U.S. Warns of China's Cyber Strategies

The U.S. Department of Defense has released its annual report, Military and Security Developments Involving the People's Republic of China, highlighting China's attempts to gain military advantage.

China is undergoing a military modernization program that is targeting capabilities with the potential to degrade core U.S. military-technological advantages, states the report. “To support this modernization, China uses a variety of methods to acquire foreign military and dual-use technologies, including cyber theft, targeted foreign direct investment and exploitation of the access of private Chinese nationals to such technologies. 

“Several cases emerged in 2016 of China using its intelligence services, and employing other illicit approaches that violate U.S. laws and export controls, to obtain national security and export-restricted technologies, controlled equipment and other materials.”

Last year, China identified cyberspace as a critical domain for national security and declared its intent to expedite the development of its cyber forces. The report states that its military may seek to use its cyber warfare capabilities to collect data for intelligence and cyber attack purposes and to constrain an adversary’s actions by targeting network-based logistics, communications and
commercial activities. 

Power Projection

China’s leaders remain focused on developing the capabilities to defeat adversaries and to counter third-party intervention, including by the United States, during a crisis or conflict. China’s officially-disclosed military budget grew at an average of 8.5 percent per year in inflation adjusted terms from 2007 through 2016, and Chinese leaders seem committed to increases in defense spending for the foreseeable future, even as China’s economic growth slows.

As China’s global footprint and international interests have grown, its military modernization program has become more focused on supporting missions beyond China’s periphery, including power projection, sea lane security, counter-piracy, peacekeeping, humanitarian assistance and disaster relief. 

In February 2016, China began construction of a military base in Djibouti that could be complete within the next year. China likely will seek to establish additional military bases in countries with which it has longstanding, friendly relationships.

Leveraging Power

The Chinese Navy is the largest navy in Asia, with more than 300 surface ships, submarines, amphibious ships and patrol craft. It is also an increasingly technologically advanced and flexible force.

China has leveraged this growing power to assert its sovereignty claims over features in the East and South China Seas. China has used coercive tactics, such as the use of law enforcement vessels and its maritime militia, to enforce maritime claims and advance its interests in ways that are calculated to fall below the threshold of provoking conflict, states the report. 

In the East China Sea, China continued to use maritime law enforcement ships and aircraft to patrol near the Senkaku Islands to challenge Japan’s claim. In the South China Sea, China continued construction at its military outposts in the
Spratly Islands. 

Important milestones in 2016 included landing civilian aircraft on its airfields on Fiery Cross, Subi, and Mischief Reefs, as well as landing a military transport aircraft on Fiery Cross Reef. In July 2016, an arbitral tribunal constituted under the compulsory dispute settlement procedures in the United Nations Convention on the Law of the Sea, issued a ruling in favor of the Philippines with respect to issues involving the interpretation and application of the convention.

Among other things, the tribunal ruled that China’s “nine-dash line” cannot represent a lawful maritime claim to the extent that any of the claims it reflects would exceed the limits of China’s maritime entitlements under the Convention. China rejected the ruling. 

Relations between China and Taiwan cooled in 2016, after Tsai Ing-wen won the Taiwan presidential election in January, bringing the Democratic Progressive Party (DPP) back to power for the first time since 2008. China has stressed that Taiwan must accept the so-called “1992 Consensus,” which holds that China and Taiwan are part of “one China” but allows for different interpretations, for there to be peace and stability in the Taiwan Strait.

Arms Supply

From 2011 to 2015, China was the world’s fourth largest arms supplier, with more than $20 billion in sales. Of this, $9 billion was to Asia-Pacific countries, primarily Pakistan. Sub-Saharan Africa was China’s second largest regional arms market. Last year, China signed an agreement with Pakistan for the sale of eight submarines. The first four will be built in China, with the remaining four in Pakistan. Other major Asia-Pacific customers of Chinese military equipment include Bangladesh and Burma.
 
The report is available here.