CHINA'S TRANSITION INTO THE 21ST CENTURY:

U.S. AND PRC PERSPECTIVES

Dr. David Shambaugh

Senior Colonel Wang Zhongchun

July 29, 1996
ii

*******

The views expressed in this monograph are those of the

authors and do not necessarily reflect the official policy or

position of the Department of the Army, the Department of

Defense, or the U.S. Government. This monograph is cleared for

public release; distribution is unlimited.

*******

Comments pertaining to this monograph are invited and should

be forwarded to: Director, Strategic Studies Institute, U.S. Army

War College, Carlisle Barracks, PA 17013-5244. Comments also may

be conveyed directly to the Conference Organizer, Dr. Earl H.

Tilford, Jr., by calling commercial (717) 245-4086 or DSN 242-

4086.

*******

This monograph was originally presented at the U.S. Army War

College Seventh Annual Strategy Conference held April 23-25,

1996, with the assistance of the Office of Net Assessment. The

Strategic Studies Institute is pleased to publish the paper as

part of its Conference Series.

*******

All 1995 and later Strategic Studies Institute (SSI)

monographs are available on the Strategic Studies Institute

Homepage for electronic dissemination. SSI's Homepage address is:

http://carlisle-www.army.mil/usassi/.
iii

FOREWORD

This past April the Army War College's Strategic Studies

Institute held its Seventh Annual Strategy Conference. The theme,

"China Into the 21st Century: Strategic Partner and . . . or Peer

Competitor," was especially timely.

The following papers, presented by Dr. David Shambaugh and

Senior Colonel Wang Zhongchun, look at China from two very

different perspectives. Professor Shambaugh contends that those

who succeed Deng Xiaoping, fearful of any further erosion of

Communist Party hegemony and determined to return China to a

purer form of neo-Maoist Marxism, will become even more

conservative as China's economic and social problems intensify.

Despite considerable political and economic challenges, his best

estimate is that China will, from inherent inertia, "muddle

through" well into the 21st century. Indeed, it is in the

interests of the United States for China to hold together as a

territorial nation-state and political unit because

disintegration would foster socio-economic dislocations that

could destabilize Asia. At the same time, U.S. policy must

maintain pressure on China to improve human and civil rights

performance.

Senior Colonel Wang Zhongchun provides a tour d'horizon<D>

of nearly a half-century of Chinese defense policy, from a

distinctly PRC perspective. He then argues that China has

attained a position of security and, even though the world

presents many uncertainties, Beijing is committed to playing a

positive role for peace and stability in Asia. The central

principle in today's security analysis is that defense policy

must support economic development so that China can grow into an

economically progressive, democratic, and modern socialist

country. Colonel Wang portrays China's military posture as one

that seeks, above all, to protect China's territorial

sovereignty, while focusing in this relatively peaceful era on

modernizing in step with national economic development.

These two monographs provide useful, if divergent,

perspectives on a nation whose course in the early 21st century

will increasingly interact with our own in political, military,

and economic spheres.

RICHARD H. WITHERSPOON

Colonel, U.S. Army

Director, Strategic Studies Institute
iv

BIOGRAPHICAL SKETCHES OF THE AUTHORS

DAVID SHAMBAUGH teaches Chinese politics, foreign relations, and

the international politics of Asia at the School of Oriental and

African Studies at the University of London. Since 1991, he has

served as Editor of The China Quarterly. Prior to that, Professor

Shambaugh directed the Asia Program at the Woodrow Wilson

International Center for Scholars. He has published widely on

various aspects of contemporary Chinese politics, foreign

relations, and military affairs.

SENIOR COLONEL WANG ZHONGCHUN is a Professor at the National

Defense University of the People's Liberation Army and an

Associate of the Institute for the Study of Diplomacy. This year

Colonel Wang is a visiting scholar at the Institute for the Study

of Diplomacy at Georgetown University. He has served in command

positions at the platoon, company, and battalion levels and was

Chief of the Office of Combat and Training at Army Corps

Headquarters. Colonel Wang is the author of four books, his

latest being United States Nuclear Armament and Nuclear Strategy,

published by the PLA's National Defense University Press in 1995.
1

POLITICAL DYNAMICS IN TRANSITIONAL CHINA:

IMPLICATIONS FOR THE UNITED STATES

David Shambaugh

Introduction.

The United States is dealing with a complex and transitional

political system in China. By some measures it is a strong,

centralized, competent and decisive system. By others, it is a

decentralized, weak, fragile, and decaying system. Understanding

the nature of the transitions affecting the Chinese political

system, the system's many complexities, and its strengths and

weaknesses, is fundamental to fashioning an American strategy for

dealing with China in the years to come. How China will behave on

the world stage, whether it keeps its agreements with the United

States and other nations, and its willingness to accept and

uphold the norms and standards of international relations, all

depend in no small part on the nature and evolution of China's

political system and the officials that work in it.

This paper explores several elements of China's current

political system with an eye towards anticipating its evolution

and potential impact on Sino-American relations. Predicting this

evolution is a difficult and ultimately impossible task. If

Chinese politics have proven one thing since 1949, it is their

unpredictability. At a time of such transition in the Chinese

state and society, analysts have identified numerous potential

scenarios and variables for China's political future.1

 My own

estimate is that political change in China will be incremental at

best and will very likely lurch further in the direction of harsh

authoritarianism. I do not foresee the blossoming of political

pluralism and democracy in China unless there is a fundamental

change in the regime--a possibility to which I would assign very

little chance. Rather, I foresee that:

• The ruling party and elite will continue to take a zerosum view of politics--i.e., any gain in political autonomy on

society's part is a loss for the state, and any move towards

liberalization and pluralism is a step in the direction of

increased societal pressure on the state and the ultimate

political demise of the Chinese Communist Party (CCP). While this

is not necessarily a correct view--the CCP could likely increase

its legitimacy and longevity by relaxing its authoritarian grip

and increasing political freedoms and participation--it is the

consensus of the current ruling elite and represents a key lesson

learned from the events of 1989-91 in China and the communist

world.

• No Gorbachev-style political reformer will emerge in the
2

post-Deng era. The regime will continue to be comprised of a

combination of party apparachiks, economic technocrats, military

modernizers, and political commissars--all of whom have an

interest in maintaining tight authoritarian political control and

modest economic reforms. The balance of political power among the

ruling elite will thus remain profoundly conservative and

dominated by the Soviet-trained generation now in power. This

generation and ruling elite is profoundly suspicious of the West

in general, and the United States in particular.

• Dissent and popular unrest will be dealt with harshly, and

no genuinely autonomous forms of civil society will be permitted

to develop.

• The regime and state will not be allowed to implode and

fall from power. Brute force will be used to maintain power if

necessary. The military and security services will not only

strictly police society, but will also play an increasingly

important role in elite politics. A Polish Jaruzelski-style

military/ security dominant state could well emerge if the partystate is challenged on a mass scale and proves divided or

ineffective in dealing with popular unrest.

• Intensified nationalism will remain the psychological glue

binding the state to society. This will also tend to win over

many conservative intellectuals to the regime, and further

isolate liberal intellectuals. "Neo-conservatism" (xin

baoshouzhuyi) will replace "neo-authoritarianism" (xin

quanweizhuyi) as the ethos of the intellectual elite.

• The political center (Zhongyang) in Beijing and the party

and state authorities at the provincial and local levels will

continue to work out a modus vivendi for demarcating respective

responsibilities. The parameters of such a bargain are already

taking shape in the form of the new revenue-sharing scheme and

nomenklatura appointment procedures. In essence, the quid pro quo

will entail a tradeoff of greater flexibility and leeway given to

subnational levels in economic affairs in return for strict

compliance in political affairs.

These are the main elements that I foresee in the evolution

of the Chinese political system towards the turn of the century

(any predictions beyond that are too difficult to envision). The

implications of such a political system for U.S.-China policy are

not encouraging. The very essence and nature of the Chinese

political system will be an object of American concern in and of

itself (particularly in the realm of human rights), but also

because such a political regime will likely be very reluctant to

meet American demands and cooperate on a variety of substantive

issues of deep concern to the United States. The Chinese

leadership will tend to see the United States in adversarial
3

terms and vice versa. The decentralization of the economic system

and declining local compliance with central policies also

suggests that China's capacity to enforce bilateral and

international agreements will continue to decline, thus further

irritating Sino-American relations.

China as Political Pariah.

To many Americans and the Congress, the Chinese political

system is repugnant and antithetical to cherished American values

and national interests. China is seen by many as a harshly

repressive, authoritarian, communist regime that concentrates

power in the hands of a despotic few and systematically abuses

the human rights of its citizens.

This is not an incorrect image. The Chinese regime is one of

the world's worst abusers of human rights and basic freedoms. It

maintains itself in power in large part through intimidation and

coercion of the population. It tolerates no opposition. It

maintains a garrison state of nearly 3 million in the armed

forces, nearly 1 million in the paramilitary People's Armed

Police, and perhaps 50 million nationwide in the Ministry of

Public Security, Ministry of State Security, and local police. As

many as 200 million serve in local militias. All of these forces

are used more for the maintenance of internal security than

external security. These security services are the direct tools

of the ruling Communist Party and its constituent local

governments. They brook no dissent. The judiciary system is

merely a compliant arm of the security state, which prosecutes

cases swiftly and metes out harsh punishments for a wide range of

offenses. China has, by far, more capital punishment cases than

any other nation on earth (approximately 6,000 in 1995); over 60

different offenses are punishable by death under the Chinese

criminal and civil codes. China's penal system includes a vast

network of draconian labor camps--which have been brought to the

world's attention by former inmate and human rights campaigner,

Harry Hongda Wu.

China is also a country that denies its citizens fundamental

political freedoms (despite many being enshrined in the Chinese

constitution). The formation of autonomous civic or political

organizations are forbidden, thus denying the opportunity for

civil society to develop. Those that are permitted to exist are

co-opted, infiltrated, and controlled by the party-state. No

independent trade unions are allowed. No legitimate forms of

political petition or protest are permitted. Nor are competitive

parties and elections permitted to exist; the so-called

"democratic parties" that operate under the Chinese People's

Political Consultative Congress (CPPCC) are a sham. To be sure,

there has been a greater measure of choice in the selection of
4

local government officials and delegates to local and provincial

people's congresses in recent years, but there is no doubt that

any individual who transgresses Communist Party dictates,

discipline, and norms will be removed from office. Freedom of

speech and assembly is severely restricted--if not denied.

Freedom of religion is also constricted, and a variety of

religious practitioners are persecuted. Public expressions of

political opposition are absolutely not tolerated, and will

result in a lengthy sentence for "counter-revolutionary

behavior." The media in China remain tightly controlled by the

Propaganda Department of the Communist Party, and international

media are also censored and restricted in their domestic

distribution. Foreign journalists in China cannot leave the

capital without permission and being accompanied by security

monitors. While in Beijing, tailing and harassment by State

Security agents is de riguer, as is telephone tapping, mail

opening, and general surveillance. Other foreigners resident in

China are subjected to similar forms of restriction and

monitoring.

Let us not deceive ourselves--China's political system

remains authoritarian and repressive. In fact, it has become

significantly more so in recent years. Many features are

antithetical to many core American values and those enshrined in

the U.N. Covenant on Human Rights and other international

agreements. Thus there is an empirical basis for the image of the

Chinese political system as one that denies and abuses

fundamental human and political rights, and operates a virtual

police state. Under any set of criteria, it is difficult not to

judge such a political system as inimical to American values and

interests.

As the subject of this conference is to forecast whether

China will become a "strategic partner" or "peer competitor" of

the United States, I would submit that--in the political realm--

China is neither partner or competitor, but is rather a pariah

and an adversary. The United States and the international

community cannot sit idly by and ignore such gross violations of

basic human rights. It must both publicize and penalize China's

transgressions, while working with Chinese authorities where

possible to promote humane governance. Whether this state of

affairs will continue into the future depends entirely upon

whether the Chinese leadership returns to the path of increased

tolerance, openness, pluralism, and political reform embarked

upon during the 1980s under Zhao Ziyang and Hu Yaobang. As noted

above, I rate the chances of such a change in the near term (3-5

years) as slim to nonexistent.

Such a pervasive negative image obscures the fact that the

Chinese government also meets many basic human needs of its

citizens and has done much to alleviate poverty, develop the
5

economy and raise the standard of living of the populace. It has

also removed many of the more draconian features of the Maoist

era and opened China to a wide range of cultural pursuits. The

difference between China in 1976 and 1996 could not be more

stark. There is much that has improved for Chinese citizens.

China's Political Fragility.

The image of China's political system presented above

provides the sense that the regime is strong and in control. In

some respects it is--but this image belies, I believe, a more

fundamentally fragile and weak political system. On the surface

it seems a strong and stable system--effectively governing 1.2

billion people, modernizing rapidly, attaining great power

status, and beginning to flex its muscles on the world stage. But

this image is deceiving.

There are many indicators of severe social and systemic

weaknesses that the regime will be hard-pressed to cope with in

the years to come. Corruption is rampant on a national scale, and

is both corroding society and a cancer on the state. Politburo

member and Beijing Mayor Chen Xitong was toppled from power in

1995 on corruption charges, while 18 of his associates were

indicted for allegedly embezzling $2.2 billion. Crimes of various

sorts are rising rapidly. Drug use is increasing, as is

prostitution. Secret societies and criminal triads operate

nationally. Alienation is rampant among youth, and material

hedonism permeates society. Intellectuals are a distraught lot.

Respect for political authority has waned, and communist ideology

is discredited. Compliance with political directives is usually

feigned or often ignored. Local urban governments must cope with

a huge migrant population on top of "normal" population increases

that add more than 20 million per annum. Many of the old organs

of the Leninist state--the propaganda, organization, united front

departments--have atrophied. Recruitment into the Communist

Party has fallen off, and in many cases new recruits must now be

bribed by the Party to enter. In any event, they no longer see

party membership as entree into the elite--nor as a guaranteed

avenue of upward mobility. For many, party membership simply

decreases the chances of harassment by the party-state and

security authorities. It also means better access to guanxi

(connections) that can be used in business or to get a passport

and go abroad. Another sign of declining Party control is the

more restricted impact of the nomenklatura system, whereby the

"one-level-down" appointment system is now the national norm.

In brief, China is becoming an increasingly anarchic

society. The general decline in state authority and moral

community is the root of the problem, but the erosion of the

public security system outside the capital, the opportunities for
6

graft, rising social tensions, and increased access to weapons

all have contributed.2 China's social fabric is fraying. Even the

nuclear family is fracturing--divorces increased nearly 100

percent between 1984 and 1994.

When considering this social decay in the context of China's

political system, one has the sense of the proverbial emperor

without clothes: a naked state stripped of its traditional

sources of legitimacy and sources of rule; a state increasingly

dependent on coercive methods of rule, corruption, and striking

deals with local power barons to stay in power. In traditional

Chinese political philosophy, such a state lacks moral authority

(de) and, hence, legitimacy. A legitimate Chinese state is

benevolent (wangdao), while an illegitimate state is coercive

(badao). The analogy of the current Chinese Communist regime to

moribund imperial dynasties is clear to many.

Does this mean it will implode or collapse? It is not

likely. Many Chinese dynasties endured in despotic states for

several generations, and many nations "muddle through" with

problems far more severe than China. Indeed, one could easily

identify countless structural weaknesses in the United States--a

crippling national debt that periodically shuts down the national

government, laggard economic growth, decayed inner cities,

widespread drug use, racial and ethnic tensions, a society

alienated from political life, political leaders who are at

loggerheads and fail to inspire the citizenry, rising terrorism--

but the United States is not about to collapse. (Although quite a

few of China's America watchers have predicted it!)

The expectation that the Chinese party-state will continue

to muddle through should not obscure an analysis of the existing

weaknesses and potential challenges to the regime and system. It

is a political system with weak institutions and atrophied

mechanisms of control within the context of hegemonic rule. The

ruling elite are undergoing wholesale generational turnover and a

political succession. The new elite is a conglomerate of

apparachik-technocrats who, thus far, pursue incrementalist

policies intended to preserve their power and maintain social

order above all. They continue to reform the economic system, but

show few signs of making concomitant changes to the political

system. The Chinese Communist Party is a ruling party riddled

with corruption, drawing upon shrinking sources of legitimacy,

and maintaining its rule through coercive power and appeals to

strident nationalism. If China suffers a downturn in the economy

and living standards begin to stagnate (which is already

occurring in many regions and among some classes), the most

positive tool in the regime's arsenal would disappear.

Thus, while weak, I do not think that China's political

system is about to collapse or imminently implode. Decay is a
7

gradual process--the instruments of statecraft progressively

corrode, but it takes time. China's political system is still far

from being impotent. Unlike its neighbor, North Korea, China's

political system is capable of performing certain social

responsibilities of state, delivering remarkable economic growth,

and protecting national security. These are not signs of a system

on the verge of collapse. Yet, they should not mask underlying

systemic weaknesses in the system and the profound challenges

facing it in the future.

While China's leaders today are confronted with systemic

weaknesses and an array of domestic problems, it can be argued

that many problems have subsided compared with a year ago, and

that the leadership's position has somewhat stabilized as a

result. The growth and inflation rates have come down to

manageable levels, leading some economists to conclude that China

has managed the "soft landing" desired. The leadership succession

seems more stable than it did a year ago, and China's foreign

relations show strength in many cases.

On this basis, some China specialists find cause for

cautious optimism--when only 6 months or a year ago, many

prognoses were pessimistic. But if China-watching has proven one

truism, it is not to overemphasize the peaks or the troughs in

China's evolution. While detailing the problems and challenges

that confront the Chinese party-state, they must at the same time

be placed in comparative context.

Placing China's Problems in Context.

China's leaders are not the only ruling elites in the world

who fail to inspire their citizenry and face problems of

political succession, and the Chinese Communist Party is hardly

the only political party in Asia or the world that suffers a

crisis of confidence. Alienation runs deep in the body politic of

many nations. The leaders of Great Britain, America, Germany,

Israel, and Russia are fighting for their political lives. The

Japanese and Italian governments seem in a perpetual state of

flux. India and South Korea are prosecuting unprecedentedly highlevel corruption cases, while North Korea is on the verge of

collapse. By comparison, China's leadership appears remarkably

stable, and the Chinese Communist Party has shown endurance not

demonstrated by its erstwhile comrades elsewhere in the shrunken

socialist world.

China's social problems are generally well-managed when

compared with other developing countries. China has a rapidly

rising crime rate and growing problem with narcotics production

and consumption, but it pales on an international basis. China

has rampant corruption, but what developing country does not?
8

China has problems of truancy, delinquency, illiteracy, and

domestic violence, but these are all international problems

associated with developed and modernizing societies. By the

measures of many developing nations, China has demonstrated basic

social stability and remarkable poverty alleviation, the ability

to feed and deliver essential social services to the population,

and a capacity for unparalleled economic growth.

Many of China's economic problems are shared by other

transitional economies or are not as critical as elsewhere.

China's difficulties of containing unemployment and social unrest

while overhauling a laggard state industrial sector are shared by

Germany and all the nations of the former socialist bloc. Its

inflation rate (12 percent in 1995) is minuscule compared to the

rates witnessed in certain Latin American, Middle Eastern, and

Asian countries in recent years. A ballooning national budget

deficit to approximately $11 billion is unheard of in China, but

would be welcome in the debt-plagued United States or Latin

American states. China's foreign exchange reserves continue to

mount (currently $70 billion), its foreign trade shows a

substantial surplus in its favor, and foreign investment

continues to pour into the country at unprecedented levels.

Externally, for the first time in 150 years, China has no

pressing threat to its national security, and has managed to

pacify its borders and normalize relations with all of its

neighbors.

There are thus reasons not to overemphasize the myriad

difficulties and problems encountered in its transition to a

market economy. The magnitude of economic reforms undertaken in

China over the last 15 years deserve much acclaim. They have

produced the most rapid and dramatic economic transformation in

as short a period of time as the world has ever known, with

surprisingly little socio-political disruption. More than 200

million peasants have been moved off the land, out of

agriculture, and into light industrial manufacturing. As a result

of the growth of township and village enterprises (TVEs), China

has become a major trading nation, and its manufactured exports

flood world consumer markets. The socialist commune system in

agriculture has been dismantled, with the result that annual

grain production has increased by a quarter to an average annual

yield of 435 million metric tons. (Whether this amount is

sufficient to feed a population growing by approximately 20

million per year is another question.) The national economy has

grown at an average of nearly 10 percent over the past 15 years,

while wage increases have generally been able to keep pace with

inflation. The service sector, nascent only a decade ago, now

accounts for almost one-third of the country's Gross Domestic

Product (GDP). The private and collective sectors of the economy

have grown most dramatically, now accounting for roughly half of

GDP. Chinese science and technology have made great strides, as
9

has its military modernization program.

The success of China's reforms are consequently receiving

close study by the former socialist countries in Eastern Europe,

the former Soviet Union, and Asia. The "shock therapy" approach

to economic transition from socialist to market economies (as

advocated by the International Monetary Fund and Harvard

economist Jeffrey Sachs) has produced mixed results--with Poland,

Hungary, and the Czech Republic enjoying softer landings and

easier transitions than Bulgaria, the former East Germany, the

Baltic states, and the former Soviet Union. As a result, China's

more gradualist approach to introducing reforms has attracted

increasing attention from economic planners and specialists in

these countries and abroad.3

The Political Implications of China's Socio-Economic Problems.

Notwithstanding the context and balanced perspective called

for above, an assessment of China's political stability must take

into account the multiple social and economic problems existing

in the country. Politics cannot be isolated from a nation's

society and economy; indeed, as Marx aptly noted, the former

reflects the latter.

While China seems relatively stable at present, it remains a

volatile and unstable country that could suffer social and

political turmoil at any time. Episodic outbreaks of unrest in

cities and countryside provide the sense that social frustrations

run deep and could easily erupt. Industrial action is on the

rise, while rural riots have returned after a 2-year hiatus.

Inflation and widespread corruption, taken together with labor

mobility and rural unemployment, could trigger mass

demonstrations again as in 1989. Widening income disparities is

also a potential catalyst. The declining incentives to engage in

farming--rising cost of inputs, inadequate procurement prices,

IOUs paid for contracted grain, shrinking arable land--and better

opportunities in the commercial sector have all stimulated

countless cases of rural unrest and confrontation with local

authorities. The government's plans to restructure state

industrial enterprises, which will inevitably result in

widespread urban unemployment, will fuel urban discontent. Lossmaking state-owned enterprises (SOEs) have already endured

several years of sporadic industrial action (by some accounts

more than 10,000 incidents in 19944

). The government has thus far

put off the restructuring program of SOEs for fear of the

resulting dislocations and demonstrations, but the price paid has

been a ballooning budget deficit resulting from the rising

subsidies needed to keep the socialist behemoths afloat. The

subsidies, in turn, have impinged upon the tight monetary policy

needed to stem inflation and rationalize the chaotic banking
10

system.

Nearly two-thirds of China's 12,000 large and medium-sized 

state industries lose money, yet they employ approximately 45

million workers and account for more than 50 percent of China's

national industrial output. It is estimated that 70 percent of

factories are unable to meet salaries on a regular basis.5

Keeping them afloat is causing severe budgetary strains on state

coffers. In May 1995 the government announced that the SOEs had

total assets of $300 billion, but that they were also saddled

with a $200 billion debt.6 Chinese leaders have repeatedly stated

their intention to bite the bullet and restructure the SOEs, but

each time they have backed away. In 1995 the government finally

moved from intention to specifics, and proclaimed that 1996 would

be the year in which restructuring begins. Under the planned

reform, several initiatives would be taken. The restructuring

would not be undertaken wholesale, but rather incrementally--so

as to assess progress and stagger the impact. Over a 5-year

period, those firms with the worst losses would be declared

bankrupt, but those that show improvement would be incorporated

and amalgamated with existing collective enterprises (thus

creating vertically-integrated zaibatsu-style conglomerates along

the Japanese model), or auctioned off to foreign concerns. The

bank debts of those that are to be turned into corporations would

be written off and new shares created, backed by government

bonds. The enterprises' housing, hospitals, clinics, schools, and

other affiliated institutions (the major source of subsidies)

would be absorbed by the central and provincial governments. A

social security system is to be readied to compensate redundant

workers. It is questionable whether these plans will work, but,

if they are phased-in, the worst dislocations could be avoided.

Thus, on balance, the Chinese economy remains in a half-way

house between plan and market, with significant distortions left

over from the socialist command economy plaguing further

development. Proceeding with further market reforms will

inevitably accentuate social dislocations and bring pressure to

bear on the political system. It is likely that local governments

will have to bear the brunt of both meeting and repressing social

demands. Given the complex and intertwined environment in which

local governments and local enterprises operate,7

 these demands

will place local governments in very awkward situations. On the

one hand, they will be put into the position of having to

subsidize local industries without adequate capital allocated

from the central banking system. They will also potentially have

to absorb large numbers of unemployed without adequate

infrastructure, housing, or social services. On the other hand,

if demonstrations erupt, local governments will be the first

"decision point" to deploy People's Armed Police riot control

troops. Such locally- garrisoned troops are generally far less

competent or well-equipped for such circumstances.
11

While social instability is to be expected in a country the

size of China and one that has experienced such dramatic 

economic change, the stresses and strains in society and on the

political system have never been greater. Pent-up demands are not

being met. Nor are they given avenues for interest aggregation

and articulation, thus compounding social frustrations. China is

following the well-worn path of other developing countries,

whereby, after reaching a certain level of economic development

and consumer satisfaction, citizens begin to desire improved

social services and public policies. If the political channels

for articulating these demands--or to aggregate these interests

via civic and political non-governmental organizations (NGOs)--

are unavailable or closed off by the state, the experience of

many developing countries has been expression of political

demands through political protest. The weak institutionalization

of the Chinese political system in terms of expressing political

demands and fashioning responsive public policies is a chronic

weakness in the system at present and will only become more so

over time.

China's Current Political Situation.

China faces a series of political challenges in the year

ahead, not the least of which are the various political

implications of managing the social dislocations caused by the

economic reform policies outlined above. Providing social welfare

for over 100 million unemployed; maintaining grain stocks and

feeding China's 1.2 billion people; stemming the tide of internal

migration of between 100-150 million people; bridging the growing

income gaps within and between provinces; and satisfying public

demands for improved housing, education, and environment will all

top the government's agenda. All are difficult feats to

accomplish.

In the coming years China's political problems will largely

be those common to development--but on a magnified scale. In this

regard, China's leaders confront challenges not unlike India,

Indonesia, and other large developing countries. The key will be

the degree to which the political system fashions public and

private institutions that are responsive to public demands. This

will inevitably require a political loosening to permit the

development of civil society and NGOs--something the Communist

Party has thus far feared and refused to permit. It will also

necessitate more accountable government institutions. With the

current level of corruption in China, the Communist Party and

government already face a severe crisis of legitimacy. But if

government institutions at all levels fail to meet growing

demands for social services, tensions will only galvanize and the

regime's legitimacy will be further undermined. Given the
12

Communist Party's zero-sum view of political power and its

leaders' morbid fear of enfranchising other institutional bases

of political mobilization, prognoses for institutional reform are

not good. This, in turn, underlies the fragility of the current

regime and political system.

China's creaking political system will probably "muddle

through" in the near term, but fundamental structural adjustments

are needed. In the immediate future, of course, China's

leadership faces the prospect of political succession to Deng

Xiaoping. It is not certain that Deng will die in 1996, but his

frail condition and one public appearance in 3 years has sparked

much speculation about his condition and the arrangements for his

succession. Deng is thought to be suffering from a variety of

ailments--including pancreatic cancer, diabetes, chronic hearing

loss, and rheumatism.

Deng has arranged his succession as best possible. At the

14th Congress of the Chinese Communist Party in 1992, Deng made a

last effort to overhaul the leadership, removing his opponents

and installing a new cohort. Jiang Zemin was confirmed in the

three top positions of state president, chairman of the Central

Military Commission, and general-secretary of the Chinese

Communist Party. Subsequently Jiang Zemin has consolidated his

grip on power, particularly in the armed forces. In September

1995 Jiang shook up the Central Military Commission, bringing

those loyal to him into the elite body. This shakeup of the High

Command follows 2 years of personnel changes throughout military

apparat at lower levels. Jiang's hand has also been visible in

promoting many former proteges from Shanghai to the inner-circle

of the Politburo and putting his men in charge of key Central

Committee departments. Jiang has also made his mark on the world

stage, and has generally been well received abroad. Premier Li

Peng, the Soviet technocrat and political hardliner, remains No.

2 in the hierarchy. He is not well liked at home or aboard, but

has proven adept at managing the economy and building up a loyal

network of supporters in State Council ministries. Qiao Shi,

Chairman of the National People's Congress (NPC) and the man in

charge of the internal security services, remains an enigmatic

figure. He has breathed some new life into the NPC and has

emerged from the shadows of security work to be a more visible

leader at home and abroad in recent years. Vice-Premier Zhu

Rongji has helped restructure the economy, but has made many

political enemies in the process. Zhu is vulnerable in any

succession struggle, although he is being mentioned as the

leading candidate to succeed Li Peng as Premier when the latter's

term expires in 1997 (Wu Bangguo, Luo Gan, and Li Lanqing are the

other leading contenders). Hu Jintao, the youngest member of the

leadership, was elevated to the Standing Committee of the

Politburo and given the propaganda and ideology portfolio in
13

1992, while Li Ruihuan remains a peripheral member of the ruling

elite.

These are the prime players among active politicians in the

succession. Each has strengths and weaknesses in their bases of

power, but they have an intrinsic interest in hanging together.

However, as in other Communist systems, numerous retired and

second echelon leaders wield important power and influence. My

sense is that Jiang Zemin's status as primes inter pares is

secure at present. If he does not play his hand carefully, he

could be toppled, but, for the time being, his position seems

secure. Jiang's links to the PLA are particularly crucial, and

these too seem fairly solid at present. Jiang is vulnerable,

however, for promoting many of his Shanghai cronies to the

Politburo and top jobs in Beijing. But if he had not done so,

critics would be accusing him of not building his power base. If

Jiang has rivals, they would seem to be Li Peng and Yang

Shangkun. The 87-year-old Yang particularly has scores to settle

with Jiang and retains considerable influence in the armed

forces, while Li Peng has a strong following in both the Party

and State Council and has a good track record on managing

economic affairs. Both will be carefully watching for Jiang to

slip, and will "keep their powder dry" for a showdown.

Thus Deng's arrangements for the succession seem to have

taken root. Indeed, there is no real reason to expect midnight

arrests, purges, or other overt factional struggles following the

patriarch's demise. The leadership remains essentially united and

collectivist--a marked departure from years past. Nonetheless,

occasionally Deng's reform policies come under attack from

remnants of what one may describe as neo-Maoism: those who fear

the erosion of Communist Party hegemony, cultural and ideological

contamination by Western "bourgeois" influences, and the

usurpation of core communist values. Their threat to Deng's

arrangements is not great, but it does point up the fact that

such elements still exist among the Chinese elite, and they can

marshall some influence and work to undermine further reforms.

While Deng's succession arrangements seem well-laid, it must

be recognized that Communist party-states have a notoriously bad

track record of arranging smooth successions. No doubt the

leadership is not as united as it seems, and key cleavages do

exist. But they should not be exaggerated either. The military

High Command will be a crucial--even decisive--player and arbiter

and has a strong interest in ensuring a smooth succession and

social stability. It also has a corporate interest in maintaining

the Communist Party civilians in power, but individuals who are

supportive of the PLA's wishes and demands.

Just because the elite appears relatively united does not
14

mean that the system is stable. Far from it. The entire system of

Communist Party rule in China remains fragile and vulnerable.

When considering post-Deng scenarios, internal upheaval and

fundamental challenges to the system should not be ruled out.

Recognizing the vulnerability of the system is not to overlook

the Party's remaining sources of power--not the least of which is

the military and the capability to maintain power through armed

force if necessary. In the near term, China will not likely

implode or collapse, but will rather continue to "muddle through"

with more of the same: high growth, moderate inflation, growing

corruption, increasing crime and social instability, sporadic

dissidence and demonstrations, and attempts by the authorities to

maintain social and political control.

Implications for the United States.

The above analysis of China's political system and situation

 suggests ten implications for the United States:

1. The U.S. capacity for inducing political change in China

is limited in a direct sense, although contributing to policies

that foster economic reform and openness is the best long-term

assurance of exerting pressures for fundamental political change.

2. The United States should persistently address, through

diplomatic channels, Chinese political trans- gressions and

particularly flagrant abuses of human, religious, civic, and

political rights. When necessary, it should speak out and

publicly criticize such transgressions. It must also, whenever

possible, work with its European and Asian partners and

international organizations in making such representations.

3. The United States must deal with the existing leaders in

China. Recognizing that the leadership is undergoing an elite

succession in which the outcome is not predictable, it is not in

American interests to align closely with a single individual or

faction. The United States should stress its interests in humane

and responsible policies, not individuals. The United States has

a national interest in a stable, developing, and humanely

governed China.

4. Given the potential for social and political unrest in

China, the United States is well-advised not to assume the status

quo--although it is the most likely scenario at present. The U.S.

Government must carefully monitor events in China, and prepare

for a range of contingences--including the potential for more

lethal force against civilians by state security agencies.

5. The United States should encourage the civilian control

of the military in China. It is not in U.S. interests for the PLA
15

to seize political power, as it would undoubtedly be more

repressive internally and assertive externally. At the same time,

it is imperative to expand and deepen direct contacts with the

Chinese military establishment on a variety of levels.

6. It is in the interest of the United States for China to

hold together as a territorial nation-state and political unit.

The disintegration of China would result in widespread social

dislocations, a potentially unprecedented refugee exodus, and

destabilized Asian security.

7. It is in U.S. interests for China to build political

institutions capable of addressing multiple social and public

policy issues confronting its populace. This need is pressing.

8. It is in U.S. interests to encourage political reform,

legal reform, liberalization, and openness in China. Whether the

regime likes it or not, China is becoming socially and

economically more pluralistic--the political and legal systems

need to accommodate and reflect these changes.

9. It is in U.S. interests to build direct ties with

provincial and sub-provincial politicians and governments.

Multiple benefits will accrue, including, hopefully, better

subnational compliance with international agreements. It is also

in U.S. interests to dramatically increase the contact between

the Congress and Chinese politicians at various levels.

10. The United States should contribute, where possible, to

enhancing civil society and non-governmental organizations in

China.

ENDNOTES

1. See, for example, "China After Deng: Ten Scenarios in

Search of Reality," The China Quarterly, March 1996, pp. 153-175.

2. For elaboration, see David Shambaugh, "Losing Control:

The Erosion of State Authority in China," Current History, September 1993, pp. 253-59.

3. For a comparison and expanded discussion of China's

development experience in comparison with other transitional

economies, see "China's Transitional Economy," The China

Quarterly, special issue, December 1995.

4. Citing internal PRC government documents, Willy Wo-Lap

Lam, "Unrest on the Cards," South China Morning Post Weekly, December 16, 1995.

5. Ibid.
16

6. Western estimates place both total SOE assets and debts

at approximately half these amounts.

7. See Jean C. Oi, "The Role of the Local State in China's

Transitional Economy," The China Quarterly, December 1995, pp.

1132-1149.
17

THE CHANGES AND DEVELOPMENT OF

CHINA'S PERIPHERAL SECURITY ENVIRONMENT

AND ITS DEFENSE POLICY

Senior Colonel Wang Zhongchun

The founding of the People's Republic of China was a great

turn in Chinese history. Since then, China brought to an end the

several thousand-year reign of the exploiting class and removed

the long term semi-feudal and semi- colonial state of suffering

from the imperialists' aggression and enslavement; and it came

into a new era of peaceful development as a people's democratic

and socialist republic.

The Peripheral Security Environment of China and Its Defense

Policy During the Cold War Era.

The Chinese people, who suffered from the disaster of more

than 100 years of war and the humiliation from the enemy's

aggression, thirst for peace and also know the value of state

sovereignty. After the founding of the New China, the Chinese

government and Chinese people hoped to rebuild the wounded

homeland in a peaceful external environment, but because the

United States and the Soviet Union posed a military threat to

China at different times, and even simultaneously, during more

than three decades following 1949, China had to devote

substantial resources to prepare for a large-scale defensive war

against a possible invasion from either superpower.

1950s. During the 1950s, because the U.S. Government pursued

a hostile policy of encirclement and isolation against China, the

main point of China's defense policy was to join in alliance with

the Soviet Union to oppose the U.S. policy of containment.

During World War II, China and America were allies fighting

against Japanese aggression. There were useful exchanges between

the government of the liberated areas led by the Chinese

Communist Party and the American Government. U.S. President

Roosevelt, who was both far-sighted and pragmatic, sent a group

of American military observers to Yanan, where the Central

Committee of Communist Party was located. Differences in ideology

did not stand in the way of their cooperation. Many reports were

filed by members of the group, American diplomats, and reporters,

giving truthful accounts of the democratic life in the liberated

areas and communist-established base areas behind enemy lines.

Both these Americans and General Stilwell, Commander of the

China-Burma-India theater of operations, believed that the

communist-led resistance forces constituted the main fighting

force against Japanese aggression. They called on the U.S.

Government to assist and coordinate with these forces in the
18

common war effort. They were also opposed to giving assistance

only to the Kuomintang (KMT) government for fear that the United

States would be dragged into an unpopular and anti-communist

civil war. Many U.S. Government officials, dismayed by the

widespread corruption in the KMT government, viewed the Chinese

Communist Party as a force of progress in China and called for

the establishment of ties with it. Regrettably, with the onset of

the Cold War between the United States and the Soviet Union,

America's China policy became increasingly subjected to

ideological influence. As the Anti-Japanese War came to an end,

the United States turned to support the KMT government in its

launching of a civil war by providing it with money, weapons, and

military advisors. However, the U.S. government's support of the

KMT ended in failure as the KMT government was overthrown by the

Chinese people. The People's Republic of China was founded in

1949.

By 1949, the downfall of the KMT government was imminent.

Mr. Huang Hua, then the head of the Communist Party of China

(CPC) foreign affairs office in Nanjing and the Secretary of

China's Foreign Ministry in the late 1970s, made numerous

contacts with then U.S. Ambassador John Leighton Stuart, who

still remained in Nanjing. Hua passed the message that Stuart was

welcome to visit Beijing and that he would be received by Zhou

Enlai during such a trip, thus indicating that New China was

ready to enter into good relations with the United States.

Unfortunately, the U.S. State Department quickly recalled Stuart.

On June 25, 1950, the Korean civil war broke out. Only 24

hours later, U.S. President Truman sent troops to the war,

ordered the U.S. Seventh Fleet to patrol the Taiwan Straits and

the U.S. 13th Air Force to set up base on Taiwan to prevent the

People's Liberation Army (PLA) from liberating Taiwan Island, and

supported the French Army's aggression in Vietnam. So, obviously,

the United States constituted the main and realistic military

threat to New China from three directions: the Korean Peninsula,

the Taiwan Straits, and Vietnam.

On September 15, 1950, the U.S. troops landed on Inchon,

Korean Peninsula. On September 28, they occupied Seoul, and,

regardless of the last diplomatic efforts of the Chinese

government, they crossed the 38th parallel and marched almost to

the Yalu River, the boundary of China and Korea. Under such

serious circumstances, China had to organize the Chinese People's

Volunteers to cross the Yalu River on October 19 and fight

against the U.S. troops on the Korean Peninsula for nearly 3

years. An armistice was signed on July 27, 1953.

 After the Korean War, the Chinese government hoped that

America would draw a lesson from the war and adopt an attitude of

equality toward China. China took an active diplomatic policy of
19

trying to pursue dialogue with the American government. But the

United States continued pursuing its policy that isolated,

blocked, and encircled China. It threatened the peace and

security of the new Republic and made China's economic

development very difficult. So China had to adopt the one-sided

foreign policy of entering into an alliance with the Soviet Union

and made efforts to break the U.S. policy of blocking and

encircling China. In fact, during this period, besides the direct

military confrontation between their armies, China and the United

States were indirectly in confrontation over the Taiwan Straits

and in the region of Indochina.

1960s. During the 1960s, China faced a military threat

simultaneously posed by two superpowers: the United States and

the Soviet Union. The geographical focus of China's defense

policy began to gradually shift from an East-only orientation to

one split between the East and the North.

The peripheral security circumstances of China became more

serious during the 1960s. First, the good relationship between

China and the Soviet Union ended. Beginning in 1964, the Soviet

Union began sending reinforcements to the boundary separating

China and the Soviet Union, and China and Mongolia. This provoked

numerous incidents. First, Northern China sustained increasing

military pressure from the Soviet Union. Second, the United

States started an undeclared "special" war in Vietnam in 1961 and

made a surprise bombardment on the northern part of Vietnam in

August of 1964. It broadened the Indochina war and threatened

China from the south. Third, the Indian government adopted a

hostile policy toward China, with the support of the Soviet

Union, and the Indian troops continuously operated in the border

area and even invaded China's territory. Fourth, the Kuomintang

authorities on Taiwan also stepped up harassing attacks against

the southeast coastal area of mainland China.

The divergence between China and the Soviet Union began from

the 20th Congress of the Soviet Union Communist Party in 1956. In

1958, the Soviet Union wanted to set up a united naval fleet with

China in order to control China's military, but China refused. In

June 1959, the Soviet Union unilaterally tore up the New National

Defense Technical Agreement between China and the Soviet Union,

and later recalled all Soviet experts and specialists from China.

After 1964, the Soviet government began to increase its troops

along the boundary of China and the Soviet Union, and China and

Mongolia from about 10 divisions to 54 divisions; it also

deployed a growing number of offensive weapons and continuously

conducted military maneuvers aimed at China. In March 1969,

Soviet forces invaded Chinese territory at Zhen Bao Island along

the eastern part of the border. The Chinese frontier troops

mounted a counterattack in self-defense and drove all the Soviet
20

aggressors back. Facing increasingly great military pressure and

an aggressive threat, China had to strengthen its defense forces

in northern China.

At the same time, China gave full support to Vietnam for

opposing the American aggression. From 1965 to the end of 1968,

China sent supporting troops, including air-defense, engineering,

railway-building, mine-sweeping, logistics, and shipping

personnel to Vietnam. During the entire Vietnam War, the Chinese

government gave the Vietnam People's Army a substantial amount of

military weapons, equipment, and other supplies. The total value

added up to $20 billion U.S. dollars.

Along the southwest border, because the Indian Army

continuously encroached on and invaded Chinese territory, China's

frontier force counterattacked from October to November 1962 and

achieved success. In the southeast area, the PLA defeated the

Kuomintang's harassing attack from the land, the sea, and the

air. The PLA also waged an anti-aircraft struggle and shot down

U.S. military reconnaissance aircraft which invaded China's

airspace, to safeguard the security and economic construction of

the Chinese people.

1970s. During this decade, Sino-U.S. relations began to

improve and at last became normalized. Meanwhile, the Soviet

Union continued to build up its military forces along the border

between the Soviet Union and China. As a result, China's defense

policy emphasized preparations for an overall defensive war

against a possible surprise attack from the Soviet Union.

 Toward the end of the 1960s, relations between China

and America began to change. Because of the relative decline of

the United States, the bankruptcy of the policy that the American

government pursued to isolate and encircle China for two decades,

and the strong challenge of the expanded military power of the

Soviet Union, the U.S. Government had to adjust its global

strategy. It decided to reduce its forces in Asia and wanted to

improve relations with China. When U.S. President Richard Nixon

indicated his desire to talk with the Chinese leader, the Chinese

government responded immediately. After Henry Kissinger, Nixon's

special envoy, secretly visited China in 1971, President Nixon

himself visited China during February 20-28, 1972. He seriously

and frankly exchanged opinions about the issues in China-U.S.

relations with then Chinese leaders Mao Zedong and Zhou Enlai.

During this visit, the Chinese and American governments issued

the Shanghai Joint Communique, and both sides hoped for the

normalization of relations between the two countries. China and

the United States formally established diplomatic relations in

January 1979. Also, the United States signed an agreement in

Paris in January 1973 to end the Vietnam War and resume the peace
21

in Vietnam, agreeing to withdraw all its troops and dismantle its

military bases in South Vietnam. The American threat to China's

security diminished significantly.

On the other hand, the Soviet Union went on pursuing the

policy of political pressure and military threat toward China,

keeping about one million troops in the border area of China and

the Soviet Union and Mongolia, and continuously strengthening its

Pacific Fleet. It established a military base in Vietnam, and

encouraged Vietnam to invade and occupy Cambodia. Even further,

the Soviet Union invaded and occupied Afghanistan in 1979, and

stationed troops at the border of China and Afghanistan. So the

Soviet Union constituted the main and real threat to China from

the North, the South, and the West.

China and the Soviet Union shared a border 7,000 kilometers

long; adding the border of Mongolia, the total length of shared

border was 12,000 kilometers. It was very possible for the Soviet

Union to concentrate forces in advance, and to carry out a

surprise strategic attack against China from different

directions. The Pacific Fleet of the Soviet Union could press

toward the Yellow Sea and the East China Sea directly from the

Sea of Japan and blockade or land troops in China. So China kept

on strengthening the defense of the northern frontier and sped up

preparation for a defensive war against the Soviet Union. During

this period, Mao Zedong, the Chinese leader, put forward the

strategic thinking of "One Front," which was to organize an

international united front running from Japan, through China,

Pakistan, Turkey, the Middle East, and Europe to America in order

to counter the expansion of the Soviet Union and to prevent the

outbreak of world war.

The Strategic Shift in China's Defense Policy in the 1980s.

1980s. China made an assessment that even though the

competition between the United States and the USSR was fierce,

the world situation on the whole would move toward relaxation.

Thus, China made a strategic change in its defense policy from

the guiding principle of preparation for an early and large-scale

defensive war, to one based on the gradual modernization of the

country's defense in a relatively peaceful era.

In the late 1970s, China reassessed the world situation and

the trend of development at that time and held that a world war

was not likely to occur and that peace and development are the

top priorities on the agenda of the world. Then it put forward

the general state strategy of making economic development the

central task. The Third Plenary Session of the Eleventh Central

Committee of the Communist Party of China decided in December

1978 to shift the focus of the work of the whole country onto
22

economic development in three strategic stages. The first stage

was to double the gross national product (GNP) of 1980 by 1990

and to solve the problem of food and clothing for the people. The

second stage was to quadruple the GNP of 1980 by the end of this

century, thus reaching a higher level for the people's

livelihood. The third stage was to reach the level of mediumdeveloped countries in terms of per capita GNP by the middle of

the next century, thus enabling the people to enjoy a relatively

well-to-do life. After that, China will continue going forward to

develop the country into a more wealthy, democratic, civilized,

and modern society.

With the shift in the focus of the work of the state, the

guiding principles of China's defense and armed forces

development have also started to make a strategic change. In the

enlarged session of the Central Military Commission held in May

1985, Deng Xiaoping, then-Chairman of the Central Military

Commission, pointed out that, under the new historical

conditions, it was imperative to make a correct assessment of the

world situation and resolutely shift the guiding principles for

defense and armed forces development. To sum it up in one

sentence, it was aimed at changing a guiding principle which had

long been based on preparations for an early and large-scale

nuclear war to one that is based on development in a peaceful

era.

This decision was based mainly on three considerations.

First, concerning the analysis of the then-international

situation, China's assessment was that even though the

competition between the United States and the Soviet Union was

fierce, and on the surface the East-West contradictions,

particularly with respect to the INF struggle, were becoming

acute, the tension would not continue. The world situation would

move toward relaxation, and the possibilities of a new world war

or direct military confrontation between the two superpowers

would be reduced. It was based on such assessment that China

foresaw the approach of a long-term peaceful environment which

would render it unnecessary to mobilize the entire population to

resist a foreign invasion.

Second, China acquired a deeper understanding of the

importance of economic security within state security. It

realized that, without economic development, there would be no

final guarantee for state security. And therefore, the meeting of

the Central Military Commission reconfirmed a decision taken by

the government in 1978 to take economic development as the

overriding target for the whole nation, and that defense

development must serve the need of economic development. The

readjustment of the guiding principles of the defense policy is

reflected in the military field.
23

Third, in line with readjusting the guiding principles of

the defense policy is the need of building a modern and regular

army. In view of the above-mentioned two points, it is not only

necessary but also possible for the armed forces to do some

concrete work to develop national defense by proceeding from the

long-term mission of the army instead of taking temporary and

expedient measures to meet the immediate threat.

 To effect the strategic change in the guiding principles of

defense policy, the Chinese government and its armed forces

adopted the following measures:

The demobilization of the People's Liberation Army. On

October 6, 1985, China's Xinhua News Agency reported that China

had decided to reduce the its military by one million personnel.

In the ensuing 2 years, a number of corps, divisions, and

regiments which were constructed in war time, earning numerous

war merits and great fame, were inactivated (together with their

designations), helping to reduce the total figure of the PLA from

4 million to 3 million. This unilateral disarmament before the

end of the Cold War indicated that China is willing to make

contributions to world peace and has done so with its own

concrete actions.

Streamlining and Restructuring. All the similar staff

departments and overlapping institutions at the level of General

Headquarters were disestablished or incorporated, and the rating

of some units was downgraded. The number of Military Area

Commands (MAC) was cut from 11 to 7. Some academies in the Army,

Navy, and Air Force were closed or incorporated. A number of

combined army groups were newly established. Some troops for

civil guard duties were handed over to the control of the civil

security departments and were renamed as People's Armed Police

(PAP). The county-level People's Armed Departments were

incorporated into civilian establishments.

Establishing a new national defense system of combining

standing forces with reserve forces. The newly organized reserveduty divisions and regiments were conferred with relevant

designations and army flags, formally lining up into the

establishment of PLA. A new system for reserve-duty officers was

also instituted, and efforts were made to bolster the defense

reserve strength. The national mobilization regulations,

statutes, and system were newly enacted and improved, aiming at

combining a crack standing force with a powerful reserve force.

Emphasis on education and training. It was ruled that

education and training should be regarded as the centerpiece for

the daily work of field troops. A training system categorized

into high, medium, and rudimentary levels and two long-term and

short-term training forms were put into force for commanders so
24

as to qualify them for their posts in terms of political theory,

knowledge of science, and battle preparing and commanding

capability.

After the strategic readjustment of China's defense policy

was made, the PLA has also converted great quantities of its

military facilities for civilian use or for dual purposes. The

Air Force and the Navy have provided large numbers of airfields

and docks for civilian use. The army has opened more than 300

special-purpose military railroads to society and has provided

257 military long-distance telephone lines to government

institutions. The defense-related industrial departments have

also converted on a large scale to manufacturing civilian

products and have played their roles in economic development.

China's Security Environment and Defense Policy in the Post-Cold

War Era.

1990s. During the post-Cold War era, China has even more

firmly pursued its strategic change of the mid-1980s and has

continued pursuing a defense policy and military strategy for

peace. China now enjoys the best security environment since the

founding of the PRC. China will devote every effort to maintain

the peace and the stability in Asia-Pacific region in order to

develop its economy.

After the strategic readjustment of China's defense policy

of the mid-1980s, profound global changes have taken place. The

Soviet Union is no more. The Cold War has ended. The world

bipolar structure has collapsed, evolving rapidly towards

multipolarity. However, as the new balance in the international

area is short of formation, the transitional period may run

through the whole of the 1990s or even longer, which, on its own,

is likely to complicate further the world situation due to its

overextended duration. On one hand, the Cold War pattern leaves

behind strong imprints and interactions. On the other hand, the

multipolarization and unbalanced development of world economic,

political, and military forces bring forth a series of new

problems, giving rise to a number of new characteristics in the

present world strategic situation. This phenomenon not only

offers historic opportunity to China, which is now fully absorbed

in economic development, but also entails stern challenges. Yet,

by and large, opportunities outnumber challenges.

First, the world strategic situation continues to be more

relaxed, and the possibility of a global war can be basically

ruled out. This is due to the interaction of various sources:

• The major powers have for the first time since the end of

World War II done away with the relationship of direct imminent
25

military antagonism. Both the United States and the Soviet Union,

two pillars bolstering two blocks of the East and West which were

on antagonistic terms for almost 45 years, were reduced to

decline for the one and disintegration for the other. Russia, the

main successor of the former Soviet Union, has, from the Chinese

perspective, adopted a pro-West foreign policy. It can be argued

that U.S. power has declined in the wake of the Gulf War.

• One after another, the major powers have adjusted their

military strategies, aiming now at fighting regional conflicts or

local wars rather than large-scale wars as they did in the past.

In March 1992, the United States formally proposed its regional

defense strategy, the centerpiece of which was to shift its focus

of defense from the former Soviet Union and the Warsaw Pact to

regional crises and middle-to-low intensity conflicts. Russia,

for its part, emphasized in its new military strategic conception

preparation for local wars or armed conflicts with modern conventional weapons. In addition, countries like Great Britain,

France, and Japan all set their focus of war strategy upon

preparation for regional conflicts.

• Breakthroughs have been made in negotiations on arms

control and disarmament. In the field of nuclear disarmament,

START II was signed by the presidents of the United States and

Russia in January 1993, and the Nuclear Non-Proliferation Treaty

was indefinitely extended in 1995. Regarding conventional disarmament, an agreement on the reduction of conventional weapons

in Europe was signed by 29 countries of NATO, the former Soviet

Union, and East Europe in June 1992. To echo these actions, many

countries unilaterally put into force their disarmament plans.

• The growing integration of the world economy constrains

the outbreak of world war. The growing interchanges,

interactions, and intimacy of the world economy have fostered a

competitive community which interweaves the interests of

different countries.

 Second, China has shaken off the direct and imminent

military posture of the superpowers so that it now is not

confronted with the realistic threat of a large-scale attack.

After many years of devoted efforts, China also has established

normal and friendly relations with all its peripheral neighboring

countries. China's relations with Japan are sound and stable, and

it is China's hope that the two countries will go on maintaining

good relations for generations. China has resumed its normal

relations with Russia, Vietnam, Laos, and Mongolia, and has

extended exchanges and cooperation with them. Sino-Indian

relations have been improved. China's traditional and friendly

relations with the Democratic People's Republic of Korea,

Pakistan, and Nepal have been further developed. It has

established diplomatic relations with the Republic of Korea and
26

the republics of the Commonwealth of Independent States and has

resumed diplomatic relations with Indonesia, resulting in many

friendly exchanges between China and these countries. Good

progress has also been made in China's relations with the

Association of Southeast Asian Nations. Generally speaking, China

has made relatively large achievements in its policy of good

neighborliness.

Third, the world situation continues to be more relaxed, and

China has been enjoying the best period in its peripheral

security environment since the founding of the Republic. However,

the world today is in a period of change in strategic structure.

The international situation is complicated and volatile, and

there are many uncertainties. Hegemony and power politics still

exist, and some western powers still intervene and meddle in

China's internal affairs--even on issues concerning China's

fundamental interests. So China should provide against danger

while living in peace; a country cannot do without defense.

Defense modernization is not to be overlooked and should be

correspondingly developed step-by-step on the basis of economic

development (so as to guard against any change in the future

security situation).

 In the new historical period after the Cold War, China's

defense policy and armed force development have the following

characteristics:

(1) Defense modernization must be subjected to and serve the

nation's general strategy of making economic development the

central task, and developing the country into a rich, democratic,

civilized, and modern socialist country through the three-stage

modernization process which was decided in 1978. By now, the

Chinese people have completed the first stage (to double the GNP

of 1980 by 1990) ahead of time, and the 1990s will be a critical

period for China to realize the second stage (redoubling the GNP

of 1990 by the end of this century). Deng Xiaoping, the Chinese

senior leader, pointed out on many occasions that China will not

alter within 100 years, insisting on the economic drive as the

central task of the whole nation. Jiang Zemin, the President of

China, emphasized in his Political Report for the 14th Congress

of the Chinese Communist Party that the most important thing for

adhering to the Party's basic line is to insist on taking the

economic drive as the center, and that "this center cannot be

shaken in any case unless the enemy launches a large-scale

invasion against us." The defense policy has to be subjected to

and serve the party's basic line and strategy of national

economic development. To "be subjected" means that the national

defense development has to be in a less important and subordinate

position, proper size and speed have to be kept for the

development of national defense, and it cannot spend more funds

and national resources and must not harm the general interest of
27

national economic development. To "serve" means that it must

provide the security support for the country's economic

development. Additionally, departments of defense, science and

technology, and the defense industry must actively make

contributions to national economic development by pursuing

principles of peace-war combination and civilian military

compatibility.

(2) China's defense policy is purely self-defensive in

nature and is not directed at any specific country. The peaceful

settlement of international disputes and refraining from the use

of force or the threat of using force constitute the basic

principles of China's foreign policy with regard to conflict

resolution. In recent years China has established normal and

amicable relations with all its neighboring countries. China has

already solved long-standing border disputes with some countries

through peaceful negotiation and is in the process of settling

further border problems with other countries. China and India

took steps to reach agreement on some confidence-building

measures and to reduce tension along their border in 1993. China

and Russia initialed an accord on settling boundary disputes and

agreed to stop targeting their nuclear weapons at one another in

1994. China and Vietnam created a commission to settle their

territorial disputes, including territorial waters. With regard

to the Spratly Islands issue, China has put forward the principle

of "shelving the disputes and conducting joint development."

China's positive attitudes are beneficial to avoiding new 

conflicts in the region and to solving the problem through

peaceful means, winning appreciation from various quarters. This

is not a tactical move, but China's long-term national strategic

policy.

(3) The sole aim of China's defense policy is to maintain

sovereignty and territorial integrity, while ensuring a stable

security environment for domestic development. China's military

strategy of "active defense" is based on guiding a territorial

defensive operation. In effect, the fighting task of the PLA is

to counter and eventually win a military conflict or a local war

within the border area in case of foreign invasion. China will

not invade other countries forever and will not provoke a war.

But China will not absolutely allow other countries to violate

its own territorial integrity and sovereignty. "We will not

attack unless we are attacked; if we are attacked, we will

certainly counterattack." Once the enemy launches an aggressive

war, the Chinese people and army will be bound to rise in selfdefense, and will take effective and flexible operational forms

for fighting against the invaders until the war is won, thus

resuming and rebuilding peace.

(4) China does not prepare to establish any force-projection

capability overseas, does not join in any military alliance, and
28

does not seek spheres of influence; these are important

distinguishing qualitites of China's armed forces development and

defense policy. China has no military bases overseas or any

active-duty soldiers stationed abroad. China is not interested in

being involved in an arms race with other powers and will never

engage in military expansion. China has never sought hegemony in

the past, does not at present, and will not in the future.

(5) The overall modernization objective of the PLA is to

develop the army into one that is leaner, better equipped and

better trained, with the capability to win a local war under

modern fighting conditions. In this respect, Jiang Zemin, Central

Secretary of the CPC and Chairman of Central Military Commission,

pointed out at the 14th Party's Congress that:

In the light of Deng Xiaoping's ideas on the armybuilding in the new period, we must develop the

People's Liberation Army into a powerful, modern, and

regularized revolutionary army, and enhance our

strength of national defense, thus providing our

reforms, opening to the outside world an economic drive

with strong security support. The PLA must take the

modernization drive as the center, attach high

importance to its qualitative developing and strengthen

its combat power comprehensively so as to meet the need

of modern warfare and better shoulder the sacred task

of safeguarding state sovereignty of our land, air, and

sea territories and maritime right, and tasks of

maintaining reunification and security of our

motherland.

And

the PLA must surely attach strategic importance to its

education and training, so as to raise the quality of

all officers and soldiers comprehensively and help the

army strive for qualified political consciousness,

perfect mastery of military skill, fine style of

working and fighting, strict disciplines, and powerful

logistic support. And it also should attach great

importance to researches of defense science and

technology and to development of defense industry, thus

gradually improving its weapons and equipment.

So we can see from Jiang Zemin's speech that upgrading weapons,

equipment, and military technology, and improving the quality of

army personnel while developing military thought and doctrine are

the main tasks of China's armed forces modernization.

(6) China's defense modernization will be a gradual and

long-term process due to the limitation of China's defense
29

expenditure. In recent years, there have been many discussions

over the level of China's defense expenditure. Although in recent

years China's military spending has increased to some extent, the

increase was partly used to offset the debts accumulated in

previous years because of unduly low military spending. It also

compensated for the loss of spending power caused by high

inflation. For example, China's defense expenditure was 63

billion yuan which was equivalent to US$7.4 billion in 1995.

While defense expenditures increased by 14 percent over the

spending in 1994, the increase was actually zero due to a 15

percent inflation rate for this period. In terms of GNP, China's

defense expenditure is declining in proportion to GNP, from 5.56

percent of GNP in 1979 to 1.2 percent in 1995. At the same time,

China's defense expenditure is also declining in proportion to

the overall government expenditure from 17.4 percent in 1979 to 8

percent in 1995. These figures fully illustrate that China's

defense spending is at a very low level with respect to GNP and

overall expenditures.

China's arms sales have also aroused suspicions. The fact is

that (1) China's arms exports are very limited, and (2) the

Chinese departments which manufacture weapons belong to the State

Council, so the income of arms sales is at the government's

disposal. In late 1979, China's Defense Industry, which includes

nuclear, electronics, shipbuilding, aviation, aerospace, and

weaponry manufacturing, began its first step toward

demilitarizing. During the past decade, China's defense industry

has switched from a formerly military-oriented monorail to its

current dual track system of serving both civil and military

production, and the products for civil use have increased 20

percent every year. At present, more than 70 percent of the

output value of the defense enterprises are civil products. Twothirds of defense enterprises now produce purely civilian

products. What some have said about income from arms sales and

military-produced civil products being used for military spending

is totally wrong.

(7) China's defense modernization is mainly based on its own

efforts of self-reliance. China is a developing country with a

large territory and population. The PLA's weapons and equipment

are of low quality. China cannot build up its national defense by

relying on purchasing new weapons abroad. It is true that China

has purchased 26 SU-27 long-range fighters and 5 SA-10 Grumble

anti-missile systems for the Air Force, and a few new submarines

for the Navy. However, this is relatively modest when compared to

the 150 F-16s and 60 Mirage 2000s bought by Taiwan, and the 160

F-15s purchased by Japan. The argument that "China has imported

large quantities of foreign weaponry and equipment" is much

exaggerated. To improve weapons and equipment, the PLA will

depend mainly on constantly rising levels of research and

development, along with manufacturing technology of industry.
30

Such improvement can only be carried out gradually with the

growth of national economic power, while the introduction of

advanced technology and new equipment is limited in scale and is

only supplementary.

(8) China has actively participated in international arms

control and disarmament negotiations. Since the 1980s, China has

signed the Biological Weapons Convention (BWC), the Nuclear NonProliferation Treaty (NPT), and the Chemical Weapons Convention

(CWC). China also has committed itself to implementing the

Missile Technology Control Regime (MTCR) and participated in the

U.N. Arms Transfer Register. China has taken a serious and

conscientious attitude in the U.N. Security Council, has

supported peacekeeping operations, which uphold and preserve

justice, and shows respect for the Charter of the United Nations

as well as international law. It has also dispatched officers to

serve as U.N. military observers.

China will firmly and unswervingly implement the national

general strategy of making economic development the overriding

task, and will adhere to seeking a peaceful and stable external

environment. China's defense policy will also adhere to this

general strategic orientation. China has made and will continue

to make a big contribution to the peace and stability in the

Asia-Pacific region and to the world at large.
U.S. ARMY WAR COLLEGE

Major General Richard A. Chilcoat

Commandant

*****

STRATEGIC STUDIES INSTITUTE

Director

Colonel Richard H. Witherspoon

Director of Research

Dr. Earl H. Tilford, Jr.

Authors

Professor David Shambaugh

Senior Colonel Wang Zhongchun

Director of Publications and Production

Ms. Marianne P. Cowling

Secretaries

Ms. Rita A. Rummel

Mrs. Kay L. Williams

*****

Composition

Mrs. Mary Jane Semple

Cover Artist

Mr. James E. Kistler