XI HAS TAKEN CHARGE at a moment when China has been building up its military power as never before, surprising the United States and shocking its neighbors with the speedy development of new hardware and the aggressive manner in which it has deployed those tools to support its expanding ambitions. Top U.S. intelligence analysts and generals have admitted to being caught out by the 2011 flight-testing of China's new J-20 stealth fighter. They were dumbfounded by China's subsequent deployment of the East Wind 21D, the world's first anti-ship ballistic missile, dubbed the "assassin's mace" in China and "the carrier killer" in the West. And now China is on track to nearly triple its fleet of maritime strike aircraft by 2020, according to the U.S. Congressional Research Service. Its naval weapons -- and capabilities -- are proceeding even faster.
China is simultaneously developing and producing seven types of submarine and surface warships. That's after a decade in which it quadrupled its number of modern submarines, including nuclear submarines designed to carry nuclear-armed ballistic missiles. It has massively expanded production of corvettes, frigates, amphibious ships, and destroyers. In September, China launched its first aircraft carrier, which it has flagged as a training platform for others to come.
Then there's the less visible but perhaps more troubling escalating cyberwar now being waged with hyperactive assertiveness by PLA cyberunits that have reportedly penetrated deeply and repeatedly into key U.S. government departments and top U.S. defense, media, and technology companies. Along with probing infrastructure vulnerabilities and spying on commercial transactions, they have reportedly pilfered military designs and technology. Mandiant, an IT security firm, reported in February that it had traced 141 specific cyberattacks to a single PLA unit based in Shanghai. The PLA has been tasked with "systematic cyber espionage and data theft against organizations around the world," the report stated.
"No other great power today enjoys China's ability to dedicate such vast amounts of capital and personnel so dynamically to such a wide range of new programs," says Andrew Erickson, an expert on PLA technology at the U.S. Naval War College's China Maritime Studies Institute. "China enjoys unparalleled flexibility and adaptability and could increase production rapidly if desired."
The backstop for all these new platforms and capabilities is the PLA's strategic missile force, which possesses conventional ballistic missiles that can destroy satellites in space, plus as many as 400 nuclear weapons. The dizzying display of hard power is sending fear and awe throughout the Asia-Pacific region. But Xi, it seems, is unconvinced that all this shiny hardware can be effectively deployed by an organization that was designed for civil war and adapted in recent decades as a political force to ensure the party's grip on power.
That's where China's rapidly escalating territorial showdown with Japan, its largest trading partner and still the world's third-largest economy, comes in. In September, the Japanese government bought the disputed Senkaku Islands, or Diaoyu Islands as they are known in China, from private owners to prevent them from falling into the hands of Tokyo's governor at the time, a hawkish nationalist provocateur. But China responded with fury. It launched a propaganda blitz against Japan, facilitated protests and riots across China, and escalated its maritime and air patrols of the disputed area. For Xi, according to his close family friend, the otherwise baffling diplomatic crisis that resulted has offered a priceless opportunity to "sort the horses from the mules" and mobilize willing generals around him. Claims that Xi has exploited or even orchestrated the brinkmanship with Japan might seem preposterous to outside observers, given that a miscalculation could lead to war. But the logic is compelling for those who have grown up near the center of China's endless and unforgiving internal struggles.
"Promoting people into positions is always a very sensitive question," says a retired officer, the son of one of the PLA's most decorated commanders and who was himself working at the PLA's General Staff Department, the operational command center, when Xi was at the Central Military Commission in 1979. "This is why Xi is coming to power using a very strong voice on the Diaoyu Islands," he says. "He was asking them to prepare for war … like Deng."
Indeed, the crisis with Japan seemed to come exactly in tandem with Xi's ascension last fall. In September, Xi disappeared for a fortnight, missing top-level meetings (including with U.S. Secretary of State Hillary Clinton) for reasons that remain unexplained. He re-emerged looking healthy and happy on Sept. 15. A day earlier, according to a report in the Japanese newspaper Asahi Shimbun that cited a "source close to the Communist Party," Xi had assumed control of a special cross-agency and military task force to manage the Diaoyu dispute. China immediately increased air and maritime patrols in the area.
For the remaining three months of 2012, roughly once each day, a Chinese government plane flew southeast toward the Japanese-administered islands. With equal regularity, when the plane crossed an "identification" line nearly 100 miles east of the Chinese mainland, Japan tried and failed to make radio contact and then scrambled F-15 Eagle fighters from its Air Self-Defense Force. The Chinese planes would each veer east at about the 28th parallel and then north, out of harm's way, without crossing into Japanese-controlled airspace or encountering approaching Japanese fighters, according to Western defense officials. That's the way it happened on 91 occasions between October and December, according to Japan's Defense Ministry.
But on Dec. 13, the 75th anniversary of the Nanjing massacre and a day after Chinese media reported that Xi had called for "real combat" awareness during a three-day tour of a PLA warship and live-fire tank drills, a low-flying China Marine Surveillance Y-12 twin-propeller plane crossed the 28th parallel. It kept flying southeast and penetrated Japanese airspace -- the first such episode since Japan began monitoring half a century ago -- and took a snapshot of the largest of the disputed islands out of its left window, a photo that was published widely in the Chinese state media the following day. On Dec. 16, a new Japanese government led by Shinzo Abe, who had promised to stand up to China, was elected in a landslide. Abe immediately increased surveillance over the disputed area and reportedly loosened the rules of engagement so that Japanese vessels could approach much closer to Chinese vessels.
On Jan. 10, with Xi firmly in control but now up against a more assertive Japanese administration, Chinese and Japanese surveillance and fighter planes tangled above disputed oil fields north of the Senkakus. On Jan. 14, the PLA Daily reported that the General Staff Department had ordered all units to prepare for battle, in what may have been the first such warning since Deng's debacle in Vietnam. On Jan. 18, Clinton met the Japanese foreign minister and warned China against taking "unilateral" steps to challenge Japanese administration of the Senkakus. It did little good. On Jan. 19 a PLA Navy frigate responded by locking its missile-control radar on a Japanese Self-Defense Forces helicopter around the same disputed oil fields, according to Japanese accounts. On Jan. 30 it was a similar story, this time with a Japanese ship in close proximity, according to more detailed Japanese accounts that were backed by the United States but denied by China. Western military officials and diplomats have told me that they have evidence, including from electronic intercepts, that shows that the movements of Chinese boats and ships were micromanaged by the new task force chaired by Xi.
The world still knew nothing of these dangerous confrontations when Captain Fanell gave his remarkable speech in San Diego the following day, Jan. 31. Asia's two heavyweights -- America's key ally and its global rival -- were one itchy trigger finger away from exchanging live fire on the water while Chinese J-10 and Japanese F-15 fighters were buzzing overhead, according to Western military sources. "If you are the Japanese captain, you would have an incredibly uncomfortable choice to make very quickly," says a Western diplomat who has been following the dispute closely. "You're seconds away if that thing decided to fire." What had been hypothetical musings about the PLA's combat capability took on a more urgent tone.
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