China and the US: The Second Cold War


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As we’ve discussed in a previous article in this series, there has been increased confrontation between the U.S. and China. Mistrust and China’s technological and economic rise have resulted in the country becoming increasingly assertive, defying the United States, and seemingly vying to become the world’s unipolar power.

China can wield influence in the USA´s fractured political landscape through lobbyists, anonymous political money, PR, and bots. America’s society is open to it. Meanwhile, China is very controlled and closed. Its political system is not so easily swayed. In terms of technology, China is catching up to the U.S. in all areas. Only the most advanced semiconductor, new space, and jet engine technologies are not in China’s immediate grasp. If AI is as transformative as many think, it could lead to China leapfrogging the US or reaching parity. Militarily, the U.S. has a huge lead in the most advanced military technology areas. The US also spends over $877 billion on its military, more than double what China does.

Spend like a Drunken Senator

Maintenance work on a C-130 at Hill Air Force Base. Image Credit: Hill Air Force Base.

Defense spending in the U.S. is notoriously inefficient, however. Programs have cost overruns and often radically overcharge the government. The U.S. lost $60 billion in Iraq and another $100 billion in Afghanistan. In this sense, one would expect things to be much more efficient in China.

It costs the U.S. over $1 million to send one soldier to war for a year. The average cost per service member for the country is $135,000. Military spending is approximately 12 to 16% of all government spending in the nation and above half of all discretionary spending. In 2021, it represented 3.4% of GDP, which was down from 9% in 1960 but still high. The U.S. famously spends more than the next ten countries combined on its armed forces and around 40% of the global total. The country unquestionably has a technological lead on the world and more kinetic toys than anyone, including a lead in fifth-generation planes with “490 stealth fighters, of which 185 were F-22s and a further 305 were F-35As.” China has around 210 J20 planes, which could be comparable, while Russia has 10 of its own fifth-generation planes. The U.S. boasts over 13,000 military aircraft, compared to 3,000 for China and 1,000 for France. 

High Roller

If the U.S. slumbers forward, it will pile inefficiency upon inefficiency and remain the leader in technology and vehicles, but, in a world that could see autonomous drones work in air, land, and sea, the future may turn out to be far too efficient for the US. As we’ve seen in recent conflict, drones are becoming war-winning tools. However, so far, it has not been the whiz-bang U.S. drones that have seen the most interest. America’s MQ-1 Predator from General Atomics costs around $40 million, while the Global Hawk costs $99 million. But, it is Turkey´s Bayraktar TB2 drones, which cost around $5 million, that are making the most waves. In Nagorno-Karabakh, Azerbaijan, Ethiopia, and Ukraine, these aircraft have completely turned the tide in favor of their operators in those respective conflicts. It’s not which tank, how much armor, which radar system or training that made the difference, but the purchasing of a relatively inexpensive unmanned aerial vehicle (UAV).

The First Cold War

US Air Force RSO is using advanced manufacturing. Image courtesy of US Air Force RSO.

If the U.S. continues to produce the best mega-expensive, over-the-top fancy kit, then it will continue to overspend. It risks being impoverished through defense spending. In essence, it will lose the new Cold War just like the Soviet Union lost the one. It also risks making ultra-complex weapon systems that do not deliver on bang for the buck. The country risks having the perfect tank that costs ten times more than those from other nations, but has a fatal flaw. Or it risks propagating its complexity. Every new system, part, and generation is more complex, needs to be more precise, and results in everything becoming more rigid.

In effect, increasingly complicated weapons that are always more expensive and not necessarily better. In this way, the US path will be similar to the Nazis in the Second World War, who had the best tanks but whose complexity, high tolerance requirements, and intricate supply chain meant that there were never enough of them on the battlefield. On the whole, the U.S. system is not very versatile, agile or rapid at all, so it may also take too long to upgrade the arsenal during wartime, making the country very vulnerable. Rapid battlefield or technological developments will also take very long to implement.

Just Good Enough

If you’re a country on the sidelines of the conflict in Jemen, Armenia, Ukraine and Ethiopia, you’re probably not going to be spending a lot of money on tanks in the future. Instead, you will be very interested in ultra-long range artillery and cruise missiles. You would realize that something like Norwegian Advanced Surface-to-Air Missile Systems would be very important. You may want to plan a trip to Israel to see if you could get an Iron Dome or may want to play a round of golf with some people from Raytheon to ask about the Patriot.

Rather than look at a whole menu of upgrades, or have all the latest vehicles, you would probably want a more à la carte approach. And you’d definitely want to try an Adana Kebab with your Bayraktar TB2 drone. Just use the regular stuff we have, plus a few key war-winning things.

You’d also be more than a little worried about the drip-feeding of kit that is going on in Ukraine. Things like increasing export restrictions, and news that the Swiss don’t want their ammunition used in war may worry you. So, you’d be tempted by the slightly morally flexible, foreign arms supplier—the type who doesn’t ask too many questions or have too many nosy members of parliament. Meanwhile, the morally flexible Russia is getting taking a beating in Ukraine. I wouldn’t really be in the market for any Russian weaponry, since it is clearly poorly made and does not actually perform well. Instead I’d look to South Korea, Turkey, Israel, and France, perhaps. U.S. military gear may just be too luxurious for me, and politically costly, as well. In this way, the U.S. may see its advantages eroded, its export markets ebb, its global influence diminished, and its costs higher still. In the next installment, we will look at a solution to this conundrum.

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