Must have been a slow newsweek, because there's a whole cluster of China articles today in the
. Most of them are of the "OMFG they're going to attack us!" variety, but there's a few good ones too.
Wall Street Journal
July 16, 2004
Pg. 1
The New Weapon In China's Arsenal: Private Contractors
Once-Lethargic PLA Becomes Stronger Force With Help Of Modern Defense Sector
By Charles Hutzler, Staff Reporter Of The Wall Street Journal
SHENZHEN, China -- When China's military wanted to buy equipment for a new communications network, it bypassed the state-owned defense contractors that had once catered to its needs. Instead it turned to a young, private company run by a former army engineer.
Operating from a landscaped corporate campus in this booming city adjacent to Hong Kong, Huawei Technologies Co. speedily filled the order. In 2000 and 2001, company engineers installed routers, switches and other gear to connect military command centers across China, according to former executives and an engineer involved in the installation. As a result, the military got a network that's faster, more reliable and, foreign military experts say, less susceptible to U.S. eavesdropping.
After decades as a lumbering giant, the People's Liberation Army is on the verge of fielding a military force commensurate with China's strategic ambitions. To get there, Chinese leaders have abandoned old principles and are harnessing the country's increasingly free-market economy to build a competitive defense industry. The PLA has dug ditches to lay fiber-optic cables for commercial telephone operators in return for extra bandwidth. The government is doling out billions of dollars to fund the private development of cutting-edge technologies. And the country's retooled commercial shipyards are booming.
Encouraging the commercial sector is just one way that China is beefing up its military capabilities. In recent years, Chinese commanders have shredded war-fighting doctrines based on the communist revolution and have rolled out new regimens for recruitment, training and combat. As a result, Washington's foreign-policy establishment is worrying about China again. The Bush administration, which had largely reined in its concerns after Sept. 11, is reassessing the country's capabilities, especially in light of the U.S.'s legal obligation to help protect Taiwan.
"The Chinese have leapfrogged," says James Mulvenon, a Chinese military specialist with Rand Corp., a think-tank often commissioned by the U.S. government to study security issues. "Don't comfort yourself by thinking that they're not formidable."
The PLA isn't likely to catch up with the U.S. for a long time, foreign military analysts say. Its 2.25-million-member force, the world's largest, is largely land-bound. It has an improving arsenal of missiles but underpowered naval and air forces; they and the infantry rarely train together. China also still relies on Russia and other foreign suppliers for major weapons systems. Defense attachés who have visited Chinese ships describe seeing a mish-mash of electronics, some of it commercially available. Only in recent years have commanders boasted of a new capability -- encrypted e-mails.
China's defense sector remains inefficient, a problem exacerbated by a government that hasn't discarded its love of central control. The military insists on buying products at cost and that blunts innovation. Arms-buyers for the PLA "would come to us all the time and say: 'We're not doing business. We're defending the country,' " says a former executive at a top ordinance manufacturer.
China's strategic ambitions and key aspects of its modernization program remain largely under wraps. The Ministry of Defense and the PLA command declined to comment for this article, and the PLA's main strategy documents are classified. Chinese leaders have publicly stated that their military build-up is defensive. Any war would risk China's international standing and dent the trade and investment that buoy its economy.
Nonetheless, foreign experts don't doubt the seriousness of China's modernization effort. "This modernization isn't rapid, but it's very determined," says Dennis Blasko, a former military attaché in Beijing for the U.S. Army.
For decades, the PLA struggled to keep up with international rivals, hobbled in part by state-run defense contractors that grew lethargic serving only one client -- the military. As creatures of a planned economy, these companies couldn't produce the computers and communications equipment that have been remaking warfare in the West. An East German-designed factory in Beijing that churned out radio components for the PLA is now an exhibition space for avant-garde art shows, for example.
The PLA itself was a complacent organization. During the 1990s, it conducted war games for senior Communist Party leaders so skewed that the communists, represented by the Red Team, won every time. The Chinese state media glorified these proxy battles while others in the region dismissed them as evidence of the PLA's ineptitude.
Many senior generals now in charge know the PLA's shortcomings from firsthand experience. Many cut their teeth in its last major campaign, a disastrous three-week offensive in Vietnam in 1979. The battle-tested Vietnamese forces outwitted the Chinese. Communications between field units and commanders failed. Chinese units were lured into ambushes where the Vietnamese picked them off "like fish on a platter," according to a study by a Chinese officers' training academy. The campaign, according to that study, left 25,000 Chinese dead and wounded. Some foreign scholars say the number of casualties was nearly twice that estimate.
The current defense minister, Gen. Cao Gangchuan, was sent from his job as a staff officer in PLA headquarters to the Vietnam border to oversee artillery assaults during that campaign, according to David Shambaugh, a professor at George Washington University, and author of an in-depth study of the PLA. By 1998, Gen. Cao had the ear of then-President Jiang Zemin, who still heads the military, even though he has stepped down as party chairman and president. Mr. Jiang put Gen. Cao in charge of overseeing the development and procurement of weapons systems.
By the 1990s, the veterans of Vietnam dominated the upper ranks of the Chinese military. They grew even more concerned about the PLA's weaknesses after the U.S.'s display of technological superiority in the first Gulf War. In 1999, the U.S. bombed China's embassy in Yugoslavia -- the U.S. says it was a mistake but many Chinese are skeptical -- and Taiwan asserted its lack of interest in unification. At that point, China accelerated its military reforms.
Since then, the PLA has introduced new combat practices and weaponry and has significantly boosted its military budget. It also cut its bloated ranks by half a million and reduced conscription of poorly educated peasants who for a long time constituted the core of the force.
At the same time, PLA modernization got a boost from the rapidly growing free-market economy and increasingly competitive industries. Huge, newly equipped shipyards are churning out so many destroyers, frigates and landing vessels -- as well as 10% of the world's commercial shipping vessels -- that the head of China's leading shipbuilder says he tells managers not to seek out military contracts. "We just can't manage it all," says Chen Xiaojin, president of China State Shipbuilding Corp., a state-owned company.
Legend, a computer maker spun off from the Chinese Academy of Sciences in 1984 -- and now named Lenovo Group Ltd. -- last year unveiled a new supercomputer, DeepComp 6800, for military use, according to a person familiar with the arrangement.
A senior executive at leading software maker Neusoft Group Ltd. says it is working with the PLA on a satellite-based navigation system -- the kind the U.S. military uses to track special forces and steer missiles. The PLA is also canvassing leading Chinese mobile-phone makers about building specialized handsets, according to two industry consultants.
Huawei, the maker of communications equipment, is a private company with an overtly militaristic feel. Its founder and current general manager, Ren Zhengfei, spent 10 years in the army. New Huawei employees, mostly recent university graduates, are sent to a month-long boot camp and PLA songs such as "Unity is Strength" are commonly sung at company gatherings.
A Huawei spokesman said Mr. Ren wouldn't comment and said the company doesn't supply the PLA. Previously, the company has said a small percentage of sales went to the military.
The government remains at the center of the defense industry by handing out seed money to encourage research into commercial products with potential military applications. From a shabby 10-story building in Beijing in a neighborhood of military garrisons, the Ministry of Science and Technology has pledged to hand out $2.4 billion in grants between 2001 and 2005, twice the amount of the previous 15 years. Funding is directed toward cutting-edge fields, chiefly wireless networks, semiconductor design and new materials, says Vice Minister Ma Songde.
An ideal find, Mr. Ma says, would be something like carbon fiber "which can be used to make tennis rackets and jet fighters too."
The PLA has also lent a more direct hand to the commercial sector, in the expectation of getting something in return. For example, Chinese soldiers dug trenches and laid fiber-optic cables for the country's latest commercial phone networks. In return, telecom operators dedicated bandwidth for military use and the PLA also placed cables in the trenches for their own networks, industry executives say. Already these nascent systems are proving more difficult for foreign militaries to intercept and decipher, military experts say.
The military is also happy to buy equipment from China's booming commercial tech sector, rather than waiting for the development of specialized equipment. That's allowing the PLA to catch up faster, says Richard Bitzinger, a researcher at the Asia-Pacific Center for Security Studies in Honolulu, the think-tank for the U.S. Pacific Command.
"For most military computers, using Pentium chips is good enough," says a PLA senior colonel involved in long-range strategic planning.
With its growing proficiency, the PLA is making a concerted push into information warfare -- the use of computer viruses to paralyze an enemy's financial markets or traffic systems. The PLA has opened an information-warfare center and is training special units in these skills, according to Shen Weiguang, a former aide to the PLA's recently retired chief of staff and a lecturer at military academies on warfare trends.
In 1996, the PLA couldn't track two U.S. aircraft-carrier groups that Washington dispatched to Taiwan, recalls Mr. Shen. "We're not deaf and blind anymore. If you come, we'll know," he says.
All these changes are giving China's leadership real military options for the first time in decades. Military analysts think the PLA still lacks sufficient naval and air power to launch a full invasion of Taiwan, for example. But the areas where the PLA is making its greatest strides -- commando forces, information warfare and missiles technology -- could, if deployed together in a few years time, demolish Taiwan's military bases and command centers, according to a Pentagon assessment of the PLA's capabilities.
The Pentagon's report, released in May, cites "the PLA's determined focus on preparing for conflict in the Taiwan Strait." In that area, the report says, the "balance of power is steadily shifting in China's favor." Beijing has sought the island's capitulation since a failed assault by Mao Tse-tung's communist troops 55 years ago.
A debate is under way in Chinese military and policy circles about whether to take pre-emptive military action, perhaps by seizing one of the small islands that Taiwan controls. "Some say that a minor action now could prevent the need for a major action later," says a former foreign-ministry official who has taken part in some of the closed-door discussions about military options.
Alarmed by China's rapid modernization, Taiwan's government, after years of foot-dragging, is proposing a special $18 billion outlay to purchase U.S. weapons.
LONG MARCH
A look at the People's Liberation Army
Founded: Aug. 1, 1927, as the Red Army
Size: 2.25 million personnel, world's largest by manpower
Budget: $25 billion official; $50 billion to $70 billion Pentagon estimate
Missiles: 30-plus intercontinental; 500-plus short-range
Army: 1.7 million personnel; 8,680 tanks
Navy: 69 submarines; 63 destroyers, frigates
Air Force: 1,900-plus combat aircraft
Bases abroad: None
Source: International Institute for Strategic Studies; WSJ Research
