Neighborhood watch

China’s aggressive behavior, in the East and South China Seas has prompted many of its neighbors to band together or seek the support of larger, more powerful allies. Japan is the hub for many of these of these cooperative agreements.

Politically and constitutionally limited in what kind of direct action it can take to counter China, Japan is building relationships with China’s other disgruntled neighbors and with Western powers. Tokyo is currently in talks with Australia, the U.K., India, Indonesia, The Philippines, Vietnam, Canada and the U.S.

Logistics cooperation, co-development of military equipment, intelligence sharing, joint exercises and security-related aid are all on the table.

Vietnam, a historical enemy of China, has begun building a military specifically tailored to counter the PLA. It has procured Russian Su-27 and Su-30 fighters and four Gepard frigates. Vietnam has even bought its first submarines—six Improved Kilo diesel-electrics from Russia that are more advanced than the Chinese navy’s own Kilos.

Hanoi is strengthening foreign ties. India will train Vietnam’s submariners. Vietnam has also hinted at letting foreign fleets use the harbor at Cam Ranh Bay, but is likely holding back as that would be a serious provocation to China.

The Philippines, locked in a standoff with China over the Ayungin Shoal, has begun rebuilding its navy and air force, purchasing retired U.S. Coast Guard cutters for its navy and a dozen South Korean TA-50 light fighters for the air force. Manila has agreed to host American facilities—and American troops—on its military bases.

Asia probably won’t assemble a new NATO-like alliance in the near future. China’s opponents aren’t willing to accept such close military integration. Most are unwilling to fight for someone else. Many of these countries, despite being wary of Chinese aggression, still have strong economic ties to Beijing.

Still, the level of cooperation would complicate any military moves by China. Not that Beijing necessarily intends to invade … anyone. Ever. Military, diplomatic and economic power are intertwined forces that enable a government to shape its environment—peacefully and against a rival’s will.

The big question is, when does China catch up to America militarily?

Never.

“China will grow old before it gets rich” is, by now, a cliche among China-watchers. But it’s true. The same demographic wave that has gifted China with an abundance of labor will soon also transform the country into the world’s biggest retirement home.

Beijing’s “one-child” policy has sharpened the trend. Today China has 16 retirees per 100 workers. Projections see that increasing to 64 retirees per 100 workers by 2050, resulting a much grayer population than in America.

This has indirect—but serious—implications for China’s defense. Most Chinese do not have retirement benefits and in their old age must rely on personal savings or family … a difficult proposition when there is only one child to take care of two parents.

If Beijing wants to preserve household savings and productivity, it will have to build some kind of social welfare system. And that means making some difficult choices.

China’s borders are secure. The U.S., Japan and India cannot bring down the Chinese government. But tens of millions of desperate Chinese families could do so—and just might, if Beijing can’t find some way to care for them as they age.

China has nuclear weapons. It’s ruled by a deeply nationalistic, authoritarian regime with a history of brutality towards its own citizens. It has territorial claims that clash with those of other countries—and a defense budget rising by eight percent annually. It’s wise to keep a watchful eye on China.

Yet China is a hobbled giant with many deep, systemic problems. Some of these problems—particularly the technological ones—are solvable. The demographic issue is not. And it’s the biggest reason the paper dragon does not pose a major threat to the rest of the world over the long term.