ANNUAL REPORT

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210 Second aircraft carrier confirmed: In December 2015, a Chinese Ministry of National Defense spokesperson confirmed for the first time that China’s second aircraft carrier (Type 001A) is under construction. 135 He did not give a timeline for construction. 136 The new carrier will have a conventional power plant and a ski jump ramp rather than a powered catapult launch system. 137 The ski jump ramp will limit the carrier’s capabilities by restricting the launch weight of its fighters. 138 Satellite imagery indicated that as of August 2016, construction of the new carrier was nearly complete. 139 China could build multiple additional aircraft carriers over the next 15 years. 140 According to DOD, ‘‘China’s next generation of carriers will probably be capable of improved endurance and of launching more varied types of aircraft, including [electronic warfare], early warning, and [antisurface warfare], thus increasing the potential striking power of a [PLA Navy] ‘carrier battle group’ in safeguarding China’s interests in areas beyond its immediate periphery.’’ 141 Su-35 fighter purchase: In November 2015, Russia and China signed a $2 billion contract for Russia to deliver 24 Su-35 (FLANK- ER–E) multirole jet fighters to China. 142 The Su-35, with its advanced avionics and targeting and passive electronically scanned array radar systems, will improve China’s air-to-air and strike capabilities. 143 Moreover, the aircraft’s long range (reportedly approximately 2,200 mi with internal fuel and 2,800 mi with auxiliary fuel tanks) will enhance the PLA’s ability to project force in the South China Sea and Western Pacific. 144 The Su-35 is capable of firing advanced antisurface and air-to-air missiles. 145 China most likely will attempt to reverse engineer components of the Su- 35—particularly its advanced turbofan engine—to aid indigenous jet fighter production. 146 The Su-35 could enter service in 2018. 147 Type 072A tank landing ship production: The PLA Navy commissioned three Type 072A tank landing ships * (see Figure 5) from May 2015 to January 2016, bringing the PLA Navy’s Type 072A fleet to 12 ships. 148 The Type 072A can carry 10 tanks, 4 landing craft (such as China’s Zubr [POMORNIK] hovercraft), and 250 soldiers, and has a helicopter landing pad. 149 The resumption of production could suggest Beijing wants to increase its force projection capabilities for contingencies in the South and East China seas. It may also signal to Taiwan’s new Democratic Progressive Party-led government that Beijing is willing to take Taiwan by force. 150 dkrause on DSKHT7XVN1PROD with USCC * Tank landing ships are designed to carry vehicles and troops to shore during amphibious operations. VerDate Sep 11 2014 12:16 Nov 02, 2016 Jkt 020587 PO 00000 Frm 00120 Fmt 6601 Sfmt 6601 G:\GSDD\USCC\2016\FINAL\06_C1_C2_M.XXX 06_C1_C2_M
211 Figure 5: Type 072A Tank Landing Ship Source: Shahryar Pasandideh, ‘‘China’s Developing Naval Power Projection Capabilities,’’ NATO Association of Canada, October 29, 2014. dkrause on DSKHT7XVN1PROD with USCC Type 054A frigate production: China commissioned its 22nd Type 054A (JIANGKAI II) guided missile frigate in February 2016. 151 The Type 054A has been deployed for global missions, such as Gulf of Aden antipiracy patrols. However, according to China Signpost, a China-focused research consultancy, the ship’s limited size, armaments, and electronics suite make it suited for a limited fleet defense role rather than for high-intensity missions. 152 The Type 054A reportedly is equipped with HHQ–16 surface-to-air missiles (range of 20 nm to 40 nm) and can fire YJ–83 antiship cruise missiles (range of 65 nm to 100 nm). 153 Type 052D destroyer production: In December 2015, a second Type 052D (LUYANG III) destroyer entered service with the PLA Navy. 154 According to the U.S. Office of Naval Intelligence, the Type 052D’s advanced air defense radar ‘‘allows the [PLA Navy] surface force to operate with increased confidence outside of shorebased air defense systems, as one or two ships are equipped to provide air defense for the entire task group.’’ 155 According to the U.S. Office of Naval Intelligence, the Type 052D carries the YJ–18 antiship cruise missile (range of 290 nm) and an extended-range variant of the HHQ–9 surface-to-air missile (80 nm). 156 The PLA Navy reportedly plans to deploy ten Type 052Ds in total. 157 Y–20 production: In July 2016, the PLA Air Force inducted China’s first operational Y–20 heavy transport aircraft into service (see Figure 6). 158 The PLA likely will develop airborne early warning, maritime patrol, and tanker variants of the Y–20. 159 A tanker variant of the Y–20 would improve China’s force projection capabilities by extending the range of its aircraft to reach farther into areas of VerDate Sep 11 2014 12:16 Nov 02, 2016 Jkt 020587 PO 00000 Frm 00121 Fmt 6601 Sfmt 6601 G:\GSDD\USCC\2016\FINAL\06_C1_C2_M.XXX 06_C1_C2_M C2S1Fig5.eps
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USCC 2016 ANNUAL REPORT
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1 2016 REPORT TO CONGRESS of the U.
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U.S.-CHINA ECONOMIC AND SECURITY RE
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• The safety of food, drug, and o
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CONTENTS Page TRANSMITTAL LETTER TO
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IX Page Recommendations ...........
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2 ernment’s “going out” strat
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4 economically and politically stra
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6 wage rates are determined by free
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8 while allowing a greater role for
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10 began construction on its first
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12 from—the People’s Republic o
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14 cluding cyber and human intellig
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16 exporter of manufactured goods,
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18 Pakistan’s economic and securi
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20 Beijing appears to remain skepti
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22 trends in Hong Kong with regard
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24 UNSCR 2270. However, in May and
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26 Korea, designating Dandong Hongx
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28 tional order—both before and a
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30 to examine China’s economic an
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32 debt, and jeopardizing long-term
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Introduction CHAPTER 1 U.S.-CHINA E
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37 Statistics with Chinese Characte
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39 up from 52.3 percent in the seco
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41 Early signs suggest President Xi
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43 Figure 4: China’s Total Debt b
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45 reserves to defend the RMB. 75 I
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47 The pace of U.S. export growth t
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49 The United States continued to r
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51 commitments, China has only take
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53 Table 3: Top Five Business Chall
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55 U.S. Tech Firms and Their Chines
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57 ment of Justice’s May 2014 ind
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59 Internet Censorship As a result
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61 on the future of U.S.-China rela
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63 Chapter 1, Section 2, “State-O
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65 Table 5: Failed Chinese Bids for
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67 • Accelerating Bilateral Inves
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69 cess capacity, which will share
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71 United States Challenges Chinese
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73 rulings of the DSB [Dispute Sett
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75 Conclusions • In 2015, the U.S
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77 Addendum I: WTO Cases Recent and
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79 ENDNOTES FOR SECTION 1 1. Lucy H
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81 55. Gabriel Wildau and Don Weinl
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83 119. American Chamber of Commerc
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85 and Espionage Operations, oral t
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87 217. Kane Wu, “Chinese Compani
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89 271. Office of the U.S. Trade Re
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93 Lardy, senior fellow at the Pete
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99 pany competitiveness and stimula
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105 Table 2: Select Chinese Overcap
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107 levels. 135 The situation is on
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109 Figure 5: China’s Monthly Cru
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111 Figure 6: U.S. Steel Industry Q
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123 Addendum I: Section 15 of China
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125 Addendum II: AD and CVD Investi
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141 dkrause on DSKHT7XVN1PROD with
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143 lifetime cost of bringing the e
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145 gets achieved). 57 Using satell
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147 cost of compliance,’’ and p
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151 boost the efficiency of China
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Table 1: 157 Chinese Attempted and
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Page 191 and 192: 177 Addendum I: Key Targets in Chin
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Page 209 and 210: 195 The ultimate impact of the ruli
Page 211 and 212: 197 Environmental Impact of China
Page 215 and 216: 201 China’s Maritime Disputes in
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Page 221 and 222: 207 • PLA Army Headquarters: Chin
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271 stan. 109 In 2014, the PLA Air
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275 conflict Chinese expeditionary
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279 RECOMMENDATIONS Developments in
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SECTION 3: CHINESE INTELLIGENCE SER
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291 Strategic Support Force In Dece
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293 of advanced intelligence, surve
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295 tives, and sexual entrapment. 4
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297 information to a Chinese intell
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299 such as power transmission grid
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301 for transferring trade secrets
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303 nal U.S. discussions of issues
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305 ENDNOTES FOR SECTION 3 1. U.S.-
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307 29. U.S. Department of Justice,
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309 63. U.S. Department of Justice,
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311 106. Eric Holder, “Attorney G
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314 sure its own ambitions in South
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316 Chinese foreign direct investme
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318 • Pakistan: In 2015, China an
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320 India “Acts East” and Puts
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322 Counter Terrorism and Religious
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324 tivities of the Dalai Lama and
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326 incursions across the border fr
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328 conducive to sea lane protectio
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330 Karachi Port, that could eventu
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332 India and OBOR India has not en
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334 China’s Arms Sales to Pakista
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336 For China, the goals of CPEC ar
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338 according to Mr. Small, “The
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340 side the Treaty on the Non-Prol
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342 Facets of U.S.-India Defense Re
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344 of China, but has advocated for
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346 • Recent U.S.-China tensions
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348 24. Debasish Roy Chowdhury, “
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350 71. Jeff Smith, Cold Peace: Chi
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352 127. U.S.-China Economic and Se
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354 2016, 86; Andrew Small, The Chi
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358 Taiwan’s Economic Challenges
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364 agreements. 57 Since then, many
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366 $67.2 billion, comprising 25.4
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368 Foreign Direct Investment China
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370 is leading the initiative, have
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374 Taiwan and the 11-Dash Line The
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384 trade-based partner to an innov
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390 • China’s military moderniz
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410 Hong Kong’s Political Gossip
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414 moving up one place compared to
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418 Chinese Censorship of Prize-Win
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420 Hong Kong and the ‘‘Panama
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424 Table 1: Select PLA Hong Kong G
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428 sitive periods in Hong Kong, le
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436 150. Commission meeting with Ta
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442 Korea. The resolution also bans
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444 increase pressure on Pyongyang.
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446 pand China-South Korea ties. 54
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448 Technical Details of THAAD The
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456 Korea runs perpetual merchandis
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460 pressure is more likely to brin
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462 ty for sanctions violations, co
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479 sailors would be stationed in J
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485 Table 1: U.S. Goods Trade with
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489 basis for President Obama’s c
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APPENDIX II BACKGROUND OF COMMISSIO
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APPENDIX III PUBLIC HEARINGS OF THE
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537 June 9, 2016: Public Hearing on
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APPENDIX IIIA LIST OF WITNESSES TES
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541 Alphabetical Listing of Panelis
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APPENDIX IV LIST OF RESEARCH MATERI
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547 China’s Military Agreements w
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APPENDIX V ACRONYMS AND ABBREVIATIO
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551 OPM PBOC PLA PMI PPI PPP PRC QD
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553 2016 COMMISSION STAFF MICHAEL R
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ANNUAL REPORT

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