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China Reform Monitor - No. 688

PLA buildup ruffles Pentagon feathers;
Communist Party hijacked... by capitalists

Edited by Ilan Berman
April 1, 2008

[Beginning with our next issue, AFPC Fellow in Asia Studies Joshua Eisenman will return to the helm of the China Reform Monitor.]

February 29:

A much-anticipated U.S.-China military “hotline” two years in the making has been given the green light by a group of American and Chinese defense officials in Shanghai. In order to “reduce the risk of misunderstanding” the two militaries – in closer contact than ever in the shrinking Pacific – will now have direct access to each other’s top brass in the event of a crisis. According to the Press Trust of India, the Shanghai meeting also generated a spin-off agreement opening cooperation between the two countries’ military archives in the hopes of recovering missing US military personnel from the Korean War.

March 3:

In the past, the Pentagon’s congressionally-mandated annual report on China’s military power has raised alarm about China’s rapidly expanding military budget and its interest in unconventional and asymmetric weaponry. This year’s report is no different. Citing the new study, CNN notes that China’s military last year was estimated at between $97 and $139 billion – several times higher than Beijing’s own official numbers would indicate. Most alarming for the Pentagon has been a presumed expansion in the cyber-warfare budget, reflected in a string of “intrusions” into sensitive military computer networks in 2007. China’s January 2007 anti-satellite test, and its dedication to improving its nuclear-capable intercontinental ballistic missiles, also top the DoD’s list of concerns.

Much of China’s military modernization appears guided by the potential for a conflict over Taiwan – and the possibility of having to deter a U.S. intervention in the event of such hostilities. Some changes, however, are more fundamental and long-term in nature: China is undertaking a “comprehensive transformation from a mass army designed for protracted wars of attrition on its territory to one capable of fighting and winning short-duration, high-intensity conflicts along its periphery and against high-tech adversaries,” the study says. This transformation, according to the report, would give China “the greatest potential to compete militarily with the [U.S.]… that could, over time, offset traditional U.S. military advantages.”

March 16:

Scholars at China’s top think tanks and universities are convinced that the foreign policy of this communist country has been “hijacked” by an old foe: Chinese capitalists. According to the Financial Times, respected officials in Beijing have begun leveling charges at Chinese multinationals, dismayed by the firms’ sole focus on “economic considerations.” Zhu Feng of the Centre for International and Strategic Studies at Peking University finds the behavior of giant firms such as PetroChina “worrisome.” “The state-owned companies have become very powerful interest groups,” he says. “They even hijacked China’s foreign policy in Sudan.”

March 17:

Much of the world is familiar with China’s early-March crackdown on Tibetan protesters, the aftermath of which continues to reverberate in the international media. Less well known, however, is the degree to which the heavy hand of Chinese authorities has spread to the Internet, as Beijing enforces a de facto “black out” of the unrest in Tibet. United Press International reports the popular video-sharing website YouTube was officially blocked by Chinese authorities during the crisis, as were similar China-based websites such as and The popularity of such websites has alarmed Beijing and in recent months some fifty sites were ordered by the State Administration of Radio Film and Television to sign a “self-discipline agreement.”

Related Categories: North America; Military; China; Public Diplomacy; International Economy

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