Panel: Toughen China Policy
Beijing Makes Manufacturing Gains, Sees U.S. as Vulnerable


By Glenn Kessler
Washington Post Staff Writer
Friday, July 12, 2002;

A bipartisan congressional commission warns that China is making dramatic economic and strategic advances against the United States, requiring a much tougher response to ensure compliance with trade laws and to prevent the spread of weapons of mass destruction.

A 200-page report from the U.S.-China Security Review Commission, scheduled for release Monday, is noteworthy for its skeptical view of Chinese intentions and the near-unanimous endorsement of that view by members of the panel.

The report asserts that the Chinese leadership often portrays the United States as a "powerful protagonist and overbearing bully" but also views the United States as a declining power with exploitable military vulnerabilities. The report concludes that, despite the advent of China's entry into the World Trade Organization, the U.S. trade deficit with China will continue to worsen.

The report also determined that despite the popular perception of China as mostly a manufacturer of toys and other simple products, the Chinese have made huge strides in the production of advanced goods. The United States runs a trade deficit with China in a majority of the items on the Commerce Department's advanced technology product list, the report said, warning that a growing reliance on Chinese imports might eventually "undermine the U.S. defense industrial base."

The commission also warns that China is one of the world's leading sources for missile-related technology and nuclear materials for terrorist-sponsoring nations, presenting "an increasing threat to U.S. security interests, in the Middle East and Asia in particular." While China has made numerous multilateral and bilateral commitments to stop proliferation, "despite repeated promises [it] has not kept its word," the report said.

The report, the product of nine public hearings involving 115 witnesses, was the first produced by the commission, which was evenly divided among Democrats and Republicans. It was adopted 11 to 1. A copy of the report was obtained yesterday.

The report has stirred concern among business executives, who fear it could spur congressional efforts to limit business investment and trade with China. The lone dissenter, William A. Reinsch, a Clinton administration undersecretary of commerce, noted: "The commission majority has bent over backwards to avoid describing the Chinese as a 'threat;' yet the belief that they are permeates every chapter."

Congress created the commission at the end of 2000, when U.S.-China relations were at a low point. In the past year, especially after Sept. 11, relations have improved, and it is unclear if the report will generate renewed furor about Chinese intentions.

The report urges an "immediate review and overhaul" of U.S. sanction policies, including giving the president authorization to invoke economic sanctions against foreign nations that proliferate weapons of mass destruction or related technologies. The report also recommends the use of financial sanctions, such as denial of access to U.S. capital markets to companies involved in proliferation.

"The toolbox of incentives and disincentives needs to be broadened," said commission Chairman C. Richard D'Amato. "Quite clearly, jawboning does not work in this area."

The report notes that the Chinese government and state-owned enterprises have raised more than $40 billion in the international capital markets in the past decade, including $14 billion in the United States in the past three years. But the report said the U.S. government lacks ways to monitor national security concerns raised by this development, requiring beefed-up disclosure and reporting requirements for Chinese companies at the Securities and Exchange Commission.

The commission was formed in part to provide a congressional imprimatur to U.S.-China policy, which many lawmakers believed has been dominated by the White House since Henry A. Kissinger, as national security adviser, secretly traveled to Beijing in 1972 to reopen relations. "We hope to build some kind of common ground in the Congress as we go forward," said D'Amato, a former foreign policy aide to Sen. Robert C. Byrd (D-W.Va.), who had pushed for the commission's creation.

China Buildup Said to Target Taiwan, U.S.
Pentagon Says Beijing's Military Spending Increases Options for Missile Attacks


By Vernon Loeb
Washington Post Staff Writer
Saturday, July 13, 2002; Page A18

In a comprehensive assessment of China's military aspirations, the Pentagon said yesterday that sustained increases in defense spending and new high-tech weaponry give Beijing "an increasing number of credible options to intimidate or actually attack Taiwan."

The assessment, contained in an annual report mandated by Congress on Chinese military power, also concludes that China's military training exercises "increasingly focus on the United States as an adversary."

But the report, while reflecting the Bush administration's generally hard-line stance toward China, says Beijing sees "opportunity and benefit" in continued interactions with the United States as it confronts its own internal problems, from the spread of the HIV virus to demands for political change.

China spends about $65 billion a year on defense, giving it the second-largest military budget in the world after the United States and the largest in Asia, according to the report. The Pentagon's budget for fiscal 2003, now before Congress, will exceed $390 billion.

Driving Beijing's military modernization, the report states, is preparation for a potential conflict in the Taiwan Strait. "Beijing is pursuing the ability to force Taiwan to negotiate on Beijing's terms regarding unification with the mainland," the document says. "It also seeks to deter, deny, or complicate the ability of foreign forces to intervene on Taiwan's behalf."

Beijing's official position is that it favors a peaceful resolution of its differences with Taiwan, which it considers a renegade province of China. But Beijing has refused to renounce the use of force as a possible means of bringing about reunification. Most Western analysts believe Beijing will refrain from attacking or invading Taiwan as long as Taipei does not formally declare independence.

The United States maintains a "one China" policy, which holds there is only one China and the self-governing island Taiwan is part of it. President Bush has said that any reunification must be peaceful, and that the United States would defend Taiwan in the event of a Chinese attack.

Whatever China's official position is toward Taiwan, the Pentagon report concludes that its "ambitious" military modernization "casts a cloud" over its stated preference for a peaceful resolution of the reunification issue, particularly in light of China's new military doctrine and its buildup of short-range ballistic missiles across the Taiwan Strait.

"Chinese doctrine is moving toward the goal of surprise, deception, and shock effect in the opening phase of a campaign," the report says. "China is exploring coercive strategies designed to bring Taipei to terms quickly."

One coercive tactic, the report says, is an increase of 50 short-range ballistic missiles per year, bringing China's deployed inventory to about 350. Those missiles would be capable of hitting Okinawa if launched near the coastline, or Taiwan if fired further inland.

As for China's small inventory of intercontinental ballistic missiles, Beijing is working to replace all 20 of its liquid-fuel CSS-4 missiles, capable of hitting targets in the United States, with two longer-range, solid-fuel variants. One of those new missiles would be mobile, and the other would be submarine-launched.

Beijing has maintained its ICBMs since the 1960s as a minimal deterrent against a conventional or nuclear attack by either the United States or Russia. While working to extend the range of those missiles, Beijing has not sought to increase the size of its long-range arsenal.

China's strategic thinking, however, could be affected by the Bush administration's pursuit of missile defense technologies. "Beijing apparently calculates that U.S. efforts to develop missile defenses will challenge the credibility of China's nuclear deterrent and eventually be extended to protect Taiwan," the report says.

Another major thrust of the Pentagon document is the extent to which China's military modernization remains "heavily reliant" on purchases of advanced weaponry from Russia and other former Soviet states, including fighter jets, Kilo-class submarines, Sovremenny-class destroyers and sophisticated air defense systems.