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

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dkrause on DSKHT7XVN1PROD with $$_JOB332from the CCP’s actual view of international relations, and fromChina’s longer-term policy goals, remains an open question.The ‘‘Shanghai Spirit’’In June 2011, on the tenth anniversary of the founding of theShanghai Cooperation Organization (SCO), the Chinese mediabegan to extol the institution’s ‘‘Shanghai Spirit’’ as the embodimentof a new model of international relations. According to anarticle published in English by PRC Foreign Minister YangJiechi:The SCO embodies . . . the ‘Shanghai Spirit’ whose essenceis mutual trust, mutual benefit, equality, consultation, respectfor diverse civilizations and seeking common development.It reflects the member states’ fresh perspectives on security,development, cooperation and civilization. An inspirationto the world, it is a major contribution to efforts tofoster a new type of state-to-state relations and build aharmonious region. 88Material published in Chinese is more revealing as to why theChinese government holds up the SCO as its preferred model foran international organization. In thinly veiled code language referringto the threat allegedly posed by the United States andother western governments, the People’s Daily has written that:The SCO supports the democratization of international relations,actively advancing the building of a new internationalorder. In our world, although the Cold War isover, the paths of unilateralism and new interventionismare still prevalent; the ‘Superiority of Western Civilization,’‘Democratic Reform,’ and other such concepts still threatenthe balanced and stable development of international politics.89In contrast to other institutions that ‘‘the PRC had little rolein creating and had to join on a take-it-or-leave-it basis, Chineseofficials have been able to shape the design and evolution of theSCO more than any other country . . . allowing the Chinese toconstruct the SCO as an institution that reflects their preferredvalues.’’ 90 Such values include ‘‘full respect for independence,sovereignty and territorial integrity, as well as upholding theprinciple of non-interference in internal affairs of all states;’’ and‘‘democratic development with due regard for [members’] nationalrealities as well as cultural historical features.’’ 91 Theyalso include ‘‘democratizing international relations’’—that is, excludingfrom participation the ‘‘hegemonic’’ United States and itsallies, who have historically played a prominent role in internationalinstitutions. (For further discussion of the increasinglyinfluential role of China in international organizations, see theMarch 2011 contracted research report, ‘‘The Evolving Role ofChina in International Institutions,’’ available on the Commission’swebsite at www.uscc.gov).VerDate Nov 24 2008 13:46 Nov 10, 2011 Jkt 067464 PO 00000 Frm 00344 Fmt 6601 Sfmt 6601 G:\GSDD\USCC\2011\067464.XXX 067464
dkrause on DSKHT7XVN1PROD with $$_JOB333The Chinese Government’s Messages Related to China’sMilitary Modernization and Defense PoliciesIn referring to China’s military modernization and its nationalsecurity policies, Chinese writings consistently assert China’speaceful military tradition and its rejection of ‘‘hegemony’’ and‘‘power politics.’’ Chinese messages often contrast the Chinese militarytradition with that of the West, which they characterize asviolent and expansionist. 92 Notably, since 2005 PRC messaging hasmade particular use of the story of the 15th century Ming Dynastymaritime explorer Zheng He, stressing the theme that China’snaval expansion will be peaceful in nature and beneficial to surroundingcountries. 93All of these themes have figured prominently in official PRC policydocuments intended for foreign audiences. As stated in China’s2010 defense white paper:The pursuit of a national defense policy which is defensivein nature is determined by China’s development path, itsfundamental aims, its foreign policy, and its historical andcultural traditions. [China] promotes the building of a harmoniousworld enjoying lasting peace and common prosperityexternally [and] maintains . . . its belief in valuingpeace above all else, advocating the settlement of disputesthrough peaceful means, prudence on the issue of war, andthe strategy of ‘attacking only after being attacked.’ Chinawill never seek hegemony, nor will it adopt the approach ofmilitary expansion now or in the future, no matter how itseconomy develops. 94These messages have also been promoted in U.S.-China militaryto-militaryexchanges. In May 2011, General Chen Bingde, thechief of the People’s Liberation Army (PLA) General Staff Departmentand a member of the 17th CCP Central Committee, 95 led a24-member delegation to the United States to restart high-levelmilitary exchanges that the PRC had halted following U.S. militarysales to Taiwan in October 2008 and January 2010. 96In an address at the National Defense University in Washington,DC, General Chen offered statements consistent with the messageson foreign policy and national security issues that the Chinese governmentpromotes to foreign audiences: Foremost, that China hasa peaceful military tradition and poses no threat to its neighbors,and that it is focused on promoting a peaceful external environmentto allow for its own domestic economic development. GeneralChen repeatedly stressed the capabilities gap between the Chineseand U.S. armed forces and that China has no intent to challengeU.S. military superiority or the U.S. position in the internationalsystem. He also stressed the prospects for security cooperation betweenthe United States and China on transnational issues such asterrorism, piracy, and counterproliferation. However, General Chenattached conditions to closer military-to-military ties—in particular,the need for the United States to ‘‘respect’’ China’s ‘‘core interests,’’especially in regard to Taiwan. 97 (For a fuller discussionof General Chen’s visit and the issues surrounding it, see theUSCC backgrounder ‘‘The Chinese People’s Liberation Army Dele-VerDate Nov 24 2008 13:46 Nov 10, 2011 Jkt 067464 PO 00000 Frm 00345 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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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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161gress, the DoD noted that China
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165eral U.S. military policies, inc
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167Figure 1:Territorial Disputes in
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171provides guidelines for dealing
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173network exploitations to facilit
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181ligence, surveillance, and recon
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187Therefore, the PLA maintains the
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189Of import, the PLA’s geographi
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197ther moves toward independence,
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199trates the depth of China’s sp
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201Figure 2:Representation of Beido
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205ganization, modeled on the Europ
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207China’s leadership also places
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211[General Armaments Department] p
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213Table 2: Select Chinese Satellit
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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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Page 289 and 290: 281trade, and dispute settlement. 2
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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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