China continues to be a significant military and cybersecurity threat that will require the United States to adapt and change to counter such threats.

Those were but a couple of the conclusions from the Department of Defense 's wide-ranging "Military and Security Developments Involving the People's Republic of China 2012" annual report to Congress about the status of China and its burgeoning power to influence world events, for better or worse.

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In the world of cyber espionage and cyber warfare the report stated: "In 2011, computer networks and systems around the world continued to be targets of intrusions and data theft, many of which originated within China. Although some of the targeted systems were US government-owned, others were commercial networks owned by private companies whose stolen data represents valuable intellectual property. In the hands of overseas competitors, this information could diminish commercial and technological advantages earned through years of hard work and investment."

Some of the more interesting observation from the report included:

Authoritative writings and China's persistent cyber intrusions indicates the likelihood that Beijing is using cyber network operations (CNOs) as a tool to collect strategic intelligence.

In parallel with its military preparations, China has increased diplomatic engagement and advocacy in multilateral and international forums where cyber issues are discussed and debated.

Beijing's agenda is frequently in line with Russia's efforts to promote cyber norms under a UN framework. In September 2011, China and Russia were the primary sponsors of an Information Security Code of Conduct that would have governments exercise sovereign authority over the flow of information in cyberspace. China has not yet accepted that existing mechanisms (such as the Law of Armed Conflict), apply in cyberspace. However, China's thinking in this area may evolve as its own exposure increases through greater investment in global networks.

Chinese actors are the world's most active and persistent perpetrators of economic espionage. Chinese attempts to collect U.S. technological and economic information will continue at a high level and will represent a growing and persistent threat to U.S. economic security. " The nature of the cyber threat will evolve with continuing technological advances in the global information environment.

Sensitive U.S. economic information and technology are targeted by intelligence services, private sector companies, academic/research institutions, and citizens of dozens of countries. China is likely to remain an aggressive and capable collector of sensitive U.S. economic information and technologies, particularly in cyberspace.

China's influence in space was also targeted in the report: "China is expanding its space-based surveillance, reconnaissance, navigation, meteorological, and communications satellite constellations. China continues to build the Bei-Dou (Compass) navigation satellite constellation with the goal of establishing a regional network by the end of 2012 and a global network by 2020.

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Again, some of the more interesting observations included:

China launched the Tiangong space station module in September 2011 and a second communications relay satellite (the Tianlian1B), which will enable near real-time transfer of data to ground stations from manned space capsules or orbiting satellites.

China continues to develop the Long March V rocket, which will more than double the size of the low Earth and geosynchronous orbit payloads that China will be capable of placing into orbit. In parallel, the PRC is developing a multidimensional program to limit or deny the use of space-based assets by adversaries during times of crisis or conflict.

In addition to the direct-ascent anti-satellite weapon tested in 2007, these counter-space capabilities also include jamming, laser, microwave, and cyber weapons. Over the past two years, China has also conducted increasingly complex close proximity operations between satellites while offering little in the way of transparency or explanation.

China's space and counter-space programs are facing some challenges in systems reliability. Communications satellites using China's standard satellite launch platform, the DFH-4, have experienced failures leading to reduced lifespan or loss of the satellite. The recent surge in the number of China's space launches also may be taking its toll. In August 2011, in the third satellite launch in seven days for China, a Long March 2C rocket (carrying an experimental Shijian 11 satellite), malfunctioned after liftoff and failed to deliver the satellite into orbit.

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