In the News: Nukes for South Korea?

Rep. Chung Mong-joon, longtime South Korean lawmaker and high-profile member of the ruling party, is speaking about the need for South Korea to either demand the return of American tactical nuclear weapons or develop its own. Why? To force China to take the North Korean situation seriously and keep its dog off the furniture. The reasoning is that only China still has the power to make North Korea listen to reason. The tactical nukes were removed as part of a de-nuclearisation agreement for the peninsula, which North Korea has clearly violated.

The US Navy will deploy a solid-state laser weapon aboard USS Ponce in 2014, the first time a viable laser weapon will have been operationally deployed.

In an unaccustomed display of competence, the US Navy’s Littoral Combat Ship program is testing Thales’ excellent Sonar 2087 towed array for the ASW mission package, slated for operational capability in the 2016-2018 bracket. The Thales sonar has an outstanding reputation, and is reportedly able to operate effectively even at the high speeds of which LCS boats are capable. This would be an alternative to drawing on the production line for the MFTA towed array slated to replace the rest of the US Navy’s existing arrays.

US Navy CNO Admiral Greenert is trying to raise awareness of hacking and electromagnetic spectrum vulnerability in US forces. As I’ve written, this angle plays a major part in China’s strategy for dealing with carrier strike groups should they ever face them in combat.

Singapore Prime Minister Lee Hsien Loong has called on the US and China to build “strategic trust” during a speech in Washington, while continuing Singapore’s tradition of asking for increased US presence in the region. The problem is that from a Chinese viewpoint, those positions are in conflict. Building international trust requires creativity, and while inviting China to next year’s RIMPAC exercise was certainly creative, it was the exception in a relationship that both sides seem to be putting less and less effort into.

The US military has published its crowning joint doctrine document, covering military doctrine for all services. Creatively titled Joint Publication 1, it’s probably nothing to get excited about, especially if its lower-tier predecessors, Air-Sea Battle and the jargon-based Joint Operational Access Concept, are anything to go by.

The US Navy is also contemplating major procurement changes. The plan had been to design a Flight III Arleigh Burke-class destroyer to take the new AMDR radar. Unfortunately, the design seems not to have enough room to do that economically, and so the current Flight IIA may continue in production until a new design, possibly a cruiser successor, can be fielded. Also, the planned order of 52 Littoral Combat Ships may be cut to 24, with a single mission package including urgently-needed minesweeping equipment and possibly a vertical launch system for missiles. It seems that the Navy has decided it can’t afford $650 million ships that do nothing.

The Trouble with Carrier Groups: Why the US needs different approaches in the South and East China Seas

There was a time, now looked back on fondly, when Taiwan was seen as the one issue that might lead to a military confrontation between China and the United States. Today, with the deepening of territorial disputes between China and most of its maritime neighbours, and the uncomfortable reality that the wrong inciting incident might pull the United States into a regional conflict, it is time for another look at the tactical realities of operating a Carrier Strike Group in the East and South China Seas under opposed conditions. We will begin by assuming that the carrier group is patrolling near a disputed territory and is within range of land-based air support.

This analysis of operational concepts on both sides will show the futility of conventional confrontations and the need to prepare alternate strategic concepts based on the one inescapable premise: that continuing or escalating confrontation would be in the interests of neither side.


The Informational Approach

This approach to strike group defence emphasises “network centric” or “full-spectrum dominance” approaches to assure maximum information and awareness of the battlespace. This means that airborne, surface and sub-surface sensor platforms are deployed throughout the battlespace in such a way that no threat unit can approach close enough to the strike group to inflict damage without the coordination of a multi-layered response from surface, air and subsurface assets, including land-based aircraft.

The key sensors and platforms would include:

Airborne Early Warning Aircraft
Airborne radar aircraft with command and control capabilities, including the ability to provide remote targeting, could potentially include E-2 Hawkeyes from carriers, land-based E-3 Sentries and Japanese E-767 AWACS. All of these platforms are somewhat dated in their current states, and the real force multipliers would be the presence of Active Electronically Scanned Array (AESA) systems, such as the E-2D when it comes into service. The surface and terrain-scanning capabilities of such systems, in addition to longer range and higher refresh rates, would be of great help in managing the complex scenarios that could occur.

E-2D Hawkeyes

E-2D Hawkeyes

Other Airborne Radars
Any airborne radar is a potential asset through datalinks, including especially fighter radars and the surface search and periscope detection-optimised radars of land-based P-8 Poseidon ASW aircraft. Helicopter-mounted surface-search radars such as the AN/APS-153 on the MH-60R or the Blue Kestrel radar on the AW-101, if present with allied forces, would be a tremendous help in dealing with fast attack craft in island-rich environments.

P-8 Poseidon (foreground) with P-3 Orion

P-8 Poseidon (foreground) with P-3 Orion

Surface Radars
The obvious major surface assets are the AN/SPY radars of US and allied Aegis-equipped vessels. What the US Navy currently lacks is a more capable AESA shipboard radar. An equally significant lacuna is the lack of radars designed for cluttered littoral conditions or any surface platforms survivable in such a situation (see below).

Sonar Platforms
Given the impressive conventional submarine capabilities of the PLAN, diversity and coverage of sonar platforms is crucial. US and allied submarines would operate to cover designated approaches to the strike group. P-8s and helicopters would deploy sonarbuoy pickets. Helicopters would work possible contacts with dipping sonars.

The number of helicopters is one of the key leverage points the US and its allies could bring to bear. Between the relatively uncrowded decks of today’s supercarriers, the availability of amphibious flattops and the possible participation of Japanese helicopter “destroyer” flattops, there is almost unlimited potential to augment helicopter numbers, a very good idea as we will soon see.

Ship-based sonars, particularly towed arrays, would increase coverage, although the lack of towed arrays in the Flight II Arleigh Burke class is a matter of concern. The US Navy is currently working with relatively old towed arrays, though they are slated for replacement.

In theory, this three-dimensional detection net, connected by datalinks and backed by coordinated responses from sea and land-based assets, would be all but unassailable.

The Opposition

Unfortunately for the US Navy, this is an old approach. It is essentially an augmented version of the concentric protection strategy of carrier battle groups of the 1980s. Chinese planners have had decades to pick it apart. So what have they come up with?

The Chinese strategy is essentially asymmetric, following Sun Tzu’s approach of making yourself strong where the enemy is weak. This means pursuing avenues traditionally undervalued by the United States and its allies.

Missile Saturation
There’s nothing better for an old strategy than an old solution, and the Soviet Navy’s approach using saturated, three-dimensional anti-ship missile attacks just refuses to die. The PLANAF (People’s Liberation Army Navy Air Force- they like to cover all their bases) has a very capable core maritime strike capability in its 100+ JH-7 strike aircraft, 70+ Su-30MKK and 24 MK2 multirole fighters. That is without counting their old H-6 bombers, various fighters and the many PLAAF aircraft that could be adapted for the role (all modern PLAAF tactical aircraft now have the ability to carry the YJ-82 ASM). In addition, some sources have indicated that China is in possession of a large fleet of unmanned aerial vehicles which could be used for targeting and missile delivery.



Virtually every major Chinese surface combatant carries at least 8 and often 16 Ship-to-Ship Missiles (SSMs), with the YJ-82/83 making up most of the inventory. The YJ-83 and the Russian Moskit missiles carried on China’s four Sovremenny class destroyers are supersonic, reducing the defenders’ response time. Missile capabilities of Chinese submarines remain unclear, although it is likely that at least the Russian-built boats have the ability to launch the Klub family of land attack and anti-ship missiles. Of perhaps greatest concern are the 80+ Type 022 Houbei class stealth missile boats, whose operational characteristics lend them to swarm attacks.

Subsurface Disruption
Chinese submarines have demonstrated the ability to surface undetected in the middle of American carrier groups. It is certain that their recent conventional designs have become almost as irritatingly quiet as their Swedish, German, Australian and Italian counterparts, which have had so much fun “sinking” US carriers and other vessels in wargames. Add to this the home field advantage in underwater terrain, and the headache posed by these platforms could be extreme. The good news for the US Navy is that Japan also has an impressive conventional submarine force.

Surface to Air
Others have illustrated China’s ability to cover the Taiwan Strait under a surface-to-air missile umbrella from the mainland; with the addition of sea-based assets, they could notionally do so for virtually the entire island. In non-Taiwan scenarios, SAMs remain very relevant, both as an obstacle to any attempt to strike at mainland targets and, in their naval forms, as a means of constricting tactical aircraft launched from a strike group or from land bases. SAMs may also be used by naval task groups to cover tactical aircraft into launch range for anti-ship missile attack. The Russian and Chinese variants of the Shtil, S-300 and S-400 missiles are one to two generations beyond anything the United States military has had to face in combat thus far, and all new Chinese frigates and destoyers for the past five years have had a credible area air defence capability. The extreme range of the S-300 and S-400 variants, combined with the multiple guidance options of the Chinese versions and enhanced networking ability gives them a level of capability that should not be underestimated.

Type 054A firing HQ-16 SAM

Type 054A firing HQ-16 SAM

Threats to Basing
While the Chinese might call Japan a “giant unsinkable aircraft carrier,” and while the US does have some basing options in the region, China has the cruise missile capabilities to pose a significant threat to any land base in the region, thereby tying up assets needed for other missions in defensive roles. Apart from dedicated land-attack weapons, their standard YJ-82 anti-ship missile can be used for land attack without modification.

Electromagnetic Disruption
The United States Navy without the electromagnetic spectrum is a bunch of very expensive yachts, and the Chinese have been keen to exploit this dependence. This spectrum carries radar, communications, targeting data, GPS, and all of the networked systems that make modern warfare work. The possibility of depriving such a force of its GPS, sensor and communication satellites with anti-satellite weapons, of disabling its electronic systems with an Electromagnetic Pulse, of jamming radars and datalinks, offers the potential of rendering it tactically useless. Articles by Chinese military scholars suggest that “mastery of space” and “electromagnetic dominance” will soon assume the previous importance of aerial dominance in naval warfare.

A declassified intelligence report obtained by George Washington University’s National Security Archive suggests that China has conducted advanced research into the generation of EMPs, including its effects on living tissue. Such a pulse could be used to knock out electronics on a Carrier Strike Group. Pentagon sources have occasionally dropped hints that electromagnetic vulnerabilities are being addressed, though given the pace of known electronic upgrades to the fleet, this may be un-reassuring.

Anti-Ship Ballistic Missiles
The DF-21D anti-ship ballistic missile is China’s bid to complete an old Soviet dream, being able to sink a carrier with a long-range, high-speed ballistic missile. This missile would have a conventional warhead and would, at hypersonic or high-supersonic speeds, be nearly impossible to shoot down for conventional SAMs. Whether the anti-ballistic SM-3 missile can be successfully modified to deal with the trajectories (and manoeuvring capability) involved is unknown.

Cyber Warfare
That China has a considerable cyber warfare capability is old news, as is the fact that the US military has not always been careful in purchasing electronics from China. What China could do with this in wartime against a strike group is, simply, unknown.

Conventional Scenario
Using the more conventional area-denial strategies together, whether or not they are successful at sinking ships, will create a number of unavoidable problems for a US carrier force, including:

– Ordinance depletion: While a carrier strike group has a considerable supply of ordinance at its disposal, the PLAN will also have done the math, employing swarm tactics, decoys, trading old ordinance for new and other means to exhaust stocks of AMRAAM, SM-2/SM-6 and ESSM missiles.

– Platform pressure: Even backed by significant numbers of land-based aircraft, the strike group’s Super Hornets will be under intense pressure to generate sufficient sorties to respond to incoming air attack, particularly if they are also tasked with any offensive strike roles. Because of the vast numbers of opposing aircraft and China’s ability to threaten land-based targets, land-based friendly aircraft will be under the same pressure. This means that aircraft will be subject to constant and conflicting air defence, anti-ship, SEAD, strike and other missions beyond the ability of any air wing to sustain. This above all is a good reason to saturate carrier air groups in the area.

– Multitasking stress: The PLAN has the resources to force a strike group to contend with 24-hour, 3-dimensional pressure from submarines, aircraft and surface ships, and more importantly, incoming missiles and torpedoes, a likely tactic if the situation does not make a single massed strike politically acceptable.

These guaranteed gains would allow China to emphasise the defensive position of the strike group without expending a great many valuable platforms to do so. This would be consonant with their understanding of American psychology as responding unyieldingly to a single massive strike but tiring of constant low-level attrition. It would also allow the Chinese to avoid risking their hard-won military advantages.

The math says that the PLAN and PLAAF can sink a carrier strike group, even without resorting to unconventional technologies- it’s simply a matter of counting missiles and platforms and accounting for certain probability factors. But the math also says that in doing so, they would lose a sizeable portion of their major air, submarine and surface assets- and that first strike group would surely be followed by all the others. That is why they would be more likely to attempt to wear down the US force, degrading its effectiveness by every means available as the conflict progresses.

Conventional Air War
We will not repeat here the depressing conclusions of RAND’s Pacific Vision ’08 study, which showed that, even with perfect performance, perfect stealth capabilities and unrealistic 100% kill rates, US forces would inevitably lose a conventional air campaign against Chinese air forces. The equation may change somewhat depending on the geography of the inciting dispute and the participation of Japan, but given the capabilities of China’s more modern aircraft and their ability to leverage numerical superiority against the Japanese using older airframes, it may not improve very much.

Unconventional Logic
Using conventional tactics, China might succeed, at the cost of many of its modern air and naval assets, in destroying one carrier group. With non-conventional and attritional tactics, the modern successor to Mao’s “People’s War”, they hope to neutralise an opponent long enough to achieve peace on favourable terms. China’s area denial strategies follow a doctrine of Sun Tzu, “good warriors cause others to come to them, and do not go to others,” and, “To unfailingly take what you attack, attack where there is no defence.” Part of the reasoning behind this approach is a deep understanding of what Mao called the “subjective factor” in war. China would enter into a conflict with the object not of a military victory (though of course they would like to), but of forcing favourable negotiations thereafter.

Bottom Line
China has the ability to ensure that the United States Navy and Air Force, in concert with whatever allies, cannot execute offensive operations or the forced entry implied by Air-Sea Battle and Joint Operational Access Concept doctrines without a massive commitment of resources, and cannot do so without paying an extremely high cost.

What that means is that China has the ability to force the United States to make a choice between unlimited conventional war and negotiation. This position tests the willingness of the American people to go to war over distant island chains, and leaves the United States in the role of the aggressor.


A number of approaches to countering these area-denial/ anti-access strategies have been batted around in the United States. Air-Sea Battle and the Joint Operational Access Concept (JOAC- no, I’m not kidding) emphasise an all-branches synergistic approach to gain and maintain operational access in denied areas. What do they mean by “synergy”? Near as anyone can tell, they mean forcing the services to work together to find uses for existing equipment that it was never designed for and to leverage comparative advantages. Any attempt to find a more thorough explanation leads to documents heavy on jargon and laden with repackaged strategic maxims (see “Operational Access Precepts” on page 17 of the JOAC document for the latter and “A Concept for Joint Operational Access” on page 14 for the former).

Fortunately, this isn’t the only conceptual framework the brain trust of the US Navy has to offer.

Subsurface Campaign
An article by retired Captains Jeffrey Kline and Wayne Hughes in the Naval War College Review proposed that the best approach to neutralising Chinese missile superiority would be to fight under the waves. The goal of this campaign would be to deter aggression by denying the PLAN freedom of movement within the “first island chain” (as the Japan-Taiwan-Philippines line is called in Chinese strategic discourse), their own backyard.

Submarines could be used for a number of graduated mission profiles calibrated to the situation, from sinking a single warship (on the General Belgrano model) to sinking submarines and surface combatants to interdicting civilian traffic within maritime exclusion zones and mining military ports. Use of submarines also neatly neutralises the impact of China’s electromagnetic warfare capabilities.

Yuan class submarine

Yuan class submarine

Unfortunately, this part of the strategy rather cavalierly assumes that the US Navy can establish underwater superiority in Chinese coastal waters. How the all-nuclear US submarine force stacks up against ultra-quiet air-independent conventional submarines in relatively confined waters and in their home undersea terrain is an open question, and the answer may be different for the newer Virginia and Seawolf classes than for the older Los Angeles class boats which comprise the backbone of the US fleet. Underestimating the PLAN submarine force has proved a mistake in the past. Cooperation with Japan, owner of the most powerful conventional submarine force in the world, would be the key factor in securing superiority in an underwater confrontation. In any case, this part of the strategy could prove costly, albeit far less so than carrier-based options.

A US Pressure Strategy
In addition to submarine warfare, there would be a number of complementary pressure tactics. Kline and Hughes emphasise the need to develop a force of small missile-armed craft to undertake flotilla-strength raids against illegal seabed-exploitation sites and Chinese surface forces and to escort friendly shipping.

During peacetime, this force would counteract China’s increasingly dominant patrol presence in the area and engage with Southeast Asian nations in preventing unilateral Chinese actions in territorial disputes. During wartime, it would tax China’s area-denial resources and provide the US Navy with the freedom to act without putting large surface groups in the line of fire. Like submarines, fast attack flotillas would have minimal reliance on the electromagnetic spectrum. Such forces can be extremely cost-effective- the Norwegian Skjold class, at $125 million per unit, is an ideal off-the-shelf option capable of matching and overmatching the Type 022 (compare the $650 million Littoral Combat Ship).

More conventional surface groups would occupy choke points outside the island chain, providing a number of graduated interdiction options. At last resort, they would confer the ability to exert crippling economic pressure on China’s shipping-dependent economy. Marine expeditionary forces would be positioned to hold disputed islands at risk, whether through reactionary raids against Chinese presence or outright occupation.

War at Sea
Kline and Hughes’ approach, dubbed War at Sea, is by far the best approach to this tactical problem to emerge from the US naval establishment. War at Sea is superior to prevailing doctrines such as Air-Sea Battle in an East Asian context, in that it is inherently offensive (as we have seen, a Carrier Strike Group would quickly find itself under siege), containable (it confines engagements to non-mainland targets and focuses on de-escalation), calibrated and flexible (it provides many levels of response depending on the situation), cost-effective (it inflicts damage without presenting significant danger to core US capabilities) and geopolitically astute (its objective is de-escalation and creating the conditions for negotiation).

‘War at Sea’ is definitely outside-the-box thinking, however, as most successful wartime strategies are. Like past strategic innovations, it might face considerable resistance.

Two Can Play EM Games
If the US must deploy carrier groups within the first island chain, there are a few capabilities they could leverage, and some serious liabilities that need to be addressed. With the reputed capability of the Growler, the electronic warfare version of the Super Hornet, to selectively disrupt enemy signals of all types while leaving friendly systems free and clear, EM spectrum denial is certainly a game that two can play. The more China advances its military, the more equal the vulnerability of the two sides to EM disruption.

Dealing with Missile Boats
We’ve mentioned the possibilities of leveraging helicopters against fast attack craft, a strategy employed most prominently by the Royal Navy with the Lynx helicopter/ Sea Skua missile combination. This approach has the virtue of freeing up tactical aircraft for higher-value targets. Helicopters employed to clear littoral island areas of submarines will likely be the first to meet missile boats, and by arming them with light missiles, it is possible to use this inevitability to tactical advantage.

Houbei class Missile Boat firing YJ-83 SSM

Houbei class Missile Boat firing YJ-83 SSM

The Type 022 has MANPAD-class anti-air capability. For this reason, the US Navy would be prudent to provide its helicopters with a longer-ranged and harder-hitting ASM than their current Hellfire missiles when the Penguin goes out of service, and to train in coordinated tactics for this eventuality. If Marine AH-1Z attack helicopters can be added to the mix, so much the better, but again, the platform could stand a longer-ranged weapon. The Maverick missile is the obvious choice, particularly since its optical guidance mode makes radar stealth moot.

Littoral Combat
Despite the partly littoral nature of our scenarios, the US Navy’s Littoral Combat Ships can have no place in them, except possibly as extra towed array sonar/ helicopter sets under a Carrier Strike Group’s protection. They cannot be safely used in these island littoral environments, for the simple reason that any Chinese platform they are likely to encounter (including the much smaller Type 022 and any tactical aircraft) could confront them with YJ-82/83 missiles. The LCS would be forced to answer with the Griffin missile, which is an infantry weapon used when an anti-tank missile would be uneconomical. The most potent weapon the LCS possesses in such a situation is its admittedly excellent Bofors 57mm gun.

Freedom class Littoral Combat Ship

Freedom class Littoral Combat Ship

This mismatch in range and firepower is compounded by the LCS’s acknowledged lack of damage resistance. Nor would stealth characteristics be of much help to an LCS, since the upgraded versions of the YJ-82 missile come with the choice of imaging infrared or electro-optical seekers in addition to radar, with optional command guidance from the launch platform via datalink on the same principle as the US Maverick. Under contested airspace, the LCS would be extremely vulnerable.

The ships are also vulnerable to submarines in coastal waters, lacking an on-board torpedo capability, and even the meagre ASW mission package will not be ready until 2018. Also, like all US Navy ships, they lack what any ship more likely would require for littoral ASW operations- an anti-submarine mortar like the Swedish ASW-601, or preferably, a comprehensive rocket-based underwater self-defence system like the Russian Udav-1. For more on the LCS, see this article.

Stay Cool, Play the Long Game

Despite China’s increasingly belligerent displays of territorial nationalism, a military confrontation that risks bringing in the United States is a lose-lose proposition for China for the foreseeable future. Chinese anti-access strategy as so far disclosed revolves around demonstrating that China can exact a prohibitive cost on any comer, that it is a significant military power and that a war with it is a real, full-scale war. But it is also inherently defensive. America has the means to wreak extensive and highly-targeted destruction on China if it so wished, and China many fewer means of striking at America. To sink an American Carrier Strike Group by conventional means is to invite the certainty of a re-match. To sink a carrier with a ballistic missile invites an even more emphatic response. Escalation is definitely not in China’s interest.

For China to push any issue as far as war would be to cause all of its thus-far unaligned (or multi-aligned) neighbours to choose sides, and it would risk being surrounded by US allies. In any case, the latent military might of Japan would certainly become a very active concern in any of these scenarios. China and Japan are almost equally matched now in the air and at sea (allowing for differences in training and experience), but Japan thus far devotes only a small portion of its GDP to defence and is not a nuclear power. Changing that situation is not high on the Communist Party’s, or the Central Military Commission’s, list of happy thoughts.

For China, the endgame is always to come out with a superior position at the negotiating table. Quite apart from anything else, prolonged disruption of trade is a very real political danger to the Party. On the other side of the equation, the Party’s major vulnerability, and the major concern of any potential adversary of China, is its need to save face domestically, which could determine the future of Party rule given China’s fever-pitch nationalism.

By understanding these factors, the United States can control the dynamics of any conflict to avoid escalation beyond minor skirmishes and play a long game that emphasises foreshadowing the unfavourable outcomes of prolonged conflict. Above all, both sides should tread with care that invisible line between negotiable conflict and that irrevocable step that forces the other side to play for keeps. Captains Kline and Hughes emphasise in their article the need for a non-escalatory approach that confines conflict to the sea, and we must heartily concur:

“We believe that maritime options may be a more credible deterrent than Air-Sea Battle’s deep-strike capability, if China perceives our leadership as being more willing to employ them in response to aggression within a maritime exclusion zone or in territorial disputes. A strategy of maritime interdiction or blockade has been criticized as too slow-acting. A war-at-sea strategy, however, affords time for passions to cool and opportunities for negotiation in which both sides can back away from escalation to a long-lasting, economically disastrous war involving full mobilization and commitment to some kind of decisive victory—in other words, World War III. In addition, if potential allies within the Pacific basin realize we intend to exercise “at-sea only” strategic options that lessen the likelihood of Chinese attacks on their homelands, they may be more willing to maintain and expand partnerships with the United States.”

This stands in direct contradiction to the precepts of Air-Sea Battle and the Joint Operational Access Concept, which are predicated on penetrating enemy anti-access/area-denial capabilities in order to execute war-winning strikes on their territory. These doctrines are basically designed to “kick down the door,” destroying the enemy’s ability to fight in every dimension. Employed against China, this approach invites full-scale war to the finish, followed by years of hostility.

The Chinese Communist Party has spent decades preaching nationalism and an end to the “Century of Humiliation” at the hands of foreign powers. For a Western power to execute widespread strikes on the Chinese mainland is something that would evoke in China the same kind of unyielding nationalism that Pearl Harbour produced in the United States. This truly would be a “People’s War” with the world’s largest armed forces, one that the United States might not have the will to persist in.

Finally, it does no harm to remember the obvious. Both China and the United States are nuclear powers. While the Chinese leadership can be considered on most levels to be an extremely rational actor, the last thing that anyone should want to do is put them in a position where nuclear capability is the only card they have left to play.

China and the Future of the Developmental State- Success and Propaganda

Every country with an advanced economy in East Asia- Japan, South Korea, Taiwan, Singapore- attributes its success to a state-led model of development. The remarkable thing about China was that it managed to shift from a Soviet-style command economy, wherein the government owns all major industry and directs all production, to a state planning model wherein the State shapes and facilitates the economy with a much lighter touch. To understand the implications of this legacy of state planning for the future of China, we have to understand not only the history of state-led development, but the ways in which it is used to support Party rule and the obstacles it faces today.

Directed Development
The history of the state’s role in China’s development is becoming fairly well-known. At the national level, the state has intervened systematically in order to grow key national “pillar” industries. It has used tariff barriers to encourage import-substitution. Along with other industrial, trade and investment policies, this has allowed a relatively rapid mobilisation of resources toward the “commanding heights” of the economy.

By commanding heights, China means the industries that it believes form the core of a nation’s industrial strength, both more traditional industries, such as steel and automobiles, and new entrants such as high-tech.

In the case of the automotive industry, the state was able to elicit key transfers of technology and expertise from multinational automakers to their Chinese partners, thus making sure that the lion’s share of development on future vehicles could be done in China. Development toward a market economy becomes a national project that focuses on developing certain key capabilities to ensure national economic strength and competitiveness.

The Chinese version of economic planning has also relied on the more decentralised entrepreneurship of local officials. The mechanisms of state planning and their effects in shaping and encouraging economic development are felt at a local level.

At the township and county levels, enterprises compete for a place on government enterprise lists, which in turn confers preferential assistance from the state in securing land, capital and other inputs needed for growth. Under the cadre responsibility system, township mayors sign contracts with the county which include economic productivity measures.

Some scholars have suggested that the measure of the strength (or relevance) of a developmental state should not be the ability of the state to engage in unilateral action, but rather its ability to coordinate among societal and economic actors to achieve the priorities it has selected through “strategic guidance.”

In the Chinese case, a decentralised state allows initiative, and competition, at the lower levels of government and in local industry, while providing structural incentives to rapidly advance the most successful enterprises that line up with the broad economic plans of the state.

This process was not without problems. Although highly successful at cultivating growth, the decentralised approach to state planning meant not only that lower government levels tended to coddle inefficient industries and become corrupt themselves, but that government itself grew in proportion to the economy.

Adaptation and Restructuring
Beginning in 1995, the state began to release all but the most profitable State-Owned Industries, and in 1998 began a series of programs designed to reduce government size and improve the efficiency of economic regulation. Although these reforms did liberalise large parts of the economy, they do not represent a transition from a planned economy to a market economy, but rather a new concentration of resources in strategic areas.

The idea has been not only to pick the winners in a Darwinian competition for state patronage, but to maintain state control of the “commanding heights” and to ensure that China had big, globally-competitive industries rather than smaller enterprises competing nationally.

State Agency
If this seems strange, the mental leap we have to make is that the state itself is viewed almost as an enterprise, competing globally for the public good of its citizens. We can carp about unfair practices all we want, but the truth is that nations which adopt this principle will tend to gain the high ground (and every Western nation does engage in protectionism in one industry or another, as the Chinese are quick to point out), while others get left behind.

Chinese scholars persistently argue that the transition from command planning to reform economic planning was possible in China because of the continuing strength and coherence of the Party. In contrast to post-Soviet states, China was able to leverage the Party’s authority to systematically build an economy based on long-term national interest, rather than surrendering abruptly to market forces with disastrous consequences as Russia did.

Whether or not this is wholely supportable, it’s important to understand how the Party and many Chinese would like us to see the party-state.

Authoritarianism and the Developmental State
There is absolutely no question that the Chinese approach to development has worked incredibly well, or that the Party has gained enormous legitimacy with its people because of it. But when we ask about the future of the developmental state, we have to remember how the Party uses it, both ideologically and materially.

Consider this statement from Yip Kwok-wah, a former pro-Communist leader in Hong Kong and adviser to the Hong Kong Chief Executive, in his recent book The Uniqueness of China’s Developmental Model, on the difference between democracy and party rule:

“(Western) people may feel they are participating in the formation of the government but may find that, after venting their anger at the ballot box, there is no improvement in their welfare… The China Model, on the other hand, emphasises the effectiveness of government policies… the legitimacy of government policies through effective results is different from legitimacy achieved through election… Public opinion and sentiment have put great pressure on the (Chinese) government on many occassions, resulting in the government implementing measures to comply with the people’s wishes. Mao Zedong’s principle of “from the mass to the mass” has been largely adopted.”

He then proceeds to tie his argument directly into the developmental state by invoking Nobel laureate Amartya Sen’s assertion that people will only have genuine freedom of political choice when their basic needs are met. You’ve heard of “guns or butter”? This is democracy or butter.

First of all, let’s look at the uncomfortable truths in Yip’s assertions. For many of us, his comments about an uncaring political establishment incapable of consistent policy-making for the public good despite democratic process may strike very close to home. The Party has won a great deal of legitimacy by providing public goods, and it has certainly bowed to the wishes of the public in many instances.

As for the argument that people only have genuine political choice when they aren’t going hungry, well, consider Egypt. The former regime was overthrown by a minority of educated urban people. The new government has been put in place largely by the vote of the rural poor, whose basic needs have always been met more by the Muslim Brotherhood than by the state.

No More Incentive
But then we must consider another recent book, Unequal China edited by Sun Wanning and Guo Yingjie. Like many books about China, it is filled with tales of all the issues on which the Party is not listening to the people- unequal laws, gender discrimination, unequal development, unjust land laws, discrimination in social services and education.

And even many of these issues come second to the issues of labour abuses, environmental degradation, corruption, censorship and so many others that plague China. As premier, Wen Jiabao spent ten years telling the people that these problems must be dealt with. They never were, and the new administration is unlikely to change that.

The Chinese government reaches its highest adaptive potential when motivated by the need to maintain legitimacy though the provision of a public good, whether that be economic prosperity, economic sustainability or environmental health. But the catch is, they don’t think they need to adapt anymore. No crowds are assembling in China to campaign for democratic reform, no new student movement seeks to topple the government.

Those who campaign on issues like corruption or labour are effectively canalised within their own special interest. The government and the Party will make concessions in specific instances to keep a lid on popular protest- but it will not reform the system.

And why would it? The children of the Party, the “princelings” or taizidang, own vast amounts of the economy thanks to their covert pillaging of the old state industries and the power of their connections, control the commanding heights of the economy. They benefit from a loyal military, as well as the resurgent nationalism of a China that, thanks to the Party, is again truly the Middle Kingdom.

The Party experiences no immediate threat to its existence, as it did when reform and opening began. And without that, it has no reason at all to go the distance in satisfying the desires of the people to the detriment of the expensive lifestyles of its own higher cadres. Lacking that will, state-led development will hit a dead end. The Party might find itself trying to control a country on overload, and sooner than it thinks.

But even if the Party falls or is forced to radically reform, it is doubtful that state planning will ever entirely disappear. The people understand that a country the size of China must be managed, one way or another.

F-35 vs. Typhoon: Which Costs More?

When the Aeronautica Militare placed its initial order for three F-35As, it was able to approach the Italian Parliament with a surprisingly low unit cost: 80 million dollars. This is significantly lower than what European countries are paying for their Eurofighters. But what exactly is unit cost? How is it determined? Is it the cost of manufacturing the airframe? The cost of airframe plus engines? Airframe plus engines plus flight avionics? What about weapons systems integration? What about development costs? Up-front investment? Cost of ownership? What about differences caused by different service requirements? What gets averaged into the unit price can mean a difference of hundreds of millions of dollars. One thing is certain: whether or not it’s included in the sticker price, it will be in a contract somewhere, and will get paid somehow.


Eurofighter (Centre) with Su-30MKI and Tornado

Eurofighter (Centre) with Su-30MKI and Tornado

With so many possibilities for juggling the figures, it is no surprise that fighter manufacturers have become expert in doing so, and incidentally created a confusopoly (to borrow a word from Scott Adams) by filling the market with incomparable prices. Defense’s 2006 paper Sticker Shock: Estimating the Real Cost of Modern Fighter Aircraft is one of the braver attempts to create comparable baselines for the major contenders in the Western fighter market. Some of its findings are unsurprising- the Swedish JAS-39 Gripen is both the cheapest to buy and the cheapest to own, with the French Rafale a close second. The Super Hornet is not nearly as cheap as advertised. But most shockingly, the F-35 is at least several million dollars less expensive per unit than the Typhoon.

That the Typhoon is expensive is something everyone has been painfully aware of. Its tortuous pan-European procurement model and the vascillation and wrangling over different national requirements have contrived to make it one of the great cautionary tales in procurement lore. But that the F-35 is cheaper- well, we’ll see about that.

It should be noted that Defense Aerospace’s estimate of F-35 unit price, $115 million, is significantly higher than the price quoted by the Italian Air Force- and this was in 2006, before the full cost footprint of the F-35 was understood. Winslow Wheeler, the Director of the Straus Military Reform Project at the U.S. Center for Defense Information, estimates the unit cost at $155 million. As far as a country like Canada is concerned, that could go up as far as $167 million. But that is nothing compared with Canada’s share in the total program cost, now estimated to be in the neighbourhood of $46 billion over 42 years- an eye-bugging $707.7 million per plane.

So, are we just comparing apples and oranges? Should we concede that the whole mess is beyond our meagre imaginations and give up trying to make sense of it? No. Because in the end, whatever the sticker price, a certain amount of money has been directed in total to procuring a certain number of new airframes. That global number may be difficult to dig out, but the taxpayer deserves to know how much public money is being spent per aircraft. More than that, it is part of due diligence for a government to properly study all the ways in which these programs might bleed money in order to improve the cost-effectiveness of their purchase. Unfortunately, if they believe a program is in their interest for other reasons, they may deliberately turn a blind eye.

It also matters who’s buying. If you’re paying for the development of an aircraft and the initial orders, your costs will be higher than those of a foreign buyer five years later. If you consider the Rafale’s total program cost of around 39.6 billion euros, then the 115 aircraft built for France thus far average to 344 million euros, which will decrease to around 152 million euros if all planned aircraft are delivered. The flyaway cost for a new customer, however, may actually be in the neighbourhood of the avertised $62.1 million, which of course does not include cost of ownership and may not include certain systems.

In short, it is usually better to buy someone else’s aircraft with a limited defence budget, and, for Canada at least, even a $114-118 million Typhoon (assuming that unit prices have not been reduced) would still be far better than a $167 million F-35. But it is not the sticker price, but rather the total program cost, from the beginning of the program through systems integration through cost of maintenance and upgrades that needs to be considered- and laid out for public scrutiny. If they are not, then no unit cost quoted in any competition can be trusted to reflect the true cost of the program.

North Korea Reveals War Strategy

North Korea is to restart its Yongbyon nuclear plant, deactivated under the 2007 disarmament-for-aid deal. Assuming the facility can be reactivated, it could produce both enriched uranium and weapons-grade plutonium. As wars go, this one is rather odd. In fact, North Korea’s war strategy is the same as its peacetime strategy, and can best be formulated as, “Give us food or we’ll keep hurting ourselves.”

North Korea has scrapped the armistice on a war that never officially ended, threatened nuclear war, actually stated that they are at war, and are now threatening to reactivate a facility that may be able to produce material that may be used in a bomb in a few years. They have threatened to target Guam, Hawaii, Los Angeles and, for some reason, Austin, Texas. Just how many steps can there be between war and actual combat?

The answer, apparently, is as many as they want, particularly since all this sound and fury has been met with little but strong language and the scheduled annual Foal Eagle exercise by the South and the United States. Sure, the US sent B-2 bombers and F-22s to participate, but that was it. Why isn’t the North being taken seriously in its tantrum?

Well, in a diplomatic sense, the answer is that it has proven an untrustworthy partner. There is very little appetite left to prop up North Korea with aid when it is clear that nuclear disarmament is not going to happen- particularly when the Chinese and the South are so obviously willing to help the DPRK undertake economic reforms and develop a Chinese-style economy. The Chinese have taken every visit by the North Korean leadership as an opportunity to emphasise the advantages of this path. And yet somehow, it hasn’t sunk in.

South Korean K1 Tank

South Korean K1 Tank

North Korean Pokpung-ho Tank

North Korean Pokpung-ho Tank

We can only speculate on the bizarre psychology of the situation. But in a military sense, it is clear that the North doesn’t have a leg to stand on. Nuclear war would be suicide. Conventional war would also be suicide, at least for the regime. North Korea’s armoured forces, though numerically impressive, are dominated by the 1950’s vintage T-54/55 and the 1960’s vintage T-62. The most recent indiginous design, which may incorporate more recent Russian and/or Chinese technology, has insufficient numbers to counter the K1 and M1 tanks of the South and the US. The DPRK Air Force is dominated by MiG-21 “Fishbeds”, the same aircraft faced by F-4s and F-8s during the Vietnam War, with around 120 newer MiG-23s, MiG-29s and Su-25s, and would prove little more challenging than the Iraqi Air Force in 1991. North Korea’s two advantages are numbers and a very dense air defence system, equipped with significant numbers of the modern SA-17 medium-range missile. Their chances, to put it mildly, are not good.

In summary, neither the Americans nor the South Koreans will be intimidated into perpetuating the cycle of nuclear blackmail at this point, and any follow-through on the DPRK’s threats would be both hopeless and tragic. The question is what Pyongyang will do next. Coming away from this encounter with neither face for the young leader nor desperately-needed aid, at what point will they feel forced to break out of their current futile paradigm- and in which direction will they go?