Wikinvest Wire

China's Military Buildup

Thursday, March 08, 2007

The first day of April will mark the six-year anniversary of the Hainan Island Incident in which a U.S. Navy reconnaissance plane, flying in international waters, was intercepted by military aircraft from the naval branch of the Chinese People's Liberation Army.

During the encounter, one plane bumped into another, one of the Chinese fighters crashed, and the U.S. spy plane made an emergency landing on Hainan Island. Following procedure, the 24 crew members destroyed sensitive equipment prior to landing and once on the ground, the plane was boarded and the crew shuffled off to a military barracks where they were interrogated.

Eleven days later, after sometimes tense negotiations, the crew was released, however, the disassembled spy plane was not returned until months later.

Naturally, the events of September 2001 make this incident all the more difficult to recall, but thinking back on George W. Bush's first international crisis in light of China's recently announced military spending plans provides an uncomfortable reminder of how much the world has changed in just six years.

With the astonishing buildup of largely U.S. Dollar denominated foreign exchange reserves combined with their first manned space flight and the somewhat reckless shooting down of their own weather satellite with a ground-based missile, the Chinese military has taken on much greater significance in the global balance of power.

The team of Chinese government officials scouring the globe, buying infrastructure and forming partnership agreements to secure steady supplies of natural resources complicates the new world view further. If activity in Sudan is any example, the Chinese government clearly employs a different set of standards than that to which the West has become accustomed.

A review of some recent news stories sheds additional light on these developments. This story is sure to take on added significance over time.

Over the weekend, ChinaDaily reported on the country's new defense budget:

China's defense budget for 2007 is expected to hit 350.921 billion yuan (44.94 billion U.S. dollars), 17.8 percent higher than that last year, a spokesman for China's top legislature's annual session said in Beijing Sunday.
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"China won't pose a threat to any country, as it does not intend nor has the capacity to seek arms races against other countries," he added.
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The United States has repeatedly said it does not believe China 's figures and doubts that China has spent more than what is reflected in the budget.
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"All facts prove that China's increased military budget is used to enhance its defense capacity," Yao said, adding that it echoes the persistent stance China takes in following a defensive policy on military building and opposing hegemony and arms expansion.
On Monday, Chinese Premeir Wen Jiabao pledged a stronger military, also commenting on the eventual reunification with "break-away province" Taiwan:
Reflecting the increased focus on information technology in the People's Liberation Army, Wen also called for an improved ability to fight a "defensive IT war."

The White House said it was concerned over the increase in military spending, warning it was "inconsistent" with Beijing's policy of peaceful development.

"This kind of spending not only concerns us but raises concerns among China's neighbors. This is inconsistent with China's policy of peaceful development," said national security spokesman Gordon Johndroe.
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"Taiwan is part of our territory. That of course is a factor (in boosting defence spending), but it's not the only one... there are lots of factors threatening China, and they come from all corners."

Reunification with Taiwan is one of China's long-term objectives, and analysts have said Beijing is beefing up its military partly to enable it to take the island back by force if necessary.
Yesterday, an article($) in The Economist commented on the prospects of American involvement in a conflict between the two.
“Our aim,” says a senior Chinese diplomat, “is to win an information war in the Taiwan Strait.”

Some Chinese policymakers believe that if confronted with a fait accompli, America would lack the heart for a fight to liberate Taiwan. They point to opinion polls showing that a solid majority of Americans oppose using troops over Taiwan. Not wanting to see matters put to the test, the State Department was almost as critical of Mr Chen’s remarks as was China.
Meanwhile, the question of China's impact on global energy security was addressed by Ma Kai, the minister of the National Development and Reform Commission:
China's per capita oil consumption in 2005 is 242 kilograms, compared with the world average of 590 kilograms, over 3 tons in the US and 1.9 tons in Japan, noted Ma on the sidelines of the National People's Congress session.

For per capita oil import, the figure in China is 100 kilograms, 400 for the world average, 2.1 tons for the US and roughly 2 tons for Japan, added the minister.

"So I can't imagine why some people are saying that we, with a low consumption and import, pose a threat to global energy security, instead of those countries with high consumption and import, " said Ma. "It is unfair."
And in the U.S., the new Defense Secretary, clearly with more pressing issues on his mind, quickly dismissed concerns about the new Chinese military spending plans.
"I do not see China, at this point, as a strategic adversary of the United States," he said. "It's a partner in some respects, it's a competitor in other respects, and so we are simply watching to see what they're doing."

Gates also said: "I think it's very important for us to engage the Chinese on all facets of our relationship as a way of building mutual confidence."
Anyone who takes seriously the argument for potential global conflict in the years ahead over energy security will see the increased emphasis on defense spending in China as a troublesome development.

The fact that the government has banned new internet cafes for a year, citing growing problems with internet addiction and online gambling, should be troubling as well.

9 comments:

Unknown said...

I am sure they see the looming recession, and being the lower guy on the totem pole it is going to be more severe that what will happen in the US.
They need to have the military in place to squash the political dissent. Also I wouldn't be surprised if they steal one from the US play book and use a war to prop up the economy.

Greyhair said...

It's unfortunately, but were I world leader watching the behavior of the U.S., I'm afraid I would be militarizing as well.

I think you're spot on in suggesting that China will be the new superpower counterweight to the U.S. And certainly Taiwan will be an issue of contention. The only real leverage "we" have there is that Taiwan is a wonderful portal for skill, technology and innovation for the greater China. The Chinese may be hesitant to rock that boat. But let's face it. If they decide they want it, I'm not sure there's anything the U.S. could do about it anyway short of nuclear war.

Anonymous said...

How is it possible to wring your hands about China's increase in military spending without pointing out that the U.S. spends almost as much on its military as every other nation in the world combined?

Given the U.S. fondness for starting wars without much justification, anybody who doesn't look for ways to protect themselves from U.S. aggression is doing a disservice to their citizens.

Tim said...

I guess when I said "troublesome" in relation to the military build-up, I really meant "inevitable".

I've been bullish on China for a long time, but the restrictions on personal freedom will probably be "troubling" for the Chinese people.

Anonymous said...

Man...I hope the Chinese are smarter than Americans in thinking that the military and spending money on it is a viable, sustainable future.

They've got a good thing going with their economic stronghold with goods and services...if they're smart they won't piss it all away with military spending and promoting violence like the neocons.

Anonymous said...

You can not be the biggest military super power without being the biggest economy. So at some point China will be the military leader of the world. It is too bad America has not been a better example of how to be a super power, by our use of force out side of world institutions such as the UN, world court, or even world opinion, China will surely do the same when its their turn. I agree that Bush has scared most countries to build their military, look at Pakastan, North Korea, Russia, India, etc. We have circled China with military bases and they have noticed it. The spy plane crash was caused when America did repeated nuclear attack drills on China to test their response. Bush had stepped this drill up as soon as he got to office.

NZ

Anonymous said...

In order to become the world's next economic superpower, China has a critical pb to overcome: they are labor rich but resource poor, notably energy resources. They can go out and buy up all the oil they want (Venezuela, Africa, etc.) but if somebody imposes a naval blockade or cuts off their overland pipelines (Afghanistan), their growth will choke. This is the real battle being played out. Notice there is a US military presence just about everywhere where there is big oil/gas reserve or transport choke point? Our aggression is forcing China to team with Russia and the rest of Central Asia. If that bloc becomes whole, they can bypass any naval action. This is essentially the same pb the English had when they were the world's premier superpower.

Anonymous said...

Sure the Chinese are watching what the US does, but it is naive to think that this is the only or even main reason why they are ramping up military spending.

They would be doing it anyway, in fact they are following the path set out by Dan Xiaoping in the 80s and 90s to talk peace and essentially prepare for war. Indeed from their point of view this probably makes sense.

The real scandal is that the US is giddily transferring our manufacturing to China, at the same time lecturing them on all subjects. Unlike, say, Germany or Japan, we are not even trying to hold on to critical industries. The lesson of previous wars between big powers is that usually whoever has greater industrial capacity wins. Guess how things will stack up in 10 years. Opposite to Teddy Roosevelt’s words that are clearly heeded by China, we speak loudly, while carrying a shrinking stick.

On a different note, comparisons of Chinese and US budgets in US$ are incredibly misleading: not only their official budget does not include foreign weapons purchases, nuclear research, etc; but also when you pay people 30 times less, you can put 30 times more people on the task for the same $.

Anonymous said...

About the incident. We all spy on each other. The crash occured because the pilot of the aircraft was trying to hold up a sign with his email address.

All these guys on missions over there see each other all the time. So, it was just a couple of millitary guys having some "fun".

Anyhow, China is our trading partner and we both have prospered with the trade between our nations. We are located on opposite sides of a big ocean. So, we really have little to be hostile about.

China is worried about India & Russia. Probably to a lesser extent Japan. I am not going to make them out as the next menace. So this is a non-story.

I am all for working hard to have an enviromentally friendly developemnt that improves the standard of living for the poeple of China. Clearly the negative economic impact of the one child problem is going to be a long term disaster for them. So, they have their own problems to deal with too.

Hopefully the economic miracle will be they start buying drugs/software/medical equipment and financial services. Not to mention we might be able to sell them some Harley's.

No reason to go all goofy about these guys.

LAEF2

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