James Holmes

What to Make of China’s Defense Spending Increase

The amounts the U.S. and China invest in usable firepower are closer than raw spending figures indicate.

On Tuesday outgoing Chinese premier Wen Jiabao opened the annual meeting of the National People's Congress with a report announcing, among other things, that defense spending will expand by 10.7 percent this year, reaching an official figure of $115.7 billion. Wise China-watchers attach a mental asterisk to economic and budgetary figures issuing from Beijing, which has every incentive and every opportunity to fudge such numbers for political reasons. Last year, for instance, the Pentagon estimated Chinese defense spending at $120-180 billion, against the official total of $106 billion. Its 2012 report on Chinese military power ascribed the disparity to such factors as "poor accounting transparency," the nation's "still incomplete transition from a command economy," and the absence of major expenditures such as foreign weapons purchases from the defense budget. In all likelihood the Pentagon's is a conservative estimate, compiled by U.S. defense officials worried about standing accused of peddling the "China threat theory," pursuing nouveau containment, and the rest of the usual sins.

Communist Party spokesmen drew a contrast between the Chinese and U.S. military budgets, pointing out that the Chinese figure remains a fraction of the American one. That's true, but it disguises as much as it reveals about the state of the U.S.-China competition.

Two comments, one about arithmetic and one about geostrategy. My amphibian buddy Commander Salamander points out that under the Rule of 72, the PLA budget will double in less than seven years if it increases at 10.7 percent each year. That casts new light on the soothing Chinese talking point that it will take China thirty years to catch up with the United States. Let's suppose the Pentagon bumps up its estimate of Beijing's actual spending to $130-190 billion for this year. Take the midpoint of that range, $160 billion. If the double-digit increases of the past two decades persist, doubling the defense budget around every seven years, then China may exceed U.S. spending long before three decades elapse. It will do so even using the official CCP numbers, albeit a tad more slowly. (The Pentagon budget stands at around $600 billion this year.) Call it Beijing's Thirty-Year Rule, a bizarro version of Great Britain's Ten-Year Rule. The interwar Royal Navy, that is, assumed there would be no war for the coming decade. For Britain the Ten-Year Rule mutated into an excuse not to spend scarce funds on modernizing the fleet; for China a Thirty-Year Rule provides a breathing space to get ready.

The geostrategic point is the one I made on Monday, namely that side-by-side comparisons of defense figures mislead. For China the theater is the Asian seas, primarily the waters and skies landward of the first island chain. That's a relatively compact, manageable space. For the United States the theater is the world. Getting into most parts of that theater demands long voyages or flights through potentially contested thoroughfares. Projecting power across transoceanic distances is a daunting — and disproportionately expensive — enterprise. Apply a physics metaphor. Energy diminishes by the square of the distance from the energy source, not in linear fashion. It plunges. Much the same holds true for military power. The PLA has the luxury of concentrating its efforts, and its budget, on the fraction of the earth's surface that is maritime Asia. The U.S. military remains dispersed, and it must invest lavishly in bases, logistics, and large platforms capable of traversing vast distances, just to reach faraway scenes of action.

In short, the amounts the two competitors invest in usable firepower are closer than raw spending figures indicate. Let's refuse to be lied to by statistics.