– China, Growing Superpower

U.S. says China could be long-term regional threat
By Carol Giacomo, Diplomatic Correspondent

WASHINGTON (Reuters) - China's rapidly modernizing military could pose a long-term threat to other regional armed forces but its ability to project conventional power beyond its borders remains limited, the Pentagon said on Tuesday.

In its long-awaited annual report, the Pentagon said Beijing's military buildup has already begun to put the regional balance at risk. But it also concluded that China does not now possess the military capability to attack Taiwan.

It described China as being at a strategic crossroads that could lead down three paths but "not yet set immutably on one course or another."

One path is peaceful integration and benign competition in the world. Or China would exert dominant influence in an expanding sphere. A third path sees China as a less confident, inward-looking state focused on challenges to national unity and the Chinese Communist Party's claim to legitimacy.

"Questions remain about the basic choices China's leaders will make as China's power and influence grow, particularly its military power," the report said.

The Pentagon has been raising alarms over China's military modernization for several years.

VARIOUS CONCERNS
The annual report, always controversial, is the focus of even more attention this year because of increasingly vocal concerns in Washington over China's trade, currency and proliferation trends, as well as the military buildup.

It went through considerable vetting by U.S. agencies besides the Pentagon and included the personal involvement of Defense Secretary Donald Rumsfeld, who in the past often left the task to his deputy, a former administration official said.

"As I see it, China is on a path where they are determined to increase their economy, the opportunities for their people and to enter the world community. They want the (2008) Olympics to go well. They are doing a number of things to leave the world with the impression that they are a good place for investment and a good economic partner," Rumsfeld told a news briefing before the report was released.

While U.S.-China ties have improved since 2001 -- when a U.S. surveillance plane collided with a Chinese fighter jet in international air space off the Chinese coast -- the military buildup underscores why Washington opposes European Union military sales to Beijing, he said.

But asked if he saw "gathering clouds" and a threat similar to what Europe faced from Germany in the 1930s, Rumsfeld replied: "I guess the short answer is no."

TAIWAN
In the short term, Beijing appears "focused on preventing Taiwan independence or trying to compel Taiwan to negotiate a settlement on Beijing's terms," the report said.

China has deployed some 650-730 mobile short-range ballistic missiles and 375,000 ground forces opposite Taiwan, has more than 700 aircraft within range of the island and is modernizing its longer-range ballistic missile force.

"China does not now face a direct threat from another nation. Yet it continues to invest heavily in its military, particularly in programs designed to improve power projection," the report said.

"The pace and scope of China's military buildup are, already, such as to put regional military balances at risk ... (and) over the long term, if current trends persist (Chinese military) capabilities could pose a credible threat to other modern militaries operating in the region," it added.

The report also pointed up weaknesses, concluding "China's ability to project conventional military power remains limited" and it is deterred from military action against Taiwan.

For one thing, China "does not yet possess the military capability to accomplish with confidence its political objectives on the island," the Pentagon said.

For another, Chinese leaders realize war could retard economic development, partly because democratic Taiwan is China's largest single source of foreign direct investment.

Rumsfeld, defense secretary since 2001, has never visited China while in office. Officials say he may go this year. Secretary of State Condoleezza Rice, who assumed her current post in February, has already been to Beijing twice.

Rice was in Beijing last week to work on reviving North Korean nuclear talks and U.S. sources said they understood the report's release was delayed partly to avoid new tensions during her visit.