The myth of China’s military might Beijing's defence budget doesn't tell the whole story

The day after Li Keqiang, China’s departing Prime Minister and the last of Beijing’s moderates, called for more market liberalisation to reach this year’s 5% growth target, Xi Jinping responded by announcing a muscle-flexing 7.2% increase in China’s defence spending. That is certainly consistent with Xi’s truculent stance (he replied to Nancy Pelosi’s recent Taiwan visit with a series of ballistic missile launches), and with his official promise to the Communist Party that China will become the world’s dominant power by 2049. But what do those percentages actually mean?

The declared total of China’s newly increased defence budget at 1.56 trillion yuan amounts to $230 billion, according to the current exchange rate. If that were the case, it would mean that China is falling further behind the United States, whose own fiscal 2023 defence spending is increasing to $797 billion (and actually more, since that figure does not include its funding for military construction or the added help to Ukraine).

China’s own figure is also generally assumed by experts to be greatly understated — not by fiddling the numbers one by one, but rather by wholesale exclusions, such as the attribution of research-and-development spending to civilian budgets. Even if a commando team of elite forensic accountants were sent into action to uncover China’s actual defence spending, with another team dispatched to determine what’s missing from the US budget, we would still only have a very loose indication of how much actual military strength China and the United States hope to add.

But one thing can be said with absolute certainty: each side is adding less than the rising numbers imply.

In China’s case, a manpower shortage undercuts military spending in the PLA’s ground forces and naval forces, and soon it will affect manned air units as well. The PLA ground forces now stand at some 975,000, a very small number for a country that has 13,743 miles of borders with 14 countries — including extreme high-mountain borders where internal combustion engines lose power, jungle-covered borders where remote observation is spoiled by foliage, Russian-river borders with endemic smuggling, and the border with India’s Ladakh where an accumulation of unresolved Chinese intrusions have forced each side to deploy substantial ground forces, with at least 80,000 on the Chinese side.

Except for Ladakh, which now resembles a war-front, borders are not supposed to be guarded by army troops but by border police. And China did in fact have a substantial dedicated border force, but it was abolished for the same reason that the PLA ground army is so small: a crippling shortage of physically fit Chinese men willing to serve in these regions. Cities and towns, by contrast, do not seem afflicted by such severe manpower shortages, leading to the weird phenomenon on Nepal’s main border crossing to Tibet where, according to an acquaintance, a group of freezing Cantonese city policemen were checking travellers and “guarding the border”. (They said they had been “volunteered” for two months.)

Even the Party’s strong-arm “People’s Armed Police” — China’s equivalent of the uniformed and combat-armed French Gendarmerie, Italian Carabinieri and Guardia di Finanza, and Spain’s Guardia Civil — is affected by the refusal of young Chinese men to serve. Its 1.5 million total may sound like a lot, but Italy has 150,000 Carabinieri and Finanzieri for a 60-million population — 10% of the numbers for 5% of the population. And Italy does not have to allocate vast numbers of armed men to corral and control Uyghurs and Kazakhs in Xinjiang, Tibetan herdsmen or severely disaffected Mongols.

There are no such conclusive comparisons to determine the impact of manpower shortages on the air and naval forces, but here there is another consideration: much more than the ground army, which continues to accept some recruits of low intelligence, the naval and air forces really do need recruits who can absorb technical skills quickly enough to maintain competence as their personnel turns over. High-glamour roles such as pilots will always attract enough bright people, but these days air and naval forces need high skill levels across the board, and that is the PLA’s Achilles’ heel: bright young Chinese are possibly the planet’s most civilian-minded population, least inclined to serve under the command of a military hierarchy. More money would only help to induce them to volunteer if there were a concurrent economic downturn. There is one right now, as it happens, with very high youth unemployment numbers declared to be around 20%. But that is hardly a stable remedy for a demographic and cultural reality with deep roots in Chinese history; it’s a key reason for the long sequence of foreign conquest dynasties that ruled China until 1912. They could do so because their Turkic, Manchurian and Mongol populations preferred to serve as soldiers rather than farmers, while with the Han Chinese it was the other way round.

As for the United States, what diminishes the value of $797 billion is much more obvious: decades of “research and development” without war against peer antagonists has generated a culture of baroque, even rococo, weapon designs, offering wonderful capability enhancements in exchange for costs only sustainable if there is no war. For example, an F-35 fighter is so extraordinarily and unrealistically complex that, since production started in 2006, a measly 890 have been delivered (as of February this year) for the US Air Force, US Navy, US Marine Corps and all foreign allies. This year, a grand total of 156 F-35s are to be produced in all versions for all countries. In other words, the F-35 is not actually a practical weapon of war because, stealth or no stealth, 100 aircraft could be lost in a single day of combat. Much the same is true of tanks, as was revealed when Canada was bountifully praised for finding four Leopards to donate to Ukraine — even though an army can lose 40 tanks before breakfast on a bad day.

In other words, because of the accumulated drift from reality, caused by decades without large wars with peer antagonists (already in 1914 it was discovered that colonial wars taught nothing of value when it came to fighting Germans), military equipment and military organisations cannot benefit proportionally from budget increases. What would really increase China’s military power is radical military reform — not increased spending on PLA forces that keep trying to imitate American forces, technologies and strategies designed long ago.

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Professor Edward Luttwak is a strategist and historian known for his works on grand strategy, geoeconomics, military history, and international relations.

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