Wednesday, March 05, 2008

China - NPC tackle inflation & increase military spend

One of China's submarines which the US see as a threat

The National Peoples’ Congress has opened in China with inflation being one of the major issues being discussed. Inflation rose by 7.1% in January - the highest level in more than a decade - and opinion polls show it is one of Chinese people's top concerns. Over 7% of annual production is exported and accounts for a significant proportion of China’s GDP. But speaking at the NPC, Premier Wen Jiabao said economic growth could slow. Chinese politicians are worried higher food prices could lead to discontent and social unrest. Prices, particularly for basic food items such as pork and eggs, rose markedly last year in China, partly because of supply problems. This was further exacerbated by a severe winter which destroyed many crops [BBC / CNN].

China is set to increase its military spending this year, causing increased concern in the West. [BBC]. China has said it plans to increase military spending by nearly 18%, to 417.8bn yuan ($59bn; £30bn). This week the Pentagon released a 66 page document [PDF] outlining China’s military expenditure. The document laid out many concerns that the US has over Chinese military spending. While the “United States continues to encourage China to participate as a responsible international stakeholder by taking on a greater share of responsibility for the stability, resilience and growth of the global system” there was “much uncertainty” surrounding “China’s future course, in particular in the area of its expanding military power and how that power might be used” the summary said. The concerns also outlined in the Pentagon report talks of China’s development of space weapons and intercontinental ballistic missiles. “China’s nuclear force modernization, as evidence by the fielding of the new DF-31 and DF-31A intercontinental-range missiles, is enhancing China’s strategic strike capabilities. China’s emergent anti-access/area denial capabilities – as exemplified by its continued development of advanced cruise missiles, medium-range ballistic missiles, anti-ship ballistic missiles designed to strike ships at sea, including aircraft carriers, and the January 2007 successful test of a direct-ascent, anti-satellite weapon – are expanding from the land, air, and sea dimensions of the traditional battlefield into the space and cyber-space domains.” The Pentagon says that the “lack of transparency in China’s military and security affairs poses risks to stability by increasing the potential for misunderstanding and miscalculation.” [CNN]

However, China has dismissed the assertions laid out by the Pentagon saying that the document was a “distortion of the facts”. Most of this year's military increase will be spent on increasing salaries and accommodating higher oil prices, according to Jiang Enzhou, a spokesman for China's National People's Congress, which began its annual meeting today [Wednesday]. "China's limited military capability is solely for the purpose of safeguarding independence, sovereignty and territorial integrity, and does not pose a threat to any other country" Mr Jiang said. But it is the ‘safeguarding of independence, sovereignty and territorial integrity’ that is perhaps of some concern to the US especially as China continues to reassert its ‘contentious claim to Taiwan’. The Pentagon report makes it clear that the Taiwan issue is one of the major reasons behind increased expenditure. “China’s near-term focus on preparing for contingencies in the Taiwan Strait, including the possibility of U.S. intervention, is an important driver of its modernization” the report says. Regarding Taiwan, President Hu’s 17th Party Congress speech did not emphasize military threats, but affirmed the importance of continuing China’s military modernization and urged the Party to “accelerate the revolution in military affairs with PLA characteristics [and] ensure preparations for military struggle”. Hu’s speech also included an offer to hold consultations with Taiwan, based on Beijing’s One China principle, toward “reaching a peace agreement.” However, Taiwan’s President Chen Shui-bian rejected the offer. China also places many advanced military systems opposite Taiwan leading to further worries by foreign observers. By November 2007, the PLA [Peoples Liberation Army] had deployed between 990 and 1,070 CSS-6 and CSS-7 short-range ballistic missiles (SRBM) to garrisons opposite Taiwan. It is increasing the size of this force at a rate of more than 100 missiles per year, including variants of these missiles with improved ranges, accuracies, and payloads. For its part the United States continues to make available defense articles, services, and training assistance to enable Taiwan to maintain a sufficient self-defense capability. Speaking on CNN, James Mulvenon, from the Centre for Intelligence Research & Analysis, said this week that “China is currently engaged in probably the largest most aggressive defence industrial production of submarines of any country in the world”. It is the strategic use of such machines that worry US military strategists. One of China’s submarines surfaced within torpedo range near to the USS Kitty Hawk in 2006 sending a clear message to some the potential threat China might pose in any future conflict [BBC]. “It brought home the message that the Chinese might be able to sneak up on our aircraft carriers, and perhaps sink a couple of them in a battle”, said Hans Kristensen, a China military analyst. The Pentagon has called on China for greater transparency with regards its military spending. “Misunderstanding can lead to conflict or crisis” said Admiral Timothy Keating, of the US Pacific Command, on a visit to Beijing last year.

It is Taiwan’s continued moves towards ‘independence’ from the mainland that continues to rattle leaders in Beijing. Recent representations to the United Nations by Taiwan to become recognized as a member state have drawn strong statements from the Chinese government.

Jiang Enzhou made China’s feelings very clear this week when he said, “Attempts by Chen Shui-bian and his administration to move forward a UN referendum on Taiwan is a key step to deny the reality of one China and declare de jure independence. This is tantamount to declaring independence. If the authorities succeed it will undermine the interests of all and jeopardize the peace and stability of both sides of the Taiwan Straits and Asia Pacific at large” [CNN]

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