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

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188ergy and natural resources in the region are necessary for China’scontinued economic growth. Second, China has several disputedterritorial claims in this region, the most important of which is itssovereignty claim over Taiwan, an island that enjoys de facto, albeitdisputed, independence from Beijing.* Several nations also disputeBeijing’s maritime territorial claims, and the accompanyingresources, in the South and East China Seas.† 189 Third, China’sunderstanding of modern warfare posits the importance of preventingan enemy from being able to operate freely close to China’sterritory. According to The Science of Military Strategy:As long as the battlefield is concerned, we should not passivelyfight against the enemy in our border regions, coastalregions and related air space. On the contrary, after thelaunching of the war, we should try our best to fightagainst the enemy as far away as possible, to lead the warto enemy’s operational base, even to his source of war, andto actively strike all the effective strength forming the enemy’swar system. [sic] 190Figure 1:The First and Second Island ChainsSource: Jan Van Tol et al., AirSea Battle: A Point of Departure Operational Concept (Washington,DC: Center for Strategic and Budgetary Assessments, 2010), p. 13.dkrause on DSKHT7XVN1PROD with $$_JOB* For more on the Sino-Taiwan dispute, see chapter 3, section 3, of this Report.† In the South China Sea, China has maritime territorial disputes with Taiwan, the Philippines,Malaysia, Brunei, and Vietnam. In the East China Sea, Japan disputes China’s claimto the Senkaku/Diaoyutai Islands.VerDate Nov 24 2008 13:46 Nov 10, 2011 Jkt 067464 PO 00000 Frm 00200 Fmt 6601 Sfmt 6601 G:\GSDD\USCC\2011\067464.XXX 067464Ch2Fig3.eps
189Of import, the PLA’s geographic focus is expanding. Over thepast five years, the PLA has expanded its mission beyond a Taiwancontingency also to cover potential conflicts in the East and SouthChina Seas. 191 This change was highlighted during Commissioners’discussions with senior Singaporean officials in December 2010. 192The Commission concluded in both its 2009 and 2010 Reports thatthe Chinese leadership has tasked the PLA to be capable of conductingoperations increasingly farther from China’s territory, 193 apoint underscored in several of China’s defense white papers. 194The U.S. Department of Defense, in its most recent assessment ofthe PLA, goes so as far to state that ‘‘the PLA has been developingnew platforms and capabilities that will extend its operationalreach to address other concerns within the East and South ChinaSeas, and possibly to the Indian Ocean and beyond the second islandchain in the western Pacific.’’ 195 According to Stacy A.Pedrozo, a captain in the U.S. Navy and military fellow at theCouncil on Foreign Relations, this expansion reflects the influenceof the PLA’s strategy to extend its control gradually out past whatis often referred to as the ‘‘Second Island Chain.’’ * Said CaptainPedrozo:In the first stage, from 2000 to 2010, China was to establishcontrol of waters within the First Island Chain thatlinks Okinawa Prefecture, Taiwan, and the Philippines. Inthe second stage, from 2010 to 2020, China would seek toestablish control of waters within the Second Island Chainthat links the Ogasawara Island chain, Guam, and Indonesia.In the final stage, from 2020 until 2040, Chinawould put an end to U.S. military dominance in the Pacificand Indian Oceans, using aircraft carriers as a key componentof their military force. 196The Implementation of the PLA’s Area Control StrategyFueled by decades of strong economic growth, China has beenable to ramp up spending on its military modernization efforts (seesec. 1 of this chapter for more on China’s military budget). Manyof these efforts closely mirror the requirements for China’s AreaControl Strategy. Below are detailed briefly the PLA’s military developmentsthat are most relevant to its Area Control Strategy.Submarines: As noted by General Deptula, ‘‘China’s submarineforce is a key component of their sea denial strategy.’’ 197 Of particularimportance are the PLA Navy’s diesel-electric attack submarines,which have the requisite stealth capabilities for sea controloperations. Although the submarines were originally acquiredfrom Russia, China is now able to produce its own modern dieselelectricsubmarines. 198 Since 1995, China has deployed 27 moderndiesel-electric attack submarines with advanced capabilities. Forexample, China’s most modern submarine, a Yuan-class launchedin September 2010, is almost as difficult to detect as the most advancedRussian diesel-electric submarine. In addition, this submarinelikely employs an air-independent propulsion system, allowingit to stay submerged for longer periods of time. 199dkrause on DSKHT7XVN1PROD with $$_JOB* The ‘‘Second Island Chain’’ concept denotes the set of islands that run in a north-south linefrom Japan, the Bonin (Osagawara) Islands, the Mariana Islands, and Indonesia.VerDate Nov 24 2008 13:46 Nov 10, 2011 Jkt 067464 PO 00000 Frm 00201 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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113drivers cited increased fuel pri
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123uating from college and hoping t
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131unfairly or unjustifiably harm U
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Page 229 and 230: 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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3190aRCRD&ss=Hong+Kong&s=News; Pete
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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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