China prefers guns over butter
Many observers are concerned about China’s current economic slowdown, including the possibility that the Chinese Communist Party (CCP) will attempt to replace nationalism with prosperity as the basis of legitimacy. Some also worry that the party will launch attacks abroad to deflect blame and garner support at home. These concerns are justified, as new data shows that the CCP decided years ago to use or threaten to use force to stay in power. From Beijing’s point of view, nationalism and military might are the keys to future prosperity, and if this is surprising, it is intentional.
Many observers are concerned about China’s current economic slowdown, including the possibility that the Chinese Communist Party (CCP) will attempt to replace nationalism with prosperity as the basis of legitimacy. Some also worry that the party will launch attacks abroad to deflect blame and garner support at home. These concerns are justified, as new data shows that the CCP decided years ago to use or threaten to use force to stay in power. From Beijing’s point of view, nationalism and military might are the keys to future prosperity, and if this is surprising, it is intentional.
China’s economic growth has been slowing for more than a decade, so the CCP has the task of managing the slowdown responsibly and – as urged by many Western policy makers and economists – moving towards more sustainable consumption-based growth. There is enough time for But the party has failed to implement this advice, perhaps because it would require structural changes that could weaken its hold on power. Instead, the CCP responded to slow economic growth by pouring resources into its military, the People’s Liberation Army (PLA).
Beijing attempted to hide the scale of this investment. Touting the party’s commitment to “peaceful growth”, Chinese officials released annual defense budget figures for the past decade, indicating they expect PLA spending to be roughly equal to China’s gross domestic product (GDP). are keeping – that is, that the PLA budget grows. were proportional to the wider economic benefits.
Even though China’s GDP is widely believed to be lower than reported and the PLA’s budget is higher, Beijing’s contention that the two are linked has been largely accepted by the global community. The party helped explain the largest peacetime military build-up since the 1930s.
For example, the Center for Strategic and International Studies describes Beijing’s “increasing defense spending” as “closely linked to its growing GDP”, as “since 2000, China’s Defense spending has been 2 percent or below.” This comforting summary is consistent with Chinese public data, but not common sense. Unfortunately, until now, every public estimate of Chinese defense spending – whether from the Stockholm International Peace Research Institute or the International Institute for Strategic Studies – has come from Beijing. Based on data released, including non-defense expenditure line items with minor changes, from the government budget.
If you look at how China progressively produced more new ships, aircraft and missiles in the last decade than you’d expect, and then wonder how the PLA budget can realistically only increase by single digits, as claimed Well, you were right. Suspicious. Our group’s independent, bottom-up estimates of Chinese defense spending show that investment in the PLA has significantly outpaced macroeconomic growth since at least 2015. It comes from a unique, open-source effort to recreate Chinese spending every year until 2000. Observable outputs from key categories including Purchasing, Personnel, and Operations and Maintenance. For example, we estimate the cost in dollars of each system or weapon deployed by the PLA based on its capabilities compared to its market economy analog, and then use a corresponding purchasing power parity exchange rate to account for the differences. Let’s convert to renminbi. Prices of goods and services in China compared to other countries. Although our absolute numbers are likely to be low for any given year, as we cannot price what we do not see (i.e., secret programs or underground facilities), this approach provides a longitudinal understanding of major cost centers and trends. Is. The PLA’s budget, independent of official statements from Beijing. We estimate that from 2015 to 2019, China’s military spending grew almost twice as fast as China’s official GDP in real terms.
PLA investment stalled during the height of COVID on the mainland in 2020 as Chinese shipyards shifted from building PLA naval ships, a traditional cost center, to building commercial ships – possibly because bulk carriers were being used to build warships. Stricter working conditions were required than in the construction of the U.S., and health concerns were paramount. But it appears that spending growth has resumed over the past year and is once again outpacing GDP growth. Chinese drydocks are buzzing again with nearly 20 major warships under construction; The PLA Rocket Force has begun a radical nuclear expansion; The PLA Air Force is investing more resources in procuring advanced aircraft; And China is orbiting a record number of military satellites, surpassing even the United States. All this is happening in the face of Chinese President Xi Jinping’s zero-COVID policy and the resulting economic crisis, which has exacerbated China’s macroeconomic slowdown.
In the midst of this crisis, Beijing’s decision to double defense spending – which coincides with a shift from the party’s “peaceful rise” to increasingly “wolf warrior” diplomacy – is a well-thought-out strategy. Bullied by credible threats, Beijing is in the process of robbing the rest of the world of the resources, market access, technology and capital it needs. In other words, the CCP is in a position to coerce or, if necessary, fight—this is the way to riches.
Consider the South China Sea. In 2010, on the sidelines of a meeting in Hanoi, then-foreign minister Yang Jiechi reacted angrily to the small regional countries’ persistence in defending their rights to the disputed islands and their surrounding waters. “China is a big country, and other countries are small countries, and that’s just a fact,” he explained.
Since then, China has tried to claim essentially the entire sea by building and militarizing new islands. Outposts in the South China Sea not only have symbolic and defense value, but also influence sea routes that serve as economic lifelines for East Asian countries dependent on both energy shipments from the Middle East and access to other overseas markets. Are. The acquisition of the South China Sea has enabled Beijing to lay claim to local fish reserves and gas and oil reserves under the sea.
As Xi speeds up this concluding campaign, he explains to the domestic audience his argument – what he calls the “dialectic of war and peace” – as follows: “Only those who are able to fight can prevent war. , And only those who are ready to fight can stop the war, not the need to fight. The creation of the PLA, then, is designed to enable the party to assert its interests abroad without fear of resistance.
Of course, the PLA’s history of engaging in China’s domestic economy makes it difficult to discriminate between defense investment for military purposes and internally oriented stimulus spending (i.e., make-work). But the focus of PLA investment over the last decade has been on expeditionary capabilities rather than traditional homeland defence. In the event that China fails to transition to sustainable consumption-led growth, Beijing will remain one of the world’s biggest hammers, and recalcitrant parties abroad may all look like nails.
This may also include the United States. In the face of the dominant PLA, US defense spending as a percentage of GDP is historically low, slightly above pre-9/11 lows. America is deeply trapped, while the CCP is on the run.
On its part, the CCP will claim it is responding to threats, but the PLA was built over a 20-year period during which US forces were focused almost exclusively on low-intensity conflicts outside the Indo-Pacific region. Equally, while Japan and Taiwan have begun to scale back and prepare for war, respectively, this is only a delayed reaction to the PLA’s ascendancy.
It remains to be seen how the United States will respond. The good news is that Xi’s own guidance implies that the United States can counter Chinese coercion and avoid conflict if it is able and willing to fight. While China’s spending is closing the gap, the US military still boasts the most valuable arsenal in the world, and US forces, thanks to a World War II legacy, are globally deployed to operate with allies and partners. Are. These residual forces should form the basis of a strategy to contain or, if necessary, defeat Chinese adventurism. To paraphrase Xi, Americans only need to “dare to speak to enemies in a language they understand.”
Source: foreignpolicy.com