Can China Tip the Balance? The Security Dilemma in East Asia

The “rise of China” has been one of the most popular headlines of the 21st century. Books like Destined For War: Can America and China Escape Thucydides’s Trap? and Easternization: Asia’s Rise and America’s Decline have topped best-seller lists. Authors of these texts, as well as other scholars and policymakers, predict that China will not only continue to rise in economic terms but also transfer its resources into military might. As a consequence, many U.S. analysts worry that the People’s Republic will gain control over the South China Sea, claim hegemony in East Asia, and from there, challenge the United States’ position as the sole superpower.

Examining the military balance in East Asia, Michael Beckley, Professor of Political Science at Tufts University, found that China faces three major checks on these geostrategic ambitions. First, internal policing soaks up about 20 percent of China’s defense budget. Second, China’s regional rivals possess significant defensive capabilities. Third, China’s mounting debt, decelerating growth and changing demographics weaken its potential for future military modernization. In this context, Beckley proposed that the U.S. should provide targeted aid to allies in Asia, rather than attempt to command maritime East Asia itself. This would maintain the status quo without risking undue escalation.

Although China’s economy and military have grown at an incredible rate in recent decades, its capacity to project power abroad is limited, Beckley argued. Domestic concerns present one roadblock: the number of protests and riots has risen from 9,000 in 1993 to 280,000 in 2010. In addition, the People’s Republic faces intense homeland security issues, ranging from border disputes with India and Vietnam to sporadic insurgencies in Tibet and Xinjiang. For these reasons, the World Bank now ranks China 157 out of 212 on its index of political stability. Internal conflicts should not be underestimated; the People’s Liberation Army devotes 45 percent of its active-duty forces and 35 percent of its defense budget to internal policing and border defense.

With its leftover resources, China could try to claim territory in Taiwan or the South China Sea, but it would run into considerable barriers. First off, Beckley noted that the Chinese navy accounts for less than 30 percent of East Asia’s naval tonnage. (Contrast this with the 80 to 99 percent dominance enjoyed by the U.S. and Imperial Japan over their own regions at one time.) Moreover, China’s current number of naval vessels stands at near parity with its regional rivals. Most significantly, Beckley found that many anti-access/area denial (“A2/AD”) defense systems, such as anti-surface and anti-air missiles, can be acquired for about one-fiftieth the cost of the offensive assets they are meant to neutralize. Thus, even China’s weaker neighbors such as Vietnam, Indonesia and Malaysia—to say nothing of Taiwan, Japan and South Korea—could hold their own in the event of Chinese aggression.

Beyond the current security balance, Beckley forecasted about China’s future economic health. He suggested that the combination of slowing growth, mounting debt and changing demographics seriously undermines China’s ability to grow and modernize its military. In terms of output, China’s economic growth rate dropped from 15 percent in 2007 to 6.7 percent in 2016. While this number remains high by historical standards, China’s post-2007 growth is attributable to increases in investment, not productivity. As Chinese firms fail to improve how efficiently they use capital, they face diminishing returns and augment their debt. One estimate found the total corporate, household and government debt in China is as high as 300 percent of the nation’s GDP, or $28 trillion. Worse yet, China is set to undergo an aging crisis, the likes of which history has never seen. The ratio of workers-to-retirees is expected to decline from eight-to-one today to about two-to-one by 2040. The tradeoff between bailing out debt-ridden corporations, funding pension liabilities, and increasing the military budget will present a significant challenge for the Chinese Communist Party.

With so many headwinds in the way of China’s military rise, Beckley advocated a moderate U.S. strategy of active denial in East Asia, providing defensive arms and aid to America’s regional allies, while tempering the direct use of force. According to Beckley, this strategy would serve to deter China’s territorial ambitions, while also minimizing the risk of a devastating escalation between the U.S. and China.

Article source: Beckley, Michael, “The Emerging Military Balance in East Asia: How China’s Neighbors Can Check Chinese Naval Expansion,” International Security 42(2), (2017): 78-119.

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