American Enterprise Institute

July 11, 2006

[Edited transcript from audio tapes]

9:45 a.m.	Registration
10:00	Panelists:	Richard Fisher, International Assessment and Strategy Center
		Daryl Kimball, Arms Control Association
		Evan Medeiros, RAND Corporation
		Henry Sokolski, Nonproliferation Policy Education Center
	Moderator:	Dan Blumenthal, AEI
Noon	Adjournment

Proceedings:

Dan Blumenthal:  We are going to get started here, if you could find a seat please.  My name is Dan Blumenthal, and I’m a resident fellow in Asian Studies here at the American Enterprise Institute. 

I would like to welcome you all this morning to a panel discussion on Growing Missile Forces of China, the People’s Liberation Army, what it means for the strategic balance in Asia and for US international non-proliferation goals.  There has been quite a bit of public debate in the past few months, if not year, on the issue of the US-India Nuclear Deal and what that means for non-proliferation and strategic balance in South Asia and East Asia.  And, of course, we are meeting here today after North Korea once again put itself on the world radar’s screen with its testing of a series of missiles last week. 

There has not been, I think, for sometime real public debate on where China is going with its strategic forces.  The Pentagon’s annual report on Chinese military did mention that of all its uncertainties and surprises over the last year, the accelerated development of Chinese strategic nuclear forces has been one key surprise, and stood out in this year’s report.  There has been a recent article in Defense News about Chinese inter-continental ballistic missiles, as well.  So I think the time is certainly right for a public discussion and public debate about how China sees its nuclear future, what it means for the United States and what it means for Asia? 

We have assembled here today a terrific panel to deal with these issues.  We have Rick Fisher from the International Assessment and Strategy Center, who is an expert on the Chinese military, and has written very widely and broadly on Chinese military developments.  We have Evan Medeiros from the RAND Corporation, who is an expert on a host of issues, and has written specifically on this issue of Chinese nuclear doctrine as well as Chinese strategic forces. 

We have Daryl Kimball from the Arms Control Association, who is a very well-known expert on non-proliferation and arms control issues, to talk more about the non-proliferation side of the issue. 

Henry Sokolski from the Non-proliferation Policy Education Center is really the inspiration behind this panel.  He thought it was time to get this issue debated and discussed once again.  He is a very well known expert on non-proliferation issues and a prolific writer on these issues as well. 

Without further ado, we are going to turn to Rick Fisher for his presentation, then Evan, Daryl and down the line to Henry before we open it up to questions and answers. 

So, Rick?

 Richard Fisher:  Dan, thanks once again for inviting me to AEI, and I would like to thank all our audience for joining us on this soon-to-be hot day.  I’m sure our friends in the PLA are also happy that you have decided to host this event, as it can be viewed as an extension of the 40th anniversary celebration of the Second Artillery.  And, besides, why let those North Korean fraternal allies get all the headlines when China has been making significant investment in their missile, space and, in my opinion, missile defense efforts as well? 

What I hope to do in my allotted time is provide an illustrative primer on PLA missile modernization efforts and introduce some of the issues that I hope we can discuss as the panel goes on.  There are many issues, including whether the Second Artillery is, today and always, destined to be vulnerable to an overwhelming American first strike, as was suggested in a recent article in Foreign Affairs.  What about the issues of numbers, issues concerning possible multiple warhead introductions into the [indiscernible] missile force?  What about the balance that is emerging between land-based and sea-based nuclear forces?  Finally, something that has always interested me is the degree to which the PLA is actually interested in missile defense even as it constantly and publicly opposes to the same. 

We should understand that the Second Artillery is an organization that is responsible for the main part of the nuclear deterrent mission for the PLA, and is comprised of nuclear armed and non-nuclear armed missiles.  One of the main questions that I mentioned was whether we can look towards a future in which the PLA introduces multiple warheads.  The 2002 PLA report out of the Pentagon hinted that the current DF-5 Mod 2 may have multiple warheads.  There has been no public confirmation of that.  The more recent report out of Wright-Patterson, the National Air Space Intelligence Council also contains the statement that China may be considering moving toward multiple warheads. 

This is a chart that illustrates one measurement of the potential.  If China were to pursue a minimal modernization build-up of, let us say, one unit of modern land-based ICBMs and, perhaps, up to five new-type 094 SSBNs and if they are armed with one warhead… the possible total result and then estimates regarding multiple warheads.  The potential is quite different, and something that we should keep in mind. 

In terms of my research, I see the following modernization priorities being pursued by the PLA in regards to its missile forces.  Warheads have been made smaller.  There has been a great emphasis on survivability, mobility, dispersion and decoys.  The nuclear missile force, of course, is being built up, by how much we are not sure.  And non-nuclear missile forces are being built up much more rapidly.  Now we are seeing the possible deployment of not one but two types of new long-range land attack cruise missiles. 

The PLA has also been making quite an investment in both space and airborne targeting and communications assets to give its nuclear and non-nuclear missiles much greater accuracy.  I believe that there is a significant effort underway in regards to counter space capabilities and then missile defense is a PLA interest as well.  Here we have illustrations that I collected from the 1996 Zhuhai Air Show, from an aerodynamic research institute which, to my opinion, shows the two generations of Chinese nuclear warheads. 

From Chinese open literature, we can detect interest in the following kinds of technologies that might be used to defeat American missile defenses.  The most important new modernization effort, in my opinion, is the DF-31A, an extended-range version of the DF-31, which, the Pentagon informs us, could be deployed as early as 2007.  In my opinion, the DF-31A could be analogous to the KT-2A solid-fill space launch vehicle.  At the 2002 Zhuhai Air Show, the nice ladies responsible for this exhibit explained to me that the KT-2A is capable of launching three payloads, whereas its counterpart, the KT-2, which, they told me, was analogous to the DF-31, can only launch one payload.  At least, there is a question to my mind whether the DF-31A could potentially be carrying up to three payloads. 

Next we have the DF-31, which has a slightly shorter range, but can reach American territory if launched from northern parts of China.  This is a photo that may be the first photo of a DF-31 launching.  It was reproduced by the NASIC report this year, lending some credibility.  And this photo appeared on the Chinese web just yesterday, of a DF-31 on a railroad bed with very sophisticated cardboard safety devices on the windshield. 

Here is evidence of a bit of a cavalier attitude towards safety, possibly indicating that the missile tube may be empty - who knows.  But at any rate this picture does raise curious questions about the potential for the DF-31 to be both road mobile – it has wheels - and rail mobile.  Thus the deployment potential is far greater, given China’s extensive rail networks.  In my opinion, this could probably be easily tipped up and launched in this configuration. 

Then we have the DF-5 Mod 2, which, as Pentagon reports indicate, has probably just completed deployment in the last year or two.  The 2002 report hinted that this missile might contain multiple warheads.  It is a large missile, and it could contain up to five or ten warheads if it was developed in that direction.  Most likely, because it has just been deployed, it will probably be around for sometime, perhaps another decade. 

The interesting questions begin to emerge when considering China’s sea-based deterrent.  It is clear to me that China is now embarking on a significant investment in a second- strike capability to insure the survival and, thus, viability of its nuclear forces.  The first 094 SSBN has been launched.  The JL-2 SLBM has undergone a series of tests.  The potential for this to be armed with multiple warheads is there, in my opinion. 

And also we have to consider the basing options for these systems.  The northern fleet base is quite vulnerable; it is surrounded by relatively shallow water.  The Americans could pretty much bottle up the fleet if they wanted to.  As a consequence many sources have explained to me over the last several years that China is investing in a large new naval base on Hainan Island, in the South China Sea. 

If you care to go to your Google Earth, look at Yu Lin, and go slightly to the east, you will find this very curious facility, which looks like the large naval base that I have been told about.  Here we have new docks, new construction, and a very curious opening in construction.  When you zoom in on it, it appears to be an underground facility.  Now, is this what I’m actually seeing?  I cannot say for sure, but it certainly conforms to what I have been told by my sources for a number of years. 

How many SSBNs will China make?   Nobody knows.  According to American doctrine, you need to have at least three in order to maintain one on station at all times.  And China still deploys a number of its older liquid-fueled medium-range missiles like the DF-3, which were sold to Saudi Arabia in the late ‘80s, and the DF-4.  The DF-21 is a new solid-fuel mobile medium range missile, of which the Pentagon estimates anywhere from 19 to 50 are deployed.  The DF-15 heads up the large short-range ballistic missile arsenal. 

On the right we have a new version of the DF-15.  This picture emerged on the internet just within the last two months.  It is a sophisticated short-range ballistic missile.  The nose is shaped to enhance stealth and counter American Patriot-level missile defenses. 

Then we have the more numerous DF-11, the DF-11 Mod 1.  Here is a curious picture that emerged on the web, apparently from a Chinese academic journal that illustrates the potential for the Chinese to develop what our Office of Naval Intelligence and others have identified as a potential anti-ship ballistic missile mission for China’s missile forces.  This would be a breakthrough for China if it were possible, but our intelligence community is apparently concerned enough about this Chinese effort.  According to my sources, China has been interested in a terminally-guided capability for short-range and medium-range ballistic missiles for sometime.  So it is not surprising to me that China would try to develop this into an anti-ship capability. 

We also have to consider a gray area, in which a couple of Chinese companies are now marketing artillery rockets that border on the edge of short-range ballistic missiles.  The B-611 was developed in cooperation with Turkey, the WS-2…  The key advantage is that these are much cheaper to produce.  If you could put a terminally guided anti-ship warhead on the B-611, then you have the potential to sell Hugo Chavez something that would give the American Navy something to think about. 

Cruise missiles are on the way.  There has been an intensive Chinese effort to develop its long-range land attack cruise missiles, at least since the 1970s.  This is the YJ-62, a new anti-ship missile which is being marketed.  It has all the attributes of a longer-range cruise missile.  This is a single photo from web sources that we have of a cruise missile shape in stress-testing. 

H-6 bombers now have re-entered production with the capability of carrying four cruise missiles, potentially anti-ship cruise missiles.  Also, if this is developed into a land-attack cruise missile, we can also expect that this will be delivered by Chinese submarines, including new nuclear attack submarines. 

Space surveillance assets are also receiving great investment.  This is a Russian NPO Mashinostroyenia program that the Chinese have been investing in for sometime.  The Chinese also are investing in their own optical space surveillance, and also probably have a number of long-range UAV programs underway to add multiple layers to missile targeting problems. 

On the matter of counter-space, the Pentagon reports have noted Chinese interest in counter-space capabilities for sometime.  Since the beginning of the Pentagon PLA report series, there has been mention of ground-base laser.  On anti-satellite weapons, the KT-1, which is based on the DF-21 medium-range ballistic missile has been tested on a number of occasions, and could potentially deliver a new micro or nano-satellite, anti-satellite designed systems.  This capability could very likely exist today. 

And then finally - my last slide, I promise – on missile defenses.  In the mid-to-late 1990s, the Chinese government was very loud and vociferous in protesting American missiles defense efforts, particularly, its efforts to engage Japan in cooperative missile defense programs.  We do not hear so much about that anymore.  I suspect that one potential reason for this decrease in Chinese verbiage is that they have come to accept that they have the wherewithal to develop missile defenses, as well.  The Russians, I believe, have provided a critical assist, but what we are also finding out is that the Chinese have had an interest in missile defense for sometime. 

This is a program that reportedly began in the 1960s and ‘70s, a kind of parallel to the American first generation sprint anti-missile system, but was discontinued during the Cultural Revolution.  China now is producing a version of the Russian S-300, which has a low-level anti-missile capability, and a new destroyer that is entering the PLA naval service as a more advanced version of the S-300, which has even better tactical anti-missile capability. 

I would expect that regardless of what China tells us about its opposition to missile defenses, it is also investing in this capability, and that will also advance.  I hope what I have done is introduce a broad range of issues and prompt some questions and hopefully some debate from my colleagues here.  Thank you very much.

 Dan Blumenthal:  Thank you very much, Rick.  You certainly did provide a very broad introduction to the various capabilities, both online now and aspirational [sounds like].  Now we turn to Evan now who has done some very good work on China thinking, and the like.  Evan, go ahead.

 Evan Medeiros:  Thanks, Dan.  I want to begin by thanking AEI and all of you for coming today.  I have been at RAND for about four years.  I’ll do something very un-RAND like, and not give a Power Point presentation since I spend most of my day doing that.  I have just written out some notes, and I’ll make some key points. 

Dan specifically asked me today to address Chinese nuclear missile forces and, in particular, doctrinal changes.  That is an area that we have been working on fairly heavily at RAND for the past several years, using a lot of our language skills and our access to some pretty interesting Chinese materials.  The three questions that I would like to briefly address in the next 15 minutes are:  What does China have regarding strategic nuclear forces?  How do they think about them?  And where are they going to go in the future?

Regarding the first question, I think Rick did a very nice job in laying out what is essentially the key point to make about Chinese strategic nuclear forces - there is a transition going on from the possession of old liquid fueled silo and cave-based missiles that have very limited accuracy to much more modern solid fueled accurate road-mobile increasingly survivable nuclear forces.  I think Rick nicely made that point in the first few slides. 

What I would add to that discussion is that when you look at nuclear force modernization for China, there are a few points that stand out.  First of all, nuclear force modernization for China has been fairly deliberate and fairly limited.  There is no evidence of a crash nuclear program.  The systems that we see coming on line, in particular the DF-31 and the follow on version the DF-31A have been in the developmental pipeline since the mid-1980s. 

To date, there does not seem to be a crash effort where you see a lot of the activity in terms of force modernization going on for China.  What may have a more crash element to it would be in their development of responses to missile defenses, in particular, decoys, penetration aids and possibly MIRVs as well, both MIRVs and [indiscernible], which Rick highlighted.  But essentially, for China, nuclear force modernization, to date, has focused on issues like improving mobility, invulnerability and penetrability.  Those are core attributes for China. 

What seldom gets discussed when we address force modernization are the questions of China’s nuclear command and control capabilities.  I would encourage you, when you think about China, to remember that there are more to just missiles and warheads that are important for having a viable nuclear force structure.  There are issues of early warning capabilities.  It is not clear precisely what kind of early warning capabilities China has, but yet those are critical to your ability to effectively use nuclear weapons. 

Also critical are your nuclear command and control capabilities, specifically the possession of either trans-attack or post-attack communication systems.  Simply put, if a country lobs a nuclear weapon on you and you have no, or very slow, ability to constitute post-attack communications capabilities, your ability to prosecute a nuclear war and to respond becomes much more difficult.  Or, if you do not possess a trans-attack communications capability, meaning your forces cannot talk to one another during the attack process, this has dramatic implications for your ability to have a viable deterrent.  Those are issues that seldom get discussed when we talk about force modernization, but in fact they are extraordinarily important in that particular calculus. 

Now let me address the second question, where I have devoted most of my analytic energy.  If you are really interested, there is a chapter in the packet that I wrote in a book about a year ago that looks at China’s nuclear doctrine, which draws on a variety of internal- and military-circulation Chinese writings about their nuclear doctrine.  It tries to isolate the key Chinese concepts and ideas that they use to talk about their doctrine. 

The first point that I would make about doctrine is simply that the PLA has been a late-bloomer to nuclear strategy research.  It really was not until about 1985, about 20 years after China first tested its nuclear weapon, that the PLA even began writing and thinking about nuclear weapons issues.  And it was not until about 10 years later, until the mid-1990s, that they had accumulated sufficient intellectual expertise within the academic community and the PLA to have serious and well-informed debates about what Chinese nuclear doctrine is.  What we have is a situation where the discussion going on within the PLA, which began early this decade, is probably the first instance where there is a serious institutionalized systematic discussion within the PLA about their nuclear doctrine. 

The second point I would make is, as a result of the maturation of institutional expertise within the PLA, we are reaching a point where Chinese nuclear doctrine, I believe, is comprised of a set of identifiable beliefs and concepts.  I’m not going to go through all of them but they are outlined in the chapter in the packet that Dan distributed today.  But I will make one point in this regard.  When you accumulate the collection of Chinese beliefs and concepts that form what I believe is their doctrine, it does not add up to what we in the West would normally call minimum deterrents. 

I think that is not the best characterization.  Rather, the terms I like to use are the concepts of sufficiency and effectiveness, because they are indicative, or they capture, an inherent flexibility that exists within Chinese doctrine.  In particular, the point I’m trying to make is that China does not like minimalism, and I do not think it is accurate to use minimum deterrence because there is a question about whether or not minimalism is enough. 

To China, it implies that there is some quantitative ceiling on their forward structure, which I do not think the Chinese are willing to accept.  Whereas, when you emphasize the concepts of sufficiency and effectiveness it captures two important dynamics.  It captures, the variegated nature of the doctrinal concepts that China is using.  Some of their concepts do not neatly accord with what we in the West refer to as minimum deterrence.  Also the terms sufficiency and effectiveness, I think, capture the dynamic nature of Chinese thinking about the requirements of deterrence and retaliation.  

But I will say this.  There remains that kind of core element of minimalism, or there is logic of minimalism, still, within Chinese debates about doctrine.  In particular, I have seen no evidence that the Chinese are pursuing a damage limitation or a nuclear war fighting strategy in which they would seek to use nuclear weapons either first or for the purposes of intra-war escalation control. 

For China, nuclear weapons largely have four purposes: one, strategic deterrence; two, retaliation; three, counter-coercion; and four, great-power status or listening deference [sounds like].  One of the most interesting things to emerge from this new group of doctrinal materials that the PLA published in the late 1990’s was the fact that the nuclear forces for the Second Artillery only have one campaign, the nuclear counter-attack campaign. 

By contrast, for example, the Second Artillery conventional missile forces have numerous campaigns, something like six or seven … I do not recall right now.  These campaigns for the conventional missile forces involve preemption, decapitation, successive waves of attack, things that are much more oriented towards what we in the West would refer to as war fighting options or damage limitations. 

In essence, China is pursuing what I would call an assured retaliation capability in which it wants to have the ability to impose unacceptable damage on an adversary.  It wants to hold at risk a sufficient number of an adversary’s assets on which it can be assured to retaliate, and, in that retaliation, inflict unacceptable damage on an adversary. 

An additional important element of China’s deterrence calculus is that deterrence is very much viewed as a psychological battle, in which absolute numbers are not nearly as important as shaping the perceptions of an adversary.  In particular, the Chinese think about conducting retaliation strikes in a way that produces a psychological shock in an adversary and cows him into submission, or at least leads to a break or a halt in the nuclear phase of operations.  The reason why I highlight that psychological dimension is because it is a persistent theme in a lot of these military circulation writings, but also, because it stands in stark contrast to what Soviet nuclear doctrine was during the Cold War, where there was a high priority on absolute numbers and, in particular, making sure that there was numerical superiority against the United States. 

Another important point about doctrine is that, largely, when the Chinese think about their nuclear security environment, they are highly sensitive to a number of factors that inform both their doctrinal debates, but also their forward structure.  These are US missile defense capabilities, US global strike concepts, in particular the new triad, US regional missile deployments, in particular US deployments toward Guam, and, to a lesser extent, Russian-Indian and, potentially, Japanese nuclear policies.  While there is an overwhelming emphasis among Chinese strategists on what US nuclear policies are, there still is quite a bit of attention to what India and, to a lesser extent, Russia is doing. 

On doctrine, let me make one final point.  There has been an enormous amount of attention focused on the issue of No First Use.  The most recent Pentagon Chinese military power report nicely, I think, highlighted that there is a debate in China about whether or not to abandon or conditionalize [sounds like] No First Use. 

Let me make four points about this particular debate.  First of all, even if China were to abandon or conditionalize No First Use, it does not change the strategic balance between the United States and China.  It does not change the fact that first use of nuclear weapons by China, especially against the continental United States or US forces would still be an unmitigated disaster for China, because of the simple fact that we have overwhelming strategic nuclear superiority.  So even if China were to abandon that, it does not fundamentally change anything overnight, but it does raise the question of whether Chinese nuclear doctrine is changing, and I think that is why the Pentagon highlighted this debate about No First Use. 

But I would argue from my reading of Chinese materials that the debate about whether to abandon or conditionalize No First Use is really a question of how China improves the quality of its deterrent capability.  Does it need to conditionalize NFU to improve its deterrence, in particular, to deter things like the use of advanced long-range precision conventional missiles to take out Chinese strategic nuclear assets? 

It is those concerns that have informed the debate about NFU.  So if China were in fact to abandon or conditionalize NFU, to me it does not mean that China is about to accept a first strike capability because not having No First Use does not actually mean you actually have first use.  All it means is that you are conditionalizing your doctrine in a way to deter a broader range of threats to your assets.  And if you read what the PLA is writing about this, even if they were to conditionalize NFU the core retaliatory logic to their doctrine does not change. 

My third point on NFU would simply be that the real issue is not whether or not China will abandon their conditionalized NFU.  Frankly, I do not think it is likely they are going to do it.  The public relations downside to doing it is too significant for this government.  I think what we should focus on when we talk with people in China, when we read Chinese materials are, is the question of what constitutes first use for China.  I do not think China is going to abandon No First Use. 

So then, what, actually, does China mean, or what counts as first use for China?  What for China would be considered crossing that line after which it feels that it is appropriate to retaliate with nuclear weapons?  I think it is that issue that is most important to look at. 

Let me just end very briefly on where I think China is going to go in the future.  I would argue that China has a deterrence challenge. It is currently debating internally how it is going to address this challenge.  Some of the modernization developments that Rick highlights get at this challenge, which is that China lacks the ability to deter a broad range of threats from the United States and, potentially, other states.  These threats are both from nuclear weapons and non-nuclear strikes that could have implications for the viability and survivability of Chinese nuclear assets. 

What I mean is that China’s retaliatory options are pretty limited.  China has these large long-range ICBMs with very big warheads in the area of something like one to three megatons.  Even for some of the new warheads it is developing, the estimates are that their yields are 400 to 600 kilotons.  These are pretty big major weapons. 

It is not clear to me that threatening retaliation with those types of weapons is going to effectively deter the types of threats China needs to deter.  So what you are going to see in the future in fore structure modernization for China is that it is going to develop the capability to hold at risk in various ways a greater variety of US assets in Asia to minimize the US ability to use either low-yield nuclear threats or conventional threats to coerce China during a crisis. 

Fundamentally, that is what China worries about.  It is the US ability to use nuclear threats to coerce or blackmail China, and it is not clear to me that its current retaliatory options are sufficient to deter the range of threats the United States could use.  And so what you are likely to see in future force modernization is at the high-end, in terms of the long-range nuclear assets, in particular DF-31, DF-31A and these new SSBNs that are coming online.  You are going to see China improve survivability, penetrability and accuracy.  That is largely what the long-range assets are going to focus on, but then to address the problem that I raised, to address these deterrence challenge, what you are likely to see is a greater emphasis on development of medium-range ballistic missiles and intermediate-range ballistic missiles to give China more accurate regional strike capabilities, to be able to hold at risk in credible way a greater variety of US assets in Asia. 

A second major focus of Chinese nuclear force modernization will be responses to ballistic missile defense.  The Chinese are keeping a hawk’s-eye watch on where US ballistic missile defense capabilities are going.  They are actively going to invest in decoys, counter measures, and MIRVs to make sure the US missile defense system will not undermine their ability to have this assured retaliatory capability. 

So in the future I would argue that the four indicators that we should all look at are as follows: One, the relative distribution of land-based versus sea-based nuclear forces for China; two, the types of training and exercises the Second Artillery nuclear forces undertake, in particular, how extensive they have become for regional contingencies; three, the modernization of China’s nuclear early warning and command and control infrastructure, a critical indicator of their investment in nuclear capabilities, and whether or not China is going to step over the line into damage limitation nuclear war fighting options; and four, related to the work that we have been doing at RAND on doctrine, whether or not the Chinese take some of the core concepts that we have isolated and begin to reinterpret them in a way that looks like China is adopting a much more war fighting orientation in their nuclear forces. 

Why do I not stop there?  Thank you.

 Dan Blumenthal:  Thank you very much, Evan.  Both Rick and Evan have pointed out that, from the capability standpoint, the fore structure standpoint, the doctrinal standpoint, and even strategic thinking, there certainly has been over the past decade a sea-change in the overall Chinese approach to nuclear and strategic forces.  I think we have entered this new nuclear age, and we are still trying to sort it out. 

Now we are going to shift gears, to two leading non-proliferation scholars who will talk about the consequences and implications for our international non-proliferation goals.  So, first is Daryl.

 Daryl Kimball:  Thank you very much, Dan.  And thanks for the opportunity to be here to discuss this topic, which is timely and overdue to discuss and debate.  What you asked me to talk about are some of the proliferation implications.  I’m going to interpret that mandate also to talk about what we do about this, because I think that is one of the key issues.  What I want to do is to present some ideas that, I hope, open our thinking a little bit about how we might be able to respond to some of the developments, or some of the non-developments, that we have been hearing about in the past two presentations. 

The core question that we are dealing with here is whether the nuclear modernization program that China is pursuing is aimed at building a larger force with a strong offensive war fighting capability, including multiple types of weapons, multiple warheads with the ability to launch quickly.  Or will China continue to pursue the basic fore structure to support its existing approach to nuclear weapons and to deterrence, as Evan discussed in the No First Use issue, and maintain a relatively small reactive nuclear force that is more survivable against a first strike attack, whether it is nuclear or conventional? 

One thing we do have to acknowledge is that while we have had a very specific presentation by Rick on China’s forces, it is difficult to assess the capabilities.  It is even harder to assess intentions.  But let me just offer a couple of thoughts about what I think we should do, with what we just heard as a backdrop.  I would agree that we are facing a shift in China’s capabilities.  I think Evan summarized it very well.  The shift from the old generation to the newer generation of missiles and warheads is taking place.  That modernization program has not been going forward as quickly as the US intelligence agencies have been predicting for some time but we are on the cusp of that modernization program.  The DF-31 program, the DF-31A program, what do these represent? 

In my view, and I think this is what Evan was also saying, these missiles represent something of a replacement for an existing capability.  They appear not to be the Great Leap Forward, so to speak, that some might believe it is, but these are missiles that continue to be focused on - I think it was a very good phrase, Evan - assured retaliatory capability, given the changes in US capabilities over the last several years.  Nevertheless, this is not something to sit back and watch idly, and hope will not change.  We do need to explore options now that could reduce the threat of China’s nuclear modernization program having a catalyzing effect on the nuclear and missile programs of other countries in the region. 

We also have to take steps now to engage China to ensure that its force posture and nuclear and missile numbers do not grow in number or quality.  Allow me to share a couple of thoughts about their neighbors.  We could have a whole panel about regional reactions to China’s nuclear and military capabilities, but let me just focus on a couple of things. 

China’s neighbors are concerned about the overall military modernization with respect to missiles.  I think we have to focus on India and its reactions to the missile modernization program.  Just this past weekend, India unsuccessfully tested its Agni-3 missile, which has intercontinental capabilities, capable of carrying nuclear warheads.  I think that the DF-31/DF-31A program is clearly something that the Indian military planners have in mind as they develop the Agni program.  If they do not see this as a direct threat in some way, they see this as a capability that they would also like to have because of the prestige associated with ICBMs. 

We also have to consider that China’s neighbors have reason to be concerned beyond the missile program because China has not joined the United States, Britain, France and Russia in publicly declaring a stop to fissile material production for weapons.  Although it has a stockpile of weapons-grade plutonium and highly enriched uranium that could allow it to substantially increase its arsenal, its opacity about its fissile material production program is cause for concern.  It is one reason why India has resisted calls for it to follow the lead of the US and others in stopping fissile production for weapons.  Though China has signed the Conference of Nuclear Test Ban Treaty and halted nuclear testing since 1996, it has not ratified the CTBT. 

I think one thing that is worth mentioning is that without a nuclear testing program, China would be hard-pressed to develop high-yield low-weight warheads that are more suitable for MIRVing [sounds like] on its ICBMs.  This is not a hard technical barrier, but it clearly would create an impediment for the qualitative improvement of Chinese warheads, and this has been established in several assessments since 1998. 

Now, I think that might be an interesting issue to discuss here further.  I am not sure to what extent there is agreement about it, but I think it is a factor that we need to consider.  So the question is how to move Beijing to exercise greater restraint on its nuclear and missiles modernization programs in a way that does not make outsiders and other regional actors make worst-case judgments about its intentions and capabilities. 

Let me list off some things that China could do to help, and then let me discuss what the United States might do to help prompt some of these actions.  First, China should publicly declare it has halted fissile material production for weapons purposes. 

Second, China should stop waiting for the United States to ratify the Conference of Nuclear Test Ban Treaty, something that may never happen, unfortunately.  But China could reinforce confidence in the region that it has no further intentions to significantly advance its qualitative warhead development by ratifying the treaty. 

The third area and perhaps the most important is nuclear force size [sounds like] and transparency.  It is, of course, highly unlikely that, given China’s relatively small nuclear numbers relative to the United States and Russia, China is going to be interested any time soon in a phased quantitative nuclear reductions dialogue.  There is an opportunity, I think a need and an interest, for the United States to try to engage China in a discussion about nuclear doctrine and what kind of nuclear forces are appropriate for China’s - to borrow Evan’s phrase - assured retaliatory capability. 

One of the great uncertainty factors that I think Rick’s presentation illustrated is the possible decision by China to MIRV its missile force.  If it does, that would create a significant shift in the strategic balance.  If they do not, I think we can expect a similar slow-paced track.  We should be engaged with China in deeper, more energetic and regular discussions on this subject.  Now some Chinese analysts suggest that if China succeeds in making its strategic force less vulnerable to a first strike through increase mobility, ergo, the DF-31 road-mobile programs, China may be willing to offer more transparency about its nuclear forces.  I would rather not wait until China develops that program in order to pursue that kind of dialogue. 

The fourth area that is important that we have not really addressed here has to do with conventional missiles and looking for ways to get China to reduce the cross- straits deployment of sort-range ballistic missiles, which continue to grow at a rapid pace. 

How to do this?  Let me outline some ideas.  I offer these as suggestions that have not been fully thought out.  What I want to try to do here is stimulate some debate and ideas about what the United States might be able to do using the tools that it has.  First, regarding the No First Use policy and the concern that China might move away from it, I would disagree a little bit with Evan about the significance of China moving away from this, though I would agree with him that it is unlikely that they are going to do so, given the political cost and given that there do not appear to be any signs that they have made a doctrinal shift.  In fact, that is the assessment of the Pentagon’s military forces assessment from 2006. 

Still, what can we do to lessen the pressure on China to pull the trigger in a crisis, or further increase the numbers of its long-range ballistic missiles?  My bold suggestion is that United States itself should consider a No First Use policy, or a conditional No First Use policy, under certain circumstances involving China.  If we step back and think about the various scenarios involving nuclear weapons in that region, the United States does not have an interest in using nuclear weapons first.  This is something that we can give in order to lock in something that we might find to be important. 

Second, considering China’s long-standing concerns about space weapons and our stated interest in pursuing a global ban to cut fissile material production, I believe there is little reason at this point to continue to oppose the Chinese and the Russian suggestion to have discussions at the Conference on Disarmament on a treaty to prevent an arms race in outer space.  The United States opposition to that idea is one of the reasons why the Chinese and the Russians oppose the initiation of discussions on a fissile material cut-off treaty.  Now, putting aside the question of whether this Administration is truly interested in securing an FMCT in our lifetime, I believe that this would be an important step that could dislodge or unblock the difficulties that have existed for years in pursuing an FMCT. 

Another idea I would put forward is that, given the differences between the United States and France and other countries on the verifiability of the FMCT, the US might try to work with China to engage the other five states that have tested and have a knowledge they have nuclear weapons in a seven-nation initiative to cut off fissile material production for weapons purposes with something less than a thorough verification system as an interim step towards a global, verifiable FMCT.  This is essentially the substance of what the United States proposed in its treaty text at the Conference on Disarmament on a Fissile Material Cut-Off Treaty back in May of this year. 

Third, China is very interested in joining the missile technology control regime.  This creates some opportunities and some very real problems.  The voluntary MTCR, which includes 30-plus nations, is dedicated to preventing missile proliferation.  China has continued to be a problem in this regard.  Back in 2004 when China sought MTCR agreement for joining the US, some other states opposed it.  As one US official said, China is not there yet with respect to their missile proliferation behavior, and I agree. 

The US has imposed non-proliferation sanctions on Chinese entities some 72 times over the last six years.  Many of these deal with cases of missile proliferation and cases involving Iran.  Given China’s record, and given what the MTCR could do to aid China’s missile program, I think there should be no rush to give China entry into the MTCR.  But we need to recognize that this is something that China seeks and that we might use in order to leverage some progress in other areas.  We need to press China to improve its missile non-proliferation record, but also use this as a way in which to seek greater information, meaningful information about China’s nuclear forces, its capabilities and its plans – transparency, in other words. 

Finally, the fact that China’s overall military modernization program is increasing, the military imbalance between China and Taiwan should be a reason for concern.  Our response needs to be more than to offer Taiwan Aegis destroyers because, in the long-run, China will be far more capable of producing short-range ballistic missiles that can overwhelm any such system.  And I would note that back in 2004 President Chen suggested in a speech that China and Taiwan “should seriously consider the issue of arms control and take concrete actions to reduce tensions and military threats across the Taiwan Strait.”  He went on to say that both capitals should review their armament policies and explore a code of conduct for the strait to help keep the peace. 

Since then, China has not responded specifically to that, but there have been reports of a Chinese idea that would involve a freeze or withdrawal of some Chinese missile deployments targeting Taiwan, in exchange for restrictions on the United States providing arms to Taiwan.  So far, as far as I know there has been no discussion about either of these two quasi-proposals. 

So these are some ideas.  Some of them may seem radical, may seem different.  But my purpose here is to stimulate some thoughts about how we might be able to use arms control in greater engagement with China in order to deal with very real problems, significant uncertainties about its modernization programs, specifically its missile modernization program.  Whether you see China’s nuclear forces going faster or slower, whether you believe that China’s nuclear posture will remain more reactive or more forward-leaning, I think we should agree that there are some steps we should take in order to test China’s interest in greater transparency, predictability and new forms of nuclear and missile restraint before some of the more dire predictions and outcomes become a reality. 

Dan Blumenthal:  Thank you very much, Daryl.  You certainly did throw out some provocative ideas out there that we will hopefully get to discuss in the Q&A and discussion session.  Let's turn to Henry to be the clean-up hitter.  We will never know what he is going to say, but it will always be provocative.  So let's turn over to Henry now.

Henry D. Sokolski:  Well, first I want to congratulate you, Dan and AEI on holding a panel that is so broad-based in saying one single thing, and that is we have a problem.  I think we have been in denial about this problem for quite a long time.  Many of you may know that I have been fairly outspoken in saying that our cooperation on nuclear and space matters with India needs to be looked at in a much more hard-nosed fashion to make sure that proper conditions are in place so it does not push things in the wrong direction.  Many people have mistakenly thought, “Well, I just basically do not think the Indians have a case for basically building up.”  I think, unfortunately, they might.  That is the reason I have been so concerned. 

One of the things I take very seriously, and what the original idea behind this panel was - My gosh!  I think six or seven months ago – the Indian complaint, “What about the Chinese?  You keep picking on us.  What about them?”  I always like to say that two wrongs do not make it right, but I think it is a fair-enough point, that it is still a problem what the Chinese are doing. 

Now, in this regard, my Center has been fairly consistent in pointing out that China is a problem.  Back in ’98 when there were nuclear tests in India and Pakistan I wrote a piece, which was quite popular in the New York Times, called “The Blast of Reality.”  Most of its emphasis was on, “We are not addressing one of the key drivers of this event,” which is China.  We were not doing it then, I did not think. 

This concern personally dates back to 1987 when I worked in the Pentagon, when I was getting evidence that, frankly, the cooperation that we were pushing at that time with China on rockets - we called it space launch vehicle assistance - was going to backfire.  And that, in fact, turned out to be the case.  I think you can see some of the fruits to that in the first set of pictures.  Now, at the time when I raised this with certain Reagan officials, some of whose names I will protect because they are now senior officials in this administration, they dismissed my concerns.  They said, “You know, the fact of the matter is it may frighten you, and it may even be frightening that we are validating the design of their ICBMs by helping them launch our satellites, but we hope it scares the Soviets, too.” 

I did not think that was a complete thought.  And the reason I did not think that was a complete thought… I said, “Yes, but what if we win the Cold War?”  This was beyond imagination for a lot of people in ’87, but not for all people.  I think Andrew Marshall at that time was holding seminars on what the end of the Cold War would mean.  Unfortunately, these officials were not going to those seminars.  I mean, I will talk a little bit more.  NPEC, my operation, tried to highlight the implications of that cooperation.  About four years before indictments were handed down, we identified all of the specific firms and all the transfers that were later confirmed by the intelligence committees as being a problem.  But it took indictments a long time. 

Now, why have I and my Center been so concerned about China so consistently?  I think it is because it is a unique country amongst all the nuclear powers.  It is the only country I know of that has had recent serious military wars.  They have gone to war with India, Japan, Russia, and if you can include the way in which we were engaged in activities in the 50s, the United States.  I mean, we were flying planes in the straits of Taiwan.  Now, there is no other country amongst that list that has had so much intramural sport activity, if you will. 

Now, I do not want to blame China for that.  But it is a fact that they have put people on edge in larger numbers than most other countries.  I'm not saying they are the worst, but they have engaged and they have not played well with others.  That has consequences.  I see them, and always have seen them, as a fulcrum point because of that.  They are not just another country.  They have a history that, unfortunately, we have to live with, as well as them. 

Now, there has been a tendency - and you have seen a little bit of that today, although, actually, quite good we did not get into too much of it - to debate about how many nuclear warheads they have and what their capabilities are, or what their intentions are.  You should know by now we do not know, exactly.  And if we get numbers between 100 warheads and 400 warheads, all of that totally misunderstands how to think about the problem that China presents us now. 

I do not know how many of you know the myth of the Sword of Damocles.  But in the trade many, many years ago, I would say about 30, there was a phrase called “Damocletian [phonetic] overhang.”  It is a very fancy word.  We do not hear that kind of fancy talk anymore, but it was very popular then.  And the idea was uncertainty plus break-out capacity in a lot of different places would spell disaster.  I will come to that at the end of the presentation. 

But the way to look at China and, frankly, India and a lot of other countries is that the ability to break out, the capacity to deliver warheads and make stockpiles of fissile material, fissile-making capacity, those are the things to watch.  Those are numbers we know about.  Those numbers have been going up.  And that, I would submit, is at least this much of a problem as anything relating to these pictures, which are not… I mean, they are kind of frightening.  I mean, look at these things.  They should be making sports cars, not those things. They should be doing something else.

Daryl G. Kimball:  I-pods.

Henry D. Sokolski:  I-pods, whatever.  Now, I think the second problem relating to Damocletian overhanging is that we have had, I have got to say, a fairly incoherent unsound policy response to this set of developments, incoherent in the sense that it is bipartisan.  We have tried for the last 30 years to device policies, both dovish and hawkish, that really emphasize some clear-cut separation between peaceful and military space and nuclear activity, fundamentally a mistaken distinction, so that you get assistance to one form of activity that we claim as peaceful that actually increases the Damocletian overhang, the uncertainty about breakout. 

I gave you one example with the Chinese assistance we gave with regard to the missile activity.  We called it “space launch assistance” and we launched satellites.  By the way, we do not do that anymore.  We also still want to engage in civilian nuclear assistance, and that, I think, is also not well-thought out.  I would not say it is mistaken entirely, but I think it is not well-thought out.  And we were doing the same thing, I have to say, with India.  We are about to do some of that with Russia. 

I think all of this need to be looked at much harder.  The reason I say that is part of the reason we are not engaging China right now in tough talk about the uncertainties associated with its fissile holdings, what it might have in the way of warheads and all of that, has to do with our previous policy, which we thought hard-headed, of using them as a shell [sounds like] in the Cold War against the Soviets.  That residual legacy, if you will, has kept them out of the mainstream of browbeating rhetorically about how many weapons they have. 

You do not hear that much talk about it until, I think, really recently and, I would argue, in a big sense today.  I think part of that is because we wanted to help the Chinese in this war against the Soviets.  But part of it, too, I think, is that, in general, not just with China, we have moved as a country in the United States to a kind of ala carte approach to enforcing rules.  During the liberal years, I would say the Clinton years, this ala carte approach came up in how we dealt with North Korea, for example.  They said, “Well they do not have to follow the rules for X number of years, while we try to supply them with reactors.” 

So we kind of changed the rules even though they were breaking it.  We were too generous towards that.  My team, if you will, the Republicans, has another form of ala carte and that is, “We know who our friends are and we do not really like having to labor under rules.” 

And so, in a sense, I kind of like to think that our approach is kind of like… have any of you been to the Outback Steakhouse?  No rules, just right.  And the way this works is we deal with each country separately.  We have a deal for Russia, a deal for Iran, we have a deal for North Korea, and we have a deal for China.  I think at some level that is breaking down.  Let me give you just a few numbers to give you some idea of what the overhang now looks like. 

In the case of China, the number of tons of material that could be converted into weapons – I went on the Web this morning – the uncertainty went between 15 and 25 tons of highly-enriched uranium and 2.8 to 6.8 tons of plutonium.  Assuming they make an advanced warhead, not a crude weapon, that is somewhere between 1,500 and 2,600 advanced weapons.  They have, in addition, about 100,000 separate [sounds like] work units of enrichment, which is like between 400 and 800 weapons’ worth of material a year assuming they use some of it for the civil program. 

When you go to Japan, they have 40 tons of plutonium that is separated, sitting around, and a large enrichment capacity.  India, of course, now is our favorite, we want to treat them.  We are using the approach we took with China in dealing with the Soviet Union.  We are trying to use them as the mule for dealing with China.  It worked so well in the case of China, and now we want to do it again. 

The Indians, I think, to their credit, have been much more circumspect than the Americans.  You listen to Indians, they say, “Well, I'm not sure we want to do it exactly the way you say.”  But we have harped on, “Well, they do not really want to make weapons, and they say they do not really want to make weapons.”  The problem is they are moving into a capacity that is about an order of magnitude greater if they choose to make more weapons.  They just launched this rocket that is MIRVed, or at least a multiple warhead.  They are talking now more publicly again about an ICBM program based on a rocket that is larger than anyone made in the world, the Zara [sounds like].  And I have not even gotten to Pakistan. 

The point I'm trying to get at is you do not want those numbers and those uncertainties to keep growing.  Let me close with two suggested readings which are favorites, I think, among my tribe.  One is by Jared Diamond, who any thinking conservative has probably already read.  He wrote a book called Guns, Germs and Steel: The Fates of Human Societies.

[Cross-talking]

Henry D. Sokolski:  Well, you see, they already have read it.  I did not read that one.  But I'm reading another one, which is a little annoying.  It is called Collapse.  The gist of this book, which is focused on environmental things, by the way, is that if things get too complicated we tend to make mistakes that are fatal.  It is a serious point. 

And let me close with one other suggested reading.  Thayer Mahan wrote a book in 1911 called Armaments and Arbitration.  I recommend it very strongly.  It is not generally read any longer, although they came out with a new edition.  This book essentially explained why the rise in armament activity in Europe was not worrisome.  And the reason he said it was not worrisome is because it would embolden the White Race - you do not hear that anymore – to gird itself and become stronger to deal with the Slav and the Yellow Peril.  That is a code for Russia and China.  And that they, as they built up, would not really have to worry about going to war with one another because they would deter one.  And they would get stronger and be a counter-balance to the real problem, which was this Slavic-Yellow peril. 

Boy, was he wrong.  Dead wrong.  We need to be very careful right now in paying attention to this and stop making the same mistakes we have made over the last 30 or 40 years in how we deal with these problems.  My guess is we are going to have pay attention to creating and strengthening new rules.  We can talk about it.  I mean, Darryl has some ideas.  I'm not sure I fully sign up to those, but something.

Daryl Kimball:  I'm not am either…

Henry Sokolksi:  Yes, right.  And I think it is going to mean that we have to probably be tougher-minded about how we deal with China, how we deal with India, and now Russia, than we have then.  We think we can gain this and that we are on top of this.  I sense the Damocletian overhang is getting much worse, and the complications much greater and we need to slow down.

Dan Blumenthal:  Thank you, Henry.  Thank you very much to all of you.  Before I open it up to Q&A, I would like to take a step back and ask the following question.  What we have been presented with essentially … the following question relates to Chinese strategy.  Evan got into it a little bit, but I wonder if I could sort of prod both Evan and Rick and anyone else a little bit more.  If you are a rising power …  Evan mentioned that one of the reasons that China is pursuing this transition is for status reasons, but Evan also said counter-coercion. I'm wondering, what about coercion?  And along those lines, one country that has not been mentioned here at all is Japan.

Henry D. Sokolski:  Well, I mentioned it.

Dan Blumenthal:  Well, except that China went [indiscernible] Japan, right?  But…

Henry D. Sokolski:  [indiscernible]

Dan Blumenthal:  Okay, I'm sorry.  But in terms of the Damocletian overhang, in terms of breakout, in terms of the way countries in the region are viewing the Chinese transition and strategic forces, I wonder if anyone of you can tackle the issue of, well, what if all of this is true and they do not change the doctrine of No First Use?  All of a sudden you have a much more credible, much more modern force, and countries of the region such as Japan and Taiwan, are simply part of the strategy.  It is just simply …

Richard D. Fisher:  [indiscernible] … very important set of concerns.  I firmly see a coercive element in what China is trying to do.  If you look at the use of missiles in ’95 and ’96 around Taiwan, we have very clearly an attempt to use raw missile power to coerce a Taiwanese electorate.  Well, that did not work.  But I would not assume that China has abandoned the creative use of missile forces to influence behavior and cause people to consider what they are doing. 

One could easily imagine that there is a plan to drop, in a surprise manner, 10 to 12 warheads on either side of the continental United States in conjunction with a build-up to rescue Taiwan from whatever kind of attack China seems to be contemplating.  I can easily imagine, I do not know, President Hilary Clinton sitting in the White House wondering, “Gee, we could not do anything to stop those 12 warheads that did not explode but landed off of all our major cities on both coasts.”  And do we really want to be sending our single carrier that might be deployed with the Seventh Fleet into this maelstrom?  That is the kind of coercion potential that is out there. 

Now, how is the region responding?  Well, I think our allies in the region are taking a cue from our behavior.  We are entering a phase in which grand commitments may become more problematic.  We are entering a phase in which we are discussing a new limited, if you will, kind of isolation.  We do not want to get involved in grand conflicts.  So we see, in Taiwan, especially, interest in a limited deterrent capability.  Hopefully, not a nuclear capability, but they are definitely developing their own ballistic and cruise missiles. 

In Japan, there are reports of a program to develop a 300 kilometer-range supersonic anti-ship missile.  And we see by their regular space launches that they have the capability to develop much longer-range missiles if they so choose, both liquid and solid fuel.  And just yesterday, Foreign Minister Abe introduced the idea to the Japanese public that Japan must consider having its own offensive preemptive strike capability.  What does that mean?  We know there has been some interest in the Japanese in purchasing Tomahawk cruise missiles. 

Ditto on the part of Australia.  So a dynamic is already underway. 

There are suggestions, at least in regard to Taiwan, that we are trying to oppose, sit on a Taiwanese development of a missile deterrent capability.  In my opinion, the numbers are so overwhelmingly against Taiwan.  We are not able to supply anti-missile defenses to ensure adequate deterrence.  We really have little choice, given the Chinese non-interest in real disarmament and non-proliferation, but to allow the Taiwanese to do what they view is in their interest and what they need to do to hold hostage enough PLA strike assets that would hold off a general attack, perhaps for another decade if they can assemble several hundred [indiscernible], and such.

Dan Blumenthal:  We have both Evan… let's go down the line. Evan, you are next and then…

Evan Medeiros:  Great.  I will make two brief comments.  In addressing the issue of coercion, the distinction between Chinese nuclear forces and its conventional military forces is critical.  When you look at conventional military modernization, in particular, the build-up and modernization of their ballistic missile force, their cruise missile force in terms of number, quality, accuracy, new warheads, it is clear that the conventional military modernization, specifically conventional missile modernization, has a coercive element to it. 

There is simply no question.  As Rick said specifically, the coercion is focused on Taiwan.  The Chinese had been explicit about this in issuing the anti-secession line.  It is focused on preventing independence by Taiwan.  Perhaps in a conflict scenario there could be more coercive elements to it.  But if one looks at the positioning of certain other missile assets, there is clearly a coercive element to Japan, as well.  A lot of the conventional missile forces are likely trying to hold at risk US military assets based on Japan, particularly Kadena Air Base in the island of Okinawa.  Again, it is pretty clear that has a coercive purpose. 

And then, broader Chinese military modernization has an anti-access [sounds like] component to it, in which it is trying to hold at risk a variety of US assets, specifically aircraft carrier deployments, to prevent them from being able to dominate sea and airspace around the island of Taiwan.  So there is no question that Chinese conventional military modernization has a coercive element. 

Now, does nuclear modernization have a coercive element?  Let's think through this a little bit.  For China to effectively use nuclear weapons to coerce the United States or Japan, for example, it has to make sure that these threats are credible.  For China’s threats to be credible, it has to have the capability.  Does it have the capability to credibly threaten the United State or Japan?  Well, when all you have in your arsenal, to date, are very large lumbering warheads like one megaton, three megaton,  I think that calls into question a little bit whether or not you can actually use nuclear weapons for coercion. 

That was my argument about why China developed a greater variety of missiles to hold at risk in different ways US assets.  But my real point on the nuclear question is that for China to effectively engage in nuclear coercion, it has to calculate what the response is going to be, either the response from United States or from Japan.  When you are talking about Japan, because it is defense ally of the Unite States, clearly the response would come from the United States.  It is not really clear to me that this is a winning strategy for China that it has the capability to essentially say, “We have the capability to credibly threaten the use of nuclear weapons against Japan, which is a treaty ally of the United States.  And we are actually going to threaten the United States, as well, because we think we can fight and win a nuclear war with the United States.” 

I simply see nothing in Chinese doctrine, and I see nothing in Chinese capability to suggest that is a wining strategy.  I would welcome input from those who think that there is anything in Chinese doctrine or capabilities to suggest that they have the wherewithal to effectively engage in that kind of coercive strategy.

Dan Blumenthal:  Daryl, do you have a comment, in terms of the implication for some of the arms control suggestions you had, if part of the trajectory over the long-term is something that we cannot convince the Chinese to get out of, such as the coercion of Taiwan or the cowing of Japan?

Daryl G. Kimball:  Let me pick up on Henry’s Damocletian factor to mention one other variable which we have not discussed, which is North Korea.  I do not like to predict the future, to forecast the future, to come up with dire predictions, but we do have to consider the potential situation 10 years or so from now if the North Korean situation is not resolved or reversed, in which you have Japan and, perhaps, South Korea responding to North Korea. 

I think some of the statements coming out of the more hawkish Japanese politicians are motivated right now more because of North Korea than China, specifically, but there could be a double meaning in some of those statements in an ulterior motive.  So the question then becomes how China’s nuclear force modernization and its strategy would evolve 10 years from now if you have Japan and South Korea rethinking their no-nuclear-weapons calculation over again. 

I mentioned this because I think it is another reason to think about how we can lock in what we can before too many other horses are out of the barn.

Henry D. Sokolski:  I think Daryl has got it right.  The problem of China and the neighborhood, and what might spill out beyond the neighborhood, is a 10-to-15-year problem.  A lot of people say, “Ah, well, great.  Go home and start drinking again.”  The problem is the answers require action now.  This brief is in enough fidelity to make you want to get on edge now.  Of course they do not have the capability to do a major war with the United States.  The problem is you spend another 10 to 15 years not doing much to kind of hem them in and get them to rethink what they are doing, they will.  That is not that long.  I'm 55.  I just celebrated my birthday.  Time flies, believe me.  And this kind of problem is closer than you think, if it is 10 to 15 years.  It takes a long time to get big organizations to think, even come up, with wrong answers, much less right ones. 

I think the other points that have been raised are very much on- point.  Japan is watching what is going on in North Korea and Taiwan.  These are dress rehearsals for what they see as the big competition.  It is with China, and China sees it the same way.  And the fact of the matter is last week we gave a wink to South Korea making a really big cruise missile over MTCR guidelines as a way of, again, an incomplete thought to kind of deal with this.  That is not the way to address and calm down Japan.  They are going to at some point ask themselves whether going it alone beyond what they have done makes more sense.  They have already not trusted our intelligence. 

Dan Blumenthal:  Actually, some people might want to start drinking now, given some of the things we are hearing today.  We have 25 minutes for questions.  Let’s go by AEI rules where you wait for the microphone coming around, state your name and affiliation, and please ask a question rather than making a comment, because there are a lot of hands up.  I think right here.

Rachel Stewart:  Hi, Rachel Stewart from the Center of International Trade and Security.  You have been talking a lot about how the US [indiscernible] certainly right now, their neighbors in the region how to deal with China.  But I’m worried about Europe, especially with countries like France, talking about dropping an EU embargo.  How can we bring in the European allies and educate them, so to speak, on our anxieties towards China?

Dan Blumenthal:  Anyone want to tackle that one?  Evan and Rick?

Evan Madeiros:  I think the trans-Atlantic debate on the possibility of EU countries lifting the arms embargo actually galvanized a lot of trans-Atlantic discussion and dialogue on questions of Asian security.  For example, there is now an assistant secretary-level annual dialogue that meets between Chris Hill, the Assistant Secretary for East Asia, and his counterparts within the EU. 

There is also regular discussion between the State Department and the EU about the arms embargo issue, but the fact that the Europeans are not really pushing the issue anymore in at least the short term has taken this issue off the table.  But I think the debate that happened, one that interestingly the Chinese were pushing for, sensitized and galvanized leaders within the European Union to the fact that we needed to have a trans-Atlantic dialogue about Asian security, and reminded them that the US has far more equities in Asia, given the fact that we have five defense allies in the region and a variety of security partners. 

So I’m not actually that worried anymore.  I think the Chinese, by pushing the embargo on the Europeans, did a great service to us all and gave us an opportunity, especially the leaders in the US and the EU, to actually begin talking about these issues.  It gave the US an opportunity to sensitize them to our deep and enduring security interest in the region.

Richard Fisher:  I am and would remain extremely concerned about not just the ability of the EU but all of China’s main military technical partners to continue to propel and accelerate China’s military modernization.  I would hasten to guess that, over the last 15 years, roughly 75 percent of China’s real advances in hardware technical capabilities have either been directly purchased or have been spun off because of technology they have been able to acquire from around the globe. 

I had the DF-21 up here a second ago.  As Henry was beginning to explain, this missile was made possible because of the solid fuel satellite kick motor from a former Maryland corporation called Martin Marietta.  Cruise missiles have received a tremendous assist from Israeli technologies…

Male Voice:  Our good friends.

Richard Fisher:  …our good friends.  And then the Russian contribution remains quite substantial.  The Type 094 SSBN may benefit from fourth generation Russian submarine technologies.  It is quite amazing.  I credit George Bush tremendously with having made a personal mission over the last two to three years out of trying to convince European leaders to pay attention to this matter.  We must remain as firm on it as possible.  The list of PLA weapons that already benefit from EU technologies alone is long and scary.  If that embargo were to be lifted, it is possible that waning Russian technical capabilities could be superseded, and that the PLA could really accelerate its drive to achieve parity, and in some cases maybe military technical superiority over the United States within 10 to 15 years.

Henry Sokolski:  Actually, I have a very different take.  I would credit Congress for not listening to the Administration and insisting on really archaic, Neanderthal export controls.  If it was not for that, we could not have held Europe hostage to the possibility they would not be able to build things with US money.  Those old laws came in and saved our tail on that embargo issue, and had we voted those export controls out of existence as was being recommended by the Administration, we would not have had a lever to lean on.  More generally, beyond export control, as you can see, I still think those old rules are good.  They are good for a lot of things. 

The second thing is a soft point.  When you are dealing with Europeans, the idea that you could talk them into thinking about military things for very long is just not in their nature.  They are good cooks.  They are wonderful dressers.  They are nice people, and because of that, it would be very sensible to talk about liberal self-rule a lot more.  You want to talk about democracy.  It is such a tough case to make in some of the places we are pushing it.  It is not such a tough thing to talk about in Asia if you take a look at what has happened in the last half century, and the Europeans know that.  I would lean on them on that point because that is where they want to be leaned upon, and that does have some resonance with regard to the embargo. I had to weigh in on this already very interesting discussion.

Jay Lu [phonetic]:  My name is Jay Lu.  I’m with the Formosan Association for Public Affairs.  We just sent Aegis destroyers to Yokosuka.  Next month, another one will be sent to Japan and presumably, these are to cope with any potential missile assault by North Korea on Japan.  In the Taiwan Strait, the Chinese have something like 800 missiles targeted on Taiwan, and Taiwan is very vulnerable because its military assets are concentrated in eight military air bases and two naval ports.  The worry is if there is a war, Taiwan’s military may crumble before help can arrive. 

So my question is this:  If the US chooses to deploy Aegis destroyers on Okinawa, could such a [indiscernible] missile defense be sufficient to slow down the PLA offensive so that the US Carrier Task Force can get there in time?

Dan Blumenthal:  Aegis.  You introduced Aegis into the region earlier in the discussion, and I would like to see your take on the question, and whoever else...

Daryl Kimball:  Well, I think your question was something of a military one.  I hesitate to try to answer whether a certain number of destroyers will be able to knock out a certain number of missiles, but let me just go back to a couple of more fundamental points.  One is we are not going to win a race with mainland China over short-range ballistic missiles.  No matter how many destroyers are sent there, I think the Chinese reaction is going to be - and I think this is one of the reasons why the short-range ballistic missile force increases are so large right now - to try to overwhelm it.  That is their response, putting aside whether they are going to be seeking new decoys with the intercontinental missiles to deal with the United States [indiscernible] strategic missile defense. 

So I think we have to recognize that in this region, these kinds of ballistic missiles may have value in dealing with some of the missiles.  They may serve some sort of cautionary deterrent function in terms of their deployment in the region to show the United States is serious in the crisis situation.  But I do not think we can count on them in the long run working to mitigate the threat of the Chinese missiles. 

That leaves you with another question:  what do you do about it?  And that is why I was suggesting the idea that what we need to try to pursue is a freeze and an eventual reversal of this ballistic missile deployment across from Taiwan.  How to do that?  That is one tool that we do need to look at.  I do not think it has been looked at in a serious way.  There have been some feelers that have been sent out over the last few years.  There are some examples from Cold War history and US-Soviet history that we might be able to borrow upon that might lead to some solutions, not in the near term, but that is one thing we need to pursue.

Dan Blumenthal:  Rick.

Richard Fisher:  Two points, Jay.  In a tragic all-out war against Taiwan, I doubt we are going to have sufficient warning to be able to deploy these ships to the Taiwan Strait.  And as they make their way there, there will be layer upon layer of barriers to try to sink them. 

Secondly, if we were going to try to supply Taiwan with the ability to defensively counter this missile onslaught - we are talking about 2,000, maybe 3,000 ballistic and cruise missiles in the not-too-distant future - then the only alternative that I see is to move as quickly as we can into energy systems – microwave, laser, whatever.  This, at least, holds the potential to diminish the first and second strikes to a point where you can at least prompt PLA commanders to question the value of beginning to start that kind of assault. 

Secondly, we just do not have that kind of technology to sell to Taiwan and if we did have it, there would probably be a huge debate over whether we would want to.  That leaves Taiwan with several options, one of which is what it is pursuing, the development of its own land-attack cruise missile capability and ballistic missile attack capability.  As this effort has been explained, both in the Taiwan press and occasionally by Taiwan officials, it does not appear that they are interested in nuclear weapons.  If that was the case, we would have swept down on them the way we did at least twice in the 1980s. 

However, there is a lot of compelling logic to Taiwan’s current programs.  The idea, as I understand it, is to develop a small number of missiles that can hold hostage PLA amphibious, potentially airborne nodes, command and control, and such.  What you are doing is asymmetrically threatening the PLA’s ability to complete a campaign.  If you can do that, then quite possibly, you can deter the PLA from believing that it could succeed, to begin with.  If all the PLA can do is rain down missiles, lasers, satellite-guided bombs on Taiwan, they still lose the war, if you will, because nobody is going to be raising a red flag over Taipei.  And if they lose the war, then the government in Beijing will face, it is assumed by many, a tremendous reaction.  Thanks.

Dan Blumenthal:  Henry.

Henry Sokolski:  Yes.  Are we all frightened yet?  Did that not do it?  Energy weapons, okay.  Well…  I do not know about you folks, but I pay a lot for gasoline right now.  Somehow, we now know that in dealing with the Middle East, one of the costs is you have to pay more for oil to have a forceful policy in the Middle East.  We do not question it, really.  We pay at the pump. 

Perhaps it is time that we start thinking about whether or not we can tolerate higher prices at Wal-Mart, because there is one massive comparative advantage that has to do with trade, and we have, as a nation, said, “No, we want those cheap goods.”  Perhaps it is time to rethink that because that leverage may have something to do with standing behind Taiwan before you have your energy weapons, and the idea that we want to encourage Taiwan to do a lot of offensive activity, given that it has an interest in nuclear technology that is historical, is something to think long and hard about.

Nigel Sutton:  Nigel Sutton from Raytheon.  Sorry I was a little late, so I had to borrow someone’s notes here to make sure I did not ask something that may have been covered already.  This is really for Evan and Richard, although the whole panel may address it, too.  You mentioned something on modernization of command and control.  That fascinates me a little bit and that is where I would like to ask a question on.  Double ISS asked of research about the transparency of the budget.  You have seen the numbers, 20 billion supposedly, but ISS is saying so much more, like 90 billion. 

The first question is what do you think it really is, if you have had research in that to see how much was it really?  Or what do you think the real budget amount is?  The second part of that is where do you think they are going to spend it?  And that is where I’m alluding to with the modernization of command and control. 

I do agree [indiscernible] in that conventional side is what they are putting emphasis on as a coercive side.  Do you think on a nuclear side they are going to put more dollars in there for their surveillance systems and command and control?¬

Evan Madeiros:  On the budget question, I had the privilege of being part of a RAND team that published a study that specifically addressed this question.  The study is called Modernizing China’s Military.  I encourage you to look at it.  We have an estimate in there where we say that we actually, unlike any other study I have seen, produced a methodology for coming up with our estimate of what the real Chinese budget is. We would say that it is about 40 to 70 percent larger than the official Chinese estimate.  So take a look at that report.  That is a view that I’m happy to stand behind. 

Where they will spend it?  That is a very difficult question.  I can talk in qualitative terms about the fact that they are going to spend more.  Clearly there is a greater emphasis on conventional military modernization now… or conventional military modernization is a priority, but we also know that nuclear modernization is a priority, as well.  But it is very difficult for me to make any type of guess about the amounts of money. 

I do not know how much an air defense destroyer in China costs versus a DF-31 or 31A.  So it is very, very difficult to know.  In fact, one of the things we tried to do at RAND was try and get a better understanding of whether or not there is a guns-versus-butter debate in China about social expenditures versus military expenditures, even something like that, which presumably, is far less secretive than understanding army versus navy versus second artillery spending.  We could not get much insight on it, so in terms of your second question, I do not have any data from which to answer it.

Nigel Sutton:  [inaudible].

Evan Madeiros:  Most of the mainstream non-internal Chinese media is largely propaganda.  For me, it is very difficult to distinguish between whether or not they are trying to shape external perceptions of the fact that, yes, we are modernizing our nuclear command and control because they want people to think that they have developed some sophisticated trans-attack communication system, when in fact they have not.  Other than that kind of propaganda, I do not know of anything else that would give us real insights into it. 

My point about nuclear command and control is that when we talk about forced modernization, people forget that there is this other component to nuclear force modernization that is equally important to the missiles and warheads.  If we do not focus on those particular capabilities, we are missing half the picture.  But data on that is just not something I’m aware of. 

Richard Fisher:  The Pentagon estimates of annual spending potentially breaking $100 billion a year seem fair to me.  When you really get into the [indiscernible] of it all and try to calculate the amount of money that local governments are told they have to spend in order to support the ability of the PLA to mobilize this road, that bridge, this building for anti-aircraft and such, you really wonder whether the Chinese government itself knows how much they are spending. 

But what I can say to answer your question is that there is a tremendous investment in the broad range of C4ISR capabilities.  All of the manned space missions have had a military component, both the unmanned capsules and the two-manned capsules.  They have both had a dual-use purpose. Gee, whiz, the investment in surveillance satellites, dedicated communication satellites, the national effort to create one of the most modern fiber-optic communication grids in the world, overlapping tropospheric high-frequency radio - what does that do to the survivability of PLA communications, and such?  You see the real proliferation of digital communication devices throughout the PLA services to include even an emphasis on digital soldier capabilities like we are developing.

Dan Blumenthal:  Last question [inaudible].

Shao [phonetic]:  Hi, I’m Shao from the Chinese Embassy.  Today we talked about the missile threat posed by China, but on the other hand, it seems that the United States, in solving the threat by North Korea’s nuclear tests or the missile tests, also needs China’s help.  So how would you see China, as a competitor, or a partner in maintaining the strategic stability in Asia?

Dan Blumenthal:  Actually, it is a very good question. I would like to put a corollary to it, which is how you think the Chinese view the North Korean nuclear issue.  There is some talk about whether or not this is part of a nuclear strategy, whether it is not… so I would like your take on that as well.  Go ahead, down the line.

Richard Fisher:  I encourage this dialogue very much.  It would certainly assure Americans if the Chinese government, for example, could explain to us the full extent of China’s involvement in North Korea’s missile programs and capabilities.  There is a substantial amount of open public discussion that the third stage in the Taepodong-1 ’98 launch was a solid-fuel stage that was made possible because of Chinese technical transfers. 

Would you be willing to tell us today, for example, your incomplete disclosure with the American government and the Japanese government about China’s role in enabling North Korea’s capability as a means of trying to promote assurance, so that we can begin to consider at least in this one area that cooperation is possible and not just competition?    

Dan Blumenthal:  We will have to invite Mr. Shao back to be on the panel.  Since he is not on our Panel today, you do not have to answer that question.  Go ahead.

Evan Madeiros:  Let me address the broad theme of the question about competition and cooperation, or competition and partnership, the complexity in the bilateral relationship.  The overriding dynamic in Asia in the future is simply the issue that US-China interactions in Asia in the future are going to be characterized by both competition and partnership.  Dan graciously included in the packet an article that I wrote on the Washington Quarterly that lays out what I call a dynamic of reciprocal hedging or a mutual hedging, where you have both the United States and China simultaneously pursuing mixed strategies of both cooperation and competition, in which you are essentially going to have some mix of both. 

The future of the relationship, and, largely, the future of the security architecture in Asia, is going to be defined by the extent to which we are able to reach some kind of balance or mix between competitive policies and cooperative policies in the region.  It is going to be both, and there is no way of extricating ourselves from that particular dynamic. 

The question for China, really, is what mix does China want in its relationship with the United States?  We hear from Chinese friends all the time, “We are interested in partnership, we are interested in partnership.”  Yet, China, like the United States, will simply have to make some very difficult decisions about where it wants to compete with the United States and where it wants to cooperate.  And when you have issues like North Korea, China has a glaring opportunity to cooperate with the United States if it so chose, but we understand it is a very costly decision for China. 

So China’s actions on North Korea, in many ways, are an important litmus test of what type of future actor China is going to be in the future, and, in particular, what type of security architecture China will promote in the region.

Daryl Kimball:  A couple of thoughts.  Well said, Evan.  It is a good question to close on.  In those areas where there is, and could be, competition, I think that the United States and China, as well as other countries in the region, have to figure out new methods by which we can achieve more transparency, predictability and restraint in any competition between nations.  Those three guiding ideas are essential to maintaining stability, even if there is a competitive situation. 

What my concern is in large part is that we do not have the tools by which to achieve these three goals in those areas of competition, and we need to pursue our thinking in these ideas.  The two governments have to stop being in a wait-and-see mode and waiting for the other or blaming the other.  We need to be discussing and engaging with one another much more in areas where there is mutual interest, and there clearly are a lot of them.  I think we do have the ingredients for “success” with North Korea. 

What I would focus this on is the September Framework Agreement, which China played an important role in putting together.  Now we need to implement it, and I think there are some reasons to fault the Bush administration for not moving ahead since then.  But right now, given what North Korea has done with the missile test, China is the country that can get these six-party talks going in ways that no other country can.  And so this is, as Evan said, China’s opportunity to make a difference in something that not only the United States wants, but China obviously wants, too, to resolve.

Henry Sokolski:  Thinking China and thinking US, to say nothing of thinking India or Japan would cooperate…  I, for one, like inexpensive Chinese goods.  They are getting better and better.  I’m looking forward to buying a Chinese car, actually.  That said, it is like a marriage.  You have to pay attention to your wives.  In this case, you have lots of people you want to cooperate with.  It is not one-way.  Let me give you two things for a homework assignment. 

Will China honor its treaty obligations with regard to not doing forced repatriation of people fleeing North Korea?  That is not a big, big tall order.  You just signed the treaty.  It will make a big difference on the future of North Korea.  They would get the message quickly if you just follow the rules you signed up to.  And it is the right thing to do, by the way.  That is the reason you signed it. 

I think the second thing is, will China simply make public what it has said privately, repeatedly, that it does not make fizzle [sounds like] for military purposes?  That would help immensely in capping what will undoubtedly be a major competition between India and Pakistan, and one that will cost you a lot of aggravation, as well as us.  It might actually lead to another big war. 

Get back to me.  I would like to hear the answers.

Dan Blumenthal:  Well, thank you very much, Mr. Shao, for the question bravely put.  Thank you all for coming.  Thanks to our panelists for a very rich discussion, enough that I think will require some follow through.  We may call our next panel on regional reactions…

[End of file]

[End of transcript]