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Shadow Government

A Moment of Truth for the People’s Liberation Army

China is at an economic, political, and military crossroads.


The last three decades have been relatively easy for China’s defense planners. But its economy is stagnating and its security environment is deteriorating. The People’s Liberation Army (PLA), China’s military, will face some tough choices. Decades of double-digit budget increases have allowed it to concentrate on building what Beijing most desires: a strong, maritime-focused force. China now has the world’s most active precision-strike missile program, is acquiring submarines at a faster rate than any other navy, and is building a large surface navy.

After the fall of the Soviet Union and until very recently, China’s land borders appeared secure — to borrow a metaphor from U.S. history, its “frontier was closed.” With China’s explosive economic growth over the last few decades, it not only quickly became one of the most important maritime trading nations in the world, but could also shower largesse on the PLA (while China faces periodic bouts of domestic unrest, the PLA is no longer in charge of that mission). Until recently, the PLA had but one main requirement: build a military capable of protecting China’s regional maritime interests.

And so, almost every year for the last few decades, Beijing has announced double-digit increases to the PLA’s budget. This year is no different: On March 5, the ruling Chinese Communist Party (CCP) announced a 10.1 percent increase, to a total of roughly $141 billion.

What’s different now, however, is that the easy days are over. Resources are shrinking. The situation is Xinjiang is getting worse. And an anti-corruption campaign announced by CCP secretary Xi Jinping shortly after he took office in November 2012 is starting to pick up steam in the military. Meanwhile, China’s land borders no longer appear as secure, as terrorists infiltrate China from South and Central Asia. For the first time since the Cold War, the PLA faces a real set of tough strategic and investment trade-offs and challenges to its weapons program development.

First, China’s fiscal situation is under severe strain. Its debt burden increased from $7 trillion in 2007 to $28 trillion in mid-2014, while Chinese national wealth has only increased by $5 trillion since mid-2008. As my colleague Derek Scissors argued in a November essay, “Chinese growth since 2008 has been built entirely on sand.” China is also aging rapidly: its labor force shrunk by 2.44 million in 2013, and by a whopping 3.71 million in 2014. Moreover, its gross domestic product grew at only 7.4 percent in 2014 — a 24-year low — and Beijing is aiming for around 7 percent for 2015. The current economic slowdown could potentially derail the PLA’s gravy train. Its military budget will have to align with China’s fiscal realities. The CCP will have to meet pension obligations to retirees and try and service the debt.

Second, Xi’s anti-corruption campaign is going after PLA elites. In early March, the PLA announced that 14 more of its generals were targeted in the anti-corruption crackdown. And in October, Beijing indicted Xu Caihou, a former vice-chairman of the Central Military Commission, the body that oversees the PLA, on bribery charges. Xu, who died last week, was the highest military official in decades to be publicly accused of corruption.

The anti-corruption campaign is likely making the PLA very cautious about procurement and innovation. And this caution will likely lead to poor investment decisions: fearful of drawing the attention of anti-corruption investigators, officers in the PLA will likely overcompensate and cut back more than they should.

Third, China’s international security environment is changing. For the past 20 years, it has been primarily concerned with building a coercive force in maritime East Asia. However, domestic terror attacks have risen sharply since the Beijing Olympics. Between 2008 and 2013, China experienced 48 terror attacks, most of them attributed to radical Uighurs, an ethnically Turkic, Muslim minority group who live in Xinjiang, a massive region in northwest China. Long repressed by Beijing, some Uighurs have joined militant groups in the Middle East, Afghanistan, and Pakistan. The Chinese government claims that over 300 Uighurs have joined the Islamic State (IS). While some Western analysts doubt the veracity of this figure, there have been firsthand accounts of Uighurs fighting on the front lines. In addition, several hundred Uighur fighters have established themselves in training camps along the rugged Afghan-Pakistan border.

As recently as February, a suicide bomber reportedly killed up to eight people in Xinjiang. Four days later, four police officers were stabbed to death, nine suspects in the attack were shot dead, and four bystanders were killed in Xinjiang, according to The New York Times. And, with growing Chinese oppression of Muslims, international jihadi groups like IS are reportedly setting their sights on China. While domestic security forces take the lead in counter-terror activities, the PLA will have to step up as well. Xinjiang’s long and porous border touches eight countries. Preventing terrorist attacks will not be easy.

The Chinese leadership will debate where scarcer resources should be directed — pursuing maritime-based ambitions, or defending against continental threats and enhancing border security. The neglected PLA ground forces will see an opportunity to beef up mobile forces capable of crossing China’s borders, and work with Central Asian governments in counter-terrorism operations.

The PLA will still be a formidable maritime force. Land and ship-based precision-guided missiles, networked through modern command, control, communications, computers, intelligence, surveillance, and reconnaissance systems, can create kill zones against U.S. and allied forces in China’s surrounding seas. Over the last few years, Beijing has deployed destroyers, frigates, and submarines in attempts to coerce Japan, the Philippines, and Vietnam, to budge on territorial disputes. Moreover, as Putin’s Russia has demonstrated, stagnation does not necessarily lead to placidity. A China growing more slowly can just as easily become more aggressive abroad to distract from problems at home.

Still, the PLA may be entering a period of relative weakness. What does this mean for U.S. policy? Washington should avoid the temptation to overreact and worry less about the PLA. Instead, it should view periods of relative Chinese weakness as opportunities to consolidate advantages in its security competition with China. Washington can begin to roll back some of China’s maritime gains by convoying Philippine and Vietnamese oil and fishing vessels that China harasses, operating consistently in new maritime territories China is trying to claim, and building the maritime capacity of Southeast Asian nations

Washington should use the moments when China is back on its heels to demonstrate to Beijing that it cannot win a competition, and that cooperation is the better path for China to fix its increasing domestic problems. With the PLA ready to face fiscal pressures and a renewed Chinese concern about its land borders, that moment has arrived.

Photo Credit: Goh Chai Hin / AFP

Daniel Blumenthal is the director of Asian studies at the American Enterprise Institute.

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