China and the Pax Americana

The slides for this speech are also available as a PDF at the link here.

Many thanks to Tony Hernandez, James Schenck and Jim Hayes for inviting Melissa and me back for your always excellent conference. This is the first DCUC forum in Asia, and we are pleased to be a part of it.  If you don’t mind I would like to start with a few housekeeping items.

This 2023 Congressional Research Service study on American military bases in the Pacific is excellent. Here is the website address, and I have brought several hard copies with me if anyone wants one for your airplane reading. 

U.S. Defense Infrastructure in the Indo-Pacific: Background Issues for Congress

CONGRESSIONAL RESEARCH SERVICE

6 June 2023

https://www.congress.gov/crs-product/R47589

As part of my presentation, I will be briefing you on military personnel numbers on several of our most important bases in the Western Pacific. The bases themselves do not publish the number of personnel they have on board.  My numbers are estimates, but they are estimates based on good sourcing, and I think they are safe and useful for your planning purposes. Please be aware that the individual base populations will not always add up to the top-line number in a particular country. Please also be aware that this is just for our forward bases west of the International Date Line. So they do not include, for instance, Hawaii and Alaska. Also, the numbers do not include civil servants, contractors, or dependents. If you added up all the categories of folks working for the U.S. military in all of IndoPacom, on both sides of the International Date Line, it would be about 350,000 people. But our interest today is the Western Pacific and Indian Ocean. 

Before I get underway, I would like to share a few maps with you. They should help give our discussion some context.

In 1854, before our civil war, the famed American Commodore Matthew Perry proposed to the U.S. Congress that Taiwan be annexed by the United States. It obviously did not happen, but today that island nation might be a logical choice for a 51st state.  There is widespread use of English on Taiwan. It is a high-tech, dynamic, hard-working democratic society that is also quite pro-America. But we are not here today to give President Donald Trump any new real estate ideas.  

American expansion in the Pacific picked up steam later in the 19th century. Alaska was bought from Russia in 1867. Hawaii and Guam were annexed, both in 1898. We have held other Pacific possessions off and on, including the Philippines and Okinawa. America has fought three big wars in the Pacific basin: the Spanish-American War, World War Two, and the cold war, which included the Korean and Vietnam wars. As a result the U.S. military has dropped deep roots in this far-flung theater, has excellent allies, and is well-positioned for future contingencies. 

Japan serves as the American lynchpin for security in the Western Pacific. 60,000 American servicemen and women are stationed there, making it the largest U.S. forward stationing in one country.

The U.S. 7th Fleet and the 5th Air Force, both headquartered in the Tokyo area, serve as forward bases only about a thousand miles from China and North Korea. The American presence in Japan comes with multiple decades of bilateral training and cooperation. The 1900-mile Japanese archipelago offers the American military extensive access to large airfields and port facilities. This means the American military can posture fewer blue-water warships in a distant ocean than would otherwise be required to achieve the same deterrent effect.

The American presence in Japan brings U.S. forces approximately 4,000 miles closer to the potential Western Pacific war zone than they would be from the U.S. Indo-Pacific Command headquarters on Oahu. 

The benefits of the American presence in Japan are multiplied by the fact that Japan possesses a powerful military in its own right. Japan maintains a highly capable blue-water navy and is the largest foreign customer of the American-made F-35 aircraft, the world’s most advanced jet fighter. Bilateral military cooperation is deeply synergistic, particularly because the Japanese navy uses American radar and missile systems on its most advanced guided-missile destroyers.

There are just under 30,000 U.S. troops stationed in South Korea. After losing 37,000 troops in the Korean War, the United States sought a solution to permanently stabilize the peninsula. The stakes have only grown over the decades, as North Korean nuclear-armed missiles now place much of the continental United States under threat. Ballistic missile defense is among the most technically challenging and costly military endeavors. Keeping a potential Korean conflict localized and contained is a worthy goal, both as an effective deterrent and as a means of reducing reliance on extremely expensive continental U.S. defensive weapon systems. 

A discussion about the state of security in the Western Pacific is primarily about the rivalry between America and China. 

Globally, the two countries are in a league of their own. They account for about 40% of the world’s economic activity. America’s gross domestic product is about $30 trillion, and China’s is $20 trillion. Germany, with the third-largest economy in the world, generates only a quarter of China’s economic output. With Japan and Western Europe continuing to stagnate economically, America and China will likely be way ahead of the pack for at least the remainder of this decade.

Most people currently working on the national security scene in Washington think the balance of power in the Western Pacific favors China due to China’s regional presence, rapid economic rise, robust manufacturing capabilities, and impressive military buildup. These factors are all valid and make China a more significant challenge than the rest of America’s conventional military threats combined. In preparing for this speech, I did an informal survey of about 20 experts on China and national security, with the key question being “what is China’s most important strength?” Most of those experts responded that China’s massive manufacturing base and ability to scale up production of military equipment were China’s greatest strengths. 

China’s 21^st century military buildup has indeed been impressive. During the Taiwan Strait crisis in 1996, the United States sailed the USS Nimitz Carrier Battle Group through the Taiwan Strait. China would likely not have been able to stop the maneuver even if it had tried. Today, thirty years later, the same action would be unthinkable.

The Chinese response to that national humiliation has been a 30-year military modernization sprint. In terms of advanced jet fighters, missile systems, radars, guided missile warships and even aircraft carriers, the People’s Liberation Army of 2026 is unrecognizable compared to the PLA of the mid-1990s.

The People’s Liberation Army Air Force (yes, that is the actual name) has gone from thoroughly obsolete third-generation fighters to boasting the second most powerful air force in the world. Both America and China measure their fifth-generation fleets in the hundreds. If trends continue, the U.S. and China will have roughly one thousand fifth-generation fighters each by 2030, while the next largest fleets will be a tenth that size.

The Chinese navy has gone from having essentially no modern combatants to having nearly 50 major guided missile surface ships, which are comparable to U.S. Arleigh Burke-class destroyers. While their destroyer fleet size is roughly half that of the American Navy’s, it is all concentrated in the Western Pacific and qualitatively changes the battlespace. The total People’s Liberation Army Navy is now larger than the U.S. Navy by ship count, but not by tonnage.

China’s rocket force has equally matured and is now the largest in the world. According to President Xi Jinping, it is a cornerstone of Chinese national security. From the anti-ship ballistic missiles to the “Guam Killers,” they are the primary reason why the U.S. must now think of military engagement with continental Asia from longer and longer standoff distances.

In space, China and Russia track U.S. satellites daily and can potentially take them out. Space is essential to complete the U.S. Blue Force kill chain. The other mission is to prevent China and its friends from completing the Red Force kill chain.  Indo-Pacom certainly understands that space effects are needed for aircraft carriers to get closer to the fight in the Western Pacific. 

For the U.S. Space Force to defend commercial space assets, it would have to be instructed by the President. The Chinese will assume U.S. Space Force is using Starlink, Amazon’s Leo and other networks even though they are commercial, and China will see them as valid targets. The proliferated warfighter architecture in space, both military and commercial, should be resilient due to the sheer number of targets to shoot at. China won’t be able to hit them all.

China has made commensurate advancements in its submarine, aircraft carrier, amphibious ship, and surface-to-air missile forces. This is a monumental accomplishment which deserves to be treated with the utmost severity, and respect. Again, it is by far the largest conventional military threat that the United States faces in the early 21st century. 

But I will argue a combination of three key geopolitical factors actually tilts the balance of power in the Western Pacific in favor of the United States and her allies. Indeed, the 2026 Iran war has shown a significant public spotlight on these Chinese challenges. 

First, geography. The First Island Chain in the Western Pacific Ocean boxes China in. Second, alliance asymmetry. China has only one ally, and it is North Korea, which may cause more trouble than it is worth. The U.S. possesses a deep bench of serious, committed allies, both formally and informally, in the Western Pacific and South Asia. And finally, domestic resource scarcity. China’s economic survival depends on moving oil, food, and manufactured goods on the ocean through the First Island Chain. The first two factors make this third factor extremely difficult.

The First Island Chain is a network of nations running from north to south along the entire coast of China. These nations are in close proximity to the Chinese coast, ranging from 100 to 500 miles offshore. They all have political disagreements with China and they all benefit from continued cooperation with America, whether as formal treaty allies, like Japan, or more ambiguous security partners, like Singapore.

Unlike America, which has no significant landmass off its coasts for over three thousand miles, the Chinese are boxed in. Picture the American eastern seaboard lined by three island nations, all hostile to the United States. How different would we feel in Washington or New York if Iran or North Korea were 100 miles east of Virginia Beach?

My presentation will now concentrate on the three primary sections of the first island chain: the Japanese portion, which brackets the East China Sea; the Taiwanese portion, which brackets the Taiwan Strait; and the nations surrounding the South China Sea. Keep in mind that the People’s Republic of China does not stretch from sea to shining sea— it only has an east coast, which defines China’s access to the rest of the world. China’s inland border is mostly made up of inhospitable deserts, mountains, jungles and tundra. This helps explain China’s Hermit Kingdom-like history, and why China has never been a global power. 

Japan is the northern section of the First Island Chain. It hosts 60,000 American troops, more than any other nation. It is the largest international customer of the F-35, which is the most advanced fighter in the world, and it possesses a powerful blue-water navy. It also has the fifth-largest economy in the world, and a centuries-long history of invading and harassing China. China has never invaded Japan. 

Southern Japan, positioned off the coast of Shanghai, is a loaded gun pointed at the heart of the Chinese economy. Half of China’s economic activity occurs along the Yangtze River, which is analogous to the Mississippi River in America. Shanghai sits at the mouth of this river and serves as central China’s gateway to world trade. Any trade that moves in and out of Shanghai must pass through the East China Sea, which is completely hemmed in by the southern half of the Japanese archipelago, and by our good friend Taiwan to the south. 

To make matters worse for China, its economy is heavily dependent on foreign oil for economic activity. China is the world’s largest importer of oil. China imports roughly three-quarters of its oil consumption, the vast majority through the East China Sea. The vulnerability this creates for China is hard to overstate. In comparison, America has been a net energy exporter for this entire decade, and has a blue-water Navy that dominates the world’s sea lanes. America is the largest producer of oil in the world. For China to safeguard its domestic economy, it must protect almost 12 million barrels of oil per day that flow into the region on Very Large Crude Carriers, or VLCCs, that weigh 300,000 tons and travel at only 15 knots. Protecting those easy targets is not optional for China. Oil is the commodity that enables all other commodities. Almost everything you are touching and seeing now needed oil to produce. While the entire First Island Chain is relevant to these critical sea lanes, the Japanese portion is the most important. 

When Chiang Kai-shek fled from continental China to the island of Taiwan at the end of the Chinese civil war in 1949, it did not seem likely that the conflict would remain unresolved in 2026. Seventy-seven years later, the Republic of China, also known as Taiwan, is a thriving democratic nation of 23 million people, well known for high-tech manufacturing, particularly in the semiconductor field.

It is still the official position of mainland China, the People’s Republic, that Taiwan is an inalienable part of China, and China reserves the right to use military force to establish its rule. It is almost certain that Taiwan would have fallen had massive Chinese involvement in the Korean War in the early 1950s not distracted the communists in those critical first few years after their revolution. Instead, Taiwan is now a militarized porcupine, located 100 miles off the Chinese coast, and has been preparing for an invasion for seven and a half decades. Were China to invade Taiwan, it certainly would not be a simple matter of a large country swallowing a small island. If that were the case, it would have already happened. The operation would be extremely complex, and its outcome would not be a given. 

We Americans have special insight into the difficulty of invading Taiwan because America actually drew up plans to do so under the code-name “Operation Causeway” during the island-hopping campaign at the end of World War Two. In an era before precision-guided weaponry, when the United States had sea and air dominance in the region, our plans called for 2,000 ships and half a million men to take over Taiwan. Whether undertaken in the 20th or 21st century, an invasion of Taiwan would likely be the third-largest military operation in history, behind only the German invasion of Russia in 1941, and the Allied invasion of Normandy on D-Day, 1944.

A brief comparison to the 2022 Russian invasion of Ukraine sheds light on this challenge. The Russians used a force of roughly 200,000 troops to invade along a 1,000-mile border of flat, open land. Their only task was to secure a single city, Kiev, located 50 miles from the Belarus border. 

Unlike Taiwan, which has been preparing for this specific contingency for three-quarters of a century, Ukraine had not even existed as an independent nation for a third of that time. Before that, Ukraine had been part of Russia for 350 years. Moreover, amphibious invasions are both chronologically and geographically funneled and difficult.  China has never undertaken an amphibious assault in its 3,500-year history. Americans have been running amphibious operations since the French and Indian War…before we were even a country. 

Amphibious invasions must occur at low tide, or else the amphibious ships run the risk of being stranded on the beach. In Taiwan’s case, there are also seasonal limitations. Sea states are only compatible with Strait of Taiwan crossings for a few weeks per year in the spring and fall. Taiwan also has prepared defenses along the narrow bands of earth–the beaches– that amphibious invasions must traverse. And, because Taiwan is rocky and mountainous, there are few beaches suitable for landings in the first place. In addition, Taiwan has excellent U.S. and Western military equipment that packs a nasty punch.  

The southern and final section of the First Island Chain outlines the South China Sea. The primary states surrounding this body of water are the Philippines, Indonesia, Malaysia, and Vietnam. The South China Sea is a mess of overlapping international claimants on minuscule islands, which would ostensibly provide the claimants exclusive access to valuable undersea resources.  By claiming the entire body of water inside its infamous “Nine-Dash Line,” China has angered all regional players and isolated itself politically. This does not help China’s regional reputation, which is already strained by U.S. treaties with the Philippines and Thailand, historic U.S. cooperation with Singapore, and China’s history of  invading Vietnam, most recently in 1979.

The South China Sea is one area where China has made some progress in mitigating its sea lane vulnerability.  By building a series of man-made islands and populating them with military bases, they are changing the situation “on the ground.”  But this is only a small portion of their lengthy sea lane problem, and big harbors like Subic Bay, Philippines, and Cam Ranh Bay, Vietnam, are still more valuable for their surge capacity into the South China Sea in any wartime contingency. 

The Philippines rivals Japan in its geographic influence along the first island chain.  It is 1100 miles long, has a good American military presence and history, and blocks China’s access to the open Pacific waters. The U.S. now has access to nine bases in the Philippines, and is about to conduct a joint military exercise there with 17,000 troops from the U.S., Canada, Japan, France and the Philippines. 

Diego Garcia is the gateway to the Indo-Pacific from the Middle East.  It is a small U.S. Navy Support Facility on a small island that has a long runway. It has been busy this century, mostly as a base for long-range bombers and their tankers conducting operations over the Middle East. It sits dead square on China’s sea lanes flowing to and from Europe and Africa. 

China’s true problem is that it lies on the wrong side of the Indian Ocean. Should the U.S-China rivalry heat up, even if China were to somehow subdue the entire First Island Chain, China would be only one tenth of the way toward securing its required sea lanes to its European markets and Persian Gulf oil. An odd geographic idiosyncrasy left East Asia with a combination of factors that led to explosive population growth and economic development, along with a dearth of hydrocarbon resources. It is not sufficient for China to solve one of the three First Island Chain problems. It must solve all of them simultaneously and then project power through the Indian Ocean in order to secure the vital resources and markets necessary for its continued economic activity. Despite China’s formidable strengths, this is not an even match.

This presentation is living in real-time. The world’s eyes were opened to China’s sea lane vulnerability as the 2026 Iran war commenced two months ago. President Trump made some comments about it as the Straight of Hormuz blockage got worse in early March. Knowing the president’s usual modus operandi, he no doubt recognizes this as a point of leverage in his upcoming summit in Beijing. Several observers believe the Trump administration absolutely had China in mind when launching the Iran attack, as well as the New Year’s Venezuela military operation. China now has three key oil providers under duress: Venezuela, Iran, and Russia. The Ukrainians are systematically degrading Russia’s oil production with long range drone attacks and other sabotage. Most of the Russian oil that China buys also moves by sea. 

China has barely lifted a finger to help three close friends in big trouble this year: Venezuela, Cuba, and Iran.  China’s ability, or interest, in projecting power appears to be minimal, at least at this time. China is also taking a cautious approach to helping Russia in its war to take back Ukraine. The “no limits” friendship between those two regional powers appears to actually have some serious boundaries. China will dabble in dual-use technologies for Russian military assistance, but will not provide actual military equipment and weapons to its friend in need. In the meantime Russia is stuck holding the same 20% of Ukraine it held three years ago. 

I believe there are two more factors in play that need consideration before we conclude: China’s military purges, and China’s weakening economy.

Chinese military purges have been ongoing and dramatic this decade. They are at a scale unseen since Chairman Mao’s death in 1976. Chairman Xi has purged about 100 senior officers since 2022. This may reflect the Chinese Communist Party’s lack of confidence, or worse, in their own military. Loyalty seems to take precedence over experience. Financial corruption appears to be rampant. As we used to say about the Kremlin during the Soviet era, every once in awhile someone just disappears. 

These purges probably make a near-term attack on Taiwan less likely. They are viewed as a positive development by many China watchers and Western military experts, including in an official assessment by the U.S. director of national intelligence. The purges include the commander and deputy commander of the strategic rocket force, which is viewed as China’s military ace in the hole, as well the commander of the Eastern Theater that is focused on Taiwan. 

China’s political system is quite opaque, but it is hard to believe this is all simply about financial corruption. It has to reflect a broader dissatisfaction with the People’s Liberation Army. Xi Jinping has fired almost all of his generals, including five of his six direct reports. These are mostly leaders Xi picked himself. He as been president since 2012. We are now looking at an inexperienced Chinese military leadership cadre.  A youthful officer corps may be more loyal to Chairman Xi and the communist party, but they are not necessarily confident. It is possible that with all the new money that has been poured into the Chinese military over the last thirty years, the PLA became viewed as a rival to the communist party’s monopoly power. However, we also need to consider the tremendous consolidation of power this represents in one man’s hands.  Chairman Xi is 72 years old.  If he wants to attempt a midnight assault on Taiwan, there would likely be little domestic resistance. 

In the meantime, China’s economic weaknesses are becoming better understood, and appear to be worsening.  China announced for decades that it grew 8-10% a year, year after year after year.  As each year passed, those stats became more suspect, including to central bankers around the world. Yet China and the world still reported them.  Until that time no country had ever outpaced Japan in the 1960s and 1970s with its annualized 6-8% growth. 

One of my favorite examples from that era took place in 2001. Most of the world fell into a recession that year in the wake of the dotcom collapse and the nine-eleven (9-11) terrorist attacks. Hong Kong was still an open, free city at the time, and announced it had been in a recession with two back-to-back quarters of negative economic growth.  At the same time, Guangdong province, which is the manufacturing hub around Hong Kong, announced their economic growth was…you guessed it, 10%. 

The covid pandemic was a disaster for China.  It highlighted to every company in the world the need to diversify supply chains away from China. You now want to have exposure to places like Vietnam and India, and Central and South America, and within the North American common market, as alternatives to China. The Chinese economy appears to be in deep trouble. With collapsing consumption and an unresolved real estate debt problem, China could be on the doorstep of an expanding deflationary problem and collapsing currency. 

This decade, China has restricted or halted the publication of numerous economic statistics, including youth unemployment, land sales, and foreign investment figures. This move hides economic weaknesses like falling consumer confidence and debt, severely reducing transparency for investors and analysts. In 2023, China temporarily stopped publishing youth unemployment data after it hit a record high of 21.3%.  Reporting was later resumed with a revised, lower figure. Data regarding land sales by developers—crucial for gauging the property sector crisis—has been reduced or removed from official reports. Real-time data on foreign investor activity has been restricted following major financial market selloffs.

One could fill libraries with literature that has been published over the past two decades about the inexorable Chinese rise over the United States. Many commentators have come to the conclusion that war between the two powers is somehow inevitable. This is known by some in the political world as the “Thucydides Trap:” a phenomenon first observed by Thucydides in his history of the Peloponnesian War. In short, Sparta felt compelled by a rising Athens to go to war to prevent them from being overtaken.

But what if the reverse is true? The United States is now outpacing China economically, and in global, if not regional, military power. Is a reverse Thucydides Trap possible? The Chinese Communist Party has derived its political legitimacy not from the consent of the governed, but from its promise of 6% annual growth. What happens if that growth continues to falter? Economically overtaking the United Kingdom in 2006 was a source of national pride for the Chinese Communist Party. Overtaking the United States was to be the crown jewel.

If this crown cannot be plucked, to what will Xi Jinping and the communists turn? There is another jewel that he may come to believe he can snatch just by extending his hand. Of course, I’ve made the argument in this speech that the probability of a successful Chinese invasion of Taiwan is very low. But how often are those who start wars the eventual victors?

Thirty-five years ago, we witnessed the improbable, peaceful dissolution of the Soviet Union, whose states needed to reinvent themselves to derive some form of legitimacy from those governed. Whether due to a succession crisis, which might occur when Xi Jinping dies, or when China and the world realize that their economic legitimacy no longer suffices as a surrogate for political legitimacy, Chinese Communist leadership will have to make some difficult choices.

In ten weeks, we Americans will celebrate the 250th anniversary of our greatest political holiday. It is certainly history’s greatest political holiday as well. Our republic, our self-government, has taken the world by storm in a short period of time. Our openness, assimilation of millions of immigrants from all continents, management of a global free trade regime for decades while opening up our domestic market to almost all comers, including our war-time enemies, is unparalleled in the annals of recorded history. We were a major force vanquishing German fascism and Russian communism, and helped spread democracy to the darkest corners of the globe. We have created unprecedented wealth for hundreds of millions of people. Today, the largest and third-largest countries in the world, India and America, are thriving, dynamic democracies. China has numerous democracies right on its doorstep, including Japan, South Korea, Taiwan, the Philippines, and, of course, India. Alongside our formidable military power, this appears to be an opportune time to fashion a strategy to push the second largest nation on earth–China–to join the family of democratic nations. Now that would be a boon for peace and for prosperity.