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Pentagon's new defence strategy eyes China Add to ...

The Pentagon’s strategic review of the U.S. military comes in the age of austerity.

Defence budget cuts are on the way, the only question is: how deep will they be? Estimates range from at least $450-billion to $1-trillion over the next decade.

But one of the key aspects of President Barack Obama’s comments this morning at the Pentagon is the shift in strategy to bolster the air force and navy, and to build the U.S. military’s capacity in the Pacific region to counter China’s growing military presence.

“We’ll be strengthening our presence in the Asia Pacific, and budget reductions will not come at the expense of this critical region,” Mr. Obama said in the Pentagon’s briefing room on Thursday.

This isn’t the first time the U.S. has addressed military spending in the Asia-Pacific region. The Pentagon has been warning about China’s military spending for years.

Last August, it warned in a report that China’s military was on course to build a modern military by 2020, and in a year when the Chinese military tested a stealth aircraft and conducted trials of a new aircraft carrier, the Pentagon's concern was unmistakable.

China’s defence spending and military growth “are potentially destabilizing to regional military balances, increase the risk of misunderstanding and miscalculation and may contribute to regional tensions and anxieties,” Deputy Assistant Secretary of Defence for East Asia Michael Schiffer said in August of last year around the release of the report on China’s military.

China’s sea disputes with neighbours such as the Philippines and Vietnam over competing claims of sovereignty on islands is nothing new. And Chinese President Hu Jintao’s recent message to its navy – ”make extended preparations for warfare” – will no doubt make U.S. allies nervous.

But how fast is the Chinese military growing? And is there any expectation that defence spending will one day surpass the U.S. military?

Reality check: the size of the U.S. military and the scale of U.S. defence spending will continue to dwarf China’s military growth for years to come. Mr. Obama will be careful to point out in an election year that, whatever reductions in defence, the U.S. defence spending will continue to grow but just not at the pace it has in the past.

But there will come a point when, theoretically, China can surpass the Unites States on defence spending.

This bubble graph by the Stockholm International Peace Research Institute, an independent international institute dedicated to research into conflict, armaments, arms control and disarmament, illustrates the story of defence spending from 2001 to 2010: the United States is spending more than any other country, with China a distant second.

A trend line graph by the same institute compares military spending regionally. North American spending (dominated obviously by the United States) rose dramatically from 2001 to 2010 compared to total military spending in the Asia and Oceania region (dominated obviously by China).

So when will China overtake the United States in defence spending?

China has witnessed incredible economic growth, and it has invested its wealth with consecutive double-digit increases in military spending. In March of 2011, it announced that it will increase its military spending in 2011 by 12.7 per cent.

But how long can China sustain such phenomenal economic growth? Military spending will depend on that growth.

This handy interactive graph by The Economist magazine allows readers to adjust GDP growth rates, inflation and Yuan appreciation to arrive at their own date for when China will surpass the United States in real GDP growth.

The Economist assumes a GDP growth rate over the next decade of 7.75 per cent in China and 2.5 per cent in the U.S., compared to the GDP growth rate over the last decade of 10.5 per cent a year in China and 1.6 per cent in the U.S.

And following on from the growth figures, the magazine concludes that China will surpass U.S. defence spending in 2025.

There is no telling what the Chinese military would look like after all that spending.

Its navy is small compared to the United States, and there are all kinds of factors worth considering: what if Chinese economic growth slows dramatically? And even though China is closing the technological gap with the United States, a recent report by the International Institute for Strategic Studies concluded that factories involved in arms manufacturing “often possess outdated manufacturing and research attributes.”

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