Felix K. Chang is an FPRI Senior Fellow, as well as the co-founder of Avenir Bold, a venture consultancy. He was previously a consultant in Booz Allen Hamilton’’s Strategy and Organization practice; among his clients were the U.S. Department of Energy, U.S. Department of Homeland Security, U.S. Department of the Treasury, and other agencies. Earlier, he served as a senior planner and an intelligence officer in the U.S. Department of Defense and a business advisor at Mobil Oil Corporation, where he dealt with strategic planning for upstream and midstream investments throughout Asia and Africa. His publications include articles in American Interest, National Interest, Orbis, and Parameters.
Felix K. Chang
This year, Asian defense spending will surpass that of Europe for the first time in over half a millennium. A steep drop in European military expenditures after the Cold War, a concurrent and steady rise in Chinese expenditures, and a recent sharp increase in defense spending across the rest of Asia rapidly closed the gap between the two continents. Reasons vary for Asia’s military buildup and many, whether right or wrong, have begun to darkly speculate about its implications for the region. But one thing seems certain: Asia’s military buildup is no flash in the pan; it is likely to endure.
For the most part, China played down its increased military expenditures throughout the 1990s. But its defense spending was never as low as it claimed, nor probably as wisely spent. At the start of the decade, much of China’s military budget was devoted to preparations for national mobilization and maintaining large standing conventional forces. But within a few years, China began to reallocate that budget, shifting resources from ground forces and pouring them into its navy and air force. Chinese ground forces were subjected to a series of deep cuts that demobilized over a million troops; the army shrank from over 120 division equivalents to fewer than 60 more heavily mechanized division equivalents by the end of the decade. Just as significantly, the process also freed up resources that fueled the research, development, and acquisition of new weapon systems.
Chinese shipyards produced small batches of progressively more capable warships at first, and then far more rapidly a decade later. Although the navy did purchase destroyers and submarines from Russia, their numbers, in retrospect, were small, especially after China began serial production of its own modern surface combatant and submarine classes and ultimately refurbished and re-commissioned a former Soviet aircraft carrier, the Liaoning, in 2012. It may yet build a further two of its own in the coming years. The Chinese navy even constructed a major new naval base at the southern tip of Hainan Island that includes an underground tunnel for nuclear attack and ballistic missile submarines. Over that same period, China’s air force began to transform itself, steadily replacing its older fighters with more modern Russian Su-27SK and Su-30MKK fighters and indigenously-built J-10 and J-11 fighters. To create its new fleet, China heavily invested in not only reverse engineering Russian designs, but also laying the groundwork for a domestic aerospace industry that could develop its own next-generation fighters. Meanwhile, the air force also acquired the kinds of aircraft that it would need on an “informationized” battlefield, such as A-50 and Y-8W airborne early warning and control (AEW&C) aircraft and H-6U aerial refueling tankers. China excelled in missile and rocket technology too. Its conventional forces received new air-to-air missiles and their first undersea-launched anti-ship cruise missiles; its strategic forces rolled out not only newer ballistic missiles, but also those potentially accurate enough to target a ship at sea (if paired with an oceanic surveillance system with sufficient fidelity). And fearing American dominance of space, China put into orbit its own military satellites as well as designed and tested anti-satellite missiles, first in 2007 and then possibly again in early 2013 
However, as formidable as China’s defense industry has become, it does have its shortcomings. Even as Chinese shipyards launch new warship classes, many of them are powered with Ukrainian gas turbine engines and protected by Russian air search radars. And though China’s Chengdu Aircraft Design Institute and Shenyang Aircraft Corporation surprised many observers with the unveiling of stealthy next-generation fighters, the J-20 and J-31, most of the country’s upgraded fighter fleet is still propelled by Russian and Ukrainian-designed and manufactured turbofan engines. Indeed, with all the advances its defense industry has made, some observers were surprised to learn that China was in negotiations with Russia to buy as many as 48 of its new Su-35 fighters.
Certainly China has not been alone in modernizing its armed forces. Many other Asian countries also did so, beginning in the early 1990s. But almost all soon fell afoul of some economic woes. As Japan’s economy struggled through the first of its two “lost decades,” the Japanese self-defense forces managed to maintain its force structure—benefitting only from the largess Tokyo bestowed on its aerospace and shipbuilding firms, which turned out a small but steady stream of F-2 fighters and new warships. India’s military fared far worse. For much of the 1990s, it saw its strength sapped conducting counterinsurgency operations in Kashmir and its budget shrivel from high inflation and a weak currency that ate away at its foreign purchasing power (a situation repeating today). As a result, Indian troops would fight the Kargil War in 2002 with largely outdated equipment. Finally, when the Asian Financial Crisis struck South Korea and much of Southeast Asia in 1997–1998, it severely dented their military modernization ambitions. Thailand, for example, had aspired to become an Asian naval power. Early in the 1990s, Bangkok even funded the new construction of East Asia’s first aircraft carrier, the Chakri Naruebet, commissioned in 1996. But soon after the crisis, the ship idled at port, sailing for only one day a month as funds to maintain it and its complement of Harrier jets declined (as did the number of operational jets). A similar fate befell Malaysia’s modern F/A-18 and MiG-29 fighters. With high maintenance costs, they rarely flew and their combat readiness suffered.
When the economic clouds over Asia finally lifted in the first decade of the new century, many countries in the region were slow to resume their military upgrade programs. The first to do so was India. But its biggest challenge turned out to be its own bureaucracy; even though funds were allocated to modernize its military’s equipment and organization, a significant portion was never spent, while other monies were wasted. While many point to India’s fifty-year old Arjun tank program as the paragon of such inefficiency, more practically worrying was the 27-year wait the army had to endure to receive any new artillery. Still, India has had success in upgrading its bases along the disputed border with China and in the Bay of Bengal and, after several cost overruns, putting into service a refurbished Soviet aircraft carrier, the Vikramaditya, as well as a new Akula-class nuclear attack submarine. Also recovering from its debt crisis by mid-decade, South Korea revitalized its military modernization plans. Since then, it has procured new tanks, armored fighting vehicles, Aegis-equipped destroyers, and six Type 214 submarines.
By and large, most other Asian countries accelerated their military modernization programs only within the last few years. Vietnam turned to its former Russian patrons to acquire new sophisticated air defense systems, Su-30MK2 fighters, and, most impressively, an order for six Kilo-class submarines. It also requested Russian assistance to restore its (and former American) naval base at Da Nang. Indonesia also began large-scale modernization in 2012 with multiple orders of combat vehicles, three South Korean-built Type 209 submarines, a small number of Su-30MK2 fighters, and a much bigger number of transport and training aircraft. But possibly the most dramatic turnabout occurred in the Philippines, which had allowed the parts of its armed forces designed for external defense to decline to near non-existence. That changed in 2011, when Manila procured two retired American high-endurance cutters and began discussions with Japan for ten small patrol boats. Since then, the Philippine government has scoured the world for military hardware, recently negotiating for a dozen South Korean fighters and even considering two Italian guided-missile frigates.
Among the latest countries to accelerate its military buildup is Japan. While Japan has continued its measured shipbuilding program that averages one new attack submarine and one new surface combatant each year, that pace may increase in the coming years. Already, it is replacing its older combat ships with far more powerful ones. Its two 1970s-era Shirane-class destroyers, carrying three helicopters apiece, will be replaced by two new 22DDH-class “helicopter destroyers”—each of which will nominally embark about a dozen helicopters—even though their size and displacement more closely resemble those of American Wasp-class amphibious assault ships, which are capable of operating V/STOL combat aircraft and up to 40 helicopters. The first 22DDH-class destroyer, the Izumo, was launched in August 2013. And given the victory of Japanese Prime Minister Shinzō Abe’s coalition in Japan’s upper house elections one month earlier, it is possible that he will push through new measures to speed the procurement of warships and coast guard vessels, although the recent depreciation of the Japanese yen may force him to extend the purchase of American combat aircraft.
Apart from China, only Singapore has steadily devoted resources to upgrading all three branches of its armed forces since the 1990s. As a result, the island nation has been able to transform its once provincial defensive forces into a modern military with substantial power projection capabilities, including not only attack submarines, but ones with advanced air-independent propulsion and not only F-15SG and F-16C/D fighters, but ones backed by several networked AEW&C and aerial refueling aircraft. Today, Singapore is already preparing itself to receive delivery of the second of its follow-on Archer-class submarines and will likely be the second Asian country, after Japan, to acquire the American F-35 Joint Strike Fighter.
REASONS FOR ASIA’S MILITARY BUILDUP
Naturally, the reasons behind Asia’s military buildup are varied and often intertwined. A number have less to do with strategic considerations than domestic ones. One reason concerns domestic political calculations. In countries where militaries have intervened in politics, civilian politicians sometimes use larger defense budgets to buy military quiescence. Past studies of Asian civil-military relations have revealed that this may have been the case in countries like Indonesia and Thailand. Another reason deals with military expenditures that are directed to support favored domestic companies or industries or provide local employment. Of course, that is likely to be true to some degree in any country with a sizable defense industry, like India, Japan, and Singapore. Japan’s regular orders for warships and submarines may have reflected its hope to maintain the country’s shipbuilding base as much as its desire to improve the country’s security, especially after commercial ship orders largely migrated to lower-cost China and South Korea. A third (and somewhat counterintuitive) reason is a growing appreciation among national leaders of how military power can contribute to humanitarian relief efforts. When the 2004 Indian Ocean tsunami devastated the province of Aceh in Indonesia, the Indonesian military could do little to help but watch as American and Australian troops came ashore from offshore ships to deliver aid and search for victims. Humbled by the event, Indonesia has since set aside more of its military budget for transport ships and aircraft.
Even so, strategic considerations related to changes in the geopolitical environment have played the biggest role in Asia’s military buildup in the years after the Cold War and particularly over the last decade. As early as 1991, many Chinese leaders—after witnessing the undeniable success of American arms and organization during the Persian Gulf Conflict—realized that they needed to modernize their armed forces. But institutional interests made progress slow; it was not until after Beijing’s failure to deter American intervention in its attempt to intimidate Taiwan with ballistic missile tests in 1995 and 1996 did China’s military transformation resume in earnest. China’s leadership was finally convinced that its traditionally mainland-bound forces were inadequate to counter American naval and air strength in the western Pacific Ocean and that only a comprehensive military modernization could hope to keep American forces at arms’ length as well as prevent other countries from either impinging on its “core interests”—including its territorial claims in the East and South China Seas and on the Himalayan frontier—or geopolitically encircling China.
Unfortunately, China’s accelerated military modernization created a security dilemma for its Asian neighbors. As China became more militarily powerful, other Asian countries saw their relative security decline. Unsurprisingly, India was quick to act, given its historic suspicion of China—its enemy during the 1962 Sino-Indian border conflict and an ally of its long-time adversary, Pakistan. And over the course of the 2000s, New Delhi also grew concerned over China’s rapid development of dual-use civil-military infrastructure—airports, railways, and roads—in Tibet and its growing commercial interests in the Indian Ocean. No stranger to encirclement schemes, Indian security experts saw China developing a “string of pearls” across the Indian Ocean that could one day encircle India. And so, even as China often benchmarks itself against the United States, India came to benchmark its military capabilities against those of China and has found itself wanting. Indeed, Indian fears of China’s growing ability to rush massive reinforcements to their disputed border in Arunachal Pradesh has led India to station six mountain division (including two newly-raised ones) there to face only three Chinese mountain brigades on the other side. In 2013, India even decided “in principal” to fund a new “strike” corps, to give its frontline units a better offensive capacity.
In recent years, many other Asian countries have begun to similarly react to China’s military buildup, though they had earlier welcomed China’s rise, because it had brought them economic benefits. Between the late 1990s and the first half decade of the new century, Beijing’s diplomatic “charm offensive” raised the hopes of many Southeast Asians, who were pleased with China’s seeming willingness to accept their preference to prioritize economic development over political conflict and consider the region’s multilateral norms. But as China’s confidence grew with its economic influence and military strength, Beijing began to assert the primacy of its interests in its disputes with Southeast Asia. Rather than embrace multilateral dialogue, China seemed to increasingly sideline Southeast Asian concerns and pursue its aims either alone or through only bilateral negotiations. That has been true of China’s recent approaches to conflicts over both its use of the Mekong River and (more famously) its maritime borders in the South China Sea.
In late 2007, Beijing raised the status of the administrative authority governing the Paracel and Spratly Islands to that of a “county-level city” in Hainan province. Then, it listed its South China Sea claims among its “core interests”—those over which it is willing to fight. Sensing the start of a slippery slope, several Southeast Asian countries publicly confronted China about its assertiveness at the 17th ASEAN Regional Forum in 2010. China was incensed by the rebuff. Thereafter Chinese patrol vessels have occasionally harassed oil exploration ships from the Philippines and Vietnam—the militarily weakest disputants in the South China Sea—by cutting the cables towing their ships’ seismic equipment. In 2012, China further fired tensions when it built structures on Philippine-claimed Amy Douglas Reef and triggered a months-long maritime standoff. As a result, despite the willingness of many Southeast Asian countries to give China the benefit of the doubt that its military buildup was part of a “peaceful rise” or narrowly directed against its wayward province of Taiwan, they now view China with far more circumspection and their own military buildups with greater urgency.
As similar series of events occurred over the Japanese-controlled Senkaku (Diaoyu) Islands in the East China Sea. Starting in 2010, Chinese and Japanese patrol boats have confronted one another in the waters surrounding the islands. Then, after a risky move that Tokyo thought would calm tensions badly misfired, Beijing stepped up its maritime patrols in the area and allowed its citizens to vent their anger against Japanese commercial interests in China. On the other hand, more Japanese have conceded the need to boost their defense preparations, despite their generally pacifist sentiments. As a result, Tokyo has deployed an additional squadron of F-15J fighters to Okinawa and maintained around-the-clock coast guard patrols near the disputed islands. But such sustained demands placed on Japan’s self-defense forces and coast guard have begun to strain their equipment, prompting the need for newer and more capable aircraft and ships.
Some have now suggested that Asia’s military buildup might point to the existence of one or more arms races—situations where conflicting interests or mutual fears cause competitive increases in arms between two states or coalition of states. So far that is not the case, at least not in the literal sense, if for no other reason no Asian state or coalition of states can afford to directly compete with China’s pace and scale of military modernization, barring a downturn in the Chinese economy. Rather than an arms race, much of Asia’s military buildup can be characterized as an arms catch-up. As Asian countries abandoned their purely bandwagon policies toward China, they have scrambled to strengthen their relative military power—partly through their own military modernizations and partly through closer ties with external powers—to hedge against China’s rise. No doubt that is also why Asian countries, like India, Japan, the Philippines, and Vietnam, whose interests seemed so disparate in the past have become so keen on economic and security cooperation today.
IMPLICATIONS OF ASIA’S MILITARY BUILDUP
The primary concern of many of those who follow Asia’s military buildup is that the increased level of armaments will likely lead to conflict, whether through miscalculation or design. In addition, they could argue that the possibility for miscalculation is made all the more likely because of the overlapping military catch-up efforts—China’s attempt to catch-up to the United States, India’s to China, Japan’s to China, and the rest of Asia’s to China—which creates a complex situation where the actual, functioning balance of power is difficult to ascertain.
Even so, sometimes overlooked are countervailing factors that could lessen the possibility of conflict. First, though Asian countries are rearming in response to China’s increased defense spending and more assertive behavior, they would prefer not to see China as an adversary and hope that it could continue to be a source of economic vitality for the region. Indeed, all Asian countries, even China, have underlined the benign nature of their intentions. Second, all the countries of Asia share common interests that bind them as states, such as promoting economic growth, deterring terrorism, and foiling transnational crime. And third, as history has demonstrated, military expansion can also result in agreements to limit arms, especially as they become more costly to accrue. It was just such a concern that led the world’s five leading naval powers to agree to a naval arms limitation treaty at the Washington Conference in 1921–1922.
But if economic benefits and common interests are insufficient to allay qualms over the intentions of possible rivals—as often is the case—and Asia’s military buildup continues, then those countries playing catch up with China would be well advised to do so through the acquisition of new military technologies. Rather than try to match Chinese forces in terms of absolute numbers of aircraft and ships, they could attempt an asymmetric approach with new technologies against which China has fewer defenses. Much like China’s attempt to thwart American carrier battle groups with conventionally-armed ballistic missiles, Asian countries could emphasize some combination of new technology and tactics that can compensate for smaller quantities. Such systems could include supersonic land-based cruise missiles (and radar systems that support them), stealthy attack submarines, armed unmanned aerial vehicles, or even long-range standoff weapons launched from unconventional platforms, like the P-8A maritime patrol aircraft. Doing so would enable Asian countries to more quickly approach parity with China, regardless of the current gap in conventional military power, and bring greater security and stability to the region.
For the United States, Asia’s military buildup can be seen as a source of both concern and comfort. Naturally, China’s continued military expansion and benchmarking against American capabilities are troubling, though not yet alarming, unless the United States curtails its own military modernization efforts. But China’s growing power has created new tensions in the dynamics of America’s bilateral security arrangements across the region. On the one hand, if American security guarantees are too firm, then its security partners could embroil the United States in an unwanted conflict. On the other hand, if American security guarantees are too weak, then its security partners could decide that their interests might be better served by currying favor with China. So far, that is not the case. China’s new arms and recent maritime assertiveness have led many Asian countries to seriously invest in their own defenses for the first time since the Cold War. And to the extent that these countries are friendly to the United States, Washington can take some cheer from the fact that for now others are willing to share more of the balancing burden in Asia.
In any case, it is far from certain that Asia’s military buildup will inexorably lead to crisis or war. What matters in the end is not the region’s quantity of armaments, but rather the region’s perceptions of power and intentions. At the moment, those of China concern many Asian countries. Yet if they, along with the United States, collectively gather enough power to persuade China to temper its provocative behavior, then their military buildup will have contributed to the region’s security and stability. Conversely, if China’s military power continues to grow relative to that of its neighbors, then one can expect more confrontations to come—no matter the quantities of arms amassed.
 Division equivalents include only airborne, armored, and infantry formations; three independent brigades or regiments are counted as a division equivalent. Fourteen infantry divisions were merged into the People’s Armed Police.
 A second aircraft carrier might be under construction at Jiangnan Group’s Changxing Island shipyard near Shanghai. James Hardy, “Images suggest China’s first carrier under construction,” Jane’s Defence Weekly, Aug. 2, 2013.
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 “With Agent 220 Million, No Agent 110 Million,” Kuala Lumpur Security Review, Jun. 8, 2010; Wassana Nanuam, “Thai Navy Chief Reveals Lack of Cash Hindering Arms Maintenance, Sub Deal,” FBIS-EAS-2001-0513, Bangkok Post, May, 13, 2001; David Saw, “Funding Crisis Threatens To Submerge Navy,” Defense Daily International, Sep. 15, 2000.
 Rahul Bedi, “Defending Delhi, running the budgetary obstacle course,” Jane’s Defence Weekly, Mar. 9, 2012; Mrityunjoy Mazumdar and James Hardy, “India rolls out reactivated airstrip in Arunachal Pradesh,” Jane’s Defence Weekly, Nov. 29, 2011; Rahul Bedi, “Indian army laments continuing weapon delays,” Jane’s Defence Weekly, Sep. 21, 2010; Rahul Bedi, “Indian Navy to build two new bases and upgrade defences of island territories,” Jane’s Defence Weekly, Apr. 16, 2010; Manu Pubby, “Probe stalls upgrade, Army to get new guns,” Indian Express, Jun. 24, 2009,http://www.indianexpress.com/story-print/480429.
 Alexis Romero, “DND approves terms for acquisition of 12 fighter jets,” Philippine Star, Jul. 11, 2013,http://www.philstar.com/headlines/2013/07/11/964112/dnd-approves-terms-a… “Philippines to buy 2 frigates from Italy,” Agence France-Presse, Jul. 3, 2013.
 Yuka Hayashi, “As Tensions Rise, Pacifist Japan Marches Into a Military Revival,” Wall Street Journal, Jul. 18, 2013; Paul Kallender-Umezu, “Japan Might Delay F-35 Purchases,” Defense News, Jun. 10, 2013.
 Aurel Croissant, David Kuehn, and Philip Lorenz, Breaking With the Past?: Civil-Military Relations in the Emerging Democracies of East Asia (Honolulu: East-West Center, 2012), pp. 14-15, 17-18, 34-41; Paul W. Chambers, “Thailand on the Brink: Resurgent Military, Eroded Democracy,”Asian Survey 50:5 (2010), pp. 835-58; “Seeking a modern role,” Economist, Mar. 20, 2012; “Old soldiers, old habits,”Economist, Sep. 21, 2006; Terence Lee, seminar, “The Armed Forces and Regime Maintenance: Explaining the Role of the Military in 1973 and 1992 Thailand, and 1998 Indonesia,” Institute of Southeast Asian Studies, Feb. 10, 2006.
 Gerald Segal, “East Asia and the ‘Constrainment’ of China,” International Security 20:4 (1996), pp. 107-135.
 Rahul Bedi, “Indian Finance Ministry approves 90,000-strong mountain strike corps,” Jane’s Defence Weekly, May 29, 2013.
 Felix K. Chang, “The Lower Mekong Initiative and U.S. Foreign Policy in Southeast Asia: Energy, Environment, and Power” Orbis 57:2 (2013), pp. 282-299.
 Kosuke Takahashi and James Hardy, “UAVs, marines, BMD top Japanese MoD’s policy recommendations,” Jane’s Defence Weekly, Jul. 30, 2013.
 Paul Kennedy, The Rise and Fall of British Naval Mastery (London: Macmillan, 1983), p. 274; Roger Dingman,Power in the Pacific: The Origins of Naval Arms Limitation, 1914-1922 (Chicago: University of Chicago Press, 1976).