The Pentagon estimates that real military expenditures, including weapons acquisitions and research tucked into other budgets, should be calculated at two or three times the announced figure. That would make China's defense expenditures among the world's largest, but still far behind the $400 billion budgeted this year by the United States.
Projecting Force to Taiwan
Taiwan, the self-ruled island that China insists must reunite with the mainland, has long been at the center of this growth in military spending; one of the military's chief missions is to project a threat of force should Taiwan's rulers take steps toward formal independence.
Embodying the threat, the 2nd Artillery Corps has deployed more than 600 short-range ballistic missiles aimed at Taiwan from southeastern China's Fujian and Jiangxi provinces, according to Taiwan's deputy defense minister, Michael M. Tsai. Medium-range missiles have also been developed, he said, and much of China's modernization campaign is directed at acquiring weapons and support systems that would give it air and sea superiority in any conflict over the 100-mile-wide Taiwan Strait.
But the expansion of China's interests abroad, particularly energy needs, has also broadened the military's mission in recent years. Increasingly, according to foreign specialists and Chinese commentators, China's navy and air force have set out to project power in the South China Sea, where several islands are under dispute and vital oil supplies pass through, and in the East China Sea, where China and Japan are at loggerheads over mineral rights and several contested islands.
China has acquired signals-monitoring facilities on Burma's Coco Islands and, according to U.S. reports, at a port it is building in cooperation with Pakistan near the Iranian border at Gwadar, which looks out over tankers exiting the Persian Gulf. According to a report prepared for Rumsfeld's office by Booz Allen Hamilton, the consulting firm, China has developed a "string of pearls" strategy, seeking military-related agreements with Bangladesh, Cambodia and Thailand in addition to those with Burma and Pakistan.
Against this background, unifying Taiwan with the mainland has become more than just a nationalist goal. The 13,500-square-mile territory has also become a platform that China needs to protect southern sea lanes, through which pass 80 percent of its imported oil and tons of other imported raw materials. It could serve as a base for Chinese submarines to have unfettered access to the deep Pacific, according to Tsai, Taiwan's deputy defense minister. "Taiwan for them now is a strategic must and no longer just a sacred mission," Lin said.
Traditionally, China's threat against Taiwan has been envisaged as a Normandy-style assault by troops hitting the beaches. French, German, British and Mexican military attaches were invited to observe such landing exercises by specialized Chinese troops last September.
Also in that vein, specialists noted, the Chinese navy's fast-paced ship construction program includes landing vessels and troop transports. Two giant transports that were seen under construction in Shanghai's shipyards a year ago, for instance, have disappeared, presumably to the next stage of their preparation for deployment.
But U.S. and Taiwanese officials noted that China's amphibious forces had the ability to move across the strait only one armored division -- about 12,000 men with their vehicles. That would be enough to occupy an outlying Taiwanese island as a gesture, they said, but not to seize the main island.
Instead, Taiwanese officials said, if a conflict arose, they would expect a graduated campaign of high-tech pinpoint attacks, including cruise missile strikes on key government offices or computer sabotage, designed to force the leadership in Taipei to negotiate short of all-out war. The 1996 crisis, when China test-fired missiles off the coast, cost the Taiwanese economy $20 billion in lost business and mobilization expenses, a senior security official recalled.
A little-discussed but key facet of China's military modernization has been a reduction in personnel and an intensive effort to better train and equip the soldiers who remain, particularly those who operate high-technology weapons. Dennis J. Blasko, a former U.S. military attache in Beijing who is writing a book on the People's Liberation Army, said that forming a core of skilled commissioned and noncommissioned officers and other specialists who can make the military run in a high-tech environment may be just as important in the long run as buying sophisticated weapons.
Premier Wen Jiabao told the National People's Congress last month that his government would soon complete a 200,000-soldier reduction that has been underway since 2003. That would leave about 2.3 million troops in the Chinese military, making it still the world's biggest, according to a report issued recently by the Defense Ministry.
Because of pensions and retraining for dismissed soldiers, the training and personnel reduction program has so far been an expense rather than a cost-cutter, according to foreign specialists. But it has encountered competition for funds from the high-tech and high-expense program to make China's military capable of waging what former president Jiang Zemin called "war under informationalized conditions."
The emphasis on high-tech warfare, as opposed to China's traditional reliance on masses of ground troops, was dramatized by shifts last September in the Communist Party's decision-making Central Military Commission, which had long been dominated by the People's Liberation Army. Air force commander Qiao Qingchen, Navy commander Zhang Dingfa and 2nd Artillery commander Jing Zhiyuan, whose units control China's ballistic missiles, joined the commission for the first time, signaling the importance of their responsibilities under the modernization drive.
Striving for air superiority over the Taiwan Strait, the air force has acquired from Russia more than 250 Sukhoi Su-27 single-role and Su-30 all-weather, multi-role fighter planes, according to Richard D. Fisher, vice president of the International Assessment and Strategy Center in Washington. The Pentagon has forecast that, as the Sukhoi program continues to add to China's aging inventory, the air force will field about 2,000 warplanes by 2020, of which about 150 will be fourth-generation craft equipped with sophisticated avionics.
But specialists noted that many of China's Su-27s have spent most of the time on the ground for lack of maintenance. In addition, according to U.S. and Taiwanese experts, China has remained at the beginning stages of its effort to acquire the equipment and skills necessary for midair refueling, space-based information systems, and airborne reconnaissance and battle management platforms.
A senior Taiwanese military source said Chinese pilots started training on refueling and airborne battle management several years ago, but so far have neither the equipment nor the technique to integrate such operations into their order of battle. Similarly, he said, China has been testing use of Global Positioning System devices to guide its cruise missiles but remains some time away from deploying such technology.
Buying such electronic equipment would be China's most likely objective if the European Union goes ahead with plans to lift its arms sales embargo despite objections from Washington, a senior European diplomat in Beijing said. A Chinese effort to acquire Israel's Phalcon airborne radar system was stymied in 2000 when the United States prevailed on Israel to back out of the $1 billion deal.