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Powell: U.S. carefully watching China military buildup

WASHINGTON (CNN) -- U.S. Secretary of State Colin Powell said the United States will be watching China's military buildup carefully, but he wouldn't say China's 17.7 percent defense spending increase raises security concerns.

Powell said the United States does not view China "as an enemy" but as a "trading partner, as a regional competitor."

Chinese Finance Minister Xiang Huaicheng announced the dramatic increase in a speech Monday before the National People's Congress, the Chinese legislature's annual meeting. Xiang said China would increase its defense spending this year by 17.7 percent, the 12th straight year of double-digit increases in the nation's defense budget.

The increase was the third-highest since 1990, surpassed only by hikes of 21 percent in 1995 and 18 percent in 1994.

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    Powell said the Bush administration will ask in upcoming talks with China whether the buildup is defensive, for modernization or has "offensive potential."

    The secretary of state also said he wanted to learn if China's defense budget presents a new threat to Taiwan.

    Until those things are known, he said, he is "not prepared to say this creates a new ... state of conflict."

    Defense officials said they welcomed China's public disclosure of its plans.

    "I very much would welcome and do welcome the transparency," said Adm. Craig Quigley, a Pentagon spokesman. "To have the Chinese government officially say that there is a 17.7 percent increase in their defense spending next year, I think is a welcome addition to the knowledge that the world can then assess as to the amount of money that the Chinese government is spending on defense."

    Quigley said the spending increase does not pose a threat by itself.

    "The fact that the Chinese are modernizing their defense forces is not new," he said. "They have made their goals in this area very clear for several years now. ... and now we've seen this 17.7 percent increase in the defense spending. It is not destabilizing of itself."

    One analyst said this increase reflects China's heightened concern following the war in Kosovo in 1999, when the United States was willing "to go unilateral" to further its political and strategic interests.

    The Chinese government's assessment in the summer of 1999 was that "clearly it hadn't judged the role of the U.S. correctly," said James Mulvenon, a China security specialist at the Rand Corp.

    The United States led a NATO campaign against Yugoslavia in 1999 to end that government's repression on Albanian separatists in the province of Kosovo.

    Mulvenon said China worries the United States might do the same if China and Taiwan were to get into a similarly tense situation.

    "If Clinton's room had the slogan 'It's the economy stupid,' " said Mulvenon, "then for China it's 'It's Taiwan, stupid.' "

    Mulvenon estimated the Chinese government is in fact spending closer to two to three times above the official figure.

    The fact that the notoriously opaque defense budget was announced publicly is significant, he said, because it is a political signal to the military that the civilian leadership is sympathetic to its financial woes and an effort to improve the People's Liberation Army's war-fighting capability.

    Powell said the United States will watch to see how "this buildup relates to the situation with Taiwan, whether it presents any new threat to Taiwan."

    Since the United States switched its diplomatic recognition from Taiwan to China in 1979, the United States has been obliged by law to sell Taiwan weapons systems to help defend the island.

    Successive U.S. administrations have been purposely vague as to just how far the United States would go to defend the island in the event of an invasion by mainland China.

    President Bush is expected to make a decision in April as to which advanced weapons systems to sell Taiwan this year. The Taiwanese are pushing for two highly controversial systems: high-tech Arleigh Burke-class destroyers, equipped with the Aegis radar system, as well as upgraded Patriot missile batteries.

    After announcing the military spending hike, China sought Tuesday to deny weaponry to Taiwan, warning Washington that providing high-tech arms to the island would be dangerous and harm U.S.-China relations.

    Chinese Foreign Minister Tang Jiaxuan told a Beijing news conference that selling the weapons would send "a very wrong signal" to Taiwan's government, inflame tensions and encourage Taiwanese who want to remain separate from China.

    China is so alarmed that the Bush administration might go forward with these sales that it's sent several high-level delegations to Washington in recent weeks to plead its case.

    Later this month, a former Chinese foreign minister, Vice-Minister Qian Qichen, is scheduled to come to Washington for more talks on Taiwan and the Bush administration's plans to go forward with developing a national missile defense shield.

    China raises defense budget
    March 5, 2001
    Chinese premier commits to radical reforms
    March 4, 2001

    Chinese Foreign Ministry
    U.S. Department of Defense

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