China policies fuel tensions with US: commission

China's souring foreign investment climate, "unfair" trade practices and increased military spending heightened tensions between the United States and Beijing in 2014, a US commission said today.
Security ties between the two world powers deteriorated this year amid increased territorial disputes in the South China Sea.
These potential China-US military confrontations risk escalating into a "major political crisis," the US-China Economic and Security Review Commission (USCC) said in its annual report to Congress.
Reports by the commission of former lawmakers, former officials, and other experts have in the past irritated officials in Beijing, where Washington opinions are always under a microscope.

The report said President Xi Jinping's government "made minimal progress in implementing (economic) reforms in 2014, and it remains unclear whether the Xi government will accelerate reform in 2015."
But it made substantial progress on the military development front, USCC reported, citing China's two decades of double-digit increases in its defense budget.

"This trend continued in 2014 with a 12.2 per cent increase over the previous year, bringing China's announced projected defense budget to approximately USD 131.6 billion, though China's actual spending on defense is no doubt larger than this figure," USCC chairman Dennis Shea said while unveiling the report.

China's expanding navy is replacing its surface ships with "modern platforms equipped with advanced, long-range weapon systems and sensors" and increasing its fleet of modern submarines from just one in 2000 to nearly 40 in 2014.
"These developments are enabling China to challenge decades of air and naval dominance by the United States in the Western Pacific, and are contributing to a shift in the regional balance of power in China's direction," he said.
The US-China security relationship mostly "deteriorated" in 2014, the report said, citing China's territorial disputes with US treaty allies Japan and the Philippines and Chinese military aircraft and ships confronting US military aircraft and vessels "on several occasions since late 2013."

"On each of these occasions, Chinese military personnel engaged in unsafe, unprofessional, and aggressive behavior that could have resulted in the loss of life or a major political crisis.