CHAPTER 6

Soldiers and Civilians

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

—President Dwight David Eisenhower, “Farewell Address to the Nation,” January 17, 1961

The Chinese military is quite different from the U.S. military that takes orders from the civilians. Power comes out of the barrel of a gun, [it does] not just take orders like the U.S. military. To the military it is a shame of fifty years’ duration that Taiwan is not solved. Whereas, if MFN [most favored nation tariff treatment] is the issue, the military is much less involved. MOFTEC [The Ministry of Foreign Trade and Economic Cooperation] was not much in favor of military exercises [in the Taiwan Strait] because it would spoil the international environment, hurt relations with others—the military doesn’t care so much. The Foreign Ministry is different from the military.

—Shanghai think tank analyst, June 20, 1998

“Deng Xiaoping could say mostly blunt things to military generals and the newer leaders cannot. Deng never minced words and they [the generals] listened. With Jiang, it is different; he needs to be much more suave and persuasive—directly admonishing them would be avoided. This doesn’t mean that the military is out of control.”

—Senior Chinese diplomat, August 15, 2002

China has now stood at a new historical point and its future destiny has never been more closely connected with those of the international community.

—Preface to China’s National Defense in 2010 (white paper)

At this point in history, China faces two critical tasks: to adapt its political institutions to the reality of a pluralized society and bureaucracy, and to control the military and associated industry as President Dwight Eisenhower (in different circumstances) urged his fellow Americans to do with respect to their military-industrial complex in 1961. This chapter considers this second task. China’s military, the People’s Liberation Army (PLA), can still be brought to heel by civilian leaders when they are unified and serious, but the military has considerable room to maneuver with limited oversight. When civilian party leaders are divided, the existing problem of civilian control over the military complex is compounded.

From 1929 until well into the post-1949 era, the ethos of the PLA, and its antecedent Red Army, was that it was a party army—that the party controlled the gun, even though Mao Zedong played an outsized role from the earliest years. During Mao’s post-1949 reign, the PLA progressively became guardian of the Chairman as the embodiment of the party and its ideology, particularly in the 1960s through mid-1970s. In Mao’s later years, the PLA effectively had become his personal army. A few weeks before the Chairman’s 1976 death, a division-level officer described the army’s relationship to Mao by saying, “The PLA is personally led and commanded by Mao Zedong and the Chinese Communist Party.”1 There are many examples of Mao’s control over the PLA, including the sacking of Defense Minister Peng Dehuai in 1959 (for criticizing Mao’s Great Leap Forward) and the September 1971 fiery airplane death of the subsequent defense minister and onetime successor to the Chairman, Lin Biao.

Reasserting the traditional understanding of PLA subservience to the party as an organization, rather than an armed force loyal to a single individual, had to await Mao’s death. While preferable to the cult of personality and blind loyalty to a single leader, this PLA-party relationship is not fidelity to a constitution or long-held principles enforced under a rule of law. A simmering argument in today’s China is the degree to which the PLA ought to be an instrument of the state (a “national army”), not the instrument of a single political party.

To provide some comparative perspective, when in 2000 the Democratic Progressive Party (DPP) on Taiwan took power from the Kuomintang (Nationalist Party, or KMT), with which the Republic of China (ROC) military long had been identified, the new civilian administration of President Chen Shui-bian was concerned that the military would not be loyal to their new government. President Chen’s chief civilian foreign policy adviser, Chiou Yi-jen, put it this way at the time:

Civil control of the military is a more serious problem for us—we have no experience. He’s [President Chen] trying to stabilize the military, “but [we] don’t know if it is having a result. [We] don’t change any top military intelligence leaders. If this works we don’t know. We don’t know if they will do what we say. The chief of the joint command said, ‘Show loyalty to the new [DPP] regime.’ The joint commander said, ‘Fight independence.’ I worry about this tendency.” . . . We are worried about the reliability of the military and want to establish good relations [with our military].2

In short, in circumstances where the military is an arm of a political party, as on China’s mainland today, when there is turmoil within that party, or there is a change of ruling party, the political alignment of the military cannot be assumed.

In this chapter we examine issues constituting the crux of the PRC civil-party-military relationship in the reform era, as they are crucial to both China’s domestic political evolution and its relationship with Asia and the world. Among those issues are: How does the PLA relate to civilian political leadership? How much latitude does the PLA have to act in areas that have consequences for the broader society, the civilian leadership, and China’s foreign relations? What is the PLA claim on budgetary resources, how is this claim articulated, and where do corruption and associated business activity fit in the picture? Finally, what is the relationship between the PLA and other parts of the decision-making system?

REFORM-ERA TRENDS IN THE MILITARY

A PLA major general succinctly summarized the major strategic mileposts along the reform era’s pathway of military modernization in a 2005 meeting:

There has been a string of important decisions along the road of Chinese military modernization: “The important decisions on PLA modernization are: 1985, reduce military troops by one million troops; 1985, there was a strategic task change to strengthen the navy; 1989, we began to increase the money for the military by a big margin; 1993, the strategic task was defined as to win a war under high-tech conditions; 1995, the strategic military and S&T task was realizing the transition from quantitative forces to qualitative forces and technology intensive; 1997, there was another five hundred thousand troop reduction announced; 1998, there was a reorganization of the State Commission on Science and Technology and the establishment of the fourth department, the General Armaments Department; 2000, there was reform of the logistical system and joint logistics support; 2002, we decided to push the RMA [revolution in military affairs] with Chinese characteristics building informationalized war; 2003, we announced another troop reduction of two hundred thousand to reach a size of 2.3 million in the PLA; 2004, we further adjusted the strategic guideline to preserving the maritime interests of China and Taiwan. These are key tasks.”3

In the years between Mao’s 1976 death and 2013, the PLA’s development and role in society proceeded along several avenues. The first was that, despite the June 1989 entanglement of the armed forces in domestic politics and struggle, as it professionalized the military generally retreated from mass politics. Nonetheless, the PLA remains the ultimate regime backstop, and as military affairs become more technically complex and civilian leaders are often without experience in this domain, the civilians rely increasingly on expert advice from those in uniform. As one well-connected senior Chinese scholar put it in 2005, “‘As the military is becoming more professionalized and the political leaders more civilianized, the civilians need their advice and professional input more deeply, in a narrow range of issues, related to Taiwan and military force issues. So it is not that the military will take over, but their expertise is indispensable in a specific set of issues.’”⁴

In the early days of the PRC almost all the political elite had significant military experience, many having been senior officers during the revolution and the Anti-Japanese War. But since the elevation of Jiang Zemin to party leadership in 1989, and the death of Deng in 1997, very few members of the Standing Committee of the Politburo or the party’s commanding heights have had military experience—China’s current ruler Xi Jinping being a modest exception, having served as General Geng Biao’s secretary (mishu) in the Central Military Commission (CMC) for a brief time. As David Shambaugh explained, “The ‘interlocking directorate’ has been completely broken by generational succession. . . . The party-army elite is clearly becoming bifurcated.”⁵

A second avenue of PLA development has been the relative diminution of the land army as a service component, and the relative rise of the navy and missile forces, and to a lesser extent the air force. As one PLA general put it to me, “‘Ground forces in the past were big brother but now are the younger brother.’”⁶ Since 1982–83, the PLA land army’s personnel count has been reduced by approximately 31 percent, the navy has held constant, and the missile forces have achieved an 11 percent increase. The navy, missile forces, and air force have also procured the greater number of modern systems.7 These budgetary and procurement patterns reflect the fact that Deng Xiaoping shifted the emphasis from a “people’s war” of attrition fought on Chinese territory by low-tech land forces to a progressively higher-tech war, fought beyond China’s boundaries by combined services. This shift is more easily conceptualized than achieved, but in the intervening years the PLA’s gains have been significant.

This reorientation of the Chinese military has had a number of implications, including an upgrade of the education and skills of personnel recruited, a larger defense budget to pay for more complex systems and more highly trained personnel who now can sell their skills in a higher-paying civilian economy, and a parallel increase in the sophistication of China’s defense and defense-related industry (most notably missiles, shipbuilding, IT-related industrial capability, and some improvement in the aviation industry).⁸ While one should not exaggerate, these new capabilities (including new generations of quieter submarines, new aircraft, an aircraft carrier, new types of ballistic and cruise missiles, and a stealth aircraft under development) enable the PLA to contemplate more expansive goals, in turn boosting the anxiety of China’s neighbors and more distant powers. All this also raises issues of command and control. As China moves into the maritime, air, and space domains previously monopolized by the United States, the opportunities for frictions and accidents multiply.

As the PLA has become more technologically sophisticated, the services with the greatest power projection capacity are slowly increasing their relative strength in military-related decision making—these high-tech services within the PLA will gain importance in the Chinese economy as well. Air force representation on the party’s Central Committee went up 200 percent in the 1990–2007 period, and navy representation increased by 133 percent, while the representation of the land army declined.⁹ To be sure, the ground forces remain an important force in intramilitary politics.

All this change finds reflection in the changing face, character, and outlook of the military people one has met in China over time. In 1976, at Mao’s death, the PLA’s face was the land army, and those one encountered looked rumpled, often spoke poor Chinese, and were rough-hewn in every sense. They had no vision that extended beyond the locales in which they had served, they were not big on conversation, and what they said was formulaic ideological rhetoric. In the new millennium, one meets officers who have had experience abroad; many speak foreign languages, and they have aspirations that parallel their uniformed counterparts in all modern militaries. It was quite in character when one senior Chinese general expressed the desire to land on an American aircraft carrier! “I want to land. No helicopter, fixed wing.”10

Turning to military-related industry, the process of converting former government armaments ministries into more autonomous economic actors (there are now ten corporations under the State Administration of Science, Technology, and Industry for National Defense and the State-Owned Assets Supervision and Administration Commission) has contributed to improved innovation and profitability. These corporations have more freedom of action for commercial activities, which can create coordination and policy implementation problems in foreign and national security policy.¹¹ In short, China is building a military-industrial sector, still of modest proportions, characterized by selective deep pockets of excellence and more moderate capability elsewhere. This industry will become increasingly important in the polity, the society, the economy, and foreign and national security policy making. In his report at the Eighteenth Party Congress in November 2012, Hu Jintao essentially wrote a potential blank check for allocations to the military, saying: “Building strong national defense and powerful armed forces that are commensurate with China’s international standing and meet the needs of its security and development interests is a strategic task of China’s modernization drive.”¹²

As the PLA acquires increasing power projection capabilities, there is a resonance with popular nationalism—a convergence of popular pride and the military’s desire to increase its capabilities and resources. This convergence was evident when China launched its first aircraft carrier in 2011, and when its space program launched the Tiangong space station module in September the same year (and as of mid-2013 had successfully placed twelve people in space). The space program is a hard-power asset and has a soft-power, attractive potential as well, with Yang Liwei, the PRC’s first man in space, traveling to the United States in 2004. It is no stretch of the imagination to say Colonel Yang is gregarious, even charismatic, with both foreigners and his countrymen; his mass popularity made it predictable that he would be the lowest-ranking officer elevated to the Seventeenth Central Committee in 2007.¹³

The overall architecture of the policy-making system must also be considered. Under the current and traditional structure, the military has a direct channel to the chairman of the CMC (who generally, though not always, is the general secretary of the party) and through him to the Standing Committee of the Politburo. This creates a structural problem in decision making because other intelligence and foreign policy institutions report up through separate state and party channels. There generally is insufficient horizontal coordination between these channels and the military, almost guaranteeing there will be instances (sometimes important) where the left hand (the diplomats) do not know what the right hand (the military) is doing. There is anemic horizontal communication between bureaucracies that are separate in structure but interrelated in function. Further, coming out of the Eighteenth Party Congress of fall 2012, the foreign policy apparatus had no seats on the Politburo, while the uniformed military had two. Concisely, the military is under civilian control, but it could be under better coordination within the security-foreign policy system. It is this fact, for example, that accounts for Xi Jinping, shortly after taking office as general secretary and chairman of the CMC, establishing an interdepartmental task force (which he personally oversaw) to deal with a growing crisis with Tokyo over the Diaoyu/Senkaku Islands—a volatile situation in which dozens of Chinese agencies, localities, and other actors needed to be coordinated, not least the diplomats and military.14

Other important developments in civil-military relations concern the activism of retired military officers and corruption within the military—including the purchase of ranks, often related to one’s retirement security.¹⁵ The concept of retirement was nearly nonexistent under Mao, when the three principal exit paths from a position were political disgrace, dementia, or death. But the professionalization of the military, education requirements, and age limits have created a body of high-ranking retired officers.¹⁶ These officers, once retired, do not sink into obscurity; instead they are often beckoned by the market economy. Growing numbers of institutions (education, think tanks, etc.) are anxious to hear their views, and more diverse and receptive media have provided these retirees avenues for the expression of their views and sources of considerable income on the PRC speaking and opinion-editorial circuits. Unsurprisingly, the most balanced and moderate voices are not the ones the market and media reward, although it is unclear what these new voices actually represent. As one PLA colonel put it: “‘PLA officers are not supposed to have personal views, but China is in the process of transformation, so people’s understanding of the situation is different. Some in the PLA want to show their personal view, that they have freedom of speech, some go on TV to become personal stars. I hope you can forgive some wrong views.’”¹⁷

The military has a zone of technical competence and information that may or may not be easily accessible to the PLA’s supposed civilian masters—to what degree do civilian leaders defer to military expertise? The PLA can endlessly hypothesize future threats requiring more response, which in turn require greater budgetary allocations. Standing for pride and muscle means that the military can more readily become aligned with popular nationalism than the civilian leaders and diplomats who have broader, more nuanced responsibilities. China’s military is increasingly operating in the wider world, a world that used to be nearly the sole preserve of China’s Foreign Ministry. Now Beijing’s Foreign Ministry competes with the military for attention and policy support of the party center.

Many of these changes are underpinned by a rapidly increasing Chinese military budget. Though what is recounted in the quote below is the opinion of only one well-placed senior Chinese scholar, it forecast well the trajectory China has followed since these views were articulated in 2004 and describes—accurately, I believe—the broad direction in which PLA and security thinking in China is headed.

“Today China spends US$30 billion [official budget] on its military. By 2020, it will be four times higher, and at least for the last decade-plus China’s military budget has increased at the rate of GNP increase, about 12 percent per annum. By 2020 our military budget would be $180 billion at this rate of growth—almost 50 percent the U.S. military budget of last year. I don’t know where the U.S. budget will go. But with Chen Shui-bian there is no hope that we will be restrained. And if you put this in PPP terms, our military budget would be close to $700 billion. We now spend about $2 billion per year on Russian equipment, so we can buy a lot more. And these figures don’t include off-budget procurement.”18

These dimensions of development have fundamental implications for civil-military relations, not to mention China’s relations with its neighbors and more distant big powers.

THE PARTY/CIVIL-MILITARY RELATIONSHIP

Strongman leadership within the party has progressively weakened since Mao’s death. The functional responsibilities of various senior central political leaders have become more explicitly delineated and separated. Schisms among members of the most senior political elite periodically become publicly visible. China’s post-Deng civilian leaders (with the modest exception of Xi Jinping) have had slim to no military experience. These developments raise a key question—if the party center splits, “who” is the party? If this occurs, it raises the possibility that the military (or various parts of it) may align with that fragment most congenial to its interests, thereby creating “factionalism.”

This brings us to the problem of “two centers,” meaning that it may be unclear at times where (or who) the authoritative party center is. This became a challenge in late 2002, when Jiang Zemin (who was no longer on the Standing Committee of the Politburo) retained the chairmanship of the CMC (where critical security decisions are made), while his successor, Hu Jintao, headed the Politburo Standing Committee and nearly all of the other foreign policy–related leading small groups. As one senior Chinese scholar explained,

Scholar: “First, there is a difference between foreign policy and security policy, not to mention domestic policy. Hu [Jintao] is in charge of foreign policy, and Jiang [Zemin] much more so in security policy. Hu is in charge of domestic policy.”

Lampton: But Hu Jintao is in charge of most of the Leading Small Groups, so it looks like he is in charge, and he is chairman of the Politburo Standing Committee, which Jiang is not even on.

Scholar: Yes, but remember that Jiang is chair of CMC, and the way the military works is often decisions are made by the CMC; there Jiang is number one and Hu number two.19

This circumstance of divided power between Jiang and Hu lasted two years. During this period, one interviewee said to me, “‘We are in a most vulnerable period in PRC history to be indecisive, to make decisions on national security.’”²⁰ Another strategic analyst said, “The ultimate survival [of the party] depends on the military. The military did demand Jiang stay on—not good—interference. ‘The military is more involved in the international crisis management system.’”²¹

In a November 2002 meeting with outgoing general secretary Jiang Zemin shortly after the conclusion of the Sixteenth Party Congress, he pointed out to his American visitors that there had been a split in the party center in 1989 (Deng Xiaoping had remained chair of the CMC after leaving the Politburo Standing Committee in 1987, and he personally motivated particularly reliable military units to repress the protesters in Tiananmen Square when the Politburo Standing Committee on which he no longer sat was unable to act in the face of its own division). Jiang told our group: “What also is important is that the leadership has been stable for thirteen years; in 1989 we had ‘two headquarters.’”22 Jiang Zemin went on to explain why he was retaining the chairmanship of the CMC: “According to my character and morality, I would not keep it [the CMC chairmanship,] but all the people in the military wanted me to keep it” (emphasis added). I construe Jiang to have been saying that the military was not yet confident about Hu Jintao’s leadership. In keeping his CMC chairmanship, Jiang set the stage for the “two headquarters” problem, which he said he had avoided for the preceding thirteen years. And of course, explaining that he was keeping his CMC chairmanship post because that is what the military wanted is not what reasonably can be counted as civilian control. It is significant that at the end of that meeting, as we were moving toward the exit, he said to us, “‘I will not interfere in the work of the new guys.’”²³

Jumping ahead to the run-up to the Eighteenth Party Congress in the fall of 2012, there was considerable internal debate, and external speculation, as to whether Hu Jintao would relinquish his chairmanship of the CMC “on time” or choose to retain that position for some period beyond the Party Congress. As one senior person in the military put it to me prior to the Eighteenth Party Congress, “I don’t know if Hu Jintao will leave ‘completely.’”²⁴ Had he retained the CMC chairmanship, this would have created yet another potential “two headquarters” problem with his successor Xi Jinping. In this sense, one can count Hu’s seemingly complete departure from positions of power in the 2012–13 transition as a modest step in the direction of both institutionalization and more unified civilian/party control of the military. That the debate went on so long and was subject to such internal horse trading, however, is an indication of how far institutionalization still has to go and just how fragile norms are.

Beyond this issue in 2012 was also the open fight preceding the Eighteenth Party Congress to select the next Politburo Standing Committee. The fight involved the attempt by Chongqing party secretary Bo Xilai to strong-arm his way onto the Standing Committee by mobilizing popular support, the resistance of the bulk of the party center to this attempt, and Bo’s March 2012 dismissals from his post in Chongqing and from the Politburo a month later. Bo’s removal was followed by a nationwide effort to ensure that military units having personal and historic connections with Bo or his family remained loyal to the party center, not to Bo Xilai, whose father had earlier led the Fourteenth Group Army. The center also seemed concerned about possible Bo loyalists in the Second Artillery (the strategic and conventional missile forces) and the Chengdu Military Region,²⁵ consequently making efforts to ensure that the military remained unified and under central control. It is not inconsequential that Yin Fanglong, head of the political department of the Second Artillery, came out in People’s Daily at the time saying, “We should boycott all wrong ideas and refute those key issues like ‘The military should not be led by the party.’ When encountering a situation when it is hard to choose between emotion and principle, we should choose to put personal relationships subordinate to the development of the party’s cause.”26

In short, as the CCP becomes more pluralized and as intraparty groups vie for power, the meaning of military loyalty to the party at key junctures may be unclear. In the case of Bo Xilai, the PLA seems to have responded to the center’s call for displays of loyalty in a disciplined fashion.²⁷ Nonetheless, the fact that the party center’s opening move against the effects of Bo included making sure the PLA was under unified party control reveals the underlying problem and embedded anxieties. This is one of the dangers of military subordination to a political party rather than to a constitution, the law, or the state. Even though in the 1982 State Constitution an effort was made to increase state and civilian control of the military by the creation of a State Central Military Commission, this effort has had no discernible effect.

One also can discern the character of the civilian-military relationship in the information the military provides, or fails to provide, the civilian leadership. While evidence in this area is ambiguous, several interviews with senior Chinese military and foreign affairs officials lead me to question whether civilian leaders can count on the military to provide accurate and timely information at key junctures; these concerns extend beyond ordinary military uncertainties, the fog of war.

A probable example of the misinformation problem occurred in April 2001 with the collision of a U.S. reconnaissance aircraft (EP-3) and a Chinese fighter off Hainan Province, over international waters but within the Chinese Exclusive Economic Zone. The Chinese pilot, Wang Wei, died and the disabled American plane made a forced landing on the Hainan airfield from which the now dead Chinese pilot had taken off. In a meeting with a senior Chinese military officer during the extended crisis that followed the accident I was, in effect, told that the Chinese pilot indeed had run into the U.S. aircraft (“‘It is difficult’” to control young pilots, was the way it was put)²⁸ and that the local Hainan military authorities had initially explained the accident to their superiors in the chain of command as caused by the American aircraft. One senior member of the foreign affairs system said, “You know, last year, [with respect to the EP-3 incident, we] ‘didn’t handle it so well from my point of view. The Foreign Ministry didn’t know the situation, it got information from the Ministry of National Defense, so [the Foreign Ministry] can’t say anything. So at the very beginning [we made] mistakes.’ . . . The problem became big. [Vice President] Hu Jintao was in charge and communicated with Jiang every day. . . . Hu [was] in a difficult situation and Qian [Qichen] in a difficult situation. ‘They were in charge but didn’t know the real situation.’”29

Soon after the collision was announced publicly (presumably on the basis of incomplete or misleading information provided by his own military), President Jiang Zemin demanded that the United States cease its surveillance of the Chinese coast and demanded an apology, setting the stage for an eleven-day period in which twenty-four U.S. military personnel remained unable to leave Hainan.³⁰ Later, the issues of U.S. compensation and the conditions for the return of the U.S. aircraft also arose. The immediate crisis involving detained U.S. personnel was resolved when the U.S. Department of State and China’s Ministry of Foreign Affairs took the lead in negotiations, not the respective militaries. As the PLA officer put it to me, it was a mistake for China “to make a national incident out of it.”³¹ In the end, the PLA did what it was told by the civilian leadership, but that doesn’t hide the fact that the initial reports were at best inaccurate and at worst intentionally misleading, leading Beijing to take a more intransigent position than the incident could, in the end, sustain.

Another category of information problem is that local commanders and various military services may exaggerate the threats they face in order to get policy attention and resources, while the job of higher-level military staff and executive leaders is to adjust these distorted figures and assessments. This situation gives rise to debates within the security establishment as to how much threat China may actually face. With respect to U.S. air reconnaissance along China’s coast, for instance, I was told in 2012 by a senior military officer: “Many [PLA] operational military commanders give examples of close-in reconnaissance [by the United States] in our South China Sea. [Local operation] commanders give a number of slide briefings, figures, they show what feels like a front line.” I then asked whether China’s leaders thought the number of U.S. reconnaissance sorties was rising or falling as of early in 2012 and was told: “‘[It is] obvious that in sensitive areas they [the PLA] see an increase.’ Facts provided [to upper-level decision makers] by the general staff sometimes are lower than the figures from these regional commanders. ‘The result of this debate will have far-reaching impact and the debate extends all over our research community.’”32 Concisely, different entities within the Chinese armed forces and other components of the security and foreign policy establishments provide information to superiors that best serves their interests.

In this discussion the focus has been on tensions between civilian and military authorities, but this is only part of what is evolving into a more complex story. Portions of the economy increasingly find their interests aligned with the military. One striking example is seen in the alignment of interests between the China National Offshore Oil Corporation (CNOOC) and the PLA Navy. As one individual in the intelligence and foreign policy realm explained, “As for the military, oil companies, CNOOC, are a natural ally. The navy wants to be more active. CNOOC, ‘oil, wants to be a partner with the navy, to be more assertive in dealing with small countries.’”³³ In its broadest sense, civil-military relations constitute a much bigger universe than simply the chain of command.

THE BUDGETARY WARS

In the opening days of reform until 1989, the military was a low (and sometimes declining) budgetary priority. Top echelons of the armed forces grudgingly accepted the low status because they understood the need for basic economic development and a modernized economic foundation if a strong military was ever to be created. As Admiral Liu Huaqing, China’s most senior uniformed military officer, put it to Robert McNamara in 1994, “‘Therefore, we [the PLA] have had great patience because we believe in the common interest, and when China modernizes we’ll have more resources.’”³⁴ The PLA share of GDP reached its nadir in 1994–95, as documented in chapter 1.³⁵ The period of a relatively calm external environment made the low economic priority of the PLA feasible. To make the slim budgetary diet more palatable, in the latter half of the 1980s and in much of the 1990s the military was permitted to retain revenues it made in subsidiary industries and enterprises (everything from hotels to missile sales)—a volume of cash that was of a large, albeit uncertain, magnitude. By the mid-1990s, two things began to happen that would affect the military budget: China’s civilian leaders became anxious about the problems created by large off-the-books PLA revenues, and China’s military became progressively less satisfied with its low budgetary priority.

From 1995 to1998, China’s civilian leaders sought to shut off most irregular sources of income to the military and to compensate for the PLA’s losses through increases in the regular military budget. They took this action because irregular sources of revenue flowing into military units at various levels had a number of pernicious effects, including fostering corruption, generating diplomatic problems, diverting soldiers from training to business, and weakening civilian control because the civilians (and perhaps even the upper levels of the military itself) could not be sure what resources were flowing to subordinate units through various channels.36 From the perspective of PRC leaders (both civilian and senior PLA), if you don’t control the money, you don’t control the organization.

With respect to dissatisfaction of the military, by the early 1990s the PLA was becoming less and less patient with its budgetary straitjacket. The first stage of increasing the defense budget occurred in the wake of the June 1989 Tiananmen violence; increased budgets became a reward for loyalty to the party in its moment of need. Shortly thereafter, PLA budgetary demands went up further as the United States powerfully demonstrated its new military technology in the First Gulf War of 1991—Saddam Hussein’s army, not unlike the PLA, was pulverized by newly unveiled smart weaponry and incredible U.S. logistical feats.

The PLA argument for resources was further strengthened by increasingly loud calls by Taiwan’s president Lee Teng-hui for more international space and by the progressively louder voice of proindependence forces on the island. President George Herbert Walker Bush’s 1992 approval to sell 160 F-16s to Taiwan further strengthened PLA demands. Then, with Deng Xiaoping’s 1992 Southern Tour, economic growth took off, so soon there was more money—from 1987 through 1991, the GDP growth rate averaged 8 percent; from 1992 through 1996, it averaged 12.44 percent.³⁷ The PLA wanted more money, the economy was able to provide it, and the technological and educational base of Chinese society was qualitatively improving, so better human and technical resources were becoming available. Moreover, the PLA had to compete for talent with the civilian economy, which drove personnel costs up. As one general put it to me a decade later (after there had been pay increases): “The young are reluctant to join the armed forces. A general gets one-half the pay of his daughter two years into the workforce. ‘So the increase of the military budget to some extent is new hardware, but most is salaries and welfare for soldiers.’”³⁸

By 1994 (even before the 1995–96 missile crisis in the Taiwan Strait, in which the PLA deescalated in the face of U.S. counterpressure), the PLA was becoming more public in its calls for resources. Sometimes the calls were gently put, sometimes they were strident—either way, they were unmistakable. One very senior PLA general, in addressing former U.S. defense secretary Robert McNamara and a group of senior retired U.S. military officers, gave the soft sell, letting the numbers speak for themselves:

This year the defense budget reached 52 billion RMB, which is only US$6 billion. We can give you three figures, appropriate for a country pursuing “active defense.” From 1980 to 1993, our defense [expenditures were] up 1.16 times, while in the same period prices went up 1.3 times—so, in real terms, it declined and we reduced [our forces] by one million persons. If we take out inflation, from 1980 to 1993, the U.S. defense budget was up 25 percent in real terms. Our defense budget from 1980 to 1993, the percentage in GNP declined—in 1980 it was 4.33 [percent of GNP]; 1993, 1[?] percent. . . . So China’s strategy of defense is manifested in this budget.39

In a 1994 group meeting I attended with Admiral Liu Huaqing, China’s highest uniformed military officer at the time and patron saint of the navy, Liu also voiced the soft, patient approach:

In China, the contribution of defense is always subordinate to the development of the economy—defense is not a top priority. Although [there have been] increases [in budget] lately, still limited, and that is why we are so slow to modernize and we cannot borrow to finance it. So our defense expenditures are kept to a minimum. We are aware that our weapons of all services are far behind the present equipment of the United States. We are aware of these differences and we hope to modernize, but the problem is that we have no resources and if we compete with economic needs, we’ll be in competition with the economy and that is not in China’s interest. . . . The weapons and equipment of the U.S., Russia, Japan, and even South Korea are much more advanced than ours—the latter two because of U.S. technology. We are aware of this, but we put economy as the first priority. But we believe a large war won’t break out and if small wars [occur], not too tough for us to handle. But if we don’t have economic growth now, we won’t modernize later. One point two billion people need housing, shelter, and so if we have a strong military, but they are poor, “What is the use?”⁴⁰

On the other hand, a subordinate, but nonetheless a very senior general himself, was less restrained and left less to the imagination in describing the need for more PLA funding:

We are concerned with military expenditures. Take 1993, our military expenditures, according to state allocations, were 40 billion RMB; however, the exchange rate was 1:6. That means $US 6 billion. The year 1994, military expenditure is 52 billion RMB, but the exchange rate changed to 1:8.7, or this is $US 5.97 billion. One-third [of military expenditures] are spent on maintenance of daily life [renmin shenghuo], salaries, and other expenses; maintenance and this is one-third; and equipment, including R&D and procurement, [is the remainder]. Compare this to the United States in 1993—[defense expenditures] were $US 279 billion; Japan was $30 billion. Incomparable to the United States. Japan was $37 billion,41 and China much smaller than Japan’s. China has an “active defense” policy. To protect sovereignty we need to have a limited degree of military expenditure. Also, we have inflation, and [real] military expenditures are dropping. We give priority to economic development. Apart from reducing staff by one million persons, we are trying to reduce expenditure. There is a $1 billion deficit for our military staff, and we are subsidizing ourselves. For example, from 1980 to 1993, the rate of increase of inflation for civil products was 1.3 percent, and [the rate was] much higher for military goods. In substance, it [military expenditure] has been reduced.⁴²

Then one of the American visitors angered this same PLA interlocutor by saying that outside assessments of the PLA’s budget were much higher than officially acknowledged. The PLA general responded, hotly:

Our policy is defensive. China’s expenditures are small. Minimum expenditures; with inflation, difficult to maintain our armed forces. There are many complaints in the armed forces, so we are asking for a quota in the national budget, but this is not very practicable. Deng once said that it is impossible to raise military expenditures. We should place priority on other economic sectors. XX [American delegation member mentioned by name] said that the Chinese military budget is $US 30 billion. In 1993 the total national income was 514.82 billion RMB. “Is it conceivable that we have spent that much? The truth is, XX [American delegation member mentioned by name], we are poor!” This would hamper our development—that is groundless. Is it that useful?⁴³

This tension over budget priority was between the military and the party’s supreme decision makers, as well as the NPC. According to a senior Chinese general speaking in frustration, expressions of opposition to increased military spending were rife in the NPC in the 1990s:

At each National People’s Congress session the military complains that the budget is too small, but each time the NPC delegates vote for cuts. And in the 1980s, when Deng was elected chair of the Military Affairs Commission [MAC or CMC], and “when Deng met with the MAC he said that the military would have to be patient.” [He said], “Now you have selected me, I want to cut one million [troops], and I can tell you that you will not have the increases you want, you will have to be patient. I can tell you that the army still has to be patient. The reason that we restrain our budget is that we are now building Chinese socialism, and according to the theory we can’t have an arms race that would drain away our resources. This is a rational approach because to seek truth from facts, it is because we have to keep up with inflation and readjustment and market factors, so we have to maintain a minimal level for the PLA. So when there is price readjustment, inflation, we have to increase the budget. But for us, our first concern is salaries and rations for the men, and second is maintenance and repair of weapons, and procurement is our third priority.”44

Moving into the new millennium, China’s military was still not reconciled to what it viewed as its persistently insufficient budgetary priority, given that it saw itself confronted with many threats: modernizing neighbors, a globally more interventionist United States, an increasingly independence-minded Taiwan, a need to protect the PRC’s growing global interests, and a revolution in military affairs (RMA). As China’s defense minister put it to a U.S. group headed by Henry Kissinger in 2001:

We need to maintain arms, give good salaries. The U.S. spends $354 billion—Japan spends $40 billion. The ROK spends $9.8 billion. Taiwan spends $9.9 billion, and last year increased to $12.6 billion. But China is only at $14 billion. To introduce new weapons and to develop an effective deterrent are our objectives. Facts speak louder than words. Some media are trying to stir up trouble by reporting [unintelligible]. Facts. [China is a country of] 9.6 [million?] square kilometers. One point three billion population, an eighteen-thousand-kilometer-long coastline, borders fifteen countries [unintelligible]. Yet our budget not only does not compare with that of the United States, but even with our smaller neighbors. We want to cut down the military. But a 17.7 percent increase in our military [budget] has given rise to charges of China threat, yet . . .

The USA was the first to introduce the RMA. I remember being in the United States in 1996 and visiting Bill Perry, the National Defense University, and a Texas base. First time I heard about the RMA. So efforts are being made to bring China’s military into the twenty-first century. We know we need to change, along with the rest of the world. Jiang Zemin said so. Therefore, we are beginning. We lag far behind. Trying to modernize weapons and systems. Strengthen the military through science and technology.⁴⁵

In a quotation above, a general said that the PLA was asking for a budgetary “quota.” I subsequently was told by another PLA general that, at about the same time as Jiang Zemin was worried about the implications of the PLA having off-the-books revenues from its enterprises, a broad deal was worked out: namely, the PLA would get a fixed share of the GDP through the budgetary mechanism. If PLA allocations through the budget grew at the rate of the overall economic expansion, then when the GDP was rising rapidly, as in the 1990s, the PLA would get rapidly increasing amounts of money through the budget without changing its overall priority in the economy. In exchange, the PLA agreed to divest itself of most of its enterprises generating funds outside the budget. As a senior officer put it to me in 2011, “The Ministry of National Defense had a sort of fixed slice of the GDP, 1.2 to 1.4 percent of GDP for the last twenty years. It [the PLA] had asked for 3 percent, but that had been turned down. This is what ‘defense in balance with the overall economy’ operationally means.”46

As one would expect in the bargaining system described in chapter 3, the PLA asked for a percentage that was twice as much as it got. In exchange for the PLA receiving growing funds through the budgetary mechanism, civilian leaders were to get more transparent and controllable money flows into the military. As of 2013, however, despite the agreement, individuals and organizations in the PLA have been creative in devising channels for off-the-books revenues—land sales, sales of promotions in rank, and other sundry means. And the PLA remains unhappy with its allocations given what it views as its geographically expanding responsibilities, the need to acquire and master ever more expensive technologies, and an increasingly complex threat environment.

Part of that threat environment is U.S. military cooperation with and weapons sales to Taiwan, which the PLA uses in its arguments for more money. As one general put it in 2010, “‘As a soldier, I support U.S. sales [to Taiwan], and then we [the PLA] can ask the [Chinese] government to give us a bigger budget.’”⁴⁷ Then, in the fall of 2011, in connection with his trip to Australia and Indonesia, President Obama announced a “pivot” (later renamed “rebalancing”) to Asia, telling the world that U.S. military, economic, and diplomatic attention would be methodically shifted to Asia as the United States presumably drew down resources devoted to the Middle East and Central Asia. An initial installment in this effort was the announced rotation of a small contingent of American marines through Darwin, Australia, and Secretary of State Hillary Clinton standing on the deck of the U.S. destroyer Fitzgerald in Manila Bay proclaiming: “We will stand and fight with you.”⁴⁸ With this stance by Washington, the PLA is able to argue that the threat environment has further increased. As one Chinese analyst put it in early 2013, “With tension in this area, ‘the PLA will have another golden age.’”⁴⁹

The budgetary deal outlined above in which the PLA got a fixed percentage of a briskly growing GDP (albeit not the percentage it desired) has many implications, two of which are central. First, because China’s GDP has rapidly increased, defense expenditure has grown at a double-digit rate for all but one year since 1990.⁵⁰ This rapid increase has, in turn, energized the fears of neighbors and distant powers. Beijing has tried to compensate for this budgetary growth and resulting concern by increasing transparency, military-to-military exchanges, and other reassuring moves, but the reality of China’s growing power and some ham-handed diplomatic and military actions (in 2009 and thereafter) have contributed to anxieties in the region. Looking at China’s PLA budget growth from another angle, however, it is positive inasmuch as off-the-books monies that previously went to the PLA but were of unknown magnitude by outsiders are being substituted for regular budget flows that at least have a chance of being seen. Further, the PLA has less incentive to make money by doing things that are disruptive to China’s foreign relations.

Second, this budgetary deal with the PLA suggests that if GDP growth slowed for a sustained period (as it already has begun to do as China shifts to a growth model that presumably will be less dependent on exports and investment-intensive growth), particularly if such deceleration were concurrent with the military feeling more threatened by U.S. “rebalancing” in the region or other large security concerns, the PLA would be distressed that its revenues were constrained just as external challenge was mounting. This presumably would increase PLA pressure on civilian leaders for more resources, for a new deal.

The military now is making the argument that it is not simply an instrument of hard power but an instrument of soft power as well. One example is the PLA navy’s 2007 launch of the “Peace Ark,” a hospital ship that undertakes humanitarian missions around the world. The military will never believe it is being given adequate financial and human resources to accomplish its tasks, which are limitless, in a sense. The problem is not simply budgetary allocations but the fact that the PLA must increasingly compete with an ever more dynamic domestic economy for technically capable human resources.

THE MILITARY IN CIVILIAN MINDS

For civilian leaders, although the military missions enumerated above are central to ensuring security, maintaining domestic order, and mobilizing mass support on nationalistic grounds, as one very senior former U.S. intelligence official put it in 2011, “Military modernization is not on Hu Jintao’s top ten ‘to do’ list when he wakes up.”51 Rather, when the members of the Standing Committee of the Politburo—a body on which no uniformed officer sits as of 2013—arise each morning, their agenda is usually close to home: managing an internal rural-urban migration of gargantuan proportions; generating jobs by the tens of millions; quelling tens of thousands of mass public disturbances;52 cleaning up the garbage and piping away and (sometimes) treating the sewage of 20 percent of the world’s people; and so on and so forth. I remember a meeting with President Jiang Zemin after he became president, and asking him what he most remembered about a trip he had made to the United States. He said, without skipping a beat, “When in 1981, I went to Chicago and people asked what I wanted to visit, I said I’d like to know about garbage. Chicago has these difficult problems, but does a good job in garbage relative to Shanghai.”⁵³

In a remarkable 1996 group meeting with Vice-Premier Zhu Rongji, he explained which issues worried him most, including inflation, agriculture, and growth. Then the vice-premier went on to say: “Regarding defense burdens, China may not be the lowest, but one of the lowest in the world in the budget. China doesn’t need a huge arsenal; we have 1.2 billion people; no nation is crazy enough to fight a ground war [here]. ‘What we need is a deterrent force. Don’t need to spend much in the military budget, but we need to maintain our deterrent force for defense.’ Nothing here that I lose sleep over.”⁵⁴ Of course, much has changed in terms of China’s global role, interests, and the environment in which it finds itself in 2013. Nonetheless, Zhu’s domestic politics vantage point is shared by the bulk of Chinese officials, most of the time.

Against the background of this agenda for civilian leaders that is overwhelmingly domestic, the military is viewed, in the words of a former senior U.S. intelligence official cited above, as “just another pressure group.”⁵⁵ If one imagines China’s uppermost leaders to be at the top of a huge, inverted policy funnel, as described in chapter 3, with only the most significant, thorny, and generally domestic policy disputes landing on their desks, it is easy to see how they would tend to see the PLA as just another noisy claimant on scarce resources. Add to this situation the fact that no paramount Chinese leader since Deng Xiaoping, except Xi Jinping, has had any active military experience. This missing life experience connecting China’s civilian leaders and the military could play out in a number of possible ways, from a complete lack of ability to communicate on important issues to the possibility that civilian leaders with no prior connection to the military might be even more solicitous toward military demands. On balance, however, it appears that China’s civilian party leaders are not mere pawns in the hands of officers they fear to cross. Most of the problems in civil-military relations have their origins elsewhere.

One of the ways the civil-military relationship can play out is cyclical. Some “supreme” leaders, at the start of their terms, use external conflicts to shore up their positions with both the military and the populace, exerting more control over the PLA and external relations once they have consolidated power. As one knowledgeable senior person explained, it is like Deng Xiaoping coming back and then in 1979 pursuing a strike against Vietnam. “Do something to control the army, and indeed Jiang Zemin did this in 1995–96 regarding Taiwan. . . . Xi Jinping is following these lines—‘tough with Japan and the United States, closer to Russia, and once he consolidates power he will be better to the U.S.—there is a learning curve.’”56

ROOM TO RUN FOR THE PLA

The highest organ of military decision making is the party’s CMC, a body composed overwhelmingly of senior military personnel. Once he is chair of the CMC, the “supreme leader” finds that there is no analogue to the Office of the Secretary of Defense in the Pentagon or the National Security Council in the White House to institutionalize and create effective civilian oversight of the PLA on the leader’s behalf. Thus an overwhelmed and often distracted civilian leader sits atop a specialized organization with which he has little personal expertise and few personal relationships born of shared experience. Over time, the civilian can appoint military officers and foster personal support and relationships, but it takes time. President Jiang Zemin appears to have been far more effective in this regard than his successor, Hu Jintao.

Complicating the life of the civilian/party chairman of the CMC is interservice rivalry—something familiar to American observers of their own defense establishment. Each branch of the PLA (the Second Artillery, the navy, the air force, the land army, and other specialized agencies) wants to boost its quota of high-ranking officers, complement of personnel, and expensive war-fighting platforms. As one long-experienced Chinese respondent in the foreign affairs system put it: “‘Only in recent years, the services each have their own interests and bargain with the big bosses on the CMC, and the big guys try to keep balance among the services. If this were the Deng Xiaoping era, he didn’t have this, but after him the services want to be somebody.’”⁵⁷

Organizationally, there are few somewhat anemic horizontal, cross-system integrating structures that can help civilians monitor military behavior, apprise the civilian leadership of how military activity may affect other realms of policy, and make sure that civilian leadership decisions are implemented. The military basically has quite a lot of “room to run,” since it has a direct channel to an overwhelmed leader at the top, and there is a dearth of coordinating and oversight mechanisms. In a 1999 group conversation with former senior American defense officials, President Jiang Zemin made what, at face value, seems a rather startling statement: “You mentioned missiles [potentially targeted on Taiwan] several times. . . . Actually, I am chairman of the Central Military Commission; [I] began this post in middle of my career. I am in charge of general policy but not in charge of actual deployments. ‘I am not like your generals.’ So I hope you won’t be swayed by unfounded reports. You have good intelligence and know how many missiles—but I don’t even know this information.”58

The problem is not simply that the civilians are often ignorant of what the military is doing in detail, at least until it is too late. There is an added challenge—the entire foreign and security policy-making apparatus is fractured by institutional fault lines and personal rivalries and resentments. Some of this is quite normal, since politics is often about who has access to the top—a line of friction that, for example, sometimes separated Jiang Zemin’s foreign policy adviser Wang Daohan (who had direct personal access to the president) and Foreign Minister and Vice-Premier Qian Qichen.⁵⁹ On the Politburo Standing Committee, each member has trusted allies in key positions below, opening up the possibility that different members of the supreme policy-making body get different information and perspectives from diverse subordinates and that policy coming from the supreme decision-making body is, in turn, implemented by a varied group of subordinates. This was the case when Jiang Zemin took advice from Vice Premier (and Foreign Minister) Qian Qichen, and Premier Li Peng tended to listen to his ally in the Foreign Affairs Office of the State Council, Liu Huaqiu (who happened to be a competitor to Qian). My notes of one meeting with a senior person in the Foreign Ministry system put it as follows:

I asked about the difficulties having [Premier] Li in charge of the Foreign Affairs Small Group and Jiang as senior leader, with Qian Qichen, Jiang’s man, in the Foreign Ministry (“Jiang always takes his advice from Qian”) and Liu Huaqiu, [Premier] Li’s man, in the Foreign Affairs Office of the State Council. He said that this “caused frictions, contradictions.” [Premier] Li could order someone in the office of North America and Oceania Affairs to do something and Qian might or might not know about it, and in any case the emphasis of what Li/Liu might direct the Bureau might be different from what Qian would prefer. It was not that the line was entirely different but simply that the tone, emphasis might be different—“Li was more rigid.”60

This situation is a real problem: decision by committee at the top, with each committee member plugged into different parts of the sprawling bureaucracy, and woefully inadequate cross-system integration.

Some people in the Chinese military, foreign policy, and security structures have argued for years that Beijing needs a more effective staff coordinating apparatus that provides a check on the military greater than just the CMC chairman—a National Security Council (NSC) akin to that in the United States. This structure has never been created because, among other reasons, the Politburo Standing Committee considers itself to be that integrative body, even though it is overwhelmed with the problems of governing China across all issues, foreign and domestic, and because each Standing Committee member has a different functional coordinating responsibility. Someone senior in the national security analytic world in China explained:

“For ten to fifteen years we have wanted an NSC, but it hasn’t become a reality. Don’t know. One reason is that we don’t want to copy your IPR [intellectual property rights; joke!]. Another reason is that we have a different political system, we are a collective system, not a presidential system. Our head doesn’t have the power of Obama. So with a collective system it is hard to have an NSC. Every leader [in the PBSC] is in charge of several departments, so if they can agree, we don’t need to offset. So how to make the current system more effective [is the question.]”⁶¹

This creates an important, perhaps worrisome condition—the most senior civilian leader does not really see himself as “commander in chief” in the same way a U.S. president does. To the degree that there is an ultimate authority, it is the Communist Party’s Standing Committee of the Politburo. One ranking member of the U.S. Senate, a recognized expert on foreign and security policy, met with President Hu Jintao in January 2011 and asked him, “Are you the commander in chief in China?” The legislator said that Hu had replied: “No, not really. The PLA reports to the party.” The senator went on to observe that Hu’s reply was not reassuring, asking: “Who is in charge?”⁶² In short, the military makes its tactical and operational decisions in a bubble in which military officers are dominant. Although strategic decision power rests with the party and the Politburo Standing Committee, it is ill-equipped and insufficiently informed to manage the military minutely. China has no effective NSC staff (or equivalent), as one senior foreign policy adviser explained: “‘The Full Politburo meets only once every few months or a couple of times a year in plenary session, though individuals get together more frequently. Beidaihe [the sometimes summer meeting place of the party elite] even is not so important. The Taiwan Affairs Leading Small Group is mostly short-term discussion, not operational, not what to do. The [U.S.] NSC gives the president direction each day. It is very difficult [for China] to change in a year.’”63

The PRC political structure is vastly different from the structure in the United States: China has about thirty or more politicians who are at the vice-premier level and above, each of whom wants a say and does not want to create some kind of foreign policy superagency. Creating a powerful, cross-system security, intelligence, and foreign policy integrator and coordinator will be difficult to politically engineer.⁶⁴ Consider the difficulties that the United States, even with its director of national intelligence, has had in getting its arms around the sixteen agencies of the U.S. “intelligence community.”

Many of the considerations enumerated above simply boil down to leadership, command presence, or leadership style. Chinese leaders differ from one another. One Chinese scholar plugged into the PRC defense establishment explained to me in a 2011 conversation:

Lampton: Is it [the PLA] becoming more assertive and empowered in the policy process?

Chinese Scholar: I think it has to do with officers now feeling they can go to the media, like Huan Qiu Shibao [Global Times].

Lampton: But we just fired a general, Stanley McChrystal, for going to the press, admittedly criticizing our president, and Truman got rid of MacArthur. Some of us are wondering whether or not the current Chinese leadership, not having been in the military, feels able to exert the necessary control—or maybe they don’t want to. Even Jiang Zemin seemed to have more visible interest in generating support in the military.

Chinese Scholar: This is a matter of “personal leadership style.” Jiang Zemin’s political style was to actively build support in the military and political structures. Hu’s style is to find the consensus point in the existing structures and distribution of power.

Lampton: So Jiang actively tried to build supporters and support bases, and Hu is looking for the consensus that can be built assuming the current distribution of power?

Chinese Scholar: Yes, their personal political styles are different.⁶⁵

The preceding considerations help explain where the PLA gets its “room to run.” Often China’s supreme leader appears to be responding to initiatives taken by the military that, while tactical in nature, have consequences (often negative) for Chinese foreign policy and for the PRC’s standing in the world. It is this loose process of oversight, for instance, that may account for Hu Jintao’s apparent surprise when he was told by visiting U.S. Secretary of Defense Robert Gates that the PLA had just unveiled its new stealth aircraft.66 It may also be this process that accounts for the Foreign Ministry’s apparent surprise to learn from the mass media about the PLA testing of an antisatellite weapon in early 2007. It is not that the PLA is making fundamental strategic decisions but rather that the PLA and defense industry move ahead to concretely implement general policy in ways that serve their separate or collective interests and exploit available room for maneuver. As the former senior U.S. intelligence official mentioned above put it, “I think there is a lot of local initiative in the PLA.”⁶⁷ Upon occasion, the military has outright misled its senior leaders about what has transpired at lower echelons, as explained above, but the problems run deeper than misrepresentation.

The developments explained in this chapter have effects on domestic politics and on Chinese foreign and security policy; they also shape perceptions of the PRC abroad.

The PLA and associated industry are playing a larger role in the domestic economy and will do so in the future as they increase their capacity to innovate. As the military-industrial complex’s domestic economic reach expands, so too will its political influence, even if the military remains only indirectly represented on the Politburo Standing Committee—as has been the case since 1997, when Admiral Liu Huaqing was the last uniformed military officer on that august body as of 2013.

The fact that the PLA remains a party army means that China periodically can have a “two centers” problem. When there is division within the party there will be the danger that the military will align with one side or another in a domestic conflict or succession struggle. Even if this situation does not materialize, various fragments of the party will constantly be on alert for the danger or opportunity that military involvement may represent. Imagine, for instance, how different the situation would have been during the 1989 Tiananmen episode if the PLA had sided with Zhao Ziyang, not Deng Xiaoping.

To provide perspective, contrast the above possibility with the reality of a smooth transition in the United States when John F. Kennedy was assassinated in 1963. A smooth transition occurred even in a circumstance in which it was not clear whether foreign entities were involved in the president’s murder—the U.S. military was not even a political consideration, as Robert A. Caro describes in his masterful biography of Lyndon Johnson: “It is, for example, not so much that the American military did not attempt to take control of the government; it is that no one even thought to ask where the military’s support lay.”68 The military does not determine policy or succession in China, but the PLA matters, and where it puts its support will always make a difference until the system changes.

In terms of money, the PLA’s budget deal has given it a modest, but relatively stable, percentage of China’s rapidly growing GDP, in what was a relatively easy arrangement to maintain as long as China’s GDP was growing at approximately 10 percent annually and the threat environment was relaxed. The civilian leadership could keep raising the PLA budget in absolute RMB without having to change overall budget priorities—indeed, the share of budget going to health, education, and social safety net expenditures could go up faster than military spending. If, however, Chinese economic growth slows, as is likely in the years ahead, it is predictable that the military’s demands for a more advantageous budgetary deal will increase and the contradiction with domestic needs will become more acute. Military demands will become more strident and effectual if the external environment is perceived to be deteriorating. Expanding budgets are much easier to deal with than shrinking (or, in this case, less rapidly expanding) ones. How tame will the PLA be under these circumstances? What resource conflicts with other agencies will emerge?

Looking ahead, the PLA can be expected to lobby vigorously for more resources. One way to do so is to point to external security challenges for which PLA strengthening is the appropriate response and to identify ever more closely with Chinese nationalism. We see this phenomenon, with retired military officers speaking out in terms that mobilize domestic nationalism. Retired admiral Yang Yi, for instance, asks his fellow countrymen and foreigners alike: “Whenever there’s a conflict, the first question U.S. leaders ask is where their nearest U.S. aircraft carrier is. The U.S. operates its warships worldwide, apparently as deterrence and to portray itself as the champion of freedom of navigation. One wonders what makes the U.S. navigation justified and China’s disturbing.”69 The U.S. “rebalancing” or “pivot” policy is widely viewed in the PRC as scarcely disguised “containment”—whatever its strategic character, it has given added impetus to PLA pleas for more resources.

Another way to get resources is to invigorate revenue channels “outside the budget.” A military that is insulated from effective civilian control, has significant independent sources of revenue, and is able to align itself with popular nationalism is of concern. No single reform would be of greater importance than ensuring effective and comprehensive civilian oversight of China’s military so that all revenues flow through a transparent budget.

Finally, mechanisms for more effective cross-agency coordination in the foreign affairs and security policy areas must be developed. Too often China’s Foreign Ministry is out of the loop. It is difficult for foreigners to be fully confident of the trajectory of a military of the character described above. Developing stronger constitutionally governed civilian control of the military, with more transparent revenue and expenditures and more effective interagency coordination, needs to be part of China’s strategy if it is to reassure others. If China is to grow its “soft power,” in part through a strategy of reassurance, institutional reform of the civil-military relationship must be part of that effort.