Despite the bluster, aggressive regional stance and shiny new armaments, China isn’t necessarily a potential foe to fear.

In fact, if all hell breaks loose, it’s more likely to happen within the PLA ranks itself than, say, the South China Sea, according to an excellent investigative report by John Garnaut in Foreign Policy, which describes how corruption is rotting the PLA from within. Selected excerpts:

“No country can defeat China,” but “our own corruption can destroy us and cause our armed forces to be defeated without fighting,” said Gen. Liu Yuan. [Liu is a full three-star general, the son of a former president of China and one of the PLA's rising stars. He is also the political commissar and the most powerful official of the PLA's General Logistics Department.]

[Liu] described the army as beset by a disease of “malignant individualism” where officers follow only orders that suit them, advance on the strength of their connections, and openly sell their services at “clearly marked prices.”

In some ways, [graft is] hiding in plain sight. Outsiders can glimpse the enormous flow of military bribes and favors in luxury cars with military license plates on Changan Avenue, Beijing’s main east-west thoroughfare, and parked around upmarket night clubs near the Workers’ Stadium.

Retired officers have told me that promotions have become so valuable that it has become routine to pay the equivalent of hundreds of thousands of dollars in bribes to even be considered for many senior positions.

Foreign government strategists are starting to worry that corruption and byzantine internal politics may amplify the known difficulties in communicating with the PLA and adroitly managing crisis situations.

Despite the risks inherent in China’s growing arsenal, expanding ambitions and spasmodically aggressive rhetoric and actions, military cooperation between the United States and China is almost nonexistent.

Military corruption is a more “imminent” threat to the PLA than the U.S. armed forces, said Zhu Feng, a professor of international relations at Peking University.

Garnaut notes that all Chinese observers interviewed for his article “agreed that the PLA’s corruption and discipline problems are growing worse.”

The PLA’s problem is so prevalent that President Hu Jintao, its commander-in-chief, publicly urged the military to rid itself of graft.

Respected China watcher Bill Bishop remarked that “PLA corruption is probably a good thing for the US and its allies on several levels, from lower force readiness to procurement of defective weapons systems (think high speed rail problems) to exploitable, corrupt officers.”

Read John Garnaut’s report in full here.

This post originally appeared at Forbes. Follow me on Twitter.

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Ray Kwong is senior advisor to the USC US-China Institute, a charter member of the Asian International Business Advisory Group, a Forbes contributing writer and columnist for the Hong Kong Economic Journal. He is currently facilitating talks between China and U.S. interests on such matters as clean energy economics, nanotechnology and commercial aerospace. While it sounds way cooler than it really is, he is also a member of the Bloomberg BusinessWeek Market Advisory Board and the McKinsey Quarterly Executive Panel. You can follow him on Twitter @raykwong. Eyeball Ray's posts from Forbes ChinaTalk.
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