The impact this has on each country’s respective military budget is staggering. When personnel costs are removed from the U.S. side, military spending decreases from $597 billion to $298 billion. By comparison, China’s military spending drops from $145.8 billion to $97.2 billion. In other words, when personnel costs are taken out of the equation, China’s military spending goes from about a quarter of America’s to nearly a third.
As Alexander de Tocqueville observed nearly two centuries ago, Americans are by nature an optimistic people. This optimism has often been a source of national strength, propelling us to seek ever greater heights.
In certain instances, however, optimism can be dangerous. One such instance is in dealing with China’s rise. Many Americans have failed to grapple with the magnitude of China’s rise, confident that Beijing will go ultimately go the way of the Soviet Union or Japan in the 1980s. Those making this case can marshall some impressive statistics to bolster their case that America remains far and away the most powerful country in the world. One of the more popular data points they use is defense spending: specifically, that America still spends about four times as much as China on its military.
(This first appeared last year.)
But comparing the raw numbers is misleading in a number of ways. Some of these are relatively well known: for example, it is generally acknowledged that America is a global power with its military assets dispersed around the world, while China can concentrate its armed forces in Asia. Similarly, military spending fails to account for what is often called the “tyranny of distance.” That is, to project military power in Asia, the United States must cross the largest ocean in the world. By contrast, China is located in the center of the action. And, as anyone who works in Washington understands, proximity to power is a power unto itself. Being so close to the battlefield also enables China to implement an anti-access/area denial (A2/AD) strategy by using its territory to deploy large amounts of missiles, aircraft, surveillance systems and radar. In effect, these are unsinkable aircraft carriers.
Other ways that U.S. and Chinese defense budgets fail to capture the real balance of power in Asia are less well known. One factor that many observers overlook is personnel costs. Despite having a larger military, China’s military spends far less than the United States on personnel. And, once personnel costs are taken into account, the gap between U.S. and Chinese military spending is less than the raw budget numbers suggest.