The following are excerpts from Annual Threat Assessment released by US Intelligence community

CHINA

Regional and Global Activities

President Xi Jinping envisions China as the preeminent power in East Asia and as a leading power on the world stage. The Chinese Communist Party (CCP) will attempt to preempt challenges to its reputation and legitimacy, undercutting U.S. influence, driving wedges between Washington and its partners, and fostering global norms that favor its authoritarian system. Most significantly, thePeople’s Republic of China (PRC) will press Taiwan on unification, an effort that will create critical friction points with the United States.Despite economic setbacks,China’s leaders will maintain statist economic policiesto steer capital toward priority sectors, reduce dependence on foreign technologies, and enable military modernization.

• Chinaviews Washington’s competitive measures against Beijing as part of a broader U.S. diplomatic, economic, military, and technological effort to contain its rise, undermine CCP rule, and prevent the PRC from achieving its regional and global power ambitions. Nevertheless, China’s leaders will seek opportunities to reduce tensionwith Washington when they believe it benefits Beijing and protects core interests,such as Xi’s willingness to meet with President Biden at the APEC Summit in late 2023.

• China faces myriad domestic challenges that probably will hinder CCP leaders’ ambitions. CCP leaders have long believed that China’s technology-powered economic growth would outpace Western countries. However, China’s growth almost certainly will continue slowing thanks to demographic challenges and a collapse in consumer and investor sentiment due in large part to Beijing’s heavyhanded policies.

• PRC leaders’ regionaland global ambitions are also hampered by growing resistance to China’sheavyhanded and coercive economic, diplomatic, and military tactics toward Taiwan and other countries.In particular, China’s policies have led many countries and businesses to accelerate de-risking in key sectors and to limit exports of sensitive technology to China, which is further hindering PRC leaders’ goals for technology-enabled economic and military development.

The PRC combines its economic heft with its growing military power and its diplomatic and technological dominance for a coordinated approach to strengthen CCP rule, secure what it views as its sovereign territory and regional preeminence, and pursue global power.In particular, Beijing uses these whole-of- government tools to compel others to acquiesce to its preferences, including its assertions of sovereignty over Taiwan.

• In 2024, following Taiwan’s presidential and legislative election, Beijing will continue to apply military and economic pressure as well as public messaging and influence activities while promoting long-term cross-Strait economic and social integration to induce Taiwan to move toward unification. Taiwan is a significant potential flashpoint for confrontation between the PRC and the United States as Beijing claims that the United States is using Taiwan to undermine China’s rise.Beijing will use even stronger measures to push back against perceived increases in U.S. support to Taiwan.

• In the South China Sea, Beijing will continue to use its growing military and other maritime capabilities to try to intimidate rival claimants and to signal it has control over contested areas. Similarly, China is pressing Japan over contested areas in the East China Sea.

• Beijing aims to expand its influence abroad and be viewed as a champion of global development via several multinational forums and PRC-branded initiatives such as the Belt and Road Initiative, the Global Development Initiative, and the Global Security Initiative. China is promoting an alternative to existing, often Western-dominated international development and security forums in favor of norms that support state sovereignty and place political stability over individual rights. As part of this effort, Beijing seeks to champion development and security in the Global South—areas that Beijing perceives are receptive to engagement with China because of shared historical experiences under colonial and imperialistic oppression—as a way to build global influence; demonstrate leadership; and expand its economic, diplomatic, and military presence.

Beijing is balancing the level of its support to Moscow to maintain the relationship without incurring risk to its own economic and diplomatic interests.In return, China is securing favorable energy prices and greater access to the Arctic.

• The PRC is providing economic and security assistance to Russia’swar in Ukraine through support to Russia’sdefense industrial base, including by providing dual-use material and components for weapons. Trade between China and Russia has been increasing since the start of the war in Ukraine, and PRC exports of goods with potential military use rose more than threefold since 2022.

Economics

During the next few years, China’s economywill slowbecause of structural barriers and Beijing’s unwillingness to take aggressive stimulus measures to boost economic growth.Beijing understands its problem but is avoiding reforms at odds with Xi’sprioritization of state-directed investment in manufacturing and industry. A slower Chinese economy probably would depress commodity prices

worldwide, erode export competitiveness of countries that directly compete against China, and slow

global growth, but it is unlikely to curtail Beijing’s spending onstate priorities.

• China’s slowing economy could create resource constraints in the long run and force it to

prioritize spending between social issues, industrial policy, military, and overseas lending.

• Xi is prioritizing what he deems“high-quality growth”—which includes greater self-sufficiency in strategic sectors and a more equitable distribution of wealth—replacing the focus on maximizing GDP growth, while also attempting to mitigate the threat of U.S. sanctions and unhappiness with semiconductor export controls.

Technology

China seeks to become a world S&T superpower and to use this technological superiority for economic, political, and military gain.Beijing is implementing a whole-of-government effort to boost

indigenous innovation and promote self-reliance, and is prioritizing advanced power and energy, AI, biotechnology, quantum information science, and semiconductors. Beijing is trying to fast-track its S&T development through investments, intellectual property (IP) acquisition and theft, cyber operations, talent recruitment, scientific and academic collaboration, and illicit procurements.

• In 2023, a key PRC state-owned enterprise has signaled its intention to channel at least $13.7 billion into emerging industries such as AI, advanced semiconductors, biotechnology, and new materials. China also announced its Global AI Governance Initiative to bolster international support for its vision of AI governance.

• China now rivals the United States in DNA-sequencing equipment and some foundational research. Beijing’s large volume of genetic data potentially positions it to lead in precision medicine and agricultural biotechnology applications.

• China is making progress in producing advanced chips for cryptocurrency mining and cellular devices at the 7-nanometer (nm) level using existing equipment but will face challenges achieving high-quality, high-volume production of cutting-edge chips without access to extreme ultraviolet lithography tools. By 2025, 40 percent of all 28-nm legacy chips are projected to be produced in China, judging from the number of new factories expected to begin operating during the next two years.

WMD

China remains intent on orienting its nuclear posture for strategic rivalry with the United States because its leaders have concluded their current capabilities are insufficient.Beijing worries that bilateral tension,

U.S. nuclear modernization, and the People’sLiberation Army’s(PLA) advancing conventional capabilities have increased the likelihood of a U.S. first strike. As its nuclear forcegrows, Beijing’s confidence in its nuclear deterrent probablywill bolster the PRC’s resolve and intensify conventional conflicts.

• China probably has completed construction of more than 300 new ICBM silos and has loaded at least some of those silos with missiles.

China probably possesses capabilities relevant to chemical and biological warfare (CBW) that pose a threat to U.S., allied, and partner forces as well as civilian populations.

Military

Beijing will focus on building a fully modernized national defense and military force by 2035 and for the PLA to become a world-class military by 2049.In the meantime, the CCP hopes to use the PLA to secure what it claims is its sovereign territory, to assert its preeminence in regional affairs, and to project power globally, particularly by being able to deter and counter an intervention by the United States in a cross-Strait conflict. However, China lacks recent warfighting experience, which probably would weaken the PLA’s effectiveness and leaders’ willingness to initiatea conflict. In addition, PRC leaders almost certainly are concerned about the ongoing impact of corruption on the military’s capabilities and reliability, judging froma purge of high-level officers including the defense minister in 2023.

• The PLA has fielded modern systems and improved its competency to conduct joint operations that will threaten U.S. and allied forces in the western Pacific. It operates two aircraft carriers and is expected to commission its most advanced carrier in 2024, operates a host of ballistic and cruise missiles as well as the DF-17 hypersonic glide vehicle, and is fielding fifth-generation fighter aircraft.

• PLA ground forces have conducted increasingly realistic training scenarios to improve their readiness and ability to execute operations, including a potential cross-Strait invasion.

The PLA is developing and deploying new technologies to enhance its capability to process and use information at scale and machine speed, allowing decisionmakers to plan, operate, and support cross-domain unconventional and asymmetrical fighting. The PLA is researching various applications for AI, including support for missile guidance, target detection and identification, and autonomous systems.

• The PLA is accelerating the incorporation of command information systems, providing forces and commanders with enhanced situational awareness and decision support to more effectively carry out joint missions and tasks.

The PLA will continue to pursue the establishment of overseas military installations and access agreements in anattempt to project power and protect China’s interests abroad.Beyond developing its military base in Djibouti and its military facility at Ream Naval Base in Cambodia, Beijing reportedly is considering pursuing military facilities in multiple locations, including—but not limited to—Burma, Cuba, Equatorial Guinea, Pakistan, Seychelles, Sri Lanka, Tajikistan, Tanzania, and the UAE.

For at least a decade, Beijing and Moscow have used high-profile, combined military activities to signal the strength of the China–Russia defense relationship but have made only minor enhancements to interoperability in successive exercises.

Space

China remains committed to becoming a world-class space leader and continues to demonstrate its growing prowess by deploying increasingly capable space systems and working towards ambitious scientific feats.

By 2030, China probably will achieve world-class status in all but a few space technology areas.

• Space-based intelligence, surveillance, and reconnaissance (ISR), as well as position, navigation, and timing, and satellite communications are areas the PLA continues to improve upon to close the perceived gap between itself and the U.S. military.

• In early 2023, China’s Manned Space Agency announcedits intention to land astronauts on

the Moon around 2030 and is engaging countries to join its lunar research station effort as part of its broader attempt to develop an alternative bloc to the U.S.-led Artemis Accords.

• China’s commercial space sector is growing quickly and is on pace to become a major global competitor by 2030. For example, China is developing its own low-earth orbit (LEO) satellite Internet service to compete with Western commercial satellite Internet services.

Counterspace operations will be integral to potential PLA military campaigns, and China has counterspace-weapons capabilities intended to target U.S. and allied satellites. China already has fielded ground-based counterspace capabilities including electronic warfare (EW) systems, directed energy weapons, and antisatellite (ASAT) missiles intended to disrupt, damage, and destroy target satellites.

• China also has conducted orbital technology demonstrations, which while not counterspace

weapons tests, prove China’s ability to operate future space-based counterspace weapons.

Cyber

China remains the most active and persistent cyber threat to U.S. Government, private-sector, and critical infrastructure networks. Beijing’s cyber espionage pursuits and its industry’s export of surveillance, information, and communications technologies increase the threats of aggressive cyber operations against the United States and the suppression of the free flow of information in cyberspace.

• PRC operations discovered by the U.S. private sector probably were intended to pre-position cyber attacks against infrastructure in Guam and to enable disrupting communications between the United States and Asia.

• If Beijing believed that a major conflict with the United States were imminent, it would consider aggressive cyber operations against U.S. critical infrastructure and military assets. Such a strike would be designed to deter U.S. military action by impeding U.S. decisionmaking, inducing societal panic, and interfering with the deployment of U.S. forces.

• China leads the world in applying surveillance and censorship to monitor its population and repress dissent. Beijing conducts cyber intrusions targeted to affect U.S. and non-U.S. citizens beyond its borders—including journalists, dissidents, and individuals it views as threats—to counter views it considers critical of CCP narratives, policies, and actions.

Malign Influence Operations

Beijing isexpanding its global covert influence posture to better support the CCP’s goals.The PRC aims to sow doubts about U.S. leadership, undermine democracy, and extend Beijing’s influence.

Beijing’s information operations primarily focus on promoting pro-China narratives, refuting U.S.- promoted narratives, and countering U.S.and other countries’ policies thatthreatenBeijing’s interests, includingChina’sinternational image, access to markets, and technological expertise.

• Beijing’s growing efforts to actively exploit perceived U.S. societal divisions using its online personas move it closer to Moscow’s playbook for influence operations.

• China is demonstrating a higher degree of sophistication in its influence activity, including experimenting with generative AI. TikTok accounts run by a PRC propaganda arm reportedly targeted candidates from both political parties during the U.S. midterm election cycle in 2022.

• Beijing is intensifying efforts to mold U.S. public discourse—particularly on core sovereignty issues, such as Hong Kong, Taiwan, Tibet, and Xinjiang. The PRC monitors Chinese students abroad for dissident views, mobilizes Chinese student associations to conduct activities on behalf of Beijing, and influences research by U.S. academics and think tank experts.

The PRC may attempt to influence the U.S. elections in 2024 at some level because of its desire to sideline critics of China and magnify U.S. societal divisions.PRC actors’have increased their capabilities to conduct covert influence operations and disseminate disinformation. Even if Beijing sets limits on these

activities, individuals not under its direct supervision may attempt election influence activities they perceive

are in line with Beijing’s goals.

Intelligence Operations

China will continue to expand its global intelligence posture to advance the CCP’s ambitions, challenge

U.S. national security and global influence, quell perceived regime threats worldwide, and steal trade secrets and IPto bolster China’s indigenous S&T sectors.

• Officials of the PRC intelligence services will try to exploit the ubiquitous technical surveillance environment in China and expand their use of monitoring, data collection, and

advanced analytic capabilities against political security targets beyond China’s borders. China is rapidly expanding and improving its AI and big data analytics capabilities for intelligence operations.

• More robust intelligence operations also increase the risk that these activities have international consequences, such as the overflight of the United States by the high-altitude balloon in February 2023.

Challenges

Xi Jinping’s prioritization of security and stability for the CCP is undermining China’s ability to solve complex domestic problems and will impede achievingthe CCP’s goal of becoming a major power on the world stage.China’s leadersprobably are most concerned about corruption, demographic

imbalances, and fiscal and economic struggles—all of which influence economic performance and quality of life, two key factors underpinning domestic support for the government and political stability.

• Beijing’s growingnational security focus has generated new laws on data security and anti- espionage targeting foreign firms, driven a crackdown on PRC technology companies, and calls for all of China’s society to participate in counterintelligence activities.

• Xi continues to regularly reprimand, publicly warn, investigate, and conduct firings based on the dangers of corruption. However, anti-corruption efforts probably never will uproot underlying problems because of the unrivaled power of top party officials, and Xi’s insistence that the party apparatus has exclusive power to monitor and fight corruption.

• Despite an easing of restrictions on birth limits, China’s birth rate continues to decline. Marriage rates are on a similar downward trajectory, which will reinforce negative population trends and a shrinking labor force.

• Xi’s blending of domestic and foreign security threatsisundermining China’s position and standing abroad, reducing Beijing’s ability to influence global perceptions and achieve its objectives. Beijing’s hardline approach to alleged separatism in Xinjiang, Hong Kong, and Tibet, as well as broader crackdowns on religion and dissent in China, have generated widespread global criticism of China’s human rights abuses and extraterritorial interference.