In conjunction with the April 23 fiftieth anniversary of the founding of the Chinese People's Liberation Army naval forces, China's Xinhua News Agency has conducted an interview with Chinese Navy Commander Shi Yunsheng. In the interview, Shi pointed out the emphasis the Chinese Communist Party (CCP) Central Committee and Central Military Commission have placed on modernizing and improving the Chinese Navy. He cited Chinese President Jiang Zemin, who also chairs the Central Military Commission, who wrote that China should "strive to establish a modern navy with a strong, comprehensive combat capacity." Shi spoke of three major aspects of the naval improvement program. First, he said China was pursuing an "offshore defense" policy, improving naval technology to bring the Chinese Navy closer to other modern navies of the world, and providing it with the ability win a war at sea. Second, he said the Navy was working to develop and improve weapons systems, launching new models of warships, submarines, and fighter aircraft, and developing better missiles, torpedoes, guns, and electronic equipment. Third, he said the Navy was accelerating and improving the training of new recruits, as well as working to attract more qualified entrants. He pointed out that improved training facilities are already in place and operating, giving Naval commanders more comprehensive training. The focus on expanding and improving China's Navy is not new. In 1996, Chinese military officials were calling for improved logistical support to allow China's Navy to break free of its coastal defense role (STRATFOR Global Intelligence Update, September 19, 1996). Since the 1980s, China has been developing its petroleum supply equipment for naval support, announcing newly improved designs earlier this month. The expansion of the Chinese Navy from its current coastal roles to a blue water navy remains a vital part of Beijing's long-term regional goals, for without it China has very little ability to project its power. This is the central issue behind the long-running naval expansion plans. While China is a massive country with ample human and natural resources, it remains unable to fully take on the role of a superpower, or even a major regional power, due to its lack of a blue water navy. This is not to say that China is not an important regional and world player, but that its geographical position encourages a defensive posture, which has occasionally undermined its offensive intentions, principally in Taiwan. China shares extensive borders with over a dozen other nations, while its industrial and population centers are located primarily in the east and south east around the maritime periphery of the country. This geography has resulted in a defensive posture designed to protect its land borders as well as its coastal industrial and financial infrastructure. The Chinese Navy has maintained a defensive position vis-à-vis its southern and southeastern coast, one which required relatively close contact with the shore for supplies and logistics. This in part explains why China, despite its size and apparent power, has been unwilling and unable to launch a war of conquest against Taiwan. While China can launch a massive missile strike against Taiwan, it lacks the naval resources for a full naval assault. To overcome this, Beijing has promoted two main strategies for years. One is the formation of a blue water navy, including better supply vessels. The other is to extend its maritime borders by controlling key island locations, thereby allowing its coastal forces to maintain supply far from the mainland. This has been most actively pursued in recent years in the Spratly Islands. By controlling forward naval bases in the Spratlys, China extends its "legitimate" zone of control to the other side of the South China Sea. This same strategy has led to the disputes over the Paracel Islands, and the Diaoyutai Islands, the latter of which would extend control over the East China Sea. While the "creeping invasion" of the Spratlys may be extending China's southward reach, its attempts to modernize and expand the Navy face a serious hindrance. China's naval plans have been promoted since before the financial crisis the country now faces. However, even then there was little progress toward creating a naval force with a true ability to project its power over long distances. Now, it is increasingly unclear how China plans to finance this blue water Navy. China's economic troubles are numerous. Beijing has just announced its foreign debt for 1998 was $146.04 billion, $1.04 billion more than its total foreign reserves at the end of 1998. China has also recently hinted at plans to increase the wages of its civil servants by 30 percent, among other new spending initiatives. China's lack of financial resources will continue to seriously hinder its ability to expand it naval forces to create a forward projection force. Its associated policy of artificially extending its maritime borders by basing naval operations at various island groups will most likely remain as China's primary method of projecting its naval capabilities. However, while the economic situation is slowing the process, China remains committed to expanding its role in the region, extending its naval reach. It should be noted that historically, when a land-based power attempts to exert its influence over the sea, it often sets off a naval arms race it cannot win without risking financial and social stability. However, only in doing so can China finally become a major regional power with the ability to extend its military influence well beyond its coastal waters.