China's imposition of an Air Defense Identification Zone (Adiz) over the East China Sea sparked protests across the region. The Adiz—defined by a set of rules that require any air traffic in the area to identify itself and comply with Chinese instructions—is not a hostile act in itself, but raises tensions between China and Japan, and consequently with the United States.

China's confidence arises from its growing power. Despite fears of a slowdown, the Chinese government has been projecting a 7.6% economic growth rate for 2013, slightly above the official goal of 7.5%. This should allow for another year of military spending growth in the 10% range, resulting in a 2014 estimated budget of about $126 billion. But according to U.S. Department of Defense adjusted estimates, China's military spending for 2014 could rise to $174-$259 billion.

China claims the spending increases are driven by the rising costs of personnel, logistics improvements and training. But larger budgets are also funding an aggressive modernization program, enabling China's People's Liberation Army (PLA) to exercise greater power regionally, building toward global military power status by the 2020s.

New PLA commander and Chinese Communist Party (CCP) Secretary General Xi Jinping has benefited from a career-long association with the PLA. He made numerous high-profile unit visits in 2013, helping both to build his support for the PLA and assert his authority over it. Xi is likely to spend much of 2014 doing the same, as control of the PLA remains central to the continuation of CCP rule.

China is now making more use of the PLA to enforce maritime territorial claims in the East China Sea, first around the Senkaku/Diayoutai Islands and then in the Spratly Island group in the South China Sea. In 2014, China is likely to increase its aggressive use of its newly consolidated coast guard to challenge Japanese coast guard ships around the Senkakus.

Despite China's improving economic relations with Taiwan, Beijing has made clear in words, and by the continued buildup of PLA forces in the Taiwan theater, that Taiwan's political status will not remain “unresolved,” as Washington describes it. For several years, Taiwanese military sources have told Aviation Week that the main threat has evolved from blockade to invasion. A September 2013 report from the Taiwan defense ministry asserted that by 2020, the PLA may be able to defeat external forces attempting to intervene against a PLA attack on Taiwan.

In 2014, the PLA will continue to fund many known programs intended to build regional power, and will likely reveal lesser-known programs. New missiles being procured will include a 4,000-km (2,500-mi.)-range intermediate-range ballistic missile (IRBM), the medium-range DF-16 and the new short-range DF-12. The new 1,700-km-range DF-21D anti-ship ballistic missile (ASBM) could be joined by an ASBM version of the new IRBM.

Alongside the stealthy Chengdu J-20 and Shenyang J-31 fighters, China is also developing upgraded versions of existing designs: the Shenyang J-16 strike fighter, derived from the Sukhoi Su-27 via the “bootleg” J-11, and the single-engine Chengdu J-10B multirole fighter. New medium-altitude, long-endurance unmanned air systems are entering air force and navy units, while longer-range, high-altitude long-endurance UAS are in testing.

In 2014 China may also start building an improved version of the Type 071 Landing Platform Dock (LPD) amphibious assault ship. Naval combatant production will include the new Type 052D air-defense escort destroyer and the Type 056 corvette, a class expected to number 30-40 ships. The Pentagon estimates that China will build up to 20 of the Yuan-class conventional submarine, with a new Type 093B version to include an air independent propulsion system based on a Stirling-cycle engine.

A high-profile Chinese navy squadron visit to Chile, Argentina and Brazil in October-November 2013 underscores the fact that China is pursuing several power-projection programs that will be funded in 2014. Shipyards in Dalian and Shanghai could start construction of different aircraft carrier designs in 2014. In January 2013 Xian Aircraft started testing its new Y-20 short-takeoff-and-landing heavy transport, expected to eventually be capable of carrying 65 tons of cargo when modified with new Chinese high-bypass turbofans.

China's nuclear investments may include the large, road-mobile and multiple-warhead-capable DF-41 ICBM. New images of this missile suggest it may be transitioning from testing to production. Chinese sources also suggest that a longer 10,000-km range version of the JL-2 SLBM may be in development.

China
Estimated Budget $126 billion (based on official figures)
Percent of GDP 1.41
Personnel Under Arms 2.28 million
Deployments United Nations peacekeeping operations, Somalia anti-piracy patrols