Chinese entities world's biggest economic spies: Pentagon By Paul Eckert and Phil Stewart Posted 2012/05/19 at 8:03 am EDT WASHINGTON, May 19, 2012 (Reuters) The Pentagon said on Friday it believes China spent up to $180billion on its military buildup last year, a far higher figure thanacknowledged by Beijing, and it accused "Chinese actors" of beingthe world's biggest perpetrators of economic espionage. China rejected the report as irresponsible, saying the UnitedStates was spreading a "China military threat" theory. The Pentagon, in its annual report to Congress on China's military,flagged sustained investment last year in advanced missiletechnologies and cyber warfare capabilities and warned that Chinesespying threatened America's economic security. "Chinese actors are the world's most active and persistentperpetrators of economic espionage," the report said. |
"Chinese attempts to collect U.S. technological and economicinformation will continue at a high level and will represent agrowing and persistent threat to U.S. economic security." David Helvey, acting assistant secretary for defense, stopped shortof saying the Chinese government was behind cyber intrusions, andinstead repeated that they were "from China." "As we learn more about them, we have a better understanding of thenature of the operations and that helps us to say with greaterconfidence that some of these are in fact coming from China," hetold reporters in a briefing on the annual report. Analysts said espionage and aggressive acquisition of dual-usetechnology could accelerate China's military modernization. The United States could be in for a surprise in 2013-15 if "Chinasuccessfully exploits it extensive cyber-espionage efforts andunveils new weapons systems that are on par with U.S.
systems,"said Capital Alpha Partners LLC, a investment analysis group, in aresearch note on the Pentagon report. China expressed its opposition to the report for painting itsmilitary development as a threat, saying it was for defensivepurposes and not aimed at any country or target. "China is committed to maintaining and promoting the peace,stability and prosperity in the Asia Pacific region, and even theworld," Foreign Ministry spokesman Hong Lei said in a statement. Hecalled on the United States to halt the annual publication of thereports and do more to promote Sino-U.S.
military relations. The report was the first by the Pentagon since President BarackObama last year launched a policy "pivot" to reinforce U.S.influence across the Asia-Pacific region, even as plannedbelt-tightening shrinks the size of the military in many otherparts of the world. That pivot has fanned unease in China, with some People'sLiberation Army officers calling it an effort to fence in theircountry and frustrate Beijing's territorial claims. The Pentagonreport identified China's rapid development of Anti-Access/AreaDenial weaponry, such as missiles targeting aircraft carriers, as apotential threat to U.S.
movements in Asia. STEALTH FIGHTER, AIRCRAFT CARRIER China has advertised its long-term military ambitions with shows ofnew hardware, including its first test flight of a stealth fighterjet in early 2011 and its August launch of a fledgling aircraftcarrier - a refitted former Soviet craft. The Pentagon noted that some components of China's firstindigenously produced carrier may already be under construction. Itsaid that carrier could achieve operational capability after 2015.
"China likely will build multiple aircraft carriers and associatedsupport ships over the next decade," it said. It would be 2018 before China's stealth fighter would have"operational capability," said Helvey, citing the need to fieldmore aircraft, integrate weapons and conduct training. China announced in March that 2012 outlays on the PLA will reach670.3 billion yuan for 2012 (about $106 billion), an 11.2 percentincrease over 2011. That follows a near-unbroken string ofdouble-digit rises across two decades.
The Pentagon suggested that China's 2011 figure was anunderestimate, noting "poor accounting transparency and China'sstill incomplete transition from a command economy." "Using 2011 prices and exchange rates, (the U.S. Department ofDefense) estimates China's total military-related spending for 2011ranges between $120 billion and $180 billion," the Pentagon said. "Some of their nuclear forces modernization occurs off-budget, someof the research and development monies that go to their defenseindustry we also think comes from a different budget ... some ofthe foreign acquisitions comes from a different account as well,"said Helvey. In contrast, U.S.
lawmakers are now debating a bill seeking $554billion in base defense spending for the 2013 fiscal year beginningin October and $88.5 billion for the Afghan war and other overseasoperations. Taiwan, the self-ruled island that China claims as a renegadeprovince to be recovered by force, if required, "remains theprincipal focus and driver of much of China's military investment,"the report said. Despite an ongoing improvement in China-Taiwan relations underTaipei's Beijing-friendly President Ma Ying-jeou, "China's militaryshows no sign of slowing its efforts to prepare for Taiwan Straitcontingencies," said Helvey. The report underscored the Pentagon's desire for more steady andcontinuous military-to-military relations with China, noting that"this aspect continues to lag behind other aspects of the broaderbilateral relationship." But Helvey noted that although China canceled some militaryexchanges after the September 2011 U.S. announcement of arms salesto Taiwan, dialogue continued and the two powers have set a"robust" schedule for 2012, which has already seen a U.S.
visit byDefense Minister Liang Guanglie. The 43-page report is posted atwww.defense.gov/pubs/pdfs/2012_CMPR_Final.pdf (Additional reporting by Don Durfee in Beijing; Editing by RonPopeski).
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