To carry out this strategy, China is engaged in developing and acquiring new fighter aircraft, submarines, improved naval air defences, and short-range ballistic missiles. In the ground forces, it is giving attention to the creation of rapid reaction units and airborne forces. In accordance with this developing strategy, the People’s Liberation Army (PLA) has indicated that it will decrease in size in the near future to conserve funds for military modernization.

China’s nuclear strategy probably will continue to emphasize the development of a nuclear retaliatory capability as a deterrent against the potential use of nuclear weapons by existing nuclear weapons states. Ongoing ballistic missile modernization encompasses a shift from liquid to solid fuel missiles.

The central institution of the Chinese intelligence community was the Communist Party of China (CPC) prior to 1949 was Central Department of Social Affairs, which subsequently became the Central Investigation Department (replaced by the Ministry of State Security in 1983). During the Yanan period, the Central Department of Social Affairs provided CPC leaders with reports on the world situation and on the major events and issues taking place abroad. These efforts were based on news reports of foreign press agencies, and a limited number of foreign newspapers and books. During the 1946-1949 warfare between Kuomintang and Communist troops, the intelligence provided by the Central Department of Social Affairs proved instrumental in the Communist's battlefield victories. After the Party consolidated state power in China, the intelligence system played an increasingly important role. Li Kenong, head of the department, also held several other leadership positions, including head of the Central Investigation Department, deputy chief of General Staff, and vice minister of foreign affairs, and attended meetings of the Political Bureau as an observer. During the 1950's every Chinese embassy had an Investigation and Research Office for intelligence collection by staff from the Central Investigation Department. Analytical tasks were the responsibility of the Central Investigation Department Eighth Bureau, publicly known since 1978 as the Institute of Contemporary International Relations.

Shortly before the Great Proletarian Cultural Revolution, Li Kenong died and was succeeded by Luo Qingchang. Kang Sheng [who had once headed the Central Department of Social Affairs] was by that time a member of the CPC Political Bureau, and he assumed responsibility for the work of the Central Investigation Department. During the Cultural Revolution the Central Investigation Department was abolished, most of its senior leadership was sent down to the countryside for re-education, and most of its activities and assets were absorbed by the PLA General Staff Second Department. The Central Group for the Examination of Cases, composed of Central Investigation Department cadres acting on orders of Kang Sheng, were instrumental in the removal from power of individuals such as Deng Xiaoping. With the death of Lin Biao in the early 1970's the Department was re-established. When Hua Guofeng and Wang Dongxing assumed power in 1977 they sought to enlarge the Central Investigation Department and expand the CPC's intelligence work as part of their more general efforts to consolidate their leadership positions. This initiative was resisted by Deng Xiaoping, who had returned to power. Deng Xiaoping argued that the intelligence system should not use Chinese embassies to provide cover, and that intelligence personnel should be sent abroad under the cover of reporters and businessmen. Consequently, the Central Investigation Department withdraw its men from Chinese embassies abroad, apart from a small number of secret intelligence agents. Zhou Shaozheng, a veteran of the Central Investigation system, became head of the General Office of the Central Investigation Department in 1976. During the CPC's 12th National Congress in 1982 Zhou Shaozheng was informed against by a bureau chief under the Central Taiwan Affairs Office, and was accused of moves against Premier Zhou Enlai during the latter's mourning period. Investigation results later showed that Zhou Shaozheng was innocent, though he had lost the chance to be considered for the post of Minister of State Security.

In 1983 Liu Fuzhi, secretary general of the Political Bureau of the CPC Central Committee and minister of Public Security, proposed the establishment of a Ministry of State Security that would merge the whole Central Investigation Department with the counter-intelligence elements of the Public Security Ministry. This proposal was approved by the Political Bureau of the CPC Central Committee. In June 1983 the National People's Congress, perceiving a growing threat of subversion and sabotage, established the Ministry of State Security under the State Council. The new ministry was charged with ensuring the security of the state through effective measures against enemy agents, spies, and counterrevolutionary activities designed to sabotage or overthrow China's socialist system. At its inception, the ministry pledged to abide by the state constitution and the law and called upon the citizenry for their cooperation, reminding them of their constitutional obligations to "keep state secrets" and "safeguard the security" of the country. Lin Yun, deputy minister of Public Security, was appointed the first minister of the Ministry of State Security Ministry. However in 1985 a department head of the Anti-Espionage Bureau (a cadre from the Ministry of Public Security) defected to the United States. After the incident, Lin Yun and the chief of the Anti-Espionage Bureau were both removed from their posts. Jia Chunwang was appointed Minister of State Security in 1985, following the dismissal of Lin Yun. Both the public security and central investigation elements of the Ministry insisted that Lin Yun be replaced by one of their own cadres. To settle this conflict, the CPC leadership appointed Jia Chunwang, as he was an outsider with ties to neither element.

Chinese intelligence agents are generally assigned to overseas postings for terms of six years, 10 years, or long-term residence depending on the nature of the job or on performance. In mid-September 1996, the Central Military Commission and the State Council approved the report of the plan drawn up by the General Staff Department and Ministry of State Security on the consolidation, readjustment, and reinforcement of intelligence in Hong Kong, Macao, and abroad. Nearly 120 intelligence agents who had been operating in the United States, Canada, Western Europe, Northern Europe, and Japan as industrialists, businessmen, bankers, scholars, and journalists, were recalled. China's leadership was so impressed with the favourable international reaction that it received for its revisions of the Criminal Procedure Law in March 1996 corresponding set of revisions to the country's Criminal Law were enacted in March 1997. These included the long-awaited repeal of the historic counterrevolution statutes (Articles 90 to 104) and their replacement with systematic provisions for the punishment of crimes endangering state security. China's MSS and other intelligence services aggressively target the US, placing particular emphasis on the high tech sector heavily concentrated in Southern California, and in the Silicon Valley. Cover for Beijing's espionage in the United States includes the 1,500 Chinese diplomats operating out of 70 offices, 15,000 Chinese students who arrive in the US each year, and 10,000 Chinese who travel in some 2,700 visiting delegations each year.

Most of the research personnel in Communist China are locked up in the compound of their research institutes, and very few of them have ever had the chance to see things in foreign countries. The shortcomings of the CPC's intelligence research institutes has affected the judgment of the CPC top leadership when making foreign- related policies. Thus it is not surprising that the CPC's foreign policies have been at times confused or too aggressive. In 1987, Vietnam invaded Cambodia. Prior to Vietnam's 1987 invasion of Cambodia, the CPC's intelligence community assured the Chinese leadership of the Khmer Rouge's ability to resist the Vietnamese invasion. Based on this assurance, the CPC continued suppling the Khmer Rouge with arms, which were seized by the Vietnamese. CPC intelligence also claimed that Vietnam could not capture Phnom Penh, but only a few days after this assessment, Phnom Penh fell into Vietnamese. In 1979, Hua Guofeng planned to pay a visit to Iran on his way to Western Europe. The assessment of CPC intelligence was that the Shah of Iran would not step down in the near future, though shortly after Hua Guofeng's visit the Shah was forced to leave the country. The CPC was thoroughly discredited by this event and later fell afoul of the new regime in Iran. On the eve of the collapse of Romania's Ceausescu, Qiao Shi visited Romania to attend the national congress of the Romanian Communist Party. In their reports Qiao Shi before he left for Romania, Chinese analysts stated that the situation in Romania was fairly good. As it turned out, Ceausescu was executed shortly after Qiao Shi returned home. As early as 1991, the FBI knew about Chinese government contributions to U.S. campaigns. There is evidence that China sought favourable American treatment on trade policy by contributing millions of dollars to the re-election of Bill Clinton and members of Congress. The US National Security Agency intercepted communications indicating that China was targeting 30 Congressional candidates (mostly Democrats) for influence buying campaign contributions. Republican House Speaker Newt Gingrich was one of those candidates. According to James F. Lilley, U.S. ambassador to China in the Bush administration and a former CIA officer:

"U.S. counterintelligence agents and the FBI discovered Chinese efforts to interfere in American campaigns as early as 1991, when FBI agents warned a number of Democratic members of Congress to watch for Chinese donations passed through intermediaries.... It's the way they operate in Asian countries. They do it by bribing government officials; they bribe them to change policy.... Beijing is trying to influence the U.S. position on a host of issues related to ongoing negotiations about China's and Taiwan's entry into the World Trade Organization, market access for American products in China, intellectual-property piracy, technology transfers and weapons proliferation. Sen. Fred D. Thompson (R-Tenn), who chaired the 1997 campaign finance hearings, said the committee believed: that high-level Chinese government officials crafted a plan to increase China's influence over the U.S. political process, and took specific steps to do so, including the allocation of substantial sums of money to influence federal and state elections. US security agencies and the Justice Department's Criminal Division believe, based on counterintelligence surveillance, that Beijing's diplomatic community and espionage network helped Democratic fundraiser John Huang and other political operatives get millions of dollars in campaign donations and "walking-around" cash for the 1996 election. The plan was launched in 1995 as a relatively benign congressional lobbying activity, but became an effort whose goal was to illegally funnel money into political campaigns. Approved at the highest levels of the Beijing government, the plan was placed under the control of the Chinese Ministry of State Security. U.S. intelligence has established that about $2 million was allocated by the Chinese government, of which at least $1 million was transferred to U.S. banks or to the Chinese Embassy in Washington."

First Bureau - Domestic

Second Bureau - Foreign

Third Bureau - Hong Kong, Macao and Taiwan

Fourth Bureau - Technology

Fifth Bureau - Local Intelligence

Sixth Bureau - Counterintelligence

Seventh Bureau - Circulation

Eighth Bureau - Research (Institute of Contemporary International Relations)

Ninth Bureau - Anti-Defection and Counter-Surveillance

Tenth Bureau - Scientific and Technological Information

Eleventh Bureau - Electronic Computers

Foreign Affairs Bureau

Schools

The PRC's Armed Police with a mixed function between the military police and the police of the democratic countries is equipped with the light weapons. In recent years, its forces have been beefed up with the wheel armoured vehicles, command vehicles, and patrol cars, etc. Besides, the air patrol units like the fly boat and helicopter units have been activated with the capabilities in the field of the mobile and long-range disposition. Its contingencies have capabilities better than those of the public security police in general. Some of the GHO-level units of the Armed Police are given the PLA's military training and exercise, functioning as the main force of the domestic public security. In April 1984 the State Council issued the Tentative Regulations Governing People's Republic of China Resident Identity. The regulations, to be implemented over a period of years, required all residents over sixteen years of age, except active-duty members of the PLA and the People's Armed Police Force and inmates serving sentences, to be issued resident identity cards by the Ministry of Public Security. The picture cards indicated the name, sex, nationality, date of birth, and address of the bearer. Cards for persons sixteen to twenty-five years of age were valid for ten years; those for persons between twenty-five and forty-five were valid for twenty years; and persons over forty-five were issued permanent cards. As of early 1987, only 70 million people had been issued identity cards, well below the national goal. Also, even those with resident identity cards preferred to use other forms of identification. Public security officials also made extensive use of the authority granted them to impose administrative sanctions by two sets of documents. These were the 1957 Regulations on Reeducation Through Labour, which were reissued in 1979 with amendments, and the 1957 Regulations Governing Offences Against Public Order, which were rescinded and replaced in 1986 by regulations of the same name. Offenders might include vagabonds, people who have no proper occupation, and people who repeatedly breach public order. The police could apprehend such individuals and sentence them to reeducation through labour with the approval of local labour-training administration committees. The 1957 regulations placed no limit on the length of sentences, but beginning in the early 1960s three or four years was the norm. The 1979 amended regulations, however, limited the length of reeducation through labour to three years with possible extension for extraordinary cases. The Regulations Governing Offences Against Public Order empowered the police to admonish, fine, or detain people for up to fifteen days. Goods illegally in the possession of an offender were to be confiscated, and payment was imposed for damages or hospital fees in the event injury had been caused.

The criminal laws in force after January 1, 1980, restricted police powers regarding arrests, investigations, and searches. A public security official or a citizen could apprehend a suspect under emergency conditions, but a court or procuratorate was required to approve the arrest. The accused had to be questioned within twenty-four hours and his or her family or work unit notified of the detention "except in circumstances where notification would hinder the investigation or there was no way to notify them." Any premeditated arrest required a court or procuratorate warrant. The time that an accused could be held pending investigation was limited to three to seven days, and incarceration without due process was illegal. Two officials were needed to conduct a criminal investigation. They were required to show identification and, apparently, to inform the accused of the crime allegedly committed before he or she was questioned. The suspect could refuse to answer only those questions irrelevant to the case. Torture was illegal. The 1980 laws also provided that in conjunction with an arrest the police could conduct an emergency search; otherwise, a warrant was required. They had the right to search the person, property, and residence of an accused and the person of any injured party. They could intercept mail belonging to the accused and order an autopsy whenever cause of death was unclear. In July 1980 the government approved new regulations governing police use of weapons and force. Police personnel could use their batons only in self-defence or when necessary to subdue or prevent the escape of violent criminals or rioters. Lethal weapons, such as pistols, could be used if necessary to stop violent riots, to lessen the overall loss of life, or to subdue surrounded but still resisting criminals. The regulations even governed use of sirens, police lights, and whistles.

In January 1996 authorities issued regulations requiring Internet users to register and sign a vaguely worded pledge not to use the Internet to endanger security. In September 1996 the Government blocked access to more than 100 news sites on the World Wide Web, including many Chinese language sites in Hong Kong and Taiwan and the sites of major Western news organizations. Sites hosted by dissidents were also blocked. During the year, China's Ministry of State Security was tasked with controlling material on line. Regulations allegedly adopted to preserve public security were used to implement Internet censorship. Reportedly Chinese internet users will be required to register with Ministry of Public Security departments at the county and prefecture level within 30 days of being summoned. New users and users who change their hook-up or disconnect must also notify public security departments within 30 days. Those failing to comply will be dealt with in accordance with the country's Regulations on Protection of Computer Information System Security, administered by the Ministry's Computer Management and Monitoring Department. The Administrative Measures for Ensuring the Security of Computer Information Network, the Internet, which the State Council approved on 11 December, was promulgated for implementation on 30 December. This administrative law for ensuring the security of the Internet is China's code of conduct for collective and individual subscribers of the Internet service. China's criminal justice system consists of police, procurates, courts and correctional institutions. At the central level, the Ministry of Public Security and the Ministry of Justice administer China's police and correctional institutions, respectively. The public security station generally had considerably broader responsibilities than a police station in the West, involving itself in every aspect of the district people's lives. In a rural area it had a chief, a deputy chief, a small administrative staff, and a small police force. In an urban area it had a greater number of administrative staff members and seven to eighteen patrolmen. Its criminal law activities included investigation, apprehension, interrogation, and temporary detention. The station's household section maintained a registry of all persons living in the area. Births, deaths, marriages, and divorces were recorded and confirmed through random household checks. The station regulated all hotels and required visitors who remained beyond a certain number of days to register. All theatres, cinemas, radio equipment, and printing presses also were registered with the local public security station, permitting it to regulate gatherings and censor information effectively. It also regulated the possession, transportation, and use of all explosives, guns, ammunition, and poisons.

Another important police function was controlling change of residence. Without such controls, large numbers of rural residents undoubtedly would move to the overcrowded cities in search of better living standards, work, or education. In the 1980s secret police operations employed agents, informers, and roving spies. Police surveillance apparently was restricted to probation and parole. Plainclothes agents were posted at bus and railroad stations and other public places. Police informers denounced "bad elements" and assisted in surveillance of suspected political criminals. Roving spies were a special category of informant in the factories and work units and were ever watchful for dissidence or sabotage. Youths aspiring to be Communist Youth League members, or league members aspiring to be party members, sometimes cooperated as informants and agents for the police. The relationship between the police officers assigned to neighbourhood patrols and the people was close. Police officers lived in a neighbourhood on a long-term assignment and were expected to know all the residents personally. Their task was not only to prevent and punish crime but to promote desirable behaviour by counselling and acting as role models. This positive side of the police officer's duties was a constant responsibility, but the bond between the public security units and the people was strengthened annually by means of "cherish-the-people" months, during which the police officer made a special effort to be of help, especially to the aged and the infirm.

The central level is composed of the Second and Third Departments under the PLA General Staff Headquarters and the Liaison Department under the PLA General Political Department. At the major military regions intelligence activities consist of the Second Bureau established at the same level as the Operation Department under the Headquarters, and the Liaison Department established under the Political Department. The third system includes a number of communications stations directly established in the garrison areas of all the major military regions by the Third Department of the PLA General Staff Headquarters. The Second Bureau under the Headquarters and the Liaison Department under the Political Department of major military regions are only subjected to the professional leadership of their counterpart units under the Central Military Commission and are still considered the direct subordinate units of the major military region organizationally. Those entities whose names include the word institute, all research institutes under the charge of the Second and the Third Departments of the PLA General Staff Headquarters, including other research organs inside the Army, are at least of the establishment size of the full regimental level. Among the deputy commanders or deputy chiefs of staff of a major military region in China, there is always one who is assigned to take charge of intelligence work, and the intelligence agencies under his charge are directly affiliated to the headquarters and the political department of the military region. The Conference on Strengthening Intelligence Work held from 3-18 September 1996 at the Xishan Command Centre of the Ministry of State Security and the General Staff Department. Chi Haotian delivered a report entitled Strengthen Intelligence Work in a New International Environment To Serve the Cause of Socialist Construction. The report emphasized the need to strengthen the following four aspects of intelligence work:

The Institute of International Relations was known in the 1950s as the School for Foreign Language Cadres of the Central Military Commission, with the current name being used since 1964. The training of intelligence personnel is one of several activities at the Institute. While all graduates of the Moscow Institute of International Relations were employed by the KGB, only some graduates of the Beijing Institute of International Relations are employed by the Ministry State Security. The former Institute of International Relations, since been renamed the Foreign Affairs College, is under the administration of the Ministry of Foreign Affairs and is not involved in secret service work. The former Central Military Commission foreign language school had foreign faculty members who were either Communist Party sympathizers or were members of foreign communist parties. But the present Institute of International Relations does not hire foreign teachers, to avoid the danger that its students might be recognized when are sent abroad as clandestine agents. Those engaged in professional work in military academies under the Second Department of the PLA General Staff Headquarters usually have a chance to go abroad, either for advanced studies or as military officers working in the military attache's office of Chinese embassies in foreign countries. People working in the military attache's office of embassies are usually engaged in collecting military information under the cover of military diplomacy. As long as they refrain from directly subversive activities, they are considered as well-behaved military diplomats. Some bureaus under the Second Department which are responsible for espionage in different regions, of which the First Bureau is responsible for collecting information on Taiwan and Hong Kong. Agents are dispatched by the Second Department to companies in Hong Kong like the China Resources Group. In addition, the military also dispatches agents to the Everbright Group, Bank of China Group, and other local corporations to gain cover.

The Autumn Orchid intelligence group assigned to Hong Kong and Macao in the mid-1980s mostly operates in the mass media, political, industrial, commercial, and religious circles, as well as in universities and colleges. The Autumn Orchid intelligence group is mainly responsible for the following three tasks:

Finding out and keeping abreast of the political leanings of officials of the Hong Kong and Macao governments, as well as their views on major issues, through social contact with them and through information provided by them. Keeping abreast of the developments of foreign governments' political organs in Hong Kong, as well as of foreign financial, industrial, and commercial organizations. Finding out and having a good grasp of the local media's sources of information on political, military, economic, and other developments on the mainland, and deliberately releasing false political or military information to the media to test the outside response. It is understood that news of the so-called "fourth-wave military exercise" last spring was spread by the Japanese media on tips supplied by a correspondent assigned by the Chinese Communists to Hong Kong. The correspondent was recalled in early May.