The US-China Economic and Security Review Commission (USCC) has issued its annual report, recommending that the intelligence community monitor and assess various non-military strategic indicators related to China’s preparedness for potential conflict.
Established by Congress in October 2000, the USCC is an independent entity tasked with reporting to Congress on the impact of US-China trade and economic relations on American national security.
In its annual report released on Tuesday, the USCC put forth ten key recommendations, one of which is for Congress to direct the Office of the Director of National Intelligence (ODNI) to submit a classified assessment report related to China’s preparations for conflict within 180 days and to brief Congress on the findings.
Due to the lack of transparency on the part of China, the USCC suggests that the US intelligence community accurately monitor and assess China’s non-military indicators. These indicators can reveal Beijing’s preparations for potential conflicts and the extent to which it is strengthening its military capabilities.
These assessments should include:
– China’s energy reserve locations and storage rates, especially for crude oil, coal, and natural gas; the shift in production from civilian to military use; defense mobilization systems; strategic reserves and their composition and locations, among others.
– Coordination between the intelligence sector and federal agencies in agriculture and trade technology fields to monitor China’s food and energy stockpiles, as well as any derivative indicators signaling potential conflict preparations.
– Assessing whether the current geospatial intelligence posture of the intelligence community is sufficient to offset losses from open-source Chinese information.
– The necessity and feasibility of establishing an energy strategic warning system involving coordination among entities such as the National Geospatial-Intelligence Agency (NGA) and relevant bodies like the US Department of Energy, Commerce, State, and Treasury.
The report released on Tuesday was based on input from 59 experts from government, business, and research organizations through six hearings held by the USCC over the past year. The 12 commission members are not members of Congress; they are appointed by Congress.
In June, the USCC held hearings on whether China is preparing for a full-scale attack on Taiwan. The backdrop of the hearings was the escalating tensions in the Taiwan Strait region, US actions to reduce reliance on Chinese supply chains, and Washington’s concerns that US exports of high-end chips and technology to China are increasingly being used for military purposes.
USCC member Cliff Sims bluntly stated that China’s strategic preparations for the “worst and most extreme scenarios” have permeated various levels within China. He also disclosed that some US intelligence personnel predict that the Chinese military could be ready for a Taiwan conflict as early as 2025.
Experts at the meeting suggested that the US needs to enhance its collection and monitoring of China’s reserve capacities and changes in mobilization across multiple sectors, including military, financial, energy, and food.
Currently, the likelihood of a full-scale war breaking out over Taiwan remains low, but there are widespread concerns about the potential for accidental conflicts stemming from misjudgments or provocations. Therefore, preparing in advance is the best course of action.
Observers note that if China plans to invade Taiwan, it would be difficult to conceal military preparations, and outsiders may be able to infer from China’s actions in the economic and financial spheres.
One key focus is on commodities such as energy, food, and metals to see if there are any anomalies. Many of China’s commodities require imports from abroad, purchased by government agencies, making trade data an effective indicator.
In 2000, 94% of China’s food production supply came from domestic sources. By 2020, this proportion had dropped to 66%, meaning about one-third of China’s demand still relies on imports.
If a war were to break out, the US military could potentially block Beijing’s maritime oil imports. As of January 2024, China’s total crude oil inventory, including commercial and government reserves, stood at 934 million barrels, enough to meet approximately two months of domestic consumption.
While a single data point change may not prove an impending war, a comprehensive observation can form an early warning system.
Chinese-American political scientist Pei Minxin wrote in Bloomberg that signs of war can be seen in China’s foreign exchange reserves at Western financial institutions, strategic grain reserves, and oil reserves.
Pei Minxin suggested that building oil reserves and enhancing food self-sufficiency is costly and time-consuming, and preparing for wars also requires funds. Therefore, it is unlikely to provoke a conflict significantly until Beijing significantly reduces its holdings of US debt.