China's military modernization is progressing but still lags behind other powers. It aims to build an informatized military capable of winning modern wars by mid-century. However, China faces immense domestic challenges like an aging society, income inequality, corruption, and environmental degradation that demand resources. Its lack of transparency about defense spending also creates uncertainties. Going forward, China will prioritize addressing internal issues while continuing military development, but still needs time to project large forces globally.

1. Future Course of
Japan’s National Security Policy
in face of rising China
Thursday, May 29, 2008
3:30 - 5:00 P.M.
Tadahiro Yashima, Visiting Fellow
The Henry L. Stimson Center

2. Outline
Introduction
１．US policy toward China: observation
１
(１) Policy change of Bush administration
２
(２) Still remaining worries, “hedge” against China
３
(３) US policy toward China after the Bush administration
２．China’s military modernization/China’s future
１
(１) Current state of China’s military modernization
２
(２) Additional concern: China’s domestic situations
３
(３) China’s future
３．Future course of Japan’s national security policy
１
(１) Security environment surrounding Japan
２
(２) Other points to be considered
３
(３) How should Japan’s future national security policy look?
Conclusion

3. １． US policy toward China: observation
(1)Policy change of Bush administration
(a) Bush’s presidential campaign, ”China is a strategic competitor”
(b) The incident at Hainan Island and September 11th
“The United States relationship with China is an important part of our strategy
to promote a stable, peaceful, and prosperous Asia-Pacific region”
“There are, however, other areas in which we have profound disagreements”
“We will work to narrow differences where they exist, but not allow them to
preclude cooperation where we agree”
(source) The National Security Strategy of the United States of America, September 20, 2002
(c) The importance of Chinese market
“We need to urge China to become a responsible stakeholder”
(source) Robert B. Zoellick, “Wither China: From Membership to Responsibility?” remarks to National Committee
on U.S.-China Relations, New York City, Sept. 21, 2005

4. (2)Still remaining worries, “hedge” against China
(a) Anxiety and Uncertainty
“many Americans worry that the Chinese dragon will prove to be a fire-breather.
There is a cauldron of anxiety about China”, “China’s actions – combined with a lack
of transparency – can create risks. Uncertainties about how China will use its power
will lead the United States – and others as well – to hedge relations with China. Many
countries hope China will pursue a "Peaceful Rise," but none will bet their future on it”
(source) Robert B. Zoellick, “Wither China: From Membership to Responsibility?” remarks to National Committee
on U.S.-China Relations, New York City, Sept. 21, 2005
(b) Shaping the Choices of Countries at Strategic Crossroads
“The choices that major and emerging powers make will affect the future strategic
position and freedom of action of the United States, its allies and partners. The
United States will attempt to shape these choices in ways that foster cooperation and
mutual security interests”, “the United States, its allies and partners must also hedge
against the possibility that a major or emerging power could choose a hostile path in
the future”, “Of the major and emerging powers, China has the greatest potential to
compete militarily with the United States“
(source) Department of Defense, Quadrennial Defense Review Report, February 6, 2006

5. (3) US policy toward China after the Bush administration
(a) The necessity to maintain and encourage the economic
relations with China is and will be high
(b) The necessity to pursue more cooperative foreign policy
is and will be also high (than Bush administration)
(c) The top priority for US foreign policy remains the Middle East
○ US will have stronger tendency to avoid the decisive confrontation
and to intend the status quo on the security matters in Asia.
○ US will also tend to maintain the cooperative relationship with China
as a whole, even if the confrontation such as human rights and
trade fictions sometimes might be caused.
○ As the economic growth and the military expansion of China will
continue, the US wariness for the Chinese rise will become stronger.
○ US will have to hedge against the future uncertainties.

6. ２．China’s military modernization/China’s future
(1)Current state of China’s military modernization
(a) Modernization proceeds, still lack of transparency
“On March 4, 2007, Beijing announced a 17.8 percent increase in its military
budget to approximately $45 billion.”
“China’s published defense budget does not include large categories of
expenditure, such as expenses for strategic forces, foreign acquisitions,
military-related research and development, and China’s paramilitary forces.”
“Accurately estimating actual PLA military expenditures is a difficult process
due to the lack of accounting transparency and China’s incomplete transition
from a command economy. As a result, outside estimates of China’s military
spending vary. The Department of Defense estimates China’s total military-
related spending for 2007 could be between $97 billion and $139 billion.”
(source) Office of the Secretary of Defense, ANNUAL REPORT TO CONGRESS, Military Power of the People’s
Republic of China 2008

7. (source) Office of the Secretary of Defense, ANNUAL REPORT TO CONGRESS,
Military Power of the People’s Republic of China 2008

8. (b) US assessment of China’s military modernization
“China pursues a three-step development strategy in modernizing its national
defense . . . . The first step is to lay a solid foundation by 2010, the second is to
make major progress around 2020, and the third is to basically reach the
strategic goal of building informatized armed forces and being capable of
winning informatized wars by the mid-21st century.”
– China’s National Defense in 2006”
(source) Office of the Secretary of Defense, ANNUAL REPORT TO CONGRESS, Military Power of the People’s
Republic of China 2008
In spite of significant progress toward fielding a modern military, “The U.S.
Intelligence Community estimates China will take until the end of this decade or
longer to produce a modern force capable of defeating a moderate-size
adversary. China will not be able to project and sustain small military units far
beyond China before 2015, and will not be able to project and sustain large
forces in combat operations far from China until well into the following decade.”
(source) Office of the Secretary of Defense, ANNUAL REPORT TO CONGRESS, Military Power of the People’s
Republic of China 2008

9. (source) Office of the Secretary of Defense, ANNUAL REPORT TO CONGRESS,
Military Power of the People’s Republic of China 2008

10. (2)Additional concern: China’s domestic situations
“Building a moderately prosperous society in all respects is a goal for the Party
and the state to reach by 2020”
(source) Hu Jintao's report at 17th Party Congress, Report to the Seventeenth National Congress of
the Communist Party of China on Oct. 15, 2007
“China has massive internal challenges that include an aging society, a weak
social safety net, large and growing disparities in development, and systemic
corruption—all of which have resulted in social unease. China’s leaders also
are faced with growing labor unrest, a weak banking and financial system,
lingering ethnic disputes, environmental problems almost unimaginable to
Westerners, and vulnerability to epidemic disease. Together, these challenges
have caused Chinese leaders to focus internally, thereby putting a premium on
external stability. China seeks a stable, peaceful international environment in
which to develop its comprehensive national power”
(source) Richard L. Armitage & Joseph S. Nye, THE U.S.-JAPAN ALLIANCE Getting Asia Right through 2020, CSIS REPORT, February 2007

11. Rapid Economic Growth Absolute Control by CCP Enormous Population
Various Problems and Contradictions in Chinese Society
Corruption Income Gap Environmental Issues Resource Shortage
・Coastal and Inland gap ・ Energy for economic growth
・Central and Local ・ Air and water pollution
・Urban and Rural gap ・ The 2nd largest consumer of
・ Party and Government ・Intra-Urban gap ・ Decrease of green area oil
Aging Society Medical Service 水不足
Water Shortage Foods Shortage
・Impact by “One-Child ・Only two-thirds of water ・Net importer of foods since 2004
・ Too expensive for the poor ・北部は特に不足
Policy” resource per person vis-à-
・Growing burden for youth vis Japan ・Import of foods still growing
Concern for Social Instability Concerns for hindering
（Public protests are now frequent）
） economic growth
Chinese government and CCP now prioritizes solution of domestic issues.
“Construction of harmonized society”

12. (3) China’s future
(a) China’s military modernization has been obviously
making progress, but still way in the middle
(b) The necessity to face the internal challenges is high
(c) The lack of transparency is a serious problem
○ China will tend to seek a stable, peaceful international environment.
○ The possibility that China becomes a real threat to the US could be
low in terms of both intensions and military capabilities
○ In the longer term, however, there is no doubt it will become more
serious and necessary to pay careful attention to prospective
China’s military capabilities and military balance in East Asia
○ US and its allies have to encourage China to clarify its intentions
clear, including its military build-up. Their modernization may
increase risks of following miscalculation.
・ The outside world underestimates PLA’s power.
・ China’s leaders overestimate their military power.

13. ３．Future course of Japan’s national security policy
(1)Security environment surrounding Japan
・ Strategic coexistence of US and China
(both countries will seek a stable, peaceful
environment in Asia)
・ Relative decrease of US presence or priority in Asia
＋
○ Low probability of full-scale invasion against Japan
○ Uncertainties and destabilizing factors are still remain
・ ballistic missiles
・ proliferation of weapons of mass destruction
・ the situation on the Korean Peninsula and Taiwan-strait
・ Chinese military modernization
・ Piracy

15. (2)Other points to be considered
(a) Geographical characteristics of Japan
・ Security vulnerabilities resulting from geographical reasons (a high
population density, the concentration of population and industry in urban
areas, and a large number of important facilities in coastal areas)
・ Indispensability of the security of sea lines of communication (Japan
depends almost entirely on import of natural resources from overseas)
(b) Political situation about security matters
・ Severe criticism from the public because of successive scandal about
Ministry of Defense and Self-Defense-Forces
・ Inward-looking tendency of the public
・ Strictly limited budget resources
・ Trend toward fewer children (that could lead to the difficulty in the
recruitment)

16. (3)How should Japan’s future national security policy look?
(a) Maintain and expand the close relationship between Japan-US
・ Strengthen the credibility of Japan-US alliance by promoting such measures as
intelligence exchange, operational cooperation, and cooperation on BMD etc.
(b) Develop a cooperative relationship with China
・ Encourage China to improve transparency of its military affairs (together with US)
・ Encourage the cooperation such as PKO, disaster relief activities etc.
(c) Encourage efforts to improve the international security environment
particularly in Asia (together with ASEAN, India, Australia, and US etc.)
・ Encourage participations and engagements in international cooperation activities
such as PKO, disaster relief, humanitarian relief, international counter-terrorism
measures, reconstruction assistance, piracy precaution etc.
・ Establish a “permanent law” allowing for the dispatch of SDF overseas operations
(d) Reallocate the resources
・ Reduce the personnel size of GSDF, its tanks, main artillery etc.
・ Put priority on modernization of MSDF and ASDF, response to new
threats, and the international cooperation activities

17. Conclusion
Remaining uncertainties and
unpredictable factors
・China’s future (a) Maintain and expand the close
・new threats such as ballistic missile, relationship between Japan-US
terrorism, piracy etc.
・Importance of sea lane
(b) Develop a cooperative relationship
with China
・ Strategic coexistence of US and China
・ Relative decrease of US presence (c) Encourage efforts to improve
or priority in Asia international security environment
・Low probability of full-scale
invasion against Japan
・Security vulnerabilities
・Indispensability of the security of
the sea lines of communication
(d) Reallocate the resources
(reform appeal to the public)
・Severe criticism
These seem to be more important and realistic than
・Inward-looking tendency
facing the revision of the constitution and recognition
・Limited budget resources
of the collective self defense
・Fewer children