Accidental Conflict by Stephen Roach;

Author:Stephen Roach;
Language: eng
Format: epub
Publisher: Yale University Press
Published: 2022-05-15T00:00:00+00:00

China as a Premature Leader

China is most assuredly a major country. But is it truly ready for global leadership, as its new model of major country relationships seems to presume?

To an important extent, the answer to this question goes back to China’s scale fixation that I stressed in the previous chapter. In making the case for a new relationship, China’s senior leaders seem to be conflating the absolute size of their economy with leadership clout. This makes sense on one level: the larger the economy, the greater its capacity for outlays on military expenditures, foreign direct investment, foreign aid, import demand, consumer spending, and other forms of global power projection. But there is more to clout than scale alone.

As a proxy for the power projection associated with global leadership, military spending is obviously of special significance. In 2020, China’s defense budget was reported to be just 1.7 percent of GDP, far short of the United States’ 3.7 percent share.16 But with dollar-based estimates of Chinese GDP on a trajectory to converge with the United States around 2030, the defense spending gap is expected to narrow even if the disparity in the GDP shares of military spending remains wide. This is exactly what has happened over the past fifteen years. China’s defense outlays, despite consistently being a much smaller share of its GDP, rose in US dollar terms from nearly 8 percent of America’s total in 2005 to 33 percent by 2020.17

In purchasing-power parity (PPP) terms, a more meaningful metric in many respects, the convergence has been even more dramatic. As we have seen, in large part this is because PPP-based Chinese GDP actually surpassed that of the United States in 2016. As a result, by 2020, despite the significant disparity in the defense spending shares of US and Chinese nominal GDP, the dollar volume of China’s military budget had risen to 54 percent of that in the United States in PPP terms—fully 1.7 times the current-dollar differential of 33 percent.18

With China’s defense spending second only to that of the United States and greater in US dollar terms than the combined defense expenditures of India, Russia, Japan, South Korea, and Taiwan, there can be little doubt of its ascendancy as a global military power.19 In a break from the quantity emphasis that dominates most aspects of China’s ascendancy, here its leaders have also focused on quality. Xi Jinping has long emphasized an information-based modernization of the People’s Liberation Army, drawing heavily on China’s growing AI capabilities. The PLA’s stunning recent progress in the new technologies of modern warfare, from stealth aircraft and laser targeting to breakthroughs in space exploration and, according to recent reports, hypersonic weaponry, dovetails with Xi’s focus on improving the quality of China’s defense capabilities.20

Moreover, there is a consensus that official statistics on Chinese military outlays significantly understate the full extent of the nation’s defense spending. Among other things, they leave out paramilitary forces charged with internal security, the coast guard, and the increasingly impressive Chinese space program.21

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