Playing to Win: Indo-Pacific Strategy and Partnerships to Deter China By Dustin Walker

A Response By Dustin Walker

And oftentimes, to win us to our harm, The instruments of darkness tell us truths, Win us with honest trifles, to betray’s In deepest consequence. Macbeth, Act 1, Scene 3

President Biden should have heeded Banquo’s warning for Macbeth. Last September, he downplayed China’s threat to Taiwan, saying, “I think China has a difficult economic problem right now...I don’t think it’s going to cause China to invade Taiwan. And matter of fact, the opposite: it probably doesn’t have the same capacity that it had before.”¹

President Biden’s indulgence of the “Peak China” trifle revealed either naivete or a dangerous penchant for wishful thinking—a willingness or desire to believe that China’s military threat is exaggerated, that economic struggles might lead Beijing to be inwardly focused or more receptive to dialogue, and that the United States can afford to put China on the backburner and focus elsewhere. To wit, two months later, President Biden sought to use his meeting with Chairman Xi Jinping not to press America’s advantage, but to enable the White House to “instead focus its energy on Israel, Ukraine and the upcoming reelection campaign.”²

As I warned in a previous paper for the Reagan Institute Strategy Group, for all the talk of a strong bipartisan consensus on China, “the preeminence of the Indo-Pacific in American foreign policy is precarious—never more so than when events elsewhere around the world inevitably demand our attention.”³

In a welcome contrast, Dale Swartz’s paper offers a clear warning about the scale and scope of the long-term challenge ahead—and the need for sustained urgency and focus. China’s economy will remain one of the world’s largest and most influential. In spite of U.S. and allied restrictions, China will remain a formidable competitor in advanced technology. China’s military threat is not limited to Taiwan, but instead extends across the Indo-Pacific and increasingly into other theaters. And China remains fundamentally antagonistic to U.S. leadership in the international system. While Swartz offers broad guiding principles for U.S. strategy to compete with China, this paper explains the implications of these four “inconvenient truths” specifically for defense.

Peak China

“Peak China” is an honest trifle, one that confuses more than it clarifies. Yes, China’s economy has major structural challenges. China’s economy is smaller relative to the U.S. economy than it was three years ago. Once thought an inevitable milestone, it is no longer clear China’s economy will ever surpass the United States.

But the more salient realities are these: despite recent setbacks, China’s economy is still larger relative to the United States than the Soviet Union’s ever was. Its industrial capacity dwarfs that of the United States, which is evident in the People’s Liberation Army’s (PLA) quantitative advantages in key platforms and weapons. And perhaps most importantly, China is preparing its economy for war. It is boosting energy security to overcome maritime interdiction in wartime, eliminating supply chain vulnerabilities, and reducing exposure to foreign exchange reserves, among other steps. As a former J-2 at U.S. Indo-Pacific Command has assessed, “Xi seems to have studied the sanctions playbook the West used against Russia over Ukraine and subsequently initiated long-lead protective measures to batten down the hatches of China’s economy to resist similar pressure… [The choices he is making today leading to domestic wealth destruction portend his willingness to countenance even greater wealth destruction on a global scale.”⁴

Tech Innovator, Not Imitator

It is another honest trifle that China has copied Western technology and stolen data and designs for American weapons like the F-35. This is partly why many in defense circles still assume China has a talent for reverse engineering but not for genuine innovation. As a result, the United States remains at risk of underestimating the increasing quality of China’s military and its ability to develop and field advanced technology. The Pentagon has assessed that China already has qualitative advantages in shipbuilding, land-based conventional ballistic and cruise missiles, and integrated air defense.⁵ Its more recent assessments find China is making progress “fielding modern indigenous systems.” The Office of Naval Intelligence assesses new PLA Navy ships are increasingly comparable to U.S. ships. And American officials express “surprise” at the pace of China’s hypersonic weapons program.⁶

The Department of Defense (DOD) must prepare itself to compete with a PLA that enjoys significant quantitative advantages and is increasingly closing the qualitative gap with the U.S. military.

It needs to abandon its post-Cold War investment bias for quality over quantity, which is rooted in a dangerously outdated assumption that the United States enjoys an immutable qualitative advantage over its adversaries. And it needs to grow the defense budget to prevent a false choice between research and development (R&D) and procurement spending. DOD needs more of the former to preserve and expand its qualitative advantages. It needs more of the latter to field capability at scale, especially given the prospect of protracted conflict.

Taiwan Myopia

The DOD should continue to focus on Taiwan as the pressing scenario for its defense planning purposes. With interagency partners, it should also continue to boost Taiwan’s ability to defend itself. But Swartz is right to point out the limits of a strategy exclusively focused on the prospect of war in the Taiwan Strait.

China threatens not just to invade Taiwan but to subvert its political system into capitulation. For all its military preparations, Beijing would still prefer to win without fighting. While the United States should prepare for the real prospect of war, it also needs to improve its ability to respond credibly to the Chinese below the threshold of conflict. That is not only true with respect to Taiwan, but in the South China Sea and beyond. Failure to do so could lead allies and partners to lose confidence in U.S. security guarantees.

China’s military threat is not limited to Taiwan. At present, China is engaged in illegal, coercive, aggressive, and deceptive behavior against the Philippines. Escalation is a real possibility for which the United States seems ill-prepared, especially given the local military balance in the South China Sea. Over the long term, as its force capacity and power projection capability both grow, China’s military threat will extend more broadly across the Indo-Pacific (e.g., the Indian Ocean and Central Pacific) and, increasingly, globally.

Finally, Taiwan is not necessarily a galvanizing issue with allies and partners, especially in Southeast Asia. Rather than focusing on Taiwan or China, U.S. strategy should focus on demonstrating to allies and partners that the United States shares their security and economic interests as they conceive them.

Anti-American Antagonism

Hopes that China would integrate itself into a U.S.-led international system have largely faded. Chairman Xi has made clear he intends to displace and replace the United States as the world’s leading superpower by 2049. U.S. defense strategy accounts for these facts but has yet to come to grips with China’s leadership of an increasingly connected axis of anti-American states that includes Russia, Iran, and North Korea. The possibility of simultaneous conflict is increasingly real—as is the possibility that China could proliferate advanced military technology to other U.S. adversaries.

Are we ready for the long-term challenge of China as a peer rival? Here are some questions we must answer to know:

• We are in a long-term competition with China. What is our objective in this competition?

• We are right to prioritize China. Are we any closer to politically sustainable and resource-efficient alternatives to securing America’s enduring interests in Europe and the Middle East?

• We need more from allies and partners. Are we prepared for them to exercise greater agency in Europe and the Middle East?

• We need more defense spending. How do we invest in defense in a fiscally sustainable way?

• We need leap-ahead capabilities to achieve “strategic distance.” How do we get better about placing our technological bets?