Chinese President Xi Jinping is preparing his military forces for war and directing the rest of the country to prepare for economic hardships that conflict would bring, according to the latest annual report from a congressional commission on China.

The Chinese leader, who also heads the ruling Communist Party and is scheduled to have his first face-to-face meeting with President Biden in a year on Wednesday, has called on government officials and the population to expect “worst-case” and “extreme” scenarios in the future as a result of heightened tensions with the United States and its allies in the region.

The 753-page report to Congress by the U.S.-China Economic and Security Review Commission includes an alarming list of indicators that Beijing is preparing for war with the United States.

“Throughout 2023, China accelerated its political, military, economic and information pressure against Taiwan, raising further concerns of potential military action,” Commission Co-Chair Carolyn Bartholomew said in releasing the report from the influential advisory body.

And on the eve of the meeting with President Biden, the panel said Washington had little to show for a flurry of meetings between senior leaders in recent months trying to moderate Beijing’s policies.

“China now appears to view diplomacy with the United States primarily as a tool for forestalling and delaying US pressure over a period of years while China moves ever further down the path of developing its own economic, military and technological capabilities,” the report said.

‘Danger on all fronts’

Commanders of the U.S. Indo-Pacific Command have warned Congress for several years that China could use military forces against Taiwan in the coming years. President Biden has vowed to defend the island militarily.

The Indo-Pacific Command intelligence chief, Rear Adm. Mike Studeman, also has warned that a war with China could take place as the result of a separate regional confrontation. “It’s danger on all fronts,” Adm. Studeman said in a 2021 speech.

China’s maritime militia in recent weeks rammed a Philippines resupply ship and used water cannons against other ships that have sought to resupply a grounded Philippines warship at a disputed outpost in the Spratly Islands that both countries claim as their territory. The United States has a defense treaty with Manila and the State Department has said any attack on Philippines vessels, military or civilian, would be covered by the treaty.

Japan also has been squaring off against China over the uninhabited Senkaku Islands in the East China Sea that are claimed by both countries.

Commission Vice Chairman Alex Wong said the report comes at a critical time, given the high-profile Xi-Biden meeting this week after months of bilateral tensions and efforts to repair diplomatic and military communications.

“There is a broader realization not just in Washington, D.C., and not just in the capitals of our friends and allies, but across the peoples of the Free World that the Chinese Communist Party represents a generational challenge to the international order,” he said.

According to the bipartisan commission report, the Chinese government also is bracing for serious economic damage from international sanctions, foreign economic controls and sharpened strategic rivalry, “including the possibility of an open war over Taiwan.”

Mr. Xi in 2022 ordered the nation to harden all aspects of the country for worst-case scenarios and uphold CCP control with a “fighting spirit.” The Chinese leader also directly blamed the United States and its  allies for recent economic and diplomatic problems that he said were due to “containment, encirclement and suppression.”

“The military must … focus on combat ability as the fundamental and only criterion, concentrate all energy on fighting a war, direct all work towards warfare and speed up to build the ability to win,” Mr. Xi said, in a quote cited in the congressional panel’s new report.

The war preparations have been backed by legislative, budgetary and logistics moves that the report said are clear signs Chinese leaders are “taking preliminary but limited steps to enable effective war mobilization by the military.”

Among the steps are regulations that will enable the faster call-up of military reservists, and the conscription of additional troops from retired People’s Liberation Army soldiers. PLA recruiters also are picking up students with science and engineering backgrounds for military cyber and space warfare units.

New military recruitment centers have been opened since late 2022, and air raid shelters are being upgraded.

And in a sign Beijing is preparing for casualties from a coming conflict, a “wartime emergency hospital has been set up in Fujian Province, across the 100-mile-wide Taiwan Strait from Taiwan,” the report said.

The Chinese government announced plans to increase grain production “in the event a war disrupts global supply chains,” the report said, and, to counter anticipated foreign sanctions in a war, new regulations call for countermeasures in the event China faced sanctions and export controls.

Moritz Rudolf, a specialist at the Yale Law School Paul Tsai China Center, told the commission the regulation’s vague language “sends the signal that the necessity to prepare for ‘international struggle’ outweighs the other elements of the PRC’s foreign relations.”

Pressure on Taiwan

Meanwhile, the report warns that the military situation in the Taiwan Strait remains tense as a result of China accelerating a campaign of near-daily military pressure against the island, including large-scale war games; regular aircraft intrusions into Taiwan’s air defense zone; warship deployments encircling the island; missile firings over Taiwan; and drills simulating attacks on the island.

Chinese military strategists are studying the war in Ukraine for lessons that can be applied by the PLA in a Taiwan conflict, such as the use of drones and commercial Starlink satellites for military communications, the report said.

Low-level conflict against Taiwan also included the use of two Chinese-flagged vessels, a fishing ship and a container ship, that “deliberately cut two undersea internet cables used by Taiwan’s outlying Matsu Island in February 2023,” the report said.

Better weapons

The report also highlighted the development of advanced weapons systems designed to provide China with an edge over U.S. forces, including multiple types of advanced missiles capable of hitting ships at sea with either conventional or nuclear warheads. Cyber and space weapons also advanced systems that could be used to cripple U.S. military forces.

One unique weapon system showcased in the report is China’s new space-based nuclear weapon, called a fractional orbital bombardment system, or FOBS.

The new weapons “raises the possibility that China could permanently deploy nuclear weapons in space, effectively adding a fourth leg to its nascent nuclear triad,” the report said.

The current Chinese triad, like that of the U.S. military, includes ground-based nuclear missiles, missile submarines and bombers.

“China’s deployment of such a [FOBS] system would deprive the United States of early warning,” the report said, something that would increase the danger of a nuclear conflict.

As with past annual reports, the China commission report includes developments in both security and economic relations and makes recommendations for U.S. policymakers.

The sections on U.S.-China trade and economic matters included an examination of how China uses financing deal with foreign nations to promote its goals, and the impact of the Biden administration’s so-called “de-risking” policy that seeks to protect U.S. interests from Chinese actions on issues such as supply chain resilience and technology transfers.

The report also includes a section on how China is using what the report said were heavy-handed and aggressive measures against its regional neighbors, while challenging current international norms and exploiting the weaknesses of open societies.

Influence operations

A section of the report focuses on China’s aggressive efforts to shape public and elite opinion around the world in support of its policies.

“Under Xi’s rule, China’s overseas influence activities are now more prevalent, institutionalized, technologically sophisticated, and aggressive than under his predecessors,” the report said.

Chinese military basing facilities are growing and espionage operations are “intensified” that show increasing sophistication against foreign spy targets, the report said. Chinese surveillance and military facilities now deployed in Cuba could lead to electronic spying against Americans in the United States.

The Cuban facilities could be used by China to monitor and potentially disrupt U.S. military deployments and material shipments during a war between the United States and China, the report said. A naval base for Chinese military forces is being built in Cambodia.

According to the report, China even is seeking to control access to the Moon for strategic purposes.

“Beijing is working to establish a long-term presence in space, which it seeks to accomplish by first dominating the cislunar domain, or the space between Earth and the moon,” the report said, noting plans by China to build a lunar base by 2030.

The report quotes Jeff Gossel, an analyst with the Air Forces National Air and Space Intelligence Center, as saying a Chinese satellite orbiting the moon “could allow China to fly to the far side of the moon and attack U.S. satellites in geosynchronous orbits.”