February 7, 2017                                                                   Issue No. 10
In This Issue

Comments and suggestions on our content can be sent to Eric Anderson, Research Analyst, at  eanderson@ucsd.edu. 
 
 
SITC News Team
UC Institute on Global Conflict and Cooperation
SPACE AND MISSILE INDUSTRIES AND PLA STRATEGIC ROCKET FORCE SpaceMissile
China May Be Developing New Long-Range Air-To-Air Missile | Reuters
China may be testing a new, long-range air-to-air missile that could take out early warning aircraft and aerial refueling aircraft, a state-run newspaper said after pictures of the new missile surfaced online. Air Force researcher Fu Qianshao told the newspaper he believed the missile was designed to hit distant high-value targets, such as early warning aircraft, normally outside actual combat zones. That represents an improved capability over existing Chinese missiles, which have ranges of less than 100 km (62 miles).
 
China Announces Deployment of New Long Range Nuclear Missile | Popular Mechanics
In a rare move, China has publicly announced the deployment of a new intercontinental ballistic missile. The Dong Feng ("East Wind") 41 missile, or DF-41, can carry up to a dozen nuclear warheads and China claims it has the longest range of any nuclear missile in the world. According to China's Global Times newspaper, the People's Liberation Army has deployed its newest intercontinental ballistic missile to Heilongjiang Province.
 
China to Attempt Moon Sample Return Mission in November | gbtimes
China has announced that its Chang'e-5 automated Moon surface sampling and return mission will launch in late November 2017. The 8.2-tonne probe will launch on a Long March 5 rocket from the Wenchang Satellite Launch Center on Hainan island, and attempt the first lunar sample return since the Soviet Union's Luna 24 mission in 1976.
 
Chinese Lunar Probe Chang'e 5 to Take Wings in November | SwiftNary
China Aerospace Science and Technology Corporation  publicized details about the launch agenda of its first lunar probe, reporting that  the Chang'e 5 will take off in November of this year. The Chang'e 5 is the first un-crewed sample return spaceship of China, which will collect samples of Moon and return the testers to the earth. The development of the spacecraft is on the move and will touch down on the lunar surface in November of this year.
 
China to Launch First Beidou-3 Navigation Satellite | Belarus News
Chinese navigation satellite Beidou-3 is scheduled to be launched in July 2017, according to its developer, China Aerospace Science and Technology Corporation. The company claimed that six to eight satellites will be deployed within the year.
 
China Develops Own Explosive Atmosphere Test Chambers | Business Standard
China has developed its own explosive atmosphere test chambers, ending the country's reliance on foreign technology and products, a media report said recently. The equipment tests products operating in various explosive environments, such as rockets, planes, vehicles, mines and gas pipelines in kitchens. The new equipment will bring an end to China's dependence on foreign technology and products, said China Aerospace Science and Technology Corporation.
AVIATION INDUSTRY AND PLA AIR FORCE Aviation
Meet China's Sharp Sword, a Stealth Drone That Can Likely Carry 2 Tons of Bombs | Popular Science
The Sharp Sword UAV (unmanned aerial vehicle), China's stealthy attack drone, just won second place in the National Science and Technology Advancement Prizes. Considering the secrecy surrounding stealth drones to come out of China, the Sharp Sword's victory is noteworthy. The drone, known as "Lijian" in Mandarin Chinese, is being paraded as a huge win for Chinese aviation technology. 
 
China and Russia to Collaborate on Aero-Engine R&D | IHS Jane's
State-owned enterprises in China and Russia have agreed to collaborate on aero-engine technologies, China's State Administration for Science, Technology, and Industry for National Defense (SASTIND) has announced. The memorandum of understanding was signed in mid-January by the China Aviation Research Institute--a subsidiary of the Aviation Industry Corporation of China--and Russia's Central Institute of Aviation Motors, SASTIND said in a press release published on January 24.
SHIPBUILDING INDUSTRY AND PLA NAVY ShipbuildingIndustry
New 'Carrier Killer' Delivered to Fleet | China Daily
The People's Liberation Army Navy on Sunday commissioned its fifth Type 052D guided missile destroyer to the North Sea Fleet. The PLA Navy said in a news release that the CNS Xining, which has a hull number of 117, was delivered to a destroyer flotilla of the North Sea Fleet at a naval base in Qingdao, Shandong province.
 
China Developing Manned Submersible Capable of Reaching the Bottom of Any Ocean | South China Morning Post
China is developing a manned submersible that can take a crew to the bottom of any ocean on earth, according to China Shipbuilding Industry Corporation, the maker of the Jiaolong, the country's first manned deep-sea submersible, Science and Technology Daily ­reported. If successful, the project would be another big step forward in the country's quest to explore undersea resources and help it catch up with US technology.
 
China's Second Aircraft Carrier 'Takes Shape': Report | Channel NewsAsia
China's second aircraft carrier is "taking shape" after two years and nine months of construction, local media reported, a move likely to further unnerve Taiwan and other neighbors about Beijing's growing military assertiveness. Construction of the Shandong began in 2014, the APP of Shandong television and radio said in a recent report.
 
China's First Aircraft Carrier Bares Its Teeth | Economist
The Liaoning aircraft carrier  has been a crucial building block for the PLA Navy in its evolution from a coastal defense force into what is now a modern navy that China uses to assert its (contested) maritime claims in the East and South China Seas.
 
China's Aircraft Carriers: Full Steam Ahead? | Diplomat
A closer look at the advances Beijing has been making of late.
 
Defending Against a Chinese Navy of 500 Ships | Wall Street Journal (login required)
China's naval expansion has been modest so far, focused mainly on replacing obsolete ships. That's about to change.
 
New Arms Race: China Develops its Naval Power, Launches Type 055 Destroyer | Global Research
The first of China's largest and most capable surface warships, the Type 055, will be launched in 2017. Although the Type 055 will not be a game changer, in that it does not afford China a distinct advantage over near-peer adversaries, it does level the playing field in China's favor in any prospective conflict. Only Japan's JMSDF and the United States Navy in the Pacific region will maintain an edge over an increasingly capable and assertive PLAN. As time goes on, this advantage in naval power will continue to diminish.
DEFENSE ELECTRONICS AND IT INDUSTRY DefenseElectronics
China Seeks to Calm US Over Its Semiconductor Ambitions | Wall Street Journal (login required)
Amid escalating tensions, China's technology ministry is playing down China's semiconductor ambitions and contending that US concerns over the issue are overblown. Chinese officials have been alarmed at the US backlash toward its efforts to advance its chip sector, especially since many of China's programs are still on the drawing board, said Peng Hongbing, vice director of information technology at China's Ministry of Industry and Information Technology. "There's been unnecessary panic,"  Peng said in a rare interview this week. "We don't want the US and China to have these conflicts."
 
Talent Hunt in China's Memory Triangle | EE Times
Tsinghua Unigroup's recently revealed plan to build a $30 billion memory chip plant in Nanjing was unexpected--even by many China watchers. The move is a head-scratcher, considering the uncertainty of China's memory production even by such a known entity as XMC in Wuhan. Tsinghua Unigroup's Nanjing announcement, however, speaks volumes for China's determination to rule the global memory industry.
 
New 'Made In China' Chip on the Way As Country Boosts Indigenous Tech | PC World
A joint venture between Qualcomm and China's Guizhou province, called Huaxintong Semiconductor Technology, has started the development of a new server chip based on ARM technology. The joint venture is "now busy developing a customized server CPU product based on our technology and designs for the China market," said Derek Aberle, president at Qualcomm, according to a Seeking Alpha transcript of an earnings call last week.
 
China's Intelligent Weaponry Gets Smarter | New York Times
The Pentagon's plan to bring AI to the military is taking shape as Chinese researchers assert themselves in the nascent technology field. And that shift is reflected in surprising commercial advances in artificial intelligence among Chinese companies.
 
CSIS, Defense Warned Ottawa on China Laser Technology Deal | The Globe and Mail
National-security agencies counselled Ottawa against allowing a Chinese firm to take over a Montreal high-tech company, warning it would undermine a technological edge that Western militaries have over China, the Globe and Mail has learned. "If the technology is transferred, China would be able to domestically produce advanced-military laser technology to Western standards sooner than would otherwise be the case, which diminishes Canadian and allied military advantages," said a national-security assessment prepared for cabinet by the Department of National Defense and the Canadian Security Intelligence Service in 2015.
 
China's New Microwave Weapon Can Disable Missiles and Paralyze Tanks | Popular Science
For more than six years, Huang Wenhua and his team at the Northwest Institute of Nuclear Technology in Xi'an have been working on a potent microwave weapon. This one, which recently won China's National Science and Technology Progress Award, is small enough to fit on a lab work bench, making it theoretically portable enough for land vehicles and aircraft.
 
The Cybersecurity Implications of Chinese Undersea Cable Investment | University of Washington
Chinese companies are the most active investors and builders of submarine cables in the developing world. Between 2012 and 2015, Chinese companies were involved with only 7% of disclosed global submarine cable projects, and exclusively with projects that connected either to the Chinese mainland, Taiwan, or Hong Kong. In contrast, between 2016 and 2019, Chinese companies will participate in 20% of all cable construction projects, over half of which take place outside the South China Sea.
 
China Aims to Build World's First Exascale Supercomputer Prototype by End of 2017 | The Verge
Building supercomputers is a digital arms race, and China is moving quickly to solidify its lead. Last year, the country unveiled the world's fastest supercomputer, the Sunway TaihuLight. This year, according to state news agency Xinhua, the government has set its sights on completing the world's first prototype exascale computer: a machine capable of making a billion billion calculations per second.

OTHER INDUSTRIES other
China to Build World's Brightest Synchrotron Light Source Facility | Indian Express
China plans to build a next-generation synchrotron radiation facility in Beijing, according to a researcher from Chinese Academy of Sciences. Dong Yuhui said that the project is expected to start in November 2018 and will be completed in six years. The total investment will reach 4.8 billion yuan ($698 million), the China Daily reported. The facility, dubbed Beijing Light Source, will meet national security demands and create aerospace materials, among other products.
CIVIL-MILITARY INTEGRATION CMI
Xi to Head Civil-Military Integration Body | Global Times
Chinese President Xi Jinping will head a newly formed central commission for integrated military and civilian development launched recently, which experts said is vital for China's national defense. The commission will decide and coordinate affairs on civil-military integration, which will be under the Political Bureau of the Communist Party of China (CPC) Central Committee and the Standing Committee of the Political Bureau of the CPC Central Committee, the Xinhua news agency reported.
 
Can Xi Jinping's Arms Production Shake-Up Create China's Version of Lockheed or Boeing? | South China Morning Post
China's creation of a commission headed by President Xi Jinping to increase integration between the nation's military and industry shows Beijing's determination to shake up the country's bureaucratic and antiquated weapons production system, analysts said. Military observers believe the ultimate goal of the commission is aimed at cultivating defense manufacturers in China similar to Lockheed Martin and Boeing in the United States.
 
China Eyes Breakthrough R&D Defense Plan to Take on US Technological Dominance | Sputnik News
Recently, China established a new central commission for joint military and civilian development. The new institution will be chaired by Chinese President Xi Jinping. "Apparently, a new coordinating commission stems from the fact that China is concerned about a major defense program gaining momentum in the United States. The program is known as the Third Offset Strategy. It's aimed at countering China. The strategy is based on understanding the fact that in the future Washington will not be able to increase military spending [and] will have to dominate China in R&D capabilities," military expert Vasily Kashin told Sputnik Chinese.

DEFENSE BUDGETS, CAPITAL, AND FINANCIAL MARKETS budgets
China's AVIC Posts Another Decline in Annual Sales | IHS Jane's
The Aviation Industry Corporation of China (AVIC) has reported a decline in annual sales for the second year in a row. The state-owned group said on January 24 that its total revenues in 2016 reached CNY 370.6 billion (USD 54 billion) and total profit was CNY 16.7 billion. These represent year-on-year decreases of 2% and 3% respectively. AVIC's revenues in 2015 fell 3.5% against sales recorded in 2014.
 
CSSC Expects To Incur Loss for 2016 | Seatrade Maritime News
China State Shipbuilding Corporation (CSSC) has alerted investors of a net loss for 2016 due mainly to the downturn of the shipping and offshore sectors. The Shanghai-listed state-owned shipbuilder is forecasting a deficit of RMB 2.5bn ($364.7 m) to RMB 2.8bn for the financial year 2016. This will compare to a profit of RMB 61.85m in 2015.
 
China's CETC Registers Double-Digit Growth In 2016 | IHS Jane's
The China Electronics Technology Group Corporation (CETC) has continued its rapid expansion, registering double-digit growth for fiscal year 2016, the group announced on January 16. CETC, which produces a wide range of defense electronics for both domestic and export markets, posted revenues of CNY 188 billion (USD 27.4 billion) and net profit of CNY 18.3 billion, respective year-on-year increases of 14% and 12%.

ARMS TRADE arms
Thai Junta Gives Go-Ahead to Buy Chinese Submarine and Tanks | Reuters
Thailand's military government has approved 13.5 billion baht ($380 million) to buy a submarine from China after putting the purchase on hold last year, Thai officials said. The Thai army will purchase 10 tanks and auxiliary vehicles from China, in addition to 28 main battle tanks ordered from China last year.
 
More China Tanks for Thailand? | Diplomat
General Chatudom Thittasiri, the deputy permanent secretary at Thailand's defense ministry, told Reuters that Thailand has set aside two billion baht ($57 million) over three years to buy ten tanks and auxiliary vehicles from China. Separately, The Bangkok Post quoted the commander-in-chief of the RTA, Chalermchai Sittisat, as saying in early January that Thailand would look to purchase even more Chinese tanks in 2017, and perhaps even cut the number of tanks ordered from Ukraine.
 
Pakistan Makes Progress on First Locally Built 95 M Patrol Vessel | IHS Jane's
A locally built 1,500-tonne maritime patrol vessel  on order for the Pakistan Maritime Security Agency  is currently on track for delivery by 2019, a Karachi Shipyard & Engineering Works (KSEW) Limited public relations official confirmed with Jane's on February 2. The vessel, which is being built in collaboration with China State Shipbuilding Corporation (CSSC), is one of two 1,500-tonne platforms ordered from China Shipbuilding Trading Company, the trading arm of CSSC, in June 2015. The platform's keel was laid down on January 27, said KSEW.
 
Myanmar Reportedly in Talks to License-Produce Jf-17 | Quwa
Myanmar is currently negotiating for the local licensed production of JF-17 Thunder lightweight multi-role fighters, IHS Jane's reports. In July 2015, Myanmar became the first third-party customer of the JF-17, which is co-produced by the Pakistan Aeronautical Complex (PAC) and Chengdu Aircraft Industry Group (CAIG), with an order of 16 JF-17 Block-II fighters. As of January 2017, PAC had produced more than 30 JF-17 Block-IIs.
 
China's AR-2 UAV-Capable Air-to-Surface Missile Ready for Export, Says Report | IHS Jane's
China can now offer foreign users of its Cai Hong (Rainbow) family of unmanned combat aerial vehicles its AR-2 short-range semi-active laser air-to-surface missile for use in anti-terrorism operations and low-intensity conflicts, the state-owned China Daily newspaper reported on February 3.
CHINESE LEADERSHIP AND ORGANIZATION leadership
New Leader Takes Helm of PLA Navy | China Daily
The People's Liberation Army (PLA) Navy has a new commander, 60-year-old Vice-Admiral Shen Jinlong. That means he has replaced Admiral Wu Shengli, 71, to take charge of the largest navy in Asia. Although the Navy did not disclose when the transition took place, observers believe it occurred in the past week.
OTHER REGIONAL ACTORS actors
Military Inks Deal to Develop Trainer Jets | China Post
Taiwan's Defense Ministry signed a memorandum with the National Chung-Shan Institute of Science and Technology (CSIST) to develop the next generation of advanced trainer jets in Taiwan. CSIST will develop 66 of the trainers (named XT-5 Blue Magpie) to replace its aging fleet of F-5E/F jet fighters and AT-3 jet trainers. The jets are scheduled for completion in 2026.
 
Japan Launches First Military Communications Satellite | Reuters
Japan launched its first military communications satellite to boost the broadband capacity of its Self Defense Forces as they reinforce an island chain stretching along the southern edge of the East China Sea.