ANALYSIS: What’s the Risk of War with China?

Since at least 2014, China’s been busy building islands in the South China Sea, sending waves of concern to the U.S. and its partners and interests in the area.  The islands are in a disputed part of regional waters roughly located between the shores of Vietnam, Malaysia, and the Philippines, and will likely allow China to assert dominance over the area if left unchecked.

On Wednesday, the Department of Defense made available audio taken from a Navy spy plane flying in the vicinity of these islands.  The U.S. aircraft was being warned by a Chinese installation:  “Foreign military aircraft.  This is Chinese Navy.  You are approaching our military alert zone.  Leave immediately.”

During a CNN interview with Erin Burnett, former Central Intelligence Agency Deputy Director Mike Morell said of the incident:

The tactical issue is there’s a real risk, right, when you have this kind of confrontation, for something bad happening…  Strategically, this is part of a very significant dynamic between China and the United States.  China is a rising power.  We’re a status quo power.  We’re the big dog on the block in Asia.  They want more influence… This is going to be a significant issue for the next president of the United States.

When pressed by the host on whether or not US foreign policy is failing, former Deputy Director Morrell replied:

So here’s what’s interesting, alright.  I saw a study recently of all the times in history when a rising power, in this case China, comes up against a status quo power, in this case the United States; 70 percent of the times in history, the result has been war.

Analyst Comment:

On 31 March 2001, a Chinese pilot bumped a U.S. Navy spy plane and forced it to land in Chinese territory.  The Chinese aircraft crashed into the ocean below, and its pilot died sometime during ejection.  That event started several tense days of negotiations to get back our 24 U.S. crewmen and the sensitive intelligence-gathering instruments on board, and signaled that China was willing, albeit ill-prepared, to challenge US dominance in the South Pacific. The Chinese returned the US crewmen several days later, but spent months dismantling the aircraft before returning it in July of the same year.  The specific aircraft was a Navy EP-3 Aries II, one of the most advanced spy craft in the arsenal, which allowed US eyes and ears to penetrate the Chinese mainland.  According to testimony from the Navy pilot, the crew were able to conduct the aircraft’s sensitive equipment emergency destruction plan before being boarded by Chinese forces.  Other sources, however, dispute that success, and there was no official report published.

This was not the first time that U.S. and Chinese forces nearly went head-to-head in the South Pacific in the post-Vietnam era.  In 1995, the State Department denied a visa to then-Taiwanese president Lee-Teng Hui in order to preserve U.S.-Sino relations.  President Lee is considered the father of democracy in a nation which China still considers part of its own territory.  In 1996, President Lee again attempted to travel to the States to give a speech on democracy at his alma mater of Cornell.  Although the State Department was prepared to again deny entry to Lee, on behalf of Chinese relations, Congress intervened and the State Department reluctantly approved the visa.  Chinese leaders later said that the event “ruined” relations between the two countries.  The Chinese response was a retaliatory show of force by test-firing missiles into Taiwan’s territorial waters in a simulated attack leading up to the 1996 elections, which attempted to intimidate Taiwanese voters away from voting for Lee.  The message was, in essence, that Lee’s re-election would start a war over the philosophical and political differences with the Communist Chinese.  (Lee won his reelection, anyway.)  Perhaps the sole success of former president Bill Clinton’s foreign policy regarding China occurred shortly after, when he ordered two aircraft carrier battle groups into the Strait of Taiwan.

By 2001, China had already begun a marked increase in defense spending.  It introduced the 12th straight year of double-digit increases in military spending.  According to some defense analysts, China was actually spending two to three times as much as was officially being reported.  Chinese defense spending, by official numbers, has risen from $17 billion in 2001 to an estimated $144 billion in 2015, putting them at the world’s second spot behind the US for spending on defense.  Those official Chinese numbers are still likely to be less that what’s actually being spent.

China’s military build-up is the result of at least two factors; the first of which is its economy.  Without strong economic growth in the 2000s, the military budget would not have been possible.  And considering that the US is China’s largest trade partner, it’s not inconceivable to say that Chinese imports to America are partially financing the Chinese military.  Not only does the US hold a trade deficit with China to the tune of $425 billion (2013), but China also partially finances that deficit through holding about $1.2 trillion dollars in US national debt.  China literally has the U.S. coming and going.

The second factor in increased defense spending is how China sees itself as a nation and regional power with global aspirations.  Since Clinton’s intervention over Taiwan in 1996, and US-led campaigns in Kosovo in 1999, Afghanistan in 2001, and Iraq in 2003 – not to mention the countless other countries included in the Global War on Terror – China understood that US leaders aren’t afraid to act in ways that protect Pax Americana, the albeit shifting global landscape America and the West enjoy today.  But protecting Pax Americana in the Pacific means a likely threat to Chinese aspirations in their own back yard.

So where does that leave us today?  The Chinese military, for all its investment and modernization, is still years behind an ability to win a large-scale war with the U.S., even in the South Pacific.  There are military as well as cultural reasons.

First, any conflict in the region might involve other forces than the Chinese and U.S. militaries.  U.S. allies in the region, while still trading partners with China, are being made very nervous by Chinese aspirations that disrupt the stability of the region.  They’ve experienced decades of peace and prosperity, and are less sure that a powerful Chinese presence will be able to protect the peace fairly for all sides.  On the other hand, any involvement might disrupt trade relations, which could be detrimental to the nations involved.  The current course of action for these nations, then, is to continue trade with China and work with the U.S. to continue to degrade the acceleration of an imbalance of Chinese power.  For instance, this year both Japan and South Korea announced historical increases in defense spending.  Both of those countries are also participants in the annual Rim of the Pacific (RIMPAC) military exercise, which is a US-led effort to maintain the military readiness of Pacific partners.  The 2014 participants included Pacific partners such as: Australia, Brunei, Chile, China (first-time participant; previously a spectator), India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, and Tonga.  In all 22 nations participated in 2014.

The second set of factors revolve around China’s ability to actually fight a war.  China’s last war occurred in 1979 (Third Indochina War), in which they received a black eye after the Vietnamese toppled the Chinese-backed Khmer Rouge in Cambodia.  Although China claimed victory, Vietnamese troops remained in Cambodia until 1989.  Despite massive increases in military spending, the fact of the matter is that modern Chinese forces are still untested.  And it’s not likely that they’d pass their first test against a global super power.  The Chinese military is still hamstrung by corruption, which degrades military readiness.  Further, they haven’t proven that they’re able to implement combined-force warfare and integrate independent components of air-sea-land battle.

Add to this the cultural expectations of Chinese youth to become doctors, engineers and scientists; a low wage enlistment into the People’s Liberation Army (PLA) just isn’t appealing to China’s best and brightest.  This leaves the PLA to scrape the bottom of the Chinese barrel to recruit poorly educated peasants that fill the rural landscape.

And China is imminently aware of its own military shortcomings.  Internal documents show acknowledgement of the gap between where the Chinese military is and where it needs to be, which makes a large scale conflict less likely in the near-term.  Still, I believe the Chinese see themselves as locked in a battle, whether potentially kinetic or ideological, for its sovereignty in the region, which makes the likelihood of a conflict with the US more likely in the next decade.  Of course, current trajectory can be changed.  With President Obama’s 2013 announcement of the “Pivot to Asia”, it’s less likely that the current trajectory will be affected over the long-term, except by perhaps a future administration’s change of course.

But two areas where China is closing the gap with the U.S. is in the cyber realm and espionage.  Earlier this year, the PLA formally acknowledged its cyber warfare units and their collective abilities to wreak havoc against electronic targets over the internet.  That poses a significant strategic threat, even if the Chinese military isn’t on par with the U.S.

It’s also estimated that up to two-thirds of Chinese espionage is directed at economic and industrial targets.  Why spend billions of dollars in research and development when you can exploit the U.S. need for scientists who can develop advanced technologies with military applications?  Over the past decade, there are countless examples of espionage conducted by Chinese and/or Chinese-American researchers and professors developing dual-use technology in U.S. academia.  This is what separates Chinese espionage from any other nation: they are literally stealing the secrets vital to U.S. military superiority right our from under our noses.  This is what’s going to accelerate the competitiveness of the Chinese military in the decade to come, and, ultimately, make conflict more likely.

But perhaps the largest unanswered question is, if there’s a conflict, what happens to all that US debt?  It’s unlikely that China would opt for the “nuclear option” (i.e., unloading and/or calling-in US debt obligations) except in a case of last resort.  But a scenario of last resort is unlikely to involve the areas currently on the radar.

We’ll be staying up to date on how China views US debt and what they might do in response, given a likely scenario.