2011 report to congress - U.S.-China Economic and Security Review ...

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dkrause on DSKHT7XVN1PROD with $$_JOB164not an area where you will see dramatic breakthroughs and newheadlines, but rather evolutionary growth.’’ 68The unexpected highlight of the trip was the test flight of China’snew J–20 stealth fighter aircraft, which took place hours beforeSecretary Gates’ meeting with President Hu. When SecretaryGates inquired about the test flight, President Hu claimed to beunaware that it had occurred. 69 A Chinese defense ministry deputydirector stated that the test was part of a ‘‘normal working schedule’’and that it was not related to Secretary Gates’ visit. 70 Accordingto the Commission testimonies of Andrew Scobell, senior politicalscientist at the RAND Corporation, and Mr. Denmark, it is inconclusivewhether or not the test was planned to occur because ofthe visit. 71 The ‘‘surprise’’ test flight raised concerns that the PLAmight be acting independently of China’s civilian leaders. In aspeech in Tokyo following his trip to China, Secretary Gates notedthat ‘‘[o]ver the last several years we have seen some signs of . . .a disconnect between the military and the civilian leadership [inChina].’’ He added that he was confident that President Hu and theCCP remained fully in control of the military. 72 Dr. Scobell, however,opined that ‘‘[f]undamentally, the J–20 episode underscoresthe fact that civilian control of the military is underinstitutionalizedin 21st Century China.’’ 73PLA Chief of Staff Chen Bingde’s visit to the United StatesChina’s pledge to enhance military-to-military exchanges in 2011was upheld in May when the PLA Chief of General Staff, MajorGeneral Chen Bingde, visited the United States. During his trip,Major General Chen toured four military bases; * delivered aspeech at the U.S. National Defense University; and held talkswith Secretary Gates, Secretary of State Hillary Rodham Clinton,and Admiral Mike Mullen, then chairman of the Joint Chiefs ofStaff. He and his delegation also attended a goodwill concert featuringperformances of the official bands of the U.S. Army and thePLA. 74A joint statement presented by Admiral Mullen and Major GeneralChen outlined six bilateral agreements reached from the visit:(1) a consensus that the two sides would work together within theframework agreed by President Hu and President Barack Obama;(2) the establishment of a direct telephone line between the ChineseMinistry of Defense and the U.S. Department of Defense;(3) plans to conduct joint naval exercises in the Gulf of Aden aspart of the international antipiracy effort; (4) plans to conduct ahumanitarian disaster rescue and relief joint training exercise in2012; (5) an agreement to exchange medical information and conductjoint medical rescue training exercises; and (6) an invitationfrom China for the U.S. Army Band and shooting team to visitChina. 75Although the two sides were able to reach several points of consensus,a number of differences were highlighted. During a pressconference, General Chen commented on China’s opposition to sev-* General Chen toured Naval Station Norfolk, Virginia; Fort Stewart, Georgia; Nellis AirForce Base, Nevada; and the National Training Center at Fort Irwin, California. AgenceFrance-Presse, ‘‘U.S. Rolls Out Red Carpet for China Military Chief,’’ May 14, 2011. http://www.defensenews.com/story.php?i=6502345.VerDate Nov 24 2008 13:46 Nov 10, 2011 Jkt 067464 PO 00000 Frm 00176 Fmt 6601 Sfmt 6601 G:\GSDD\USCC\2011\067464.XXX 067464
165eral U.S. military policies, including arms sales to Taiwan, reconnaissanceactivities along Chinese coasts by U.S. military aircraftand vessels, and restrictions on U.S. exports of high technologiesto China. 76 Of note, some U.S. observers, including Members ofCongress, were critical of Major General Chen’s visit to U.S. militarybases, saying those visits might violate the 2000 National DefenseAuthorization Act, which bans Chinese military visitors to theUnited States from ‘‘inappropriate exposure’’ to information thatcould be used to enhance the PLA’s capacity to conduct combat operations.77Admiral Mullen’s visit to ChinaAdmiral Mullen reciprocated Major General Chen’s visit in July2011. Admiral Mullen and his 39-person delegation visited Beijingas well as Shandong and Zhejiang provinces, where they met witha number of high-level government and military officials, includingVice President (and likely future President and Party Secretary) XiJinping. On the trip, Admiral Mullen visited units in the army,navy, air force, and the Second Artillery (strategic rocket forces)and was introduced to several pieces of Chinese military technology,including the Su-27, one of China’s most advanced operationalfighter jets, and a Type-39A Yuan-class diesel-electric submarine.78 At a joint press conference, Admiral Mullen and MajorGeneral Chen announced plans to hold antipiracy maneuvers inthe Gulf of Aden by year’s end, to hold talks on operational safetyin Hawaii and China, and to plan joint humanitarian relief exercisesin 2012. 79Some divisive issues punctuated the visit. During a press conference,General Chen three times criticized recent joint naval exercisesbetween the United States, Australia, and Japan in theSouth China Sea. He also raised complaints over controversial nonmilitaryissues such as the attitudes of some American politicianstoward China and a U.S. visit by the Dalai Lama. 80 AdmiralMullen expressed concern over North Korea’s recent provocativecomments and actions and encouraged Beijing to use its strong tieswith Pyongyang to ensure stability on the Korean Peninsula. 81Implications for the United StatesAs demonstrated above, China has progressed substantially overthe past year in its military modernization efforts. These developmentsshow that China is attempting to increase its ability toproject power in the region. Developments in China’s stealth fighter,aircraft carrier and carrier aircraft, and antiship ballistic missileprograms, when completed, will provide the PLA with an increasedcapacity to exert control over the western Pacific andthreaten regional states and U.S. forces operating within the regionin the event of a conflict. These developments also embolden Chinaand the PLA in its interactions with other nations, as evidencedduring recent U.S.-China military-to-military dialogues.dkrause on DSKHT7XVN1PROD with $$_JOBVerDate Nov 24 2008 13:46 Nov 10, 2011 Jkt 067464 PO 00000 Frm 00177 Fmt 6601 Sfmt 6601 G:\GSDD\USCC\2011\067464.XXX 067464
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12011REPORT TO CONGRESSof theU.S.-C
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U.S.-CHINA ECONOMIC AND SECURITY RE
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dkrause on DSKHT7XVN1PROD with $$_J
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CONTENTSPageTRANSMITTAL LETTER TO T
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23Figure 1:China’s Share of the U
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25The weakness in U.S. exports of a
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31Table 3:RMB Bond Issuances by Mul
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35of bilateral negotiations under t
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37Stonewalling the WTO: A Case Stud
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39that China’s existing system of
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41now. Because the structures of th
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43How Big Is China’s State Sector
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45Fortune Global 500, compared to j
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47panies are less profitable, after
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49erate primarily within state-cont
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57Figure 1: Chinese FDI Stock in th
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63U.S. firms with sensitive technol
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65Addendum I: SASAC Companies, Larg
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67Addendum I: SASAC Companies, Larg
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69dkrause on DSKHT7XVN1PROD with $$
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71January 2010, the heads of 19 U.S
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77cause Beijing had sought to exclu
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81China in Search of Western Techno
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83scious policy seeking to drive Ch
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89Like previous plans, the 12th Fiv
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95Consultative Conference National
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99panies account[ed] for fully 7 pe
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101Dr. Shih has testified before th
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103ment subsidies, which in turn wi
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105Addendum II: Figures 1-2Figure 1
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Page 121 and 122: 113drivers cited increased fuel pri
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Page 131 and 132: 123uating from college and hoping t
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Page 207 and 208: 199trates the depth of China’s sp
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215weapons or coorbital satellite w
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217Malicious Cyber ActivitiesDirect
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RECOMMENDATIONSChina’s ‘‘Area
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239320. Chang Xianqi, Military Astr
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243woman Jiang Yu simply expressed
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245Table 1:Timeline of Sino-North K
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249China also provides economic sup
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251economic and social strains woul
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255Iran’s South Pars Gas Field af
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257When asked by Commissioners abou
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281trade, and dispute settlement. 2
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287of Request to the United States
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289fense, since its current fleet o
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323mation Office. Day-to-day superv
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327Although the slogans change over
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335What Constitutes a ‘‘Core In
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339Selected CAIFC/CPD Track Two Exc
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341disseminated through diplomatic
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375ecutive Schedule under section 5
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APPENDIX IIIPUBLIC HEARINGS OF THE
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APPENDIX IIIALIST OF WITNESSES TEST
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393Alphabetical Listing of Panelist
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397In TaiwanU.S. Government• Amer
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APPENDIX VLIST OF RESEARCH MATERIAL
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401The National Security Implicatio
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APPENDIX VIACRONYMS AND ABBREVIATIO
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