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The U.S. Response to China’s Military Modernization

An Interview with Mark Cozad

By John Ryan
June 4, 2015

The 114th Congress has the opportunity to set the tone in military relations with China through the National Defense Authorization Act (NDAA) for 2015. As the NDAA awaits approval in the Senate, some analysts have raised concerns about the potential for an escalating arms race between the United States and China, while others have emphasized the rate of growth in China’s military expenditures and lack of transparency in budgets and intentions. China has consistently increased its official annual defense expenditures for more than two decades, while appearing to emphasize strategic forces modernization and the development of key anti-access/area-denial (A2/AD) capabilities. These military investments provide China with a greater ability to project and sustain power at increasingly longer ranges while also challenging U.S. power-projection capabilities by attempting to undermine traditional U.S. technological advantages.

Given these competing considerations, how should U.S. policymakers best address growing Chinese military power? In this Q&A, Mark Cozad of the RAND Corporation analyzes the new defense capabilities that China has developed and their effect on U.S. interests in Asia. He maintains that Chinese military modernization has advanced even when U.S. attention was focused on Afghanistan and the Middle East and recommends robust development of U.S. military capabilities to maintain the balance of power and the United States’ leadership role in Asia.

China’s defense spending is now outpacing its economic growth. Although official data from China is opaque, real defense spending is estimated to be 35%–50% higher than stated. What military procurements and programs are supported by this spending? How concerned should the United States be? Can the U.S. Congress take any action to address these concerns?

The United States should be very concerned and vigilant given the opacity of the Chinese defense budget. Regarding the issue of transparency, there is not really any analysis that gives a good understanding of funding, with a detailed methodology or approach on how estimates of actual spending are reached. It is an opaque and an inexact science—it is not clear if money is going to new weapons systems, new technologies, research and development, training, personnel, command and control, or intelligence, surveillance, and reconnaissance (ISR), among many other possibilities. We do know that China has acquired a lot of new systems that require a significant amount of training and integration. Funding increases could be for training to develop a more professional force or incentivize people to stay in the military in a job market where other, more local opportunities are available. Similarly, these increases could be focused on foreign procurement, indigenous research and development, and militarily significant infrastructure, all of which are concerning.

Congressional leverage to increase Chinese transparency is limited. For example, limitations on military-to-military engagement to change China’s behavior have only a negligible impact because the Chinese side values the practical benefits of these engagements much less than the United States does. Given that China sees itself as the weaker of the two parties and at a distinct disadvantage, its lack of transparency is a strategic decision. If transparency increases, this raises the question of why? What is Beijing trying to show?

This opacity does make it quite challenging for China to portray its rise as peaceful and nonthreatening, particularly at a time when Beijing is accusing others of militarization—namely Japan—and is starting to press its claims in the region more aggressively and more confrontationally.

Although supplemental funding for Overseas Contingency Operations and congressional additions have helped offset the bite of the Budget Control Act (sequestration) in defense spending, how have cuts to the base budget affected the U.S. posture in Asia and the United States’ ability to respond to China’s increasing capabilities?

This topic is best understood in terms of perceptions in Asia. Sequestration and U.S. engagements in other regions have raised questions in many Asian countries about whether the United States is willing to be there. The United States should be careful not to take the entirety of these concerns at face value, as there are definite incentives for countries to raise questions regarding our commitment. For China, raising these questions may help undermine U.S. credibility, while U.S. allies could use such speculation to spur the United States to deepen its commitment. If there are sustained and noticeable defense cuts, their impact on exercises, deployments, and crisis response capabilities in the region would have a significant effect on the U.S. ability to counter the Chinese narrative (of an America in decline).

On the other hand, not all of the implications of U.S. fiscal constraints work in China’s favor. One of the things that is remarkable about Asia over the 25 years since the end of the Cold War is the relative lack of massive arms spending by most regional states. There are countries with well-equipped, capable militaries, such as South Korea, Japan, and Singapore, but for the most part when you look at the region, these militaries lack massive arms spending and buildup. The Republic of Korea’s military is largely confined to the Korean Peninsula and focused on the threat from the North, while Japan’s forces have been focused on self-defense. In Southeast Asia, a region that has grown considerably in wealth, there are some new advanced systems but not great numbers. Singapore’s military is one of the most capable, but it is not a large force and is narrowly focused on Singapore’s immediate environment. If there is a perception of U.S. spending cuts and declining readiness in the region, there will be an increased effort by these countries to purchase weapons systems, whether from the United States, Western Europe, or Russia, especially if China becomes more aggressive about its territorial claims. This potential development could work against China, but it is also not necessarily a good thing for the United States because such a development could create regional conflicts we would have to respond to. These issues create a delicate balancing act.

What lessons has China learned from U.S. military actions, and how have those lessons been put into practice as part of the A2/AD concept? How is the United States responding to Chinese A2/AD strategies, and what technologies, programs, and platforms serve this end?

A2/AD is an American term, but it is reflective of a lesson Chinese planners learned from the first Iraq war and Operation Allied Force (the 1999 NATO bombing of Yugoslavia): namely China cannot allow another country to move forces into the region and act with impunity around Chinese borders during a conflict. Through the 1990s, in the former Yugoslavia, the first Iraq war, and up to the war in Afghanistan, the United States had a great track record of surprising China with its capabilities, largely based on operational concepts or technologies developed for something other than China. Each revelation required a whole series of responses on China’s part. Beijing would have the realization, “We need to be able to do that as well,” for things like advanced sensors, precision strike, advanced command and control, and networked operations. In addition, China associated U.S. technologies and capabilities with operational concepts that it felt it needed to develop, whether employed itself or as a counter-capability, such as air defense and precision strike.

After 1996, China recognized that aircraft carriers were vulnerable, not just to the DF-21D antiship ballistic missile, but to submarines and other capabilities. This is also a vulnerability that the United States must still address. Since Afghanistan in 2005, Chinese policymakers have had to spend less time responding to new U.S. technologies, operational concepts, and capabilities as they did in the 1990s and early 2000s, given the United States’ involvement in counterterrorism and counterinsurgency operations that were not necessarily applicable to a U.S.-China scenario. In a lot of respects, China continued developing capabilities that it derived from earlier lessons learned.

An interesting recent development was the impact that the idea of "air-sea battle" had on the Chinese military planners. They took U.S. documents on air-sea battle written by authors outside the government, translated at least one verbatim, and republished it for use in military institutions. Overall, they paid close attention to these developments and demonstrated a significant degree of concern. The biggest impact the United States can have is to pursue technologies, platforms, and operational concepts that could negate or severely diminish the effectiveness of China’s major investments made in response to developments initiated in the 1990s, or even prevent them from coming to reality to force a change in modernization. A lot of work remains to be done in this area, but investments to counter ballistic missiles, ISR sensors, electronic warfare, and anti-radiation weapons are a just a few examples of areas where this approach might be effective.

There have been conflicts between service priorities, congressional aims, and budget realities on developing and funding weapons platforms. How do these weapons platforms fit into the U.S. strategy to deter Chinese aggression without triggering a security dilemma for China? How can the United States address A2/AD given current budget realities?

China has been modernizing its military since the early 1990s, even during a period when the United States was perceived as being engaged in other places against a variety of different threats. Thus, the notion that the United States’ development of new capabilities is somehow going to force China to engage in a more robust modernization effort is questionable. China has already been engaged in that effort, and U.S. actions will fit into a certain Chinese narrative of “containment,” such as the accidental bombing of the Chinese embassy in Belgrade. The United States is not likely to create a security dilemma by developing capabilities that offset the gains that China has made over the past several years. In some respects, it would be unwise to respond to China’s very specific, targeted programs for the key capabilities of U.S. programs. The United States’ lack of modernization would not discourage further Chinese modernization, which proceeds according to its own internal logic.

In terms of the United States’ ability to afford these capabilities, it is a basic issue of priorities. A high-end conflict with China is a relatively low probability, but such an event has the ability to swiftly escalate, making it extremely high-risk in relation to other scenarios. Developing these capabilities is a strategic judgment U.S. policymakers have to make. In the event that the United States were to lose a conflict with China, it would be hard for Washington to claim the leadership role in Asia that it has possessed for the past 70 years. For many other conflicts, the United States can mitigate those effects, but when it comes to China, Washington must be ready, even if such an outcome is a low-probability scenario. In terms of capabilities to emphasize, the United States should focus on long-range strike, stealth, and missile defense.

The timing of the Democratic People’s Republic of Korea (DPRK) regime’s demise is unknowable but an important contingency to consider. There is a nascent U.S.-China dialogue on this possibility. What actions support continued U.S.-China engagement on this topic?

I am quite skeptical of potential in this area and have few recommendations. Even though China’s relations with the DPRK are at their lowest point in quite some time, I suspect China’s willingness to work with the United States and the Republic of Korea on any kind of regime-collapse scenario is aimed at finding out more about our own strategic planning. After the sinking of the Cheonan in 2010, there was very little support or productive input in that process from Beijing. That situation was pretty cut and dry in what happened, but China still was unable to respond. This case was prior to the recent downturn in China-DPRK relations; however, it should serve as a cautionary example that highlights the areas in which U.S. and Chinese interests on the Korean Peninsula diverge.

In a discussion about the collapse of the DPRK, the possibility of a united Korea with potentially significant U.S. influence existing along the Chinese border is an important factor to consider. In that scenario, it is unlikely the United States would receive any degree of Chinese willingness to cooperate. The United States hears very little detail from China about its contingency planning, but Beijing is planning. Chinese military publications have discussed a range of operational concepts and scenarios that clearly demonstrate that China has been considering a North Korean collapse for several years now, but the scope for cooperation between the United States and China is extremely limited given conflicting strategic goals.

It is plausible that the Democratic People’s Party will win Taiwan’s elections next year and fulfill its campaign promise to purchase F-16s from the United States. How might China react to these arms sales? How would its reaction affect U.S. policy to Taiwan?

China’s response to any future arms sales will likely be very vocal and negative, but the practical effect beyond that will be limited. In the past, China has cut off military-to-military relations in a pro forma manner. Many capabilities it has developed have already taken into account the F-16. Arms sales to Taiwan are more a political problem for Beijing—since they would show that there is new life in the U.S.-Taiwan relationship—than a defense problem. Many questions remain about whether F-16s would have an impact in a conflict. Survivability is a concern given that China and the surrounding area are a difficult operating environment for the F-16: operating locations are already limited with the air defenses China has in place, and could become even more limited with the possible sale of the S-400 from Russia.

Nonetheless, unless the United States is willing to write off Taiwan’s ability to defend itself in a conflict between China and Taiwan, Washington will need to consider arms sales. China has developed and purchased large numbers of capabilities related to the U.S. position in Taiwan since the 1980s and 1990s. To offset these gains, the United States should consider sales of additional air-defense systems capable of countering ballistic missiles, devices to counter anti-radiation weapons, enhanced ISR, tactical air-defense systems, cruise missiles, and more advanced, survivable, mobile strategic air defense. The sale of F-16s alone would not fundamentally change this equation, but as part of a bigger arms package, such gains could help enhance Taiwan’s security.

John Ryan is an intern with NBR’s Political and Security Affairs group.

Mark Cozad is a Senior International Defense Policy Analyst at the RAND Corporation focusing on East Asia military and security issues. Prior to coming to RAND he was a senior executive in the Defense Intelligence Agency and the Office of the Director of National Intelligence with a primary focus on East Asia.

Ashton B. Carter, then Deputy Secretary of Defense, delivered the keynote address at the launch of Strategic Asia 2012–13: China's Military Challenge. Learn more about the volume and watch the event video.

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