May 31, 1999
Web posted at: 11:14 a.m. EDT (1514 GMT)

If you're looking to understand better why Chinese spies have been so eagerly vacuuming the U.S. for military secrets during the past three decades, you could do worse than start in China with the People's Liberation Army. China's military today is so outdated that much of its equipment might well have seen action in the Korean War, and many of its troops are semiliterate. The country's strategic nuclear arsenal is 300 times as small as that of the U.S. The entire arsenal packs about as much explosive power as what the U.S. stuffs into one Trident submarine. China's ballistic-missile sub (singular, not plural) hasn't been to sea for a year and would be sunk in minutes in a battle with a U.S. attack sub. The People's Republic has no aircraft carriers (the U.S. maintains 11 carrier battle groups), no long-range strategic bombers (the U.S. has 174) and funds this stumbling juggernaut with a budget of 14 cents for every dollar the U.S. spends on defense. The P.L.A., says the Pentagon, is "still decades away from possessing a comprehensive capability to engage and defeat a modern adversary beyond China's boundaries."

Beijing desperately wants to change that perception, not because China's leaders have an enemy in their sights but because they seek the kind of credibility that a truly modern military brings. Capitol Hill rhetoric aside, China doesn't covet nuclear missiles so it can lob them at Los Angeles. It wants them so that it can be a legitimate player on the international stage, a nation fully in control of its own military destiny. So, as its entrepreneurs have embraced StarTacs and Yahoo!, Beijing's generals now want to trade their antique weaponry and cold war tactics for the PlayStation power they see in NATO's arsenal.

For the first time since the People's Revolution succeeded 50 years ago, Beijing is finally struggling to recast its military priorities. The process began in the early 1990s, at the very top of the armed forces, when politicians pushed the military to streamline its command-and-control structure. The old model for communications, logistics and war fighting was an astonishingly inefficient hybrid that mixed the ideological militarism of the Long March with old-style Soviet doctrines about how to fight on land. Instead the Chinese are toying with a far more flexible-force structure, one that would rely more on highly mobile, highly modernized soldiers. Overall goal: a military that could fight "a limited war under high-tech conditions"--read Desert Storm in Asia. Out would be the old-style model of "military regions" and "group armies" that were designed to support massive human waves in punishing ground attacks. In would be a joint-forces model copied, in many respects, from what currently sits in that five-sided building on the Potomac. Insiders in Beijing say top Chinese brass tried to sell the idea to President Jiang Zemin last year, but he vetoed the plan as too radical--especially on top of all the other changes he had instituted in the P.L.A.

The big shift that Jiang must have had in mind was his firm push to get the P.L.A. out of business. For more than a decade, P.L.A. generals have been fighting to make money, not war. At one point, the military controlled nearly 20,000 companies employing more than 16 million people. Top P.L.A. brass, often ditching combat boots for tasseled loafers, were common sights at properties that included hotels, telecommunications services, pharmaceutical concerns and even airlines. Less public was the fact that some of the nation's vital naval and air bases had become smuggling hubs for everything from cigarettes to cement. The handsome profits--more than $10 billion a year--were used to improve the paltry living conditions of the rank and file.

But arming the nation's warriors with Camcorders wasn't exactly what Jiang had in mind. So after repeatedly failing to get the message across in speeches and memos, Jiang last year issued an order: by Dec. 31, the P.L.A. was supposed to unload the businesses and get back to the barracks. While the effort may never be completely successful--the P.L.A. still controls such high-profile properties as Beijing's Poly Plaza complex--it seems at least to have separated the soldiers from the swindlers. Today's army is filled with men and women who want to emulate MacArthur, not Trump.

But building a world-class military is still going to be a challenge. Largely, it's a matter of money. Though the P.L.A.'s budget shot up 13% last year, that cash went to help the army get leaner, not meaner. From a mid-1970s high of 4 million soldiers, the army now fields some 2 million. And even that massive khaki swarm is armed mostly with Mao-era weapons. Explains Brookings Institution China expert David Shambaugh: "They have no, repeat no, 1990s weapons in their inventory." Though China's procurement officials are easy to spot working the Paris Air Show and other military fests, they are mostly window shopping. The P.L.A. has sampled some 1970s-era high-tech toys like Soviet Su-27 jets, but most of the cool new Nintendo military gear is out of its price range or on forbidden export lists in the West. In the aftermath of the Cox report, it will probably be even harder for China to buy sophisticated weapons systems.

And that's why the missile technology China stole from the U.S. is so important: it helps the Chinese advance toward the head of the class in terms of military credibility. A popular phrase in slogan-crazy China captures the idea: yibu daowei, one step and you're there. Instead of taking years to build carriers and subs, the Chinese are keen on constructing a sophisticated missile force that could pack a punch tomorrow. The Pentagon says China is developing sophisticated short-range ballistic missiles and lethal antiship cruise missiles. And though the Chinese have yet to adopt many of the tricks they picked up by stealing U.S. secrets--how to cram multiple warheads on a single missile, for instance--Representative Christopher Cox is not alone in his fear that the spying may have helped accelerate an Asian arms race.

China's primary military aim may be to look and not act muscular, but that hasn't stopped others from wondering under what scenarios Beijing would actually use its muscles. It's a question the Chinese themselves are struggling to answer. To begin with, China is surrounded by several other regional powers: Russia, Japan, South Korea and India. And it has special security worries with each nation. Russia's internal chaos could spill into China's already uneasy Western provinces. An India-Pakistan war--something that didn't look too farfetched as the two nations shelled each other last week--would take place right along China's southwestern border, a nervous-making event for any government.

There are also more nuanced worries that some Chinese planners surely suspect could be clarified if China becomes stronger. Exhibit A is China's complex relationship with Japan. While the two nations have extensive trade and technology links, there is a lingering mutual distrust. In both countries there is a passionate sense that one of them ought to be first among political equals in Asia.

No place is a more likely target for Chinese missiles than Taiwan, which Beijing insists is still its own. Recent discussions between Japan, Taiwan and the U.S. about an antimissile defense network in eastern Asia have infuriated Beijing. Even though such a shield is decades away, a "missile-proof" Taiwan would surely continue--and flaunt--its independence, possibly triggering Asia's next war.

As China's generals are all too aware, the only force that really prevents them from exercising their muscles in Asia is the U.S. And one of Washington's few consistent foreign policy goals since the end of the cold war has been to maintain a major presence in Asia. American bases and security arrangements currently weave a net throughout the region from Okinawa to Diego Garcia. While China's navy can get away with minor adventures--barging around the South China Sea establishing outposts on little atolls is a favorite--there is no doubt that Uncle Sam still rules the waves. If China wants to dominate the region, it will need to unseat the U.S.

Even Jiang Zemin probably isn't sure whether that's a viable goal. To be sure, it would take decades. But just about every military mind in China agrees that China does need to start arming, and soon. This doesn't mean an inevitable cold war with the U.S. The possibility of a world held hostage by the threat of mutual assured destruction is still far away. But no one expects China to put its military ambitions aside anytime soon. In fact, as the country matures, its high-tech military hopes may grow as well. If the Cox report is even partly accurate, China has data that will make it much easier to turn those hopes to reality.

--Reported by William Dowell/New York, Jaime A. FlorCruz/ Beijing and Douglas Waller/Washington

Cover Date: June 7, 1999

• The Cox report hypes the China danger, but the rivalry is real and growing.
• Is China's military the biggest winner from the boom in trade with U.S. technology firms?
• China wants to be a world power on a par with the U.S., but it has a lot of catching up to do
• When the U.S. bungles, the world sees a conspiracy. The story may be simpler
• Gore joins the choir, saying that faith has a role in public life. How did the idea go mainstream?
• Mental health reform: What it would really take
• Inside Kosovo: A visit to a devastated land
• On the stump, Hillary comes down in size and sounds more like Al than Bill
• Judicious spending

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