Despite the much-vaunted “Asia pivot,” American defense spending and force allocations haven’t shifted that much to Asia. As China’s economy exhibits signs of slowing down, there have been questions about whether this would affect Chinese defense spending. China’s officials made clear that it would not when they announced this week that defense spending would again outpace economic growth rates in 2015.
China’s economic growth rate for 2014 is believed to be 7.4 percent, the lowest in a quarter-century, and below the projected mark of 7.5 percent. For 2015, Chinese planners are reportedly expecting only 7 percent growth. But reports indicate that China’s defense budget for 2015 will enjoy a 10 percent boost, sustaining a nearly two-decade-long trend of double-digit annual increases. However, this 10 percent growth marks the lowest hike in the defense budget in five years, below last year’s 12.2 percent increase.
China’s defense budget, which outpaces that of its neighbors, is the second largest in the world. As Bill Wilson, my China economist counterpart, has calculated, assuming that China’s official defense budget figure of $145 billion was accurate (highly unlikely), Chinese defense spending would equal that of the United States in less than 15 years. If China’s budget grew faster (e.g., if their economy recovered quickly), or if their starting point were higher (very likely) that time horizon would shrink even faster.
Meanwhile, the People’s Liberation Army has steadily modernized its forces over the past 20 years, transitioning from an army that fielded the world’s best obsolete equipment to one that incorporates sophisticated land, sea, air, outer space, and cyber and electronic weapons systems. These include two new stealth fighters, several new classes of submarines, and anti-satellite systems, as well as electronic warfare aircraft and airborne early warning platforms. As important, the Chinese appear to be devoting more resources to training, so that they can use that new equipment to maximum effect.
As China’s military forces have modernized, it has begun operating farther afield. In 2014, China dispatched submarines on several visits to the Indian Ocean. Chinese military spokesmen have indicated that this will likely mark a new pattern. This is in addition to the regular deployment of Chinese naval combatants to the Gulf of Aden as part of the anti-piracy patrol.
Countering this requires a robust American military, in conjunction with our regional allies. As The Heritage Foundation’s Index of U.S. Military Strength notes, however, the U.S. military is currently able to handle one contingency but would be hard-pressed to meet two. In the face of growing Chinese capabilities, mounting Russian aggression in Eastern Europe, and metastasizing terrorist threats in the Middle East, a static defense budget means accepting ever-heightening risk.
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