic Missile
IRCM: Intermediate Range Cruise Missile
SLBM: Submarine-Launched Ballistic Missile
MRBM: Medium Range Ballistic Missile
LACM: Land Attack Cruise Missile
Basing
The Second Artillery missile force operates fixed-silo based ICBMs, cave based ICBMs
and mobile ICBMs, MRBMs, SRBMs and LACMs that are cave and hanger based, even in
the middle of cities. Some DF-5As are reportedly silo-based, indicating that newer DF-5
Mod2 ICBMs may be silo based too. There are reports that the PLA is also considering
rail-basing for some new ICBMs, similar to what the Russians are retiring from service.
Missiles that are towed out of storage facilities like the DF-3, DF-4 and perhaps some
DF-5s rely on stealth and camouflage to cover their transport to pre-surveyed launch
locations. Because they must then undergo lengthy fuelling they may be vulnerable to
rapid attack if an adversary can locate them almost immediately after preparations
begin. It is likely that newer mobile missiles like the DF-21, DF-15, DF-11 and DF-31 are
also towed to pre-surveyed launch locations to facilitate rapid launch preparations. It is
likely the Second Artillery will make extensive use of camouflage, smoke, decoys and
counter-PGM defences to protect mobile missiles. Second Artillery mobile launch
battalions usually include a large number of troops to guard missile units.
Satellite imagery has aided the analysis of some Second Artillery missile bases. For
example, this imagery has revealed a major upgrade for the Base 56 missile brigades
near Delingha and Da Qaidam. Between these two mountainous areas it is possible to
count up to 58 paved launch areas for mobile ballistic missiles spread over an area of
2,000 square kilometers. While Base 56 is usually reported to deploy DF-4 and DF-21
IRBMs targeted against Russia and India, it is also worth noting that if fired from the
Delingha area, Chicago and some of the U.S. Minuteman ICBMs near Minot Airbase are
within the range of the DF-31A ICBM.
Little is known publicly about actual Second Artillery combat doctrine. It is reported that
the PLA envisions using its non-nuclear missiles as part of a broader joint-force
campaign. Against Taiwan these missiles would be launched in salvos from multiple axis
to attack high-priority targets, with reserves kept for follow-on attacks if needed.
Priority targets would include critical government and military command facilities, anti-
missile defences and air force, navy and army bases and facilities, especially those that
542
must be eliminated to facilitate heavier follow-on air strikes.
Second Artillery and Army Missile Units
Base Brigade Province City Missiles Estimated Target
SA Beijing Quighe
Headquarters
51 Base Liaoning Shenyang
806 Brigade Shaanxi Hancheng
810 Brigade Liaoning Dalian DF-3A Korea, Japan,

Okinawa, Taiwan
UI Brigade1 Jilin Tonghua DF-312/DF- US2, Korea, Japan,

21/DF-3A Okinawa, Taiwan
UI Brigade1 Shangdong Laiwu n/a n/a
52 Base Anhui Huangshan
807 Brigade Anhui Chizhou DF-21/DF- Japan, Okinawa,

3/DF-15 Mod Taiwan, Philippines
22
811 Brigade Jiangxi Fuliang DF-15 or DF-11 Taiwan

County Mod 1
815 Brigade Jiangxi Leping DF-15 or DF-11 Taiwan

Mod 1
817 Brigade Fujian Sanming DF-15 or DF-11 Taiwan

Mod 1
UI Brigade1 Zhejiang Jinhua DF-15 or DF-11 Taiwan

Mod 1
UI Brigade1 Guangdong Meizhou DF-15 or DF-11 Taiwan
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Mod 1
UI Brigade Jiangxi Ganzhou DF-11 Mod 1 Taiwan

(Army)1
53 Base Yunnan Kunming
802 Brigade Yunnan Jianshiu DF-3/DF-21 India, SE Asia
808 Brigade Yunnan Chuxiong DF-21 India, SE Asia
UI Brigade1 n/a n/a n/a n/a
54 Base Henan Luoyang
801 Brigade Henan Sanmenxia DF-5A/DF-5 US

Mod 2
804 Brigade W. Henan Luanchuan DF-4 Russia, India, Hawaii

County
813 Brigade Henan Henan DF-312 US, Russia
UI Brigade1 Henan Louyang n/a n/a
55 Base Hunan Huaihua
803 Brigade Hunan Jingzhou DF-3
805 Brigade Hunan Tongdao DF-4 Russia, India, Hawaii
UI Brigade1 Hunan Huitong n/a n/a
UI Brigade Hunan Dongkou n/a n/a
56 Base Qinghai Xining
809 Brigade Qinghai Datong DF-3/DF-21 Russia, India
812 Brigade Qinghai Wulan DF-4 Russia, India
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UI Brigade1 n/a n/a n/a n/a
UI Base
UI Brigade Hainan n/a DF-11Mod 2 n/a
Note:
1. UI: Unidentified
2. Unconfirmed.
Proliferation
Beijing has been accused of supporting missile technology and finished product transfer
to Iran, Iraq, North Korea, Libya, Pakistan, Saudi Arabia and Syria. In October 1994 China
agreed to abide by the US-sponsored, 25 nation-strong Missile Technology Control
Regime (MTCR), although Beijing claims that the M-11, exported to Pakistan and
possibly other countries, falls outside the coverage of the MTCR. However, Washington
says that it defines an MTCR missile as including any which 'is intended for the delivery
of weapons of mass destruction'.
In 1988 China sold its liquid fuelled DF-3 to Saudi Arabia, and there is suspicion that
Riyadh may be seeking to update these with the DF-21 solid-fuelled IRBM. China has
exported the DF-11 Mod 1 in the form of the Pakistani Ghaznavi, and the Pakistani
Shaheen 1 is a 750 km range derivative of the DF-11 Mod 1. The 2,500 km range
Shaheen-2 is a unique design but relies on Chinese technology. In addition, China is
believed to have assisted Pakistan's Babur land attack cruise missile program, with the
first test taking place in August 2005.
In 2004 it was revealed that China and Turkey had co-developed the B611, a 150 km
range manoeuvrable SRBM. In early 2005 Turkish officials confirmed this co-operation,
noting the range of their tested version was 152 km. Some sources indicate that a 250
km range version is in development. The Chinese version of this development was
revealed in early 2007 as the 250 km range B-611M. In mid-2005 it was revealed that
Indonesia had discussed with China the transfer of ballistic missile technology, with little
indication whether this would entail long-range surface-to-surface missiles. In early
2006 Turkish reports indicated interest in Pakistan's Babur LACM, which offers the
possibility of indirect transfer of Chinese technology.
China has long been suspected of providing technical assistance to Iran's Shahab series
of missiles derived from North Korea's Nodong series. In late 2007 Israeli sources
545
relayed to Jane's defence Weekly the existence of the Iranian 2,000 km range solid fuel
Ashura missile, a report subsequently confirmed by US officials. While some sources
have asserted this missile uses the same technology as the Shaheen 2, or is essentially a
Chinese design, there has yet been no official confirmation of a Chinese connection to
the Ashura. Since the early to mid 1990s Iran has co-produced a version of the C-802
anti-ship cruise missile called the Noor. This missile is now used on Iranian Su-24 fighter-
bombers and Mi-17 helicopters, and was transferred by Iran to Hezbollah forces which
used them to attack an Israeli corvette off Lebanon on 14 July 2006. Iran has also co-
developed a series of short-range anti-ship missiles with the AVIC-2 Hongdu Aircraft Co.
These include a radar-guided version of the C-701.
Chinese proliferation of missile technology also occurs via technical conferences. In

Xi'an from October 23 to 26, 2007, the "2007 International Autumn Seminar on
Propellants, Explosives and Pyrotechnics" was attended by eleven engineers from Iran.
China is also preparing to market it new longer range cruise missiles. In September
2007, Thailand became a customer for the 120 km range C-802 anti-ship cruise missile
to upgrade its Jianghu class frigates. In 2007 China also aggressively marketed its new C-
602 long-range anti-ship missile, which in PLA service forms the basis of a much longer
range land attack cruise missile. China is now allowing perspective customers to visit the
C-602 factory.
NBC Capabilities
Nuclear Weapons
China began an independent nuclear weapon programme in the late 1950s, probably as
a reaction to a perceived threat of a US atomic bomb attack during the Korean War
(1950-53). Initially, Beijing received some assistance from Moscow but after the Sino-
Russian political schism independent development continued. It has, therefore, taken
some time for the Chinese nuclear arsenal to grow and there are still programmes
underway to ensure it develops in terms of quality rather than quantity.
Until early this decade, the performance characteristics of most Chinese missile systems
were inferior in most respects to corresponding US weapons of the mid-1960s. The
major shortcomings were low combat readiness and poor accuracy. The archaic design
of the missiles made re-targeting difficult, which precludes their combat use in a
retaliatory strike. Thus, they were only really viable against soft targets. This has started
to change rapidly with the PLAs introduction of new liquid and solid-fuelled ICBMs and
MRBMs, as well as new solid-fuelled SLBMs.
China has also introduced a new series of small conical-shaped nuclear warheads that
546
are highly suspected by the US Government of having benefited from open and
classified US nuclear weapons technology. The latest DF-5 Mod 2 liquid-fuelled ICBMs
are rumoured to use multiple warheads and various PENAIDS, while the DF-31 and DF-
21A are mobile ICBMs. The advent of the Type 094 SSBN in 2004 marks the beginning of
China's first reliable sea-based "second-strike" capability. The latest DF-5 Mod 2 ICBM,
DF-31A ICBM and JL-2 SLBM are reported to have a range of about 12,000 km, meaning
they can cover the US from Chinese territory or from contiguous waters.
The US Defence Intelligence Agency estimate is that China has deployed 300 nuclear
warheads for land-based, silo-launched ballistic missiles, submarine-launched missiles,
mobile missiles and free-fall bombs for deployment by bomber aircraft. However, such
"small" estimates of China's nuclear inventory cannot be confirmed from Chinese
sources or even from more detailed Western disclosures. Unofficial estimates hoping to
gauge Chinese deterrence requirements range from the small hundreds to over 1,000
nuclear weapons. At least 40 of the 100 H-6 medium bombers in active service are
thought to be nuclear-capable; another 20 have been modified to carry the C-601 air-to-
surface missile, which some sources believe may have a future nuclear capability. An
unknown number of tactical nuclear warheads are employed by DF-15 SRBMs and in
bomb form by strike aircraft.
For the first time in a Chinese document, the 2002 Defence White Paper stated that
China's ballistic missile and nuclear submarine missiles forces were under the direct
command of the CMC. This was also reaffirmed in the 2006 Defence White Paper. The
Second Artillery Corps comes under the operational control of the military supreme
command or General Staff Department. Nuclear missile-equipped submarines, nuclear
equipped bombers and other tactical nuclear weapons are also placed under the direct
control of the CMC during wartime. The PLA's Second Artillery Corps retains operational
control of China's land-based nuclear missiles. The PLA Navy retains operational control
over sea-based nuclear missiles while the PLA Air Force maintains operational control
over some nuclear weapon. Control of non-nuclear missiles likely devolves to Joint
Force commanders. Like nuclear weapons, space weapons would also fall under the
direct control of the CMC, while operational control is likely exercises by the
organisations under the General Armament Department (GAD) that control space
activities. There has been some reporting that China will form a separate "Space Force"
and that the GAD, Second Artillery and PLA Air Force have been jockeying over who will
control military space.
Chinese press reports indicate that Second Artillery units utilise broadband fibre-optic
cable, satellite, cellular and high-frequency radio communication links. Operational and
tactical control of Chinese nuclear weapons for land-based missiles is vested in the
Second Artillery Corps.
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Second Artillery Chain of Command
Commander: General Jing Zhiyuan
Political Commisar: General Peng Xiaofeng
Deputy Commander: Lieutenant General Yu Jixun
Deputy Commander: Lieutenant General Zhang Yuting
Deputy Commander: Major General Wang Jiurong
The PLA Air Force controls some air-dropped nuclear bombs for H-6 bombers and some
tactical nuclear weapons for fighter-bomber delivery. The PLA Navy exercises
operational control over nuclear armed JL-1 SLBMs on its single Type 092 XIA class
SSBN, and in the near future, JL-2 SLBMs on its second generation Type 093 SSBNs now
under construction.
General Peng Xiaofeng
In January 2004, as one of his final appointments as Chairman of the Central Military
Commission, Jiang Zemin appointed then Major General Peng Xiaofeng as the Political
Commissar of the Second Artillery. At that time this appointment was viewed in the
context of Jiang's efforts to sustain his influence after his expected retirement later that
year, and as his effort to promote officers would then be allies of his preferred
successor, Zeng Qinghong. Peng has also gained notoriety as being a "princeling," or the
favoured relation of a former high party or military official. His father, General Peng
Xuefeng, was a division commander in the New Fourth Army and was killed fighting the
Japanese in 1942. He was promoted to full General in June 2006.
Nuclear Tests
China has agreed to abide by the comprehensive test ban of 1996 but in the meantime
is working hard to ensure that its nuclear warhead development programme is
completed. China's nuclear technology is not sufficiently advanced to miniaturise the
warheads on light, tactical ballistic missiles. During 1994-95 China exploded three
nuclear warheads at the Lop Nor test range - the 40th, 41st and 42nd tests; the
launches are thought to have been part of the continuing series of tests of the M-11
ballistic missile system. Other sources say that the tests were carried out in connection
with the development of a new missile for a strategic submarine-launched ballistic
missile. In October 1994 former US Secretary for Defence William Perry offered China
548
access to US computer technology which simulates nuclear blasts and triggers, allowing
Beijing to curb its underground testing programme.
The December 2006 Defence White Paper contained a rare but useful summation of
China's declared nuclear doctrine and policies, which is quoted in full:
"Pursuing a self-defensive nuclear strategy. China's nuclear strategy is subject to the

state's nuclear policy and military strategy. Its fundamental goal is to deter other
countries from using or threatening to use nuclear weapons against China. China
remains firmly committed to the policy of no first use of nuclear weapons at any time
and under any circumstances. It unconditionally undertakes not to use or threaten to
use nuclear weapons against non-nuclear-weapon states or nuclear-weapon-free zones,
and stands for the comprehensive prohibition and complete elimination of nuclear
weapons. China upholds the principles of counterattack in self defence and limited
development of nuclear weapons, and aims at building a lean and effective nuclear
force capable of meeting national security needs. It endeavours to ensure the security
and reliability of its nuclear weapons and maintains a credible nuclear deterrent force.
China's nuclear force is under the direct command of the Central Military Commission
(CMC). China exercises great restraint in developing its nuclear force. It has never
entered into and will never enter into a nuclear arms race with any other country."
China has been accused of exporting nuclear technology to North Korea, Iran and
Pakistan. In late 2003 it was discovered that Pakistan had, in turn, sold a Chinese
nuclear weapon design to Libya. There is great concern that terrorists could acquire this
Chinese nuclear bomb design via Pakistan or Libya, or from other states to which they
may sell the design. Then, in late 2005, it was revealed that Pakistan sold its Chinese
nuclear weapon designs to Iran.
Biological Weapons
China has been a victim of biological weapons and, since 1960, has also been considered
a developer of these devices.
Chemical Weapons
China first learned about modern chemical weapons in the 1930s when it is alleged that
imperial Japanese troops used them on the inhabitants of Nanjing. Following the end of
the Korean War (1950-53) China is thought to have begun trials with non-persistent
weapons, leading to a substantial capability to produce a wide range of nerve, blood
and choking agents. China is also believed to have developed a range of "incapacitants"
which serve to temporarily inhibit human defensive responses to enable military
operations with fewer casualties. It is expected that PLA Special Forces will make heavy
549
use of incapacitants when attacking high value targets so at to capture key political or
military leaders as part of a "decapitation" strategy.
There have been no allegations that China has produced chemical warheads for any of
its missile systems.
Information warfare capabilities
In 2007 China's aggressive exploitation of the "common ground" of cyberspace for

purposes of military, political and economic espionage shocked governments in Europe,
America and Asia. In 2003 Chinese cyber attacks against Taiwan forced the wholesale
reconstruction of computer systems in the Taiwan Ministry of Foreign Affairs and other
ministries. In 2003 Chinese hackers were believed to have been responsible for shutting
down power stations that resulted in electricity blackouts in Michigan, Ohio, New York
and Canada, indicating that China has exercised its ability to launch attacks against
electronic infrastructure. In early 2008 the US Federal Bureau of Investigation revealed
its suspicion that cheap imitations of Cisco computer routers made in China that had
been routinely purchased by classified US government users, may have been modified
to give Chinese cyber warriors back doors to these computers.
In reaction to a high level of complaints, the Chinese Government consistently issue

denials. The US Federal Bureau of Investigation and the UK's MI5 have issued explicit
warnings about Chinese cyber espionage.
Since the late 1980s China has developed its own theory, doctrine and order of battle
for Information Warfare (IW) and Computer Network Operations (CNO). Computer
network operations forces are now integrated in the MR commands of the PLA, and
there is extensive co-operation between government and criminal "cybercrime"
networks. Chinese IW personnel heavily target military and civilian computer networks
in the United States, Great Britain, Japan and Taiwan. Today their main focus is
information gathering but this experience also contributes to their ability for potential
offensive operations. The PLA is expected to combine a surprise and large scale IW
attack with other military operations as part of any general offensive against Taiwan, to
include IW attacks against the United States.
Responsibilities for offensive and defensive cyberwarfare are shared by the PLA, the
Ministry of State Security, the Ministry of Communications and the Propaganda
Department. In the PLA it appears that cyberwarfare is the primary responsibility of
General Staff Department Deputy Director General Chen Xiaogong, who oversees the
Third Department of the General Staff Department, which long has had responsibility
for electronic warfare, and electronic and signals intelligence. The Third Department
would also oversee all ELINT, SIGINT and cyberwarfare activities of the other PLA
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services. Other PLA cyberwarfare centers would include the General Staff Department's
Fourth Department, responsible for electronic warfare, and the General Armaments
Department. In the later, the E-Information Base Department is headed by General
Zhang Chi.
The Third Department is led General Qui Ruilin, with General Wu Guohua as his
technical director. Deputy Directors include General Pan Huizhong, who is also deputy
director of the PLA's Central Communication University, General Liu Xiaobei, an
encryption specialist, Professor Yang Huida and Professor Liu Meng. A key centre for
cyberwarfare is the Third Department's Fifth Bureau, which is responsible for
operational intelligence. The Fifth Bureau is headed by Professor Yang Jingzong, who is
a specialist in communication security and information warfare.
Chinese theorists believe that the capabilities and qualities of the information era
enhance and breathe new life into Mao Zedong's theory of a People's War. Chinese IW
specialist General Wang Pufeng first noted this condition in 1995. Some believe that
electronics, computer and information engineering experts are likely to become the
heroes of a new People's War, much like the warrior class of the past.
China clearly has the people to conduct a 'take-home battle' - a battle conducted with
laptops at home - allowing thousands of citizens to hack foreign computer systems
when needed. China has a number of superior software writers and much untapped
potential in the information field. The problem is how to find more information space
and equipment for its population.
Ideas for uniting a People's War with IW are finding fertile ground in the 1.5 million-
strong reserve force of China. Early in its IW development the PLA turned reserve forces
in some districts into mini-IW regiments. The PLA is turning reserve forces in some
districts into mini-IW regiments. For example, in the Echeng District (1,125 km south of
Beijing) in Hubei Province, the People's Armed Forces Department (PAFD) reportedly
organised 20 city departments into a militia/reserve IW regiment. The PAFD had a
network warfare battalion, as well as EW, intelligence and psyops battalions, and 35
technical Fenduis (squad to battalion). The PAFD also set up the first reserve IW training
base for 500 people.
Echeng is not the only district with reserve/militia units conducting IW training. The
Fujan Province held a meeting at Xiamen in December 1999 that used reserve and
militia forces. The Xiamen area is a special economic zone, and attracts a higher than
usual number of science and technology clients to the area. Thus it is a prime candidate
for IW-related activities. There were also reports of reserve IW activity in Xian PAFD and
in the Datong military sub-district.
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While CNO is by nature borderless, with skilled practitioners able to hide their identities
behind mazes of servers in multiple countries, the PLA does likely deploy its
cyberwarriors to its main allies in intelligence gathering: Cuba and Burma. The PLA also
very likely uses Chinese telecommunication and computer companies to conduct cyber
operations in countries where they have personnel and joint ventures. Chinese students
have been caught conducting cyber espionage in Europe and are likely recruited to do
so elsewhere. The degree to which Chinese intelligence organs routinely recruits
Chinese nationals abroad to conduct covert and open source espionage likely reflects
China's willingness to use this same community to gain access to key military and civil
electronic networks around the world. In addition the Third Department reportedly has
use of the fleet of large Yuanwang-class space and satellite control ships. These ships
are equipped with large parabolic dishes to control Chinese satellites, but logically can
also be used to attack adversary satellites.
By 2005 PLA organisation for information warfare had accelerated. By this year every
Military Region had established a "Special Technical Reconnaissance Unit" for the
purpose of waging offensive and defensive information warfare. This constitutes the
PLA's 'net force' to fight the high-tech battles of the future. The net force would protect
net sovereignty and engage in net warfare, a technology and knowledge-intensive type
of warfare. Net technology would include scanning technology to break codes, steal
data and take recovery (anti-follow-up) actions.
It would also include superior offensive technology capable of launching attacks and
countermeasures on the net, such as information-paralysing software, information-
blocking software and information-deception software.
In addition, it would include masquerade technology capable of stealing authority from

the network by assuming a false identity; and defensive technology that can ward off
attacks, serve as an electronic gate to prevent internal leaks, and block arbitrary actions
- like an electronic policeman.
Training to Conduct IW
IW has been defined as knowledge-style warfare, a special trial of strength between

highly talented people. This definition arose from the fact that high-tech war demands a
high level of knowledge by commanders and operators, strong psychological qualities,
command ability and operational skills.
Recognising that China lags behind in several of these categories, the PLA leadership has
undertaken training at various levels. The first category is support-style talent, with the
main targets leading cadres over 40 years of age. These are decision-makers and the
aim is to eliminate their information illiteracy, to change their concepts through training
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(from mechanised concepts to simulated IW fighting), and to apply their new ideas to
future war. Training content for this group is information technology basics, the theory
of IW and general knowledge of IW weapons. Training focuses on short courses,
supplemented by other methods.
The second category is transitional-style talent. Here cadres aged 30 to 40 have been
targeted. As the future leaders of China, they must focus on enhancing their ability to
command in IW environments.
The third category is regeneration-style talent. This involves cadres under 30 years old.
These individuals are already acclimatised to information society and possess an all-
round foundation in modern IT theory. Their focus is on command and technology.
The training for each age group includes: basic theory, such as computer basics and
application, communications network technology, the information highway and
digitised units; electronic countermeasures; radar technology; IW rules and regulations;
IW strategy and tactics; theatre and strategic IW information systems, including
gathering, handling, disseminating and using information combat command;
monitoring; decision making and control systems; information weapons, including
concepts and principles of soft and hard destruction, and how to apply these weapons;
simulated IW; protection of information systems; computer virus attacks and
counterattacks; and jamming and counter jamming of communications networks.
Space Programme
China's space programme serves its military, civilian, economic and broader strategic-
diplomatic and domestic political requirements. The Communist Party hails the manned
space programme as a high-profile achievement to promote nationalism and support
for the Party. However, China's leaders also understand that leadership in space is one
of many requirements for achieving greater international leadership, and is committed
to a far reaching unmanned and manned planetary exploration programme and wider
international space technical co-operation.
In October 2005 China organised the Asia-Pacific Space Cooperation Organisation, with
initial members Bangladesh, China, Indonesia, Iran, Mongolia, Pakistan, Peru and
Thailand, with Turkey joining in June 2006. Argentina, Malaysia, the Philippines, Russia
and the Ukraine may join, but the US is not invited. As the US does through NASA, China
hopes to build technical co-operation that paves the way for greater use of Chinese
technology, and acceptance of Chinese standards in space. Earlier this decade China
tried but failed to interest India in co-developing Earth observation satellites. Reports in
August 2006 indicate China and Pakistan will "co-develop" three earth resource
satellites. For Iran and Pakistan, potential co-operation with China in space launch
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vehicles could help their programmes to build longer-range ballistic missiles.
China's space programme is directly controlled by the PLA and is subordinate to the
General Armament Department (GAD). It controls both military and civilian space
activities. However, Chinese military sources have noted that for some time there has
been a debate within the PLA over which branch should control military space activities,
the PLA Air Force or the current organisations under the GAD. Chinese press reports in
mid-2005 indicate that this debate may have been settled in favour of the GAD-led
organisations, who may now have a mandate to form a new branch of the PLA to
control all military space activities. In early 2006 some Chinese space officials were
calling for the creation of a "national space organisation," a possible attempt to place
manned space under "civilian" control in line with other space-faring nations.
Satellite Programmes
Commercial communication satellites and the manned space program, have been
enlisted to serve military needs. China's principal space launch vehicles are derived from
the DF-4 and DF-5 ICBMs. Since 1986 China has sold commercial space launch services
in part to subsidise its space and missile programmes. China has stated its intention to
launch at least 35 different science and application satellites during the years 2002 to
2006, 10 during 2004. The satellites would be used for communications and direct-to-
home broadcasting, meteorological and oceanographic observations, navigation and
positioning, disaster mitigation and seed breeding. At the same time China is also
expected to develop a direct-assent anti-satellite capability based on new mobile solid-
fuel space launch vehicles and micro-satellites.
Imaging Satellites
In 2000, Beijing orbited its first high-resolution electro-optical imaging satellite, which
relays its state-of-the-art digital pictures by radio to ground stations. In the past,
Chinese satellites snapped pictures on photographic film, which then was dropped
down to Earth in canisters. The Chinese satellite, named Ziyuan-2 (ZY-2), can yield
photographs with a resolution more than three times the capability of China's earlier
earth sensing satellite, Ziyuan-1 (ZY-1). On May 25 2007 China launched its JianBing-6 or
YaoGan-2, reportedly a new high resolution electro-optical surveillance satellite. It is
believed to compliment the JianBing-5/YaoGan-1 radar satellite.
In 2006, China began to loft a more ambitious space imaging constellation. On April 27,
2006 it launched its first synthetic aperture radar (SAR) satellite, called the 2,700 kg
JingBing-5, or YaoGan 1. Its resolution has not yet been reported. An indigenous PLA
programme funded by the "863 Program," the JianBing-5 utilises a flat planar radar
array and a sun-synchronous orbit, as does the Canadian RADARSAT with which China
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had a brief co-operative agreement in the late 1990s. Then on 11November 2007 China
launched YaoGan 3, presumably another radar satellite as it occupies the same orbit as
YaoGan 1. An additional YaoGan is expected to be launched in 2008.
Late 2007 reports indicate that by end of 2008, China is expected to launch the initial
elements of an eventual eight-satellite constellation based on satellites developed by
the Russian NPO Machinostroyenia company and the Chinese DFH company. The
constellation will eventually have four new HJ-1A/B electro-optical satellites and four
new HJ-1C radar satellites. Both satellites will use NPO Machinostroyenia's small-sat bus
and the radar satellite will use the antennae from NPO Mash's KONDOR-E system. Both
satellites are very likely to have a resolution of 1 m or less. The HJ-1B will have a hyper-
spectral imaging capability. With an eight satellite constellation, the PLA will have the
ability to revisit a target location twice daily with both electro-optical and radar
satellites. Additionally, a poster at the 2006 Zhuhai show suggested that China would fly
two HJ-1C radar satellites in formation in order to provide a continuous 360-degree
target perspective.
A review of Chinese military technical literature indicates a strong PLA interest in

developing missile early-warning satellites. These can be located in deep space or in low
Earth orbits. China's interest in such satellites would be consistent with its interest in
developing missile defences.
Navigation Satellites
China is pursuing both domestic and foreign co-operative programmes to ensure that it
maintains access to navigation satellite signals to guide military platforms and weapons.
In October and December 2000, and then May 2003, the PRC launched three Beidou
locating satellites. A fourth Beidou was launched in February 2007 to serve as a reserve,
or to possibly replace the first satellite, but it was later reported to have experienced
technical problems and its status is unclear. A fifth Beidou satellite was launched on 14
April 2007, perhaps confirming problems with the fourth, but also demonstrating an
ability to rapidly repopulate this system. Placed in geostationary orbits over China, they
are not true navigation satellites in that this system relies on ground station signal
broadcasts, not signals from the satellites themselves. Beidou, however, may also be
capable of providing low-rate data transmission for PLA forces as well.
The PLA has long had its own navigation satellite program, but in 2003 it invested over
USD200 million to become an official partner in the European GALILEO navigation
satellite programme, which expects to be operational in 2008. China hopes this will
ensure military access to navsat signals in the event the US denies GPS signals.
However, mid-2006 reports of China's apparent dissatisfaction over Europe's refusal to
grant China its required level of control over the Galileo system have led to a renewed
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Chinese commitment to lofting its own navigation satellite constellation. At the 2006
Zhuhai show, China confirmed its plans to launch its own 30 satellite navsat
constellation called COMPASS. Reports in 2007 suggest that China intends to loft its
navsat constellation by 2012. China has registered for 14 GEO and 22 MEO orbital slots
for its COMPASS system. There was concern in early 2008 that the COMPASS signal
would overlap and potentially jam broadcast frequencies for the European Galileo and
the US GPS navigation satellite systems. Russia tried but apparently has failed to gain
Chinese investment in its faltering GLONASS constellation. Nevertheless many PLA
weapon systems, especially those purchased from Russia, use the GLONASS
constellation.
Communication Satellites
The PLA has direct control over two ZHONGXING-20 communication satellites, launched
in 2000 and November 2003. These are believed to be based on the domestic DFH-3
comsat, built in co-operation with Germany's DASA. These will be succeeded by the
DFH-4 built in co-operation with France's Alcatel. The DFH-4 will have 52 C and Ku-band
transponders. In addition the PLA has regular access to many of the 12 or so foreign-
made satellites launched by China but owned by Chinese government related entities. It
is also believed that Chinese government entities, including the PLA, are making
increasing use of the commercial Iridium satellite communications network.
Data Relay Satellites
On April 25, 2008, China launched its first Tian Lian data relay satellites. The China
Aerospace Corporation revealed its intention to produce potentially two types of data
relay satellites at the 2002 Zhuhai Airshow. On type was to be based on the DFH-3
communication satellite with two small relay antennae. A second type would be more
comparable to US data relay satellites with two large folding antennae arrays. Such
satellites, when launched, would give the PLA the ability to access more rapidly data
from satellites and manned spacecraft in distant regions and not be dependent on
ground relay stations that require access to foreign territory.
The China Aerospace Corporation revealed its intention to produce potentially two
types of data relay satellites at the 2002 Zhuhai Airshow. On type was to be based on
the DFH-3 communication satellite with two small relay antennae. A second type would
be more comparable to US data relay satellites with two large folding antennae arrays.
Such satellites, when launched, would give the PLA the ability to access more rapidly
data from satellites in distant regions and not be dependent on ground relay stations
which may be vulnerable to foreign politics.
Micro Satellites
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In the future China will use micro and nano-satellites for surveillance, communication
and space combat missions. China launched its first 50 kg TSINGHUA-1 micro-satellite in
2000. This was the direct result of a 1998 co-development programme between
Tsinghua University and Britain's Surrey Space Systems. Then, on 18 April 2004, China
launched its first nano-satellite, the 55 lb NAXING, or NS-1. As in the US and elsewhere,
China is studying the development of nano-satellite constellation to perform military
missions. In late 2004 a DFH official revealed that his company, not Tsinghua University,
will take the lead in developing operational micro and Nano satellites. DFH is now
marketing a 65 kg microsat for surveillance missions.
Satellites and unmanned vehicles will also figure prominently in China's space
exploration programme. On 24 October 2007, amid much nationalist fanfare, China
launched its Chang'e 1 Moon observation satellite, which then entered Moon orbit on 5
November 2007. Accuracy in its Moon orbit braking maneuver saved enough fuel to
possibly double its planned mission to two years. This will survey the Moon to select
landing sites for an unmanned Moon exploration mission that could occur by 2010. At
the 2004 Zhuhai airshow China's space pavilion featured illustrations of an unmanned
rover exiting a lander on the Moon, while other illustrations showed what appeared to
be a Moon sample return vehicle lifting off of the Moon surface. Around 2010 the
Chang'e 2 will feature a small lunar rover that will return close up imagery. Chang'e 3
will feature a Moon sample return mission and may take place as early as 2012. The
concepts so far featured by Chinese artists are similar to those used by the unmanned
moon exploration vehicles designed by Russia's Lavochkin Bureau. In 2009 China
expects to launch a small satellite probe on a Russian booster to return imagery of
Mars.
Manned Programme
In early 2002 former President Jiang Zemin personally credited then PLA GAD Director
Cao Gangchuan with leadership of China's manned space programme. This was a clear
admission that China's manned space programme was under complete control of the
PLA. The current manned space programme commander is General Chen Bingde.
China's first manned mission into space was completed successfully on 16 October 2003
when the descent capsule with astronaut Yang Liwei on board returned to earth in Inner
Mongolia. While the safe return of the descent capsule marked a significant
achievement for China, the other section of the Shenzou-5 spacecraft, the orbital
module, is important for China's long-term efforts to use space for military intelligence
gathering. The Shenzhou spacecraft manufactured by the Shanghai Academy of
Spaceflight Technology (SAST) under Project 921-1 for China's manned space
programme currently provides a substantial electronic intelligence (ELINT) and image
gathering capability.
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Shenzhou's surveillance systems are carried in its orbital module, which continues to fly
long after the crew capsule has returned to Earth. The missions of the Shenzhou-2 to
Shenzhou-6 orbital modules have varied from five months to two years for Shenzhou-6.
Shenzhou-1 and 2 were likely outfitted with ELINT detection gear, while Shenzhou-3
carried a microwave radar and was used to monitor the US buildup before the 2003
invasion of Iraq. Shenzhou's 4 to 6 have all carried optical surveillance equipment. The
camera on the Shenzhou-5 reportedly had a ground resolution of 1.6 m, and while the
configuration of the forward end of the orbital module is different from that of its
predecessors, ELINT equipment could be carried elsewhere in the module. The orbital
module for Shenzhou-6 carried at least one camera, but may not have carried a large
external camera to save weight for the extra crew member.
The Shenzhou spacecraft, including the autonomous orbital modules, were controlled
from the Beijing Aerospace Command and Control Centre (BACC), which received an
enormous amount of mission operation data from the long-duration modules, and the
Xian Satellite Control Centre (XSCC) at Weinan, which also received data from them. The
tracking stations at Qingdao, Xiamen and Kashi also tracked the modules. The Kashi
station, because of its extreme western location, has played an especially important
role in tracking and supporting the Shenzhou vehicles. The signals intelligence (SIGINT)
complex at Kashi would have been the first recipient of any ELINT mission data collected
by the Shenzhou orbital modules, both to clear the tape recordings and to process the
data for any time-urgent intelligence.
In September 2008, Shenzhou 7 featured a three-man crew and China's first space-walk.
In early 2008 Chinese television revealed the new Chinese EVA suit as having been
influenced or copied from the Russian Orlan-D model. As such, Shenzhou-8 may be the
first that will not feature a secondary surveillance mission for the PLA.
Perhaps starting in 2010, Shenzhou-8 onward will likely test docking technologies and
then support China's first manned space laboratory, the smaller predecessor to a larger
manned space station that may emerge by 2020 or thereafter. In 2003 and 2004 China
began releasing artist projections of the spacelab, and at the 2006 Zhuhai show
exhibited a model confirming these projections, of a cylinder with roughly three times
the volume of the Shenzhou. It will also have docking ports at both ends, indicating that
modified Shenzhou orbital modules or other missionized modules can be sent to the
spacelab for military or civilian missions.
China also plans an ambitious unmanned Moon exploration programme, with the
Chang'e-1 mapping probe having been launched in October 2007, to be followed by
another surveillance probe, and then a lunar lander with a rover scheduled for 2012. A
Moon sample return mission is scheduled for 2017. In 2005 a Chinese official noted that
a manned moon mission may have to wait for 15 years due to financial constraints.
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However, in October 2007 then NASA director Michael Griffin speculated publicly that
China might beat the US back to the Moon, a prediction repeated by another US space
official in early 2008. A mid-2006 report indicated that Russia and China might co-
operate on future Moon and Mars exploration missions and in 2007 it was announced
that a Russian launch vehicle would loft a small Chinese surveillance satellite to Mars in
2009. It is likely that China may benefit has benefitted from Russian lunar and planetary
exploration technologies, such as those developed by the Lovochkin concern.
Future SIGINT/ELINT Satellites
The most recent US geostationary SIGINT satellites, the Advanced Orions, have primary
intercept antennae more than 100 m in diameter and are estimated to cost USD1.5
billion to manufacture and place into orbit. While China has neither the technical
capacity nor the fiscal resources to build and maintain such systems, it will soon be able
to produce SIGINT satellites with antennae of a few tens of metres in diameter, similar
to the first US Rhyolites of the 1970s. Telecommunications satellites with fairly large
antennae (10 to 15 m diameters) have become available on the international
commercial market, affording Chinese engineers and technicians access to the
technology and the potential to use the satellites themselves for intercepting particular
sorts of telecommunications.
These possibilities were evident in concerns expressed in Washington in the late 1990s
when a Chinese consortium of official aerospace and telecommunications agencies
(including the China Satellite Launch and Tracking Control Authority) attempted to
procure two Asia Pacific Mobile Telecommunications (APMT) satellites from Hughes
Space & Communications in California. In 1996, the consortium contracted with Hughes
for the two HS-702 satellites (one spare), which were based on the HS-601 design, and
supporting ground facilities, at a cost of USD650 million. The HS-702 satellites were to
provide a satellite-based mobile phone system capable of handling 16,000 voice circuits
simultaneously over some 22 countries, from Pakistan in the west to Japan in the north,
and from northern China, south to Indonesia. However, critics argued that this would
allow Chinese authorities to intercept the mobile phone calls of all APMT users across
the region. In a memorandum on 7 July 1998, a US defence official noted that "the
Chinese sought configurations on the APMT satellite that would allow for
eavesdropping", that "the APMT satellite would give the Chinese military access to
telephone intercepts in [some] 20 Asian countries", and that the People's Liberation
Army "will be able to intercept business transactions" and use the information for
"economic advantage".
These matters were investigated by the Cox Committee, which was set up by the US
Congress on 18 June 1998 to conduct a full and complete inquiry into a plethora of
allegations about Chinese espionage in the US and the 'theft' of US nuclear, missile and
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space technologies and produced a top-secret report for Congress on 3 January 1999. A
declassified version was released on 25 May 1999, which reported that: "Unlike
previous communications satellites this satellite uses a very large antenna array, which
has raised concerns that the satellite could be used not simply for telecommunications,
but also for space-based signals intelligence (SIGINT) collection." This would give the
PRC the capability to eavesdrop electronically on conversations not only in the PRC, but
also in neighbouring countries. The 40-foot antenna, which uses a truss-like outer ring
and mesh reflector surface, is the unique aspect of the APMT satellite design. It has led
to concerns that the PRC could use the APMT satellite for signals intelligence collection
against a wide spectrum of communications.
The report also noted the concern about Chinese exploitation of the technology for
indigenous SIGINT satellite development: "Yet another concern with proposed APMT
sale is that it could help the PRC learn about the deployment of large antenna
structures. This could assist the PRC in the development of future [electronic]
reconnaissance satellites. Mechanisms used to deploy large antenna systems have been
protected from PRC scrutiny in the past. Visual access to the satellite, as well as the risk
of unauthorised discussion with engineers could give the PRC access to this sensitive
technology for the first time. Since the APMT satellite's antenna array is significantly
larger than any that has been provided to the PRC by any Western nation, it is likely that
the PRC would seek to exploit the APMT design for a future PRC SIGINT satellite." In
February 1999, the US Department of State formally denied Hughes Space &
Communications an export licence for the APMT satellites, and the contract was
cancelled. However, China has continued to seek similar telecommunications satellites
from European manufacturers, and is likely to eventually acquire geostationary
satellites with secondary capabilities for intercepting not only mobile phone calls, but
other telecommunications using these services.
China has experimented with several different sorts of ELINT spacecraft and satellite
configurations, including single, dedicated ELINT satellites, small doublets and triplets,
and ELINT packages on large multi-mission satellites. It is likely that ELINT packages have
been deployed aboard some photographic intelligence (PHOTINT), communications and
'experimental technology' satellites, as well as the Shenzhou spacecraft developed for
China's manned space programme. Since the mid-1990s, there have been several
indications that the SAST has a new ELINT satellite development programme under way,
possibly with the Southwest China Research Institute of Electronic Equipment
developing the ELINT receivers for installation aboard the satellites. The SWIEE
produces ELINT pods and associated equipment for larger ELINT aircraft.
The development, co-ordination and operational management of China's intelligence

satellite programmes is carried out by the Central Military Commission's General
Armament Department (GAD). The GAD was formed in April 1998 to provide
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comprehensive management of the People's Liberation Army's (PLA) equipment

programmes, from research and development through production and logistical
support. It was created largely by the incorporation of large parts of other military and
non-military organisations, especially the General Staff Department's Equipment Bureau
and the military-related functions and assets of the Commission of Science, Technology
and Industry for National Defence (COSTIND), including all the missile test and satellite
launch and tracking facilities formerly managed by COSTIND. The inaugural head was
General Cao Gangchuan, who had been director of COSTIND from November 1996 to
April 1998 and had presided over its dismemberment, and who had previously been
First Deputy Chief of the General Staff (1992-96) with overall responsibility for PLA
equipment and weaponry. Much of his career had been devoted to modernisation of
the PLA and its acquisition processes, including involvement in China's military space
programme.
GAD has a close, if not smooth, working relationship with the General Staff Department
(GSD). The Service Arms Department, which remains in the GSD, determines equipment
and technical requirements that are then issued as directives to the GAD. The GSD's
Third (SIGINT) and Fourth (EW) Departments work with the GAD's Department of
Electronics and Information concerning signals intelligence and electronic warfare
capability requirements and technical options, and with the China Satellite Launch and
Tracking Control Authority with regard to the operation and tasking of space-based
ELINT systems. These GAD departments also work closely with the Shanghai Academy of
Spaceflight Technology (SAST) and the SWIEE regarding the design, development and
production of military intelligence satellites and ELINT collection systems.
The GAD also maintains a working relationship with COSTIND, which is actively involved
in the acquisition of advanced aerospace and information technology from the West,
including technology relating to space-based ELINT systems. The central control station
for China's intelligence satellites is the Xian Satellite Monitor and Control Centre (XSCC),
also known as Base 26, which is located at Weinan, some 60 km northeast of Xian, in
Shaanxi province. In addition, the Beijing Aerospace Command and Control Centre
(BACC) was constructed in 1994-97 specifically to support the manned space
programme (Project 921), including the Shenzhou spacecraft and their intelligence-
collection activities. Nine tracking, telemetry and control stations are located at various
sites including: Weinan, which was built in 1972 and is part of the XSCC complex;
Changchun, in Jilin province, which is the only space-tracking station located in the
northeast of China; Kashi, in Xinjiang, which was commissioned in the 1960s and is also
called the 'No.1' station because it is the first to detect satellites approaching China
from the west; Nanning, in Guangxi, built in 1967, and used to support international
satellite networks; Qingdao, in Shandong, built in the early 1990s, mainly for the
manned space programme; Guiyang; Minxi, in Fujian; Xiamen, in Fujian; and Yilan.
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The station at Base 26 also has a control element from the Strategic Missile Forces that
is responsible for strategic early warning. This element works closely with the Third
Department's SIGINT station at Lanzhou, which has the responsibility for strategic early
warning against Russian missile attack by monitoring signal traffic associated with the
missile launch sites. The design, development and production of China's ELINT satellite
systems has been undertaken at the Shanghai Academy of Spaceflight Technology
(SAST), a research and production complex headquartered in Shanghai, which employs
some 30,000 people in 17 institutes and 11 factories that produce rockets, satellites and
tactical missile systems. Also known as the Eighth Academy, the SAST was established in
1961 as Shanghai No. 2 Bureau, and was later called the Shanghai Bureau of
Astronautics, before being redesignated SAST in 1993. Its institutes include the
Shanghai Institute of Power Machinery, which produced the launch vehicles for the
ELINT satellite programmes in 1975-91; the Shanghai Institute of Satellite Engineering,
also known as the 509th Research Institute, which has designed and produced the ELINT
satellites, has more than 600 personnel, and the Shanghai Xinwei Electronic Equipment
Research Institute, also known as the 809th Institute, and which is involved in the
development and production of military space projects.
Anti-Satellite and Military Space Programmes
While China has taken a leading diplomatic role in seeking to ban weapons from outer
space since the early 1980s, it is also a fact that the PLA has been intently interested in
building the capacity to deny the use of out space to potential adversaries. An
influential study from 1999, an extensive review of Chinese technical sources by former
US military attaché in Beijing, Lt. Col. Mark Stokes, suggests that China's quest for anti-
satellite weapons began in the 1960s. Following delays imposed by the Cultural
Revolution this effort was resumed with vigour under Deng Xiaoping's "863 Program" to
fund a broad range of basic research for the purpose of developing new high-tech
weapons.
More recently disclosed information indicates that China's ASAT ambitions also
benefited from Mao Tse Tung's mid-1950s decision to begin an anti-ballistic missile
program, which by the 1970s resulted in new long-range radar and the FJ-1, a short-
range interceptor similar to the US Sprint. But foreign technology has also helped. DF-21
motors were made reliable after technology from the former US Martin Marietta Co
allowed China to perfect solid rocket insulation and China's microsatellite technology
received a large boost from a 1998 co-development agreement with the UK's Surrey
Space Systems.
ASAT programs have been spread within the China Aerospace Corporation (CASC),
which makes missiles, satellites and space management technologies, and the newer
China Aerospace Science Industries Corporation (CASIC), which makes solid fuel
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missiles, air defences and microsatellites. Part of CASIC, ASLVC's close relationship to
the PLA was demonstrated by the appearance at its 2001 founding ceremony by then
former PLA Central Military Commission Vice Chairman Liu Huaqing and then PLA
Second Artillery Vice Commander Huang Cisheng.
PLA officers and engineers from China's military-technical sector also have produced a
large body of literature from which is it possible to gain some understanding of China's
developing space warfare doctrine and potential military-space weapon developments.
In a recent extensive analysis of such literature for the US China Commission, Dr
Michael Pillsbury draws from books on space warfare published by the PLA's National
defence University in 2001, 2002 and 2005 and from many PLA military academic and
technical journal articles. These authors stress the need for covert space warfare
preparations, the need for China to build a "space army" and for the development of
direct ascent, satellite, laser and even plasma-bomb space weapons. Chinese sources
also indicate that China may soon form a distinct "Space Force" service under the
command of the Central Military Commission.
China is keenly aware of the crucial role that communication, surveillance and data-
relay satellites play in Washington's ability to extend conventional and nuclear
deterrence in Asia, to sustain its National Missile defence, build missile defence co-
operation with Japan, and even to support Taiwanese missile defence operations. Since
the first Gulf War, PLA military planners also noted the increasing US reliance on space
systems for its military operations and for its civilian economic infrastructure. PLA
planners appear to believe that attacking US satellite networks can help deter, impede
or even prevent US military assistance in the event of a Chinese move to attack Taiwan.
Lasers
Since 1998 the Pentagon has stated that the PLA may have the ability to damage low-
Earth orbit satellites with ground-based lasers, while in September 2005, a US
government source stated that China had also "jammed" satellites. Then, in September
2006, Pentagon sources leaked that China had actually used its high power lasers
against US surveillance satellites. The Chinese lasers did not damage the satellites, as
Russian lasers had done to a US Kh-11 satellite during the 1980s, but the "hits" indicated
that China was developing its capability in this area. In the future China could opt to
place high power ground based lasers in Cuba or Venezuela to damage some of the
many satellites that are now essential to the function of the US economy. Such strikes
would serve to cause domestic US chaos, distracting US officials while China's leaders
commenced military operations elsewhere.
Direct Ascent ASATs
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In 2000 China began to reveal that it was gathering the potential to make a direct-
assent anti-satellite (ASAT) system. That year it revealed its KT-1 solid-fuel mobile low-
Earth orbit space launch vehicle and launched its first 50 kg micro-satellite, the
Tsinghua-1. Then, in 2002, China revealed that the four-stage KT-1 was based on the DF-
21 MRBM, and used a mobile truck-based launch platform. The KT-1 was successfully
launched for the first time in September 2003. By late 2004 the KT-1 had undertaken
three test launches according to a CASIC official. In 2002 China revealed that it was also
developing the KT-2 and KT-2A mobile solid-fuel space launch vehicles, based
respectively on the DF-31 ICBM and a lengthened version of the DF-31 ICBM. The KT-2
and KT-2A are intended to launch micro and nano-satellites into geosynchronous and
polar orbits. The KT-2A can carry up to three 50 kg payloads. While some sources noted
these were legitimate space launch vehicles directed at an emerging market, it was also
noted they had the potential to launch future micro and nano-satellite-based ASATs.
The reason to build a mobile space launch system is to have the ability to anticipate the
orbital track of target satellite and launch a surprise strike, rather than wait for it to
come within reach of existing fixed launch sites.
These concerns were validated on 11 January 2007, when China used a direct ascent
ASAT interceptor to destroy a Chinese FY-1C weather satellite operating in a polar orbit
over 500 miles above the Earth. Later identified by Pentagon officials with the
designator "SC-19," this ASAT is based on the DF-21 based KT-1 space launch vehicle.
The fourth stage contains a new interceptor that likely uses a combination of infrared
and radar sensors to complete its interception. The 11 January test was later revealed
to be China's third attempt to destroy the same FY-1C satellite with a SC-1 ASAT. The
first attempt may have occurred in late 2005. US officials have noted that these tests
utilised a mobile launch platform which displays a "worrisome level of flexibility."
Statements by US officials indicate that China may now be building a stockpile of SC-19
interceptors. Given the precedent of the KT-1, it is possible now that the planned larger
KT-2 and KT-2A may be developed into ASATs that can reach much higher orbits,
threatening US navigation and high level surveillance satellites. At the 2006 Zhuhai
show CASC also revealed an air launched space launch vehicle for Low Earth Orbit
launches, similar in size and function to the US Orbital Corporation Pegasus. It was
shown being launched from an H-6 bomber, but other aircraft might also serve as
launch platforms. With additional boosters such a vehicle could be developed into an
ASAT for higher polar orbits but with the added tactical flexibility of its air launched
platform.
The fact that China undertook this demonstration with no public notice, did not publicly
acknowledge the test until after twelve days and could only issue non-assuring
statements about its opposition to an "arms race" in space, all served to accentuate
alarm in Washington, Tokyo, Taipei and other capitals. The demonstration also created
564
a large cloud of debris, about 1,000 to 1,500 pieces, which will pose a decade-long
threat to many manned and unmanned space vehicles. The US, which had tested its
own air-launched ASAT in 1985 but did not build and deploy them, may now revisit this
policy and develop its own ASAT capabilities.
Unmanned Space Combat Platforms
China may be researching the feasibility of using unmanned space platforms for both
space and Earth-attack combat missions. Chinese aerospace literature indicates that the
PLA may be developing a "space based ground attack weapon system," meaning, a
satellite that can dispense weapons for attacking targets on Earth. This literature
describes the use of a "war capsule" which delivers the weapon through the
atmosphere to its target. One Chinese aerospace article notes, "The greatest advantage
of a space-based ground attack weapon system is its high speed and short re-entry
time. It is extremely difficult for the enemy to intercept such a weapon." Indeed, US
missile defence systems very much depend on the warning time and interception cues
given by a missile launched from great distances, whereas a stealthy space platform
might strike with no warning from nearly atop its target. While China has disclosed no
information about possible plans for such a space weapon platform, there should be
little doubt that it is capable of producing such a weapon if it so chooses. The ability to
develop and launch manned space vehicles the size of the Shenzhou or a similarly sized
space lab point to China's space weapons platform potential. In addition, China may be
developing an unmanned "space plane." Such space weapon platforms could potentially
carry a range of nuclear, non-nuclear, kinetic and chemical/biological weapons. Two
other potential unmanned space combat platforms were revealed in December 2007
from Chinese Internet sources. First, the "Shenlong" or "Divine Dragon" space plane was
seen suspended from a H-6 launch aircraft. Other internet sources suggest the Shenlong
is also known as the "863-706," indicating its funding comes from the "863 Program" of
high technology research to support military modernisation. Shenlong's design and
testing is apparently being led by the 611 Institute associated with the Chengdu Aircraft
Company. Its development has also been assisted by the Nanjing University of
Aeronautics and Astronautics, Northwest University and the Harbin Technical
University. Shenlong is apparently a test article designed to validate new reusable trans-
atmospheric vehicle technology. A second unmanned space aircraft is similar to the
aborted French Hermes space plane design of the early 1980s. In 1996 a Chinese
brochure revealed a wind tunnel model similar in configuration to the Hermes, and then
in December 2007 another Chinese Internet source image of this same space craft
appeared, indicating it may still be an active program. The Shenlong or "Hermes" design
could fulfil a number of civil/commercial missions, but could also be configured to
launch military microsatellites, satellite interceptors, and to deliver "war capsules" to
attack ground targets.
565
Manned Military Space
China's willingness to combine civilian and military functions has been demonstrated by
all Shenzhou missions through 2005. This sets a precedent, inasmuch as the PLA
controls China's manned space programme, that future manned Shenzhou missions and
eventual permanent manned space stations may also perform some military missions.
Such might include defensive and offensive space combat missions. One or more
military surveillance or combat-configured Shenzhou orbital modules could be
transferred to a space lab or space station before hostilities. Potential future space
shuttle like vehicles would also offer multiple military uses. If China does continue with
this trend, it is also conceivable that China will seek to perform defensive or even
offensive military missions from a future Moon base. The Moon would offer an ideal
location from which to monitor or even control the strategic "high ground" around the
Earth.
In the late 1950s the US military studied manned military space stations and military
Moon bases, but did not follow through with either. The former Soviet Union developed
extensive plans for manned and unmanned military space platforms. The Soviet had at
least three military Salyut space stations and tried to launch its large Polyus unmanned
laser combat station. But the Soviets eventually abandoned manned military stations in
favour of unmanned military space platforms. It is possible that China has reached an
opposite conclusion about the utility of a manned military space presence.
Another potential Chinese manned space combat platform could be a "space plane" or
a "space shuttle." In the 1990s the Shenyang Aircraft Company developed a concept
small space plane that would be launched from an air-breathing hypersonic flying first
stage. More recent Chinese aerospace literature has mentioned the idea of a "space
plane" that can fly at very high altitudes, and enter and exit Low Earth Orbit when
necessary. Such a space plane could attack targets or dispense microsatellites. The
China Aerospace Company has also discussed plans to develop a "space shuttle" similar
to but slightly smaller than the U.S. model, perhaps by the end of the next decade.
Chinese sources indicate that their space plane or space shuttle will be designed for
military as well as non-military missions. Before the end of the end of the Soviet regime,
the Soviet military also envisioned the use of small and large space planes and shuttles
for space combat. This would include arming space planes with missile or energy
weapons, and even deploying "Space Marines," or armed astronauts to do battle in
space.
566
DEFENCE BUDGET
Summary
Defence spending trends
Defence Equipment Imports
Summary
2008
Total Defence Spending (USD billions) 65.6
Total Defence Spending (CNY billions) 472.4
Total Defence Spending (% of GDP) 1.66
Total Defence Spending per member of Armed Forces USD32,000
Includes People's Liberation Army Armed Police.
China's official defence spending has been on a steep and rapid trajectory for 15 years,
with double-digit increases annually since the early 1990s. Figures for 2008 mark the
continuation of this trend and there is little indication that it will slow in the next few
years. Expenditure has risen to meet the requirements of the 11th Five Year Plan (2006
to 2010) and this is likely to continue as the plan unfolds. China's aim of extending its
strategic reach in order to protect its access to markets and energy means that the
Peoples Liberation Army (PLA) has extensive modernisation requirements. The high-
technology equipment that is needed to meet those goals is expensive to produce and
import. There are also significant wage pressures in a two million-strong army,
particularly as the PLA looks to recruit and train more highly skilled soldiers. Ongoing
political tensions, especially over Taiwan, are also likely to be enhancing PLA influence
over the budget as the 2006 to 2010 Five Year Plan reaches its final stages.
The official 2008 defence budget makes China the fourth largest military spender
globally, with a budget equal to that of France, although below both the UK and the US.
The US Department of Defense estimates that if non-declared spending is taken into
consideration, the real budget is two to three times higher than official announcements
567
- which means it would be the second biggest spender in the world.
Defence spending trends
The official 2008 defence budget was announced on 4 March 2008, with Chinese state-
run media reporting that it was to be set at CNY417.8 billion (USD58.1 billion). This
reflects an increase of nearly 19 per cent over the official 2007 budget. However, as
with other years, the officially reported increase is somewhat lower (at 17.6 per cent)
indicating that there were in-year budget increases in 2007 that had raised spending for
the year beyond what was initially announced.
Regardless of the slight discrepancy, the increase marks the 20th consecutive year of
double digit defence spending growth. The budgets of 2006, 2007 and 2008 have seen a
return to the higher levels of budget growth seen in the early years of the 21st Century
when increases in 2001 to 2002 averaged 19.27 per cent. This follows a period of lower
rises from 2003 to 2005 which averaged 13 per cent annually. Overall, the average
annual increase in spending since 2000 has been 16.5 per cent.
Jane's reported that National People's Congress spokesman Jiang Enzhu has stated that
the rise will pay for enhanced benefits for military personnel, education and training in
the PLA and will offset the impact of recent increases in the price of oil. In comments
quoted by the country's state-run media, Jiang added that the defence budget increase
was a "compensatory" rise, saying it will help "reinforce the originally weak basis of
military defence, given the rapid and steady growth of China's economy and fiscal
revenues in recent years". Jiang also added that the military procurement budget would
receive a "moderate" increase so as to "enhance the military's ability to conduct
defence operations under 'informationised' conditions".
In March 2007 Jiang Enzhu announced that defence spending was to rise to CNY350.92
billion (USD44.06 billion) in 2007, a 17.8 per cent increase in its official military budget
over 2006.
The announced percentage increase can give an insight into what previous years' actual
spending has been compared to the announced budget. For example the provisional
2007 defence budget stated that official spending would total CNY350.92 billion
(USD44.06 billion). The government claimed this was a 17.8 per cent rise on the
previous year's figure, however this would indicate actual spending in 2006 of CNY297.9
billion, CNY14.2 billion more than the figure of CNY283.8 stated in the 2006 Budget and
reiterated in the 2006 Defence White Paper.
Furthermore, as it has been well documented, most observers believe that true
military-related spending in China is two to three times the official figure. The US
568
Pentagon, in its report 'PRC Military Power 2008', estimated that total military-related
spending was between USD98 billion and USD140 billion in 2007, in comparison to the
2007 official figure of USD46 billion.
As well as the well documented deficiencies in Chinese defence budget reporting, one
other potential reason behind the assumed 'undeclared' discrepancy is the relative
cheapness of domestic production costs in China compared to the major industrialised
powers. Using Purchasing Power Parity (PPP) (rather than the standard market rates) to
convert Chinese spending into its dollar equivalent produces a much higher dollar
defence budget than that obtained using standard market rates. The World Bank
produces an implied PPP rate for China and the US of 1.9. Using this measure would
result in a dollar-equivalent defence budget of USD157 billion in 2006 - USD120 billion
higher than that obtained by using market exchange rates.
In previous years government spokesmen have said the increases were necessary
mainly due to soldier salary increases. However in a rare frank statement in early March
as the 2007 budget was announced, Geneal Liao Xilong, Chairman of the General
Logistics Department, stated that increased spending would go towards improving
China's ability to wage high-tech warfare, to defend its information systems against
jamming and to co-ordinate among land, air and sea forces. This is in line with the
priorities set out in the 2006 White Paper.
Escalating personnel costs resulting from both improving service conditions and the cost
of downsizing, together with the loss of funds from divested PLA commercial
enterprises, suggest that double digit increases in the medium term are likely.
Expenditure has risen to meet the requirements of the 11th Five Year Plan (2006 to
2010) and this is likely to continue as the plan unfolds. Political tensions, especially over
Taiwan, will likely serve to enhance PLA influence over the budget as the 2006-2010
Five Year Plan reaches its final stages.
Defence Equipment Imports
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
USD (billion) N/A 3.0 1.0 1.15 1.92 1.24 1.25 n/a n/a n/a
Source: Jane's Defence Forecasts.
China has traditionally relied on Russia to fulfil its requirements for advanced combat
equipment and it has been the only source for advanced military systems. This
relationship has become strained as China's own defence-industrial capabilities have
569
improved, with Jane's reporting in February that new deals for Russian exports to China
have virtually disappeared. Part of the problem is China's annoyance over Russia's
willingness to sell some of its most advanced weaponry to India.
Despite this apparent cooling of the defence-export relationship, some key players in
Russia are understandably keen to maintain the USD1-2 billion annual trade: on 11
October 2007, Russian Deputy Foreign Minister Alexander Alexeyev said Moscow would
maintain its arms export position with regard to Beijing for the foreseeable future,
saying, "now China has its own advanced weapons manufacturing technology there is
no need [for China] to buy outdated military equipment," adding that Russia was
concentrating on selling new equipment to China.
Nikolay Dimidiuk, director of Special Projects at Russia's state export organisation

Rosoboronexport, also told Jane's in September 2007 that China's continuing industrial
modernisation will not influence the current import-export relationship,"No, this does
not affect it," Dimidiuk said. "We have sold the licence of production for military
equipment to China. China is our neighbour and strategic partner, and they remain
interested in Russian equipment."
570

Overview
Tibetan Separatists
Uighur Separatists
Overview
TOTAL STRENGTH
Uighur separatists - unknown
Tibetan separatists - unknown
China's draconian and effective law enforcement has ensured that threats to the
stability of the country are low. Despite widespread secessionist sentiment in outlying
provinces such as Xinjiang and Tibet (Xizang), organised resistance is minimal, and of
little concern to Beijing. The ethnic and cultural differentiation of the population of both
provinces means loyalty to the central authority in China is lacking, and dissatisfaction
has been caused by mass migration programmes that are overwhelming both regions,
which has the potential to manifest itself in infrequent but serious outbreaks of ethnic
or political violence, such as the March 2008 riots and ethnic violence in Tibet in March
2008. However, these are not as yet reflective of an organised insurgent movement in
the regions.
Tibetan Separatists
• Group name: Tibetan separatists. There is no single identifiable group of separatists

and the Chinese government has not still identified specific "terrorist" groups by
name. In general, non-violent opposition is loosely co-ordinated, sometimes by
Buddhist monks, and receives some support from the self-proclaimed Tibetan
government-in-exile at Dharamsala in India. China claims Tibetan exile youth groups,
such as the Tibetan Youth Congress, retain the desire, if not the capabilities, for violent
unrest. At various times between 1954 and the late 1970s, there were groups
associated with the Khampas in eastern Tibet, and with the so-called Special Frontier
Forces, which had links to the CIA, in the remote Tibetan part of Nepal, the valley of
Mustang. Such groups no longer exist as active entities.
• Level of threat: In-country, the present level of threat from organised militancy is very
low. Separatists or those dissatisfied with Han Chinese encroachment or rule from
Beijing have only been able to stage limited resistance and are thought to be little
571
more than a nuisance to Chinese security forces. Out of country, attempts to persuade
or pressure China are certainly an irritant for Beijing but, historically, have achieved
little.
• Status: Politically active; virtually no organised violent activities have been attributed
to Tibetan separatists, although infrequent uprisings can create temporary instability.
• Date of founding: No formal date. Tension and unrest goes back as far as 1954, and
possibly as far as 1951, the year after China's annexation of Tibet.
• Aims and objectives: Since the 1950s, the objectives of Tibetan separatist groups have
been political independence for Tibet and religious freedom for its citizens. However,
since the late 1980s, the Dalai Lama, the Tibetan spiritual leader, has advocated a
"middle-way approach" giving "genuine autonomy" to Tibet, as opposed to either
continued direct rule from Beijing or total independence as desired by many Tibetans
either at home or in exile. This approach was formally outlined in 1987 in his Five-
Point Peace Plan, delivered to the US Congress, and in his Strasbourg Proposal of
1988.
• Leaders: Leadership on the ground in Tibet remains unknown. Spiritual leadership and
inspiration for all Tibetans is provided by the exiled Dalai Lama. There is a Tibetan
government-in-exile, headed by Kalon Tripa Lobsang Tenzin (also known as Samdhong
Rinpoche), located at Dharamsala in India.
Uighur Separatists
• Group name: There is no single, dominant group fighting for independence in Xinjiang
Uighur Autonomous Region (XUAR), in large part because of the lack of unity within
the region itself. The main groups identified by the Chinese government as actively
engaged in guerrilla warfare in XUAR include the Organisation for the Liberation of
East Turkistan, the East Turkistan Islamic Movement, the East Turkistan Liberation
Front, and the Turkistan Islamic Party. Other groups that have been mentioned
include: the United Revolutionary Front of Eastern Turkistan; the Organisation for the
Liberation of Uighurstan; the Xinjiang Liberation Organisation; the Islamic Reformist
Party "Shock Brigade"; the East Turkistan Islamic Party; the East Turkistanian
Opposition Party; the East Turkistan Islamic Party of Allah; the Islamic Holy Warriors;
East Turkistan International Committee; the Uighur Liberation Organisation; the Home
of East Turkistan Youth; the Free Turkistan Movement; the East Turkistan Party (Tengri
Tag), a pan-Turkic movement; the East Turkistan People's Party; the East Turkistan
National Congress; and the Regional Uighur Organisation.
• Level of threat: Uighur separatists pose no immediate threat to Chinese rule, but
intermittent small-scale attacks on government buildings occur.
• Status: China reported raids on alleged Uighur separatists in January 2006 and January
2007, but no attacks were reported until early 2008. With the Olympic Games acting
as a focal point for international attention, a rash of attacks or attempted attacks
between March and August 2008 occurred, highlighting continued violent activity.
572
• Date of founding: Low-intensity rebellion has been ongoing since the PRC takeover in
1949.
• Aims and objectives: To establish an independent Turkic state of East Turkistan
(sometimes referred to as Uighurstan) under ethnic Uighur control. Uighur identity,
unlike other minority groups in China, owes almost nothing to Chinese culture,
although the influences helping Uighurs to define themselves as a people did come
from China (including communist nationality policy). In terms of language, religion,
culture and diet, they are unlike any other minority group in the country. As such,
Islamic and Turkic culture have been greater influences on the Uighur identity than
Chinese; and Uighurs look more to the west culturally than the east.
• Leaders: Hasan Mahsum, allegedly the founder of ETIM, was killed in a
counter-terrorism operation in South Waziristan, Pakistan on 2 October 2003.
Since then, no military leader has been identified for ETIM or Uighur
separatism, although a self-styled Commander Seyfullah released a video in
2008 claiming to represent the Turkistan Islamic Party. However, his
importance in a marginal group is unclear.
There has been no political figure as widely recognisable as the Dalai Lama in
Tibet to represent Uighur issues. Political group leaders have included Modan
Mikhilisi and Ashir Vakhdid, but since the death of Yusuf Alptekin, a former
senior East Turkistan Republic official, in 1995, the main leaders have been
embroiled in personal rivalries. The emergence of his son, Erkin Alptekin as
president of the World Uighur Congress may change this if he can establish
himself as the recognised leader of Uighur exiles. Rebiya Kadeer is a Uighur
businesswoman and activist for Uighur separatism, who lives in exile in the US
having been detained between 1999 and 2005.
573
SECURITY AND FOREIGN FORCES

Police
People's Armed Police
Ministry of Public Security
Customs
Organisation
Border Guards
Organisation
Security Forces
Organisation
Role and Deployment
Intelligence Agencies
Organisation
Role and Deployment
Foreign Forces
Organisation
Police
TOTAL STRENGTH
People's Armed Police -1,500,000 (2006 estimate)
Ministry of Public Security (People's Police) - unknown
People's Armed Police
574
Organisation
Established in 1983, the People's Armed Police (PAP) has an estimated 1,500,000
personnel, organised into three types of unit: an internal security force of 45 divisions; a
second force of 186,000 personnel, which has a border and coastal control mission; and
a third force of 69,000 which protects key national logistic sites. The PAP is organised
and run along military lines. Its general headquarters has three departments
responsible for operational, political and logistical matters.
Formerly under the joint control of the Central Military Commission (CMC) and the
Ministry of Public Security (MPS), in October 1995 control of the PAP's internal security
wing (of about 441,000 personnel) was consolidated under the CMC. The revised
structure left the MPS with direct control over only a limited number of border security
troops and a number of auxiliary units, such as forest protection units.
Unlike the vertical leadership of the PLA units, the armed police force falls under the
dual leadership of the State Council and the Central Military Commission. In a combat
situation, the armed police corps is mainly under the unified command of the Central
Military Commission.
Mobile units: The most important contemporary development within the PAP has been
the creation of fast-response mobile units. These 'fast units', which are drawn from the
internal guard forces, were first formed in 1988 and their numbers grew rapidly after
the June 1989 crackdown. Each general detachment has at least one mobile regiment
and each internal guard regiment is required to have at least one battalion or company
that can function as a rapid response unit. Beijing's second general unit, which was
created after the 1989 Tiananmen Square crisis, is the PAP's only mobile general unit.
Around one third of all PAP internal guard units are estimated to have now been turned
into mobile units.
Chain of Command
In March 1998 the then-commander of the PAP, Yang Guoping, was promoted to
general, revealing the rising status and importance of the PAP. For the first time since its
inception in 1983 the paramilitary force had a full general as its commander, upgrading
the force in the heirarchical system.
Wu Shuangzhan
Renmin Ribao reported in January 2000 that Wu Shuangzhan, commander of the PAP,
Jia Chunwang, first political commissar, and Xu Yongjing, political commissar, signed
orders to commend selected armed police units for their outstanding performance in
575
carrying out routine duties and dealing with 'unexpected events'. This report revealed
that Lieutenant General Wu Shuangzhan, a former deputy commander, replaced
General Yang Guoping, who reached retirement age, as commander of the PAP. It has
been learned that the high-level personnel reshuffle was one of the decisions reached
at a recent enlarged meeting of the Central Military Commission and was a routine step
taken to make the first-line military leadership a little younger.
Wu Shuangzhan is the sixth commander of the PAP since its establishment in 1983. He
originally ranked third among the six deputy commanders. According to informed
sources, Wu came from the 24th Group Army stationed in Chengde under the command
of the Beijing MR. He was involved in the 1989 Tiananmen suppression operations in his
capacity as deputy commander of the group army. The then-commander of the group
army was Lieutenant General Zhou Yushu, who was promoted to commander of the
PAP.
Wu Shuangzhan was subsequently promoted to deputy chief of staff of the Beijing

Military Region, a post equivalent to army commander in rank. After his former
superior, Zhou Yushu, left the PAP, Wu was moved from the People's Liberation Army to
serve as chief of staff of the PAP. He served from 1993 in charge of the headquarters
and the leading organ for military operations. In February 1996 Li Peiyao, vice chairman
of the National People's Congress Standing Committee, was murdered by his armed
police guard. PAP Commander Ba Zhongyan and Political Commissar Zhang Shutian
were purged. Wu Shuangzhan, however, was promoted to deputy commander and
concurrently chief of staff.
Wu Shuangzhan's promotion can be tied to his background in the 24th Army. The army
was the primary force of the Third Field Army during the Chinese civil war. After 1989 at
least one infantry division was transformed into the Second Corps of Beijing's armed
police force and became the nation's first mobile corps and second police corps in a
province or municipality. The corps is equipped with the most advanced anti-riot
equipment and staffed with specially trained personnel. As the corps' former superior,
Wu Shuangzhan will be able to retain the unit's reliability in protecting the capital's
safety, as well as representing the continuity of the unit's leadership. On 9 January
2004, Wu attended a high-profile Spring Festival variety show held in Beijing for Beijing
area military officers, significant in that the public listing of the officers in attendance is
viewed as a gesture of public support for Jiang Zemin.
Role and deployment
The PAP is one the three main elements of the Chinese armed forces (PLA, PAP and
militia/reverse forces). Its primary peacetime role involves maintaining social stability
and order, guarding critical buildings and infrastructure, and aiding disaster relief
576
operation (for instance forest fires and floods).
In the past, these police units were at the division level. However, in line with the
doctrinal shift within the People's Liberation Army (PLA) to limited high-technology
wars, the police corps of all provinces, autonomous regions, and municipalities (as well
as special police corps under the Headquarters of Chinese People's Armed Police Force)
were upgraded to become units of the assistant army level in October 2000. To
correspond to this move, armed police units have more personnel, a larger
infrastructure, and newer weaponry.
In these 'high-technology wars', A-type military units of the three forces of the PLA will
form the major forces, and armed police units will maintain the security of major
political and economic targets, carry out border duties, and handle unexpected
incidents at home. In addition, the PAP will send its more experienced units to directly
participate in some campaigns.
The major task of the armed police during wartime is to work with local military units,
the reserve force, and militia as well as with public and government security
departments. They would guard borders, protect major government organisations and
important civil targets, safeguard social order, deal with major unexpected incidents,
and eradicate the supply of enemy information.
Once critical urban warfare comes to an end, armoured units of the PLA withdraw from
the city to its suburban areas. The armed police units are subsequently responsible for
defeating the residual force of the enemy and safeguarding social order. The field army
units will work with the armed police units only when necessary.
Given their experience in dealing with major unexpected incidents at home, armed
police units that shoulder the task of participating in military operations know how to
carry out anti-guerrilla warfare in the cities. In this way, they should effectively alleviate
the damage done to cities during a war.
Training
Throughout September 2002, China held large-scale military drills in a series of regions
involving soldiers, reservists and police officers. The exercises were intended to prepare
reserve units for battle and help other forces practice combating terrorists, biochemical
warfare and violent crime. In the largest of the drills, the Beijing Military Region
mobilised more than 1,500 reserve duty officers from five counties and cities at an
unidentified practice site in northern China. The units practised mobilising to active duty
at short notice, and undertook combat manoeuvres with experienced soldiers in the 20-
day drill. It was the first time the military zone- which covers the northern Chinese cities
577
of Beijing and Tianjin as well as the provinces of Hebei, Shanxi and Inner Mongolia - had
mobilised so many reservists units.
In other parts of the country that year, police-type exercises were conducted. In
Guizhou province, an air raid drill involving around 600 soldiers and militiamen was
organised at Leizhuang Airport to fend off "an invasion by enemy planes". In Fuzhou
city, southeastern Fujian province, police officers held a drill for an audience of 20,000
civilians in a sports stadium where they practised combat, dealing with riots by football
fans, anti-hijacking manoeuvres and hostage rescues. In 2003 this same range of
activities continued. The PAP is also going to play a significant role in security for the
2008 Olympics scheduled to be held in Beijing.
Inventory: People's Armed Police
In 2000, armed police units that shouldered the task of participating in military
operations were equipped with various advanced heavy field weaponry and light
weaponry. In addition, they have intensified their special training such as anti-guerrilla
warfare in the cities.
All armed police units are being equipped with a significant array of sophisticated
weaponry including new purpose-developed armoured vehicles, amphibious vehicles,
new-type lethal and non-lethal weapons, high-precision guns and high-performance
anti-mob shields for police use. The PAP has also begun to acquire helicopters.
Ministry of Public Security
Organisation
The Ministry of Public Security (MPS) is the principal Chinese authority for policing
activities, largely through the unarmed People's Police. The ministry has functional
departments for areas such as police operations, prisons, and political, economic, and
communications security. Subordinate to the ministry are provincial-level public
security departments; public security bureaux and sub-bureaux at the county level (the
bureaux located in the prefectures and large cities, the sub-bureaux in counties and
municipal districts); and public security stations at the township level. While public
security considerations have a strong influence at all levels of administration, the police
appear to wield progressively greater influence at the lower levels of government.
The Science and Technology Bureau, operating under the Ministry of Public Security, is
in charge of national scientific and technical administration that is related to public
security. Computers are extensively used in criminal investigation, traffic control and
communication. A fingerprint search system was computerised in 1986. In 1987, a
578
special police communication network linking all the police agencies at the county level
and above was established. A radio communication network at provincial level was also
established in the 1980s.
Role and Deployment
The MPS is responsible for the majority of daily police activities within mainland China,
but is not involved in domestic intelligence gathering (which is under the guise of the
Ministry of State Security) or paramilitary functions (undertaken by the PAP). Hong
Kong and Macau both retain their own police forces (the Hong Kong Police Force - HKPF
- and the Security Forces of Macau - SFM).
Training
The Institute of International Politics was established in 1980, providing training for
police and public security personnel, along with training for counterintelligence and
political security cadres. When the former Central Investigation Department training
institute became part of the Ministry of State Security, the Institute of International
Politics, which remained part of the Ministry of Public Security, was renamed the
Chinese People's University of Police Officers. Its counter-intelligence department still
supplies the Ministry of State Security each year with a small number of personnel,
while graduates of other departments primarily work for the Ministry of Public Security.
Customs
TOTAL STRENGTH
50,000 (2004 estimate)
Organisation
People's Border Inspection
The People's Border Inspection force (bian jian) is most widely seen in the ports and
river estuaries of China, where it operates a number of patrol vessels.
People's Customs Service
The Customs Service (hai guan) is also seen widely in ports, coastal waters and river
estuaries.
Border Guards
579
TOTAL STRENGTH
See Police
Organisation
People's Border Security Police
The border security force (gong bian) operates under the direct command of the PAP. In
coastal provinces this force operates numerous coastal patrol vessels (which have dark
green hulls), although the police manning them wear PLA-style uniforms.
People's Marine Security
The maritime force (hai gong) operates a variety of small patrol craft for anti-smuggling
operations.
Security Forces
TOTAL STRENGTH
12,000,000 (2004 estimate)
Organisation
China maintains some 12,000,000 paramilitary personnel, responsibility for them

divided between the Ministry of Public Security and the PAP. The largest security force,
the Militia, consists of approximately 10,000,000 personnel ranging from 18 to 35 years
of age. It is divided into two groups: the Basic (Primary) Militia and the Ordinary Militia.
Role and Deployment
The Militia's principal task is to assist in production, to undergo military training and to
defend China's frontiers in peacetime. In wartime, the militia would supply reserves for
mobilisation, provide logistical support to the PLA and conduct guerrilla operations
behind enemy lines.
Intelligence Agencies
TOTAL STRENGTH
580
n/a
Organisation
In June 1983 the National People's Congress, perceiving a growing threat of subversion
and sabotage, established the Ministry of State Security under the State Council. The
new ministry was charged with ensuring"the security of the state through effective
measures against enemy agents, spies, and counter-revolutionary activities designed to
sabotage or overthrow China's socialist system". The new ministry was an
amalgamation of the previous Central Investigation Department and the counter-
intelligence elements of the Ministry of Public Security. At its inception, the ministry
pledged to abide by the state constitution and the law and called upon the citizenry for
their co-operation, reminding them of their constitutional obligations to "keep state
secrets" and "safeguard the security" of the country.
Role and Deployment
Chinese intelligence agents are generally assigned to overseas postings for terms of six
years, 10 years, or long-term residence depending on the nature of the job or on
performance. In mid-September 1996, the Central Military Commission and the State
Council approved the report of the plan drawn up by the General Staff Department and
Ministry of State Security on the consolidation, readjustment, and reinforcement of
intelligence in Hong Kong, Macau, and abroad.
First Bureau: Domestic Bureau
The First Bureau, the Domestic Bureau, which resembles the former Second Directorate
of the Soviet Committee for State Security (KGB), mainly operates within China. Its
duties include recruiting people with overseas connections to work for the Ministry of
State Security. The First Bureau recruits persons going abroad for study, business,
pleasure, residence, inheritance or other purposes.
The First Bureau expedites procedures applying for exit documents in the event of
troubles or difficulties with other agencies. It also offers travellers payment in exchange
for intelligence collection. The bureau is also responsible for receiving Chinese secret
agents from abroad who are returning to mainland China every few years for holidays,
or to receive medical treatment, awards and citations, and to meet their superiors.
To conceal the identity of its agents, the First Bureau may require its agents to enter
China through one or more third countries. The Ministry of State Security has special
guesthouses in the suburbs of Beijing to provide accommodation for returning agents.
581
These guesthouses are self-contained so the agents do not have to meet their
neighbours.
Second Bureau: Foreign Bureau
The Second Bureau is the Foreign Bureau, responsible for operations abroad. The
Second Bureau outlines collection priorities and receives, analyses and reports to higher
levels intelligence collected by its operatives and agents.
The bureau is responsible for sending clandestine agents abroad using covers such as
cadres posted to foreign trade companies, banks, insurance companies, ocean shipping
companies. Chinese embassies and consulates also have senior bureau personnel
working under diplomatic cover while performing intelligence functions. In the past only
Renmin Ribao and Xinhua were used to provide journalist cover for agents. However
this practice has recently extended to most major newspapers, including Guangming
Ribao, Jingji Ribao, Zhongguo Qingnian Bao, and Gongren Ribao, which have
correspondents in the US, Japan, Europe and other countries.
The Second Bureau is also responsible for recruiting agents abroad. Some of these
agents have worked for the bureau for decades, while others are sleeper agents who
are not normally assigned duties and are only activated as needed.
Third Bureau: Hong Kong, Macau and Taiwan Bureau
The Third Bureau, the Hong Kong, Macau and Taiwan Bureau, is responsible for
operations in these areas. The main activities of the bureau include agent operations in
Hong Kong, Macau and Taiwan, and recruitment of people with connections in the
three areas. The bureau receives Chinese agents operating in Hong Kong, Macau and
Taiwan when they return to the mainland for reporting, tasking or holidays. It also
receives, analyses and reports to higher-level intelligence collected by agents in its area
of responsibility, and gives agents directions on the types of intelligence required.
The Ministry of State Security increased its activities in Hong Kong following the
reversion of the territory in 1997, where it can now operate without foreign
interference against pro-democracy elements in the territory.
The Ministry of State Security is directly responsible for the work group charged with
gathering intelligence in Hong Kong and Macau. This group, code-named 'Winter
Chrysanthemum,' is mainly responsible for the following three tasks:
1. monitoring and gathering information on the activities of Taiwanese organisations and

their responsible persons in Hong Kong and Macau, as well as the activities of
582
Taiwanese political and military figures visiting Hong Kong and Macau;
2. monitoring and gathering information on activities of foreign political figures and
political organisations in Hong Kong; and
3. gaining access into the core of political bodies in Hong Kong and keeping abreast of the
action plans of political bodies and their contacts with foreign political bodies.
Fourth Bureau: Technology Bureau
The Fourth Bureau, the Technology Bureau, studies and develops intelligence gathering
and counter-intelligence techniques. These include tracking, wiretapping, photography,
recording, communications and intelligence transmission. Owing to the technical nature
of these tasks, post-graduates in virtually every discipline have been recruited to the
work of the bureau.
Fifth Bureau: Local Intelligence Bureau
The Fifth Bureau, the Local Intelligence Bureau, is responsible for directing and co-
ordinating the work of local departments and bureaux of the Ministry of State Security
at the provincial and municipal levels.
Sixth Bureau: Counter-intelligence Bureau
The Sixth Bureau is the Counter-intelligence Bureau. The primary task of Chinese
counter-intelligence activity is to work against overseas Chinese pro-democracy
organisations or those perceived as potentially destabilising to China. The bureau has
been harbouring all sorts of suspicions in the past few years. Investigation priorities
have included Western consortia investing in China, which were suspected of
involvement in attempts to bring about peaceful political reform in China. Overseas
Chinese pro-democracy organisations have been investigated under suspicions that
they were sending "investors" to China, who were actually engaged in anti-communist
activities. However, these investigations have over time been reduced owing both to a
lack of evidence and because the bureau's activities were affecting the confidence of
foreign investors. Work is now focused on surveillance and security awareness
education activities among local authorities encouraging reporting of suspicious people
and activities.
In June 2005 a Chinese national working as a political affairs consul in the consulate in
Sydney, Australia, Chen Yonglin, defected, applied for asylum and claimed he worked
for "6-10," that is the 10th office in the Sixth Bureau. Chen claimed that China had
"1,000 spies" in Australia, primarily businessmen and students resident in the country.
Chen stated that 6-10 was tasked with monitoring the Falun Dafa movement, outlawed
in China.
583
Seventh Bureau: Circulation Bureau
The responsibilities of the Seventh Bureau, the Circulation Bureau, are to check, verify,
prepare and write intelligence reports and special classified reports on the basis of first-
hand intelligence obtained from open or secret sources. The former are written for the
departments concerned, while the latter are submitted to the top Chinese hierarchy.
Although these activities appear straightforward, no small art is required in deciding
what should or should not be circulated, and to whom. Work at the Seventh Bureau is
said to be the most tedious of all the Ministry of State Security units, and extremely
difficult, with morale a continuing problem.
Eighth Bureau: China Institute of Contemporary International Relations (CICIR)
The Eighth Bureau is one of the largest institutes for research on international relations,
with a staff that at one time numbered over 500 research fellows. The bureau is divided
into some 10 research offices, specialising in general international relations, global
economy, the US, Russia, Eastern Europe, Western Europe, the Middle East, Japan, Asia,
Africa, and Latin America. One of its main objectives is to collect open source
information.
The institute is also responsible for providing every foreign affairs secretary of each
Political Bureau Standing Committee member with subscriptions to major English-
language newspapers as well as major Hong Kong and Taiwan newspapers and
magazines. Another mission of the institute is the compilation of publications issued to
units at the provincial, army, and ministerial levels.
CICIR seeks to maintain relations with other academic or think-tank organisations in

Asia, Europe and North America, often placing its analysts in these organisations.
Ninth Bureau: Anti-Defection and Counter-Surveillance Bureau
The Ninth Bureau, the Anti-Defection and Counter-Surveillance Bureau, is responsible

for countering efforts by foreign intelligence services to recruit personnel of the
Ministry of State Security and among cadres of Chinese institutions abroad. It also
counters surveillance, wiretapping and infiltration by foreign intelligence services
against Chinese embassies and consulates. This has required the import in recent years
of sophisticated state-of-the-art surveillance equipment. The Ninth Bureau includes an
overseas students section which specialises in "anti-defection" work among Chinese
students abroad, which includes both preventing their recruitment by foreign
intelligence services as well as student participation in overseas Chinese pro-democracy
organisations. In the last decade there has been growth in the number of overseas-
based"Chinese student-run" organisations that have served to expand surveillance of
584
this community but also organise them for public demonstrations, either in favour of
visiting Chinese high level leaders or against top Taiwanese government officials.
Tenth Bureau: Scientific and Technological Information Bureau
The Tenth Bureau, the Scientific and Technological Information Bureau, is focused on
collecting economic, scientific and technological intelligence, following the example of
Russian agencies in stepping up the work of collecting scientific and technological
information from the West. This represents a significant shift in emphasis from work
under the former Central Investigation Department, which was mainly concerned with
political intelligence.
Eleventh Bureau: Electronic Computers Bureau
The Eleventh Bureau, the Electronic Computers Bureau, is responsible for analysing
intelligence gathered with electronic computers, and operating the computer network
of the Ministry of State Security. It also collects information on advanced electronic
systems from the West, and protects the information systems of the Chinese secret
service from attacks by foreign intelligence agencies.
Foreign Affairs Bureau
The Foreign Affairs Bureau co-ordinates and develops co-operation with foreign
intelligence organs.
The intelligence agencies of China and Pakistan have worked very closely since the
1960s, including co-operation on nuclear weapons technology and Chinese support of
Pakistan in its conflict with India.
Despite official Chinese support of Arab countries, close secret ties exist with Israeli
intelligence agencies. Israel is supplying China with much-needed Western military
technology to drive a wedge between China and the Arab countries. Since the 1980s,
senior intelligence leaders from both countries have exchanged visits on several
occasions.
Close ties between Chinese and North Korean intelligence agencies include North Korea
providing information on Japan gathered by Korean nationals in Japan as well as
intelligence on American forces in South Korea.
In the 1970s and 1980s when China and the US made common cause against the Soviet
Union, the Chinese permitted the US to establish several intelligence collection facilities
along the Soviet border. In the wake of the Sino-Russian reconciliation and Sino-US
585
estrangement in 2001, the Chinese and the Russians have forged an Asia-Pacific
strategic partnership. The intelligence organs of the two countries are collaborating in
collecting diplomatic, political, economic and military intelligence in the Asia-Pacific
region.
However, following the September 2001 terrorist attacks on the US, both US and
Chinese intelligence services increased their frequency of contact.
Foreign Forces
TOTAL STRENGTH
None
Organisation
There are no foreign forces stationed in the People's Republic of China.
586
INFRASTRUCTURE
Infrastructure
Roads
Railways
Waterways
Airports
Beijing Capital International
Guangzhou-Baiyun International
Hong Kong International
Shanghai Hongqiao
Shanghai Pudong
Shenzhen Huangtian
Urumqi Diwopu
Civil Airlines
Air China International
China Eastern Airlines
China Northern Airlines
China Northwest Airlines
China Southern Airlines
China Southwest Airlines
Hainan Airlines
587
Shanghai Airlines
Ports
Dalian
Haikou
Huangpu
Huludao
Nantong
Ningbo
Qingdao
Qinhuangdao
Shanghai
Shenzhen
Xingang
Zhanjiang
Telecommunications
Infrastructure
Country/Territory Railway Railway Paved Navigable Main airports Main ports

(km) gauges roads waterways
(mm) (km) (km)
China 72,000 1,435; 7770,265 110,000 Beijing Capital Hong

1,000; International; Kong;
750 Shanghai Pudong; Shanghai
Hong Kong
588
International
Japan 25,526 1,1,967; 859,000 1,770 Narita Tokyo;

1,435; International Kobe
067 (Tokyo)
Mongolia 1,810 1,520 3,523 400 Buyant Uhaa n/a

(Ulaanbaatar)
North Korea 8,000 1,435 2,000 2,250 Sunan Nampo

(Pyongyang)
South Korea 3,118 1,435 63,000 1,600 Incheon Pusan

International
(Seoul)
Taiwan 2,363 1,067 17,000 n/a Chiang Kai-shek Kaohsiung

International
(Taipei)
Roads
In 2007, China was estimated to have over 3.3 million km of total road network,
although approximately 1.47 million km of this network are classified as village roads.
The total length of the paved road network was 770,265 km in 2004 - the remainder is
gravel or improved earth standard or consists merely of earth tracks. Highways
(totalling 130,000 km) remain key to economic growth as China seeks to overcome a
poor distribution network and the authorities seek to spur economic activity directly. In
parallel, many of China's larger cities are further developing their urban transport
systems.
The Ministry of Communications has afforded development of a National Trunk

Highway System (NTHS) high priority. The core of the NTHS will comprise two north-
south highways, two east-west highways and three other key sections. The NTHS
identifies some 35,000 km in roads, expansion of which to highway status would build a
modern inter-provincial highway system. Some 19,000 km of these roads had been
completed by end-2001, with a second phase due for completion by 2010. The Beijing-
Shenyang expressway and the Beijing-Shanghai expressway were completed by 2002.
Simultaneously, a further 130,000 km of provincial and rural roads are planned, in order
to spread the benefits of the NTHS into more peripheral areas.
589
A high priority is the development of an all-weather road network for remote and low-
income areas especially beset by communication problems. In the 11th Five-Year Plan
(2006-2010), the government is focusing on rural roads, which comprise 85 per cent of
China's road system, including 480,000 km of county roads (20 per cent paved), 945,000
km of township roads (15 per cent paved), and 1.47 million km of village roads (nine per
cent paved). During the 10th Five-Year Plan, the government constructed some 72,000
km of rural roads at a cost of CNY60.9 billion (USD7.4 billion), and aims to invest a
further CNY100 billion (USD12.5 billion) on rural roads in the 11th Five-Year Plan.
The Chinese government has continued to focus infrastructure projects in the western
part of China, chiefly in Tibet and Xinjiang, perhaps encouraged by Hu Jintao's attention
to the outlying regions following his experience as party secretary in Tibet between
1988 and 1992 and as vice-chairman of the construction committee in Gansu province
in the early 1980s. The Tibet Communications Department estimates that over CNY100
billion (USD12.5 billion) needs to be invested to enhance the roads in the region.
Currently, the total length of road in Tibet amounts to approximately 40,000 km. In the
11th Five-Year Plan period, CNY30 billion (USD3.75 billion) was committed to highway
development in Tibet. Furthermore, Tibet's regional government also plans to invest
CNY70 billion (USD8.75 billion) in highway construction until 2016.
Railways
Chinese People's Republic Railways (CPRR) operates approximately 72,000 km of track,

almost all of which is of 1,435 mm gauge. The Ministry of Railways controls 12 CPRR
railway administrations, as well as most of the country's locomotive and rolling stock
factories via the Locomotive and Rolling Stock Factories Department. The railway
administrations are Harbin, Shenyang, Beijing, Hohhot, Zhengzhou, Jinan, Shanghai,
Guangzhou, Liuzhou, Chengdu, Lanzhou and Urumqi. Sinotrans and China Ocean
Shipping Company (COSCO) offer limited rail service in conjunction with the Ministry of
Railways but rail cargo is essentially a monopoly of the ministry. Despite low prices, a
bureaucratic outlook and high prices for specialised services (such as cold chain supply)
have made rail uncompetitive, although rail cargo services opened up to foreign
competition in December 2003, under China's World Trade Organisation (WTO)
commitments.
Current policy is for progressive devolution of authority to individual railway regions

and in 1993 the Guangzhou area administration was reconstituted as the first
autonomous railway organisation - the Guangzhou Railway Corporation, prior to the
offer of shares on the Hong Kong stock market and in the US in 1996. During the 1990s,
the government also encouraged local authorities to build and operate their own
railways of up to 2,000 km length, where such investment would stimulate local
development. However, demand for passenger and freight transport services has so far
590
outstripped railway infrastructure and rolling stock capacities despite such policies.
The main problem is inadequate network coverage, which is only being slowly rectified.
New line is being added to the rail system every year, partly to relieve pressure on the
heavily used trunk routes in the east of the country, where the bulk of the network is
concentrated, and partly to extend railways into the western provinces which are
almost without rail transport. Demand remains high because railways remain the least
expensive mode of transportation (especially for bulk products such as mineral ores).
Accordingly, rail transport was granted a prominent position in the 10th Five-Year Plan
period (2001-05), with about CNY100 billion (USD12.5 billion) allocated for projects, 80
per cent of which took place in the western region.
Major rail hubs such as Shanghai are enjoying further large-scale development in their
switching, metropolitan rail and station infrastructure. Meanwhile, prominent projects
planned at the national level include a 2,000 km high-speed railway link between Beijing
and Guangzhou to begin during the 11th Five-Year Plan (2006-10), cutting journey times
from 23 hours to 10 hours at a projected cost of USD24 billion; a 273 km high-speed line
between Fuzhou and Xiamen in Fujian province, for which construction began in
October 2005; and a Beijing-Shanghai high-speed rail project launched in May 2005,
creating a 1,300 km link that will use either conventional or maglev technology, at a cost
of up to USD12 billion. In 2004, the central government approved plans to build a 600
km high-speed rail network by 2020 that would connect nine major Pearl River Delta
cities.
In June 2001, China commenced the building of a railway connecting Lhasa in Tibet with
the central provinces from the city of Golmud in Qinghai province. The 1,142 km line
was finished in October 2005, linking Tibet to China's national rail network for the first
time at a cost of CNY24 billion (USD3 billion). Given that more than 960 km of track is
over 4,000 m in altitude and 547 km runs over frozen earth, the railway presented
severe technical challenges, and now stands as a source of national pride. Bridges were
constructed over some of the permafrost. Risks to the line remain, in particular in the
form of earthquakes, although the authorities have dismissed this as a potential barrier
to safe use. With the track at times passing 5,000 m above sea level, passenger cars
require a pressurised and/or oxygen-enriched atmosphere. The first transport of 600
passengers arrived in Lhasa on 2 July 2006, with one passenger having died from
altitude sickness as of mid-May 2007.
Internationally, China is looking to improve its rail links. A 935 km link from Harbin in
Heilongjiang province to Manzhouli near the Russian border was upgraded by 2006,
with 100-year-old track rebuilt. Jilin province is also seeking to improve its surface links
with Russia and North Korea via railways and highways by the end of 2007. A direct
('trans-Asia') link between China and Singapore is also due, with construction starting in
591
2003. There are three routes planned for the first section into Malaysia, with Vietnam,
Laos and Myanmar possible transit countries for a route starting in Kunming, Yunnan
province. In December 2005, Beijing provided USD8 million to Cambodia for a feasibility
study on a 255 km railway linking the Vietnamese border to the southwestern Kampong
Spoe province. The 1,000 mm gauge typical of Southeast Asia will present some
integration problems, although the winding 661 km Kunming-Hekou route, built by the
French through mountainous terrain some 100 years ago, is also 1,000 mm (non-
standard Chinese) gauge.
Forthcoming projects
Project Projected completion Start date/current progress
Qinghai-Tibet railway Possibly 2010 to Xigaze Planning stage

extension to Xigaze
and then to Nepalese
border
Shanghai-Hangzhou End of 2009 On 22 February 2006, negotiations began

with Germany's Transrapid Konsortium
(mainly ThyssenKrupp and Siemens) for a
197 km high-speed, maglev link.
Beijing-Tianjin high- Construction to be 2005. A high-speed service is covering the 79

speed line completed in 2007. Line km in place since 2000.
to open in July 2008.
Kashgar (China)- n/a Pre-feasibility studies on the Pakistani side

Havelian (Pakistan) launched in 2006 by Pakistani government.
Kunming (China)- 2015 2003. 1

Singapore
1. China and 17 other countries, chiefly Association of Southeast Asian Nation

member states, signed a November 2006 inter-governmental agreement to
build a pan-Asian railway network, which would include a 81,000 km long
network which also links four key railways in different parts of Asia. One of the
railways is the China-ASEAN rail link with three separate lines linking Myanmar,
Vietnam and Laos with China. The rail link will pass through Thailand and
Malaysia before terminating in Singapore, making the Southeast Asian line
5,500 km long. China has already stated construction of the eastern line from
592
Kunming to the Vietnamese border and it is investing CNY50 billion (USD6.25

billion) to build a total of three lines in Yunnan province to link them with Laos
and Myanmar besides Vietnam.
A line linking Kars in Turkey to Baku in Azerbaijan via Georgia will also be
completed in 2009, allowing travel across Asia from Turkey to Shanghai.
Waterways
China has about 140,000 km of inland waterway, 110,000 km of which are navigable.
China's river ports have over 8,500 berths with over 550 of these along the Yangzi river
(Changjiang).
A major policy goal is to create a container logistics network incorporating inland

waterways offering international standards and compatibility. China's first inland
international container terminal opened in Chongqing in late 2000. Although it was
created as the state international shipping line, COSCO has become the dominant
transporter between China's coastal and inland ports; COSCO barges operate in the
Pearl River Delta and along the Yangzi from Shanghai to Chongqing.
Inland waterway transport is set to be transformed by the Three Gorges Dam, which will
enable ships of up to 10,000 tonnes to travel the 2,000 km inland from Shanghai to
Chongqing. From mid-2002, the waters had begun to rise along the 650 km man-made
reservoir created by the USD14 billion dam project. The waters are expected to reach a
maximum level by 2009.
Airports
China has 330 airports, 260 of which have permanent-surface runways. Of these, 147
airports in 135 cities handled scheduled flights and 30 offered international services in
2005. The airports in Beijing, Guangzhou and Shanghai alone account for over a third of
all passenger turnover. Meanwhile, air traffic has expanded sharply in recent years. By
2006, freight moved by air in China had reached approximately 3.49 million tonnes (an
increase of 13.9 per cent over 2005, but still a minimal amount by international
standards, reflecting low demand). In contrast to the 9.4 billion tonne-kilometres
carried by air in 2006, 5.39 trillion tonne-kilometres were carried by waterway. The total
number of air passengers reached 159.6 million people (up 15.4 per cent on 2005).
Passenger demand is projected to grow at almost double-digit rates annually, with air
freight potentially following suit. Accordingly, China is aiming to have 260 airports open
for scheduled flights by 2015, to handle the more than 700 operational aircraft within
Chinese airlines, a figure expected to more than double to 1,600 by 2010. The number
of civil airports with scheduled flights is expected to increase by 40 by 2010, to reach
593
187.
In line with the development of outlying provinces, the number of airports in these
regions is set to grow. One example, Nyingchi Airport, the third airport in Tibet, will
become operational at the beginning of July 2007. With a total investment of CNY780
million (USD97.5 million), the Nyingchi airport plans to carry 12,000 passengers every
year. Located at 2,954 m above the sea level, Nyingchi Airport is the lowest airport
located in central Tibet. Currently it is expected that the Southwest Branch of Air China
will operate a flight course between Chengdu and Nyingchi.
However, only a minority of existing airports are able to land the largest civil aircraft
such as the Boeing 747, 777 and 767, and Airbus 300 and 310 aeroplanes. Moreover,
highly centralised control of airports is a recent legacy; it was only in March 2001 that
the Civil Aviation Administration of China (CAAC) finally said it would give up its control
of 120 airports to local authorities. Other common features of a mature national
aviation system such as a national ticketing system, a national aeronautical information
system, an adequate national fleet of feeder aircraft and a national hub-and-spoke
network of routes remain in development. Nevertheless, the country has clearly come a
long way since the 1940s when China lacked any airports able to handle anything larger
than small transport aeroplanes.
In a crucial step, military control over China's 1,122 civil airways is being loosened,
allowing more market-driven use of airspace. The State Air Traffic Control Commission,
a State Council-level body in which the Civil Aviation Administration of China (CAAC),
People's Liberation Army (PLA), Air Force (PLAAF) and Navy (PLAN) are represented,
now oversees national airspace policy. Below it are the Regional Air Traffic Control
Commissions grouping PLA Theatre Control Units and CAAC Regional Administrations.
Below these are local PLA, CAAC and air traffic control bodies that co-ordinate use of
local airspace in real time.
Prominent major airports in China include:
Beijing Capital International Airport, redeveloped in the late 1990s with the aid of
Japanese soft loans, is one of China's few profitable airports. Floated on the Hang Seng
index in February 2000, Beijing Capital operates near capacity and has received ISO9002
certification. In 2006, the airport handled some 48.5 million passengers and 1.03 million
tonnes of freight. The airport intends to co-design, co-build and co-invest in other CAAC
airports in tandem with Tianjin's Binhai airport (less than 140 km away) and develop
supporting surface transport networks. However, central government plans to let local
governments run their own airports may prove a barrier to Beijing airport's plans to
594
expand.
The airport has been expanding its capacity rapidly in order to keep pace with increased
demand. As such, the Terminal One building was renovated in 2004, with the objective
of handling nine million passengers annually, and a USD650 million third terminal is
being constructed, in order to be ready for the 2008 Olympics. By completion, the
airport is expected to be able to handle 60 million passengers, 500,000 flights and 1.8
million tonnes of freight.
Reference point 40° 04.5'N 116° 31.4'E
Elevation 35 m (116 ft)
Nearest town/city Beijing (26 km)
A new Guangzhou-Baiyun International Airport was opened in Huadu, 22 km from

Guangzhou, in August 2004, with the old Guangzhou-Baiyun airport closing after 72
years of service. The new airport will, when completed in 2010, have cost at least CNY20
billion (USD2.4 billion) and be linked to the city by a 30 km expressway. The project is
being financed by the CAAC, local funds, the sale of the old airport and overseas
investors. When fully completed, it may be one of the largest civil aviation projects in
the world, with a projected capacity of 80 million passengers and one million tonnes of
cargo annually, four times the size of the old airport. Currently, the airport can handle
25 million passengers annually, and is operating near capacity, with 23.6 million
passengers handled in 2005. The 350,000 m3 terminal building will be able to handle
10,000 passengers during peak hours, and its three runways will be a marked
improvement on the existing airport's single runway. Guangzhou-Baiyun, the primary
hub for China Southern Airlines, is one of the busiest airports in China, handling 825,000
tonnes of freight in 2006, behind Shanghai Pudong and Beijing.
595
Nearest town/city Guangzhou (7 km)
Hong Kong International is the busiest freight airport in China, and the second busiest
passenger airport. Annual passengers handled totalled 44.5 million in 2006, an increase
of 9.1 per cent over 2005, and total freight handled was 3.58 million tonnes, an increase
of 5.2 per cent, and over 65 per cent more than the next largest freight airport in
Shanghai.
Currently, a number of improvements totalling approximately USD4.5 billion are being

undertaken to increase passenger capacity at the two-terminal airport.
Reference point 22° 18.54'N 113°54088'E
Nearest town/city Hong Kong (25 km)
Shanghai Hongqiao
The existing airport at Shanghai Hongqiao will be upgraded, with improvements to

include a second runway. Currently, the airport consists of one 3,400 m runway, one
taxiway, and one 82,000 m2 terminal building. Hongqiao handles approximately 300
flights per day, and is increasingly being used as a domestic airport, or as standby for
596
international flights initially destined for Shanghai Pudong.
Shanghai Hongqiao
Reference point 31° 11.9'N E121° 20.0'E
Nearest town/city Hongqiao (13 km)
Shanghai Pudong
Shanghai Pudong International Airport's first phase of construction was completed in

September 1999, with a 280,000 m2 terminal building, and a 4,000 m runway with two
parallel taxiways. A further runway was completed in 2005. However, the whole project,
including a new metro rail link between the airport and the city, will not now be
completed before a second terminal, along with one more runway and another cargo
transportation centre, are completed by the end of 2007, at a cost of approximately
CNY19.7 billion (USD2.5 billion). The airport is expected upon completion to handle 60
million passengers annually (as opposed to the current capacity of 20 million
passengers). The airport already handles approximately 60 per cent of air traffic through
Shanghai and in 2006, Shanghai Pudong handled the most cargo for any mainland
Chinese airport, with 2.16 million tonnes passing through the airport, an annual
increase of 16.3 per cent. The airport already handles the largest number of
international passengers in mainland China, with 17.15 million in 2006, an increase of
9.4 per cent (second-placed Beijing Capital handled 12.6 million), although it handles
fewer total passengers than Beijing Capital.
Shanghai Pudong
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Nearest town/city Shanghai (30 km)
Shenzhen Huangtian
A new plan has been unveiled to prepare Shenzhen airport for the continued growth in
air traffic to the city, which is expected to involve an increase in traffic from the present
16 million passengers to 40 million by 2020. A total of 16 projects are planned, costing a
total of CNY4 billion (USD490 million).
Shenzhen Huangtian
Reference point 22° 38'N 113° 49'E
Nearest town/city Fu Yong (42 km)
Urumqi Diwopu
Urumqi Diwopu airport consists of two passenger terminals and one cargo terminal,
while passenger growth in the western airport has been rapid, recording an increase of
over 40 per cent between 2003 and 2004.
Urumqi Diwopu
Reference point 43° 54'N 087° 28'E
Elevation 648 m (2,126 ft)
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Nearest town/city Urumqi (17 km)
Civil Airlines
Air China International
Air China International was established in July 1988 on the basis of the CAAC
Administration Bureau in Beijing. It gained greater autonomy in 1993, when it was
granted independent trade group status as the largest air transport group in China. In
2001, the CAAC unveiled a national restructuring plan making Air China the core of
three major consolidated civil aviation groups. The plan was approved by the State
Council in February 2002, and in October the new China National Aviation Company
(CNAC) was formed, consisting of Air China, CNAC, and China Southwest Airlines.
Air China's shareholders are China National Aviation Holding (51.16 per cent); China
National Aviation Corp (14.64 per cent); Cathay Pacific (10 per cent); and individual
shareholders (24.2 per cent).
On 20 November 2004, Cathay Pacific and Air China jointly announced a memorandum
of understanding under which Cathay Pacific would purchase a 10 per cent equity stake
in Air China, at the time of Air China's Initial Public Offering, along with other joint co-
operation on completion of the purchase. On 15 December 2004, the purchase was
confirmed at a cost of approximately HKD2.7 billion in cash.
In 2005, Air China carried 27.7 million passengers, an increase of 13 per cent, and cargo
weighing 732,995 tonnes, an increase of 10.2 per cent.
Fleet details
A319 × 24
A320 ×5
A330-200 × 1 (leased in)
A340-300 ×6
B737-300 × 31
B737-700 × 11
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B737-800 × 21
B747-200B ×2
B747-200F ×2
B747-400 ×5
B747-400F ×2
B747-400M ×8
B747SP ×4
B757-200 × 10
B767-200ER ×5
B767-300 ×4
B767-300ER ×2
B777-200 × 10
Harbin Y12 ×4
Tupolev 154M ×5
L-382G Hercules ×2
Xian Yunshuji Y-7-100 × 4
China Eastern Airlines
China Eastern is an IATA-scheduled passenger carrier, majority owned by the state

(61.64 per cent), with a number of publicly held shares owned by HKSCC Nominees
Limited (30.18 per cent). The airline's domestic services are based around Shanghai
Hongqiao airport, and it operates on routes throughout Asia, to Europe, to the US and
to the Middle East. It has been one of the three largest air carriers in China, based on
tonne-kilometers and number of passengers carried. Regional destinations in 2002
600
included Bangkok, Cheju, Fukuoka, Fukushima, Nagasaki, Nagoya, Okayama, Osaka,

Pusan, Seoul, Singapore and Tokyo.
The airline became increasingly independent of its CAAC origins in settling commercial
policy and for raising funds to finance investment in new aircraft and associated
facilities during the 1990s. In the first quarter of 2007, the airline carried 8.59 million
passengers, a 7.15 per cent increase on the same period a year previously, and 200,130
tonnes of cargo, a 0.86 per cent decrease on the first quarter in 2006.
Fleet details
A300-600R × 10 (all are leased in)
A300F ×1
A319 × 10 (all are leased in)
A320-200 × 40 (17 are leased in)
A321-200 × 4
A330-200 × 1
A340-300 × 5
A340-600 × 5
B737-300 × 6 (all are leased in)
B737-700 × 13 (9 are leased in)
MD-11F × 6 (all are leased in)
MD-82 × 3 (all are leased in)
MD-90-30 × 9 (7 are leased in)
China Northern Airlines
China Northern is an IATA-scheduled carrier. Its domestic services are based around
601
Beijing and Shanghai and it also flies to Khabarovsk, Macau, Seoul and Pyongyang. The
Shenyang-headquartered airline was merged with Guangzhou-based China Southern
and Xinjiang Airlines following State Council approval in October 2002.
Fleet details
A300-600R × 6 (all are leased in)
A321 ×2
MD90-30 × 11
MD-82 × 28
Note
 Eight more A321 airliners are on order.
China Northwest Airlines
China Northwest is an IATA-scheduled domestic and international charter carrier. It

charters to Hong Kong and numerous domestic destinations. Based on the CAAC Xian
Bureau, China Northwest Airlines became a separate entity in 1989. The airline also has
full engineering and maintenance facilities together with schools for technical training.
The airline was merged with China Eastern and Yunnan Airlines in late 2003.
International destinations include Tokyo, Osaka and Hiroshima.
Fleet details
A300-600R ×3
A310-222 × 2 (both leased in)
A320-200 × 13
Bae 146-100 ×3
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BAe 146-300 ×8
Shijiazhuang Yunshuji Y-5 × 12
Tu-154M ×9
China Southern Airlines
China Southern is an IATA-scheduled passenger carrier. It operates to numerous

domestic destinations and also flies to Bangkok, Fukuoka, Hanoi, Ho Chi Minh City,
Jakarta, Kuala Lumpur, Manila, Melbourne, Osaka, Penang, Phnom Penh, Seoul,
Singapore, Sydney and Tokyo, as well as extra-regional destinations including
Amsterdam, Dubai, Islamabad, Los Angeles, Melbourne, Moscow, Paris, Saipan, Sharjah
and Sydney. In 2006, the airline carried 49.2 million passengers, an 11.6 per cent
increase on the 2005 figure of 44.2 million. Cargo carried has also been increasing,
reaching 774,550 tonnes in 2005, up from 545,000 in the previous year.
Based on the former CAAC Guangzhou Bureau, China Southern became a separate
entity in February 1991, following which it began operations over a large domestic and
Asian route network, which has now been extended to the US. It also has substantial
interests in other air transport activities. The company is majority owned (50.3 per cent)
by the government, through the trustee SA Group, with 26.84 per cent of shares listed
overseas, and 22.86 per cent listed domestically. As China's largest air carrier, it will
form the core of a group comprising China Northern and Xinjiang Airlines. It expects its
cargo centre at the new Guangzhou Baiyun international airport to position it to tap
growth in demand for air freight in the Pearl River Delta.
Fleet details
A300 ×6
A319-100 × 17 (17 are leased in)
A320-200 × 49 (1 leased in)
A321 × 17
A330-200 ×4
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ATR 72 × 5 (all are leased in)
B737-300 × 31
B737-500 × 15
B737-700 × 29
B737-800 × 15
B747-400F ×2
B757-200 × 38
B777-200ER/200ER × 10 (6 leased in)
ERJ-145LR ×6
MD-82 × 23
MD-90 × 13
China Southwest Airlines
China Southwest is an IATA-scheduled passenger carrier. Its extensive domestic network

is based around Chengdu; it also flies to Vientiane and Kathmandu.
Based on the CAAC Chengdu Bureau, China Southwest Airlines became the first major
state airline to be established in 1987. On 11 October 2002, under the guideline of the
system Reform Program for Chinese Civil Aviation Industry approved by the State
Council, China National Aviation Company (CNAC) was founded, with Air China as the
main body and consolidating with China National Aviation Company (CNAC) and China
Southwest Airlines. On 28 October 2002, the new Air China was set up after combing
the air transportation resources of the three airlines.
Fleet details
A340-300 ×3
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B737-300 × 20
B737-800 ×1
B757-200 × 13 (3 are leased in)
Harbin Yunshuji Y-12 × 4
Tu-154M ×5
Hainan Airlines
Hainan Airlines is a scheduled domestic carrier. Having taken stakes in Shanxi, Changan
and China Xinhua airlines, Hainan became China's fifth-largest airline group after the
government-led restructuring and consolidation programme.
At the end of 1995, with the approval from the Ministry of Foreign Trade and Economic
Co-operation, the company successfully completed a USD25 million private placement
with a US institutional investor, thus making Hainan Airlines the first airline in China to
have a foreign stock holder. Currently, American Airlines owns 14.8 per cent of Hainan
Airlines' shares, although hard currency B shares were sold on the Shanghai Stock
Exchange in January 2004.
Fleet details
A319 × 2 (both leased in)
B737-300 × 11 (all leased in)
B767-300ER × 3 (all leased in)
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DHC-8 Dash × 2 (both leased in)
Fairchild Dornier 328-300 × 19 (all leased in)
Shanghai Airlines
Shanghai Airlines is a scheduled carrier. It operates on domestic routes to Ahuhai;

Baotou; Beijing; Changsha; Chengdu; Chongqing; Dalian; Fuzhou; Guangzhou; Guilin;
Guiyang; Haikou; Hangzhou; Harbin; Hohhot; Huangshan; Jinghong; Jinjiang; Kunming;
Lijiang; Mudanjiang; Nanjing; Ningbo; Qingdao; Qiqihar; Shanghai; Shantou; Shenyang;
Shenzhen; Wenzhou; Wuyishan; Xiamen; Xian; Xuzhou; Yantai; Yichuan; Zhenzhou; and
Zhoushan. It also flies to Macau, Phnom Penh (Cambodia), Phuket (Thailand), and
Vladivostock (Russia). Shanghai uses a training centre, which provides courses for cabin
and ground service crew, and also for commercial staff.
On 11 October 2002, the airline was listed on the Shanghai Stock Exchange.
Fleet details
B737-700 × 5 (all are leased in)
B737-800 × 7 (all are leased in)1
B757-200 × 12
B767-300 ×4
B767-300ER × 1 (leased in)
Bombardier CRJ200 ×3
Note
Shanghai Airlines currently has nine further Boeing 737-800s on order.
Ports
Within China there are more than 50 ports open to foreign vessels, according to the
Ministry of Communications, while the handling capacity for foreign trade commodities
stood at 1.57 billion tonnes in 2006 (the total capacity for all large-scale ports was 4.56
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billion tonnes). Waterway remains one of the primary forms of cargo transportation
owing to China's maritime history and lack of sufficient air services. In 2006, 2.4 billion
tonnes of cargo was carried by waterway, an 11 per cent increase over the previous
year. Container handling capacity in ports across the country was 93 million standard
containers in 2006, an increase of 23 per cent.
The International Maritime Bureau has in the past accused the Chinese government of
failing to take seriously the problem of piracy off its coast. This charge followed the
detainment of the Petro Ranger oil tanker, which fell victim to the recent surge in East
Asian piracy when it was hijacked en route from Singapore to Hanoi in 1998. It is
thought that well-organised professional criminal groups may operate in the South
China Sea and on major international routes in the region with the tacit support of
corrupt local government officials in China's southern provinces.
Although Hong Kong, Shanghai and Shenzhen are participating in the US Container
Customs Security Initiative (CSI), it is not certain whether other Chinese ports will also
accept the presence of US customs and security officials. Even without the unfortunate
resonance of the 'treaty ports' era of the 19th Century and first part of the 20th Century
(when foreigners collected and administered China's customs revenues), sovereignty
and jurisdictional issues could lead the Chinese central government to oppose any
extension of the CSI to mainland Chinese ports. However, major carriers between the
US and China will be encouraged to apply to join the parallel Customs Trade Partnership
Against Terrorism (C-TPAT). Shanghai was finally included in the CSI in April 2005 and
Shenzhen in June 2005, over two and a half years after an October 2002 agreement
reached between Presidents Bush and Jiang for a CSI partnership in principle. No other
ports are now expected to be included in the CSI.
Dalian
Dalian is located at 38° 55' N, 121° 41' E, on the southern part of the Liaodong
peninsula. It is China's largest natural oil port. Seven of Dalian's eight stevedoring
districts accept foreign vessels. There are at least 58 berths available, with total wharf
frontage of 16,277 m or more.
Floating cranes with a maximum capacity of 600 tonnes are available, in addition to
numerous 37.5-tonne capacity modern cranes and heavy lift equipment. The port has a
liquid tank wharf with an annual transit throughput capacity of 1.5 million tonnes and a
crude oil terminal completed in June 2004 in the new harbour area capable of receiving
300,000-tonne class oil tankers. In 2004, Dalian became the largest oil transiting port in
northern China, a position it retains by handling 20.9 million tonnes of throughput in
2006, an increase of 14 per cent over the previous year. The port intends to open a
further six crude oil storage tanks in 2007 in order to cope with the surging demand for
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crude. Deep-water container terminals are also to be constructed at Dalian, with a

December 2006 agreement with Nippon Yusen and China Shipping Group along with a
March 2007 agreement with Hong Kong-based Wharf Holdings to undertake the
project.
Given increases in China's exports, Dalian, along with other Chinese ports, continues to
enjoy rapid growth of throughput and concomitant revenue and profit growth. In 2006,
revenue climbed 22 per cent to reach CNY1.55 billion (USD198 million), while profit rose
51 per cent to reach CNY 631.6 million (USD80.9 million).
Haikou
Haikou is located at 20° 01' N, 110° 16' E, on the northern coast of Hainan Island. A 300
m long wharf is situated in the Outer Harbour, in which three 5,000-tonne vessels can
berth simultaneously.
Cranes with a capacity of up to 20 tonnes are available. The Outer Anchorage area
handles vessels in the 10,000-tonne class in depths of up to 10 m.
Huangpu
Huangpu is located at 23° 05' N, 113° 25' E, at the estuary of the Pearl river 20 km
southeast of Guangzhou. Vessels exceeding a draught of nine metres can be accepted at
the Port Authority's discretion. There are 45 berths with wharf frontage totalling over
5,000 m and these include 21 berths for vessels of the 10,000-tonne class and six
35,000-tonnage container berths. The two-berth container terminal has a total length of
471 m. Floating cranes with a capacity of up to 250 tonnes and wharf cranes with a 30-
tonne lifting capacity are available.
Together with the Guangzhou, Humenwai and Xinsha ports, Huangpu is one of the most
important and largest ports in southern China, with a cargo throughput capacity of
approximately 215 million tonnes. However, the authorities are thought to be anxious
that river course restrictions may cause Guangzhou's complex of ports, China's
traditional second largest port area, to lose out further to Ningbo port.
Huludao
Huludao is located at 40 47' N, 121 E, on the Bohai Rim in the northeastern province of
Liaoning. In May 2000, China's State Council passed a resolution opening up Huludao
(one of its leading military ports) to international commercial shipping. With the
opening of the port, domestic freighters are now able to engage in foreign trade.
Although not significant in volume terms, the shift in port use suggested that a policy of
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freeing national infrastructure for civilian use is ongoing.
The port now has an annual commercial handling capacity of one million tonnes. One
dock, with a handling capacity of 10,000 tonnes, was completed in mid-2000. Two
additional docks are being constructed, one for vessels with a capacity of up to 20,000
dwt and another for vessels with a capacity of up to 35,000 dwt.
Nantong
Nantong became China's 12th port with an annual handling capacity of 100 million
tonnes in 2006 (the other ports are Shanghai, Ningbo, Guangzhou, Tianjin, Shenzhen,
Qingdao, Qinhuangdao, Dalian, Nanjing, Suzhou and Rizhao). Nantong is located in
Jiangsu province on the Yangzi River at 32° 01' N, 120° 51' E, and has 88 berths and eight
anchorages. In 2005, the throughput of Nantong reached 83.3 million tonnes.
Ningbo
Ningbo is located 130 miles south of the Yangzi river at 29° 52' N, 121° 33' E. Ningbo
incorporates the ports of Zhenhai and Beilun. Zhenhai's cargo wharves have a total
length of 768 m and feature five portal cranes of 10-tonne capacity, while Beilun has a
350 m F-shaped wharf with a depth alongside of 18 m.
As part of the 10th Five-Year Plan (2001-2005), Ningbo expanded its container and crude
oil docks in order to make it one of the largest deep-water ports in the world.
Construction of a berth with a handling capacity of 50,000 tonnes for liquid chemicals
and another with a handling capacity of 250,000 tonnes for crude oil was undertaken.
This added to Ningbo's existing two 250,000-tonne oil wharves, among the largest in
China with an annual handling capacity of 20 million tonnes. Currently, Ningbo has 292
operating berths, with 43 berths over 10,000 tonnage capacity and 29 between 50,000
and 250,000 tonnage capacity. In 2006, Ningbo handled 300 million tonnes of cargo,
and seven million TEU, making it the fourth busiest port in China. The medium-term
goal set out in the 11th Five-Year Plan (2006-2010) is to expand Ningbo's capacity to
enable handling of 350 million tonnes of cargo and 11 million TEU.
Qingdao
Qingdao is located at 36° 05' N, 120° 18' E, in Jiaozhou Bay on the Shandong peninsula.
The port's large harbour is the main section for foreign shipping with a 260 m wide
entrance and over 3,000 m of wharf frontage. Of Qingdao's 71 berths, 24 are used by
vessels of 10,000 tonnes or more. Cranes with maximum capacities of up to 50 tonnes
are available. Six further container berths (two 100,000 dwt, three 20,000 dwt and one
20,000 dwt) will be constructed by 2010.
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In the first nine months of 2006, Qingdao handled 5.6 million TEU and 167 million
tonnes of cargo, making it the third largest port in China in throughput. With the aim of
centralising its position as China's northern maritime hub, Qingdao is planning an initial
public offering in Hong Kong by the end of 2007, while the port's capacity is expected to
increase to 260 million tonnes of cargo in 2007. Container handling volume is expected
to reach 20 million by 2010. The port's revenue stood at CNY8 billion in 2006, with
profits of CNY1.3 billion in 2006.
Qinhuangdao
Qinhuangdao is located at 39° 54' N, 119° 36' E, in the Bohai Gulf in Hebei province. The
Old Channel has a maximum depth of 10.6 m and the New Harbour Channel a depth of
10.2 m. However, in 2001 a 100,000-tonne navigational channel was built. There are 29
berths available, with berths 103, 301, 302 and 303 being the longest at 340 m. A fifth
dock was completed in March 2006 for coal transport. Qinhuangdao has a floating crane
capacity of 70 tonnes, with cranage available for cargo operations. The port transports
coal from northern to eastern and southern China and is accordingly a key node in
China's internal energy transportation network. Other goods handled are crude oil, bulk
grain, timber and mineral ores. The port's throughput stood at 200 million tonnes in
2006, although this figure is expected to double by 2015 amid an ambitious expansion
project.
Shanghai
Shanghai is located at 31° 15' N, 121° 30' E, on the Huangpu river at the mouth of the
Yangzi. As a principal node in the National Trunk Highway System (NTHS), a national
railway hub and the ocean port for the entire Yangzi river basin (forming an inland
waterway stretching inland as far as Yunnan province, bordering Myanmar), Shanghai is
mainland China's principal port and its second-largest container port after Hong Kong.
Shanghai ranked second in the world for container traffic in the first quarter of 2007,
overtaking Hong Kong but behind Singapore, with 5.9 million TEU processed during the
period, an increase of 28.1 per cent on the same period in the previous year.
The port of Shanghai stretches along the Huangpu's and Yangzi's banks and is divided
into 12 cargo handling districts with quay lengths of between 387 and 1,600 m. In total,
the districts have 88 berths and all can accommodate vessels with draughts of up to 10
m. In addition, there are 86 buoy moorings. Cranes with lifting capacities of up to 100
tonnes are available at all piers, together with six floating cranes.
The container port centred around Waigaoqiao is a joint venture between the Shanghai
Port Authority and Hutchison Port Holdings of Hong Kong. The latter is thought to
manage one quarter of all China's international port traffic. Bottlenecks that persist owe
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in part to shallowness at the Waigaoqiao terminal limiting access to 50,000-tonne ships.
Following drawn-out discussions between Shanghai municipality and Zhejiang province,

construction on a 33-berth offshore container port began in Hangzhou bay in the latter
half of 2002. The ambitious Yangshan project, which involved the building of a 1.7 km2
artificial island between the islands of Dayangshan and Xiaoyangshan in Hangzhou bay
to obviate the need to relocate 1,000 fishing families resident on Xiaoyangshan, was
finally opened in December 2005, providing Shanghai with its first deep-water port.
The first phase involved construction of five of the planned 33 container berths, a new
port town in Shanghai's Nanhui district; an eight-lane, 31 km bridge connecting Nanhui
to Dayangshan and Xiaoyangshan; and a 1,600 m navigation channel to allow super-
large container ships to enter the new port. The full complement of 33 berths is only
envisaged by 2020 by the completion of the USD18 billion project, but the fact that
Hong Kong (the world's largest container port) has only 18 container berths and
Singapore (the world's second-largest) only 16, makes the scale of the Yangshan project
clear.
In tandem with the Yangshan development, major inland watercourses in the Shanghai
municipal area were renovated over 2002-05, to enable passage of larger container hips
between Shanghai's container ports, and the Yangzi Delta as a whole. Inland waterway
traffic can be expected to retain a major share in China's internal freight traffic, with
Shanghai-Yangzi water-borne freight a major contributor.
Shenzhen
Shenzhen is located at approximately 114° N, 22° E, across from Hong Kong on the
south coast on the Pearl River Delta between the Lingding Sea and Daya Bay. The
Shenzhen Port Authority spent approximately USD1.9 billion between 2001-05 on
building 22 new berths for general cargo and 10 berths exclusively for container vessels.
These increased Shenzhen's container capacity by a further 3.4 million TEUs and
enhanced its ability to take fourth- and later-generation container vessels.
Prior to this expansion, Shenzhen already had 10 exclusive container berths, built up
over the previous two decades, besides 100 others for general cargo use.
Unsurprisingly, given the investment in new berths, Shenzhen has grown rapidly as a
container terminal, and became the world's fourth largest container handler in 2006,
handling 18.5 million TEUs in the year. This compared to just 3.99 million TEUs in the
entirety of 2000. The port is composed of the Chiwan, Yantian and Shekou port areas.
Xingang
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Xingang is located at 38° 59' N, 117° 45' E, situated at the mouth of the Haihe river in
Bohai Bay. Xingang is operated by the Port of Tianjin Authority and handles foreign
vessel requirements for the Beijing-Tianjin conurbation and their hinterland provinces.
It is one of north China's principal container ports. It handles more than 100 million
tonnes of cargo per year and has an annual container handling capacity of more than
one million TEUs.
10,000-tonne vessels can be handled at 29 or more of the 64 berths, where depths

alongside range from eight to 12.5 m. There are eight container berths. Some of these
berths can accommodate vessels of 50,000 dwt. There are specialised handling facilities
for coal, crude oil, grain and salt. Modernisation plans over 2001-05 include conversion
of six bulk berths into four container facilities and the construction of five other
container berths. An island dock with a 200,000-tonne mineral ore terminal and a
250,000-tonne oil terminal in Bohai bay is also planned.
Xingang has cranes with lifting capacities of up to 150 tonnes available at every pier and
floating cranes with 100- to 500-tonne maximum lifting capacities.
Zhanjiang
Zhanjiang is located at 21° 12' N, 110° 25' E in Kuangchou Bay, situated on the northern
part of the Leizhou peninsula. It is one of the key ports of the dynamic Pearl River Delta.
The port features 23 berths and 18 anchorage berths with depths alongside of between
13 and 34 m. Number 1 Area has nine berths suitable for vessels of up to 10,000 tonnes,
with a depth alongside of 10.97 m. Six new berths with a total quay length of 1,350 m
are able to accommodate 10,000-tonne class vessels.
Cranes with a lifting capacity of up to 60 tonnes are available, as are 50-tonne capacity
floating cranes. In 2002, Zhanjiang put into operation the first phase of a 100,000-tonne
water channel. The port is set to see construction of large-scale exclusive berths for
mineral ore.
Telecommunications
Telecommunications have expanded rapidly in China alongside the country's dynamic

economic growth, although state control of media remains. One area where this is
apparent is the broadcast media. By the end of 2006, digital cable television services
reached 30 Chinese cities, with approximately 12 million subscribers. According to the
11th Five-Year Plan (2006-2010), Beijing intends to replace existing analogue television
services with digital cable services in all major cities in the eastern and central regions
and most cities in the western region by 2010. At the same time, the radio and
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television broadcasting coverage rates are now over 95 per cent, while the number of
radio and television stations are near 1,000. This spectacular burst in media penetration
and variety was in parallel with China's deep and wide-ranging social and economic
transformation since the 1980s. The obverse has been a falling off in the number of
magazines and newspapers distributed (many issued automatically by central
propaganda organs to China's millions of work units). The number fell from over 300
million in 1985 to 200 million in 2000. In 2003, there were over 400 daily newspapers in
the country, with a distribution of 80 million. Although this number fluctuates from year
to year, the divergent trend in print media compared to broadcast media is a sign of
how the media mix in China has been modernised.
Besides the growth in broadcast media, telecommunications have effectively been

revolutionised. In 1990 there were only 12.3 million lines and 12.3 million telephone
handsets in the country. This compared to 178.3 million lines and 256.1 million
handsets in 2000, and an estimated 371 million fixed line subscribers in April 2007. At
the same time, the numbers of mobile phone subscribers increased from 18,000 in 1990
to 84.5 million in 2000, and 487 million by the end of April 2007. More than USD50
billion in investment has seen marked changes in telecommunications densities. Mobile
phone penetration (subscribers per 100 persons) grew from 0.01 in 1990 to 5.1 in 2000
and approximately 30 in 2007.
The internet has found a ready market as a medium throughout China's urban centres,
with total users estimated at 137 million in May 2007 (although subscribers will be a
smaller figure; many users utilise internet cafés). The state has traditionally heavily
censored the internet to prevent its use to proliferate dissident views, including
blocking access to most Taiwanese sites, and international news organisations such as
the BBC. Similarly, major Western internet firms entering the Chinese market have been
forced to accept restrictions on their services, most notably the censorship of Google
agreed in January 2006 that allowed the search engine to enter the Chinese market. The
internet surveillance and censorship technologies available to the central authorities
have proved to be more effective than expected by analysts who anticipated the
government would be helpless. Meanwhile, internet entrepreneurs have been given
hefty prison sentences for publishing what has been seen as 'anti-government'
propaganda on their websites. In any case, there remains a problem with rural access
(less than one per cent of national users are to be found in Qinghai, Ningxia and Tibet
provinces, for example) meaning the internet is unlikely to amplify separatist activities
or the political consequences of rural discontent for the time being.
Nonetheless, Beijing is finding it increasingly difficult to navigate their way between the
desire to embrace modern technology and the need of the state to limit its
consequences on the society that it strives to control. Given the rapidly expanding use
of the internet within China, absolute censorship is proving impossible, and an evolving
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policy of releasing greater amounts of still heavily controlled information to further the
government's view has become apparent.
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DEMOGRAPHY
Demographic indicators
Ethnic Groups
Religion
Buddhism
Islam
Protestantism
Catholicism
Daoism
Judaism
Regional Distribution
Language
Births and Deaths
Health and Medical
Demographic indicators
Country/Territory Population Population Population Male life Female life

(million) density growth rate expectancy expectancy
(number of (per cent) from birth from birth
people per
2
km )
China 1,311.7 130 0.90 70 73
Japan 127.7 334 0.20 78 85
615
Mongolia 2.6 2 1.10 62 69
North Korea 22.6 177.5 0.80 65 68
South Korea 47.7 470.5 0.80 73 80
Taiwan 22.4 619 0.58 73 78
Source
World Health Organisation
Ethnic Groups
Although dominated by the Han Chinese, who comprise over 90 per cent of the
population, the Chinese government is aware of the number of ethnic minorities within
the country, and the concomitant dangers of unrest should these minorities be
suppressed or under-represented. As such, Beijing has been astute at providing party
membership to various ethnic groups, with the unicameral, annual National People's
Congress, comprising nearly 3,000 delegates with all 56 officially recognised ethnic
groups represented.
Ostensible political autonomy owing to the concentrated location of these ethnic

minorities is provided not only at provincial level (to Tibet Autonomous Region, Xinjiang
Uighur Autonomous Region, Ningxia Hui Autonomous Region, Guangzi Zhuang
Autonomous Region and Inner Mongolia Autonomous Region), but also at prefecture
(with 30) and county (with 120) levels. This relative autonomy is enshrined in the
constitution and ensures that the head of government of each autonomous area will be
of the ethnic group stipulated, as well as guaranteeing greater independence over
finance, economic planning, and socio-cultural autonomy. However, as power largely
rests with Chinese Communist Party representatives rather than heads of area
governments, and as such heads are often in favour of the Chinese Communist Party, in
reality little autonomy beyond the party line is granted.
Ethnicity Percentage of the population
Han 91.96
Zhuang 1.37
616
Manchu 0.87
Hui 0.76
Miao 0.65
Uygur 0.64
Yi 0.58
Tujia 0.50
Mongolian 0.42
Tibetan 0.41
Bouyei 0.22
Dong 0.22
Yao 0.19
Korean 0.17
Bai 0.14
Hani 0.11
Kazak 0.10
Li 0.10
Dai 0.09
Religion
There are five officially recognised religions in China - Catholicism, Protestantism,

Buddhism, Islam and Daoism. Article 36 of the 1982 constitution provides for freedom
of religious belief and the freedom not to believe; however, the government has
traditionally sought to restrict religious practice to government-sanctioned
617
organisations and registered places of worship, and to control the growth and scope of
the activity of religious groups.
The situation improved marginally following the forceful suppression of all religious
observances and closure of all seminaries during the 1966-76 Cultural Revolution. In the
late 1970s, for instance, the government began to restore or replace some damaged or
confiscated churches, temples, mosques and monasteries, and to allow the reopening
of seminaries. Implementation of this policy has varied from locality to locality.
However, several unregistered religious groups have been subjected to increased
restrictions since the 1990s, although the degree of restrictions varies significantly from
region to region. In the past, official tolerance for religions considered to be traditionally
Chinese, such as Buddhism and Daoism, has been greater than that for Christianity. The
revival of traditional folk religion has largely been tolerated as a loose affiliate of
Daoism, or as an ethnic minority cultural practice, despite government campaigns to
eliminate "feudalism and superstition" and to destroy thousands of shrines.
The number of religious adherents, in both registered and unregistered churches,

continues to grow rapidly. In the years since the Cultural Revolution, when religion was
banned, there has been a general loosening of repression and a resurgence in religious
activity. There are approximately 200 million religious adherents with a great variety of
beliefs and practices, mostly professing eastern faiths, but with millions adhering to
Christianity as well. According to official figures from early 2007 (which only recognise
"over 100 million religious adherents"), there are more than 85,000 sites for religious
activities, 300,000 clergy, and more than 3,000 religious organisations. The official
figures have remained unchanged since 1997, and are therefore unlikely to represent
the growth in religious activity in recent years. A poll taken of 4,500 people (albeit a
small sample for China's population) between 2005 and 2007 by the East China Normal
University in Shanghai found over 31 per cent of respondents were religious, which
would equate to 300 million adults in China.
Buddhism
Buddhists make up the largest body of organised religious believers, with approximately
eight per cent of the population registered as Buddhist. The government estimates that
there are more than 100 million Buddhists, most of whom are from the dominant Han
ethnic group. The accuracy of numbers of practising Buddhists varies as they often
practice their faith without participating in public ceremonies. Official figures place the
number of Buddhist temples and monasteries at approximately 26,000, with 200,000
nuns and monks (these figures are far easier to calculate than adherents).
Some local governments strictly enforce regulations on places of worship, particularly

on illegally constructed Buddhist temples and shrines.
618
Islam
According to government figures, there are 20 million Muslims, 40,000 Islamic places of
worship, and more than 45,000 imams. Muslims comprise some 1.5 per cent of the total
population. In some areas where ethnic unrest has occurred, such as the Uighurs of
Xinjiang, officials restrict the building of mosques and the religious education of youths
under the age of 18. Some young Uighur Muslims are trained outside of the country in
madrassahs (Muslim religious schools). Other regions where significant concentrations
of Muslims are found include Gansu, Guizhou, Yunnan and Sichuan, while some major
cities, such as Xian, have well-developed Muslim quarters.
After a series of violent incidents in Xinjiang in 1997 (where more than half of the
official places of worship exist), police cracked down on Muslim religious activity and
places of worship, and local authorities issued regulations further restricting religious
activities and teaching. Officials often accuse separatists of having "carried out
subversion and sabotage in the region in the name of religious activities."
The government permits, and in some cases subsidises, Muslim citizens who make the
hajj (pilgrimage to Mecca). However, government sensitivity to concerns of the Muslim
community is generally limited. There is some evidence that the government is actively
preventing the spread of Islam to the Han population, and most importantly preventing
the Han Chinese from seeing Islam as a religion that is more international in character.
As such, the Huis (physically indistinguishable from the Han Chinese but their ethnic
identity affirmed by their subscription to Islam) are coming under greater scrutiny.
Protestantism
The government maintains that there are 16 million registered Protestants, and over
55,000 churches and other places of worship. However, Chinese Protestants have
claimed a community of some 20 million adherents, while other estimates have varied
from 30 million to 100 million, depending upon the number of house churches that are
independent of government control. Although often optimistic and biased, these larger
estimates have some precedence. A 2004 non-governmental survey in Beijing counted
over 100,000 unregistered Protestants, far more than the 30,000 registered with the
government, while even Qi Xiaofei, deputy director of the State Administration of
Religious Affairs admitted in May 2007 that the number of Protestants in the country
had expanded by 2,000 per cent, while 40 million bibles had been published since 1982.
Catholicism
The unofficial, Vatican-affiliated Catholic church claims a membership of five million

persons registered with the official Catholic church. Vatican officials have estimated
619
that there are as many as 10 million adherents, although these figures are highly
speculative. The government-approved sect has 67 bishops, 5,000 clergy and over 6,000
churches and meeting houses.
China has refused to establish diplomatic relations with the Holy See, and there is no
Vatican representative in China. Bishops in the official Catholic church are not
consecrated by Rome, but many have been recognised unofficially. Since 2005, the
possibility of ties between China and the Vatican have grown owing to a number of
official comments and suggestions of meetings, but are still predicated on the Holy
See's ability to appoint its own representatives, a prospect Beijing does not relish.
In Hebei, where approximately half of the country's Catholics reside, friction between
unofficial Catholics and local authorities continues. Hebei authorities have forced many
underground priests and believers to make a choice of either joining the 'patriotic'
church or facing punishment such as fines, job loss, and, in some cases, having their
children barred from school.
Daoism
Although no official estimate of the number of Daoists are available, estimates of

several hundred thousand are most likely conservative. According to the Taoist (Daoist)
Association, there are more than 25,000 Daoist priests and nuns and more than 1,500
temples. In reality, Daoism's tradition of folk religious practices and the rise of folk
religion within China since the 1990s means that it is difficult to classify and calculate
Daoism's influence and number of adherents.
Judaism
Weekly services of the foreign Jewish community in Beijing have been held largely
uninterrupted since 1995 and High Holy Day observances have been permitted since the
mid-1980s. Members experienced initial difficulty in establishing worship services due
to the fact that Judaism is not one of the five officially recognised religions, and
meetings have in the past been temporarily suspended.
Religious groups
Religious minority Percentage of population practising
Buddhism 8.0
Muslim 1.4
620
Catholicism 0.4-0.6
Protestant 1.2-1.5
Independent "house" churches 2.4-6.5
Note
 Official 2007 figures
 Figures for Daoists are less distinct, but there are believed to be over 25,000 Daoist monks
and nuns, and over 1,500 Taoist temples.
Regional Distribution
Province Population
Henan 91,236,854
Shandong 89,971,789
Guangdong 85,225,007
Sichuan 83,348,296
Jiangsu 73,045,577
Hebei 66,684,419
Hunan 63,274,173
Hubei 59,508,870
Anhui 58,999,948
Zhejiang 45,930,651
Yunnan 42,360,089
621
Liaoning 41,824,412
Jiangxi 40,397,598
Heilongjiang 36,237,576
Shaanxi 35,365,072
Guizhou 35,247,695
Fujian 34,097,947
Shanxi 32,471,242
Jilin 26,802,191
Gansu 25,124,282
Hainan 7,559,035
Qinghai 4,822,963
Note
 2000 census figures
Autonomous Regions Population
Guangxi Zhuang 43,854,538
Neimenggu (Inner Mongolia) 23,323,347
Xinjiang Uighur 18,459,511
Ningxia Hui 5,486,393
Xizang (Tibet) 2,626,329
Municipalities Population
622
Shanghai 16,407,734
Beijing 13,569,194
Tianjin 9,848,731
Chongqing 27,709,800
Language
The principal language is Mandarin Chinese, historically a northern Chinese language

used by officials, particularly in the Ming and Qing dynasties. In the south and southeast
local dialects are spoken, although the writing system is uniform. Thousands of
dialectical groups exist, with seven major groups traditionally identified:
Putonghua/Han (Mandarin), Gan, Kejia (Hakka), Min, Wu, Xiang, and Yue (Cantonese).
Three further groups were recently identified and separated from these seven
categories (Jin from Mandarin, Hui from Wu, and Pinghua from Yue). Within each
grouping, a variety of often mutually unintelligible dialects will exist. In addition, there
are a number of dialects as yet unclassified.
Other languages are widely spoken in autonomous regions such as Xizang (Tibet),
Xinjiang and Neimenggu (Inner Mongolia).
Births and Deaths
Mortality rate per 1,000 (male, aged 15-59) 155
Mortality rate per 1,000 (female, aged 15-59) 98
Infant mortality rate per 1,000 (male, aged 0-5) 27
Infant mortality rate per 1,000 (female, aged 0-5) 27
Note:
 All figures are from the World Health Organisation's 2007 indicators.
Health and Medical

623
Western and traditional Chinese medical attention are available in the cities and, to a
lesser degree, in rural areas. Fees are often partly handled by the patient's employer,
but medical treatment is only free for certain groups of employees. There were 1.36
million physicians in 2004, according to the WHO, with 1.06 physicians per 1,000
population. A further 1.4 million nurses and midwives administer health care,
approximately 1.05 per 1,000 population. Semi-professional peasant physicians, known
as 'barefoot doctors', assist with simple cures, treatment and the distribution of
contraceptives. Chinese estimates places the total number of health sector workers to
be 3,534,707 in 1980, rising to 5,426,851 in 2005.
624
NATURAL RESOURCES
MAJOR NATURAL RESOURCES
Oil and Gas Reserves
Oil
Assessment
Production
Exploration
Refining
Consumption
Pipeline and reserves
Trade and foreign exploitation
Gas
Production
Exploration
Consumption
Pipelines
Trade
Minerals
Coal
Extraction
Trade
625
Power Generation
Current capacity/production
Energy mix and diversification
Land Use
Food Supply
Water Supply
Threats
MAJOR NATURAL RESOURCES
Oil and Gas Reserves
OIL RESERVES
27.86 billion barrels (IHS, 2006)
GAS RESERVES
4.84 trillion cubic metres (IHS, 2006)
Oil
Assessment
China's state petroleum industry is grouped mainly under three national firms: the
China National Petroleum Corporation (CNPC), the China Petrochemical Corporation
(Sinopec), and the China National Offshore Oil Corporation (CNOOC). CNPC handles oil
and gas production, as well as refining in China's north and west, while Sinopec handles
production and refining operations in the south. CNOOC handles offshore production
and refining. The government holds a majority share in all three firms, and the State
Energy Administration oversees the industry as a whole.
With a total oil production in 2006 of 184 million tonnes, and a total consumption of
320 million tonnes, China's petroleum mainly supplies domestic demand. Chinese oil
consumption has grown at a rapid pace in recent years, even compared to GDP growth,
and it is likely that China will become increasingly dependent on foreign sources of oil in
the coming years. According to the Chinese Ministry of Commerce, oil dependency
626
increased 4.1 per cent in 2006 to 47 per cent. At the moment, the Middle East,
especially Saudi Arabia, is the main supplier of oil to China. To ensure access to overseas
oil sources, Chinese energy companies have acquired shares in a number of foreign
companies worldwide, a trend which is likely to continue.
Although China mainly depends on coal for its electrical energy, certain segments of the
Chinese population, in agriculture especially, are very sensitive to fuel prices. The
government regulates domestic fuel prices in an effort to control inflation and cost of
living. With the rise in global fuel prices, the greater difference between domestic and
global prices caused an increase in petroleum exports since 2005. This price differential
also placed a heavy burden on Chinese refiners who were obliged to go out of business
or operate at a loss. The government raised domestic prices in October 2007 to reduce
some of this pressure. In response to falling international fuel prices, the government
lowered prices in January 2008. In both these cases, the government maintained a firm
control over pricing, and allowed the international and domestic markets to deviate
significantly before changing pricing. The government hopes to change this over the
longer term. According to a draft energy law released by the National Energy Leading
Group for comment in December 2007 (drafts have been released since mid-2006), the
government plans on eventually implementing a partially market-based pricing scheme.
China is increasingly dependent on access to foreign oil suppliers. This has had a
significant impact on Chinese foreign policy, international development, and business
partnerships. Although China has developed trade and diplomatic ties with oil exporters
worldwide, Africa and the Middle East play key roles in China's energy security policy.
Developing secure transport links to energy suppliers has also been a priority.
China has also focused more and more on developing its petroleum reserves in addition
to securing access to its suppliers. In an effort to insulate itself from fluctuations in the
international market and stabilise supplies, the government decided in 2004 to build a
strategic petroleum reserve. The draft energy law released in 2007 would also oblige
fuel companies to maintain their own reserves. The development of China's oil reserves
still lags. High global oil prices have delayed the filling of the existing tanks, and the total
capacity of the planned strategic reserve remains low.
Production
China's most productive oil fields have historically been in the northeastern region,
especially the Daqing field. However these fields have generally been operating for a
long time, and production is starting to drop. The Daqing field, for example, has been
operational since 1963, and production has begun to decline. Although some new fields
are being discovered in the northeast, the government has begun to focus on increasing
production in the west and offshore, while stabilising eastern production. As of January
627
2008, the development of new fields was compensating for decreased production in old
fields: oil production grew at a normal rate, but failed to keep pace with China's growing
domestic demand.
Exploration
China's state oil companies have in recent years focused particularly on offshore and
foreign exploration. Offshore exploration has focused on the Bohai Sea area, east of
Tianjin, which is believed to hold more than 1.5 billion barrels in reserves, and the Pearl
River mouth area. Phillips Petroleum announced in March 2000 that it had completed
its appraisal drilling of the Peng Lai find in Block 11/05 in the Bohai Sea. Full-scale
production at the field reached more than 100,000 barrels per day (bpd), and is
expected to increase to 190,000 bpd by 2010. Another major offshore field has been
developed in the Pearl River Mouth area by a consortium including Chevron, Texaco,
Agip and CNOOC. The field began production in February 1999 and is expected to reach
production of 27,000 bpd when fully operational. In May 2007, CNPC announced the
discovery of a massive oil and gas reserve of some 7.35 billion barrels in its Nanpu block
in the Baohai Sea area Jidong field. China's Ministry of Land and Resources announced
significant new discoveries in 2007, including three 100 million ton oilfields, at Jidong
South Fort, Daqing Gulong, and Changqing Jiyuan.
Refining
Increasing its oil refining capacity has been a government priority in recent years.
According to the US Energy Information Agency, China's refinery capacity rose from 4.6
million barrels per day in 2005 to 6.2 million barrels in 2006. Oil companies have been
upgrading their existing refineries to allow them to process heavier Middle Eastern
crude, and have also worked to develop new capacity. CNOOC is working on a USD4.3
billion refinery and petrochemical complex in Huizhou, Guangdong, in conjunction with
Royal Dutch Shell, which should have an eventual capacity of 240,000 bpd when
completed by the end of 2008. Sinopec is working to increase the capacity of its
Quongang refinery, in Fujian, from 80,000 bpd to 240,000 bpd, following a December
2005 agreement reached with ExxonMobil and Saudi Aramco. CNPC is increasing the
capacity of its Dushanzi refinery in Xinjiang in a USD3.5 billion project that also includes
increasing ethylene technical reformation capacity, expected to be completed by the
end of 2008. Dushanzi is the project used to refine oil transported via the 1,000 km
China-Kazakh pipeline from Atasu completed in December 2005. In December 2007, the
Chinese government approved a USD5 billion joint venture between Sinopec and Kuwait
Petroleum Group to build a refinery in Nansha, Guangdong Province. As well as
increasing their refining capacity, Chinese oil companies are also upgrading their
existing refineries to allow them to process heavier Middle Eastern crude.
628
However, domestic price controls and rising global oil prices have forced Chinese
refiners to operate at a loss. Smaller local refiners have closed, and In November 2007,
the National Development and Reform Commission ordered refiners to maintain output
to meet domestic demand. With the majority of crude coming from overseas sources at
a higher price than they can tolerate, refiners have faced severe problems.
Consumption
China's oil consumption grew from 6.5 million barrels per day in 2005 (IHS) to 7.3
million barrels in 2006 (US Energy Information Agency). China is now the second largest
consumer of oil in the world. Despite long-term governmental efforts to develop
alternative sources of energy, Chinese consumption and oil dependence both continue
to rise, with implications both for China and the world.
Pipeline and reserves
China is working to expand its petroleum infrastructure. In addition to projects to allow

oil from expanded production in western China to reach consumers in coastal regions,
Beijing is working on its capacity to import oil from its neighbours. In particular, a
pipeline from Atasu in Kazakhstan to Xinjiang was completed in December 2005, and is
capable of carrying 200,000 bpd to Chinese refineries. By 2010, the pipeline is expected
to be able to transport 20 million tonnes per year (approximately 400,000 bpd).
Moreover, China and Japan have been competing over a possible Russian pipeline from
Siberia. China's preferred option is a one million bpd pipeline from Anagarsk to Daqing;
Japan would prefer a pipeline to the port of Nakhodka to supply the Japanese market.
As it stands, Russia has made it clear that they are intending to extend the pipeline to
Japan, not least because the then-Yukos president Mikhail Khodorkovsky, a vocal
political opponent of President Putin, backed the Chinese pipeline. Khodorkovsky was
subsequently arrested by the Federal Security Service (Federalnaya sluzhba
bezapasnosti: FSB) in Novosibirsk, Siberia in October 2003 and sentenced to nine years
in prison for tax evasion. Yukos was charged with tax evasion and subsequently sold off.
China was particularly dismayed at the outcome as Russia had initially promised to build
the project to China. For Moscow, the benefit of the project is not only in balancing
Chinese and Japanese interests in the region, but also in diversifying Russia's future
reliance as an energy supplier away from the Chinese market to Japan and South Korea
in order to have a price-and-demand stablising mechanism on future Russian energy
supplies. This pipeline would also bring about huge economic benefits to parts of Siberia
as Japan has almost promised to undertake bulk of the cost of the project, and might
have positive implications for overall Russo-Japanese relations. The Russians however
have indicated that a branch of the pipeline would still be built from Siberia to supply
the Chinese market.
629
As well as greatly increasing the capacity of its oil pipeline network, China has also
started work on a strategic petroleum reserve. Aimed at protecting China from a
sudden breakdown in oil supply, the reserve will consist of four facilities: Zhenhai and
Daishan in Zhejiang province, Huangdao in Shandong province, and Xingang in Liaoning
province. China aims to build a total of 16.2 million cubic metres (101.9 million barrels)
of reserves by 2012, equivalent to 20 days of consumption. This would augment the
commercial stocks of the country's major refiners and importers, which typically hold
between 10 and 30 days' worth of supplies, and give Beijing a substantial cushion
against price fluctuations or disruptions to supply. This reserve may also give limited
leeway in the case of hostilities. However, the reserve only gives twenty days of
peacetime consumption - wartime consumption would be much greater. Furthermore,
the majority of the storage facilities are in coastal areas within striking range of the sea,
meaning that they could be among the first locations targeted in the event of a military
conflict. According to reports, China wants to build up a reserve of 90 days of supplies at
projected future rates in accordance with International Energy Agency
recommendations.
Trade and foreign exploitation
China became a net importer of oil in 1993. Since then, the gap between consumption
and domestic production has continually widened, and China now depends heavily on
imported oil. As of 2007, China was the third largest net importer of oil in the world.
According to the Chinese General Administration of Customs, China imported 138.8
million tons of oil in 2007, an increase of 16.9 per cent over 2006. Exports over the
same period fell 38.7 per cent to 3.89 million tons.
China has developed partnerships with a wide variety of countries to supply its oil
needs. The Middle East, especially Saudi Arabia and Iran, has always been a key
supplier. African countries are also playing an increasingly important role in China's
energy security, and the Chinese government has been criticised for the development
support and recognition that it has given to governments that the US accuses of human
rights abuses. As of July 2007, China's top five suppliers of oil were in order: Saudi
Arabia, Angola, Oman, Russia and Iran.
Development aid, investments and joint ventures have become important tools in
maintaining relations with oil exporters. Chinese oil companies have become heavily
involved in buying oversees oil companies, or shares in those companies. Although the
press has paid particular attention in 2005 to Chinese bids for Unocal in the US, and the
Canadian firm Petrokazakhstan, which has significant reserves in Kazakhstan, China's
acquisition of foreign petroleum companies has become a global phenomenon. Chinese
state oil firms now own oil concessions, or stakes in companies, in Latin America,
Canada, Africa, the Middle East, and Asia. Of particular political significance are Chinese
630
interests in oil fields in Sudan, and in the Yadaravan field in Iran. In February 2008, the
Iranian oil ministry also announced a 16 billion joint venture between CNOOC and Iran's
Pars Oil and Gas Company.
In Sudan the major foreign oil players are the China National Petroleum Corporation
(CNPC) and its state-controlled counterparts from India and Malaysia, ONGC Videsh and
Petronas. They provided much of the investment needed to build a 1,240 km oil
pipeline from the centre of southern Sudan to an export terminal on the Red Sea.
Around 25 per cent of crude imports are from Africa, and while Sudan is not yet a
mainstay supplier to China it is becoming increasingly important. Of the 2.4 million bpd
that China imported in April 2004, only 71,000 bpd came from Sudan. However, Africa's
largest country is already an important energy source for China and seems set to
become more so as Chinese oil production and exploration expand in Sudan.
Meanwhile, improvements in Sino-Vietnamese relations have opened the way for oil
and gas exploration in the Beibu Gulf. Both oil and gas fields have been discovered in
the area, which are starting to be exploited. The Spratly Islands also are suspected to
hold oil and gas reserves, but six governments claim the area: China, Taiwan, the
Philippines, Brunei, Malaysia and Vietnam. China has long claimed "indisputable
sovereignty" over the region, but agreed in March 2005 to jointly explore the region
with the Philippines and Vietnam.
Given the country's demand for overseas energy supplies, such exploration has
continued and looks set to do so in the future. In May 2006, China National Petroleum
Corporation (CNPC) won an auction in Lagos for four of 17 blocks on offer in Nigeria,
two located in the northeastern Lake Chad Basin and two in the restive southern Niger
Delta, the country's main oil-producing region. The rights in the Lake Chad basin blocks
were sold for USD510,000 each, while the two in the Niger Delta were sold for USD5.01
million and USD10.01 million respectively. One month later, China and North Korea
reportedly reached a deal to prospect for oil in the Yellow Sea near to the Sino-North
Korean border, although few details were provided publicly.
Moreover, following President Hu's visit in early 2007, a deal was announced that
CNOOC was allowed to head the exploration of six onshore blocks covering 115,343 km2
in the northern and southern of part of Kenya. No exploitable oil or gas discoveries have
yet been made in these six blocks, but several international companies have
demonstrated their interest lately, indicating that there is a high potential for finding
major reserves. Exploration investments in the six blocks, located in the basins of Lamu,
Anza and Mandera, will commence by the end of 2007.
Oil production/export figures
631
2002 2003 2004 2005 2006
Total Oil Production1 3,560.35 3,556.16 3,507.67 3,617.07 3,673.53
Crude Oil Production2 3389.70 3408.90 3485.30 3608.60 3672.70
Net exports/imports2 -1631.00 -2019.10 -2780.00 -2939.20 -3428.40
Figures in thousands of barrels per day
1. Source: IHS
2. Source: US Energy Information Agency
Gas
Based on 2006 estimates, natural gas satisfied three per cent of total energy
consumption, with this total likely to increase as China improves its natural gas
infrastructure and shifts its focus to the relatively cleaner gas-powered stations from its
current reliance on coal-fired power stations. The total contribution of natural gas to
China's energy mix is expected to increase to seven per cent by 2010, with total capacity
of gas-fired power stations planned to increase to 60 GW by 2020. China has significant
natural gas reserves, but a shortfall of approximately 30 billion cubic metres by 2010
(rising to 40 billion cubic metres by 2015), will ensure that potential access to Russian-
supplied natural gas will become more important, as will liquefied natural gas (LNG).
However, currently there are two major barriers to increased dependence on natural
gas to supply the country's energy needs: infrastructure needs and regulatory
limitations. China's energy infrastructure has historically been biased towards coal-fired
plants and there are considerable costs in terms of both time and investment involved
in creating the basis for a gas-powered system. As regards regulatory limitations, China
is still working on developing a unified regulatory system to handle gas sales but such
things do not come easily in a country struggling to manage the transition between
state-controlled and free markets. Nonetheless, with rising energy needs, and faced
with the significant environmental costs of its present dependence on coal for
electricity generation, China is likely to increase its natural gas dependence in the
coming years.
Production
The Chinese government historically discouraged heavy investment in natural gas
632
production by keeping gas prices low, and it was mainly used for fertiliser production or
was burnt for energy at oil and gas fields. In the mid-1990s the discovery of significant
domestic gas reserves in Shaanxi province led the government to see a bigger role for
gas in China's energy strategy. Prices were allowed to appreciate, and gas transport
infrastructure was developed, beginning with a Shaanxi-Beijing pipeline. As a result,
domestic natural gas production has risen dramatically to 55 billion cubic metres in
2006. Production is currently focused around reserves in Xinjiang Province in Western
China, and in the Ordos Basin in the North. China's two largest reserves are the Sulige
gas field in Inner Mongolia, and the Puguang field in Sichuan.
Exploration
Increasing gas production plays a role in the CCP's long-term policy of diversifying its
energy and fuel supply. Sizeable new reserves continue to be discovered on a regular
basis, mainly in the Tarim, Ordos and Sichuan basins. For example, in 2006, Sinopec
announced the discovery of several large reserves, including the Puguang field in
Sichuan. In June 2006, the discovery of significant reserves in the South China Sea was
also announced, which may hint at a greater role for offshore exploration and
production in coming years. Of particular interest is the Xihu trough area in the East
China Sea. In August 2003, Sinopec, CNOOC, Unocal and Shell announced a joint venture
to explore the area, which is near the median line between China and Japan. Although
Shell and Unocal dropped out of the project in 2004, the potential exploitation of the
area has been a source of tension between China and Japan.
Consumption
Natural gas consumption in China has risen dramatically in recent years. Although it still
only constitutes a small proportion total consumption, gas consumption is rising in
absolute terms. Consumption rose from 1.65 trillion cubic feet in 2005 to two trillion
cubic feet in 2006 (US Energy Information Agency figures). The government continues
to favour diversification away from coal and oil, and increased reliance on natural gas,
which is cleaner than coal, the current backbone of Chinese energy production. Natural
gas consumption remains limited by a complicated regulatory structure, and by
problems in securing reliable access to foreign suppliers. Despite a governmental target
since 1999 of eight per cent dependence on natural gas by 2010, estimates in April 2007
put the figure at only 5.3 per cent.
Pipelines
China's gas pipeline system was historically fragmented. Limited systems existed in gas
producing regions, but there was no network for distribution on the national scale.
China's primary natural gas reserves are in Xinjiang province in the west, and in the
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Ordos Basin in Inner Mongolia, while demand is highest along the coast. As government
policy began to favour increased natural gas consumption, the pipeline network became
a limiting factor. Several large-scale projects have improved this, but the government
continues to work on improving the PRC's natural gas infrastructure. PetroChina
completed a USD7 billion, 2500-mile West-East gas pipeline linking Xinjiang to Shanghai
in 2005, and Sinopec is planning to construct a pipeline linking reserves in Sichuan with
demand in Guangdong province. CNPC announced in 2007 the construction of a second
West-East pipeline linking Xinjiang to Guangdong province. China's natural gas
infrastructure is also being enhanced to cope with higher levels of trade. Proposals
include a Kazakh-Chinese pipeline that would link with the existing Turkmenistan-
Kazakhstan pipeline, a Chinese-Myanmar pipeline, and proposals for a Russian-Chinese
pipeline from the Kovykta gas fields. Most of China's fuel imports currently pass through
the Straits of Malacca. Gas pipelines would represent a source of fuel that would be
independent of this choke point.
Trade
China's demand for natural gas is rising as it develops the infrastructure for it. Projected
gas usage outstrips projected growth in domestic production, and China is likely to
become dependent on imported gas. China has focused on two approaches to
importing oil: pipeline projects allowing it to import directly from land neighbours,
particularly Russia, and the development of the infrastructure to bring in liquefied
natural gas (LNG) by sea. China has constructed two LNG terminals, in Guangdong and
in Fujian. While potentially less economical than land pipelines, and also dependent on
secure maritime trade routes, this would reduce China's dependence on Russia as the
sole supplier of gas.
Despite growing demand, natural gas usage lags behind government targets. Although
this is partly due to regulatory problems and deficiencies with the domestic
infrastructure, the main problem has been securing reliable and affordable foreign
partners. Despite talks with Russia, Kazakhstan, and Turkmenistan, pipeline projects
remain in limbo. China's efforts to import LNG by sea have also not reached the scale
that the government wanted because of difficulties in negotiating long-term supply
agreements.
Gas production/export figures
2002 2003 2004 2005 2006
Gas production1 32.46 34.12 42.48 50.48 59.58
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Net exports/imports2 91.40 67.90 89.10 108.40 n/a
Figures in billion cubic metres
1. Source: IHS
2. Source: US Energy Information Agency
Minerals
China possesses a fairly complete range of proven reserves both of metallic and non-
metallic minerals, and new discoveries continue to increase the countries resource
potential. Distribution is concentrated in the central and western parts of the country,
while the industrial and export base remains in the eastern coastal region. Quality is a
factor in evaluating the country's mineral potential. Although the country contains a
relatively complete range of metallic mineral reserves, some of them, especially iron
ore, manganese, aluminium, and copper are of relatively low quality, expensive to
smelt, and are poorly concentrated. On the other hand, reserves of metals like
tungsten, tin, molybdenum and antimony are of a high quality. China also possesses a
variety of non-metallic minerals, many in large, high quality deposits.
Coal
China has historically turned to coal to meet the majority of its energy needs. Coal
accounts for just under 65 per cent of energy consumption, and China is both the
world's largest consumer and producer of coal. Coal consumption has risen dramatically
since 2001, and, since 2003, the country has either run a deficit or an extremely minor
surplus (production in 2005 was estimated at 1,108 million tonnes of oil equivalent
against consumption of 1,082 million tonnes of oil equivalent, according to BP). With
rapid growth in electricity consumption - associated with the country's overall rate of
growth - coal supply has become problematic. Two particular issues stand out: firstly,
accidents are common in China's antiquated mines. China accounts for approximately
35 per cent of global coal production, and 80 per cent of global coal mine related
deaths, at an average of 6,000 deaths per annum. Although Beijing is working on
modernising its coal mines, and bringing in the expertise of foreign partners, the rate of
accidents remains high. The ability of the government to reduce coal-mining deaths is
hampered by a lack of regulation, particularly among the large number of small,
unlicensed mines. Second, China's coal transportation infrastructure, especially rail
networks, cannot meet demand. The government has inaugurated a large-scale
programme to improve the ability of its rail network to carry coal, but this remains a
limiting factor in overall coal supply.
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The snowstorms of early 2008 highlighted ongoing regulatory and infrastructure

problems with China's coal and electricity industries. Government efforts to reduce coal
mine accidents led to the closing of mines, particularly smaller ones. On top of this, a
policy of allowing coal prices to rise with demand, while capping electricity tariffs
discouraged power companies from keeping reserves of coal. When snowstorms
disrupted coal transport, power shortages became a serious problem.
Over the longer term China's coal demand is projected to rise significantly, more than
doubling by the year 2020. Several projects exist for the development of coal-fired
power plants co-located with large mines. With its extensive coal reserves, China has
displayed an interest in alternative coal-based technologies, either to improve
infrastructure, such as slurry pipeline transportation, or to use coal to meet its other
energy demands, like the Shenhua Group's coal liquefaction project in Inner Mongolia.
Extraction
The government announced the discovery in 2007 of 62 large-scale reserves containing

17 minerals. However, the distribution and quality of reserves are not consistent.
China's industrialised Eastern region, especially South of Shandong province, is relatively
lacking in mineral reserves, particularly of minerals needed for industrial purposes like
coal, bauxite, and phosphorous. China's central region currently forms the backbone of
energy and raw material extraction. Energy reserves are relatively abundant in the form
of oil and coal, and the southern region has significant reserves of non-ferrous and non-
metallic minerals, particularly bauxite, copper, and phosphorous. The central region
supports a significant industrial base, especially the coal, petroleum, petrochemicals,
iron, steel, copper, aluminium and phosphorous. China's Western region also contains
significant and varied mineral reserves, and plays a significant part in overall extraction
of coal, gas, nickel, mercury, aluminium and phosphorous. Other mineral reserves in the
area are also plentiful, but do not yet play a major role in the national economy.
Trade
China's industrial growth has made it dependent on imports of minerals, especially base
metals for industry, of which it has relatively poor quality supplies. As of the end of
January 2008, according to Rio Tinto, China already accounted for 47 per cent of global
iron ore consumption, 32 per cent of aluminium consumption, and 25 per cent of
copper. If growth continues at the current pace, China will have to compete more and
more for its share of the global market. As with oil, the PRC is already taking steps to
secure relations with suppliers. Early in 2008, state-owned Chinalco's acquisition (in
partnership with the American company Alcoa) of a USD14.05 billion stake in Rio Tinto
received press attention. It is not clear whether this was purely a commercial move, or
an effort to block the company's merger with BHP.
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Of greater long-term interest is the Chinese government's ongoing policy of building

relations especially with developing countries in Africa, in exchange for mining rights.
For example, in January 2008 the Chinese government offered a USD5 billion
development loan to the government of the Democratic Republic of Congo. In
exchange, Chinese companies received rights to natural resources. This is part of a
larger-scale policy: the Chinese government has promised a total of USD20 billion in
trade and investment to Africa over the next few years, and the continent is already full
of Chinese expatriates, joint ventures, development projects, and investment. China
became a net exporter of steel in 2006. Domestic demand for the metal led the
government to impose tariffs in an effort to limit exports. While China is the world's top
producer of coal, it is also its largest consumer. Domestic growth, the closing of coal
mines for safety reasons, and rising global oil prices led the PRC to become a net
importer of coal in the first quarter of 2007. China's increased demand for coal had
driven up Asian coal prices by the end of 2007. The government has worked hard to
improve China's infrastructure for extracting, importing and distributing coal: in
particular, it has increased the capacity of ports to receive coal shipments. Chinese coal
imports come mainly from Vietnam and Indonesia.
Coal extraction and trade figures
2002 2003 2004 2005 2006
Coal production1 1521.2 1837.6 2156.4 2430.3 2620.5
Net exports/imports2 1875.1 2120.1 1817.8 1288.2 877.1
Source: US Energy Information Agency
1. Figures in millions of short tons

2. Figures in trillion btu
Power Generation
After a period of over-supply in the late 1990s, growth in energy demand has outpaced
production, and power shortages are now common in many parts of China. These are in
part caused by bottlenecks in coal production and transportation, as discussed above,
but are also the result of inadequate generation capacity. This is likely to become
increasingly problematic, as demand is expected to grow at an average rate of over four
per cent per annum until 2025. Regulatory problems (like discrepancies between coal
and electricity pricing) and long-term issues with infrastructure and coal mining
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continue to limit the PRC's power industry. In response, the government has approved a
series of power-generating projects. Due to increasingly severe environmental
problems, China has shifted its emphasis away from coal-based power generation,
although coal is likely to provide the majority of China's electricity for the foreseeable
future. Beijing is increasing the construction of natural gas power plants, especially in
the polluted coastal region, and has increased the emphasis on other sources of energy,
especially nuclear and hydroelectric power.
Current capacity/production
In 2006, China produced 2.83 trillion kW h of electricity, according to the State

Electricity Regulatory Commission. During that year, capacity increased by 100 GW, to a
total capacity of 622 GW. Total capacity exceeded 700 GW by the end of 2007. The
Chinese government has approved plans to add a total of 27 GW in nuclear generating
capacity to its mid-2005 capacity of 15 GW. Over the longer term, the government plans
to construct at least thirty nuclear power plants, to provide a total of around four per
cent of total electricity generation. In addition, it has been working on a series of very
large-scale hydroelectric projects. In particular, the Three Gorges project, which began
operating in mid-2003, is expected to produce a total of 18.2 GW in 26 separate 700
MW generators when completed in 2009. In addition, a programme in the Yellow River
area, under the direction of the Yellow River Hydroelectric Development Corporation,
should have an eventual total capacity of 15.8 GW.
Energy mix and diversification
China's power generation largely comes from coal, and China will remain dependent on
coal power for many years. A combination of environmental factors and the wish to
reduce dependence on imported fuel has driven the government to push for increased
reliance on alternative sources of energy. The government is relying on legal measures
and economic incentives to increase the use of alternative sources of energy. China
invested an estimated USD10 billion into renewable energy in 2007 alone. Although
sources like wind and solar energy are used in China, the main alternative sources of
energy in the government's plans are nuclear and hydroelectric power.
As of the beginning of 2008, 11 nuclear power plants operated in China, generating 5.8
billion kW h. The government aims to increase this to 40 billion kW h by 2020, or four
per cent of total power. The government is not only driven by environmental factors in
this matter: China also has large reserves of uranium, and nuclear power would remain
independent of imported fuel. The discovery early in 2008 of large new uranium
reserves in the Ordos Basin suggests that this will continue to be a viable policy.
Hydroelectric power is China's main form of renewable energy, and it plays a major role
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in Chinese energy policy. As of 2007, China was the world's largest producer of
hydroelectric power, with a generating capacity of over 145 GW. China continues to
favour further use of hydroelectric and other renewable sources of energy: in 2006,
around seven per cent of power came from renewable sources, and the government is
likely to surpass its target of 16 per cent by 2020.
Land Use
Despite its size, a relatively small area of the PRC is suitable for agriculture. Lack of
water, and the conversion of farmland to industrial land continue to reduce China's
potential agricultural capacity, and the confiscation of agricultural land remains a source
of friction between rural farmers and local authorities.
Type Proportion (per cent)
Arable land 14.86
Permanent crops 1.27
Other 83.87
Source: CIA Fact book
Food Supply
China faces a fundamental difficulty in providing adequate food for its large population -
the country has 25 per cent of the world's population, but only seven per cent of its
arable land. Since late 1988, greater emphasis has been placed on basic farmland
improvement. The introduction of new technology and increasing investment in
agricultural development are intended to increase the efficiency of food supply. As of
2006, just over 50 per cent of arable land was irrigated, with plan to expand this figure
by one per cent every year. Principal crops are rice, wheat, maize, soya beans, sugar
cane, peanuts (for oil), sesame, beet, vegetables, pork and poultry. Paddy rice is the
major grain crop in China, grown mainly in the Yangzi river valley and southern China,
and on the Yunnan-Guizhou plateau. Its output accounts for approximately two fifths of
the total grain output. Wheat, cultivated largely in northern China, accounts for
approximately one fifth of grain output, while corn, grown in north, northwestern and
southern China, comprises approximately one quarter of total output. The number of
undernourished people in China fell from 250 million in 1978 to 29 million in 2003,
according to the Food and Agricultural Organisation (FAO).
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Water Supply
China has approximately seven per cent of the world's water resources. The demand for
water is high, not only for human consumption but also for agriculture. As such,
sufficient water resources cannot be guaranteed for approximately two thirds of China's
cities for the entire year. The country's per capita water resources, according to 2004
estimates, are approximately 2,200 cubic metres per annum (2.8 billion cubic metres of
renewable water resources in total), among the lowest in the world (approximately 25
per cent of the global average). This figure is expected to decrease to 1,750 cubic
metres per capita per annum by 2030, when the population is expected to have
expanded to 1.6 billion people.
Threats
China's groundwater reserves are under threat from a combination of decreased rainfall
and pollution. Demographic pressure has worsened the situation, as the massive
pumping of groundwater for irrigation, especially in the North where grain cultivation is
concentrated, has resulted in massive depletion on reserves. China has stated that it will
encourage foreign investment in water-conservation projects, particularly important
given that Chinese industry typically recycles just 25 per cent of its water supply.
Moreover, China has built over 80,000 reservoirs since 1949, which have proven a heavy
economic burden, requiring extremely expensive maintenance, many of them also
needing to be industrialised for the generation of electricity. Other technologies are
being plumbed to aid China's water shortage. From 1995 to 2003, the country spent
USD266 million on rain-making technologies. A further problem with China's water
supply is the lack of clean water as economic growth pollutes groundwater. In 2005, the
State Environmental Protection Agency (SEPA) estimated that 70 per cent of China's
rivers and lakes were polluted, while legislator Sheng Huaren claimed that 300 million
people were without a clean water supply in June 2005. More recently, Pan Yue, deputy
director of SEPA, stated in May 2007 that pollution in three major rivers in China, the
Songhua, Huaihe and Haihe, had worsened considerably, while an April 2007 SEPA
report claimed that 600 km of the Yangzi is in critical condition and 30 per cent of its
tributaries are seriously polluted. Although the government is aware of the problem,
remedies are costly to implement. In December 2005 the southern province of
Guangdong stated that it would spend CNY11 billion (USD1.36 billion) on drinking water
projects during its 11th Five-Year Plan (2006-2010), to provide safe drinking water for
22.1 million people, or 40.1 per cent of the province's population. However, given that
the provincial government also intends to spend CNY263 billion (USD32.43 billion) on
263 heavy and chemical industry projects in the same period, it is unclear whether such
rapid industrial expansion will make the provision of drinking water even more difficult.
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GEOGRAPHY
PHYSICAL SUMMARY
Physical Overview
Rivers
Coastline
CLIMATIC SUMMARY
Climatic Overview
PHYSICAL SUMMARY
AREA
9,596,960 km2
LOCATION
18-53°North, 75-135°East
ELEVATION
-154 m to 8,848 m
LAND BORDERS
Afghanistan, Bhutan, India, Kazakhstan, Kyrgyzstan, Laos, Mongolia, Myanmar, Nepal, North
Korea, Pakistan, Russia, Tajikistan and Vietnam.
Physical Overview
China has an extremely varied geography. Only 15 per cent of the country is suitable for
agriculture and this lies mainly in the eastern third of the landmass, which is relatively
flat (although interspersed with mountain ranges). In the west are the mountains
around the Tibet/Qinghai plateau (over two thirds of China is mountainous) and the
deserts of Xinjiang. There are large areas of semi-arid grassland in the northeast.
China's mountainous regions form part of the Himalayas, the tallest, coldest, highest
and most formidable mountain range in the world. The geological structure of China has
granted the country great mineral resources.
Rivers
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China's three principal river systems start on the high mountains of Tibet and Central
Asia. These rivers are the Huanghe (Yellow river), the Changjiang (Yangzi) and the Xihe
(West river), and they run to the coastal plains in a generally easterly direction. The
Huanghe is known as 'China's sorrow', due to its high propensity to flood. It carries the
highest proportion of silt of any river in the world: 1,600 million tonnes of silt per year
enter the river's lower reaches (approximately a quarter goes into the bed, half into the
delta and a quarter into the sea). Centuries of silt have raised the river banks high above
the surrounding countryside and flood control facilities are critical to the survival of
China's agricultural basins.
These were strained to the limit in 1991, when central China experienced widespread
and serious flooding; at least 1,730 people were killed and 200 million people in 18
provinces, autonomous regions and municipalities were affected. Floods in 1998 and
2002 subsequently killed over 4,000 and 1,500 respectively. The floods of 1998 notably
affected the whole Yangzi river basin and in scale eclipsed that of 1991. Economic
damage in the less economically productive upper reaches of the Yangzi alone reached
an estimated USD1.4 billion (more than 0.1 per cent of GDP) in 1998; the cost
nationwide may have been close to USD20 billion (over two per cent of GDP).
Although official reportage of the 2002 flooding along the middle reaches of the Yangzi
may have been slightly exaggerated for domestic political reasons, the risk is of more
fearsome repeats of the 1998 flooding. It is not clear how the Three Gorges Dam
project, meant to alleviate flood risk permanently, will protect the middle and lower
reaches of the Yangzi valley. Most of the last century's major flood episodes were
caused by natural phenomena such as heavy rainstorms below the site of the Three
Gorges Dam or in tributaries joining the Yangzi below the site.
According to the Chinese Ministry of Water Resources in 2007, investment in flood

management and forecasting have reduced the loss of life caused by flooding in recent
years. Massive-scale relief efforts have also played a role. Floods in recent years have
caused lower levels of death, although economic damage (especially to infrastructure
and farming) and social disruption remain high. In 2007, despite severe flooding,
especially of the Huai River, loss of life was kept to a little over 1,100. Direct economic
damage and homelessness caused by flooding were high.
Flooding is not the only problem. Many parts of China, especially in the north, face
water shortages on a regular basis. The causes are to a significant extent man made:
deforestation and the destruction of marshes and grassland in northern China have
resulted in water shortages and desertification. The CCP has given the green light to a
USD25 billion project to channel the water of the Yangzi river along a 1,200 km route to
the north. Approximately 200,000 people will have to be relocated as a result of this
massive undertaking.
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In May 2002, it was reported that the 'South-to-North Water Transfer Project' had met
the technical requirements for its construction to start later in the year. By 2010, the
first and second phases of the eastern route construction and the first phase of the
middle route construction should be completed. The western route will be the largest,
requiring heavy tunneling, and will take longer to complete. Pollution control will be
concentrated along the eastern route via over one hundred sewage treatment stations.
The redistribution of water on such a scale will likely result in shortages and local
resentment. For example, in the run-up to the Beijing Olympics, the CCP set the goal of
completing 309 kilometres of canals (part of the 'South-to-North Water Transfer
Project) in Hebei province and pumping 300 million cubic metres of extra water to
Beijing. Hebei is already one of China's most water-short provinces, and it already bears
the brunt of Beijing's water needs. Resentment among farmers is growing, as water
shortages are driving them out of work.
Overall, there is great pressure on a large number of riverine ecosystems in China. Since
1999, the major rivers north of the Yangzi have run dry. The Yellow, Huai, Han, Luan and
Fen rivers are under serious threat of extinction. The Yellow river was only kept flowing
in 2000 due to the emptying of its reservoirs. The Yangzi experienced significant drought
in the 2006 flood season, with large sections of the river at record low levels. In October
2002, the Chinese government announced that a monitoring system had begun to
record environmental changes along the Yangzi, Yellow and Mekong rivers, employing
Finnish meteorological equipment and the Global Positioning Satellite (GPS) system.
However, it is not clear how the root causes of China's ecological problems, of which
threats to river sustainability are only one part, can be checked, let alone reversed,
without major economic sacrifice.
Coastline
China has a coastline of length 14,500 km.
CLIMATIC SUMMARY
AVERAGE ANNUAL TEMPERATURE

Varied
AVERAGE ANNUAL RAINFALL
Varied
AVERAGE RELATIVE HUMIDITY
Varied
Beijing (elevation 52 m)
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Av Temperature (°C) Av Humidity (%) Rainfall (mm)
min max All hours
Jan-Mar -6 5 49 15
Apr-Jun 12 26 51 130
Jul-Sep 18 28 69 440
Oct-Dec 1 11 55 30
Kashgar (elevation 1,309 m)
min max 0800 hours
Jan-Mar -5 6 68 31
Apr-Jun 14 27 46 20
Jul-Sep 17 30 52 20
Oct-Dec -1 12 67 25
Mukden (elevation 43 m)
min max 0600 h 1400 h
Jan-Mar -13 -1 72 43 34
Apr-Jun 10 22 70 38 181
Jul-Sep 16 27 89 53 420
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Oct-Dec -6 6 78 47 80
Shanghai (elevation 7 m)
min max 0600 h 1400 h
Jan-Mar 2 10 88 55 200
Apr-Jun 15 24 92 61 370
Jul-Sep 20 30 94 65 420
Oct-Dec 8 17 90 58 170
Wuzhou (elevation 11 m)
min max 0530 h 1330 h
Jan-Mar 11 18 82 66 190
Apr-Jun 22 28 88 73 550
Jul-Sep 25 32 85 65 430
Oct-Dec 16 23 81 63 120
Climatic Overview
The climate of China is dominated by the Asiatic monsoon. From October to April the
weather patterns across much of the country's huge landmass are a function of the
high-pressure system which builds in Siberia and Central Asia and the winds which blow
out from China and Mongolia. From May to September the area is dominated by a low-
pressure system, and as a result winds are drawn in from the Indian and Pacific oceans.
These winds bring moist air and, as a consequence, rain. These wet summers and dry
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winters are so unique that this type of weather pattern has become known as
distinctively Chinese.
Regional variations in weather patterns are caused primarily by differences in latitude

across the huge country. Northern China has extremely cold winters, as does, for
example, the mountainous Tibet. Southern and central China have a more tropical and
sub-tropical climate, with far less winter cold. Eastern China has far more rain and
northern and western regions contain areas of semi-arid and arid desert.
Extreme weather phenomena have at times had severe social and economic
consequences. Flooding has already been discussed. Investment in disaster
management and forecasting has diminished the loss of life caused by flooding in recent
years. Drought and desertification remain key issues. Snowstorms also brought about a
crisis early in 2008: agricultural land and livestock were destroyed, and infrastructure
was disrupted, causing food and fuel prices to rise. The social consequences, especially
in the run-up to the Lunar New Year holiday, required the visible and direct action of
the central government.
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ECONOMY
Assessment
Regionalisation
Resource shortages and infrastructure bottlenecks
Policy
Deng's reforms
Jiang's exuberance
Hu's moderation
Sector Analysis
State-owned enterprises
Agriculture
Main Economic Indicators
Assessment
Since Deng Xiaoping's economic reforms in the late 1970s, China's GDP has averaged a
high single digit rate of growth. From an isolated, communist economy, China has
become the fourth largest economy in the world. From a Western perspective, China is
best known for its low-cost manufacturing, although foreign businesses are increasingly
tempted by the prospect of having China's massive population as a market. Although
mainly viewed from the West as an exporter of manufactured goods, China is also a
major importer of raw materials and fuel. At the moment, China may be viewed as a
regional importer and global exporter, although China is also well on the way to
becoming a global importer of food and raw materials (for example, from Latin
America), as well as of fuel (especially from Africa and the Middle East).
Despite its overall GDP growth, and the remarkable transformation of major southern
and eastern cities like Shanghai, Fujian and Guangzhou, China's economy still has major
problems. These are in part legacies of the economic policies of Deng Xiaoping and Jiang
Zemin, which achieved unprecedented economic growth at the cost of significant
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structural and regional imbalances. Specifically, China's economy is threatened by

imbalances between growth in the coastal regions and the interior, weaknesses in the
banking sector (particularly because of the need to prop up failing state-owned
enterprises (SOEs), although these threats are now dissipating), a general climate of
economic overheating, and an infrastructure system that that is developing in ways that
does not meet the demands of the growing economy and has resulted in serious
environmental problems. Overheating, in particular, has become a significant concern
as the economy has expanded at a rate of over 10 per cent since 2003, and the first
quarter of 2007 witnessed growth of 11.1 per cent, according to official figures.
Moreover, in more recent years, foreign investment has heightened economic threats
to the country. Despite efforts to moderate growth through macroeconomic and
regulatory measures, the influx of foreign direct investment and easy credit has created
a liquidity surplus in the Chinese economy. This strong flow of foreign direct investment
is unlikely to diminish, particularly given the government's eagerness to reassure
investors that China remains a stable country in which to do business, most recently
exemplified by the March 2007 passing of the country's first private property law that
offers urban property owners a guarantee that leases, which are capped at 70 years,
will be automatically renewed, although all property remains in the hands of the state.
Investment in fixed assets and real estate is taking place at a rapid rate, and there is a
risk of excess capacity if growth slows abruptly, In the mean time, there are threats of
inflation.
Regionalisation
Both as a result of easier accessibility to shipping routes and overseas investors, and as
a result of a favourable political climate, the coastal regions have developed at a much
higher pace than the interior of China. As such, oolitical analysts both within and
outside China are advocating that China's economic growth could be undone by the
growing disparity between the coastal and inland areas. The burden of agricultural
taxes, a history of food price controls, and little foreign investment has left income in
rural areas far behind urban areas. In 2006, for example, the average annual net income
for families in rural areas was CNY3,587, compared to CNY11,759 in urban areas, with
this gap widening by the year. The personal preferences of Chinese Communist Party
(CCP) officials have also contributed to China's uneven development. Between 1990 and
2002, for example, Shanghai, a favourite of Jiang Zemin, received the lion's share of
government grants and loans; this in turn stimulated foreign direct investment. As a
consequence, according to official statistics, over the period 1978 and 2001, China's
eastern coast received 86 per cent of total FDI, the centre received nine per cent, and
the west received five per cent. Since then, attempts have been made to reduce the
disparity, with Beijing investing in regions and provinces with a sizeable minority, such
as Tibet, in order to alleviate poverty, raise standards of living and to ensure these
648
regions are integrated firmly in Beijing's sphere of influence. The CCP stepped up its
efforts in 2002 during the departure of Jiang when it relaunched its "go west" policy to
aggressively encourage and channel FDI and investments to inland areas to increase the
economic vibrancy while slowing down the growth in the eastern coastal seaboard.
However, despite such government projects to develop the interior and reduce
agricultural taxes, the more favourable geographical situation of China's coastal
provinces makes real improvements difficult.
Resource shortages and infrastructure bottlenecks
Demand for oil is the greatest immediate pressure generated by China's economic
growth, and access to fuel imports has become a central foreign policy under Hu Jintao.
The CCP is taking steps to reduce its dependence on fossil fuel imports, through the
establishment of a strategic petroleum reserve, the development of a large-scale
nuclear power programme, and investment in other alternative energy projects like the
Three Gorges Dam. Nonetheless, total oil imports have risen quickly over the past years
(something which is unlikely to change for some time if China maintains its present
growth rate), and the ratio between energy consumption and GDP growth is far less
favourable in China than in most developed countries. Efforts to reduce dependence on
foreign suppliers of fuel will take a long time to become effective. Chinese hydroelectric
and nuclear projects may eventually reduce dependence on coal as an electricity
source, but the need for fuel for agriculture and transportation is likely to continue to
grow. China's dependence on its petroleum suppliers worldwide is likely to continue to
increase, and Chinese diplomacy heavily emphasises its energy security.
Economic growth is also constrained by a lack of commodities, especially base metals,

but also including food. Domestic resources are relatively limited; there have been
substantial discoveries of raw materials made in Xinjiang and Tibet, but the possibility of
mining and translating these resources to commercial usage is still a distant possibility.
Moreover, due to infrastructure constraints, commodity imports are limited not only by
prices and international availability, but also by the ability of ports to handle the volume
of shipping required, as China's infrastructure development has failed to keep up with
overall growth. Improved cargo handling has increased the efficiency of ports, but rail
transportation may take longer to upgrade, despite plans to invest over USD240 billion
in railway projects by 2020. Electricity supply also lags behind growth, especially due to
bottlenecks in coal mining and transportation. Even with efforts to increase power
generation, the country is expected to continue to face power shortages in the near
term. Chinese growth has greatly exceeded its underlying infrastructure, and it is hard
to see how infrastructure can catch up unless growth is moderated.
Policy
649
Deng's reforms
In 1978, Deng Xiaoping reversed the policy inherited from Mao Zedong of preserving
China's identity and independence by keeping out Western influence. Beginning with
the Third Plenum of the 11th Central Committee, Deng began to transform China from a
socialist command economy to a market economy, and attract Western money,
expertise, and technology. Deng's approach included the establishment of 'Special
Economic Zones' and 'Special Administrative Regions', under Article 31 of the
constitution, where socialism, especially socialist economics, is suspended. As well as
the ideological challenge of reconciling de facto market capitalism with a nominally
communist political system, Deng's market liberalisation created organisational
challenges.
Specifically, Deng's economic reforms created a phenomenon of not only economic, but
also to a degree political 'localism', making it difficult for Beijing to formulate and
enforce unified policy. With local administrators making decisions which previously
would have been made in Beijing, and given the geographical differences between
provinces, the result was that provincial economies developed in very different forms,
and with very different levels of prosperity. These local economies even developed their
own external trade partners, with whom they were arguably more economically
integrated than with China as a whole: for example, in 1991, Guangdong, with strong
ties with Hong Kong, drew only three per cent of capital development from Beijing.
Similarly, in the same year, seventy per cent of industrial output in Fujian was created
through investment from Taiwan. By the 1990s, the result of this increase in provincial
autonomy was a decrease in the central government's ability to tax the provinces. The
traditional tax mechanism relied on the taxation of state-owned enterprises, and new
forms of ownership had come to dominate the economy. Partly as a result, the
government budget, as a share of national income, fell from just under forty per cent at
the beginning of the reforms, to under twenty per cent by the early 1990s.
Jiang's exuberance
Jiang Zemin's economic policy largely followed Deng's precedent. He continued to

emphasise overall growth (by setting aggressive targets for GDP growth), at the expense
of balanced development. The result of this was a continuation of the trend towards
regionalism, especially in the ever-growing prosperity divide between the coast and the
poorer inland regions of China. Jiang and his 'Shanghai faction' in the CCP also tended to
favour Shanghainese development. China's banking sector, which was forced to protect
failing state-owned enterprises from bankruptcy through a series of loans, became
increasingly threatened by bad debt. On the other hand, a number of successes were
also achieved during this period. On top of continued stellar growth, China avoided the
1997 economic crisis in Southeast Asia, negotiated entry into the WTO, and, under the
650
capable Zhu Rongji, implemented fiscal reforms. Although China still struggles to comply
with all the terms of WTO accession, and the implications of foreign competition,
especially banking competition, within the country are not yet clear, accession has
greatly benefited Chinese trade.
Hu's moderation
Facing these structural problems inherited from previous administrations, especially

uneven growth and economic overheating, Hu Jintao and especially Wen Jiabao have
implemented a policy of 'macroeconomic recontrol', albeit with little immediate effect
on the pace of growth in China. From late 2003 (the 'Decision of the CCP Central
Committee on Several Issues in Perfecting the Socialist Market Economy' at the Third
Plenary Session of the 16th Central Committee in October 2003 marks the approximate
beginning of the policy, and greater emphasis was added in April 2004, at dedicated
Politburo and State Council meetings), Hu and Wen have pursued a very different
economic policy from that seen under Jiang. Setting aside Jiang's push for higher GDP at
almost any cost, Hu and Wen have pressed for more moderate GDP growth and more
balanced economic development across China as a whole.
Under the policy, more conservative GDP growth targets were set by the CCP. At the
same time, measures were taken to reduce unrestrained lending that contributed both
to China's banking problems, and to unsustainable growth. The approach was two-fold:
regulatory measures were introduced to reduce lending, especially for fixed asset
investments, while interest rates were raised slightly, in a market-based effort to
constrain borrowing. These measures were of only very limited effectiveness. China's
poor regulatory culture, and continued high levels of FDI meant that these measures
had little impact on China's high levels of liquidity, and overall growth was barely
affected.
The long-term effectiveness of Wen's policy of macroeconomic recontrol remains

unclear. The government's present efforts to build up the regulatory environment of
the financial services sector, and develop a truly market-based credit system are
certainly a prerequisite for China's long-term economic health. The government also has
difficulties in applying market-based controls on growth. Interest rate increases and
currency adjustments have been hesitant, despite the Bank of China raising both
interest rates and bank resserves in 2006, and certainly inadequate as far as controlling
growth is concerned. This is likely due to concern that such measures, if forcefully
implemented, would not merely control growth in the booming coastal regions, but also
reduce or stymie growth in the poorer interior, as well as the uncertain effects of
changes in monetary policy in a country where the banking system and financial
markets are not fully developed. Chinese state-owned enterprises (which continue to
account for between 30 and 40 per cent of the Chinese economy) behave very
651
differently from private and publicly owned businesses in response to adjustments

made in monetary policies, and hence government policy is made more difficult.
Balancing development between the coast and the interior is another central part of
economic policy under Hu and Wen, primarily owing to the income differential causing
social problems, such as excessive rural-urban migration. Moreover, Hu Jintao also
depends on the support of party members from poorer provinces much more than his
Shanghai-focused predecessor did. However, it is increasingly difficult for the inner
provinces to adhere to any suggestions that they should slow their economic growth. In
2006, the CCP threatened punitive actions against provinces that were resilient to
Beijing's cooling initiatives, although no action was taken.
Measures to boost rural incomes include the elimination of agricultural taxes, and
efforts to improve the rural infrastructure, and the allowance for the provinces to
encourage the various township and village enterprises (TVE) to thrive. These measures
have been moderately successful in terms of improving the standards of living in the
rural areas, but have made no real difference in addressing the divergent income
growth rates between the coastal and inland regions. There are still areas which rural
incomes continue to stagnate or decline, and, arguably most importantly, the disparity
between the coastal cities and inner provinces still continues to grow.
Sector Analysis
State-owned enterprises
Following economic liberalisation, during the 1990s China's old state-owned

enterprises, particularly in the industrial northeast, proved to be uncompetitive and
unprofitable in the new market economy. Nonetheless, the government was unable to
close them, or allow them to go bankrupt, as the existing social security network would
have been unable to handle the unemployed workers, creating the serious risk of social
problems. Consequently, China's major banks were obliged under government pressure
to support failing SOEs through loans. As a result, China's banks are now weighed down
with significant levels of non-performing debt. The actual level of non-performing debt
is difficult to estimate. In May 2007, official figures placed the non-performing loan ratio
of commercial banks at 7.02 per cent, although the true figure may be far higher.
Beijing has made a concerted effort to deal with failing SOEs and bad debt, by selling
failing SOEs to private investors, and by attempting to recapitalise banks with
government money or by selling distressed debt. More importantly, there has arguably
been a shift in Chinese banks to a more market-based approach to lending, with
reduced government interference, which may in the long run greatly improve their
performance. On the other hand, government attempts to control growth by tightening
652
credit controls may themselves exacerbate the bad debt problem, by creating a new
generation of failing firms. Unlike the bad debt held by China's major banks as a result
of supporting failing SOEs, this is more likely to affect China's mid-size and smaller
banks, especially if smaller real estate developers begin to fail.
The CCP continues to take measures to deal with bad debt, especially that held by the
major banks as a result of supporting China's failing SOEs. These measures broadly fall
under three categories: removing the burden of the SOEs, creating a stricter lending
environment, and recapitalising the banks.
Since the 1990s, efforts have been made to reform SOEs, especially by privatising them
or bringing in foreign partners, in order to reduce their burden on banks. Earlier efforts
included the Contract Responsibility System introduced in 1985-1986, which aimed to
give more independence to managers, but failed to eliminate bureaucratic interference.
Later, 'shareholding' (gufènzhì) reforms were introduced in the early 1990s. The policy
of 'keep the big and let go of the small' (zhudà fàngxiao) introduced in 1994 reduced the
SOE burden by allowing smaller SOEs to be privately owned. More recent measures
have been aimed at allowing private capital even into the largest SOEs.
These measures have been moderately successful, although there are still political
obstacles to the privatisation of 'key' large SOEs. One approach to dealing with such
objections has been to list large SOEs on a stock market, while designating a certain
percentage of shares as 'non tradable'. Despite this designation, 'non tradable' shares
can be traded privately. There are now few real regulatory barriers keeping private
capital out of the state-owned sector, and, in February 2005, the State Council declared
that private capital would be permitted in areas 'not specifically banned by laws and
regulations'. This leaves most SOEs now open to private capital (including infrastructure
and petroleum refining), and the role of private companies in the Chinese economy is
likely to continue to grow.
In order to reduce the accumulation of further bad debt, the government has increased
regulatory control of banks to ensure that a more market-based credit system is in play.
Where banks were in the past under government pressure to accept bad debt to
protect SOEs from bankruptcy, they are now under pressure to avoid excessive lending.
Reducing corruption and improving the regulatory culture in China's banks may over the
longer term reduce their rate of accumulation of bad debt to more normal levels.
Recapitalisation of China's major banks is a third measure being taken to control bad
debt, and avert a potential banking crisis. This takes three forms: using state money to
recapitalise key Chinese banks, selling shares in Chinese banks, and selling distressed
debt to private investors, especially foreign investors. It is difficult to asses the
effectiveness of these measures: foreign investors have not yet bought enough
653
distressed debt to reinvigorate China's banks, and the questionable accuracy of the
government's distressed debt figures makes it difficult to judge how much further
capitalisation is still needed.
Agriculture
After a good start in the 1980s, the agricultural sector is now experiencing slower
growth. Rural incomes are growing much slower than those in urban areas, creating a
drag on consumer demand and, after over-investment in the early 1990s, many TVEs
are now insolvent.
One of the structural problems in agriculture is the lack of a land market, which
prevents the consolidation of small plots. Farmers still lease their land from the state
(the March 2007 private property law did not affect the collective ownership of China's
rural areas). The government remains opposed to allowing a land market develop for
two reasons. First, there are still ideological objections to such a capitalist venture.
Many officials also worry that if land is sold and consolidated there will be no safety net
for the millions of farmers who have moved to cities in search of work and who will one
day want to return. Another problem is the hundreds of ad hoc fees levied by local
administrations. The central government has attempted to put a stop to this by offering
larger fiscal allocations to the localities, but so far the policy has been resisted.
Some improvements appear to have been made: a lowering of the tax burden, and
greater investment in infrastructure appear to have had some effect. Nevertheless,
farmers still suffer from a continuing wealth deficiency in comparison to urban areas,
and the migratory patterns caused by this fact are further hampering agricultural
growth.
Main Economic Indicators
2001 2002 2003 2004 2005
GDP (current USD billion) 1,325 1,454 1,641 1,932 2,234
FDI net inflows (BoP current USD billion) 37.36 46.79 47.23 53.13 67.82
Inflation (annual %) 0.46 -0.77 1.16 3.99 1.82
654
External debt (DoD current USD billion) 184.82 186.13 208.45 247.70 281.61
Exports (current USD billion) 299.41 365.40 485.00 655.83 836.89
Imports (current USD billion) 271.33 328.01 448.92 606.54 712.09
Note: World Bank World Development Indicators.
655

Janes - 2009 - China

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2009

[CHINA – COUNTRY PROFILE]

8. Defence Production And R & D

11. Air Force

13. Armed Forces

14. Defence Budget

15. Non-state Armed Groups

16. Security And Foreign Forces

19. Natural Resources

Economic inequality and corruption

Area: 9,596,960 km2

Language: Mandarin (official), and many ethnic languages.

Religion: Atheist (official); Confucianism; Buddhism; Daoism; Islam; Roman Catholicism

Time Zone: GMT +8

Population: 1,321,290,000 (China National Bureau of Statistics 2007).

Neighbours: Afghanistan, Bhutan, India, Kazakhstan, Kyrgyzstan, Laos, Mongolia, Myanmar,

Capital City: Beijing

Primary Port: Shanghai

Primary Beijing Capital International, Shanghai International

Currency: Chinese yuan renminbi (CNY)

Economic inequality and corruption

to elimination of many industrial state-owned enterprises), threatening the social

The burgeoning military and economic power of China is creating strategic

China is involved in a variety of territorial disputes, the most controversial of which is

Internally, a currently improbable threat to China is the possibility of fragmentation of

An extensive hardware and software modernisation effort is challenging previous views

CCP confirmed Hu's ongoing programme of economic reform. However, factional

Politburo Standing Committee Profiles

Party elder profiles

State Council profiles

Zeng Qinghong, vice-president

Wen Jiabao, premier

Wu Yi, vice premier

Zeng Peiyan, vice premier

Hui Langyu, vice premier

Cao Gangchuan, minister of national defence

Official Name: People's Republic of China

Political System: Communist one-party system

Declaration of Independence: 1949 (declaration of the People's Republic of China)

Head of State: Hu Jintao

Next Election: None planned

Vice President: Xi Jinping

Standing Member: Hu Jintao

Standing Member: Wu Bangguo

Standing Member: Wen Jiabao

Standing Member: Jia Qinglin

Standing Member: Li Changchun

Standing Member: Xi Jinping

Standing Member: Li Keqiang

Standing Member: He Guoqiang

Standing Member: Zhou Yongkang

Member: Wang Lequan

Member: Wang Zhaoguo

Member: Wang Qishan

Member: Wang Gang

Member: Hui Liangyu

Member: Liu Yunshan

Member: Liu Yandong

Member: Wang Yang

Member: Zhang Gaoli

Member: Zhang Dejiang

Member: General Guo Boxiong

General Secretary: Hu Jintao