Annual Report to Congress

The long-term, comprehensive modernization of the armed forces of the People's Republic of China (PRC) entered a new phase in 2015 as China unveiled sweeping organizational reforms to overhaul the entire military structure. These reforms aim to strengthen the Chinese Communist Party's (CCP) control over the military, enhance the PLA's ability to conduct joint operations, and improve its ability to fight short-duration, high-intensity regional conflicts at greater distances from the Chinese mainland. China's leaders seek ways to leverage China's growing military, diplomatic, and economic clout to advance its ambitions to establish regional preeminence and expand its international influence. Chinese leaders have characterized modernization of the People's Liberation Army (PLA) as essential to achieving great power status and what Chinese President Xi Jinping calls the "China Dream" of national rejuvenation. They portray a strong military as critical to advancing Chinese interests, preventing other countries from taking steps that would damage those interests, and ensuring that China can defend itself and its sovereignty claims. Throughout 2015, China continued to assert sovereignty claims over features in the East and South China Seas. In the East China Sea, China continued to use maritime law enforcement ships and aircraft to patrol near the Senkaku (Diaoyu) Islands in order to challenge Japan's claim. In the South China Sea, China paused its land reclamation effort in the Spratly Islands in late 2015 after adding more than 3,200 acres of land to the seven features it occupies in the archipelago. Although these artificial islands do not provide China with any additional territorial or maritime rights within the South China Sea, China will be able to use them as persistent civil-military bases to enhance its long-term presence in the South China Sea significantly. China demonstrated a willingness to tolerate higher levels of tension in the pursuit of its interests, especially in pursuit of its territorial claims in the East and South China Sea; however, China still seeks to avoid direct and explicit conflict with the United States. China's leaders understand that instability or conflict would jeopardize the peaceful external environment that has enabled China's economic development, which is central to the perpetuation of the CCP's domestic legitimacy. In the near-term, China is using coercive tactics short of armed conflict, such as the use of law enforcement vessels to enforce maritime claims, to advance their interests in ways that are calculated to fall below the threshold of provoking conflict. In the long term, Chinese leaders are focused on developing the capabilities they deem necessary to deter or defeat adversary power projection and counter third-party-including U.S.-intervention during a crisis or conflict. China's military modernization is producing capabilities that have the potential to reduce core U.S. military technological advantages.