The Pentagon's Surprisingly Sober Look at China

Ted Galen Carpenter and Justin Logan

After numerous delays reflecting disagreements within the Bush administration, the Pentagon has finally released its Annual Report to Congress on the Military Power of the People's Republic of China. Previous reports conveyed a very hawkish, worst-case portrait of the PRC's capabilities and intent. The 2005 version, however, presents a reasonably even-handed assessment of the PRC military, and of China-U.S. relations generally.

Perhaps the most striking aspect of the latest report is its tone. It lauds a "cooperative and constructive" relationship that has emerged between the United States and China since the 2001 EP-3 spy plane incident. At the same time, it seems to acknowledge the seriousness of China's warnings about Taiwan. It recognizes China's recent anti-secession law as "a rhetorical counter to the U.S. Taiwan Relations Act," and cites a Chinese general who worries about Taiwan for strategic reasons. In the general's view, reunifying with Taiwan is of "far reaching significance to breaking international forces' blockade against China's maritime security"

America's interest is in managing China's inevitable rise to great power status without needlessly embroiling Americans in a war. Doing so requires a dispassionate assessment of China's views on Taiwan. The DOD report is a good step in that direction. The report acknowledges that controlling Taiwan is a "core interest" for China, and for good reason: aside from the motive of national pride regarding reunification, roughly 80 percent of China's energy imports pass through the waters adjacent to Taiwan.

Securing those sea lanes by way of naval access to Taiwan is a high priority for Beijing. (For a look at how seriously great powers take the issue of securing access to energy supplies, one could examine U.S. policy in the Middle East since the 1940s.) China's economic growth is precariously perched on its ability to meet its growing energy needs, and the PRC leadership feels its energy lifeline is in jeopardy if it does not control vital sea lanes.

While DOD recognizes that "China's ability to project conventional military power beyond its periphery remains limited," it also acknowledges China's growing capabilities regarding Taiwan. China has focused its defense spending on acquiring increasing numbers of fourth-generation fighter aircraft from Russia, bolstering its submarine forces, and other measures designed to make its claims over Taiwan more credible. As China's military power increases, the risks to the United States of shielding Taiwan from China will continue to grow higher, raising serious questions regarding the prudence of Washington's commitment.

From a strategic standpoint, the most significant new component of the report is an effort to put the problems China's military modernization poses in a regional context. Previously, the report has been framed in the context of a United States struggle with China over Taiwan; by contrast, the 2005 report notes that the decisions China makes "will have significant implications -- not just for the United States, but for China, the Asia-Pacific region, and the world." In particular, China's military modernization could "accelerate a shift in the regional balance of power, affecting the security of many countries."

This reframing is long overdue, and could be useful in shaking other countries in East Asia from their security slumber. Until now, such regional powers as Japan, South Korea, and Indonesia have been able to shrug off China's growing power because of the assumption that the United States would do whatever it took to balance against China. With a costly and distracting war continuing in Iraq, the Defense Department may have come to the recognition that its resources are not infinite, and that China's neighbors must share the concern over its growing power and prepare their own responses. The new DOD report, coupled with the recent joint U.S.-Japan security declaration adopted in February, may signal a growing recognition that regional powers must step up to help shape China's rise.

On the issue of regional military capabilities, Taiwan gets a well deserved drubbing for its complacent approach to its own security. "Taiwan defense spending has steadily declined in real terms over the past decade, even as Chinese air, naval, and missile force modernization has increased the need for countermeasures that would enable Taiwan to avoid being quickly overwhelmed." DOD officials have been increasingly frustrated over Taiwan’s recalcitrance, and the sharp words in the report should be taken as a sign that the United States is not infinitely patient with wealthy allies who seek to free ride on an increasingly overstretched United States.  If Taiwan’s opposition parties continue to succeed in blocking adequate defense measures, China could be emboldened, thus making a U.S.-PRC military confrontation more likely.

The 2005 report is not entirely free from the dubious vestiges of reports past. Historically, the DOD estimates of China's defense spending have represented high-end outliers of a wide range of other calculations. The 2005 report claims that PRC defense spending in 2005 could reach $90 billion. That estimate is almost certainly overblown. Indeed, one of America's top experts on the People's Liberation Army, James Mulvenon, recently accused the Defense Department of making "wild assed guesses" about PRC military spending that are "not based on empirical fact." A recent Rand Corporation report based on source material from China concluded that an accurate figure would be between $31 and $38 billion. The new claim about $90 billion raises questions about the Defense Department's methodology, to say the least.

The chest-beating at the House Armed Services Committee hearing over the Unocal deal should ring alarm bells in American security circles.  Demagoguing the China issue may be useful for political purposes, but it can be incredibly damaging to the U.S.-China diplomatic and economic relationship. The fact is, China is a rising great power, and even if we wanted to, there is little we could do to stop it. But by dispassionately assessing China's intent and capabilities, we can accommodate that country's rise in a way that protects American interests and defuses the risk of a conflict. The new tone of the Defense Department's report seems to be a modest step in the right direction.

Ted Galen Carpenter is vice president for defense and foreign policy studies at the Cato Institute.  He is author of, most recently, America’s Coming War with China: A Collision Course over Taiwan (forthcoming, Palgrave/Macmillan).  Justin Logan is a research assistant at the Cato Institute.

Updated 8/16/05