Afghanistan Primer by fjhuangjun

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             People’s Republic of China (PRC) Primer


                                            Answering tomorrow’s questions today!

               Prepared by: Virtual Information Center, (808)-477-3661 ext. 2500 on 28 May 2004
                                         Updated on: 02 April 2007

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

                                   People’s Republic of China (PRC) Primer
                                                      Executive Summary
1. Assessment: The People‟s Republic of China (PRC) has become a major economic player on the
international scene and, based on this foundation, become a major political factor on a global scale. Looking
for trade deals, resources and general political relationships, Beijing has exerted itself mainly in Europe, Africa,
Southeast Asia and Oceania. In Beijing‟s dealings with other countries, it advocates its “one China” policy and
its multipolar world philosophy. Despite its growing economic strength, it faces several internal issues--the
continuing Taiwan dispute, Hong Kong‟s constituency demanding greater democracy under the “One China,
Two Systems” policy, disparate wealth between costal and inland regions, rural unemployment, ethnic unrest,
corruption, and pollution. Militarily, China has vastly increased its defense expenditures, looking to downscale,
professionalize, and modernize its forces while handling its military relations independently; conducting
military exchanges and cooperation with other countries on the basis of the Five Principles of Peaceful
2. Background: For centuries China stood as a leading civilization, outpacing the rest of the world in the arts
and sciences. But in the 19th and early 20th centuries, China was beset by civil unrest, major famines, military
defeats, and foreign occupation. After World War II, the Communists under Mao Zedong established a
dictatorship that, while ensuring China's sovereignty, imposed strict controls over everyday life and cost the
lives of tens of millions of people. After 1978, his successor Deng Xiaoping gradually introduced market-
oriented reforms and decentralized economic decision-making. The Chinese leadership then began moving the
economy from a sluggish, Soviet-style centrally planned economy to a more market-oriented system. Political
controls remain tight while economic controls continue to be relaxed.
3. Discussion: Allegedly still a communist country with the socialist philosophy reaffirmed by President Hu
Jintao as the model for the future, the People‟s Republic of China (PRC) has embraced a robust capitalist
economic theory and transformed itself into the world‟s fourth largest economy. In recent years, Chinese leaders
have served diplomacy to all parts of the globe, and its moves to play a greater regional leadership role in Asia
and the success of its "charm offensive" in Southeast Asia are examples of a new, more mature diplomacy.
Internally, this economic growth has created a growing income disparity between wealthy coastal provinces and
poorer inland regions, rural unemployment, and encouraged high levels of corruption, all of which undermine the
authority of the Chinese Communist Party (CCP) and fragment the unity of China. This is further exacerbated by
the presence of restive outlying provinces such as Tibet and Xinjiang, with continuing separatist movements, and
increasing demands for democracy in Hong Kong. Together these concerns present a number of decentralizing
forces that could lead to widespread civil unrest. The possibility of such unrest escalating rapidly was amply
proven by the Cultural Revolution of the late 1960s and the Tiananmen Square massacre. Externally, as the
country has become an economic giant it has also gained confidence within international politics. China is
attempting to develop as the regional hegemon, expanding its sphere of influence and vying with India and Japan
for dominance in Southeast and East Asia. Although China's territory is not at risk, given its burgeoning military
capabilities and secure, second-strike nuclear capability, the prospect of military tension remains. This is
particularly true owing to the long-standing Chinese claim to Taiwan. The U.S. alliance with Taiwan and Taipei‟s
increasingly pro-independence rhetoric poses Beijing's greatest and most immediate external threat. With a long
history of territorial disputes, clashes with Russia and India have greatly diminished over recent years, and China
continues to claim territory in the South and East China Seas, in particular the potentially resource-rich Spratly
and Diaoyu (Senkaku) Islands. With a burgeoning space program, China‟s recent Anti-satellite (ASAT) test has
alarmed the international community, bringing into question Beijing‟s portended claims for the peaceful
development of space, while making Beijing one of three countries to have that proven capability.
4. Prepared by: The Virtual Information Center, 808-477-3661 ext. 2500 on 02 April 2007

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

                                         People’s Republic of China (PRC) Primer
                                                                     Table of Contents
       Executive Summary ..........................................................................................................................2
       1. Introduction ..................................................................................................................................5
          A. Overview ................................................................................................................................5
          B. History ....................................................................................................................................5
       2. Travel Information ....................................................................................................................15
          A. Orientation...........................................................................................................................15
              General .................................................................................................................................15
              Holidays ...............................................................................................................................16
          B. Crime ....................................................................................................................................19
          C. Transportation, Traffic Safety and Road Conditions .....................................................22
          D. Health ...................................................................................................................................25
              Medical Facilities ................................................................................................................32
              Emergency Medical Assistance / Hospital List ................................................................32
       3. At a Glance .................................................................................................................................54
          A. Population ............................................................................................................................54
          B. Ethnic Groups, Religions and Languages.........................................................................56
          C. Climate, Geography, and Topography .............................................................................59
          D. Natural Resources ...............................................................................................................63
       4. Government ................................................................................................................................67
          A. Executive Branch ................................................................................................................68
              President – Hu Jintao .........................................................................................................68
              Vice President - Zeng Qinghong ........................................................................................75
              State Council........................................................................................................................79
          B. Legislative Branch ..............................................................................................................80
          C. Judicial Branch ...................................................................................................................82
          D. Political System ...................................................................................................................83
          E. Political Pressure Groups ...................................................................................................88
          F. Foreign Affairs ....................................................................................................................88
       5.   International Organization Participation ..........................................................................129
       6.   Diplomatic Representation in the United States ...............................................................130
       7.   U.S. Diplomatic Representation..........................................................................................130
       8.   Economy................................................................................................................................135
       9. Infrastructure ...........................................................................................................................143
          A. Transportation ..................................................................................................................143
          B. Communications ...............................................................................................................160
       10. Military ...................................................................................................................................162
          A. Leadership .........................................................................................................................162
          B. Armed Forces Overview ...................................................................................................171
          C. Procurement ......................................................................................................................200
          D. People’s Liberation Army (PLA) ....................................................................................222
          E. People’s Liberation Army Air Force (PLAAF)..............................................................254
          F. The People’s Liberation Army Navy (PLAN) ................................................................284
          G. Defense Production and R & D........................................................................................315
          H. Defense Budget ..................................................................................................................327

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       11. Security and Foreign Forces .................................................................................................329
       12. Non-State Armed Groups....................................................................................................339

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                        People’s Republic of China (PRC) Primer
       1. Introduction
               A. Overview
       For centuries China stood as a leading civilization, outpacing the rest of the world in the arts and
       sciences. However, in the 19th and early 20th centuries, China was beset by civil unrest, major
       famines, military defeats, and foreign occupation. After World War II, the Communists under Mao
       Zedong established an autocratic socialist system that, while ensuring China's sovereignty,
       imposed strict controls over everyday life and cost the lives of tens of millions of people. After
       1978, Mao‟s successor Deng Xiaoping gradually introduced market-oriented reforms and
       decentralized economic decision making, and output quadrupled by 2000. Political controls remain
       tight even while economic controls continue to be relaxed.

                B. History

       Historical Sequence
       Date         Event
       1911         The Wuchang Uprising among the modernized New Army led to the abdication of the Qing
                    emperor and began a process that would end 5,000 years of imperial rule in China. leading to the
                    southern provinces declaring independence from the Qing dynasty.
       1912         On New Year's Day Sun Yat-sen, the "Father of Modern China" was elected provisional
                    president of the Republic of China.
                    In March, Yuan Shikai, the "Father of the Warlords" and the commander of the largest military
                    organization in China, the Beiyuan Army, forced a compromise from the southern
                    revolutionaries and became president.
                    The Kuomintang was founded by Sun Yat-sen and Sung Chiao-jen.
       1915         Yuan Shikai reinstated the monarchy and proclaimed himself emperor.
       1916         Yuan Shikai died of kidney failure several months after dissolving the monarchy. The lack of a
                    central authority and dominant military plunged China into warlordism.
       1919         Gathering of students at Tiananmen (Beijing).
       1921         Sun Yat-sen inaugurated president of a self-proclaimed national government in Guangzhou.
                    The Chinese Communist Party (CCP) was founded by Chen Duxiu and Li Dazhao.
       1925         Sun Yat-sen died.
       1926         General Chiang Kai-shek assumed control of the Kuomintang (KMT), and launched the
                    Northern Expedition against the warlord government in Beijing.
       1927         Chiang Kai-Shek purged the KMT of left-wing members and allied communists, and the rivalry
                    between the CCP and the KMT led to the Chinese Civil War.
       1928         The Kuomintang forces took Beijing.
       1934         The Long March (a 6,000 km retreat) by the communists from Jiangxi to the interior of Shaanxi
                    allowed Mao Zedong to assume control of the faction and solidified support among the rural
       1945         Following the unconditional surrender of the Japanese, the communists and the KMT signed an
                    uneasy truce.
       1946         The KMT-communist truce fell apart.

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       1949         Following the taking of Beijing by the communists and the fall of several major cities, Mao
                    Zedong proclaimed the creation of the People's Republic of China (1 October).
                    Chiang Kai-Shek flees to Taiwan (December).
       1950         Tibet annexed (October).
       1953         First five-year plan launched.
       1955         Xinjiang Uighur Autonomous Region proclaimed.
       1956-1957 'Hundred Flowers' campaign permitted open debate before an ideological crackdown.
       1958         Start of Great Leap Forward, an attempt to rapidly industrialize the country, which led to
                    massive famine.
       1964         China tested first atomic bomb.
       1966         Beginning of the "Great Proletarian Cultural Revolution" and the purge of intellectuals and CCP
                    enemies by students and Red Guards.
       1967         China tested hydrogen bomb.
       1971         The PRC replaced the Republic of China (Taiwan) in the UN.
       1973         Gang of Four entered the politburo.
       1976         Tiananmen Square incident (4 April).
                    Death of Mao Zedong.
                    End of Cultural Revolution.
                    Gang of Four arrested.
       1978         Third Plenum of the 11th Central Committee endorsed Deng Xiaoping's program of economic
                    reform. 'Democracy Wall' movement encouraged criticism of the Gang of Four and previous
                    CCP governments.
       1979         One-child policy encouraged
       1980         Shenzhen, Zhuhai, Shantou, and Xiamen were designated as 'Special Economic Zones'
       1986         First Chinese stock market opened in Shanghai.
       1988         Hyperinflation by year-end, consumer prices up 36 per cent.
       1989         Tiananmen Square massacre (4 June).
       1995         Jiang Zemin appointed to succeed Deng Xiaoping (April).
                    Crackdown in Tibet (May-July).
       1996         NPC reformed legal code (March).
                    China announced it would adopt new civil service rotation system to weed out corruption.
       1997         Death of Deng Xiaoping (February).
                    Hong Kong reverted to Chinese sovereignty (1 July).
       1998         Li Peng stepped down as premier, replaced by Zhu Rongji.
       1999         Portugal handed Macau over to the PRC (February).
                    Jiang Zemin announced his 'Three Represents' theory.
       2000         200 officials were implicated in a multi-billion dollar smuggling scandal in Xiamen, Fuijan
                    province (August).
       2001         China joined the WTO (December).
       2002         16th CCP Congress: Hu Jintao replaced Jiang as general secretary. Jiang retained Chair of the
                    PRC and CCP CMCs. Constitutional amendments allowed entrepreneurs into party membership.
       2003         Hu replaced Jiang as president (March).
                    First SARS epidemic controlled; flow of Yangzi halted (June).
                    500,000 people marched in Hong Kong to demonstrate against the implementation of Article 23
                    of the Basic Law (July).

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                    China's first manned space vehicle placed in orbit (October).
       2004         The NPC amended the PRC constitution, adding the 'Three Represents', and including clauses
                    protecting human rights and private property (March).
                    The NPC supported Chief Executive Tung Chee-Hwa's decision to prevent suffrage in Hong
                    Kong elections in 2007 (April).
                    Jiang Zemin retired from the CCP CMC (September).
                    Jiand Zemin offered his resignation for the PRC CMC (December).
       2005         Zhoa Ziyang, a prominent reformist who failed to support the Tiananmen crackdown, died amid
                    muted CCP statements (January).
                    The 2005 National People's Congress was held, during which Jiang Zemin retired from the PRC
                    CMC (March).
                    Hong Kong Chief Executive Tung Chee-Hwa resigned and was replaced by career civil servant
                    Donald Tsang (March-June).
                    A village in Zhejiang province revolted over allegations of local corruption and forced the police
                    to withdraw (April).
                    First of six state-run HIV/AIDS centers opened in Yunnan (August).
                    45,000 people marched in Hong Kong to commemorate the July 2003 protest (July).
                    11th Five-year Plan adopted by the Central Committee (October).
                    Former general secretary of the CCP, and reformer Hu Yaobang's 90th birthday was officially
                    celebrated by the CCP. Hu's death in 1989 had been one of the motivations for the student
                    demonstrations of 1989, two years after he was forced to resign for failing to crack down on
                    demonstrations in 1986. Hu Yaobang was a mentor of Hu Jintao, both of whom were first
                    secretaries of the Communist Youth League (November).
                    Beijing claimed that just three people died following the police shooting at a demonstration in
                    Guangdong province. Witnesses stated that the figure was closer to twenty (December).
                    Approximately 100,000 people marched in Hong Kong, demanding universal suffrage in chief
                    executive elections (December).

       Dynastic Period
       China is the oldest continuous major world civilization, with records dating back about 3,500
       years. Successive dynasties developed a system of bureaucratic control that gave the agrarian-
       based Chinese an advantage over neighboring nomadic and hill cultures. Chinese civilization was
       further strengthened by the development of a Confucian state ideology and a common written
       language that bridged the gaps among the country's many local languages and dialects. Whenever
       China was conquered by nomadic tribes, as it was by the Mongols in the 13th century, the
       conquerors sooner or later adopted the ways of the "higher" Chinese civilization and staffed the
       bureaucracy with Chinese.

       The last dynasty was established in 1644, when the Manchus overthrew the native Ming dynasty
       and established the Qing (Ch'ing) dynasty with Beijing as its capital. At great expense in blood and
       treasure, the Manchus over the next half century gained control of many border areas, including
       Xinjiang, Yunnan, Tibet, Mongolia, and Taiwan. The success of the early Qing period was based
       on the combination of Manchu martial prowess and traditional Chinese bureaucratic skills.

       During the 19th century, Qing control weakened, and prosperity diminished. China suffered
       massive social strife, economic stagnation, explosive population growth, and Western penetration
       and influence. The Taiping and Nian rebellions, along with a Russian-supported Muslim separatist
       movement in Xinjiang, drained Chinese resources and almost toppled the dynasty. Britain's desire
       to continue its illegal opium trade with China collided with imperial edicts prohibiting the
       addictive drug, and the First Opium War erupted in 1840. China lost the war; subsequently, Britain

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       and other Western powers, including the United States, forcibly occupied "concessions" and
       gained special commercial privileges. Hong Kong was ceded to Britain in 1842 under the Treaty of
       Nanking, and in 1898, when the Opium Wars finally ended, Britain executed a 99-year lease of the
       New Territories, significantly expanding the size of the Hong Kong colony.

       As time went on, the Western powers, wielding superior military technology, gained more
       economic and political privileges. Reformist Chinese officials argued for the adoption of Western
       technology to strengthen the dynasty and counter Western advances, but the Qing court played
       down both the Western threat and the benefits of Western technology.

       Early 20th Century China
       Frustrated by the Qing court's resistance to reform, young officials, military officers, and students--
       inspired by the revolutionary ideas of Sun Yat-sen–began to advocate the overthrow of the Qing
       dynasty and creation of a republic. A revolutionary military uprising on October 10, 1911, led to
       the abdication of the last Qing monarch. As part of a compromise to overthrow the dynasty without
       a civil war, the revolutionaries and reformers allowed high Qing officials to retain prominent
       positions in the new republic. One of these figures, Gen. Yuan Shikai, was chosen as the republic's
       first president. Before his death in 1916, Yuan unsuccessfully attempted to name himself emperor.
       His death left the republican government all but shattered, ushering in the era of the "warlords"
       during which China was ruled and ravaged by shifting coalitions of competing provincial military

       In the 1920s, Sun Yat-sen established a revolutionary base in south China and set out to unite the
       fragmented nation. With Soviet assistance, he organized the Kuomintang (KMT or "Chinese
       Nationalist People's Party"), and entered into an alliance with the fledgling Chinese Communist
       Party (CCP). After Sun's death in 1925, one of his protégés, Chiang Kai-shek, seized control of the
       KMT and succeeded in bringing most of south and central China under its rule. In 1927, Chiang
       turned on the CCP and executed many of its leaders. The remnants fled into the mountains of
       eastern China. In 1934, driven out of their mountain bases, the CCP's forces embarked on a "Long
       March" across some of China's most desolate terrain to the northwestern province of Shaanxi,
       where they established a guerrilla base at Yan'an.

       During the "Long March," the communists reorganized under a new leader, Mao Zedong (Mao
       Tse-tung). The bitter struggle between the KMT and the CCP continued openly or clandestinely
       through the 14-year long Japanese invasion (1931-45), even though the two parties nominally
       formed a united front to oppose the Japanese invaders in 1937. The war between the two parties
       resumed after the Japanese defeat in 1945. By 1949, the CCP occupied most of the country.

       Chiang Kai-shek fled with the remnants of his KMT government and military forces to Taiwan,
       where he proclaimed Taipei to be China's "provisional capital" and vowed to reconquer the
       Chinese mainland. The KMT authorities on Taiwan still call themselves the "Republic of China."

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       The People's Republic Of China
       In 1949, following the defeat of the KMT forces in the Second Chinese Revolution, Mao Zedong
       declared the creation of the People's Republic of China on 1 October 1949, standing high above
       Tiananmen Square.

       Immediately after the revolution, Mao began a series of reforms, based on Soviet communist
       dogma, modified according to the dictates of the Chinese situation. For example, land reform was
       instituted with painful results. It is estimated that over a million landlords were executed in the
       early 1950s as a result of the decisions of peasants' courts throughout China.

       CCP membership continued to grow and Mao's ideology began to dominate more and more
       aspects of everyday life. There is no doubt that for many Chinese, the party improved the quality
       of life considerably but there was also hardship and death. Chief among the campaigns which
       brought great suffering was the 'Great Leap Forward', which was initiated in 1958, which
       attempted to rapidly industrialize the country through the use of its cheap labor to produce steel (a
       symbolic and practical industrial material) in abundance. However, with rural peasantry
       concentrated on steel production, agricultural production plummeted as central quotas meant that
       farmers could not find the time to harvest their crops and even agricultural tools were smelted to
       aid the steel production process. During the following five years massive famine led to the deaths
       of an estimated 20 million Chinese peasants.

       The Great Leap Forward was followed by the Great Proletarian Cultural Revolution (1966-76),
       which attempted to purge the CCP of anti-Mao members and 'imperialist' intellectuals, although
       the low-level violence soon spiraled out of central control and descended into mob rule. In some
       isolated districts cannibalism became rife, while tertiary educational institutions were closed
       nationwide until 1977.
       Source: Jane‟s Information Group

       The "Great Leap Forward" And The Sino-Soviet Split
       In 1958, Mao broke with the Soviet model and announced a new economic program, the "Great
       Leap Forward," aimed at rapidly raising industrial and agricultural production. Giant cooperatives
       (communes) were formed, and "backyard factories" dotted the Chinese landscape. The results were
       disastrous. Normal market mechanisms were disrupted, agricultural production fell behind, and
       China's people exhausted themselves producing what turned out to be shoddy, unsellable goods.
       Within a year, starvation appeared even in fertile agricultural areas. From 1960 to 1961, the
       combination of poor planning during the Great Leap Forward and bad weather resulted in one of
       the deadliest famines in human history.

       The already strained Sino-Soviet relationship deteriorated sharply in 1959, when the Soviets
       started to restrict the flow of scientific and technological information to China. The dispute
       escalated, and the Soviets withdrew all of their personnel from China in August 1960. In 1960, the
       Soviets and the Chinese began to have disputes openly in international forums.

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       The Cultural Revolution
       In the early 1960s, State President Liu Shaoqi and his protégé, Party General Secretary Deng
       Xiaoping, took over direction of the party and adopted pragmatic economic policies at odds with
       Mao's revolutionary vision. Dissatisfied with China's new direction and his own reduced authority,
       Party Chairman Mao launched a massive political attack on Liu, Deng, and other pragmatists in the
       spring of 1966. The new movement, the "Great Proletarian Cultural Revolution," was
       unprecedented in communist history. For the first time, a section of the Chinese communist
       leadership sought to rally popular opposition against another leadership group. China was set on a
       course of political and social anarchy that lasted the better part of a decade.

       In the early stages of the Cultural Revolution, Mao and his "closest comrade in arms," National
       Defense Minister Lin Biao, charged Liu, Deng, and other top party leaders with dragging China
       back toward capitalism. Radical youth organizations, called Red Guards, attacked party and state
       organizations at all levels, seeking out leaders who would not bend to the radical wind. In reaction
       to this turmoil, some local People's Liberation Army (PLA) commanders and other officials
       maneuvered to outwardly back Mao and the radicals while actually taking steps to rein in local
       radical activity.

       Gradually, Red Guard and other radical activity subsided, and the Chinese political situation
       stabilized along complex factional lines. The leadership conflict came to a head in September
       1971, when Party Vice Chairman and Defense Minister Lin Biao reportedly tried to stage a coup
       against Mao; Lin Biao allegedly later died in a plane crash in Mongolia.

       In the aftermath of the Lin Biao incident, many officials criticized and dismissed during 1966-69
       were reinstated. Chief among these was Deng Xiaoping, who reemerged in 1973 and was
       confirmed in 1975 in the concurrent posts of Politburo Standing Committee member, PLA Chief of
       Staff, and Vice Premier.

       The ideological struggle between more pragmatic, veteran party officials and the radicals re-
       emerged with a vengeance in late 1975. Mao's wife, Jiang Qing, and three close Cultural
       Revolution associates (later dubbed the "Gang of Four") launched a media campaign against Deng.
       In January 1976, Premier Zhou Enlai, a popular political figure, died of cancer. On April 5, Beijing
       citizens staged a spontaneous demonstration in Tiananmen Square in Zhou's memory, with strong
       political overtones of support for Deng. The authorities forcibly suppressed the demonstration.
       Deng was blamed for the disorder and stripped of all official positions, although he retained his
       party membership.

       Power Struggle Following Mao's Death (1977-1980)
       On 9 September 1976 Chairman Mao Zedong died. His death formally unleashed the struggle for
       power which had been in gestation within the Chinese leadership for several years between
       Premier Hua Guofeng and the 'Gang of Four', led by Jiang Qing, Mao's third wife.

       Hua Guofeng, a former minister of public security, moved quickly to form an alliance with
       Marshal Ye Jianying, the chairman of the Standing Committee of the National People's Congress
       and the most influential figure within the military. With the backing of the high command, Hua

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       engineered the arrest of the Gang of Four on 6 October 1976 on the pretext that it was plotting to
       'usurp party and state power'. This cleared the way for Hua to augment his power by adding the
       posts of party chairman, chairman of the CCP Central Military Commission (CMC) and premier.

       The 11th Congress of the CCP (12-18 August 1977) confirmed the status of the post-Mao
       leadership and formally terminated the Cultural Revolution. China's modernization was designated
       the party's central priority. To meet this objective, Hua and the neo-Maoists sought an alliance of
       convenience with Deng Xiaoping and his pragmatic faction against the lingering leftist elements
       within the leadership. Deng was restored to the posts he had held before his fall from power.

       However, this alliance was short-lived. Hua was outmaneuvered and eventually overpowered by
       Deng and his pragmatic faction. The culmination of Deng Xiaoping's restoration of power and the
       commencement of significant political, economic, social and cultural reform were achieved at the
       Third Plenum of the CCP's 11th Central Committee in December 1978. The Third Plenum is
       considered an important watershed in post-Mao Chinese history. 'Leftist' mistakes committed
       before and during the Cultural Revolution were 'corrected'.

       Deng's Modernization Program (1980-1986)
       The modernization campaign begun by Deng not only exposed China to foreign capital and
       technology; it also opened it up to foreign ideas and values. For a large segment of the Chinese
       population, the influx of foreign goods portended a welcome change in China's domestic fortunes.
       At the same time that the party was attempting to discipline its own ranks, Deng Xiaoping, sensing
       that a conservative sentiment within the party could be used against him, co-opted the leadership
       of the campaign against 'spiritual pollution' in the Autumn of 1983. It was the first large-scale
       political campaign since the Cultural Revolution.

       The spiritual pollution campaign effectively came to an end in 1984 as the pragmatic wing of the
       CCP reasserted its dominance. Art, literature and culture were no longer targets of repression as
       the party stressed that the campaign's energy would be strictly confined to ideology. Contacts with
       the outside world flourished as Zhao Ziyang and Hu Yaobang stressed the importance of Western
       technology for China's development. In order to implement these new policies, reformers were
       promoted to key positions within the party and state apparatus as China's move toward a market
       economy took a huge step

       The Rise And Fall Of Zhao (1987 – 1989)
       Hu Yaobang was removed from the post of party general secretary by Deng in 1987 for a refusal to
       denounce demonstrators, a step taken by a unanimous decision at an extraordinary expanded
       Politburo meeting on 16 January 1987. Hu was replaced by Zhao Ziyang, a reflection of Deng
       Xiaoping's effort to keep control over the situation while continuing the course of reform and the
       open-door policy.

       Ironically, it was Zhao's success in pushing forward the reform effort that eventually brought about
       his downfall. Deng's strategy had been to balance liberalization with control in a cyclical pattern
       that ensured that Chinese politics did not lean too far to the right or to the left. Zhao's refusal to
       subscribe to this strategy undermined his relations with Deng.

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       In the latter half of 1987 and throughout 1988, Zhao's rivals (primarily the Chen-Yun faction)
       acted to counter his growing power. Zhao encountered reverses over policy that resulted in his
       losing control over the management of the economy. Premier Li Peng took over much of the
       responsibility for economic reform in April 1988 when he assumed control over the State
       Commission for Restructuring the Economy, replacing Zhao's protégé, Li Tieying.

       As Zhao's control over the economy weakened, accompanying the loss of the premiership to Li
       Peng in late-1987 and the elimination in mid-1988 of the Central Finance and Economics
       Leadership Group, the trend toward decentralization ceased and Beijing re-established its control.
       Throughout 1989 his position grew more precarious. During the Tiananmen Square
       demonstrations, he tried to resurrect his political fortunes by trying to reach an accommodation
       with the students. In doing so he sealed his fate and was ousted from power on 24 June 1989.

       Documents, which surfaced in the West in January 2001 in a volume entitled The Tiananmen
       Papers: The Chinese Leadership's Decision to Use Force Against Their Own People, revealed that
       Deng Xiaoping ordered a military crackdown to end the massive student protest in the spring of
       1989 because he felt it represented a serious threat to communist rule. The papers contended that
       Deng defended the crackdown of 6 June 1989 (two days after troops opened fire) at a Politburo
       Standing Committee meeting with these words: "If we hadn't been firm with these counter-
       revolutionary riots - if we hadn't come down hard - who knows what might have happened?"

       Jiang Comes To Prominence (1996)
       Following the events of 1989 in Tiananmen Square, Chinese politics entered a phase not
       dominated by the old guard that could trace its lineage back to the revolution, but by a new
       political class that emerged under the reforms of the 1980s. At the center of this new leadership
       was Jiang Zemin, who replaced Zhao as general secretary. In the first five years of his reign, Jiang
       ruled in the shadow of his patron, Deng Xiaoping.

       In 1996 Jiang began to dominate the front pages of the major daily newspapers in Beijing, as well
       as state television's primetime programs. This significant media coverage was enforced by the
       Chinese leader himself. In a speech to the staff of the People's Daily Jiang issued a stricter party
       line to the news media and propaganda organs. It echoed speeches of the late chairman Mao
       Zedong, calling on people working in the media to be "loyal to Marxism, loyal to the party and
       loyal to the people."

       The leadership was apparently looking towards nationalism as their new source of political
       legitimacy, as well as the ideological 'glue' to hold the country together. It stressed patriotism,
       obedience, traditionalism and increasingly anti-foreign sentiments. Regular campaigns to promote
       nationalism were noticeably aimed at party members, government bureaucrats, soldiers and other
       key groups and organizations.
       Source: Jane‟s Information Group

       Third Generation Of Leaders
       Deng's health deteriorated in the years prior to his death in 1997. During that time, President Jiang
       Zemin and other members of his generation gradually assumed control of the day-to-day functions
       of government. This "third generation" leadership governed collectively with President Jiang at the

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       In March 1998, Jiang was re-elected President during the 9th National People's Congress. Premier
       Li Peng was constitutionally required to step down from that post. He was elected to the
       chairmanship of the National People's Congress. Zhu Rongji was selected to replace Li as Premier.

       Transition To The 'Fourth Generation'
       A reshuffle of China's top provincial leaders, including the resignation of Shanghai's popular
       mayor in December 2001, showed that early political jostling had begun ahead of a key change in
       the communist leadership. The shake up came ahead of the 2002 five-yearly Communist Party
       Congress, a crucial meeting that ushered in the so-called 'fourth generation' of leaders.

       The Politburo that emerged in November 2002 heavily reflected Jiang's preferences. Of the nine
       members of the expanded Standing Committee, five were of the Jiang faction. Vice premier Wu
       Bangguo was granted second rank after Hu Jintao; Jia Qinglin, the near-disgraced ex-Beijing
       mayor and Jiang crony, the fourth rank; the crown prince of the Shanghai faction, Zeng Qinghong
       took the fifth-ranked position; Huang Ju, another Jiang protégé rescued by Jiang from various
       political shenanigans, was sixth-ranked; and Li Changchun, formerly the Guangdong party boss,
       ranked eighth. Provincial party secretaries were prominent in the new Politburo, reflecting a bias in
       favor of party affairs specialists over figures with government experience.

       Hu was made general secretary and retained his position as vice-chairman of the CCP Central
       Military Commission. Jiang retired from the Politburo but stayed as the chairman of the Central
       Military Commission and his protégé, confidant and advisor Zeng became the most senior member
       of the CCP Secretariat (the body tasked with daily administration of CCP affairs at a national
       level). As all other members of the Secretariat were new faces, this made it Zeng's organ. The CCP
       Central Committee General Office also passed into the hands of a Jiang loyalist, Wang Gang,
       granting him a position equivalent to chief of staff. In addition, Jiang was also to be consulted on
       all matters of national importance.

       Hu's successes were mainly defensive. He probably prevented Zeng from gaining the civilian vice-
       chairman's post on the Central Military Commission, and he also saw up to 30 of his Communist
       Youth League faction enter the 150-strong Central Committee. However, the result of the congress
       was that Hu and Zhu Rongji's candidate for the premiership, Wen Jiabao (ranked third in the
       Politburo Standing Committee), gained the offices they had long expected only to face a strong
       network of Jiang figures in almost all the key party political organs.

       With regard to the crucial preservation of his grip over the security apparatus, Jiang's promotion of
       over 100 majors and lieutenant generals in mid-2002, may have paid off by granting a critical
       weight of support in the military. Then vice-chairman of the Central Military Commission General
       Zhang Wannian in July 2002 had notably urged his PLA colleagues to "swear allegiance to the
       party central authorities and Chairman Jiang", in somewhat explicit fashion - a call likely to have
       reflected expectations of further funding for military modernization.

       Hu acted to consolidate his position in the weeks intervening between the CCP Congress and the
       First Plenum of the 10th NPC in March 2003. Statements in the press lauding Jiang Zemin and his
       theory of the 'Three Represents' were toned down in the aftermath. Hu advanced several of his

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       allies into key positions, including mayor of Beijing, mayor of Shanghai and several provincial
       posts. In calculated photo opportunities, Hu visited the needy and even put forward his own "New
       Three Principles of the People", paying lip service to the achievements of his predecessor but
       implicitly criticizing the Shanghai faction's obsession with image and influence-building.

       However, the 10th NPC saw further advances for the Jiang faction. The revised cabinet saw the
       new premier, Wen Jiabao, surrounded by a host of Jiang loyalists; over 40 per cent of the new top
       government body was made up of cadres from the greater Shanghai area. Three of the four vice-
       premiers and Wen's deputy, executive vice-premier Huang Ju were of Jiang's faction. Zeng
       Qinghong advanced to the vice-presidency, a position with little power but signaling the possibility
       that despite being three years older than Hu, he might succeed the new state president before 2007.

       Only the fact that Hu and other non-Jiang faction cadres gained high ratios of the NPC vote
       (typically near to 100 per cent) compared to Zeng Qinghong's 87.5 per cent, hinted at a hope in the
       broader CCP that the power of the Shanghai faction might be relaxed.

       Hu Jintao Comes To The Fore
       With the continuing influence of Jiang and his Shanghai faction in the Politburo in 2002 and 2003,
       it was some time before Hu Jintao was able to emerge from Jiang's shadow. However, the Third
       Plenary Session of the 16th Central Committee, in October 2003, and 2004's NPC meeting
       indicated that Hu had begun to place his own shape on CCP policy. His 'inner-party democracy'
       reforms, aimed at limiting the personal authority of party members at various levels, should in time
       weaken the individual factions which have caused tension within the party leadership. These
       reforms, building on reforms introduced in the 1990s, may well establish a degree of transparency
       and accountability in intra-party dealings. For example, with the introduction of the rule there are
       to be more candidates than seats in elections, while the power of the 'princeling' and Shanghai
       graduate factions within the party has diminished.

       At the Fifth Central Members' Assembly of the CCP's 16th Party Congress, in September 2004,
       Jiang Zemin announced his retirement as chairman of the CCP Central Military Committee, and
       offered his resignation of the PRC CMC in December 2004 in a traditional and largely ceremonial
       handing over of power. Jiang's failure to secure the vice chair of the CCP CMC for his associate
       Zeng Qinghong demonstrated that his influence in the party may slowly be on the wane.

       SARS: An Early And Unwelcome Test
       The outbreak of Severe Acute Respiratory Syndrome (SARS) first took place in Guangdong
       province in late 2002 and subsequently was transmitted with virulence to Hong Kong Special
       Administrative Region (SAR) and Beijing, probably during the Spring Festival (Chinese New
       Year) in February 2003. SARS, characterized by a form of atypical pneumonia, besides other
       symptoms imperfectly documented by mid-2003, appeared to be a genuinely new disease, killing
       up to 20 per cent of its victims. The sole credible isolated pathogen was only distantly related to
       the cold virus, although both were within the family of corona viruses. Speculation was rife that
       SARS arose from a human-animal interface, or from a bio-weapons program. No theory had been
       confirmed and no theory looked likely to be.

       The political impact only began to unfold following the National People's Congress in March
       2003, as the CCP began to relax its safeguards against negative news reporting. Both in October

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       2002 and February 2003, the CCP had ordered the media to suppress reports of epidemics. The
       World Health Organization (WHO) was able to place pressure on the authorities in Beijing to
       disclose the true scope of the outbreak in the capital in April 2003, causing tens of thousands of
       migrant workers and students in Beijing to flee to their home provinces, mostly by rail, despite
       government attempts to check such a dangerous exodus.

       The new cabinet and non-Shanghai faction CCP leadership in Beijing at first bore the brunt of the
       political cost given their higher visibility and occupancy of prominent posts. However, given their
       success in ultimately beating back this first occurrence of the disease, via a national campaign
       resembling a traditional ideological mobilization the Hu-Wen combination may have benefited
       from the SARS episode.
       Source: Jane‟s Information Group

       The Next Five Years
       The next five years represent a critical period in China's existence. To investors and firms,
       especially following China‟s accession to the World Trade Organization (WTO) in 2001, China
       represents a vast market that has yet to be fully tapped and a low-cost base for export-oriented
       production. Educationally, China is forging ahead as partnerships and exchanges with foreign
       universities have helped create new research opportunities for its students. The new leadership is
       also committed to generating greater economic development in the interior and providing more
       services to those who do not live in China‟s coastal areas. However, there is still much that needs
       to change in China. Human rights issues remain a concern among members of the world
       community, as does continuing proliferation of weapons of mass destruction (WMD)-related
       materials and technology.

       2. Travel Information
                A. Orientation

       Time Zone: GMT +5 through +8.
       International airports: Beijing (Capital International (PEK); Shanghai (Hong Qiao (SHA), Pudong
       (PVG)); and Hong Kong (HKG)
       Primary ports: Dalian, Fuzhou, Guangzhou, Haikou, Huangpu, Lianyungang, Nanjing, Nantong,
       Ningbo, Qingdao, Qinhuangdao, Shanghai, Shantou, Shenzhen, Tianjin, Wenzhou, Xiamen,
       Xingang, Yantai, Zhanjiang
       Electricity: 220 Volts AC, 50 Hz

       Country Description
       China was established on October 1, 1949, with Beijing as its capital city. With well over 1.3
       billion citizens, China is the world's most populous country and the third largest country in the
       world in terms of territory. China is undergoing rapid, profound economic and social change and
       development. Political power remains centralized in the Chinese Communist Party. Modern tourist
       facilities are available in major cities, but many facilities in smaller provincial cities and rural areas
       are frequently below international standards. Read the Department of State Background Notes on
       China for additional information.

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Travel Documents
       A valid passport and visa are required to enter China and must be obtained from Chinese
       Embassies and Consulates before traveling to China. Americans arriving without valid passports
       and the appropriate Chinese visa are not permitted to enter and will be subject to a fine and
       immediate deportation at the traveler's expense. Travelers should not rely on Chinese host
       organizations claiming to be able to arrange a visa upon arrival. Chinese authorities have recently
       tightened their visa issuance policy, in some cases requiring personal interviews of American
       citizens and regularly issuing one or two entry visas valid for short periods only. See our Foreign
       Entry Requirements brochure for more information on China and other countries. Visit the
       Embassy of China web site at for the most current visa

       Visas are required to transit China. Persons transiting China on the way to and from Mongolia or
       North Korea or who plan to re-enter from the Hong Kong or Macau Special Administrative
       Regions should be sure to obtain visas allowing multiple entries. Permits are required to visit Tibet
       as well as many remote areas not normally open to foreigners.

       For information about entry requirements and restricted areas, travelers may consult the Visa
       Office of the Embassy of China (PRC) at Room 110, 2201 Wisconsin Avenue, N.W., Washington
       D.C. 20007, or telephone (1-202) 338-6688 and (1-202) 588-9760. For a list of services and
       frequently asked visa questions and answers, travelers can view the Chinese Embassy's web sites
       at The Chinese Embassy‟s visa section may be reached by e-mail
       at There are Chinese Consulates General in Chicago, Houston, Los
       Angeles, New York, and San Francisco. Americans traveling in Asia have been able to obtain
       visas to enter China from the Chinese visa office in Hong Kong and the Embassy of China in
       Seoul, South Korea.

       Americans who overstay or otherwise violate the terms of their Chinese visas will be subject to a
       maximum fine of 5,000 RMB (approximately $600) and departure delays and may be subject to
       detention. Travelers should note that international flights departing China are routinely
       overbooked, making reconfirmation of departure reservations and early airport check-in essential.
       Passengers must pay a RMB 90 airport user fee (approximately $11 US) when departing China on
       international flights and RMB 50 airport fee (approximately US $6.10) for all domestic flights.
       Note: the airport user fee is now included in your ticket price, so travelers do not have to be
       prepared to pay separately.

       In an effort to prevent international child abduction, many governments have initiated new
       procedures at entry / exit points. These often include requiring documentary evidence of
       relationship and permission for the child‟s travel from the parent(s) or legal guardian if they are
       not present. Having such documentation on hand, even if not required, may facilitate


       New Year's Day (January 1)

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

            Not as much celebrated as it is in other parts of the world because it is overshadowed by the
            upcoming Chinese New Year somewhere a month away. However, employees will enjoy a
            paid day-off. And there will be parties everywhere, in parks, dancing halls and universities
            where students will leave for the winter vacation.
       International Women's Day (March 8)
            Interestingly, women employees will get a whole or an half paid day-off on the day while the
            men are at the mercy of their employers.
       Tree-Planting Day (April 1)
            Highly promoted since the late 70's by the reformist government and yet to become
            established. It marks the beginning of a greening campaign all over the country during the
            month each year.
       International Labor Day (May 1)
            No less celebrated than the New Year's Day. Employees will enjoy a paid day-off. Celebration
            parties in parks took the place of parades today.
       Youth Day (May 4)
            A day in memory of the first mass student movement in 1919, a movement touched off by the
            then Chinese government that gave in to the Japanese government's attempt to colonize
            Shandong Province. It is also an anti-Confucius movement as well as one that promoted the
            western scientific and democratic ideas. Government organized youth activities everywhere in
            the country today characterizes the celebration of this day.
       Children's Day (June 1)
            It is the most memorable day of Chinese kids all over the country. Almost all entertainment
            places such as cinemas, parks and children museums and palaces are open free to them.
            Elementary schools throw celebration parties while parents shower them with presents.
       The CCP's Birthday (July 1)
            It marked the founding of the Chinese Communist Party in 1921 in Shanghai. It is usually
            characterized by front page editorials from major government newspapers.
       Army's Day (August 1)
            A communist-led nationalist army staged the first armed uprising in Chinese communist
            history against the Nationalists on August 1, 1927. It was regarded as the beginning of the Red
            Army (later the People's Liberation Army). Now the anniversary is often used to promote
            better relationships between the army and civilians, a tradition believed to have helped it beat
            the Nationalists during the civil war in 1949.
       Teacher's Day (September 1)
            It was started in the early eighties as an effort to reverse the anti-intellectual sentiment nurtured
            by the "Cultural Revolution". It is yet to become an established holiday.
       National Day (October 1)
       It is the anniversary of the founding of the People's Republic of China in 1949 in the wake of
       routing the Nationalists who have since taken refuge in Taiwan. There used to be grand parades
       squares of major cities of the country. Now celebrations usually take the form of parties in
       amusement parks by day and fire-works and grand TV ensembles during the evening. Employees

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       enjoy two paid days-off. It is also a good occasion for many people to take a short excursion to
       enjoy the beauty of the golden fall.

       Traditional Chinese Holidays

       The calendar the traditional Chinese holidays follow is of a unique lunar-solar system. Therefore,
       1st of the 1st month referred here does not necessarily mean January 1. Come here to see the
       details of the Chinese calendar.

       Lantern Festival (15th of the 1st month)
       Lantern exhibits, lion and dragon dances, and eating Tang Yuan (ball-shaped boiled sweet rice
       dumplings with delicious stuffing.) feature this day. It is very much celebrated in the rural areas by
       farmers. The Lantern Festival also marks the end of the Chinese New Year season.

       Qing Ming (Pure & Bright in Chinese) (Fifth of the 24 Solar Terms)
       Originally it was a celebration of spring. People used to customarily go out on an excursion to
       "tread grass". Later it became day dedicated to the dear departed. Tidying up ancestors' tombs is its
       major big event.

       Duan Wu (Dragon Boat) Festival (5th of the 5th month)
       Said to be in memory of a great patriot poet of the then State of Chu during the Warring States
       period (475-221 B.C.), Qu Yuan (Ch'u Yuan), who drowned himself to protest his emperor who
       gave in to the bully State of Chin. For fear that fish may consume his body, people of Chu threw
       launched their boats and started throwing rice dumplings wrapped in bamboo leaves into the river
       where he was drowned to feed the fish. Now the big event of dragon boat contest may be a legacy
       of such activity. People today still eat the bamboo-leave rice dumplings on the occasion today.

       The Seventh Eve (7th of the seventh month)
       It is a traditional holiday almost lost to the younger generations today. It originates from a
       beautiful legend about a cowboy and a fairy who were cruelly separated and reunited once each
       year on this happy sad occasion. A more detailed story is forthcoming.

       Mid-Autumn Festival (15th of the eighth month)
       It is second only to the Chinese New Year in significance. The moon on this day is the fullest and
       largest to the eye. Viewing it by the whole family while feasting on good wine, fruits and moon-
       cakes is a feature of the night event. There is also a beautiful story behind it. Children are told that
       there's fairy on the moon living in a spacious but cold crystal palace with her sole companion, a
       jade rabbit. A heavenly general and friend would occasionally pay her a visit, bringing along his
       fragrant wine. She would then dance a beautiful dance. The shadows on the moon made the story
       all the more credible and fascinating to the young imaginative minds.

       Spring Festival (The Chinese New Year) (1st of the 1st month)
       The biggest and most celebrated festival in China and part of east and south east Asia. For more
       details, please refer to my Chinese New Year homepage

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

                B. Crime

       China has a low crime rate. Pickpockets target tourists at sightseeing destinations, open-air
       markets, airports, and in stores, often with the complicity of low-paid security guards. Violence
       against foreigners, while rare, is on the increase. Over the past year, incidents of violence against
       foreigners, including sexual assaults, have taken place, usually in urban areas where bars and
       nightclubs are located. Robberies, sometimes at gunpoint, have occurred in western China and
       more recently in Beijing. There have been some reports of robberies and assaults along remote
       mountain highways near China‟s border with Nepal. Travelers are sometimes asked by locals to
       exchange money at a preferential rate. It is illegal to exchange dollars for RMB except at banks,
       hotels and official exchange offices. Due to the large volume of counterfeit currency in China,
       unofficial exchanges usually result in travelers losing their money and possibly left to face charges
       of breaking foreign exchange laws. If detained by police under suspicion of committing an
       economic crime involving currency, travelers may be delayed for weeks or months while police
       investigate the allegations.

       Recently, there have been instances in Beijing and elsewhere of mobs in bar districts attacking
       foreigners. Nationalism is on the rise. Disputes among Chinese citizens or between Chinese and
       foreigners can quickly turn against foreigners. Caution should be exercised when visiting bar
       districts late at night, especially on weekends. There have been reports of bar fights in which
       Americans have been specifically targeted due their nationality. Simple arguments can turn into
       mob scenes and many times have resulted in the American being detained for hours for
       questioning with no right to an attorney or consular officer at that stage.

       Travelers should have small bills (RMB 10, 20 and 50 notes) for travel by taxi. Reports of taxi
       drivers using counterfeit money to make change for large bills are increasingly common,
       especially in Guangzhou. Arguments with taxi drivers over fares or over choice of route usually
       are not easily resolved on the scene. In some cases, Americans who instigate such arguments have
       been detained for questioning and are not usually released until the fare is paid or a settlement is
       reached and the American offers an apology. We have seen an increase in the number of
       Americans falling victim to scams involving the inflation of tea and drink prices. Normally, the
       scam involves young people who approach English-speaking tourists and ask to have a cup of tea
       with them to practice their English. When the bill comes for the tea, the charge has been inflated
       to an exorbitant amount. When the tourist complains, enforcers arrive to collect the money. A
       similar scam involves buying drinks for young women at local bars.

       Throughout China, women outside hotels in tourist districts frequently use the prospect of
       companionship or sex to lure foreign men to isolated locations where accomplices are waiting for
       the purpose of robbery. Travelers should not allow themselves to be driven to bars or an
       individual's home unless they know the person making the offer. Hotel guests should refuse to
       open their room doors to anyone they do not know personally.

       Recently, Americans visitors have encountered scams at the international airports in China
       whereby individuals appearing to work for the airport offer to take American tourists‟ bags to the
       departure area, but instead they carry the bags to another area and insist that the visitor pay an

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       airport tax. Travelers should be advised that the airport tax is now included in the price of the
       airline ticket. The airport police or security officers should be contacted if this happens

       American visitors to China should carry their passports with them out of reach of pickpockets.
       Americans with Chinese residence permits (juliuzheng) should carry these documents, and leave
       their passports in a secure location except when traveling. All Americans are encouraged to make
       photocopies of their passport bio-data pages and Chinese visas and to keep these in a separate,
       secure location, and to register with the nearest U.S. Embassy or Consulate General. Please note
       the contact information below for registration by e-mail addresses.

       Information For Victims Of Crime: The loss or theft abroad of a U.S. passport should be
       reported immediately to the local police and the nearest U.S. Embassy or Consulate. If you are the
       victim of a crime while overseas, in addition to reporting to local police, please contact the nearest
       U.S. Embassy or Consulate for assistance. The Embassy/Consulate staff can, for example, assist
       you to find appropriate medical care, contact family members or friends and explain how funds
       could be transferred. Although the investigation and prosecution of the crime is solely the
       responsibility of local authorities, consular officers can help you to understand the local criminal
       justice process and to find an attorney if needed. See our information on Victims of Crime.

       Organized Crime
       Crime, especially violent and organized crime, has been rapidly increasing in recent years. Official
       statistics show reported crime has increased more than tenfold in the past decade. Some 4.5 million
       criminal cases were registered with China's public security organs in 2001, a rise of 22 per cent on
       the previous year, as the 'strike hard' anti-crime campaign increased detection rates. Registered
       cases of robbery grew almost 14 per cent following a 56 per cent increase in 2000 while registered
       cases of abduction of women and children fell 70 per cent after their 219 per cent rise in 2000,
       suggesting an organized increase in human trafficking was no longer meeting a vacuum in terms of
       law and order response, or gangs had moved on to other types of operation. Greater wealth is
       notably creating criminal opportunities.

       Lawlessness is said to be so rampant in some rural and border areas such as Yunnan province that
       the out-gunned public security forces have had to call in heavily armed security forces to restore
       order. The availability of small arms is on the rise. Some assessments indicate that there are now
       certain cities which senior central government officials may not visit. Organized crime has grown
       too powerful and there are thought to be are threats to their safety.

       However, white-collar crime by former state-owned enterprise managers and other officials may
       present an equal or greater threat to social and even economic stability, as cadres stuck with
       austerity in their youth turn their hand to profit in the new China. The spectacular theft of US$725
       million by provincial Bank of China managers, uncovered in 2002, was one example. Such crimes
       are closely linked to asset flight; in aggregate, corrupt officials are reckoned to remove billions of
       US dollars overseas annually, many sending their families to safety overseas beforehand.
       Source: Jane‟s Information Group

       Safety and Security

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Americans visiting or residing in China are advised to take the normal safety precautions travelers
       take when in any foreign country. Specifically, travelers should remain aware of their surroundings
       and of events that are happening around them. Travelers should respect local police requirements
       to temporarily avoid travel in some areas. In light of the greatly increased numbers of older
       Americans traveling to China, U.S. tour operators should check that local guides are familiar with
       medical facilities and emergency medical evacuation procedures.

       American citizens who rent apartments with gas appliances should be aware that, in some areas,
       natural gas is not scented to warn occupants of gas leaks or concentrations. In addition, heaters
       may not always be well vented, thereby allowing excess carbon monoxide to build up in living
       spaces. Due to fatal accidents involving American citizens, travelers are advised to ensure all gas
       appliances are properly vented or to install gas and carbon monoxide detectors in their residences.
       These devices are not widely available in China and should be purchased prior to arrival. Chinese
       security personnel may place under surveillance foreign government officials, journalists, and
       business people with access to advanced proprietary technology. Hotel rooms and personal
       computing devices for these categories of visitors may be subject to search without the consent or
       knowledge of the traveler.

       Terrorism is rare in China, although a small number of bombings occurred in areas throughout
       China. Recent bombings have largely been criminal activity, frequently the result of commercial
       disputes. Last year there were over 74,000 incidents of social unrest according to Chinese
       government figures. The vast majority of these are small-scale local incidents related to disputes
       over land seizures, social issues or environmental problems. While some incidents have grown to
       larger scales and involved some violence, these demonstrations have not been directed against
       foreigners. In April 2005 anti-Japanese demonstrations resulted in property damage and some
       reports of violence being directed against foreigners of Asian appearance.

       Recently, there have been a few instances in Beijing and elsewhere of mobs in bar districts
       attacking foreigners. Disputes among Chinese citizens or between Chinese and foreigners can
       quickly turn against foreigners. Caution should be exercised when visiting bar districts late at
       night, especially on weekends. Security personnel may at times place foreign visitors under
       surveillance. Hotel rooms, telephones and fax machines may be monitored, and personal
       possessions in hotel rooms may be searched. Taking photographs of anything that could be
       perceived as being of military or security interest may result in problems with authorities.

       For the latest security information, Americans traveling abroad should regularly monitor the
       Department‟s Internet web site at where the current Travel Warnings and
       Public Announcements, including the Worldwide Caution Public Announcement, can be found.
       Up-to-date information on safety and security can also be obtained by calling 1-888-407-4747 toll
       free in the U.S., or for callers outside the U.S. and Canada, a regular toll-line at 1-202-501-4444.
       These numbers are available from 8:00 a.m. to 8:00 p.m. Eastern Time, Monday through Friday
       (except U.S. federal holidays).

       The Department of State urges American citizens to take responsibility for their own personal
       security while traveling overseas. For general information about appropriate measures travelers
       can take to protect themselves in an overseas environment, see the Department of State‟s pamphlet
       A Safe Trip Abroad at

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.


                C. Transportation, Traffic Safety and Road Conditions

       While in a foreign country, U.S. citizens may encounter road conditions that differ significantly
       from those in the United States. The information below concerning China is provided for general
       reference only, and may not be totally accurate in a particular location or circumstance.

       The rate of traffic accidents in China, including fatal accidents, is among the highest in the world.
       Driving etiquette in China is developing. As a result, traffic is often chaotic, and right-of-way and
       other courtesies are often ignored. Travelers should note that cars and buses in the wrong lanes
       frequently hit pedestrians and bicyclists. Pedestrians should always be careful while walking near
       traffic. Road/traffic conditions are generally safe if occupants of modern passenger vehicles wear
       seatbelts. Most traffic accident injuries involve pedestrians or cyclists who are involved in
       collisions or who encounter unexpected road hazards (e.g., unmarked open manholes). Foreigners
       with resident permits can apply for PRC driver licenses; however, liability issues often make it
       preferable to employ a local driver. Child safety seats are not widely available in China.
       Americans who wish to ride bicycles in China are urged to wear safety helmets meeting U.S.
       standards. All drivers should be aware of the Chinese regulations regarding traffic accidents.
       These include the requirement that drivers:

               Not move their vehicles or disturb the scene of the accident unless and until ordered to by
                the traffic police (in Shanghai, the police now prefer that if the parties can reach agreement
                as to who was at fault they move the vehicles out of the flow of traffic.)

               Summon the traffic police and wait at the scene until the police arrive and complete their

       If called to an accident, the police may take 20 minutes or longer to arrive. Once the police arrive,
       they will complete a preliminary investigation and arrange a time for you to report to the police
       station responsible for the accident scene. The police will prepare a written report, in Chinese,
       describing the circumstances of the accident. They will present the report to you either at the
       scene, or more likely at the police station, and ask you to sign it verifying the details of the
       accident. Do not sign the report as is, unless your Chinese is good enough to completely
       understand the report and you find it totally accurate. If you either do not understand it or believe
       it is partly or wholly inaccurate, you may either:

              Write a disclaimer on the report to the effect that you cannot read and understand the report
               and cannot attest to the accuracy thereof, but are signing it because of the police
               requirement that you do so, and then sign, or
            Write your own version of the accident, in English, on the police form and indicate that
               your signature only attests to the accuracy of the English version.
       Most incidents (such as an accident) will draw a crowd. Drivers should remain calm. A crowd
       will usually move in very close to the accident and participants. In many cases the bystanders
       consider themselves to be an ad hoc jury. They may call for money, usually from RMB 100 to
       1,000, to be paid by the party they consider at fault. The amount is not necessarily relevant to the

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       amount of damage. A certain amount of bargaining is normal, even at accidents involving two
       Chinese parties. Though a crowd may seem threatening, crowd assaults on foreigners at accidents
       have not been reported. If a traffic police booth is nearby, you may wish to leave the vehicle and
       walk there to await the arrival of the police accident team. Alternatively, you may walk to a shop,
       restaurant, or other location nearby in the immediate vicinity and wait for police.

       You should not leave the scene of an accident. Your actions may serve to further incite the crowd
       if they perceive that you are fleeing to evade responsibility for your share of blame or payment of
       damages. The crowd may attempt to keep your vehicle at the accident scene by standing in the
       way or blocking the roadway with vehicles, bicycles and other objects.

       Please refer to our Road Safety page for more information. Visit the website of the country‟s
       national tourist office and national authority responsible for road safety at China National Tourist
       Bureau --

       Aviation Safety Oversight: The U.S. Federal Aviation Administration (FAA) has assessed the
       Government of China as being in compliance with ICAO international aviation safety standards for
       oversight of China‟s air carrier operations. For more information, travelers may visit the FAA‟s
       internet web site at

       Special Circumstances

       Chinese customs authorities may enforce strict regulations concerning temporary importation into
       or export from China of items such as antiquities, banned publications, some religious literature, or
       vehicles not conforming to Chinese standards. It is advisable to contact the Embassy of China in
       Washington or one of China‟s consulates in the United States for specific information regarding
       customs requirements. In many countries around the world, counterfeit and pirated goods are
       widely available. Transactions involving such products are illegal and bringing them back to the
       United States may result in forfeitures and/or fines. A current list of those countries with serious
       problems in this regard can be found at Office of the United States Trade Representative.

       China‟s customs authorities encourage the use of an ATA (Admission Temporaire/Temporary
       Admission) Carnet for the temporary admission of professional equipment, commercial samples,
       and/or goods for exhibitions and fair purposes. ATA Carnet Headquarters, located at the U.S.
       Council for International Business, 1212 Avenue of the Americas, New York, NY 10036, issues
       and guarantees the ATA Carnet in the United States. For additional information call (212) 354-
       4480, send an e-mail to,or visit for details.

       Please see our information on customs regulations at

       Criminal Penalties

       While in a foreign country, a U.S. citizen is subject to that country's laws and regulations, which,
       in China, differ significantly from those in the United States and do not afford the protections

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       available to the individual under U.S. law. Penalties for breaking the law can be more severe than
       in the United States for similar offenses. Persons violating China‟s laws, even unknowingly, may
       be expelled, arrested or imprisoned. Penalties for possession of, use of, or trafficking in illegal
       drugs in China are severe, and convicted offenders can expect long jail sentences and heavy fines.
       Engaging in sexual conduct with children or using or disseminating child pornography in a foreign
       country is a crime, prosecutable in the United States. Please see our information on Criminal

       On March 1, 2006, a new Public Security Law went into effect that gives police new powers,
       including the authority to detain and deport foreigners, relating to the commission of a wide range
       of offenses. The list of offenses has been expanded to include certain religious activities and
       prostitution-related crimes.

       Americans in China, who are not staying at hotels, including Americans who are staying with
       friends or relatives, must register with local police as soon as they arrive. Otherwise, they may be
       fined up to 500 RMB per day.

       Americans who are questioned by police should immediately notify the U.S. Embassy or the
       nearest consulate. Foreigners detained for questioning may not be allowed to contact their national
       authorities until the questioning is concluded. Foreigner‟s detained pending trial have often waited
       over a year for their trial to begin. Foreigners suspected of committing a crime are rarely granted
       bail. Criminal punishments, especially prison terms, are much more severe than in the United
       States. Persons violating the law, even unknowingly, may be expelled, arrested or imprisoned.
       Criminal penalties for possession, use, or trafficking of illegal drugs are strict, and convicted
       offenders can expect severe jail sentences and fines. Non-American foreigners have been executed
       for drug offenses. Several Americans currently incarcerated in China have been implicated in
       financial fraud schemes involving falsified bank or business documents, tax evasion schemes and
       assisting alien smuggling, including selling passports to provide aliens with travel documents.

       In the past, protesters detained for engaging in pro-Falun Gong activities have been quickly
       deported from China after being questioned. Several of these protesters alleged they were
       physically abused during their detention. In addition, they allege that personal property, including
       clothing, cameras and computers, have not always been returned to them upon their deportation.
       Chinese authorities report while they have deported these foreigners quickly after public
       demonstrations in favor of the Falun Gong, future adherents who intentionally arrive in China to
       protest against Chinese policy may receive longer terms of detention and possibly face prison
       sentences. In one instance, an American Falun Gong practitioner who was traveling in China on
       personal business was detained and asked to provide information on other Falun Gong
       sympathizers in the United States.

       Several Americans have been detained and expelled for passing out non-authorized Christian
       literature. Sentences for distributing this material may range from three to five years
       imprisonment, if convicted.

       Children's Issues

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       For information on international adoption of children and international parental child abduction,
       see the Office of Children‟s Issues website.

       Registration / Embassy Location

       Americans living or traveling in China are encouraged to register with the nearest U.S. Embassy or
       Consulate through the State Department‟s travel registration website, and to obtain updated
       information on travel and security within China. Americans without Internet access may register
       directly with the nearest U.S. Embassy or Consulate. By registering, American citizens make it
       easier for the Embassy or Consulate to contact them in case of emergency.

       BEIJING - The U.S. Embassy is located at No. 2 Xiu Shui Dong Jie, Chaoyang District, Beijing,
       the American Citizen Services section can be reached at (86)(10) 6532-3431 (8:30-12:00 a.m. and
       2:00-4:00 p.m., Mon-Fri), after hours (86)(10) 6532-1910. For detailed information please visit
       the Embassy‟s website at The Embassy consular district
       includes the following provinces/regions of China: Beijing, Tianjin, Shandong, Shanxi, Inner
       Mongolia, Ningxia, Shaanxi, Qinghai, Xinjiang, Hebei, Henan, Hubei, Hunan, and Jiangxi.

       CHENGDU - The U.S. Consulate General in Chengdu is located at Number 4, Lingshiguan Road, Section
       4, Renmin Nanlu, Chengdu 610041, tel. (86)(28) 8558-3992, 8555-3119, after hours (86)(28) 1370 8001
       422, and email address the This consular district includes the following
       provinces/regions of China: Guizhou, Sichuan Xizang (Tibet), and Yunnan, as well as the municipality of

       GUANGZHOU - The main office of the U.S. Consulate General in Guangzhou is located at Number 1 South
       Shamian Street, Shamian Island 200S1, Guangzhou 510133. The Consular Section, including the
       American Citizens Services Unit, is now located at 5th Floor, Tianyu Garden (II phase), 136-146 Lin He
       Zhong Lu, Tianhe District, tel. (86)(20) 8518-7605; after hours (86)(20) 8121-6077, and email This consular district includes the following provinces/regions of China:
       Guangdong, Guangxi, Hainan, and Fujian.

       SHANGHAI - The Consular Section of the U.S. Consulate General in Shanghai is located in the Westgate
       Mall, 8th Floor, 1038 Nanjing Xi Lu, Shanghai 200031; tel. (86)(21) 3217-4650, ext. 2102, 2013, or 2134,
       after hours (86)(21) 6433-3936; email This consular district includes the
       following provinces/regions of China: Shanghai, Anhui, Jiangsu and Zhejiang.

       SHENYANG - The U.S. Consulate General in Shenyang is located at No. 52, 14th Wei Road, Heping
       District, Shenyang 110003; tel. (86)(24) 2322-2374; email This consular
       district includes the following provinces/regions of China: Liaoning, Heilongjiang, and Jilin.

                D. Health

       Health Information for Travelers to Countries in East Asia

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       On This Page

       Vaccines for Your Protection
       Diseases Found in East Asia
       Other Health Risks
       What You Need To Bring With You
       Staying Healthy During Your Trip
       After You Return Home
       For More Information

       Travel Notices in Effect
           Keeping Yourself Safe from Bird Flu: An Important Message for People Going to Asia during the
              Lunar New Year (February 18)
              (Released February 7, 2007)
           Human Infection with Avian Influenza A (H5N1) Virus
              (Updated February 2, 2007)
           Interim Guidance about Avian Influenza A (H5N1) for U.S. Citizens Living Abroad
              (Updated February 2, 2007)
           In the News: Dengue, Tropical and Subtropical Regions
              (Released December 6, 2006)
           Transportation Security Administration – Security Measures for Air Travel
           U.S. Department of State
           See all Traveler's Health travel notices

       Vaccines for Your Protection: East Asia

       Routine Vaccinations

       Before travel, be sure you and your children are up to date on all routine
       immunizations according to schedules approved by the Advisory Committee
       on Immunization Practice (ACIP). See the schedule for adults and the
       schedule for infants and children. Some schedules can be accelerated for

       See your doctor at least 4–6 weeks before your trip to allow time for
       shots to take effect. If it is less than 4 weeks before you leave, you should
       still see your doctor. It might not be too late to get your shots or medications                Check with your healthcare
       as well as other information about how to protect yourself from illness and                     provider: you and your family
       injury while traveling.                                                                         may need routine as well as
                                                                                                       recommended vaccinations.
       Recommended Vaccinations and Preventive Medications

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       The following vaccines may be recommended for your travel to East Asia. Discuss your travel plans and
       personal health with a health-care provider to determine which vaccines you will need.
            Hepatitis A or immune globulin (IG). Transmission of hepatitis A virus can occur through direct
              person-to-person contact; through exposure to contaminated water, ice, or shellfish harvested in
              contaminated water; or from fruits, vegetables, or other foods that are eaten uncooked and that were
              contaminated during harvesting or subsequent handling.
            Hepatitis B, especially if you might be exposed to blood or body fluids (for example, health-care
              workers), have sexual contact with the local population, or be exposed through medical treatment.
              Hepatitis B vaccine is now recommended for all infants and for children ages 11–12 years who did not
              receive the series as infants.
            Japanese encephalitis, if you plan to visit rural farming areas and under special circumstances, such as a
              known outbreak of Japanese encephalitis.
            Malaria: if you are traveling to a malaria-risk area in this region, see your health care provider for a
              prescription antimalarial drug. For details concerning risk and preventive medications, see Malaria
              Information for Travelers to East Asia.
            Rabies, if you might have extensive unprotected outdoor exposure in rural areas, such as might occur
              during camping, hiking, or bicycling, or engaging in certain occupational activities.
            Typhoid, particularly if you are visiting developing countries in this region. Typhoid fever can be
              contracted through contaminated drinking water or food, or by eating food or drinking beverages that
              have been handled by a person who is infected. Large outbreaks are most often related to fecal
              contamination of water supplies or foods sold by street vendors
            As needed, booster doses for tetanus-diphtheria and measles.

       Required Vaccinations
           None.

       Diseases found in East Asia (risk can vary by country and region within a country; quality of in-country
       surveillance also varies)

       The preventive measures you need to take while traveling in East Asia depend on the areas you visit and the
       length of time you stay. You should observe the precautions listed in this document in most areas of this
       region. However, in highly developed areas of Japan, Hong Kong, South Korea, and Taiwan, you should
       observe health precautions similar to those that would apply while traveling in the United States.


This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Malaria is always a serious disease and may be a deadly illness.

       Humans get malaria from the bite of a mosquito infected with the parasite.
       Prevent this serious disease by seeing your health care provider for a
       prescription antimalarial drug and by protecting yourself against mosquito
       bites. Travelers to some areas in China, North Korea, and South Korea may
       be at risk for malaria. Travelers to malaria-risk areas in China, North Korea,
       and South Korea should take an antimalarial drug.

       For additional information on malaria risk and prevention, see Malaria                          An Anopheles freeborni
       Information for Travelers to East Asia.                                                         mosquito takes a blood meal.

       There is no risk of malaria in Japan, Taiwan, Hong Kong S.A.R. (China), Macau S.A.R. (China), and

       Yellow Fever

       There is no risk for yellow fever in East Asia. A certificate of yellow fever vaccination may be required for
       entry into certain of these countries if you are coming from countries in South America or sub-Saharan Africa.
       For detailed information, see Comprehensive Yellow Fever Vaccination Requirements. Also, find the nearest
       authorized U.S. yellow fever vaccine center.

       Food and Waterborne Diseases

       Make sure your food and drinking water are safe.
       Food and waterborne diseases are the primary cause of illness in travelers.
       Travelers’ diarrhea can be caused by viruses, bacteria, or parasites, which
       are found throughout East Asia and can contaminate food or water.
       Infections may cause diarrhea and vomiting (E. coli, Salmonella, cholera,
       and parasites), fever (typhoid fever and toxoplasmosis), or liver damage (

       Additional information: see the Safe Food and Water page for a list of links.
                                                                                                       Avoid buying food or drink
       Other Disease Risks                                                                             from street vendors, because
                                                                                                       it is relatively easy for such
       Dengue, filariasis, Japanese encephalitis, leishmaniasis, and plague are                        food to become contaminated.
       diseases carried by insects that also occur in this region. Protecting yourself
       against insect bites (see below) will help to prevent these diseases. Avian influenza is also present in China.

       Outbreaks of severe acute pulmonary syndrome (SARS) occurred in mainland China, Hong Kong, and Taiwan
       in 2003. Avian influenza is present in the region.

       If you visit the Himalayan Mountains, ascend gradually to allow time for your body to adjust to the high
       altitude, which can cause insomnia, headaches, nausea, and altitude sickness. In addition, use sunblock rated at
       least SPF 15, because the risk of sunburn is greater at high altitudes.

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Other Health Risks


       Motor vehicle crashes are a leading cause of injury among travelers. Protect yourself from motor vehicle
       injuries: avoid drinking and driving; wear your safety belt and place children in age-appropriate restraints in
       the back seat; follow the local customs and laws regarding pedestrian safety and vehicle speed; obey the rules
       of the road; and use helmets on bikes, motorcycles, and motor bikes. Avoid boarding an overloaded bus or
       mini-bus. Where possible, hire a local driver.

       What You Need To Bring With You

               Long-sleeved shirt, long pants, and a hat to wear whenever possible while outside, to prevent illnesses
                carried by insects (e.g., malaria, Dengue, filariasis, leishmaniasis, and onchocerciasis).
               Insect repellent containing DEET.
               Bed nets treated with permethrin. For use and purchasing information, see Insecticide Treated Bednets
                on the CDC malaria site. Overseas, permethrin or another insecticide, deltamethrin, may be purchased
                to treat bed nets and clothes.
               Flying-insect spray to help clear rooms of mosquitoes. The product should contain a pyrethroid
                insecticide; these insecticides quickly kill flying insects, including mosquitoes.
               Iodine tablets and portable water filters to purify water if bottled water is not available. See Preventing
                Cryptosporidiosis: A Guide to Water Filters and Bottled Water for more detailed information.
               Sunblock, sunglasses, and a hat for protection from harmful effects of UV sun rays. See Skin Cancer
                Questions and Answers for more information.
               Prescription medications: make sure you have enough to last during your trip, as well as a copy of the
                prescription(s) or letter from your health-care provider on office stationery explaining that the
                medication has been prescribed for you.
               Always carry medications in their original containers, in your carry-on luggage.
               Be sure to bring along over-the-counter antidiarrheal medication (e.g., bismuth subsalicylate,
                loperamide) and an antibiotic prescribed by your doctor to self-treat moderate to severe diarrhea. See
                suggested over-the-counter medications and first aid items for a travel kit.
               New security measures were implemented on August 10, 2006, regarding what passengers may carry
                onto the airplane. Up-to-date information may be obtained at the Transportation Security
                Administration‟s Guidance For Airline Passengers Fact Sheet and Frequently Asked Questions.

       Staying Healthy During Your Trip

       Travelers should take the following precautions

       To stay healthy, do...

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

               Wash your hands often with soap and water or, if hands are
                not visibly soiled, use a waterless, alcohol-based hand rub to
                remove potentially infectious materials from your skin and
                help prevent disease transmission.
               In developing countries, drink only bottled or boiled water, or
                carbonated (bubbly) drinks in cans or bottles. Avoid tap
                water, fountain drinks, and ice cubes. If this is not possible,
                learn how to make water safer to drink.
               Take your malaria prevention medication before, during, and
                after travel, as directed. (See your health care provider for a
                prescription.)                                                           When using repellent on a
               To prevent fungal and parasitic infections, keep feet clean              child, apply it to your own
                and dry, and do not go barefoot, even on beaches.                        hands and then rub them on
               Always use latex condoms to reduce the risk of HIV and                   your child. Avoid children's
                other sexually transmitted diseases.                                     eyes and mouth and use it
               Protect yourself from mosquito insect bites:                             sparingly around their ears.
                    o Wear long-sleeved shirts, long pants, and hats when
                    o Use insect repellents that contain DEET (N, N-diethylmethyltoluamide). For more information
                         about insect repellents and correct use, see What You Need to Know about Mosquito Repellent
                         on the CDC West Nile Virus site.
                    o If no screening or air conditioning is available: use a pyrethroid-containing spray in living and
                         sleeping areas during evening and night-time hours; sleep under bed nets, preferably
                         insecticide-treated ones.
                    o If you are visiting friends and relatives in your home country, see additional special information
                         about malaria prevention in Recent Immigrants to the U.S. from Malarious Countries Returning
                         'Home' to Visit Friends and Relatives on the CDC Malaria site.

       Do not

               Do not eat food purchased from street vendors or food that is not well cooked to reduce risk of
                infection (i.e., hepatitis A and typhoid fever).
               Do not drink beverages with ice.
               Avoid dairy products, unless you know they have been pasteurized.
               Do not swim in fresh water to avoid exposure to certain water-borne diseases such as schistosomiasis.
                (For more information, please see Swimming and Recreational Water Precautions.)
               Do not handle animals, especially monkeys, dogs, and cats, to avoid bites and serious diseases
                (including rabies and plague). Consider pre-exposure rabies vaccination if you might have extensive
                unprotected outdoor exposure in rural areas. For more information, please see Animal-Associated
               Do not share needles for tattoos, body piercing or injections to prevent infections such as HIV and
                hepatitis B.
               Avoid poultry farms, bird markets, and other places where live poultry is raised or kept.

       After You Return Home

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       If you have visited a malaria-risk area, continue taking your antimalarial drug for 4 weeks (mefloquine or
       doxycycline) or seven days (atovaquone/proguanil) after leaving the risk area.

       Malaria is always a serious disease and may be a deadly illness. If you become ill with a fever or flu-like
       illness either while traveling in a malaria-risk area or after you return home (for up to1 year), you should seek
       immediate medical attention and should tell the physician your travel history.

       For More Information

       For more information about these and other diseases, please check the Diseases page and CDC Health Topics

       Diseases carried by insects
           Dengue:
           Japanese encephalitis:
           Malaria information for Travelers to East Asia :
           Malaria Frequently asked questions:
           Malaria Prescription Drugs:
           Plague:

       Diseases carried in food or water:
           Cholera:
           Escherichia coli diarrhea:
           Hepatitis A:
           Schistosomiasis:
           Typhoid fever:

       Diseases from person-to-person contact
           Hepatitis B:
           HIV/AIDS prevention:
           HIV-infected travelers (in The Immunocompromised Traveler):

                 Important: This document is not a complete medical guide for travelers to this region. Consult
                 with your doctor for specific information related to your needs and your medical history;
                 recommendations may differ for pregnant women, young children, and persons who have

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

                 chronic medical conditions.

       Date: February 7, 2007
       Content Source: National Center for Infectious Diseases, Division of Global Migration and Quarantine

       Medical Facilities

       Western style medical facilities with international staffs are available in Beijing, Shanghai,
       Guangzhou and a few other large cities. Many other hospitals in major Chinese cities have so-
       called VIP wards (gaogan bingfang). These feature reasonably up-to-date medical technology and
       physicians who are both knowledgeable and skilled. Most VIP wards also provide medical services
       to foreigners and have English-speaking doctors and nurses. Most hospitals in China will not
       accept medical insurance from the United States, with the exception of the following hospitals,
       which are on the Blue Cross Blue Shield‟s worldwide network providers - overseas network
       hospitals‟ list, Hong Kong Adventist Hospital, Beijing United Family Hospital, Beijing Friendship
       Hospital, International Medical Center in Beijing, and Peking Union Medical Center. Travelers
       will be asked to post a deposit prior to admission to cover the expected cost of treatment. Many
       hospitals in major cities may accept credit cards for payment. Even in the VIP/Foreigner wards of
       major hospitals, however, American patients have frequently encountered difficulty due to cultural
       and regulatory differences. Physicians and hospitals have sometimes refused to supply American
       patients with complete copies of their Chinese hospital medical records, including laboratory test
       results, scans, and x-rays. All Americans traveling to China are strongly encouraged to buy foreign
       medical care and medical evacuation insurance prior to arrival.

       Ambulances do not carry sophisticated medical equipment, and ambulance personnel generally
       have little or no medical training. Therefore, injured or seriously ill Americans may be required to
       take taxis or other immediately available vehicles to the nearest major hospital rather than waiting
       for ambulances to arrive. In rural areas, only rudimentary medical facilities are generally available.
       Medical personnel in rural areas are often poorly trained, have little medical equipment or
       availability to medications. Rural clinics are often reluctant to accept responsibility for treating
       foreigners, even in emergency situations.

                Emergency Medical Assistance / Hospital List

       Beijing Consular District

       Beijing United Family Hospital
       北 京和 睦 家 医 院
       Tel: 010-64333960/1/2/4/5 (24-hour number)
       Fax: 010-64333963
       Emergency Hotline: 010-64332345

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Add: 2 Jiang Tai Lu, Chao Yang District, Beijing 100016
       地 址: 北 京 朝 阳 区 蒋 台 路2 号
       Beijing United Family Clinic - Shunyi
       Tel: 010-80465432
       Fax: 010-80464383
       Add: Pinnacle Plaza, Unit # 818, Tian Zhu Real Estate Development Zone,
       Shunyi District, Beijing 101312
       地 址: 北 京 顺 义 区 天 竺 房 地 产 开 发 区 日 祥 社 区818 号
       SOS International (Medical Emergency and Evacuation Service)
       Tel: 010-64629100 (24-hour Alarm Center), 010-64629112
       Fax: 010-6462-91111
       Add: Building C, BITIC Leasing Center,
       No. 1 North Road, Xing Fu San Cun, Chao Yang District, Beijing 100027
       地 址: 北 京 朝 阳 区 幸 福 三 村 北 接1 号 北 信 租 赁 中 心C 座100027
       Vista Clinic
       Tel: 010-8529-6618
       Fax: 010-8529-6615
       Add: Kerry Center Shopping Mall B29/B30
       No.1 Guanghua Road, Chao Yang District, Beijing 100020
       地 址: 北 京 朝 阳 区 光 华 路1 号 嘉 里 购 物 中 心 B29B/B30
       Bayley & Jackson Medical Center
       Tel: 010-8562-9998
       Fax: 010-8561-4866
       Add: 7 Ritan Dong Lu, Chaoyang District, Beijing 100020
       北 京 朝 阳 区 日 坛 东 路7 号
       MEDEX Assitance Corporation (Medical Evacuation Service)
       Tel: 010-65958510
       Fax: 010-65958509
       Add: No. 871 Poly Plaza, 14 South Dongzhimen, Beijing 100027
       Friendship Hospital - GlobalDoctor Clinic
       Tel: 010-8456-9191 or 010-83151915
       Add: 95 Yong An Lu, Xuan Wu District, Beijing 100050

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       地 址: 北 京 宣 武 区 永 安 路95 号
       Medivac Center in Bangkok: 66-2-236-8444
       International Medical Center (IMC) - Beijing
       Tel: 010-64651561/2/3 (24-hour number)
       Fax: 010-64651984
       Add: Lufthansa Center, Office Building, Suite 106,
       50 Liang Ma Qiao Rd., Chao Yang District, Beijing 100016
       地 址: 北 京 朝 阳 区 亮 马 桥 路50 号 燕 莎 中 心 办 公 楼106 室
       Beijing First Aid Center
       Tel: 010-120 (24-hour Alarm number), 010-65255678, 66014336
       Add: 103 Qian Men Xi Da Jie, Xuan Wu District, Beijing
       地 址: 北 京 前 门 西 大 街103 号
       Hong Kong International Medical Clinic - Beijing
       Tel: 010-65012288 Ext. 2346
       Add: Swissotel 9 Fl., Beijing Hong Kong Macau Center,
       Dong Si Shi Tiao Li Jiao Qiao, Beijing 100027
       地 址: 北 京 东 四 十 条 立 交 桥 港 澳 中 心9 层
       Arrail Dental
       Tel: 010-65006472/3, 85263235/6
       Add: 19 Jian Guo Men Wai Da Jie, Chao Yang District, Beijing 100004
       地 址: 北 京 建 国 门 外 大 街19 号
       Intech Eye Hospital (Dr. Hu)
       Tel: 010-6773-2909
       Add: 12 Pan Jia Yuan Nan Li, Chao Yang District, Beijing
       地 址: 北 京 朝 阳 区 潘 家 园 南 里12 号
       China Academy of Medical Science-Beijing Hospital (Peking Union Hospital)
       Tel: 010-6529-5120; 010-6529-5284
       Fax: 010-65124875
       Add: 1 Shui Fu Yuan, Dong Cheng District, Beijing 100730
       地 址: 北 京 东 城 区 帅 府 园1 号
       Sino-Japanese Friendship Hospital
       Tel: 010-6422-2965; 010-64221122
       Fax: 010-6421-7749

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Add: Ying Hua Dong Lu, He Ping Li, Beijing 100029
       地 址: 北 京 和 平 里 樱 花 东 路
       Ministry of Public Health-Beijing Hospital
       Tel: 010-65132266
       Add: 1 Da Hua Lu, Dong Dan, Beijing 100730
       地 址: 北 京 东 单 大 华 路1 号
       No. 3 Hospital of Beijing Medical University
       Tel: 010-62016925, 62017691
       Add: 49 Hua Yuan Bei Lu, Hai Dian District, Beijing 100083
       地 址: 北 京 海 淀 区 花 园 北 路49 号
       Beijing Red Cross Chaoyang Hospital Affiliated to Capital Medical University
       Tel: 010-6500-7755 Ext. 2380, 65024704
       Add: 8 Bai Jia Zhuang Lu, Chao Yang District, Beijing 100020
       地 址: 北 京 朝 阳 区 白 家 庄 路8 号

       General Hospital of Tianjin Medical University
       Tel: 022-27813159
       Add: 154 An Shan Da, He Ping District, Tianjin 300450
       地 址: 天 津 和 平 区 鞍 山 道154 号

       The First Center Hospital of Tianjin
       Tel: 022-3366916
       Add: 24 Fu Kang Lu, Tianjin 300450
       地 址: 天 津 复 康 路24 号
       The Third Hospital of Tianjin
       Tel: 022-24341139
       Add: 26 Jiang Du Lu, He Bei District, Tianjin 300250
       地 址: 天 津 河 北 区 江 都 路26 号

       No. 1 Affiliated Hospital to Hubei Medical University
       Tel: 027-88041919, 88066234

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Add: 238 Jie Fang Lu, Wu Chang District, Wuhan 430060
       地 址: 武 汉 市 武 昌 区 解 放 路238 号
       No. 2 Affiliated Hospital to Hubei Medical University
       Tel: 027-7312993, 7317926
       Add: 169 Dong Hu Lu, Wu Chang District, Wuhan 430071
       地 址: 武 汉 武 昌 区 东 湖 路169 号
       Xie He Hospital Affiliated to Tong Ji Medical University
       Tel: 027-3646230, 3634590
       Add: 1095 Jie Fang Da Dao, Wuhan 430030
       地 址: 武 汉 汉 口 解 放 大 道1277 号
       Yichang Center People‟s Hospital
       Tel: 0717-6447894, 6456947, 6457795
       Add: 127 Yi Ling Da Dao, Yichang 443003
       地 址: 宜 昌 市 夷 陵 大 道127 号

       People‟s Hospital of Shaanxi Province
       Tel: 029-5251331 Ext. 2283/2217, 5241709
       Add: 214 You Yi Xi Lu, Xian 710068
       地 址: 西 安 市 友 谊 西 路214 号
       No. 2 College Affiliated to Xian Medical University
       Tel: 029-7273634
       Add: 36 Xi Wu Lu, Xian 710004
       地 址: 西 安 市 西 五 路36 号

       People‟s Hospital of Hebei Province
       Tel: 0311-7046996 Ext. 8361/8126
       Add: 348 He Ping Xi Lu, Xin Hua District, Shi Jia Zhuang 050011
       地 址: 石 家 庄 市 新 华 区 和 平 西 路348 号

       No.1 Hospital of Shanxi Medical University

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Tel: 0351-4044648, 4044111 Ext.25463/26706
       Add: 85 Jie Fang Nan Lu, Taiyuan 030001
       地 址: 太 原 市 解 放 南 路85 号

       Inner Mongolia
       The Affiliated Hospital to Inn Mongolia Medical College
       Tel: 0471-6965931, 6963300 Ext. 6804
       Add: 1 Tong Dao Bei Jie, Hui Min District, Inner Mongolia 010050
       地 址: 内 蒙 古 呼 和 浩 特 市 回 民 区 通 道 北 街1 号

       The People‟s Hospital of Jiangxi Province
       Tel: 0791-6813352 Ext. 358, 6813124
       Add: 152 Ai Guo Lu, Nanchang 330006
       地 址: 南 昌 市 爱 国 路152 号

       Qianfoshan Hospital of Shandong Province
       Tel: 0531-2968900 Ext.2224/2082, 2963647
       Add: 66 Jing Shi Lu, Jinan 250014
       地 址: 济 南 市 经 十 路66 号
       Qingdao Municipal Hospital
       Tel: 0532-2827191, 2826437
       Add: 1 Jiao Zhou Lu, Shi Bei District, Qingdao 266011
       地 址: 青 岛 市 市 北 区 胶 州 路1 号

       The People‟s Hospital of Henan Province
       Tel: 0371-5951056,5952183, 5580011
       Fax: 0371-5964376
       Add: 7 Wei Wu Lu, Jin Shui District, Zhengzhou 450003
       地 址: 郑 州 市 金 水 区 纬 五 路7 号


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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       The People‟s Hospital of Hunan Province
       Tel: 0731-2224611 Ext. 3333/2210
       Add: 28 Dong Mao Jie, Jie Fang Xi Lu, Changsha 410002
       地 址: 长 沙 市 解 放 西 路 东 茅 街28 号

       The People‟s Hospital of Gansu Province
       Tel: 0931-8416801 Ext. 203/302, 8822184
       Add: 160 Dong Gang Xi Lu, Cheng Guan District, Lan Zhou 730000
       地 址: 兰 州 市 城 关 区 东 岗 西 路160 号

       The People‟s Hospital of Qinghai Province (The First Aid Center of Qinghai Province)
       青 海 省 人 民 医 院( 省 急 救 中 心)
       Tel: 0971-120, 8177911 Ext. 215
       Add: 2 Gong He Lu, Xining 810007
       地 址: 青 海 省 西 宁 市 共 和 路2 号

       The People‟s Hospital of Ningxia Hui Autonomous Region
       Tel: 0951-2021154, 2021491 Ext. 335, 361
       Add: Huai Yuan Lu, Xin Shi District, Yinchuan 750021
       地 址: 银 川 市 新 市 区 怀 远 路

       Xinjiang Uigur Autonomous Region
       The People‟s Hospital of Xinjiang Uigur Autonomous Region
       Tel: 0991-2822927 Ext. 3120/2209
       Add: 91 Tian Chi Lu, Urumqi 830001
       地 址: 乌 鲁 木 齐 市 天 池 路91 号

       Chengdu Consular District
         ** (updated on March 23, 2001) **

       Sichuan Province


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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Sichuan international medical center and foreigners‟ clinic
       Tel: 5422408(English and Chinese, Monday to Friday 8:30 to 5:30)
       5422777(English and Chinese, Monday to Friday, night time and weekend)
       No.1 Hospital Attached to West China Medical University
       No.37, Guoxuexiang
       Emergency and Ambulance: 5553329, 5422286
       Appointment: 13808005795(English, Japanese)
       Medical Service: 5551331(Chinese)
       Office of OPD: 5422290
       No.2 Hospital Attached to West China Medical University
       No.20, Section 3, Renmin Nanlu
       Emergency 5501340
       Stomatological Hospital Attached to West China Medical University
       No.14, Section 3, Renmin Nanlu
       5553331; 5501437; Emergency 5501452
       Sichuan Province People‟s Hospital
       1st ring road, west section 2, No. 32
       Switchboard 7769981; Emergency 7769262
       Chengdu Children‟s Special Hospital
       The east corner of Jiangjun Street
       Switchboard 6691296
       Hospital Attached to Chengdu Traditional Chinese Medical University
       No.39, 12 Qiao Road
       Switchboard 7769902
       Chengdu No.1 People‟s Hospital
       The east part of Chunxi Road #2
       Switchboard 6667223 Emergency 6659298
       Chengdu No.2 People‟s Hospital
       No.10, Qingyun Nanjie
       Switchboard 6621522 Emergency 6740843
       Chengdu No.3 People‟s Hospital
       No.82, Qinglong Jie
       Emergency 6638387
       Chengdu Children‟s Hospital
       Taishengnai road 137#
       Emergency 6624792
       Chengdu Military Bayi Orthopedics Hospital
       Beijiaochang Houjie, 6637492
       Ya Fei Dental Clinic, #25 Xifuhuajie ( not far behind the Mao Statue ), Chengdu.
       Tel: 6276100, 6697436, 6274034.

       Central Hospital of Panzhihua City, North Dahe Road.
       Contact: Li Jinfa; Tel: 0812-2223255, 2222512
       English Speaker: Liu Aijun; Tel: 2222941 ext. 3346

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       People‟s Hospital of Leshan City, No.76, Baita Street, Central District, Leshan.
       Contact: Wang Xingshu; Tel: 0833-2119310. Englsih Speaker: Xiao Dongxia (nurse);
       Tel: 2119311; Emergency 2119328

       People‟s Hospital of Guangyuan City, No.28, Jinjia-xiangzi (Jinjia Lane).
       Contact: Jia Mingcong; Tel: 0839-3222256.
       English Speaker: Shi Ping; Tel: 3223672 ext. 3266

       People‟s Hospital of Songpan County, No.01, Shoubei Lane, South Shuncheng Road, Jin-an
       Town. Contact: Li Gang; Tel: 0837-7232497.

       People‟s Hospital of Kangding County, No.63, Xiangyang Street. Contact: Gu Yuchao; Tel: 0836-
       English Speaker: Fan Xu; Tel: 2832445.

       First People‟s Hospital of Liangshan Prefecture, No.82, Shunjie, Xichang City. Contact: Yang
       Meng; Tel: 0834-3222761, 3226779; BP: 129 ext. 5705322.
       English Speaker: Liu Xiaokang; Tel: 3222138;
       BP: 129 ext. 8655470.
       Chongqing City

       Urban Area
       First Attached Hospital of Chongqing Medical University, No.1, Youyi Road, Yuanjiagang. Tel:
       023-68816534; Emergency 69012330.
       English Speakers: about 30.
       Third People‟s Hospital of Chongqing City, No. 104, Pibashan Zhengjie.
       Tel: 023-63515394. English Speakers: about 10.
       Chongqing Emergency Medical Center, No.1, Jiankang Road, Yuzhong District.
       Tel: 023-63862747. English Speakers: about 10.
       Wanzhou District (Wanxian)
       Three Gorges Central Hospital of Chongqing City, No.165, Xincheng Road, Wanzhou District.
       Tel: 023-58122821, 58122622 (office). English Speakers: about 10.

       People‟s Hospital of Fuling District, No.2, Gaosuntang Road, Fuling District.
       Tel: 023-72224460 (office), 72223629 ( out-patient department).
       English Speakers: about 10.

       People‟s Hospital of Fengjie County, No.61, Xinqiao Road, Fengjie County.
       Tel: 023-56522704. English Speakers: about 6.

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       People‟s Hospital of Dazhu County, West Zhongshan Street. Contact: 023-43722184.
       English Speaker: Xiong Jian; Tel: 43722184 (office).

       People’s Hospital of Fengdu County, No. 251, Zhonghua Road, Mingshan Town, Fengdu
       County. Tel: 70623569 (office).
       English Speakers: about 6.


       Tibet Autonomous Region No. 1 People's Hospital Emergency Medical Facility.
       This is a 24 hour facility (unlike the rest of the hospital).
       Address: No. 18, North Lin Kuo Road, Lhasa, Tibet 850000.
       Emergency number: (0891) 120.
       24 hour emergency number with an English language speaker: (0891) 632-2200.
       Tibetan Medical Hospital of Tibet Autonomous Region.
       Sickward Department: No.14, Buliangre Road(liangre road in Chinese).
       out-patient Department: No.10, Yutuo Road
       Tel: 0891-6322351
       People’s Hospital of Tibet Autonomous Region, No.7, North Linkuo Road, Lhasa.
       Tel: 0891-6332462

       People’s Hospital of Xigaze Prefecture

       People’s Hospital of Gyangtse County



       First Attached Hospital of Kunming Medical College, No. 153, Xichang Road, Kunming.
       Tel: 0871-5324888(operator); Emergency 5324590
       First People’s Hospital of Yunnan Province, No. 172, Jinbi Road, Kunming.
       Tel: 0871-3634031(operator)

       People’s Hospital of Dali Prefecture, No.122, South Renmin Road, Xiaguan.
       Tel: 0872-2125465


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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       People‟s Hospital of Lijiang Prefecture, Fuhui Road, Dayan Town, Lijiang.
       Tel: 0888-5121343(office)

       Minzu Hospital of Ruili City, No.1, Biancheng Street, Ruili. Tel: 0692-4141758

       Hospital of Xishuangbanna Prefecture, No.17, Central Galan Road, Jinghong City.
       Tel: 0691-2123636(office); Fax 2123849

       People‟s Hospital of Diqing Prefecture, No.28, Heping Road, Zhongdian County.
       Tel: 0887-8222022

       Guizhou Province

       Attached Hospital of Guiyang Medical College, No. 28, Guiyijie Street, Guiyang.
       Tel: 0851-6821113. English Speakers: Liu Jian (Surgical Dept.); Ding Jingjuan ( Internal Dept. )

       People‟s Hospital of Anshun Prefecture, No. 22, East Hongshan Road, Anshun City.
       Tel: 0853-3222403, English Speaker: Gou Puren, head of the hospital.

       Attached Hospital of Zunyi Medical College, No. 113, Dalian Road, Zunyi City.
       Tel: 0852-8622042. English Speaker: Yang Yuhao (Internal Dept.)

       418 Hospital of Kaili City, West Beijing Road, Kaili City.
       Tel: 0855-8220700(operator)
       English Speakers: Yu Yongcheng (Internal Dept.); Wang Jiatang (Surgical Dept.)

       Hospitals In Southern China
       The following is a list of hospitals in Southern China where there are English-speaking doctors
       providing medical care and services to foreigners.

       Guangzhou Consular District

       Guangzhou Emergency Center
       Tel: 120
       Anyone who needs emergency medical service can call the city Emergency Center (eg.
       Guangzhou: 020-120), which will inform the hospital nearest the patient to arrange an ambulance
       and a medical team to the patient's location as soon as possible.

       Hospitals In Guangzhou:

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Guangzhou Can Am International Medical Center
       5/F Garden Hotel 368 Huanshi Dong Lu, Guangzhou
       TEL: 8386-6988 (24-HOUR)
       SOS Alarm Center in Hong Kong
       Tel: (86-852)2528-9900 (Provides medevac services only)
       Global Doctor Medical Center
       Guangzhou City No. 1 People's Hospital
       Outpatient Department, 7-floor, 1 Panfu Lu
       Guangzhou, Guangdong, 510180
       Tel: 8104-5173 Fax: 8104-5170
       Mobile phone: 13570035254
       Guangdong Concord Medical Center
       9/F of the Guangdong Provincial Hospital
       96 Dong Chuan Road, Guangzhou
       Tel: 8387-4283, 8387-4293, 83874313
       8387-4283 (Emergency)
       Guangdong Provincial People's Hospital
       96 Dongchuan Road, Guangzhou 510080
       Tel: 8382-7812x2603; 8384-8627 (Emergency)
       Affiliated Hospital of Zhongshan University of Medical Science
       58 Zhongshan 2nd Road, Guangzhou 510080
       Tel: 8775-5766x8511; 8733-0808 (Emergency)
       Sun Yat Sen Memorial Hospital
       #107 Yanjiang Road West, Guangzhou 510120
       Tel: 8133-2199; 8133-2469, 8133-2648 (Emergency)
       Guangzhou No. 1 People's Hospital
       #602 Renmin Road North, Guangzhou 510180
       Tel: 8108-2090; 81085509 (Emergency)
       No. 1 Affiliated Hospital of Guangzhou Medical College
       1 Yanjiang Road, Guangzhou 510120
       Tel: 8333-7750x3046; 8333-6797 (Emergency)
       Guangzhou Red Cross Hospital
       396 Tongfu Road Central, Guangzhou 510220
       Tel: 8441-2233x1108; 8444-6411 (Emergency)
       Guangzhou Children's Hospital
       318 Renmin Central Road, Guangzhou 510120
       Tel: 8188-6332x5103(Emergency)
       Guangzhou Overseas Chinese Hospital
       Shipai, Guangzhou 510630
       Tel: 3868-8102 (Emergency)
       Nanfang Hospital
       Shahe, Guangzhou
       Tel: 8514-1888x87287; 8770-5656 (for foreigner service)
       8770-6163 (Emergency)

       Dental Hospital In Guangzhou:

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Guangdong Provincial Dental Hospital
       366 Jiang Nan Da Dao, Guangzhou 510260
       Tel: 8444-6867 (Director Office); 8442-7024 (Medical Dept.)
       8442-7034, 8443-8740 (Medical Office)
       Sun Shine (Kai Yi) Dental Clinic
       No. 2 Tianhe North Road
       Tel: 3886-2888x3111

       Hospital In Shenzhen:

       Shenzhen People's Hospital
       Dongmen Road North, Shenzhen
       Tel: (0755)-2553-3018 Ext.; 2553-1387 (Outpatient Dept.)
       Shenzhen Red-Cross Hospital
       Tel: (0755) 8336-6388
       Shenzhen Affiliated Hospital to Beijing University
       Tel: (0755) 8392-3333

       Hospitals In Hainan Province:

       Hainan People's Hospital
       Office: Xianlie Lu, Xiuying Qu, Haikou City, Hainan Province 570011
       Outpatient Dept. #8 Longhua Rd, Haikou City, Hainan Province 570001
       Tel: (0898)-6864-2660
       (0898)-6622-3287 (Outpatient Dept.)
       (0898)-6622-5866; 6622-6666; 6222-2423 (Emergency)
       Haikou People's Hospital
       #68 Desheng Sha Road, Haikou City, Hainan Province 570001
       Tel: (0898)-6622-3897 (Outpatient Dept. Office)
       (0898)-6618-9675; 6622-2412 (Outpatient Dept.)

       Hospitals In Fujian Province:

       Fujian Provincial Hospital
       #134 Dongjie, Fuzhou, Fujian 350001
       Tel: (0591)-755-7768 Ext.
       Union Hospital Affiliated to Fujian University of Medical Science
       #11 Xin Quan Road, Fuzhou, Fujian 350001
       Tel: (0591)- 335-7896; 335-7896 Ext. 8291, 8292 (Emergency)
       Lifeline Medical System
       123 Xidi Villa Hubin Bei Road, Xiamen City, Fujian 361012
       Tel: (0592) 532-3168 (24 hours), Mobile: (0)138-5008-2911
       Fax: (0592) 532-6168
       Working Hours: Monday-Friday 8:00?8:00, Saturday 8:00-12:00

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Hospital In Guilin City:

       Guilin People's Hospital
       #70 Wenming Lu, Guilin, Guangxi 541002
       Tel: (0773)-282-9065 Ext.
       -282-3767 Ext.
       -282-5116 (Emergency)

       Telephone Numbers For Emergency Medical Services In Guangzhou

       Guangdong Provincial People's Hospital
       Tel: 8188-5119; 8387-4283 Ext. (Guangdong Concord Medical Center)
       No. 1 Subsidiary Hospital of Zhongshan Medical Sciences University
       Tel: 8777-8314
       Sun Yet-Sen Memorial Hospital of Zhongshan Medical Sciences University
       Tel: 8133-2469, 8133-2648
       No. 1 Affiliated Hospital of Guangzhou University of Traditional Chinese Medicine
       Tel: 3659-0957, 3659-1316
       Guangdong Hospital of Traditional Chinese Medicine
       Tel: 8190-4609; 8188-9683
       Overseas Chinese Hospital affiliated to Jinan University
       Tel: 8551-6025
       No. 1 Affiliated Hospital of Guangzhou Medical College
       Tel: 8333-6797
       No. 2 Affiliated Hospital of Guangzhou Medical College
       Tel: 8444-9613
       Guangzhou No. 1 People's Hospital
       Tel: 8108-0509
       Guangzhou No. 2 People's Hospital
       Tel: 8181-4711
       Guangzhou Red Cross Hospital
       Tel: 8444-6411
       Guangzhou Emergency Center
       Tel: 120

       Anyone who needs emergency medical service can telephone the Guangzhou Emergency Center,
       which will inform the hospital nearest the patient to arrange an ambulance and a medical team to
       the patient's home as soon as possible.

       Medical Facilities In Guangzhou

       Note: Following list merely represents a list of information of some of the medical facilities
       often used by foreigners in Guangzhou. The Consulate leaves the decision rights to the
       person whether to avail or not to avail of medical services from medical facilities mentioned

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       SOS Clinic:
       Address: 1/F North Tower, Ocean Pearl Building, No.19 Hua Li Rd. Zhujiang New City,
       Phone Number: (8620) 8735-1051 Fax # (8620) 8735 -2045
       Ask for Dr. Pagget Lu or Dr. Hugues Francoi
       Office Hours: Monday to Friday 9:00AM to 12:00N and 2:00PM to 6:00PM, Saturday (by
       appointment and emergencies only) 9:00AM to 12:00N
       This clinic is run by foreign doctors who has overseas training and experience. They have a
       program called "one week program" in which you can become a member for a week. Consultation
       fee and commonly prescribed medicines like antibiotic, cough syrup, anti-histamine is covered
       under membership fee once you sign up in the one week program. Multiple visits to the doctor
       during that week period is also covered.
       Small emergencies such as lacerations that may require stitches can be taken cared of at:
       Ersha Island Hospital (emergency department) officially known as Guangdong Provincial
       Hospital of Traditional Chinese Medicine (TCM).
       Address: Da Tong Lu, Ersha Island, Guangzhou, 510100
       Guangzhou Can Am International Medical Center
       Address: 5/F, Garden Hotel, 368 Huanshi Dong Lu, Guangzhou
       Phone #: (8620) 83866988
       The Guangzhou Can Am Medical Clinic offers a second choice for Guangzhou expatriates who
       wish to visit a Western standard health care setting. No membership is required, though those who
       are members ($120 fee) received a 20% discount on services. On site laboratory, radiology, and
       pharmaceutical services are part of the operations. Four medical doctors, one dentist, and one
       professional counselor are on staff.
       Visitors are welcome if you'd like to have a tour of their facilities. The clinic has also arranged
       direct billing with 10 insurance companies and is looking to increase this list.
       Clinic hours: Monday through Friday 9:00am to 12:30pm and 2:00pm to 6:00pm.
       Saturday 9:00am to 12:30pm.
       For more serious emergencies such as trauma injuries with extensive bleeding, unconsciousness or
       suspected heart related problems or any condition that requires immediate treatment, can be
       handled at:
       Guangdong Provincial People's Hospital
       Address: 106 Zhongshan Er Road, Guangzhou Phone #: (8620) 83827812
       Medical staff members can handle any emergency treatment for evaluation and stabilization. This
       is the facility where the Fok Heart Center is located which can also help you with any possible
       heart related emergencies. This hospital has an inpatient and an outpatient department.
       Global Doctor Medical Center
       Address: Guangzhou City No. 1 People's Hospital, Outpatient Department, 7th Floor, 1 Panfu Lu,
       Guangzhou 510180
       Phone#: 8104 5173
       Fax: 8104 5170
       Mobile Phone: (1357) 003 5254
       Sun Yatsen Memorial Hospital (approx. 15 minutes by walk from Consulate)
       Address: 107 YanJiang Xi Lu, Guangzhou Telephone #: 81332469 Dr. Qui (ER Head). Dr. Qui
       can not speak English. Please have someone with you who can translate or request that hospital
       staff find someone who can translate for you.

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       The urgency and the location of the patient would have to be the primary factor in making the
       decision to use this facility. Assurance had been given that they use disposable needles and
       syringes and sterilization is in evidence for those requiring such but there is no way of being able
       to confirm the validity of this information. They also have an outpatient department in this
       Guangdong Concord Medical Center is located at the 9th floor of the Guangdong Provincial
       Address: 96 Dong Chuan Road, Guangzhou
       Phone Numbers: 83874283, 83874293, 83874313
       This hospital is clean and modern and has a private inpatient floor. It has an inpatient and an
       outpatient unit located in a large government hospital. Outpatient visits are handled by staff
       physicians by appointment. Specialists are called in as needed or the patient is escorted to see the
       specialist. There is a membership fee. Make sure to make an appointment before going in for
       check up since this facility gives priority to its members and does not guarantee service to non-

       Shanghai Consular District

       World Link Clinic. Expatriate doctors and imported vaccines.
       --- Portman Clinic: Shanghai Center #203 W, 1376 Nanjing Xi Lu, 200040
       Tel: 6279-7688. For appointments: 6279-8678
       Fax: 6279-7698
       --- Hong Qiao Clinic: Mandarine City Unit 30, 788 Hong Xu Lu , 201103
       Tel: 6405-5788; Fax: 6405-3587

       Medical/Surgical Emergencies:
       Hua Shan Hospital, 15th Floor, Foreigner's Clinic, Zong He Lou, 12 Wulumuqi Zhong Lu, Tel:
       6248-3986 or 6248-9999 x2531.
       Hua Dong Hospital, 2nd Floor, Foreigner's Clinic, 221 Yanan Xi Road.
       Tel: 6248-4867 6248-3180 x3106
       The First People's Hospital, International Medical Care Center, 585 Jiu Long Lu (near the Bund):
       Tel: 6324-3852 (24 hours).
       Rui Jin Hospital, 197 Rui Jin Er Lu, Tel: 6437-0045 x668101,
       After hours: 6437-0045 x668202

       The No. 9 People's Hospital, 7th Floor, Shanghai Dental Medical Center Cooperative Co. (Sino-
       Canadian Joint venture), Outpatient Service Building, 639 Zhi-Zao-Ju Lu, Tel: 6313-3174.
       Dr Harriet Jin's Dental Surgery
       Rm 17C Sun Tong Infoport Plaza, No. 55 Huai Hai West Rd. , 200030
       Tel: 5298-9799; Fax: 5298-9799
       DDS Dental Care in Shanghai: 2F/1, Tao Jiang Rd. (Dong Ping Rd.)
       Tel: 021-64660928 Fax: 021-54562311 Email:

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Maternity And Gynecology
       International Peace Maternity Hospital: 910 HengShan Road, Tel: 6407-0434 x1105.
       The First Maternity and Child Hospital: 536 Changle Road, 5403-5335.
       Pediatric Hospital, Foreigner's Clinic: Shanghai Medical University, 183 Fenglin Road, 2nd Floor
       Tel: 6403-7371; 6404-7129 x5009.

       Western brand toiletries and over-the-counter medications are available at Watson's in the Portman
       Shanghai Centre shopping area, 1376 Nanjing Xi Lu, 200040.

       Anhui Medical Facilities
       Anhui Provincial People's Hospital : # 1 Lu Jiang Road, He Fei City
       Tel: 0551-2652-797
       Affiliated Hospital of Anhui Provincial Medical Institute: #218 Ji Xi Rd. He Fei City
       Tel: 0551-3633-411

       Jiangsu Medical Facilities
       Jiangsu Provincial People's Hospital: #300 Guangzhou Rd. Nanjing City
       Tel: 025-371-4511
       General Hospital of Nanjing Military Base: #305 Zhong Shan Dong Rd. Nanjing City
       Tel: 025-4826-808
       Zhejiang Medical Facilities
       Sir. Run Run Show Hospital: #3 Qing Chun Dong Rd. HangZhou City
       Tel: 0571-8609-0073

       Shenyang Consular District

       Shenyang Consular District includes China's three northeast provinces: Liaoning, Jilin and
       Heilongjiang. There are several hospitals which can provide services for foreigners in each
       province. Not all hospitals, however, have the designated English-speaking doctor for foreigners.
       Due to the relatively small number of resident Americans in our district, we do not have sufficient
       data available to evaluate the merits or deficits of these facilities. Therefore, this list is provided for
       reference only and does not constitute a recommendation.

       Liaoning Province
       The People's Hospital of Liaoning Province
       33 Wenyi Rd
       Shenhe Dist.
       Shenyang, 110015 China
       Tel: (024)2414-7900. Director's Office: (024)2481-0438
       Ambulance: (024) 2481-0136/2414-7900
       Dr. Deng Zhong Xin speaks excellent English, ext. 8479.
       Cell Phone: 13002430807/24118259(home)
       This hospital is designated for use by foreigners, English-speaking doctors available.
       The No. 2 Hospital of China Medical University
       26 Wenhua Rd

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Heping Dist,
       Shenyang, 110003
       Tel: (024) 2389-3501
       Ambulance: (024) 2389-2620(day)/2389-2430(night)
       Dr. Xie Hui Fang speaks adequate English, ext.: 6640, Mon. & Fri.; 6540/6549, Tue, Wed. & Thu
       (Lab). (024) 2389-1476 (home)
       Cell phone: 13609827551
       First Hospital of China Medical University
       155, Nanjing North Street
       Heping District
       Shenyang, 110001, China
       Tel: (024) 2326-8760
       Fax: (024) 2326-4417
       Tel: (024) 2325-6666 (switchboard)
       He's Eye Hospital
       128, Huanghe Bei St., Huanggu District
       Tel: 8653-1325(president's office); 8652-0800(switchboard)
       Name: He Wei (8653-1325) Cell Phone: 13940088957
       Xu Ming Li Office: 024(8654-2153)
       Cell Phone: 13898815140
       Guo Su Ping 8652-0800
       American Medical Center-Global Doctor Medical Staff
       Pangjiang Rd., Dadong Dist, Shenyang
       Tel No.: 024-2433-0678; 2432-6409
       Fax No.: 024-2433-1008
       Emergency call No.: 024-2432-6409
       Emergency BP: 8887-85858

       Peter Arthur Burgos MD
       Dr. Cassie Zhou
       Dr. Gu Jian

       Dalian Friendship Hospital
       8 Sanba Square
       Zhongshan District
       Shenyang, 116001
       Tel: (0411) 271-8822; Admin office: 271-3281
       Dalian Railway Hospital
       6 Jiefang St.
       Zhong Shan District
       Tel: (0411) 282-1120
       Foreign Cruise Line Ward: Wang Xiao Mei (0411) 2636293/2834447
       The No. 1 Hospital of Dalian Medical University
       222, Zhongshan Rd. 116011
       Tel: (0411) 363-5963 (switchboard)

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Dr. Gao Hua can not speak English but is in charge of special need medical department which can
       meet medical needs of foreigners, ext.2126/2127/2128/2129(night) or 4394743.

       Heilongjiang Province

       The No. 1 Hospital of Harbin Medical University
       5 Youzheng St Nangang District 150001
       Tel: (0451) 364-1918/360-7924/3641563
       The No. 2 Hospital of Harbin Medical University
       247, Xue Fu Rd
       Nangang District 150086
       Tel: (0451) 666-2962
       All doctors in Department No. 2 can assist foreigners.
       Provincial Hospital
       82 Zhongshan Rd.
       Xiangfang District
       Tel: (0451) 566-2971
       The No. 1 Hospital of Harbin
       151, Diduan St
       Daoli Dist. 150010
       Tel: (0451) 468-3684(Admin office);
       Switchboard: 461-4606; 461-4636;
       Dr. Sun Wei Fu speaks English, Tel: 468-3733, ext. 5102
       Dr. Chen Mi Bin speaks English, ext. B Ultrasonic Room.

       The No. 1 Hospital of Qiqihaer
       20 Gongyuan Lu
       Longsha Dist, 161005
       Tel: (0452) 2425-981
       Dr. Song Ben Hai, Dr. Zhang Qi Chang and Dr. Sun Tian Zhao speak English

       Jilin Province

       The # 2 Hospital of Norman Bethune Medical University
       18, Zhiqiang Street
       Nanguan District
       Changchun, 130041
       Tel: (0431) 8974612
       Ambulance: Same As Above, Ext: 621
       The Hospital Of Changchun Chinese Medical University
       20, Gongnong Road
       Changchun, 130021
       Tel: (0431) 5955911

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Yanbian Hospital
       119, Juzi Street
       Yanji, 133000
       Tel: (0433) 2532435.
       Dr. An, Chang Shan speaks English, ext.: 212

       Pharmacies in Shenyang:

       Pharmacies in China are different from those in the US. They sell medicines only. Do not expect
       sun tan lotion or deodorant from them. The largest difference may be that you can buy prescription
       drugs at any dosage on the street (except for sleeping pills and some toxicant, in case you commit

       People's Hospital
       Pharmacy at People's Hospital has doctors who speak moderate medical English during the day.
       However, if you try to get medicine from them, they can find doctors who speak better English.

       No. 2 Hospital of Medical University
       If you want to buy medicine at this hospital, pay 1.00 Kuai for the registration fee and they will
       find some doctor who can speak good English.

       Medical Insurance

       Americans are advised not to travel to China without both health insurance and medical evacuation
       insurance (often included in so-called "travel" insurance and provided as part of a tour group
       package). U.S. medical insurance is not always valid outside the United States. Medicare/Medicaid
       programs do not provide coverage for medical services outside the United States. Even when
       insurance does cover services received in China, it will usually be necessary to pay first and then
       file for reimbursement with the insurance company upon returning to the United States.
       Supplemental insurance with specific overseas coverage, including provision for medical
       evacuation, is strongly recommended and can be purchased in the United States prior to travel.
       Please check with your own insurance company to confirm whether your policy applies overseas,
       and if it includes a provision for medical evacuation.

       Recent medical evacuations by air ambulance from China to nearby areas have cost over US
       $30,000. Two private emergency medical assistance firms, SOS International, Ltd., and Medex
       Assistance Corporation, offer medical insurance policies designed for travelers. Both of these
       companies have staff in China who can assist in the event of a medical emergency.

       SOS International, Ltd.
       Beijing Clinic address: Building C, BITIC Leasing Center
       No. 1 North Road, Xingfu Sancun, Sanlitun, Chaoyang District, Beijing 100027
       Beijing SOS International Clinic, telephone: (86-10) 6462-9112, Fax (86-10) 6462-9111.

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       For medical emergencies, please telephone the SOS International Alarm Center at (86-10) 6462-
       9100 from anywhere in Mainland China, From Hong Kong: call (852) 2428-9900 From the U.S.:
       1-800-468-5232. These phone lines are answered 24 hours by SOS International Alarm Center
       personnel. For information on purchasing health or travel insurance from SOS International, please
       telephone (1-800) 523-6586 (8:30 a.m. to 4:30 p.m. Eastern Time, Monday through Friday) in the
       U.S. or visit on the Internet or e-mail:

       SOS members calling with a medical emergency should first telephone the Alarm Center in
       Beijing at (86-10)6462-9100.

       MEDEX Assistance Corporation
       871 Poly Plaza
       Beijing 100027
       Beijing Office Fax: (86-10) 6595-8509
       Email: (Baltimore, Maryland)
       U.S. telephone: (1-800) 537-2029 or (1-410) 453-6300 (24 hours)
       Emergencies (members only): (1-800) 527-0218 or (1-410) 453-6330
       Web site:

       Medex members calling with a medical emergency should call Medex-Emergency in China at
       telephone (86-10) 6595-8510.

       Heathrow Air Ambulance

       Heathrow is an air evacuation service with offices in the United States and England. Travelers can
       pre-arrange air evacuation insurance and other emergency travel assistance. This service also has a
       business plan to assist foreigners who lack travel insurance. Heathrow Air Ambulance Service,
       15554 FM, Suite 195 Houston, TX. 77095-2704. Office telephone 1-800-513-5192. Office fax 1-
       281-550-9763. E-mail:

       Useful information on medical emergencies abroad, including overseas insurance programs, is
       provided in the Department of State's Bureau of Consular Affairs brochure, “Medical Information
       for Americans Traveling Abroad,” available via the Bureau of Consular Affairs home page, or
       autofax: 1-202 647-3000

       Avian Influenza - Recent Outbreaks

       Outbreaks of H5N1 avian influenza ("bird flu") were reported in January-February 2004 from
       poultry farms in many parts of the country. Suspected or confirmed cases were described in the
       provinces of Guangxi, Hunan, Hubei, Gansu, Shaanxi, Anhui, Shanghai, Guangdong, Zhejiang,
       Yunnan, Henan, Jiangxi, and Xinjiang Uygar Autonomous Region. No human cases have been
       reported to date. In previous outbreaks of avian influenza, all severe human cases resulted from
       direct contact with live, infected poultry. Transmission from person-to-person was extremely
       limited and did not result in significant illness. Travelers to China should avoid contact with live
       poultry, including visits to poultry farms and open markets with live birds, and should not touch

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       any surfaces that might be contaminated with feces from poultry or other animals. Also, travelers
       should not consume any poultry or egg products unless thoroughly cooked. The currently available
       influenza vaccines do not protect against avian influenza. Anyone who develops fever and flu-like
       symptoms after travel to China should seek immediate medical attention, which may include
       testing for avian influenza.

       An outbreak of severe acute respiratory syndrome (SARS) was reported from mainland China
       beginning in November 2002, resulting in a total of 5327 cases and 349 deaths. The outbreak was
       terminated by an aggressive program of contact identification and quarantine. In December 2003, a
       new case of SARS was reported from Guangdong province, followed in January 2004 by three
       additional cases. The source of these recent infections has not been determined. All contacts of
       these patients have been quarantined and appear to be free of disease. No travel restrictions are
       recommended for China at this time. The disease appears to be caused by a previously unknown
       virus belonging to the corona virus family. The incubation period usually ranges from two-to-
       seven days, but may be as long as ten days. The first symptom is usually fever, often accompanied
       by chills, headache, body aches, and malaise. This is typically followed by dry cough and
       difficulty breathing, at times severe enough to require intubation and mechanical ventilation.

       The Centers for Disease Control continues to recommend consideration of testing for SARS in
       anyone who develops pneumonia or adult respiratory distress syndrome (ARDS) after travel to
       mainland China, Taiwan, or Hong Kong, or close contact with an ill person with a history of recent
       travel to one of these areas. For those with pneumonia or ARDS who have recently traveled to
       Guangdong Province, diagnostic testing for SARS should be performed immediately.

       Other Health Information

       Most roads and towns in Tibet, Qinghai, parts of Xinjiang, and western Sichuan are situated at
       altitudes over 10,000 feet. Travelers should seek medical advice in advance of travel, allow time
       for acclimatization to the high altitude, and remain alert to signs of altitude sickness. HIV has
       become a significant concern in China. Travelers should always ask doctors and dentists to use
       sterilized equipment and be prepared to pay for new syringe needles in hospitals or clinics. Air
       pollution is a problem throughout urban China. Travelers should consult their doctor prior to travel
       and consider the impact seasonal smog and heavy particulate pollution may have on them.

       Alcoholics Anonymous can be reached in Beijing at telephone (86-10) 6437-6305, or visit the U.S.
       Embassy web page in advance of travel to China for additional contact numbers. There is an Al-
       Anon chapter in Beijing that can be reached at (86-10) 6940-3935. Information on vaccinations
       and other health precautions may be obtained from the Centers for Disease Control and
       Prevention's hotline for international travelers at 1-877-394-8747; fax -888-232-3299, or via the
       CDC's Internet site at For information about outbreaks of infectious diseases
       abroad consult the World Health Organization‟s website at Further health
       information for travelers is available at

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       3. At a Glance
          Flag description: red with a large yellow five-pointed star and four smaller yellow five-pointed stars (arranged in
                            a vertical arc toward the middle of the flag) in the upper hoist-side corner

                A. Population
                  Population: 1,313,973,713 (July 2006 est.)
               Age structure: 0-14 years: 20.8% (male 145,461,833/female 128,445,739)
                              15-64 years: 71.4% (male 482,439,115/female 455,960,489)
                              65 years and over: 7.7% (male 48,562,635/female 53,103,902) (2006 est.)
                 Median age: total: 32.7 years
                             male: 32.3 years
                             female: 33.2 years (2006 est.)
           Population growth 0.59% (2006 est.)
                   Birth rate: 13.25 births/1,000 population (2006 est.)
                  Death rate: 6.97 deaths/1,000 population (2006 est.)
          Net migration rate: -0.39 migrant(s)/1,000 population (2006 est.)
                    Sex ratio: at birth: 1.12 male(s)/female
                               under 15 years: 1.13 male(s)/female
                               15-64 years: 1.06 male(s)/female
                               65 years and over: 0.91 male(s)/female
                               total population: 1.06 male(s)/female (2006 est.)
       Infant mortality rate: total: 23.12 deaths/1,000 live births
                              male: 20.6 deaths/1,000 live births
                              female: 25.94 deaths/1,000 live births (2006 est.)
           Life expectancy at total population: 72.58 years
                       birth: male: 70.89 years
                              female: 74.46 years (2006 est.)
          Total fertility rate: 1.73 children born/woman (2006 est.)
            HIV/AIDS - adult 0.1% (2003 est.)
             prevalence rate:
          HIV/AIDS - people 840,000 (2003 est.)
                living with
         HIV/AIDS - deaths: 44,000 (2003 est.)
                  Nationality: noun: Chinese (singular and plural)
                               adjective: Chinese

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Regional Distribution
       Province                            Population
       Henan                               91,236,854
       Shandong                            89,971,789
       Guangdong                           85,225,007
       Sichuan                             83,348,296
       Jiangsu                             73,045,577
       Hebei                               66,684,419
       Hunan                               63,274,173
       Hubei                               59,508,870
       Anhui                               58,999,948
       Zhejiang                            45,930,651
       Yunnan                              42,360,089
       Liaoning                            41,824,412
       Jiangxi                             40,397,598
       Heilongjiang                        36,237,576
       Shaanxi                             35,365,072
       Guizhou                             35,247,695
       Fujian                              34,097,947
       Shanxi                              32,471,242
       Jilin                               26,802,191
       Gansu                               25,124,282
       Hainan                              7,559,035
       Qinghai                             4,822,963

       Autonomous Regions                  Population
       Guangxi Zhuang                      43,854,538
       Neimenggu (Inner Mongolia)          23,323,347
       Xinjiang Uighur                     18,459,511
       Ningxia Hui                         5,486,393
       Xizang (Tibet)                      2,626,329
       Municipalities                      Population
       Shanghai                            16,407,734
       Beijing                             13,569,194
       Tianjin                             9,848,731


       The principal language is Northern Chinese (Mandarin). In the south and southeast local dialects
       are spoken, although the writing system is uniform. Thousands of dialectical groups exist, with

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       seven major groups traditionally identified: Putonghua/Han (Mandarin), Gan, Kejia (Hakka), Min,
       Wu, Xiang, and Yue (Cantonese). Three further groups were recently identified and separated
       from these seven categories (Jin from Mandarin, Hui from Wu, and Pinghua from Yue). Within
       each grouping, a variety of often mutually unintelligible dialects will exist. In addition, there are a
       number of dialects as yet unclassified.

       Other languages are widely spoken in autonomous regions such as Xizang (Tibet), Xinjiang and
       Neimenggu (Inner Mongolia).

       Density of Population

       130 per km2 .
       Source: Jane‟s Information Group

       Births and Deaths

       Birth rate per 1,000 population                                 13.14
       Mortality rate per 1,000 (male, aged 15-59)                     164
       Mortality rate per 1,000 (female, aged 15-59)                   103
       Infant mortality rate per 1,000 (male, aged 0-5)                32
       Infant mortality rate per 1,000 (female, aged 0-5)              43
       Life expectancy (female)                                        73.0
       Life expectancy (male)                                          70.0
                 ures are from the World Health Organization‟s 2005

       Population Growth Rate

       China's population is estimated to be growing at a rate of 0.58 per cent per year (2005 estimate).

                B. Ethnic Groups, Religions and Languages

       Ethnic Groups
                                                          % of total
       Han                                                91.96
       Zhuang                                             1.37
       Manchu                                             0.87
       Hui                                                0.76
       Miao                                               0.65
       Uygur                                              0.64
       Yi                                                 0.58
       Tujia                                              0.50

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

                                                        % of total
       Mongolian                                        0.42
       Tibetan                                          0.41
       Bouyei                                           0.22
       Dong                                             0.22
       Yao                                              0.19
       Korean                                           0.17
       Bai                                              0.14
       Hani                                             0.11
       Kazak                                            0.10
       Li                                               0.10
       Dai                                              0.09


       There are five officially recognized religions in China- Catholicism, Protestantism, Buddhism,
       Islam and Daoism. The constitution provides for freedom of religious belief and the freedom not to
       believe; however, the government has traditionally sought to restrict religious practice to
       government-sanctioned organizations and registered places of worship, and to control the growth
       and scope of the activity of religious groups.

       The situation improved marginally following the forceful suppression all religious observances and
       closure of all seminaries during the 1966-76 Cultural Revolution. In the late 1970s, for instance,
       the government began to restore or replace some damaged or confiscated churches, temples,
       mosques and monasteries, and to allow the reopening of seminaries. Implementation of this policy
       has varied from locality to locality. However, several unregistered religious groups have been
       subjected to increased restrictions since the 1990s, although the degree of restrictions varies
       significantly from region to region. In the past, official tolerance for religions considered to be
       traditionally Chinese, such as Buddhism and Daoism, has been greater than that for Christianity.
       The revival of traditional folk religion has largely been tolerated as a loose affiliate of Daoism, or
       as an ethnic minority cultural practice, despite government campaigns to eliminate "feudalism and
       superstition" and to destroy thousands of shrines.

       The number of religious adherents, in both registered and unregistered churches, continues to grow
       rapidly. In the years since the Cultural Revolution, when religion was banned, there has been a
       general loosening of repression and a resurgence in religious activity. There are approximately 200
       million religious adherents with a great variety of beliefs and practices, mostly professing eastern
       faiths, but with millions adhering to Christianity as well. According to official figures from April
       2005 (which only recognize 'over 100 million religious adherents'), there are more than 85,000
       sites for religious activities, 300,000 clergy, and more than 3,000 religious organizations. The
       official figures have remained unchanged since 1997, and are therefore unlikely to represent the
       growth in religious activity in recent years.

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Buddhists make up the largest body of organized religious believers, with approximately eight per
       cent of the population registered as Buddhist. The government estimates that there are more than
       100 million Buddhists, most of whom are from the dominant Han ethnic group. The accuracy of
       numbers of practicing Buddhists varies as they often practice their faith without participating in
       public ceremonies. Official figures place the number of Buddhist temples and monasteries at
       16,000, with 200,000 nuns and monks (these figures are far easier to calculate than adherents).

       Some local governments strictly enforce regulations on places of worship, particularly on illegally
       constructed Buddhist temples and shrines. For example, in 1998 it was a priority in Hunan to
       "...tighten management of places of religious activities, properly handle issues concerning the
       indiscriminate establishment of temples and the setting up of outdoor Buddha statues, and crack
       down on heretical religious organizations and illegal religious activities."

       According to government figures, there are 18 million Muslims, 30,000 Islamic places of worship,
       and more than 40,000 imams. In some areas where ethnic unrest has occurred, such as the Uighurs
       of Xinjiang, officials restrict the building of mosques and the religious education of youths under
       the age of 18. Some young Uighur Muslims are trained outside of the country in madrassas (
       Muslim religious schools).

       After a series of violent incidents in Xinjiang in 1997, police cracked down on Muslim religious
       activity and places of worship, and local authorities issued regulations further restricting religious
       activities and teaching. Officials often accuse separatists of having "carried out subversion and
       sabotage in the region in the name of religious activities."

       The government permits, and in some cases subsidizes, Muslim citizens who make the hajj
       (pilgrimage) to Mecca. Government sensitivity to concerns of the Muslim community is, however,

       The unofficial, Vatican-affiliated Catholic church claims a membership of five million persons
       registered with the official Catholic church. Vatican officials have estimated that there are as many
       as 10 million adherents, although these figures are highly speculative. The government-approved
       sect has 67 bishops, 5,000 clergy and over 6,000 churches and meeting houses.

       China has refused to establish diplomatic relations with the Holy See, and there is no Vatican
       representative in China. Bishops in the official Catholic church are not consecrated by Rome, but
       many have been recognized unofficially. In 2005, the possibility of ties between China and the
       Vatican grew, but are still predicated on the Holy See's ability to appoint its own representatives,
       something Beijing will not relish.

       In Hebei, where approximately half of the country's Catholics reside, friction between unofficial
       Catholics and local authorities continues. Hebei authorities have forced many underground priests
       and believers to make a choice of either joining the "patriotic" church or facing punishment such as
       fines, job loss, and, in some cases, having their children barred from school.

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       The government maintains that there are 16 million registered Protestants, and over 55,000
       churches and other places of worship. However, Chinese Protestants have claimed a community of
       some 20 million adherents, while other estimates have varied from 30 million to 100 million,
       depending upon the number of house churches that are independent of government control.
       Although often optimistic and biased, these larger estimates have some precedence. A 2004 non-
       governmental survey in Beijing counted over 100,000 unregistered Protestants, far more than the
       30,000 registered with the government.

       Although no official estimate of the number of Daoists are available, estimates of several hundred
       thousand are most likely conservative. According to the Taoist (Daoist) Association, there are
       more than 25,000 Daoist monks and nuns and more than 1,500 temples. In reality, Daoism's
       tradition of folk religious practices and the rise of folk religion within China since the 1990s means
       that it is difficult to classify and calculate Daoism's influence and number of adherents.

       Weekly services of the foreign Jewish community in Beijing have been held uninterrupted since
       1995 and High Holy Day observances have been permitted since the mid-1980s. Members
       experienced initial difficulty in establishing worship services due to the fact that Judaism is not one
       of the five officially recognized religions, and meetings have in the past been temporarily

       Minority religious groups
       Religious minority                               Percentage of population practicing
       Buddhism                                         8.0
       Muslim                                           1.4
       Catholicism                                      0.4-0.6
       Protestant                                       1.2-1.5
       Independent "house" churches                     2.4-6.5
       -- Official 2005 figures
       -- Figures for Daoists are less distinct, but there are believed to be over 25,000 Daoist monks
       and nuns, and over 1,500 Taoist temples.
       Source: Jane‟s Information Group

                C. Climate, Geography, and Topography


       General Overview
       The climate of China is dominated by the Asiatic monsoon. From October to April the weather
       patterns across much of the country's huge landmass are a function of the high pressure system
       which builds in Siberia and Central Asia and the winds which blow out from China and Mongolia.
       From May to September the area is dominated by a low pressure system, as a result winds are
       drawn in from the Indian and Pacific oceans. These winds bring moist air and, as a consequence,

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       rain. These wet summers and dry winters are so unique that this type of weather pattern has
       become known as distinctively Chinese.

       Regional variations in weather patterns are caused primarily by differences in latitude across the
       huge country. Northern China has extremely cold winters, as does, for example, the mountainous
       Tibet. Southern and central China have a more tropical and sub-tropical climate, with far less
       winter cold. Eastern China has far more rain and northern and western regions contain areas of
       semi-arid and arid desert.

       Climatic summary

       Average Annual Temperature
       Average Annual Rainfall
       Average Relative Humidity
       Beijing (elevation 52 m)
                               Av Temperature (°C)        Av Humidity (%)         Rainfall
                               min          max           All hours               (mm)
       Jan-Mar                 -6           5             49                      15
       Apr-Jun                 12           26            51                      130
       Jul-Sep                 18           28            69                      440
       Oct-Dec                 1            11            55                      30
       Kashgar (elevation 1,309 m)
                               Av Temperature (°C)             Av Humidity        Rainfall
                               min               max           0800 hours         (mm)
       Jan-Mar                 -5                6             68                 31
       Apr-Jun                 14                27            46                 20
       Jul-Sep                 17                30            52                 20
       Oct-Dec                 -1                12            67                 25
       Mukden (elevation 43 m)
                               Av Temperature (°C)             Av Humidity (%)               Rainfall
                               min               max           0600 h        1400 h          (mm)
       Jan-Mar                 -13               -1            72            43              34
       Apr-Jun                 10                22            70            38              181
       Jul-Sep                 16                27            89            53              420
       Oct-Dec                 -6                6             78            47              80
       Shanghai (elevation 7 m)
                               Av Temperature (°C)             Av Humidity (%)               Rainfall
                               min               max           0600 h        1400 h          (mm)

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       Shanghai (elevation 7 m)
                               Av Temperature (°C)             Av Humidity (%)            Rainfall
                               min             max             0600 h       1400 h        (mm)
       Jan-Mar                 2               10              88           55            200
       Apr-Jun                 15              24              92           61            370
       Jul-Sep                 20              30              94           65            420
       Oct-Dec                 8               17              90           58            170
       Wuchow (elevation 11 m)
                               Av Temperature (°C)             Av Humidity (%)            Rainfall
                               min             max             0530 h       1330 h        (mm)
       Jan-Mar                 11              18              82           66            190
       Apr-Jun                 22              28              88           73            550
       Jul-Sep                 25              32              85           65            430
       Oct-Dec                 16              23              81           63            120
       Source: Jane‟s Information Group


       Physical Summary
       9,596,960 km2
       18-53°north, 75-135°east
       Sea level to 8,848 m
       Afghanistan, Bhutan, India, Kazakhstan, Kyrgyzstan, Laos, Mongolia, Myanmar, Nepal,
       North Korea, Pakistan, Russia, Tajikistan and Vietnam.

       General Overview

       China has an extremely varied geography. Only 15 per cent of the country is suitable for
       agriculture and this lies mainly in the eastern third of the landmass, which is relatively flat
       (although interspersed with mountain ranges). In the west are the mountains around the
       Tibet/Qinghai plateau (over two thirds of China is mountainous) and the deserts of Xinjiang. There
       are large areas of semi-arid grassland in the northeast.

       China's mountainous regions form part of the Himalayas, the tallest, coldest, highest and most
       formidable mountain range in the world. The geological structure of China has granted the country
       great mineral resources.


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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       China's three principal river systems start on the high mountains of Tibet and Central Asia. These
       rivers are the Huanghe (Yellow river), the Changjiang (Yangzi) and the Xihe (West river), and
       they run to the coastal plains in a generally easterly direction. The Huanghe is known as 'China's
       sorrow', due to its high propensity to flood. It carries the highest proportion of silt of any river in
       the world: 1,600 million tons of silt per year enter the river's lower reaches (approximately a
       quarter goes into the bed, half into the delta and a quarter into the sea). Centuries of silt have raised
       the river banks high above the surrounding countryside and flood control facilities are critical to
       the survival of China's agricultural basins.

       These were strained to the limit in 1991, when central China experienced widespread and serious
       flooding; at least 1,730 people were killed and 200 million people in 18 provinces, autonomous
       regions and municipalities were affected. Floods in 1998 and 2002 subsequently killed over 4,000
       and 1,500 respectively. The floods of 1998 notably affected the whole Yangzi river basin and in
       scale eclipsed that of 1991. Economic damage in the less economically productive upper reaches
       of the Yangzi alone reached an estimated USD1.4 billion (more than 0.1 per cent of GDP) in 1998;
       the cost nationwide may have been close to USD20 billion (over 2 per cent of GDP).

       Although official reportage of the 2002 flooding along the middle reaches of the Yangzi may have
       been slightly exaggerated for domestic political reasons, the risk is of more fearsome repeats of the
       1998 flooding. Unfortunately, it is not clear how the Three Gorges Dam project, meant to alleviate
       flood risk permanently, will protect the middle and lower reaches of the Yangzi valley. Most of the
       last century's major flood episodes were caused by natural phenomena such as heavy rainstorms
       below the site of the Three Gorges Dam or in tributaries joining the Yangzi below the site.

       Perhaps in light of this, the Chinese Communist Party (CCP) has effectively given the green light
       to a USD25 billion project to channel the water of the Yangzi river along a 1,200 km route to the
       north - in doing so it has tacitly accepted that droughts in northern China are a man-made
       phenomenon caused by deforestation and the destruction of marshes and grasslands in western
       China. Approximately 200,000 people will have to be relocated as a result of this massive

       In May 2002, it was reported that the 'South-to-North Water Transfer Project' had met the technical
       requirements for its construction to start later in the year. By 2010, the first and second phases of
       the eastern route construction and the first phase of the middle route construction should be
       completed. The western route will be the largest, requiring heavy tunneling, and will take longer to
       complete. Pollution control will be concentrated along the eastern route via over one hundred
       sewage treatment stations.

       The background is of great pressure on a large number of riverine ecosystems in China. Since
       1999, the major rivers north of the Yangzi have run dry. The Yellow, Huai, Han, Luan and Fen
       rivers are under serious threat of extinction. The Yellow river was only kept flowing in 2000 due
       to the emptying of its reservoirs. In October 2002, the Chinese government announced that a
       monitoring system had begun to record environmental changes along the Yangzi, Yellow and
       Mekong rivers, employing Finnish meteorological equipment and the Global Positioning Satellite
       (GPS) system. However, it is not clear how the root causes of China's ecological problems, of
       which threats to river sustainability are only one part, can be checked, let alone reversed, without
       major economic sacrifice.

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                       opinions, assessments or positions of the DoD or any other government agency or entity.


       China has a coastline of length 14,500 km.
       Source: Jane‟s Information Group
                D. Natural Resources

       Oil and gas reserves
       18.3 billion barrels (US Energy Information Administration 2005 estimate)
       53.3 trillion cubic feet (US EIA 2005 estimate)



       China's state petroleum industry is grouped mainly under three national firms: the China National
       Petroleum Corporation (CNPC), the China Petrochemical Corporation (Sinopec), and the China
       National Offshore Oil Corporation (CNOOC). CNPC handles oil and gas production, as well as
       refining in China's north and west, while Sinopec handles production and refining operations in the
       south. CNOOC handles offshore production and refining. The government holds a majority share
       in all three firms, and the industry is overseen as a whole by the State Energy Administration.

       With a total oil production in 2004 of 3.62 million barrels per day (bbl/d), and a total consumption
       of 6.53 million bbl/d, China's petroleum mainly supplies domestic demand. Chinese oil
       consumption has grown at a rapid pace in recent years, even compared to GDP growth, and it is
       likely that China will become increasingly dependent on foreign sources of oil in the coming years.
       At the moment, the Middle East, especially Saudi Arabia, is the main supplier of oil to China. To
       ensure access to overseas oil sources, Chinese energy companies have acquired shares in a number
       of foreign companies worldwide, a trend which is likely to continue.

       Although China mainly depends on coal for its electrical energy, certain segments of the Chinese
       population, in agriculture especially, are very sensitive to fuel prices. Domestic fuel costs are
       therefore still regulated by the government. With the rise in global fuel prices in 2005, the greater
       price difference between fuel domestically and globally led to an increase in petroleum exports.


       Presently, China's most productive oil fields are in the northeastern region, especially the Daqing
       field. Unfortunately these fields have generally been operating for a long time, and production is
       starting to drop. Although some new fields are being discovered in the northeast, the government
       has begun to focus on increasing production in the west and offshore, while stabilizing eastern


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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       China's state oil companies have in recent years focused particularly on offshore and foreign
       exploration. Offshore, exploration has focused on the Bohai Sea area, east of Tianjin, which is
       believed to hold more than 1.5 billion barrels in reserves, and the Pearl River mouth area. Phillips
       Petroleum announced in March 2000 that it had completed its appraisal drilling of the Peng Lai
       find in Block 11/05 in the Bohai Sea. Full-scale production at the field reached more than 100,000
       bbl/d by 2004. Another major offshore field has been developed in the Pearl River Mouth area by a
       consortium including Chevron, Texaco, Agip and CNOOC. The field began production in
       February 1999 and is expected to reach production of 27,000 bbl/d when fully operational.

       Overseas, Chinese oil companies have become heavily involved in buying oil companies, or shares
       in those companies. Although the press has paid particular attention in 2005 to Chinese bids for
       Unocal, in the US, and the Canadian firm Petrokazakhstan, which has significant reserves in
       Kazakhstan, China's acquisition of foreign petroleum companies has become a global
       phenomenon. Chinese state oil firms now own oil concessions, or stakes in companies, in Latin
       America, Canada, Africa, the Middle East, and Asia. Of particular political significance are
       Chinese interests in oil fields in Sudan, and in the Yadaravan field in Iran.

       Meanwhile, improvement in Sino-Vietnamese relations has opened the way for oil and gas
       exploration in the Beibu Gulf. Both oil and gas fields have been discovered in the area, which are
       starting to be exploited. The Spratly Islands also are suspected to hold oil and gas reserves, but the
       area is claimed by six governments: China, Taiwan, the Philippines, Brunei, Malaysia and
       Vietnam. China has long claimed "indisputable sovereignty" over the region, but agreed in March
       2005 to jointly explore the region with the Philippines and Vietnam.


       All three of China's state oil companies are now working to increase refining capacities. CNOOC
       is working on a refinery project in Huizhou, in Guangdong, which should have an eventual
       capacity of 240,000 bbl/day. Sinopec is working to increase the capacity of its Quongang refinery,
       in Fujian, from 80,000 bbl/day to 240,000 bbl/day. CNPC is increasing the capacity of its
       Dushanzi refinery in Xinjiang. As well as increasing their refining capacity, Chinese oil companies
       are also upgrading their existing refineries to allow them to process heavier Middle Eastern crude.


       China is working to expand its petroleum infrastructure. As well as projects to allow oil from
       expanded production in western China to reach consumers in coastal regions, Beijing is working
       on its capacity to import oil from its neighbors. Two projects are of particular interest: firstly, a
       pipeline from Atasu in Kazakhstan to Xinjiang, to be completed in December 2005, should
       eventually carry 200,000 bbl/day to Chinese refineries. Secondly, China and Japan have been
       competing over a possible Russian pipeline from Siberia. China's preferred option is a one million
       bbl/day pipeline from Anagarsk to Daqing; Japan would prefer a pipeline to the port of Nakhodka,
       to supply the Japanese market.

       As well as greatly increasing the capacity of its oil pipeline network, China has also started work
       on a strategic petroleum reserve. Aimed at protecting China from a sudden breakdown in oil

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       supply, the reserve will consist of four facilities: Zhenhai and Daishan in Zhejiang province,
       Huangdao in Shandong province, and Xingang in Liaoning province.


       Based on 2003 estimates, natural gas only satisfies 2.6 per cent of total energy consumption. This
       is likely to increase as China improves its natural gas infrastructure. China has significant natural
       gas reserves, as well as potential access to Russian supplied natural gas.

       Currently, there are two major barriers to increased dependence on natural gas to supply the
       country's energy needs: infrastructure needs and regulatory limitations. China's primary natural gas
       reserves are in Xinjiang province in the west, and in the Ordos Basin in Inner Mongolia, while
       demand is highest along the coast. Since the completion in 2005 of CNPC's USD7 billion pipeline
       from Xinjiang to Shanghai, access to natural gas resources has become significantly more efficient.
       Other natural gas projects include offshore exploration and production (including disputed fields in
       the Xihu Trough near the median line between Japan and China), and plans to build a pipeline to
       Russia's Kovykta gas fields.

       The second obstacle to increased reliance on natural gas is regulatory: China is still working on
       developing a unified regulatory system to handle gas sales. Nonetheless, with rising energy needs,
       and the environmental costs of its present dependence on coal for electricity generation, China is
       likely to increase its natural gas dependence in the coming years.


       126.2 billion short tons (US EIA 2003 estimate)

       China has historically turned to coal to meet the majority of its energy needs. Coal accounts for
       64.8 per cent of energy consumption (2003 estimate), and China is both the world's largest
       consumer and producer of coal. Coal consumption has risen dramatically since 2001, and, since
       2003, the country no longer runs a coal surplus.

       With rapid growth in electricity consumption - associated with the country's overall rate of growth
       - coal supply has become problematic. Two particular issues stand out: firstly, accidents are
       common in China's antiquated mines. As of the end of 2004, China accounted for 35 per cent of
       global coal production, and 80 per cent of global coal-mine related deaths, at an average of 6,000
       deaths per annum. Although Beijing is working on modernizing its coal mines, and bringing in the
       expertise of foreign partners, the rate of accidents remains high, and may result in significant labor
       disputes. The ability of the government to reduce coal mining deaths is hampered by a lack of
       regulation, particularly among the large number of small, unlicensed mines. Secondly, China's coal
       transportation infrastructure, especially rail networks, cannot meet demand. The government has
       inaugurated a large-scale program to improve the ability of its rail network to carry coal, but this
       remains a limiting factor in overall coal supply.

       Over the longer term China's coal demand is projected to rise significantly, more than doubling by
       the year 2020. Several projects exist for the development of coal-fired power plants co-located

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       with large mines. With its extensive coal reserves, China has displayed an interest in alternative
       coal-based technologies, either to improve infrastructure, such as slurry pipeline transportation, or
       to use coal to meet its other energy demands, like the Shenhua Group's coal liquefaction project in
       Inner Mongolia.

       Water Supply

       The demand for water is high, not only for human consumption but also for rice production. As
       such, sufficient water resources cannot be guaranteed for approximately two thirds of China's cities
       for the entire year. The country's per capita water resources in 2004 were approximately 2,200
       cubic meters per annum (2.8 billion cubic meters of renewable water resources in total), among the
       lowest in the world (approximately 25 per cent of the global average). This figure is expected to
       decrease to 1,750 cubic meters per capita per annum by 2030, when the population is expected to
       have expanded to 1.6 billion people.

       China has stated that it will encourage foreign investment in water-conservation projects,
       particularly important given that Chinese industry typically recycles just 25 per cent of its water
       supply. Moreover, China has built over 80,000 reservoirs since 1949, which have proven a heavy
       economic burden, requiring extremely expensive maintenance, many of them also needing to be
       industrialized for the generation of electricity. Other technologies are being plumbed to aid China's
       water shortage. From 1995 to 2003, the nation spent USD266 million on rainmaking technology.

       A further problem with China's water supply is the lack of clean water as economic growth
       pollutes groundwater. In 2005, the State Environmental Protection Agency estimated that 70 per
       cent of China's rivers and lakes were polluted, while legislator Sheng Huaren claimed that 300
       million people were without a clean water supply in June 2005. Although the government is aware
       of the problem, remedies are costly to implement. In December 2005 the southern province of
       Guangdong stated that it would spend CNY11 billion (USD1.36 billion) on drinking water projects
       during its 11th Five-Year Plan (2006-2010), to provide safe drinking water for 22.1 million people,
       or 40.1 per cent of the province's population. However, given that the provincial government also
       intends to spend CNY263 billion (USD32.43 billion) on 263 heavy and chemical industry projects
       in the same period, it is unclear whether such rapid industrial expansion will make the provision of
       drinking water even more difficult.

       Food Supply

       China faces a fundamental difficulty in providing adequate food for its large population - the
       country has 25 per cent of the world's population, but only seven per cent of its arable land. Since
       late 1988 greater emphasis has been placed on basic farmland improvement, the introduction of
       new technology and increasing investment in agricultural development with the objective of a
       more efficiently produced food supply. As of 2004, approximately 50 per cent of arable land was
       irrigated, with plan to expand this figure by one per cent every year. Principal crops are rice,
       wheat, maize, soya beans, sugar cane, peanuts (for oil), sesame, beet, vegetables, pork and poultry.

       Padi rice is the major grain crop in China, grown mainly in the Yangzi river valley and southern
       China, and on the Yunnan-Guizhou plateau. Its output accounts for approximately two fifths of the
       total grain output. Wheat, cultivated largely in northern China, accounts for approximately one

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       fifth of grain output, while corn, grown in north, northwestern and southern China, comprises
       approximately one quarter of total output. The number of undernourished people in China fell from
       250 million in 1978 to 29 million in 2003, according to the Food and Agricultural Organization


       After a period of over-supply in the late 1990s, growth in energy demand has outpaced production,
       and power shortages are now common in many parts of China. These are in part caused by
       bottlenecks in coal production and transportation, as discussed above, but are also the result of
       inadequate generation capacity. This is likely to become increasingly problematic, as demand is
       expected to grow at an average rate of 4.3 per cent per annum until 2025.

       In response, the government has approved a series of power-generating projects (although
       production is not expected to catch up with demand until 2007). Due to increasingly severe
       environmental problems, China has shifted its emphasis away from coal-based power generation,
       although coal is likely to provide the majority of China's electricity for the foreseeable future.
       Beijing is increasing the construction of natural gas power plants, especially in the polluted coastal
       region, and has increased the emphasis on other sources of energy, especially nuclear and
       hydroelectric power.

       The Chinese government has approved plans to add a total of 27 GW in nuclear generating
       capacity to its mid-2005 15 GW capacity. Over the longer term, the government plans to construct
       at least thirty nuclear plants, to provide a total of around four per cent of total electricity
       generation. In addition, it has been working on a series of very large-scale hydroelectric projects.
       In particular, the Three Gorges project, which began operating in mid-2003, is expected to produce
       a total of 18.2 GW in 26 separate 700 MW generators when completed in 2009. In addition, a
       program in the Yellow River area, under the direction of the Yellow River Hydroelectric
       Development Corporation, should have an eventual total capacity of 15.8 GW.
       Source: Jane‟s Information Group

       4. Government
              Government type: Communist state
                         Capital: Beijing
                  Administrative 23 provinces (sheng, singular and plural), 5 autonomous regions (zizhiqu, singular
                      divisions: and plural), and 4 municipalities (shi, singular and plural)

                                    provinces: Anhui, Fujian, Gansu, Guangdong, Guizhou, Hainan, Hebei,
                                    Heilongjiang, Henan, Hubei, Hunan, Jiangsu, Jiangxi, Jilin, Liaoning, Qinghai,
                                    Shaanxi, Shandong, Shanxi, Sichuan, Yunnan, Zhejiang; (see note on Taiwan)

                                    autonomous regions: Guangxi, Nei Mongol, Ningxia, Xinjiang, Xizang (Tibet)

                                    municipalities: Beijing, Chongqing, Shanghai, Tianjin
                                    note: China considers Taiwan its 23rd province; see separate entries for the special
                                    administrative regions of Hong Kong and Macau
                  Independence: 221 BC (unification under the Qin or Ch'in Dynasty); 1 January 1912 (Manchu

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

                                    Dynasty replaced by a Republic); 1 October 1949 (People's Republic established)
               National holiday: Anniversary of the Founding of the People's Republic of China, 1 October (1949)
                    Constitution: most recent promulgation 4 December 1982
                   Legal system: based on civil law system; derived from Soviet and continental civil code legal
                                 principles; legislature retains power to interpret statutes; constitution ambiguous on
                                 judicial review of legislation; has not accepted compulsory ICJ jurisdiction
                        Suffrage: 18 years of age; universal

                A. Executive Branch

           Executive branch: chief of state: President HU Jintao (since 15 March 2003) and Vice President ZENG
                             Qinghong (since 15 March 2003)

                                head of government: Premier WEN Jiabao (since 16 March 2003); Vice Premiers HUANG Ju
                                (since 17 March 2003), WU Yi (17 March 2003), ZENG Peiyan (since 17 March 2003), and
                                HUI Liangyu (since 17 March 2003)

                                cabinet: State Council appointed by the National People's Congress (NPC)

                                elections: president and vice president elected by the National People's Congress for five-year
                                terms; elections last held 15-17 March 2003 (next to be held mid-March 2008); premier
                                nominated by the president, confirmed by the National People's Congress

                                election results: HU Jintao elected president by the Tenth National People's Congress with a
                                total of 2,937 votes (four delegates voted against him, four abstained, and 38 did not vote);
                                ZENG Qinghong elected vice president by the Tenth National People's Congress with a total
                                of 2,578 votes (177 delegates voted against him, 190 abstained, and 38 did not vote); two
                                seats were vacant

       Politburo Standing Committee Profiles

                President – Hu Jintao

       Hu holds the 'holy trinity' of posts - general secretary of the Chinese
       Communist Party, president of the People's Republic of China, and
       chairman of the two Central Military Commissions, giving him official
       control over the party, state and military apparatus respectively. As such,
       Hu is the most powerful man within the CCP, although Jiang Zemin
       retains influence and allies within the party and state apparatus. He is the
       youngest party chief since Chairman Mao (Hu was aged 59 when he
       became party chief in November 2002 and 60 when he was elected to the
       state presidency in March 2003). He is considered a protégé of the late reformist party chief Hu
       Yaobang (the CCP officially commemorated Hu Yaobang's 90th birthday on 20 November 2005,
       the first time an official celebration of the late general secretary of the CCP will be held, while Hu
       Yaobang's daughter was allowed to publish memoirs of her father at the same time) and heads a
       looser coalition of party cadres unaffiliated to Jiang Zemin's 'Shanghai faction', with roots in the

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       younger generation of provincial CCP leaders in China's poorer provinces, reflecting his career in
       China's west and the party's Youth League. This has made him popular in the broader party, which
       is at times skeptical if not envious of the image-focused and more cartel-like power of the
       Shanghai region-dominated pro-Jiang faction. However, this position as an alternative power
       center has also reduced his opportunities for top-level political experience.

       A Qinghua graduate in hydro-engineering born in Jiangsu province and registered as a native of
       Anhui province, Hu was Deng Xiaoping's unchallengeable choice to succeed Jiang. He was
       recommended to Deng by party elder Song Ping in 1992, when Jiang's tenure as CCP chief briefly
       became vulnerable (Jiang's initially leftist economic policies were implicitly criticized by Deng
       during his second 'southern tour'). However, despite a decade on the Politburo Standing Committee
       Hu, until 2002, was unable to gain substantial operational experience of issues surrounding either
       security or foreign affairs thanks to discreet blocking by the rival Jiang Zemin-Zeng Qinghong
       political axis. Hu concentrated instead on domestic policy and party affairs.

       Since his appointment as party chief in late 2002, Hu has moved away from a prior strategy of
       avoiding all except the most uncontroversial policy statements. A variety of statements and visits
       have been interpreted as marking out a distinct ideological territory, including his December 2002
       pilgrimage to the revolutionary shrine of Xibaipo; comments made in favor of "plain living and
       hard struggle" in contrast to "the flattery of the bourgeoisie" and "the weak-willed among our
       ranks"; much-publicized visits to the needy in remote areas; and new aphorisms surrounding the
       need to serve the cause of popular welfare (such as his "New Three Principles of the People").

       Hu may have a vested interest in appealing to various traditional revolutionary themes which have
       not been emphasized by the pro-Jiang faction in order to place them on the ideological defensive.
       His rhetorical tapping of the original revolution should be seen alongside his commitment to
       modernization of the party along alternative lines from the 'machine politics' style of the Jiang

       Hu is known to have asked his wife to resign from office when he became a Politburo Standing
       Committee member in 1992, in order to prevent complications arising, a clear difference in
       political style from that of the group surrounding Jiang Zemin. In his last two years as head of the
       Central Party School in 2001-02, in collaboration with the rest of the leadership, he is thought to
       have sent up to 2,000 high-level cadres to Eastern Europe to study the evolution of post-reform
       communist parties there. Hu was also tasked with implementing the July 1998 Central Committee
       decision to steer the country's armed forces, armed police and law-enforcement authorities out of
       business activities.

       Chronological History
       Date           Event
       1942           Born in Taizhou, Jiangsu Province (December) and
                      registered native of Jixi, Anhui province.
       1964           Joined the CCP (April). Graduated from Qinghua
                      University with a degree in hydraulic engineering.
       1965-68        Postgraduate researcher in Qinghua hydro-engineering
                      department; political instructor until outbreak of
                      Cultural Revolution (1966).

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       1975           Deputy director, Gansu Provincial Construction
                      Commission's design and construction department.
       1980           Deputy director, Gansu Provincial Construction
       1982           Secretary of the Communist Youth League (CYL),
                      Central Committee Secretariat; chairman of the All-
                      China Youth Federation.
       1984           First secretary of the CYL Central Committee.
       1985-88        Secretary of the Guizhou Provincial CCP Committee.
       1988-92        Secretary of the CCP Committee of Tibet Autonomous
       1990           First secretary, Tibet Military Region CCP Committee.
       1992           Elected member of the Standing Committee of the
                      Political Bureau of the CCP. Promoted to the CCP
       1993           President of the Central Party School.
       1997           re-elected member of the Standing Committee of the
                      CCP Central Committee (September).
       1998           Elected vice-president of China (March).
       1999           Elected vice-chairman of the People's Republic of
                      China Central Military Commission (September).
       2002           Elected general secretary of the CCP and re-elected
                      vice-chairman of the People's Republic of China
                      Central Military Commission (November).
       2003           Elected state president and re-elected vice-chairman
                      chairman of the People's Republic of China Central
                      Military Commission (March).
       2004           Succeeded Jiang Zemin as chairman of the CCP Central
                      Military Commission (September).
       2005           Elected to succeed Jiang Zemin as chairman of the
                      People's Republic of China Central Military
                      Commission (March).

       Wu Bangguo

       Although officially ranked number two in the Politburo
       Standing Committee after Hu Jintao, Wu's position is not as
       influential as other committee members such as Zeng
       Qinghong or Wen Jiabao who benefit from their state as
       well as party appointments. A native of Anhui province,
       born in 1941, Wu is another Qinghua-educated engineer
       who became chairman of the National People's Congress in March 2003, succeeding Li Peng. He
       is also of the Jiang faction, having graduated to politics at the national level via Shanghai. Wu
       moved from the party organization of the Shanghai electronics company into the Shanghai
       municipal party while Jiang Zemin was mayor. He gained his seat on the Central Committee
       Politburo in 1992, a position as vice-premier in central government in 1995 and a place on the

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Politburo Standing Committee in November 2002. Wu was granted responsibility for the reform of
       state-owned industries in the mid-1990s, potentially a poisoned chalice as he could be a scapegoat
       for any future major reverse (such as social unrest) caused by China's industrial policy in this
       regard. The rise in demonstrations, with some three million people protesting in 2004 according to
       official figures, could prove limiting on Wu's future career.

       Chronological History
       Date           Event
       1941           Born and registered as a native of Feidong, Anhui
       1964           Joined CCP.
       1967           Graduated from Qinghua University from the
                      Department of Radio Electronics.
       1967-76        Worker and technician of Shanghai No. 3 Electronic
                      Tube Factory, deputy chief and chief of its technical
       1976-78        Deputy secretary of the CCP Committee of Shanghai
                      No. 3 Electronic Tube Factory, deputy director of its
                      revolutionary committee, deputy factory director,
                      deputy secretary of the party committee of the factory,
                      and director of the factory.
       1978-79        Deputy manager of Shanghai Electronic Elements
       1979-81        Deputy manager of Shanghai Electronic Tube
       1981-83        Deputy secretary of the party committee of Shanghai
                      Meters, Instruments and Telecommunications Bureau.
       1983-85        Member of the Standing Committee of the CCP
                      Shanghai Municipal Committee and secretary of the
                      CCP Municipal Committee in Charge of Science and
       1985-91        Deputy secretary of the CCP Shanghai Municipal
       1991-92        Secretary of the CCP Shanghai Municipal Committee.
       1992           Elected member of the Political Bureau of the CCP
                      Central Committee.
       1994           Appointed member of the Secretariat of the CCP
                      Central Committee.
       1995           Appointed vice-premier of the State Council.
       1998           Appointed secretary of the Work Committee of Large
                      Enterprises of CCP Central Committee.
       1999           Appointed member of the CCP Leading Party Member
                      Group and secretary of the Central Work Committee of
                      Large Enterprises.
       2003           Elected chairman of the Standing Committee of the
                      National People's Congress (March).

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Premier – Wen Jiabao

       A quickly rising Politburo member (he is formerly third in the
       Politburo hierarchy), Wen, born in 1943, also holds the
       influential position of premier of the State Council. His well-
       respected administrative skills have enabled him to be promoted
       without major debts to his political patrons, and to survive his
       past association with the former party general secretary, Zhao
       Ziyang, ousted in 1989, with whom he was photographed visiting
       students on hunger strike in Tiananmen Square. He served very
       different political leaders through the 1980s and early 1990s, as
       party chief of staff, and has since held crucial portfolios. Apart
       from agriculture and finance (he was secretary of the CCP
       Central Committee Financial and Economic Leading Group from
       1992-2002) he helped to develop the Western Development
       program and draft the 10th Five Year Plan (2001-05).

       Wen enjoys a deft touch for genuinely unscripted photo opportunities with ordinary members of
       the public, allowing him to cultivate a reputation as accessible. This has granted him a positive
       public relations profile - prior to his appointment as premier in March 2003, an online poll ranked
       him the most popular member of the Politburo. Although Zhu Rongji was Wen's most recent
       political patron, Wen evidently has a different political style. While Zhu was famously abrasive,
       and a favorite with foreign investors who admired his political brand, Wen has a more consensual

       Chronological History
       Date           Event
       1942           Born in Tianjin (September).
       1960-65        Majored in geological surveying and prospecting of the
                      No. 1 Department of Geology and Minerals at Beijing
                      Institute of Geology.
       1965           Joined CCP (April).
       1965-68        Postgraduate in geological structure at Beijing Institute
                      of Geology.
       1968-78        Technician and political instructor of the Geomechanics
                      Survey Team under Gansu Provincial Geological
                      Bureau and head of its political section.
       1978-79        Member of the Standing Committee of the CCP
                      Committee of the Geomechanics Survey Team under
                      Gansu Provincial Geological Bureau and deputy head
                      of the team.
       1979-81        Deputy section head and engineer of Gansu Provincial
                      Geological Bureau.
       1981-82        Deputy director-general of Gansu Provincial Geological
       1982-83        Director of the Policy, and Law Research Office of the

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

                      Ministry of Geology and Mineral Resources.
       1983-85        Vice minister of Geology and Mineral Resources and
                      director of the ministry's political department.
       1985-86        Deputy director of the General Office of the CCP
                      Central Committee.
       1986-87        Director of the General Office of the CCP Central
       1987-92        Alternate member of the Secretariat of the CCP Central
                      Committee and director of the General Office of the
                      CCP Central Committee.
       1992-93        Alternate member of the Political Bureau of the CCP
                      Central Committee, member of the Secretariat of the
                      CCP Central Committee, director of the General Office
                      of the CCP Central Committee.
       1993-97        Alternate member of the Political Bureau of the CCP
                      Central Committee and member of the Secretariat of the
                      CCP Central Committee.
       1997-98        Member of the Political Bureau of the CCP Central
                      Committee and member of the Secretariat of the CCP
                      Central Committee.
       1998-2002      Member of the Political Bureau of the CCP Central
                      Committee, member of the Secretariat of the CCP
                      Central Committee, vice premier of the State Council.
       2002           Elected to the Standing Committee of the Political
                      Bureau of the CCP (November).
       2003-present Premier of the State Council.

       Jia Qinglin

       Jia is formally the fourth-ranking member of the Politburo
       Standing Committee, although he retains less influence in state
       bodies as fifth-ranking Zeng Qinghong. He was appointed
       chairman of the Chinese People's Political Consultative
       Conference (CPPCC), a purely consultative body meant to provide
       a forum for non-communist, civil society and overseas Chinese
       elements, in March 2003.

       Jia was born in 1940 in Qingdao in Shandong province but is
       registered as a native of Hebei province. Another Qinghua-
       educated engineer (specializing in electrical machinery), he
       worked in the engineering industry for many years, moving into
       party work in the industry. A close friend of Jiang Zemin since the
       1970s, he rose through the party ranks in the Fujian provincial
       organization, becoming party secretary and provincial governor.
       He moved to the Beijing municipal government in 1996 and became mayor in 1997, opening the
       road to the national party hierarchy as he became a member of the Politburo. Jia owes his political
       survival since 1999-2000 to Jiang Zemin, who appeared on Chinese state television side by side

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       with Jia, then Beijing mayor, after Jia's wife was directly implicated in the multi-billion dollar
       Xiamen smuggling scandal. This effectively immunized Jia from criticism and saved him. Jia was
       the most senior Chinese official to attend the funeral of former premier and reformer Zhao Ziyang
       in January 2005 and appears to have assumed the role of co-coordinating policy on Taiwan under
       Source: Jane‟s Information Group

       Chronological History
       Date           Event
       1940           Born and registered as a native of Botou, Hebei
       1958           Graduated from Shijiazhuang Industrial Management
                      School in industrial enterprise planning.
       1959           Joined the CCP.
       1962           Graduated from Hebei Engineering College in electric
                      motor and appliance engineering
       1962-69        Technician of the Complete Plant Bureau of the First
                      machine-building Industry Ministry and deputy
                      secretary of its Communist Youth League Committee
       1969-71        Manual work in the May 7th Cadre School of the First
                      machine-building Industry Ministry in Fengxin County,
                      Jiangxi Province.
       1971-73        Technician of the Policy Research Office of the General
                      Office of the First machine-building Industry Ministry.
       1973-78        Chief of the Product Management Bureau of the First
                      Ministry of machine-building Industry.
       1978-1983      General manager of China National Machinery and
                      Equipment Import and Export Corporation.
       1983-85        Director of Taiyuan Heavy Machinery Plant and
                      secretary of its CCP committee.
       1985-86        Member of the Standing Committee of the CCP Fujian
                      Provincial Committee and its deputy secretary.
       1986-88        Deputy secretary of the CCP Fujian Provincial
                      Committee and head of the Organization Department of
                      the CCP Fujian Provincial Committee.
       1988-90        President of the party school of the CCP Fujian
                      Provincial Committee and secretary of the Work
                      Committee of Departments under the CCP Fujian
                      Provincial Committee.
       1990-91        Deputy secretary of the CCP Fujian Provincial
                      Committee, deputy governor and acting governor of
                      Fujian Province.
       1991-93        Deputy secretary of the CCP Fujian Provincial
                      Committee and governor of Fujian Province.
       1993-94        Secretary of the CCP Fujian Provincial Committee and
                      governor of Fujian Province.

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       1994-96        Chairman of the Standing Committee of the Fujian
                      Provincial People's Congress.
       1996-97        Deputy secretary of the CCP Beijing Municipal
                      Committee, vice-mayor, acting mayor and mayor of
       1997-99        Appointed member of the Political Bureau of the CCP
                      Central Committee and secretary of the CCP Beijing
                      Municipal Committee.
       2003           Elected chairman of the 10th National Committee of the
                      Chinese People's Political Consultative Conference
       2005           Attended funeral of Zhao Ziyang (January).

                 Vice President - Zeng Qinghong

       Ostensibly the fifth highest-ranking member of the Standing
       Committee, vice-president Zeng Qinghong is more influential
       throughout the party and state apparatus than this classification
       suggests. He is understood to be the organizational eminence
       grise and intellect responsible for many of Jiang Zemin's key
       political decisions during the latter half of his premiership. He
       has cultivated and fulfilled a reputation as an exceptionally
       astute political operator, although this has come at the expense
       of his popularity within the broader party and contributed to his
       notoriety. His political relationship with Jiang began in
       Shanghai and the two are extremely close by all accounts.
       However, Zeng's ambition exceeds that of merely being Jiang's

       During the 1990s Zeng performed the vital role of moving Jiang's opponents out of the way -
       notably former president Yang Shangkun and his brother Yang Baibing, prominent on the Central
       Military Commission. Zeng is also a CCP 'princeling' as the son of the revolutionary hero of the
       1930s, Zeng Shan. Zeng Shan began working life as a rickshaw runner - endowing his son with
       impeccable revolutionary pedigree. Zeng Shan was vice mayor of Shanghai in 1949 and minister
       of internal affairs in 1960.

       Zeng has been of invaluable assistance to Jiang Zemin time and again, to the extent that he has
       faced opposition within the party as a result of this support. This fact may have explained his delay
       in gaining full Politburo status (in November 2002), when his meteoric rise from alternate status to
       Standing Committee member was notable. In turn, his work as director of the party's organization
       department from 1999 gave him control of party employment. For example, in July 2002, the CCP
       Central Committee promulgated its Regulations of the Work of Selecting and Appointing Leading
       Cadres for the Party and Government - modification of these regulations were 'sponsored' by Zeng.

       Although Zeng as of 2005 had no formal position in China's military command structure, he has
       served as Jiang's liaison with top army commanders, granting him considerable informal influence

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       in the PLA. However, he appears to be more than a mere superb tactician of the status quo or
       'machine politician'. Zeng is held to favor incremental political reform and must harbor his own
       vision of the likely evolution of the CCP over the longer term.

       Chronological History
       Date           Event
       1939           Born native of Jian, Jiangxi province (July).
       1960           Joined CCP (April).
       1963           Graduated from the Automatic Control Department of
                      the Beijing Institute of Technology.
       1963-65        Technician in People's Liberation Army (PLA) unit
       1965-69        Technician of No. 6 office, No. 2 department of the 2nd
                      Academy, the Seventh machine-building Industry
       1969-70        Manual work at Chikan base of Guangzhou PLA and in
                      Xihu production center in Hunan province during Great
                      Proletarian Cultural Revolution.
       1970-73        Technician of No. 2 Department of the 2nd Academy,
                      the Seventh machine-building Industry Ministry.
       1973-79        Technician of Production Division and Science and
                      Technology Division, Beijing Office of National
                      Defense Industry.
       1979-81        Secretary of the General Office of the State Planning
       1981-83        Deputy division director of the General Office of the
                      State Energy Commission.
       1983-84        Deputy manager of the Liaison Department of China
                      National Offshore Oil Corporation (CNOOC); deputy
                      director of the Foreign Affairs Bureau of the Ministry
                      of Petroleum Industry; secretary of the CCP Committee
                      of the South and Yellow Seas Petroleum Corporation
       1984-86        Deputy head and head of the Organization Department,
                      and member of the Standing Committee of and
                      secretary-general of the CCP Shanghai Municipal
       1986-89        Deputy secretary of the CCP Shanghai Municipal
       1989-93        Deputy director of the General Office of the CCP
                      Central Committee.
       1993-97        Director of the General Office of the CCP Central
                      Committee; secretary of the Work Committee for
                      Offices Directly Under the CCP Central Committee.
       1997           Elected alternate member of the Political Bureau of the
                      CCP Central Committee; member of the Secretariat of
                      the CCP Central Committee (September).
       1999-2002      Head of the Organization Department of the CCP
                      Central Committee.

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       2002           Elected to the Standing Committee of the CCP Political
                      Bureau and re-elected member of the CCP Secretariat
                      President of the CCP Central Committee Party School
       2003           Elected vice-president of China at the First Session of
                      the Ninth National People's Congress (March).

       Huang Ju

       Born in 1938, Huang Ju is a native of Jiashan in coastal Zhejiang
       province. He has been granted a brief of economic affairs within
       the Politburo and is ranked number six in the Standing
       Committee hierarchy. Another Qinghua-educated electronics
       engineer, most independent sources comment that he is
       "strongly" associated with the Jiang camp, with even this
       possibly being something of an understatement. Huang's career
       has followed a common path for a Shanghai faction member, via
       the engineering industry and its party cells into the municipal
       government. He was deputy party secretary and vice-mayor of
       Shanghai in the late 1980s when Jiang was mayor, a position
       Huang later filled himself. However, he was held in poor esteem by Zhu Rongji when the two were
       colleagues in Shanghai.

       Huang is widely seen as a mediocre official promoted entirely because of his unswerving
       dependence on Jiang. Huang's daughter studied abroad and is now a resident of the US, married to
       a high-ranking Taiwan official's son, an issue which could have destroyed Huang's career. For
       Huang to sit on the Politburo Standing Committee despite this is exceptional.

       Speculation surrounded the health of Huang Ju in February and March 2006. The Hong Kong-
       based South China Morning Post reported that Huang was diagnosed with pancreatic cancer in late
       February, although other sources claimed he was suffering from an unidentified cerebrovascular
       disease (most likely a stroke). In early March a CCP spokesman, Wu Jianmin, stated that Huang
       was recovering from 'physical unfitness'. Although the cause of the illness is unknown, the
       Standing Committee member's extended absence from politics at a crucial time (during the fourth
       session of the 10th National People's Congress) attests to its serious nature. As such, Huang's
       future involvement in politics among the higher echelons of the CCP. Should he require
       replacement, the decision will be a test of Hu Jintao's ability to substitute a strong Jiang supporter
       for a non-aligned or Hu supporter will be a key test of the president's control over the party.

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Wu Guanzheng

       Born in 1938, Wu Guanzheng is currently ranked seventh in the
       Politburo Standing Committee. A native of Yugan in Jiangxi
       province, Wu joined the CCP in 1962, and graduated with
       postgraduate qualifications in thermal measurements and automatic
       controls from the Power Department of Qinghua University. He
       began work as a technician in 1968, spending his early career in
       Wuhan, Hubei province. In 1982, Wu became secretary of the
       Wuhan Municipal Committee, where he eventually held the post of
       mayor. Four years later he moved to his native Jiangxi province,
       where he served as secretary of the CCP Municipal Committee, as
       well as holding the post of provincial governor.

       Wu has been a member of the CCP Central Committee since 1987, and a Politburo Standing
       Committee member since 2002. He also holds the post of secretary of the Central Committee for
       Discipline Inspection. Wu's rise follows a typical pattern for Qinghua graduates. He acted as
       'Political Counselor', a sign of future importance in the party. Since his rise to higher office, Wu
       has apparently, in a manner characteristic of the patronage networks at the heart of Chinese elite
       politics, promoted the careers of former subordinates (mìshu) in Jiangxi, including Shu Shengyou,
       Shu Huiguo, Huang Zhiquan and Cheng Andong.

       Li Changchun

       Li Changchun was born in 1944 in Dalian, Liaoning province,
       and as such is the youngest member of the Politburo Standing
       Committee. He joined the CCP in 1965, and graduated in 1966
       from the Department of Electrical Machinery, Harbin Institute of
       Technology specializing in the automation of industrial
       enterprise. From 1968 to 1980, he held technical and
       management posts in the field of electrical machinery in
       Shenyang, and played a strong role in the factory's party affairs.
       Through the 1980s, he held party posts of growing importance, becoming secretary of the CCP
       Municipal Committee of Shenyang in 1983, and later mayor of the city. From 1987, he was
       governor of Liaoning province, but three years later he moved to Henan province, where he held
       gubernatorial posts, and eventually became secretary of the CCP Henan Provincial Committee.
       Li has been a CCP Central Committee member since 1987, and a Politburo member since 1997.
       The gradual advancement of Li's CCP career, from a factory level to senior ranks, as well as his
       technical background is characteristic of many members of the CCP's 'fourth generation' of
       leadership. Before Hu Jintao succeeded Jiang Zemin, Li was also considered by many an outside
       candidate for higher office. Li's appointment as party secretary of Guangdong Province, replacing
       Xie Fei, a Guangdong native, proved unpopular with Cantonese local officials.

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Luo Gan

       At 70, Luo Gan is the oldest member of the Politburo Standing
       Committee, and the lowest-ranked of the nine members. Luo was
       born in 1935 in Jinian, Shandong province, and joined the CCP in
       1960. He studied at the Beijing Institute of Iron and Steel
       Engineering, and went to study at Karl Marx University, Leipzig,
       east Germany in 1955. He graduated in 1962 from the Freiburg
       Institute of Mining and Metallurgy, Leipzig, specializing in machine
       casting. From 1962, he held a series of technical and management posts at the 1st Ministry of
       Machinery Building.

       In 1980, Luo was posted to Henan province as vice-governor, and, from 1983, played a senior role
       in the All-China Federation of Trade Unions. He became a CCP Central Committee member in
       1987, and a Politburo Standing Committee member ten years later. Luo is also secretary of the
       CCP Political and Legislative Affairs Committee.
       Source: Jane‟s Information Group

                State Council

       The State Council is the effective cabinet of China's government, and the most effective state
       administrative body. Its tasks comprise the management of the country's ministries, although its
       policy-making capabilities are restricted by the control held by the CCP over the state. The premier
       appoints the members of the State Council, while the premier himself is appointed by the
       president. The National People's Congress ratifies the appointments and therefore nominally holds
       higher power, but in effect never disagrees with the premier or presidential decisions.

       President:                                       Hu Jintao
       Vice President:                                  Zeng Qinghong
       Premier, State Council:                          Wen Jiabao
       Vice Premier, State Council:                     Huang Ju
       Vice Premier, State Council:                     Wu Yi
       Vice Premier, State Council:                     Zeng Peiyan
       Vice Premier, State Council:                     Hui Liangyu
       Secretary General, State Council and             Hua Jianmin
       State Councillor, State Council:
       State Councilor, State Council:                  Zhou Yongkang
       State Councilor, State Council:                  General Cao Gangchuan
       State Councilor, State Council:                  Tang Jiaxuan
       State Councilor, State Council:                  Chen Zhili
       Minister of Agriculture:                         Sun Zhengcai
       Minister of Civil Affairs:                       Li Xueju
       Minister of Commerce:                            Bo Xilai
       Minister of Communications:                      Li Shenglin

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Minister of Construction:                        Wang Guangtao
       Minister of Culture:                             Sun Jiazheng
       Minister of Education:                           Zhou Ji
       Minister of Finance:                             Jin Renqing
       Minister of Foreign Affairs:                     Li Zhaoxing
       Minister of Health:                              Gao Qiang
       Minister of Information Industry:                Wang Xudong
       Minister of Justice:                             Wu Aiying
       Minister of Labor and Social Security:           Tian Chengpin
       Minister of Land and Natural                     Sun Wensheng
       Minister of National Defense:                    General Cao Gangchuan (concurrently)
       Minister of Personnel:                           Zhang Bolin
       Minister of Public Security:                     Zhou Yongkang (concurrently)
       Minister of Railways:                            Liu Zhijun
       Minister of Science and Technology:              Xu Guanhua
       Minister of State Security:                      Xu Yongyue
       Minister of Supervision:                         Li Zhilun
       Minister of Water Resources:                     Wang Shucheng
       Cabinet Rank Officials
       Minister in Charge of the State    Ma Kai
       Development and Reform Commission:
       Minister in Charge of the State Ethnic           Li Dezhu
       Affairs Commission:
       Minister in Charge of the State      Zhang Weiqing
       Commission for Population and Family
       Minister in Charge of the Commission             Zhang Yunchuan
       of Science, Technology and Industry
       for National Defense:
       Chairman of the CCP Central Military             Hu Jintao (concurrently)
       Governor, People's Bank of China:                Zhou Xiaochuan
       Auditor-General, National Audit Office: Li Jinhua
       Source: Jane‟s Information Group

                B. Legislative Branch

       The National People's Congress (NPC) is China's unicameral legislative body or parliament. It
       comprises nearly 3,000 deputies, elected every five years by Provincial People's Congresses and
       the People's Liberation Army. The NPC meets for two weeks once a year to review and approve
       major new policy directions, laws, the budget, and key changes in personnel and elects a standing
       committee that convenes regularly and exercises state power when the NPC is not in session. In
       addition, the NPC has the power to make amendments to the constitution and appoint and remove

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       the president and vice-president, the premier and vice premiers of the State Council, the procurator
       and president of the Supreme People's Court and the chairman and members of the state's military
       commission. However, the NPC is little more than a rubber stamp for policies and legislation that
       have been devised by the CCP Politburo. The NPC is entirely separate from the National Party
       Congress, which is a five-yearly body that meets largely to confirm party strategy devised by the
       CCP Politburo.
       Source: Jane‟s Information Group

             Legislative branch: unicameral National People's Congress or Quanguo Renmin Daibiao Dahui (2,985
                                 seats; members elected by municipal, regional, and provincial people's congresses to
                                 serve five-year terms)

                                    elections: last held December 2002-February 2003 (next to be held late 2007-
                                    February 2008)

                                    election results: percent of vote - NA%; seats - NA

       CCP Politburo

       The Political Bureau (Politburo) is tasked with devising the long-term strategy of the Chinese
       Communist Party (CCP). The organization‟s tasks are differentiated from the Secretariat, which
       has responsibility for the day-to-day running of the party, particularly involving personnel
       decisions. Members of the Politburo are often concurrently members of the Secretariat. Executive
       power within the Politburo is concentrated in the Standing Committee, which is therefore the most
       powerful party organ. (The over 1,500-member National Party Congress is theoretically the
       highest party body, but its meetings are too infrequent and unwieldy and its powers too limited for
       it to be of relevance). The CCP Central Committee ostensibly nominates Politburo members (who
       are also all members of the Central Committee), although in reality the body is self-perpetuating.

       Standing Member:                          Hu Jintao
       Standing Member:                          Wu Bangguo
       Standing Member:                          Wen Jiabao
       Standing Member:                          Jia Qinglin
       Standing Member:                          Zeng Qinghong
       Standing Member:                          Huang Ju
       Standing Member:                          Wu Guanzheng
       Standing Member:                          Li Changchun
       Standing Member:                          Luo Gan
       Member:                                   Wang Lequan
       Member:                                   Wang Zhaoguo
       Member:                                   Hui Liangyu
       Member:                                   Liu Qi
       Member:                                   Liu Yunshan
       Member:                                   Wu Yi

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Member:                                   Zhang Lichang
       Member:                                   Zhang Dejiang
       Member:                                   Chen Liangyu
       Member:                                   Zhou Yongkang
       Member:                                   Yu Zhengsheng
       Member:                                   He Guoqiang
       Member:                                   General Guo Boxiong
       Member:                                   General Cao Gangchuan
       Member:                                   Zeng Peiyan
       Alternate Member:                         Wang Gang

       CCP Secretariat (Communist Central Party)

       The Secretariat is the principal administrative organ of the Chinese Communist Party, tasked with
       the day-to-day running of the CCP and supervision of its actions. In essence, the Secretariat
       ensures that the CCP is acting according to the Politburo's broader aims. The overlap between
       Secretariat members and Politburo members allows effective control over CCP policy
       implementation. Secretariat members are elected by the CCP Central Committee (of which they
       are also members).

       General Secretary:                               Hu Jintao
       Member:                                          Zeng Qinghong
       Member:                                          Liu Yunshan
       Member:                                          Zhou Yongkang
       Member:                                          He Guoqiang
       Member:                                          Wang Gang
       Member:                                          General Xu Caihou
       Member:                                          He Yong
       Source: Jane‟s Information Group

                C. Judicial Branch

            Judicial branch: Supreme People's Court (judges appointed by the National People's Congress); Local Peoples
                             Courts (comprise higher, intermediate and local courts); Special Peoples Courts (primarily
                             military, maritime, and railway transport courts)

       China's legal system includes seven categories: the constitution and related laws, civil and
       commercial laws, administrative laws, economic laws, social laws, criminal laws, and litigation
       and non-litigation procedural laws. The people's courts are the judicial organs of the state and are
       composed of a president, vice-president, judges and 'people's assessors', the equivalent of jurors.

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       The Supreme People's Court is the highest court and operates at state level. It is responsible to the
       NPC and its Standing Committee and supervises the judicial work of the local people's courts,
       military courts and other special courts. Additionally there are higher people's courts in the
       provinces, autonomous regions and municipalities, and intermediate and basic people's courts at
       lower levels which try all cases publicly, except those involving state secrets, individual privacy or
       minors. The accused has the right to be defended either by themselves, a lawyer or close relatives
       or guardians. Procuratorial powers and functions are exercised by the Supreme People's
       Procuratorate, local people's procuratorates and special people's procuratorates.
       Source: Jane‟s Information Group

                D. Political System


       Since the founding of the People's Republic of China in 1949 constitutions were formulated in
       1954, 1975, 1978 and 1982. Revisions and amendments to some articles in the present
       constitution, promulgated on 4 December 1982, were made and adopted by the National People's
       Congress in 1988, 1993 and 1999. The constitution guarantees the basic rights and interests of
       citizens including freedom of speech, the press, religious beliefs, and the right to vote and stand for
       election. Citizens are also entitled to receive education, material assistance from the state and
       society when they are old, ill or disabled and have the right to demonstrate and form processions,
       and criticize or make suggestions to state organs or functionaries.

       The 2004 session of the National People's Congress (NPC), which supervises the enforcement and
       amendment of the constitution, further revised the constitution. Former president Jiang Zemin's
       'Three Represents' policy was added, which legitimizes the presence of entrepreneurs within the
       CCP. Clauses protecting human rights and private property were also added to the constitution.


       A president, who is head of state, and vice president are elected by the National People's Congress
       (NPC) for a term of five years and are limited to serving no more than two consecutive terms. The
       most important administrative organ of power of central government is the State Council
       comprising the head of government (premier), a variable number of vice premiers, five state
       councilors, a secretary-general and various ministers. The State Council draws up the national
       budget and economic plans, in accordance with the policy of the Chinese Communist Party (CCP),
       and, together with the premier and vice premiers, co-ordinates the work of ministries and
       commissions. The Chinese government has always been subordinate to the CCP, the central
       organizations of which make the key policy decisions concerning economic development strategy,
       foreign policy, and military affairs. The CCP Politburo Standing Committee is the most influential
       organization within the party, and formulates medium-term and long-term strategies for the party.
       The CCP Secretariat handles the day-to-day administration of the party.


       The National People's Congress (NPC) is China's unicameral legislative body or parliament. It
       comprises nearly 3,000 deputies, elected every five years by Provincial People's Congresses and

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       the People's Liberation Army. The NPC meets for two weeks once a year to review and approve
       major new policy directions, laws, the budget, and key changes in personnel and elects a standing
       committee that convenes regularly and exercises state power when the NPC is not in session. In
       addition, the NPC has the power to make amendments to the constitution and appoint and remove
       the president and vice-president, the premier and vice premiers of the State Council, the procurator
       and president of the Supreme People's Court and the chairman and members of the state's military
       commission. However, the NPC is little more than a rubber stamp for policies and legislation that
       have been devised by the CCP Politburo. The NPC is entirely separate from the National Party
       Congress, which is a five-yearly body that meets largely to confirm party strategy devised by the
       CCP Politburo.


       China's legal system includes seven categories: the constitution and related laws, civil and
       commercial laws, administrative laws, economic laws, social laws, criminal laws, and litigation
       and non-litigation procedural laws. The people's courts are the judicial organs of the state and are
       composed of a president, vice-president, judges and 'people's assessors', the equivalent of jurors.

       The Supreme People's Court is the highest court and operates at state level. It is responsible to the
       NPC and its standing committee and supervises the judicial work of the local people's courts,
       military courts and other special courts. Additionally there are higher people's courts in the
       provinces, autonomous regions and municipalities, and intermediate and basic people's courts at
       lower levels which try all cases publicly, except those involving state secrets, individual privacy or
       minors. The accused has the right to be defended either by themselves, a lawyer or close relatives
       or guardians. Procuratorial powers and functions are exercised by the Supreme People's
       Procuratorate, local people's procuratorates and special people's procuratorates.

       Political Parties

         Political parties and Chinese Communist Party or CCP [HU Jintao, General Secretary of the Central Committee];
                      leaders: eight registered small parties controlled by CCP

       Chinese Communist Party

       The only recognized political party is the Chinese Communist Party (CCP). Although communism
       remains the official ideology of China, the de facto market economy and changes to the
       constitution in 2004 (admitting entrepreneurs to the CCP and legitimizing private property), have
       challenged the continued relevance of communism as a national ideology, and as the basis of the
       CCP's legitimacy.

       At the Fourth Plenum of the 16th Communist Party Central Committee in September 2004, a party
       document was issued discussing possibilities for the CCP to enhance its 'ruling capability'. The
       document underlined the realization that economic growth alone is not sufficient to secure political
       legitimacy. While specific policy changes were not outlined in this document, promoting 'inner-
       party democracy' and controlling party corruption were identified as key areas for ensuring regime

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       If successfully implemented, this process will prevent the regular recurrence of some traditional
       problems within the CCP elite. Most notably, the formation of dominant power groupings like the
       Gang of Four (a former group of CCP leaders including Mao Zedong's widow) or Jiang Zemin's
       'Shanghai faction' should be curtailed, while succession problems like those seen after the death of
       Mao would be eradicated. The internal stability of the CCP should in turn help create a more stable
       environment for Chinese economic and social development.

       Historically, CCP elite decision making has been difficult for outsiders to follow. The mechanics
       of decision-making processes within the Great Hall of the People are not generally discussed
       within the Chinese media. More importantly, influence both within the CCP and China at large has
       traditionally depended more on an individual's personal influence and network of contacts (the
       guanxì system) than it has depended on his official titles and posts.

       Understanding the roles played by particular individuals depends as much on the relationships that
       they have developed, especially during their academic background and provincial postings as on
       their current official posts. For example, former president Jiang Zemin's key subordinates tended
       to be members of his 'Shanghai faction' - individuals who had attended Shanghai University, rather
       than Qinghua University, the traditional breeding ground for members of the CCP elite. This
       situation is complicated by the fact that, for the first time, CCP leadership is not solely focused
       around a clear 'paramount leader' like Deng Xiaoping or Jiang Zemin.

       CCP Leadership under Hu Jintao

       Since becoming president, Hu Jintao has implemented a program of 'inner-party democracy',
       which is intended to reduce the role played by patronage and nepotism within the CCP elite, by
       increasing the relevance of an individual's official post rather than his guanxì-based network of
       personal influence. This program has in particular involved regulatory measures to set term limits
       on major posts and increase the importance of intra-party elections. The immediate goal has been
       to reduce party corruption, which has limited the authority of Beijing over the provinces.

       With the arrival of Hu's program of 'inner-party democracy', the CCP has entered a transitional
       phase, although the role of traditional patronage networks and personal influence is unlikely ever
       to be completely eliminated. Jiang Zemin himself has resigned from all of his official posts,
       including the chair of the CCP Central Military Committee, the traditional marker of supreme
       authority within the CCP. Nonetheless, members of his 'Shanghai faction' retain key posts within
       the CCP elite, especially the Standing Committee of the Politburo, and are likely to have retained
       some of his preferences.

       It is difficult to judge Hu's overall authority within the CCP. He holds all the most powerful
       positions, including that of chairman of the Central Military Committee, normally associated with
       authority in the CCP. He has also succeeded in implementing policies that significantly diverge
       from Jiang's legacy, especially in his handling of the economy. On the other hand, the majority of
       key senior posts are still held by party members who are loyal to Jiang or to Zeng Qinghong. With
       the 17th National Party Congress in 2007 approaching, Hu must work to develop support within
       the party. Significantly, Hu has appointed former Chinese Communist Youth League (CCYL)
       officials, one of his main loyalty bases, to top provincial and ministerial positions. Similarly, Hu
       has cultivated the support of officials with backgrounds in the western and northern provinces that

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       were left behind in development under Jiang. Hu's program of 'inner-party democracy' may also
       serve to strengthen his position within the CCP as a whole. Although many top posts are still held
       by officials grouped with Jiang and Zeng, Hu's reforms should reduce the influence of top-level
       cronyism, and increase the power of mid-level officials, where Hu has many supporters.

       One sign that Hu may be on track to asserting his influence over the CCP is that Jiang's protégé
       Zeng Qinghong was not appointed to CCP CMC vice-chairman when Jiang resigned, as many had
       anticipated. On the other hand, Hu is unlikely to be able for the moment to depart too far from
       Jiang's legacy when it comes to key issues like Taiwan, and, with supporters in many of the top
       party positions, Jiang's opinions are likely to remain a crucial parameter for the assessment of
       intra-party policy.

       Civil Society

       Interests groups in China have, since the 'revolutionary' period, traditionally been tied to the
       political leadership and did not exist as independent, identifiable entities. However, this has now
       changed with economic liberalization. Provincial elites and officials at all levels are arguably
       obsessed with the spoils of office. Holding an official position alone does not guarantee security;
       corruption substitutes accordingly. Problems with a significant criminal and judicial dimension
       have thus arisen. Parallel changes have also meant the formation of new political and economic
       interests, typically at the sub-national level.

       Entrepreneurs that flourished as heads of rapidly expanding collective or private-sector entities
       from the 1980s or 1990s are now major taxpayers to whom the local authorities, judiciary and
       police are beholden, funding from central government having become scarcer and less secure.
       Such figures are now able to command local or higher elements of the authority structure against
       threats or rivals. At the highest level, the ties between business and politicians are also growing
       fast. Since 2002's 16th National Party Congress, entrepreneurs have even been able to hold
       positions within the CCP itself.

       Human rights

       A lack of human rights discourse in China can be attributed not only to the lack of autonomous
       media outlets, and the stringent penalties for subversion, but also the deployment of Chinese
       nationalism by the CCP as a countervailing force against international calls for social and political
       liberalization. Both Jiang and Hu have portrayed calls for liberalization or human rights reforms as
       'interference' in Chinese sovereignty. By pointing to the involvement of foreign, colonial, powers
       in Chinese history, Jiang and Hu have drawn a modern parallel, claiming that foreign calls for
       liberalization and human rights improvements are a similar, more subtle, attempt at economic and
       social 'colonization' by interfering in Chinese sovereignty and 'Westernizing' Chinese culture. This
       view seems at present popular with many segments of the Chinese population.

       China has been criticized in particular for media censorship and lack of freedom of speech, the
       holding of political prisoners, a lack of fair trial, the use of torture, and its treatment of ethnic
       minorities, particularly in Tibet and Xinjiang. These were all common under Jiang Zemin, and it
       was initially hoped that Hu Jintao would pursue a more liberal approach to relations between the
       CCP and the population at large. However, Hu seems to be continuing Jiang's policy in the form of

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       a campaign against 'neo-liberalism'. Both Jiang and Hu have explicitly rejected the Western notion
       that economic progress must be accompanied by political liberalization. In the autumn of 2004, the
       Fourth Plenary Session of the 16th Central Committee passed a decision to strengthen the
       'governing ability' of the party. While this was largely aimed at eliminating party corruption and
       improving the transparency of internal party decision-making, it also recommended the 'guidance'
       of public opinion, especially through control of the media. Controls over Chinese media, including,
       increasingly, the internet, remain strong.

       Civil-Military Relations

       The opinions and political role of the PLA, although difficult to gauge, are fundamental to regime
       security. Although the CCP elite no longer depends on military or 'revolutionary' credentials for
       legitimacy, the PLA's loyalty to the CCP remains the ultimate guarantor of the party's control.
       Historically, the Chinese military viewed itself firstly and foremost as the protectors of Chinese
       communism. By the early 1990s, the role of communism in China's market economy had
       diminished, and the military itself was deeply involved in private enterprise. The increased
       professionalism of the Chinese officer corps has reduced its 'revolutionary' role. Similarly, senior
       party members of the 'third generation' and later are more likely to have a technical background
       than one based on military experience.

       This leaves the relations between the PLA and the CCP unclear. Chinese military rhetoric, like
       Chinese political rhetoric as a whole, has tended to display an increasingly nationalistic tone. It is
       reasonable to suppose that the 'elite nucleus' of the Chinese military sees itself as much as a
       guarantor of China's international prestige as guardians of Mao's communist legacy. This may not
       be entirely to the CCP's satisfaction. There are signs of decay in the relationship between party and
       military, in particular, rhetoric that has become increasingly focused on the need to ensure the
       military's absolute loyalty to the party, and avoid the pernicious influence of calls for
       'depoliticization' (fèizhèngzhìhuà), 'de-partification' (fèidanghuà), and 'nationalization' (gúojiahuà).
       This implies a background of disagreement between the party and, at least, some members of the
       military's elite over the role of the CCP within the social and political structure of the country as a
       whole. The party seems to be becoming concerned over a trend towards an apolitical military loyal
       to China as a whole, instead of a military specifically loyal to the CCP.

       Another potential cause for friction in civil-military relations is the state's perceived failure to
       provide employment or care for retired military personnel. This grievance was highlighted in April
       and August 2005, when former members of the military gathered in Beijing to protest their

       Non-governmental organizations (NGOs)

       NGOs have proliferated in China during the past twenty years. According to statistics from the
       Ministry of Civil Affairs, cited by the World Bank, there were in 2002 133,000 officially
       registered social organizations and 1,268 foundations in China. The CCP has in recent years
       demonstrated a high level of tolerance, and even support, for (non-political) Chinese NGOs. With
       the liberalization of the Chinese economy, state-owned enterprises can no longer play the role they
       did prior to China's economic reforms, when schooling, housing, healthcare and pensions were all
       focused around state-run employment. NGOs have proved helpful in assuming tasks in Chinese

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       society that emerged with the decline of true communism in China, and there are now NGOs in a
       wide range of fields, satisfying a range of needs from legal assistance and healthcare to
       environmental awareness. It is likely, though, that should it display an outright political agenda, a
       Chinese NGO would soon find itself shut down.

       Foreign NGOs operating in China faced increased difficulties in the second half of 2005. The CCP
       displayed an increased concern that human rights NGOs in particular are attempting to influence
       Chinese politics by promoting democracy, perhaps under the direction of Western governments.
       As a consequence, new regulations making it easier for foreign NGOs to register in China,
       proposed in 2004, were cancelled, and foreign NGOs found themselves under government
       scrutiny. Chinese NGOs receiving funding from foreign NGOs have also been affected.
       Source: Jane‟s Information Group

                E. Political Pressure Groups

           Political pressure no substantial political opposition groups exist, although the government has identified the
         groups and leaders: Falungong spiritual movement and the China Democracy Party as subversive groups

                F. Foreign Affairs

       Foreign Policy Overview

       A maxim of Chinese foreign policy is to divide potential adversaries; for example, when Tokyo
       and Washington disputed a trade issue, China would move to support Japan. With regional powers
       such as Japan moving closer to, rather than further from, the US security framework, such a
       strategy may become increasingly difficult to exercise. In parallel, efforts to build a Chinese brand
       of multilateralism in tandem with Russia in Central Asia - via the Shanghai Co-operation
       Organization (SCO) - as a counterweight to NATO are ongoing, although very unlikely to produce
       instant results as numerous obstacles need to be overcome before the SCO becomes a viable device
       for regional co-operation. In this light, China's advances to the Association of Southeast Asian
       Nations (ASEAN) on the issue of free trade make sound strategic as well as economic sense. 'Soft
       power' - through the diffusion of Chinese business interests across Central, South and Southeast
       Asia - may be China's main means to advance its highly ambitious agenda of regaining the status it
       enjoyed in the pre-modern era as a fùqiáng' (wealthy and powerful) country.

       China may fall back on the hope that burgeoning trade and investment links with its neighbors will
       reap long-term influence and security for China, without the need for formal state-to-state
       mechanisms beyond the establishment of free-trade pacts. In the meantime, its more ambitious
       leaps of foreign policy will have to encompass a traditional staple of its diplomacy - exploitation of
       market niches for which rival suppliers do not have the expertise, diplomatic autonomy or

       China remains reluctant to become involved in any comprehensive arms-control agreements.
       During the 1990s, it notably did not answer repeated requests from the UN to complete the

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Register of Conventional Arms transfers. The stated reason for this reluctance was that China was
       especially sensitive to measures that it perceived as infringing upon its rights as a sovereign state.
       However, China seems prepared to pursue opportunities of arms sales it deems appropriate
       wherever they present themselves. Despite its low-key participation in maritime measures which
       could contribute to the US Proliferation Security Initiative, China appears reluctant to commit
       itself indefinitely to any arms-control regime that would undermine its ability to market military
       items or technology that are especially attractive to its prospective buyers in developing states.
       Such opportunistic sales aside, long-term foreign policy goals (such as maintaining Pakistan's
       nuclear deterrent) will also contribute to this stance.

       Foreign Policy Consistency

       As a permanent member of the UN Security Council, China has the potential to be a major force in
       international relations, although it is notably without great influence on issues seen by fellow
       members as the preserve of the mainstream international community; such as the Middle East. Its
       need for foreign markets, resources, and capital in the context of internal economic regeneration
       have further made the rhetoric of co-operation and peaceful co-existence prominent in public
       Chinese diplomacy. It has also notably acted as a conduit for states with widely differing views to
       communicate; for example, the EU and the US tend to pass diplomatic messages to North Korea
       via Beijing. Nevertheless, it has stumbled to assert a coherent foreign policy doctrine in the wake
       of the flux of changes wrought in Asia by the end of the Cold War.

       Chinese support for concepts such as 'anti-hegemonism' (code for its lack of willingness to see a
       purely US-dominated world order) have sat slightly awkwardly with its prospering on the basis of
       deepening commercial ties with the US and a multitude of core US allies. While exploiting the
       tremendous gains to be made between a labor-rich China on the one hand and the resources- and
       capital-rich states of the Western world, on the other, China has also attempted to build its own
       shadow network of states with which it has pursued both military technology and investment links,
       including those it sees as architectural to its security strategy (such as Pakistan). State-owned
       Chinese companies have periodically exported ballistic missile and non-conventional weapons
       technologies to (as US foreign policy vocabulary has developed) 'rogue states', 'states of concern'
       and, under the Bush administration, members of the 'axis of evil'. A number of Chinese companies
       have as a result faced US sanctions.

       Energy Diplomacy

       Chinese desire for forward bases of influence among the scattered fringe of states which, for
       whatever historic or domestic reasons have not acquiesced to the 'new world order', has not simply
       been to gain leverage over the US in other arenas, or to guarantee it some diplomatic support
       outside the immediate Asian region. Its desire for internal security, for instance, has led it to
       cultivate relations with Central Asia, to forestall territorial disputes and safeguard its sensitive
       (ethnically non-Han) 'autonomous regions' of Tibet and Xinjiang. More importantly, China has
       recognized the importance of cultivating diplomatic, economic and occasionally military links with
       oil-producing states.

       China displays an ever-growing demand for petroleum imports to fuel its economic growth. Since
       domestic measures to diversify power generation will not come online on a large scale over the

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       next few years, and since, even when they do, they may not be able to keep pace with Chinese fuel
       needs, securing access to foreign sources of fuel has become one of the main goals of Chinese
       foreign policy.

       Beijing's approach to this policy is multifaceted. At a diplomatic or governmental level the CCP
       cultivates its relationship with oil-producing states, for example by supporting their interests in the
       UN, through treaties, or through arms sales. At the same time, state-owned energy companies
       invest in oil exploration and production projects within the country. China has in particular
       developed ties with oil suppliers in the Middle East and, increasingly, Africa.

       While the cultivation of these ties is necessary to ensure a consistent supply of fuel, this policy
       may also prove embarrassing for China. For example, Iran is China's second largest supplier of oil,
       and other international outcasts like Sudan are also suppliers. The need to maintain good relations
       with countries like these has forced China to support them both at the UN level and through arms
       sales. For instance, in November 2004 China used its influence at the UN to oppose calls for
       sanctions or intervention in Sudan. China imports 60 per cent of Sudanese oil output, as well as
       being a major exporter of armaments to the country. Beijing also expressed opposition to the
       prospect of UN sanctions against Iran over its nuclear program. As the United States increasingly
       becomes more hawkish towards countries like Iran, China's support for them may become

       Trade Diplomacy

       China has solidly established itself as a key exporter of manufactured goods in the international
       arena. With an extremely cheap yet increasingly skilled labor pool (although labor costs are now
       rising), China is unmatched in its competitiveness in exporting manufactured goods. This has been
       at the heart of China's economic development, both by increasing the volume of its exports, and in
       attracting foreign capital from investors wishing to move or outsource manufacturing to China.
       While this has been of benefit to China, it leaves the country with several problems, including
       dependence on access to foreign export markets and sources of raw materials. China has also come
       under heavy criticism from several trading partners, especially the United States, on the grounds
       that local jobs cannot compete with cheap Chinese imports.

       Since the appointment of Hu, China has increased the number of free-trade agreements which it
       has signed, or is negotiating to sign, not only with its immediate Asian neighbors, but also as far
       afield as Latin America. These are to a large extent aimed at securing access to raw materials and
       markets, but, over time, they may serve to increase China's influence, at the expense of rivals such
       as South Korea and Japan.

       At the same time, China's vast population and sizeable government expenditure have also proved
       tantalizing to foreign exporters, who hope to secure China as a market. China has proved adept in
       using this in negotiations. The US has argued, for instance, that current EU plans to eliminate its
       arms embargo on China have been driven by the desire to secure export contracts for companies
       like Airbus.

       Defense Diplomacy

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Beijing has often utilized arms transfers and military diplomacy, rather than formal ties, to increase
       its international influence. The practice, encouraged when General Chi Haotian gained the external
       affairs portfolio in the Central Military Commission in 1995, has since continued, often involving
       countries broadly outside China's limited zone of influence, such as in Eastern Europe or the
       Middle East, or states otherwise considered 'pariah' by the international community, such as Cuba,
       Myanmar and North Korea.

       According to the October 2000 national defense white paper, China handles its military relations
       independently, and conducts military exchanges and co-operation with other countries on the basis
       of the Five Principles of Peaceful Co-existence. Military diplomacy should serve the state's overall
       diplomacy and the modernization of national defense and the armed forces. In pursuance of this
       purpose the PLA has actively engaged in external contacts and exchanges in a flexible and
       practical manner, and made sustained efforts for enhanced mutual trust, friendship and co-
       operation with armed forces of other countries, and for regional and world peace, stability and

       The desire for countries to maintain a proper relationship with China is reflected in an increasing
       number of military exchanges the PLA has been involved in over the past 25 years. Since reform
       began in 1978, senior PLA officers have led thousands of delegations to over 100 countries. The
       PLA has also welcomed thousands of military delegations from five continents, involving tens of
       thousands of people, of which more than half of the delegations were led by defense ministers,
       joint service commanders, chiefs of the general staff, and service commanders.

       While most PLA visits in the 1980s were confined to the senior officers from Beijing, during the
       1990s, the PLA began allowing military region commanders, deputy commanders, or political
       commissars and fleet commanders to lead delegations abroad. There have been PLA naval
       squadron visits to the US, Russia, Europe, India, Latin America, Southeast Asia, Australia and
       North Korea. The PLA Navy has conducted simple exercises with the US, Russian, Indian and
       French navies, while it has also participated in multi-national submarine rescue exercises hosted by
       Singapore. In 2002 the PLA Army conducted its first foreign exercise, an anti-terror exercise in
       neighboring Kazakhstan. PLA Army Special Forces units have participated in the Estonian ERNA
       competitions and have sent soldiers to train in Venezuela. Military exercises continue to form a
       key component of China's diplomacy.

       Foreign Policy Under Hu Jintao: Increased Flexibility

       Chinese foreign policy since the appointment of Hu Jintao has become noticeably more pragmatic.
       Compared to the regularly forceful rhetoric of the Jiang Zemin era, China's international relations
       under Hu display a greater degree of flexibility and negotiation. The recognition that concession
       and co-operation do not necessarily constitute capitulation of sovereignty marks a move from some
       of the rhetoric used by Jiang Zemin regarding subjects like foreign complaints over Chinese
       human rights abuses. For example, China's role in hosting talks aimed at defusing the North Korea
       situation displays a level of interest in multilateral solutions to international problems that would
       have been rare under Jiang Zemin's government.

       While there are few signs that China's basic agenda regarding, for example, its territorial claims to
       Taiwan, have changed, Hu's priority seems to have shifted somewhat towards enhancing China's

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       international status through dialogue while continuing to ensure access to export markets and
       resources. This is not to say that Hu is necessarily 'dovish' where Jiang was 'hawkish'. Rather, Hu
       has displayed his skill at institutional negotiation and consensus building within the CCP, and it is
       natural for him to bring these abilities to the international arena.

       Multilateral Relations

       Outside of the United Nations, China is not a member of any meaningful political or military
       organization and prefers to remain an autonomous, yet powerful, player in the international arena.
       The organization in which China has invested hopes for more than mere bilateral co-operation has
       been the Shanghai Co-operation Organization (SCO), previously called the Shanghai Five.

       Association of Southeast Asian Nations (ASEAN)

       China's relations with the members of ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia,
       Myanmar, the Philippines, Singapore, Thailand and Vietnam) have traditionally focused on
       China's military and territorial ambitions, overshadowed by a history of domination by imperial
       China within the region. However, in recent years they have begun to reflect the growing
       economic prominence China has over the sub-region; economic diplomacy between Beijing and
       ASEAN states has thus come to the fore. Following the regional financial crisis of 1997-1998, in
       which China prevented further intense financial and social turmoil by refusing to devalue the
       renminbi, its weight in economic diplomacy was increased substantially. Chinese exports and
       competition for foreign direct investment have since contributed to ASEAN fears of becoming
       economically eclipsed by China.

       Plans to create a China-ASEAN Free Trade Area (FTA) by 2010, ultimately to include Japan and
       South Korea, were set in motion at the Vientiane ASEAN meeting in November 2004. As part of
       the phased plan to introduce the FTA, tariffs on the trade of industrial goods fell in July 2005, and
       zero tariffs were introduced for over 100 'early harvests' products from January 2006. The
       establishment of such a trading bloc is expected not only to strengthen trade links within the
       region, but also to create an international rival to bodies like the EU.

       There are fears within ASEAN that the free trade agreement will flood their markets with cheap
       Chinese products and undermine domestic industries. There are therefore likely to be a number of
       protected industries and a delay to the liberalization of certain markets (in particular the
       automobile industry for Malaysia and the petrochemical industry for Thailand and Singapore). For
       this reason, the first stage of the agreement will involve only the non-sensitive industries of
       agriculture, livestock and fishery, as well as a unilateral reduction of customs duties by China on
       imports from ASEAN to reassure the Southeast Asian countries as to the potential advantages to be
       gained by greater access to the Chinese market (which imported USD47 billion of ASEAN goods
       in 2003, an increase of 50 per cent over the previous year).

       Trade with China has been a double-edged sword for ASEAN countries. China's low labor costs
       and increasingly skilled labor pool have proved impossible for its Southeast Asian neighbors to
       match. At the same time, China's growing need for food, fuel and raw materials has developed into
       a market that its neighbors are finding profitable to supply.

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       As a result of improving trade, the infrastructure needed for the movement of goods and people
       between China and ASEAN is due to deepen over the next decade. The first section of a 'trans-
       Asia' rail link that should eventually reach from Yunnan province to Singapore saw construction of
       its Chinese section completed in December 2005 with a 180 km long, eight-lane expressway
       between Nanning in China's southern province of Guangxi to the Friendship Pass on the Sino-
       Vietnamese border. A planned 263 km road link through Laos to Thailand, to be funded in part by
       the Asian Development Bank, will also directly lift the volume of traffic with Thailand and the rest
       of ASEAN in general (construction began in 2003).

       European Union (EU)

       Europe is primarily perceived by China as an important trading partner, and a potential
       counterweight to US power. China has accordingly tried to maintain good relations with EU
       members and the European Commission despite EU concern over the human rights environment in

       Below the commission level, Germany has traditionally maintained close relations with China
       (German engineers and technicians have been active in China since the 1800s), while France has
       been involved in technology transfers to China, especially of helicopters and their weapon systems.
       In the 1970s and 1980s this involved the licensed production of naval and battlefield types,
       although France was also a major arms supplier to Taiwan. European states have notably been
       more willing to bow to Chinese pressure on issues related to Taiwan. Neither Germany nor the
       Netherlands, for example, agreed to support US plans to construct diesel-powered submarines for
       Taiwan in 2001, for fear of offending Beijing.

       Exchanges on security also take place, at a level insulated from politics - such as the high-level
       defense and security meeting between senior officers of the People's Liberation Army General
       Staff and the German Federal Defense Forces in May 2002. France even carried out joint naval
       exercises with the PLAN in the run-up to Taiwan's 2004 presidential elections.

       Over the course of 2005, as well as high-ranking diplomatic visits, multilateral co-operation
       between China and EU member states took place at all levels. In January 2005, British Foreign
       Secretary Jack Straw announced, despite strong objections from the US and Japan, EU intentions
       to lift a 15-year embargo on arms exports to China, established after the Tiananmen incident in
       1989. As of January 2006, this was still under discussion, with an EU delegation to Beijing stating
       a human rights prerequisite in May before the ban could be lifted. If the embargo is eventually
       lifted, China is likely to relish the opportunity to have an alternative to Russia as the backbone of
       its military modernization program. However, relations with European countries focus more
       naturally on bilateral or multilateral trade diplomacy, and Chinese WTO commitments than on
       defense-oriented ties. In June 2005, China and the EU set forth a trade accord aimed at limiting the
       rise in Chinese textile exports to the EU until 2008. Both the US and the EU faced dramatically
       increased textile imports from China during the first part of 2005, and Chinese officials praised the
       EU's negotiated solution in comparison with the quotas that the US imposed on Chinese textiles.

       Shanghai Cooperation Organization (SCO)

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Originally seen as a means of resolving Soviet-era border disputes, the SCO subsequently began to
       acquire the status of a forum for co-operating on anti-terrorism issues. The first presidential
       summit (of the Shanghai Five as it was then known) was held in 1996 between the heads of state of
       China, Kazakhstan, Kyrgyzstan, Russia and Tajikistan. In June 2001 Uzbekistan was admitted and
       the group changed its name. Further expansion of the SCO has since been undertaken, with India,
       Iran and Pakistan assuming observer status in early July 2005. China has also hinted at the
       prospect of offering membership or observer status to Afghanistan.

       The group has legalized for the first time the projection of Chinese troops beyond China's borders
       on the request of the signatories. However, despite its explicit anti-terrorism and security mandate
       the nascent SCO failed to react in the aftermath of September 11, raising questions over its
       relevance as an organization. Further, following the US-led military operation of Afghanistan, the
       US' influence increased with the basing of troops in Kyrgyzstan and Uzbekistan. As such, China is
       eager to maintain the grouping, seeing it not only as a possible balance to the Western collective
       defense of NATO, but also a means through which China and Russia can counter US influence in
       Central Asia. Indeed, the large Sino-Russian military exercises in August 2005 were held under the
       auspices of the SCO, at which India was an observer. Russia's defense minister suggested in
       October 2005 the possibility of joint Sino-Russo-Indian exercises under the SCO.

       Sino-Russian attempts to balance US influence in Central Asia through the SCO have witnessed
       some success. In July 2005, SCO member states called on the US to provide a timeline to vacate
       its bases in Kyrgyzstan and Uzbekistan (the US also has fly-over rights in Tajikistan) once military
       operations in Afghanistan finished. Relations between Uzbekistan and the US have subsequently
       soured in the wake of President Karimov's suppression of the 'Orange Revolution'. Karimov
       subsequently demanded that the US vacate its K2 base in Uzbekistan, with the US forces leaving
       by 1 December 2005. The US has responded by working on building bilateral ties, especially with
       Kyrgyzstan and Tajikistan.

       The SCO's remit has also expanded beyond merely security as China in particular attempts to
       broaden the organization‟s scope, with a meeting between the members' trade ministers in 2002
       pledging greater economic integration. To further co-operation a secretariat was inaugurated in
       Beijing in January 2004 and an anti-terrorism centre in Bishkek was created in the same year.
       China is likely to press for greater integration in order to further its interest in the region and
       counterbalance the growing influence of the US in Central Asia.

       World Trade Organization (WTO)

       China's entry into the WTO has helped access to valuable export markets. Numerous grievances
       with China's compliance with the terms of WTO entry have been noted, especially by the US,
       whose trade deficit with China reached USD162 billion in 2004. Not only have complaints been
       raised about barriers to free trade in China, but also regarding continued problems with counterfeit
       goods and intellectual property.

       In addition to regulatory obstacles to foreign exports to China, complaints have been made
       (particularly by US officials) about China's fixed exchange rate, on the grounds that it has unfairly
       reduced the cost of Chinese exports. In July 2005, following international pressure, Beijing
       revalued the currency for the first time in a decade, allowing the yuan to float against a basket of

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       currencies. However, the measure failed to prevent further criticism over the minor shifts in value.
       At the same time, China's trade in counterfeit goods has affected a range of foreign producers. This
       counterfeit market is estimated by the Chinese State Council at some USD19 billion to USD24
       billion per annum.

       China's long-term status in the WTO remains to be seen. While Chinese exports have benefited
       from China's entry, foreign trading partners, including the US and the EU, have protested
       continued non-tariff barriers to foreign companies wishing to export to China or operate
       manufacturing facilities there. The US, in early 2004, formally complained to the WTO that China
       discriminated against foreign agricultural imports, and also complained over restrictions on
       imports from the optical fiber manufacturer Corning. In response, the US imposed anti-dumping
       tariffs on Chinese exports of wooden furniture of up to 198 per cent in June 2004. In January 2005,
       with the abolition of textile import quotas, Chinese textile exports to the US jumped 75 per cent,
       leading to US anti-dumping limits being imposed by Washington on certain textile exports. It
       seems probable that the terms of China's entry into the WTO will remain contentious for some
       years to come. Beijing still has obligations to allow foreign companies, including banks, more
       freedom to operate within China.

       Given the high levels of corruption still present in Chinese regulatory bodies, and the problems
       facing a number of Chinese businesses, like failing state-owned enterprises and insolvent banks, it
       is difficult to see how China can operate with the degree of openness which its WTO obligations
       demand. At present, the CCP depends more on direct regulatory intervention like the lending
       restrictions imposed during the first half of 2004. It is therefore challenged to phase in regulatory
       changes in order to prepare for a more market-oriented structure of economic control, without
       upsetting economic development in the interim due to overly abrupt transitions.

       Relations With Bhutan

       Although Beijing maintains friendly relations with Bhutan, as of January 2006 China had still not
       established formal diplomatic ties with the Himalayan kingdom. An Agreement to Maintain Peace
       and Tranquility on the Bhutan-China border was signed in 1998. However, border issues remain
       outstanding despite shrinkage of the area of dispute. Since 1984 there have been annual rounds of
       negotiations on the matter, with the latest occurring on July 13-14 2005. The talks, which
       discussed the disagreement which has existed since the Chinese invasion of Tibet in 1951, led to a
       statement from Thimphu that it had "agreed to change the claim line". No details were provided,
       but the statement led to concern from India that Bhutan would cede territory to China, particularly
       the strategically important Chumbi valley. As of January 2006, no agreement over the border had
       been reached.

       Bhutan is thought to oppose any extension of South Asian regional forum's (such as the South
       Asian Association for Regional Co-operation, SAARC) to include China, although Beijing gained
       observer status within SAARC in November 2005 with the support of Pakistan and Bangladesh.
       Nevertheless, Bhutan is likely to need to co-operate further with its neighbors India, Nepal and
       China in the future, to monitor, via satellite, the problem of glacial melting, which could
       destabilize the hydrology of this geo-politically sensitive area over the medium to long term.

       Relations With India

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Although Sino-Indian relations have been improving dramatically since the late 1990s, the
       relationship is colored by a mutual distrust, particularly over potential future strategic competition
       and a historical war over the common Himalayan border in 1962. It was only in 1993 that relations
       started to thaw again after more than three decades of diplomatic hostility. Throughout much of the
       second half of the 20th century, border disputes between the two countries colored their relations.
       In particular, disputes have arisen over the status of Tibet, Sikkim and parts of Kashmir.

       A real improvement in relations began with the visit to China in 2003 of the then-Indian prime
       minister Atal Behari Vajpayee. Since then, China has recognized Sikkim as part of India, while
       India reciprocated with a recognition of Tibet as part of China.

       In January 2005, the two countries held the first bilateral 'strategic dialogue', suggesting a trend
       moving from merely resolving their long-term border disputes, to addressing their shared strategic
       interests at a global level. This partnership was furthered at a summit held between Chinese
       Premier Wen Jiabao and Indian Prime Minister Manomohan Singh in April 2005, which ended
       with the signing of 11 economic and social accords and an agreement to lay the basis for a final
       resolution of the demarcation of their 3,500 km border, and a second 'strategic dialogue' in January
       2006. China has also expressed support for India's candidature for a permanent seat on the UN
       Security Council, which stands in sharp contrast to its rejection of Japan's candidature in April
       2005. The probability of open war between China and India is therefore now low.

       It is difficult to forecast how strong economic growth within the two countries will affect the
       relationship. On the one hand, there is a distinct likelihood that India and China, two of the fastest
       growing economies in the world with the largest populations, will develop into genuine economic
       rivals by 2020, with the issues of energy and water provision particularly contentious. Both
       countries are prospecting for oil and gas joint ventures within Iran and are eager to import oil from
       Russia and Sudan. India's textile exports have also suffered from the growth in Chinese exports,
       since the end of Multifiber Agreement quota at the beginning of 2005. At the same time, there is
       also the prospect of economic interdependence between the two powers. While Indian economic
       growth focuses on computers and information technology, the Chinese economy emphasizes
       manufacturing. India could grow into a major market for Chinese consumer goods, while Chinese
       resource shortages, especially food, could be filled by Indian imports. It remains to be seen
       whether or not these two rivals will develop real economic interdependence, but the total value of
       trade between the two has risen from USD291 million in 1991 to USD13 billion in 2004,
       suggesting rapidly expanding links in the short term. Over the longer term, both China and India,
       barring major upsets, seem to be candidates to become economic superpowers. This economic
       rivalry will likely be matched by increased competition over sources of fuel.

       Rapprochement Since The 1990s

       The early 1990s saw moves towards rapprochement, as expressed in the 1993 "Maintenance of
       Peace and Tranquility Agreement", which indicated neither power would develop further defense
       installations in areas whose ownership was under contest. However, in May 1998, as both India
       and Pakistan conducted nuclear fission test detonations, then-Indian defense minister George
       Fernandes breached a longstanding taboo by declaring publicly that China, not Pakistan, was
       India's "potential threat number one". He said that India should awaken to the fact that Chinese

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       military activities and alliances, notably those involving Pakistan, Myanmar and Bangladesh, had
       begun to "encircle" India.

       Following a meeting between the countries' two heads of state in mid-2000, there were signs of a
       rapprochement. China and India had already marked the 50th anniversary of the establishment of
       diplomatic relations between the two countries in April 2000. During the subsequent meeting
       (which marked the end of the acrimony following India's nuclear test) the two countries went out
       of their way to stress issues in which they held shared views. They subsequently side-stepped
       matters such as the nuclearization of the region, instead concentrating on combating terrorism and
       their mutual desire of a multipolar world.

       High-level diplomatic meetings in 2001 and 2002 set a definite timetable for resolution of the Line
       of Actual Control never demarcated since the 1962 conflict, with the two sides swapping border
       maps staking their claims once more in April 2002. Diplomacy continued with Atal Behari
       Vajpayee's visit to Beijing in June 2003, the first by an Indian prime minister since the early

       The subsequent summit produced a Joint Declaration in which India recognized "Tibet
       Autonomous Region as part of the territory of the People's Republic of China", an advance on the
       formulations of 1988 and 1991, in which Tibet was acknowledged merely as an "autonomous
       region of China". In what was immediately criticized as an unequal concession, China agreed to
       the opening of the Nathu La pass into "Sikkim state" in a separate memorandum on border trade,
       to the consternation of many in the Indian military who feared the opening of a border trade route
       could provide opportunities for infiltration. This pass, closed since 1962, is the shortest route
       between the two countries. The Indian government's national security advisor and the "senior
       most" vice-minister in China's Ministry of Foreign Affairs were appointed as special
       representatives to the border question. In September 2005 Chinese ambassador to Sun Yixi
       claimed that the Nathu La Pass would be open to border trade in the following month and fully
       opened in the second half of 2006. Further talks aimed at conclusively resolving the Sino-Indian
       border disputes were held in September 2005 and January 2006.

       It is likely that a domestic political rationale, the desire for India's then-ruling Bharatiya Janatha
       Party to create the impression of a diplomatic breakthrough, worked in China's favor. However,
       since India's strategy with regard to China has long remained relatively inchoate, Vajpayee's
       government could have perhaps only been accused of pragmatism and appreciating the strategic
       logic of the situation. In any case, despite defense minister Fernandes' famous comment (and
       Vajpayee's citing of China to the US president in 1998 as a reason for India's nuclear tests), much
       of India's intelligence community has, since the reorganization of 2000, been oriented more
       exclusively to Pakistan.

       Strategic Encirclement

       The high-profile diplomacy that has taken place between India and China since 2003 belies deep
       strategic mistrust. Although the potential gains from co-operation are clear to both countries, both
       sides fear hostile encirclement. China fears a US-India entente, with tacit Russian acceptance (via
       Russian ties to NATO and large-scale Russian arms sales to India, a longer-standing customer than
       China). Meanwhile, India fears encirclement at a regional level, via China's potential reach through

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Myanmar into the Bay of Bengal and through Pakistan into the Arabian Sea, and China's
       cultivation of less influential countries disaffected with India's sway in South Asian affairs, namely
       Bangladesh, Nepal and Sri Lanka.

       China is backing development of the port of Gwadar in Pakistan, expanded road links between
       Yunnan province and Myanmar, and development of naval bases in Myanmar along the Bay of
       Bengal. This may be intended to lessen Chinese dependence on the Pacific and South China Sea
       for access to shipping lanes and energy imports, and simultaneously step up China's presence
       along the crucial shipping lines from the Middle East, through the Arabian Sea, Bay of Bengal and
       Strait of Malacca.

       China's large-scale investment in transport links into and within Tibet, and between Xinjiang and
       Tibet and Yunnan and Tibet, up to the border with India, may be seen as a separate effort on the
       land frontier. Indian sources believe China has stationed at least 25 nuclear-tipped medium-range
       ballistic missiles in Tibet. This has been accompanied by constant probing of the LAC, via
       unscheduled border crossings by PLA military units, in a manner designed to test Indian border
       intelligence and psychology. Meanwhile, China's avowed interest in joining regional forum's such
       as the South Asian Association for Regional Co-operation (SAARC) and the Mekong-Ganga
       (Ganges) Co-operation (MGC) group should be seen as the public face of its hopes of extending
       influence regionally. The MGC is India's creation.

       Indian diplomacy with ASEAN states such as Thailand, Malaysia, Vietnam, Cambodia and
       Myanmar, intended to outflank China, has so far proven relatively unsuccessful, in comparison to
       China's positive engagement with the region. However, India's progress in expanding co-operation
       with the US has been notable, especially since September 2001. This has included an expanded
       Indian naval blue-water presence in the areas in which China is seeking to expand its reach in the
       near term. Joint US-Indian naval patrols up to the Strait of Malacca (the world's busiest shipping
       lane, through which the crude oil transported each day is equivalent to daily US import demand)
       have increased to over 150, compared to 25 in 1998 as a whole.

       Moreover, US sanctions imposed on India since the 1998 nuclear testing have been lifted. Sale of
       high-powered mainframe computers (ostensibly for India‟s space program) have taken place, in
       addition to joint land exercises and speculation that India will buy US defense hardware.

       All of these developments are likely to make China cleave more tightly to its regional strategy of
       expanding influence in South Asia, while seeking to engage India at the highest diplomatic levels.
       China notably seeks long-term settlement of its Himalayan border to shore up its energy security.
       Without this, plans for a pipeline from Central Asia via Tibet will not be on a secure basis.

       In the background at all times, is China's long-standing support for Pakistan. China has indicated
       that Pakistan holds a place in its strategic matrix equivalent to the position enjoyed by Israel in that
       of the US. This makes it determined both to prevent war or any other sequence of events which
       might, in the worst case scenario, result in an internal collapse of authority in Pakistan. In turn,
       China's development of Pakistan's military arsenal is clearly disruptive to Indo-Chinese relations,
       although improving Indo-Pakistan relations may mitigate this factor.

       Relations With Iran

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Iran's significant role in satisfying China's petroleum requirements has left China in an awkward
       diplomatic position. While international opinion, especially that of the US, has coalesced against
       Iran (in particular given increasingly clear evidence of an Iranian military nuclear program) China
       has continued to support Iran in international forum's. With Iran as a vital source of oil (Iran was
       China's second largest oil supplier in 2004, accounting for 13.6 per cent of China's oil imports),
       and with international competition for access to Iranian oil, China cannot afford to alienate the
       country. Chinese companies have also invested in a number of Iranian projects including, in July
       2005, negotiations to invest USD285 million in transportation projects, although it continues to
       deny having provided any significant military assistance to Iran.

       Nevertheless, missile component sales to Iran are thought to have taken place from the late 1980s,
       while the sale of Iran's short-range ballistic missile systems reflects transfers of Chinese know-how
       in guidance systems, fuel and computerized machine tools. Transfers of telemetry equipment for
       medium-range missiles may also have taken place, in contravention to the Missile Technology
       Control Regime (MTCR), by which China has made only a verbal agreement to abide. However,
       such commitments, associated US pressure and probably incentives from Israel, have controlled
       the trade in the past. Iran has been forced to pay up front for missile systems in order to fund
       China's considerable research and development costs. Iran is also believed to receive various
       missile sub-systems and production technologies rather than direct sales of integrated weapons
       systems, and this is often under the guise of other types of technical assistance not covered by the
       MTCR. In December 2005 the US placed sanctions on six Chinese military technology companies
       for allegedly transferring sensitive missile technology to Iran.

       As China seeks additional sources of supply of raw materials in line with the growth of domestic
       transport, industrial output and consumer demand, the relationship is bound to strengthen in a new
       direction over the medium term, even if co-operation in the defense industry does not develop
       further. China is one of the largest foreign investors in Iranian oil and gas projects, including a
       recent Memorandum of Understanding suggesting Chinese investment in Iran's Yadavaran oil
       field. China is also a potential bidder in the Azadegan oil project, a fact Japanese negotiators point
       to in attempting to resist US pressure against involvement in the project. China has restricted itself
       to largely neutral statements on the question of inspection of Iran's nuclear facilities by the
       International Atomic Energy Agency, indicating it supports international Co-operation towards the
       development of nuclear energy for civilian purposes but opposes any form of nuclear proliferation.

       In June 2004, US Congress' US-China Economic and Security Review Commission accused
       Beijing of supplying equipment and expertise in support of Iran's nuclear program. The Chinese
       foreign ministry denied the report, but, given China's growing fuel shortage, this sort of
       relationship with an oil-rich state might not be entirely unexpected. The possibility of the Iranian
       nuclear issue being brought before the UN Security Council is a diplomatic hurdle for Beijing.
       Given China's (as well as Russia's) ties with Iran, and its dependence on Iranian oil supplies, any
       resolution would likely be vetoed, but this would hardly help Chinese relations with the EU and
       US, which are increasingly moving towards such a solution. China has publicly opposed any plan
       to refer the Iran issue to the UN Security Council. In September 2005, for example, a Chinese
       Foreign Ministry spokesman called for the nuclear dispute between Iran and the EU to be dealt
       with under the framework of the International Atomic Energy Agency alone, without referral to the
       UN Security Council.

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Relations With Israel

       China's relationship with Israel is driven by its need to diversify its arms procurement and
       modernize its military capability, especially in fields such as avionics. Consequently, Israel is, after
       Russia, China's main supplier of weapons. Israel also potentially functions as a conduit for US-
       derived military technologies to make their way into China, although the volume and intensity of
       US-Israel technology transfer makes any specific claims of sales to third parties difficult to verify.
       In turn, Israel has historically hoped to put pressure on China to persuade it to stop supplying
       'sensitive material' to Iran, in particular special steel for ballistic missiles. Although the
       relationship is clearly mutually beneficial, the interaction with the US, which attempts to limit
       sales of sophisticated arms to China, complicates Sino-Israeli dealings and has led to periodic
       diplomatic problems.

       The first Sino-Israeli secret weapons agreement dates back to 1979, long before the two countries
       opened diplomatic relations in 1992, by which time Israel had already sold some USD4 billion
       worth of arms to China. China was keen to obtain the sophisticated technology that the West
       refused to supply and it was a time when Israel saw itself as the counter-balance to the Soviet
       Union. Israel has sold China numerous military items, including radar systems, optical and
       telecommunications equipment, drones and flight simulators, and even their Lavi fighter aircraft,
       which formed much of the basis of China's own Jian-10 fighter.

       Relations faltered in 2000 when Israel was forced to cancel a contract to sell China its own
       (Phalcon) version of the US airborne warning and control system (AWACS) radar mounted by
       Israel Aircraft Industries (IAI) on a Russian-made Ilyushin Il-76 transport aircraft. China had
       agreed to pay USD250 million for a single Phalcon system, with an option to buy three to eight
       more. Although China's ability to integrate these into its flight-borne early warning radar systems
       in sensitive areas such as the Taiwan Strait and Bay of Bengal was doubtful, the US feared that any
       greater number of such systems could over time lead to superior Chinese aerial surveillance
       capabilities in key theatres. This was to the intense regret of the Israeli government and parties
       such as IAI, as the deal was potentially valued at over USD1 billion.

       Revelations that the US would permit Israeli sales of three Phalcon systems to India as
       compensation further cooled Israeli-Chinese relations. In August 2001, Israel signed a USD2
       billion defense sales agreement with India, of which the systems were thought to have been a part.
       then-president Jiang Zemin in December 2001 subsequently warned unspecified 'countries' not to
       carry out actions detrimental to peace and stability in South Asia, a comment aimed at Israel. In
       March 2002, in response to Israeli Defense Force actions in the West Bank, the Chinese foreign
       ministry announced that it considered "Israel's actions [would] lead to no solution but further
       deterioration of the situation". However, in the same month China's ambassador Pan Zhanlin
       expressed optimism that the difficulties in the relationship would be overcome and military Co-
       operation continue.

       Despite some continued animosity over the Phalcon controversy in 2000, Sino-Israeli
       rapprochement seemed to be moving forward in 2002. Given increased trade, which grew by some
       20 per cent in 2003, and increased business co-operation between Chinese and Israeli companies,
       relations between the two countries seemed promising. Yet the issue of arms sales continues to

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       hamper the association. In December 2004, Israel found itself caught between China and the
       United States after Beijing requested that Israel upgrade Harpy-type drone aircraft, sold during the
       1990s. In May 2005, the Pentagon cancelled several joint projects with Israel, protesting Israel's
       sales of high-technology armaments to China. In response to these US sanctions, Israel cancelled
       its Harpy deal with China in June 2005, and confiscated components of the drone. With relations
       between China and Israel still colored by the Phalcon controversy, this is likely to sour relations
       between the two for the near future.

       Relations With Japan

       Sino-Japanese relations are colored by a history of antipathy following the actions of the Imperial
       Army in China before and during the Second World War. This hostility has led to a large amount
       of mistrust, compounded by territorial disputes over the Diaoyu/Senkaku islands, Okinotori reefs,
       and areas of the East China Sea, an extremely close Japan-US alliance, competing strategic
       objectives, and Japanese fears of a 'rising' China expanding its military capabilities each year and
       threatening Japan economically as well as militarily.

       The Koizumi government has proved willing to address China as a security concern, leading to
       heightened tension. After a Chinese submarine incursion into Japanese waters in November 2004,
       Koizumi discussed the possibility of the remilitarization of Japan in response to the threat of
       China. In December 2004, Japan's National Defense Program Outline identified China as Japan's
       main security threat. A joint US-Japanese security statement given in February 2005 also upset
       Beijing by identifying Taiwan as a shared security issue. Subsequently, Japan assumed control of a
       lighthouse on Daioyu island in April and reinforced its claim to the islets of Okinotori in May and
       June. The situation was not ameliorated by a Japanese defense white paper published in August
       2005, which highlighted Chinese military expansion and increasing naval power projection as
       areas of concern.

       On an individual rather than governmental level, Chinese-Japanese relations are poor. Both the
       Japanese occupation and the subsequent dominance of East Asia by a more technologically
       proficient and economically powerful Japan have led to resentment and enmity among the Chinese
       population. The decision by Tokyo to approve historical textbooks in April 2005 which the
       Chinese claimed, with justification, made light of Japan's involvement in China in the 1930s and
       1940s led to widespread protests throughout China on several weekends. Although Tokyo alleged
       complicity by Beijing in the protests, with little done to prevent the demonstration, there is little
       doubt that anti-Japanese sentiment in China runs high even without such provocation. At the
       diplomatic level, China's opposition to Japan's bid to join the UN Security Council also reflects the
       poor relations between the two countries.

       The possibility of conflict is limited by trade and investment ties between the countries, which are
       strong. Sino-Japanese two-way trade for 2003 totaled USD132 billion, and almost USD8 billion
       dollars in direct investment was made by Japanese companies in China in that year. In 2004, China
       became Japan's top trading partner, overtaking the US, accounting for 20.1 per cent of Japan's
       trade, at USD213 billion. However, in the same year Japan also announced plans to terminate
       foreign aid to China. Although the strength of trade ties, and common concerns regarding North
       Korea give the two countries common interests, the relationship is not currently promising. The
       resurgence of nationalist sentiment in Japan (as well as talks of Japanese remilitarization), Japan's

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       increased closeness with the US regarding Taiwan, increasing competition over access to Russian
       oil, and anti-Japanese sentiment in China, all point towards further friction, if not open conflict.

       Energy Rivalry

       Increasingly, China and Japan, the second and third largest importers of oil and gas in the world,
       have experienced tension over access to fuel supplies. Both have been negotiating for a larger
       share of Russian oil exports, although Japan seems to have had the upper hand in negotiations. Of
       more long-term concern are tensions over natural gas deposits under the East China Sea.

       Towards the end of 2004, Japan protested China's construction of offshore drilling platforms near
       the median line between the two countries in the East China Sea. In April 2005, the Japanese
       government claimed that two Chinese gas fields, Chunxiao and Duanqiao, were linked to Japanese
       fields. In response, Tokyo granted exploration rights to a Japanese company, Teikoku Oil, in July
       on its side of the median line. The beginning of gas production at the Chunxiao field in September
       2005 increased resentment over the dispute, and has meant that with the issue escalating, relations
       are set to deteriorate further over this issue. Several rounds of negotiations have failed to improve
       the situation, with a meeting in January 2006 in particular being undermined by tension and the
       issue of a Japanese diplomat's suicide in May 2004 in China, and both sides have used military
       vessels or aircraft to intimidate the other side.

       While there is little danger of this particular dispute growing into conflict for the moment, it seems
       likely that, as Chinese energy needs grow greater, further territorial disputes may arise in the
       region, especially over potential oil and gas reserves in disputed maritime Exclusive Economic

       Japanese Wariness

       Japan is deeply concerned about Chinese rearmament programs and its annual white paper on
       defense in July 1996 stated that China needed to be "watched with caution in terms of promotion
       of nuclear weapons and modernization of the navy and air forces, expansion of naval activity and
       heightened tension in the Taiwan Strait as seen in the military drill near Taiwan." Further evolution
       of the US-Japan defense relationship in the post-Cold War context in turn stoked Chinese fears.

       Despite confidence-building measures in the late 1990s, such as the 1998 bilateral dialogue on
       security issues, China's force modernization continues to worry Japan, while Japanese efforts to
       normalize its military stance and self-identity worry China. In December 2005, Japanese Foreign
       Minister Taro Aso stated that, "[China is] a neighboring country with nuclear bombs, and its
       military expenditure has been on the rise for 17 years. It's beginning to pose a considerable threat".

       Moreover, contemporary Japanese views of China also encompass other fears. China's economic
       advantage at Japan's expense is one theme, as Japanese manufacturers are forced to relocate to
       China or face more competitive Chinese imports.

       Chinese Fears

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       On the Chinese side, where the Japanese wartime occupation record is almost inevitably seen as
       the central issue of the relationship, the words and deeds of Japanese politicians are closely
       watched. The 'textbook' controversy, which resurfaces every four years as the Ministry of
       Education approves new historical textbooks for the school curriculum, inevitably elicits direct
       criticism from Beijing, and ire from the Chinese population. A historical primer for schools (the
       Atarahii Rekishi Kyokasho or 'New History Textbook') approved by the Ministry of Education in
       April 2005, described the Nanjing massacres of 1937-38 as an 'incident' and the occupation of
       areas of China as driven by self-preservation. In 2001 the same textbook described the Japanese
       advance into Asia in muted terms, as, for example, driven by a need "to strengthen military control
       of the occupied areas in order to carry out the war effort".

       Koizumi offered his "heartfelt apology" for Japan's actions during this time in April 2005 in order
       to defuse the row, but the fact that the same phrase had been used in 2001 following the textbook
       disagreement greatly detracted from its effect.

       A further issue that incites disagreement are the regular visits by Koizumi to the Yasukuni war
       shrine. Since a visit by Koizumi in August 2001, coming one day after the anniversary of Japan's
       unconditional surrender, the heads of governments have not visited each others countries, although
       this has not prevented Koizumi from making more visits to the shrine. Koizumi's visit to the shrine
       in October 2005 drew a strong Chinese reaction, at a time when tensions over natural gas fields in
       the East China Sea were already high.

       Japan's Militarization

       For China, unease at Japan's apparent loosening of its regime of self-imposed military controls in
       the course of co-operation with the US in the 'war on terror' is also a concern. The realignment of
       Japan's pacific constitution is a particular sign of both Japanese fears of China's growing military
       might and China's concerns over a renewed conflict with Japan. Currently, Japan is restricted by
       Article Nine of its constitution which renounces war and states that the "right of belligerency of the
       state will not be recognized". The constitution thereby prevents the Japanese Self-Defense Forces
       (so named as the country is constitutionally bound not to maintain war-making forces) from
       engaging in aggressive operations. However, this position has been under debate for some time,
       and is gradually being relaxed.

       In late 2001, Japan's Diet approved changes allowing Japanese forces to carry out logistical
       activities in zones of military operations. This led to the appearance of Japanese military transport
       aircraft in Afghanistan and Japanese naval vessels in the Indian Ocean, in support of the US effort
       in Afghanistan. China is likely to have viewed these developments as a bid for a creeping
       normalization of Japan's military posture. This suspicion will have been encouraged by reports that
       the Japanese Maritime Self-Defense Forces (MSDF) discreetly pressured the US navy to request
       deployment of an Aegis-class MSDF vessel in early 2002.

       War preparedness legislation put before the Diet in 2002 - to set a framework for military-civilian
       relations if Japan were attacked - also raised unease in Beijing. Likewise, China will not have
       taken a sanguine view of comments in early 2002 by an extremely senior Liberal Democratic Party
       (LDP) official that Japan could nuclearize in the future. Even if the LDP was quick to distance
       itself from such sentiments, they were subsequently echoed by the controversial opposition figure,

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       former LDP leader and now Democratic Party of Japan member Ichiro Ozawa, in April 2002,
       although Ozawa indicated this would be a "tragic" outcome.

       Since then, the steady progress towards constitutional revision has continued. In late November
       2005 a proposed draft revision was published by the ruling Liberal Democratic Party, which
       suggested that the renunciation of war in Clause One, Article Nine should be kept, but would
       legalize "efforts to maintain international peace and security under international co-operation."

       Ballistic Missile Defense

       The long-term strategic uncertainties facing China and Japan are also well reflected in current
       thinking regarding missile defense, an uncertain and unproved technology that would only be
       developed and implemented over the long term. China fears that any Japanese acquisition of
       functioning Ballistic Missile Defense (BMD) technology, specifically defense provided by the US
       program, especially a mobile naval platform, would reduce its leverage over Taiwan and Japan,
       support Japanese efforts to re-establish influence over Taiwan, permit Japanese re-militarization
       (and possible nuclearization) and deepen Japan's integration into the US regional military
       structure. However, it may be that these fears are exaggerated on the part of China in order to deter
       Japan from investing in BMD.

       Japanese policymakers are crucially divided on how to deal with the issue. The defense
       establishment probably favors Japanese involvement in BMD to guard against Chinese missile
       capability. In this scenario, it is feared that a Chinese missile threat to Japan could become an
       outright instrument of Chinese policy in the event of a rapidly internationalizing crisis over
       Taiwan. Civilian politicians and bureaucrats are by contrast thought to fear BMD will limit Japan's
       foreign policy options in Asia by rendering it too dependent on US policy and force structures.
       However, some may favor strategic ambiguity on the question of Japan acquiring BMD, in order to
       gain crucial concessions from China in the security arena. Yet Japanese involvement in the BMD
       program seemed to be inevitable in early 2005, when the two countries agreed to begin
       development in 2006. In September 2005 Japanese news agency Kyodo reported that Tokyo would
       design the nose cone for the interceptor missiles within the BMD system.

       Relations With Kazakhstan

       Officially, there are no longer any border disputes and China was by 2003 Kazakhstan's second
       largest trading partner. Major Chinese investments in Kazakhstan include the involvement of state
       oil company China National Petroleum Corporation (CNPC), the largest oil company in China, in
       the northwestern Aktyubinsk region and the Kenkiyak-Atyrau pipeline. China, through CNPC, has
       also taken steps to acquire a stake in Kazakhstan's oil production. CNPC bid USD4.18 billion for
       Canadian-registered PetroKazakhstan in August 2005. In response to initial fears that the Kazakh
       government would block the sale (special legislation was passed for this purpose), the Chinese
       company undertook to sell a 33 per cent stake in PetroKazakhstan to Kazakh state oil company

       A possible source of tension in the future may be access to water. Kazakhstan depends on two
       rivers, the Ili and Irtysh, for a portion of its water needs. These rivers, which originate in the
       western Xinjiang Uighur Autonomous Region of China, are becoming increasingly depleted as

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       they supply growing infrastructure and industry in Xinjiang. Kazakh concerns have also been
       increased by a Chinese project to build a 300 km canal diverting water from the Irtysh river. It is
       feared that this canal, set to become operational around 2020, will dramatically reduce the amount
       of water that will reach Kazakhstan. For the meantime however, Kazakhstan remains eager to
       maintain Chinese investment in the country and is unlikely to provoke Beijing.

       Chinese influence in Kazakhstan naturally trails after that of the US and the Russian Federation.
       Chinese commentators noted in mid-2002 that the US had successfully negotiated the leasing of
       airfields and related facilities with Kazakhstan, and that it was likely to give USD52 million in aid
       in the course of the year. Kazakhstan is also a member of the Commonwealth of Central Asian
       Nations established in December 2001, together with Uzbekistan, Kyrgyzstan and Tajikistan, a
       group which the US has encouraged and which pointedly excludes Russia (and by extension, other
       powers in the region, such as China).

       Nevertheless, China pays close attention to Kazakh affairs. The country was the third foreign
       destination of Hu Jintao following his installation as state president in March 2003, after France
       and Russia. Besides interest in Kazakhstan's energy resources, China is keen to ensure that the
       Kazakh government does not allow Uighur groups in Kazakhstan to establish training camps and
       support bases for the ethnic Uighurs in the western Xinjiang province (which abuts Kazakhstan),
       who wish to secede from China. In September 2003, a senior Kazakh security official noted that
       170 "new reconnaissance radio electronic subdivisions, transmitters with a big range of operation
       which make it possible to intercept information from satellites and relay channels" were being
       installed on the Sino-Kazakh border, "with a range of operation up to 6,000 km".

       Since then, plans have been made for the expansion of oil pipeline capabilities between China and
       Kazakhstan, with the final pipeline to carry 20 million tons of oil over 3,000 km per annum.
       Construction of this pipeline began in September 2004, and is expected to be completed in 2011.
       The development of oil import pipelines is aimed at reducing Chinese dependence on the
       approximately 80 per cent of its total oil imports which are shipped via the Strait of Malacca from
       primarily the Middle East. China has also discussed plans to build a petrochemical refinery in
       Xinjiang province to process Kazakh oil, and to reopen negotiations to build a costly natural gas
       pipeline alongside the oil line. A joint statement by Hu Jintao and Kazakh President Nursultan
       Nazarbayev in July 2005 reaffirmed commitment to the two pipeline projects, as well as to the
       establishment of a 'strategic partnership' between the two countries.

       Relations With Kyrgyzstan

       As Kyrgyzstan is the weakest of the former Soviet Central Asian republics, there is little concern
       in Beijing about mutual relations. However, China is concerned by the US presence in Kyrgyzstan.
       With the expulsion of US forces from their K2 base in Uzbekistan in December 2005, the US has
       made strong efforts to cultivate bilateral relations with Kyrgyzstan, and, during US Secretary of
       State Rice's visit to the country in mid-2005, Kyrgyz President Bakiev confirmed that Kyrgyzstan
       would for the moment allow the US to maintain its base at Manas. This potentially threatens
       Chinese leverage over Kyrgyzstan, which China's growing economic influence in Central Asia
       would otherwise promote unabated. Beijing is likely to see generous US contracts for jet fuel and
       the use of the Manas airbase near Bishkek in this light. On the other hand, in 2004 Kyrgyzstan
       joined New Zealand, Singapore and Malaysia (and was followed by Thailand) in choosing to

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       recognize China as a full market economy. This seems to confirm signs of growing economic co-
       operation between the two countries.

       In 2002 the government's transfer of 95,000 hectares of Kyrgyz land to China (almost 0.5 per cent
       of Kyrgyz territory) created civil unrest and may have heightened anti-Chinese sentiment among
       the Kyrgryz population, but is unlikely to concern Beijing. With the fall of President Akayev in the
       'Tulip Revolution' of March 2005, Beijing will be interested in the disposition of his successor. Not
       only has China opposed the presence of US troops in Kyrgyzstan (and the growing US influence in
       Central Asia in general), but a well-disposed Kyrgyz president could greatly aid China's fight
       against Uighur separatism in the western provinces. The growth of extremist Islamic groups on
       China's border in Kyrgyzstan, especially under Hizb al-Islami Turkestan, will remain a concern for

       Relations With Mongolia

       In the wake of Mongolia's newly found independence from the communist bloc, relations between
       Beijing and Ulaanbaatar have remained friendly, but wary. A formal treaty of friendship and co-
       operation was signed in 1994, and Mongolia has expressed interest in joining the Shanghai Co-
       operation Organization. Although several issues maintain tension between the two countries, the
       asymmetry of Mongolian and Chinese economic and military power effectively deters any conflict.

       Chinese concerns over Mongolia are multiple but minor. The close language and religious ties
       between Mongolia and Tibet is viewed in Beijing with some alarm, especially as the Dalai Lama
       visited Mongolia on several occasions during the 1990s and again in late 2002. Further, China has
       accused unspecified foreign nations of inciting trouble in Inner Mongolia and this has often been
       thought to have been a tacit threat to Mongolia not to become involved in local rebellions and
       unrest in China. Several ethnic groups in China share close bonds with those in Mongolia.

       Mongolia, in turn, has in the past protested against Chinese nuclear tests in Inner Mongolia and the
       Gobi Desert region. Further, concerns over Chinese dominance of the Mongolian economy have
       created mistrust from Ulaanbaatar. Despite political mistrust of Chinese intentions, China's de
       facto influence in Mongolia has been on the rise. Chinese trade and investment in Mongolia has
       risen to a level such that Beijing now has the potential to wield significant economic clout in

       Relations With Myanmar

       China has developed a long-term relationship with Myanmar in order to improve its economic and
       military access to the Indian Ocean and the Strait of Malacca and further encircle India with its
       allies. China has access to the Coco and Victoria Point naval installations on Myanmar territory in
       the Andaman Sea, as well as to Ramree on the Bay of Bengal coast. The Chinese intelligence
       gathering station at Coco was first spotted in November 1992. Indeed, since the collapse of the
       Chinese-backed Communist Party of Burma (CPB) in 1989, the Myanmar-China military
       relationship has thrived.

       Combat aircraft, including F-7 and A-5M jets, were among the first arms to be delivered by China
       - the first batch of 12 in May 1991, a second squadron in May 1993 and the third in September

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       1994 - as defense links grew in the early 1990s amid Myanmar's international isolation. Myanmar
       is thought to have acquired USD1.2 billion worth of equipment between 1990 and 1994 and the
       total has by some accounts grown to more than USD2 billion since, with an emphasis on
       helicopters, assault rifles, patrol boats and armored vehicles.

       However, Chinese economic influence in the north is growing and could be a future source of
       resentment or friction in domestic Myanmar politics. Bilateral trade exceeded USD1 billion in
       2003, primarily Chinese exports, and, in March 2004, a package of cooperation agreements was
       signed between China and Myanmar. Chinese investment in Myanmar companies is also growing -
       in June 2005, an agreement was signed with a Chinese company to invest in a hydropower project
       north of Yangon. Nonetheless, Myanmar is anxious not to be completely dependent on China, with
       which it had an ambivalent relationship before 1989.

       Other potential partners for Myanmar include India, with which some elements of the Myanmar
       army leadership have cultivated links since New Delhi reversed its strategy of supporting the
       opposition leader Aung San Suu Kyi. The visit by Senior General Than Shwe, the highest ranking
       official in the ruling State Peace and Development Council (SPDC), in October 2004 following the
       removal of the moderate, pro-China Prime Minister General Khin Nyunt, was a clear sign of a shift
       in Yangon's diplomacy towards New Delhi. In January 2006, Indian Chief of Naval Staff Admiral
       Arun Prakash finalized the transfer of an unspecified number of BN-2 Defender maritime
       surveillance aircraft and deck-based air defense guns. Russia has also been a rival source of
       defense hardware, with the sale of 10 MiG-29 aircraft to Myanmar in 2001 eclipsing earlier
       Chinese sales of the K-8 trainer and light ground-attack aircraft in the late 1990s. Although Beijing
       is not duly concerned about growing Russian influence, a shift in Myanmar relations towards India
       is potentially damaging to Chinese efforts to encircle its rival, and could harm China's regional
       security strategy if access to the Andaman Sea was restricted as a result. Beijing is therefore likely
       to be eager to prevent any further improvement in India-Myanmar relations.

       Myanmar is playing a growing role in China's efforts to fulfill its need for oil. Onshore and
       offshore reserves are estimated at a total of 3.2 billion barrels of oil and 2.46 trillion cubic meters
       of gas, and Chinese oil companies have shown a strong interest in investing in oil projects in
       Myanmar. In September 2004, for example, SINOPEC signed an agreement with a state-run oil
       company in Myanmar for oil exploration. However, even in this arena rivalry with India is
       growing. In early April 2005 a consortium of foreign companies including ONGC Videsh Ltd of
       India and Gas Authority of India Ltd (GAIL) discovered a new natural gas field off Myanmar's
       western Rakhine coast, with an estimated 141.5 billion cubic meters of gas. Discussions are being
       held between both China and Myanmar and China and India regarding the prospect of building
       pipelines, the former linking the port of Akyab to China's Yunnan province, to carry Middle
       Eastern and African oil, and the latter to carry gas from offshore Myanmar sites through
       Bangladesh and India's restive northeast states.

       The long-running ethnic insurgencies, narcotics production and lawlessness in Myanmar's ethnic
       border regions has been a factor in bilateral relations with China, although in the short term, the
       strategic necessities of maintaining good relations with Yangon in the face of increased Indian
       competition will prevent the issue from disrupting Chinese engagement.

       Relations With Nepal

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       China's relations with Nepal have been altered in the short term at least by the self-coup launched
       by Nepal's King Gyanendra in February 2005. The alienation of Nepal's traditional ally, India,
       following the assumption of power by the monarch has allowed China to develop its relations with
       the Himalayan kingdom. In particular, India's decision to withhold lethal military supplies from
       Nepal in the wake of the self-coup forced Nepal to begin searching elsewhere for its much-needed
       equipment. Beijing subsequently granted USD1.1 million in military aid to Kathmandu in October
       2005, with deliveries of assault rifles, explosive grenades and ammunition occurring the following
       month, a significant boon to Sino-Nepalese relations.

       Historical Relations

       Despite the 1950 India-Nepal Peace and Friendship Treaty and a dominance of Nepal's foreign
       relations by India, Kathmandu's tensions with New Delhi over trade, water resources and boundary
       issues, have periodically driven it to draw on the support of China. In spite of the common
       ideological ancestry of the CCP and Nepal's own Maoist rebel movement, China has accordingly
       been a valued balance factor in Nepal's relations with India, which are probably the more
       important - traditionally a new prime minister of Nepal visits China soon after a first diplomatic
       visit to India.

       China has historically put pressure on the Nepalese government to ensure that Tibetan groups
       living there in exile will not develop a strong base for insurgency against the Chinese authorities.
       Nepal has also responded to Chinese requests, with the government's closure in 2005 of two
       organizations, the office of the Dalai Lama's representative in Nepal and the Tibetan Refugee
       Welfare Office, demonstrating Kathmandu's willingness to listen to Beijing. Aid for Nepal's
       infrastructure during the 1990s (such as on the main Pokhara-Baglung highway) has been a further
       occasional incentive. Since 2001, the upswing in Maoist insurgency that caused a state of
       emergency to be declared in Nepal has elicited high-level support for the government from
       Beijing. China has distanced itself from Nepal's Maoist rebels (the Communist Party of Nepal-
       Maoist), although one source of rebel arms is thought to be Chinese small arms smuggled in by
       groups in Myanmar.

       Long-Term Prospects

       China is likely to continue to see Nepal as a relatively trusted buffer state with which it has a
       secure land border. For its part, Nepal has expressed a desire to become a transit route between
       China and India, and between China and South Asia. A feasibility study is currently under way to
       determine whether the Syfrubesi-Rasuwgadi project, which would form the second major road link
       between the countries, is possible. The completion in October 2005 of a direct rail link between
       Qinghai and Lhasa is also aimed at enhancing the trade relationship between the two countries.

       Accordingly, China will not particularly welcome any greater US role in Nepal that could follow
       from the government's requests for US aid for its own 'war on terror'. The February 2005 self-coup
       is therefore seen as positive within China, as it has alienated Nepal from its Western allies, and
       driven it closer to Beijing. Further, the long-standing Sino-Indian rival claim to the Barahoti area
       (at the confluence of Nepal, India and Tibet) will prevent any resolution of the Nepali-Indian rival

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       claim to the Kalapani area. India needs the latter to guard against a powerful Chinese garrison at
       Taklakot, and is thus a long-term support for China-Nepal relations.

       Relations With North Korea

       China and North Korea signed a mutual security pact agreed in 1961 which stated that "...should
       either of the treaty powers come under an armed attack and go to war, the other treaty power with
       all its force without delay will extend assistance in not only the military area but also other areas."
       China maintains that it is "a consistent position" of the Chinese government and CCP to
       consolidate and develop the friendship between the two countries. Both countries frequently
       exchange delegations, particularly groups from the respective ministries of foreign affairs and
       armed forces. Indeed, Beijing officially describes its relationship with Pyongyang as "sealed in

       However, warm top-level diplomacy aside, relations between the two are more ambivalent.
       Recently, China's alliance with North Korea has largely proved to be an embarrassment. China has
       been criticized both for its failure to bring real concessions from Pyongyang in six-party talks, and
       for its repatriation of North Korean refugees. North Korea's often antagonistic relations with Japan,
       South Korea and the United States have also proved embarrassing for China. Over the longer term,
       the possibility of regime failure in North Korea could create more serious security concerns for

       An Expensive Ally

       Bouts of mass starvation following the simultaneous food and energy crises of the mid-1990s led
       to North Korea becoming a burden requiring unconditional support at times. Although the risk of a
       collapse of the North Korean state has receded since the late 1990s, this would threaten a
       humanitarian crisis in northeast China and present a dangerously fluid security situation on the
       Korean peninsula. Furthermore, North Korea has a range of policies which are decidedly
       unpopular in Beijing. These include failing to return rolling stock used to deliver Chinese food aid;
       basing of underground missile storage sites by the northern border with China; and development
       and storage of chemical and biological weapons, again in the northern border region (around the
       cities of Chongjin, Manpo and Sinuiju).

       North Korea's nuclear program, and its inconsistent responses to international efforts at negotiation
       have proved both embarrassing and potentially dangerous for China. Under international pressure
       to bring North Korea back to negotiations, China has lost 'face' from its inability or unwillingness
       to apply the necessary pressure. Moreover, the presence of a nuclear power on China's border,
       especially given the possibility of regime failure in North Korea, could prove regionally
       destabilizing. China is left in the uncomfortable position of having to balance international
       pressure against North Korea's nuclear ambitions with the need to avoid regime failure in its

       The Refugee Problem

       North Korea also presents China with a serious refugee problem, indicating the risks of an
       overspill of problems from North Korea even when the latter has seen a return to relative political

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       stability and nutritional security. Hundreds of thousands of North Korean illegal immigrants,
       whether from hunger, political persecution or rational opportunism, are thought to have crossed
       into China, preferring a marginal, clandestine existence in China over life in North Korea. They
       are beginning to cause a nation-wide search-and-detection challenge as they seek to travel overland
       through China to third countries such as Cambodia, where they can seek asylum unimpeded by the
       Chinese authorities.

       The situation is placing Beijing in an awkward position, as it is forced to arrest and deport refugees
       in successive crackdowns, often in close co-operation with the North Korean security services,
       while treating high-profile cases where the international media become involved differently. North
       Korean refugees who have stormed foreign embassy compounds demanding asylum are often
       allowed to proceed to South Korea via third countries such as the Philippines or Thailand in order
       to protect China's own fragile human rights reputation.

       Six-Party Talks

       The present series of multilateral talks highlight the role that China wishes to play as a regional
       power. The third round of talks in Beijing, in June 2004, failed to achieve any lasting settlement,
       and the fourth round, scheduled for September 2004 was cancelled by North Korea, with the claim
       that the US was pursuing a 'hostile' policy. In February 2005, North Korea announced that it had
       nuclear weapons, and had no intention of returning to the negotiating table.

       These talks raised two main points of interest: firstly, they underline how severe a regional
       problem a starving, nuclear North Korea is given that even traditional rivals like China and Japan
       find a shared interest. Secondly, they highlight the predicament that China's allegiance to North
       Korea has brought to Beijing. Although it has been expected to use its political and economic
       leverage to bring North Korea back to the negotiating table and convince it to abandon its nuclear
       program, China has proved unwilling or unable to put enough pressure on North Korea. In March
       2005, Chinese Minister for Foreign Affairs Li Zhaoxing responded to US pressure by suggesting
       that the United States should take more responsibility for bringing North Korea back to
       negotiations, since it was the Bush administration, not China, that had escalated tensions with

       As of January 2006, the six-party talks had still failed in their attempt to persuade North Korea to
       abandon its nuclear ambitions in exchange for aid. Despite an announcement in mid-September
       that Pyongyang would renounce its nuclear program, this was followed by a caveat that requested
       a civilian nuclear reactor prior to any denuclearization. Pyongyang currently appears keen both to
       achieve nuclear status and subsequently negotiate for aid. While ambiguous diplomatic signals
       (such as North Korean overtures to South Korea in May 2005, and an offer to resume negotiations
       in the Autumn of the same year) suggest a willingness to compromise, Pyongyang's admission in
       February 2005 that it possessed nuclear weapons and its announcement in May 2005 that it was
       preparing to process a further 8,000 spent reactor fuel rods into weapons material suggest that
       Pyongyang is keen to become a full member of the 'nuclear club'.

       For Beijing, the result has been an ongoing diplomatic embarrassment, having failed to bring
       North Korea back to negotiations. The United States seems more and more likely to favor stronger
       action against North Korea (as evidenced by the North Korea Human Rights Act of 2004). Should

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       the US bring the matter to the UN Security Council, China may be left with an embarrassing
       choice between abandoning its old ally or opposing the US in the Security Council in support of a
       nuclear North Korea. Part of China's reluctance to apply further pressure on North Korea may well
       be based on the danger of regime failure in its neighbor, if all aid and trade were cut off. China has
       always rejected economic sanctions for North Korea, ostensibly on the grounds that sanctions
       could bring an economic collapse to the country, although Chinese investments in North Korea are
       another motivation, having risen from USD1.3 million in 2003 to USD200 million in 2004. A
       collapse of the North Korean government would have far more severe consequences for China
       than North Korea's nuclear weapons program.

       Relations With Pakistan

       China enjoys an extremely close relationship with Pakistan, which Beijing has used to underpin its
       safeguarding of its hold on Tibet and Xinjiang, as well as containing Indian ambitions in general
       through its strategic encirclement. Pakistan meanwhile has benefited from substantial Chinese
       economic and military aid.

       The mutually beneficial relationship was launched in earnest in 1963, one year after China's
       conflict with India in the northeast, when Pakistan and China settled their border and agreed for the
       defense of contiguous areas under the actual control of Pakistan. Although not reaching an explicit
       commitment to mutual security such as that between China and North Korea, the relationship
       subsequently gained strength from concurrent Sino-Indian and Indo-Pakistani tensions and been a
       defining feature of Chinese foreign policy. The Indo-Pakistan rapprochement since April 2003 and
       improving Sino-Indian ties have complicated China's relations in the region, but it is likely that
       China will retain its strong ties with Pakistan.

       However, China's trust in Pakistan naturally has some limits. Previous support for Islamist groups
       in Afghanistan and Kashmir by Pakistan's Directorate of Inter-Services Intelligence concerned
       Beijing, which believes the 'East Turkistan' separatism in Xinjiang could internationalize.
       Although this appears a distant and unlikely threat, Pakistan is clearly a potential conduit for such
       dangers after the US campaign in Afghanistan which uprooted large numbers of jihadis. As such,
       China closed the Khunjerab customs point on the Sino-Pakistan border between October 2001 and
       April 2002 for fear of infiltration.

       Military Assistance

       According to the US government, China has not only been involved in the transfer of conventional
       weapons and technology, including joint aircraft manufacturing programs, but has also allowed
       Pakistan to acquire tactical ballistic missiles. It is also widely believed that China has provided
       Pakistan with access to nuclear test results, designs of warheads and other technology.

       In the late 1980s Beijing and Islamabad signed several contracts for the provision of M-11 tactical
       ballistic missiles and further components were transferred between March 1992 and August 1993,
       despite China's agreement to abide by the Missile Technology Control Regime. Further missile
       transfers were undertaken, according to US Defense Intelligence Agency reports, in early 1995.
       Beijing has denied transferring complete medium-range ballistic missiles as the reports suggest.

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       However, China is thought to have provided assistance to various Pakistani ballistic missile
       programs such as the short-range Hatf-2 and Hatf-3 (with similarities to the Chinese DF-15/M-9),
       possibly the Shaheen-1 (similar to the Chinese DF-11/M-11) as well as the medium-range
       Shaheen-2. Assistance may have extended to missile guidance (including gyroscopes,
       accelerometers and on-board computer technology); while the national defense complex in
       Fatehgarh 40 km west of Islamabad is thought to host a missile production factory with Chinese

       China has moreover provided Pakistan's navy with ship-borne cruise missiles and surface-to-
       surface missiles and its air force with F-6 and F-7 fighter aircraft. Further acquisitions are likely to
       include the lower-cost joint production JF-17 "Thunder" fighter aircraft, which was demonstrated
       before a Pakistani air force delegation in Chengdu, Sichuan province, in September 2003. The two
       countries agreed in May 2005 to begin joint production of the JF-17, with the first 150 aircraft to
       be delivered in 2007, out of a total of 400 (of which 250 are to go to China). A defense agreement
       was also signed on April 2005 for the delivery of four F22P frigates, based on the Jiangwei II-class
       Chinese frigate.

       Relations With The Russian Federation

       Sino-Russian relations have since the collapse of the Soviet Union enjoyed a period of entente,
       founded on a similar mistrust of US hegemony, military transfers, and trade in natural resources.
       Trade between the two is also an important factor, totaling USD15.8 billion in 2003, and
       exceeding USD20 billion in 2004. Russia is China's eighth largest trading partner, and China is
       Russia's fourth largest trading partner. Following the Russian Duma's ratifications of a Sino-
       Russian agreement to officially end the remaining border disputes between the two powers and a
       subsequent agreement to conduct joint surveys of oil and gas reserves in the border region in June
       2005, there is a basis for co-operation between the neighbors.

       This alliance is likely to remain firm in the medium term, given China's need for oil and gas
       suppliers and its current reliance on Russian arms sales for military modernization. However, the
       longer term remains more uncertain. Russian concerns such as Chinese immigration in its Far East
       and trade imbalances may have to be addressed. Although it is certainly profitable for Russian
       industry to sell arms and fuel to China, it is not clear whether or not Russia is willing to create as a
       neighbor not merely an economic rival but a military one as well.

       Historical Animosity

       The current Sino-Russian relationship stands in sharp contrast to Russian territorial gains made in
       the 18th and 19th century, which saw some 2.9 million km2 ceded to Tsarist Russia, and the often
       hostile association during the Cold War. Despite relying on the Soviet Union immediately after the
       creation of communist China, Chairman Mao soon proclaimed the USSR as having abandoned its
       ideology of global revolution, leading to a Sino-Soviet split, and as China gained independence
       through its own nuclear arsenal, eventually several border clashes in 1969.

       Since then, a Sino-Russian agreement signed in 1991 demarcated 98 per cent of the border
       between the two states. In October 2004, Presidents Putin and Hu agreed to the demarcation of the
       final sections of the border, which was subsequently ratified in June 2005. Although it is likely to

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       take several years to decide where precisely the length of the border as yet unresolved is to lie, this
       contrasts with the period after the Sino-Soviet split when hundreds of thousands of Chinese were
       relocated nationwide, by the Maoist state, in order to guarantee a residual industrial base in the
       event of a Soviet nuclear strike.

       Arms Transfers

       China and its formerly hostile neighbor have undergone a series of important treaty and
       memoranda exchanges since the creation of the Russian Federation in 1991. Important events
       during the 1990s included the signing of the first treaties or memoranda on trade and border Co-
       operation, in January 1994; and arms transfers, especially the sale of Russian high technology
       combat equipment to China including Su-27 long-range interceptor jet aircraft, in-flight refueling
       tankers and conventional submarines.

       China has since been permitted to produce a number of Russian military equipment systems under
       license, including the Kilo-class submarine, the Su-27 combat aircraft and the Il-76 transport
       aircraft. As of 2005, China remained Russia's primary recipient of military hardware. Although the
       prospect has been raised of China being able to purchase arms from EU exporters, Russia is likely
       to remain for the immediate future China's main source for military modernization, with Beijing
       currently importing roughly USD2 billion worth of defense-related equipment and technology
       from Russia annually. The two countries have also underlined their military relationship by
       holding their first joint military exercise, Peace Mission 2005, in August 2005, near Vladivostok
       and on the Shandong peninsula.

       Oil And Gas

       The transfer of oil and gas is also a major factor in current warm Sino-Russian relations. The
       Russian gas company, Gazprom, is an investor in the Xinjiang-Shanghai gas pipeline, and also
       provided technology for the challenging Tibet-Qinghai railway, using the lessons gained in
       Siberia. In May 2003, the prospect of a 2,400 km pipeline to transport oil from Siberia to China
       was on the table, following Hu Jintao's visit to Moscow to sign a declaration of co-operation with
       Russian President Vladimir Putin. Since then, and despite an offer of USD12 billion by Premier
       Wen Jiabao in September 2004, Russia's interests have moved away from a single oil pipeline to
       China, to building a pipeline to the Pacific coast to supply the Japanese market. In January 2005,
       the head of Russian pipeline company Transneft announced that plans had been made to construct
       a pipeline from Siberia's Irkutsk region to the Pacific port of Perevoznaya (and eventually the port
       of Nakhodka), with the first section to be completed by 2008, supplying the Japanese market.
       Although a side branch could still be built from Skovorodino to the Chinese border, this would still
       leave China bidding in competition with Japan for access to Russian oil supplies.

       Nonetheless, China's economic growth and growing energy need promises to provide a long-term,
       stable market for Russian oil, gas and power. China has also increasingly bought electricity
       directly from Russia, whose far eastern region enjoys an electricity surplus. In 2004, China bought
       300 million kWh of electricity, and this figure is expected to grow over the next few years. In
       September 2005, Gazprom announced its negotiations with China National Petroleum Corporation
       for a possible gas pipeline through the northeastern Heilongjiang province, or northwestern

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       Xinjiang Uighur Autonomous Region. Both pipelines, which would transport between 20 and 30
       billion cubic meters annually, are being assessed for feasibility.

       Strategic Similarities

       This economic and military co-operation has been conducted against a background of similar
       strategic aims, most notably the common goal to contain Islamic fundamentalism and revisionism
       in the former Soviet Central Asian republics. The pro-Moscow governments in these states that
       border China were encouraged to sign treaties with Beijing and for the most part they have now
       agreed to recognize each other's borders. Russia, through its Collective Security Treaty
       Organization (CSTO) and China, through the Shanghai Co-operation Organization (SCO) have
       strengthened their relationships with the Central Asian republics.

       This attempt to form a power bloc in Central Asia reflects a common international position
       asserted by both China and Russia since the 1990s, highlighting each country's eagerness to
       promote a 'multi-polar' world. US abrogation of the 1972 Anti-Ballistic Missile (ABM) was
       criticized at the signing of the July 2001 Sino-Russian Friendship Treaty as attacking a
       "cornerstone of strategic stability"; China and Russia made sure they harmonized their positions
       and "stood together" during the negotiations over North Korea at the six-party talks in Beijing in
       August 2003.

       However, Russia and China have struggled to realize their ambition of creating a multi-polar
       global security environment, hampered by the potential for either to outflank the other by
       cultivating Washington. Indeed, Russia and China monitor each other's engagements with the US
       carefully. Russian concessions to the US on missile defense and NATO eastward expansion, and
       the constitution of a joint NATO-Russian council on security matters, highlighted China's
       weakness in cultivating Russia as a partner. In turn, Russia's support of France and Germany,
       attempting to check the unilateralism of the US position in Iraq in March 2003, advanced China's
       cause in Washington counsels and worked to undo Chinese paranoia about Beijing's usefulness to
       Washington despite officially taking an anti-war line.

       As these events demonstrated, there is always a danger that a third party or international political
       event will highlight weaknesses in any Sino-Russian entente. Given that the relationship is
       founded on opportunistic energy and weapons sales, the durability of the alliance is often called
       into question.

       Strategic Differences

       The inherent fragility to the Sino-Russian entente is highlighted by their diverse interests, ancient
       suspicions and the relatively young nature of the alliance in itself. Minor irritations, such as the
       extent of poaching by impoverished Chinese in the Russian Far East‟s maritime territory, or the
       abuse of tourism visas by Chinese shuttle traders, hint at broader distrust on the Russian side over
       a resource-hungry China allowing its population to spill over into Siberia. Even in energy sales,
       where a natural harmony of interests might be thought to arise, the Russian establishment is torn
       between China and satisfying another Asian customer - Japan.

       Relations With South Korea

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       The prospects for China-South Korean co-operation appear bright. Both share a direct interest in
       improving matters in North Korea, although China's handling of the North Korean refugee
       problem may well become an increasing issue between the two countries. Despite this, the
       enormous bilateral trade opportunities are cementing Sino-Korean relations.

       Formal relations between China and South Korea were initiated in 1992. The result of this political
       thaw and new economic and industrial complementarities has been an accelerating volume of
       trade, valued at over USD90 billion in 2004, a 42 per cent increase on the previous year. South
       Korean interests in Chinese prosperity may also be driven by the high levels of foreign direct
       investment into China. In 2004, China became the largest recipient of South Korean foreign direct
       investment, at USD3.6 billion. South Korean corporations can enjoy a large market, a convenient
       production base (in logistical and geographic terms) and China's low-cost labor supply, while
       building on the heavy-industrial base of China's northeast (originally laid during the period of
       Japanese invasion).

       The growing relationship is also not marred by perceived historical injustices, despite China's
       influence and control on the Korean peninsula during the imperial period, as Korean-Japanese or
       Sino-Japanese interaction has been. South Korea has even joined China in protesting Japanese
       Prime Minister Koizumi's visits to the Yasukuni Shrine.

       Relations With Taiwan

       Beijing claims Taiwan is an integral part of China, and the often tense relationship between the
       island and the mainland underline regional security strategies. Two previous crises across the
       Taiwan Strait in the 1950s and the mobilization of large military resources in 1999 are examples of
       the propensity to conflict over the issue.

       It is the stated policy of China that it reserves the right to use military force in the event of a move
       by Taiwan towards independence. Furthermore, if Taiwan were to declare independence without
       incurring a military response from Beijing, it is probable that the CCP, and Hu Jintao in particular,
       would face a massive backlash of public opinion on the grounds that it had allowed the
       'motherland' to become divided. This is particularly true given the CCP's move to substitute
       communist ideology for nationalism as its basis for political legitimacy.

       Since the election of President Chen Shui-bian in 2000, Taiwanese politics have increasingly
       addressed issues of Taiwanese identity and sovereignty. This rhetoric came to a peak with the re-
       election of Chen, and in the run-up to the Legislative Yuan elections in Taipei in December 2004.
       The failure of the pro-independence pan-green alliance to secure a majority in these elections has
       likely reduced the likelihood of Chen achieving any genuinely pro-independence legislation, like
       the constitutional changes which he outlined in 2003. Nonetheless, China's National People's
       Congress implemented in March 2005 a long-discussed 'anti-secession' law. The legislation
       formalized the CCP's long-stated position that it reserves the right to use military force in the event
       that Taiwan should declare independence, or abandon any prospect of re-unification. However, its
       insistence on the preference for reunification through non-military means demonstrated that is was
       more of an 'anti-secession' rather than a 'unification' law. Further, the motivations for the

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       legislation are not only to deter pro-independence politics in Taiwan, but also to reassure the
       domestic population that the CCP would not allow the motherland to be 'split'.

       However, deepening economic ties, including the presence of as much as USD280 billion in
       Taiwanese foreign direct investment (FDI) in mainland China by 2005, and the presence of as
       many as 400,000 Taiwanese businesspeople and their (mainland and Taiwanese) families on the
       mainland, especially in Greater Shanghai and the Yangzi delta, moderate the security situation and
       ameliorate the risks of armed confrontation. The direct effect of bilateral tensions on these links
       was amply demonstrated by the 6.57 per cent fall in Taiwanese government-approved FDI in
       China in the first quarter of 2005 amid disagreements over the 'anti-secession' law. Although the
       situation remains precarious, both countries are eager to extend these links, which will hamper the
       possibility of conflict. China is therefore likely to attempt to develop a non-military source of
       influence over Taiwan, without interrupting the flow of money across the Taiwan Strait.

       Military Options

       Despite the restraining effects of economic links, China retains a number of military options.
       Although much Chinese rhetoric on the issue of Taiwan is overtly bellicose to satisfy and
       encourage nationalistic sentiment among the mainland population, the scale of the war games
       which China carried out in June and July 2004, on Dongshan Island, Fujian Province, suggests the
       ease with which posturing can escalate into a full-scale crisis.

       China may be looking beyond its existing approach of relying on a threat of short-range ballistic
       missile attack or submarine/mine blockade to dissuade Taiwan from declaring independence.
       Although China still lacks the ability to carry out a large-scale amphibious occupation of Taiwan,
       Taiwan's offshore islands of Kinmen (previously Quemoy) and Matsu may be within its reach. A
       large-scale bombardment using ballistic missiles stationed in China's coastal provinces also
       remains a real threat.

       In order to expand its military options, China has been building up its naval and air forces on the
       Taiwan Strait, encompassing silent-technology Project 636 Kilo-class Russian submarines,
       Russian air-to-air missiles, first deliveries of the Russian Su-30 multirole aircraft and (according to
       US intelligence sources) Israeli-developed anti-radar drones. However, acquisition of these
       platforms mostly represents an incomplete drive to bring PLA forces facing Taiwan up to equality
       with the Taiwanese military's capabilities and is in any case increasingly focused on an ability to
       mount a naval blockade and credibly threaten shipping, rather than amphibious invasion.

       Taiwanese Politics Under Chen Shui-Bian

       The election of Chen Shui-bian in 2000 came after a period of increasing belligerence from China
       with regards Taiwan in the late 1990s. In 1998, China published its national defense strategy,
       which stated that "the Chinese government seeks to achieve the reunification of the country by
       peaceful means, but will not commit itself not to resort to force." In July 1999, then-Taiwanese
       president Lee Teng-hui claimed that China-Taiwan relations could take place on a 'state-by-state'
       basis. In August 1999 sections of the People's Liberation Army stationed on the coast facing
       Taiwan were put on the highest level military alert. As part of a Chinese campaign of intimidation,
       the People's Liberation Army Air Force (PLAAF) launched more than 100 sorties across the strait,

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       keeping Taiwan's air force on a constant state of alert. The Chinese air force flew as many as 30
       sorties a day in the strait, notably by Jian-7 and Jian-8 fighters. These incidents overlapped with
       the test of a new Chinese long-range surface-to-surface missile on Chinese territory.

       The victory of Chen Shui-bian, therefore, caused concern on both sides of the strait. Despite the
       new president claiming that Taiwan would not declare independence, Beijing did not relax its
       rhetoric and accused Chen of insincerity. Chen's politics continued to incorporate strong themes of
       Taiwanese identity and sovereignty. Beijing-Taipei tension increased in November 2003 after
       Taiwan's parliament approved a bill which followed proposals from President Chen for a
       referendum in 2006, with a view to implementing a new constitution in 2008.

       The 2004 re-election of Chen was closely watched in Beijing, amid abundant rhetoric on the issue
       of independence. Prior to the vote, Chen had suggested a number of pro-independence policies,
       including amendment of Taiwan passports.

       This rise in pro-independence pressure was eventually checked by the poor performance of the
       pan-green alliance (between Chen's Democratic Progressive Party, and Lee Teng-hui's Taiwan
       Solidarity Union). The failure of this campaign, which focused on issues of Taiwanese identity, to
       secure a parliamentary majority not only denied Chen the ability to push forward pro-
       independence legislation, but also indicated that Chen's focus on Taiwanese independence (and a
       potential Chinese reaction) might finally have begun to concern the Taiwanese electorate. This did
       not stop Chen's pro-independence party winning a narrow majority in Taiwan's National Assembly
       elections in May 2005, although the voter turnout was only 23.3 per cent. In June 2005, the
       National Assembly ratified constitutional amendments which make it unlikely that Chen will be
       able to pass any pro-independence constitutional revision. Not only would any amendment need a
       three-quarters majority in the Legislative Yuan (which at present has an opposition majority), but it
       would also need to be ratified by popular referendum. As any pro-independence constitutional
       amendment would be seen as highly inflammatory by Beijing, this may serve to calm relations
       across the straits, and force Chen to adopt more centrist politics, although Chen's New Year's
       message on 1 January 2006 once again underlined his desire for a constitutional referendum.

       Economic And Transport Links

       There is much pressure on both sides of the strait to normalize business relations, especially in
       Taiwan, a fact Beijing exploits. Taiwanese businesses have been keen for Chen to improve
       economic ties across the strait and increase tourism. Economic integration has proceeded to a high
       level, indicating the degree of balance between Taiwan's economy and the mainland. The situation
       has become anomalous; the embargo on direct links has been made a mockery of by the deepening
       business environment in 21st century 'Greater China'. It therefore seems a question of how rather
       than when this normalization of trade relations will occur.

       "Direct" chartered flights that touched down in Hong Kong before flying back to Shanghai were
       only permitted - for the first time by Taiwan - in February 2003, for the lunar new year.
       Meanwhile, proposals for domestic airlines to operate "direct" chartered flights (again flying via
       foreign airspace such as Okinawa) were put forward in September 2003 by Taiwan's Mainland
       Affairs Council, after negotiations between the two sides' airlines (advised by transport ministry
       officials) provided a cover for what remained an essentially political question. As of January 2006,

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       the 'three links' (direct trade, transport and postal links between China and Taiwan) have not been
       established, although 'mini direct links' in trade and transport between Fujian province and
       Taiwan's outlying islands of Kinmen and Matsu, which were established in 2001, are still active.
       For the lunar new year holiday of 2005, direct charter flights were for the first time permitted
       between China and Taiwan, and discussion is under way to resume this policy for the lunar new
       year at the end of January 2006.

       U.S. Involvement

       China-Taiwan relations are complicated by the involvement of the US. Despite recognizing 'one
       China' in the 1970s, the US remains a guarantor of Taiwanese sovereignty. The US is still bound
       by the terms of the Taiwan Relations Act to treat any danger to the security of Taiwan as a danger
       to US interests. President Bush has also on several occasions explicitly pledged US support in the
       event of unilateral military action on the part of China against Taiwan. The proposal entertained by
       the Bush administration to extend missile defense systems to allies in the North Asian region -
       including Taiwan - has further diminished the credibility of the potential for direct Chinese
       military action against Taiwan.

       The mainland's perception of US policy with regards Taiwan has been amply expressed. In its
       1998 White Paper, Beijing stated that "the Chinese government opposes any country selling arms
       to Taiwan" and "the issue of Taiwan is entirely an internal affair of China. Directly or indirectly
       incorporating the Taiwan Strait into the security and Co-operation sphere of any country or any
       military alliance is an infringement upon and interference in China's sovereignty."

       The triangular relationship between China, the US and Taiwan continues to create bouts of strong
       language and posturing from China. The US Department of Defense's annual Taiwan Strait
       balance report in 2004 generated a strong response from China, while negotiations over
       prospective arms sales totaling some USD18 billion also prompted protests from Beijing over
       interference in its "sovereign affairs".

       Relations With The U.S.

       The outlook for Sino-US relations under President Bush's second term remains mixed. China's
       pivotal role in the series of six-way talks over North Korea has seen Chinese and US interests
       converge over this matter, although Chinese foreign relations are increasingly driven by its need
       for access to foreign oil and raw materials. In particular, China's need to maintain friendly relations
       with oil suppliers like Iran and Sudan is likely to continue to place China at loggerheads with the
       US. Similarly, should China continue to be unable to persuade North Korea to renounce its nuclear
       program, possible US sanctions could leave China forced to choose between supporting its old ally
       and supporting the US. Finally, Chinese economic growth, and especially the US trade deficit with
       China has caused significant diplomatic friction between the two.

       Bush's second term has tended towards a robust diplomatic stance when dealing with states such as
       Iran and North Korea, while China has tended to preserve its ties with such states, due to
       dependence on fuel exports, or the need to preserve regime stability. Furthermore, the Bush
       administration has proven more willing than the Clinton administration to keep US commitments

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       to Taiwanese security under the terms of the Taiwan Relations Act. Bush's re-election may be seen
       as a factor in Taiwan's favor when assessing the cross-strait balance of power.

       Closer to the US, China's influence in Latin America has steadily increased over the past few
       years. While Latin America has historically fallen within the US sphere of interest, President Hu
       Jintao's visit to the region in 2004 underlines China's growing interest in the region. While the US
       does not seem to view growing Chinese influence in Latin America as an economic or security
       threat yet, it is likely to react if its own influence in the region is significantly eroded as a

       Hu introduced the prospect of increased Chinese investment in, and trade with, the region. China is
       already Brazil's third largest trading partner, and Argentina's fourth. Beijing also began
       negotiations in January 2005 to establish a free trade area with Chile. China is already importing
       raw goods like soybeans, minerals and oil from South America, and Hu suggested that China
       might be interested in investing USD100 billion in the region by 2014. Chinese trade with Latin
       America sextupled between 1993 and 2003, and shows no signs of slowing. At the same time,
       President Bush's own plans for a Free Trade Area of the Americas (FTAA) is meeting with only
       limited interest, with a 2005 deadline passing unsuccessfully owing to vociferous opposition from
       countries such as Brazil and Venezuela.

       Historical Relations Under Bush: Before 11 September 2001

       The arrival of a Republican administration closed a whole era in US-Chinese relations. Allegations
       of Chinese nuclear espionage, or Democratic Party campaign fund manipulation, were in
       retrospect historic pieces rather than living politics, redolent of the Clinton period of the mid-
       1990s. As the foreign policy of President George W. Bush began to take shape via the return of
       Reagan-era figures to his team, the nadir of the Clinton-era US-China relationship (the bombing of
       the Chinese embassy in Belgrade in 1999) threatened to compare unfavorably with the new
       strategic uncertainties China faced in the US.

       Indeed, President Bush almost immediately replaced Clinton's view of China as a "strategic
       partner" with one of a "strategic competitor". Although he also maintained the traditional "one
       China" policy, he continued to denounce Chinese human rights violations by sponsoring a UN
       resolution condemning these abuses, and oversaw a House of Representatives bill opposing the
       Chinese bid for the 2008 Olympics.

       The first major complication in diplomatic relations occurred on 1 April 2001 when a US EP-3
       surveillance plane on a routine reconnaissance mission collided with a Chinese J-8 fighter jet with
       the loss of a pilot. The 24-member US crew were forced to land the badly damaged aircraft on the
       Chinese island of Hainan.

       The US subsequently requested the return of the crew, but the Chinese government insisted that
       they had a right to detain them in order to perform a full investigation. Chinese officials also
       claimed that the EP-3 was not over international waters but Chinese maritime territory and placed
       full blame for the loss of their pilot on the US. Although China demanded that the US apologize,
       both President Bush and Secretary of State Powell drew the line at expressing regret over the

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       pilot's death. They refused to make a formal apology for an incident they claim was the fault of
       China's pilot.

       The rhetorical exchange between the two veered between overt bellicosity and subtle persuasion,
       but the fact that the two sides found a diplomatic solution reflected the importance both sides
       placed upon the maintenance of cordial relations. The impasse was not quite resolved when Bush
       sent a letter to the wife of the Chinese pilot expressing sorrow at his loss, although this fell short of
       an overt apology. It was left to other members of the Bush team to express regret via translators in
       the Chinese term 'bàoqiàn', one step short of the term 'dàoqiàn' (a formal apology).

       Bush faced another tough decision in April 2001 regarding whether to sell a large request for
       military equipment to Taiwan, including an upgraded Patriot anti-missile system and warships with
       the Aegis battle-management radar system. Ultimately it was decided that sale of Aegis systems
       would not be worthwhile, given the damage that would be done to US-China relations and the fact
       that it was unclear how Taiwan would pay for such expensive hardware and whether it could
       incorporate such sophisticated systems into its armed forces. Four Kidd-class destroyers originally
       built for the Shah of Iran were ultimately allocated to Taiwan, as well as several diesel-powered
       submarines, although it remained unclear where these were to be built, production in the US
       having ceased.

       Despite recalcitrant elements on either side eager to undermine the other, bilateral relations
       maintained a controlled, if somewhat uncertain, course. This was primarily due to both countries
       having much to lose if relations deteriorated. Bilateral trade in 2000 was worth over USD75
       billion, and Congress faced a decision on whether to approve Permanent Normal Trade Relations
       (PNTR) with China (a prerequisite before China could enter the WTO). Determined not to escalate
       tensions, both administrations established a wary but optimistic relationship.

       Historical Relations Under Bush: The 'War On Terror'

       In October 2001 China and the US agreed to set up an anti-terrorism co-operative mechanism
       following high-level negotiations. Jiang Zemin stressed that China consistently opposed all forms
       of international terrorism and supported the crackdown on terrorist activities while stressing the
       importance of avoiding civilian casualties. Jiang also emphasized the importance of the UN
       Security Council in the fight against terrorism. The window for a world-historical alliance of the
       US with China, alongside Russia and India, against terrorist threats appeared open, with some
       surmising an end to these traditional political rivalries as the era of the 'non-state' threat loomed.
       Respected voices in Chinese foreign policy circles surmised a new multipolar era as the US was
       forced to depend heavily on new allies for human intelligence and diplomatic support.

       However, this did not materialize. China expected US recognition of its problem of 'terrorism'
       (namely separatism) in Xinjiang as a parallel threat to be granted equal weight. By December
       2001, with the US campaign in Afghanistan at the end of a successful first phase (and China's
       policy of expanding its influence in Central Asia in tatters), it was becoming clear that no such
       quid pro quo would be immediately forthcoming from Washington. Indeed, a senior US counter-
       terrorism special envoy went so far as to refer to the "legitimate economic and social issues that
       confront people in northwestern China", which were "not necessarily counter-terrorist issues".

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       By the beginning of 2002, the episode seemed to have developed into a decisive reverse for China.
       Although one potential danger regarding the situation in Xinjiang had been banished, in the form
       of the Taliban, the entire ethnic Pashtun area of Afghanistan and North West Frontier Province of
       Pakistan had become a refuge for militant Islamists that might be directed against Chinese interests
       in the future. Indeed, China had been building unofficial links with the Taliban in the summer of
       2001, via channels such as construction contracts, before events in Central Asia moved sharply
       beyond its control. Now, with Pakistan-US relations firming (and Russian-backed groups
       ascendant in Afghanistan), China was potentially prey to the vagaries of US policy on its western
       flank - a prospect that few forecasters of international politics in Beijing had ever expected.

       As the balance of power in Central Asia and on China's west experienced flux after September
       2001, China was granted Permanent Normal Trade Relations by Congress and acceded to the
       World Trade Organization in December 2001. China had negotiated with the US the right to
       subsidize farmers to the value of 8.5 per cent of agricultural output value - a key provision to guard
       against future social instability in China's rural hinterland (and demographic heartland). WTO
       membership had been sought by the Chinese leadership as the only way to lock China into a path
       of pro-growth structural reform and guarantee long-term prosperity and stability. While the 'low
       politics' of WTO-mediated trade diplomacy and investment liberalization appeared insulated from
       the 'high politics' of the new 'great game' in Central Asia, the contrast was illustrative of the
       uncertainties facing Beijing in its relations with Washington. While economic relations expanded,
       political wariness couched the relationship. In particular, Beijing is wary of a persistent US
       presence in Central Asia, however limited at present, which could impact upon China's strategy of
       seeking channels into the region to guarantee its future energy security.

       China has adopted a pragmatic approach to such new realities. Following meetings with General
       Taylor in December 2001, Chinese officials extended permission for the establishment of a US
       Federal Bureau of Investigation legal attaché position in Beijing. While there was Chinese
       skepticism regarding US plans for Iraq in late 2002, this was markedly less vocal than that of
       either Russia or France. In turn, this approach won it minor concessions from Washington. In an
       apparent U-turn by the Bush administration, US Deputy Secretary of State Richard Armitage
       announced in August 2002 that the East Turkistan Islamic Movement (ETIM), an ethnic Uighur
       separatist group from Xinjiang, would be included on the US list of terrorist organizations. The
       Chinese government welcomed the move, a long-standing goal in Beijing's campaign to counter
       legitimate ethnic separatism in the autonomous region.

       The Iraq Campaign: 2003

       With a new leadership in place in Beijing in March 2003 and the US forcing regime change in Iraq
       in April 2003, Sino-US relations remained stable. During the initial phase of the US campaign in
       Iraq in April-June 2003, China made sure that its official media coverage of the war was muted.
       There was no mass mobilization of popular opinion against the US, nor any threat of veto use, in
       contrast to the positions taken by UN Security Council members France and Russia, with support
       from council chair Germany. In the months that followed as China watched the spectacle of the US
       attempting to reconstitute state authority and welfare provision for Iraqis in 2003, officials drew
       attention to China's readiness to aid the United Nations (rather than the US) in pacifying and
       rebuilding Iraq, but in general did not focus pointedly on the controversy brewed by the war.

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Chinese diplomacy vis-à-vis North Korea also proved useful to the US in a situation where
       brinkmanship could cause embarrassment for Washington, given its existing difficulties in Iraq.
       Other gestures, such as a commitment of USD150 million towards the embattled Afghan
       government of Hamed Karzai, were also appreciated, as was the unofficial stationing of American
       customs personnel to Chinese ports as an extension of the Container Security Initiative (CSI). By
       September 2003, Beijing was reported to be so emboldened as to hope that US sales to Taiwan
       could be suspended or controlled in exchange for further help in managing the North Korean
       problem. This compared to a less attractive offer of reducing the number of short-range missiles
       opposite Taiwan (in exchange for reduced arms sales) extended by then-president Jiang Zemin in
       Crawford in October 2002. Whether or not such a quid pro quo could be extracted, military-to-
       military links resumed in 2003 after their freezing in early 2001.

       Economic And Trade Relations

       At a rhetorical level, US pressure on China continued. As the debate over China's renminbi
       currency began to take hold on Capitol Hill, a resolution imposing higher tariffs on China if it did
       not take a more flexible approach appeared in Congress. The annual Pentagon report on China's
       military power again pointed to dangers. Other lobbies such as the National Association of
       Manufacturers pointed to China's "unfair" capacity to flood the US market. The anticipated rise in
       Chinese exports to the US, especially after China's full WTO entry in 2006, has led to the use of
       strong rhetoric over the outsourcing of 'American' jobs.

       Washington has protested that the yuan's formerly fixed exchange rate with the dollar gave China
       an unfair price advantage, that China has not properly opened its markets to foreign trade, that
       China abets the infringement of copyright, and that the dramatic increase in Chinese textile imports
       during the first half of 2005 constituted dumping. The floating of the yuan against a basket of
       currencies in July 2005 was welcomed by the US, but seen as too minor to greatly affect the trade
       relationship. China's trade surplus with the US has also become a crucial issue in US relations,
       especially with policy makers on Capitol Hill. The US trade deficit has risen from USD30 billion
       in 1994 to USD162 billion in 2004. The US also responded with concern in June 2005 at two
       highly publicized bids by Chinese companies to buy US companies: the Chinese Lenovo Group
       offered USD1.28 billion for the US manufacturer Maytag, and the China National Offshore Oil
       Company offered USD18.5 billion for the US oil company Unocal.

       These issues are unlikely to result in an outright break between the two countries, but they have
       played a major part in the background of dialogue since the late 1990s. Structurally speaking, the
       US trade deficit indicates that the US economy's production is far smaller than spending, and that
       therefore foreign financing supports US expenditure. In fact, China's purchase of vast amounts of
       US dollars in order to support the yuan peg, and the investment of this dollar reserve in US
       securities, is financing US expenditure. In this case, US calls on China to revalue the yuan may
       prove harmful both to the US economy and to the health of the dollar in the long run. In the shorter
       term, US efforts to curtail Chinese imports by imposing textile quotas have damaged relations.

       U.S. Security Commitment: Taiwan

       While the Bush administration's stated commitment to Taiwanese security and the cross-strait
       balance of power remains in line with the terms of the Taiwan Relations Act of 1979, the situation

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       may look rather different from the Chinese side. The arms transfers, which have already been
       approved by the Bush administration, must look from the Chinese side like an unpleasant shock to
       the cross-strait balance of power which had been moving steadily in their favor. Similarly,
       although it showed noticeable discomfort at the rise in pro-independence rhetoric from Chen Shui-
       bian in the run up to the Legislative Yuan elections of 2004, the Bush administration was quick to
       censure China's 'anti-secession' law, which was passed in March 2005.

       More threatening, from a Chinese point of view, is the Bush administration's present plans to
       extend a missile defense shield, involving Aegis destroyers and PAC-3 (Patriot) missiles, to its
       allies in Northeast Asia, including Taiwan. From a Chinese perspective, such a move, ostensibly
       aimed at dealing with a potentially rogue and nuclear North Korea, would look like a return to a
       Cold War approach to the region.

       Long-Term Prospects

       Throughout recent periods, from the 1990s up until the 'spy-plane' drama of early 2001, episodes
       of Sino-US confrontation have taken place in an overall positive framework. Jiang Zemin inherited
       from Deng Xiaoping what from a Chinese perspective was a definitively pro-US foreign policy,
       designed to win US acceptance at both a personal level for Jiang and at a national level for China.
       The broadening of bilateral economic ties post-WTO accession is in any case set to see a new
       phase as US business comes to depend on stable Sino-US relations. In regional politics, too, China
       and the US have come to a degree of Co-operation on some issues, such as North Korea, although
       other issues, such as Taiwan and Chinese human rights, remain points of conflict.

       There is accordingly something of a perceptions gap. Anticipation of long-term 'strategic
       competition' coexists with views of a broadly co-operative relationship, apparent in trade and
       investment ties, on both sides. In turn, this means the US has not seen what a decisively anti-US
       Chinese foreign policy would look like since perhaps the Cultural Revolution. With links between
       the southern and eastern export-oriented 'Gold Coast' of China and the US (especially the west
       coast and California, the 'Gold Peak' to Chinese immigrants in the 19th century) burgeoning, it will
       take a decisive change in the tenor of economic relations to see more confrontational foreign
       policy postures exert an impact on the broader relationship. It is highly unlikely that US calls for
       textile quotas, on the grounds that Chinese textile goods are unfairly cheap, or complaints over
       trade barriers would lead to a severance of relations or immediate tension between the two

       Relations With Vietnam

       Although relations between China and Vietnam were officially normalized in 1991, and a series of
       border negotiations have resolved long-standing land boundary disputes, relations remain fraught
       by competing claims over the Spratly and Paracel Islands in the South China Sea. China and
       Vietnam have infrequently clashed in the South China Sea, where both claim substantial or overall
       control of economic resources. Although no natural resources have been discovered in the area,
       there are hopes that oil and gas reserves could be found near the low-lying archipelago. The
       relationship is also colored by a historical animosity stemming from competition between China
       and Vietnam further inland. Battle-hardened Vietnamese troops severely embarrassed China in
       1979 when the PLA tried to 'punish' Vietnam for invading Cambodia.

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       A rapprochement since late 2001 and a burgeoning trade between the two countries has improved
       relations, but the apprehension of maneuvers in the South China Sea remains close to the surface.
       This was amply demonstrated in January 2005, when nine Vietnamese nationals were killed by a
       Chinese patrol in the Gulf of Tonkin, amid China's accusations of piracy, although Vietnam
       maintains the men were fishermen. The likelihood of a resolution of the competing claims in the
       South China Sea is remote.

       South China Sea

       At sea, in 1974, a Chinese naval task group, with naval infantry, invaded and secured an
       occupation of the Paracel Islands. The Vietnamese garrison and a community of fishermen were
       removed. Over a decade later, over 70 Vietnamese sailors were killed in a naval engagement
       between the Chinese PLA Navy and Vietnamese warships off Fiery Cross Reef (Yongshu) in the
       Spratly Islands in 1988. China claims that Vietnam had been trying to occupy a number of reefs
       since 1986 but it was only in 1987 that Beijing began to take an interest in the islands, using
       Vietnamese and Malaysian expansion into the region as the excuse for involvement.

       By 1992 China had placed on record its claims to the rest of the islands and shoals in the South
       China Sea, including the Spratly Islands. In January 1995 Beijing warned Hanoi to stop all
       geological survey work in the South China Sea, with China alleging that such activity was
       infringing on its sovereign territory. Vietnam's decision to acquire Russian Su-27 long-range
       fighter aircraft and possibly missile-armed patrol craft, first identified in June 1995, also led China
       to express concern about the future relations between the two neighbors.

       China remains wary of the integration of the Vietnamese-controlled Spratly Islands into
       Vietnamese administrative structures, while Vietnam similarly worries about Chinese naval
       encroachments in the disputed area. However, in late 1999 the two countries agreed on
       demarcation of the land border, and in 2000 on the marine boundary and fishing rights in the Gulf
       of Tonkin. According to Vietnamese officials, the land border agreement settled claim overlaps in
       227 km2 along the 1,350 km border. Boundary stone laying ceremonies on the land border
       continued in 2002.

       Rapprochment After The Spratly's

       In December 2001, a joint communiqué was issued saying the two sides agreed to put aside the
       matter of the Spratly‟s for the time being and concentrate on developing burgeoning trade
       relations. Bilateral trade totaled close to USD3 billion in 2002, a promising distraction from a
       confrontation inherited from the era of the Sino-Soviet split.

       Chinese President Jiang Zemin paid an official state visit to Vietnam in February 2002, the
       strongest signal yet that Sino-Vietnamese relations had fully recovered from over two decades of
       animosity and mutual suspicion. Jiang, accompanied by a delegation that included CCP Central
       Committee member and State Council Vice-President Qian Qichen, met with senior Vietnamese
       politicians including Communist Party of Vietnam General Secretary Nong Duc Manh, President
       Tran Duc Luong and Prime Minister Phan Van Khai during what was described as a "family visit".

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       In a visit rich with symbolism, the two sides agreed preferential loans packages to Vietnam during
       talks aimed at boosting bilateral political and economic ties. The talks skirted the outstanding issue
       of both countries' territorial claims in the South China Seas, although long-standing land border
       disputes were formally concluded with the laying of the first of 1,500 border markers in July 2002.
       (In July 2005, a boundary tablet was also set up at the juncture between China, Vietnam, and Laos,
       based on the decisions of the second round of border talks, and both sides subsequently agreed to
       complete the demarcation by 2008.)

       Relations, therefore, are far warmer than prior to 2002, but a resolution of the Spratly Islands
       claims is not expected in the near term. The possibility of Co-operation in the area has increased,
       as in March 2005, state oil companies of China, Vietnam, and the Philippines signed an agreement
       to conduct joint seismic surveying of possible undersea oil and gas reserves in a 143,000 km2
       region around the islands. This agreement, conceived as a purely commercial venture, with no
       implications for claims to sovereignty, was hailed as a breakthrough for the implementation of the
       ASEAN South China Sea code of conduct signed in 2002. If reserves are actually found, it remains
       to be seen whether this 'spirit of co-operation' can actually be maintained, when the time comes to
       share in profit.

       Trade and External Relations


       The US and Japan import nearly one third of China's total exports. Exports to all regions of the
       world have grown rapidly in recent years. Countries experiencing a second, expanded phase of
       trade integration with China on top of existing developed bilateral trade flows include Japan, South
       Korea and several of the ASEAN states. Guangdong province remains China's chief gateway for
       international trade, emphasizing the importance of the Pearl River Delta and Hong Kong to China's
       growing economic interdependence with the rest of the world.

       According to the WTO, the vast majority of goods exported from China in 2005 by commodity
       group (90.7 per cent) were manufactured goods. In contrast, agricultural products comprised 5.1
       per cent, and mining products 4.1 per cent.

       Exports by destination (2003)
       Country                         Value (USD million)              Per cent of total
       United States                   92,467                           21.10
       Japan                           59,409                           13.55
       South Korea                     20,095                           4.59
       Germany                         17,442                           3.98
       The Netherlands                 13,501                           3.08
       United Kingdom                  10,824                           2.47
       Taiwan                          9,004                            2.05
       Singapore                       8,864                            2.02
       France                          7,294                            1.77
       Italy                           6,652                            1.52

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Australia                       6,264                            1.43
       Malaysia                        6,141                            1.40
       Russia                          6,030                            1.38
       Canada                          5,632                            1.29
       United Arab Emirates            5,037                            1.15
       Other                           163,572                          37.33
       Total                           438,228                          100
       Source: China Statistical Yearbook, 2004


       Trade with Russia, including energy imports from Russia, is growing rapidly, partly in reflection
       of China's desire to diversify its energy import requirements, given its rising dependence on
       Middle Eastern crude oil, as domestic demand grows. China's rapidly growing industrial sector has
       also led to an increased demand for foreign raw materials, especially base metals.

       Imports into China are largely manufactured goods (79.5 per cent), with agricultural products
       comprising 7.4 per cent and mining products 12.7 per cent.

       Country                         Value (USD million)              Per cent of total
       Japan                           74,148                           17.96
       Taiwan                          49,360                           11.96
       South Korea                     43,128                           10.45
       United States                   33,866                           8.03
       Germany                         24,292                           5.88
       Malaysia                        13,986                           3.39
       Singapore                       10,485                           2.54
       Russia                          9,728                            2.31
       Thailand                        8,827                            2.14
       Australia                       7,300                            1.73
       Philippines                     6,307                            1.53
       France                          6,099                            1.48
       Brazil                          5,842                            1.39
       Indonesia                       5,747                            1.40
       Italy                           5,081                            1.23
       Other                           109,564                          26.54
       Total                           412,760                          100
       Source: China Statistical Yearbook, 2004

       Revolutionary struggle
       Several trends and shifts have characterized Chinese foreign policy since 1949. In its first decade
       of existence (1949-59), China regarded the US, acting in collaboration with Japan, as a serious

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       threat and the Soviet Union as its only effective ally and source of aid. During this period, the
       developing world (including Asia) was regarded essentially as a testing ground for the Maoist
       revolutionary strategy and a field of maneuver against the US.

       A strategy of revolutionary armed struggle played a major role in China's Asian policy. Primary
       targets of this strategy included former colonial countries in Southeast Asia. Chinese influence and
       support played a role in the communist insurgencies that broke out in Myanmar, Malaya (now
       Malaysia), Indonesia and the Philippines in the 1940s and 1950s.

       Sino-Soviet Split And Its Aftermath

       It was not until the late 1950s that China was forced to re-examine its worldview in light of the
       Sino-Soviet split. After Stalin's death in 1953, Mao increasingly felt and displayed a sense of
       seniority and superiority to the former Soviet leader's quarrelling successors.

       The Soviet Union's condescending criticism of China's Great Leap Forward in 1958, its cautious
       detachment in the Sino-US conflict during the Kinmen (then Quemoy) crisis, and the Chinese
       feeling that the Soviet Union restricted its aid to their economic and military development further
       aggravated the Sino-Soviet relationship at the end of the 1950s. The Soviet cancellation in June
       1959 of the Sino-Soviet agreement on nuclear Co-operation, followed by Khrushchev's visit to the
       US, seemed to confirm China's charges that the Soviet Union sought accommodation rather than
       revolutionary confrontation with the US.

       Mao Zedong was forced to devise a Marxist-Leninist theory of foreign policy that accorded with
       the realities of the international system and the imperatives of China's national security. The 'two
       camp view' of the world was replaced by the 'three world theory', which divided the world into
       super powers, the developed countries and the developing countries.

       However, as the 1980s progressed, China began to reassess the strategic triangle and its own
       foreign policy. As a result, it began to retreat from the single-minded efforts of the 1970s to build a
       matrix of strategic relations focused on confrontation with the Soviet Union. This meant moving to
       an international posture more critical of and detached from the US, closer to the developing
       countries and less hostile toward the Soviet Union.

       After The Fall Of The Soviet Union

       In the post-Cold War era, China reassessed the security environment. Instead of focusing
       exclusively on the strategic triangle, China concentrated much of its foreign policy on the Asian
       theatre. The security environment in Asia was characterized as stable and peaceful, with economic
       development the priority for most countries. However, Chinese analysts pointed to several factors
       of uncertainty and sources of instability, highlighted by 1997's economic crisis in the region,
       political and social unrest in a number of countries, and unresolved territorial disputes.

       Within this context, the establishment of a new regional political order required the following:

             resolving existing conflicts and preventing new ones;
             promoting regional arms control and disarmament;

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               establishing state-to-state relations based on the Five Principles of Peaceful Coexistence;
               respecting each country's right to decide its own course of democratization conducive to
                political stability;
               promoting regional economic Co-operation and prosperity;
               setting up regional security dialogues based on regional specifications.

       While Chinese policymakers downplayed the role of the strategic triangle, the balance of power
       continued to feature prominently in Chinese thinking about the post-Cold War order. There was a
       marked emphasis on great power relations and how they may have affected the contour of regional
       security arrangement. Such concepts as the "new trilateral relationship" (Japan, China, and the US)
       replaced the Cold War strategic triangle. The quadrangular power relationships (China, Japan,
       Russia, and the US) and the five-force interactions (the four powers plus the Association of
       Southeast Asian Nations) also became prominent features of Chinese foreign policy.

       The Chinese model pre-supposed that the future security of the region would primarily depend on
       maintaining a balance of power in which no one country played a dominant role. That is, stability
       in the region would be largely affected by the co-ordination and changes of relationships among
       the five centers of force in the region - the US, China, Japan, Russia, and ASEAN. Indeed, China's
       emphasis on major power relations is based on the principle of global multi-polarization in which
       it will gradually assume a progressively more important place in regional affairs.

       This assumption and philosophy were being radically challenged in 2002 following extensive US
       intervention in Central and Southwest Asia, often in states bordering China's west, and increased
       US overtures, supported in some cases be military Co-operation and inspired by the perceived need
       for greater counter-terrorism initiatives, among ASEAN states such as the Philippines, Thailand
       and Indonesia. From a Chinese perspective, these new or renewed theatres of US involvement
       added to the established US presence in Northeast Asia, contributing to a sense of encirclement.

       Nevertheless, given the Chinese leadership's prioritization of China's economic development, from
       what is still a low base, essentially good relations with the US (not least in trade and investment)
       constitute a matter of national security and are a precondition for internal stability. Positively for
       China, there are also opportunities for Co-operation with the US in counter-terrorism and the
       promotion of peace and security in the Korean peninsula. China should in this context be able to
       trade its vote on the UN Security Council in exchange for stable external relations and benefit in
       the process.

       Jiang's Theory of Great Power Diplomacy (1999-2002)

       Jiang's foreign policy theory was meant to mirror his public stature as the great Chinese statesman
       of the age, heir of Mao Zedong and Deng Xiaoping. Early in 1999 Jiang Zemin made a number of
       statements which suggested that he was grappling with a new concept of security with a view to
       making a definitive contribution to China's philosophy of international relations. He first
       enunciated the new security view in a speech entitled Push Ahead with Disarmament and Protect
       International Security that he delivered at a disarmament conference in Geneva in March 1999
       (shortly before the bombing of China's Belgrade embassy). This statement was Jiang's response to
       the evolving international situation. According to Jiang, multi-polarization and the intensification
       of the trend toward economic globalization helped ease world tension and furthered the

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       development of world peace. However, Jiang argued that the Cold War mentality still existed in
       the periodic appearance of hegemony and power politics, the growing trend to strengthen military
       alliances, the use of 'gunboat diplomacy' and the endless occurrence of regional conflicts.

       NATO's military action against Kosovo and other parts of Yugoslavia, he contended, represented a
       violation of the established rules of international relations and would do nothing to promote peace
       in the Balkan Peninsula. Meanwhile, instead of being scaled down, the high-tech arsenal under the
       control of the military powers was actually expanding and international effort to prevent the
       proliferation of nuclear weapons severely strained. Under these circumstances, Jiang claimed,
       disarmament and international security were manifestly challenged. These views expressed in
       1999 were subsequently developed into Jiang's much-touted 'Theory of Great Power Diplomacy'.

       The stated aim of overcoming Cold War-era hegemony and military escalation, as a basic theme of
       the emerging official Chinese security philosophy, always had an ambivalent emphasis. On the one
       hand, it represented a potential challenge to a US-dominated post-Cold War order, should the US
       be implicated as responsible for such ills. On the other, it represented an example of Jiang's
       continuation of the pro-US line inherited from his predecessor, Deng Xiaoping, emphasizing
       peaceful coexistence with the US, supporting a strategy of prioritizing economic modernization
       over military modernization or foreign policy adventures. In retrospect, this tension rendered
       China's publicly stated security philosophy vulnerable to events in the international arena. Should
       the US call China's bluff by extending its global security remit on the basis of a generally agreed
       international principles, for example, that of combating international terrorism, it is not certain
       how Jiang's 'Theory of Great Power Diplomacy' would respond.

       Accordingly, the changes in the regional balance of Chinese influence from 2001, following the
       extension of the US 'war on terrorism' to Central and Southwest Asia, rendered Jiang vulnerable to
       domestic critics of his foreign policy and cast doubts over the relevance of Jiang's 'Theory of Great
       Power Diplomacy', as elaborated in his Selected Works.

       China's long-term strategy clearly lies in gaining freedom from radical security challenges in order
       to fund economic modernization unimpeded. In this analysis, its longer-term goal is eventually to
       reach equal power status with the leading powers of the G7, and over the extreme long term, with
       the US. The covert strategy that accompanied the high-minded anti-hegemony rhetoric of Jiang
       was, by various accounts, either to secure China's western borders through a strategy of
       engagement and consensus-building via the Shanghai Co-operation Organization (SCO) - as for
       the first time since the Sino-Soviet split China might then concentrate on its defense perimeter
       along its maritime frontiers - or alternatively, to build a zone of influence in Central, South and
       Southeast Asia while keeping the US distracted on Pacific theatre issues such as Taiwan. Provided
       China is pragmatic regarding its influence in international affairs, its basic position - that of a
       major regional power enjoying a long-term recovery in economic prospects and relative political
       normalization - has the potential for continued consolidation.
       Source: Jane‟s Information Group

       5. International Organization Participation

                International AfDB, APEC, APT, ARF, AsDB, ASEAN (dialogue partner), BCIE, BIS, CDB, EAS, FAO,

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

                 organization G-24 (observer), G-77, IAEA, IBRD, ICAO, ICC, ICRM, IDA, IFAD, IFC, IFRCS, IHO,
                participation: ILO, IMF, IMO, Interpol, IOC, IOM (observer), IPU, ISO, ITU, LAIA (observer), MIGA,
                               MINURSO, MONUC, NAM (observer), NSG, OAS (observer), OPCW, PCA, PIF (partner),
                               SAARC (observer), SCO, UN, UN Security Council, UNCTAD, UNESCO, UNHCR,
                               UNWTO, UPU, WCO, WHO, WIPO, WMO, WTO, ZC

       6. Diplomatic Representation in the United States

                 Diplomatic chief of mission: Ambassador ZHOU Wenzhong
        representation in the chancery: 2300 Connecticut Avenue NW, Washington, DC 20008
                         US: telephone: [1] (202) 328-2500
                              FAX: [1] (202) 328-2582
                              consulate(s) general: Chicago, Houston, Los Angeles, New York, and San Francisco
                              consulate(s): Los Angeles

       7. U.S. Diplomatic Representation

                 Diplomatic chief of mission: Ambassador Clark T. RANDT, Jr.
         representation from embassy: Xiu Shui Bei Jie 3, 100600 Beijing
                     the US: mailing address: PSC 461, Box 50, FPO AP 96521-0002
                             telephone: [86] (10) 6532-3831
                             FAX: [86] (10) 6532-3178
                             consulate(s) general: Chengdu, Guangzhou, Hong Kong and Macau, Shanghai, Shenyang

       U.S. Ambassador - Clark T. Randt, Jr.

       Clark T. Randt, Jr., is the longest serving United States Ambassador to the
       People's Republic of China. Mr. Randt was confirmed by the Senate on
       July 11, 2001, arrived in Beijing on July 23, 2001.

       Mr. Randt is a lawyer fluent in Chinese Mandarin, has lived and worked in
       Asia for more than 30 years and has been traveling to China on business
       for more than 30 years. He was a resident of Beijing from 1982 through
       1984 where he served as First Secretary and Commercial Attaché at the
       U.S. Embassy. He then lived in Hong Kong for 18 years, most recently as a partner with the
       international law firm of Shearman & Sterling where he headed the firm's substantial China
       practice. He is a member of the New York and Hong Kong bars and is a recognized expert on
       Chinese law.

       In 1974, Mr. Randt was the China representative of the National Council for United States-China
       Trade and, from 1968 to 1972, he served in the United States Air Force Security Service.

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       After preparing at Hotchkiss School, Mr. Randt graduated from Yale University with a B.A. in
       1968 and received his Juris Doctor from the University of Michigan in 1975. He also attended
       Harvard Law School where he was awarded the East Asia Legal Studies Traveling Fellowship to

       Mr. Randt is a former Governor, First Vice President of the American Chamber of Commerce in
       Hong Kong. He is married and has three children.

       The U.S. Embassy web site address is and the e-mail address
       is The Consular Section, including the American Citizen Services Unit,
       is located on the eighth floor of Westgate Mall, 1038 West Nanjing Road, tel: (86-21) 3217-4650
       ext. 2102 or 2103., fax: (86-21) 6217-2071. The Embassy consular district includes the following
       provinces/regions of China: Beijing, Tianjin, Shandong, Shanxi, Inner Mongolia, Ningxia,
       Shaanxi, Qinghai, Xinjiang, Hebei, Henan, Hubei, Hunan, and Jiangxi.


       United States Embassy of Beijing, China
       Ambassador Clark T. Randt, Jr.
       Xiu Shui Bei Jie 3, 100600
       Phone (86-10) 6532-3831

       Public Affairs
       Public Affairs Officer Donald Bishop
       Fax (86-10) 6532-2039

       For technical problems regarding the website

       Web Comments
       The Web Team does not answer or forward e-mail, but all comments pertaining to the US
       Embassy and issues are read. For comments on political and policy issues or for other messages or
       requests to the White House, please contact the offices of the President and Vice-President.

       American Citizen Services
       Consular Section
       Consul General: Michael B. Regan
       Consular Officer Katherine E. Lawson
       Monday - Friday Hours: 8:30-12:00, 14:00-16:00
       Fax (86-10) 6532-4153

       Non-Immigrant Visas
       Consular Officer Thurmond H. Borden

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Monday - Friday Hours: 8:30-16:40
       Fax (86-10) 6532-3178
       Visa Information Call Center 4008-872-333 or (86-21) 3881-4611

       Immigrant Visas available only in Guangzhou
       Fax (86-20) 8121-8341
       Visa Information Call Center 4008-872-333 or (86-21) 3881-4611

       Administration Office
       Administrative Officer James Van Laningham
       Fax (86-10) 6532-5141

       American Center for Educational Exchange (ACEE)
       Address Jing Guang Center RM2801
       Tel (86-10) 6597-3242

       Animal and Plant Health Inspection Services (APHIS)
       APHIS Officer Gary Greene
       Address 12-21 China World Trade Ctr., No. 1 Jianguomenwai Ave., Beijing
       Fax (86-10) 6505-4574

       Department of Homeland Security/Immigration and Customs Enforcement (DHS/ICE)
       Customs Officer Andy Yu
       Fax: (86-10) 6500-3032

       Department of Homeland Security (DHS)
       Department of Homeland Security Officer Jeannette Chu
       Fax: (86-10) 6561-4507

       Economic Office (ECO)
       Economic Officer Robert Wang
       Fax: (86-10) 6532-6422

       Environment, Science, Technology and Health Office (ESTH)
       Environment, Science, Technology and Health Officer Deborah Seligsohn
       Tel: (86-10) 6532-3831 ext 6609
       Fax: (86-10) 6532-3297

       Federal Aviation Administration (FAA)
       FAA Officer Joseph Tymczyszyn
       Address No. 15 Guang Hua Lu, Jianguomen Wai Chaoyang District, Beijing
       Tel: (86-10) 6504-2571
       Fax: (86-10) 6504-5154

       Foreign Agricultural Service (FAS)
       Foreign Agricultural Officer Maurice House

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Fax: (86-10) 8532-2962

       Foreign Commercial Service (FCS)
       Foreign Commercial Officer Craig Allen
       Tel: (86-10) 8529-6655
       Fax: (86-10) 8529-6558/6559

       Political Office (POL)
       Political Officer Daniel Shields
       Fax: (86-10) 8532-6423

       Regional Medical Office (RMO)
       Regional Medical Officer Lawrence Hill
       Fax: (86-10) 6532-6424

       Regional Security Office (RSO)
       Regional Security Officer Robert Eckert
       Fax: (86-10) 8532-6923

       Consulate Guangzhou
       No. 1 Shamian Street South,
       Guangzhou 510133
       Phone: 020-8121-8000                                                                                            Fax:

       Consul General:     Edward Dong
       CG OMS:             Antonette Schroeder
       ECO/POL:            Harvey Somers
       COM:                Eric Zheng            Tel 8667-4011, Fax 8666-6409
       CON:                Linda Donahue         Fax 8121-8428
       ADM:                Wade Leahy
       RSO:                Charles Lisenbee
       PAO:                Wendy Lyle            Tel 8335-4269, Fax 8335-4764
       FAS:                Keith Schneller       Tel 8667-7553, Fax 8666-0703

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       INS:                Young S. Ly

       The U.S. Consulate in Shanghai
       The US Consulate General in Shanghai
       1469 Huai Hai Zhong Lu, Shanghai, P.R.C. 200031
       Tel. (86-21) 6433 – 6880
       Fax. (86-21)6433-4122

       US Consulate in Shenyang
       52, 14th Wei Road, Heping District, 110003
       PSC 461, Box 45, FPO AP 96521-0002
       Tel [86] (24) 2322-0848, Duty Officer Tel 137-0988-9307
       Fax 2322-2374; PAO Fax 2322-1505; FCS Fax 2322-2206

       Acting Consul General        Cynthia Caples
       CG OMS                       Kathryn Ramsay
       COM                          Erin Sullivan
       CON                          Douglas Sonnek
       ECO                          Bruce Hudspeth
       POL                          Mark Zimmer
       ADM                          Joseph Zadrozny
       IRM                          Jerry Shepard
       PAO                          Cynthia Caples

       The US Consulate General in Chengdu
       No. 4 Lingshiguan Road, Chengdu, Sichuan, PRC 610041
       Tel: (28) 8558-3992, 8558-9642
       Fax: (28) 8558-3520

       U.S. Consulate General
       Hong Kong and Macau
       26 Garden Road, Hong Kong
       Tel: (852) 2523-9011
       Fax: (852) 2845-1598

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       8. Economy
       China's economy during the last quarter century has changed from a centrally planned system that
       was largely closed to international trade to a more market-oriented economy that has a rapidly
       growing private sector and is a major player in the global economy. Reforms started in the late
       1970s with the phasing out of collectivized agriculture, and expanded to include the gradual
       liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, the
       foundation of a diversified banking system, the development of stock markets, the rapid growth of
       the non-state sector, and the opening to foreign trade and investment. China has generally
       implemented reforms in a gradualist or piecemeal fashion, including the sale of equity in China's
       largest state banks to foreign investors and refinements in foreign exchange and bond markets in
       2005. The restructuring of the economy and resulting efficiency gains have contributed to a more
       than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis,
       China in 2006 stood as the second-largest economy in the world after the US, although in per
       capita terms the country is still lower middle-income and 130 million Chinese fall below
       international poverty lines. Economic development has generally been more rapid in coastal
       provinces than in the interior, and there are large disparities in per capita income between regions.
       The government has struggled to: (a) sustain adequate job growth for tens of millions of workers
       laid off from state-owned enterprises, migrants, and new entrants to the work force; (b) reduce
       corruption and other economic crimes; and (c) contain environmental damage and social strife
       related to the economy's rapid transformation. From 100 to 150 million surplus rural workers are
       adrift between the villages and the cities, many subsisting through part-time, low-paying jobs. One
       demographic consequence of the "one child" policy is that China is now one of the most rapidly
       aging countries in the world. Another long-term threat to growth is the deterioration in the
       environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in
       the north. China continues to lose arable land because of erosion and economic development.
       China has benefited from a huge expansion in computer Internet use, with more than 100 million
       users at the end of 2005. Foreign investment remains a strong element in China's remarkable
       expansion in world trade and has been an important factor in the growth of urban jobs. In July
       2005, China revalued its currency by 2.1% against the US dollar and moved to an exchange rate
       system that references a basket of currencies. In 2006 China had the largest current account surplus
       - nearly $180 billion - in the world. More power generating capacity came on line in 2006 as large
       scale investments were completed. Thirteen years in construction at a cost of $24 billion, the
       immense Three Gorges Dam across the Yangtze River was essentially completed in 2006 and will
       revolutionize electrification and flood control in the area. The 11th Five-Year Program (2006-10),
       approved by the National People's Congress in March 2006, calls for a 20% reduction in energy
       consumption per unit of GDP by 2010 and an estimated 45% increase in GDP by 2010. The plan
       states that conserving resources and protecting the environment are basic goals, but it lacks details
       on the policies and reforms necessary to achieve these goals.

            GDP (purchasing
              power parity):
                                $10 trillion (2006 est.)
                GDP (official
              exchange rate):
                                $2.512 trillion (2006 est.)

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

           GDP - real growth
                                 10.5% (official data) (2006 est.)
            GDP - per capita
                                 $7,600 (2006 est.)
          GDP - composition
                  by sector: agriculture: 11.9%
                             industry: 48.1%
                             services: 40%
                             note: industry includes construction (2006 est.)
                 Labor force:
                                 798 million (2006 est.)
             Labor force - by
                 occupation: agriculture: 45%
                              industry: 24%
                              services: 31% (2005 est.)
        Unemployment rate:
                                 4.2% official registered unemployment in urban areas in 2005; substantial unemployment and
                                 underemployment in rural areas
            Population below
                poverty line: 10% (2004 est.)
        Household income or
            consumption by lowest 10%: 1.8%
          percentage share: highest 10%: 33.1% (2001)
       Distribution of family
        income - Gini index: 44 (2002)
                Inflation rate
           (consumer prices): 1.5% (2006 est.)
            Investment (gross
                      fixed): 44.3% of GDP (2006 est.)
                                 revenues: $446.6 billion
                                 expenditures: $489.6 billion; including capital expenditures of $NA (2006 est.)
                  Public debt:
                                 22.1% of GDP (2006 est.)
                 Agriculture -
                    products: rice, wheat, potatoes, corn, peanuts, tea, millet, barley, apples, cotton, oilseed; pork; fish
                                 mining and ore processing, iron, steel, aluminum, and other metals, coal; machine building;
                                 armaments; textiles and apparel; petroleum; cement; chemicals; fertilizers; consumer
                                 products, including footwear, toys, and electronics; food processing; transportation
                                 equipment, including automobiles, rail cars and locomotives, ships, and aircraft;
                                 telecommunications equipment, commercial space launch vehicles, satellites
       Industrial production
                growth rate: 22.9% (2006 est.)

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

                  Electricity -
                  production: 2.5 trillion kWh (2005)
                  Electricity -
                consumption: 2.494 trillion kWh (2005)
         Electricity - exports:
                                  11.2 billion kWh (2005)
        Electricity - imports:
                                  5 billion kWh (2005)
            Oil - production:
                                  3.631 million bbl/day (2005)
           Oil - consumption:
                                  6.534 million bbl/day (2005)
                Oil - exports:
                                  443,300 bbl/day (2005)
                Oil - imports:
                                  3.181 million bbl/day (2005)
       Oil - proved reserves:
                                  16.1 billion bbl (2006 est.)
                 Natural gas -
                  production: 52.88 billion cu m (2005)
                 Natural gas -
                consumption: 47.91 billion cu m (2005)
       Natural gas - exports:
                                  2.79 billion cu m (2005)
                 Natural gas -
                     imports: 0 cu m (2005)
         Natural gas - proved
                    reserves: 2.35 trillion cu m (2005 est.)
             Current account
                    balance: $179.1 billion (2006 est.)
                                  $974 billion f.o.b. (2006 est.)
                   Exports -
                commodities: machinery and equipment, plastics, optical and medical equipment, iron and steel
          Exports - partners:
                                  US 21.4%, Hong Kong 16.3%, Japan 11%, South Korea 4.6%, Germany 4.3% (2005)
                                  $777.9 billion f.o.b. (2006 est.)
                   Imports -
                commodities: machinery and equipment, oil and mineral fuels, plastics, optical and medical equipment,
                             organic chemicals, iron and steel
          Imports - partners:

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

                                 Japan 15.2%, South Korea 11.6%, Taiwan 11.2%, US 7.4%, Germany 4.6% (2005)
          Reserves of foreign
          exchange and gold: $1.034 trillion (2006 est.)
              Debt - external:
                                 $305.6 billion (2006 est.)
               Economic aid -
                   recipient: $NA
            Currency (code):
                                 yuan (CNY); note - also referred to as the Renminbi (RMB)

       Main Economic Indicators


       Since Deng Xiaoping's economic reforms in the late 1970s, China's GDP has averaged a high
       single digit rate of growth. From an isolated, communist backwater, China has become one of the
       largest economies in the world. From a Western perspective, China is best known for its low-cost
       manufacturing, although foreign businesses are increasingly tempted by the prospect of having
       China's massive population as a market. Although mainly viewed from the West as an exporter of
       manufactured goods, China is also a major importer of raw materials and fuel. At the moment,
       China may be viewed as a regional importer and global exporter, although China is also well on
       the way to becoming a global importer of food and raw materials (for example, from Latin
       America), as well as of fuel (especially from Africa and the Middle East).

       Despite its overall GDP growth, and the remarkable transformation of major coastal cities like
       Shanghai, China's economy still has major problems. These are in part legacies of the economic
       policies of Deng Xiaoping and Jiang Zemin, which achieved unprecedented economic growth at
       the cost of significant structural imbalances. Specifically, China's economy is threatened by
       imbalances between growth in the coastal regions and the interior, weaknesses in the banking
       sector (particularly because of the need to prop up failing state-owned enterprises (SOEs)), a
       general climate of economic overheating, and an infrastructure system that has not kept pace with
       the economy. The industrialization of China has also resulted in serious environmental problems.
       Moreover, in more recent years, foreign investment has heightened economic threats to the
       country. After a relatively slow period since 1998, Chinese economic growth accelerated in late
       2002 and early 2003, driven particularly by a 23 per cent increase in bank lending and an increase
       in FDI. Despite efforts to moderate growth through macroeconomic and regulatory measures, the
       influx of foreign direct investment and easy credit created a liquidity surplus in the Chinese
       economy. Investment in fixed assets and real estate is taking place at a frantic rate, and there is a
       risk of excess capacity if growth slows abruptly, In the mean time, there are threats of inflation.


       Both as a result of easier accessibility to shipping routes and overseas investors, and as a result of a
       favorable political climate, the coastal regions have developed at a much higher pace than the
       interior of China. The burden of agricultural taxes, a history of food price controls, and little

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       foreign investment has left income in rural areas far behind urban areas. In 2004, for example, the
       average annual net income for families in rural areas was CNY2,936, compared to CNY9,422 in
       urban areas. The personal preferences of CCP officials also contributed to China's uneven
       development. Between 1990 and 2002, for example, Shanghai, a favorite of Jiang Zemin, received
       the lion's share of government grants and loans; this in turn stimulated foreign direct investment.
       As a consequence, according to official statistics, over the period 1978 and 2001, China's eastern
       coast received 86 per cent of total FDI, the center received nine per cent, and the west received
       five per cent. Despite government projects to develop the interior by investing in infrastructure and
       industry in inland regions, and reduce agricultural taxes, the more favorable geographical situation
       of China's coastal provinces makes real improvements difficult.

       Resource Shortages And Infrastructure Bottlenecks

       Demand for oil is the greatest immediate pressure generated by China's economic growth, and
       access to fuel imports has become a central foreign policy under Hu Jintao. The CCP is taking
       steps to reduce its dependence on fossil fuel imports, through the establishment of a strategic
       petroleum reserve, the development of a large-scale nuclear power program, and investment in
       other alternative energy projects like the Three Gorges Dam. Nonetheless, total oil imports have
       risen quickly over the past years (something which is unlikely to change for some time if China
       maintains its present growth rate), and the ratio between energy consumption and GDP growth is
       far less favorable in China than in most developed countries.

       As a consequence of relatively limited domestic resources, economic growth is also constrained by
       the rate at which commodities, especially base metals, but also including food, can be imported.
       Due to infrastructure constraints, however, commodity imports in 2004 were limited not only by
       prices and international availability, but also by the ability of ports to handle the volume of
       shipping required, as China's infrastructure development has failed to keep up with overall growth.
       In the earlier part of 2004, ports were unable to cope with the volume of shipping required, and
       domestic transportation, especially rail transportation of coal, was unable to handle demand.
       Improved cargo handling has increased the efficiency of ports, but rail transportation may take
       longer to upgrade, despite plans to invest over USD240 billion in railway projects by 2020.
       Electricity supply also lags behind growth, especially due to bottlenecks in coal mining and
       transportation, with 24 provinces facing shortages in 2004. Even with efforts to increase power
       generation, the country is expected to continue to face power shortages in 2005. Chinese growth
       has greatly exceeded its underlying infrastructure, and it is hard to see how infrastructure can catch
       up unless growth is moderated.

       Efforts to reduce dependence on foreign suppliers of fuel will take a long time to become effective.
       Chinese hydroelectric and nuclear projects may eventually reduce dependence on coal as an
       electricity source, but the need for fuel for agriculture and transportation is likely to continue to
       grow. China's dependence on its petroleum suppliers worldwide is likely to continue to increase,
       and Chinese diplomacy heavily emphasizes its energy security. On the other hand, domestic
       infrastructure projects should eventually allow electricity generation, fuel transportation, and the
       handling of raw materials to catch up with overall growth.


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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Deng's Reforms

       In 1978, Deng Xiaoping reversed the policy inherited from Mao Zedong of preserving China's
       identity and independence by keeping out Western influence. Beginning with the Third Plenum of
       the 11th Central Committee, Deng began to transform China from a socialist command economy
       to a market economy, and attract Western money, expertise, and technology. Deng's approach
       included the establishment of 'Special Economic Zones' and 'Special Administrative Regions',
       under Article 31 of the constitution, where socialism, especially socialist economics, is suspended.
       As well as the ideological challenge of reconciling de facto market capitalism with a nominally
       communist political system, Deng's market liberalization created organizational challenges.

       Specifically, Deng's economic reforms created a phenomenon of not only economic, but also to a
       degree political 'localism', making it difficult for Beijing to formulate and enforce unified policy.
       With local administrators making decisions which previously would have been made in Beijing,
       and given the geographical differences between provinces, the result was that provincial
       economies developed in very different forms, and with very different levels of prosperity. These
       local economies even developed their own external trade partners, with whom they were arguably
       more economically integrated than with China as a whole: for example, in 1991, Guangdong, with
       strong ties with Hong Kong, drew only three per cent of capital development from Beijing.
       Similarly, in the same year, seventy per cent of industrial output in Fujian was created through
       investment from Taiwan. By the 1990s, the result of this increase in provincial autonomy was a
       decrease in the central government's ability to tax the provinces. The traditional tax mechanism
       relied on the taxation of state-owned enterprises, and new forms of ownership had come to
       dominate the economy. Partly as a result, the government budget, as a share of national income,
       fell from just under forty per cent at the beginning of the reforms, to under twenty per cent by the
       early 1990s.

       Jiang's Exuberance

       Jiang Zemin's economic policy largely followed Deng's precedent. He continued to emphasize
       overall growth (by setting aggressive targets for GDP growth), at the expense of balanced
       development. The result of this was a continuation of the trend towards regionalism, especially in
       the ever-growing prosperity divide between the coast and the poorer inland regions of China. Jiang
       and his 'Shanghai Faction' in the CCP also tended to favor Shanghainese development. China's
       banking sector, which was forced to protect failing state-owned enterprises from bankruptcy
       through a series of loans, became increasingly threatened by bad debt. On the other hand, a number
       of successes were also achieved during this period. On top of continued stellar growth, China
       avoided the 1997 economic crisis in Southeast Asia, negotiated entry into the WTO, and, under the
       capable Zhu Rongji, implemented fiscal reforms. Although China still struggles to comply with all
       the terms of WTO accession, and the implications of foreign competition, especially banking
       competition, within the country are not yet clear, accession has greatly benefited Chinese trade.

       Hu's Moderation

       Facing these structural problems inherited from previous administrations, especially uneven
       growth and economic overheating, Hu Jintao and especially Wen Jiabao have implemented a
       policy of 'Macroeconomic Recontrol'. From late 2003 (the 'Decision of the CCP Central

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Committee on Several Issues in Perfecting the Socialist Market Economy' at the Third Plenary
       Session of the 16th Central Committee in October 2003 marks the approximate beginning of the
       policy, and greater emphasis was added in April 2004, at dedicated Politburo and State Council
       meetings), Hu and Wen have pursued a very different economic policy from that seen under Jiang.
       Setting aside Jiang's push for higher GDP at almost any cost, Hu and Wen have pressed for more
       moderate GDP growth and more balanced economic development across China as a whole.

       Under the policy, more conservative GDP growth targets were set by the CCP. At the same time,
       measures were taken to reduce unrestrained lending that contributed both to China's banking
       problems, and to unsustainable growth. The approach was two-fold: regulatory measures were
       introduced to reduce lending, especially for fixed asset investments, while interest rates were
       raised slightly, in a market-based effort to constrain borrowing. These measures were of only very
       limited effectiveness. China's poor regulatory culture, and continued high levels of FDI meant that
       these measures had little impact on China's high levels of liquidity, and overall growth was barely

       The long-term effectiveness of Wen's policy of macroeconomic recontrol remains unclear. The
       government's present efforts to build up the regulatory environment of the financial services sector,
       and develop a truly market-based credit system are certainly a prerequisite for China's long-term
       economic health. The government also has difficulties in applying market-based controls on
       growth. Interest rate increases and currency adjustments have been hesitant, and certainly
       inadequate as far as controlling growth is concerned. This is likely due to concern that such
       measures, if forcefully implemented, would not merely control growth in the booming coastal
       regions, but also kill growth in the poorer interior.

       Balancing development between the coast and the interior is another central part of economic
       policy under Hu and Wen. Not only is the income differential causing social problems, like
       migration to urban regions, Hu Jintao also depends on the support of party members from poorer
       provinces much more than his Shanghai-focused predecessor did.

       Measures to boost rural incomes include the elimination of agricultural taxes, and efforts to
       improve the rural infrastructure. These measures have been moderately successful, at least in terms
       of a reduction in the difference in income growth rates between the coastal and inland regions.
       Nevertheless, measures taken thus far remain inadequate: rural incomes continue to stagnate, and,
       arguably most importantly, coastal cities continue to receive the vast majority of FDI.

       Sector Analysis

       State-Owned Enterprises

       Following economic liberalization, during the 1990s China's old state-owned enterprises,
       particularly in the industrial northeast, proved to be uncompetitive and unprofitable in the new
       market economy. Nonetheless, the government was unable to close them, or allow them to go
       bankrupt, as the existing social security network would have been unable to handle the
       unemployed workers, creating the serious risk of social problems. Consequently, China's major
       banks were obliged under government pressure to support failing SOEs through loans. As a result,
       China's banks are now weighed down with high levels of non-performing debt. The actual level of

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       non-performing debt is difficult to estimate. In 2004, official figures placed the non-performing
       loan ratio at 17.8 per cent, although some have suggested a true figure closer to forty per cent.

       Beijing has made a concerted effort to deal with failing SOEs and bad debt, by selling failing
       SOEs to private investors, and by attempting to recapitalize banks with government money or by
       selling distressed debt. More importantly, there has arguably been a shift in Chinese banks to a
       more market-based approach to lending, with reduced government interference, which may in the
       long-run greatly improve their performance. On the other hand, government attempts to control
       growth by tightening credit controls may themselves exacerbate the bad debt problem, by creating
       a new generation of failing firms. Unlike the bad debt held by China's major banks as a result of
       supporting failing SOEs, this is more likely to affect China's mid-size and smaller banks,
       especially if smaller real estate developers begin to fail.

       The CCP continues to take measures to deal with bad debt, especially that held by the major banks
       as a result of supporting China's failing SOEs. These measures broadly fall under three categories:
       removing the burden of the SOEs, creating a stricter lending environment, and recapitalizing the

       Since the 1990s, efforts have been made to reform SOEs, especially by privatizing them or
       bringing in foreign partners, in order to reduce their burden on banks. Earlier efforts included the
       Contract Responsibility System introduced in 1985-1986, which aimed to give more independence
       to managers, but failed to eliminate bureaucratic interference. Later, 'shareholding' (gufènzhì)
       reforms were introduced in the early 1990s. The policy of 'keep the big and let go of the small'
       (zhudà fàngxiao) introduced in 1994 reduced the SOE burden by allowing smaller SOEs to be
       privately owned. More recent measures have been aimed at allowing private capital even into the
       largest SOEs.

       These measures have been moderately successful, although there are still political obstacles to the
       privatization of 'key' large SOEs. One approach to dealing with such objections has been to list
       large SOEs on a stock market, while designating a certain percentage of shares as 'non tradable'.
       Despite this designation, 'non tradable' shares can be traded privately. There are now few real
       regulatory barriers keeping private capital out of the state-owned sector, and, in February 2005, the
       State Council declared that private capital would be permitted in areas 'not specifically banned by
       laws and regulations'. This leaves most SOEs now open to private capital (including infrastructure
       and petroleum refining), and the role of private companies in the Chinese economy is likely to
       continue to grow.

       In order to reduce the accumulation of further bad debt, the government has increased regulatory
       control of banks to ensure that a more market-based credit system is in play. Where banks were in
       the past under government pressure to accept bad debt to protect SOEs from bankruptcy, they are
       now under pressure to avoid excessive lending. Reducing corruption and improving the regulatory
       culture in China's banks may over the longer term reduce their rate of accumulation of bad debt to
       more normal levels.

       Recapitalization of China's major banks is a third measure being taken to control bad debt, and
       avert a potential banking crisis. This takes three forms: using state money to recapitalize key
       Chinese banks, selling shares in Chinese banks, and selling distressed debt to private investors,

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       especially foreign investors. It is difficult to asses the effectiveness of these measures: foreign
       investors have not yet bought enough distressed debt to reinvigorate China's banks, and the
       questionable accuracy of the government's distressed debt figures makes it difficult to judge how
       much further capitalization is still needed.


       After a good start in the 1980s, the agricultural sector is now experiencing slower growth. Rural
       incomes are growing much slower than those in urban areas, creating a drag on consumer demand
       and, after over-investment in the early 1990s, many township and village enterprises (TVEs) are
       now insolvent.

       One of the structural problems in agriculture is the lack of a land market, which prevents the
       consolidation of small plots. Farmers still lease their land from the state. The government remains
       opposed to allowing a land market develop for two reasons. First, there are still ideological
       objections to such a capitalist venture. Many officials also worry that if land is sold and
       consolidated there will be no safety net for the millions of farmers who have moved to cities in
       search of work and who will one day want to return. Another problem is the hundreds of ad hoc
       fees levied by local administrations. The central government has attempted to put a stop to this by
       offering larger fiscal allocations to the localities, but so far the policy has been resisted.

       Some improvements appear to have been made: a lowering of the tax burden, and greater
       investment in infrastructure appear to have had some effect. Nevertheless, farmers still suffer from
       a continuing wealth deficiency in comparison to urban areas, and the migratory patterns caused by
       this fact are further hampering agricultural growth.

       Statistical Overview

                                              2000           2001           2002     2003      2004
       GDP (current USD billion)              1,080          1,176          1,271    1,417     1,649
       GDP growth (annual %)                  8.0            7.5            8.3      9.3       9.5
       GDP per capita (constant 2000 USD) 855.9              913.5          982.7    1,067.4 1,161.5
       FDI net inflows (BoP current USD       38.40          44.2           49.31    53.51     60.90
       Inflation (annual %)                   0.26           0.46           -0.77    1.16      3.90
       External debt (DoD current USD         145.73         170.13         168.34 193.57 177.70
       Exports (current USD billion)          279.56         299.41         365.40 485.00 638.84
       Imports (current USD billion)          250.69         271.33         328.01 448.92 623.97
       Note: World Development Indicators database.
       Source: Jane‟s Information Group

       9. Infrastructure
                A. Transportation

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                     Airports: 486 (2006)
        Airports - with paved total: 403
                    runways: over 3,047 m: 56
                              2,438 to 3,047 m: 127
                              1,524 to 2,437 m: 138
                              914 to 1,523 m: 22
                              under 914 m: 60 (2006)
              Airports - with total: 83
           unpaved runways: over 3,047 m: 4
                              2,438 to 3,047 m: 2
                              1,524 to 2,437 m: 13
                              914 to 1,523 m: 25
                              under 914 m: 39 (2006)
                    Heliports: 32 (2006)
                    Pipelines: gas 22,664 km; oil 15,256 km; refined products 6,106 km (2006)
                    Railways: total: 74,408 km
                              standard gauge: 74,408 km 1.435-m gauge (19,303 km electrified) (2004)
                   Roadways: total: 1,870,661 km
                             paved: 1,515,797 km (with at least 34,288 km of expressways)
                             unpaved: 354,864 km (2004)
                  Waterways: 123,964 km (2003)
           Merchant marine: total: 1,723 ships (1000 GRT or over) 21,405,633 GRT/32,411,260 DWT
                            by type: barge carrier 2, bulk carrier 387, cargo 695, chemical tanker 45, combination ore/oil
                            1, container 152, liquefied gas 31, passenger 8, passenger/cargo 83, petroleum tanker 261,
                            refrigerated cargo 30, roll on/roll off 8, specialized tanker 6, vehicle carrier 14
                            foreign-owned: 13 (Hong Kong 7, Japan 3, South Korea 2, Norway 1)
                            registered in other countries: 1,191 (Bahamas 3, Bangladesh 1, Belize 103, Bolivia 1,
                            Cambodia 128, Cyprus 11, Georgia 2, Honduras 3, Hong Kong 274, India 2, North Korea 1,
                            Liberia 35, Malaysia 1, Malta 14, Mongolia 4, Norway 3, Panama 420, Saint Vincent and the
                            Grenadines 103, Sierra Leone 2, Singapore 23, Thailand 1, Tuvalu 23, unknown 33) (2006)
         Ports and terminals: Dalian, Guangzhou, Nanjing, Ningbo, Qingdao, Qinhuangdao, Shanghai


       In 2005, China was estimated to have over 3.3 million km of total road network, although
       approximately 1.47 million km of this network are classified as village roads. The total length of
       paved roads was 770,265 km in 2004 - the remainder is gravel or improved earth standard or
       consists merely of earth tracks. Highways (totaling 130,000 km) remain key to economic growth
       as China seeks to overcome a poor distribution network and the authorities seek to spur economic
       activity directly. In parallel, many of China's larger cities are further developing their urban
       transport systems.

       The Ministry of Communications has afforded development of a National Trunk Highway System
       (NTHS) high priority. The core of the NTHS will comprise two north-south highways, two east-
       west highways and three other key sections. The NTHS identifies some 35,000 km in roads,
       expansion of which to highway status would build a modern inter-provincial highway system.

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       Some 19,000 km of these roads had been completed by end-2001, with a second phase due for
       completion by 2010. The Beijing-Shenyang expressway and the Beijing-Shanghai expressway
       were already complete as of 2002. Simultaneously, a further 130,000 km of provincial and rural
       roads is planned, in order to spread the benefits of the NTHS into more peripheral areas.
       A high priority is the development of an all-weather road network for remote and low-income
       areas especially beset by communication problems. In the Eleventh Five-Year Plan (2006-2010),
       the government is focusing on rural roads, which comprise 85 per cent of China's road system,
       including 480,000 km of county roads (20 per cent paved), 945,000 km of township roads (15 per
       cent paved), and 1.47 million km of village roads (9 per cent paved). During the Tenth Five-Year
       Plan, the government constructed some 72,000 km of rural roads at a cost of CNY60.9 billion, and
       aims to invest a further CNY100 billion on rural roads in the Eleventh Five-Year Plan.

       Traffic flows along Beijing's Third Ring Road in October 2005. (EMPICS)


       Chinese People's Republic Railways (CPRR) operates approximately 72,000 km of track, almost
       all of which is of 1,435 mm gauge. The Ministry of Railways controls 12 CPRR railway
       administrations, as well as most of the country's locomotive and rolling stock factories via the
       Locomotive and Rolling Stock Factories Department. The railway administrations are Harbin,
       Shenyang, Beijing, Hohhot, Zhengzhou, Jinan, Shanghai, Guangzhou, Liuzhou, Chengdu,
       Lanzhou and Urumqi. Sinotrans and China Ocean Shipping Company (COSCO) offer limited rail
       service in conjunction with the Ministry of Railways but rail cargo is essentially a monopoly of the
       ministry. Despite low prices, a bureaucratic outlook and high prices for specialized services (such
       as cold chain supply) have made rail uncompetitive, although rail cargo services opened up to
       foreign competition in December 2003, under China's World Trade Organization (WTO)

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       Current policy is for progressive devolution of authority to individual railway regions and in 1993
       the Guangzhou area administration was reconstituted as the first autonomous railway organization
       - the Guangzhou Railway Corporation, prior to the offer of shares on the Hong Kong stock market
       and in the US in 1996. During the 1990s, the government also encouraged local authorities to build
       and operate their own railways of up to 2,000 km length, where such investment would stimulate
       local development. However, demand for passenger and freight transport services has so far
       outstripped railway infrastructure and rolling stock capacities despite such policies.

       The main problem is inadequate network coverage, which is only being slowly rectified. New line
       is being added to the rail system every year, partly to relieve pressure on the heavily used trunk
       routes in the east of the country, where the bulk of the network is concentrated, and partly to
       extend railways into the western provinces which are almost without rail transport. Demand
       remains high because railways remain the least expensive mode of transportation (especially for
       bulk products such as mineral ores). Accordingly, rail transport was granted a prominent position
       in the Tenth Five-Year Plan period (2001-05), with about CNY100 billion (USD13.2 billion)
       allocated for projects, 80 per cent of which took place in the western region.

       Major rail hubs such as Shanghai are enjoying further large-scale development in their switching,
       metropolitan rail and station infrastructure. Meanwhile, prominent projects planned at the national
       level include a 2,000 km high-speed railway link between Beijing and Guangzhou to begin during
       the Eleventh Five-Year Plan (2006-10), cutting journey times from 23 hours to 10 hours at a
       projected cost of USD24 billion; a 273 km high-speed line between Fuzhou and Xiamen in Fujian
       province, for which construction began in CNY14.42 billion in October 2005; and a Beijing-
       Shanghai high-speed rail project launched in May 2005, creating a 1,300 km link that will use
       either conventional or maglev technology, at a cost of up to USD12 billion. In 2004 the central
       government approved plans to build a 600 km high-speed rail network by 2020 that would connect
       nine major Pearl River Delta cities.

       In June 2001, China commenced the building of a railway connecting Lhasa in Tibet with the
       central provinces from the city of Golmud in Qinghai province. The 1,142 km line was finished in
       October 2005, linking Tibet to China's national rail network for the first time at a cost of CNY24
       billion (USD3 billion). Given that more than 960 km of track is over 4,000 m in altitude and 547
       km runs over frozen earth, the railway presented severe technical challenges, and now stands as a
       source of national pride. Bridges were constructed over some of the permafrost. Risks to the line
       remain, in particular in the form of earthquakes, although the authorities have dismissed this as a
       potential barrier to safe use when complete. With the track at times passing 5,000 m above sea
       level, passenger cars may require a pressurized and/or oxygen-enriched atmosphere.

       Internationally, China is looking to improve its rail links with Russia via a 935 km link from
       Harbin in Heilongjiang province to Manzhouli near the Russian border, due to be completed by
       2006. The link will see 100-year-old track rebuilt; while Jilin province will seek to improve its
       surface links with Russia and North Korea via railways and highways over 2002-07. A direct
       ('trans-Asia') link between China and Singapore is also due, with construction starting in 2003.
       There are three routes planned for the first section into Malaysia, with Vietnam, Laos and
       Myanmar possible transit countries for a route starting in Kunming, Yunnan province. In
       December 2005, Beijing provided USD8 million to Cambodia for a feasibility study on a 255 km
       railway linking the Vietnamese border to the southwestern Kampong Spoe province. The 1,000

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       mm gauge typical of Southeast Asia will present some integration problems, although the winding
       661 km Kunming-Hekou route, built by the French through mountainous terrain some 100 years
       ago, is also 1,000 mm (non-standard Chinese) gauge.

                                                         China's Rail System.


       China has about 140,000 km of inland waterway, 110,000 km of which is navigable. In 2001,
       China's river ports were thought to have 8,528 berths with 558 of these along the Yangzi river

       A major policy goal is to create a container logistics network incorporating inland waterways
       offering international standards and compatibility. China's first inland international container
       terminal opened in Chongqing in late 2000. Although it was created as the state international
       shipping line, COSCO has become the dominant transporter between China's coastal and inland
       ports; COSCO barges operate in the Pearl River Delta and along the Yangzi from Shanghai to

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       Inland waterway transport is set to be transformed by the Three Gorges Dam, which will enable
       ships of up to 10,000 tons to travel the 2,000 km inland from Shanghai to Chongqing. From mid-
       2002, the waters had begun to rise along the 650 km man-made reservoir created by the USD14
       billion dam project. The waters are expected to reach a maximum level by 2009.


       China has 330 airports, 260 of which have permanent-surface runways. Of these, 147 airports in
       135 cities handled scheduled flights and 30 offered international services in 2005. The airports in
       Beijing, Guangzhou and Shanghai alone account for over a third of all passenger turnover.
       Meanwhile, air traffic has expanded sharply in recent years. By 2004, freight moved by air in
       China had reached approximately 2.7 million tons (an increase of 23.3 per cent over 2003, but still
       a minimal amount by any standards, reflecting low demand); while the total of domestic air
       passengers reached 121 million people (up 38.1 per cent on 2003). Passenger demand is projected
       to grow at almost double-digit rates annually, with air freight potentially following suit.
       Accordingly, China is aiming to have 160 airports open for scheduled flights by 2005 and 260 such
       airports by 2015, to handle the 700 operational aircraft within Chinese airlines in 2005, a figure
       expected to more than double to 1,600 by 2010. The number of civil airports with scheduled flights
       is expected to increase by 40 by 2010, to reach 187.

       However, only a minority of existing airports are able to land the largest civil aircraft such as the
       Boeing 747, 777 and 767, and Airbus 300 and 310 airplanes. Moreover, highly centralized control
       of airports is a recent legacy; it was only in March 2001 that the Civil Aviation Administration of
       China (CAAC) finally said it would give up its control of 120 airports to local authorities. Other
       common features of a mature national aviation system such as a national ticketing system, a
       national aeronautical information system, an adequate national fleet of feeder aircraft and a
       national hub-and-spoke network of routes remain in development. Nevertheless, the country has
       clearly come a long way since the 1940s when China lacked any airports able to handle anything
       larger than small transport airplanes.

       In a crucial step, military control over China's 1,122 civil airways is being loosened, allowing more
       market-driven use of airspace. The State Air Traffic Control Commission, a State Council-level
       body in which the Civil Aviation Administration of China (CAAC), People's Liberation Army
       (PLA), Air Force (PLAAF) and Navy (PLAN) are represented, now oversees national airspace
       policy. Below it are the Regional Air Traffic Control Commissions grouping PLA Theatre Control
       Units and CAAC Regional Administrations. Below these are local PLA, CAAC and air traffic
       control bodies that co-ordinate use of local airspace in real time.

       Prominent Major Airports In China Include:

       Beijing Capital International Airport, redeveloped in the late 1990s with the aid of Japanese soft
       loans, is one of China's few profitable airports, floating on the Hang Seng index in February 2000,
       operates near capacity and is on track to receive ISO9002 certification. In 2003, the airport handled
       some 236,000 flights, 23 million passengers, and 693,000 tons of freight. The airport intends to co-
       design, co-build and co-invest in other CAAC airports in tandem with Tianjin's Binhai airport (less
       than 140 km away) and develop supporting surface transport networks. However, central

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       government plans to let local governments run their own airports may prove a barrier to Beijing
       airport's plans to expand.

       The airport has been expanding its capacity rapidly in order to keep pace with increased demand.
       The airport is projected to handle 40 million passengers by 2007, especially with the construction
       of a third runway in 2004. As such, the Terminal One building was renovated in 2004, with the
       objective of handling nine million passengers annually, and a USD650 million third terminal is
       being constructed, in order to be ready for the 2008 Olympics.

       Reference point    40º 04.5'N 116º 31.4'E
       Maximum            3,800 m (12,467 ft)
       runway length
       Runway surface     Asphalt
       Elevation          35 m (116 ft)
       Nearest town/city Beijing (26 km)

                                                             An Air China aircraft taxis past the construction site for the new
                                                             terminal at Beijing Capital International Airport. (EMPICS)

       A new Guangzhou International Airport was opened in Huadu, 22 km from Guangzhou, in August
       2004, with the old Guangzhou-Baiyun airport closing after 72 years of service. The new airport
       will, when completed in 2010, have cost at least CNY20 billion (USD2.4 billion) and be linked to
       the city by a 30 km expressway. The project is being financed by the CAAC, local funds, the sale
       of the old airport and overseas investors. When fully completed, it may be one of the largest civil
       aviation projects in the world, with a projected capacity of 80 million passengers and 1 million
       tons of cargo annually, four times the size of the old airport. Currently, the airport can handle 25
       million passengers annually. The 350,000 m3 terminal building will be able to handle 10,000
       passengers during peak hours, and its three runways will be a marked improvement on the existing
       airport's single runway.

       Reference point                     23º 11.1'N 113º 11.9'E
       Maximum runway length               3,379 m (11,089 ft)
       Runway surface                      Concrete
       Elevation                           11 m (37 ft)

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       Nearest town/city                   Guangzhou (7 km)

                                                             The new Guangzhou-Baiyun airport.

       Shanghai Hongqiao
       The existing airport at Shanghai-Hongqiao will be upgraded, with improvements to include a
       second runway. Currently, the airport consists of one 3,400 m runway, one taxiway, and one
       82,000 m2 terminal building. Hongqiao handles approximately 300 flights per day, and is
       increasingly being used as a domestic airport or as standby for international flights initially
       destined for Shanghai Pudong.

       Reference point                     31º 11.9'N E121º 20.0'E
       Maximum runway length               3,400 m (11,155 ft)
       Runway surface                      Asphalt
       Elevation                           3 m (11 ft)
       Nearest town/city                   Hongqiao (13 km)

       Shanghai Pudong

       Shanghai Pudong International Airport's first phase of construction
       was completed in September 1999, with a 280,000 m2 terminal
       building, and a 4,000 m runway with two parallel taxiways.
       However, the whole project, including a new metro rail link between
       the airport and the city, will not now be completed before a second
       terminal, along with two more runways and another cargo
       transportation center, are completed by 2007, at a cost of
       approximately CNY19.7 billion (USD2.5 billion). The airport is
       expected upon completion to handle 60 million passenger arrivals
       and departures annually (as opposed to the current capacity of 20
       million passengers). The airport already handles approximately 60
       per cent of air traffic through Shanghai.

       Shanghai Pudong

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       Reference point                     31º 08.57'N 121º 47.54'E
       Maximum runway length               4,000 m (13,123 ft)
       Runway surface                      Concrete
       Elevation                           3 m (11 ft)
       Nearest town/city                   Shanghai (30 km)

       Shenzhen Huangtian
       A new master plan has been unveiled to prepare Shenzhen airport for the expected traffic
       explosion, which is expected to involve an increase in traffic from the present 14 million
       passengers to 40 million by 2020 (the airport currently handles approximately 11 million
       passengers). A total of 16 projects are planned, costing a total of CNY4 billion (USD490 million).

       Shenzhen Huangtian
       Reference point                     22º 38'N 113º 49'E
       Maximum runway length               3,505 m (11,499 ft)
       Runway surface                      Concrete
       Elevation                           4 m (13 ft)
       Nearest town/city                   Fu Yong (42 km)

       Urumqi Diwopu
       Urumqi Diwopu airport consists of two passenger terminals and one cargo terminal, while
       passenger growth in the western airport has been rapid, recording an increase of over 40 per cent
       between 2003 and 2004.

       Urumqi Diwopu
       Reference point                     43º 54'N 087º 28'E
       Maximum runway length               3,600 m (11,811 ft)
       Runway surface                      Concrete
       Elevation                           648 m (2,126 ft)
       Nearest town/city                   Urumqi (17 km)

       Civil Airlines

       Air China International
       Air China International was established in July 1988 on the basis of the CAAC Administration
       Bureau in Beijing. It gained greater autonomy in 1993, when it was granted independent trade
       group status as the largest air transport group in China. In 2001, the CAAC unveiled a national
       restructuring plan making Air China the core of three major consolidated civil aviation groups. The
       plan was approved by the State Council in February 2002, and in October the new China National
       Aviation Company (CNAC) was formed, consisting of Air China, CNAC, and China Southwest
       Airlines. Air China's shareholders are China National Aviation Holding (51.16 per cent); China
       National Aviation Corp (14.64 per cent); Cathay Pacific (10 per cent); and individual shareholders
       (24.2 per cent). On 20 November 2004, Cathay Pacific and Air China jointly announced a

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       memorandum of understanding under which Cathay Pacific would purchase a 10 per cent equity
       stake in Air China, at the time of Air China's Initial Public Offering, along with other joint co-
       operation on completion of the purchase. On 15 December 2004, the purchase was confirmed at a
       cost of approximately HKD2.7 billion in cash.

       Fleet details
       A319                                × 22
       A320                                x5
       A340-300                            × 6 (3 are leased in)
       B737-300                            × 31 (7 are leased in)
       B737-700                            × 11
       B737-800                            × 14
       B747-200B                           ×2
       B747-200F                           ×2
       B747-400                            ×5
       B747-400F                           x2
       B747-400M                           x8
       B747SP                              ×4
       B757-200                            x 10
       B767-200ER                          ×5
       B767-300                            ×4
       B767-300ER                          ×2
       B777-200                            × 10
       Harbin Y12                          x4
       Tupolev 154M                        ×5
       L-382G Hercules                     ×2
       Xian Yunshuji Y-7-100               ×4
       Note: Air China also has four Airbus A319s, 20 A330-200s, seven
       Boeing 737-800s, one B747-400F, 15 B787-8s, and three Tupolev
       204-120Cs on order.

       China Eastern Airlines
       China Eastern is an IATA-scheduled passenger carrier, majority owned by the state (61.64 per
       cent), with a number of publicly held shares owned by HKSCC Nominees Limited (30.18 per
       cent). The airline's domestic services are based around Shanghai Hongqiao airport, and it operates
       on routes throughout Asia, to Europe, to the US and to the Middle East. It has been one of the three
       largest air carriers in China, based on ton-kilometers and number of passengers carried. Regional
       destinations in 2002 included Bangkok, Cheju, Fukuoka, Fukushima, Nagasaki, Nagoya,
       Okayama, Osaka, Pusan, Seoul, Singapore and Tokyo. The airline became increasingly
       independent of its CAAC origins in settling commercial policy and for raising funds to finance
       investment in new aircraft and associated facilities during the 1990s. In 2004, the airline carried
       17.71 million passengers, a 47.1 per cent increase on the year previously, and 663,560 tons of
       cargo, a 44.3 per cent increase on 2003.

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       Fleet details
       A300-600R                           × 10 (all are leased in)
       A300F                               x1
       A319                                × 10 (all are leased in)
       A320-200                            × 40 (17 are leased in)
       A321-200                            x4
       A340-300                            ×5
       A340-600                            ×5
       B737-300                            × 6 (all are leased in)
       B737-700                            × 11 (7 are leased in)
       MD-11F                              × 6 (all are leased in)
       MD-82                               × 3 (all are leased in)
       MD-90-30                            × 9 (7 are leased in)
          China Eastern also has five Airbus A319s, four A320-200s, 11
           A321-200s, 20 A330-200/300s, two Boeing 737-700s, and three
           B737-800s on order.

                                                              A China Eastern A319 in flight. (Airbus Industries)

       China Northern Airlines
       China Northern is an IATA-scheduled carrier. Its domestic services are based around Beijing and
       Shanghai and it also flies to Khabarovsk, Macau, Seoul and Pyongyang. The Shenyang-
       headquartered airline was merged with Guangzhou-based China Southern and Xinjiang Airlines
       following State Council approval in October 2002.

       Fleet details
       A300-600R                           × 6 (all are leased in)
       A321                                ×2
       MD90-30                             × 11
       MD-82                               × 28
       Xian Yunshuji Y-7-100               × 11

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       China Northwest Airlines
       China Northwest is an IATA-scheduled domestic and international charter carrier. It charters to
       Hong Kong and numerous domestic destinations. Based on the CAAC Xian Bureau, China
       Northwest Airlines became a separate entity in 1989. The airline also has full engineering and
       maintenance facilities together with schools for technical training. The airline was merged with
       China Eastern and Yunnan Airlines in late 2003. International destinations include Tokyo, Osaka
       and Hiroshima.

       Fleet details
       A300-600R                           ×3
       A310-222                            × 2 (both leased in)
       A320-200                            × 13
       Bae 146-100                         ×3
       Bae 146-300                         ×8
       Shijiazhuang Yunshuji Y-5           × 12
       Tu-154M                             ×9

       China Southern Airlines
       China Southern is an IATA-scheduled passenger carrier. It operates to numerous domestic
       destinations and also flies to Bangkok, Fukuoka, Hanoi, Ho Chi Minh City, Jakarta, Kuala
       Lumpur, Manila, Melbourne, Osaka, Penang, Phnom Penh, Seoul, Singapore, Sydney and Tokyo,
       as well as extra-regional destinations including Amsterdam, Dubai, Islamabad, Los Angeles,
       Melbourne, Moscow, Paris, Saipan, Sharjah and Sydney. In 2003, the airline carried 20.47 million
       passengers, a decrease on 2002's figure of 21.49 million, but greater than 2001's 19.12 million.
       Cargo carried followed a similar pattern from 398,000 tons in 2001 to 470,000 in 2002 and
       464,000 in 2003. Based on the former CAAC Guangzhou Bureau, China Southern became a
       separate entity in February 1991, following which it began operations over a large domestic and
       Asian route network, which has now been extended to the US. It also has substantial interests in
       other air transport activities. The company is majority owned (50.3 per cent) by the government,
       through the trustee SA Group, with 26.84 per cent of shares listed overseas, and 22.86 per cent
       listed domestically. As China's largest air carrier, it will form the core of a group comprising China
       Northern and Xinjiang Airlines. It expects its cargo center at the new Guangzhou Baiyun
       international airport to position it to tap growth in demand for air freight in the Pearl River Delta.

       Fleet details
       A319-100                            × 4 (all leased in)
       A320-200                            × 20 (1 leased in)
       A330-200                            ×4
       B737-300                            × 20 (7 are leased in)
       B737-500                            × 12 (all are leased in)
       B737-700                            ×8
       B737-800                            × 12

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       B747-400F                           × 3 (1 leased in)
       B757-200                            × 18 (2 are leased in)
       B777-200ER/200ER                    × 10 (6 leased in)
       ERJ-145LR                           ×6
       Saab 340B                           ×4
       Xian Yunshuji Y-7                   ×5
       Note: China Southern has19 Airbus 319-100s, 20 A320-200s, 10
       A321s, two A330-200s, eight A330-300s, five A380-800s, five
       Boeing 737-700s, five B737-800s, one B757-200, and 10 B787s.

       China Southwest Airlines
       China Southwest is an IATA-scheduled passenger carrier. Its extensive domestic network is based
       around Chengdu; it also flies to Vientiane and Katmandu. Based on the CAAC Chengdu Bureau,
       China Southwest Airlines became the first major state airline to be established in 1987. On 11
       October 2002, under the guideline of the system Reform Program for Chinese Civil Aviation
       Industry approved by the State Council, China National Aviation Company (CNAC) was founded,
       with Air China as the main body and consolidating with China National Aviation Company
       (CNAC) and China Southwest Airlines. On 28 October 2002, the new Air China was set up after
       combing the air transportation resources of the three airlines.

       Fleet details
       A340-300                            ×3
       B737-300                            × 20
       B737-800                            ×1
       B757-200                            × 13 (3 are leased in)
       Harbin Yunshuji Y-12                ×4
       Tu-154M                             ×5
       Xian Yunshuji Y-7-100               ×5

       Hainan Airlines
       Hainan Airlines is a scheduled domestic carrier. Having taken stakes in Shanxi, Changan and
       China Xinhua airlines, Hainan became China's fifth-largest airline group after the government-led
       restructuring and consolidation program. At the end of 1995, with the approval from the Ministry
       of Foreign Trade and Economic Cooperation, the company successfully completed a USD25
       million private placement with a US institutional investor, thus making Hainan Airlines the first
       airline in China to have a foreign stock holder. Currently, American Airlines owns 14.8 per cent of
       Hainan Airlines' shares, although hard currency B shares were sold on the Shanghai Stock
       Exchange in January 2004.

       Fleet details
       B737-300                            × 5 (3 leased in)
       B737-400                            × 7 (all leased in)
       B737-700                            × 2 (both leased in)
       B737-800                            × 13

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       B767-300ER                          × 3 (all leased in)
       Fairchild Dornier 328-300           × 19 (all leased in)

       Shanghai Airlines
       Shanghai Airlines is a scheduled carrier. It operates on domestic routes to Ahuhai; Baotou;
       Beijing; Changsha; Chengdu; Chongqing; Dalian; Fuzhou; Guangzhou; Guilin; Guiyang; Haikou;
       Hangzhou; Harbin; Hohhot; Huangshan; Jinghong; Jinjiang; Kunming; Lijiang; Mudanjiang;
       Nanjing; Ningbo; Qingdao; Qiqihar; Shanghai; Shantou; Shenyang; Shenzhen; Wenzhou;
       Wuyishan; Xiamen; Xian; Xuzhou; Yantai; Yichuan; Zhenzhou; and Zhoushan. It also flies to
       Macau, Phnom Penh (Cambodia), Phuket (Thailand), and Vladivostok (Russia). Shanghai uses a
       training center, which provides courses for cabin and ground service crew, and also for
       commercial staff. On 11 October 2002, the airline was listed on the Shanghai Stock Market.

       Fleet details
       B737-300                                    × 6 (leased in)
       B737-700                                    × 6 (all are leased in)
       B737-800                                    × 5 (all are leased in)
       B757-200                                    × 12
       B767-300                                    ×4
       B767-300ER                                  ×1
       Bombardier CRJ200                           ×3
       Note: Shanghai Airlines currently has three further Boeing 737-800s
       on order.


       Within China there are more than 50 ports open to foreign vessels, according to the Ministry of
       Communications. The International Maritime Bureau has in the past accused the Chinese
       government of failing to take seriously the problem of piracy off its coast. This charge followed
       the detainment of the Petro Ranger oil tanker, which fell victim to the recent surge in East Asian
       piracy when it was hijacked en route from Singapore to Hanoi in 1998. It is thought that well-
       organized professional criminal groups may operate in the South China Sea and on major
       international routes in the region with the tacit support of corrupt local government officials in
       China's southern provinces.

       Although Hong Kong, Shanghai and Shenzhen are participating in the US Container Customs
       Security Initiative (CSI), it is not certain whether other Chinese ports will also accept the presence
       of US customs and security officials. Even without the unfortunate resonance of the 'treaty ports'
       era of the 19th century and first part of the 20th century (when foreigners collected and
       administered China's customs revenues), sovereignty and jurisdictional issues could lead elements
       in the Chinese central government to oppose any extension of the CSI to mainland Chinese ports.
       However, major carriers between the US and China will be encouraged to apply to join the parallel
       Customs Trade Partnership Against Terrorism (C-TPAT). Shanghai was finally included in the
       CSI in April 2005 and Shenzhen in June 2005, over two and a half years after an October 2002

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       agreement reached between Presidents Bush and Jiang for a CSI partnership in principle. No other
       ports are now expected to be included in the CSI.


       Dalian is located at 38º 55' north, 121º 41' east, on the southern part of the Liaodong peninsula. It
       is China's largest natural oil port. Seven of Dalian's eight stevedoring districts accept foreign
       vessels. There are at least 58 berths available, with total wharf frontage of 16,277 m or more.

       Floating cranes with a maximum capacity of 600 tons are available, in addition to numerous 37.5-
       ton capacity modern cranes and heavy lift equipment. The port has a liquid tank wharf with an
       annual transit throughput capacity of 1.5 million tons and a crude oil terminal completed in June
       2004 in the new harbor area capable of receiving 300,000-ton class oil tankers. In 2004, Dalian
       became the largest oil transiting port in northern China, with 8.59 million tons throughput for the

                                            Cranes at Dalian. (EMPICS)

       Haikou is located at 20º 01' north, 110º 16' east, on the northern coast of Hainan Island. A 300 m
       long wharf is situated in the Outer Harbor, in which three 5,000-ton vessels can berth
       simultaneously. Cranes with a capacity of up to 20 tons are available. The Outer Anchorage area
       handles vessels in the 10,000-ton class in depths of up to 10 m.

       Huangpu is located at 23º 05' north, 113º 25' east, at the estuary of the Pearl river 20 km southeast
       of Guangzhou. Vessels exceeding a depth of 9 m can be accepted at the Port Authority's discretion.
       There are 45 berths with wharf frontage totaling over 5,000 m and these include 21 berths for
       vessels of the 10,000-ton class. The two-berth container terminal has a total length of 471 m.
       Floating cranes with a capacity of up to 250 tons and wharf cranes with a 30-ton lifting capacity
       are available. Together with the Guangzhou, Humenwai and Xinsha ports, Huangpu is key. Its port
       is set for expansion under Guangzhou's drive, under the Tenth Five-Year Plan (2001-05), to
       maximize use of the 643 berths Guangzhou has along its coasts and river banks, of which 46 can
       take ships at or above the 10,000-ton level. The authorities are thought to be anxious that river

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       course restrictions may cause Guangzhou's complex of ports, China's traditional second largest
       port area, to lose out further to Ningbo port.

       Huludao is located at 40 47' north, 121 east, on the Bohai Rim in the northeastern province of
       Liaoning. In May 2000, China's State Council passed a resolution opening up Huludao (one of its
       leading military ports) to international commercial shipping. With the opening of the port,
       domestic freighters will be able to engage in foreign trade. Although not significant in volume
       terms, the shift in port use suggested that a policy of freeing national infrastructure for civilian use
       is ongoing. The port now has an annual commercial handling capacity of one million tons. One
       dock, with a handling capacity of 10,000 tons, was completed in mid-2000. Two additional docks
       are being constructed, one of 20,000 dwt and another of 35,000 dwt.

       Ningbo is located 130 miles south of the Yangzi River at 29 º 52‟ north, 121 º 33' east. Ningbo
       incorporates the ports of Zhenhai and Beilun. Zhenhai's cargo wharves have a total length of 768
       m and feature five portal cranes of 10-ton capacity, while Beilun has a 350 m F-shaped wharf with
       an alongside depth of 18 m. As part of the Tenth Five-Year Plan (2001-2005), Ningbo expanded
       its container and crude oil docks in order to make it one of the largest deep-water ports in the
       world. Construction of a berth with a handling capacity of 50,000 tons for liquid chemicals and
       another with a handling capacity of 250,000 tons for crude oil was undertaken. This added to
       Beilun's existing 250,000 ton oil wharf, one of the largest in China with an annual handling
       capacity of 20 million tons. The medium-term goal is for Ningbo to handle 150 million tons of
       cargo and 3 million twenty-foot equivalent units (teus) annually.

       Qingdao is located at 36º 05' north, 120º 18' east, in Jiaozhou Bay on the Shandong peninsula. The
       port's Large Harbor is the main section for foreign shipping with a 260 m wide entrance and over
       3,000 m of wharf frontage. Of Qingdao's 71 berths, 24 are used by vessels of 10,000 tons or more.
       Cranes with maximum capacities of up to 50 tons are available.

       Qinhuangdao is located at 39º 54' north, 119º 36' east, in the Bohai Gulf in Hebei province. The
       Old Channel has a maximum depth of 10.6 m and the New Harbor Channel a depth of 10.2 m.
       However, in 2001 a 100,000-ton navigational channel was built. There are 29 berths available,
       with berths 103, 301, 302 and 303 being the longest at 340 m. Qinhuangdao has a floating crane
       capacity of 70 tons, with cranes available for cargo operations. The port transports coal from
       northern to eastern and southern China and is accordingly a key node in China's internal energy
       transportation network. Other goods handled are crude oil, bulk grain, timber and mineral ores.

       Shanghai is located at 31º 15' north, 121º 30' east, on the Huangpu river at the mouth of the
       Yangzi. As a principal node in the National Trunk Highway System (NTHS), a national railway
       hub and the ocean port for the entire Yangzi river basin (forming an inland waterway stretching
       inland as far as Yunnan province, bordering Myanmar), Shanghai is mainland China's principal
       port and its second-largest container port after Hong Kong. Shanghai ranked first in the world for

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       container traffic in 2005, overtaking Singapore with 443 million tons of throughput in the year, a
       16.7 per cent increase on 2004.

       The port of Shanghai stretches along the Huangpu's and Yangzi's banks and is divided into 12
       cargo handling districts with quay lengths of between 387 and 1,600 m. In total, the districts have
       88 berths and all can accommodate vessels with drafts of up to 10 m. In addition, there are 86 buoy
       moorings. Cranes with lifting capacities of up to 100 tons are available at all piers, together with
       six floating cranes. The container port centered around Waigaoqiao is a joint venture between the
       Shanghai Port Authority and Hutchison Port Holdings of Hong Kong. The latter is thought to
       manage one quarter of all China's international port traffic. Container throughput is estimated to
       have reached 10 million teus in 2005. Bottlenecks that persist owe in part to shallowness at the
       Waigaoqiao terminal limiting access to 50,000-ton ships.

       Following drawn-out discussions between Shanghai municipality and Zhejiang province,
       construction on a 33-berth offshore container port began in Hangzhou bay in the latter half of
       2002. The ambitious Yangshan project, which involved the building of a 1.7 km2 artificial island
       between the islands of Dayangshan and Xiaoyangshan in Hangzhou bay to obviate the need to
       relocate 1,000 fishing families resident on Xiaoyangshan, was finally opened in December 2005,
       providing Shanghai with its first deep-water port.

       Five of the planned 33 container berths are expected to have been built by 2005. The first phase
       also involved construction of a new port town in Shanghai's Nanhui district; an eight-lane, 31 km
       bridge connecting Nanhui to Dayangshan and Xiaoyangshan; and a 1,600 m navigation channel to
       allow super-large container ships to enter the new port. The full complement of 33 berths is only
       envisaged by 2020, but the fact that Hong Kong (the world's largest container port) has only 18
       container berths and Singapore (the world's second-largest) only 16, makes the scale of the
       Yangshan project clear.

       In tandem with the Yangshan development, major inland watercourses in the Shanghai municipal
       area were renovated over 2002-05, to enable passage of larger container hips between Shanghai's
       container ports, and the Yangzi Delta as a whole. Inland waterway traffic can be expected to retain
       a major share in China's internal freight traffic, with Shanghai-Yangzi water-borne freight a major

       The newly opened Yangshan deep-water port in Shanghai. (EMPICS)


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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Shenzhen is located at approximately 114º north, 22º east, across from Hong Kong on the south
       coast on the Pearl River Delta between the Lingding Sea and Daya Bay. The Shenzhen Port
       Authority indicates spent approximately USD1.9 billion between 2001-05 on building 22 new
       berths for general cargo and 10 berths exclusively for container vessels. These increased
       Shenzhen's container capacity by a further 3.4 million teus and enhanced its ability to take fourth-
       and later-generation container vessels. Prior to this expansion, Shenzhen already had 10 exclusive
       container berths, built up over the previous two decades, besides 100 others for general cargo use.
       Unsurprisingly, given the investment in new berths, Shenzhen has grown rapidly as a container
       terminal, and became the world's largest container handler in 2005, handling 14.78 million TEUs
       in the first 11 months of 2005, an increase of 19.21 per cent over the previous year. This compared
       to just 3.99 million TEUs in the entirety of 2000.The port is composed of the Chiwan, Yantian and
       Shekou port areas.

       Xingang is located at 38º 59' north, 117º 45' east, situated at the mouth of the Haihe river in Bohai
       Bay. Xingang is operated by the Port of Tianjin Authority and handles foreign vessel requirements
       for the Beijing-Tianjin conurbation and their hinterland provinces. It is one of north China's
       principal container ports. It handles more than 100 million tons of cargo per year and has an annual
       container handling capacity of more than one million teus. 10,000-ton vessels can be handled at 29
       or more of the 64 berths, where alongside depths range from 8 to 12.5 m. There are eight container
       berths. Some of these berths can accommodate vessels of 50,000 deadweight tons. There are
       specialized handling facilities for coal, crude oil, grain and salt. Modernization plans over 2001-05
       include conversion of six bulk berths into four container facilities and the construction of five other
       container berths. An island dock with a 200,000-ton mineral ore terminal and a 250,000-ton oil
       terminal in Bohai bay is also planned. Xingang has cranes with lifting capacities of up to 150 tons
       available at every pier and floating cranes with 100- to 500-ton maximum lifting capacities.

       Zhanjiang is located at 21º 12' north, 110º 25' east in Kuangchou Bay, situated on the northern part
       of the Leizhou peninsula. It is one of the key ports of the dynamic Pearl River Delta. The port
       features 23 berths and 18 anchorage berths with depths of between 13 and 34 m. Number 1 Area
       has nine berths suitable for vessels of up to 10,000 tons, with an alongside depth of 10.97 m. Six
       new berths with a total quay length of 1,350 m are able to accommodate 10,000-ton class vessels.
       Cranes with a lifting capacity of up to 60 tons are available, as are 50-ton capacity floating cranes.
       In 2002, Zhanjiang put into operation the first phase of a 100,000-ton water channel. The port is
       set to see construction of large-scale exclusive berths for mineral ore.
       Source: Jane‟s Information Group

                B. Communications

           Telephones - main
                 lines in use: 350.433 million (2005)
         Telephones - mobile
                    cellular: 437.48 million (2006)
           Telephone system:
                                general assessment: domestic and international services are increasingly available for private

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

                                 use; unevenly distributed domestic system serves principal cities, industrial centers, and many
                                 towns; China continues to develop its telecommunications infrastructure, and is partnering
                                 with foreign providers to expand its global reach; three of China's six major
                                 telecommunications operators are part of an international consortium which, in December
                                 2006, signed an agreement with Verizon Business to build the first next-generation optical
                                 cable system directly linking the US mainland and China
                                 domestic: interprovincial fiber-optic trunk lines and cellular telephone systems have been
                                 installed; mobile cellular subscribers are increasing rapidly; a domestic satellite system with
                                 55 earth stations is in place
                                 international: country code - 86; satellite earth stations - 5 Intelsat (4 Pacific Ocean and 1
                                 Indian Ocean), 1 Intersputnik (Indian Ocean region) and 1 Inmarsat (Pacific and Indian Ocean
                                 regions); several international fiber-optic links to Japan, South Korea, Hong Kong, Russia,
                                 and Germany (2000)
             Radio broadcast
                    stations: AM 369, FM 259, shortwave 45 (1998)
         Television broadcast
                     stations: 3,240 (of which 209 are operated by China Central Television, 31 are provincial TV stations,
                               and nearly 3,000 are local city stations) (1997)
             Internet country
                        code: .cn
               Internet hosts:
                                 232,780 (2006)
               Internet users:
                                 123 million (2006)

       In 1991 there were 721 radio and 543 television stations in China. In 1997, there were more than
       10,000 radio stations and more than 3,000 television stations. By the end of 2004, digital cable
       television services reached 30 Chinese cities, with approximately 1.22 million subscribers, while
       the radio broadcasting coverage rate was 94.1 per cent of the population and the television
       broadcasting coverage was 95.3 per cent. This spectacular burst in media penetration and variety
       was in parallel with China's deep and wide-ranging social and economic transformation since the
       1980s. The obverse has been a falling off in the number of magazines and newspapers distributed
       (many issued automatically by central propaganda organs to China's millions of work units). The
       number fell from over 300 million in 1985 to 200 million in 2000. In 2003, there were over 400
       daily newspapers in the country, with a distribution of 80 million. Although this number fluctuates
       from year to year, the divergent trend in print media compared to broadcast media is a sign of how
       the media mix in China has been modernized.

       Besides the growth in broadcast media, telecommunications have effectively been revolutionized.
       In 1990 there were only 12.3 million lines and 12.3 million telephone handsets in the country. This
       compared to 178.3 million lines and 256.1 million handsets in 2000, and an estimated 345 million
       fixed line subscribers in October 2005.At the same time, the numbers of mobile phone subscribers
       increased from 18,000 in 1990 to 84.5 million in 2000, and 377 million by the end of the third
       quarter of 2005. More than USD50 billion in investment has seen marked changes in
       telecommunications densities. Telephone access (measured by handsets per 100 persons) grew

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       from 0.6 and 1.1 in 1985 and 1990 to 20.1 in 2000 and 26.6 in 2005. Mobile phone penetration
       (subscribers per 100 persons) grew from 0.01 in 1990 to 5.1 in 2000 and 29.1 in 2005.

                                                                                             Young Chinese people use an
                                                                                             internet cafe in Beijing, June
                                                                                             2005. (EMPICS)

       The internet has found a ready market as a medium throughout China's urban centers. Internet
       subscribers were thought to number 8.9 million in March 2000 and total users estimated at 100
       million in October 2005. The state has traditionally heavily censored the Internet to prevent its use
       to proliferate dissident views, including blocking access to most Taiwanese sites, and international
       news organizations such as the BBC. The internet surveillance and censorship technologies
       available to the central authorities have proved to be more effective than expected by analysts who
       anticipated the government would be helpless. Meanwhile, Internet entrepreneurs have been given
       hefty prison sentences for publishing what has been seen as 'anti-communist' propaganda on their
       websites. In any case, there remains a problem with rural access - less than 1 per cent of national
       users are to be found in Qinghai, Ningxia and Tibet provinces, for example - meaning the internet
       is unlikely to amplify separatist activities or the political consequences of rural discontent for the
       time being.

       Nonetheless, Beijing is finding it increasingly difficult to navigate their way between the desire to
       embrace modern technology and the need of the state to limit its consequences on the society that
       it strives to control. Given the rapidly expanding use of the Internet within China, absolute
       censorship is proving impossible, and an evolving policy of releasing greater amounts of still
       heavily controlled information to further the government's view has become apparent.
       Source: Jane‟s Information Group

       10. Military
                A. Leadership

       The Central Military Commission (CMC)

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       At the apex of the Chinese military establishment stand two bodies, the state and party Central
       Military Commissions. The 1982 constitution created the state CMC as the organ subordinate to
       the National People's Congress (NPC) responsible for 'directing the country's armed forces'. It is
       the state's co-coordinating body in military affairs and directs and commands the armed forces. It
       consists of a chairman, who is also the commander-in-chief of the armed forces, three vice
       chairmen and six members. In September 2004, CMC membership was expanded by three, to
       include the commanding officers of the Air Force, Navy and Second Artillery, reflecting ongoing
       PLA efforts to better implement new Joint Doctrines.

       The party CMC, elected by the Central Committee, exercises de facto, authoritative policy-making
       and operational control over the military. The party CMC has the identical membership as the state
       CMC, a result of the fact that the military has been under the party's control since its inception and
       its senior leaders have all been party members. One critical difference between the two institutions
       is the existence of the General Office, which serves as the central co-coordinating unit for the party

       This small body facilitates and supervises personal interaction among the senior members of the
       PLA leadership, manages the external activities of the Ministry of Defense, co-ordinates
       bureaucratic interactions among the core military agencies and their subordinate systems,
       supervises the daily operations of the CMC departments and oversees the CMC ad hoc sub-
       committees, which study specific policy issues or problems. It also serves as the key co-ordination
       and evaluation point for strategic research and assessments developed within the defense
       bureaucracy. In the past, the General Office was directly subordinate to the CMC secretary
       general, a position that was eliminated with the purge of Yang Baibing in the early 1990s.

       Ministry of Defense and Commission for Science, Technology and Industry for National
       Defense (COSTIND)
       After the CMC, the next level of military bureaucracy includes the Ministry of National Defense
       and COSTIND. Both exist within the state apparatus and operate formally under the joint control
       of the CMC and the State Council. Neither has any operational control over the PLA. The Ministry
       of National Defense is responsible for administrative planning, manpower, budget, foreign liaison
       and training materials, but possesses no policy-making or implementation authority. However,
       some overlap is possible depending on the national defense minister. Current Minister of National
       Defense Cao Gangchuan spent most of his career in the General Equipment Department and
       carries a great deal of authority with regards to modernization issues to his new position. It appears
       that he continues to exercise influence regarding foreign arms acquisition.

       Before 1998 the COSTIND was the primary organization responsible for military research and
       development, weapons procurement and coordination of the defense and civilian economic sectors.
       It also had a role in the import and export of military arms and technology and was the primary
       bureaucracy charged with technical intelligence-gathering overseas. Following the 1998 reforms,
       COSTIND lost its leadership position in the PLA military-industry complex to the CMC's General
       Equipment Department. COSTIND had been blamed for the slow progress in a range of
       indigenous military development programs.

       General Staff Department (GSD)

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       The GSD is the most important of the PLA's general departments. It carries out staff and
       operational functions of the PLA and holds significant responsibility for implementing military
       modernization plans. Within the defense hierarchy it conveys policy directives downwards,
       translates national security and defense policy into specific responsibilities for the various
       subordinate functional departments of the PLA, oversees policy implementation on behalf of the
       CMC and commands China's military force operations in wartime. In mid-2004 the GSD was
       made to conform to the PLA's new Joint Warfare doctrines by the inclusion of a General-level
       officer from the Air Force and Navy as Deputy Chairman. The GSD also performs important
       organizational functions such as procurement, operational planning and intelligence. Headed by
       the chief of the GSD, the department serves as the headquarters for the ground forces and contains
       directorates for the three other armed services: air force, navy and Strategic Missile Force. The
       GSD includes functionally organized sub-departments for artillery, armored units, engineering,
       operations, training, intelligence, mobilization, surveying, communications, quartermaster services
       and education.

       General Political Department (GPD)
       The GPD is responsible for ideological indoctrination, political loyalty, morale, personnel records,
       cultural activities, discipline and military justice. Organizationally, the GPD provides the PLA
       with its party structure. The director of the GPD oversees a system of political commissars
       assigned to each echelon in the PLA. One of the primary tasks of the political commissar is the
       supervision of the party organization through party committees at the battalion level and above or
       through party branches at the company level. In the late 1980s, under the guidance of Yang
       Baibing, the GPD was able to exert a considerable amount of political influence throughout the
       defense establishment. In the aftermath of the Tiananmen Square massacre, 1989, the GPD's role
       in elite politics was strengthened when Yang was appointed secretary general of the CMC. Rumors
       of an institutional rivalry between the GPD and the GSD remain prevalent. Following the purge of
       the Yang family, the GPD's influence was significantly curtailed, but not eliminated. It still exerts
       an indirect but potentially major influence on defense policy through its role as political and
       ideological watchdog at all levels of the military. Moreover, its control over personnel selection at
       all levels of the PLA accords it respect within the high command.

       General Logistics Department (GLD)
       The GLD is the least politically influential of the three general departments. Headed by a director,
       the GLD is responsible for production, supply, transportation, housing, pay and medical services.
       Historically, most of this support came from the civilian populace, and before the establishment of
       the GLD, it was organized most frequently by commissars. In the mid-1980s, the GLD was
       downsized and any influence it had garnered within the high command was dissipated. For this
       reason, Jiang Zemin used the GLD in the early 1990s to establish his foothold within the high

       General Equipment Department (GED)
       In April 1998 the CMC established the GED, also known as the General Armament Department.
       This measure brought a new change to the system of 'three general departments' of the PLA which
       had been in place for four decades. Before the establishment of the GED, the PLA's weapons and
       equipment management had also gone through a few phases of change, from management by the
       General Staff Headquarters to management by the GLD and then back to management by the
       General Staff Headquarters. In May 1953 the CMC decided that a Weapons and Equipment

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       Planning Department be set up in the General Staff Headquarters (later renamed the Equipment
       Planning Department). The first department head was Wan Yi. In October 1969 the Equipment
       Planning Department of the General Staff Headquarters merged into the GLD. In April 1975 the
       Equipment Department of the General Staff Headquarters was reinstituted.

       Civil-Military Relations
       Between 1977 and 1979, according to the instructions of the CMC, the General Staff Headquarters
       defined the responsibilities pertaining to the management of weapons and equipment and
       promulgated relevant regulations. According to these regulations, the General Staff Headquarters
       was largely responsible for the leadership and management of the work related to the whole army's
       weapons and equipment, such work included:

       Studying and proposing the orientation and focus of the development of weapons and equipment;
       Deciding on systems and series of weapons and equipment; formulating weapons and equipment
       development plans and peacetime and wartime support plans; Setting primary requirements for
       new weapons and equipment for application in operations; Managing the organizational and
       planning work for the selection, ordering, distribution, replacement, decommissioning, scrapping,
       reserving and sealing-up of weapons and equipment; Organizing foreign aid involving military
       equipment and the trading of military goods; and Exercising centralized management of the
       research and technical innovation of weapons and equipment by specialized departments.
       The party's control over the military appears stronger than it has in years. For the first time since
       the founding of the republic, the military holds no key positions within the Politburo Standing

       In late September 2000 former President Jiang Zemin appointed an informal three-man leading
       group to run the People's Liberation Army (PLA) day-to-day operations. This was an innovative
       step to speed up reform. The Chinese leadership considered establishing a national security council
       chaired by Chairman Jiang Zemin. Council members would include members of the Politburo
       Standing Committee as well as ministers in charge of national security matters. The council could
       become the most powerful organization in the Chinese Communist Party, since it would cover
       foreign affairs, Taiwan affairs, and propaganda affairs. The proposal implied that China was
       expanding the scope of issues that fall under national security.

       National security relates only to issues concerning the stability of government, the suppression of
       subversive activities and prevention of infiltration by enemies. The concept of the new council that
       was initiated by President Jiang was purported to follow the model of the US National Security

       Chain of Command

       China's military is unusual in that its existence predates the formation of the state; the PLA was
       founded in 1927, more than 20 years before Mao declared the People's Republic on the Tiananmen
       rostrum in 1949. As such, the PLA is in a sense the armed wing of the Chinese Communist Party
       (CCP), controlled by the party's Central Military Commission (CMC) rather than the ministry of
       defense, and has a political as well as a military role. Therefore, a major party event such as the
       NPC is by definition a major event for the PLA. The 16th National Party Congress in November

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       2002 elected a new Central Military Commission (CMC), and in the weeks that followed, it
       appointed new personnel to key positions in the PLA.

       The transition in PLA leadership was completed in September 2004 at the 4th Plenary Session of
       the 16th Chinese Communist Party Central Committee, when Hu Jintao succeeded Jiang Zemin as
       Chairman of the Central Military Commission, and Jiang finally retired fully. During his time in
       Tibet Hu earned the respect of the PLA by demonstrating his ability to work with them to advance
       the party's goals for the autonomous region, which still harbors great resentments against its
       forcible inclusion into China in 1954.

       There have been persistent reports of tensions between Jiang and new Secretary General Hu, and
       of higher ambition by Jiang's closest protégé Zeng Qinghong. This tension was made evident
       during the April 2003 accident resulting in the loss of 70 crew members on Ming-class submarine
       No. 361. It was Hu's intervention that led to a high-profile public investigation and the dismissal of
       the commanders of the navy and the Northern Fleet. Jiang had also sought to affirm the support of
       subordinate officers to him, as reports increased in 2003 and 2004 that Hu had become more
       involved in military affairs in preparation for Jiang's retirement from the CMC. It is also
       significant that Zeng Qinghong was not appointed to the CMC; Hu was able to demonstrate his
       ascendance over a potential rival. In mid 2005, however, there was increasing indication that
       rivalry had been replaced by increasing cooperation between the two, especially after Jiang's
       formal retirement.
       Central Military Commission

       Chairman                            Hu Jintao
       Vice Chairman                       General Guo Boxiong
       Vice Chairman                       General Cao Gangchuan
       Vice Chairman                       General Xu Caihou
       Member                              General Li Jinai
       Member                              General Liang Guanglie

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       Member                              General Chen Bingde
       Member                              General/Admiral Wu Shengli
       Member                              General Qiao Qingchen
       Member                              General Jing Zhiyuan

       Membership of the CMC, the top military body, is dependent on membership of the Central
       Committee of the CCP. The PLA holds 40 seats on the 198-seat CCP Central Committee.

       At the November 2002 National Party Congress, existing CMC member generals Guo Boxiong
       and Cao Gangchuan were promoted to the two remaining vacant positions of vice chairman,
       following the departure of Defense Minister General Chi Haotian and General Zhang Wannian,
       both of whom were well into their 70s. This represents the end of the generation that began its
       military career in the revolution, and the concurrent shift in attitude and emphasis, as well as in
       military approaches. The old guard learned its trade when what is sometimes referred to as „human
       wave‟ tactics of the Korean War was in the ascendant. The current fourth generation is far more
       attuned to the requirements of high-technology warfare and has busily led the PLA through the
       initial stages of fundamental reforms in doctrine, training, logistics, personnel professionalism and
       modern equipment development and acquisition.

       The CMC undertook a fundamental political and operational reform in September 2004 when it
       increased its membership to 11 by elevating the commanders of the navy, air force and Second
       Artillery for the first time to member status in addition to the commander of the army. The new
       members were army General Chen Bingde, who became director of the General Equipment
       Department, navy commander General/Admiral Zhang Dingfa, air force commander General Qiao
       Qingchen and Second Artillery commander General Jing Zhiyuan. The final elevation of the high-
       tech service commanders serves to formalize the PLA's shift from a traditionally army-dominated
       military to one striving to fight modern high-technology wars. It is also consistent with new joint-
       warfare doctrines conceived during the later 1990s.

       The promotions since 2002 also show an increased outreach toward future war fighters and experts
       on future war with Taiwan. Liang Guanglie was a commander during the 1979 Vietnam incursion,
       and Chen Bingde and Jing Zhiyuan were key leaders during the 1995 to 1996 exercises that sought
       to intimidate Taiwan. General Chen, also a veteran of post-1979 fighting with Vietnam,
       commanded the 1st Group Army, one of the first army units that would likely be used to invade
       General Guo Boxiong

       Following on from Zhang Wannian, General Guo Boxiong has
       become the senior 'war-fighting' PLA figure on the CMC,
       having assumed the role of the principal vice chairman in
       September 2004. A former commander of the Lanzhou military
       district, which covers the sensitive Xinjiang province, General
       Guo (b.1945), is responsible for the running of the CMC. A
       relatively young man, he has been promoted ahead of more
       senior figures through Jiang's intervention. He is credited with
       introducing the 'blue army' concept to the PLA to enable more

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       realistic exercises designed to expose PLA weaknesses. His most recent job was as the deputy to
       the chief of general staff. In July 2006 General Guo made a high-profile visit to the United States
       during which he met with former Secretary of Defense Donald Rumsfeld and with President
       George W Bush.

       General Cao Gangchuan

       In addition to his position as the second ranking vice chairman
       on the CMC, General Cao (b.1935), took over the office of
       defense minister at the NPC from March 2003. He is a technocrat
       with a career in ordnance and procurement rather than direct
       military command. Control over foreign arms purchase
       expenditures, as well as the sale of nuclear and missile
       technologies to client states, allowed Cao to benefit from
       patronage politics that accelerated his career. Both as GED
       director and as defense minister he has maintained an active
       profile. In 2002 he was identified as the first director of China's
       manned space program and during China's first manned space
       flight on 15 October 2003, astronaut Yang Liwei spoke to Cao,
       calling him "chief". During a December 2003 visit to Russia he
       took an active role, visiting shipyards and airbases and negotiating future arms purchases. He was
       also very visible during the unprecedented August 2005 "Peace Mission 2005" China-Russia
       military exercises.While the defense minister has been seen as a largely ceremonial position, Cao
       can be assumed to be actively involved in the breadth of the PLA's modernization.

       General Xu Caihou

       General Xu Caihou (b. 1943) became the third CMC vice chairman in
       September 2004. Thought to be close to both Hu Jintao and Jiang
       Zemin, Xu serves as an important liaison between civilian and military
       leaderships, and between the party and the military. Much of his career
       was spent in the Sheyang Military Region with a strong emphasis on
       political work, including a 1985 appointment as Political Department
       director of the 16th Group Army. In 1992 he was appointed as an
       assistant to the Director of the CMC's General Political Department,
       and for a brief period was director of the Liberation Army Daily, and
       was deputy director of the GPD in 1993. After then moving to be
       Political Commissar of the Jinan MR, in 1997 he became a member of
       the CMC, serving as executive deputy director of the GPD and the CMC's Discipline and
       Inspection Commission. He took over leadership of the GPD in 2003.

       General Liang Guanglie

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       General Staff Department Director General
       Liang Guanglie gained excellent party loyalty
       credentials for having commanded a unit in the
       1989 Tiananmen crackdown. Liang has the
       distinction of having actual combat experience,
       as well as being an expert on Taiwan, having
       been elevated to the CMC in 2002 directly from
       being commander of the sensitive Nanjing
       Military Region (MR) opposite Taiwan. Before
       that he commanded the sensitive Shenyang MR
       on North Korea's border, and was deputy
       commander of the Beijing MR. In 1979, during the PLA's punitive war against Vietnam, Liang
       was promoted to deputy division command and then to division commander. When he commanded
       the 20th Group Army he helped lead army reform from divisions to brigades, and commanded the
       army's first mechanized brigade. While in command of the Nanjing MR he oversaw the writing of
       a book titled Sea Crossings And Landing Operations.
       Photo: Jane‟s Information Group (EMPICS)

       General Li Jinai

       The Director of the General Political Department is General Li
       Jinai, who took over in 2004 after the previous GPD Director
       General Xu Caihou was promoted to be one of the three vice
       chairmen of the Central Military Commission. Li had served as
       the director of the General Armament Department from 2002
       and was previously the Political Commissar of the General
       Armament Department under General Cao Gangchuan starting
       in 1998. Li has extensive background in the Second Artillery
       starting from 1969, rising to deputy political commissar of
       Base 54, which controls inter-continental ballistic missiles
       directed against the US. From 1985 to 1990 he served in the General Political Department, rising
       to deputy director. From 1992 to 1998 he served in COSTIND, serving as Political Commissar
       from 1995.

       General Liao Xilong

       The director of the General Logistics Department is General Liao Xilong. In 1995 Liao was
       appointed commander of the Chengdu Military Region, and in 1985, was appointed as deputy
       commander of the Chengdu MR, at the time the youngest officer ever to be appointed to that
       position. In 1984 he was appointed commander of the 11th Army, again the youngest officer at
       that time to serve at that level. In 1979 Liao led with distinction the 31st Division in the war
       against Vietnam, occupying Laoshan and Zheyinshan.

       General Chen Bingde

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       Army General Chen Bingde was elevated to the Director of the General Armament Department
       during the September 2004 CCP plenum. In this capacity Chen is also the overall commander of
       the Chinese manned space program. Though this appointment surprised some observers, Bingde
       has had a colorful career and brings to his post both operational background from the Taiwan
       theatre and a demonstrated interest in developing the high technology potential of the PLA. Bingde
       was appointed commander of the Nanjing military region in January 1996 and thus was its
       commander during the March 1996 exercises to intimidate Taiwan. Before being selected for the
       CMC, Chen was the commander of the Jinan MR. Some reports suggest his promotion was due to
       the success of an experimental joint logistics program in the Jinan MR.

       General Qiao Qingchen

       Air Force Commander General Qiao Qingchen was elevated to the rank of Member of the Central
       Military Commission during the September 2004 CCP plenum. His career path has been
       intertwined with Communist Party control over the air force, a reminder the party once questioned
       the PLAAF's loyalty for its role in the 1971 defection attempt by Lin Biao, but which also signifies
       that role of political commissar in the PLA is increasingly intertwined with both personnel and
       doctrinal decision making. He served as deputy political commissar of the air force in the Jinan
       MR in 1990, as deputy air force commander in 1997, visiting the US in 1998, and as overall
       political commissar for the air force in 1999, before rising to Air Force Commander in May 2002.
       As political commissar and then commander, Qingchen has, on four occasions, led delegations
       abroad, including Cuba, Mexico, and Venezuela in 1999, Russia and Italy in 2000, Egypt and
       Sudan in 2003, and Brazil, Sweden and Spain in 2005.

       General Wu Shengli

       Early 2006 reports that PLAN Commander Zhang Dingfa was in poor health became confirmed in
       August 2006 with the announcement of his succession by former South Sea Fleet Commander
       Vice Admiral Wu Shengli. Shengli's promotion to full General/Admiral will be likely to follow
       soon, and his "election" to the Central Military Commission is expected to occur during the
       October 2006 6th Plenary Session of the 16th Communist Party Central Committee. Shengli
       considered an expert on anti-carrier warfare. Previously, he was the deputy commander of the East
       China Sea Fleet, which means he brings a heavy Taiwan focus to the PLAN command. In
       September 2003 he accompanied Chief of the General Staff of the PLA General Liang Guanglie on
       a trip to Pakistan, Brunei, and Malaysia.

       General Jing Zhiyan

       Second Artillery Commander General Jing Zhiyan was elevated to the rank of member of the
       Central Military Commission during the September 2004 CCP plenum. Zhiyan was promoted to
       Second Artillery commander in January 2003. He previously served as commander of 52 Base,
       which controls short and medium range ballistic missiles aimed at Taiwan, and previously
       commanded one of the DF-15 brigades that fired missiles during the 1995 and 1996 exercises to
       intimidate Taiwan. When former US Defense Secretary Donald Rumsfeld visited Second Artillery
       headquarters in October 2005, Zhiyan reportedly assured him of China's "no first use" policy for
       nuclear weapons.

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                B. Armed Forces Overview

          Military branches: People's Liberation Army (PLA): Ground Forces, Navy (includes marines and naval aviation),
                             Air Force (includes Airborne Forces), and II Artillery Corps (strategic missile force); People's
                             Armed Police (PAP); Reserve and Militia Forces (2006)
         Military service age 18-22 years of age for compulsory military service, with 24-month service obligation; no
              and obligation: minimum age for voluntary service (all officers are volunteers); 17 years of age for women
                              who meet requirements for specific military jobs (2004)
         Manpower available males age 18-49: 342,956,265
         for military service: females age 18-49: 324,701,244 (2005 est.)
            Manpower fit for males age 18-49: 281,240,272
            military service: females age 18-49: 269,025,517 (2005 est.)
         Manpower reaching males age 18-49: 13,186,433
         military service age females age 18-49: 12,298,149 (2005 est.)
       Military expenditures $81.48 billion (2005 est.)
              - dollar figure:
       Military expenditures 4.3% (2005 est.)
           - percent of GDP:


       Armed Forces Summary

       2,300,000 (2005 estimate for active forces)

       Doctrine and Strategy

       In Maoist China military doctrine was developed around the concept of the 'people's war', the
       principles of which were forged through the experience of war and flavored by Mao's vision of the
       political nature of revolutionary warfare. People's war stressed the mobilization of the masses to
       fight a protracted war against invasion. It emphasized the primacy of politics and the primacy of
       men over weapons. Its key elements were weak force against strong force, political mobilization of
       the masses and multi-mission armed forces.

       China's military strategy under Mao was referred to as an 'active defense strategy' and was
       developed in coordination with the military doctrine of people's war. According to Mao, active
       defense is defined as offensive defense, or defense through decisive engagements. It is a defense
       'for the purpose of counterattacking and taking the offensive' (not unlike the Soviet Union's
       concept of the 'deep battle'). As a military strategy, active defense embraces two concepts, namely
       strategic defense and tactical offence and strategic protraction and tactical quick decision.

       The active defense strategy has three attributes designed to lure the enemy deep inland, wear down
       his strength through attrition and finally shift to the offensive, namely strategic defense, defense in
       depth and triadic warfare (guerrilla, mobile and positional). The slogan 'people's war under modern

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       conditions', which was developed after Mao's death, aimed at fitting the old Maoist doctrine to new
       strategic and technological environments. This new doctrine coincided with the advancement of
       military technology in the late 1970s, which for all intents and purposes invalidated the concept of
       a pure people's war. Three specific modern conditions require the people's war to depart from
       Maoist doctrine:

                 Defense modernization and advancements in C3I, logistics systems, combined arms
                  training and rapid-response task forces;
                 Local war instead of total war. By the mid-1980s (the 1985 CMC meeting), the concept
                  of China being involved in a large-scale nuclear war was replaced by a consensus that
                  China was facing a relatively peaceful international environment and future conflict
                  would probably involve a local war or low-intensity conflict; and
                 Professional armed forces. Defense modernization calls for the institutionalization and
                  professionalism of armed forces. In terms of military strategy, the term 'new historical
                  conditions' is synonymous with 'modern conditions' for people's war. These conditions
                  require the PLA to abandon the active defense strategy developed over 50 years ago. The
                  revised active defense strategy under new historical conditions has three key elements:

                 Initial phase of war. Traditional strategic defense in the first stage of war is no longer a
                  viable option for China. The special economic zones and many large economically open
                  cities have become the new economic, financial and strategic centers and all are located
                  along the Chinese coast or frontier. A strategic retreat would mean giving up these
                  centers to the enemy. The new military strategy stresses 'resolute defense' to hold key
                  defense positions and prevent them from falling to the enemy;
                 Extended strategic depth. Similar to the Western concept of forward defense, this concept
                  emphasizes multi-layered defense lines or zones that can be extended beyond China's
                  territorial and maritime borders when the situation warrants; and
                 Modernized military forces. The new strategy requires the PLA to engage the enemy
                  decisively at the forward defense lines in the initial phase of the war. To meet this
                  requirement, China needs to modernize fundamentally in order to upgrade its weaponry
                  and equipment, improve its education and training systems, cultivate a qualified officer
                  corps and emphasize the study of military science.

       War Zone Campaign Doctrine

       War Zone Campaign (WZC - zhanqu zhanyi) doctrine, a term used frequently by PLA officers, is a
       doctrine that the PLA developed for its future wars and is more often referred to as "limited war
       under high-tech conditions". It is similar to the NATO notion of theatre of operation. The goal of
       WZC is to use PLA's selective Packet of Excellence (POE), to offset an adversary's technological
       edge. Deng Xiaoping first advocated the WZC concept. Instead of shifting priority resources from
       civil infrastructure and economic reform programs to a complete PLA modernization, he chose to
       focus on programs that would give China the most effective means for exploiting critical
       vulnerabilities in defense.

       The WZC concept was first recorded in 1979. Ad hoc operational area commands (zhanqu) were
       formed during the first Sino-Vietnamese war. The Southern Command, as it was known, actually
       directed the attack on Vietnam. In addition, there was a Northern Command, formed out of three

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       northern Military Regions (Shenyang, Beijing, and Lanzhou) facing toward the Soviet Union. This
       concept was further developed in the 1980s to meet China's strategic and tactical needs. In the 1st
       quarter of 1996, when the PLA was engaging in large-scale exercises and firing rockets across the
       Taiwan Strait, the Fujian Front was established, rather than have the operations conducted from the
       Nanjing Military Region.

       The coalition victory in the 1991 Gulf War pushed the PLA to accelerate the incorporation of the
       new doctrine. Limited war under hi-tech conditions calls for modernization of areas such as
       missile, air, and naval arms, plus rapid reaction and deployment formations of the army. By
       creating pockets of excellence within the PLA, the high command hopes to enable China to
       address many of its security issues. The WZC's major feature is that it attempts to bridge the gap
       between a major or total war involving partial or total national mobilization and a more limited
       war requiring special operations. The WZC can be divided into three phases:

                   Elite forces and sharp arms (jingbing liqi): To use Special Operation Forces (SOF) to
                    gain first hand information of the battle, disrupt the enemy's build up, in addition to
                    building up a presence of Chinese forces make a political statement to the adversary. The
                    WZC is aiming at a political victory, not territorial gain.
                   Gaining initiative by striking first (xianji zhidi): Conducting pre-emptive strikes against
                    the enemy's most critical targets, often referred to as winning victory with one strike to
                    convince an enemy to desist without having to defeat his military forces.
                   Fighting a quick battle to force a quick resolution (suzhan sujue): Send in mobile
                    formations such as the amour and mechanized infantry divisions for a decisive victory,
                    and force a final political resolution.

       WZC does not address total war. The scale of a total nation-state war will overwhelm and diminish
       the relevance of these PLA pockets of excellence, because of the enemy's likely superior capability
       in terms of technology where it can employ its most advanced weapons simultaneously on all
       fronts and throughout the war process. WZC is more limited and shorter than a total war and the
       goal of such limited wars is political rather then territorial. The Sino-Indian war of 1962 and Sino-
       Vietnamese war of 1979 are examples of the kind of situation to which WZC would apply.

       Command and control within the WZC is centralized and is tied directly to the CMC through a
       representative system similar to that of USSR during the Second World War. The representative is
       directly responsible to the supreme command in Beijing, commands and coordinates all PLA units
       in war zone and can issue direct orders to the civilian government in the region.

       The purpose of creating such a leadership structure is to bring all regional military units and
       civilian supporting resources under more integrated command and control. Coordinating fairly
       independent large-scale united campaigns by all four services is a key aspect of the war zone
       concept. As a profound reform of the Chinese military system this entails a long-term plan to
       establish joint command HQ that re-deploys the four services under a united system. The reform is
       based on resolving four issues:

                   Bridging the gap in C3I currently existing between the four services in the PLA;
                   Removing the existing logistical barriers between the different services so as to facilitate
                    a unified supply system (sanjun lianqin);

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                 Laying down groundwork for joint exercises of all services, for the purpose of launching
                  united campaigns; and
                 Placing the regional units under tighter central control.

       The WZC calls for non-ground service forces stationed in a Military Region (MR) not to answer to
       the MR commanding officers, but rather to service headquarters in Beijing. The WZC will use the
       existing MR command structure as the foundation; the joint command may consist of intelligence,
       decision control, communications and electronic warfare, and fire-control and coordination
       components. Rather than being dominated by the ground force as in the old MR headquarters, this
       command will be truly joint, with a higher proportion of both commanding and staff officers from
       non-ground force services. It is even possible that the joint forces commander and chief of staff
       come from services other than the ground forces. Under normal circumstances, however, the
       commanders of WZC Air Force, Navy, and Second Artillery forces serve as the deputy
       commanding officers of the joint command. Moreover, the decision control component may be
       composed of staff teams headed by a deputy chief of staff from all service commands. But most
       important, this command may become the operational commanding power over all service
       commands and forces within the war zone.

       2004 Defense White Paper

       On December 27, 2004 the PLA issued its fifth Defense White Paper (DWP). The 5th DWP
       demonstrated a marked evolution for the document, in terms of its use as a consensus Chinese
       government statement on defense issues, especially security challenges, doctrine and
       modernization priorities. This DWP offers a relative step forward in military transparency but like
       its predecessors offers no data on Chinese military systems or deployments.

       The fifth DWP contains 10 chapters including a new one entitled "The Revolution in Military
       Affairs with Chinese Characteristics," and eight appendices. Doctrinal and strategic factors are
       discussed in the second and third chapters, and represent a crystallization of the PLA's emphasis on
       local warfare under high-tech conditions and increasingly joint operations.

       Chapter two describes "National Security Policy," and sets the first goal (up from number two in
       2002) as: "to stop separation and promote reunification, guard against and resist aggression, and
       defend national sovereignty, territorial integrity and maritime rights and interests." For Taiwan this
       likely means that should the Taiwan authorities go so far as to make a major attempt towards
       independence, the Chinese people and armed forces will resolutely and thoroughly crush it at any
       cost. This section also states the conditions under which peaceful reunification can be
       accomplished, accepting the "One China" principle and stopping all "independence" activities, and
       for the first time states that military confidence building measures can be entertained.

       Regarding China's strategy, this section compliments the previous formulation of "active defense,"
       saying, "China adheres to the military strategy of active defense and works to speed up the RMA
       with Chinese characteristics." The stock phrase "win local wars under high-tech conditions" has
       been replaced by a new stock phrase "win local wars under the conditions of informationalization."
       There are only four references to "Peoples War" while there are 40 mentions of
       "informationalization." This term is not explicitly defined by the DWP but appears to encompass
       all defensive and offensive military uses for information technology. This section breaks new

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       ground by stating that priority in military development will be given to the PLA Navy, PLA Air
       Force and the Second Artillery.

       The third chapter is on "Revolution in Military Affairs with Chinese Characteristics." It replaces a
       shorter chapter in the 2002 DWP called "The Armed Forces" and RMA is used to describe a more
       integrated approach to PLA modernization. It begins by affirming previous announcements that the
       PLA will be reduced by 200,000 by the end of 2005, to a force totaling 2.3 million. A 15 per cent
       reduction in offices and personnel is accomplished by merging functions, streamlining, and
       pursing "joint logistics." It also repeats that priority will be given to the navy, air force and Second
       Artillery. The navy has "expanded the space and extended the depth for offshore defensive
       operations" and is emphasizing new abilities to conduct "nuclear counter-strikes", "long-range
       precision strike" and new prominence is given to "amphibious combat forces." The air force has
       shifted from "territorial air defense to an emphasis on "both offensive and defensive operations."
       And the Second Artillery Force "is responsible for deterring the enemy from using nuclear
       weapons against China, and carrying out nuclear counter-attacks and precision strikes with
       conventional missiles."

       This chapter also includes informative subdivisions on "Speeding Up Informationalization," which
       includes greater use of command automation, new computer and information technologies, and
       implementation of appropriate training. "Accelerating the Modernization of Weaponry and
       Equipment" also places a priority on "informationalization" while noting that new weapons
       systems will be supplemented by the upgrading of older weapons. "Implementing the Strategic
       Project For Talented People" notes an August 2003 CMC decision to implement a project that in
       "one or two decades" will produce officers capable of directing "informationalized wars" and
       necessary NCOs and scientists needed to run and develop advanced equipment. There will be a
       marked improvement in this area by 2010. "Intensifying Joint Training" offers new details on the
       emphasis and effort expended to implement new joint doctrines developed in the latter 1990s, to
       include widespread use of command post simulation, a "(joint) combat laboratory system," and
       broadband links between "military area commands, services and arms, and command colleges."
       "Deepening Logistic Reform" outlines the enormous effort expended by the PLA to create "an
       integrated tri-service support system," which encompasses the creation of a "Theatre Joint
       Logistics Department" with better all-service representation, development of new logistics
       equipment, and increased "outsourcing" of medical services and "monetization" of housing, giving
       soldiers the ability to buy or rent housing from the market.

       International Outreach

       China's aversion to military 'transparency', bourn of centuries of habit dating back to Sun Tzu, has
       come to clash with the Chinese government's oft-stated desire to convey its 'peaceful rise' in
       international economic and even military stature. In response to US pressure for such transparency,
       in the face of a limited US opening to the PLA during the 1990s, as well as due to it own
       realization that it must undertake increasing 'peaceful' military interactions with other states, in
       recent years the PLA has increased its level of international 'diplomatic' outreach. But the PLA has
       also just recently, for the first time, sought opportunities for actual exercises with foreign
       militaries. With most developed country militaries these have been limited to simple naval
       "passing exercises" (Passex), but there is also a new trend of inviting a large number of foreign

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       embassy attaches to observe more complex exercises. With members of the Shanghai Cooperation
       Organization, starting in 2003, the PLA has sought progressively more complex military exercises.

       The most ambitious of these was the August 18-25 "Peace Mission 2005" (PM-05) held with
       Russia. The idea for this exercise was likely formed during high-level meetings in 2004, but was
       not announced until December 2004. For the PLA it was its most ambitious peaceful military
       endeavor with a foreign power in its history. It was also the first time since the beginning of the
       most current period of PLA modernization that it has had an opportunity to test its new capabilities
       with a foreign peer. While some analysts have downplayed the exercise as a large "firepower
       demonstration" that combined usual annual Chinese and Russian exercises, this event was
       significant for the PLA and China for military and political reasons. The advertised scenario, one
       of intervening in a foreign country beset by military revolt, was flexible enough to indicate a
       China-Russia intention to intervene into a post-Kim Jong-il North Korea, a Central Asian republic
       beset by democratic revolution, or an invasion of Taiwan.

       For the PLA, PM-05 was an opportunity to test its new combined arms doctrine, and to conduct
       operations in all spheres, in cooperation with modern Russian forces. First the exercise was
       bracketed by Chinese satellite launches on August 2 and 29. The formal exercise was then divided
       into three parts and involved about 10,000 troops, with about 1,800 from Russia, with the bulk of
       the activity on the Weifang exercise range on the Shandong Peninsula. It began with military
       command and control exercises in Vladivostok starting on August 18. But the main military
       activities took place off the Shandong Peninsula.

       On August 23 there was one day of naval exercises that included blockade, anti-submarine, air
       defense and air escort operations. Russian forces consisted of an Udaloy-class ASW destroyer and
       Sovremenny-class missile destroyer, while the PLAN contributed its new South Sea Fleet based
       Type 052B Destroyer No. 168, its East Sea Fleet based Sovremenny destroyer No. 136, the older
       Northern Fleet destroyer No. 112 Harbin, three Jiangwei-class frigates, plus a Kilo-class submarine
       and a Song-A class submarine. The Russian Sovremenny fired a Moskit supersonic anti-ship
       missile while the PLAN Sovremenny fired its SA-N-7 SAMs. A PLAN frigate and the Song-A
       submarine fired anti-ship missiles. They practiced anti-missile defense and jamming operations,
       and ASW operations with Ka-28 and Z-9EC helicopters. J-8II fighters performed interception
       missions while PLAAF Su-27s and J-11s flew escort missions in cooperation with Russian A-50
       AWACS. A PLANAF Y-8AEW aircraft also made its first pubic appearance.

       On August 25, there were two distinct ground force operations. First, there were combined Russian
       and PLA Marine landings to capture a beachhead. Landings were preceded by simulated strikes by
       Russian Tu-95 Bear and Tu-22M3 Backfire bombers, then by a PLAAF H-6 bomber that fired the
       YJ-63 land attack cruise missile, followed by Russian Su-24 and PLAAF Su-27 strikes. The
       Russian Marines deployed in BTR APCs while the PLA Marines demonstrated their new T-63A
       amphibious tanks, plus their new T-63C and WZ501 amphibious APCs. A Jiangwei frigate
       provided naval fire support and WZ-9 combat helicopters also provided fire support. The Marines
       were then followed by a PLA Army Amphibious unit that used wheeled APCs. After the capturing
       of the beach by amphibious amour forces, joint Special Forces operations sought to cut off the
       enemy's air and sea-links. This phase also involved the use of T-96 medium tanks and new
       "Assaulter" wheeled light tanks. There were some casualties when one PLA tank or APC was

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

                                                                                      Amphibious tanks and Marine Corps
                                                                                      soldiers rush to the beachhead in an
                                                                                      amphibious landing drill during the
                                                                                      third phase of the Sino-Russian "Peace
                                                                                      Mission 2005" (AP Photo / Xinhua, Li

       Soon after the landing there were airborne assault operations to capture an airfield. These involved
       pre-landing strikes by PLAAF Sukhoi fighter, and then 10 Russian and PLAAF Il-76 transports
       dropped 24 vehicles and paratroopers. PLA Airborne forces were able to feature their new ZLC-
       2000 light infantry fighting vehicle modeled after the BMD vehicles used by the Russian Airborne
       troops. Of the 12 ZLC-2000s dropped, one landed on its side. Electronic warfare aircraft reportedly
       accompanied the Il-76s.

       For the Russia-China military relationship, PM-05 marked a new stage in which the sale of
       "software" compliments the already extensive "hardware" sales relationship. Russian reports
       indicate that it was China that paid for the participation of Russian forces. Through this and
       successive exercises, the PLA will acquire a level of military experience that is short of war, but is
       still far better than it can achieve through domestic exercise. Both Russia and China have stated
       their desire for future exercises and it can be expected they will be increasingly complex, and thus
       of greater value to the PLA. For Russia PM-05 was mainly an opportunity to enhance its ongoing
       weapon sales efforts and a more problematic exercise in great-power politics. Russian President
       Putin received some criticism at home for potentially linking Russia to future dangerous Chinese
       military endeavors; Russia had earlier rejected China's wish to hold the exercises in Nanjing,
       opposite Taiwan. But Putin is likely to have pushed for this exercise in order to signal to the US
       that Russia could increase its global leverage by moving even closer to China. In some quarters
       PM-05 was credited with helping push North Korea to accept the September 19 statement of
       principles regarding Korean nuclear disarmament, thereby demonstrating China's growing
       influence in Asia. But for Asian countries, especially Japan and Taiwan, PM-05 serves to
       demonstrate China's rapidly growing military threat.

       Soon after PM-05 the PLA conducted and exercise called 'Northern Sword' and invited a large
       number of observers from the military attaché community in Beijing. This exercise featured
       airborne drops and use of light buggies for transporting airborne troops on the ground. In August
       2006 'Northern Sword 2006' took place, which reportedly featured up to 20,000 troops. This
       exercise, however, was a demonstration of joint forces capabilities in that air force, Second
       Artillery and People's Armed Police forces were included.

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       In 2006 and beyond the PLA is likely to take part in and even host additional bi-lateral and
       multilateral military exercises. Following PM-05 there were several statements by Russian
       officials noting there would be similar exercises in the future. In mid-2006 Russian sources
       indicated the next Peace Mission exercise would take place in Russia in 2007. Under the rubric of
       the Shanghai Cooperation Organization (SCO), it is possible that in late 2005 Chinese, Russian
       and Indian forces will conduct anti-terrorist exercises. The location has yet to be revealed. In
       August 2006 Kazakhstan and China held their second military exercise. In May 2006 the SCO
       delayed decisions on the requests of Iran, Pakistan, Mongolia, India and Belarus to join that
       organization. In due course it is expected that all will join the SCO and that China will conduct
       both bi-lateral and multilateral military exercises with all SCO members.

       Strategic Weapons

       China is an independent nuclear weapon producer. It continues to develop and build strategic
       weapons of mass destruction. In 1996, however, China announced an end to its nuclear testing
       program and its intention to join the Nuclear Test Ban Treaty.

       The PLA's Second Artillery Corps retains operational control of China's land-based nuclear
       missiles. Political control over the nuclear forces is exercised by the chairman of the CMC. The
       Second Artillery Corps comes under the operational control of the military supreme command or
       General Staff Department. Nuclear missile-equipped submarines and other tactical nuclear
       weapons are also placed under the direct control of the CMC during wartime. The Second Artillery
       Corps, which comprises approximately 100,000 personnel, is organized into six ballistic missile
       divisions, or "Bases," an early warning division, communications regiment, security regiment and
       a technical regiment, all operating under the command of a senior general. Each ballistic missile
       division contains about three missile brigades, a training regiment, communications battalion,
       engineering battalion, security battalion, technical battalion and weather observation battalion.
       Bases responsible for new SRBMs are increasing the number of brigades. A missile brigade
       contains a single control battalion and five launch battalions, each responsible for one missile. The
       Second Artillery Corps reportedly has 180 to 200 nuclear warheads at its disposal, from a total
       Chinese inventory of 330 to 350.

       In addition, the Second Artillery plays a significant non-nuclear strategic strike role. This was
       deemed necessary in the early 1990s because the PLA lacked modern all-weather strike aircraft,
       but this role has only been expanded with the recent acquisition of such aircraft. The Second
       Artillery controls 400 to 500 DF-15/DF-15 Mod 1 SRBMs that are mainly armed with non-nuclear
       warheads. A small number of DF-15s may carry tactical nuclear warheads or new radio frequency
       warheads. DF-15s are stationed in two brigades in the Nanjing MR opposite Taiwan and include
       some newer longer-range DF-15 Mod 1s capable of reaching Okinawa. Their missions are to
       destroy high-value fixed military and civilian infrastructure targets. The PLA intends to coordinate
       non-nuclear Second Artillery missile strikes with follow-on precision PLA Air Force strikes.

       The development of highly accurate SRBMs, and very soon, Land-based Cruise missiles
       (LBCMs), has meant that the Army, Navy and Air Force can also conduct non-nuclear strategic
       strikes. The Army controls one or two brigades of DF-11 Mod 1 missiles based in Fujian Province.
       The PLA Air Force has some C-601-derived LACMs that are launched from modified H-6

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       bombers. It can be expected that the Second Artillery, Navy and Air Force will operate new,
       smaller Tomahawk-like LACMs expected to enter service around 2005. Some sources estimate
       that 200 initial land-based LACMs will be deployed by the end of 2005, most likely with the
       Second Artillery.

       Declared Policy

       China's state secrecy and cultural abhorrence of revealing what is considered to be sensitive data
       mean that there is very little concrete information about the government's policy towards weapons
       of mass destruction. China has repeatedly stated that its weapons would only be used as second
       strike systems but that they would be capable of 'the destruction of cities'. Under the nuclear Non-
       Proliferation Treaty (NPT) which China signed in 1992, Beijing agreed to prohibit the first use of
       nuclear weapons and to promote the establishment of nuclear-free zones. However, in recent years
       the level of discussion in military academic journals has raised concern that China may be
       adjusting its NFU policy, especially to include for the more aggressive use of nuclear weapons to
       win a possible war over Taiwan.

       In early January 1995 China called for the banning of all atomic weapons but it gave no details of
       how the dismantling mechanism would work.

       In May 1996 China announced its commitment to the prevention of nuclear proliferation. It
       followed with announcements to cease nuclear testing and join the Nuclear Test Ban Treaty. Over
       the last few years China has caused great consternation in its relations with the US and its Asian
       neighbors by ignoring the voluntary test ban which has functioned since 1992.

       In October 1994 China pledged to the US to abide by the Missile Technology Control Regime
       (MTCR) accord but was immediately in violation of its pledge by its assistance, through the 1990s
       and currently, of Pakistan's solid-fuel missile program. Chinese missile technology and
       engineering assistance has been critical in the success of Pakistan's Shaheen-1, Shaheen-2 and
       Ghaznavi solid-fuel missile programs. The latter is a copy of the DF-11 Mod 1 SRBM, while the
       Shaheen-1 is an extended range modification of the DF-11 Mod 1. The Shaheen-2 is apparently a
       unique design. Some sources indicate that China has sold non-nuclear radio frequency warhead
       technology to Pakistan. Since 2000 in reports mandated by the US Congress, the CIA has noted
       China's continued assistance to Pakistan's missile programs. China has played a key role in
       assisting North Korean missile developments based on purchased Russian missile technology, to
       include the solid-fuelled third stage of the Taepodong-1 missile launched in 1998.

       Ballistic Missiles

       China is a world-class developer and producer of nuclear and non-nuclear armed ballistic missiles,
       which are designed to help the PLA achieve strategic and regional military goals. The PLA's
       missile inventory is dominated by SRBMs but it also relies on MRBM/IRBMs and ICBMs. To
       modernize its missile fleet China has striven to make its missiles smaller, more accurate and more
       survivable, primarily by making all missiles mobile. Since the mid-1990s, China has perfected its
       solid fuel motors and has perfected a new class of small warheads. Both programs benefited from
       open and classified US technologies according to US Congressional and Administration
       investigations conducted during the late 1990s. China has also sought to develop penetration aids

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       (PENAIDS) to improve the ability of its warheads to reach their targets. It has tested warhead
       decoys and has investigated other PENAIDS like false decoys, stealth coatings, balloons and
       warhead maneuvering.

       At the strategic level, the PLA is expected to complete the fielding of a new liquid-fuelled ICBM.
       In 2002 the US reported that by 2005, about 20 DF-5 Mod 1 ICBMs would be replaced with a
       similar number of new DF-5 Mod 2 ICBMs with longer range and, possibly, armed with multiple
       warheads. China has long demonstrated that it can launch multiple satellites, indicating the
       potential to launch multiple warheads. Its new class of small warheads was perfected in the early to
       mid 1990s. China's goal is to field this new ICBM by the time the US deploys its initial National
       Missile Defense system, so that China can sustain its ability to conduct limited nuclear strikes on
       the US. Producing a new model of the DF-5 allows the PLA to incorporate improvements to this
       missile and to ensure a level of production that can support non-military space launches.

       A small number of the solid-fuelled and truck-mobile DF-31s are reported to be in service, with
       the Pentagon noting in May 2006 that deployment would begin in 2006. Revealed in the October
       1999 military parade, at least four mobile TELS were produced by that year. Production has been
       slow and some sources note that about 8 to 12 are in service. According to Pentagon figures
       released in July 2005 it has a range of more than 7,250 km and is armed with a single new small
       warhead. After 2005 a follow-on 11,270+ km range DF-31A is expected to enter service. This
       ICBM apparently has superseded the DF-41 ICBM program due to the latter's technical
       difficulties. Some sources indicate the DF-31A will be different from the DF-31 in that it will use a
       lengthened second stage, and depending on the version, the capacity to carry multiple warheads. It
       is reported that a shorter 10,000 km version has three to five MIRVs, while a potential 14,000 km
       version has a single warhead. This ICBM was once thought to be the successor to the DF-5 series,
       but it now appears that both will be deployed by China.

       China took a major step toward a continuous operational second strike nuclear delivery system
       when it launched its first second generation Type 094 SSBN in late July 2004. It is to be armed
       with 12 new JL-2 SLBMs with a range of 6,000 n miles (9,656 km), and may carry multiple
       warheads. While there were reports that a JL-2 test during the summer of 2004 was unsuccessful,
       in early June 2005 it reportedly accomplished a successful test flight, launching from a modified
       Golf II SSB. Some sources indicate the PLA will make at least 4 to 6 Type 094 SSBNs by 2015.
       Initially the Type 094 may operate in the protected "bastion" of the Bohai Sea, where its JL-2
       SLBMs have sufficient range to cover the US West Coast. A second nuclear submarine base is
       being built on Hainan Island near the existing base in Yulin. Should the PLA deploy Type 094
       SSBNs at this base it would allow for a survivable second-strike capability to be sustained against
       India, as well as present possible Southern-Hemisphere strike options against the US that would
       complicate the latter's missile defenses. For the longer term, the PLA likely values Taiwan as a
       SSBN base as its east coast would offer immediate access to more secure deep water patrol areas.
       In 2002 the PLA's single Type 092 SSBN, with 12 JL-1 SLBMs, completed a refit and in 2003 was
       described as 'operational' for the first time by the Pentagon.

       IRBMs, MRBMs and SRBMs perform both nuclear and non-nuclear strike missions for the PLA.
       The Second Artillery has become skilled at extending the life of its reported 20 to 24 liquid fuelled
       DF-3 and 20 DF-4 missiles. Both are armed with nuclear warheads and are targeted against
       potential regional adversaries. Numbers of the DF-3 are declining in favor of the DF-21 solid-

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       fuelled and mobile MRBM. Derived from the JL-1 SLBM, it is produced in at least three versions;
       two nuclear armed and one non-nuclear armed. The Pentagon notes that there are 19 to 23 DF-21
       Mod 1 and 2 missiles, while curiously it says there are 34 to 38 launchers for this missile. The non-
       nuclear armed DF-21C uses a terminally guided warhead that either employs a radar or satellite
       guidance system.

       China's most controversial missiles are its SRBMs, most of which are targeted against Taiwan. The
       2005 annual Pentagon report on PLA modernization stated there were 230 to 270 DF-15s and 420
       to 460 DF-11s, making the potential total 730 and raising the question whether the Second
       Artillery now operates the DF-11 too. Statements by Taiwan's Ministry of Defense in February and
       March 2006 offered some clarification regarding numbers and deployments. On March 7 the
       Taiwan MND stated there were 783 SRBMs aimed at Taiwan. DF-15s are deployed in two
       brigades located in Leping and Ganzhou in Jiangxi Province. DF-11s are deployed in four of the
       brigades located in Jinhua in Zhejiang Province, Yungan and Xianyou in Fujian Province, and
       Meizhou in Guangdong Province. It is believed that the two brigades in Fujian Province are
       controlled by the PLA Army. The Taiwan MND also put SRBM production at 75 to 100 per year,
       which could raise the total number of SRBMs from 1,150 to over 1,200 by 2010. In May 2006 the
       US Department of Defense's annual PLA report noted there could be 275 to 315 DF-15s and 435
       to 475 DF-11s deployed against Taiwan.

       While similar in outward appearance the DF-15 and DF-11 are quite different. Both were
       originally intended for export but, by the early 1990s, as the Chinese leadership became
       increasingly seized with its Taiwan problem, these missiles were adopted to perform military and
       coercive missions. The 600 km range DF-15 was designed to evade interception by US Patriot
       missiles through use of stealthy shaping and a slightly maneuverable second stage. It is only armed
       with a 500 kg HE warhead, though a small number are believed to be armed with a tactical nuclear
       warhead. The first reports of the 1,000 km range DF-15 Mod 2 appeared in mid-2002. In early
       2006 a DF-15 with an elongated nose section appeared on Chinese internet pages, but it is not
       known if this is the DF-15 Mod 2. Asian sources now indicate that the DF-15 may carry two type
       of radiation warheads, one a non-nuclear radio frequency device designed to attack electronic
       infrastructure and a second a very low yield nuclear device, most likely a neutron warhead. The
       500 to 600 km range DF-11 Mod 1 has a larger 800 kg payload designed to accept a variety of
       warheads, including HE, FAE and cluster munitions. Later production models of the DF-15 and
       the DF-11 Mod 1 are believed to incorporate some kind of satellite guidance to ensure greater
       accuracy. Both the DF-15 and DF-11 are reported by the Taiwan military to have an accuracy
       measured in 50m CEP. This is due to new combined modern inertial and navigation satellite based
       guidance systems.

       The Pentagon and other US agencies also contend that the PLA is working to perfect an anti-ship
       ballistic missile that will most likely be based on an SRBM or MRBM. The most likely candidates
       are the longer-range DF-15 and the DF-21. Remarkably, this missile may feature a maneuverable
       warhead that also includes a seeker that incorporates both passive and active radar that enable
       terminal guidance sufficient to hit a moving target like a ship. Such a task poses steep missile and
       ISR technology challenges for China, not to mention overcoming layers of US electronic and other
       defenses. However, Russian sources contend that a new optical seeker for the Iskander-E SRBM is
       able to hit moving targets, and this is a potential technology source for the PLA. Such a capability
       would pose a significant threat to US forces that are likely unable to defend against a maneuvering

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       ballistic missile and it can be expected that when realized, China will market this system to other
       countries. Asian sources indicate the DF-21 will be the main missile for this mission, and that
       following the deployment of an initial satellite surveillance capability this missile could be
       operational before 2010.

       China is developing several new land attack cruise missiles (LACM). China's first LACM is called
       the YJ-63, a 200 km to 300 km range missile with optical terminal guidance developed from the C-
       601 family and launched on modified H-6 bombers with a special data link system. The Chinese
       are also working on a more sophisticated, second-generation land attack cruise missile that is
       expected to enter service in rapidly increasing numbers around 2006. This program dates back to
       the 1970s and has seen the acquisition of cruise missile technology such as the Kh-55 from
       Russia/Ukraine; from Israel with DELILAH co-development; and from US TOMAHAWK cruise
       missile parts obtained via Iraq and Afghanistan. Asian sources note that there are two such
       LACMs in development; one for the Second Artillery and a second that will be employed by the
       PLA Navy and Air Force. Reportedly one of these missiles had 5 to 10 tests during 2003 and 2004,
       and some sources expect an initial battalion of 200 LACMs could be in place by 2006. This system
       will probably be deployed as a ground-launched cruise missile system and may later be deployed
       as an air/ship/sub-launched cruise missile. The missile will be a dual-capable nuclear/conventional
       system with a range in excess of 2,000 km with a nuclear warhead and approximately 1,500 km
       with a conventional warhead. When placed on new Type 093 SSNs, and used in conjunction with
       emerging satellite surveillance and guidance systems, these new cruise missiles will give the PLA
       a limited global power projection capability.

       But China may also have this capability on a regional basis in that it reportedly has purchased the
       Russian Novator 3M-14E 285km range land-attack cruise missile. These will initially be fired
       from new KILO 636M conventional submarines, providing an additional means for attacking
       Taiwan or US bases that may be used to help Taiwan. Derived from the Kh-55 family of cruise
       missiles the 3M-14E is the latest version of the 3M-14 CLUB series of anti-ship cruise missile. It
       is guided by TERCOM, GLONASS/GPS and radar for terminal guidance. It can also be launched
       from ships and aircraft-the latter may also be attractive to the PLA. Novator is also marketing a
       mobile land TEL for the 3M-14E.

       Arsenal and Inventory
       Chinese Designation US Designation              No in Service           Type
       DF-5                    CSS-4 Mod 1             Less than 10, phase     ICBM with single
                                                       out expected by end     warhead; range 12,000
                                                       2005                    km
       DF-5                    CSS-4 Mod 2             19-23, in service by    ICBM; range 12,000+
                                                       2005                    km, possible
       DF-4                    CSS-3                   20-24                   ICBM with single
                                                                               warhead; range 4,750
       DF-3                    CSS-2                   14-18                   IRBM with single
                                                                               warhead; range 2,000-
                                                                               3,000 km
       JL-1                    CSS-N-3                 12 on 1 x Type 092      SLBM with single

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

                                                       SSBN                    warhead, range 2,150
       JL-2                    CSS-N-4                 12 x per Type 094    SRBM under
                                                       SSBN, 4-6 x of which development, possible
                                                       are expected by 2015 MIRV, range 9,656
       DF-15/M-9               CSS-6                   275-315                 SRBM, HE, radio
                                                                               frequency and some
                                                                               nuclear warhead,
                                                                               range 600 km
       DF-15A                  CSS-6 Mod 1             n/a                     MRBM, range 1,000
       DF-11/M-11              CSS-7 Mod 1             435-475                 SRBM, HE,
                                                                               thermobaric, cluster
                                                                               warheads, range 500-
                                                                               600 km
       DF-21                   CSS-5 Mod 1             19-23 for Mod 1 and 2 MRBM, range 2,150
       DF-21                   CSS-5 Mod 2             n/a                     MRBM, range 2,400-
                                                                               3,000 km
       DF-21X                  n/a                     n/a                     MRBM for anti-ship
       DF-31                   n/a                     6-12                    ICBM with single
                                                                               warhead, range 7,250+
       DF-31A                  n/a                     Enter service 2007      ICBM under
                                                                               development, possible
                                                                               multiple warhead,
                                                                               range 11,270+ km
       DF-41                   n/a                     0                       ICBM development
                                                                               curtailed in favor of
       DF-61                   n/a                     0                       IRCM development
                                                                               with North Korea
       DH-10 (?)               New Generation Land Enter service 2005          LACM, range 2,000
                               Attack Cruise Missile                           km
                               for Second Artillery
       n/a                     New Generation          n/a                     LACM, 1,000+ km
                               LACM for PLAAF
                               and PLAN based on
       Novator 3M-14E          Land Attack Cruise      Purchased from Russia LACM, range 300 km
                               Missile                 in 2004 for KILO
                ICBM: Inter-Continental Ballistic Missile
                MIRV: Multiple, Independently-targeted Re-entry Vehicle
                IRBM: Intermediate Range Ballistic Missile
                IRCM: Intermediate Range Cruise Missile
                SLBM: Submarine-Launched Ballistic Missile

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

                MRBM: Medium Range Ballistic Missile
                LACM: Land Attack Cruise Missile.

       Operations and Basing

       The Second Artillery missile force operates fixed-silo based ICBMs, cave based ICBMs, and
       mobile ICBMs, MRBMs, SRBMs and LACMs that are cave and hanger based, even in the middle
       of cities. Some DF-5As are reportedly silo-based, indicating that newer DF-5 Mod2 ICBMs may
       be silo based too. There are reports that the PLA is also considering rail-basing for some new
       ICBMs, similar to what the Russians are retiring from service. Missiles that are towed out of
       storage facilities like the DF-3, DF-4 and perhaps some DF-5s rely on stealth and camouflage to
       cover their transport to pre-surveyed launch locations. Because they must then undergo lengthy
       fuelling they may be vulnerable to rapid attack if an adversary can locate them almost immediately
       after preparations begin. Most towed and mobile missiles, however, are believed to be based in
       steep mountain ravines that are usually covered in fog, making satellite detection very difficult. It
       is likely that newer mobile missiles like the DF-21, DF-15, DF-11 and DF-31 are also towed to
       pre-surveyed launch locations to facilitate rapid launch preparations. It is likely the Second
       Artillery will make extensive use of camouflage, smoke, decoys and counter-PGM defenses to
       protect mobile missiles. Second Artillery mobile launch battalions usually include a large number
       of troops to guard missile units.

       Little is known publicly about actual Second Artillery combat doctrine. It is reported that the PLA
       envisions using its non-nuclear missiles as part of a broader joint-force campaign. Against Taiwan
       these missiles would be launched in salvos from multiple axes to attack high-priority targets, with
       reserves kept for follow-on attacks if needed. Priority targets include critical government and
       military command facilities, anti-missile defenses, and air force, navy and army bases and
       facilities, especially those that must be eliminated to facilitate heavier follow-on air strikes.

       Second Artillery and Army Missile Units
       Base           Brigade         Province       City           Missiles       Estimated Target
       SA                             Beijing        Quighe
       51 Base                        Liaoning       Shenyang
                      806 Brigade     Shaanxi        Hancheng
                      810 Brigade     Liaoning       Dalian         DF-3A          Korea, Japan,
                                                                                   Okinawa, Taiwan
                      UI Brigade 1    Jilin          Tonghua        DF-            US(?), Korea,
                                                                    31(?)/DF-      Japan, Okinawa,
                                                                    21/DF-3A       Taiwan
                      UI Brigade 1    Shangdong      Laiwu          n/a            n/a
       52 Base                        Anhui          Huangshan
                      807 Brigade     Anhui          Chizhou        DF-21/DF-   Japan, Okinawa,
                                                                    3/DF-15 Mod Taiwan,
                                                                    2(?)        Philippines
                      811 Brigade     Jiangxi        Fuliang        DF-15 or DF- Taiwan
                                                     County         11 Mod 1

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

                      815 Brigade      Jiangxi       Leping         DF-15 or DF- Taiwan
                                                                    11 Mod 1
                      817 Brigade      Fujian        Sanming        DF-15 or DF- Taiwan
                                                                    11 Mod 1
                      UI Brigade 1     Zhejiang      Jinhua         DF-15 or DF- Taiwan
                                                                    11 Mod 1
                      UI Brigade 1     Guangdong     Meizhou        DF-15 or DF- Taiwan
                                                                    11 Mod 1
                      UI Brigade       Jiangxi       Shangrao       DF-11 Mod 1 Taiwan
                      (Army) 1
                      UI Brigade       Fujian        Yong'an        DF-11 Mod 1 Taiwan
                      (Army) 1
       53 Base                         Yunnan        Kunming
                      802 Brigade      Yunnan        Jianshiu       DF-3/DF-21     India, SE Asia
                      808 Brigade      Yunnan        Chuxiong       DF-21          India, SE Asia
                      UI Brigade       n/a           n/a            n/a            n/a
       54 Base                         Henan         Luoyang
                      801 Brigade      Henan         Lingbao        DF-5A/DF-5 US
                                                                    Mod 2
                      804 Brigade      W. Henan      Luanchuan      DF-4           Russia, India,
                                                     County                        Hawaii
                      813 Brigade      Henan         Yiyang         DF-31 (?)      US, Russia
                      UI Brigade       Henan         Louyang        n/a            n/a
       55 Base                         Hunan         Huaihua
                      803 Brigade      Hunan         Jingzhou       DF-3
                      805 Brigade      Hunan         Tongdao        DF-4           Russia, India,
                      UI Brigade 1     n/a           n/a            n/a            n/a
       56 Base                         Qinghai       Xining
                      809 Brigade      Qinghai       Datong         DF-3/DF-21     Russia, India
                      812 Brigade      Qinghai       Wulan          DF-4           Russia, India
                      UI Brigade       n/a           n/a            n/a            n/a
       UI: Unidentified

       New Developments

       A new Chinese short-range ballistic missile development program was reported in October 2003,
       and may have been given the NATO designator CSS-X-11. The missile has the Chinese designator
       B-611, and uses a single-stage solid propellant motor. The program is based on a requirement for a
       cheaper and more accurate SRBM, which can maneuver during flight using a low trajectory to
       make any defense more difficult. The B-611 is believed to have the Chinese name 'Zhenmu' or
       'Zhenna'. Development is believed to have started on this program in 1995, and Turkey is reported

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       to have co-operated with China to develop a similar missile known as 'Toros' or Project J. A
       further improved B-611 version was reported in 2005, increasing the range to 250 km. The missile
       has a length of 6.0 m, a diameter of 0.4 m, and weighs 1,200 kg at launch. The HE fragmentation
       warhead weighs 480 kg, and it is reported that submunition warheads have also been developed.
       The missile is believed to have laser-gyro guidance with possible updates from GPS or Glonass. A
       passive radar seeker has also been mentioned. B-611 has a minimum range of 80 km and a
       maximum range of 150 km. The accuracy has been stated to be 150 m CEP, although a Chinese
       report said 75 m CEP. If a terminal guidance system is fitted, then the accuracy might be around
       10 to 20 m CEP. An 8 × 8 wheeled TEL (type 2629) vehicle has also been developed, similar to
       that used with the WS-1B unguided rocket system, carrying two square missile canisters. The
       missile canisters can be rotated on the TEL prior to launch, with the missiles launched at around
       50° elevation. The first reported flight test was made in 2001, and the system entered operational
       service in China in 2004. It is expected that the B-611 will gradually replace the older CSS-8 (M-
       7) missiles. The B-611 missile has been developed and built by the China Aerospace Sciences and
       Technology Corporation (CASIC).

                                                                  A B-611 Chinese SRBM at launch (CASIC)

       In October 2006 CASIC displayed a P-12 missile, which was similar to the B-611 but is believed
       to be lighter. The P-12 missile looks similar in size and shape to the B-611, but the external wiring
       strakes are longer. It is believed that the P-12 missile has a launch weight of 1,000 kg, and has a
       smaller 300 kg HE fragmentation or HE blast warhead. P-12 has a single stage solid propellant
       motor, with the minimum range probably 60 km, and the maximum range 200 km. The missiles
       are reported to have an inertial guidance system, but it is believed that GPS/Glonass updates as
       well as a terminal IIR or mmW seeker may be options. The missile is controlled by rear mounted
       fins and nozzle thrust deflectors. An accuracy of 50 m CEP has been estimated. Two P-12 missiles
       are carried side-by-side in a 6 × 6 wheeled TEL vehicle, with large rectangular doors on the
       vehicle to protect the missiles during transit. The TEL is stabilized by four hydraulic jacks, and the
       missiles are raised to the vertical for launch. The TEL can be re-loaded in 3 to 5 minutes. A typical
       battery was described as having several TEL, missile re-load vehicles, a command and control
       vehicle, a warhead supply vehicle, and power supply and maintenance vehicles. It is believed that
       the P-12 system may have been developed as a low cost SRBM for export.

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

                                                                  A P-12 TEL with its two missiles, displayed at Zhuhai in
                                                                  October 2006 (Robert Hewson)

       Laser Weapons

       A ZM-87 Portable Laser Disturber, made by NORINCO, was exhibited in 1995. This laser weapon
       was designed to damage electro-optical sensors and dazzle the human eye at ranges up to 10 km.
       The equipment was portable, weighed about 35 kg, and has been seen fitted to Type 98 main battle
       tanks. It is probable that the weapon was also fitted to ships.

       There have been several reports of Chinese research into ground-based laser weapons to defend
       against cruise missiles, UAV and aircraft. The Second Artillery are believed to be developing a
       system known as 'Shen Huo' using a chemical laser. The 1,028th Research Institute is also reported
       to be developing a GBL. A laser weapon is reported to have destroyed a drone aircraft in 1999.

       A report in December 1998 indicated that China has developed a ground-based laser weapon
       capable of damaging the electro-optical sensors of a satellite in low earth orbit. This system is
       believed to use a deuterium fluoride chemical laser and became operational in mid-1998. This laser
       was reported to use solid state lasers and adaptive optics, and to have a maximum power output of
       100 kW. It is possible that the 100 kW output power was the project goal, and that the present
       system has a lower output. The site is located in central China. A further development program is
       working on a more powerful system to damage satellite structures, and this would be expected to
       have an output power of 300 kW. A report from the US in October 2006 stated that China had
       tested a ground-based laser against US satellites.


       Beijing has been accused of supporting missile technology and finished product transfer to Iran,
       Iraq, North Korea, Libya, Pakistan, Saudi Arabia and Syria. In October 1994 China agreed to abide
       by the US-sponsored, 25 nation-strong MTCR, although Beijing claims that the M-11, exported to
       Pakistan and possibly other countries, falls outside the coverage of the MTCR. However,

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Washington says that it defines an MTCR missile as including any which 'is intended for the
       delivery of weapons of mass destruction'.

       In 1988 China sold its liquid fuelled DF-3 to Saudi Arabia, and there is suspicion that Riyadh may
       be seeking to update these with the DF-21 solid-fueled IRBM. China has exported the DF-11 Mod
       1 in the form of the Pakistani Ghaznavi, and the Pakistani Shaheen 1 is a 750 km range derivative
       of the DF-11 Mod 1. The 1,500 km range Shaheen-2 is a unique design but relies on Chinese
       technology. In addition, China is believed to have assisted Pakistan's Babur land attack cruise
       missile program, with the first test taking place in August 2005.

       In 2004 it was revealed that China and Turkey had co-developed the B611, a 150 km range
       maneuverable SRBM. In early 2005 Turkish officials confirmed this cooperation, noting the range
       of their tested version was 152 km. Some sources indicate that a 250 km range version is in
       development. In mid-2005 it was revealed that Indonesia had discussed with China the transfer of
       ballistic missile technology, with little indication whether this would entail long-range surface-to-
       surface missiles. In early 2006 Turkish reports indicated interest in Pakistan's Babur LACM, which
       offers the possibility of indirect transfer of Chinese technology.

       China has long been suspected of providing technical assistance to Iran's Shahab series of missiles
       derived from North Korea's Nodong series. Since the early to mid 1990s Iran has co-produced a
       version of the C-802 anti-ship cruise missile called the Noor. This missile is now used on Iranian
       Su-24 fighter-bombers and Mi-17 helicopters, and was transferred by Iran to Hezbollah forces
       which used them to attack an Israeli corvette off Lebanon on July 14, 2006. Iran has also co-
       developed a series of short-range anti-ship missiles with the AVIC-2 Hongdu Aircraft Co. These
       include a radar-guided version of the C-701.

       Nuclear Weapons

       China began an independent nuclear weapon program in the late 1950s, probably as a reaction to a
       perceived threat of a US atomic bomb attack during the Korean War (1950-53). Initially, Beijing
       received some assistance from Moscow but after the Sino-Russian political schism independent
       development continued. It has, therefore, taken some time for the Chinese nuclear arsenal to grow
       and there are still programs underway to ensure it develops in terms of quality rather than quantity.

       Until early this decade, the performance characteristics of most Chinese missile systems are
       inferior in most respects to corresponding US weapons of the mid-1960s. The major shortcomings
       are low combat readiness and poor accuracy. The archaic design of the missiles makes re-targeting
       difficult, which precludes their combat use in a retaliatory strike. Thus, they were only really
       viable against soft targets. This has started to change rapidly with the PLAs introduction of new
       liquid and solid-fuelled ICBMs and MRBMs, as well as new solid-fuelled SLBMs.

       China has also introduced a new series of small conical-shaped nuclear warheads that are highly
       suspected by the US Government of having benefited from open and classified US nuclear
       weapons technology. The latest DF-5 Mod 2 liquid-fuelled ICBMs are rumored to use multiple
       warheads and various PENAIDS, while the DF-31 and DF-21A are mobile ICBMs. The advent of
       the Type 094 SSBN in 2004 marks the beginning of China's first reliable sea-based "second-strike"
       capability. The latest DF-5 Mod 2 ICBM, DF-31A ICBM and JL-2 SLBM are reported to have a

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       range of about 12,000 km, meaning they can cover the US from Chinese territory or from
       contiguous waters.

       Arsenal and Inventory

       The US Defense Intelligence Agency estimate is that China has deployed 300 nuclear warheads for
       land-based, silo-launched ballistic missiles, submarine-launched missiles, mobile missiles and
       free-fall bombs for deployment by bomber aircraft. At least 40 of the 100 H-6 medium bombers in
       active service are thought to be nuclear-capable; another 20 have been modified to carry the C-601
       air-to-surface missile, which some sources believe may have a future nuclear capability. An
       unknown number of tactical nuclear warheads are employed by DF-15 SRBMs and in bomb form
       by strike aircraft.

       Command and Control

       For the first time in a Chinese document, the 2002 Defense White Paper stated that China's
       ballistic missile and nuclear submarine missiles forces were under the direct command of the
       Central Military Commission. This statement was not repeated in the December 2005 Defense
       White Paper. It is likely that physical CMC command is exercised from the large general
       underground PLA headquarters in the Beijing environs.

       Chinese press reports indicate that Second Artillery units utilize broadband fiber-optic cable,
       satellite and high-frequency radio communication links. Operational and tactical control of
       Chinese nuclear weapons for land-based missiles is vested in the Second Artillery Corps.

       The PLA Air Force controls some air-dropped nuclear bombs for H-6 bombers and some tactical
       nuclear weapons for fighter-bomber delivery. The PLA Navy exercises operational control over
       nuclear armed JL-1 SLBMs on its single Type 092 XIA class SSBN, and in the near future, JL-2
       SLBMs on its second generation Type 093 SSBNs now under construction.

       Nuclear Tests

       China has agreed to abide by the comprehensive test ban of 1996 but in the meantime is working
       hard to ensure that its nuclear warhead development program is completed. China's nuclear
       technology is not sufficiently advanced to miniaturize the warheads on light, tactical ballistic
       missiles. During 1994-95 China exploded three nuclear warheads at the Lop Nor test range - the
       40th, 41st and 42nd tests; the launches are thought to have been part of the continuing series of
       tests of the M-11 ballistic missile system. Other sources say that the tests were carried out in
       connection with the development of a new missile for a strategic submarine-launched ballistic
       missile. In October 1994 US Secretary for Defense William Perry offered China access to US
       computer technology which simulates nuclear blasts and triggers, allowing Beijing to curb its
       underground testing program.


       China has been accused of exporting nuclear technology to North Korea, Iran and Pakistan. In late
       2003 it was discovered that Pakistan had, in turn, sold a Chinese nuclear weapon design to Libya.

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       There is great concern that terrorists could acquire this Chinese nuclear bomb design via Pakistan
       or Libya, or from other states to which they may sell the design. Then in late 2005 it was revealed
       that Pakistan sold its Chinese nuclear weapon designs to Iran.

       Biological Weapons

       China has been a victim of biological weapons and, since 1960, has also been considered a
       developer of these devices.

       Chemical Weapons

       China first learned about modern chemical weapons in the 1930s when it is alleged that imperial
       Japanese troops used them on the inhabitants of Nanjing. Following the end of the Korean War
       (1950-53) China is thought to have begun trials with non-persistent weapons, leading to a
       substantial capability to produce a wide range of nerve, blood and choking agents.

       There have been no allegations that China has produced chemical warheads for any of its missile

       Information Warfare Capabilities

       Since the mid-1990s China has become a major player in the area of Information Warfare (IW),
       especially computer network operations. China has developed its own theory, doctrine and order of
       battle for IW. Computer network operations forces are now integrated in the MR commands of the
       PLA, and there is extensive cooperation between government and criminal "cybercrime" networks.
       Chinese IW personnel heavily target military and civilian computer networks in the United States,
       Great Britain, Japan and Taiwan. Today their main focus is information gathering but this
       experience also contributes to their ability for potential offensive operations. The PLA is expected
       to combine a surprise and large scale IW attack with other military operations as part of any
       general offensive against Taiwan, to include IW attacks against the United States.

       Chinese theorists believe that the capabilities and qualities of the information era enhance and
       breathe new life into Mao Zedong's theory of a People's War. Chinese IW specialist General Wang
       Pufeng first noted this condition in 1995. Some believe that electronics, computer and information
       engineering experts are likely to become the heroes of a new People's War, much like the warrior
       class of the past.

       China clearly has the people to conduct a 'take-home battle' - a battle conducted with laptops at
       home - allowing thousands of citizens to hack foreign computer systems when needed. China has a
       number of superior software writers and much untapped potential in the information field. The
       problem is how to find more information space and equipment for its population.

       Ideas for uniting a People's War with IW are finding fertile ground in the 1.5 million-strong
       reserve force of China. Early in its IW development the PLA turned reserve forces in some
       districts into mini-IW regiments. The PLA is turning reserve forces in some districts into mini-IW
       regiments. For example, in the Echeng District (1,125 km south of Beijing) in Hubei Province, the
       People's Armed Forces Department (PAFD) reportedly organized 20 city departments into a

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       militia/reserve IW regiment. The PAFD had a network warfare battalion, as well as EW,
       intelligence and psyops battalions, and 35 technical Fenduis (squad to battalion). The PAFD also
       set up the first reserve IW training base for 500 people.

       Echeng is not the only district with reserve/militia units conducting IW training. The Fujan
       Province held a meeting at Xiamen in December 1999 that used reserve and militia forces. The
       Xiamen area is a special economic zone, and attracts a higher than usual number of science and
       technology clients to the area. Thus it is a prime candidate for IW-related activities. There were
       also reports of reserve IW activity in Xian PAFD, and in the Datong military sub-district.

       By 2005 PLA organization for information warfare had accelerated. By this year every Military
       Region had established a "Special Technical Reconnaissance Unit" for the purpose of waging
       offensive and defensive information warfare. This constitutes the PLA's 'net force' to fight the
       high-tech battles of the future. The net force would protect net sovereignty and engage in net
       warfare, a technology and knowledge-intensive type of warfare. Net technology would include
       scanning technology to break codes, steal data and take recovery (anti-follow-up) actions.

       It would include superior offensive technology capable of launching attacks and countermeasures
       on the net, such as information-paralyzing software, information-blocking software and
       information-deception software.

       It would include masquerade technology capable of stealing authority from the network by
       assuming a false identity; and defensive technology that can ward off attacks, serve as an
       electronic gate to prevent internal leaks, and block arbitrary actions - like an electronic policeman.

       Training To Conduct IW

       IW has been defined as knowledge-style warfare, a special trial of strength between highly talented
       people. This definition arose from the fact that high-tech war demands a high level of knowledge
       by commanders and operators, strong psychological qualities, command ability and operational

       Recognizing that China lags behind in several of these categories, the PLA leadership has
       undertaken training at various levels. The first category is support-style talent, with the main
       targets leading cadres over 40 years of age. These are decision-makers, and the aim is to eliminate
       their information illiteracy, to change their concepts through training (from mechanized concepts
       to simulated IW fighting), and to apply their new ideas to future war. Training content for this
       group is information technology basics, the theory of IW and general knowledge of IW weapons.
       Training focuses on short courses, supplemented by other methods.

       The second category is transitional-style talent. Here cadres aged 30 to 40 have been targeted. As
       the future leaders of China, they must focus on enhancing their ability to command in IW

       The third category is regeneration-style talent. This involves cadres under 30 years old. These
       individuals are already acclimatized to information society and possess an all-round foundation in
       modern IT theory. Their focus is on command and technology.

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       The training for each age group includes: basic theory, such as computer basics and application,
       communications network technology, the information highway and digitized units; electronic
       countermeasures; radar technology; IW rules and regulations; IW strategy and tactics; theatre and
       strategic IW information systems, including gathering, handling, disseminating and using
       information combat command; monitoring; decision making and control systems; information
       weapons, including concepts and principles of soft and hard destruction, and how to apply these
       weapons; simulated IW; protection of information systems; computer virus attacks and
       counterattacks; and jamming and counter jamming of communications networks.

       Chinese IW capability

       Chinese military theorists have found a willing, relatively cheap and malleable ally in IW, an ally
       that will enable China to catch up with the West in strategic, military and international status. This
       could encourage China to play an important strategic deterrent role (or become a potential
       troublemaker) in the Asia-Pacific region in the future. China is likely to gradually emerge into an
       economic competitor worthy of close scrutiny.

       China has placed an unusual emphasis on the emerging role of new IW forces. These various
       groups include a net force (separate armed forces branch), a shock brigade of network warriors,
       information protection troops, an information corps, electronic police and a united network
       People's War organ. The latter is worthy of the most consideration by foreign analysts due to its
       unique nature and potential. Chinese theorists believe that an IW victory will very likely be
       determined by the side mobilizing the most computer experts to participate in take-home battle.
       These forces would employ a strategy such as net point warfare, attempting to take out important
       information nodes and junctions.

       Chinese IW reflects a mixture of Western, Chinese and Russian thinking (due to a common frame
       of reference of military art and the Marxist dialectic with the latter). However, a Chinese-specific
       IW lexicon has also evolved that is different from Russia and the West.

       Chinese IW should be expected to look to Chinese military history to find answers to today's
       problems, such as in The Secret Art of War: The 36 Stratagems. The nature and characteristics of
       IW appear to fit well with these stratagems.

       There are many weaknesses in the Chinese approach to IW, currently more than the number of
       strengths. This article has highlighted the strengths, and the ways in which Chinese and US
       thinking differs. However, the cornerstone of IW's operational theory involves preserving the
       integrity and stability of the infrastructure of one's side to perform IW functions.

       Infrastructure stability is as important as the survivability of units in the information age. It is in
       the infrastructure where China's biggest weakness can be found. The Chinese increased their
       telecommunications industry rapidly, however, and lay a joint civil-military information

       China has been able to learn from the mistakes of others, and may soon become an IW force to be
       reckoned with. IW has allowed China to skip over some technological developments, using

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       discoveries in the West to save time and money. However, China will develop innovative, indirect
       IW strategies that do not imitate the moves of others. The important point to note is that it will be
       an IW force very different from others.

       Assessment of Covert Programs

       China has a variety of covert programs to develop weapons of mass destruction, including nuclear
       weapons and chemical systems. There has been a massive resurgence in Chinese investment
       military programs, most of which are covert because China does not believe in transparency in
       matters strategic and military.

       Space Program

       China's space program serves its military, civilian and broader strategic-diplomatic and domestic
       political requirements. The Communist Party hails the manned space program as a high-profile
       achievement to promote nationalism and support for the Party. However, China's leaders also
       understands that leadership in space is one of many requirements for achieving greater
       international leadership, and is committed to a far reaching unmanned and manned planetary
       exploration program and wider international space technical cooperation.

       In October 2005 China organized the Asia-Pacific Space Cooperation Organization, with initial
       members Bangladesh, China, Indonesia, Iran, Mongolia, Pakistan, Peru and Thailand. Argentina,
       Malaysia, the Philippines, Russia and the Ukraine may join, but the US is not invited. As the US
       does through NASA, China hopes to build technical cooperation that paves the way for greater use
       of Chinese technology, and acceptance of Chinese standards in space. Earlier this decade China
       tried but failed to interest India in co-developing Earth observation satellites. Reports in August
       2006 indicate China and Pakistan will "co-develop" three earth resource satellites. For Iran and
       Pakistan, potential cooperation with China in space launch vehicles could help their programs to
       build longer-range ballistic missiles.

       China's space program is directly controlled by the PLA, and is subordinate to the General
       Armament Department (GAD). It controls both military and civilian space activities. However,
       Chinese military sources have noted that for some time there has been a debate within the PLA
       over which branch should control military space activities, the PLA air force or the current
       organizations under the GAD. Chinese press reports in mid-2005 indicate that this debate may
       have been settled in favor of the GAD-led organizations, who may now have a mandate to form a
       new branch of the PLA to control all military space activities. In early 2006 some Chinese space
       officials were calling for the creation of a "national space organization," a possible attempt to place
       manned space under "civilian" control in line with other space-faring nations.

       Seemingly civilian programs, like commercial communication satellites and the manned space
       program have been enlisted to serve military needs. China's principal space launch vehicles are
       derived from the DF-4 and DF-5 ICBMs. Since 1986 China has sold commercial space launch
       services in part to subsidize its space and missile programs. China has stated its intention to launch
       at least 35 different science and application satellites during the years 2002-06, 10 during 2004.
       The satellites would be used for communications and direct-to-home broadcasting, meteorological
       and oceanographic observations, navigation and positioning, disaster mitigation, and seed

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       breeding. At the same time China is also expected to develop a direct-assent anti-satellite
       capability based on new mobile solid-fuel space launch vehicles and micro-satellites.

       In 2000, Beijing orbited its first high-resolution electro-optical imaging satellite, which relays its
       state-of-the-art digital pictures by radio to ground stations. In the past, Chinese satellites snapped
       pictures on photographic film, which then was dropped down to Earth in canisters. The Chinese
       satellite, named Ziyuan-2 (ZY-2), can yield photographs with a resolution more than three times
       the capability of China's earlier earth sensing satellite, Ziyuan-1 (ZY-1).

       In 2006, China began to loft a more ambitious space imaging constellation. On April 27, 2006 it
       launched its first synthetic aperture radar (SAR) satellite, called the 2,700kg JingBing-5. Its
       resolution has not yet been reported. An indigenous PLA program funded by the "863 Program,"
       the JianBing-5 utilizes a flat planar radar array and a sun-synchronous orbit as does the Canadian
       RADARSAT-with which China had a brief cooperative agreement in the late 1990s.

       In the near-future China is expected to launch an eight-satellite constellation based on satellites
       developed by the Russian NPO Machinostroyenia company and the Chinese DFH company. The
       constellation will eventually have four new HJ-1A/B electro-optical satellites and four new HJ-1C
       radar satellites. Both satellites will use NPO Machinostroyenia's small-sat bus and the radar
       satellite will use the antennae from NPO Mash's KONDOR-E system. Both satellites very likely
       will have a resolution of 1 m or less. The HJ-1B will have a hyper-spectral imaging capability.
       With an eight satellite constellation the PLA will have the ability to revisit a target location twice
       daily with both electro-optical and radar satellites. In addition, the Chinese acknowledge that their
       polar-orbit weather satellites are used to assist ICBM targeting. This is especially important for
       new smaller warheads which require more precise targeting inputs for accuracy. The FY-1D polar-
       orbit weather satellite was launched in May 2002 and the more capable FY-3 is expected to be
       launched in 2006.

       China is pursuing both domestic and foreign cooperative programs to ensure that it maintains
       access to navigation satellite signals to guide military platforms and weapons. In October and
       December 2000, and then May 2003, the PRC launched three BEIDOU locating satellites. Placed
       in geosynchronous orbits over China, they are not true navigation satellites in that this system
       relies on ground station signal broadcasts, not signals from the satellites themselves. The PLA has
       long had its own navigation satellite program, but in 2003 it invested over USD200 million to
       become an official partner in the European GALILEO navigation satellite program, which expects
       to be operational in 2008. China hopes this will ensure military access to navsat signals in the
       event the US denies GPS signals. However, mid-2006 reports of China's apparent dissatisfaction
       over Europe's refusal to grant China its required level of control over the Galileo system have led
       to a renewed Chinese commitment to lofting its own navigation satellite constellation, perhaps
       early in the next decade. Russia tried but apparently has failed to gain Chinese investment in its
       faltering GLONASS constellation. The PLA has direct control over two ZHONGXING-20
       communication satellites, launched in 2000 and November 2003. These are believed to be based
       on the domestic DFH-3 Comsat, built in cooperation with Germany's DASA. These will be
       succeeded by the DFH-4 built in cooperation with France's Alcatel. The DFH-4 will have 52 C and
       Ku-band transponders. In addition the PLA has regular access to many of the 12 or so foreign-
       made satellites launched by China but owned by Chinese government related entities.

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       The PLA has direct control over two ZHONGXING-20 communication satellites, launched in
       2000 and November 2003. These are believed to be based on the domestic DFH-3 comsat, built in
       cooperation with Germany's DASA. These will be succeeded by the DFH-4 built in cooperation
       with France's Alcatel. The DFH-4 will have 52 C and Ku-band transponders. In addition the PLA
       has regular access to many of the 12 or so foreign-made satellites launched by China but owned by
       Chinese government related entities.

       In the future China will use micro and nano-satellites for surveillance, communication and space
       combat missions. China launched its first 50 kg TSINGHUA-1 micro-satellite in 2000. This was
       the direct result of a 1998 co-development program between Tsinghua University and Britain's
       Surrey Space Systems. Then, on 18 April 2004, China launched its first nano-satellite, the 55 lb
       NAXING, or NS-1. As in the US and elsewhere, China is studying the development of nano-
       satellite constellation to perform military missions. In late 2004 a DFH official revealed that his
       company, not Tsinghua University, will take the lead in developing operational micro and Nano
       satellites. DFH is now marketing a 65 kg microsat for surveillance missions.

       Satellites and unmanned vehicles will also figure prominently in China's space exploration
       program. In 2007 China says it will launch its Chang'e 1 Moon observation satellite. This will
       survey the Moon to select landing sites for an unmanned Moon exploration mission that could
       occur by 2010. At the 2004 Zhuhai air show China's space pavilion featured illustrations of an
       unmanned rover exiting a lander on the Moon, while other illustrations showed what appeared to
       be a Moon sample return vehicle lifting off of the Moon surface.

       Manned program

       In early 2002 former President Jiang Zemin personally credited then PLA GAD Director Cao
       Gangchuan with leadership of China's manned space program. This was a clear admission that
       China's manned space program was under complete control of the PLA. The current manned space
       program commander is General Chen Bingde, Director of the General Armament Department.

       China's first manned mission into space was completed successfully on 16 October 2003 when the
       descent capsule with astronaut Yang Liwei on board returned to earth in Inner Mongolia. While
       the safe return of the descent capsule marked a significant achievement for China, the other section
       of the Shenzou-5 spacecraft, the orbital module, is important for China's long-term efforts to use
       space for military intelligence gathering. The Shenzhou spacecraft manufactured by the Shanghai
       Academy of Spaceflight Technology (SAST) under Project 921-1 for China's manned space
       program currently provides a substantial electronic intelligence (ELINT) and image gathering

       The three Shenzhou orbital modules launched since January 2001 were each operational for about
       eight months - hence providing a sustained coverage of electronic transmissions within their
       purview for about two-thirds of the time over the 2000-03 period. That said, the coverage of the
       Shenzhou modules is severely truncated by their relatively low altitudes and inclinations. At
       altitudes of around 350 km, even with some over-the-horizon ability, the ELINT receivers could
       not detect emissions from Russia or northern Japan, although the countries around China's western
       and southern borders, as well as Taiwan, could be thoroughly logged.

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       The Shenzhou spacecraft, including the autonomous orbital modules, were controlled from the
       Beijing Aerospace Command and Control Centre (BACC), which received an enormous amount of
       mission operation data from the long-duration modules, and the Xian Satellite Control Centre
       (XSCC) at Weinan, which also received data from them. The tracking stations at Qingdao, Xiamen
       and Kashi also tracked the modules. The Kashi station, because of its extreme western location,
       has played an especially important role in tracking and supporting the Shenzhou vehicles. The
       signals intelligence (SIGINT) complex at Kashi would have been the first recipient of any ELINT
       mission data collected by the Shenzhou orbital modules, both to clear the tape recordings and to
       process the data for any time-urgent intelligence. The missions involving the Shenzhou-4 and 5
       orbital modules carried optical reconnaissance cameras. The camera on the Shenzhou-5 reportedly
       had a ground resolution of 1.6 m, and while the configuration of the forward end of the orbital
       module is different from that of its predecessors, ELINT equipment could be carried elsewhere in
       the module.

       Shenzhou-6 was launched in October 2005, and featured a crew of two in a mission lasting about
       five days. Chinese sources indicate that the Shenzhou 6 orbital module was equipped with a large
       electro-optical camera, but lacked the external camera seen on Shenzhou 5, most likely to
       compensate for the weight penalty of a second crew member. In early 2006 Chinese officials
       outlined their plans for future Shenzhou missions. In 2007 Shenzhou 7 will feature China's first

       Then in 2010 there will be three missions in rapid succession. Shenzhou 8 will be a small space
       laboratory with two docking ports. The unmanned Shenzhou 9 will be launched soon after and
       dock with Shenzhou 8 to provide supplies and an emergency return capsule. Shenzhou 10 will then
       take a crew to the Shenzhou 8/9 space laboratory. Artist projections exhibited by the China
       Aerospace Company show the space lab being a single cylinder the size of a combined Shenzhou
       orbital module, crew capsule and service module. Then by 2011 to 2012 a second "space station"
       will be launched. The size of this space station is unknown but an earlier configuration revealed in
       Hannover in 2002 showed multiple habitation modules linked together. China also plans an
       ambitious unmanned Moon exploration program, with a mapping probe to be sent in 2007, and an
       unmanned return of Moon samples by 2020. Chinese officials have also noted that a manned moon
       mission may have to wait for 15 years due to financial constraints. Nevertheless, mid-2006 reports
       indicated that Russia and China might cooperate in future Moon and Mars exploration missions.
       Here it is possible that China may benefit from Russian planetary exploration technologies, such as
       those developed by the Lovochkin concern.

       China's willingness to combine civilian and military functions has been demonstrated by all
       Shenzhou missions through 2005. This sets a precedent, inasmuch as the PLA controls China's
       manned space program, that future manned Shenzhou missions and eventual permanent manned
       space stations may also perform some military missions. This also raises the prospect of future
       Chinese manned missions tasked to conduct defensive and offensive space combat missions. This
       is interesting in that the US planned for but did not launch a manned military space station, while
       the former Soviet Union developed extensive plans but eventually abandoned manned military
       stations in favor of unmanned military space platforms. It is possible that China has reached an
       opposite conclusion about the utility of a manned military space presence.

       Future SIGINT/ELINT Satellites

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       The most recent US geostationary SIGINT satellites, the Advanced Orions, have primary intercept
       antennae more than 100 m in diameter and are estimated to cost USD1.5 billion to manufacture
       and place into orbit. While China has neither the technical capacity nor the fiscal resources to build
       and maintain such systems, it will soon be able to produce SIGINT satellites with antennae of a
       few tens of meters in diameter, similar to the first US Rhyolites of the 1970s. Telecommunications
       satellites with fairly large antennae (10 to 15 m diameters) have become available on the
       international commercial market, affording Chinese engineers and technicians access to the
       technology and the potential to use the satellites themselves for intercepting particular sorts of

       These possibilities were evident in concerns expressed in Washington in the late 1990s when a
       Chinese consortium of official aerospace and telecommunications agencies (including the China
       Satellite Launch and Tracking Control Authority) attempted to procure two Asia Pacific Mobile
       Telecommunications (APMT) satellites from Hughes Space & Communications in California. In
       1996, the consortium contracted with Hughes for the two HS-702 satellites (one spare), which
       were based on the HS-601 design, and supporting ground facilities, at a cost of USD650 million.
       The HS-702 satellites were to provide a satellite-based mobile phone system capable of handling
       16,000 voice circuits simultaneously over some 22 countries, from Pakistan in the west to Japan in
       the north, and from northern China, south to Indonesia. However, critics argued that this would
       allow Chinese authorities to intercept the mobile phone calls of all APMT users across the region.
       In a memorandum on 7 July 1998, a US defense official noted that "the Chinese sought
       configurations on the APMT satellite that would allow for eavesdropping", that "the APMT
       satellite would give the Chinese military access to telephone intercepts in [some] 20 Asian
       countries", and that the People's Liberation Army (PLA) "will be able to intercept business
       transactions" and use the information for "economic advantage".

       These matters were investigated by the Cox Committee, which was set up by the US Congress on
       18 June 1998 to conduct a full and complete inquiry into a plethora of allegations about Chinese
       espionage in the US and the 'theft' of US nuclear, missile and space technologies, and produced a
       top-secret report for Congress on 3 January 1999. A declassified version was released on 25 May
       1999, which reported that: "Unlike previous communications satellites this satellite uses a very
       large antenna array, which has raised concerns that the satellite could be used not simply for
       telecommunications, but also for space-based signals intelligence (SIGINT) collection." This
       would give the PRC the capability to eavesdrop electronically on conversations not only in the
       PRC, but also in neighboring countries. The 40-foot antenna, which uses a truss-like outer ring and
       mesh reflector surface, is the unique aspect of the APMT satellite design. It has led to concerns
       that the PRC could use the APMT satellite for signals intelligence collection against a wide
       spectrum of communications.

       The report also noted the concern about Chinese exploitation of the technology for indigenous
       SIGINT satellite development: "Yet another concern with proposed APMT sale is that it could
       help the PRC learn about the deployment of large antenna structures. This could assist the PRC in
       the development of future [electronic] reconnaissance satellites. Mechanisms used to deploy large
       antenna systems have been protected from PRC scrutiny in the past. Visual access to the satellite,
       as well as the risk of unauthorized discussion with engineers could give the PRC access to this
       sensitive technology for the first time. Since the APMT satellite's antenna array is significantly

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       larger than any that has been provided to the PRC by any Western nation, it is likely that the PRC
       would seek to exploit the APMT design for a future PRC SIGINT satellite." In February 1999, the
       US Department of State formally denied Hughes Space & Communications an export license for
       the APMT satellites, and the contract was cancelled. However, China has continued to seek similar
       telecommunications satellites from European manufacturers, and is likely to eventually acquire
       geostationary satellites with secondary capabilities for intercepting not only mobile phone calls,
       but other telecommunications using these services.

       China has experimented with several different sorts of ELINT spacecraft and satellite
       configurations, including single, dedicated ELINT satellites, small doublets and triplets, and
       ELINT packages on large multi-mission satellites. It is likely that ELINT packages have been
       deployed aboard some photographic intelligence (PHOTINT), communications and 'experimental
       technology' satellites, as well as the Shenzhou spacecraft developed for China's manned space
       program. Since the mid-1990s, there have been several indications that the SAST has a new
       ELINT satellite development program under way, possibly with the Southwest China Research
       Institute of Electronic Equipment developing the ELINT receivers for installation aboard the
       satellites. The SWIEE produces ELINT pods and associated equipment for larger ELINT aircraft.

       The development, coordination and operational management of China's intelligence satellite
       programs is carried out by the Central Military Commission's General Armament Department
       (GAD). The GAD was formed in April 1998 to provide comprehensive management of the
       People's Liberation Army's (PLA) equipment programs, from research and development through
       production and logistical support. It was created largely by the incorporation of large parts of other
       military and non-military organizations, especially the General Staff Department's Equipment
       Bureau and the military-related functions and assets of the Commission of Science, Technology
       and Industry for National Defense (COSTIND), including all the missile test and satellite launch
       and tracking facilities formerly managed by COSTIND. The inaugural head was General Cao
       Gangchuan, who had been director of COSTIND from November 1996 to April 1998 and had
       presided over its dismemberment, and who had previously been First Deputy Chief of the General
       Staff (1992-96) with overall responsibility for PLA equipment and weaponry. Much of his career
       had been devoted to modernization of the PLA and its acquisition processes, including
       involvement in China's military space program.

       GAD has a close, if not smooth, working relationship with the General Staff Department (GSD).
       The Service Arms Department, which remains in the GSD, determines equipment and technical
       requirements that are then issued as directives to the GAD. The GSD's Third (SIGINT) and Fourth
       (EW) Departments work with the GAD's Department of Electronics and Information concerning
       signals intelligence and electronic warfare capability requirements and technical options and with
       the China Satellite Launch and Tracking Control Authority with regard to the operation and
       tasking of space-based ELINT systems. These GAD departments also work closely with the
       Shanghai Academy of Spaceflight Technology (SAST) and the SWIEE regarding the design,
       development and production of military intelligence satellites and ELINT collection systems.

       The GAD also maintains a working relationship that COSTIND, which is actively involved in the
       acquisition of advanced aerospace and information technology from the West, including
       technology relating to space-based ELINT systems. The central control station for China's
       intelligence satellites is the Xian Satellite Monitor and Control Centre (XSCC), also known as

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Base 26, which is located at Weinan, some 60 km northeast of Xian, in Shaanxi province. In
       addition, the Beijing Aerospace Command and Control Centre (BACC) was constructed in 1994-
       97 specifically to support the manned space program (Project 921), including the Shenzhou
       spacecraft and their intelligence-collection activities. Nine tracking, telemetry and control stations
       are located at various sites including: Weinan, which was built in 1972 and is part of the XSCC
       complex; Changchun, in Jilin province, which is the only space-tracking station located in the
       northeast of China; Kashi, in Xinjiang, which was commissioned in the 1960s and is also called
       the 'No.1' station because it is the first to detect satellites approaching China from the west;
       Nanning, in Guangxi, built in 1967, and used to support international satellite networks; Qingdao,
       in Shandong, built in the early 1990s, mainly for the manned space program; Guiyang; Minxi, in
       Fujian; Xiamen, in Fujian; and Yilan.

       The station at Base 26 also has a control element from the Strategic Missile Forces that is
       responsible for strategic early warning. This element works closely with the Third Department's
       SIGINT station at Lanzhou, which has the responsibility for strategic early warning against
       Russian missile attack by monitoring signal traffic associated with the missile launch sites. The
       design, development and production of China's ELINT satellite systems has been undertaken at the
       Shanghai Academy of Spaceflight Technology (SAST), a research and production complex
       headquartered in Shanghai, which employs some 30,000 people in 17 institutes and 11 factories
       that produce rockets, satellites and tactical missile systems. Also known as the Eighth Academy,
       the SAST was established in 1961 as Shanghai No. 2 Bureau, and was later called the Shanghai
       Bureau of Astronautics, before being redesignated SAST in 1993. Its institutes include the
       Shanghai Institute of Power Machinery, which produced the launch vehicles for the ELINT
       satellite programs in 1975-91; the Shanghai Institute of Satellite Engineering, also known as the
       509th Research Institute, which has designed and produced the ELINT satellites, has more than
       600 personnel, and the Shanghai Xinwei Electronic Equipment Research Institute, also known as
       the 809th Institute, and which is involved in the development and production of military space

       Anti-Satellite Programs

       Since 1998 the Pentagon has stated that the PLA may have the ability to damage low-Earth orbit
       satellites with ground-based lasers, while in September 2005, a US government source stated that
       China had also "jammed" satellites. In 2000 China began to reveal that it was gathering the
       potential to make a direct-assent anti-satellite (ASAT) system. That year it revealed its KT-1 solid-
       fuel mobile low-Earth orbit space launch vehicle and launched its first 50 kg micro-satellite, the
       Tsinghua-1. Then, in 2002, China revealed that the four-stage KT-1 was based on the DF-21
       MRBM, and it was successfully launched for the first time in September 2003. By late 2004 the
       KT-1 had undertaken three test launches. In 2002 China revealed that it was also developing the
       KT-2 and KT-2A mobile solid-fuel space launch vehicles, based respectively on the DF-31 ICBM
       and the DF-31A ICBM. The KT-2 and KT-2A are intended to launch micro and nano-satellites
       into geosynchronous and polar orbits. The KT-2A can carry up to three 50 kg payloads. Some
       sources are adamant that these are both legitimate space launch vehicles directed at an emerging
       market, but are also going to be used to launch future micro and nano-satellite-based ASATs. The
       reason to build a mobile space launch system is to have the ability to anticipate the orbital track of
       target satellite and launch a surprise strike, rather than wait for it to come within reach of existing
       fixed launch sites.

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Source: Jane's Information Group

                C. Procurement

       Defense Equipment Requirements

       In March 2006 a spokesman for the National People's Congress stated that China's defense budget
       in 2006 would increase by 14.7 per cent, up from 12.6 per cent the previous year, continuing a 15
       year trend of double-digit defense spending increases. The official figure of approximately USD35
       billion is more than double the official figure of 2000. However, most analysts contend the official
       Chinese figure vastly under-reports the real level of Chinese defense spending. A 2005 US DoD
       report on the People's Liberation Army (PLA) says, "According to some estimates, the official
       budget does not include foreign weapons procurement (up to USD3 billion annually from Russia
       alone), expenses for the paramilitary People's Armed Police, funding to support nuclear weapon
       stockpiles and the Second Artillery, subsidies to defense industries, some defense research and
       development, and local, provincial, or regional contributions to the armed forces." The Pentagon
       contends that real spending could be "two to three times the publicly available figure" or "up to
       USD105 billion in 2006, making China the third largest defense spender in the world after the
       United States and Russia, and the largest in Asia."

       The drive to modernize

       The real catalyst for a rapid process of modernization came in the 1990s with the US's
       unexpectedly (to the PLA) swift successes in the 1991 Gulf War and subsequent conflicts,
       demonstrating the reality and efficacy of the 'Revolution in Military Affairs' (RMA). In response,
       the PLA's emphasis changed in around 1994 from mass mobilization to fighting limited wars in
       high-technology conditions according to a doctrine termed the 'War-Zone Campaign', which is
       aimed at securing a political victory rather than gaining territory. This emphasis on political over
       military ends is a common thread in Chinese strategic thinking: questionable military actions such
       as Korea and Vietnam are regarded as successes in China because they achieved the desired
       political goals. To put the enemy decision-makers under pressure to back down, the War-Zone
       Campaign concept emphasizes the use of Special Forces to disrupt enemy build up, the gaining of
       the initiative through pre-emptive strikes, and fighting a quick battle with mobile formations to
       force a rapid solution.

       Another key factor in inducing change was the 1996 missile crisis in the Taiwan Strait, during
       which the US sent two carrier battle groups into the area. Together with the RMA, this
       demonstrated both that the PLA should expect to deal with the US military in any operation to
       regain the island and that it would not be able to. This galvanized the PLA into its current
       emphasis on technological catch-up, and the process was given a certain assurance of progress by
       the decision to purchase major armaments systems from Russia. These included Sovremenny
       destroyers with their Sunburn anti-ship missiles; 194 imported Su-27/30 'Flanker' fighter aircraft
       (with 100-200 licensed for domestic production); the S-300 anti-aircraft missile; and Kilo-class
       submarines. A PLA source described these Russian systems as a "stop-gap", and these purchases
       have been backed up by the development of new domestic systems in each field. These include the
       four Luyang (052B/C-class) air defense destroyers, the J-10 fighter aircraft, and the Song-A-class
       submarines. Many of the key systems, even on this domestic equipment, are imported and China's

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       defense industry has had problems in developing many key military technologies. This, however,
       is viewed as a step towards the ability to make complete and innovative military systems.
       Nonetheless, China is now showing greater competence in making essential high-tech subsystems
       like turbofan engines, many varieties of radar, and new self-guiding weapons.

       Such developments are seen as retrograde by some within the PLA, who feel this path to
       modernization dooms the PLA to playing catch-up with a target that has already shifted. The
       alternative approach stresses the importance of the RMA, and demands attention be paid to more
       radical approaches. It suggests that China both needs to - and has the opportunity to - leap-frog
       such intermediate solutions by emphasizing battlefield networking; information warfare, such as
       computer viruses; 'acupuncture warfare' through the acquisition of precision strike capacity for
       attacks on an enemy's C4I; and other means of combating a more powerful foe. Unrestricted
       Warfare, an influential study by two PLA senior colonels published in 1999 warned of the danger
       of the "hi-tech weapons trap" that the US finds itself in, as systems grow arithmetically more
       expensive. They argued that the only escape is the development of "new concept weapons", such
       as the engineering of stock-market crashes and other ways in which "people will awake to find
       quite few gentle and kind things have begun to have offensive and lethal characteristics".

       998 State Security Project

       But such aspirations may be more than rhetoric. Following the shock of the May 1999 US
       bombing of the Chinese Embassy in Belgrade, combined with the deteriorating political
       relationship with Washington over spy scandals and then tough rhetoric by the Administration of
       George W Bush. President Jiang Zemin began to call for the "transformation" of the PLA. In
       connection with this, Jiang and then other military leaders began to call for "shashaojian" weapons,
       or new secret weapons that when used with innovative tactics, and directed against specific
       weaknesses, can accelerate the enemy's capitulation. After 1995 this ambition was turned into a
       new high-tech weapons development program, known as the 998 State Security Project. This was
       modeled after the successful "863 Program" military high-technology development program.
       While very secret by design, the 998 Project is said by some sources to be used for funding
       weapons programs ranging from new missiles to cyber, rail-gun, energy and space weapons.

       It is also possible these represent the development of multiple and competing strands of opinion
       within the military establishment. There remain factions in favor of each of these basic positions of
       People's War, Local War, and innovative hi-tech conflict. The question remains whether there is
       any sense in which these positions can be reconciled or whether they actually conflict. Certainly, if
       there is a belief that an enemy needs to be kept out of China with hi-tech pre-emptive strikes,
       diverting resources into equipment and planning to fight a People's War in China's vast hinterland
       will undermine the potential of that capacity, and vice versa. However, if in practical terms China
       cannot afford to fully modernize its entire military, and the prospect of demobilizing vast parts of
       the PLA is politically unacceptable, then maintaining a capacity to fight a People's War does retain
       a deterrent effect. In practice, the PLA is developing an elite core of more modern units to give it
       the flexibility and experience to act in a range of more likely circumstances, but whether this 'core'
       idea is acceptable within the PLA is another matter. Senior PLA officers have indicated that the
       idea is to develop "pockets of excellence", best practices in selected units that will migrate to the
       rest of China's armed forces. However, the Chinese economy is still closer in size to second tier
       NATO countries such as the UK and Germany in dollar terms, than to the US. It therefore seems

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       more rational and likely to see China developing a core modernized military of that scale in the
       short to medium term, and to judge its progress on that level rather than on the whole of the PLA.

       However, as long as the issue of Taiwan persists, Beijing will have to prepare to fight a possible
       conflict with the US and in many ways this distorts PLA planning. Taiwan is a special case, and
       the planning is aimed more at acquiring credible capabilities that would deter a Taiwan declaration
       of "independence" and dissuade US intervention. But increasingly Beijing also realized that
       credible deterrence requires the ability to invade Taiwan, and has devoted greater resources to
       building Army Amphibious, Marine and Airborne units. While the prospect of invading Taiwan
       remains daunting, Beijing also has many options short of invasion, from the retaking of Taipei-
       controlled islands just off the mainland coast, to different levels of blockade, to missile-strikes.
       Taiwan's geography, with shallow tidal flats on the accessible western side and cliffs to the east
       adds to an invader's problems, as does the wide and stormy strait itself. Taiwan's powerful military
       would make the successful establishment of a beachhead very difficult, even without US support.
       Tensions were heightened in 2003 over Taiwan's referendum on China's deployment of 496
       ballistic missiles in range of the island. Lin Chong-ping, Taiwan's Deputy Minister of National
       Defense said, on 9 January 2003 that the PLA may surpass the Taiwan military between 2005 and
       2008, but that it would not have sufficient edge to be confident of success until 2010 to 2015. He
       said that Taiwan's military could still deliver a body-blow to invading troops.

       Nevertheless, China is making a serious investment in new amphibious capabilities. Some sources
       indicate that the PLA is very interested in novel invasion techniques such as specialized temporary
       landing docks designed to overcome Taiwan's unique terrain obstacles. China is also expected to
       rapidly mobilize many civilian assets to assist an invasion, ranging from hundreds of civil fast
       ferries to large Roll-On-Roll-Off cargo ships. The Army is improving the ability of many of its
       Nanjing- and Guangzhou-based amphibious mission divisions by producing hundreds of Type 63A
       105 mm gun and gun-launched missile armed amphibious tanks, and new Type 63C amphibious
       APCs. The PLA Navy is now building up to 15 new LST/LSMs and may be building its first LDH
       style amphibious assault ship, complete with a new US LCAC-style transport hovercraft.

       Creating a balance

       Traditionally, the PLA has been dominated by its land forces, and part of the goal of
       modernization is to adjust the ratio between the three services by enhancing the PLAN and the
       PLAAF. A PLAN source said that the modernization process includes updating the nuclear
       strategic deterrent to maintain an effective minimal and purely retaliatory strike capacity, but that
       the main goal was to achieve a "balanced conventional operational capability". The 2004 ascension
       of the commanders of the PLA Navy, PLA Air Force and the Second Artillery to the Central
       Military Commission make clear the PLA's new commitment to such a balance.

       The most profound new direction in both PLA doctrine and procurement has been the drive for
       "informationalization," or, simply put, the intense application of all manner of information
       technology to leverage better capabilities across the PLA. This is seen in the PLA's purchase of at
       least two military-dedicated communication satellites, the development of new electro-optical and
       radar surveillance satellites and its intention to launch a Chinese navigation satellite network in the
       next decade, despite having paid dearly to join the European Galileo navsat system. There is
       intense research into all manner of radar technologies, with the development of large active phased

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       arrays for naval use and the recent revealing of new passive radar similar to the Ukrainian
       Kolchuga. There are several AWACS, ELINT/SIGINT and command/control aircraft programs,
       while the PLA Navy is building new ELINT/SIGINT ships. There has been an intense effort to
       intimately link the PLA via broadband internet and new redundant high-frequency communication
       systems. Digital communication and image transfer systems are also being developed for soldiers.

       The PLAN is developing the ability to support amphibious projection to Taiwan and to be able to
       operate at the far reaches of China's South China Sea claims. Production of Type 093 SSNs is
       underway, while new "Yuan" class SSKs have joined about a dozen Song-A SSK, in addition to
       Kilo SSKs purchased from Russia. China has invested in Russian Sukhoi Su-30 strike fighters that
       can be refueled for long endurance and has increased the self-defense capability of its fleet. New
       ships, either in service or to be commissioned in the next couple of years, include four new air-
       defense destroyers (the Luyang II's have a phased array radar and new vertically launched SAMs);
       four Sovremennys; three Luhu/Luhai destroyers; and series production of the 054 class stealthy
       frigates. While 2005 saw China take more active steps toward the acquisition of aircraft carriers.
       Toward the end of the decade a limited non-nuclear naval power projection capability will be
       enabled by new long-range land-attack cruise missiles on the Type 093 SSN.

       The PLAAF has also been on a slimming regime, with the number of fighter aircraft falling
       substantially in the last decade. It appears that most of the older MiG-17/19-based J-6s have been
       retired, leaving a frontline fleet of around 170 Su-27/30, and approximately 1,000 units of the
       more recent versions of J-7s and J-8s. There are about 300 Chengdu J-7Es, the latest generation
       MiG-21 derived fighter, and the latest helmet sighted AAM equipped J-7G is entering service.
       Approximately 250 Shenyang J-8IIs are in use, and the latest J-8H features new radar, engines and

       There are now three regiments, about 60 of the JH-7 (known as the FBC-1 for export) fighter
       bombers, with PLA Naval Aviation in the anti-ship strike role. The JH-7A, enhanced with new
       radar and engines, entered production in 2003-2004 and will be used by the PLA navy and the Air
       Force. The 400 examples of the Q5 are optimized for ground attack/close-air support: they are
       aged, but have been the subject of ongoing development and upgrades, including laser-targeting
       ability. A twin-seat Q-5, called the Q-5J, was revealed in late 2004 and is believed to form the
       basis for a new PGM-armed version of the Q-5. Though woefully obsolete, the H-6 has resumed
       production, with most assumed to carry new cruise missiles and perhaps PGMs, and 10 examples
       have been converted to the tanker role. During 2005, up to 50 of the advanced multi-role canard-
       delta J-10s will be built. The Chinese aircraft industry has recently developed two similar
       lightweight fighters, the F-7MF and (with Pakistan) the Super-7/FC-1. It is growing more likely
       that the PLA will purchase some number of the latter. There are also two, maybe three, fifth
       generation fighter programs, an F-15-sized stealthy fighter by Shenyang, a large twin-engine
       canard delta by Chengdu, and perhaps a F-35 class fighter by Chengdu.

       Despite their political importance, Taiwan and North Korea scenarios are not the only focus for the
       military modernization process; other missions on China's borders or involving Tibet and Xinjiang,
       which are less dependent on hi-tech military equipment, are more the kinds of scenarios driving
       the planning for Local Wars. The emphasis here is on the development of Rapid Reaction Units
       (RRU) which will account for around 10 to 15 per cent of the PLA's strength. The War-Zone
       Campaign concept requires mobility, which remains a PLA weakness, but steps are being taken to

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       address this. One of these is the loosening of the existing Military Region structure, with the best
       units from each region being made available for trans-regional support operations and falling under
       the military commander of the war zone rather than the regional command. In order to generate
       this degree of mobility there is a process of adjustment of the basic unit size within the PLA. Some
       RRUs are divisional in scale, but increasingly they are brigade (around 6,000 men) or even
       battalion size. The aim is to give such units organic self-sufficiency in all the arms they need.

       Unconfirmed information published on Chinese internet sites has given the make-up of such
       independent brigades as follows: four tank battalions with 31 tanks each; one mechanized infantry
       battalion with 40 armored personal carriers; one artillery battalion with 18 self-propelled guns; and
       one anti-aircraft battalion with 18 self-propelled anti-aircraft guns. There are also specialist
       artillery and anti-aircraft RRU brigades. Also key to the War-Zone Campaign concept is the
       PLAAF's 15th airborne corps, with three divisions numbering 35,000 troops. This strategic force
       would be used for the kind of disruptive deep strikes the War-Zone Campaign doctrine calls for.

       Several sources note that the PLA intends to build a second Airborne Army, the 16th. The PLA is
       also buying 30 more Ilyushin Il-76 heavy transports in addition to about 20 to 25 already in
       service. Some reports indicate that the PLA purchased a small number of Russian BMD airborne
       tanks in the mid-1990s. But in early 2005, Chinese sources revealed that Russia priced itself out of
       a BMD co-production deal, forcing the PLA into a five-year development program for a new
       family of 10-tonne airmobile tanks. Airborne units are now receiving co-produced Italian IVECO
       light trucks armed with the new HJ-9 ATGM.

       Army procurement

       China has redressed the 1990s emphasis away from army modernization with a new focus on
       producing tanks, IFVs, a range of lighter armored vehicles for amphibious, airborne and Special
       Forces, while steadily upgrading helicopter, air defense and army logistics equipment. While much
       of the army's equipment remains dated, after this new emphasis during the 10th Five Year Plan, the
       11th FYP (2006-2010) is expected to see greater emphasis on building smaller but more powerful
       mechanized and motorized infantry units. There is also a steady emphasis on seeking to apply new
       information technologies to upgrade older equipment, while spreading new digital and satellite C3I
       connectivity though the force. This emphasis, not to mention the necessary personnel and training
       investments will be expensive for the PLA, but it appears there is sufficient funding.

       Armored Vehicles

       Main Battle Tanks

       In late 2003 it was revealed that a new version of the Type-98 tank had entered production. Called
       the Type 99, it features new arrow-shaped composite turret amour cheeks, similar to the German
       Leopard-2A5. By late 2005, a slightly modified version of the Type 99, without the reloader bulge
       on the turret, and slightly different turret amour began to appear signaling the possibility that
       production has expanded to a second factory. This new version reportedly incorporates a new fire
       control system and a new 1,500 hp engine. This adds to the already impressive capabilities of the
       Type 98, which features a 125 mm main gun that fires co-produced Russian Reflex laser-guided
       missiles. The Type 98 also uses a unique laser device that serves to find enemy optics and attack

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       them with laser pulses, or direct immediate main gun fire on to the target. Chinese sources confirm
       that the emergence of the modified version means that the Type 98/99 is entering a significant
       level of new production. US estimates maintain that by 2005 the PLA will acquire 1,200 of the less
       expensive Type 98/88C main battle tank. Similar in configuration to the Type 98, this tank
       emerged from co-operative tank development programs with Pakistan in the early 1990s. It is
       forming the backbone of many newly modernized mechanized and motorized infantry divisions.

       In 2005 it was revealed that China is testing a modified Type 98/99 main battle tank (MBT) fitted
       with a 140 mm smoothbore gun. If fielded, the latter would constitute the largest MBT armament
       currently deployed. It is not known whether it has an automatic or manual loading system. If the
       latter is true then it will have a crew of four.

       In early 2004 it was reported that the PLA has been upgrading part of its large fleet of Type 59
       Main Battle Tanks (MBTs) to enhance their firepower and battlefield survivability. The latest
       version, the Type 59D (or WZ 120C), is the most ambitious upgrade to date. Based on the Soviet
       T-54 design, the Type 59 is estimated to still make up 70 per cent of the PLA's tank fleet, with
       about 5,000 in service. China North Industries Corporation (NORINCO) has over the years
       developed a number of upgrades for the Type 59, including the installation of a 105 mm NATO-
       standard rifled tank gun and a computerized Fire-Control System (FCS). The baseline upgrade was
       subsequently improved with a thermal sleeve for the 105 mm gun, improved passive amour,
       automatic fire-detection and -suppression system and a new smoke-generating system. The Type
       59D also features explosive-reactive amour (ERA) and is armed with a co-produced version of the
       105 mm Russian Bastion gun-launched laser-guided missile.

       Light Tanks

       In 2004 it was reported that the PLA had upgraded some of its Type 63A amphibious light tanks
       with the addition of an active laser defense system, according to Beijing-based sources. The
       system uses a low-powered laser beam to locate any hostile optics. Once discovered, the laser's
       energy is greatly increased to neutralize these hostile optics and so blind the threat vehicle. It may
       be the same system as fitted on the Type 98 MBT. The PLA is believed to have upgraded about
       100 Type 63As and some reports indicate that up to 500 could eventually be upgraded.

       Armored Personnel Carriers

       After making two sets of prototype 4x and 8x wheeled armored fighting vehicles early in the
       decade, by 2004 the PLA began to equip some army units with its choices. The PTL-05, or
       "Assaulter," a 105mm gun armed version of the WZ551, was revealed in 2003, and was known to
       equip three army units by 2006. This light wheeled tank is able to launch Chinese-produced
       versions of the Russian "Bastion" gun-launched anti-tank missile. A version has been tested with a
       turret based on that of the T-63A, but apparently has not been accepted. Then in mid-2006 it was
       revealed that the PLA was at least testing a new family of 8x wheeled armored vehicles. One
       armed with a 105 gun and similar in shape to the French VECTRA, one with a 122mm howitzer,
       and one designed as a APC. It is not clear whether these vehicles will be acquired in great
       numbers, but do indicate a new PLA interest in more "airmobile" medium-weight amour.

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       In mid 2005 it was reported that the Type 89 family of fully tracked armored personnel carriers
       (APC) has been expanded to at least 9 variants - more than was originally revealed. These include
       an ambulance with a raised rear roof; an anti-tank guided weapon (ATGW) carrier with Red Arrow
       8 missiles; a command post vehicle with raised rear roof; a mine layer; an obstacle-removing
       vehicle with front-mounted dozer blade; a radar carrier with radar mounted on a scissors-type arm
       for increased coverage and range; a reconnaissance vehicle with a roof-mounted surveillance
       package; a recovery vehicle; and a supply vehicle.

       The army is deploying and developing three new amphibious tracked APCs. For several years a
       radical modification of the 1960s vintage Type 63 APC, the Type 63C, has been entering Army
       Amphibious and Marine units. It is simply a Type 63 with two buoyant sections, fore and aft,
       powered by an outboard motor. Two more formal amphibious APCs include one derived from the
       hull of the Type 63A, and an even larger APC revealed in early 2004, which is a more ambitious
       modification of the Type 63 hull. The latter was first revealed as an amphibious combat refueling

       New Infantry Fighting Vehicle (IFV) - Type 97 (also known as ZBD-97)

       In mid-2003 the PLA began to reveal what has grown into a new family of amphibious IFVs,
       sometimes called the ZBD-97. Larger and taller than previous PLA tracked APCs, the ZBD-97 is
       distinguished in that it uses a license-produced version of the 100mm and 30mm gun armed turret
       found on the Russian KBP Instrument Design Bureau's BMP-3. The layout of the ZBD-97 is
       similar to Western vehicles of this type with the driver seated front left, power pack to the right,
       turret in the centre and troop compartment at the rear. The troop compartment at the rear has roof
       hatches and a rapid means of entry and exit. There does not appear to be provision for troops to use
       weapons from within the vehicle. The hull is of all-welded amour construction and it is considered
       probable that an additional layer of passive amour can be added for a higher level of battlefield
       survivability. In 2004 the PLA revealed an amphibious fuel carrying vehicle that can be judged to
       have been based on the ZBD-97, and in mid-2006 it was revealed that a new amour recovery
       vehicle was based on the same chassis.

       WZ 501 Infantry Fighting Vehicle Upgrade

       In July 2006, the ship-to-shore capabilities of the WZ 501 tracked infantry fighting vehicle (IFV),
       which is a reversed-engineered copy of the Soviet-designed BMP-1 were upgraded. The new
       version's amphibious characteristics have been considerably improved with the integration of a
       large outboard motor at the rear of the hull, operated from within the vehicle. The original
       Russian-designed trim vane on the front of the hull has also been replaced with a more substantial
       one that is retracted under the nose of the vehicle when not required. These upgrades give the WZ
       501 an increased maximum water speed of 12 km/h and now allow the vehicle to be launched from
       landing craft offshore in good weather conditions, whereas the original version was limited to
       crossing slow-flowing rivers and lakes.


       Current PLA Army artillery programs are producing more accurate tube and rocket artillery
       systems. Some Army units are receiving the A-100 300 mm MLRS based on the Russian Smersh

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       system. The PLA is also producing its larger WS-1 and WS-1B artillery rockets, the later having a
       range of 180 km. In 2004 it revealed a 200 km range WS-2 as well as the 150km range B611
       battlefield rocket. The later may be developed to a 250km range SRBM. The PLA is interested in
       increasing their accuracy with satellite navigation and UAV target cuing, and in arming them with
       modern fused-sensor munitions. New tube artillery is being produced in more popular 155 mm size
       and the PLA is now producing a unique 155 mm version of the Russian Kitolov laser-guided
       artillery shell. In late 2005 the PLA revealed that it has developed a near copy of the Russian
       MSTA-2S19 large self propelled gun turret, but on a hull based on that used by the PLZ-45.
       Marketed as the PLZ05 it is armed with a 155mm gun. It also appears that the PLA is purchasing
       some WZ511 hulls equipped with a Chinese version of the Russian Nona-SVK 100mm automatic

       Air Defense

       Army air defense units are also being upgraded with some of the very capable Russian TOR-M1
       SAMs, which are capable of intercepting PGMs. Asian sources indicate this missile has recently
       entered co-production in China while Russian sources indicate such a deal remains in negotiations.
       In the late 1990s the Army introduced the Type 95 SPAAG armed with 25 mm AAA and QW-2
       SAMs. There are indications that a new wheeled SPAAG may soon be introduced, possibly
       equipped with the longer-range and faster QW-3 SAM. The Army continues to rely on massed
       AAA for air defense as well. The most modern system includes the Type 90 AAA, a co-produced
       twin 35 mm Swiss Skyguard system with the AHEAD controlled fragmentation round. There also
       appears to be a new effort to equip larger numbers of older AAA, such as 23mm systems, with
       new radar and optical electronic controls. For the future the Louyang Company plans to develop a
       SAM version of its PL-12/SD-10 AAM, following the example of the US AIM-120 "Slaamram".
       At the 2004 Air show China Louyang also revealed a ground-launched version of its TY-90 light-
       weight helicopter AAM. It was mounted on a Shenyang Aircraft Co copy of the US AM General
       Humvee vehicle, along with a small radar. The TY-90 is also marketed in conjunction with twin
       23mm guns and a search radar as the Giant Bow II. CASIC is also marketing new short-range
       SAMs, to include two vehicle mounts for its QW-2 shoulder-launched SAM, and a new more
       capable derivative of the FM-90. At the 2005 IDEX show Norinco revealed two more Army air-
       defense systems; the YITIAN, which places 8 × TY-90 SAMs with an integral radar/EO guidance
       package on a WZ551; and a truck-mounted LD-2000, which is based on the Type 703 naval 30
       mm CIWS.

       Army Aviation

       Attack Helicopter

       The China Helicopter Research and Development Institute (CHRDI) was reported to have started
       testing the WZ-10 advanced attack helicopter in April 2003. Internet-source photos released in
       2005 indicate it will resemble the Eurocopter Tiger and the Agusta A-129 in size and capability,
       and will be armed with the HJ-9 anti-tank missiles.

       In October 2005 it was believed that three development prototypes had been delivered, two of
       which are currently undertaking active flight trials.

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Transport Helicopters

       In late 2004 CHRDI revealed a new six-ton transport helicopter program, the outgrowth of an
       October 2004 co-development program with Eurocopter. Development will be split 50-50 with
       assembly lines to be built in China and France. This program is believed to supersede the transport
       version of the "Z-10" program. A five-year development program will start in 2006 with a first
       flight planned for 2009 and certification by 2011. In addition, the Change Company is producing
       an armed "WZ-11" with a roof-mounted targeting complex and the ability to carry anti-tank
       missiles, plus gun or rocket pods. The PLA Army is also taking delivery of the WZ-9G, the Harbin
       International Aviation Group's latest variant of the Eurocopter Dauphin, but with a chin-mounted
       targeting complex.

       It appears that the PLA Army will remain committed to purchasing additional Russian Mil-17I and
       Mi-17V5/7 transport helicopters from both the Ude-Ulan and Kazan factories, which by early 2006
       are believed to have exceeded 200 in number. In addition, Russia's Rostervertol is heavily
       marketing its unique Mil Mi-26 heavylift helicopter to Chinese military and civil users

       Unmanned Vehicles

       The PLA Army has a significant interest in UAVs and operates numerous company and squad
       level UAV systems that feature programmed flight via laptop control. It remains to be see whether
       the Army or Air Force will control new Predator-1 size UAVs being developed by the Guizhou
       Co. and one other Chinese company. In late 2004 China Aerospace revealed a new soldier-carried
       micro-UAV system that weighs a total of 20 kg for the aircraft, computer and bungee-cord
       launcher. In addition, the PLA appears to be investing in the necessary mobile control and
       command facilities to receive and disseminate UAV-obtained data. The PLA has also
       experimented with unmanned armored vehicles, developing a digital remote control system for a
       tracked APC.


       As per doctrinal goals, the Ground Forces are becoming increasingly "mechanized" with the
       addition of thousands of newer and more capable heavy transport trucks, and new varieties of light
       trucks. There are far more trucks for transporting tanks, and newly designed trucks that load or off-
       load supply pallets, part of the PLA's move toward "precision logistics". Two Chinese companies
       are making copies of the US AM General Humvee and these companies are beginning to market
       them for diverse missions.

       At the same time, the PLA is buying hundreds of new co-produced Italian IVECO light trucks.
       These serve in roles ranging from Airborne ATGM carrier to mobile lethal-injection execution
       vehicles for the PAP. A number have been bought for use as troop transports by the 600-strong
       Chinese contingent operating with the United Nations (UN) peacekeeping force in Liberia. Each is
       equipped with an HF-90 50W HF SSB transceiver coupled to an ML-90 magnetic-loop vehicle
       antenna, produced by Q-MAC Electronics of Australia.


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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       There has been an intense effort to link the PLA intimately via broadband internet and new
       redundant high-frequency communication systems. Digital communication and image transfer
       systems are being developed for soldiers.

       Air Force procurement


       Before the first Gulf War, PLA Air Force leaders realized their service was backward by
       developed world standards. Stigmatized by the Air Force's involvement in the Lin Biao incident,
       and sidelined during the 1979 Vietnam incursion, the PLAAF started the 1990s with very
       ambitious modernization goals. Taking the US Air Force's performance during the first Gulf War
       as an example the PLAAF sought to become an offensive/defensive all-weather combat force. And
       during the 1990s came the added requirement to be increasingly able to conduct air operations both
       independently, and within the context of complex joint-service operations. Most of the 1990s was
       spent beginning to acquire new advanced Russian 4th generation fighters, developing new
       doctrine, tactics, training and logistic support methods, while purging thousands of older 1950s-
       vintage Shenyang J-6 fighters from its inventory. Looking beyond 2010, the PLAAF is now
       looking to fund long-term production of 4th and 4+ generation versions of Shenyang/Sukhoi and
       Chengdu fighters, and to fund development of Shenyang and Chengdu 5th generation designs.
       Another expensive requirement that is looming is the development of large transport aircraft,
       which is tied to the development of competitive commercial airliners. China is reportedly looking
       to Antonov and perhaps Ilyushin to help develop military transports.

       Import of air-lifters

       In September 2005 it was revealed that long-standing negotiations had resulted in a contract for
       China to buy 30 Il-76 transports from Russia. They will augment some 20-25 Il-76MDs already in
       service. The purchase is mainly aimed at supporting a major expansion in the PLAAF's airborne
       troop capabilities. The service is reportedly establishing a new airborne corps that will be located
       in the Nanjing Military Region in eastern China, which is responsible for military operations
       dealing with Taiwan.

       This new air-mobile unit is expected to comprise upwards of three division-sized formations and
       will augment the PLAAF's existing 15th airborne army. However, analysts say that even with the
       doubling of its strategic-lift capabilities, the PLAAF's airlift capabilities will still be limited. They
       estimate that it would require up to 70 Il-76s to transport a single airborne division. Aside from the
       Il-76, the PLAAF has around 50 medium-lift Y-8 and smaller Y-7 and Y-5 transport aircraft.
       Development delays with the Antonov An-70 heavy transport mean that China's initial interest in
       acquiring production rights to build the aircraft remains unfulfilled, but Beijing may yet join
       Russia and Ukraine as a partner in the program.

       The China Aviation Industry Corporation II signed a memorandum of understanding with
       Ukraine's Antonov Aeronautical Science and Technology Complex in August 2003. That called
       for close co-operation in the joint development and production of the An-70, as well as other
       transport aircraft, such as the Y-8F600 and Y-8X. Ukrainian sources have revealed that in
       cooperation with AVIC-2, the Antonov bureau and China's First Aircraft Design Institute have

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       proposed a radical modification of the An-70, that would replace its contra-rotating props with four
       turbofan engines, increase the fuselage length by 5m, to increase cargo capacity to between 50 and
       60 tons. While the PLA supports this program it is not clear that funding will be included in the
       current Five Year Plan.

       A near-term product of this cooperation is the Shaanxi Y-9 revealed in September 2005. It will
       feature an upgraded fuselage design, WJ-6C turboprop engines and new six-blade composite JL-4
       props similar to those made by Dowty. It promises a 25,000 kg normal and 30,000 kg maximum
       payload, a 50 percent increase over the Y-8, and 12 hour endurance. In addition, Shaanxi and
       Antonov are exploring co-production of the An-124 mega transport in China, or China may instead
       support revived production in the Ukraine.


       Since the end of the Cold War, there have been more research and development activities into
       fighter aircraft in China than anywhere else in the world. There are now at least 16 active purchase,
       co-production, production or development programs for combat aircraft and combat helicopters in
       China. China is now set to acquire over 300 Su-27/Su-30/J11 fighters as it begins production of the
       Chengdu J-10 multi-role fighter, Chendgu FC-1 and the Xian JH-7A strike fighter, while it
       continues production of the Chengdu J-7G and the Shenyang J-8H, upgrades the Nanchang Q-5
       close-support fighter, and allows Shenyang and Chengdu to pursue 5th generation fighter
       programs. At the same time, Xian has resumed production of the H-6 bomber, while Guizhou
       pursues its new LFC-16 strike fighter.

       The most successful PLAAF modernization program over the last decade has been the acquisition
       of the Russian Sukhoi Su-27/Su-30 series. This fighter equips about 11 PLAAF regiments and will
       continue as an active program well into the future. By 2003 the PLAAF had acquired 76 Su-
       30MKK strike fighters, which prompted the PLA leadership to buy Su-30MKK2s for the PLA
       Naval Air Forces. Some sources suggest that the PLAAF would like to update all of its Su-
       30MKKs to MKK2 standard. These constituted the PLA's first world-class all-weather strike

       The most important component of the PLA's cooperation with Sukhoi is its Su-27 co-production
       program with the Shenyang Aircraft Company for the J-11, which in 2004 halted at the crossroad
       of continuing to rely on KnAAPO built kits and successive Sukhoi designed modifications, or
       relying increasingly on Chinese-produced components with Sukhoi taking an ever diminishing
       role. In late 2004 the Russian media revealed that earlier that year KnAAPO kit shipments to
       Shenyang had halted at 105 out of 200 stipulated in the original 1996 co-production contract. The
       Russians hope that their ability to produce better modifications faster than China, plus continued
       Chinese problems with some components, especially engines, will bring Shenyang back. However,
       the PLA has already invested heavily in new radar and the WS-10A turbofan for its "indigenized"
       J-11 and is unlikely to accept a position subordinate to Russia. By mid 2005 there appeared to be
       no resolution of this standoff, but in early 2006 reports out of China stated that the WS-10A had
       achieved a new level of certification, and may also be in production, augers well for a resumption
       of J-11 production

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Meanwhile, Shenyang's J-8II program may feature yet another version, the J-8H. This version may
       also be multi-role, with a multi-mode radar and a nose-mounted IRST. It may also use the more
       powerful Kunlun-II turbojet. It appears that some J-8s will be modified to fire the new Louyang
       PL-12 active-guided AAM. However, reports in late 2004 indicate that Shenyang may have
       curtailed production of the J-8II fighter.

       After spending most of the 1990s as a program in doubt, by the end of the 1990s the Chengdu J-10
       had gained the momentum it has long cherished. In early 2004 there were reports that Chengdu
       was making room for a second production line by moving its J-7 line to the Guizhou Aircraft
       Company, however, Chengdu sources deny this has happened. Russian sources now estimate that
       1,200 J-10s will be made over its life time. A twin-seat prototype was produced in late 2003 that
       could form the basis for a dedicated attack version. Chengdu sources note that a J-10 with an
       indigenous engine will emerge soon, and they note that advanced versions of the J-10 are already
       in development. Russian sources note that China is interested in axisymetric thrust vectoring for a
       naval variant of the J-10, but the PLAAF may also be tempted to acquire some of these too,
       perhaps to focus on advanced air combat development. In June 2006 reports from Pakistan
       indicated the government had committed to purchase 36 J-10 fighters at a future date, marking the
       first potential sale for this fighter.

       Chengdu is meeting success with its co-operative program with Pakistan to develop the FC-1/JF-
       17 multi-role lightweight fighter. Up to 150 are to be built for Pakistan, and it is also being
       marketed to Egypt, Iran, Zimbabwe, and Venezuela. In September 2005 it was revealed that flight
       testing had exhibited engine intake and stability problems that resulted in design adjustments to the
       engine intakes and wings that led to a modified 4th prototype that flew at the end of April 2006.
       This version will also test a Chinese-developed radar, glass cockpit and defensive electronics suite.
       In late 2004 Pakistani officials revealed they would equip its initial JF-17 batch with entirely
       Chinese-produced radar and avionics, giving credence to Chengdu claims there is now PLA
       interest in the FC-1. Before there was little interest due to the FC-1's reliance on a Russian RD-93
       engine and foreign electronics. But PLA attitudes may be evolving as a contract for 100 new RD-
       93 engines was signed in mid-2005, with Russian reports indicating this could grow to 500, with
       other reports noting China was meeting with success in co-producing the RD-93, to be called the
       WS-13. This news once again appears to dampen prospects for Chengdu's J-7MF, which combines
       front-fuselage features of the J-10 with a J-7E airframe powered by the Kunlun II turbojet. But
       meanwhile production of the latest version of the J-7, the J-7G, continues. Derived from the J-7PG
       program for Pakistan, Chengdu claims the J-7G can fire a helmet-sighted AAM.

       The Xian Aircraft Co's modified JH-7A twin-seat strike fighter is now entering production, after
       Xian has produced about 40 JH-7s, which now equip two PLANAF regiments. Other sources
       maintain the PLA Navy may buy three to four operational JH-7/JH-7A regiments. In early 2004
       this program received high-level government support in the form of a factory visit by Communist
       Party Secretary General Hu Jintao. Revealed in late 2000, the JH-7A incorporates the now co-
       produced modified Spey turbofan, called the QinLing, makes greater use of composites in the
       airframe, and has an upgraded radar and electronic systems to handle new weapons like the Kh-31
       and laser guided bombs. Some sources have estimated that up to 150 new version JH-7s would be
       produced once the engine source was solved. A 2004 revelation that the PLA Air Force will start
       buying JH-7As was a major boost for this program. Subsequent reports indicate that the PLAAF

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       has priority for new JH-7A production, and that current annual production of 15 could be doubled
       if engine production of 30 annually is also doubled.

       China lacks a modern close-in support aircraft though the Nanchang Company did have a proposal
       to make the Q-6, which bore a close resemblance to the MiG-23. Nanchang has modified some Q-
       5s for dropping laser guided bombs, which have been purchased from Russia, and very likely are
       being co-produced in China. There are occasional suggestions that the PLA is interested in
       purchasing a number of Sukhoi Su-25 FROGFOOT ground-attack fighters, with some sources
       indicating that Chinese officials inspected some Russian Su-25s in 2003. In late 2004 the Hongdu
       Aircraft Co revealed its JQ-5J, a twin seat version of the Q-5 that may feature new Ukrainian
       Progress AI-222-25F afterburning turbofan plus new cockpit and sensor systems. This program
       confirms what other sources reveal is a PLA decision to radically update the Q-5 to serve as a
       close-in support fighter.

       In late 2004 it was revealed that the Xian Aircraft Co had revived production of the H-6 bomber,
       presumably to serve new cruise missile and tanker missions. For regional strike missions the PLA's
       Su-30s, when combined with tankers, would appear to be sufficient. There are also occasional
       suggestions that China is interested in purchasing some Su-34-like strike aircraft or even joining
       one of Russia's advanced bomber programs. For the future it can be expected that China would be
       interested in co-operating with Russian or possibly European concerns in gathering advanced
       technologies to support a new indigenous long-range strike platform. At the 2004 Zhuhai show a
       Chinese aeronautical university revealed a delta shape model that could form the basis for a
       stealthy medium bomber.

       However, its appears that China will not wait for indigenous advanced bomber designs to
       materialize, as it may well be in negotiations to acquire Russian Tupolev Tu-95 Bear and Tu-22M3
       Backfire bombers. The recent retirement of two regiments of Russian Tu-22M3s plus the high-
       profile inclusion of both these bombers in the Peace Mission 2005 exercise may have convinced
       the PLA to take advantage of this opportunity to significantly increase its power-projection
       potential. While Russian press reports range from the sale of 10 to 40 Tu-22M3s, the final number
       of Backfires and Bears to be sold has not been disclosed. Also unknown is whether there will be
       any Chinese co-production or development of new electronic and weapons carriage capabilities.
       Both bombers could be modified to carry the latest Russian PGMs and cruise missiles, or to carry
       new Chinese equivalent systems. If acquired both bombers would give the PLAAF new options for
       heavy precision tactical support or long-range strategic strike.

       China is already well into two, possibly three 5th generation fighter programs. One of China's
       goals has been to make its 5th generation fighter consist of as many indigenous components as
       possible, to include engine, electronics and weapons. This goal would appear to have been altered
       for Chengdu's 5th generation proposal, revealed in early 2003 to have a great resemblance to
       Mikoyan's now defunct 1.44 5th generation fighter programs. This design may be evolving with
       significant Russian assistance from the SibNIA design bureau, but it retains its basic canard-delta
       layout. Chengdu sources indicate that in 2004 they began investigating the development of a F-35
       class fighter, or a lightweight 5th generation design. This indicates that Chengdu may be
       responding to PLA requests for a lower-cost advanced fighter design and that China intends to
       compete for foreign sales in this aircraft sector.

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       China has not been ignoring critical force-multiplying support aircraft. In 2002 China received the
       "empty" Beriev A-50 from its cancelled program with Israel to install the Phalcon phased-array
       radar. Called the KLJ-2000 by some sources, this aircraft is being fitted with another fixed array
       radar that very likely is being produced in a crash program with some Russian assistance. There
       are now at least three modified A-50s flying in test programs: one based on the A-50 that Israel
       was modifying, which was sent to China; an two additional Il-76 modified in China. The second
       airframe shows external difference that may indicate it is an advanced development version. In
       early 2002 Chinese sources revealed that China also has an AWACS program in which a Shaanxi
       Y-8 has been fitted with an array similar to the Swedish Erieye phased array radar system. In early
       2005, this program advanced by using what may be the prototype of the Y-9 transport, but with a
       new rampless empennage. With advertised 12 hour endurance, this variant may become the basis
       for series production of this new indigenous AWACS. Reportedly named KLJ-200, it can be
       expected to be paired with new Chinese fighters like the FC-1 to form a low-cost but still effective
       air defense network.

       The PLAAF is also acquiring new versions of the Shaanxi Y-8 for ELINT/SIGINT and possibly
       ground mapping radar missions. Two new versions utilize a new rampless empennage, one for a
       new command/control platform and a second with new large electronic arrays on the forward
       fuselage. This may be for ELINT/SIGINT but there is also speculation it is a phased array radar for
       ground mapping, based on Israeli Phalcon technology. At least one Tu-154 transport has been
       modified with a large lower-fuselage mounted synthetic aperture radar (SAR) in a manner similar
       to the US E-8A JSTARS.

       While China has converted 10 to 15 H-6 bombers to serve as tankers for J-8D fighters with the
       PLAAF and PLA Naval Air Force, in September 2005 it signed a contract to buy eight Ilyushin Il-
       78M dedicated tanking aircraft. Such a purchase would allow PLA Su-30s to strike as far away as
       Guam and to extend the PLAAF's presence over the South China Sea.

       The PLA Air Force is also working on new UAVs. In 2002 it revealed an updated version of the
       Guizhou WZ-2000, which resembles a slightly smaller version of the US Northrop Global Hawk
       UAV. In 2004, it was revealed that Guizhou was working on a medium endurance UAV, roughly
       the same size of the General Atomics Predator-1. Another twin-tail boom medium-size UAV was
       also revealed at the same time. The PLA Air Force operates the Israeli Harpy anti-radar UAV.
       Russia's Sukhoi is also marketing its ZOND series of strategic long range UAVs to the PLA. It can
       be expected that the PLA is working on UAVs for long-range maritime surveillance and for
       combat missions, as is the US. One option that may be under consideration would be the
       conversion of older model J-6 and J-7 fighters to perform UCAV missions. Chinese sources
       indicate that some J-7s have been converted to drones for target practice, or for saturating enemy
       defenses. The 2005 Pentagon report on the PLA confirms that older fighters are being turned into
       drones for this purpose. There is also considerable PLA interest in following US, European, and
       Russian progress toward unmanned combat aircraft (UCAVs). Russian firms Yakovlev, Sukhoi
       and Sokol are actively developing UCAVs, and Sukhoi says it could accelerate its UCAV
       development provided there is foreign funding.

       In addition, the PLA is developing new advanced training aircraft. The Guizhou FTC-2000/JL-9
       commenced flight development in December 2003 and two prototypes had completed at least 150

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       flights by late 2004. The JL-9 is a development of the JJ-7, with a new front fuselage influenced by
       the Chengdu FC-1, but powered by an older WP-13 turbojet.

       The first prototype of Hongdu's twin-turbofan, supersonic, fly-by-wire L-15 trainer, was completed
       in September 2005. First revealed in 2001, in late 2002 it underwent a significant redesign in co-
       operation with Russia's Yakovlev bureau. Ukrainian sources revealed in early 2006 that Hongdu
       had ordered 200 Motor Sich Al-222 engines for the L-15, indicating the PLAAF intends to
       purchase this trainer. In addition, the PLA is allowing the development of new dedicated lead-in
       training versions of new combat aircraft. The twin-seat J-10S began flying in December 2003 and
       the twin-seat version of FC-1, originally expected by 2006, now appears delayed. In addition, the
       controversial Hongdu JL-8, which started as a private venture with foreign partners in the early
       1980s, has met PLA approval. At least three regiments are flying with PLA Air Force academies.

       Navy procurement


       At the beginning of the 11th Five Year Plan the PLA Navy is moving toward complementing its
       investment in new nuclear and conventional submarines, plus new classes of major surface
       combatants, with a new investment in distant power projection capabilities. Second generation
       SSNs and SSBNs are now in production and it is likely that development of third generation
       designs are underway, perhaps with new Russian assistance. Production of surface warships is
       resuming with a new version of the Type 054 frigate and it can be expected that the PLAN will
       either chose one of its three new air defense destroyers for further development and production, or
       move toward new designs. The new emphasis for the 11th and the 12th FYP periods, however, will
       shift to building the aircraft carrier Varyag, plus its new air wing, into a platform that will
       adequately aid the development of an indigenous Chinese aircraft carrier to be built later in the
       next decade. It can also be expected that the PLAN will start building new larger ships for
       amphibious force projection, perhaps to include new large hovercraft based on the Russian ZUBR


       The current naval modernization trend can be traced back to 1975 as China sought to deal with the
       growing Soviet threat to its shores. There was a need for the rapid development of the merchant
       marine and the consequent need to protect sea lanes. China also had a growing interest in offshore
       oil resources. To cope with these problems, the need for modernization of the navy was recognized
       by the Chinese political leadership.

       There are ambitious plans to upgrade the fleet in the following areas, which tend to mirror the
       planned development of newly built warships, facilities and aircraft:

                ASW systems and weapons;
                Naval stealth;
                Supersonic anti-ship missiles;
                Long-range and close-in air defense systems;
                EW systems;

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

                Naval fire-control systems;
                Helicopter retrieval and deck handling equipment;
                Long-range missile tracking and illumination radar.

       Procurement of second generation SSNs and SSBNs are the PLA's highest priorities for its Navy.
       With extensive Russian assistance, the first Type 093 SSN is expected in service in 2006 with a
       second boat to follow in 2007. A third is expected to be launched in 2006. Estimates of final
       production range from 4 to 8, which would support one or two squadrons. In terms of stealth the
       Type 093 is often compared to the performance of early US Los Angeles class SSNs and to the
       Russian Victor III SSN. Such a performance level would constitute a remarkable advance for the
       PLA, just as their ability to sustain production of this new SSN demonstrates heretofore unknown
       confidence and ability. Some sources indicate that the Type 093's bow area may resemble that of
       later Russian SSNs, but this cannot be confirmed. The Type 093 is expected to eventually carry a
       version of the PLA's new Tomahawk-like LACM.

       In late July 2004 the PLA launched its first second generation Type 094 SSBN. Inasmuch as
       sources have reported that the Russian Rubin bureau may be the main source of nuclear submarine
       assistance to China, and Rubin is the lead designer of the new Project 955 Borei class SSBN, there
       is some concern that the Type 094 and Type 093 may benefit from Russian "4th generation"
       submarine technologies. Recently released data by the US Office of Naval Intelligence suggests
       the Type 094 will use a similar SLBM "farm" configuration often seen with Russian projections
       for the Borei. The Type 094 will be armed with 12 new JL-2 SLBMs. Sources indicate eventual
       production could be between four and six.

       This latest Kilo SSK build-up is taking place at the same time that China is meeting success with
       its domestic Type 039A Song-A SSK. About 12 to 14 Songs have been launched, and by 2010
       production could reach 20. During its public "debut" for a high-profile visit to Hong Kong in late
       April 2004 the Song was revealed to use a multi-layer rubber acoustic tile coating and to use a
       radar-absorbing material on the top of its sail. In addition the control area is dominated by modern
       digital flat-panel displays and the ship demonstrates far greater automation over the Type 035
       Ming class.

       Then in June 2004 the PLA revealed a new-type SSK being built in the Wuhan yard, dubbed the
       "Yuan" by the US Navy. A second was reportedly launched in December 2004. Significantly
       larger than the Type-039A, it features a striking resemblance to the Rubin Bureau's 1650 AMUR
       class, and a wider hull, indicating a Russian-style double-hull construction. It also features mid-
       hull cooling ports that would be consistent with an AIP system. Some sources indicate that naval
       engineering concerns in Dalian have produced a polymer electrolyte membrane fuel cell based on
       German technology that is similar in performance to those used on Germany's new Type 212 SSK.
       The PLAN may also have access to Russian AIP technologies, which include their own fuel cell
       and Walther-type AIP systems. The Yuan is expected to feature advanced quieting technologies
       and may be armed with anti-ship and land-attack cruise missiles. It is also expected to perform a
       critical anti-SSN mission in addition to new Type 093 SSNs.

       With the introduction of the Yuan, the PLAN may also be adopting a more significant Russian
       practice: submarine design competition. In contrast to the US, the Russian maintained several
       submarine design bureau and their competition resulted in consistent technology advances that

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       were quickly closing in on key US sub performance parameters by the end of the Cold War. China
       is known to intently study all foreign submarine designs to glean insights to advance indigenous
       development, but a decision to support real design bureau competition could serve to accelerate
       Chinese submarine technology in the coming decade.

       In June 2002, former President Jiang Zemin reached an agreement with Russia on purchasing eight
       Type 636M Kilo class conventional submarines worth USD1.6 billion. Two were delivered in
       2005 and all may well be delivered by the end of 2006. These are expected to be equipped with
       anti-ship, anti-submarine and land attack versions of the Club missile series. With the purchase, the
       number of the Kilo-class submarines that China has will increase to 12. China's purchase of the
       Kilo-class attack submarines is aimed politically at deterring Taiwan's independence forces, as
       well as making it operationally more difficult for US forces to come to the aid of Taiwan. This
       purchase was to some degree retaliation for the US April 2001 announcement that it would sell
       Taiwan eight diesel submarines, a purchase that is staunchly opposed by the opposition
       Kuomintang party and may never happen due to cost issues.

       Stealth and Other Combat Ships

       New PLA Navy combat ships make extensive use of stealth shaping. This includes two new air-
       defense DDGs, a new FFG and a new FAC. From 2002 to 2003 the Jiangnan Shipyard in Shanghai
       launched four new air-defense DDGs, the first such ships for the PLAN dedicated to that mission.
       Based on a common hull using Ukranian gas turbines for propulsion, two Type 052B (Luyang I)
       have two launchers for Russian SA-N-12 SAMs, use Russian search and targeting radar, carry
       Russian Ka-28 ASW/Missile targeting helicopters, while using indigenous ASMs and the new
       Type 730 30 mm CIWS. Two Type 052C (Luyang II) DDGs are centered on a new AEGIS-like
       phased array radar system that uses newly developed Ukrainian active-phased array radar, plus a
       new likely indigenous vertical and cold-launched SAM. This SAM may be based on the HQ-9/FT-
       2000 program or it may be completely different.

       China is now testing two of a new non-stealthy destroyer called the Type 051C. It is an enlarged
       Luhai design that will be outfitted with the Russian RIF-M SAM system based on the S-300PMU.
       There is a possibility that for China the RIF-M has been modified to employ the new 40km range
       9M96E active-guided SAM, carrying four per tube. Two hulls were launched in Dalian by
       September 2005 and the first hull has been photographed with a FREGAT style search radar,
       confirming its future Russian equipment outfit. Asian sources speculate that the PLA will test these
       three classes of destroyers before deciding on follow-up production.

       A third stealthy combat ship now in production is the Type 054 (Jiangkai) FFG. It is now being
       produced in shipyards in Shanghai and Guangzhou, and is the successor to the Jiangwei series of
       frigates. This investment in production infrastructure indicates a significant number will be made.
       The weapons outfit of the first two examples is not much greater than that of the latest Jiangweis,
       save for the use of the Ka-28 helicopter. Construction was halted at two, pending Russia's
       development completion of a new vertical launched SAM, which now may be ready for export by
       2006. In 2006 production started of a new version dubbed the Type 054A expected to feature a
       vertical launched version of the SHTIL-1 SAM, plus Russian radar. So far these frigates lack
       modern low-frequency sonar that would be necessary for deep ocean ASW.

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       A fourth stealthy warship was revealed in early 2004: a SSM-armed new fast attack craft (FAC)
       based on civilian fast ferry wave-piercing catamaran technology. Asian sources expect that up to
       30 will be built and construction is now underway in two or three shipyards. The use of such
       technology puts the PLA Navy clearly abreast of the US Navy and others who are now looking to
       adopt such civilian technology for military uses. While it is not yet clear that the PLA is
       considering using wave-piercing catamarans for transport and other missions envisioned by the US
       Littoral Combat Ship program, there is the potential for the PLA to move in this direction in a way
       consistent with its requirements.

       In addition, the PLAN is also upgrading older Luhu destroyers with new guns, SSMs and
       electronics. At least one older Jianghu frigate has been converted to carry multiple 122 mm MLRS
       launchers to enhance amphibious landing support. In mid-2006 China also carried out tests of a
       longer-range 300mm rocket based naval MLRS

       In 2002 and 2003 the PLA launched two new underway replenishment ships, the first in many
       years. Based on the R-27 design sold to Thailand, these ships will significantly increase the staying
       power of PLAN units conducting long-range exercises or blockade missions around Taiwan. In
       2004 the PLA also launched the first of a new class of ocean-going minesweeper.

       Naval Air Forces

       The major potential development for the PLANAF in 2005 was the prospect that it could acquire a
       number of Tupolev Tu-142 Bear ASW/maritime patrol aircraft. Asian sources contend that
       negotiations are underway for the PLA to purchase the Tu-142 along with the Tu-95. With a radius
       of 6,400 km and a refueling probe, the Tu-142 could handily extend the PLA's presence into the
       "Second Island Chain" and well into the Indian Ocean. With the potential for refueling stops in
       Burma or Pakistan, the Tu-142 could extend the PLA's presence to protect Chinese shipping as far
       as the Persian Gulf or West Africa. As a combat system, the Tu-142 could carry anti-ship cruise
       missiles as well as weapons to prosecute submarines and systems to help coordinate PLA
       submarines. Mid-2006 reports indicate that long-reported Chinese interest in the Beriev Be-200
       amphibious turbofan will lead to the purchase of 10 to 15, which will aid the PLA's maritime
       patrol and island logistic support capabilities. A long expected order of a second regiment of Su-
       30MKK2s had yet to materialize.

       In the meantime, it appears that the PLANAF will receive further regiments of Xian JH-7A
       fighter-bombers, perhaps reported advanced versions with modifications like refueling probes.
       Regarding fighter replacement, the PLANAF can chose between the Chengdu J-10 or lower cost
       FC-1, or it can also wait for Shenyang's new J-11s. Regarding helicopters, it appears that the
       PLANAF will purchase up to 20 Kamov Ka-31 AEW helicopter to assist the targeting of new
       Russian and indigenous anti-ship missiles, as well as to assist fleet defense. This will be
       accompanied by a purchase of 40 Ka-29 naval assault helicopters to aid the PLA Marines. The
       PLANAF has a requirement for more Ka-28 ASW helicopters, or it could wait for an ASW version
       of the 6-8 ton helicopter being co-developed with Eurocopter. There are also indications the PLAN
       is researching small co-axial helicopter UAVs for use aboard ships. But it is also increasingly
       apparent that the PLANAF will be growing in another important direction.

       Aircraft Carriers

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       The year 2005 may mark a turning point in China's long-standing ambition to acquire aircraft
       carriers. This ambition has been demonstrated over the last three decades by the PLA's intense
       program to acquire aircraft carrier technology and knowledge, especially by purchasing former
       British and Russian-built carriers for technology exploitation. This effort was most recently
       advanced by the 2002 acquisition of the former Ukrainian carrier Varyag. It has since rested in
       Dalian harbor with little outward signs of major work. But in May 2005 it entered a dry dock and
       emerged in early August painted in PLA Navy grey. There is speculation that Chinese engineers
       may have installed a new engine complex, as the Varyag is reported either not to have had a
       completed engine, or that its engine was damaged before sale to China. But this latest move
       increases the chances that it will be used for some kind of military purpose.

       In addition, 2005 yielded new indications regarding China's intention to assemble a carrier air
       wing. Russian sources indicate that China is interested in three possible carrier combat aircraft, not
       for the Varyag, but for a carrier yet to be built. First would be an outright purchase of the Sukhoi
       Su-33, presumably with advanced electronics and weapons. China is also considering the purchase
       of the Su-33UB, a unique larger, stealthier twin-seat version of the Su-33, which has recently been
       modified with thrust vector nozzles. A third option being pursued would be a Chengdu J-10
       modified for carrier use with an axisymetric thrust nozzle that would aid recovery in the event of a
       bolter, and enable lower landing speeds. Then in mid-2005 a Chinese magazine revealed a glimpse
       of a naval AWACS design, based on a compact turboprop airframe that could also serve as the
       basis for an ASW or COD aircraft. However, it was not clear this design would be compatible with
       a Russian-style non-assisted take-off carrier design.

       Foreign Procurement History

       In the first few years of its existence, China relied upon the Soviet Union for military assistance. In
       the 1960s a program of domestic self-reliance was initiated following the political schism between
       the two communist powers. In the late 1970's, after establishing relations with Europe and the US,
       the European nations and Israel were invited to participate in Chinese military programs,
       particularly in airframe technology, avionics and power plant provision. By the mid-1980s, the US
       and Canada were also systems and airframe providers. The Tiananmen Square incident in 1989
       caused Western plans for aid and programs like 'Peace Pearl', to put US and Western European
       systems into a MiG-21 copy airframe, to be abandoned.

       Following the end of the Cold War, and perhaps learning from the lessons of the 1991 Gulf
       conflict, Chinese military requirements turned to high technology. The West was slow to respond
       to Beijing's requests for information and samples, but the Russian Federation, keen for business,
       did supply equipment, leading to substantial orders and license production. Starting in the mid-
       1990s Europe began re-evaluating its Tiananmen European Union arms embargo and, without
       strong US opposition, would have formally lifted this ban in 2004. European arms makers view
       China as a market and investment source that could sustain their competitiveness with the US.
       During 2004, the US launched a major diplomatic campaign to prevent the formal lifting of the EU
       embargo, and was largely successful in doing so by May 2005. However, the US does not view
       this condition as permanent and some EU members could resume their campaign for ending the
       embargo in 2006. It is unlikely that the US will revive the sale of defense technologies to the PLA
       in the immediate future. Chinese nuclear and missile technology espionage scandals in the mid-

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       1990s, plus growing strategic competition and the possibility of war over Taiwan auger against the
       US ending Tiananmen weapons embargoes. Israel was a major source of military technology
       during the 1990s until Washington curtailed its sales. Through the 1990s the Ukraine became an
       increasingly important source of foreign technology, to include systems, like the Kh-55 land-attack
       cruise missile, passive detection technology and naval active phased array radar.

       Pakistan is another developing country which is keen to share expertise and technology; China and
       Pakistan have jointly developed the K-8 training and the FC-1/JF-17 combat aircraft. China has
       also entered into tactical missile co-development and production arrangements with Iran and

       Major Foreign Conventional Military Procurement

       Designation Equipment Quantity Origin                           Delivery Manufacturer
       Kondor           E/O and        n/a          Russia             1997+       NPO
       Satellite        Radarsat                                                   Machinostroyenia
       Kh-55            LACM           6            Russia/Ukraine 2001            Novator
       'Kilo' 887/636 Diesel           4            Russia             1995        Rubin
       'Kilo' 636M      Diesel         8            Russia             2005-07     Rubin
       3M54E            Anti-ship      n/a          Russia             n/a         Novator
       CLUB-S           missile
       3M-14            LACM           n/a          Russia             n/a         Novator
       91RE1            ASW missile n/a             Russia             n/a         Novator
       Sovremenny Missile              2            Russia             1998-99     n/a
       956E       Destroyer
       Sovremenny Missile              2            Russia             2007        n/a
       956EM      Destroyer
       Molnya           Fast Attack    10-12        Russia             2005+       n/a
       Moskit           Anti-ship      n/a          Russia             1998        Raduga
       T-80             Main Battle    6            Russia             1994        Russian Army
       S-300/S-         Surface-to-    12           Russia             1994-       Antey
       300PMU-1         Air Missile    battalions                      2004
       S-300PMU-2 Surface-to-          4 to 8       Russia             2005+       n/a
                  Air Missile          battalions
       Shtil            Naval SAM      n/a          Russia             2000+
       TOR-M1           Surface-to-    60           Russia             1997        Antey

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

                        Air            TELs/480+
                        Missile/Air    missiles
       Harpy            Anti-Radar     n/a          Israel             2002        IAI
       Su-27/SK         Combat         36           Russia             1993-96     Sukhoi
       Su-27UB          Combat         40           Russia             1993-       Sukhoi
                        Trainer                                        2002
       Su-30MKK         Strike         76           Russia             1999-       Sukhoi
                        Fighter                                        2003
       Su-30MKK2        Strike         48           Russia             2002-05     Sukhoi
       J-11/Su-         Combat         200          Russia/China       1998-       Shenyang/Sukhoi
       27SK             Aircraft                                       2006
       Lavi             Combat                      Israel             Early       Israeli Aircraft
       technology       Aircraft                                       1990s       Industries
       R-27             Air-to-Air     1,860        Russia             1995        Vympel
       R-77             Air-to-Air     200          Russia             2002        Vympel
       R-73             Air-to-Air     3,720        Russia             1995        Vympel
       Kh-29            Air-to-        2,000        Russia             2002        Molniya
       Kh-31P           Air-to-        200          Russia             n/a         Zvezda-Strela
       Kh-59ME          Air-to-        n/a          Russia             n/a         Raduga
       KAB-1500kr       Guided         n/a          Russia             2002        Region
       A-50             AWACS          1            Russia             2002-03     Beriev
       Il-76            Transport      20-25 (30    Russia             2005-       Ilyushin
                        Aircraft       on order)
       Il-78M           Refueling      (8 on        Russia             2005-       Ilyushin
                        Aircraft       order)
       Mi-17            Helicopter     200+         Russia             1993-       Ulan Ude
       Ka-28            Helicopter     6-8          Russia             1997        Kamov

       Main Foreign Suppliers

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       As a result of the Tiananmen Square incident, the EU and the US governments forbade the
       formation of new military and defense equipment contracts with China. Existing contracts and
       business relationships, including those of Aerospatiale/Eurocopter France and McDonnell
       Douglas, have continued, but the integration of Western equipment in the J-8II, for example,
       ceased. While the US retained a strict embargo in the mid-1990s most European states
       reinterpreted the 1989 EU ban to permit the sale of non-deadly defense technology. Under this
       guise Europe continued to sell some military electronic products and proceeded with the sale of
       helicopter technology to China. Then, in 2003, China was able to convince France and Germany to
       openly support the lifting of the 1989 EU arms ban. In the face of gathering momentum in the EU
       to lift the ban in early 2004, Washington replied with high-level lobbying against the move and by
       May 2005 had convinced enough EU members not to proceed. However, supporters of lifting the
       embargo promised to renew their efforts in 2006 and even some US officials accept that the ban
       will be lifted in the future.

       While it is not likely that Europe will gain many major weapon system sales once the embargo is
       lifted, what is expected is that many European and Chinese defense concerns will enter into co-
       operative or investor relationships. The October 2003 move by European aerospace concern,
       EADS, to buy stock in a company owned by China's AVIC-2 aerospace concern offers a preview
       of this kind of co-operation. The prospect of a significant deepening of EU-China defense industry
       co-operation would serve to advance their goals, to include an acceleration of high-technology
       weapons development to remain competitive with the US, and to increase their respective
       independence from US policy demands. By early 2005, this issue had emerged as a major obstacle
       toward the revival of US-European relations post-Iraqi invasion. The Bush Administration even
       enlisted the US Congress to threaten new legislation that could reduce European defense business
       with the US.

       From the early 1980s to the end of the 1990s Israel was perhaps the second most important seller
       of military technology to China. While Israel did not achieve sales of large numbers of actual
       weapon systems, it did meet the growing Chinese demand for military technology. Israel sold the
       technology for China to co-produce the Python-3 AAM as the PL-9 and the MAPATS anti-tank
       missile as the HJ-9. Israel has also provided technical assistance for the Chengdu J-10 fighter and
       the Type 039 diesel submarine. In July 2000 Israel cancelled a USD250 million contract to sell a
       state of the art phased-array AWACS radar system to China after pressure from the US, who
       expressed concerns that the equipment could be used to track US jets in the region. The US then
       worked to convince Israel to curtail most if not all significant defense co-operation programs with
       China. Israel, however, remains interested in resuming some level of military technology sales to
       China, such as counter-terror systems. But Washington's insistence on a formal bilateral agreement
       that would limit the sale of dangerous military technology to China and other countries of similar
       concern appears aimed at preventing Israel from skirting any informal agreements.

       According to the US, in late 2004, HARPY anti-radar drones sold to China had been returned to
       Israel for maintenance, or upgrade, which Washington pressed not to be returned. Asian sources
       indicate that the Chinese YJ-91 a supersonic ARM, combines an Israeli broad frequency seeker
       with a co-produced ramjet engine for the Kh-31 missile.
       Source: Jane‟s Information Group

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

                D. People’s Liberation Army (PLA)

       Army Summary

       1,600,000. Reserves estimated at 500,000.
       Division × 15
       Mechanized Division x 3
       Motorized Division x 24
       Amphibious Assault Division x 2
       Mechanized Brigade x 1
       Motorized Brigade x 22
       Division × 9
       Brigade × 12
       Anti-Tank Brigade x 1
       Division × 7
       Brigade × 14
       SAM/AAA Bde x 9
       Brigade × 1
       Regiment × 10
       Brigade x 1
       Regiment x 50
       Coastal Defense Division x 2
       Coastal Defense Brigade x 4
       Garrison Division x 12


       After lagging in modernization funding behind the air force and navy during the 1990s, this decade
       has seen the emergence of a new emphasis on People's Liberation Army (PLA) army
       modernization, consistent with doctrinal changes stressing "high-tech local war", "joint warfare",
       and "mechanization and informatization". The goal is to produce an army that is leaner, more
       mobile, has greater high tech firepower and is better able to operate jointly with other services.
       Operational emphasis points toward preparations for possible conflict on the Taiwan Strait and the
       Korean Peninsula and top army leaders have increasing experience in these regions, as well as in
       mobilizing for high-tech warfare.

       Heavily influenced by the US experience during two Persian Gulf wars, PLA Army modernization
       encompasses organizational, doctrinal, equipment, logistic, training and personal policy aspects. A
       special emphasis is being given to upgrading C4ISR capabilities, as well as the "projection"
       capabilities of Special Forces, Army Amphibious and Army Aviation units. Improved amour,
       mechanization and missile systems are also being deployed. In addition the PLA is showing
       greater interest in "airmobile" concepts of both light and medium-weight forces intended for
       longer-range airborne projection. The PLA in recent years has also placed much greater emphasis

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       on building local reserve and militia capabilities, to fill niche requirements and to mobilize local
       governments to support future war efforts.

       In its 2006 report to the US Congress on PLA modernization, the Pentagon noted that 400,000
       troops are now stationed in the three military regions opposite Taiwan, an increase of 25,000 over
       the previous year. This follows a September 2003 to 2005 overall reduction of 200,000 troops,
       which followed a 1997 reduction of 500,000, both of which were designed to facilitate broad PLA
       modernization. The 2003 reduction was decided during a July 2003 meeting of the eight-member
       Central Military Commission (CMC), China's senior military authority. Sources say alternative
       proposals were fiercely debated, resulting in broader consultation involving the PLA's four
       departments and seven military regions. Within the CMC, Beijing-based analysts say, Deputy
       Chairman Guo Boxiong and General Staff Department Chief Liang Guanglie were proponents of
       radical reform. They reportedly favored a cut in the strength of the armed forces by around
       500,000, together with extensive restructuring and accelerated force modernization. This view was
       countered effectively by Xu Caihou, who led the General Political Department, and General
       Logistics Department (GLD) Chief Liao Xilong. A larger demobilization would have cost more in
       retirement benefits and increased pressure to find new jobs amid already high unemployment in
       China. However, it now appears that new CMC Chairman Hu Jintao favors additional troop
       reductions as a means of financing continued hi-tech modernization.

       In terms of organization, this latest reduction will see the elimination of the 24th and 36th Group
       Armies in the Beijing Military Region, reducing the number of Group Armies from 21 to 18. The
       trend of reducing some divisions into better armed brigades is continuing, with infantry divisions
       being upgraded into mechanized or motorized brigades. In addition, a reduction in the Military
       Region (MR) command structure, seeks to reduce the number of officers. With the rapid
       absorption of new communication and information technologies the PLA is seeking to build a
       "flatter" chain of command. The PLA is not yet ready to do away with the MR structure in favor of
       two or three strategic "zones". Eliminating the MR structure would require much more resources
       for retiring so many high-level officers. Nevertheless, the MR structure becomes moot during
       wartime, as the CMC would assemble mission-tailored army, navy, missile and air force units
       under a unified War Zone command.

       This organization is now being facilitated in peacetime, by the formal promotion of a navy admiral
       and an air force general to serve as deputy Chairman of the General Staff Department, as well as
       the September 2004 elevation of the Navy, Air Force and Second Artillery commanders to
       membership in the CMC. Overall army leadership remains unquestioned, but there is also Army
       recognition of the need to better exploit the capabilities of its brother services by better integrating
       their leaders into the top councils of the PLA.

       Force reductions have been combined with profound personnel policy reforms intended to increase
       professionalism and to allow the PLA to compete for younger, better-educated talent. The most
       widely reported reform has been the divestiture of non-military related PLA business starting in
       1998. But perhaps more important has been the rapid expansion of the Non-Commissioned Officer
       (NCO) corps to create a career path for technically oriented personnel, who are required to operate
       new sophisticated equipment. Other personnel policy reforms are designed to enable the PLA to
       better compete with a growing civilian economy and include raised pay, housing, medical and
       family benefits. There is a greater recruitment from civilian universities and increasing educational

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       opportunities such as partial university scholarships, even online training, for officers and NCOs.
       Such measures are made more necessary by shifting demographics. The pool of recruits resides
       increasingly in urban areas where there is increasing demand for higher education, which the PLA
       is trying to meet, and thus better compete with civilian sector demand for the same talent.

       Under the twin doctrinal goals of "mechanization and informatization" the PLA Army is beginning
       to broaden an equipment modernization program from one that concentrated on select units
       marked for "Rapid Deployment" during the 1990s. Larger numbers of Infantry Divisions are
       becoming either mechanized or motorized, by the addition of newly developed tanks, new IFVs
       and new APCs. Mechanization also involves production of thousands of new transport trucks,
       including new fast load/off-load "precision logistics" vehicles, new families of light multi-purpose
       vehicles, and experimentation with new wheeled combat vehicles and light mechanized units. A
       new 105mm gun armed version of the 6-wheel WZ551 is entering service and a family of 8-wheel
       IFVs was revealed in mid-2006. This may lead to the formation of medium-weight air mobile
       units. In addition, a Special Force unit in Chengdu has grown into a new kind of light mechanized
       army unit with several types of light fire-support vehicles all designed to helicopter transportable.

       Modernization of Equipment

       The PLA is now in the midst of a major program to field new and upgraded amour systems. It is
       possible that two factories are now producing the Type-99, an upgraded version of the Type-98,
       first seen in 2004. The Type-99 features a revised with V-shaped modular turret cheek amour
       similar to the Leapord-2A5, but a second variant now omits the top turret bulge associated with the
       circular auto loading system first seen on the Type-98. It shares the Type-98's 125mm gun with
       gun-launched ATGMs, the unique laser-based observation/countermeasures device, and the same
       tank hull. But unlike the Type-98, which was produced in small numbers, the Type-99 can now be
       seen entering multiple tank units and is apparently going to be produced in considerable numbers.
       In addition the PLA Army is taking delivery of the Type-96/Type-88C main battle tank, 1,200 of
       which will be produced by 2005 according to US estimates. It is armed with a 125 mm main gun
       and uses a bustled turret design similar to the Type-98, presumably with the same composite
       amour and the ability to fire gun-launched missiles. The Type-96 has a less powerful engine and
       lacks the laser device of the Type-98. In addition, the PLA is upgrading large numbers of older
       Type-59s to Type-59D standard, with the addition of a 105 mm main gun, a co-produced version
       of the Russian Bastion 105 mm laser-guided gun-launched missile, and explosive-reactive amour

       2005 and 2006 have seen a new emphasis on light and medium-weight amour to fill out new
       lighter mechanized army brigades and divisions. A 105mm gun armed version of the WZ-551,
       called the PTL-05 or "Assaulter," is now reported in service with units of three divisions in
       Guangzhou, Jinan and Xinjiang. In mid-2006 Internet-sources revealed a new family of 8-wheel
       armored vehicles, which include troop-carrier, tank and assault-gun carrier versions. These are
       advanced modular developments of 8-wheeled vehicles that had been developed but not adopted in
       the late 1990s. And in addition to HJ-9 ATGM and 23mm gun armed versions of 4 and 6-wheel
       versions of the WZ551 APC, the PLA is now developing new lighter 4-wheel IFVs armed with
       30mm and 12.7 gun turrets. It can be expected that the PLA will use units based on such vehicles
       to improve its "airmobile" projection capabilities as the PLA Air Force moves to acquire new
       Shaanxi Y-9 medium and possible future Antonov An-70-based heavy air transports.

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

       After a long hiatus, there is greater investment in tracked IFVs and APCs. In early 2003 a
       prototype amphibious IFV was revealed that was similar in concept to the Russian BMP-3, though
       larger, but armed with the Russian 100/30 mm gun/missile-launcher complex. This IFV,
       sometimes called the ZBD-97, is now spawning a family of vehicles to include dedicated armored
       recovery, refueling, and a command and control versions. In addition, it appears to be the basis for
       a new amphibious IFV. The original IFV version is now in service in at least one Guangzhou-
       based army division.

       PLA Army artillery forces remain massive but are modernizing at a slower pace. This includes the
       production of new 155 mm self-propelled and towed guns and the introduction of new 300 mm
       and larger artillery rockets. In late 2005 NORINCO revealed its PLZ05 heavy self-propelled
       artillery, which uses a 155mm cannon in a turret based on the Russian MSTA-2S19, on a hull
       based on the PLZ-45. The PLA is developing greater precision for its gun artillery, to include a
       new 155 mm version of the Russian Kitolov laser-guided shell and future satellite-navigation
       guidance for large artillery rockets. Rocket artillery is being improved with the 300mm A-100, a
       near copy of the Russian Smerch. Starting in the late 1990s, the army gained a long-range
       precision strike system in the M-11 Mod 1 SRBM. With a 500 to 600 km range, this missile
       employs high-explosive, thermobaric and cluster munition warheads. Having adopted this missile,
       it seems likely that the army will also receive versions of the PLA's new Land Attack Cruise

       Medium-range SAM requirements are being met with a modest number of Russian TOR-M1
       SAMs, the Crotale-based HQ-7, and the improved FM-90 version, as well as indigenous HQ-61
       SAMs. Asians sources maintain that after years of interest, the TOR-M1 has started co-production
       in China. A number of groups under the CASIC consortium, and AVIC-1, are building new short-
       range SAM systems. One aspect most of these new systems have in common is that they combine
       short-range SAMs with a transport vehicle and extended range radar and optical guidance systems.
       It is not clear whether the PLA will purchase all of them. In 2005 NORINCO introduced its
       YITIAN, which combines the Louyang TY-90 SAM, plus an electro-optical and radar targeting
       complex, on a new six-wheeled APC vehicle. This same vehicle is also being offered with short-
       range QW-2 SAMs and short-range radar. In 2002 CASIC also revealed its longer range QW-3. At
       the 2004 Zhuhai show CASIC unveiled a new mobile SAM that appeared to be a new longer-range
       version of the FM-90, but little is known about it at this point. Under AVIC-1, the Louyang AAM
       maker has combined its TY-90 AAM and a short-range radar with a Shenyang Aircraft Company
       copy of the US AM General Humvee all-terrain vehicle. Louyang is also expected to offer a SAM
       version of its new PL-12 AAM, similar to the US Raytheon SL-AMRAAM. Norinco is also
       offering two new air defense systems that may not be adopted by the PLA. The first is a system
       similar to the US Avenger which combines 8 FN-6 SAMs and a machine gun on a Humvee-like
       chassis. In addition, Norinco is marketing the LD-2000, a land-based version of the Navy's Type
       730 CIWS, with turret mounted TY-90 SAMs.

       In addition, the PLA is upgrading the firepower and equipments of its soldiers. Increasing numbers
       of units are receiving the new Type-95 bull pup-style assault rifle with integral grenade launcher.
       This rifle fires a unique 5.8 mm round designed to better penetrate personal amour, and is made in
       carbine and sniper versions. There is also a 9mm submachine gun version of this rifle, but it is not
       clear it has been adopted by the PLA. In addition. China has also developed a new large-capacity

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       submachine gun similar to the top-feeding FN-90. Though seen increasingly throughout the ground
       forces, the Type-95 has not displaced the 7.62 mm round Type-56 or the less numerous Type-85
       assault rifle families. Starting in 2004 the PLA revealed new types of sniper and 12.7mm anti-
       material rifles. Modern lightweight bolt-action sniper rifles with highly adjustable stocks now
       compliment the older Type-79 Dragonov, and at least two companies have revealed several new
       12.7 mm anti-material rifles. Some AMRs are automatic while others are lightweight and bolt-
       action. New personal artillery included the W87 automatic grenade launcher, the PF-87 tube-
       launched anti-tank rocket, two new tube-launched thermobaric missiles patterned on the Russian
       Shmel, and the PF-89, a 120 mm lightweight recoilless round launcher. Soldiers are increasingly
       shown in better lightweight clothing, equipped with better personal amour, to include Kevlar vests
       and helmets.

       Army Amphibious Forces

       In 2006 the Pentagon reported that the PLA "has conducted 11 amphibious exercises featuring a
       Taiwan scenario in the last six years." The PLA envisions a "Joint Island Campaign" to fuse
       electronic, missile and air strikes to enable army forces to break shore defenses, establish a beach
       head, to enable follow-on attacks. Up to eight Group Armies or over half a million army personnel
       may be dedicated to amphibious missions. The 1st GA in the Nanjing MR and the 41st GA in the
       Guangzhou MR are dedicated almost entirely to amphibious missions, while much of 12th, 31st,
       26th, 67th, 39th and 40th GAs are also dedicated to amphibious missions. Like the Marines, they
       will benefit from the PLA Navy's recent investment in new amour and troop lift ships. Pending the
       outcome of negotiations that pit Ukrainian against Russian suppliers, PLA amphibious forces may
       also benefit from Chinese-made copies of the unique 550 ton, 60kt speed Zubr hovercraft.

       Army amphibious forces are upgrading with the new Type-63A/Type 99 105 mm gun-armed
       amphibious tank. About 600 have been built. This tank is also armed with a co-produced version
       of the 5 km range Russian Bastion laser-guided gun-launched missile. They are also receiving
       hundreds of new tracked APCs, a radical modification of the old Type-63, often called the Type-
       63C, with two new buoyant sections, powered by an outboard motor. A new type IFV equipped
       with a version of the Russian BMP-3 turret has recently entered service in a Guangzhou-based
       unit. It is fully amphibious with twin pump-jets and could greatly increase the fire-power of Army
       amphibious units if deployed widely. This IFV has been developed in dedicated amour recovery
       and refueling versions. In addition, this IFV serves as the basis for a new amphibious IFV
       reportedly capable of faster speeds than the T-63C. PLA Army amphibious units are also receiving
       new specialized equipment to ease beach-assaults, like trucks with rolled mats to help vehicles
       traverse the difficult mud flats encountered on Taiwan's West coast.

       Army Aviation

       Army Aviation is also being steadily built up, with 12 Regiments having been in place since 2004.
       At least two Group Armies have helicopter regiments while every MR has at least one helicopter
       regiment. Army Aviation regiments varies in content. In early 2006 Chinese television covered an
       exercise that involved the combined use of Mi-17 and Z-8A transport helicopters; with WZ-9 and
       WZ-9G attack helicopters providing fire support. In March 2006 the PLA Daily reported that a
       dedicated attack helicopter regiment was working up in the Jinan MR.

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Over 200 of the Russian Mi-17 family are expected to be in service by the end of 2006. In early
       2006, 24 Mi-17I were ordered from the Ude Ulan factory while in previous years the PLA has
       made repeated orders of the Mi-17V5/7 series from the Kazan factory. In addition, limited
       production of the Eurocopter AS-321/ Change Z-8 has resumed in the form of the Z-8A for the
       PLA Army. Mi-17 and Z-8 purchases are expected to continue until there is significant production
       of a new medium helicopter, being developed with Eurocopter following a co-development
       agreement signed in August 2004. This will be a 6-ton helicopter that bears a strong resemblance
       to the Agusta A-139. Development of this helicopter will start in 2006 and deliveries are expected
       by 2011. It will be a 50-50 co-development program but will be assembled at lines in France and
       China. This program will very likely succeed the transport version of what was called the Chinese
       Medium Helicopter (CMH), which was being developed in co-operation with Eurocopter and
       Agusta. In 2006 Russia's Rostervertol made a greater push to market its advanced heavylift Mil
       Mi-26 helicopter to both military and civil users in China.

       The long awaited heavy attack helicopter called the WZ-10, began flying in April 2003. Clear
       images of this helicopter released in 2005 and 2006 confirm the influence of the Agusta A-129 and
       the Eurocopter Tiger tandem-seat attack helicopters on this design, which will feature a five-blade
       main rotor, advanced V-shaped fuselage to help deflect ground blasts, a nose-mounted sensor
       suite, chin-mounted 23mm gun, plus missile and rocket armament. It is expected that a new
       ATGM, new AAMs plus unguided missiles will arm this helicopter. It may also eventually feature
       a mast-mounted sight, which has been tested on a Z-9.

       This attack helicopter will be preceded in service by the WZ-11, a scout/attack version of the Z-11
       training/utility helicopter, a copy of the Eurocopter AS-350. The prototype armed Z-11 began
       flying in late December 2004. It features a roof-mounted low-light/auto-tracking targeting sensor
       and can be armed with up to four ATGMs or pods for unguided rockets and cannon. Some sources
       expect the Z-11 will perform the mission of scout and attack, similar to the US OH-58.

       In addition, a new version of the WZ-9, the WZ-9G, first revealed in 2004, is now entering PLA
       Army Aviation regiments. The WZ-9G features a more powerful engine and a nose-mounted
       sensor ball that provides much greater lower-hemisphere coverage. The Z-9 configuration does not
       permit chin-mounted cannon, but the WZ-9G likely can carry a greater compliment of missiles,
       plus rocket and gun pods.

       Training helicopter numbers have also grown. PLA Army helicopter training regiments fly the
       Change Z-11 and in 2005 starting using the HC-120 (EC-120) Colibri, the product of a 2004 co-
       production agreement between Eurocopter and the Hafei Aviation Industry Group in Harbin.

       Special Forces

       Special Forces are also receiving a substantial investment, with at least one dedicated unit assigned
       to each MR. Airborne and Marine forces also appear to have their own Special Forces contingents.
       Special Forces will be used extensively in the early stages of a conflict to attack key personnel and
       infrastructure targets, and to secure air and naval facilities to allow for follow-on forces. Chosen
       for their stamina, Special Forces troops are trained in many skills, and are able to operate a wide
       range of Chinese and foreign weapons. Some specialized weapons for Special Force include a

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       range of cross-bows for silent attack. The PLA has also revealed a new rifle-size laser device,
       which can be used to cue laser-guided bombs or for non-lethal anti-personnel purposes.

       In addition, a Special Forces unit in the Chengdu MR appears to be taking the lead in developing a
       new kind of light mechanized army unit. In 2004 and 2005 this Chengdu-based unit revealed new
       4-wheel personal all-terrain vehicles new 8-wheel small ATVs, plus both small and medium size
       "jeep" vehicles. Media coverage of these units in 2006 revealed new jeep-size vehicles armed with
       small "mini-gun" style gattling guns, twin 23mm AAA and automatic 82mm mortars. This new
       equipment is designed to be transportable by medium-weight helicopters. PLA Special Forces train
       for helicopter and sea deployment, have trained in Venezuela, and have competed in the Estonian
       ERNA Special Forces games.

       Militia Forces

       There has also been a notably greater investment in the PLA's reserve and militia forces. Reserves
       are estimated to number 500,000 to 600,000. In addition to serving as back up for traditional
       amour, artillery and infantry units, reserves are also being used to fill special high-tech niche
       requirements like Information Warfare/Computer Network Attack units. These are drawn from the
       civilian computer sector. Reserve and militia units are also increasingly being devoted to the air
       defense and logistic support missions. The reserve and militia build up also enables the PLA to
       more broadly engage local civilian governments, both to fund infrastructure for mutual gain and
       get these governments to partially fund military projects.

       Information Systems

       A key enabler for the PLA Army has been a consistent investment in information systems,
       especially over the last 15 years. The PLA has led China's massive investment in its national fiber-
       optic cable network, which has enabled the widespread use of broadband computer networks for
       command, logistics, and training purposes. Computer networks are complemented by use of
       satellite communications as well has high-frequency radio. There is also a greater trend toward
       combining video, voice and data, not only at high-command levels, but also for the individual
       soldier. Initial personal video-voice-data headsets were introduced for select Special Forces units
       in 2002 and these are being improved. Some Special Forces have been depicted using gun-
       mounted video camera/helmet projectors to enable non-line-of-sight gun use. There is some
       evidence that the PLA Army is following US and European "digital soldier" developments and is
       going to apply similar concepts tailored to its needs.

       The PLA Army is also investing in information superiority, to include new information warfare,
       and intelligence capabilities. The PLA hopes to apply "People's War" strategies to information
       warfare by mobilizing many units from its growing computer technology sector that will specialize
       in computer network attack. At the tactical level there is also a greater investment in ELINT and
       SIGINT capabilities, as well as fixed and mobile radar that can support artillery, SAM/AAA, and
       infantry units.

       The PLA is also producing a larger variety of UAVs; medium sizes to support company sized
       units, and even hand-launched UAVs to support Special Forces or other smaller units. Companies
       like NRIST produce a range of medium-endurance tactical UAVs that resemble Israel's IAI Hunter

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       series and this company features both vehicle and personal digital command systems. At the 2004
       Zhuhai Air show a company affiliated with the China Aerospace Corporation featured a very small
       bungee-launched UAV designed to be carried in a back-pack. In late 2005, reports on a new APC
       outfitted with post-mounted sensors and low-light/IR sensors, indicated that it was also equipped
       to receive video imaging from a small hand-launched delta-wing UAV. In 2006 Chinese media
       coverage revealed a Special Forces six-wheel ATV outfitted to carry and deploy small hand-
       launched UAVs.


       A second key enabler of greater army capabilities has been significant reform of army logistics. In
       terms of mobility, logistics reforms have included the purchase of thousands of new trucks, and
       increasingly specialized trucks. But, at present, the PLA Army is dependent mainly on rail and
       truck transport. The 1998 reforms that saw the elimination of most non-military business also saw
       the consolidation of key functions like redundant hospitals for individual services. There has also
       been a greater trend toward contracting services like canteens and laundry to the civilian sector.

       In addition, especially at the MR level, there is a growing trend toward joint-service logistic
       service, combining the purchase storage and distribution of common items. There is also evidence
       of greater use of computer technology like bar-codes to track usage and rate of consumption. The
       PLA is also showing greater interest in precision logistics. The PLA now markets specialized
       trucks designed to load/offload palletized cargo.

       Deployments, tasks and operations

       Role and Deployment

       The PLA is tasked with defending national sovereignty and the people's revolution - in other
       words, the Chinese Communist Party (CCP). Since 1988 the former field armies have been
       reclassified as group armies, with integral artillery, engineer, aviation and other support. They are
       deployed over seven military regions. For detailed locations, see the Order of Battle below.

       Recent and Current Operations

       In recent years the PLA has decided to contribute to United Nation's led peacekeeping missions in
       order to bolster China's leadership credentials within the body, but also to give its officers and
       soldiers increased international exposure.

       As of August 2006, the PLA contributed to the following UN operational deployments:

                United Nations Interim Force In Lebanon (UNIFL). China has deployed 187 staff officers
                 and engineers.
                United Nations Truce Supervision Organization (UNTSO) (Middle East). China has
                 deployed 3 troops.
                United Nations Mission in Sudan (UNMIS). China has deployed 443 troops and 15
                 military observers.

This is product of the Virtual Information Center (VIC). As such it represents the opinions of the various authors involved and not the
                       opinions, assessments or positions of the DoD or any other government agency or entity.

                United Nations Mission in Liberia (UNMIL). China had deployed 566 troops and 5
                 military observers.
                United Nations Mission in Ethiopia and Eritrea (UNMEE). China has deployed 7 military
                United Nations Mission for the Referendum in Western Sahara (MINURSO). China has
                 deployed 15 military observers.
                United Nations Organization Mission in the Democratic Republic of the Congo
                 (MONUC). China has deployed 218 troops and 14 military observers.
                United Nations Operation in Côte d'Ivoire (ONUCI). China has deployed 7 military

       Command and control

       The People's Liberation Army (PLA) is controlled by the CCP. Military Commission, usually
       known as the Central Military Commission (CMC). The chairman of the Central Military
       Commission is elected by the National People's Congress (NPC), and the selection of other
       members is decided by the NPC and its Standing Committee on the basis of the nomination by the

       The CMC is the principal deliberative and decision-making body for all major military and
       strategic decisions that involve the armed forces in China, though the ultimate decision-making
       concerning war, armed forces, and national defense is held by the CCP's Central Committee
       Politburo. In addition to the decision-making concerning the deployment of PLA, PAP and reserve
       troops, the CMC also has direct control over the PLA Second Artillery Corps (SAC) (the Strategic
       Rocket Force) and two principle educational institutes of the PLA, the National Defense
       University (NDU) and Academy of Military Science (AMS).

       In early 2004 it was revealed that three new positions would be created in the CMC for the
       commanders of the Navy, Air Force and Second Artillery. This marks a significant evolution for
       the CMC, diluting its traditional army dominance and elevating the authority and prestige of these
       technology-intensive services.

       Central Military Commission

       Chairman                                                             Hu Jintao
       Vice Chairman                                                        Xu Caihou
       Vice Chairman                                                        Guo Boxiong
       Vice Chairman (Minister of National Defense)                         Cao Gangchuan
       Member (Director, General Political Department)                      Li Jinai
       Member (Director, General Logistics Department)                      Liao Xilong
       Member (Chief of the General Staff)                                  Liang Guanglie
       Member (Navy Commander)                                              Wu Shengli
       Member (Air Force Commander)                                         Qiao Qingchen

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Member (Commander SAC)                                               Jing Zhiyuan
       Member (Director, General Armaments Department)                      Chen Bingde

       In peacetime the CMC controls the PLA through the four general departments: General Staff
       Department (GSD), General Political Department (GPD), General Logistic Department (GLD),
       and General Armament Department (GAD). In time of crisis, the CMC commands the
       conventional field units across the country through the GSD and seven military region
       headquarters, and issues orders directly to the SAC. The CMC is supported by a fully automated
       multi-layer command, control, communications, and intelligence (C3I) system.

       According to some unconfirmed reports, the CMC established the Central Emergency War
       Command Centre in the Western Hills regions of Beijing in the late 1980s. The centre is similar in
       its functions to the US National Military Command and Control Centre (NMCC) in the Pentagon.
       The CMC is said to have also established five alternative command and control centers in Wuwei,
       Mianyang, Taiyuan, Lushan, and Guizhou. In time of crisis, the centres will be responsible for
       collecting intelligence from the frontline reports and issuing orders to military region commands
       and field units. They can also be used for issuing nuclear weapon launch orders to the SAC bases
       when China is under nuclear attack.

       Ministry of National Defense: The Ministry of National Defense is under the joint control of the
       CMC and the State Council. It has no operational control over the PLA, is responsible for
       administrative planning, manpower, budget, foreign liaison and training materials, but possesses
       no policy-making or implementation authority.

       Commission for Science, Technology and Industry for National Defense (COSTIND): Before
       1998 COSTIND was the primary organization responsible for military research and development,
       weapons procurement and co-ordination of the defense and civilian economic sectors. It also had a
       role in the import and export of military arms and technology and was the primary bureaucracy
       charged with technical intelligence gathering overseas. In 1998 the COSTIND was re-organized
       under the same title. Most of its functions directly linked to the military affair were transferred to
       the newly established GAD. It is now a purely civilian government agency led by the State
       Council, with its main responsibilities including drafting long-term military scientific research
       plans and strategy, making state policies, regulations, and standards for military industry, directing
       the transfer of military technology to civilian use, taking part in international co-operations in the
       field of military science and technology, and partially controlling the export of military equipment.

       General Staff Department (GSD)

       The GSD carries out staff and operational functions of the PLA and has major responsibility for
       implementing military modernization plans. Within the defense hierarchy it conveys policy
       directives downwards, translates national security and defense policy into specific responsibilities
       for the various subordinate functional departments of the PLA, oversees policy implementation on
       behalf of the CMC and commands China's military force operations in wartime. Since 2004 the
       GSD's capacity for "jointness" has been significantly improved with the addition of Vice Chairman
       from the Navy, Air Force and Second Artillery.

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       The GSD also performs important organizational functions such as procurement, operational
       planning and intelligence. Headed by the chief of the GSD, the department serves as the
       headquarters for the ground forces and contains directorates for the three other armed services: air
       force, navy and strategic missile force. The GSD includes functionally organized sub-departments
       for artillery, armored units, engineering, operations, training, intelligence, mobilization, surveying,
       communications, quartermaster services and education.

       General Political Department (GPD)

       The GPD is responsible for ideological indoctrination, political loyalty, morale, personnel records,
       cultural activities, discipline and military justice. Organisationally, the GPD provides the PLA with
       its party structure. The director of the GPD oversees a system of political commissars assigned to
       each echelon in the PLA. One of the primary tasks of the political commissar is the supervision of
       the party organization through party committees at the battalion level and above, or through party
       branches at the company level. It exerts an indirect but potentially major influence on defense
       policy through its role as political and ideological watchdog at all levels of the military. Its control
       over personnel selection at all levels of the PLA accords it respect within the high command.

       General Logistics Department (GLD)

       The GLD is the least politically influential of the three general departments. Headed by a director,
       the GLD is responsible for production, supply, transportation, housing, pay and medical services.
       Historically, most of this support came from the civilian populace, and before the establishment of
       the GLD, it was organized most frequently by commissars.

       General Armament Department (GAD)

       Established in 1998, the GAD's main role is to oversee the development, procurement, supply,
       maintenance and the life-cycle management of the military's weapons systems. To support these
       goals, the GAD has six sub-departments: comprehensive planning, arms and services equipment,
       army equipment, general equipment support, electronic information and technological groundwork
       and foreign affairs. The GAD is also responsible for overseeing the PLA weapons testing and
       training bases.

       Territorial Command and Control

       Command and control below the GSD is exercised through seven Military Regions (MR):
       Shenyang, Beijing, Lanzhou, Jinan, Nanjing, Guangzhou, and Chengdu. These are sub-divided
       into 28 provincial military districts, four garrison commands and further sub-divisions. The MR
       HQs are responsible for all military activity within their region. The major ground force formations
       subordinate to the MR HQ are Group Armies (GA) but some specialist formations and units are
       directly subordinate to the MR.

       In time of emergency, a temporary operational command headquarters known as a War Zone
       would be established to deal with a specific threat. This is likely to be formed around the structure
       of an MR headquarters, but could involve units from other MRs in response to the specific

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

                                     Command and Control of the People's Liberation Army

       Command and Control Modernization

       The 2004 report on Chinese military power by the US Department of Defense (DoD) to Congress
       provided details on improvements in the country's command and control systems. The PLA
       continues to upgrade its communication capabilities, which eventually will rival the most modern
       civil networks. This is not a new development as command, control, communications, computers,
       and intelligence (C4I) modernization and automation have been a PLA priority for nearly 25 years.
       According to the DoD report China is steadily improving its C4I capabilities by using commercial
       information technologies to advance ambitious plans to create a high-technology electronic
       environment capable of supporting a modern military in both peace and wartime.


       The PLA ground forces are generally organized into a three-tiered structure: main forces, local or
       regional forces, and reserve forces and militia. The main forces are mainly composed of 18 Group
       Armies (GA) stationed across the country. They are intended to be available whenever necessary
       for operations anywhere in China. The local forces consist of active and reserve PLA units as well
       as the People's Armed Police (PAP) units, which have a secondary mission of local defense against
       external enemies. Local forces are responsible for defense of areas where they are stationed and
       also share responsibility for the internal security. The militia units would provide combat and
       logistic support to main and local forces in local defense.

       PLA ground forces are also categorized according to their readiness and manning levels. Class-A
       units are at or near full manpower (over 80 per cent of personnel and equipment) and capable of

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       deploying without significant argumentation and training. Class-B units are maintained at 60-80
       per cent manning level, lack some organic units, and require more training and more time to
       deploy than Class-A units. Sometimes entire GAs may also be categorized as Class-A or -B,
       though the difference between these is much less evident.

       There are eight service arms, including infantry, artillery, amour, army aviation, air defense
       missile, engineering, communications, chemical defense troops, plus other specialized units such
       as electronic warfare, medical, reconnaissance and mapping.


       The PLA is currently in the middle of a fundamental restructuring program, which has reduced the
       number of GAs and is reducing some divisions to better-equipped brigades. The field army
       organization within group armies is equivalent to a NATO corps but the actual order of battle
       varies according to the military region and/or military district into which the Group Army falls. A
       Group Army can consist of two to three mechanized or motorized infantry divisions plus brigades,
       one or two armored divisions or brigades, one or two artillery divisions or brigades, one or more
       anti-aircraft brigades, an anti-tank brigade, and increasingly, an aviation (helicopter) regiment.
       Engineer units, including amphibious bridging units, are organized into independent units, which
       can be attached to group armies as required. Mine laying and mine detection form important parts
       of the combat engineer capability.

       An emphasis is now being placed on developing capable Rapid Reaction Forces (RRF) that can
       deploy in large numbers to areas outside China's borders. The Chinese RRF includes a variety of
       formations and units. The term 'RRF' itself is generic and refers to units and formations in all three
       services that share common missions and tasks. They all require a high level of readiness,
       mobility, training, maintenance standards, modern equipment and, in some cases, technological
       sophistication. RRF formations are assigned either general or specific contingency missions. The
       formations and units of the RRF, in fact, represent 'a force within a force'.

       The primary role of CMCUs is combat. There are three likely types of CMCU: strategic,
       operational and tactical. Strategic CMCUs are not assigned specific tasks; rather, as strategic
       assets, they are expected to be able to respond to any crisis in the country. Six divisions have been
       assigned to the rapid deployment role, each covering a designated geographic area. These units are
       primarily composed of light infantry with some tactical transport (helicopter) capability, and are
       able to reach anywhere in the mainland within 20 hours. Units currently assigned to the rapid
       deployment force include: the 162nd Division of the 54th Group Army (Jinan Military Region),
       covering the east coast and parts of the Korean peninsula; the 61st Division of the 21st Group
       Army (Shaanxi province), covering the northwest frontier; and the 149th Division of the 13th
       Group Army (Suchuan province), covering southwest China. Other ground and air units that could
       be called upon to supplement the rapid deployment units include: the 15th Group Army (airborne)
       (Taiyuan); the 38th Group Army (Gubei province); and the 39th Group Army (Liaoning province).
       The latter two are mechanized group armies that can supply heavy fire support. Each contains a
       mix of three tank and infantry divisions.

       Operational CMCUs consist of those assigned to Operational Directions. Operational Directions
       appear to correspond to the Soviet concept of a Theatre of Military Operations (TVD). The

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Chinese define a theatre of operations or an Operational Direction as "a specific operational area
       designated as necessary for carrying out strategic missions or achieving strategic plans". As such,
       an Operational Direction probably encompasses two or more contiguous MRs. Each MR probably
       has designated one ground force division for operations in one or two Operational Directions. The
       PLA has identified four, possibly five, theatres or Operational Directions. These include the China-
       India theatre; the South China Sea theatre; the China-Vietnam theatre; the China-Russia theatre;
       and the Southeast Coast, or Taiwan, theatre.

       Overall, RRF formations and units currently represent about 15 to 20 per cent of total PLA ground
       strength. By 2010 RRF units may represent about one-third of total PLA ground strength. In
       general, the bulk of RRF units are classified by the Chinese as either Special Garrison Units or
       Contingency Mobile Combat Units (CMCUs). Special Garrison Units are regimental-sized ground
       force units that probably exist in all seven military regions. Their primary mission is internal
       security operations, probably in support of People's Armed Police units. Special Garrison Units
       remain under the command of their respective MR Commander and probably would not deploy
       outside their respective MR boundaries.

       Tactical CMCUs are ground force divisions classified by the PLA 'Regional Ready Units', or
       RRUs. At least six of the seven MRs have one designated RRU division. Each division is assigned
       a region-specific mission.

       Some RRUs are brigade (around 6,000 men) or even battalion size. The aim is to give such units
       organic self-sufficiency in all the arms they need. Unconfirmed information published on Chinese
       internet sites has given the make-up of such independent brigades as follows: four tank battalions
       with 31 tanks each; one mechanized infantry battalion with 40 armored personal carriers; one
       artillery battalion with18 self-propelled guns; and one Anti-Aircraft battalion with 18 self-
       propelled Anti-Aircraft guns. There are also special artillery and Anti-Aircraft RRU brigades.

       Reserve Forces

       The PLA has substantial reserves of trained infantry and mechanized troops, with estimates of
       500,000 troop in 30 infantry divisions, 13 air defense divisions, three artillery divisions and seven
       logistic support brigades. There has also been a notably greater investment in the PLA's militia
       forces, which the Pentagon estimates may account for 10 million organized members. In addition
       to serving as back up for traditional amour, artillery and infantry units, reserves and militia units
       are also being used to fill special niche requirements, such as information warfare/computer
       network attack units (drawn from the civilian computer sector) and support units for amphibious
       operations. Reserve and militia units are also increasingly being devoted to the air defense and
       logistic support missions.

       Order of Battle

       Information on the PLA ORBAT is not available through any official channels. The data in the
       following tables are collected from unofficial sources.

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       The Central Guard Unit, which is responsible for the security of senior government, party, and
       military leaders, has some barracks in central Beijing and northwest Beijing near Western Hills. It
       reports to the CMC through the GSD

       Rapid Reaction Forces

       A number of formations are believed to be designated as rapid-reaction units, either with national
       or regional responsibilities. These may include: 38, 39 Group Armies; 127, 149 Mech Inf Div;
       seven SOF groups.

       Strategic Reserve

       The 15th Airborne Corps, which is part of the PLA Air Force (PLAAF), consists of three airborne
       divisions (43rd, 44th, and 45th), each with around 10,000 troops. As a part of the PLA's strategic
       reserve the airborne force receive direct orders from the Central Military Commission (CMC)
       through the GSD. Its strategic mobility by air is, however, limited.

       Beijing Military Region

       Beijing Garrison
       Tianjin Garrison
       Hebei Military District
       Inner Mongolia Military District
       Shanxi Military District
       MR Special Operations Group, Beijing
       MR Combined Arms Tactical Training Base, In Juhr, Inner Mongolia
       MR Tank Training Base, Changzhi, Shanxi
       2nd Chemical Defense Regiment, Beijing (Fangshan)

       Unit                                            Location
       27th Group Army                                 Shijiangzhuang, Hebei
       235 Mechanized Infantry Brigade                 Xingtai, Hebei
       UI Mechanized Infantry Brigade                  Taiyuan, Shanxi
       80th Motorized Infantry Brigade                 Luquan, Hebei
       Artillery Brigade                               Handan, Hebei
       UI Armored Brigade                              Handan, Hebei
       UI Armored Brigade                              Datong, Shanxi
       Air Defense Brigade (SAM/AAA)                   Shijiazhuang, Hebei
       38th Group Army                                 Baoding, Hebei
       6th Armored Division                            Beijing Changping
       112th Mechanized Infantry Division              Baoding, Hebei
       113th Mechanized Infantry Division              Baoding, Hebei
       114th Motorized Infantry Division               Taihangshan, Hebei
       8th Army Aviation Group (Helicopter)            Hebei, Baoding
       6th Artillery Brigade                           Beijing (Pinggu County)

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       UI Mechanized Air Defense Brigade               Shijiazhuang, Hebei
       65th Group Army                                 Zhangjiakou, Hebei
       207th Motorized Infantry Brigade                Wanquan, Hebei
       193rd Motorized Infantry Division               Xuanhua, Hebei
       194th Motorized Infantry Brigade                Huaian, Hebei
       UI Motorized Infantry Brigade                   Chengdu, Hebei
       UI Armored Division                             Huailai, Hebei
       UI Armored Division                             Tangshan, Hebei
       UI Armored Division                             Zhangjiakou, Hebei
       14th Artillery Brigade                          Huailai, Hebei
       AAA Brigade                                     Qinhuangdao, Hebei
       Beijing Garrison
       Garrison Division                               Beijing City
       Reserve AAA Division                            Beijing City
       Tianjin Garrison
       Motorized Infantry Brigade                      Tianjin
       196th Mechanized Brigade                        Tianjin (Yangcun)
       Inner Mongolia Military District
       205 Motorized Infantry Brigade                  Chifeng, Inner Mongolia
       Border Defense Regiment
            1.   MR rapid reaction unit.

       Shenyang Military Region

       Heilongjiang Military District
       Jilin Military District
       Liaoning Military District
       MR Special Operations Group, Beijing
       MR Combined Arms Tactical Training Base, Zhaonan, Jilin
       MR Tank Training Base, Dailian, Liaoning
       UI Aviation Regiment
       82nd Pontoon Bridge Regiment, Liaoning
       MR Electronic Warfare Regiment
       Engineer Regiment

       Unit                                Location
       16th Group Army                     Changchun, Jilin
       UI Motorized Infantry Brigade       Tonghua, Jilin
       4th Armored Division                Jilin
       46th Motorized Infantry Division    Meihekou, Jilin
       68th Motorized Infantry Brigade     Qiqihar, Heilongjiang

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       69th Motorized Infantry Division    Harbin, Heilongjiang
       Artillery Brigade                   Yanbian, Jilin
       AAA Brigade                         Changchun, Jilin
       39th Mechanized Group Army          Liaoyang, Liaoning
       3rd Armored Division                Siping, Liaoning
       115th Mechanized Infantry           Yingkou,, Liaoning
       116th Mechanized Infantry           Haicheng, Liaoning
       190th Mechanized Infantry           Benxi, Liaoning
       UI Army Aviation Regiment
       Artillery Brigade                   Lioyang
       Air Defense Brigade (SAM/AAA) Liaoning
       40th Group Army                     Jinzhou, Liaoning
       5th Motorized Infantry Brigade      Yixian, Liaoning
       UI Motorized Infantry Brigade
       UI Motorized Infantry Brigade       Chifeng, Inner Mongolia
       UI Armored Brigade                  Fuxin, Liaoning
       UI Artillery Brigade                Jizhou, Liaoning
       AAA Brigade                         Jinzhou, Liaoning
       Liaoning Provincial Military District
       191st Motorized Infantry Brigade Dandong, Liaoning
            1.   MR rapid reaction unit.

       Nanjing Military Region

       Shanghai Garrison
       Anhui Military District
       Fujian Military District
       Jiangsu Military District
       Jiangxi Military District
       Zhejiang Military District
       MR Special Operations Group
       MR Army Aviation Regiment
       MR Combined Arms Tactical Training Base
       MR Tank Training Base
       MR Service Arms Training Base, Zhenjiang, Jiangsu
       UI Training Base, Zhangzhou, Fujian
       Tactical Surface-to-Surface Missile Brigade**, Shangrao, Jiangxi
       MR Electronic Warfare Regiment
       31st Pontoon Bridge Regiment, Nanjing, Jiangsu
       14th Air Defense Brigade (SAM/AAA), Anhui

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       Tank Training Regiment

       Unit                                Location
       1st Group Army                      Xuzhou, Jiangsu
       10th Armored Division               Suzhou, Jiangsu
       1st Amphibious Mechanized           Hangzhou, Zhejiang
       3rd Motorized Infantry Brigade      Jinhua, Jiangsu
       9th Artillery Division              Wuxi, Jiangsu
       Air Defense Brigade (SAM/AAA) Zhenjiang, Jiangsu
       12th Group Army
       2nd Armored Division                Xuzhou, Jiangsu
       34th Motorized Infantry Brigade     Anhui
       36th Motorized Infantry Brigade     Xinqi, Jiangsu
       179th Motorized Infantry Brigade Nanjing, Jiangsu
       Artillery Brigade                   Xuzhou, Jiangsu
       AAA Brigade                         Huaian, Jiangsu
       31st Group Army                     Xiamen, Fujian
       86th Motorized Infantry Division    Fuzhou, Fujian
       91st Motorized Infantry Division    Zhangzhou, Fujian
       92nd Motorized Infantry Brigade     Nanping, Fujian
       UI Armored Brigade                  Zhangzhou, Fujian
       Artillery Brigade                   Quanzhou, Fujian
       Air Defense Brigade (SAM/AAA) Xiamen, Fujian
       Shanghai Garrison
       Coast Defense Brigade               Shanghai (Baoshan)
       Coast Defense Brigade               Shanghai (Jinshan)
       Fujian Provincial Military District
       12th Coastal Defense Division       Changle, Fujian
       UI Coast Defense Division           Jinjiang, Fujian
       UI Coast Defense Division           Shushi, Fujian
       UI Coast Defense Brigade            Fujian

       Chengdu Military Region

       Guizhou Military District
       Sichuan Military District
       Xizang (Tibet) Military District
       Yunnan Military District
       MR Special Operations Group
       MR Army Aviation Regiment
       MR Electronic Warfare Regiment

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                       opinions, assessments or positions of the DoD or any other government agency or entity.

       MR Special Reconnaissance Unit
       MR 1st Technical Reconnaissance Bureau, Chengdu, Sichuan
       MR 2nd Technical Reconnaissance Bureau, Kunming, Yunnan
       MR Chemical Warfare Unit
       MR Combined Arms Tactical Training Unit, Xichang, Sichuan
       MR Service Arms Training Base, Sichuan
       Pontoon Bridge Regiment

       Unit                                Location
       13th Group Army                     Chongq