Countering China’s Military Modernization

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Implications for the Region

China has been steadily building up its strategic and conventional capabilities since the 1990s. Eighteen years ago, experts say, China had a "bare-bones" military: basic capabilities, but nothing sophisticated or top-of-the-line. But two decades of double-digit spending increases have changed that picture. China says its 2008 defense budget is $61 billion, though the Pentagon has historically challenged Beijing’s reported figures. In its annual report to Congress, the U.S. Defense Department estimated China’s total military-related spending for 2007 to be between $97 billion and $139 billion, as compared to $52 billion reported by China. All that spending has gone to building a sophisticated, modern military: a large, increasingly capable submarine fleet, an air force stocked with Russian warplanes, and technical strides which have improved China’s ballistic missile arsenal, as well as satellite surveillance, radar, and interception capabilities.

China continues to stress that its military modernization is in line with its peaceful rise in the world. Its latest White Paper on national defense emphasizes it will never seek hegemony or engage in military expansionism. However, this has not alleviated concerns among its neighbors and regional rivals, say experts. A CFR Independent Task Force report (PDF) in 2007 on U.S.-China relations noted that many of China’s neighbors and potential adversaries were making adjustments to their own defense plans and expenditures to balance China’s growing military capabilities.

Japan: Japan and China compete over a host of issues, from regional security to international trade to access to energy. The two countries have a centuries-old history of conflict, including two Sino-Japanese wars that began in 1894 and 1931, and a bloody Japanese occupation of China during World War II. As this Backgrounder points out these animosities surface in recurring cycles, often involving Chinese anger over Japan’s perceived lack of contrition for wartime crimes. But concrete territorial and economic issues also aggravate the relationship, including Japan’s close alliance with the United States, trade frictions, and ongoing disputes over ownership of various islands in the East China Sea. In 2007, China and Japan ranked third and fifth respectively in national defense expenditures (PBS), both spending only a small fraction of the U.S. budget even after adjusting for gross underreporting by Beijing. China’s military modernization fuels Japanese fears that China will use its growing economic leverage and military prowess to throw its weight around and dominate the region. Tanaka Akihiko of the University of Tokyo, speaking at a December 2008 CFR symposium on U.S.-Japan relations said China’s growing military forces might change the balance of power in East Asia, which "would necessitate for Japan and the United States to readjust its force structure and other military management."

Japan has significantly upgraded capabilities over the past 15 years, deploying the Aegis radar and accompanying missile systems for its navy and warplanes armed with advanced air-to-air missiles for its air force. Since 1998, when a North Korean missile test violated Japanese airspace, Toyko has been working in partnership with the United States to develop theater missile defenses which have obvious application in the event of any conflict with China. Over the past decade the U.S.-Japanese security alliance has been strengthened through revised defense guidelines, which expand Japan’s noncombatant role in a regional contingency, allows for the deployment of an X-Band radar system in Japan as part of a missile defense system, expands bilateral cooperation in training and intelligence sharing, and allows a nuclear-powered U.S. aircraft carrier in the Yokosuka Naval Base. In September 2007 Japan joined a multinational naval exercise with the United States, Australia, Singapore, and India in the area west of the Malacca Straits. The exercise reinforced the U.S.-led campaign of strengthening security ties among its democratic allies and "the strategic countering (PDF) of Chinese military power," argues a December 2008 U.S. Congressional Research Service report.

In 2005, a joint statement by U.S.-Japan Security Consultative Committee 2005 for the first time included Taiwan as a common strategic objective where the parties would "encourage the peaceful resolution of issues" through dialogue. Though Japan’s foreign affairs ministry said this did not change the country’s position on Taiwan, many experts believe the shift indicates that Japan is increasingly concerned with China’s growing military capabilities.

Taiwan: It is the main driver for China’s militarization drive and biggest concern for the United States as this Backgrounder points out. Taiwan is also pursuing modernization goals which include procurement of army attack helicopters, army utility helicopters, PAC-3 missile defense systems, fighter jets, and diesel-electric submarines, as well as transformation of the military. Relations between China and Taiwan have improved dramatically under the administration of President Ma Ying-jeou, although U.S. arms sales to Taiwan remains contentious. In its white paper on national defense, China says the United States continues to sell arms to Taiwan "causing serious harm to Sino-US relations as well as peace and stability across the Taiwan Strait." In October 2008, Beijing suspended military contacts with the United States in protest of the U.S. decision to sell $6.4 billion in defense equipment and services to Taiwan.

South Korea: It has undertaken a major modernization drive, replacing antiquated fighter aircraft, frigates, tanks, and artillery pieces with advanced systems, many of them purchased from the United States or developed in partnership with U.S. defense industries, notes the 2007 CFR report (PDF). However, most experts say South Korea’s military initiatives are more in response to a possible conflict with a nuclear North Korea.A thorough look at the status of South Korea’s military is contained in CFR’s Crisis Guide: The Korean Peninsula.

Russia: The country is China’s largest supplier of advanced military hardware as well as a potential great power rival. Moscow experienced a significant decline in its overall military capabilities during the 1990s, but buoyed by strong oil revenues in the past decade, it has been increasing its defense expenditure, in what most experts see as a sign to counter U.S. influence in the region. The 2009 defense budget is expected to be $50 billion, a 25.7 percent increase from previous year. Fedor Lukyanov, chief editor of Russia in Global Affairs, told a January 2009 CFR meeting that there are limits to Russian military cooperation and arms sales to China. "We sold everything we could without making damage to Russian security," he said. CFR’s Senior Fellow on Russian and Eurasian Studies, Stephen Sestanovich says Russia’s relationship with China is based on the interests of some elites--those in the energy sector, the nuclear power sector, and the arms exports, that see China as an important market.

China and Russia also formed a security alliance to solve border disputes, which has grown into an important regional organization, the Shanghai Cooperation Organization (SCO), and includes Central Asian countries Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. China and Russia have held a number of joint military exercises under the SCO. In October 2007, the SCO also signed a memorandum of understanding with the Collective Security Treaty Organization, a military alliance of several former Soviet states. Some analysts see the SCO as a vehicle for Russia and China to curb U.S. access to the region’s vast energy supplies. But others say Russia and China have very different objectives in Central Asia. Russia wants to reassert its regional leadership there, while China seeks energy ties, note some analysts. In 2008, China and Russia resolved (BBC) their last remaining border dispute involving islands in the eastern part of the border which had seen armed clashes between the two sides during the Cold War.

Southeast Asia: Experts say Southeast Asian countries, including Indonesia, the Philippines, and Thailand, are currently calculating whether the political and economic benefits of closer ties with a strong China outweigh the military risks. Bilateral trade between China and all ten countries within the Association of Southeast Asian Nations (ASEAN) is expected to exceed $200 billion in 2008 up from $ 190 billion in 2007. The region is now China’s fourth-largest trading partner. Despite the economic windfall, ASEAN countries want the United States to pay more attention to the new security trends in the region, experts say. While these countries are not very vocal about their fears, experts say they are nervously looking over their shoulders at China’s military buildup and wondering where it’s headed.

Border disputes with some countries also complicate China’s relations with its Southeast Asian neighbors. Vietnam and China each assert claims to the Spratly and Paracel Islands, archipelagos in a potentially oil-rich area of the South China Sea. Malaysia, the Philippines, and Taiwan also claim all or part of the South China Sea. China’s assertion of "indisputable sovereignty" over the Spratly Islands and the entire South China Sea has elicited concern from Vietnam and its Southeast Asia neighbors, according to the U.S. State Department. Vietnam has been pursuing closer military relations with the United States through joint military exercises, and sharing intelligence on terrorism, drugs, and other transnational threats. Vietnam has also hosted U.S. warships at its ports.

India: It has long-time rivalry with China over disputed borders and these two Asian giants also fought a war in 1962. New Delhi watches Beijing’s military buildup closely and has undertaken military reforms of its own. It is currently building a nuclear submarine and is trying to acquire two more aircraft carriers in addition to the one it possesses. It also launched its first unmanned moon mission in October 2008, another step in what many analysts see as a race with China in space. It has also been expanding its military cooperation with the United States. In June 2005, New Delhi and Washington agreed on a new framework for their defense relationship, including increases in defense trade, technology transfers, and joint exercises for the next ten years.

China’s close military cooperation with Pakistan also concerns New Delhi. Each country helps the other to check India’s power, say experts. China remains a key supplier of arms to Pakistan and in 2008, agreed to help Pakistan build two nuclear power plants. China also supplies Pakistan with nuclear technology and assistance, including what many experts suspect was the blueprint for Pakistan’s nuclear bomb. Pakistan’s army has both short- and medium-range ballistic missiles that experts say came from China. According to Thomas C. Reed, a former U.S. Air Force secretary, China probably helped Pakistan test a nuclear weapon (Physics Today) inside China in 1990. Reed adds that this weapon was most likely based on a Chinese design.

Central Asia: Several Central Asian countries-- Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan --have forged closer relations with China as part of the Shanghai Cooperation Organization. Experts say tensions in China’s western province of Xinjiang is one of the major reasons behind Beijing’s eagerness to improve relations with the Central Asian states. Xinjiang is largely made up of Uighurs, predominantly a Muslim community with ties to Central Asia, and China has been concerned that Central Asian states may back a separatist movement in Xinjiang. Beijing also seeks energy ties in the region. Under the SCO, the countries conduct joint military exercises. Problems with their own Muslim fundamentalist groups have led these countries to assist China in its struggle against separatists from Xinjiang, say experts. However, some experts say the Central Asian states still view China and Russia as possible hegemonic powers.

Implications for the United States

China clearly complicates U.S. defense planning in Asia, says CFR’s Senior Fellow for China Studies, Adam Segal. The Pentagon’s 2008 report to Congress states: "Current trends in China’s military capabilities are a major factor in changing East Asian military balances, and could provide China with a force capable of prosecuting a range of military operations in Asia-well beyond Taiwan." Most countries in the region have some degree of caution in their relationship with China, says James Mulvenon, director of Washington-based Center for Intelligence Research and Analysis. However, none of them, he adds, want to engage in any form of containment policy with the United States. Meanwhile, though China is wary of U.S. military presence close to its border, its troubles with Uighurs has led it to support U.S. military actions inside Afghanistan, say experts.

The best way for the United States to ensure that its security interests in the region are not compromised by China’s growing military capabilities is to strengthen security alliances with China’s neighbors, notes the 2007 Council Task Force report. The report says the United States should better coordinate U.S.-South Korea-Japan security planning, give greater attention to ASEAN, work with ASEAN members to help draw China into constructive security relationships, and pursue a deeper military relationship with India.

Esther Pan contributed to the Backgrounder