Editor's note: Joseph Farah's G2 Bulletin is a weekly online, subscription intelligence news service from the creator of WorldNetDaily.com – a journalist who has been developing sources around the world for the last 25 years.

While U.S. battles terrorism around the globe and in its own backyard, it ignores a growing arms buildup in China and cautions Taiwan not to provoke the mainland, reports Joseph Farah's G2 Bulletin.

China was the developing world's largest arms customer last year, signing trade agreements worth more than $3.6 billion, the online intelligence newsletter reports in the current issue. Russia remains the biggest arms supplier to China. Since 1996, China has purchased from Moscow at least 72 Su-27 jet fighters, two Sovremenny-class destroyers, missiles systems and four Kilo-class attack submarines.

Last year China agreed to buy eight Kilo-class project 636 submarines and had options to purchase two additional destroyers and surface-to-air missiles.

Most of China's arms buildup is oriented to its No. 1 foreign policy and military objective – the reunification of Taiwan with the mainland.

As evidence, G2 Bulletin reports, China has built up its missile battery along the Fujian coast opposite Taiwan. There are now about 450 missiles in position, with the number increasing by 75 a year.

China continues to hone "credible options" to attack Taiwan and could act quickly against what it sees as a renegade province backed by America, the intelligence publication said.

Beijing is, for now, focusing on intimidating Taiwan into reaching a settlement.

For its part, America's policy has been to help Taiwan hold onto a defense capability, but not necessarily favoring Taiwanese independence.

"China's doctrine is moving toward the goal of surprise, deception and shock effect in the opening phase of a campaign," said the Pentagon's 2002 annual report on Chinese military power. "China is exploring coercive strategies designed to bring Taipei to terms quickly."

Air and missile campaigns or a naval blockade could form part of that strategy.

China's total military spending is believed to be close to $65 billion, and annual spending could increase in real terms three- to four-fold by 2020.

The Peoples Liberation Army is determined to portray itself as a modern fighting force. China is seeking to "diversify its options for use of force against potential targets such as Taiwan and to complicate United States intervention in a Taiwan Strait conflict," the Pentagon report said.

About those increasing numbers of missiles pointed at Taiwan, the Pentagon had this to say: "The accuracy and lethality of this force also are increasing," the report said, adding the missiles are ready for "immediate application" if called upon.

China, which opposes President Bush's plans to build a missile shield, fields about 20 missiles capable of hitting America – a number that will rise to about 30 by 2005 and may reach 60 by 2010.

The Pentagon is warning that China has more options to attack Taiwan.

Another problem area is China's recent acquisition of Russian-made submarines, which could be used to cut off Taiwan's sea lanes and to threaten American forces that might respond.

The communists took control of mainland China in 1949, and the nationalists fled to Taiwan. Beijing intends to one day reunify the island with the mainland, by force if necessary.

Meanwhile, yesterday, the top U.S. envoy to Taiwan declined to endorse the Taiwanese leader's call for a new constitution – a change many fear will enflame relations with rival China. Winning U.S. support for his proposal to rewrite the constitution would have given President Chen Shui-bian a huge boost.

But U.S. envoy Douglas Paal gave Chen a veiled warning not to provoke China, which is worried that a new Taiwanese constitution might enshrine the island's independent status.

"We are very concerned that stability be maintained in the (Taiwan) Strait," Paal told reporters, "and I think it's extremely important that the pledges given by President Chen in his inaugural address be adhered to."

When Chen took office in 2000, the president promised that as long as China didn't attack Taiwan, he wouldn't change the island's name, hold an independence vote or unilaterally change the status quo in other ways.

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