ANNUAL REPORT

9
Chapter 2: U.S.-China Security Relations
Section 1: Year in Review: Security and Foreign Affairs
China’s aggressive pursuit of control in the South China Sea was
the dominant feature of China’s security and foreign affairs in 2016.
The most high-profile development was the July ruling by an arbitral
tribunal at the Permanent Court of Arbitration in The Hague
for a case filed by the Philippines in 2013. In a blow to China’s
credibility, the tribunal ruled that several of China’s actions and
claims in the South China Sea were unlawful. Predictably, Beijing
immediately rejected and sought to discredit the ruling. Meanwhile,
China continued building military and civilian infrastructure on the
3,200 acres of artificial islands it has created since 2013, completing
runways and building reinforced aircraft hangars on three outposts.
This and other infrastructure will serve to improve China’s ability
to detect and track foreign maritime forces and fishing boats. As in
2015, China’s dispute with Japan and Taiwan in the East China Sea
received less official and media attention, though China continued
to patrol contested East China Sea waters with its increasingly capable
coast guard; on one occasion, six Chinese coast guard ships
and 230 Chinese fishing boats sailed out to waters near the disputed
Senkaku Islands.
Another major development in 2016 was the initiation of the People’s
Liberation Army’s (PLA) most sweeping reform and reorganization
since the 1950s, aimed at enhancing the CCP’s control over
the military and improving the force’s capability to fight regional
conflicts at greater distances from China through integrated joint
operations. The reforms will restructure China’s leading military
authority, the Central Military Commission; reorganize the military
services into the PLA Army, Navy, Air Force, Rocket Force, and
Strategic Support Force; transition from a military region to a joint
theater command structure; and eventually reduce the force size by
300,000 troops.
Supported by a still-growing military budget (announced to be
$146.67 billion for 2016), the PLA is rolling out several new weapons
systems for force projection in air, sea, and amphibious missions.
Among these are: China’s first squadron of J–20 multirole stealth
jet fighters (expected delivery in late 2016); China’s second aircraft
carrier (officially confirmed in December 2015 and apparently nearly
complete as of August 2016); additional frigates, destroyers, and
tank landing ships commissioned or entering service; and China’s
first operational Y–20 heavy transport aircraft (inducted into service
in 2016). China also signed a contract for 24 Su-35 multirole jet
fighters from Russia, which could enter service in 2018. Additionally,
China tested new space launch vehicles and launched more intelligence,
surveillance, and reconnaissance and navigation satellites in
2016, in an effort to further augment the capabilities of its military
forces.
The PLA continues to be active overseas. In 2016, China launched
its 24th antipiracy deployment to the Gulf of Aden, announced it
would increase its contributions to UN peacekeeping operations, and
conducted humanitarian assistance and disaster relief operations in
Nepal and in search of Malaysia Airlines flight MH370. China also