China recently announced it will increase its defense spending at a sharply higher rate this year, a development that has intensified U.S. concern over the communist nation's military intentions.  Leta Hong Fincher has this report on China's effort to modernize its armed forces.

China's People's Liberation Army has come a long way from its origins as a revolutionary army designed for wars of attrition.

Chinese soldier

For more than a decade, the Chinese military has received double-digit increases in its other major nations.

This year, Beijing announced an even sharper increase in defense spending – a rise of 17.8 percent, to almost $45 billion.

At the recent opening of China's parliamentary session, Premier Wen Jiabao said the funding increase will help speed up the transformation of China's armed forces into a high-technology fighting force.  "We must to continue to increase the troops' ability to fight a defensive, high-technology war," he said.

Days after Beijing's announcement, U.S. Secretary of Defense Robert Gates expressed concern at what he called China's lack of openness about its military expenditures and intentions.

US Defense Secretary Robert Gates, 07 Mar 2007

"I think that greater transparency would help, from the standpoint of the Chinese, in terms of both what they're doing and what their strategies are, their intent, in modernizing these forces, greater openness about the purposes," Gates said.

U.S. officials complain China is unwilling to share information about its military decision-making.  The U.S. Defense Department says China has aimed at least 710 short-range ballistic missiles at Taiwan, which Beijing regards as its own territory.  China has not specified how many missiles it has deployed, nor has it given a breakdown of its military budget.

The Pentagon estimates that China's official defense budget understates its real military expenditures by two to three times. 

Chinese officials point out their military budget is a mere fraction of the amount allowed for the U.S. defense budget. The Bush administration has proposed more than $700 billion for the U.S. military in 2008.

Even so, China's defense spending has grown by an average of 15 percent a year – far outstripping the country's average gross domestic product growth rate of about nine percent.

China continues to import weapons systems, primarily from Russia.  But China scholar Huang Jing of the Brookings Institution research group in Washington says Beijing is now focusing on developing its own advanced weaponry. 

"Unlike 1997, 1998, 1999, 2000, [when] China successively bought a lot of weapons, airplanes, ships from former Soviet Union/Russia, in the past three years, China has not done that,” he says.  “So where does the money go?  Obviously, they have put this money into research and development of new, modern weapons."

In January, China demonstrated its growing military prowess by shooting down one of its aging weather satellites with a missile.  That act drew criticism from Washington, which depends on satellites for military and commercial purposes.

Still, Evan Medeiros, an expert on Chinese security at the RAND Corporation research group in Washington, says Beijing's military buildup is limited to the region and it has not sought to project power globally.

"Cumulatively, this is a substantial amount of money devoted toward military modernization.  And it's clearly a reflection of the Chinese government's priorities and the fact that they seek to build a modern military with regional power projection capabilities," Medeiros says.

Chinese leaders have pledged to use their military only in "defensive operations," and U.S. officials are seeking more military contacts with the Chinese to help avoid "misunderstandings" in the region.

Some graphics courtesy of ABC News