ANNUAL REPORT

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dkrause on DSKHT7XVN1PROD with USCC 278 non-traditional threats, the increased capabilities may shape Chinese interests and preferred methods of achieving traditional regional security objectives. The implications for the United States and its regional allies and partners are uncertain. China’s increased military role in global affairs and enhanced expeditionary capabilities could create a balancing backlash among its Asian neighbors and contribute to instability in the region, as incentives for preventive war increase with the rapid shifts in the regional balance of power. China could become confident in its ability to achieve its objectives by brute force alone, especially with domestic support. However, a global expeditionary PLA could also create a more assertive China that is positioned to provide international public goods, further enmeshing Beijing into the current world order and reducing the incentives for it to use force to resolve disputes. 166 The dual-use nature of expeditionary capabilities, therefore, is resulting in China’s neighbors remaining interested in the United States being politically, economically, and militarily engaged in the Asia Pacific as a counter to an aggressive China if necessary. Conclusions • The military capabilities China is developing will expand or improve the ability of the People’s Liberation Army to conduct a range of externally focused operations, to include combat insertion, island landing operations, humanitarian assistance/disaster relief operations, noncombatant evacuation operations, and peacekeeping missions. Improvements in these areas can also strengthen China’s traditional warfighting capabilities against weaker neighbors. Given its enhanced strategic lift capability, strengthened employment of special operations forces, increasing capabilities of surface vessels and aircraft, and more frequent and sophisticated experience operating abroad, China may also be more inclined to use force to protect its interests. • China’s pursuit of expeditionary capabilities, coupled with the aggressive trends that have been displayed in both the East and South China seas, are compounding existing concerns about China’s rise among U.S. allies and partners in the greater Asia. This also is driving additional increases in defense acquisitions throughout the region. • The People’s Liberation Army will continue to modernize in the area of logistics, with implications for expeditionary operations. The air force will continue to see additional strategic airlift aircraft incorporated into the air order of battle, particularly once the Y–20 heavy lift aircraft enters serial production. Furthermore, China is likely to continue to seek opportunities to secure military facilities abroad, such as the one it has begun constructing in Djibouti, to facilitate a range of operations. • Regardless of China’s interest in developing a more robust expeditionary capability, regional contingencies, such as a conflict with Taiwan or concerning maritime disputes in the East or South China seas, will remain the focus of Chinese war planning. VerDate Sep 11 2014 12:16 Nov 02, 2016 Jkt 020587 PO 00000 Frm 00188 Fmt 6601 Sfmt 6601 G:\GSDD\USCC\2016\FINAL\06_C1_C2_M.XXX 06_C1_C2_M
279 RECOMMENDATIONS Developments in China’s Military Expeditionary and Force Projection Capabilities The Commission recommends: • Congress require the U.S. Department of Defense to conduct a study identifying the risks and gains associated with the United States pursuing a burden sharing strategy that utilizes emerging People’s Liberation Army expeditionary capabilities to help stabilize the Asia Pacific region during a crisis or to counter a shared threat such as the spread of terrorism in Southeast Asia. dkrause on DSKHT7XVN1PROD with USCC VerDate Sep 11 2014 12:16 Nov 02, 2016 Jkt 020587 PO 00000 Frm 00189 Fmt 6601 Sfmt 6601 G:\GSDD\USCC\2016\FINAL\06_C1_C2_M.XXX 06_C1_C2_M
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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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dkrause on DSKHT7XVN1PROD with USCC
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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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Table 1: 159 Chinese Attempted and
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163 Figure 4: China’s Total Debt-
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173 weapons, opens the U.S. militar
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175 ests, and allow for greater vol
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177 Addendum I: Key Targets in Chin
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179 Addendum I: Key Targets in Chin
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195 The ultimate impact of the ruli
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197 Environmental Impact of China
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201 China’s Maritime Disputes in
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203 Reform and Reorganization of th
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207 • PLA Army Headquarters: Chin
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211 Figure 5: Type 072A Tank Landin
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215 Figure 7: JL-2 Missile Range Co
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221 Space-Tracking Facility in Arge
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223 Table 1: Significant PLA Bilate
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Page 245 and 246: 231 tional annexes to the 2014 Noti
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Page 303 and 304: SECTION 3: CHINESE INTELLIGENCE SER
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Page 317 and 318: 303 nal U.S. discussions of issues
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Page 321 and 322: 307 29. U.S. Department of Justice,
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Page 330 and 331: 316 Chinese foreign direct investme
Page 332 and 333: 318 • Pakistan: In 2015, China an
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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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