Editor’s Note: Although the Trump administration has made much of China's rise when it comes to trade, the president should be focused more on the security implications. Robert Ross of Boston College points to the decline in U.S. naval strength in East Asia as a game-changer for the regional order. Ross argues that the Navy's forward presence is strained, while China's capabilities are growing steadily. U.S. allies are aware of this painful reality, and their willingness to trust America to protect them will decline.

Daniel Byman

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The rapid rise of the Chinese Navy has challenged U.S. maritime dominance throughout East Asian waters. The United States, though, has not been able to fund a robust shipbuilding plan that could maintain the regional security order and compete effectively with China’s naval build-up. The resulting transformation of the balance of power has led to fundamental changes in U.S. acquisitions and defense strategy. Nonetheless, the United States has yet to come to terms with its diminished influence in East Asia.

The New Balance of Power in East Asia

In early 2017, the Chinese Navy had 328 ships. It now possesses nearly 350 ships and is already larger than the U.S. Navy. China is the largest ship-producing country in the world and at current production rates could soon operate 400 ships. It commissions nearly three submarines each year, and in two years will have more than 70 in its fleet. The Chinese Navy also operates growing numbers of cruisers, destroyers, frigates, and corvettes, all equipped with long-range anti-ship cruise missiles. Between 2013 and 2016, China commissioned more than 30 modern corvettes. At current rates, China could have 430 surface ships and 100 submarines within the next 15 years.

According to the RAND Corporation, China’s fleet is also now more modern, based on contemporary standards of ship production. In 2010, less than 50 percent of Chinese ships were “modern;” in 2017, over 70 percent were modern. China’s diesel submarines are increasingly quiet and challenge U.S. anti-submarine capabilities. China’s ship-launched and air-launched anti-ship cruise missiles possess significant range and stealth and are guided by increasingly sophisticated targeting technologies. China’s Navy now poses a significant challenge to the U.S. surface fleet. Moreover, its DF21C and DF26 conventional intermediate-range ballistic missiles also pose a challenge to U.S. assets in the region, and can target U.S. maritime facilities in South Korea, Japan, the Philippines, Singapore, Malaysia, and Guam.

Despite the growth of the Chinese Navy, the United States retains maritime superiority throughout East Asia. But the trend is what matters and the trend is less rosy. In early 2018, the size of the active U.S. fleet was 280 ships. Going forward, according to the Congressional Budget Office, if the Navy’s budget is the average of its budget over the prior 30 years in real dollars and it maintains its aircraft carrier and ballistic submarine construction schedules, in 12 years the active naval fleet will decline to 237 ships. In six years, the U.S. submarine fleet will decline to 48 ships, and in eleven years the number of U.S. attack submarines will decline to 41 ships.

Both the Navy and the White House have pushed to grow the U.S. fleet, but budgets have not kept pace with their plans. In 2015, the Navy planned to increase the fleet to 308 ships by 2022, and the Trump administration plans a 355-ship navy. To reach 308 ships, the Navy will have to spend 36 percent more than the average shipbuilding budget over the past 30 years, requiring a one-third increase in its current budget. If funding continues at the average over the past 30 years, the Navy will likely purchase 75 fewer ships than planned over the next three decades. To reach 355 ships, the Navy will need a budget 80 percent more than the average Navy shipbuilding budget over the past 30 years and about 50 percent more than the average budget of the past six years. Moreover, the Navy’s shipyards are understaffed and in poor condition, contributing to delays in maintenance and reduced ship-days at sea. It is also currently experiencing significant challenges in meeting personnel requirements, recruitment problems are increasing, and the U.S shipbuilding industry has been in decline over the past decade. Adequate staffing and construction of a larger fleet is by no means assured.

Reallocation of the federal budget to support ship construction is not likely. Mandatory spending and interest payments on the federal debt constitute 68 percent of the federal budget, and in recent years Washington has increased spending on Medicare, Medicaid, transportation, and veterans. The Pentagon already receives over 55 percent of the discretionary budget. The United States will not raise taxes to increase funding for the Navy; instead, it reduced taxes earlier this year. Nor can the United States print more money and increase the federal deficit to increase naval spending; the harm to the economy would offset any benefit that a larger navy might contribute to U.S. security. To contend with the national debt, the White House has told the Pentagon to expect that defense spending will “flatten out” in the near future. Finally, although the Navy, the Army, and the Air Force receive approximately equal shares of the annual defense budget, there is little resolve in Washington to reallocate funding within the military.

But even a 355-ship navy would be inadequate to contend with China’s capacity to continue and expand its naval build-up. As a share of GDP, the U.S. defense budget is nearly 75 percent larger than China’s defense budget. In contrast to the United States, China’s social welfare budget, including veterans’ benefits, is a minimal part of its national budget. China does not have a costly volunteer force, it can easily reallocate defense spending to support its navy, and it is not involved in distant wars that strain its military budget. It is better positioned that the United States for a maritime arms race.

Developments in the maritime balance have weakened the confidence of East Asian countries in the ability of the United States to fulfill its security commitments and they are improving security cooperation with China. South Korea recently reached an agreement with China to limit missile-defense cooperation with the United States and security cooperation with the U.S.-Japan alliance, and it has moved ahead with cooperation with North Korea, with Chinese support and despite U.S. opposition. The Philippines has reduced the scale of its defense cooperation with the United States and improved security ties with China. Beijing now constrains Vietnamese defense cooperation with the United States, as well. And China and Malaysia have begun joint military exercises and Malaysia has not supported U.S. policy on Chinese claims in the South China Sea. Most recently, China and ASEAN have conducted their first joint naval exercise. The United States enjoys continued robust defense cooperation with all of these countries. But, as is the case with the maritime balance, it is the trend that matters and the trend is not good for U.S. security.

The U.S. Navy Adjusts

The combination of China’s rising naval capabilities, the PLA’s ability to target U.S. naval access to regional maritime facilities, and declining alliance cooperation has compelled the United States to adjust its security policy to contend with emerging Chinese war-fighting capabilities within East Asian seas—the Yellow Sea, the East China Sea, and the South China Sea.

The U.S. Navy is relying on technology to compensate for declining ship numbers. It is developing longer-range anti-ship cruise missiles to contend with China’s anti-ship cruise missiles, and longer-range torpedoes to contend with China’s submarine fleet. It is developing “dispersed lethality” capabilities to contend with the quantity of Chinese ships and their ability to “swarm” against U.S. ships. It is also developing directed energy and long-range hypersonic railgun technologies. Most significant, the Navy is focused on developing large quantities of drones as its long-term solution to declining ship numbers. It is developing and testing undersea anti-submarine and anti-mine drones, miniature reconnaissance drones that can operate in large numbers to allow simultaneous targeting of multiple Chinese platforms, carrier-based attack drones and refueling drones, air-launched electronic warfare drones, and unmanned surface vessels for minesweeping operations and anti-submarine warfare.

The United States now faces a future without assured access to the South China Sea and U.S. naval facilities in the region, and with reduced cooperation from its allies. To compensate, it is placing greater emphasis on its strategy for the “Indo-Pacific” region—a shift from its previous focus on the “Asia-Pacific.” This is more than just a name-change. Key to this Indo-Pacific strategy is greater access to Indian and Australian facilities that are secure from Chinese submarines and surface ships. These facilities will enable the U.S. Navy to contend with the Chinese Navy from outside the South China Sea and to deny the Chinese Navy access to the Indian Ocean and the Western Pacific. Recent U.S.-India agreements reflect U.S. efforts to expand its access to Indian naval facilities so that the U.S. Navy can operate in the Bay of Bengal and to the west of the Malaccan Strait. Similarly, expanding U.S.-Australian cooperation in Western Australia, including U.S. interest in Cocos Island, will enable the U.S. Navy to operate south of Indonesia to project power into the South China Sea. The Navy’s transition to operating from distant naval facilities and contending with China’s long-range capabilities has required it to develop extended ranges for its carrier-based F-18s and EA-18G Growler electronic warfare.

But these developments in acquisitions and expanded out-of-region operations cannot solve the Navy’s problem of a smaller fleet contending with a rising naval power. U.S. technological advantages over China narrow every year and quantity can be just as important as quality in maritime security.

Moreover, the increased tempo of the U.S. Navy’s operations in East Asia have led to inadequate ship maintenance, insufficient training of sailors, and over-extended tours at sea. Recent naval accidents in East Asia reflect the pressures of up-tempo presence operations on the Indo-Pacific Fleet.

The Navy at Sea

The U.S. Navy has responded predictably to its declining capabilities, eroding dependability of its allies, and reduced access to regional facilities. It is increasing its shows of military force to establish greater U.S. resolve to resist the rise of China, even as its relative capabilities decline. During the Trump administration, U.S. freedom of navigation operations (FONOP) near Chinese-claimed maritime features has increased to approximately one mission every two months, doubling the pace of the Obama administration’s FONOP operations. In June 2018, after China increased its deployments on disputed islands, the United States sailed two ships within 12 miles of Chinese-claimed Paracel Islands. China responded with a simultaneous naval transit near the islands, signaling heightened maritime tension and greater Chinese resolve to challenge U.S. naval presence in its coastal waters. In June and September 2018, the United States sent B-52 bombers near China’s artificial islands.

The United States conducts FONOPs to challenge the maritime claims of many countries each year, but only in the South China Sea does the U.S. Navy carry out multiple highly-publicized missions. And only in the South China Sea does the U.S. Navy conduct overflights of disputed territories with coverage by U.S. journalists aboard the aircraft. These South China Sea operations aim to establish U.S. resolve to contend with China’s rising naval capabilities, not to establish a U.S. commitment to the principle of freedom of navigation.

Despite the recent over-extension of the Pacific fleet and the resulting safety and training issues, the U.S. Navy has thus insisted that it will “confront” China and it has stressed the importance of its presence in East Asian waters and its plans to increase its regional operations. Secretary of Defense James Mattis reported that the United States will “demonstrate resolve through operational presence in the South China Sea.” In November 2018, the Navy carried out its largest exercise ever with Japan. But increased up-tempo U.S. naval presence in East Asia without the requisite underlying naval capabilities to contend with China’s rise will neither constrain China’s naval activism nor reassure U.S. allies. What it will do is further overextend the Navy and exacerbate the Navy’s existing maintenance and readiness problems, making U.S. ships more vulnerable to accidents at sea and cutting into the shipbuilding budget. This is especially the case as the Navy expands its operations on the Russian periphery.

This tension in the U.S. Navy’s East Asian strategy reflects the expected quandary of a declining power. The United States resists ceding greater regional influence to a rising great-power competitor. But its efforts to compensate for its eroding relative capabilities by expanding the Navy’s regional presence may well undermine its long-term ability to adjust to and contend with rising China.