After the collapse of the Soviet Union three decades ago, Chinese leaders reportedly commissioned in-depth studies of its causes. One of the U.S.S.R.’s biggest mistakes, according to Chinese researchers, was to engage in a costly arms race with the US that ultimately bankrupted the Soviet economy.
Today, as the US concentrates its military capabilities on East Asia, China confronts a similar strategic dilemma. Attempting to match America’s military might would require China to increase defense spending radically — the same trap that ensnared the Soviets. Failing to counter a US military buildup, however, could leave China even more insecure and vulnerable.
The US decision to arm Australia with nuclear-powered attack submarines has starkly highlighted China’s predicament. With this dramatic strategic move, the US is effectively challenging China to a new and likely astronomically expensive arms race. Each Virginia-class US submarine carries a price tag of $3.45 billion.
China now finds itself in an unenviable strategic position. It must contest the combined military capabilities of the US and its allies in the Pacific at the same time.
If China only had to reach near-parity with the US military, it would face a difficult but not completely impossible task. At its peak, the Soviet economy was less than half the size of its US counterpart. China’s GDP is now about 70% the size of America’s in dollar terms and is likely to surpass it within 15 years. In the foreseeable future, China could conceivably match US military spending.
But the math changes completely if the combined economic heft of the Quad nations — the US, Japan, India and Australia — is added to the equation. The Quad is fast emerging as a military alliance constructed specifically to contain China. With a total GDP of $30 trillion as of 2020, according to the World Bank, the Quad’s economic output is twice as large as China’s.
Maintaining defense spending at 3% of their combined GDP would generate $900 billion for the Quad’s militaries. China, which spent $250 billion on defense in 2020, would nearly have to quadruple its military budget to keep up.
If one factors in the technological edge held by the US, which also has a huge stockpile of weapons after decades of outsized military spending, it would be utterly unrealistic for China to think it can win the next arms race on the strength of its growing economy and technological capabilities.
So, what is to be done?
The advice of Sun Tzu — avoid confronting your opponent’s strengths — seems particularly relevant. Instead of getting drawn into an unwinnable arms race, China should focus on diplomacy to increase its security.
The root cause of America’s success in rallying Japan, India, and Australia is those nations’ fear of China’s growing military capabilities. Japan and India, which have ongoing territorial or maritime disputes with China, have particular incentive to band with the US.
China would better serve its interests if it made a serious effort to settle these disputes and defuse tensions with its neighbors. Suspending incursions into the waters of the disputed Senkaku/Diaoyu Islands and withdrawing troops from some of the contested areas on the Sino-Indian border would be welcome initial signs of goodwill.
With mutual distrust and animosity spiraling to dangerous levels, it’s equally important for China to start engaging the US again. President Xi Jinping should shed his apparent reluctance to meet with President Joe Biden. Only diplomatic engagement at the highest-level can slow the vicious cycle that is increasingly militarizing US-China competition.
China would be wise to learn two additional lessons from the Soviet experience. First, Soviet leaders kept investing in a losing arms race because they worried the US would strike first. In retrospect, such fears were totally unfounded — and economically ruinous. Today, it is unimaginable that the US would initiate a preemptive attack on a nuclear-armed China.
Second, the Soviet Union managed to keep the Cold War from turning into a shooting one by working closely with the US to set up protocols and rules to avoid accidental conflict. China would be smart to implement existing Sino-US protocols more robustly and to propose new ones.
So many of Xi’s policies have been geared toward avoiding the mistakes of his Soviet counterparts. Unless China changes course soon, he risks repeating their biggest one.
Bloomberg
