BOSTON—China's economy has spurred the growth of its military power, according to an annual Pentagon report that closely links the country's fiscal strength and its armed forces for the first time.
Beijing agrees its economy has allowed it to modernize its military, but it strongly objects to U.S. concerns about its intentions.
In an Aug. 18 statement, China's Ministry of Foreign Affairs blasted the report, saying it "made absurd comments on China's normal defense works and exaggerated China's military prowess, trying to plant this notion of a 'China threat.'"
But experts note that China has not challenged any of the Pentagon's estimates point-by-point on activities like its buildup of 1,050 to 1,150 short-range ballistic missiles opposite Taiwan.
"One would think that the failure to specifically refute the factual allegations in these reports is an implicit concession that these factual allegations are correct," said Lowell Dittmer, a China scholar and political science professor at University of California's Berkeley campus.
Richard Bush, director of the Center for Northeast Asian Policy Studies at the Brookings Institution in Washington, said China regards the annual report to Congress as interference in its affairs, but it has avoided debate about its weapons systems, force levels, and programs.
"The Chinese government here is at a disadvantage because it doesn't want to take on the Pentagon on specifics," said Bush. "They don't want to engage in that conversation."
An open window
Bush said the secrecy within China surrounding military activities may give the report its greatest value.
"It opens a window for Chinese citizens to understand—if they're prepared to read the report objectively—what their own government is doing," he said.
Like previous reports that have been required by law for the past decade, the Defense Department analysis released on Aug. 16 is a mix of conclusions and uncertainties that prompt concern.
China is believed to be spending over $150 billion a year on military-related activities, about double the amount the government claims for the People's Liberation Army (PLA) budget.
The country continues to develop an anti-ship ballistic missile with a maneuverable warhead, "intended to provide the PLA the capability to attack ships, including aircraft carriers, in the western Pacific Ocean," the report says.
And China still seeks militarily-useful technologies through commercial channels, academic contacts, and "other-than-legal means."
But one of the new aspects of the report is that it draws a closer connection between China's economic success and its military power.
Economic achievements have "enabled China to embark on a comprehensive transformation of its military," said the report.
In previous years, the Pentagon has instead cited China's "rapid rise as a regional political and economic power with global aspirations."
'Evolution in assessment'
Although the shift in emphasis is subtle, a Pentagon official made clear during a background briefing for reporters that it represents an evolution in its assessment.
The official said that "China's acting perfectly consistently with other great powers who, as they rise, translate economic power into military power."
"China has been increasingly effective at translating its increasing economic strength into military capabilities," a briefer said.
The new analysis coincides with the finding in mid-August that China has surpassed Japan to become the world's second- largest economy, according to official figures for the second quarter.
With its GDP growth rate of 11.1 percent in the first half of the year, China appears set to fund more PLA growth.
The biggest U.S. concern seems to be with a lack of transparency regarding PLA intentions that "increases the potential for misunderstanding and miscalculation," according to the report.
In its responses, China does not dispute the linkage between economic and military strength.
Speaking of security ties between the United States and countries of Southeast Asia, one commentator suggested that China may see its economic and military interests as joined.
"A rising China understands and respects other countries' pursuit of a multidirectional and diversified diplomacy," wrote Fu Mengzi, assistant president of the China Institute of Contemporary International Relations, in the official English-language China Daily.
"But it has made it clear it will not tolerate any plot to contain its economic and social development," Fu said.
Although Washington has frequently cited the PLA's lack of transparency, concerns have grown with China's suspension of military-to-military contacts following U.S. approval of a U.S. $6.4 billion arms sale to Taiwan in January.
David Finkelstein, director of China studies at CNA, an Alexandria, Virginia-based consulting firm, voiced hope that military concerns will not become the focus of bilateral relations.
"The U.S.-China relationship is really an anomaly," said Finkelstein. "On the one hand, we are economically interdependent and at the same time we have a tremendous level of apprehension about each other."
"That's the nature of this relationship, and that's why wise people are required on both sides of the Pacific to carefully manage this relationship," he said.
Finkelstein called on the governments of both countries to keep disagreements about PLA activities in perspective.
"One of the most important things that our elected leaders can do here in Washington and the chosen leaders in Beijing can do is to make sure that the military dimensions of this relationship never, ever dominate the other dimensions that are going relatively well," he said.
While the economic connections to China's military strength are becoming clearer, none of the analysts believe they will lead to calls for a cutoff of economic ties.
"I doubt that it will go that far," said Dittmer.
"There are a lot of interests in the United States that are partaking in the very large trade relationship that we have with China," he said.
"And to try to cut that off would be very difficult for the economies of both countries."