Asia Looks Seaward

and equipment. Efforts are being made to improve maritime battlefield capabilities, with

emphasis on the construction of relevant facilities for new equipment and the develop-

ment of combat support capabilities. The Navy is endeavoring to build mobile maritime

troops capable of conducting operations under conditions of informationization, and

strengthen its overall capabilities of operations in coastal waters, joint operations and

integrated maritime support. Efforts are being made to improve and reform training

programs and methods to intensify training in joint integrated maritime operations.

The Navy is enhancing research into the theory of naval operations and exploring the

strategy and tactics of maritime people’s war under modern conditions.^16

DoD Report Summary

The U.S. Department of Defense’s 2006 annual report to Congress on the

Military Power of the People’s Republic of Chinaraises concerns about Beijing’s lack

of transparency concerning the purposes and future dimensions of PLA develop-

ment. It further states that

Securing adequate supplies of resources and materials has become a major driver of

Chinese foreign policy....China has also strengthened ties to countries that are located

astride key maritime transit routes (e.g., the Straits of Malacca). PRC strategists have

discussed the vulnerability of China’s access to international waterways....China is

investing in maritime surface and sub-surface weapons systems that could serve as the

basis for a force capable of power projection to secure vital sea lines of communication

and/or key geostrategic terrain.^17

The marked disparity between these Chinese and U.S. assessments of China’s

military modernization raises pressing questions concerning the extent to

which China possesses and will seek to develop naval capabilities, particularly for

scenarios beyond Taiwan—for instance, to secure the nation’s substantial, rapidly

growing seaborne energy imports.

Force Structure

Budget

Annual increases in China’s official defense budget averaged 15 percent

between 1990 and 2005.^18 China’s official defense budget has expanded fourfold

in inflation-adjusted terms since 1997.^19 Expenditures on equipment (which

includes procurement, and, to some extent, research and development) have

quadrupled in inflation-adjusted terms, from $3.1 billion in 1997 to $12.3

billion in 2006.^20 The official 2006 budget of $35billion represented a 12.6

percent increase over 2005 and a 100 percent increase over the 2000 figure.

According to Jiang Enzhu, spokesman for the Fifth Session of China’s Tenth

National People’s Congress, ‘‘China’s defense budget for 2007 is expected to hit

350.921 billion yuan (44.94 billion U.S. dollars), 17.8 percent higher than that

74 Asia Looks Seaward