China’s Military Modernization: Stepping Ahead

One can see pretty much anything one wants in the 2012 defense budget China announced last weekend, and which the National People’s Congress (NPC) will approve this week: more military build-up from an increasingly assertive regional power; catch-up spending for a developing nation’s armed forces still in need of substantial modernization; even a proxy for the expected slowdown in the economy overall. It is arguably all those things, but most of all it is pretty much more of the same. China has had double-digit increases in its official defense budget every year since 1989, with the exception of 2009’s 7.5%.

Ahead of the NPC’s opening, spokesman, Li Zhaoxing  announced that defense spending in 2012 would be 670.2 billion yuan ($110 billion),  a rise of 11.2% on 2011’s figure. It is the first time the budget has topped $100m, if that arbitrary threshold matters to you. The proposed increase for this year is  smaller than last year’s 12.7% rise, reflecting, as promised under the current five-year plan, the slowdown in the overall economy.

This year, for the first time, China says, it is including weapons R&D and acquisition in its numbers, which have in the past been overwhelmingly for personnel pay, maintenance and equipment. Quite what difference this makes to the headline number is unclear. How big a bite, for example, is the new aircraft carrier, or China’s new anti-ship missiles and J-10B jet fighters taking out of the official defense budget, if, indeed, that is where they are being accounted?

As is well accepted, the official defense budget is reckoned to account for less than two-thirds of China’s total military spending. The People’s Armed Police has its own budget, as does the militia. Some, if not all, of both budgets can reasonably be considered military spending. But more opaque is the question of how much is being spent under the aegis of the space program and the development of the strategically important “national champion” industries on R&D that has dual military-civilian use, or in the space program’s case, pure military use.

Not only does China still spend less than a third as much on defense as the world’s largest military power, the U.S. (however you add up the figures),  much of the operational deployment of China’s new military toys is still years away. Nor are its aircraft, missiles and ships yet comparable in the aggregate with those in the most advanced fighting forces, despite the ambitious development of a huge domestic aerospace and defense contracting industry.

Pravda reports from Russia that China is trying to buy 48 of Russia’s new Su-35 fighter jets. The $4 billion deal is being held up Moscow’s concerns that their advanced frontline fighter will be cloned by the Chinese military, as happened with its Su-27 (the inspiration for China’s J-10) and the Su-30 (the J-11). If this deal comes off, it would be the first time that Beijing has bought foreign fighters for the PLA Air Force in more than a decade. What is unclear is whether this is an attempt to leap-frog to the future or a deal that is necessary because domestic development is falling behind. Aircraft engines and radar systems, we are told, are the critical areas where progress is not as rapid as hoped.

That may be one reason that President assumptive Xi Jinping reportedly rebuffed U.S. President Barack Obama’s suggestion during his recent visit to Washington that the two countries’ military hold regular talks, as their economic and security officials do. A peep behind the curtain may reveal a less than flattering picture for the world’s second most expensive military force. Xi, who has close ties with the army–his father was one of Mao’s revolutionary generals before falling from grace–will not want to embarrass the PLA, and especially not while he is assuming the reins of power.  And just as he will want to keep his military onside during the transition, he will want to keep America’s off-balance and guessing to the extent he can.

There is no doubt that Beijing will continue to build-up its military forces, particularly the navy, which is developing submarine and carrier fleets to the extent it can be a power in regional waters, the logistics capability of the national command and support infrastructure, and the capacity to fight in space and cyberspace. It wants a modern, self-sufficient fighting force by the early 2020s. The 2012 military budget just keeps it marching in that direction.

General Chen Goes To Washington

General Chen Bingde, the PLA’s chief of staff, is due in Washington on May 15th for a week-long visit to his U.S. military counterparts. Admiral Mike Mullen, chairman of the U.S. Joint Chiefs of Staff, is his host. It may prove to be the most significant bilateral exchange of the year.

For all the progress made by Beijing and Washington in managing their differences on economic and strategic issues through regular and frequent discussions, the military relationship has remained distant and suspicious. General Chen’s is the first visit to Washington by a chief of staff since 2004. Since then the PLA has made vast strides in its modernization program, particularly of its air and naval forces, to the consternation of both Washington and its regional neighbors. U.S. arms sales to Taiwan are another sharp point of conflict. Taiwan’s president Ma Yong-jeou has just called on the U.S. to sell it F-16 fighters, which are not part of the $6.4 billion weapons deal the U.S. agreed with Taiwan in January last year, a deal that sparked another rupture in Sino-American military relations when it was announced.

A determined effort is being made by both sides to bring the military dialogue into the mainstream of the bilateral relationship. Military officials were included for the first time in the Strategic and Economic Dialogue meeting held in Washington at the start of this week. Our man in Washington says that U.S. officials saw that as an opportunity to expose PLA leaders to aspects of Beijing’s civilian international agenda they haven’t much concerned themselves with as much as to get to know American counterparts. American officials were alarmed earlier this year that President Hu Jintao was apparently unaware of PLA test flights of its prototype stealth fighter during a visit to China by U.S. defense secretary Robert Gates.

General Chen is bringing a high-level team with him. His 24-member party includes eight other senior PLA officers. Their agenda will include U.S. arms sales to Taiwan, U.S. military reconnaissance within 200 miles of China’s coast, which Beijing claims, but the rest of the world does not recognize, as China’s exclusive economic zone, and U.S. restrictions on joint exercises between the two countries’ armed forces and exports of American technology to China. Beijing wants an end to all of the above. Cyberwarfare, space (Chen commanded China’s manned space flight program at one point), nuclear issues  and anti-terrorism and anti-piracy operations are also likely to be discussed.

State media have talked formulaically of Chen looking for “new” military relations based on “mutual respect and reciprocal beneficial cooperation”. Even distilling guidelines for what that means would be a start, given Washington is not likely to agree to any of Chen’s three main demands to stop arms sales to Taiwan, maritime reconnaissance in the western Pacific or limits on high-tech exports, the sort of respect Beijing is looking for. There may be some clues from a speech General Chen is due to give at the U.S.’s National Defense University during his visit. We expect no very great initial progress, but at least the visit–and a raft of lower level ones happening this year–will get a very necessary process underway.

Turning The PLA Into A Modern Joint Command

We are starting to hear murmurs and whispers about the People’s Liberation Army’s new five-year plan. Unlike the detail made public about the national five-year plan and even the White Paper on the PLA published at the end of last month, the military budget is held close to the chest.

The headline spending number we do know, from the national five-year plan: a military budget of 601 billion yuan ($92.5 billion) for 2011 and an annual increase of 12.5% for the life of the plan, restoring the double-digit annual growth derailed by the 2008 global financial crisis. But that is only the half of it. Also to be taken into account are off-budget items, spending done under the aegis of internal security and disaster relief, in both of which the PLA plays a significant role, and R&D in industries whose technologies have dual military-civilian applications. Together they likely double the formal budget number.

As for the detail that lies behind, we are told that Xi Jinping, the man slated to succeed Hu Jintao as president next year and then after as chairman of the Party’s central military commission (he was appointed as first vice-chairman last October), has signed off on a final draft. Xi is said to have good relations with the group of more than 100 fellow princelings who hold the rank of major-general and above. (As an aside, that group may prove to be an important soft factor in the coming leadership transition.)

The heading of Section XV of the national five-year plan, the one that relates to the PLA, is “Advance Military Power.” The main thrust  will be, first, to continue to modernize the PLA and to make it a more professional fighting force, particularly its officer class, and, second, to turn it into a more integrated tri-service force, commensurate with the needs of China’s growing global presence and better equipped to fight what are being called information wars. For historic reasons, ground forces have dominated the PLA. Yet the PLA Navy (PLA-N) and the PLA Air Force (PLAAF) are at the forefront of the PLA’s modernization. Witness the new aircraft carriers, submarines, ballistic missiles, and fighter jets, in keeping with China’s desire to project regional power, particularly in the waters off its coast. The PLA command structure, including its communications and logistics, does not yet anything like fully reflect the growing prominence of the naval and air services, though progress is being made a great speed on the communications infrastructure. A unified joint military command is also needed for the tighter integration between the PLA and internal security forces that the national five-year plan envisions for ensuring domestic stability.

The process of integration is likely to be least comfortable for the army. Senior officers have already been fighting a rearguard to protect the structure of the seven military regions that Mao divided China into–and to protect the multiplicity of high ranking posts they provide. They will also have to deal with the overwhelming majority of a planned cut of 500,000 personnel during the five-year plan coming from the PLA’s 1.3 million-strong ground forces, 60% of its total strength of 2.3 million personnel (excluding 6 million militia). Better pay and conditions will be provided for those remaining.

The PLAAF has already undergone a similar slimming down, ridding itself of antiquated planes and equipment and the personnel to operate and maintain them. In the process it has become a stronger combat force through modernization of what was left. It is not just new aircraft, such as the much hyped J-20 stealth fighter flaunted earlier this year. The air force has undergone a makeover of its ability to deploy over large distances. Its relief efforts in the aftermath of the Sichuan earthquake in 2008 showed up shortcomings in its capacity to transport men and materials from all over the country to a distant front. These failings are since being redressed.

As well as modernizing the command and communications structure, upgrading hardware will continue apace. The navy and the air force will get more by way of newest and deadliest toys than the ground forces, although there will be some arm-wrestling between the air force and the Second Artillery Corps, the missiles force, over who owns space weaponry and counterweaponry. Money to be put into advanced weapons and their development is likely to drive an expansion of the country’s state-owned defense industries, too, creating stiff competition for Western arms makers in Asia and Africa in particular where Chinese firms will be less encumbered with ethical restrictions on arms sales than Western competitors; China is currently the world’s ninth largest arms exporter with sales of $2.4 billion in 2010. The five-year plan calls for this number to double over its duration, with profits being used to fund more R&D in weaponry, particularly fighters and missiles.

Defense companies have more expertise and experience than the PLA in aviation, electronics, transportation, machine-building and especially the IT necessary for infowar and electronic espionage. They will be able to tap into the $1.5 trillion being earmarked under the national five-year plan to expand seven strategic industrial sectors. Most of the septet have technologies with joint military-civilian applications.

Industrial companies now account for two-thirds of the institutions that are licensed for weapons R&D and production. Beijing is consolidating the country’s defense contractors into fewer than 10 giant state-owned groups. State funds are also being allocated to them to attract top science, technology and engineering talent to the R&D effort, and to match similar incentives for scientists and technical personnel in PLA research and weapons plants. These defense contractors are also able to strike civilian joint ventures with foreign groups to acquire technologies around composite materials, turbine blades and flight control systems where their own lags. As with civilian heavy engineering markets, Western companies will have to decide if access to China’s domestic market is worth the trade-off of giving up technology.

However, they decide, the PLA’s supply chain is going to become more blended with civilian industry over the next five years–with consequent implications for the pace of economic reform in strategic areas where the military interest, already strong in some parts of the economy, will coagulate as a strong vested interest against change.

China continues to stress publicly the defensive nature of its armed forces. Peace has certainly been good for its economic growth. Yet the PLA’s modernization seems aimed at giving a modernizing country modern armed forces and Beijing the ability to project regional power and to protect its growing global commercial interests–or at least to create the perception of sufficient strength to do so, an important deterrent in its own right.

Thus the military five-year plan is predicated on a continuation of developing leaner, more technologically sophisticated armed forces with a joint command structure capable of “winning local wars under conditions of high technology and informatisation”. At the same time, the PLA is being prepared to play a more central role in internal security should that be needed, particularly during the coming leadership transition, and one able to deal with the cyber side of modern civil unrest should the current crackdown on dissent by traditional means prove insufficient.

This Bystander could readily conclude that while China is not expecting, or wanting, a serious military conflict during the course of the current five-year plan, or beyond, it does see itself becoming strong enough to deflect others from doing so,  especially off its own coast and around islands large and small in those waters, and to be able to engage in–and win–information and cyber skirmishes at home and abroad.