Yesterday, the U.S.-China Economic and Security Review Commission (ESRC) delivered its expansive report to Congress. The opening remarks contained some positive comments and a long list of concerns. Beginning with the good, the commission was pleased to see China bolstering its export controls to limit nuclear proliferation as well as its involvement in the six nation agreements to dismantle North Korea’s nuclear arsenal. The commission noted China’s pledge to send a combat reconstruction battalion to Sudan, the elevation of 200 million Chinese citizens out of poverty, and the country’s acknowledgement of environmental problems. Unfortunately, said ESRC chairman Carolyn Bartholomew, China is reversing course on its path to a more market-based economy. Indications of this regression include the government’s control and ownership of a dozen key industries, subsidizing export industries, fixing the currency artificially low, and a total failure to protect the intellectual property of foreign countries. Quite alarming is China’s willingness to invest in oil-rich countries with terrible human rights records and its increasing border tensions with India. Bartholomew also cited information censorship as a concern. “By demanding stiff penalties for dissent on the Internet as well as rewards for journalists who play by the rules, Beijing has created one of the most effective information control regimes in the world,” stated Bartholomew. Vice Chairman Dan Blumenthal spoke about the rising security threat China presents, citing spying and asymmetrical warfare techniques. He said the country’s “defense industry is producing new generations of weapon systems with impressive speed and quality” due to integration with commercial technologies. The expansion of these systems is also credited to industrial espionage. China’s asymmetrical warfare techniques are disruptive actions focused on crippling the communication systems of enemies rather than pure ballistic might. Examples include the anti-satellite missile tested earlier this year as well as the laser used to attack an American satellite in 2006. Blumenthal also noted an increase Chinese cyber attacks on American and European government offices. In the last year American government investigators have implicated Chinese hackers for compromising both Pentagon and Homeland Security systems. Blumenthal stressed the point that the evolution of China’s military seems to focus on fighting a war with America, which is more heavily reliant on satellite networks than most other countries. He also made a vague allusion to war with China when he mentioned the 1979 Taiwan Relations Act. It has been speculated that the act would be used as the impetus to actively engage China should the country take hostile action against Taiwan.