Title: China: The Near-Term Potential for Economic, Political, and Social Crises

Release Date: 2016-12-07

Document Date: 2004-06-15

Description: The author outlines major issues facing China and explains how they are likely to "dominate Chinese decision-makers' thinking for the next six months," as well as affect the regional and global economy.

Document: DYNAMIC PAGE -- HIGHEST POSSIBLE CLASSIFICATION IS
TOP SECRET // SI / TK // REL TO USA AUS CAN GBR NZL

(U) China: The Near-Term Potential for Economic, Political, and Social
Crises
FROM: Michael Vance
Assistant SINIO for East Asia (S17)
Run Date: 06/15/2004
FROM: Michael Vance
Assistant SINIO for East Asia (S17)
(C) The near-term potential for major problems in China will
remain at a relatively high level over the next six months, as the
possibility of a dangerous confluence of events persists.
Specifically, Chinese leaders may be forced to address a
convergence of crises stemming from political instability in Hong
Kong and behavior by Taiwan President Chen Shui-bian that
challenges Beijing's claim to sovereignty over the island. A hard
landing for China's overheating economy would most likely further
complicate the political landscape for the PRC leadership by
introducing another key variable into the equation.
(C) Together these issues touch upon both of the Chinese
Communist Party's key sources of legitimacy - its ability to
maintain territorial integrity and to sustain economic development.
Consequently, these three issues will likely dominate Chinese
decision-makers' thinking for the next six months.
(C) The Chinese economy's ability to absorb East Asian exports has
allowed it to play the role of regional economic engine. An
economic slow-down in China would therefore have significant
consequences for the rest of the region. A short-term decline for
the Chinese economy, particularly if it derails Japan's nascent
export-driven recovery, could also affect the United States, which
exports over 250 billion dollars in goods and services to the region.
(C) The possibility of a crisis in the Taiwan Strait or in Hong Kong
will challenge stability in the region. A major Chinese crackdown in
Hong Kong could draw the United States and the international
community into a human rights situation, and could endanger SinoAmerican cooperation in a host of fields, including counterterrorism
and the Six-Party Talks. Furthermore, the US military could be
drawn into a crisis in the Taiwan Strait at a time in which defense
assets are already stretched thin by existing overseas
commitments.

SERIES:
(U//FOUO) SINIO
Council Intelligence
Issues
1. China: Modernizing
and Mobilizing Its
Strategic Strike
Capabilities
2. China: The NearTerm Potential for
Economic, Political,
and Social Crises
3. Al-Qa'ida: An
Emerging NarcoSupported Terrorist
Group?
4. Venezuela's
President Chavez:
Castro's Ideological
Successor
5. Lebanon: Domestic
Crisis Averted, for
Now, in Wake of
Prime Minister's
Resignation
6. SIGINT Monitors
Global Spread of
Avian Flu

"(U//FOUO) SIDtoday articles may not be republished or reposted outside NSANet
without the consent of S0121 (DL sid_comms)."

DYNAMIC PAGE -- HIGHEST POSSIBLE CLASSIFICATION IS
TOP SECRET // SI / TK // REL TO USA AUS CAN GBR NZL
DERIVED FROM: NSA/CSSM 1-52, DATED 08 JAN 2007 DECLASSIFY ON: 20320108

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