In 2005, as a journalist based in Shanghai, I wrote a story about a decrepit Ukrainian aircraft carrier acquired by China and renamed the Liaoning with plans to retrofit it for its navy.
In a plot out of a spy novel, the Chinese first attempted to acquire the decommissioned carrier in the 1990s through a businessman who claimed that it would be used as a floating casino to avoid alarming the West, contradicting China’s then-constant claim of its “peaceful rise.”
When the Liaoning first arrived in drydock in 2005 it didn’t exactly trigger alarm bells amongst Western national security officials. The ship was antiquated, and the overall response was a shrug of collective shoulders as Chinese naval power lagged far behind the U.S.
Cut to nearly 20 years later and China stands by many measures as a peer to the U.S. Navy.
China currently features over 370 warships, including frigates, destroyers, submarines and other vessels, more than the U.S.’s approximately 290 ships. This includes China’s two aircraft carriers, the Liaoning and the Shandong, a Chinese-built vessel and a third, the Fujian, currently undergoing sea trials. There is speculation that a fourth is being built that will feature nuclear propulsion.
China’s “peaceful rise” was a smokescreen for activities such as its widespread industrial espionage and hacking. The story of the Liaoning and the transformation of its navy is just another example.
China has risen and it is not peaceful.
For anyone doubting that the latest example has taken place in an obscure part of the South China Sea known as the Scarborough Shoal. This small string of coral islands is claimed by The Philippines and is within their 200-mile exclusive economic zone. It sought to solidify its claim by beaching a rusted freighter on the shoal and has kept a contingent of Marines on the boat ever since.
China, which claims that Chinese fishermen have used the shoal as a fishing ground since the 13th century, rejects the claims of The Philippines and sees the shoal as within its “nine-dash line” of control. The Philippines took the matter to international arbitration and in 2016 essentially won its case.
Unfortunately, China has not respected the ruling, calling it “ill-founded,” and has harassed and impeded Filippo vessels visiting the shoal, sometimes using the world’s largest coast guard vessel, dubbed “the monster.”
This behavior has gotten more aggressive with the ever-bolder Chinese navy using increasingly dangerous tactics to stop resupply missions to the Filipino Marines. This includes aiming a military-grade laser at Filipino ships, ramming them and blasting them with high-power water hoses. In a recent skirmish, a Filipino Marine lost a thumb in the ruckus.
There is a real danger this situation could get out of control and pull in the U.S. The Philippines and the U.S. have a mutual defense treaty and the U.S. is compelled to intervene if its partner is attacked.
While this line has already seemingly been crossed, diplomats have been at pains to not call Chinese aggression an “attack.” Currently, all sides are working to tamp down the tension, but China shows no signs of backing down.
This is part of China’s long game of controlling the South China Sea and projecting naval power far beyond its shores. It fears a conflict over Taiwan and losing its sea access to the U.S. and coalition partners. So it has taken over other small shoals such as the Spratlys Islands, where it has constructed a small military base.
It is attempting to bully smaller neighbors like Vietnam, Malaysia and Brunei as well, with a mix of economic and diplomatic coercion combined with establishing new realities on the sea as China flexes its expanding naval power.
Chinese naval power isn’t just what it currently has sailing the seas. It is centered around its manufacturing prowess. China is now the world’s largest shipbuilder, an extraordinary rise from 1999 when it produced only 5 percent of the world’s ships.
While it likes to point to native innovation fueling the rapid rise of its shipbuilding sector, it is more specifically the result of billions of market-skewing subsidies invested into the sector. These subsidies have hurt its biggest competitors, neighboring South Korea and Japan, and China now produces approximately 50 percent of the world’s new ships every year. The U.S. by contrast produces less than 1 percent of new ships annually.
As with the “national champions” such as Huawei that China supports in other sectors, these shipbuilding companies blur the lines between commercial and military applications, often in plain sight. These “dual use” sights deliberately obscure the sharing of resources among commercial and government projects to give China an advantage.
Just as America’s support for Ukraine is revealing weakness in our military manufacturing infrastructure’s ability to keep up with the demands of resupplying in a hot war, our lack of shipbuilding capacity does not bode well for a war in the South China Sea.
The U.S. Navy is, of course, a formidable fighting force — still perhaps the best in the world. But in a war where the Navy would stand to lose ships to a relative peer like China, not having the ability to replace them in a reasonable time will not only impact our ability to succeed but will also affect our ability to project power and avoid other wars.
China faces significant problems such as population decline and a massive real estate debt bubble, but its steely focus on national security interests like building its navy is altering the global balance of power.
The U.S. has taken a step forward to address the erosion of its manufacturing base with the successful CHIPs Act as the leading example. However, the U.S. must urgently expand its ability to support its military to counter China’s desire to dominate the Pacific.
Jeremy Hurewitz is the head of Interfor Academy and the author of the forthcoming book “Sell Like a Spy.”