January 6, 2017                                                                   Issue No. 8
In This Issue

Welcome to the first issue of 2017.

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
GENERAL DEFENSE INDUSTRY ISSUES general
A scientist has pleaded guilty to charges he stole sensitive documents from a Connecticut military contractor and transported them to China. The 38-year-old Chinese citizen and legal permanent US resident worked until 2014 as a senior engineer and scientist for United Technologies Research Center. One of the counts was conspiracy to steal trade secrets knowing they would benefit a foreign government. The other count was unlawful export of US defense articles.
 
A US defense contractor was threatened with bankruptcy by Chinese hackers seeking jet fighter logistics secrets, according to the Pentagon's Joint Staff. A report earlier this month by the Joint Staff's J-2 intelligence directorate revealed that the American contractor, a company involved in classified defense work, was threatened by Chinese hackers, according to Pentagon officials familiar with the report.
MAJOR PROJECTS, PLANS, AND PROGRAMS major
国务院印发"十三五"国家信息化规划
The plan calls for establishing a "digitized China" by 2020, reaching international levels of informatization, and making strides in indigenizing core information technologies. It outlines steps to coordinate a "network strong country" and big data strategies. It also details 16 projects, including land-sea-air integration information network, rural and remote areas broadband, national big data development, national internet data platform construction, agricultural and rural information engineering, and network security capacity building.
AVIATION INDUSTRY AND PLA AIR FORCE air
Four Russian Su-35 fighter jets were delivered to China on Dec. 25, ending speculation about the procurement of the aircraft, which had been delayed about two years, according to an article on 81.cn, a news portal of the People's Liberation Army. Since the debut of the J-20 fighter at Zhuhai Airshow, procurement of the Su-35 fighter jets has gone quite smoothly. Some say this is the outcome of the close relationship between China and Russia. However, the latter did not change its stance on the exportation of the Su-35 until the J-20 fighter was unveiled. Russia believes that with the commissioning of the J-20, the Su-35 will soon lose its value in the Chinese market.  
 
China is ready to launch its new ­J-11D fighter after it failed to acquire Russian engines on schedule and was forced to develop its own technology, military observers said. The progress included advances in home-grown turbofan technology and radar systems, and showed that Beijing was no longer reliant on Russian engines for its new generation of fighters. In its annual report in July, AVIC said it built more than 400 WS-10 engines last year, suggesting the ­J-10 and J-11 fighters no longer needed Russian engines.
 
An article published by the China Military Online website on December 7 has provided insights into the requirements for China's new strategic bomber. Remarks made in the media report by Rear Admiral Yin Zhuo, director of the People's Liberation Army Navy's Expert Consultation Committee, followed on from the confirmation given on  September 1 by General Ma Xiaotian, Commander of the People's Liberation Army Air Force, that China is developing a new long-range strategic bomber referred to in the article as the H-20.
 
China is officially the second nation in the world (the United States was the first) to have an operational fifth-generation fighter unit. The country's first J-20 stealth fighter unit is now operational in the 176th Brigade, a unit in the China Flight Test Establishment. The public debut comes just under six years from its prototype flight, a speedy delivery by any measure.
 
The Chinese military has tested the latest iteration of its stealth fighter in an attempt to compete with US and other Western stealth fighters. The latest version of the J-31,  renamedthe FC-31 Gyrfalcon, flew for the first time on Friday, the AFP news agency reported, citing Chinese state-run media outlets.
 
Compared with the US's F-35, China's newest J-20 warplane is much cheaper. The article offers a brief comparison of the two fighter jets.
SPACE AND MISSILE INDUSTRIES AND PLA STRATEGIC ROCKET FORCE SpaceMissile
The Information Office of the State Council recently published a white paper on China's space activities in 2016.  
 
China released its latest 5-year plan for space activities today. While it states that China will "unremittingly" pursue the "dream" of building itself into a space power, the plan offers only modest goals for that period, most of which have been discussed openly for some time. They include a multi-modular space station in the early 2020s, continued robotic exploration of the Moon, and a robotic Mars orbiter/lander/rover in 2020.
 
China is aiming to own the race for space in the next decade. China's ambitious and fast-growing space program is targeting a landing on the dark side of the moon by 2018, and reaching Mars before the end of the decade.
 
China launched its first carbon tracking satellite as part of efforts to understand, monitor and tackle greenhouse gas emissions, while also setting a national record for space missions.
 
The US.Navy and the US Missile Defense Agency successfully launched a salvo of two Raytheon Standard SM-6 Dual I missiles against a medium-range ballistic missile target earlier this week. 
 
China seeks to enhance its capacity for scientific and technological innovation by building a large modular space station. Chinese leaders also hope that research conducted on the Chinese Space Station (CSS) will support their long-term goals for space exploration, including missions to the Moon and Mars.  
 
Joan Johnson-Freese discusses China's ongoing efforts in space and the objectives of its space program. Link is to an audio file. 
 
Scientists in China are engaged in intense preparations for the launch of the Chang'e-5 lunar probe in the second half of 2017, state media report. The complex mission will involve a number of stages and components that will combine to land on and collect samples from the Moon, before ascending, a docking in lunar orbit, and heading home. 
 
The China Academy of Space Technology, a subsidiary of the Chinese Aerospace Science and Technology Corporation and the manufacturer of the Dong Fang Hong satellites,  held a press conference in Beijing explaining the importance of the EmDrive research and summarising what China is doing to move the technology forward.
 
According to an anonymous source, China already has an EM Drive on board its version of the International Space Station, the space laboratory Tiangong-2. Previous publications indicates that Chinese researchers have at least constructed an EM Drive and have been studying it for more than five years now.
 
China kicked off its 2017 campaign with the successful launch of the second Tongxin Jishu Shiyan Weixing (TJSW) spacecraft from the Xichang Satellite Launch Center. This launch was set to be the final mission of 2016, which would have seen China become the dominate launch nation of the year. However, based on a tiebreaker rule, the United States won the title with the same number of launches in the 12-month period.
 
If successful, China's quantum communication network will serve as a dual-use strategic asset that may advance the People's Liberation Army (PLA) capacity for power projection through a constellation of space-based intelligence, surveillance, and reconnaissance platforms, tactical warning and attack assessment; command, control, and communications; navigation and positioning, and environmental monitoring. In PLA terms, establishing "space dominance" (zhi tian quan) is an essential enabler for "information dominance" (zhi xinxi quan)--a key prerequisite for allowing the PLA to seize air and naval superiority in contested areas.
 
A breakthrough by Chinese quantum satellite researchers could pave the way for a "constellation" of hack-proof satellites capable of transmitting secure messages 24 hours a day. Researchers from the University of Science and Technology of China in Hefei, Anhui province, beamed single photons carrying quantum information over a distance of 53km during daylight hours, several times longer than the previous daytime record and with unprecedented signal quality.
SHIPBUILDING INDUSTRY AND PLA NAVY ShipbuildingIndustry
China kicked off construction of its first domestically-built icebreaking research vessel in Shanghai on December 20, according to local media reports. The construction will be carried out by Jiangnan shipyards, located on Changxing Island in Shanghai, which has also been building Type 052D Luyang III-class destroyers for the People's Liberation Army Navy.
 
Li Jie, a Beijing-based military analyst, said that as the United States was unlikely to abandon its surveillance operations in the South China Sea, China would "significantly increase its efforts" to develop and use drone technologies, for both civil and military purposes.
 
China has announced plans to upgrade a civilian network of ­sensors and communications technology deep in the Western Pacific that it says is used in scientific research. But analysts said the PLA could already be using a military-grade version of the communications technology to contact submarines operating far from base.
 
A Conversation with Dr. Andrew Erickson on Chinese Naval Shipbuilding | Center for International Maritime Security
On the occasion of the publication of his newest book, Chinese Naval Shipbuilding: An Ambitious and Uncertain Course, CIMSEC spoke with editor and author Dr. Andrew Erickson, Professor of Strategy in, and a core founding member of, the US Naval War College's China Maritime Studies Institute.
DEFENSE ELECTRONICS AND IT INDUSTRY DefenseElectronics
Chinese Access to US Semiconductor Industry May Be Curbed | Wall Street Journal (subscription required)
The Obama administration is completing a study that could lead to restrictions on Chinese investment in the US semiconductor sector. The report, being prepared by President Obama's chief science adviser and due to be published before he leaves office this month, will include recommendations aimed at bolstering protection of an industry deemed critical to national security, according to people familiar with the study.
NUCLEAR INDUSTRY Nuclear
In the nation's first legal challenge of Chinese procurement of US nuclear know-how, the government has scored a victory in procuring the cooperation of the engineer prosecutors say was an operative for China, federal court records show.
 
China has officially begun construction of its first offshore nuclear power plant, a demonstration project that will employ the domestically developed ACPR50S small modular reactor (SMR). China General Nuclear Power Corp. on November 4 told reporters at a press conference that the project  is a "top priority" that will further the country's "strong marine power strategy."
CIVIL-MILITARY INTEGRATION CMI
"十三五"国家信息化规划:统筹推进航天领域军民融合
The plan outlines key areas of investment over the next five years. These include constructing a space-ground integrated cyberspace infrastructure and a military-civilian integrated navigation control system, improving internet capabilities for troops, coordinating a military-civilian integrated command system, compatible national large-scale storage and disaster recovery facilities, and quantum communication network development.
 
China's helicopter industry is gearing up to become a global power with a national strategy of civil-military integration, according to state-owned helicopter giant Avicopter. China has a relatively complete helicopter industry with independent development capacity in key technologies, said Wu Ximing, chief designer of Avicopter, a subsidiary of China Aviation Industry Corporation.
DEFENSE BUDGETS, CAPITAL, AND FINANCIAL MARKETS budgets
China is set to double its defense budget in the coming years from $123 billion in 2010 to $233 billion by 2020. The 2020 defense budget is a 60 percent jump from 2015's $146 billion, according to a report by IHS Jane's, a British publishing company that focuses on military information.
 
The Aero Engine Corporation of China (AECC)--the country's newest defense industrial enterprise--has entered a finance agreement with the China Development Bank to gain access to credit to support industrial expansion. In a statement on 30 December, the State Administration for Science, Technology and Industry for National Defense (SASTIND), the Chinese government body responsible for defense industrial development, said the deal would cover a range of activities undertaken by AECC as it seeks to become a major aero-engine manufacturer. These include major AECC research and development projects, infrastructure development, civil-military integration programs, as well as manufacturing activities.
 
Honghua Group, one of the world's largest assemblers of onshore oil and gas drilling rigs, has been folded into state-owned China Aerospace Science & Industry Corp, in a restructuring of the unprofitable and debt-ridden rig maker amid the global slump in oil prices.
ARMS TRADE arms
China and Thailand are mulling the possibility of setting up a joint military production facility in the latest sign of an expanding defense relationship between Beijing and one of the United States' two treaty allies in Southeast Asia.
 
China has offered to provide $14 million worth of small arms and fast boats to the Philippines for free, aiding President Rodrigo Duterte's war on drugs and fighting terrorism, Manila's defense minister said recently. The offer was made by China's ambassador Zhao Jianhua during a meeting with Duterte, Delfin Lorenzana said, adding that Beijing has also made available $500 million long-term soft loan for other equipment.
 
Since coming to office in June, Philippine President Rodrigo Duterte has sought to diversify his country's foreign policy away from its traditional ally the United States and toward other major powers, principally China.
 
The Royal Thai Navy (RTN) expects to submit a proposal within the next few months to procure the first of three S26T (Thailand) diesel-electric submarines from China, IHS Jane's understands. Under an 11-year procurement plan currently being finalized by the RTN, funding for the first boat will be sourced from the 2017 defense budget. The total value of the program is expected to reach about USD1.12 billion, making it Thailand's most expensive acquisition along with its procurement of 12 Saab Gripen fighter aircraft, which were ordered in two batches in 2008 and 2010.
CHINESE LEADERSHIP AND ORGANIZATION leadership
In the latest personnel reshuffle ahead of China's 19th party congress, Ma Xingrui, the party chief of hi-tech hub Shenzhen, has been promoted to acting governor of Guangdong province, China's economic powerhouse. Ma, a Shandong-born child of a miner, has long been seen as a rising political star in the party. As the chief commander of the Chang'e-3 lunar program, Ma, who has an extensive background in China's aerospace industry, was transferred to Guangdong to become the deputy party chief after the 18th party congress in November 2013.
OTHER REGIONAL ACTORS actors
Japan will invest billions of dollars in new submarines, ships, and stealth fighter aircraft under a record defense budget approved by the Cabinet. The $44 billion (5.1 trillion yen) Defense Ministry spending plan puts a focus on defending the Senkaku Islands, the chain in the East China Sea administered by Japan but also claimed by China. The budget includes billions of yen for six new submarines equipped with improved sensor technology that could also prove useful against Chinese challenges.