August 28, 2011

China's Economic Sword

By Jed Babbin

According to a new Pentagon report, the Beijing regime thinks the first two decades of the 21st Century are a “strategic window of opportunity” in which China’s “comprehensive national power” can be enhanced. A close reading of that report reveals that the continuing the US economic crisis is a principal reason for that belief.
The facts that our economic slump has gone on so long is, in China’s view, a validation of China’s strategy of conventional and asymmetric force buildup at a time when China is a rising power and America is apparently in decline.
The prolonged weakness of the US economy is a double-edged sword for the Communist Chinese. Though they are advantaged by the Obama administration’s increasing unwillingness to fund our defense, our economic instability threatens one of the foundations of the regime. As the Pentagon report says, continued economic development is, to Beijing, a “bedrock of social stability” as well as the means of underwriting the rapid expansion of Chinese military power. They believe that any economic slump could undermine their hold on domestic power.
Though we believe that China’s population would not likely be as dangerous to Beijing as its Egyptian equivalent was to the Mubarak regime, the Chinese rulers – and those likely to succeed them soon -- are of the opposite opinion. (We have to keep in mind that Hu Jintao, and his contemporaries, were young leaders at the time of the Tiananmen Square massacre. Hu was the first party official stationed abroad to congratulate the men who ordered that slaughter. Their view of the regime’s instability is almost certainly shared by their likely successors.)
According to House Armed Services Committee sources briefed by the Pentagon, any threat to the continued growth of the Chinese economy is considered of ultimate strategic importance to Beijing. China’s economy -- threatened by our economic weakness and Europe’s -- faces a rapid contraction caused in part by a diminution of trade.
But the other side of China’s economic sword poses a great danger to the United States. China watchers have, for nearly a decade, observed Beijing’s enormous military buildup with concern. It’s been more than 500 years since China built a deep-water navy, and it’s well on the way to having a force that can effectively block US intervention in defense of allies such as Taiwan and Japan. China’s air forces are also building to an effective area denial force. The Chinese chose to unveil their new stealthy J-20 fighter while then-Defense Secretary Robert Gates was visiting China, a gesture timed to cause Gates – and the United States – to lose face. The Chinese see themselves as a rising power and America as a global has-been. And they believe that is true in both the military and economic spheres.
However great China’s conventional military buildup is (and we don’t really know because their military spending is well-concealed) China’s dedication to the development of asymmetric weapons is even more intense. In cyberwar, China is probably the world leader and is, as the report cites, responsible for a massive cyberespionage effort. Though the Pentagon report alludes to the likelihood that China is behind major cyberattacks (principally espionage) against the US and other nations, other sources have told me repeatedly that China is clearly behind those and other cyberattacks – some successful – which were aimed at disrupting of destroying US classified computer networks.
China is also developing more exotic weapons such as “kinetic kill” weapons designed to destroy satellites and even directed-energy weapons intended for the same mission.
It is in these areas – cyberwar and anti-satellite weapons, among others -- that American economic weakness may be having the greatest effect. As one source told me, the Pentagon is enormously concerned that we are on the wrong side of the economic equation: it’s far more expensive to defend satellites and computer networks against the weapons China is developing than it is for China to develop them.
Because defense is a lot more expensive than offense, our weak economy and President Obama’s affinity for continued military spending cuts threaten our ability to build the defenses we need.
The president, months ago, credited the departing Bob Gates with $400 billion in defense cuts and set the goal of another $400 billion in cuts over ten years. Secretary Panetta is now conducting a study on how to achieve those cuts.
Panetta’s study suffers the same defect that Gates’ earlier work did. It begins with the number to be cut rather than with an assessment of the threats the armed forces are expected to deter or defeat, including China’s cyberwar threat and its development of anti-satellite weapons.
The direct effect of further US defense cuts is the validation of China’s asymmetric warfare strategy. Their offensive capabilities are affordable while our defensive capabilities are not. To the extent we abandon those capabilities, we also abandon the battlefield to those who choose to oppose us. The latest administration action seems to push the Pentagon harder for the new round of cuts.
OMB Director Jacob Lew, in an August 17 letter to all department heads, said “Unless your agency has been given explicit direction otherwise by OMB, your overall agency [budget] request for 2013 should be at least 5 percent below your 2011 enacted discretionary appropriation. As discussed at the recent cabinet meetings, your 2013 budget submission should also identify additional discretionary funding reductions that would bring your request to a level that is at least 10 percent below your 2011 enacted discretionary appropriation.”
The Defense Department, according to congressional sources, has not received any “explicit direction otherwise” and is preparing multiple options for the White House to consider in meeting those goals for further defense spending cuts.
In about ten days, President Obama will return from his vacation in Martha’s Vineyard to deliver another speech on the economy. From many leaks to the press and trial balloons floated by the White House, Obama’s “new” policies are likely to be little more than more “stimulus” spending, small tax cuts and nothing to restore growth to America’s economy. Beijing will be listening closely. They will not hear anything to dissuade them from the view that this century -- or at least the first two decades of it -- is theirs, not ours.
Jed Babbin served as a deputy undersecretary of defense under George H.W. Bush.

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