(March 2007, Department of Planning)
I. Completion of three-stage military preparations against Taiwan; cross-strait military balance continues to shift in China's favor
1. Three-stage military preparations against Taiwan: Intelligence information shows that China will complete its preparations for establishing “contingency-response combat capabilities” before 2007, building up its “combat capabilities for large-scale military engagement” before 2010, and ensuring “victory in a decisive battle” before 2015.
2. Growing military imbalance in the Taiwan Strait: According to the “2006 Annual Report on the Military Power of the People’s Republic of China” published by the United States Department of Defense (DOD), China has been developing its military capability faster than the pace of Taiwan's military procurement, resulting in a growing cross-strait military imbalance in China's favor. An analysis by the Integrated Assessment Office of Taiwan's Ministry of National Defense also indicated that if Taiwan is unable to smoothly implement its three major military procurement projects, China will enjoy a nearly three-to-one advantage in total combat capabilities over Taiwan at some point between 2020 and 2035. This will give China a military edge in an attack against Taiwan and an upper hand that will further induce China to resolve the Taiwan issue through military action.
II. Treating Taiwan as the main hypothetical enemy, and increasing deployment of missiles and submarines against Taiwan
1. One-third of China's military force is deployed in the Taiwan Strait area: The U.S. Defense Department’s “2006 Annual Report on the Military Power of the People's Republic of China” indicated that China's military deployment has still been based on the treatment of Taiwan as the greatest hypothetical enemy. China has deployed about one-third of its forces in the Taiwan Strait area with half of its naval force directed against Taiwan.
2. Nearly 1,000 missiles and 16 submarines are deployed against Taiwan: China's “anti-separation law” (ASL) emphasizes that, if necessary, China will attack Taiwan by “non-peaceful” means. During the two years after the passage of the ASL, China continually strengthened military preparations in this regard. For example, the number of missiles that China has deployed along its southeast coast has increased from over 200 in 2000 to 988 in 2006 (including 800 tactical guided missiles and 108 DH-10 cruise missiles). The current figure is likely to exceed 1,000, representing a nearly fivefold increase since 2000. The number of missiles deployed is increasing at the rapid pace of 100 to 120 missiles each year. These missiles have ranges sufficient to strike anywhere in Taiwan, posing a serious threat to the life and property of the Taiwanese people. Furthermore, with a force of about 50 submarines, China intends to deploy 16 submarines (some being under construction) against Taiwan with a view to imposing a blockade on Taiwan at any time, placing the Taiwan Strait and all of Southeast Asia under the shadow of war.
III. Releasing information on China’s own military exercises and upgrading of military capabilities to launch media and psychological warfares against Taiwan
1. Military exercises: In mid-October 2006, China's Jinan Military Region conducted the “Queshan—2006 Military Drill” in Henan Province. The drill pitted a blue army against a red army and included mountain warfare exercises heavily directed against Taiwan. Although the exercise ended with the defeat of the Chinese (red) forces, it showed that China's military exercises are becoming increasingly pragmatic. The exercise was also widely covered with photos and reports by China's official media (Xinhua News Agency, People.com, etc.). Moreover, in recent years China's military has changed its normal stance by actively allowing media coverage of the Dongshan Island, China-Russia, and Beijian military exercises, intending to use news media reports to intimidate the Taiwanese people.
2. Military expansion and buildup: China has frequently made use of heavy media coverage recently to report on its advanced weapons production and warfare capabilities. For example, such reports have sent out messages that China had put into service J-10 fighters, had acquired aircraft carrier manufacturing ability, and that China will showcase sophisticated deterrent weapons at an appropriate time. All of these signs and operational methods prove these to be attempts by China through military means to conduct media and psychological warfares against Taiwan and intimidate what China considers to be “Taiwan independence separatist forces.”
IV. Rapid expansion of military spending over successive years, with an alarming hidden budget
1. Concern of other countries over regional security: Although China declares that its diplomatic policy is aimed at pursuing a road of “peaceful development,” its actual deeds completely run counter to its professed position. In recent years, China has continuously expanded military spending, exacerbating the cross-strait military imbalance and forming a military threat that is also of deep concern to other countries. The U.S. Defense Department’s “2006 Annual Report on the Military Power of the People's Republic of China” and Japan's “Defense of Japan 2006 White Paper” both clearly mentioned that China's military buildup will lead to regional and global security concerns. However, China has not to date made a rational explanation, and it has even strongly demanded that other countries not meddle in its affairs.
2. Opaque national defense budget, with actual military spending about three to four times higher than the official figure: China has been increasing its annual national defense budget at a double-digit pace over the past 19 years. China's officially announced defense budget in 2006 was US$35.4 billion (283.8 billion renminbi). Since China's military spending is highly opaque, related experts and organizations all believe that the actual figure is three to four times higher than the officially released figure. For example, according to the report on “The Military Balance 2007” published by the U.K.-based International Institute for Strategic Studies (IISS) in January 2007, it was noted that in 2006, China's actual defense budget is as high as US$122 billion. U.S. officials also estimate that China's actual annual defense spending is between US$80 billion and US$115 billion.
3. National defense budget surges by 17.8% in 2007: In March 2007, a spokesperson of China's National People's Congress stated that China's national defense budget in 2007 is 350.9 billion renminbi (about US$45 billion), an increase of 53 billion renminbi as compared to 2006 and representing a high growth rate of 17.8%.
4. China ranks among the top-ranking countries in terms of its rapid escalation of military spending and capabilities: According to U.S. official estimates, China has the second-highest military spending in the world after the United States if its hidden budgets are also calculated. In 2006, the U.S. Defense Department issued its “2006 Quadrennial Defense Review Report” (QDRR) in which China was ranked the world’s third-largest military power in terms of its overall military capabilities. China was also ranked the fourth-strongest military power in the world in a global military assessment recently conducted by the Japanese media.
V. Test launch of anti-satellite intercept ballistic missile violates China’s so-called commitment to “peaceful development”
In addition to worldwide concerns over China's huge and opaque defense budget, the Chinese military test-fired an “anti-satellite intercept ballistic missile” in January 2007, destroying the global consensus on the peaceful use of space and fully violating China's so-called commitment to “peaceful development.” This move has raised skepticism in the U.S., Japan, European Union and other countries that China is engaging in and restarting a space arms race (In response to China's action, India has decided to establish a space command and actively develop its space military force to counter China). During a visit to Australia in February 2007, U.S. Vice President Dick Cheney indicated that China's anti-satellite missile test and continued rapid military buildup are unconstructive and inconsistent with a so-called “peaceful rise.”