Within the annual report to Congress, as required by the National Defense Authorization Act, the Department of Defense (DoD) addresses the current and future course of military-technological development of the People’s Liberation Army (PLA), as well as U.S.-China engagement and cooperation on security matters, and the U.S. strategy for continued engagement.

According to the DoD, China’s vision is to expand into a “comprehensive national power,” with focus on being the powerhouse within the Indo-Pacific region. DoD assesses that China is well on its way to achieving their goal of regional dominance.

China’s advances come at the expense of others, as China demonstrates its ability to master technologies with dual uses. To this end, China is also focused on reducing and replacing imported technologies as part of their “Made in China 2025” initiative. In addition, technological advances benefit from the civil-military partnerships via their national strategy, “Civil-Military Integration (CMI) initiatives,” which provides the civilian sector with incentives to engage with the defense market.

Economic Prosperity Linked with Military Might

A major economic initiative is the “One Belt, One Road,” which seeks to establish economic opportunity, and simultaneously enhance China’s military presence abroad. Examples include the establishment of a naval base in Djibouti, the creation of the trans-Pakistan-China highway to a Pakistani port along the Indian ocean. A naval base in Pakistan permits the Chinese Navy to have a permanent presence in proximity to the Gulf of Oman, Straits of Hormuz and the Arabian Sea.

China’s military remains focused on creating capabilities to degrade U.S. advantages. To that end, China remains focused on the acquisition of “foreign military and dual-use technologies” via a variety of avenues. These avenues include direct investment, cyber theft, covert acquisition via Chinese citizens with access, and other illicit approaches. In other words, China has a shopping list and they are ticking off their technological acquisitions. In the past year we have seen China’s MSS targeting U.S. technologies to include, aviation, submarine warfare,dynamic random access memory, energy and more. .

Submarine Technology

China covertly acquired submarine technology through the Sea Dragon project. In addition, they attempted to illegally acquire restricted technologies associate with submarine warfare, to include remotely-operated side scan sonar systems, unmanned underwater vehicles, unmanned surface vehicles, and robotic boats.

Aviation

China attempted to acquire aviation technology and simultaneously infiltrate the U.S. Army via an operation which attempted to utilize the access of a Chinese national holding a lawful U.S. permanent resident permit.

Dynamic Random Access Memory

China’s successful effort to acquire dynamic random access memory enabled the Chinese to create their own fabrication plants using the technology of a U.S. manufacturer, Micron, located in Idaho.

Energy

They attempted to acquire via separate operational activities GE’s and Phillip’s 66 proprietary energy technologies. The Phillip’s 66 technology was valued at $1 billion.

China’s influence strategy

China has developed the “Three Warfares” strategy which is comprised of psychological warfare, public opinion warfare, and legal warfare.

China’s not backing away from flexing its muscles and the U.S. and others should not be surprised to have occasional nudges both in the kinetic and cyber landscape.

The U.S. has developed its own counterintelligence strategy, and the Department of Justice has formed a working group to address the Chinese espionage and open source collection effort.

To read the entire report – Annual Report to Congress – PDF – 136 pages

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Christopher Burgess (@burgessct) is an author and speaker on the topic of security strategy. Christopher, served 30+ years within the Central Intelligence Agency. He lived and worked in South Asia, Southeast Asia, the Middle East, Central Europe, and Latin America. Upon his retirement, the CIA awarded him the Career Distinguished Intelligence Medal, the highest level of career recognition. Christopher co-authored the book, “Secrets Stolen, Fortunes Lost, Preventing Intellectual Property Theft and Economic Espionage in the 21st Century” (Syngress, March 2008).