Report: Despite Corruption Problems, China Progresses Toward Modernization

The Defense Department today released the annual "Military and Security Developments Involving the People's Republic of China" report, a congressionally mandated annual report that offers insight into the capabilities, strategies and goals of China and its military. 

Of note in this year's report is a rise in corruption within the People's Liberation Army, China's efforts to curtail that corruption, and how that corruption might affect the PRC's ambitions.

"I think the [intensity] of the anti-corruption hunt is reflective of a serious concern that this is having serious problems," said Ely Ratner, assistant secretary of defense for Indo-Pacific security affairs, while speaking today at the Center for Strategic and International Studies in Washington. "I think there are questions about the overall effect on the PLA and the whole way in which corruption reverberates through the entire system and what that means." 

The corruption touches every service in the PLA, the report notes, and Xi Jinping, China's president, has made rooting out corruption in the military a focus of his tenure since taking office. 

Last year, corruption-related investigations resulted in the removal of at least 15 high-ranking military officers and defense industry executives from their posts, including the PRC Defense Minister Li Shangfu. 

"I think if you just look at the language that China's senior leaders use to describe the intensity of the anti-corruption campaign and why it's so vital, that gives you a good sense of how they see it," said Michael Chase, deputy assistant secretary of defense for China, Taiwan and Mongolia. 

Based on who was removed and from what parts of the PLA, Chase said, the corruption could relate to such things as major military construction projects as well as research development and acquisition programs.

"Therefore, [this] may be a different kind of impact on the PLA's ability to meet the capabilities development milestones that Xi Jinping has set out for them," he said. "It certainly has to shake the leadership's confidence in the political reliability of the PLA, and again, in its sort of overall ability to deliver what they've been tasked to deliver." 

According to the report, the PRC's public defense budget increased in inflation-adjusted prices to $220 billion for 2023 and allows the PLA to focus on modernizing its weapons and equipment, recruitment and retaining personnel, and enhancing the military's strategic capacities. 

"[It] reflects investments in a range of capabilities that are focused on Taiwan contingencies, on the East or South China Seas — operations relatively close to the PRC borders," Chase said. "It also reflects investments in power projection capabilities, the kinds of things that we note in the report about the PLA Navy trying to improve its ability to operate out beyond the first island chain. And it reflects the longer-term ambition to really become a global military with capabilities that can, from the PRC's point of view, defend their interest worldwide." 

Chase said there are also investments in nuclear expansion and modernization as well as space and counter-space capabilities. 

The report details China's build-up of nuclear weapons. The U.S. Defense Department estimates the PRC has surpassed 600 operational nuclear warheads as of mid-2024 and estimates the PRC will have more than 1,000 by 2030. 

"We also talk in the report about not just the expansion in numbers, but also the increase in quality," Chase said. "We talk about the growing technological sophistication [and] the increasing diversity of China's nuclear arsenal." 

In earlier reports, decades ago, similar reports detailed China's small and outdated nuclear weapons capabilities. That has changed. 

"[What] we've seen over time is that they've expanded to a nuclear triad, with the PLA Navy having ballistic missile submarines, conducting deterrence patrols, as we cover in the report, and that the PLA Air Force has also regained a nuclear deterrence and strike mission with the addition of nuclear-capable bombers," Chase said. 

There is also an increase in diversity and capabilities such as precision strike capable missiles with lower yield nuclear warheads, for instance. 

"That gives the PRC a wider range of options in terms of the kinds of nuclear deterrence operations they would conduct, as well as ... kind of having more rungs on the escalation ladder in terms of how they could conduct nuclear operations," Chase said. 

The report also highlights struggles with deficiencies in China's military. One area that is true involves the readiness and capabilities of commanders. A term "the five incapables," used by the PLA, describes areas where Chinese military officers might improve, including the ability to evaluate situations, understand the intent of higher authorities, make operational decisions, deploy forces and manage unexpected situations. 

"I think from the PRC perspective, some of this derives from their lack of combat experience," he said. "From the PRC point of view, it means that the experience that they do have is coming from the overseas operations, from the exercises that they conduct at home — not from any sort of real-world experience with combat operations." 

Other areas where the PLA might not be where it needs to be, the report concludes, include conducting urban warfare and long-distance logistics. 

Ties between the PRC and allies, including Russia, are also included in the report. Included there is China's support to Russia for its ongoing war in Ukraine and in military cooperation and exercises. 

"We continue to see them conduct the maritime exercises ... [and] the PRC to participate in other Russian exercises, and the joint bomber patrols to take place with some regularity," Chase said. "They will add some new elements to these over time. But a lot of the time, I think [PRC is] also trying to kind of maximize the political signaling value, to showcase more and deeper military cooperation." 

Chase said that as Russia has become more dependent on the PRC, China will want more from it. 

"The PRC ... is probably going to want to exert more leverage, to kind of extract greater cooperation from Russia in areas where Russia historically has been more reluctant," he said. "In the Arctic, for example, would be one example where that might take place." 

Ratner said the PRC's relationship with Russia is not the only one to be watching. The PRC has relations with the Democratic People's Republic of Korea, Iran and Iranian proxy groups as well. 

The PRC's support to Russia's war in Ukraine, Ratner said, "is just one of the ways in which the PRC's, anti-Western, anti-American orientation has been destabilizing, not only in Europe but in other theaters throughout the world." 

The PRC is active in the Middle East as well, he said, where the PRC continues to support Iran and its proxies such as Hamas, Hezbollah and the Houthis. 

"The Houthis have built a supply chain into the PRC for drones and missiles that they are using to attack international shipping," he said. "These are not just one-off transactions. This is really systemic in terms of how the Houthis are acquiring the capabilities they need." 

He also said there is a "bargain" between the Houthis and the PRC, where if the Houthis don't attack PRC shipping, Beijing will continue to provide diplomatic and political support to the Houthis. 

"That is just an extraordinarily destabilizing set of activities," he said. "I think that the Russia piece is important, but we ought to not leave out the Middle East piece as well." 

The PRC has made public its goals for modernization of the PLA. The PLA has made uneven progress toward its 2027 capability milestone for modernization, which the report said could make the PLA a more credible military tool for the Chinese Communist Party's Taiwan unification efforts. The year 2035 has also been touted as when the PLA plans to complete its modernization efforts, while 2049 remains a target to become a "world-class military."