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Chinese Army Drives Crisis

United Press International

(UPI) -- The Chinese military appears to be driving the current standoff between China and the United States over the April 1 collision between a U.S. Navy spy plane and a Chinese F-8 fighter in an effort to force an increase in Beijing's defense budget, administration officials told United Press International.

"There's no doubt that the China's Defense Ministry is the force behind the increasing difficulties we're experiencing," said one senior administration analyst who spoke on condition of anonymity.

Another U.S. official said: "What we're trying to determine is, what interest does the People's Liberation Army have in resolving this stand-off and releasing our crew? Not much so far."

John Pike, of Alexandria, Va.-based think tank GlobalSecurity.org, told UPI that the Chinese military is facing "an extraordinary resource squeeze" after it was ordered last year to divest itself of its huge, octopus-like business empire.

According to Pentagon officials, the PLA operated more than 10,000 businesses, among them international hotels, discos, prostitution rings, railroads, postal services, karaoke parlors, telecommunications companies, and toilet paper manufacturers, among others. The PLA's business assets on paper were estimated to be $9.7 billion, but were in fact probably "worth a lot more," one official said.

While administration officials said that the divesture has been only partly successful, Pike said that the PLA "has lost a lot of operating revenues" nonetheless.

The PLA's divestiture of its various businesses coincided with a whopping 18 percent increase in the Chinese defense budget, but that went largely towards pay increases for officers and enlisted men, and for improvement in living conditions. Observers believe the PLA believes it still needs additional funding as part of a modernization effort. For example, China recently tried to buy Phalcon high-tech surveillance planes from Israel, but the sale was blocked by the United States.

Commenting on the recent statement of Chinese Defense Minister Chi Haotian, who said: "We want to convert our indignation with hegemonism into a huge motivating force ... to build a stronger country and a stronger military,"

Pike retorted: "What Chi is saying basically is that we'll call this off when we get more money."

But James Lilley, Asian studies expert at the American Enterprise Institute, disagrees. Yes, Lilley said, the PLA were the first to file a false report that a United States aircraft had deliberately rammed a Chinese fighter, but the PLA's position is being supported by the senior Communist Party leadership.

"This is being controlled by the (Chinese) State Council, a joint group of civilian and military leaders where the civilians predominate."

Lilley said that the PLA has, over the past year, been ratcheting up harassment of U.S. surveillance flights, sending up F-8s which are "a rickety, lousy plane" to "fly over, under, alongside" U.S. aircraft. The Chinese pilots were "poorly trained with very few flight hours, and they scared the hell out of us," Lilley said.

Once the F-8 hit the EP-3 on April 1 and forced the plane and its crew of 24 to make an emergency landing on Hainan Island, the PLA "immediately issued its version of the story," Lilley said. The information was immediately embraced by the senior Communist Party leadership, and even when facts emerged that showed the collision was caused by the Chinese pilot's error and not U.S. aggressiveness, the leadership was "stuck with the story -- the Infallible Emperor can't be wrong, even though he went off half-cocked," Lilley said.

The strategy that emerged, Lilley said was: "Get as much as you can out of the Americans. The Americans have short memories."

Lilley believes the PLA said something like: "We need additional resources to deal with our enemies so let's turn defeat into victory. Whip up popular outrage, turn the squeeze on."

Pike agreed, noting that the PLA gets is resources "from the Chinese central budget," which so far "has proved inadequate." U.S. officials said that the Beijing government with its growing fiscal debts lacks the resources to fully support the PLA, which is the Chinese Communist Party's ultimate defender, as shown by the 1989 Tiananmen Square massacre. Observers say the PLA has maintained, and even strengthened, its position at the center of power since that time.

The crew of 24 Americans is currently in custody on the southern island of Hainan. Chinese technicians have cannibalized the electronic surveillance equipment on the aircraft, most of which is believed by U.S. officials to have been disabled by the crew following the collision.

The EP-3E, based in Kadena, Okinawa, is part of an NSA/Navy airborne surveillance network whose Asian headquarters is in Misawa, Japan, with real-time links to NSA headquarters at Ft. Meade, Md. The flights enable the United States to track emissions from air defense radars, ships, planes, ground stations, submarines, and telecommunications centers, among others.

China has insisted that the United States apologize for the incident, which the Bush White House has refused to do. The other concern about the PLA is its indifference to what the United States views as positive incentives for China to quickly end the crisis, such as Beijing's entrance to the World Trade Organization. "The PLA has no interest in seeing China integrate itself in the world economy," said Pike.

But at home, the PLA is actively being opposed by what one U.S. official called "regional government elements" -- boards of civilian and sometimes military officials who are eager to build relationships with foreign private companies and organizations as a way of developing their own regions. "Links to the outside world are their way to prosperity," he said. These boards "definitely don't want to see a long crisis," the administration official said. "They want to avoid any economic fall-out." But he was also doubtful what weight the regional bodies would finally have in determining the outcome of the standoff.

One thing is clear, U.S. officials say: The PLA uses every opportunity to try and re-assert its power. When the United States mistakenly bombed the Chinese Embassy in Belgrade on May 8, 2000, the Chinese military tried to exploit the incident to increase its popular support by busing in angry demonstrators to protest in front of the U.S. Embassy.

"Our bombing of the embassy was a real gift," Pike said. A Pentagon source said that the PLA "are trying to determine what Chinese national interests are, and they want policies adopted that will give them the bulk of the government's resources."

Pike said that while the PLA "won't let the crisis spin out of control," it will "milk it for all its worth.

"Those who think that the Chinese military leadership are going to be nice to host the 2004 Olympics don't get it," said Pike. The PLA: "is in a win-win situation: They will get more arms for China, slow China's entry into the WTO, and do it at the cost of the political leadership."

Copyright 2001 by United Press International.