The dragon’s new teeth

A rare look inside the world’s biggest military expansion

Apr 7th 2012 | BEIJING | from the print edition

http://www.economist.com/node/21552193

AT A meeting of South-East Asian nations in 2010, China’s foreign minister Yang Jiechi, facing a barrage of complaints about his country’s behaviour in the region, blurted out the sort of thing polite leaders usually prefer to leave unsaid. “China is a big country,” he pointed out, “and other countries are small countries and that is just a fact.” Indeed it is, and China is big not merely in terms of territory and population, but also military might. Its Communist Party is presiding over the world’s largest military build-up. And that is just a fact, too—one which the rest of the world is having to come to terms with.

That China is rapidly modernising its armed forces is not in doubt, though there is disagreement about what the true spending figure is. China’s defence budget has almost certainly experienced double digit growth for two decades. According to SIPRI, a research institute, annual defence spending rose from over $30 billion in 2000 to almost $120 billion in 2010. SIPRI usually adds about 50% to the official figure that China gives for its defence spending, because even basic military items such as research and development are kept off budget. Including those items would imply total military spending in 2012, based on the latest announcement from Beijing, will be around $160 billion. America still spends four-and-a-half times as much on defence, but on present trends China’s defence spending could overtake America’s after 2035 (see chart).

All that money is changing what the People’s Liberation Army (PLA) can do. Twenty years ago, China’s military might lay primarily in the enormous numbers of people under arms; their main task was to fight an enemy face-to-face or occupy territory. The PLA is still the largest army in the world, with an active force of 2.3m. But China’s real military strength increasingly lies elsewhere. The Pentagon’s planners think China is intent on acquiring what is called in the jargon A2/AD, or “anti-access/area denial” capabilities. The idea is to use pinpoint ground attack and anti-ship missiles, a growing fleet of modern submarines and cyber and anti-satellite weapons to destroy or disable another nation’s military assets from afar.

In the western Pacific, that would mean targeting or putting in jeopardy America’s aircraft-carrier groups and its air-force bases in Okinawa, South Korea and even Guam. The aim would be to render American power projection in Asia riskier and more costly, so that America’s allies would no longer be able to rely on it to deter aggression or to combat subtler forms of coercion. It would also enable China to carry out its repeated threat to take over Taiwan if the island were ever to declare formal independence.

China’s military build-up is ringing alarm bells in Asia and has already caused a pivot in America’s defence policy. The new “strategic guidance” issued in January by Barack Obama and his defence secretary, Leon Panetta, confirmed what everyone in Washington already knew: that a switch in priorities towards Asia was overdue and under way. The document says that “While the US military will continue to contribute to security globally, we will of necessity rebalance towards the Asia-Pacific region.” America is planning roughly $500 billion of cuts in planned defence spending over the next ten years. But, says the document, “to credibly deter potential adversaries and to prevent them from achieving their objectives, the United States must maintain its ability to project power in areas in which our access and freedom to operate are challenged.”

It is pretty obvious what that means. Distracted by campaigns in Iraq and Afghanistan, America has neglected the most economically dynamic region of the world. In particular, it has responded inadequately to China’s growing military power and political assertiveness. According to senior American diplomats, China has the ambition—and increasingly the power—to become a regional hegemon; it is engaged in a determined effort to lock America out of a region that has been declared a vital security interest by every administration since Teddy Roosevelt’s; and it is pulling countries in South-East Asia into its orbit of influence “by default”. America has to respond. As an early sign of that response, Mr Obama announced in November 2011 that 2,500 US Marines would soon be stationed in Australia. Talks about an increased American military presence in the Philippines began in February this year.

The uncertainty principle

China worries the rest of the world not only because of the scale of its military build-up, but also because of the lack of information about how it might use its new forces and even who is really in charge of them. The American strategic-guidance document spells out the concern. “The growth of China’s military power”, it says, “must be accompanied by greater clarity of its strategic intentions in order to avoid causing friction in the region.”

Officially, China is committed to what it called, in the words of an old slogan, a “peaceful rise”. Its foreign-policy experts stress their commitment to a rules-based multipolar world. They shake their heads in disbelief at suggestions that China sees itself as a “near peer” military competitor with America.



In the South and East China Seas, though, things look different. In the past 18 months, there have been clashes between Chinese vessels and ships from Japan, Vietnam, South Korea and the Philippines over territorial rights in the resource-rich waters. A pugnacious editorial in the state-run Global Times last October gave warning: “If these countries don’t want to change their ways with China, they will need to prepare for the sounds of cannons. We need to be ready for that, as it may be the only way for the disputes in the sea to be resolved.” This was not a government pronouncement, but it seems the censors permit plenty of press freedom when it comes to blowing off nationalistic steam.

Smooth-talking foreign-ministry officials may cringe with embarrassment at Global Times—China’s equivalent of Fox News—but its views are not so far removed from the gung-ho leadership of the rapidly expanding navy. Moreover, in a statement of doctrine published in 2005, the PLA’s Science of Military Strategy did not mince its words. Although “active defence is the essential feature of China’s military strategy,” it said, if “an enemy offends our national interests it means that the enemy has already fired the first shot,” in which case the PLA’s mission is “to do all we can to dominate the enemy by striking first”.

Making things more alarming is a lack of transparency over who really controls the guns and ships. China is unique among great powers in that the PLA is not formally part of the state. It is responsible to the Communist Party, and is run by the party’s Central Military Commission, not the ministry of defence. Although party and government are obviously very close in China, the party is even more opaque, which complicates outsiders’ understanding of where the PLA’s loyalties and priorities lie. A better military-to-military relationship between America and China would cast some light into this dark corner. But the PLA often suspends “mil-mil” relations as a “punishment” whenever tension rises with America over Taiwan. The PLA is also paranoid about what America might gain if the relationship between the two countries’ armed forces went deeper.

The upshot of these various uncertainties is that even if outsiders believe that China’s intentions are largely benign—and it is clear that some of them do not—they can hardly make plans based on that assumption alone. As the influential American think-tank, the Centre for Strategic and Budgetary Assessments (CSBA) points out, the intentions of an authoritarian regime can change very quickly. The nature and size of the capabilities that China has built up also count.

History boys

The build-up has gone in fits and starts. It began in the early 1950s when the Soviet Union was China’s most important ally and arms supplier, but abruptly ceased when Mao Zedong launched his decade-long Cultural Revolution in the mid-1960s. The two countries came close to war over their disputed border and China carried out its first nuclear test. The second phase of modernisation began in the 1980s, under Deng Xiaoping. Deng was seeking to reform the whole country and the army was no exception. But he told the PLA that his priority was the economy; the generals must be patient and live within a budget of less than 1.5% of GDP.

A third phase began in the early 1990s. Shaken by the destructive impact of the West’s high-tech weaponry on the Iraqi army, the PLA realised that its huge ground forces were militarily obsolete. PLA scholars at the Academy of Military Science in Beijing began learning all they could from American think-tanks about the so-called “revolution in military affairs” (RMA), a change in strategy and weaponry made possible by exponentially greater computer-processing power. In a meeting with The Economist at the Academy, General Chen Zhou, the main author of the four most recent defence white papers, said: “We studied RMA exhaustively. Our great hero was Andy Marshall in the Pentagon [the powerful head of the Office of Net Assessment who was known as the Pentagon’s futurist-in-chief]. We translated every word he wrote.”

In 1993 the general-secretary of the Communist Party, Jiang Zemin, put RMA at the heart of China’s military strategy. Now, the PLA had to turn itself into a force capable of winning what the strategy called “local wars under high-tech conditions”. Campaigns would be short, decisive and limited in geographic scope and political goals. The big investments would henceforth go to the air force, the navy and the Second Artillery Force, which operates China’s nuclear and conventionally armed missiles.

Further shifts came in 2002 and 2004. High-tech weapons on their own were not enough; what mattered was the ability to knit everything together on the battlefield through what the Chinese called “informatisation” and what is known in the West as “unified C4ISR”. (The four Cs are command, control, communications, and computers; ISR stands for intelligence, surveillance and reconnaissance; the Pentagon loves its abbreviations).

General Chen describes the period up to 2010 as “laying the foundations of modernised forces”. The next decade should see the roll-out of what is called mechanisation (the deployment of advanced military platforms) and informatisation (bringing them together as a network). The two processes should be completed in terms of equipment, integration and training by 2020. But General Chen reckons China will not achieve full informatisation until well after that. “A major difficulty”, he says, “is that we are still only partially mechanised. We do not always know how to make our investments when technology is both overlapping and leapfrogging.” Whereas the West was able to accomplish its military transformation by taking the two processes in sequence, China is trying to do both together. Still, that has not slowed down big investments which are designed to defeat even technologically advanced foes by making “the best use of our strong points to attack the enemy’s weak points”. In 2010 the CSBA identified the essential military components that China, on current trends, will be able to deploy within ten years. Among them: satellites and reconnaissance drones; thousands of surface-to-surface and anti-ship missiles; more than 60 stealthy conventional submarines and at least six nuclear attack submarines; stealthy manned and unmanned combat aircraft; and space and cyber warfare capabilities. In addition, the navy has to decide whether to make the (extremely expensive) transition to a force dominated by aircraft-carriers, like America. Aircraft-carriers would be an unmistakable declaration of an ambition eventually to project power far from home. Deploying them would also match the expected actions of Japan and India in the near future. China may well have three small carriers within five to ten years, though military analysts think it would take much longer for the Chinese to learn how to use them well.

A new gunboat diplomacy

This promises to be a formidable array of assets. They are, for the most part, “asymmetric”, that is, designed not to match American military power in the western Pacific directly but rather to exploit its vulnerabilities. So, how might they be used?

Taiwan is the main spur for China’s military modernisation. In 1996 America reacted to Chinese ballistic-missile tests carried out near Taiwanese ports by sending two aircraft-carrier groups into the Taiwan Strait. Since 2002 China’s strategy has been largely built around the possibility of a cross-Strait armed conflict in which China’s forces would not only have to overcome opposition from Taiwan but also to deter, delay or defeat an American attempt to intervene. According to recent reports by CSBA and RAND, another American think-tank, China is well on its way to having the means, by 2020, to deter American aircraft-carriers and aircraft from operating within what is known as the “first island chain”—a perimeter running from the Aleutians in the north to Taiwan, the Philippines and Borneo (see map).

In 2005 China passed the Taiwan Anti-Secession Law, which commits it to a military response should Taiwan ever declare independence or even if the government in Beijing thinks all possibility of peaceful unification has been lost. Jia Xiudong of the China Institute of International Studies (the foreign ministry’s main think-tank) says: “The first priority is Taiwan. The mainland is patient, but independence is not the future for Taiwan. China’s military forces should be ready to repel any force of intervention. The US likes to maintain what it calls ‘strategic ambiguity’ over what it would do in the event of a conflict arising from secession. We don’t have any ambiguity. We will use whatever means we have to prevent it happening.”

If Taiwan policy has been the immediate focus of China’s military planning, the sheer breadth of capabilities the country is acquiring gives it other options—and temptations. In 2004 Hu Jintao, China’s president, said the PLA should be able to undertake “new historic missions”. Some of these involve UN peacekeeping. In recent years China has been the biggest contributor of peacekeeping troops among the permanent five members of the Security Council. But the responsibility for most of these new missions has fallen on the navy. In addition to its primary job of denying China’s enemies access to sea lanes, it is increasingly being asked to project power in the neighbourhood and farther afield.

The navy appears to see itself as the guardian of China’s ever-expanding economic interests. These range from supporting the country’s sovereignty claims (for example, its insistence on seeing most of the South China Sea as an exclusive economic zone) to protecting the huge weight of Chinese shipping, preserving the country’s access to energy and raw materials supplies, and safeguarding the soaring numbers of Chinese citizens who work abroad (about 5m today, but expected to rise to 100m by 2020). The navy’s growing fleet of powerful destroyers, stealthy frigates and guided-missile-carrying catamarans enables it to carry out extended “green water” operations (ie, regional, not just coastal tasks). It is also developing longer-range “blue water” capabilities. In early 2009 the navy began anti-piracy patrols off the Gulf of Aden with three ships. Last year, one of those vessels was sent to the Mediterranean to assist in evacuating 35,000 Chinese workers from Libya—an impressive logistical exercise carried out with the Chinese air force.

Power grows out of the barrel of a gun

It is hardly surprising that China’s neighbours and the West in general should worry about these developments. The range of forces marshalled against Taiwan plus China’s “A2/AD” potential to push the forces of other countries over the horizon have already eroded the confidence of America’s Asian allies that the guarantor of their security will always be there for them. Mr Obama’s rebalancing towards Asia may go some way towards easing those doubts. America’s allies are also going to have to do more for themselves, including developing their own A2/AD capabilities. But the longer-term trends in defence spending are in China’s favour. China can focus entirely on Asia, whereas America will continue to have global responsibilities. Asian concerns about the dragon will not disappear.

That said, the threat from China should not be exaggerated. There are three limiting factors.

First, unlike the former Soviet Union, China has a vital national interest in the stability of the global economic system. Its military leaders constantly stress that the development of what is still only a middle-income country with a lot of very poor people takes precedence over military ambition. The increase in military spending reflects the growth of the economy, rather than an expanding share of national income. For many years China has spent the same proportion of GDP on defence (a bit over 2%, whereas America spends about 4.7%). The real test of China’s willingness to keep military spending constant will come when China’s headlong economic growth starts to slow further. But on past form, China’s leaders will continue to worry more about internal threats to their control than external ones. Last year spending on internal security outstripped military spending for the first time. With a rapidly ageing population, it is also a good bet that meeting the demand for better health care will become a higher priority than maintaining military spending. Like all the other great powers, China faces a choice of guns or walking sticks.

Second, as some pragmatic American policymakers concede, it is not a matter for surprise or shock that a country of China’s importance and history should have a sense of its place in the world and want armed forces which reflect that. Indeed, the West is occasionally contradictory about Chinese power, both fretting about it and asking China to accept greater responsibility for global order. As General Yao Yunzhu of the Academy of Military Science says: “We are criticised if we do more and criticised if we do less. The West should decide what it wants. The international military order is US-led—NATO and Asian bilateral alliances—there is nothing like the WTO for China to get into.”

Third, the PLA may not be quite as formidable as it seems on paper. China’s military technology has suffered from the Western arms embargo imposed after the Tiananmen Square protests of 1989. It struggles to produce high-performance jet engines, for example. Western defence firms believe that is why they are often on the receiving end of cyber-attacks that appear to come from China. China’s defence industry may be improving but it remains scattered, inefficient and over-dependent on high-tech imports from Russia, which is happy to sell the same stuff to China’s local rivals, India and Vietnam. The PLA also has little recent combat experience. The last time it fought a real enemy was in the war against Vietnam in 1979, when it got a bloody nose. In contrast, a decade of conflict has honed American forces to a new pitch of professionalism. There must be some doubt that the PLA could put into practice the complex joint operations it is being increasingly called upon to perform.

General Yao says the gap between American and Chinese forces is “at least 30, maybe 50, years”. “China”, she says, “has no need to be a military peer of the US. But perhaps by the time we do become a peer competitor the leadership of both countries will have the wisdom to deal with the problem.” The global security of the next few decades will depend on her hope being realised.

Correction: The following definitions have been changed in the main table of this article: "Main battle tanks" to "Modern main battle tanks”; "Armoured infantry vehicles" to “Armoured infantry fighting vehicles”; "Intercontinental ballistic missiles" to "Intercontinental ballistic missile launchers"; “Transport helicopters” to "Heavy/medium transport helicopters"; “Transport aircraft”  to "Heavy/medium transport aircraft"; “Tanker and multi-role aircraft” to “Tanker aircraft”. Additionally, the data are from 2011 not 2010 as originally reported. These changes were made on 6th April 2012.