CRISISBOOM

AUSTRALIA’S intelligence agencies believe China is hiding the extent of a huge military build-up that goes beyond national defence and poses a serious threat to regional stability.

A strategic assessment by the agencies found China’s military spending for 2006 was $90 billion – double the $45 billion announced publicly by Beijing.

Australia’s peak intelligence agency, the Office of National Assessments, as well as the Defence Intelligence Organisation and the Defence and Foreign Affairs departments concluded that China was building a military capability well beyond its priorities of self-defence and preventing Taiwan’s independence.

”China’s longer-term agenda is to develop ‘comprehensive national power’, including a strong military, that is in keeping with its view of itself as a great power,” says a copy of the secret assessment provided by Foreign Affairs officials to the US embassy in Canberra.

”We agree that the trend of China’s military modernisation is beyond the scope of what would be required for a conflict over Taiwan. Arguably China already poses a credible threat to modern militaries operating in the region and will present an even more formidable challenge as its modernisation continues.”

Details of the 2006 intelligence assessment are contained in a US embassy cable obtained by WikiLeaks and provided exclusively to the Herald.

The Australian document goes on to warn that the pace of China’s military build-up and ”the opacity of Beijing’s intentions and programs” was ”already altering the balance of power in Asia and could be a destabilising influence”.

”There is the potential for possible misconceptions which could lead to a serious miscalculation or crisis,” it says.

The Australian intelligence agencies suggest China could overestimate its own capabilities with a significant risk of strategic miscalculation and instability.

”The nature of the [People’s Liberation Army] and the regime means that transparency will continue to be viewed as a potential vulnerability. This contributes to the likelihood of strategic misperceptions,” the document says.

”The rapid improvements in PLA capabilities, coupled with a lack of operational experience and faith in asymmetric strategies, could lead to China overestimating its military capability. These factors, coupled with rising nationalism, heightened expectations of China’s status, China’s historical predilection for strategic deception, difficulties with Japan, and the Taiwan issue mean that miscalculations and minor events could quickly escalate.”

Although successive Australian governments have called on China to be more transparent about its military spending, ministers and diplomats have studiously avoided public reference to the scale of the discrepancy between Beijing’s published figures and the likely reality behind the scenes.

The Australian estimate of a 2006 military budget of $US70 billion ($90 billion at the September 2006 exchange rate), has not been revealed previously – though it is consistent with academic and published US government estimates of China’s growing military spending.

The secret Australian assessment is also much sharper than the language later employed in the Rudd government’s 2009 Defence white paper, which said China was on the way to becoming Asia’s strongest military power ”by a considerable margin” and warned that the pace and scope of its growth could give its neighbours cause for concern if not properly explained.

The Rudd government publicly played down reports of a hostile Chinese reaction to the white paper when it was published, but secretly briefed the US that Beijing had threatened that Australia would ”suffer the consequences” if references to China’s growing military capabilities were not watered down.

The Defence Chief, Air Chief Marshal Angus Houston, and the then defence minister, Joel Fitzgibbon, insisted that China had no problem with the white paper. But other leaked US embassy cables report that the then deputy secretary for Defence, Mike Pezzullo, briefed US diplomats that he had been ”dressed down” by Chinese officials who had a ”look of cold fury” at the references to China in the white paper.

In the September 2006 briefing of the US embassy, Foreign Affairs officials advised that Australia hoped to use its defence relationship with China to promote increased transparency in that country’s military development plans.

”We remain focused on deepening the Australia-China defence relationship in areas such as peacekeeping, counter-terrorism and junior leadership exchanges, while remaining cautious to avoid practical co-operation that might help the PLA to fill capability gaps,” the Australian paper presented to the embassy concluded.

The Royal Australian Navy and the Chinese navy held their first joint exercise involving firing of live ammunition in September last year.

Last month the Defence Department secretary, Ian Watt, and Air Chief Marshal Houston attended the 13th annual Australia-China Defence Strategic Dialogue, which was hosted in China by General Chen Bingde, the chief of the PLA General Staff.

Dr Watt said that the dialogue was ”an integral component of Australia’s defence engagement with China, and provided the opportunity to have frank and open conversations and to exchange views on areas of common interest”.

Dr Watt and Air Chief Marshal Houston also met the vice-president and deputy chairman of China’s Central Military Commission, Xi Jinping.

Air Chief Marshal Houston said: ”We committed to continuing to develop our military relationship and practical cooperation together.”