Tuesday, July 10, 2012

546 Absence of China’s vice president: CCP split between Hu and Jiang factions

Absence of China’s vice president: CCP split between Hu and Jiang factions

(1) Absence of China’s vice president: CCP split between Hu and Jiang
factions
(2) Open letter demands Chinese premier’s removal
(3) The dragon’s new teeth: THE ECONOMIST on the rise of China’s military
(4) Gavan McCormack on conflict between China and Japan
(5) Occupy Beijing? Social inequality on agenda at 18th Party Congress
(6) China's real estate bubble not as disastrous as in US
(7) China takes aim at U.S. Naval Might

(1) Absence of China’s vice president: CCP split between Hu and Jiang
factions


http://www.wsws.org/articles/2012/sep2012/chin-s15.shtml

The strange absence of China’s vice president

By John Chan

15 September 2012

http://www.wsws.org/articles/2012/sep2012/chin-s15.shtml

Vice President Xi Jinping’s disappearance from public life since
September 1 is becoming another source of political instability as the
ruling Chinese Communist Party (CCP) regime prepares for a key
leadership transition at its upcoming 18th congress.

Xi has not been seen in public, and has cancelled meetings with visiting
foreign figures, including US Secretary of State Hillary Clinton on
September 5. Last week, he failed to appear at a meeting of the powerful
Central Military Commission (CMC), on which he serves as vice chairman.

Xi was expected to take over the top posts of party general secretary,
Chinese president and CMC chairman from President Hu Jintao at the CCP
congress. His unexplained absence has resulted in a rash of speculation
in China and internationally. Various stories claim he has suffered
everything from a back injury or heart attack to a car accident. Chinese
authorities have made no official statement. Instead they censored the
Internet for any search that contains “Xi”.

Even if Xi is ill or injured, that cannot explain his public
disappearance. The Stalinist bureaucracy in Beijing has a Machiavellian
tradition of using “illness” to remove officials who are out of favour.
For instance, Lin Biao, once China’s top army general, was reportedly
ill for years during the early 1960s, only to be brought back to health
to become Mao Zedong’s heir apparent during the so-called Cultural
Revolution when the army was needed to suppress the working class. After
again falling out of favour, Lin died in 1971 in a still unexplained
plane crash as he purportedly fled to the Soviet Union.

This year has already witnessed strange political events in China,
beginning with the sudden purge of Chongqing party secretary and former
Politburo member, Bo Xilai, in March. While the pretext was a scandal
involving the murder of a British business associate, Bo’s removal
pointed to political infighting in the top CCP leadership between the
two major factions—the Young Communist League group led by President Hu
and Premier Wen Jiabao, and the “Shanghai gang” headed by former
President Jiang Zemin and Zhou Yongkang, the state security chief on the
Politburo Standing Committee.

Zhou has reportedly been stripped of his powers for supporting Bo.
Earlier this month, President Hu’s key aide, Ling Jihua, was sidelined
as lurid details leaked out about his son’s alleged involvement in a car
crash.

The most obvious sign of political crisis is that no date has been set
for the party congress, despite the expectation that it would take place
next month. Such congresses are normally orchestrated down to the last
detail months, if not years, in advance.

The New York Times reported on Wednesday that the annual leadership
retreat at the seaside resort of Beidaihe in August broke up without any
agreement over the composition of the new leadership or party’s
direction for the next 10 years. The gathering involved the current
leadership as well as top military and state officials, retired party
elders and the descendants of former leaders.

A political analyst connected to the CCP’s General Office told the
Times: “The atmosphere was very bad, and the struggle was very intense.”
A veteran party scholar said the meeting was short, and only a list of
2,000 congress delegates was finalised. There was no proposed list of
new leaders and no deliberation on the drafts of the political reports
to be presented at the congress. “We thought that these issues would be
settled there, but they weren’t,” he said. The scholar further told the
Times that he had dined late last week with a close family member of Xi.
The relative had told him that he was not aware that Xi was ill. The
scholar maintained that Xi’s absence was likely due to the “unsettled
political situation”, adding:

“There is still a struggle; it is not finished.”

Xi emerged at the last party congress in 2007 as a compromise candidate
to take over as president after Hu apparently failed to win acceptance
of his protégé, Vice Premier Li Keqiang, because of opposition from the
Shanghai faction. Li is currently favoured to become the next premier.

At the heart of the factional disputes are disagreements over how China
is to respond to its economic slowdown and the increasingly aggressive
efforts by the US to undermine Chinese influence throughout Asia. The
Hu-Wen leadership’s economic policy is based on accelerating pro-market
restructuring to attract foreign investment, while its diplomatic
strategy rests on Hu’s doctrine of China’s “peaceful rise”—that is,
avoiding conflict with the US.

This program has increasingly come under fire. A loose grouping of
academics and media commentators associated with Bo, and known as the
New Left, has criticised the government’s “neo-liberal” economic
policies, and advocated protectionism and the strengthening of
state-owned enterprises. This is dressed up with appeals to return to
the CCP’s “socialist” origins as a means of duping the working class and
blocking an independent political movement fighting for genuine socialism.

The Shanghai faction, which presided over wholesale privatisations
during the 1990s and the transformation of China into the world’s
largest sweatshop, has given tactical support to Bo. This does not
indicate support for the New Left’s rhetoric or a more confrontational
policy toward the US. Both the YCL and Shanghai factions represent
layers of the CCP bureaucracy whose children took over some of China’s
largest state-owned companies and act as agents for major Western
corporations.

For the Shanghai gang, “maintaining socialism” simply means preserving
the CCP’s monopoly on power and ruthlessly suppressing any opposition.
Jiang Zemin, who came to power in the wake of the 1989 Tiananmen Square
massacre, has always been deeply suspicious of any call for even limited
“political reform”. The lesson he drew from the Tiananmen Square
protests was that the demands of students for democratic rights had
opened the door for workers to emerge with their own class demands that
the regime could not accommodate, necessitating police-state measures.

Jiang’s predecessor Zhao Ziyang, who was placed under house arrest after
the massacre, had argued that limited democratisation was needed for the
regime to build a social base for its pro-market agenda among sections
of the emerging middle classes, including the intelligentsia. Jiang was
always wary of the Hu-Wen leadership, especially Wen, who had been a top
aide to Zhao. Even after he retired, Jiang retained significant
political influence via his key protégés in the top Politburo Standing
Committee.

In this light, it is possible that Jiang’s Shanghai faction regards Xi
as having drawn too close to the YCL faction of Hu and Wen. Not only did
Xi support the investigation of Bo, but he reportedly has been
contemplating political reforms. According to a Reuters article, citing
internal party sources, Xi had been meeting in the past six weeks with a
significant individual, Hu Deping, “in a gesture intended to show he was
listening to voices calling not only for faster economic liberalisation
but also a relaxation of political control.”

Hu Deping is the son of former CCP general secretary Hu Yaobang, who was
ousted by Deng Xiaoping for promoting “bourgeois liberalisation” on the
university campuses. Hu Yaobang’s death in April 1989 prompted the
student protests that led to the weeks of demonstrations in Tiananmen
Square. In recent years, Premier Wen has published articles defending Hu
Yaobang in an attempt to politically rehabilitate him and his ideas.

Of course, the cloak of secrecy that surrounds the internal machinations
of the top CCP leadership makes it difficult to draw any hard-and-fast
conclusions. It is clear, however that this year’s events point to a
deepening factional war, fuelled by China’s economic downturn,
sharpening social tensions at home and Washington’s aggressive use of
its military might to undermine potential rivals.

(2) Open letter demands Chinese premier’s removal

By John Chan

8 September 2012

http://www.wsws.org/articles/2012/sep2012/chin-s08.shtml

In a further sign of the continuing factional turmoil within the Chinese
Communist Party (CCP), prior to its crucial 18th congress later this
year, a long open letter was issued in late July demanding Premier Wen
Jiabao’s removal. The letter, which claimed to be backed by more than
1,600 officials, accused Wen of destroying the country’s state-owned
sector “in the service of a small number of bureaucratic compradors and
the American ruling clique.”

The letter represents a counterattack by sections of the Stalinist
bureaucracy associated with former Chongqing party secretary Bo Xilai,
who was removed from his post and detained in March over allegations of
corruption. His wife was convicted this month of the murder of a British
business associate. Behind the scandal are sharp divisions within the
CCP bureaucracy over economic policy. Bo had been regarded as a likely
candidate for the CCP’s top body—the Politburo Standing Committee.

The open letter underlined the economic issues at stake. The leading
signatory was a former vice minister of the metallurgical industry, Ma
Bin, a retired 96-year-old official, who still wields a degree of
influence in the top party leadership. His critics have generally
dismissed him as an entrenched “defender of the old line and old system”
for his opposition to the privatisation of state-owned enterprises.

While none of the letter’s signatories holds any significant leadership
post, they form part of an ideological tendency—the so-called New
Left—that has broader influence within the CCP. Ma and 300 other
officials submitted another letter in June demanding the reopening of
some 30 web sites, including Utopia and Maoflag. Once mouthpieces for
the New Left, the sites were shut down in April following Bo’s removal.

The New Left is a heterogeneous grouping that includes social reformist
academics, Mao-era bureaucrats and radical intellectuals seeking to
revive Maoism. They share a common perspective of supposedly turning the
Stalinist bureaucracy back to its “socialist” origins. In reality, all
of them, including those who denounce their opponents as “capitalist
roaders,” are proposing protectionist measures to defend Chinese
capitalism against foreign competition, particularly state-owned
enterprises, along with social policies to ameliorate sharpening class
tensions in China.

Leading business management professor Han Deqiang, who signed the open
letter, was closely associated with Bo. Han founded the Utopia website,
and is typical of the New Left trend. In an interview with British
diplomat Giles Montagnon in May, Han explained his anti-globalisation
stance, complaining that “because transnational corporations are in
China, China’s own enterprises can only labour for transnational
corporations, being second-tiered, third-tiered and four-tiered bosses,
not the big boss.” In other words, China’s capitalist class should no
longer play a subordinate role to international banks and corporations.

Han’s orientation is not to the Chinese working class but to the
“bourgeoisie in the developing countries” which he declared was
oppressed by the more powerful bourgeoisie in imperialist countries. In
an open letter last year on the Utopia website, Han and Ma Bin
enthusiastically supported the “Occupy Wall Street” movement. Speaking
to the British diplomat, Han declared that China’s national
capitalists—who include some of the world’s wealthiest billionaires—were
part of the world’s “99 percent” in the struggle against the “1 percent”
super-rich in the West.

At the same time, Han insisted in his comments to Montagnon that the
Utopia website represented no danger to the Chinese government or
political stability. “This is because Utopia does not call for
overthrowing of the government, but for reform, a change of line from
the top, an integration of the party with the masses, and a return to
socialism. From the standpoint of more ‘leftist’ people, this is
‘reformist’. So how could you call Utopia ‘ultraleft’?”

The most significant aspect of the latest open letter is its demand for
Wen’s removal, not only as premier but also from the party’s powerful
Politburo Standing Committee. While appeals to the central CCP
leadership to protect the state sector have been made to previous
congresses, it is rare to call for the removal of a top leader. The
letter accused Wen of violating the Chinese constitution, destroying the
state sector as the “basis of the socialist economy” and committing
“crimes” by selling out the “core interests of the Chinese people.”

Despite the letter’s references to socialism as the basis for the
economy, China is not socialist and never has been. What emerged from
the huge upheavals of the 1949 revolution was a deformed workers’ state
based on nationalised industry and economic planning along Soviet lines,
but in which there were no organs of workers’ power. The bureaucratic
apparatus headed by Mao was rooted in the reactionary theory of
“Socialism in One Country” that led China into an economic impasse. In
1972, Mao reached a rapprochement with US imperialism for the
establishment of full diplomatic ties. Diplomatic recognition was the
political precondition for the opening up of the Chinese economy to
foreign capital, pro-market restructuring and the restoration of
capitalism in China.

The layers of the CCP bureaucracy represented by the open letter are no
more “socialist” than their rivals. Rather Han and Ma speak for sections
of China’s ruling elite, like Bo, whose wealth and privileges are bound
up with their control over large state-owned enterprises. Amid a slowing
economy, their opponents such as Wen insist that China has no choice but
to open up even further to foreign investment. Wen is actively pushing
for the removal of any protection for the remaining state-owned
enterprises, which will go bankrupt with devastating consequences for
the working class.

The open letter, entitled “An appeal to firmly stop the complete
destruction of state-owned enterprises,” opposed a major World Bank
report “China 2030,” jointly produced with Premier Wen’s State Council.
The World Bank paper, released in Beijing, called for the break-up of
state monopolies in strategic sectors like energy and banking. It
envisioned a massive reduction in the size of the state sector from 27
percent of gross domestic product in 2010 to just 10 percent by 2030.

The open letter condemned the weakening of the state sector in the past
decade under Wen’s government, declaring that “excessive dependence on
foreign capital has undermined China’s national independence and
national economic security.” In every industry already opened up to
foreign investment, the top five corporations were foreign-owned, and of
28 key industries, foreign capital controlled the majority of assets in 21.

The open letter contrasted the performance of the 123 largest state
enterprises that dominate key sectors such as energy,
telecommunications, banking and chemical. Fifty nine had made the
Fortune Global 500 list (the 500 biggest-earning companies in the world)
in 2011, it boasted, with total assets tripling in the past decade to 28
trillion yuan ($US3.15 trillion) and annual revenue increasing
seven-fold to 20.2 trillion yuan. However, the letter did not point out
that, like their private counterparts, these corporations are run as
profit-making enterprises, exploiting the cheap labour of Chinese
workers, and their “success,” like the Chinese economy as a whole,
relies on exports to the US, Europe and Japan.

The letter accused Wen of serving the “needs of US imperialism.” He had
committed six “crimes,” including the massive purchase of US debt—$1.17
trillion in federal bonds and $376 billion of investments in mortgage
giants, Fannie Mae and Freddie Mac—in order to “prop up the American
economy.” In the subsequent international “financial warfare,” the
letter declared, Wen had caved in to US pressure to revalue the yuan,
causing huge losses and risking the plunder of China’s foreign currency
reserves invested in the US.

In reality, Wen’s policy of “saving the US to save China” expressed the
dependence of Chinese enterprises on the world economy, and in
particular on America as the single largest export market. Moreover, the
letter’s claim that the state-owned enterprises are the “common property
of all people” is totally false.

After 30 years of capitalist restoration, the remaining state-owned
enterprises have undergone a profound transformation. Originally, they
formed the property basis of the deformed workers’ state, managed by the
Stalinist regime on the basis of a bureaucratically imposed economic
plan. Following the vast privatisation of the late 1990s, when tens of
millions of workers were laid off, most of the remaining state
enterprises were transformed into joint-stock corporations.

The social functions of these enterprises have also profoundly changed.
Their employees no longer enjoy the benefits of the “iron rice
bowl”—that guaranteed jobs, welfare, health, housing, child care and
pensions. Rather, the management retains the profits. The CEOs, often
the children of high-ranking CCP bureaucrats, enjoy salaries hundreds of
times those of ordinary workers’ wages and often have large share
holdings in these joint-stock companies. The profits of these “red”
businesses are guaranteed by their state-sanctioned monopoly position
and access to cheap credit from state banks. While denouncing Wen as a
“comprador” serving Western imperialism, the letter was silent on the
close collaboration between state-owned enterprises and foreign
corporations.

The New Left groups voice concern about social inequality. However, they
are just as hostile to any independent movement of the working class as
their factional rivals. Their calls for limited social reforms are aimed
at stemming the rising anger of working people over unemployment and
deteriorating living standards, and preserving social stability and the
CCP regime.

It is highly unlikely that the open letter’s demands will be presented
at the 18th CCP congress, but the publicity given to the letter points
to a deeper factional struggle within the regime. As the Chinese economy
slows, competing groups of CCP bureaucrats are seeking to shore up their
power and privileges at the expense of their rivals.

(3) The dragon’s new teeth: THE ECONOMIST on the rise of China’s military

http://www.economist.com/node/21552193

China’s military rise

The dragon’s new teeth

A rare look inside the world’s biggest military expansion

Apr 7th 2012 | BEIJING | from the print edition

AT A meeting of South-East Asian nations in 2010, China's foreign
minister Yang Jiechi, facing a barrage of complaints about his country's
behaviour in the region, blurted out the sort of thing polite leaders
usually prefer to leave unsaid. “China is a big country,” he pointed
out, “and other countries are small countries and that is just a fact.”
Indeed it is, and China is big not merely in terms of territory and
population, but also military might. Its Communist Party is presiding
over the world's largest military build-up. And that is just a fact,
too—one which the rest of the world is having to come to terms with.

That China is rapidly modernising its armed forces is not in doubt,
though there is disagreement about what the true spending figure is.
China's defence budget has almost certainly experienced double digit
growth for two decades. According to SIPRI, a research institute, annual
defence spending rose from over $30 billion in 2000 to almost $120
billion in 2010. SIPRI usually adds about 50% to the official figure
that China gives for its defence spending, because even basic military
items such as research and development are kept off budget. Including
those items would imply total military spending in 2012, based on the
latest announcement from Beijing, will be around $160 billion. America
still spends four-and-a-half times as much on defence, but on present
trends China's defence spending could overtake America's after 2035 (see
chart).

All that money is changing what the People's Liberation Army (PLA) can
do. Twenty years ago, China's military might lay primarily in the
enormous numbers of people under arms; their main task was to fight an
enemy face-to-face or occupy territory. The PLA is still the largest
army in the world, with an active force of 2.3m. But China's real
military strength increasingly lies elsewhere. The Pentagon's planners
think China is intent on acquiring what is called in the jargon A2/AD,
or “anti-access/area denial” capabilities. The idea is to use pinpoint
ground attack and anti-ship missiles, a growing fleet of modern
submarines and cyber and anti-satellite weapons to destroy or disable
another nation's military assets from afar.

In the western Pacific, that would mean targeting or putting in jeopardy
America's aircraft-carrier groups and its air-force bases in Okinawa,
South Korea and even Guam. The aim would be to render American power
projection in Asia riskier and more costly, so that America's allies
would no longer be able to rely on it to deter aggression or to combat
subtler forms of coercion. It would also enable China to carry out its
repeated threat to take over Taiwan if the island were ever to declare
formal independence.

China's military build-up is ringing alarm bells in Asia and has already
caused a pivot in America's defence policy. The new “strategic guidance”
issued in January by Barack Obama and his defence secretary, Leon
Panetta, confirmed what everyone in Washington already knew: that a
switch in priorities towards Asia was overdue and under way. The
document says that “While the US military will continue to contribute to
security globally, we will of necessity rebalance towards the
Asia-Pacific region.” America is planning roughly $500 billion of cuts
in planned defence spending over the next ten years. But, says the
document, “to credibly deter potential adversaries and to prevent them
from achieving their objectives, the United States must maintain its
ability to project power in areas in which our access and freedom to
operate are challenged.”

It is pretty obvious what that means. Distracted by campaigns in Iraq
and Afghanistan, America has neglected the most economically dynamic
region of the world. In particular, it has responded inadequately to
China's growing military power and political assertiveness. According to
senior American diplomats, China has the ambition—and increasingly the
power—to become a regional hegemon; it is engaged in a determined effort
to lock America out of a region that has been declared a vital security
interest by every administration since Teddy Roosevelt's; and it is
pulling countries in South-East Asia into its orbit of influence “by
default”. America has to respond. As an early sign of that response, Mr
Obama announced in November 2011 that 2,500 US Marines would soon be
stationed in Australia. Talks about an increased American military
presence in the Philippines began in February this year.

The uncertainty principle

China worries the rest of the world not only because of the scale of its
military build-up, but also because of the lack of information about how
it might use its new forces and even who is really in charge of them.
The American strategic-guidance document spells out the concern. “The
growth of China's military power”, it says, “must be accompanied by
greater clarity of its strategic intentions in order to avoid causing
friction in the region.”

Officially, China is committed to what it called, in the words of an old
slogan, a “peaceful rise”. Its foreign-policy experts stress their
commitment to a rules-based multipolar world. They shake their heads in
disbelief at suggestions that China sees itself as a “near peer”
military competitor with America.

In the South and East China Seas, though, things look different. In
the past 18 months, there have been clashes between Chinese vessels and
ships from Japan, Vietnam, South Korea and the Philippines over
territorial rights in the resource-rich waters. A pugnacious editorial
in the state-run Global Times last October gave warning: “If these
countries don't want to change their ways with China, they will need to
prepare for the sounds of cannons. We need to be ready for that, as it
may be the only way for the disputes in the sea to be resolved.” This
was not a government pronouncement, but it seems the censors permit
plenty of press freedom when it comes to blowing off nationalistic steam.

Smooth-talking foreign-ministry officials may cringe with embarrassment
at Global Times—China's equivalent of Fox News—but its views are not so
far removed from the gung-ho leadership of the rapidly expanding navy.
Moreover, in a statement of doctrine published in 2005, the PLA's
Science of Military Strategy did not mince its words. Although “active
defence is the essential feature of China's military strategy,” it said,
if “an enemy offends our national interests it means that the enemy has
already fired the first shot,” in which case the PLA's mission is “to do
all we can to dominate the enemy by striking first”.

Making things more alarming is a lack of transparency over who really
controls the guns and ships. China is unique among great powers in that
the PLA is not formally part of the state. It is responsible to the
Communist Party, and is run by the party's Central Military Commission,
not the ministry of defence. Although party and government are obviously
very close in China, the party is even more opaque, which complicates
outsiders' understanding of where the PLA's loyalties and priorities
lie. A better military-to-military relationship between America and
China would cast some light into this dark corner. But the PLA often
suspends “mil-mil” relations as a “punishment” whenever tension rises
with America over Taiwan. The PLA is also paranoid about what America
might gain if the relationship between the two countries' armed forces
went deeper.

The upshot of these various uncertainties is that even if outsiders
believe that China's intentions are largely benign—and it is clear that
some of them do not—they can hardly make plans based on that assumption
alone. As the influential American think-tank, the Centre for Strategic
and Budgetary Assessments (CSBA) points out, the intentions of an
authoritarian regime can change very quickly. The nature and size of the
capabilities that China has built up also count.

History boys

The build-up has gone in fits and starts. It began in the early 1950s
when the Soviet Union was China's most important ally and arms supplier,
but abruptly ceased when Mao Zedong launched his decade-long Cultural
Revolution in the mid-1960s. The two countries came close to war over
their disputed border and China carried out its first nuclear test. The
second phase of modernisation began in the 1980s, under Deng Xiaoping.
Deng was seeking to reform the whole country and the army was no
exception. But he told the PLA that his priority was the economy; the
generals must be patient and live within a budget of less than 1.5% of GDP.

A third phase began in the early 1990s. Shaken by the destructive impact
of the West's high-tech weaponry on the Iraqi army, the PLA realised
that its huge ground forces were militarily obsolete. PLA scholars at
the Academy of Military Science in Beijing began learning all they could
from American think-tanks about the so-called “revolution in military
affairs” (RMA), a change in strategy and weaponry made possible by
exponentially greater computer-processing power. In a meeting with The
Economist at the Academy, General Chen Zhou, the main author of the four
most recent defence white papers, said: “We studied RMA exhaustively.
Our great hero was Andy Marshall in the Pentagon [the powerful head of
the Office of Net Assessment who was known as the Pentagon's
futurist-in-chief]. We translated every word he wrote.”

China’s soldiers come in from the cold

In 1993 the general-secretary of the Communist Party, Jiang Zemin, put
RMA at the heart of China's military strategy. Now, the PLA had to turn
itself into a force capable of winning what the strategy called “local
wars under high-tech conditions”. Campaigns would be short, decisive and
limited in geographic scope and political goals. The big investments
would henceforth go to the air force, the navy and the Second Artillery
Force, which operates China's nuclear and conventionally armed missiles.

Further shifts came in 2002 and 2004. High-tech weapons on their own
were not enough; what mattered was the ability to knit everything
together on the battlefield through what the Chinese called
“informatisation” and what is known in the West as “unified C4ISR”. (The
four Cs are command, control, communications, and computers; ISR stands
for intelligence, surveillance and reconnaissance; the Pentagon loves
its abbreviations).

Just another corner of the network

General Chen describes the period up to 2010 as “laying the foundations
of modernised forces”. The next decade should see the roll-out of what
is called mechanisation (the deployment of advanced military platforms)
and informatisation (bringing them together as a network). The two
processes should be completed in terms of equipment, integration and
training by 2020. But General Chen reckons China will not achieve full
informatisation until well after that. “A major difficulty”, he says,
“is that we are still only partially mechanised. We do not always know
how to make our investments when technology is both overlapping and
leapfrogging.” Whereas the West was able to accomplish its military
transformation by taking the two processes in sequence, China is trying
to do both together. Still, that has not slowed down big investments
which are designed to defeat even technologically advanced foes by
making “the best use of our strong points to attack the enemy's weak
points”. In 2010 the CSBA identified the essential military components
that China, on current trends, will be able to deploy within ten years.
Among them: satellites and reconnaissance drones; thousands of
surface-to-surface and anti-ship missiles; more than 60 stealthy
conventional submarines and at least six nuclear attack submarines;
stealthy manned and unmanned combat aircraft; and space and cyber
warfare capabilities. In addition, the navy has to decide whether to
make the (extremely expensive) transition to a force dominated by
aircraft-carriers, like America.

Aircraft-carriers would be an unmistakable declaration of an ambition
eventually to project power far from home. Deploying them would also
match the expected actions of Japan and India in the near future. China
may well have three small carriers within five to ten years, though
military analysts think it would take much longer for the Chinese to
learn how to use them well.

A new gunboat diplomacy

This promises to be a formidable array of assets. They are, for the most
part, “asymmetric”, that is, designed not to match American military
power in the western Pacific directly but rather to exploit its
vulnerabilities. So, how might they be used?

Taiwan is the main spur for China's military modernisation. In 1996
America reacted to Chinese ballistic-missile tests carried out near
Taiwanese ports by sending two aircraft-carrier groups into the Taiwan
Strait. Since 2002 China's strategy has been largely built around the
possibility of a cross-Strait armed conflict in which China's forces
would not only have to overcome opposition from Taiwan but also to
deter, delay or defeat an American attempt to intervene. According to
recent reports by CSBA and RAND, another American think-tank, China is
well on its way to having the means, by 2020, to deter American
aircraft-carriers and aircraft from operating within what is known as
the “first island chain”—a perimeter running from the Aleutians in the
north to Taiwan, the Philippines and Borneo (see map).

In 2005 China passed the Taiwan Anti-Secession Law, which commits it to
a military response should Taiwan ever declare independence or even if
the government in Beijing thinks all possibility of peaceful unification
has been lost. Jia Xiudong of the China Institute of International
Studies (the foreign ministry's main think-tank) says: “The first
priority is Taiwan. The mainland is patient, but independence is not the
future for Taiwan. China's military forces should be ready to repel any
force of intervention. The US likes to maintain what it calls ‘strategic
ambiguity' over what it would do in the event of a conflict arising from
secession. We don't have any ambiguity. We will use whatever means we
have to prevent it happening.”

If Taiwan policy has been the immediate focus of China's military
planning, the sheer breadth of capabilities the country is acquiring
gives it other options—and temptations. In 2004 Hu Jintao, China's
president, said the PLA should be able to undertake “new historic
missions”. Some of these involve UN peacekeeping. In recent years China
has been the biggest contributor of peacekeeping troops among the
permanent five members of the Security Council. But the responsibility
for most of these new missions has fallen on the navy. In addition to
its primary job of denying China's enemies access to sea lanes, it is
increasingly being asked to project power in the neighbourhood and
farther afield.

The navy appears to see itself as the guardian of China's ever-expanding
economic interests. These range from supporting the country's
sovereignty claims (for example, its insistence on seeing most of the
South China Sea as an exclusive economic zone) to protecting the huge
weight of Chinese shipping, preserving the country's access to energy
and raw materials supplies, and safeguarding the soaring numbers of
Chinese citizens who work abroad (about 5m today, but expected to rise
to 100m by 2020). The navy's growing fleet of powerful destroyers,
stealthy frigates and guided-missile-carrying catamarans enables it to
carry out extended “green water” operations (ie, regional, not just
coastal tasks). It is also developing longer-range “blue water”
capabilities. In early 2009 the navy began anti-piracy patrols off the
Gulf of Aden with three ships. Last year, one of those vessels was sent
to the Mediterranean to assist in evacuating 35,000 Chinese workers from
Libya—an impressive logistical exercise carried out with the Chinese air
force.

Just practising

Power grows out of the barrel of a gun

It is hardly surprising that China's neighbours and the West in general
should worry about these developments. The range of forces marshalled
against Taiwan plus China's “A2/AD” potential to push the forces of
other countries over the horizon have already eroded the confidence of
America's Asian allies that the guarantor of their security will always
be there for them. Mr Obama's rebalancing towards Asia may go some way
towards easing those doubts. America's allies are also going to have to
do more for themselves, including developing their own A2/AD
capabilities. But the longer-term trends in defence spending are in
China's favour. China can focus entirely on Asia, whereas America will
continue to have global responsibilities. Asian concerns about the
dragon will not disappear.

That said, the threat from China should not be exaggerated. There are
three limiting factors. First, unlike the former Soviet Union, China has
a vital national interest in the stability of the global economic
system. Its military leaders constantly stress that the development of
what is still only a middle-income country with a lot of very poor
people takes precedence over military ambition. The increase in military
spending reflects the growth of the economy, rather than an expanding
share of national income. For many years China has spent the same
proportion of GDP on defence (a bit over 2%, whereas America spends
about 4.7%). The real test of China's willingness to keep military
spending constant will come when China's headlong economic growth starts
to slow further. But on past form, China's leaders will continue to
worry more about internal threats to their control than external ones.
Last year spending on internal security outstripped military spending
for the first time. With a rapidly ageing population, it is also a good
bet that meeting the demand for better health care will become a higher
priority than maintaining military spending. Like all the other great
powers, China faces a choice of guns or walking sticks.

Second, as some pragmatic American policymakers concede, it is not a
matter for surprise or shock that a country of China's importance and
history should have a sense of its place in the world and want armed
forces which reflect that. Indeed, the West is occasionally
contradictory about Chinese power, both fretting about it and asking
China to accept greater responsibility for global order. As General Yao
Yunzhu of the Academy of Military Science says: “We are criticised if we
do more and criticised if we do less. The West should decide what it
wants. The international military order is US-led—NATO and Asian
bilateral alliances—there is nothing like the WTO for China to get into.”

Third, the PLA may not be quite as formidable as it seems on paper.
China's military technology has suffered from the Western arms embargo
imposed after the Tiananmen Square protests of 1989. It struggles to
produce high-performance jet engines, for example. Western defence firms
believe that is why they are often on the receiving end of cyber-attacks
that appear to come from China. China's defence industry may be
improving but it remains scattered, inefficient and over-dependent on
high-tech imports from Russia, which is happy to sell the same stuff to
China's local rivals, India and Vietnam. The PLA also has little recent
combat experience. The last time it fought a real enemy was in the war
against Vietnam in 1979, when it got a bloody nose. In contrast, a
decade of conflict has honed American forces to a new pitch of
professionalism. There must be some doubt that the PLA could put into
practice the complex joint operations it is being increasingly called
upon to perform.

General Yao says the gap between American and Chinese forces is “at
least 30, maybe 50, years”. “China”, she says, “has no need to be a
military peer of the US. But perhaps by the time we do become a peer
competitor the leadership of both countries will have the wisdom to deal
with the problem.” The global security of the next few decades will
depend on her hope being realised.

Correction: The following definitions have been changed in the main
table of this article: "Main battle tanks" to "Modern main battle
tanks”; "Armoured infantry vehicles" to “Armoured infantry fighting
vehicles”; "Intercontinental ballistic missiles" to "Intercontinental
ballistic missile launchers"; “Transport helicopters” to "Heavy/medium
transport helicopters"; “Transport aircraft” to "Heavy/medium transport
aircraft"; “Tanker and multi-role aircraft” to “Tanker aircraft”.
Additionally, the data are from 2011 not 2010 as originally reported.
These changes were made on 6th April 2012.

(4) Gavan McCormack on conflict between China and Japan

http://www.japanfocus.org/-Gavan-McCormack/3821

Troubled Seas: Japan’s Pacific and East China Sea Domains (and Claims)

Gavan McCormack

(5) Occupy Beijing? Social inequality on agenda at 18th Party Congress

http://www.globaltimes.cn/NEWS/tabid/99/ID/684274/Social-inequality-on-agenda-at-18th-Party-Congress.aspx

Social inequality on agenda at 18th Party Congress

Globaltimes.cn | November 16, 2011 16:29

By Li Xiguang

Last weekend, I was invited to give a lecture at Brown University on
Rhode Island. After breakfast, I took a walk in the chilly Burnside Park
in downtown Providence.

Occupy Providence is one of about 1,000 "Occupy" protests across the
United Sates and the world, part of a movement seeking socioeconomic
changes, such as opposing corporate control, poverty and exploitation.

The site has been turned into a "People's Park." Walking around the
park, I saw a library, media center, a kitchen and a clinic run by
enthusiastic volunteers under different tents. Some protesters were
university students. Some were jobless. Some were veterans of the wars
in Iraq and Afghanistan. Some older people were reading books quietly.
They smiled at me when I walked by.

The fence that encloses the park was lined with colorful protest signs
which read "Hands off state pensions,""Take your dollars out of the big
banks," "Work for social justice,""Capitalism without character is
corruption," "We are assembling for a redress of grievances"and "We are
the 99 percent."

"We are the 99 percent" is a reference to the tremendous difference in
wealth between the top 1 percent and all the remaining citizens of the
US. But the inequality of incomes in China is no smaller than in the US.

China now has the second largest economy in the world. But China's Gini
coefficient, which measures inequality, is approaching 0.50, up from
around 0.28 in 1978, and among the highest in the world.

According to a 2009 UNDP report, the ratio of income between the richest
10 percent and the poorest 10 percent was 6.9 in Germany,15.9 in the
United States?According to Li Shi, a professor at Beijing Normal
University, the income of the top 10 percent of the richest Chinese in
2007 was 23 times that of the poorest 10 percent, while in 1998, the top
10 percent were only 7.3 times richer. The per capita income of urban
residents is 3.33 times that of rural dwellers. People in the coastal
areas make twice as much as residents living in the western provinces.

The fruits of the country's growth are increasingly concentrated among a
small minority of the population, who are the ruling elite in banks, in
business, in media industry, in universities and in the upper echelons
of the government.

If we follow sentiments on Weibo, China inequalities are making the
country angry. Wealth concentration seems to be getting out of control.
Ideological extremist groups, and hate groups from the far left and the
far right are also discussing about an Occupy movement in China.

On the eve of the 17th National Congress of the Communist Party of China
in 2007, US scholar Susan Shirk published a book China: Fragile
Superpower, in which she wrote, "The more developed and prosperous the
country becomes, the more insecure and threatened they feel."

Today, the Party is preparing its 18th National Congress next year. It
seems that the CPC is more upset than ever by the dichotomy between rich
and poor, which poses a serious threat to its legitimacy.

In 1949, the Party gained legitimacy through setting a development goal
of making people wealthy and the nation strong. Mao Zedong stressed high
accumulation, low consumption, and giving priority to heavy industry,
resulting in increasing disparities between urban and rural areas.

Deng Xiaoping introduced market mechanisms by breaking up the state
monopoly, allowing private sector of the economy. Since 1978, Chinese
people have experienced a change of upward social mobility in which
almost everyone became better off. But Deng emphasized speed of
development, advocating some regions and some people getting rich first
and concentrating on the development of coastal regions, resulting in
polarization of wealth and greater regional disparities.

It has been acknowledged worldwide that China has been transformed from
a planned economy to a market economy, from a rural society to a
metropolitan society, from an extremely low-income level to a
middle-income level. But shifting from being a middle-income country to
a high-income one is the challenge that confronts us now.

Chinese intellectuals and think tanks are predicting that a new
development strategy would emerge with the coming 18th Party Congress.
It is believed that the 18th Party congress will announce a course of
action for the next five years. I hope the country will take a strategy
of "People First" by investing more money in human development, such as
tackling an aging population, public health, rural education,
environmental protection, housing for low-income people.

Like the phrase "We are the 99 percent" which has become a unifying
slogan for the Occupy Wall Street movement, "People first" can become a
unifying slogan for the 18th Party Congress.

(The author is director of Tsinghua University International Center for
Communication, Xiguang@tsinghua.edu.cn)

(6) China's real estate bubble not as disastrous as in US

http://www.globaltimes.cn/NEWS/tabid/99/ID/692521/Chinas-real-estate-bubble-not-as-disastrous-as-in-US.aspx

Global Times | January 17, 2012 14:40

By Aaron Adams

Seeing rapidly rising home prices, empty luxury apartment complexes, and
frenzied speculation, Western financial experts worry that a collapse of
the Chinese housing market could cause a financial crisis just as the US
housing bubble did in 2008.

Yet there are several key differences between the fundamentals of the
Chinese and US housing markets, which indicate that although China's
bubble may lead to a severe real estate correction, it is far less
likely to pose a systemic risk to China's overall economy.

Unlike China, the US lacked sufficient GDP or income growth to sustain
its housing bubble. Demand for housing was artificially created by the
Federal Reserve when, after 9/11, it slashed interest rates out of fear
that the attacks would shake consumer and investor confidence.

Aided by lax financial industry regulations, lending companies stoked
the boom by engaging in reckless lending practices, allowing Americans
to buy homes with no money down, even if they had poor credit.

In 2005, during the peak of the real estate bubble, the median down
payment was a paltry two percent while 43 percent of borrowers purchased
their homes without any down payment.

Having little or no initial investment in their homes, many Americans,
once prices fell, owed the bank more than their home was worth.

It was therefore in the homeowner's best interest to default on
properties that were suddenly worth tens of thousands or even hundreds
of thousands of dollars less. The resulting foreclosures lowered
property values of nearby homes, creating a downward spiral of negative
equity.

This situation is less likely to occur in China where, typically, at
least 30 percent of the purchase price is required for a down payment
and 50 percent for the purchase of a second home.

This means that homes would have to lose almost one-third of their value
before any homeowners had even the slightest incentive to walk away from
their investment. Chinese banks also depend less on mortgages than their
American counterparts.

In the US, the government did not realize the seriousness of the housing
bubble until it had already burst. China's government, however, has
removed some of the froth in the real estate market by increasing down
payment requirements and implementing property taxes in selected cities.

In the US, lending standards could not be reduced, since they were
already at recklessly low levels. In an emergency, China could still
significantly relax lending restrictions to levels that are conservative
by US standards if it became necessary to boost housing demand.

While the cash-strapped US treasury was only able to provide assistance
when it was left with no other choice, China has almost $3 trillion in
foreign exchange reserves to counter any housing crisis.

China's consumers are also less burdened by debt.

The London-based Financial Times cites a study from a major brokerage
firm illustrating that the levels of household debt-to-disposable income
in China are only one-third as burdensome as the levels reached in the
US at the height of its housing bubble.

However, if one also takes into account how China's income figures leave
out over a trillion dollars a year in unreported "grey" income, the
ratio is not as severe.

The Chinese government thus faces a dilemma: it must help the middle
class achieve the dream of home ownership, while preventing the real
estate bubble from threatening China's economy.

US political leaders facilitated the creation of a housing bubble by
focusing too much on the politically popular goal of ensuring maximum
home ownership while allowing banks to grow too large and too powerful.
This unleashed forces that turned the housing market into a casino for
bankers and speculators.

These concerns must be balanced with the need of China's growing urban
population for reasonably priced homes.

By focusing on building affordable "social housing" while continuing
with measures to tame the housing bubble, China's government is making
progress in preventing a financial collapse while preventing millions of
Chinese from being permanently priced out of home ownership.

The author is a graduate of the University of Washington and a writer
and lecturer. opinion@globaltimes.com.cn

(7) China takes aim at U.S. Naval Might
http://online.wsj.com/article/SB10001424052970204397704577074631582060996.html

JANUARY 4, 2012

By JULIAN E. BARNES in Washington, NATHAN HODGE in Newport News, Va.,
and JEREMY PAGE in Beijing

WSJ's Nathan Hodge reports on a new fleet of Chinese ballistic missiles
that can strike warships nearly 2,000 miles offshore and are intended to
keep U.S. warships. AP Photo/Xinhua, Pu Haiyang

The USS Gerald R. Ford was supposed to help secure another half century
of American naval supremacy. The hulking aircraft carrier taking shape
in a dry dock in Newport News, Va., is designed to carry a crew of 4,660
and a formidable arsenal of aircraft and weapons.

But an unforeseen problem cropped up between blueprint and expected
delivery in 2015: China is building a new class of ballistic missiles
designed to arc through the stratosphere and explode onto the deck of a
U.S. carrier, killing sailors and crippling its flight deck.

Since 1945, the U.S. has ruled the waters of the western Pacific, thanks
in large part to a fleet of 97,000-ton carriers—each one "4.5 acres of
mobile, sovereign U.S. territory," as the Navy puts it. For nearly all
of those years, China had little choice but to watch American vessels
ply the waters off its coast with impunity.

Now China is engaged in a major military buildup. Part of its plan is to
force U.S. carriers to stay farther away from its shores, Chinese
military analysts say. So the U.S. is adjusting its own game plan.
Without either nation saying so, both are quietly engaged in a
tit-for-tat military-technology race. At stake is the balance of power
in a corner of the seas that its growing rapidly in importance.

Pentagon officials are reluctant to talk publicly about potential
conflict with China. Unlike the Soviet Union during the Cold War,
Beijing isn't an explicit enemy. During a visit to China last month,
Michele Flournoy, the U.S. undersecretary of defense for policy, told a
top general in the People's Liberation Army that "the U.S. does not seek
to contain China," and that "we do not view China as an adversary," she
recalled in a later briefing.

Nevertheless, U.S. military officials often talk about preparing for a
conflict in the Pacific—without mentioning who they might be fighting.
The situation resembles a Harry Potter novel in which the characters
refuse to utter the name of their adversary, says Andrew Krepinevich,
president of the Center for Strategic and Budgetary Assessments, a think
tank with close ties to the Pentagon. "You can't say China's a threat,"
he says. "You can't say China's a competitor."

China's state media has said its new missile, called the DF-21D, was
built to strike a moving ship up to about 1,700 miles away. U.S. defense
analysts say the missile is designed to come in at an angle too high for
U.S. defenses against sea-skimming cruise missiles and too low for
defenses against other ballistic missiles.

Even if U.S. systems were able to shoot down one or two, some experts
say, China could overwhelm the defenses by targeting a carrier with
several missiles at the same time.

As such, the new missile—China says it isn't currently deployed—could
push U.S. carriers farther from Chinese shores, making it more difficult
for American fighter jets to penetrate its airspace or to establish air
superiority in a conflict near China's borders.

In response, the Navy is developing pilotless, long-range drone aircraft
that could take off from aircraft carriers far out at sea and remain
aloft longer than a human pilot could do safely. In addition, the Air
Force wants a fleet of pilotless bombers capable of cruising over vast
stretches of the Pacific.

The gamesmanship extends into cyberspace. U.S. officials worry that, in
the event of a conflict, China would try to attack the satellite
networks that control drones, as well as military networks within the
U.S. The outcome of any conflict, they believe, could turn in part on
who can jam the other's electronics or hack their computer networks more
quickly and effectively.

Throughout history, control of the seas has been a prerequisite for any
country that wants to be considered a world power. China's military
buildup has included a significant naval expansion. China now has 29
submarines armed with antiship cruise missiles, compared with just eight
in 2002, according to Rand Corp., another think tank with ties to the
military. In August, China conducted a sea trial of its first aircraft
carrier—a vessel that isn't yet fully operational.

At one time, military planners saw Taiwan as the main point of potential
friction between China and the U.S. Today, there are more possible flash
points. Tensions have grown between Japan and China over islands each
nation claims in the East China Sea. Large quantities of oil and gas are
believed to lie under the South China Sea, and China, Vietnam, the
Philippines and other nations have been asserting conflicting
territorial claims on it. Last year, Vietnam claimed China had harassed
one of its research vessels, and China demanded that Vietnam halt
oil-exploration activities in disputed waters.

A few years ago, the U.S. military might have responded to any flare-up
by sending one or more of its 11 aircraft carriers to calm allies and
deter Beijing. Now, the People's Liberation Army, in additional to the
missiles it has under development, has submarines capable of attacking
the most visible instrument of U.S. military power.

"This is a rapidly emerging development," says Eric Heginbotham, who
specializes in East Asian security at Rand. "As late as 1995 or 2000,
the threat to carriers was really minimal. Now, it is fairly
significant. There is a whole complex of new threats emerging."

Beijing's interest in developing anticarrier missiles is believed to
date to the Taiwan Strait crisis of 1996. The Chinese government, hoping
to dissuade voters in Taiwan from re-electing a president considered
pro-independence, conducted a series of missile tests, firing weapons
into the waters off the island. President Bill Clinton sent two carrier
battle groups, signaling that Washington was ready to defend Taiwan—a
strategic setback for China.

The Chinese military embarked on a military modernization effort
designed to blunt U.S. power in the Pacific by developing what U.S.
military strategists dubbed "anti-access, area denial" technologies.

"Warfare is about anti-access," said Adm. Gary Roughead, the recently
retired U.S. chief of naval operations, last year. "You could go back
and look at the Pacific campaigns in World War II, [when] the Japanese
were trying to deny us access into the western Pacific."

In 2004, Chinese President Hu Jintao unveiled a new military doctrine
calling for the armed forces to undertake "new historic missions" to
safeguard China's "national interests." Chinese military officers and
experts said those interests included securing international shipping
lanes and access to foreign oil and safeguarding Chinese citizens
working overseas.

At first, China's buildup was slow. Then some headline-grabbing advances
set off alarms in Washington. In a 2007 test, China shot down one of its
older weather satellites, demonstrating its ability to potentially
destroy U.S. military satellites that enable warships and aircraft to
communicate and to target bases on the Chinese mainland.

The Pentagon responded with a largely classified effort to protect U.S.
satellites from weapons such as missiles or lasers. A year after China's
antisatellite test, the U.S. demonstrated its own capabilities by
blowing up a dead spy satellite with a modified ballistic-missile
interceptor.

Last year, the arms race accelerated. In January, just hours before then
U.S. Defense Secretary Robert Gates sat down with Chinese President Hu
to mend frayed relations, China conducted the first test flight of a
new, radar-evading fighter jet. The plane, called the J-20, might allow
China to launch air attacks much farther afield—possibly as far as U.S.
military bases in Japan and Guam.

The aircraft carrier China launched in August was built from a hull
bought from Ukraine. The Pentagon expects China to begin working on its
own version, which could become operational after 2015—not long after
the USS Gerald R. Ford enters service.

American military planners are even more worried about the modernization
of China's submarine fleet. The newer vessels can stay submerged longer
and operate more quietly than China's earlier versions. In 2006, a
Chinese sub appeared in the midst of a group of American ships,
undetected until it rose to the surface.

Sizing up China's electronic-warfare capabilities is more difficult.
China has invested heavily in cybertechnologies, and U.S. defense
officials have said Chinese hackers, potentially working with some state
support, have attacked American defense networks. China has repeatedly
denied any state involvement.

China's technological advances have been accompanied by a shift in
rhetoric by parts of its military. Hawkish Chinese military officers and
analysts have long accused the U.S. of trying to contain China within
the "first island chain" that includes Japan and the Philippines, both
of which have mutual defense treaties with the U.S., and Taiwan, which
the U.S. is bound by law to help defend. They now talk about pushing the
U.S. back as far as Hawaii and enabling China's navy to operate freely
in the western Pacific, the Indian Ocean and beyond.

"The U.S. has four major allies within the first island chain, and is
trying to starve the Chinese dragon into a Chinese worm," Maj. Gen. Luo
Yuan, one of China's most outspoken military commentators, told a
conference in September.

China's beefed up military still is a long way from having the muscle to
defeat the U.S. Navy head-to-head. For now, U.S. officials say, the
Chinese strategy is to delay the arrival of U.S. military forces long
enough to take control of contested islands or waters.

Publicly, Pentagon leaders such as Mr. Gates and Adm. Mike Mullen,
former chairman of the Joint Chiefs of Staff, have said the U.S. would
like to cultivate closer military-to-military ties with China.

Privately, China has been the focus of planning. In 2008, the U.S.
military held a series of war games, called Pacific Vision, which tested
its ability to counter a "near-peer competitor" in the Pacific. That
phrase is widely understood within the military to be shorthand for China.

"My whole impetus was to look at the whole western Pacific," says
retired Air Force Gen. Carrol "Howie" Chandler, who helped conduct the
war games. "And it was no secret that the Chinese were making
investments to overcome our advantages in the Pacific."

Those games tested the ability of the U.S. to exercise air power in the
region, both from land bases and from aircraft carriers. People familiar
with the exercises say they informed strategic thinking about potential
conflict with China. A formal game plan, called AirSea Battle, now is in
the works to develop better ways to fight in the Pacific and to counter
China's new weapons, Pentagon officials say.

The Navy is developing new weapons for its aircraft carriers and new
aircraft to fly off them. On the new Ford carrier, the catapult that
launches jets off the deck will be electromagnetic, not steam-powered,
allowing for quicker takeoffs.

The carrier-capable drones under development, which will allow U.S.
carriers to be effective when farther offshore, are considered a
breakthrough. Rear Adm. William Shannon, who heads the Navy's office for
unmanned aircraft and strike weapons, compared the drone's debut flight
last year to a pioneering flight by Eugene Ely, who made the first
successful landing on a naval vessel in 1911. "I look at this
demonstration flight…as ushering us into the second 100 years of naval
aviation," he said.

The Air Force wants a longer-range bomber for use over the Pacific. Navy
and Air Force fighter jets have relatively short ranges. Without midair
refueling, today's carrier planes have an effective range of about 575
miles.

China's subs, fighter planes and guided missiles will likely force
carriers to stay farther than that from its coast, U.S. military
strategists say.

"The ability to operate from long distances will be fundamental to our
future strategy in the Pacific," says Andrew Hoehn, a vice president at
Rand. "You have to have a long-range bomber. In terms of Air Force
priorities, I cannot think of a larger one."

The U.S. also is considering new land bases to disperse its forces
throughout the region. President Barack Obama recently announced the
U.S. would use new bases in Australia, including a major port in Darwin.
Many of the bases aren't expected to have a permanent American presence,
but in the event of a conflict, the U.S. would be able to base aircraft
there.

In light of China's military advances and shrinking U.S. defense
budgets, some U.S. military officers have begun wondering whether the
time has come to rethink the nation's strategic reliance on aircraft
carriers like the USS Ford. A successful attack on a carrier could
jeopardize the lives of as many as 5,000 sailors—more than all the
troops killed in action in Iraq.

"The Gerald R. Ford is just the first of her class," wrote Navy Captain
Henry Hendrix and retired Marine Corps Lt. Col. Noel Williams in an
article in the naval journal Proceedings last year. "She should also be
the last."

Write to Jeremy Page at jeremy.page@wsj.com and Nathan Hodge at
Nathan.Hodge@wsj.com and Julian E. Barnes at Julian.Barnes@wsj.com

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