By William T. Pendley

26 October 2000 

While assessing Chinese military development is a very complex undertaking, my task here today is much simpler.  This room is filled with experts who have studied and analyzed Chinese military development for decades.  Your contributions to our understanding of those developments is widely recognized.  Yet despite your efforts there still rages a debate as to what those developments mean in real terms.  Do the military developments that we observe foreshadow changes in Chinese strategy or policy?  Do these observed military developments require a change in US strategy or policy? 

The primary metric that must be applied to any assessment of military capabilities is whether or not the assessment is relevant for decision-makers responsible for strategy and policy.  Mere "bean counting" exercises and static balances that we developed to a science during the Cold War may or may not have relevance.  Only if our assessment of capabilities gives us clear insights into Chinese strategy and intentions will it allow us to develop the strategy and policies essential to defeat the strategy and shape the intentions.  That in turn is the essence of deterrence to maintain the peace or victory in the event of conflict--- shaping intentions or defeating the strategy of the opponent. 

My brief presentation today is an attempt to examine what are the key questions that must be answered for our assessments to be relevant for US strategists and policy makers in any administration.  In the broadest sense, they are an attempt to "follow the money."  Governments, like businesses, tend to prioritize their expenditures to support their national strategy and defense ministries tend to channel their expenditures into capabilities that support their military priorities and strategy. 

As many of you know better than I do, China is a difficult target to get reliable information on budgets and expenditures.  There is a lack of transparency compounded by dispersal of military expenditures well beyond the official defense budget.  Chinese citizens who reveal even insignificant data can quickly find themselves being provided room and board behind bars by the state.  All of this has resulted in a wide range of assessments as to the real amount of the Chinese defense budget. 

This being said, there is still a lot of self-induced distortion that is often the result of attempting to convert expenditures into dollars or purchasing power equivalents that have a tendency to distort the picture and inflate the values.  Also, we seem at times addicted to analysis based on percentage of GNP that tends to promote an exaggerated vision of the military expenditures of developing nations while obscuring the massive military investments of developed nations.  We need to avoid these types of distortions if we are to provide assessments with real value. 

In an effort to provide a meaningful framework for the assessment of Chinese military development, I have posed five key questions that must be addressed by US strategists and policy makers.  The fundamental criteria for your assessments in my opinion are their relevance to answering these key questions. 

What are the priorities within the Chinese national allocation of resources and are those priorities changing? 

This question goes to the heart of Chinese national strategy.  We must know what percentage of the resources actually available to the government is being invested in the military and how does that compare with investment in other major areas.  We need to know if that relative percentage going to the military is changing because that is far more important than reporting an increase in the military budget that may merely reflect inflation.  A significant change in the relative percentage of the national budget going to the military will give us early indications of a change in national priorities. 

In all of these areas we need to do a historical analysis that will establish a baseline against which to analyze trends.  We also need to deal in absolute values avoiding the previously discussed analytical traps of attempting conversions to dollars or other equivalency measures.  Our relative comparisons must be measured against the other major categories of Chinese national budget investments and not against external values. 

What are the priorities within the Chinese defense investments and are those priorities changing? 

Once we have determined how much of the overall pie is being gobbled up by the military we must ferret out who in the military is getting how much of the military piece of the pie.  Is it going to the strategic forces, the ground forces, air forces, naval forces, research and development, C4I, space-based capabilities, training, readiness, etc?  Where is the investment being made?  What appear to be the priorities and are there any discernible trends in the investment?  This helps to identify priorities and whether or not they are changing over time. 

Once again historical data is essential for accurate assessments of trends and changes in priorities.  Answering accurately these questions on where the defense investment is going gives us some indication of national military strategy and can give some early indications of where we can expect to find increased military capabilities being deployed in the future. 

What capabilities is the PLA getting for the investment that the Chinese government is making? 

All assessments need to be results oriented.  It is not enough to examine the input side of the equation as we have in the first two key questions even though that analysis is essential.  It is also necessary to see what China is getting for its investments in its military.  What new systems and capabilities are being developed and deployed?  How capable are those systems and are the numbers significant?  Are these systems produced indigenously or imported and what does this tell us about the state of Chinese defense industries?  Can the PLA effectively operate, support and integrate the new systems into their forces? 

Generally it is in this area that we do our best assessments.  This is the "bean counting" exercise.  There are however elements that go well beyond mere "bean counting" and require qualitative as well as quantitative assessments.  Additionally, while capabilities may give us some insights into intentions, there is not always a direct relationship as there are very few military capabilities that are purely offensive or defensive. 

4. What is Chinese national military strategy and is it changing? 

In answering this key question, it is first essential to examine China's declaratory strategy.  Mike Pillsbury has done some good work in this area in particular.  I believe that China's declaratory military strategy is relatively simple and straightforward.  First, it is to maintain strategic level deterrence with a limited but survivable nuclear arsenal.  Second, it is to prevail in any limited regional conflict along its lengthy land borders.  The capabilities required to rapidly respond to such regional contingencies also are a factor in maintaining domestic stability.  Finally, it seeks vis-a-vis the US and Japan to put in place an area denial strategy that while primarily a defensive strategy is also a necessary prerequisite for offensive actions against Taiwan.  While China is unable to totally implement this national military strategy today, I would argue that it constitutes the Chinese declaratory strategy. 

While declaratory strategies are important and are often the tool with which a nation deters a more powerful adversary or intimidates a weaker neighbor, they do not always either reflect the actual strategy that a nation will employ or accurately reflect its real intentions.  Declaratory strategy must be validated.  Does the priority of investments and the capabilities being developed and deployed dovetail with the declared strategy?  Is the declared strategy consistent with professional military education and the utilization of the best and the brightest of its human resources?  Do training and exercises validate the declared strategy? 

If there are significant disconnects between the declared strategy on the one hand and investments, capabilities, doctrine and training on the other, what does it tell us about real national military strategy?  It is essential in these assessments to work from two different directions.  The first is to start with the declaratory strategy and determine if that strategy is validated by investments, capabilities, doctrine and training.  The second is to start by examining investments, capabilities, doctrine and training to determine what national military strategy is consistent with the national priorities in those areas.   

The ultimate and critical objective is to determine what the real Chinese national military strategy is.  Often this strategic analysis is clouded by personal and political agendas that seek only to validate a preconceived outcome.  Selective use of data coupled with exaggerated conclusions does sell books.  The value of many in this audience is that they are not corrupted by a political agenda and adhere to high standards of academic analysis that are essential if we are to get it right and the stakes for our future are too high to get it wrong. 

5. Does Chinese military development require any changes in US policy or strategy? 

If our assessments facilitate our accurately answering the first four questions, we must then examine what are our own vulnerabilities and weaknesses.  Does the Chinese military development and strategy exploit those vulnerabilities and weaknesses?  Can we implement our own strategy for any reasonable scenario even in the face of Chinese military development?  This requires not just in-depth analysis but also comprehensive use of all the tools that we have developed such as net assessments, wargaming, exercises, etc.  

If we can accurately determine the Chinese strategy, capabilities and intentions, we are in a good position to make the correct policy and strategy choices. We are not interested in a conflict with China and have nothing to gain and a lot to lose from such a conflict.  We do not want China as an enemy.  At the same time, we are also not willing to accept a Chinese dominance in East Asia that would significantly reduce U.S. influence in the region. Our overarching objective is to deter China from taking military actions that will destabilize East Asia and could draw the U.S. into a new conflict or Cold War with China.  For deterrence to be effective it is necessary for U.S. policy and strategy to effectively shape Chinese intentions.  The object of deterrence is always shaping intentions.  Therefore, our objective must be to clearly demonstrate both the capability and the will to defeat any Chinese military strategy that is inimical to our interests in East Asia. 

The greatest danger that we face is that we will ignore our own vulnerabilities and weaknesses by constructing scenarios that play to our strengths.  Often the outcome of any wargame or assessment is determined not by the exercise but by the assumptions.  Just as we must require the most exacting and objective standards in analyzing Chinese strategy, capabilities and intentions, we must hold our own strategy, capabilities and intentions to the same exacting standards. 

Your efforts here and that of other researchers can go a long ways in answering these key questions.  The fifth key question will be answered by professional military officers, policy makers (dare I say politicians) and strategists.  None of them will probably speak Chinese or have the depth of knowledge on China that this assembled group has.  Nonetheless, they will determine the U.S. policy and strategy and they will make the program decisions to support the strategy and policies that they select.  The chance of them getting the fifth answer right will be greatly enhanced if your efforts and those of others result in posing the right questions on Chinese military capabilities.  Only then can you give policy makers through your assessments the right analytical foundation on which to base their decisions.  That is the real potential value of this center and of the efforts you undertake here.  Because what you are doing is important and can be relevant if the criteria that I have discussed is satisfied, I wish you the best of luck in your research and look forward to the papers and discussions.