Growing military buildup, spying in China: Pentagon

Reuters News

5/18/2012 7:31:14 PM - Reuters News

WASHINGTON (Reuters) - The Pentagon said on Friday it believes China spent up to $180 billion on its military buildup last year, a far higher figure than acknowledged by Beijing, and it accused "Chinese actors" of being the world's biggest perpetrators of economic espionage.

The Pentagon, in its annual assessment to Congress of China's military, flagged sustained investment last year in advanced missile technologies and cyber warfare capabilities and warned that Chinese spying threatened America's economic security.

"Chinese actors are the world's most active and persistent perpetrators of economic espionage," the report said.

"Chinese attempts to collect U.S. technological and economic information will continue at a high level and will represent a growing and persistent threat to U.S. economic security."

The report was the first by the Pentagon since President Barack Obama last year launched a policy "pivot" to reinforce U.S. influence across the Asia-Pacific, even as planned belt-tightening shrinks the size of the U.S. military in many other parts of the world.

That pivot has fanned unease in China, with some PLA officers calling it an effort to fence in their country and frustrate Beijing's territorial claims.

China has advertised its long-term military ambitions with shows of new hardware, including its first test flight of a stealth fighter jet in early 2011 and its August launch of a fledgling aircraft carrier - a refitted former Soviet craft.

The Pentagon noted that some components of China's first indigenously produced carrier may already be under construction. It said that carrier could achieve operational capability after 2015.

"China likely will build multiple aircraft carriers and associated support ships over the next decade," it said.

China announced in March that 2012 outlays on the People's Liberation Army will reach 670.3 billion yuan for 2012 (about $106 billion), an 11.2 percent increase over 2011. That follows a near-unbroken string of double-digit rises across two decades.

The Pentagon suggested that China's 2011 figure was an underestimate, noting "poor accounting transparency and China's still incomplete transition from a command economy." The official Chinese figure, the Pentagon said, did not include things like foreign procurement as well as other major categories of expenditure.

"Using 2011 prices and exchange rates, (the U.S. Department of Defense) estimates China's total military-related spending for 2011 ranges between $120 billion and $180 billion," the Pentagon said.

In contrast, U.S. lawmakers are now debating a bill seeking $554 billion in base defense spending for the 2013 fiscal year beginning in October and $88.5 billion for the Afghan war and other overseas operations.

(Reporting by Phil Stewart and Paul Eckert; Editing by Jackie Frank)