WASHINGTON, May 25 (UPI) -- At some point this fall, probably in September, China will take delivery of a state-of-the-art anti-aircraft and anti-missile defense system. For an overall contract that with training and spares will certainly exceed a billion dollars, the Russian-built S-300 PMU-2 air defense system will provide China with the power to challenge the United States for command of the airspace over the Taiwan straits.
The Russian air defense system, reckoned by military specialists to be more advanced than the U.S. Patriot missile system, has an intercept range of up to 120 miles, and according to the Pentagon's latest report on China's military capabilities it provides "increased lethality against tactical ballistic missiles and more effective electronic counter measures."
China's military modernization program also includes Russian-built Sovremenny-2 guided missile destroyers, another eight Russian Kilo-class submarines, and an accelerated production program for China's own Song class of submarines. They carry a new generation of underwater-launched cruise missiles and anti-ship missiles, which represent a serious challenge to the U.S. Navy's traditional command of the waters around the Taiwan Straits and the Yellow Sea.
China is also building its own advanced warships. Last year China launched its own new Luzhou class guided missile destroyer, which incorporates much of what China's naval designers learned from the Sovremenny ships, but it said to have improved electronics that double the effective radar detection range.
China claims to be doing all this with a defense budget of a mere $23 billion, or about five percent of U.S. military spending. Nobody really believes this, but equally there was skepticism of Pentagon estimates that the real level of Chinese spending was around $90 billion a year. But now London's prestigious International Institute for Strategic Studies has published its own detailed estimate, which comes very close to the U.S. estimates.
The IISS study analyzed China's defense budget for the year 2003, and by including figures for China's arms purchases from abroad (including Israel and Brazil as well as Russia), research and development costs and industrial subsidies, it came up with a more realistic figure of $39.6 billion. The IISS then applied the World Bank's purchasing power parity figures, which allow for the fact that China's real costs are far lower, and reckoned that in U.S. terms, China was really spending the equivalent of $75.5 billion.
Bear in mind that in the years since 2003, China's official defense budget has increased by over 10 percent a year (and it has for the past 15 years in a row) so the IISS figures would suggest that the Pentagon's estimate of around $90 billion for this year is bang on target. This would make China the world's number two in defense spending, ahead of Russia, Japan, Britain or France.
"Expenditure is on a sharp upward trend and will remain so in view of popular and elite support for accelerated defense modernization," said IISS director John Chipman at this week's publication of "The Military Balance," the annual IISS survey of global military power.
"As China's strategic presence continues to expand, the question of what resources Beijing is investing in defense capabilities, and to what end, loom larger," Chipman added. "The military dynamic of the U.S.-China relationship remains implicitly but decidedly competitive, and there is little that augurs for change. With that, the risk will grow that this military dynamic will over time have a greater bearing on the tone and content of the relationship as a whole."
China's official military journal recently published an interesting editorial that argued for the development of a Chinese military "commensurate with its international status... and its interests." This is significant for the long-term given that China has major energy investments in Sudan, Angola, Nigeria, Central Asia and Latin America, and its prosperity as a great trading economy and as the world's second biggest oil importer depends on sea routes.
But in the short term, any military analyst looking at China's current force structure and at the 700-plus ballistic missiles facing Taiwan would probably concur with this week's Pentagon report that "In the near term, China's military build-up appears focused on preparing for Taiwan Strait contingencies, including the possibility of US intervention."
"Beijing's sustained military buildup in the area of the Taiwan Strait risks disrupting the status quo," the Pentagon report added, which may be an understatement. The Pentagon report does not add that the status quo has been shifting because of Taiwan's own politics, where the National Assembly has declined to vote the $19 billion in funding for the arms modernization package that President George Bush offered them back in his first term. If Taiwan's politicians are reluctant to vote the money to help defend themselves, American taxpayers are entitled to ask why they should do it for them.
There is no doubt that the Pentagon and the Bush administration are aware of all this and deeply concerned by it. As Defense Secretary Donald Rumsfeld has noted, China's neighbors as well as the Americans are asking what China is intending to do with the surge in its military capabilities.
Dan Blumenthal, formerly senior country director for China and Taiwan in Rumsfeld's office and now with the American Enterprise Institute is warning that "the time may be fast approaching" when the United States has to recognize that its strategy of trying to encourage China to be a responsible player in the global security system is simply not working. Interestingly, Blumenthal's colleague at AEI Karl Zinsmeister has just been named as the new policy director at the White House. But with Iraq and Iran and North Korea already crowding out the agenda, the question is how much attention will the Bush administration can devote to China's military challenge and to the related question of Taiwan's curious reluctance to help meet it.
