The PLA’s dangerously double-edged sword

On the eve of China’s President Xi Jinping’s visit to Paris, French President Emmanuel Macron sounded a loud alarm bell when he said “Europe faces imminent danger” and that “things can fall apart very quickly.”

He is concerned about the Russian war in Ukraine, now backed by China’s industrial power. Macron advocates an EU army and doesn’t rule out a possible European direct intervention in Ukraine against Russia.

Prudence would demand to take the message seriously. If he’s wrong, little harm is done, but if he’s right, Europe could avert a historical disaster. Similar voices are also sounding in America.

On May 1, former US deputy national security advisor Matthew Pottinger said in an article that China has already crossed the red line that the US drew regarding Beijing’s support for Russia’s war in Ukraine.

Pottinger reminded that, in 2013, then-president Barack Obama drew a similar red line for Syria. Syria ignored it and Obama did not act on his warning.

This US dithering, Pottinger argued, prompted Russian President Vladimir Putin to take over Crimea in 2014. The US did not intervene at that time either.

Last week, US Secretary of State Antony Blinken visited Beijing and said that China should cease its military support to Russia or it would risk being expelled from the SWIFT system, the US-centered payment system currently controlling about 90% of all global financial exchanges.

This could be a major blow for China, the largest commercial power in the world, hindering its much-needed trade and access to foreign exchange. The question is: will the US act, and if so, what will it do? Or will China comply, and if so, how?

It’s possible China will try to have its cake and eat it too for as long as it can, or at least until the US presidential elections in late November. Many speculate Donald Trump could cut a deal with Russia and possibly also with China if he wins election. So why should Chinese President Xi Jinping decide before that?

Short of that, Beijing will try to pull any lever it can to keep Russia afloat and the Ukraine war ongoing. Beijing doesn’t want Russia to cut a separate deal with the US behind its back and against its interests.

In return for no agreement with the US, Moscow wants Chinese goods to keep flowing into its war-time economy. Moscow is in a good position to bargain with both China and America, particularly as long as Trump threatens to reverse Biden’s policies.

Regarding the SWIFT threat, Beijing might be calculating how real and costly it would actually be. The internationalization of the RMB is risky because it can cause a double exchange rate for China’s currency, one domestic and one international. That means the RMB could spin out of the Chinese central bank’s control.

Pressed by Blinken, and encouraged by some American advisors, Beijing might decide to bite the bullet.

At the same time, it’s imperative for the Republican and Democratic parties to establish a common foreign policy as soon as possible. Without this, things could spin out of control in the next few months. Or perhaps they already have.

According to “Keeping Up with the Pacing Threat: Unveiling the True Size of Beijing’s Military Spending”, an April report by Mackenzie Eaglen at the American Enterprise Institute think tank, China is beating the US in the ongoing arms race. The report’s key findings:

• Beijing’s publicly released military budget is inaccurate and does not adequately capture the colossal scope and scale of China’s ongoing military buildup and wide-ranging armed forces modernization.

• After accounting for economic adjustments and estimating reasonable but uncounted expenditures, the buying power of China’s 2022 military budget ballooned to an estimated US$711 billion— triple Beijing’s claimed topline and nearly equal to the United States’ military budget that same year.

• Equal defense spending between the United States and China plays to Beijing’s benefit. As a global power, the United States must balance competing priorities in the Indo-Pacific and elsewhere, which spreads Washington’s budget thinly across multiple theaters. Meanwhile, each yuan China invests in its military directly builds its regional combat power in Asia.

• America’s spy community has confirmed that Beijing’s defense spending is on par with Washington’s but questions remain. The intelligence community’s estimate of China’s $700 billion in annual military expenditures needs more transparency to better convey Beijing’s military budget breakdown and inform policy debates regarding US defense spending investments, gaps, and imbalances.

The $700 billion figure is already about 3.5 times Europe’s defense spending. Also, EU spending is divided among 28 countries with different agendas, making it highly inefficient. The Chinese People’s Liberation Army (PLA) has much lower industrial production costs, so it gets more bang for the buck than the US and EU.

China’s $700 billion budget is thus probably more cost-effective than the US’s $800 billion-plus budget. Moreover, PLA spending has increased faster and more significantly than both European and US military spending. The PLA is also cutting corruption, which historically has diminished the efficiency of military expenditures.

A Chinese destroyer costs $888 million while an American one costs $2.2 billion, almost three times as much. The difference is even larger in the production of drones and other state-of-the-art equipment.

Significantly, China has the most comprehensive industrial capacity in the world, which it can lend at will to any country. The American industrial base, in comparison, has been shrinking for decades.

The sheer Chinese military-industrial capacity and its efficiency in supporting Russia or any country it chooses to back thus creates an imbalance, one that is most dangerous for European countries facing today’s Russian threat and could be even more threatening in the future.

If European countries do not address this imbalance, they risk putting themselves in a weak position against any future strategic blackmail.

China’s military might be useful against foreign threats, but on its own it could backfire. American military muscle is part of a global design for security established 80 years ago, at the end of WWII.

The American military serves two aspects: domestic and international security, which have been tightly woven together for decades. As such, many countries (right or wrong) do not perceive the American military as a threat; conversely, it is seen as part of their own national security. This perception is further reinforced through a web of international defense agreements.

The PLA, on the other hand, is geared solely for China’s security and not for upholding any global or international order. Its growth, therefore, can be seen by many countries as disruptive and thus threatening to the US-led international order.

Because the PLA has no formal military alliance with anyone, without a comprehensive communication and political and strategic “pitch sale,” China’s martial buildup may isolate Beijing and could prove counterproductive by generating more security threats than it prevents.

The PLA’s buildup thus feeds on growing US-China tension about Beijing’s support for Russia’s military effort in Ukraine. If these fears are not adequately addressed, they could soon spiral out of control.

There is no quick fix for China’s predicament. Perhaps in the short term Beijing could consider distancing itself from Russia and Iran and thus gain some breathing space with the US and other countries as it reconsiders the general situation of the world and its future strategy.

Republished with the permission of the Appia Institute. Read the original here.