Monday, 30 March 2015

On China's Defense


China’s Military Spending
A Commentary

China National People`s Congress spokeswoman Fu Ying told a news conference in early March 2015 that China's defense budget would rise by 10% in 2015, to about US$145 billion.  Last year, defense spending rose 12.2% to US$130 billion, second only to the United States.

China has logged a nearly unbroken two-decade run of double-digit budget increases, even though its economic growth is slowing. Many experts also think that China`s real defense outlays are much larger.   Western experts believe that China's military spending is seriously under-stated.  For example, the US Pentagon estimates that China's real military spending is actually 50% higher.

Comments
1.  This news about the continuing rise in China's military spending is not surprising at all.  China's defense spending is internally driven, by history, politics and security.  Beijing is very mindful of the country's Century of Humiliation which started with the Opium War of 1839.  China is continuing to enjoy relatively high rates of economic growth (7% now compared to about 10% thirty years ago) and prosperity.  This means that Beijing has the resources and funds to sustain its military modernization drive.  This is  in line with President Xi Jinping's 'China Dream'. That is, the focus is on creating a rich and powerful Chinese nation.  Xi's single-minded goal is building a new China which plays a major role in world affairs, commensurate with its status as the world's second largest economy.  Xi has also spoken of a 'new form of great power relations', meaning that China wants to have the same superpower status as the US.  This has been rejected by Washington.

2   China says its growing military is for solely defensive purpose.  Its officials say that the military spending increases are 'moderate and a must'. China's defense spending accounts for about 1.3% of its GDP, relatively lower compared with the US (4%) and other Western powers. It has territorial maritime disputes with Japan over the Diaoyus/Senkakus, and with Vietnam/Philippines in the South China Sea (Spratlys).  Beijing claims about 90% of the South China Sea, with its access to critical maritime choke-points, and huge oil & gas reserves.  30 years' ago, China was self-sufficient in oil.  Today, it has almost replaced the US as the largest oil importer in the world.  China is hence very unlikely to change its hard-line position on sovereignty issues, regarding them as core, vital national interests.


3 China's continued increases in military spending is, unsurprisingly, making its neighbors very nervous. It has led to a dangerous regional arms race.  Japan has great power ambitions.  Tokyo increased its military spending this year by 2.8% to US$42 billion, and has strengthened its security alliance with the US. The aim is to deter and counterbalance China. Tokyo has re-built an increasingly powerful Self Defense Forces (SDF).  PM Shinzo Abe is seeking to change Japan's pacifist post-war Constitution, to enable Japan to play a great power role in the Asia Pacific.  On 26 March 2015, it was reported that Japan's military had just taken delivery of its latest helicopter-carrier, the mammoth Izumo, its biggest and most sophisticated warship since 1945.


4   China's PLA (People's Liberation Army) is 2.3 million strong, the largest in the world.  It has continued to add more sophisticated weaponry in its arsenal - submarines, warships, destroyers, more aircraft carriers, long-range missiles, and spaced-based laser weapons. The fighting quality of the PLA is, however, uncertain. Some Russian analysts have argued that the PLA would be quickly defeated by the US in a high-tech war.  The PLA has not fought a war since 1979.  Many of the top PLA generals have recently been purged and convicted in Xi's anti-corruption drive.  Although Chin's military power has strengthened, it still has a long way to go before becoming a full-fledged global military power.

5   One uncertainty is whether the US is prepared and ready to accommodate the rise of China.  The Obama Administration's Pivot to Asia Policy is seen by Beijing as an attempt to contain China's rise. In 2011, the US started the deployment of marines to the Australian city of Darwin.  There should be no doubt that the US is determined to maintain its primacy in Asia.  But Washington should be mindful of the need for skillful diplomacy.  In mid-March 2015, the US failed in its clumsy attempt to prevent other West European powers like the UK, France, Germany, and Italy from joining the China-led AIIB (Asian Infrastructure Investment Bank).  This was a major diplomatic defeat for the US.  Australia and South Korea are reportedly on the verge of becoming founding members of the AIIB.

6   The US is increasingly being seen as a declining hegemonic power. This will have an impact on perceptions of a changing distribution of the global balance of power. One factor is the US economic and fiscal difficulties. Two, the US is heavily indebted.  China is the largest holder of US Treasury bonds, with national reserves estimated at US$3.8 trillion. Another major factor is Washington's dysfunctional domestic politics.  GOP (Republican Party) hostility towards President Obama is actually very self-defeating, leading to growing perceptions of US global decline.  A power vacuum will be filled by other eager major powers, especially Russia and China.


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