By Bill Gertz

China is aggressively building up military forces to strike U.S. forces in the western Pacific and elsewhere as part of what the Pentagon calls an array of high-tech “anti-access” missiles, submarines and warplanes in its latest annual report.

The report to Congress on China’s military power, released Monday, also warned that China’s military is extending its global military reach beyond a weapons buildup to wage regional war with Taiwan and the United States. The report also questioned U.S.-China military exchanges, noting that Beijing is using the visits and meetings for political influence operations and intelligence gathering.

“China is fielding an array of conventionally armed ballistic missiles, ground- and air-launched land-attack cruise missiles, special operations forces, and cyberwarfare capabilities to hold targets at risk throughout the region,” the report said.

• Click here to read the report (PDF)

Release of the assessment comes amid reports that China has surpassed Japan as the world’s second largest economy in terms of gross domestic product, highlighting Beijing’s expanding global power.

Japan’s nominal GDP, which isn’t adjusted for price and seasonal variations, was worth almost $1.29 trillion in the April-to-June quarter compared with almost $1.34 trillion for China, the Associated Press reported. The figures are converted into dollars based on an average exchange rate for the quarter.

The 74-page Pentagon report highlighted numerous military developments by China’s 125-million-troop army, including the first mention of a new multiple-warhead, long-range road-mobile missile, and details on China’s plan to field aircraft carriers.

Much of the report builds on past reports on China’s arms buildup, which includes a modestly growing nuclear arsenal and large-scale expansion of missile, naval and air forces.

However, the report for the first time highlighted the growth of Chinese anti-access and area-denial weapons, notably Beijing’s building and testing of a unique anti-ship ballistic missile that can hit ships at sea with pinpoint accuracy up to 1,000 miles from China’s coasts.

The goal of these forces is to have forces that can attack U.S. ships should they be called on to defend Taiwan in a future conflict with China.

“China is pursuing a variety of air, sea, undersea, space and counterspace, and information warfare systems and operational concepts to achieve this capability, moving toward an array of overlapping, multilayered offensive capabilities extending from China’s coast into the western Pacific,” the report said of the anti-access arms.

Primary anti-access weapons are China’s medium-range missiles “designed to target forces at sea, combined with overhead and over-the-horizon targeting systems to locate and track moving ships.”

Additionally, China now has six nuclear powered attack submarines and 54 diesel-electric powered submarines, many of them outfitted with advanced anti-ship cruise missiles.

Other key anti-access weapons include Luyang 1- and 2-class guided-missile ships and Russian-made Sovremenny-class missile ships. The ships are equipped with advanced long-range anti-aircraft and anti-ship missiles.

For anti-access air strikes, the Chinese have indigenous FB-7 and FB-7A jets, and Russian SU-30s. All the jets are armed with anti-ship cruise missiles for use against surface ships.

“China’s long-term, comprehensive transformation of its military forces is improving its capacity for force projection and anti-access/area-denial,” the report said.

Other strategic and conventional weapons developments disclosed in the report include:

• Deployment of up to 500 DH-10 long-range, precision-strike land-attack cruise missiles. The number is a sharp increase from the 2009 report that listed up to 350 DH-10s deployed.

• Continued development of anti-satellite (ASAT) missiles and other weapons that can destroy or damage space communications and sensor systems, along with a growing array of space systems that China will use for its missile targeting and weapons navigation.

“China continues to develop and refine this system, which is one component of a multi-dimensional program to limit or prevent the use of space-based assets by potential adversaries during times of crisis or conflict,” the report said of the ASAT weapons.

• Deployment of joint Chinese military-civilian militia cyberwarfare units armed with computer viruses to attack foreign computer networks.

• New power projection forces that give China’s military an extended range and are upsetting East Asian stability, specifically threatening the South China Sea region where tensions have been raised.

• China’s military and civilian leaders are using numerous military exchanges at varying levels with the Pentagon “to communicate political messages and shape perceptions of China among foreign leaders.”

• China will continue to be heavily dependent on oil imported by ship in the coming decades. By 2015, almost two-thirds of its oil will be imported and by 2030, four-fifths. The oil dependency will affect China’s military power projection.

Sen. John Cornyn, Texas Republican, said the report “paints an alarming picture, despite its ‘glass half full’ perspective.”

“It is clear that China is aggressively expanding its military capabilities, which appear to be aimed at limiting American strategic options in the Pacific,” he said. “This troubling reality is inconsistent with China’s supposed interest in fostering a peaceful, stable region.”

Michael Pillsbury, a China affairs specialist and former Pentagon policymaker during the Reagan administration, said the new report continues the past practice of highlighting the Chinese military’s interest in the use of strategic deception based on ancient statecraft and stratagem.

The report quotes the late Chinese communist leader Deng Xiaoping as saying China’s military strategy coincides with a larger modernization strategy of “biding time and building capabilities” in secret.

On the report’s warning about China’s lack of sincerity in conducting military exchanges, Mr. Pillsbury said in an interview that “there is a strong hint here that any reader should be suspicious about the [People’s Liberation Army’s] purposes to exploit these exchanges.”

“Past reports have paid little attention to the exchanges, and never implied that they may not be such a good idea if the PLA is exploiting them for its own purposes, rather that the previous views that U.S.-China exchanges are completely positive and only seek to build trust and reduce misperceptions.”

Mr. Pillsbury said the military exchange portion of the report has laid a foundation for Congress “to apply a new metric to assess the content of these exchanges.”

Additionally, the report stated that China’s military has failed to implement promised talks on strategic nuclear issues, Mr. Pillsbury said.

The report had been due to Congress on March 1 but was held up by the Obama administration over internal disputes over whether to anger Beijing by producing the annual listing of China’s military forces and strategy.

China’s communist government routinely denounces the report as exaggerating its military modernization.

Mark Stokes, a former Pentagon specialist on the Chinese military, said one worrying conclusion of the latest report is that the military balance across the Taiwan Strait continues to deteriorate, despite an apparent leveling off of numbers of short-range Chinese missiles opposite the island, now numbering more than 1,000 and which had been growing by 50 missiles a year until last year. More advanced missiles, however, are being added, he said.

The new section of the report lists scores of past military exchanges between the Pentagon and China’s military and a long list of exchanges that had been planned for 2010 but have been put on hold by the Chinese suspension of the exchange program.

The 2010 report to Congress, renamed this year as the “Annual Report on Military and Security Developments Involving the People’s Republic of China” under a little-noticed congressional amendment last year, also for the first time addressed the on-again, off-again military exchanges between China and the Pentagon. China’s military twice since October 2008 has cut off exchanges to protest U.S. arms sales to Taiwan.

A defense official who is critical of the report’s new conciliatory tone on China said the report is deficient on a key issue.

“The report is silent about what is the biggest question of all: What exactly is the PLA doing to prepare for war with the USA, and what is the evidence that the PLA clearly identified the United States as its main enemy in war plans and internal writing?” the official said.

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