Summary

With the end of the Cold War, the Asia-Pacific region faces an uncertain security environment. China, once viewed as a counterweight to Soviet aggression, is now seen as aspiring to fill the role of the leading regional power. China is pursuing long-range military modernization that seeks to upgrade its air and naval power and to realign its force structure. As China's military capability increases, so does regional anxiety about China's intentions. This report (1) assesses the nature and the purpose of China's military modernization and (2) compares China's military modernization efforts with those of other Asian nations.

GAO found that: (1) China has begun to modernize its military by acquiring some new weapon systems, restructuring its forces, and improving its training; (2) since 1989, the official Chinese defense budget increased annually at a double digit pace, but GAO's analysis revealed that when adjusted for inflation there has been almost no real growth in the official defense budget; (3) major categories of defense spending, such as weapons acquisitions and research and development, however, are not part of the official budget; (4) to date, few new weapon systems have been acquired, and other improvements, such as better training, have benefited only a few units; (5) China's military modernization is being driven by several factors, including a desire to be the leading regional power in Asia, lessons learned about modern warfare from the Gulf War, the need to protect its economic/territorial interests, and a need to maintain internal stability; (6) U.S. and Asian officials and scholars GAO interviewed commented that as China's military capability increases so does regional anxiety about its intentions; (7) although many Asians believe that China now presents a limited threat to them, they are concerned that in the future China will have greater military capability with which to challenge them in contested areas; (8) tempering the potential for aggression is China's economic development, which relies heavily on foreign investment and trade; (9) further, many of China's neighbors are also modernizing their militaries, some more extensively and rapidly than China; (10) U.S. policymakers recognize that to deter aggression and combat the proliferation of weapons of mass destruction, integration, not isolation, of the region's powers is important; (11) the United States and Asian nations are reinforcing bilateral arrangements and pursuing multilateral dialogue, and U.S. policymakers are trying to renew relations with the People's Liberation Army to better understand China's intentions; and (12) although many experts do not consider China a security threat, China could eventually emerge as a more formidable power.