HEARING ON A ‘WORLD-CLASS’ MILITARY: ASSESSING CHINA’S GLOBAL MILITARY AMBITIONS HEARING BEFORE THE U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION ONE HUNDRED SIXTEENTH CONGRESS FIRST SESSION THURSDAY, JUNE 20, 2019 Printed for use of the United States-China Economic and Security Review Commission Available via the World Wide Web: www.uscc.gov UNITED STATES-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION WASHINGTON: 2019 U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION CAROLYN BARTHOLOMEW, CHAIRMAN ROBIN CLEVELAND, VICE CHAIRMAN Commissioners: ANDREAS A. BORGEAS KENNETH LEWIS JEFFREY L. FIEDLER MICHAEL A. MCDEVITT HON. CARTE P. GOODWIN HON. JAMES M. TALENT ROY D. KAMPHAUSEN MICHAEL R. WESSEL THEA MEI LEE LARRY M. WORTZEL The Commission was created on October 30, 2000 by the Floyd D. Spence National Defense Authorization Act for 2001 § 1238, Public Law No. 106-398, 114 STAT. 1654A-334 (2000) (codified at 22 U.S.C. § 7002 (2001), as amended by the Treasury and General Government Appropriations Act for 2002 § 645 (regarding employment status of staff) & § 648 (regarding changing annual report due date from March to June), Public Law No. 107-67, 115 STAT. 514 (Nov. 12, 2001); as amended by Division P of the “Consolidated Appropriations Resolution, 2003,” Pub L. No. 108-7 (Feb. 20, 2003) (regarding Commission name change, terms of Commissioners, and responsibilities of the Commission); as amended by Public Law No. 109- 108 (H.R. 2862) (Nov. 22, 2005) (regarding responsibilities of Commission and applicability of FACA); as amended by Division J of the “Consolidated Appropriations Act, 2008,” Public Law Nol. 110-161 (December 26, 2007) (regarding responsibilities of the Commission, and changing the Annual Report due date from June to December); as amended by the Carl Levin and Howard P. “Buck” McKeon National Defense Authorization Act for Fiscal Year 2015, P.L. 113-291 (December 19, 2014) (regarding responsibilities of the Commission). The Commission’s full charter is available at www.uscc.gov. ii September 9, 2019 The Honorable Chuck Grassley President Pro Tempore of the Senate, Washington, DC 20510 The Honorable Nancy Pelosi Speaker of the House of Representatives, Washington, DC 20515 Dear Senator Grassley and Speaker Pelosi: We are writing to notify you of the Commission’s June 20, 2019 public hearing on “A ‘World-Class’ Military: Assessing China’s Global Military Ambitions.” The Floyd D. Spence National Defense Authorization Act for 2001 § 1238, Pub. L. No. 106-398 (as amended by the Carl Levin and Howard P. “Buck” McKeon National Defense Authorization Act for Fiscal Year 2015 § 1259b, Pub. L. No. 113-291) provides the basis for this hearing. At the hearing, the Commissioners received testimony from the following witnesses: Christopher A. Ford, Assistant Secretary for International Security and Nonproliferation, U.S. Department of State; Mary Beth Morgan, Acting Deputy Assistant Secretary of Defense for East Asia, U.S. Department of Defense; Daniel K. Taylor, Acting Defense Intelligence Officer for East Asia, Defense Intelligence Agency; Dean Cheng, Senior Research Fellow, Asian Studies Center, Heritage Foundation; M. Taylor Fravel, Ph.D., Arthur and Ruth Sloan Professor of Political Science, Massachusetts Institute of Technology; Phillip C. Saunders, Ph.D., Director of the Center for the Study of Chinese Military Affairs, National Defense University; Isaac B. Kardon, Ph.D., Assistant Professor, Strategic and Operational Research Department, U.S. Naval War College; Christopher D. Yung, Ph.D., Donald Bren Chair of Non-Western Strategic Thought and Director of East Asian Studies, Marine Corps University; David Santoro, Ph.D., Director and Senior Fellow for Nuclear Policy, Pacific Forum; Thomas G. Mahnken, Ph.D., President and Chief Executive Officer, Center for Strategic and Budgetary Assessments; and Abraham M. Denmark, Director, Asia Program, Woodrow Wilson International Center for Scholars. The following submitted statements for the record: Elbridge Colby, Director, Defense Program, Center for a New American Security; and Derek Grossman, Senior Defense Analyst, RAND Corporation This hearing examined the internal and external challenges the Chinese Communist Party (CCP) faces in its attempts to consolidate power at home and increase its influence abroad. The first panel explored the implications of President Xi and the CCP’s tightening control over economic and security policy making. The second panel examined China’s domestic challenges, considering China’s economic weakness and financial sector risks, the risks and benefits of China’s state-led economic policies, and the country’s reliance on a number of key foreign technologies. The third panel assessed China’s external challenges, focusing on the People’s Liberation Army’s shortcomings and the limits of Chinese soft, sharp, and hard power. The full transcript of the hearing, prepared statements, and supporting documents are posted to the Commission’s website, www.uscc.gov. Members and the staff of the Commission are available to provide more detailed briefings. We hope these materials will be helpful to the Congress as it continues its assessment of U.S.-China relations and their impact on U.S. security. The Commission will examine in greater depth these issues and the others in our statutory mandate this year. Our 2019 Annual Report will be submitted to Congress in November 2019. Should you have any questions, please do not hesitate to have your staff contact one of us or our Congressional Liaison, Leslie Tisdale Reagan, at 202-624-1496 or [email protected]. Sincerely yours, Carolyn Bartholomew Robin Cleveland Chairman Vice Chairman cc: Members of Congress and Congressional Staff iii CONTENTS THURSDAY, JUNE 20, 2019 A ‘WORLD-CLASS’ MILITARY: ASSESSING CHINA’S GLOBAL MILITARY AMBITIONS Opening Statement of Commissioner Lewis (Hearing Co-Chair) .........................................................................................................6 Prepared Statement ...........................................................................................................8 Opening Statement of Commissioner McDevitt (Hearing Co-Chair) .......................................................................................................10 Prepared Statement .........................................................................................................12 Panel I: Administration Perspectives Panel I Introduction by Commissioner Lewis (Hearing Co-Chair) .......................................................................................................14 Statement of Christopher A. Ford Assistant Secretary for International Security and Nonproliferation, U.S. Department of State ................................................................................................................................15 Prepared Statement .........................................................................................................18 Statement of Mary Beth Morgan Acting Deputy Assistant Secretary of Defense for East Asia, U.S. Department of Defense ...........................................................................................................................24 Prepared Statement .........................................................................................................28 Statement of Daniel K. Taylor Acting Defense Intelligence Officer for East Asia, Defense Intelligence Agency ........33 Panel I: Question and Answer............................................................................................37 Panel II: Drivers, Ambitions, and Resources of a World-Class Military Panel II Introduction by Commissioner McDevitt (Hearing Co-Chair) .......................................................................................................52 Statement of Dean Cheng Senior Research Fellow, Asian Studies Center, Heritage Foundation ...........................53 Prepared Statement .........................................................................................................55 Statement of M. Taylor Fravel, Ph.D. Arthur and Ruth Sloan Professor of Political Science, Massachusetts Institute of Technology .....................................................................................................................74 Prepared Statement .........................................................................................................77 Statement of Phillip C. Saunders, Ph.D. Director of the Center for the Study of Chinese Military Affairs, National Defense University .......................................................................................................................93 Prepared Statement .........................................................................................................96 Panel II: Question and Answer ........................................................................................111 iv Panel III: Building a World-Class Military: Missions, Modernization, and Bases Panel III Introduction by Commissioner Lewis (Hearing Co-Chair) .....................................................................................................129 Statement of Isaac B. Kardon, Ph.D. Assistant Professor, Strategic and Operational Research Department, U.S. Naval War College .........................................................................................................................130 Prepared Statement .......................................................................................................133