INTRODUCTION THIRD LARGEST COUNTRY MOST POPULOUS BORDERS

INTRODUCTION THIRD LARGEST COUNTRY. MOST POPULOUS. BORDERS.

INTRODUCTION THIRD LARGEST COUNTRY. MOST POPULOUS. BORDERS. 3400 OFFSHORE ISLANDS. AREA – 95, 71, 300 SQ KM. ZHONGGUO.

SCOPE PART I–BACKGROUND INFORMATION. PART II–ANALYSIS OF IMPORTANT CURRENT FACETS OF POWER. PART III-THE PEOPLE’S ARMY. PART IV-INDIA-CHINA RELATIONS. PART V–PROGNOSIS.

LAND RESOURCES BROAD DIVISIONS l MOUNTAINS -43 %. l MOUNTAINOUS PLATEAUX - 26 %. l BASINS - 19%. l FLATLANDS - 12%.

NATURAL RESOURCES RESERVES OF ENERGY RESOURCES (IN TONNES) PETROLEUM COAL IRON ORE - 20 BILLION. 10 TRILLION. 50 BILLION.

POPULATION v HAN CHINESE - 93% v MINORITES - 7. 0% (56 ETHNIC GROUPS) v POPULATION - 1. 27 BILLION (2001). v DENSITY - 133 PER SQ KM. v RURAL/URBAN RATIO - 66/34.

ECONOMY v FOUR MODERNIZATIONS v AGRICULTURE. v INDUSTRY. v SCIENCE AND TECHNOLOGY. v DEFENCE. v DECENTRALIZATION OF PLANNING. v RELIANCE ON MARKET FORCES. v GROWTH RATES v - 7% v 1992 - 13% v v 1986 -90 1994 - 12% FDI - $ 30 MILLION IN 1994.

ECONOMY v GNP IN 1999 - $980 BILLION. v PER CAPITA - $ 780. v NATIONAL INCOME v - 17. 6%. v v AGRICULTURAL OUTPUT INDUSTRIAL OUTPUT - 49. 3%. GDP v 1965 -79 - 6. 4%. v 1980 -88 - 10. 3%. v 1989 - 4%. v 1990’s - 10%.

AGRICULTURE v MOST IMPORTANT SECTOR. v PER CAPITA INCREASES DWINDLING. v 1952 -79 v - 103%. v v GRAIN OUTPUT INCREASE PER CAPITA INCREASE - 20%. PER CAPITA ACREAGE v 1949 - 0. 45 ACRES. v 2001 - 0. 26 ACRES.

AGRICULTURE v MIXED FARMING. v MECHANIZATION. v FLOOD CONTROL AND IRRIGATION PROJECTS. v 2000 STATE FARMS. v FISHERIES v CATCH IN 1997 - 36. 3 MILLION. TONNES. v MARINE PRODUCTS - 7 MILLION. TONNES. ANNUALLY.

MINING v COAL - ANNUAL OUTPUT – 1. 01 BILLION TONNES. v PETROLEUM v 1994 v SELF SUFFICIENT FROM 1963. v EXPORTER FROM 1973. v LARGEST RESERVES v - 146 MILLION TONNES. NET IMPORTER SINCE 1993. - 10 BILLION BARRELS TARIM BASIN. v IRON ORE PRODUCTION IN 1999 - 63 MILLION TONNES. v GRAPHITE PRODUCTION IN 1994 - 3, 20, 000 TONNES.

MANUFACTURING v INDUSTRY’s SHARE OF GDP v 1965 - 39%. v 1999 - 49%. v 300, 000 INDUSTRIAL ENTERPRISES BY MID-1990’s. v PRODUCTION OF IRON AND STEEL (1995) v PIG IRON - 105 MILLION TONNES. v CRUDE STEEL - 95. 4 MILION TONNES. - 28 MILLION TONNES. v HEAVY INDUSTRIES. v FERTILIZERS PRODUCTION IN 1998 v PRODUCTION OF COTTON YARN IN 1995 - 5 MILLION TONNES.

MANUFACTURING v OTHER PRODUCTS v v - 476 MILLION TONNES. BOARDS - 28. 1 MILLION TONNES. v BICYCLES - 44. 7 MILLION UNITS. v MOTOR VEHICLES - 1. 45 MILLION UNITS. v v CEMENT PAPER & PAPER TV’s - 34. 9 MILLION UNITS. INDUSTRIAL UNITS BY 1994 v - 8 MILLION. v v PRIVATELY OWNED COLLECTIVES - 1. 8 MILLION. 100, 000 STATE OWNED FIRMS.

ENERGY v ELECTRICITY OUTPUT IN 1999 1. 2 BILLION k. Wh. v HYDROELECTRIC POWER – 18%. v NUCLEAR ENERGY PLANT AT SHANGHAI.

COMMERCE AND TRADE v v MARKET FORCES DOMINATE. 1999 v EXPORTS $ 195 BILLION. v IMPORTS $ 166 BILLION. FDI BY 1994 $ 39 BILLION. EXPORT COMMODITIES v CRUDE & REFIND PETROLEUM. v COTTON FABRIC. v SILK. v RICE. v CLOTHING. v PORK. v FROZEN SHRIMPS. v TEA.

IMPORT COMMODITIES v MACHINERY. v STEEL PRODUCTS. v OTHER METALS. v CARS. v SYNTHETICS. v AGRICULTURAL CHEMICALS. v RUBBER. v WHEAT. v SHIPS.

TRADING PARTNERS v JAPAN. v HONG KONG. v USA. v GERMANY. v TAIWAN. v SINGAPORE.

TRANSPORT v v v RAILWAYS v LENGTH 57, 566 KM. v DIESEL AND STEAM TRACTION. v LANZHOU - LHASA LINE UNDER CONSTRUCTION. v TRANS – ASIA RAILWAY PROJECT v LENGTH 5513 KM. v COST $ 2. 5 BILLION. v LIKELY COMPLETION 2006. v WILL CONNECT SIX ASEAN COUNTRIES. ROADS v LENGTH 1. 5 MILLION KMS. v VEHICLE PRODUCTION 1. 5 MILLION ANNUALLY PLANS TO RAISE TO 3 MILLION. v 3. 5 MILLION CARS IN 1995 AND 5. 6 MILLION LARGER VEHICLES. v 1 VEHICLE PER 131 PEOPLE. INLAND WATERWAY 110, 000 KMS LONG. MERCHANT FLEET 1800. AIR LINKS TO 90 CITIES.

COMMUNICATIONS v RADIO - v TV v v 417 MILLION BY 1997. BETWEEN 1997 & 1981 - INCREASE FROM 6, 30, 000 TO 7 MILLION. v IN 1997 - 400 MILLION TV’s WERE IN USE. v AVERAGE - 2 SETS FOR EVERY THREE HOUSE HOLDS. v SATELITE RECEIVERS. NEWSPAPERS v 200 DAILIES. v CIRCULATION v PEOPLE’s DAILY. - 50 MILLION. v ACTIVE PUBLISHING INDUSTRY. v 16. 9 MILLION INTERNET USERS. v GOVERNMENT CONTROLS P & T SERVICES.

DEFENCE v SUPREME COMMAND WITH CMC. v WORLD’s LARGEST v BREAKDOWN OF PLA – 2. 5 MILLION (ABOUT 1. 3 MILLION CONSCRIPTS). v - 2, 20, 000 (INCLUDING 27, 000 IN NAVAL AIRFORCE AND 5000 MARINES). v v v NAVY AIR FORCE ARMY - 4, 20, 000. REMAINDER. SUPPORTED BY MILITIA (12 MILLION) & SECURITY FORCE (8, 000). MAJOR EQUIPMENT v NAVY - 1700 VESSELS, INCLUDING 60 SUBMARINES. v AIR FORCE - 3740 COMBAT AIRCRAFT. v NUCLEAR WEAPONS. v NO BUSINESS VENTURES NOW.

NATIONAL SECURITY OBJECTIVES SOVEREIGNTY : l RETURN OF TERRITORIES. l BORDER DISPUTES. l CONTROL OVER RESTIVE INDIGENOUS POPULATIONS. l INTERNATIONAL PRESSURES. MODERNITY : l INCREASE ECONOMIC STRENGTH. l ENHANCE TECHNOLOGICAL CAPABILITIES. l RAISE STANDAR OF LIVING. STABILITY : l TACKLING SOCIAL DISLOCATIONS. l REGIME CONTINUITY. l PEACEFUL EXTERNAL ENVIRONMENT.

EXTERNAL FACETS MAJOR POWER. ULTIMATE GOAL. MAIN EXTERNAL PROBLEM – TAIWAN. STRATEGIC AND MISSILE FORCE. SECURITY AGREEMENTS WITH RUSSIA. SINO – US RELATIONS : l CONDITIONAL ENGAGEMENT. l BALANCE OF THREAT. l DEFENCE OF TAIWAN. l COUNTER TERRORISM. l WEAPONS PROLIFERATION. CHINA’S VIEW OF USA. SINO – INDIAN RELATIONS. DISPUTE – SOUTH CHINA SEA.

INTERNAL ISSUES v TIBETAN PROBLEM LINGERS. v FALUN GONG MOVEMENT. v SEPARATISM IN XINJIANG. v SARS.

ECONOMIC ISSUES v OPEN MARKET ECONOMY. v GROWTH IN 2001 – 7. 3%. v TRANSFORMING INTO DOMINANT ECONOMIC FORCE. v CHALLENGING USA IN FUTURE. v FUND SUPPORT FROM GOVERNMENT. v CHALLENGES v BUDGET DEFICITS. v RESTRUCTURING STATE-OWNED INDUSTRIES. v SOCIAL COSTS. v SPREADING WEALTH.

POLITICAL ASPECTS v 10 TH PARTY CONGRESS. v NEW LEADERSHIP v HU JINTAO. v WEN JIABAO. v v GEN CAO GANGCHUAN. PARAMOUNT POLITICAL LEADERJIANG ZEMIN.

ANALYSIS OF NEW LEADERSHIP v MORE OPEN TO CHANGES. v PRESS FREEDOM. v VALUE IN DE`TENTE. v NO LOOSENING OF CONTROL ON TIBET & XINJIANG.

ROLE OF MILITARY v PLA LINKS WITH CCP. v AUTONOMY AND FUNDING. v MILITARY SENTIMENT. v DE-POLITICIZATION OF PLA.

NEW LEADERSHIP v POSITIVE CHANGES EXPECTED. v DIFFUSING ‘CHINA THREAT’ THEORY. v TAIWAN ISSUE. v PEACE AND STABILITY IN ASIAPACIFIC. v MULTI-POLAR WORLD ORDER.

PART - III : THE PEOPLE’S LIBERATION ARMY

NATIONAL MILITARY OBJECTIVES PROTECT THE PARTY AND SAFEGUARD STABILITY. DEFEND SOVEREIGNTY AND DEFEAT AGGRESSION. MODERNIZE THE MILITARY AND BUILD THE NATION.

CHINA’S SECURITY ENVORONMENT INTERNAL UNREST. OPTIONS FOR TAIWAN. DEFENCE OF CENTRE OF GRAVITY – COAST. BAILATERAL PROBLEMS ON LAND BORDER. RUSSIA – LONG – TERM CONCERN. USA – ENDURING CONCERN. JAPAN VIEWED WITH SUPICION. NEED TO ENHANCE MARITIME AND AEROSPACE CAPABILITIES. CREDIBLE NUCLEAR DETERRENT.

MODERNIZATION OF THE PEOPLE’S LIBERATION ARMY (PLA)

MODERNIZATION OF PLA v INCREASED MILITARY SPENDING. v ENHANCING CAPABILITIES OF NAVY AND AIR FORCE. v SECOND ARTILLERY. v RAPID RESPONSE FORCE. v MISSILES. v ENHANCING C 3 ISR. v INFORMATION WARFARE.

DEFENCE BUDGET v $ 20 BILLION IN 2002. v INCREASE - 17. 6%. v ACTUAL BUDGET - NEARLY $ 65 BILLION.

SUPPLIES FROM RUSSIA v 70% OF FOREIGN ARMS SALES TO CHINA. v 72 SU-27 AND 10 IL-76 AIRCRAFT. v 100 S-30 MISSILES. v 4 KILO CLASS SUBMARINES. v 2 SOVERMENNY CLASS DESTROYERS. v 300 SU-27 s BY END 2003. v CO-PRODUCTION OF 200 SU-27 s BY 2012. v AERIAL RE-FUELLING TANKERS.

GROUND TROOPS v CONVERSION TO NEW EQUIPMENT. v POCKETS OF EXCELLENCE.

PLA NAVY v RESEARCH AND DEVELOPMENT. v AIRCRAFT CARRIER?

PLA AIR FORCE v SUKHOI FIGHTERS. v AEW AIRCRAFT. v HEAVY TRANSPORT AIRCRAFT. v AERIAL REFUELLING. v R&D IN NEW WEAPONS AND EQUIPMENT.

SECOND ARTILLERY v PHASING OUT FIXED MISSILES. v INCREASED SURVIVABILITY. v RAPID RESPONSE.

TEA

PART – IV : INDIA – CHINA RELATIONS

OFFICIAL POLICY OF INDIA SEEKS FRIENDLY, COOPERATIVE, GOOD – NEIGHBOURLY AND MUTUALLAY BENEFICIAL RELATIONS. LONG – TERM STABLE RELATIONSHIP. COMMITTED TO PROCESS OF DIALOGUE. AREAS OF BILAERAL RELATIONS. l TRADE. l CULTURAL EXCHANGES. l MILITARY EXCHANGES. l SECURITY AND FOREIGN OFFICE DIALOGUE. l SCIENCE AND TECHNOLOGY COOPERATION.

ECONOMIC AND COMMERCIAL FIELDS RESUMPTION OF TRADE – 1978. MOST FAVOURED NATION AGREEMENT – 1984. JEG ESTABLISHED IN – 1988. BILATERAL TRADE HAS GROWN RAPIDLY.

PROGRESS AND SETBACKS JOIN WORKING GROUP (JWG) ESTABLISHED. BILATERAL TRADE HAS GROWN. INDIA – US RELATIONS VIEWED WITH CONCERN BY CHINA. LITTLE PROGRESS ON BORDER ISSUE. TIBET – A THORNY PROBLEM. INDIA VIEWS CHINA’S RELATIONS WITH PAKISTAN WITH CONRERN.

POLICY CHANGES BY CHINA SHIFTING STANCE ON KASHMIR. ADVICE TO PAKISTANCE DURING KARGIL WAR. NEUTRAL ROLE IN 2002. BILATERAL TALKS ON BORDER ISSUE. REDUCED MILITARY AID TO PAKISTAN. REDUCTION OF RHETORIC. POLITICAL AND ECONOMIC COOPERATION.

INDIA’S RESPONSE INITIAL SUSPICION BECAUSE OF : l CHINESE ASSISTANCE TO PAKISTAN. l WEAPONS TO BANGLADESH. l MAKING INROADS INTO MYANMAR. l CONTINUED OCCUPATION OF INDIAN TERRITORY. l DANGER OF CHINA’S MEDDLING IN N E STATES. MODIFICATION TO FOREIGN POLICY. SETBACK AFTER NUCLEAR TESTS. BORDER ISSUE HAS BEEN KEPT ASIDE. CAUTIOUS PARTNERSHIP BASED ON STABILITY AND ECONOMIC GROWTH.

STRATEGIC REASONS INDIA HOPES TO WEAKEN SINO-PAK RELATIONS. CHINA’S SUSPICIONS OF PAK COMPLICITY IN XINJIANG. SIMILAR VIEW ON TERRORISM. STABLE RELATIONS WITH INDIA SECURE CHINA’S SOUTH WESTERN FLANK. FOR INDIA BETTER RELATIONS WITH CHINA CAN REDUCE DEFENCE BURDEN.

HEDGING BY CHINA UNWILLING TO BREAK ALLIANCE WITH PAKISTAN. RELATIONS WITH PAKISTAN – COUNTERWEIGHTS TO USA. HEDGE AGAINST RELATIONS WITH INDIA TURNING SOUR. RELATIONS WITH OTHER COUNTERIES OF SOUTH ASIA. CAUTIOUS APPROACH FOR THE PRESENT.

AREAS OF IMPROVEMENT REGULAR DIALOGUE INCLUDING ON STRATEGIC ISSUES. POLITICAL WILL TO SOLVE BORDER DISPUTE. MANAGEMENT OF INDIA – CHINA – PAKISTAN TRIANGLE. ACCOMODATION AND DEMONSTRANTION OF GOODWILL. SECURITY COUNCIL SEAT FOR INDIA. GREATER COOPERATION IN OTHER SPHERES.

ECONOMIC ISSUES v v v v CONSIDERABLE PROGRESS. SUSTAINED GROWTH. WILL ENHANCE MILITARY POWER. STRUCTURAL PROBLEMS v FOOD. v ENERGY. REGIONAL DISPARITY. GLOBAL MANUFACTURING AND PROCESSING BASE. TRADE WITH INDIA. ECONOMIC MODERNIZATION HAS PAID RICH DIVIDENDS.

SECURITY ISSUES v CONCERNS – JAPAN & USA. v INTEGRATIVE STRATEGY. v FORCE MODERNIZATION. v POTENTIAL CONFLICT WITH TAIWAN. v RELIANCE ON MISSILES. v NEED TO OVERCOME OBSTACLES.

INTERNAL ISSUES v FRACTURED SOCIETY. v RURAL – URBAN DIVIDE. v ONE – CHILD POLICY. v ETHNIC UNREST.

v v v v INDIA – CHINA RELATIONS STABLE & CO-OPERATIVE RELATIONS DESIREABLE. AREAS OF CONCERN REMAIN. CHINA’S VIEW OF INDA. RISING POWER. INTERNAL PROBLEMS. ONLY REGIONAL STATUS. POTENTIONAL IT GIANT.

CONCLUSION

CONCLUSION v IMPRESSIVE GROWTH BUT UNEVEN. v CREDIBILITY OF CHINESE STATISTICS. v HIGH SAVING RATE. v DOMESTIC ECONOMY WEAK. v UNEMPLOYMENT. v CORRUPTION. v LEGAL SYSTEM.

CONCLUSION v PROJECTION AS “RESPONSIBLE WORLD POWER”. v CO-OPERATION, PEACE AND STABILITY. v MILITARY MODERNIZATION. v INCREASED ASSERTIVENESS IN FUTURE. v COUNTRY IN TRANSITION.

TRANSITION

CONCLUSION v FOCUS ON TAIWAN AND ASIA-PACIFIC. v FACING NO IMMEDIATE MILITARY THREAT. v MODERNIZATION OF PLA & IMPROVING ECONOMY WILL CONTINUE.