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Keeping Up with China's PLAN

Keeping Up with China's PLAN

Now that it possesses a large and modern navy, Beijing is determined to advance China’s security in East Asia, necessarily challenging U.S. alliances and security interests.

Robert S. Ross

April 15, 2018

May-June 2018

CHINA IS no longer simply a rising power. It is now a maritime power that competes for influence with United States from the Korean Peninsula, through mainland Southeast Asia and to the Strait of Malacca. China challenges U.S. alliances and the U.S. Navy’s dominance of East Asian waters.

China’s navy has made significant gains in closing the gap in U.S.-China maritime capabilities. These gains have accelerated the power transition in East Asia, enabling China to advance its interests in East Asia and challenge U.S. security and defense strategy. These developments have undermined regional stability, raised the risk of U.S.-China hostilities and transformed the regional balance of power.

China’s challenge to U.S. security in East Asia is clear. But the United States is currently unable to compete with China and maintain the regional security order. The economic, political and institutional changes necessary to contend with China’s growing naval power are daunting. Unfortunately, the United States has yet to confront this challenge.

FOLLOWING THE end of World War II and the onset of the Korean War, the United States established air, naval and ground force bases in South Korea, Japan and the Philippines. In the 2000s, it expanded its naval presence in Singapore and Malaysian port facilities. Into the early twenty-first century, America dominated the seas of East Asia.

U.S. maritime superiority contributed to regional peace and prosperity. It provided the stability that enabled the region to focus on economic cooperation rather than on security conflicts. China benefited from this strategic order. Since the late 1970s, it prioritized economic growth over military modernization. Nonetheless, China’s acceptance of this U.S.-based strategic order reflected its naval weakness, rather than its understanding of Chinese security interests. Chinese economic prosperity and security depended on American good intentions.

China has long criticized America’s East Asian alliances as remnants of “Cold War thinking.” But this was not simply an ideological objection to U.S. policy. Rather, American alliances enabled the United States to encircle China’s coastal waters with military bases in South Korea, Japan and the Philippines. Its strategic partnership with Singapore allowed the United States to treat Singapore as a de facto naval base. These facilities have enabled the United States to carry out extensive and close-in surveillance of China’s coastal air and naval facilities and its naval operations and to challenge Chinese coastal security.

China never accepted U.S. maritime dominance. Now that it possesses a large and modern navy, China’s leaders are determined to advance China’s security in East Asia, necessarily challenging U.S. alliances and security interests.

For much of the post–Cold War era, China remained focused on developing ground-force superiority along its periphery. Russian military resurgence in Northeast Asia remained a possibility, and the border conflict with India was a persistent security concern.

In the past five years, however, China has developed greater confidence in its border security. Most important, the Russian threat has diminished. As China has modernized its economy, its infrastructure and its military, it has benefited from the persistent decline of Russia’s population, economy and infrastructure in the Far East; its inability to reform its economy; and its preoccupation with U.S. military presence in Europe and the Middle East. Chinese observers now dismiss the possibility that Russia could challenge Chinese security or “balance” against China.

Elsewhere around its border, China enjoys unchallenged superiority. India has yet to develop the technology or the economic resources to challenge Chinese security. It lacks the naval power to monitor its coastal waters, much less challenge China in East Asia. It continues to import its most modern naval ships, and the large GDP and technology gaps between the China and India expand every year. Relative to China, India is a declining power. Along the rest of its border, China dominates its smaller neighbors. Vietnam, despite its traditional hostility toward China, must contend with the large and modern Chinese army just across its border, while its army has stagnated since the end of its occupation of Cambodia in 1991.

China’s mainland strategic environment looks much like America’s strategic environment in North America; it possesses the secure borders necessary to become a naval power.

As China focused on border security, its naval modernization program proceeded at glacial pace. It developed successive generations of naval ships, but it produced only a few prototypes within each generation. It focused on the development of the advanced technology and training necessary to construct a modern navy. But just when China developed confidence over its territorial borders, its navy developed the technology and skills necessary to build and operate a capable maritime force. Thus, within the past decade, China began to reallocate its defense spending to begin serial production of naval ships.

From 2010 to 2017, the number of Chinese naval ships increased from approximately 210 to 320. In 2016 alone, the Chinese navy commissioned eighteen ships. At three hundred ships, the Chinese navy is already larger than the U.S. Navy, and before long it may operate four hundred ships. It commissions nearly three submarines each year, meaning that in two years China will have over seventy submarines. The Chinese navy is also deploying significant numbers of cruisers, destroyers, frigates and corvettes, all equipped with long-range antiship cruise missiles. Between 2013 and 2016, China commissioned over thirty modern corvettes. At current shipbuilding rates, in fewer than fifteen years China could have 430 surface ships and a hundred submarines.

As the size of China’s fleet has increased, its navy has decommissioned its older ships. In 2010, fewer than 50 percent of Chinese ships were “modern”; in 2017, over 70 percent of the fleet is modern. China’s diesel submarines are increasingly quiet, and challenge U.S. antisubmarine capabilities in the South China Sea. Similarly, China’s ship-launched and air-launched cruise missiles possess significant range and stealth, and rely on increasingly sophisticated targeting technologies.

Complimenting China’s naval capabilities are its conventional medium- and intermediate-range ballistic missiles that target maritime facilities throughout East Asia. U.S. strategic facilities in South Korea, Japan, the Philippines, Singapore, Malaysia and Guam are now vulnerable to Chinese ballistic missiles. U.S. missile-defense systems cannot defend against the large quantity of ballistic missiles that China can target and significantly degrade U.S. naval facilities throughout the region.

AS CHINA has increased the size and quality of its navy, the United States has not stood still. On the contrary, in many respects it has been going backwards.

The current size of the active U.S. fleet is approximately 282 ships. The number of its attack submarines has declined since 2010, to fifty-one ships in 2017. The current Navy budget calls for the steady expansion of the fleet. Nonetheless, the Congressional Budget Office estimates that if the Navy continues its average annual budget over the prior thirty years, and maintains its construction schedules for aircraft carriers and ballistic-missile submarines, in twelve years the size of the active naval fleet will decline to 237 ships. In six years, when the Chinese navy will possess over seventy attack submarines, the U.S. submarine fleet will decline to forty-eight ships. In eleven years the number of U.S. attack submarines will decline to forty-one ships. Current Navy plans call for an increase to sixty-six submarines in thirty years.

The U.S. Navy is acutely aware that China’s naval shipbuilding and modernization challenge U.S. maritime superiority and operational capabilities in East Asia. In 2015, it developed a plan to increase the size of the active fleet to 308 ships by 2022. In 2017, the Trump administration advocated for a 355-ship navy. These goals are neither realistic nor adequate to meet the challenge of the Chinese navy.

To reach 308 ships, the Navy would have to spend 36 percent more than its average shipbuilding budget over the past thirty years, and receive a one-third increase to its current budget. If funding continued at the past thirty years’ average, then in another thirty years the Navy could purchase seventy-five ships fewer than it plans. To reach 355 ships, the Navy would need a budget 60 percent greater than the average budget over the past thirty years and a two-thirds increase in its present budget. It is not clear where the United States will find the funds to support a 308-ship navy, much less a 355-ship navy.

Given current budget and political constraints, in November Thomas Dee, the acting under secretary of the Navy, observed that the Navy could eventually reach 355 ships—but at best in the 2050s, and only with a significant infusion of funds. He ruefully observedthat “you can’t always get what you want.”

Reallocation of the federal budget to support ship construction is not likely. Mandatory spending constitutes 60 percent of overall federal spending, but Congress has shown no interest in reducing mandatory funding for social programs. On the contrary, in recent years Congress has increased spending on Medicare, Medicaid, transportation and veterans’ benefits, and it will not consider reduced funding for Social Security benefits. On the other hand, the Pentagon already receives over 55 percent of the discretionary budget, and the remainder of discretionary spending is spread over eleven sectors, including education, additional funding for veterans, Medicare and health benefits, and infrastructure.

The federal government could raise income taxes, corporate taxes and/or capital-gains taxes to raise additional funding for the Navy. But this, too, is implausible. In 2018 the federal government reduced taxes.

The United States could print more money and significantly increase the federal deficit to increase naval spending. In the short term, this might contribute to increased naval shipbuilding. But over the long term, the harm to the U.S. economy would more than offset any benefits that a larger navy might contribute to U.S. security in East Asia.

The United States could reallocate funding within the Department of Defense budget. Currently, the Navy, the Army and the Air Force receive approximately equal shares of the annual defense budget. This allocation does not reflect prioritization of the challenges to U.S. security, but rather the politics of defense spending. Reduced spending for the Army, which contributes little to U.S. maritime security in East Asia, would allow for a significant increase in Navy shipbuilding. Nonetheless, there is little resolve in either the Department of Defense or in Congress to reallocate funding within the military.

IN THE absence of a robust shipbuilding budget, the United States has relied on technology to offset China’s numerical advantage. U.S. development of advanced-technology weapons is impressive, including research on laser weapons, the rail gun, carrier-based attack and reconnaissance UAVs, underwater antisubmarine drones, and long-range antiship cruise missiles to contend with China’s ship-based antiship cruise missiles.

The United States still possesses considerable technological advantages over China, but the global diffusion of technology is very rapid. Over the next decades, the U.S. technological lead will narrow as China continues to modernize its fleet and it develops its own advanced weaponry, including attack and surveillance drones, laser weaponry and rail-gun technologies.

Moreover, China can continue to fund construction of large numbers of ships that will offset U.S. technological superiority. And because China’s port facilities are in the region, it requires fewer ships than the United States to maintain an equal number of ships in East Asian waters. In naval affairs, technology is important, but, in sufficient numbers, “quantity can have a quality all its own.” Thus, the U.S. Navy is developing new tactics to deal with size of the Chinese surface fleet, including “dispersed lethality” technologies.

Some advocates of a 355-ship navy have proposed that the U.S. Navy return to service ships currently mothballed. But these proposals simply reflect an interest in supporting a larger navy, rather than a thoughtful effort to contend with China and with the U.S. Navy’s budget problems. The Navy has opposed this plan. The funds for operating these older ships would cut into the operating budget for the Navy’s more modern vessels, thus diminishing the Navy’s combat capabilities.

Moreover, the Navy’s shipyards cannot adequately maintain the existing 272-ship navy, much less an expanded one. The condition of the shipyards is poor, and the number of deferred maintenance and restoration projects has grown by over 40 percent in the past five years. Due to maintenance and repair delays, the Navy has lost 1,300 days at sea for aircraft carriers and 12,500 days for submarines. A significant increase in shipyard budgets will have to accompany any increase in shipbuilding to make a larger navy effective.

Most important, even a 355-ship navy would likely be inadequate to contend with China’s shipbuilding program. China will simply not accept U.S. efforts to maintain the regional security order and U.S. maritime dominance. Chinese leaders have suggested that they are prepared to increase ship production should the United States challenge China’s growing naval presence in the South China Sea. Given China’s financial resources and its security interests, it will likely prefer to engage in a naval arms race rather than accept the status quo.

As a share of GDP, the U.S. defense budget is nearly 75 percent larger than China’s defense budget. In contrast to the United States, China’s social-welfare budget, including veterans’ benefits, is a minimal part of its national budget; it does not have a costly volunteer army; it can reallocate its defense spending to support its navy; and it is not involved in distant land wars that strain its military budget. Secretary of the Navy Richard V. Spencer has reported that “when it comes to China, the bottom line there is the checkbook,” and that China’s “open checkbook keeps me up at night.” In short, China is better positioned than the United States to race.

CHINESE SUBMARINES, surface ships armed with antiship cruise missiles, and ballistic missiles now challenge U.S. access to East Asia’s “internal” seas, including the South China Sea. The Pacific fleet navy spends 70 percent of its time training in the South China Sea, but it will not fight in the South China Sea. It operates in East Asian waters to maintain “presence,” rather than train for war. The entire region is adjusting to the changing East Asian balance of power.

China’s improved capabilities have transformed Chinese policy. In just eighteen months, from late 2012 to early 2014, China carried out a series of challenges to the regional order. It established a regular coast guard presence within twelve miles of the Japanese-claimed Diaoyu/Senkaku Islands, established permanent occupation of the Philippine-claimed Scarborough Shoal, drilled for oil in the South China Sea, declared an air-defense identification zone over the East China Sea, challenged Vietnamese naval and fishing activities in disputed waters and created multiple crises in Sino-Vietnamese relations, began reclamation of submerged features in the South China Sea, and increased air and naval surveillance of U.S. military operations. Since then, China has built defense facilities on the reclaimed islands and maintained pressure on states that challenge Chinese territorial claims.

This record of Chinese strategic activism stands in stark contrast to the diplomacy of “peaceful rise.” It reflects the insistence and impatience of a new great power for greater security in a revised regional order.

America’s response to China’s strategic activism is the expected behavior of a declining and uncertain power. Concerned by China’s apparent lack of restraint and for the stability of U.S. alliances, the Obama administration “pivoted” to East Asia. In short order, it reached new defense agreements with the Philippines and South Korea and increased deployments in both countries, it deployed in South Korea its terminal high-altitude area defense system (THAAD), strengthened naval cooperation with Vietnam and gained access to Malaysian port facilities for surveillance of Chinese submarines. The U.S. Navy carried out highly publicized operations within twelve miles of Chinese reclaimed territories to signal its resolve to deter Chinese expansionism and its commitment to the defense of its allies. U.S. resistance to China’s rise was also reflected in Washington’s ill-advised opposition to China’s Asian Infrastructure Investment Bank.

The trend in the U.S.-Chinese military balance has contributed to heightened regional tension. In 2016, as the region awaited the Permanent Court of Arbitration’s ruling on China’s claims of an exclusive economic zone in the South China Sea, the United States adopted high-profile military measures to deter suspected Chinese plans to use force, should the court rule against China. At the same time, China feared that the Philippines, confident in U.S. support, would use a legal victory to challenge Chinese control over disputed waters. Greater U.S.-China tension in East Asia reflects the acceleration of the U.S.-China power transition.

THE OBAMA administration tried to strengthen U.S. alliances. But because the United States lacked the requisite military capabilities to offset Chinese naval modernization and to maintain dominance in China’s coastal waters, U.S. security partners have lacked confidence in the United States’ ability to balance the rise of China, and have developed greater security cooperation with China.

America’s efforts to strengthen the U.S.–South Korean alliance, and its deployment of THAAD in South Korea, elicited Chinese hostility toward South Korea and costly Chinese sanctions on a range of South Korean industries. But rather than strengthening relations with the United States to contend with Chinese hostility, South Korea accommodated China.

In July 2017, South Korean voters elected Moon Jae-in as president. During the campaign, Moon had pledged to stop U.S. deployment of THAAD in South Korea and restore good relations with China. After his inauguration, his first phone call as president was to Xi Jinping. To persuade China to end its sanctions and restore cooperation with South Korea, Seoul assured Beijing that it would not allow any additional deployments of THAAD, and that the existing THAAD systems would not be integrated into a U.S.–Japan–South Korea missile-defense system. It also vowed that it would not join in U.S.–Japan–South Korean alliance coordination, indicating that it would not join a U.S.-led Indo-Pacific coalition. This quid pro quo was the first China–South Korea security agreement that limited South Korean cooperation with the United States.

The new Philippine president, Rodrigo Duterte, similarly reconsidered his predecessor’s security policy. To establish its resolve to contend with China and organize a coalition against Chinese claims in the South China Sea, the Obama administration had encouraged President Benigno Aquino to bring the Sino-Philippine dispute over overlapping exclusive economic zones to the Permanent Court of Arbitration. In 2016, the court ruled in favor of the Philippines.

The Philippines had challenged Chinese sovereignty in waters that have, at best, insignificant mineral deposits. And it was foolish to think that China would submit to the decision of five men sitting in Europe and relinquish its sovereignty claims in the South China Sea; China ignored the court’s ruling. But the Philippines had isolated itself in Southeast Asia because, with the partial exception of Vietnam, the region refused to support Manila, and it incurred Chinese diplomatic and economic sanctions and faced the Chinese Coast Guard’s exclusion of Philippine fishing boats from disputed waters.

Duterte reversed Philippine policy. He stated that the court’s decision was irrelevant to the Sino-Philippine dispute and that the dispute was best ignored, rather than negotiated. He also reduced U.S.-Philippine naval cooperation in disputed waters and expanded Chinese naval access to Philippine ports. During his visit to China, he declared that, in economics and military affairs, “America has lost.” In response, China restored economic cooperation, pledged $24 billion in aid, provided military assistance to the Philippines’ battle against its Muslim insurgency and allowed Philippine fishing boats to return to disputed waters.

The Obama administration expanded U.S.-Vietnam naval cooperation. In 2012, Secretary of Defense Leon Panetta said that U.S. access to Cam Ranh Bay “is a key component” of U.S.-Vietnam relations. In 2014, the administration lifted the ban on U.S. arms sales to Vietnam, and in 2015, it agreed to expand U.S. exports to Vietnam of defense equipment and technologies, provided aid to Vietnam to purchase U.S. ships and included Vietnam in its Southeast Asia Maritime Security Initiative, helping Vietnam bolster its maritime intelligence, surveillance and reconnaissance capabilities. In 2018, a U.S. aircraft carrier anchored off the Vietnamese coast near Da Nang.

Like South Korea and the Philippines, Vietnam has responded to Chinese pressure by accommodating Chinese interests. After heightened tension in 2011–12, Vietnam jailed anti-Chinese nationalists, restrained its support for the Philippines in its dispute with China and assured China that it would not involve the United States or international law in its dispute with China. In 2014, when Chinese oil drilling in disputed waters led to a maritime confrontation and to anti-Chinese demonstrations in Hanoi, Vietnam expressed regret for the protests and assured China that it would not challenge the status quo in the South China Sea. In 2017, China compelled Vietnam to end its joint oil drilling with a Spanish company in disputed waters. Symbolic U.S. naval cooperation with Vietnam cannot offset overwhelming Chinese ground-force superiority on the Vietnamese border.

China has also expanded defense cooperation with Southeast Asian countries. In 2015 China and Malaysia held their first joint military exercise, and in 2017 they established a high-level defense committee to expand cooperation. In 2017 China and ASEAN agreed to hold their first region-wide naval exercise. Chinese-led naval exercises pale in comparison to the size and sophistication of U.S.-led exercises, but they are part of a larger trend of region-wide security cooperation with China.

The only steadfast U.S. ally in East Asia is Japan; it is the only country that has resisted the pull of Chinese power and more closely aligned with the United States. But given the contrasting long-term trajectories in Chinese and Japanese demography, economics and military spending, Japan cannot contribute to balancing Chinese power.

Faced with China’s challenge to U.S. alliances and naval superiority in East Asian seas, the U.S. Navy seeks greater cooperation with Japan, India and Australia in its “Indo-Pacific strategy.” Japan, India and Australia cannot help balance Chinese naval power, but the U.S. Navy requires access to air and naval facilities far from China’s mainland and secure from Chinese missiles and submarines. It is expanding the range of its aircraft to enable naval operations far from the South China Sea. U.S. defense strategy is adjusting to the rise of the Chinese navy.

TRENDS IN U.S. politics and economics suggest that America’s decline in the maritime balance of power will deepen over the next decade. The U.S. Navy is committed in two years to operating 60 percent of its ships in East Asia, but this will be 60 percent of a shrinking fleet. Moreover, the Navy is already significantly stressed by its current responsibilities in East Asia, and requires more ships to sustain its current level of operations. It has established an independent agency to monitor the fleet’s training, readiness and standards, and has imposed regulations to ensure that sailors get sufficient rest.

Over the next decades, to meet the Chinese navy’s challenge to U.S. regional security, the U.S. Navy will have to concentrate 70 to 80 percent of a smaller fleet to East Asia, so that it will not be able to sustain a significant naval presence in the North Atlantic, the Mediterranean and the Persian Gulf. The new U.S.-China balance of power will challenge American security interests and regional stability, not just in East Asia, but throughout the world.

China faces severe economic difficulties that will challenge its ability to sustain its rise. Its economic growth has declined from 10 percent per year to less than 7 percent per year. It has yet to reform the party-controlled financial system, and its national debt is approaching 300 percent of GDP and continuing to grow. At the recent Nineteenth Congress of the Chinese Communist Party, Xi Jinping called for greater party control over the economy and strengthening of state-owned enterprises. Rather than enhancing the role of market, China is retreating from the market economy.

But China will not have a crash landing. The Chinese Communist Party will prop up the banks and the state-owned industries. The decline of the Chinese economy will be a protracted process. Over the next ten to twenty years, China will continue to increase naval spending and strengthen its capabilities vis-à-vis the United States. The United States cannot count on China’s increasingly dysfunctional economic system to rescue U.S. security in East Asia.

Without a radical and improbable restructuring of the U.S. federal budget or defense budget, current trends in the East Asian balance of power will continue and the United States’ ability to contend with the Chinese navy will diminish. In these circumstances, proposals for how to deter China, contain China or balance the rise of China and how to strengthen U.S. alliances are illusionary. Rather than hold on to outdated notions of U.S. preeminence, the United States will have to adjust to the new balance of power in East Asia.

Robert S. Ross is a professor of political science at Boston College and an associate at the Fairbank Center for Chinese Studies, Harvard University. His research focuses on Chinese security policy and East Asian security, including the rise of China, Chinese use of force and U.S.-China relations


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