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TO RUEHC/SECSTATE WASHDC IMMEDIATE 7861
INFO RUEHOO/CHINA POSTS COLLECTIVE
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RHHMUNA/HQ USPACOM HONOLULU HI

C O N F I D E N T I A L SECTION 01 OF 02 BEIJING 002780 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 02/15/2016 
TAGS: PREL PINS CH
SUBJECT: CHINA/QDR: CHINESE THINK TANK PERSPECTIVE FROM 
CICIR'S YUAN PENG 
 
REF: OSC CPP20060208067009 
 
Classified By: Political External Chief Edgard Kagan.  Reasons 1.4 (b/d 
) 
 
SUMMARY 
------- 
 
¶1.  (C) The 2006 Quadrennial Defense Review (QDR) contains 
positive language about China but PRC analysts are concerned 
about the identification of China as the country having the 
greatest potential to compete militarily with the United 
States as well as the explicit reference to a policy of 
hedging, according to Yuan Peng, Vice Director of U.S. 
Studies at the Chinese Institute for Contemporary 
International Relations (CICIR).  Chinese analysts recognize 
that the primary focus of the QDR remains the war on 
terrorism and U.S. military restructuring, Yuan said.  The 
PLA is studying areas where it may open up more of its 
military budget to "transparency."  Yuan suggested that the 
Embassy use the Chinese media to present U.S. perspectives on 
the QDR to reduce misunderstandings.  The PLA is preparing a 
proposal for a disaster relief joint exercise.  End summary. 
 
QDR readout 
----------- 
 
¶2.  (C) Poloffs visited Dr. Yuan Peng, Vice Director of U.S. 
Studies at the Chinese Institute of Contemporary 
International Relations (CICIR), a Chinese 
Government-affiliated think tank with international security 
interests on February 13.  Dr. Yuan's February 8 article (ref 
A), "US, not China, Stands at Strategic Crossroads" reviewed 
the QDR's implications for U.S.-China relations.  Yuan told 
Poloffs that the QDR statement that "China has the greatest 
potential to compete militarily with the United States" was 
the most surprising aspect of the report for China.  He 
called the phrase "harsh" and not what the PRC expected 
following the visits of President Bush and Defense Secretary 
Rumsfeld as well as Deputy Secretary Zoellick's "stakeholder" 
speech and Senior Dialogue exchanges.  Although Chinese 
analysts recognize that the primary focus of the QDR remains 
the "long war" on terrorism and U.S. military restructuring, 
specifying China as a potential military competitor was 
disruptive, in Yuan's view.  Many Chinese analysts expected 
that the strongest language on Chinese military affairs would 
not appear until the summer 2006 annual Report to Congress on 
Chinese Military Power. 
 
¶4. (C) Yuan expressed concern about the QDR reference to the 
need to "hedge" against the PRC, saying that this was the 
first time he has seen this wording in an official U.S. 
document.  He said PRC analysts are concerned about the 
implications of a U.S. "hedging" strategy, particularly as 
there is disagreement about the meaning of the term.  On the 
positive side, he expressed appreciation for the positive 
language about working with China. 
 
¶5. (C) Poloff responded that it is difficult to argue against 
the notion that China has the greatest potential to compete 
military with the United States in the future.   Yuan said 
that while this may be correct, it should not have been said 
in such a direct way in an official document, as this sends a 
strong political signal.  Poloff commented that while this 
may be true in a PRC political context, the U.S. context 
requires acknowledging such an obvious fact.  The reference 
to the need to hedge is made in the context of both the 
uncertainties of the future as well as China's lack of 
military transparency. 
 
PLA Studying Moves Toward Transparency 
-------------------------------------- 
 
¶6.  (C) Yuan acknowledged the U.S.'s long-standing concern 
over defense transparency and said that the PRC leadership 
recognizes that U.S. statements about the PLA's lack of 
transparency have resonated within the region.  Commenting 
that Beijing must find a way to address this issue, he stated 
that several working groups within the PLA are studying ways 
to increase transparency.  In response to a question about 
the definition of greater transparency in PRC military 
development, Poloffs raised U.S. concerns on China's 
development of asymmetric capabilities and lack of 
transparency in its defense development, particularly the PLA 
budget, force structure, doctrine, capability and intentions. 
 Noting that other countries have reason to share these 
concerns, Poloffs pointed out that China's capability to 
project power have regional implications.  Lack of 
understanding of China's long-term goals make assessing the 
PLA's military buildup difficult and can create 
 
BEIJING 00002780  002 OF 002 
 
 
misunderstandings.  Enhanced opportunities for substantive 
military exchanges can help demystify the two militaries' 
views of each other, as Secretary Rumsfeld indicated in 
October 2005. 
 
Use Chinese Media to Discuss the QDR? 
------------------------------------- 
 
¶7.  (C) Yuan said out that the Chinese people do not have a 
good understanding of the QDR and suggested the Embassy might 
seek to make its case through the Chinese mass media to help 
inform Chinese public opinion about the QDR. 
 
Chinese Interest in Joint Humanitarian Relief Exercise 
--------------------------------------------- --------- 
 
¶8.  (C) Asked about the overall state of bilateral military 
ties, Yuan said that many analysts feel that military 
cooperation lags behind U.S.-China engagement in other 
fields.  He continued that the PLA is interested in future 
joint military exercises with the United States and that a 
PLA study group was drafting a proposal for a U.S.-China 
joint humanitarian disaster relief exercise. 
Randt