WASHINGTON U.S. military analysts in an annual report to Congress argue that China's military modernization effort continues as it seeks to strengthen its space capabilities while leveraging technological gains in its civilian sector to upgrade weapons and supporting networks.
The Defense Department's 2004 report on China's military power continues to portray Beijing as a potent rival that continues to threaten neighboring Taiwan. The report, released last Saturday (May 29) estimates that China's military spending in 2003 totaled as much as $70 billion, the third largest military budget after the United States and Russia.
In March, Beijing announced an 11.6 percent defense budget increase and said its annual budget would total $25 billion. DoD analysts said the public figure understates China's military spending. Chinese officials said Tuesday that the DoD report overstates Chinese military spending and that the report itself illustrates "Cold War thinking" on the part of U.S. war planners.
While the report does not directly address the rise of China's semiconductor industry, it does stress that the civilian electronics industry plays a key role in military modernization. Dual-use technologies have been integrated into military communications networks while the People's Liberation Army is seeking to make greater use of information technologies to link weapons and improve interoperability.
Among the top priorities are improved C4ISR (command, control, communications, computing, intelligence, surveillance and reconnaissance) and space operations. According to the report, China launched new military communications and film-based imagery satellites in 2003. "China is acquiring the personnel and technology bases for a credible computer network operations capability," the report added.
U.S. military planners quoted former premier and Communist Party leader Jiang Zemin as emphasizing that "electronics is of crucial importance to economic construction and
national defense communications." Following the 1991 Gulf War, the report quotes Jiang Zemin as asserting that "military electronics has a bearing on national security" and "must be given first place."
Still, the DoD report noted the Chinese Army's "difficulty in integrating modern weapons into a force [consisting] mostly1960s technology." Moreover, it stressed that China remains heavily reliant on Russia and other former Soviet states for front-line weapons such as fighter aircraft and submarines.
China's regional military strategy and modernization effort are driven largely by tensions across the Taiwan Straits. China, which views Taiwan as a renegade province, continues is saber-rattling even as the neighbors' economies become more tightly integrated. An upcoming study by the RAND Corp. on the integration of China and Taiwan's semiconductor industries estimates that Taiwanese investments in mainland China could be as high as $75 billion annually.
China does not want to be dependent on others for the semiconductor technology needed for national defense, Michael Chase, a RAND international policy analyst, told a conference here last week on the China-Taiwan economic integration.