The annual report on Chinese military power released by the Pentagon on July 19 reported that China is modernizing its military and emphasizing preparations "to fight and win short-duration, high-intensity conflicts" over Taiwan. With military spending that has grown by double digit rates since the mid-1990's, China "appears focused on preventing Taiwan independence or trying to compel Taiwan to negotiate a settlement on Beijing's terms," the report said.
This political and military pressure on Taiwan may run counter to American national security interests - and to American calls for a peaceful, negotiated resolution of the Taiwan question. But China has not yet built the military power to have full confidence it can achieve its political objectives regarding Taiwan.
Beijing's conventional forces also are not deemed capable of threatening American territory, as "China's ability to project conventional military power beyond its periphery remains limited," the report stated. At the same time, it cautioned that China was both modernizing and expanding its arsenal of nuclear missiles capable of reaching the territory of the United States.
Washington and Beijing are also in a delicate dance on a variety of economic issues, such as when and whether China should stop linking its currency with the dollar, a critical issue for the trade deficit with China. The report, scheduled for release to Congress this spring, was delayed as rough edges were smoothed by a series of debates and editing sessions with the Pentagon, the State Department, the Central Intelligence Agency and the National Security Council.
According to the report, China's military modernization has included an estimated 650 to 730 mobile, short-range ballistic missiles deployed opposite Taiwan, as well as the acquisition of jet-fighters from Russia. China also has deployed its first two Russian-built guided missile destroyers; two more are under contract for delivery, even as China is increasing the size of its submarine fleet.
Although those submarines are far less sophisticated than their American counterparts, Pentagon analysts note that increases in the Chinese fleet pose a critical challenge to the Navy: American carriers responding to a crisis could have to operate hundreds of miles farther from Taiwan, reducing the number of fighter sorties they could launch until the Chinese submarines were subdued.
The report also mentioned China's military budget."China could receive up to $90 billion in 2005," the third largest military spending figure in the world, after the United States, which budgets more than four times that figure, and Russia. (Source: Thom Shanker and David E. Sanger, The New York Times, July 20, 2005).