The truth about China's military

China announced on March 4 that it is going to increase military spending by nearly 18 percent in 2007, according the Xinhua, the nation’s official news agency. This marks the sharpest rise in such outlays in a decade.

China’s defense spending has become a cause for worry in the region in recent years, with officials in Taiwan, India and Japan especially concerned. The United States too has complained, asking Beijing to be more transparent about its military expenditures.

With an economy developing at break-neck speed and a populace becoming wealthier and increasingly assertive, it’s easy to view China’s rise with alarm and even dread.

There is increasing talk of China “eclipsing” the United States. Some even warn that the People’s Liberation Army (PLA) will soon be a serious threat to the world.

To get a clearer picture of the true state of affairs, let’s take a closer look at China’s military.

Defense Spending

No one outside the Chinese government knows for sure how much is actually spent on the nation’s military. This is because Beijing purposely hides much of its defense outlays in other parts of the budget.

Military analysts can make an educated guess, however, and most say that China’s real defense spending is two to four times what is officially stated. Beijing has announced an outlay of 351 billion yuan, or about US$45 billion for 2007, which means the real defense budget could be as high as US$180 billion.

This is no small amount, and certainly shouldn’t be ignored. It’s more than four times Japan’s defense budget, almost nine times India’s and multiples of what Taiwan is spending. (Hence their concern.)

In fact, even if you use Beijing’s official figures, China has the second largest military budget in the world. (Russia is in third place.)

As alarming as this may seen, bear in mind that the United States plans to spend US$532.8 billion on its military this year, almost three times that of China, assuming the highest estimates of the Chinese defense budget are true.

How are Americans able to spend so much? Because the United States is a US$13 trillion economy, while China’s is closer to US$2.5 trillion in size. (2006 figures, per the official exchange rate, according the CIA’s World Factbook).

Remember that the next time someone tells you that China will soon displace the United States.

Weapons Systems

With more money to spend, China’s armed forces have been working hard to upgrade their weapons systems, and for good reason: many of their planes, tanks and ships are obsolete.

According to the Rand Corporation, over the past ten years Beijing has purchased a significant amount of military equipment from foreign suppliers, especially Russia.

This includes Su-27 Flanker and Su-30MKK fighter aircraft, Sovremenny-class destroyers, Kilo-class diesel submarines, and SA-10/15/20 surface-to-air missiles. As late as 2002 they were spending US$2.5 billion a year on such purchases. (Rand Corporation’s “Modernizing China’s Military,” published in 2005.)

China has also upgraded its own indigenous manufacturing capability to produce sophisticated main battle tanks, destroyers, diesel-electric submarines (with a nuclear model in development as well), anti-ship missiles and the J-10 fighter aircraft that experts say is equivalent in performance to the F-16.

Alarmists – usually those who see no difference between the PRC of today and “Red China” of the past – raise a hue and cry whenever one of these weapons systems are purchased or China makes a breakthrough in defense technology. They’re certain the end is near and that the PLA will soon be marching on Washington.

The truth is, however, that despite China’s weapons upgrades, its military is still far from a world-class fighting force. Roger Cliff, from the Rand Corporation, testifying before the U.S.-China Economic and Security Review Commission on March 16, 2006, put it best:

“China has yet to develop a dedicated attack helicopter; its anti-submarine warfare technology is weak; it appears to be nowhere close to fielding any kind of stealth aircraft; it does not have a super-agile infra red-guided air-to-air missile like those produced by the U.S., Russia and Israel; and it has nothing like the range of precision air-to-ground munitions employed by U.S. air forces.

“For China to be able to challenge the United States for military dominance in East Asia it will need to solve these and other shortcomings.” (Rand Corporation’s “Advances Underway in China’s Defense Industries,” published March, 2006.)

One glaring shortcoming is that China does not possess even a single aircraft carrier, which means it has a limited ability to project its power beyond its shores.

A Regional Threat

Cliff’s last point is key because he specifies East Asia. What’s important to bear in mind is that although China’s military is not a world-class fighting force, it is a regional juggernaut.

And, according to Chinese officials, that’s primarily what the PRC is concerned about nowadays: it’s immediate neighbors, specifically Taiwan. This island economy used to be governed from Beijing like any other Chinese province until civil war broke out and the Nationalist KMT government fled across the Taiwan Strait in 1949 and set up a rival capital.

China is so bent on preventing Taiwan from breaking away from the mainland that it has hundreds of missiles pointed at it, and has threatened to attack if the island declares independence.

This is the potential flashpoint that could cause a military clash between the United States and China, as Washington counts Taiwan as one of its close allies and President George W. Bush once said he will “do whatever it takes” to defend the island from attack.

Unlikely to Happen

Such a scenario is unlikely to occur, however, because it is in none of the economies’ interest to start such a conflict.

The United States and China did more than US$342 billion worth of trade last year, (according to the U.S. Census Bureau, Foreign Trade Division), and hundreds of U.S. companies have offices and manufacturing plants in China.

Likewise, thousands of Chinese companies rely on exports to the United States for their livelihood, and some have succeeded in setting up branches in North America. A select few have even gotten permission (from Beijing) to list on U.S. stock exchanges, and many more wish to follow in their footsteps.

A military clash would wreak havoc with this lucrative trade, and no one wants that.

Taiwan and China’s economic ties are even stronger, and they’re bolstered by family ties that go back generations and are being forged anew as more intermarriage takes place across the Taiwan Strait.

So don’t panic when you hear that China is on the rise and its military is improving. The PRC is an important country and the Chinese are an amazing people, but the nation is not about to supplant the U.S., and the PLA isn’t poised on dominating the world.

(This article has also been posted on Helium.com.)