China’s double-digit economic growth has slowed recently, but it served to fund several successive defense modernization Five-Year Plans. As international concern over Beijing’s human rights policies stymied the PLA’s search for ever more sophisticated technologies, China shifted funds and efforts to acquiring technology by any means available. Domestic laws forced foreign partners of Chinese-based joint ventures to release their technology in exchange for entry into China’s lucrative market, and China has used other means to secure needed technology and expertise. The result of this multifaceted approach to technology acquisition is a PLA on the verge of fielding some of the most modern weapon systems in the world. In some areas, it already leads the world.

Chinese leaders characterize China’s long-term military modernization program as essential to achieving great power status. Indeed, China is building a robust, lethal force with capabilities spanning the air, maritime, space and information domains which will enable China to impose its will in the region. As it continues to grow in strength and confidence, our nation’s leaders will face a China insistent on having a greater voice in global interactions, which at times may be antithetical to U.S. interests. With a deeper understanding of the military might behind Chinese economic and diplomatic efforts, we can provide our own national political, economic, and military leaders the widest range of options for choosing when to counter, when to encourage, and when to join with China in actions around the world.

Eoin Treacy's view

China is building aircraft carriers and a daisy chain of military bases from the Persian Gulf back home. No one would engage in that kind of expense unless they wish to project power and protect their interests internationally.

China is nowhere near energy independent whereas the USA is rapidly approaching that designation. That understandably changes the geopolitical priorities of both nations with regard to the security of energy supply from the Middle East. Oil supply security is now much more pressing priority for China and therefore they have a clear interest in securing what is a key support for the economy. It is also why China is much more interested in developing nuclear and battery technology. It is simply a needs-must argument.

The much bigger question focuses on the evolution of technological innovation. Plans are underway to turn Shenzhen, Hong Kong, Macau triangle into a private equity hub to rival Silicon Valley. Meanwhile a substantial share of the world’s high technology production facilities are on China’s doorstep in South Korea and Taiwan.

China has clear interests in supporting denuclearisation on the Korean peninsula but a peace agreement could result in massive technology transfer between the North and South which would flow directly to China. Additionally, the absorption of Taiwan by cajoling or force would have the same effect. These two areas represent significant potential geopolitical flashpoints for future stress.

What this report highlights is any waning of trade stress is likely to be short-lived because there is nothing that is going to deter China from its global hegemonic goals.