In January 1974 the PLA saw action in the South China Sea following a long-simmering dispute with the Republic of Vietnam (South Vietnam) over the Xisha (Paracel) Islands (see Vietnam , this ch.). South Vietnamese and PLA naval forces skirmished over 3 islands occupied by South Vietnamese troops, and the PLA successfully seized control of the islands in a joint amphibious operation involving 500 troops and air support.

By the mid-1970s concerns among Chinese leaders about military weakness, especially vis-à-vis the Soviet Union, resulted in a decision to modernize the PLA. Two initial steps were taken to promote military modernization. First, in 1975 vacant key positions in the military structure and the party Central Military Commission were filled. (The state Central Military Commission was not founded until 1982 see the National People's Congress , ch. 10). Nonetheless, to ensure party control of the PLA, civilians were appointed to key positions. Deng Xiaoping was appointed chief of general staff, while Gang of Four member Zhang Chunqiao was appointed director of the General Political Department. Second, in the summer following Premier Zhou Enlai's January 1975 proclamation of the Four Modernizations (see Glossary) as national policy, the party Central Military Commission convened an enlarged meeting to chart the development of military modernization. The military modernization program, codified in Central Directive No. 18 of 1975, instructed the military to withdraw from politics and to concentrate on military training and other defense matters. Factional struggles between party moderates and radicals in 1975 and 1976, however, led to the dismissal of Deng from all his posts and the delay of military modernization until after the death of Mao Zedong. Within a month of Mao's death, military leaders headed by Minister of National Defense Ye Jianying cooperated with party chairman Hua Guofeng to arrest the Gang of Four, thus ending a decade of radical politics.

The Chinese leadership resumed the military modernization program in early 1977. Three crucial events in the late 1970s shaped the course of this program: the second rehabilitation of Deng Xiaoping, the major civilian proponent of military modernization the re-ordering of priorities in the Four Modernizations, relegating national defense modernization from third to fourth place (following agriculture, industry, and science and technology) and the Sino-Vietnamese border war of 1979. In July 1977, with the backing of moderate military leaders, Deng Xiaoping reassumed his position as PLA chief of general staff as well as his other party and state posts. At the same time, Deng became a vice chairman of the party Central Military Commission. In February 1980 Deng resigned his PLA position in favor of professional military commander Yang Dezhi Deng improved his party Central Military Commission position, becoming chairman of it at aef t the Sixth Plenum of the Eleventh Central Committee in June 1981. With enormous prestige in both the military and the civilian sectors, Deng vigorously promoted military modernization, the further disengagement of the military from politics, and the shift in national priorities to economic development at the expense of defense.

In 1977-78 military and civilian leaders debated whether the military or the civilian economy should receive priority in allocating resources for the Four Modernizations. The military hoped for additional resources to promote its own modernization, while civilian leaders stressed the overall, balanced development of the economy, including civilian industry and science and technology. By arguing that a rapid military buildup would hinder the economy and harm the defense industrial base, civilian leaders convinced the PLA to accept the relegation of national defense to last place in the Four Modernizations. The defense budget accordingly was reduced. Nonetheless, the Chinese military and civilian leadership remained firmly committed to military modernization.

The 1979 Sino-Vietnamese border war, although only sixteen days long, revealed specific shortcomings in military capabilities and thus provided an additional impetus to the military modernization effort. The border war, the PLA's largest military operation since the Korean War, was essentially a limited, offensive, ground-force campaign. China claimed victory, but the war had mixed results militarily and politically. Although the numerically superior Chinese forces penetrated about fifty kilometers into Vietnam, the PLA sustained heavy casualties. PLA performance suffered from poor mobility, weak logistics, and outdated weaponry. Inadequate communications, an unclear chain of command, and the lack of military ranks also created confusion and adversely affected PLA combat effectiveness.

Data as of July 1987