Is China Trying to Bankrupt US?
Image Credit: US Navy

Is China Trying to Bankrupt US?


One popular narrative credits the end of the Cold War to a US strategy to bankrupt the Soviet Union. Well aware of the advantage conferred by its superior economic performance, Washington pushed Moscow into a military competition that drained the USSR of its resources. In this narrative, US President Ronald Reagan’s push to create a missile defence system – realistic or not – was the straw that broke the Soviet back.

Are Chinese strategists pursuing a similar approach to the United States? Is Beijing pushing US buttons, forcing it to spend increasingly scarce resources on defence assets and diverting them from other more productive uses? Far-fetched though it may seem – and the reasons to be sceptical are pretty compelling – there is evidence that China is doing just that: ringing American alarm bells, forcing the US to respond, and compounding fiscal dilemmas within the United States. Call it Cold War redux.

China emerged from the 2007-8 global economic crisis with a new sense of its strength and corresponding US weakness when it comes to money and power. The Chinese don’t have the new balance of power right – the United States isn’t as weakened as many assume and China has its own problems – but they are right to note both the centrality of economic strength to international position and a new attitude and atmosphere in the United States. Beijing also senses US overextension and sensitivity to Chinese provocations (broadly defined). There’s a new economic reality for US security planners.

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Money is tight. In this era of new austerity, the United States has to make increasingly difficult choices about spending priorities. Both economic rationality and military purpose have to guide procurement. Defence Secretary Robert Gates tried to get in front of this process with a budget that cuts $100 billion in defence spending. He isn’t trying to gut the military as some allege, but instead seeks to strengthen it with a long-term spending plan. His fear is that in the absence of such a proposal, ad hoc decisions (decisions not guided by a long-term strategy) will damage US capabilities.

China is trying to shape that strategy – not just by playing down its potential to threaten the United States but by playing up some of its capabilities. That’s one way to read China’s January 2007 anti-satellite test or the test of the stealth fighter in January of this year just as Gates was visiting China. China is trying to make its capabilities, no matter how nascent or premature, the focus of US planning and forcing the US to respond.

While this theory – that China would highlight its own threat to force a US response – sounds far-fetched, it seems to be working. There’s mounting concern in the defence community over China’s deployment of an aircraft carrier and its anti-access area denial strategy. That’s reasonable: hysteria and dire warnings about a transformation of the regional balance of power are not.

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