FREEMAN REPORT
FROM THE FREEMAN CHAIR IN CHINA STUDIES |
More In This Issue
* PUBLICATIONS
“Wen’s Reforms: Following in the
Footsteps of Zhu Rongji” by
Zhenzhen Chen
“New National Strategy Provides In-
sight into China’s Rise” by Drew Th-
ompson and Zhu Feng
Complete list of Freeman Chair publi-
cations in 2004 (cont pg 4)
* FREEMAN FACTS
China’s Foreign Oil Statistics
(cont. pg 5)
Quotes Of The Month
"It is not enough to leave Taiwan
alone to face China's growing military
threat. We hope countries in the
Asian-Pacific region, the U.S., Japan,
Korea, Philippines, Australia and New
Zealand and Taiwan to set up a coop-
eration system to protect regional sta-
bility. It is also to keep the balance of
power with China's People Liberation
Army," ~ Taiwan's Deputy Minister of
National Defence Michael Tsai speak-
ing at a joint news conference of the
Defence and Foreign ministries and
Mainland Affairs Council. Source:
Channel News Asia, Oct. 19, 2004
(cont. pg 3)
Trivia
What is the average wealth of China's
richest 100 entrepreneurs in 2004?
(cont. pg 3)
Freeman Chair in China Studies ● Center for Strategic and International Studies
1800 K Street, NW ● Washington, DC 20006 ● Phone: (202) 457-8719 ● Fax: (202) 457-8713 ● FreemanChair@csis.org
OCTOBER 2004
FEATURE ESSAY: The People’s Liberation Army Under Hu
Jintao
BY TAI MING CHEUNG
When Hu Jintao finally took over as Chairman of the Chinese Communist Party Central
Military Commission (CMC) in September, one of his first activities as commander-in-chief was to
watch a presentation on the military’s information command capabilities. The event symbolized
one of Hu’s top priorities as he seeks to establish his authority among the military top brass: turning
the People’s Liberation Army (PLA) into an information era high-technology war-fighting outfit
while ensuring it retains its Maoist political credentials.
Successfully achieving this goal will require Hu to allow military commanders wide-rang-
ing autonomy over professional military issues while keeping a close check on their political loyal-
ties and activities. Hu’s predecessor Jiang Zemin did an excellent job by giving the top brass gen-
erous annual increases in defense budgets, and eagerly backing their efforts to restructure and
downsize the armed forces, which shrunk by a quarter during his reign to 2.5 million troops.
Hu’s Military Credentials
As a veteran party cadre dealing with organization and party youth affairs, Hu’s involve-
ment in military affairs has been limited. His main experience has come from his tenure as a CMC
vice-chairman since 1999. He was given this post to prepare for his eventual succession over Jiang,
but he appears to have spent little time or effort to acquaint himself with military affairs or to cul-
tivate ties with military officers, to avoid being seen as encroaching on Jiang’s power base. Hu’s
activities were largely ceremonial, such as meeting foreign military dignitaries or accompanying
Jiang on visits to military installations.
However, after becoming state president and party general secretary in 2003, Hu sought
to increase his military profile. In May 2003, he presided over a widely publicized Politburo meet-
ing that discussed the war in Iraq, and the current trends leading to revolutionary changes in the
nature of armed forces and war-fighting in the information era. Hu also assumed a prominent role
in overseeing the leadership’s response to the sinking of a Chinese navy Ming-class submarine in
the same month.
Hu’s first priority as commander-in-chief is to gain the confidence and loyalty of senior
generals in Beijing and around the country’s seven military regions. (cont. page 2)
In The News
BEIJING On his third visit to China, Russian President Vladimir Putin met with President Hu
Jintao, Premier Wen Jiabao and parliament chair Wu Banguo to discuss matters relating to bi-lateral
cooperation in trade and security as well as Russia’s bid to join the World Trade Organization (WTO).
However, talks on energy supplies, in particular oil and gas, dominated the agenda with no conclusive
agreements reached. Putin also visited Xi’an where he and Vice Premier Wu Yi co-chaired a symposium
on regional cooperation between Chinese officials in five northwestern provinces and their Russian
counterparts.
BEIJING French President Jacques Chirac's five-day state visit to China netted almost $5 billion
in business. A delegation of French companies inked more than 20 new deals with local Chinese partners,
including a $1.5 billion rolling stock order for Alstom SA, a French engineering giant. French companies
are trying to close the gap with European rivals Britain and Germany in exploiting China's vast markets.
Chirac also pushed for stronger economic and political ties with China, saying the countries had an ob-
ligation to balance U.S. global influence.
Page 2 CSIS Freeman Chair in China Studies
When Jiang became CMC chairman in 1989, he spent much of his time in the first two to three years concentrating on military affairs
and spending time with his top generals. After he became personally acquainted with the senior ranks of the top brass, Jiang moved to
put in place a new generation of commanders whom he could trust. During his 15 years as CMC chairman, Jiang promoted nearly 80
officers to the top rank of 3-star general.
Hu will need to follow in Jiang’s footsteps and speedily build up his nascent power base by choosing military officers that are
loyal to him and placing them in key command slots. His first move was to promote Gen. Xu Caihou, the director of the PLA General
Political Department, to CMC vice-chairman. Although Xu was originally loyal to Jiang, he has also spent a considerable amount of time
accompanying Hu on his military activities and official travels around China in the past few years and as played a key role in ensuring
the army’s political loyalties to the party. In his new position, Xu is likely to play a pivotal role in developing Hu’s power base among the
top brass.
Another general whom Hu is likely to rely upon is Gen. Liao Xilong, the director of the General Logistics Department. Liao was
a deputy commander of the Chengdu Military Region in southwest China in the late 1980s when Hu served as the party secretary of
Tibet. Hu had to depend on assistance from the Chengdu Military Region, whose responsibilities include Tibet, when he declared martial
law in the autonomous region in 1988.
Removing Jiang’s Military Power Base
Hu will need to carefully but steadily dismantle Jiang Zemin’s extensive power base in the high command. The surprise decision
not to elect Zeng Qinghong, Jiang’s right-hand political protégé, onto the CMC represents a major triumph for Hu, but Jiang still has a
number of close aides in important military posts. They include Jia Tingan, the long-time head of Jiang’s private office, who is the director
of the CMC General Office that controls the agenda for the commission’s meetings, and You Xigui, Jiang’s former bodyguard and the
head of the Central Guard Bureau that provides security protection of the country’s political leadership.
Although the rest of the senior military leadership has loyally served Jiang, they are primarily professional officers and can be
expected to swiftly switch their allegiances to Hu. This includes CMC Vice-Chairman and Defence Minister Gen. Cao Gangchuan, who
heads the military’s modernisation programs, and CMC Vice Chairman Guo Boxiong. Consequently, no major reshuffle of the senior
military leadership is expected until at least the next Party Congress in 2007, although there may be occasional changes in personnel.
Balancing Economic Growth with Military Modernisation
One of Hu’s most tricky challenges will be to find an appropriate balance between maintaining robust economic growth while
devoting growing resources to supporting the accelerating pace of military modernization. Over the past few years, the importance of
building a strong army has risen up the leadership’s priorities and the PLA is no longer at the bottom of the pecking order in the country’s
Four Modernizations. This is because of mounting long-term challenges to China’s national security, such as over Taiwan and volatile
Sino-U.S. relations, and the increasingly outdated state of much of the PLA’s military capabilities.
Under Jiang, defense budgets grew by more than 10 percent annually and the PLA was able to import billions of dollars of
advanced weapons systems from countries such as Russia. Hu will be expected to maintain this generous pace of funding to the top
brass, especially as the PLA is in the midst of a major long-term re-equipment of its front-line arsenal.
One early test of Hu’s willingness to politically back the financial demands of the top brass will be with the drafting of the 11th
Five Year Plan, which is already well underway. The plan will set general targets for government financial and resource allocations for
the rest of the decade and the PLA will expect to continue to receive double-digit increases to its defense budgets.
As long as overall economic growth remains robust, Hu will be able to adequately satisfy the military’s budgetary demands. But
if persisting economic overheating triggers a hard landing, the authorities might have to rein in defense spending and this could create
headaches for Hu.
Hu’s Views on China’s Strategic Posture and Military Modernisation
Hu, like Jiang before him, will likely pay most of his attention as CMC chairman overseeing political issues centered on party-
army relations and ensuring the continued political loyalty of the military rank and file. While Hu will leave professional and war-fighting
issues to the top brass, he has occasionally aired his views on military modernisation and doctrine.
At the May 2003 Politburo meeting, Hu praised the efforts to advance military modernisation by leap-frogging into the informa-
tion technology age. The PLA is shifting its priorities from focusing primarily on acquiring conventional weapons platforms such as tanks
and warplanes to according similar attention to the building of digital and information systems and systems integration technology. In-
formation systems technology includes command, control, communications, computing, intelligence and information systems.
Another issue that has attracted Hu’s interest has been the building of an integrated defense mobilization system that would
allow the civilian economy to support the military in the event of war. Civilian and military authorities have been seeking to coordinate
their development efforts over the past decade to ensure that transport infrastructure projects such as road and railways are able to be
turned over for military use in the event of an outbreak of hostilities.
There has been speculation that Hu may be more accommodating on foreign policy and strategic issues than Jiang, and this

Freeman Chair in China Studies ● Center for Strategic and International Studies
1800 K Street, NW ● Washington, DC 20006 ● Phone: (202) 457-8719 ● Fax: (202) 457-8713 ● FreemanChair@csis.org
Page 3 CSIS Freeman Chair in China Studies
could lead to a reduced role for the military top brass in key issues such as Taiwan and relations with the United States.
Over the past year, there has been intense debate within Chinese foreign policy circles about the formulation of a new concept
apparently encouraged by Hu concerning China’s “peaceful rise”, which seeks to emphasize that China’s rapid economic and military
growth is not a threat but an opportunity for the rest of the world. Despite such conjecture, Hu’s track record on critical national security
issues such as cross-strait relations suggests that he firmly supports the tough line against Taiwan.
The Changing Role of the CMC
At the same time as Hu’s accession, the ranks of the CMC leadership were expanded to include, for the first time, the heads of
the navy, air force and strategic missile forces. This suggests that the role of the CMC may be changing from an organization primarily
involved in coordinating high-level political-military matters between the party leadership and military high command to an operational
body that is directly involved in running the military establishment, such as the U.S. Joint Chiefs of Staff.
Conclusions
Hu is likely to follow in Jiang’s footsteps in allowing the PLA leadership wide-ranging autonomy in professional military matters,
although he will pay close scrutiny to ensuring the PLA’s loyalty to the party. While Hu appears to want to project China’s global economic
and military rise in more peaceful and less threatening terms than his predecessors, in reality he supports a strong military establishment
that has the capability to safeguard the country’s sovereignty and territorial integrity. For PLA chiefs, Hu’s accession as commander-in-
chief is unlikely to result in any changes to their current course of reform and modernization.
Tai Ming Cheung is a research fellow at the Institute for Global Conflict and Cooperation, University of California, San Diego. He
was a visiting research fellow at the CSIS Freeman Chair in China Studies in fall of 2003.

PUBLICATIONS
“New National Strategy Provides Insight into China’s Rise”, The China Brief, Jamestown Foundation, September 2, 2004
By Drew Thompson, Research Associate and Zhu Feng, Visiting Research Fellow at the Freeman Chair
Thompson and Zhu examine China’s recent departure from a national strategy dominated by Deng’s thinking over the previous two decades.
Achieving a “prosperous nation and powerful military” (fuguo qiangbing) is an indication of the country’s growing ambition and willingness to be
increasingly proactive in protecting China’s interests. Set against the context of an incomplete leadership transition and a sensitive geo-political
environment, the authors analyze the appeal and limitations of fuguo qiangbing which will dominate much of China’s strategic planning for years
to come. Click here for the article.
“Wen’s Reforms: Following in the Footsteps of Zhu Rongji”, The China Brief, Jamestown Foundation, September 16, 2004
By Zhenzhen Chen, Research Intern at the Freeman Chair
Chen analyzes the "Zhu-Wen" governance model which underscores the continuing – but usually overlooked – influence of Zhu Rongji's policies
in defining Chinese political reform led at present by Premier Wen Jiabao. Chen points out that the recent government reorganization launched
by Wen Jiabao in 2003, such as consolidating regulatory functions in regulatory commissions, downsizing the bureaucracy, and strengthening
administrative predictability and the rule of law, directly inherits and implements most of Zhu Rongji's 1998 reforms. Click here for the article.
** Please refer to 2004 publications from the Freeman Chair on page 4.

TRIVIA ANSWER
According to Shanghai-based accountant Rupert Hoogewerf, compiler of Forbes’ China rich list, the average wealth among China's top
100 entrepreneurs reached US$297 million. They amassed a total of US$30 billion, up 29 percent from last year. Topping the list is
Huang Guangyu, the 35-year-old founder of China's largest electronics retailing giant and second largest retailer GoMe Appliances,
who had a personal fortune of 1.3 billion dollars. Source: "China's rich getting richer; wealthiest is electronics retailer", Agence France
Presse, October 13 2004

Quotes of the Month

"We believe the Dalai Lama should genuinely abandon his position of advocating Tibet independence and make public statement acknowledging
that Tibet and Taiwan are inseparable parts of China,...He should also stop all his splittist activities abroad. Only this way, we can make further
contact or initiate discussion with him,” ~ Chinese Foreign Ministry spokeswoman Zhang Qiyue reacting to the Tibetan spiritual leader’s remarks
that Tibet might benefit more by remaining with China, provided its culture and environment is protected. Source: Xinhua News, October 20, 2004

Freeman Chair in China Studies ● Center for Strategic and International Studies
1800 K Street, NW ● Washington, DC 20006 ● Phone: (202) 457-8719 ● Fax: (202) 457-8719 ● FreemanChair@csis.org
Page 4

PUBLICATIONS FROM THE FREEMAN CHAIR 2004

(Please click on the publication title to view the article)
September
“Wen’s Reforms: Following in the Footsteps of Zhu Rongji”, The China Brief, Jamestown Foundation, September 16, 2004
By Zhenzhen Chen, Research Intern at the Freeman Chair
“New National Strategy Provides Insight into China’s Rise”, The China Brief, Jamestown Foundation, September 2, 2004
By Drew Thompson, Research Associate and Zhu Feng, Visiting Research Fellow at the Freeman Chair
August
“Onus is On Beijing to Prevent War in the Strait”, Taipei Times, August 16, 2004
By Andrew Wei-chih Yang, Research Assistant at the Freeman Chair
“China's Watchdog Agencies Need Watchdogs”, Asia Times Online, August 13, 2004
By Zhenzhen Chen, Research Intern at the Freeman Chair
“The Crisis of Neglect”, South China Morning Post, August 11, 2004
By Drew Thompson, Research Associate at the Freeman Chair
"Injecting Drug Use Fueling Spread of HIV in China" and "China’s Growing AIDS Epidemic Increasingly Affects Women", Population Reference
Bureau, August 2004
By Drew Thompson, Research Associate at the Freeman Chair
July
"When All Else Fails: Beijing's Conservative Stance on Taiwan", The China Brief, Jamestown Foundation, July 8, 2004
By Drew Thompson, Research Associate, Zhu Feng, Visiting Research Fellow at the Freeman Chair
"The Coming ‘Second Wave’: HIV/AIDS In Asia" Testimony before the Subcommittee on Asia and the Pacific Committee on
InternationalRelations United States House of Representatives, July 21, 2004
By Bates Gill, the Freeman Chair in China Studies
June
“Illegal Migration in China and Implications for Governance”, In the National Interest, June 30, 2004
By Audra Bielke, Research Intern at the Freeman Chair
“Defusing China's Time Bomb, Sustaining the Momentum of China's HIV/AIDS Response: A report of the CSIS HIV/AIDS Delegation to China,
April 13-18, 2004” released on June 17, 2004 (also availible in Chinese version)
By Bates Gill, the Freeman Chair in China Studies, J. Stephen Morrison, Director of the Africa program, and Drew Thompson, Research Associate
at the Freeman Chair. Co-chaired by Ambassadors Louis W. Sullivan and J. Stapleton Roy
“A Healthy Choice for China: Taiwan and the WTO”, The China Brief, Jamestown Foundation, June 10, 2004
By Drew Thompson, Research Associate at the Freeman Chair
May
"Anti-AIDS Effort in Central China Focuses on Former Plasma Donors" and “China Faces Challenges in Effort to Contain HIV/AIDS Crisis”,
Population Reference Bureau, May 2004
By Drew Thompson, Research Associate at the Freeman Chair
April
"Partners and Competitors: Coming to Terms with the U.S. - China Economic Relationship" released on April 21, 2004
By Bates Gill, the Freeman Chair in China Studies and Sue Anne Tay, Research Assistant at the Freeman Chair
February
"Taiwan’s Communication Problem" Pacific Forum, CSIS, February 6, 2004
By Andrew Yang, Research Assistant at the Freeman Chair

Freeman Chair in China Studies ● Center for Strategic and International Studies
1800 K Street, NW ● Washington, DC 20006 ● Phone: (202) 457-8719 ● Fax: (202) 457-8713 ● FreemanChair@csis.org
Page 5 CSIS Freeman Chair in China Studies
FREEMAN FACTS: The Freeman Report is an electronic newsletter produced monthly
by the Freeman Chair in China Studies at the Center for Strategic
and International Studies (CSIS), a private, tax exempt institution
China’s Foreign Oil Statistics focusing on international public policy issues. Its research is non-
1. China surpassed Japan as the world's second-largest con- partisan and nonproprietary. CSIS does not take specific policy po-
sitions; accordingly, all views, positions, and conclusions expressed
sumer of oil, consuming around 6 million barrels per day (bbl/d), an
in this publication should be understood to be those of the
11.5% increase from 2003.
author(s).
2. As China’s largest source of foreign oil, Saudi Arabia ac-
counted for 17% of China’s total imported oil in 2003.
Center for Strategic and International Studies 2004
3. Beijing estimates that the South China Sea may hold pe-
THE FREEMAN CHAIR IN CHINA STUDIES
troleum reserves of 213 billion bbl, including 105 billion in the con-
tested area of the Spratlys Islands. Bates Gill, Freeman Chair in China Studies

4. In December 2001, state-owned corporations from China
and Taiwan agreed to a joint petroleum exploration project with
both sides investing $20 million in a 50:50 joint venture.
Sources: Betsy Stark, "China's Consumption May Fuel Oil Prices"
ABC News, May 28, 2004, China Country Analysis Brief, Depart-
ment of Energy - Energy Information Administration, July 2004,
Bernard D. Cole, “Oil for the Lamps of China – Beijing’s 21st Cen-
tury Search for Energy,” McNair Paper 67, Washington, DC.: Na-
tional Defense University – Institute for National Strategic Studies,
2003.
Savina Rupani, Special Assistant and Program Coordinator
Zhu Feng, Visiting Research Fellow
Andrew Thompson, Research Associate
Sue Anne Tay, Research Assistant
Virginia Chan, Eric Fung & Melissa Murphy, Research Interns
If you would like to be added to the Freeman Report listserv, please
e-mail FreemanChair@csis.org. Or visit http://csis.org/china/
index.htm

About the FREEMAN CHAIR IN CHINA STUDIES

The Freeman Chair in China Studies was established at the Center for Strategic and International Studies in 1994 to advance the study of China
and to promote understanding between the United States and the countries of the Asia Pacific region. The Freeman Family—Luther Freeman
as a clergyman, Mansfield Freeman as a scholar-business leader, and Houghton Freeman as a corporate executive in a global enterprise—have
established a tradition of contributing to international understanding through practical experience in East Asia and China.
The United States has a long-standing relationship with China and the countries of East Asia, which play increasingly important roles in future
international economics, politics, culture, and security. In the diplomatic, public policy, business, and government fields, the peoples of both
China and the United States will benefit from greater mutual appreciation and understanding through broadly based international exchange.
The Freeman Chair’s active policy-oriented agenda is dedicated to delivering informed public policy debates, expert briefings, and strategic
policy recommendations on Greater China and East Asia to the diplomatic, policymaking, business, and government arenas.

Current research projects

· China’s domestic challenges and their consequences for U.S.-China relations and U.S. strategic interests
· The evolving U.S.-China strategic nuclear dynamic
· China’s HIV/AIDS crisis and its implications for U.S.-China relations
· Examining the economic, trade, and financial tensions in U.S.-China relations
· China’s emergence in Central Asia and its implications for the United States.
· China’s military modernization and its impact on regional security
· U.S-China-Taiwan relations
To learn more about our program and ongoing research projects, please visit our website at http://csis.org/china/index.htm

Freeman Chair in China Studies ● Center for Strategic and International Studies
1800 K Street, NW ● Washington, DC 20006 ● Phone: (202) 457-8719 ● Fax: (202) 457-8719 ● FreemanChair@csis.org