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China could overtake US in weapons spending by end of Biden’s term

China's People's Liberation Army Navy (PLAN) sailors stand before the first Type 075 class of amphibious assault ship, Sept. 25, 2019. (China's People's Liberation Army Navy/Released)
May 28, 2021

The Pentagon has increasingly described the Chinese military as a “pacing threat” in recent years and U.S. defense analysts are now warning that China could overtake the U.S. in terms of both the quantity and quality of its armaments by the end of President Joe Biden’s term in 2024.

One graph shared with Politico by the LTSG research group on Thursday shows the comparative spending between the U.S. and Chinese militaries. LTSG compiled the graph and the underlying research to better understand China’s defense spending compared to the U.S. The projection has the PLA overtaking the U.S. military spending on new weapons by around 2024.

Adm. Philip Davidson, who retired in April as commander of U.S. Indo-Pacific Command (INDOPACOM), similarly told the American Enterprise Institute in a March speech that “the period between now and 2026, this decade, is the time horizon in which China is positioned to achieve overmatch in its capability, and when Beijing could, ‘could, widely choose to forcibly change the status quo in the region.”

Politico reported that if the PLA’s annual procurement value exceeds that of the U.S. military as projected by 2024, then by 2030 the U.S. will no longer have the world’s most advanced fighting force in total inventory value.

The warning about China’s potential to overtake the U.S. comes as China has steadily expanded its military in recent years. In 2019, China overtook the U.S. for the country with the largest naval fleet and it continued to expand its lead in 2020.

Complicating U.S. efforts to understand China’s military expansion and stay ahead of it is a lack of complete data about how China is spending its military budget. Since Barack Obama’s presidency, Pentagon officials have called the Chinese military the most capable rival to the U.S., but accounting for what China’s military has bought or plans to buy remains scarce.

In a 2019 report, the U.S. Defense Intelligence Agency (DIA) attributed the difficulty in accounting for China’s military spending activities to “poor accounting transparency.” The DIA also noted China’s formal defense funding process does not account for its purchases of foreign weapons as well as some of its research and development (R&D) and personnel benefits.

Politico reported that while the U.S. spends more on defense than the next 10 countries combined, there are disparities between U.S. and Chinese defense spending. The U.S. has spent more of its budget on operations and maintenance (O&M) for its existing systems rather than on acquiring new systems over the past two decades. U.S. O&M costs are estimated to outweigh the next two spending categories, personnel and procurement, combined. Meanwhile, China’s military spending primarily focuses on procurement, with combined O&M and personnel costs only slightly outweighing its procurement.

The LTSG research group also attributed the U.S. military focus on conflicts in the Middle East as having drawn away from developing capabilities to counter threats from near-peer countries like China.

Michael Mort, leader of LTSG’s Chinese defense spending project, told Politico, “Overseas conflicts like Iraq and Afghanistan have effectively stunted U.S. military modernization, forcing tremendous outlays for O&M at the expense of other priorities. No state on earth has benefited more from our asymmetric preoccupation than China.”

China’s outpacing of U.S. military spending is also of concern to other nations neighboring China, as it has increasingly used its military to expand activities in contested regions of the Pacific, such as setting up military bases in the South China Sea and flying near-constant military flights around Taiwan.

In March, Davidson said China could invade Taiwan within six years. U.S. Navy Adm. John Aquilino, who was selected to replace Davidson in command of INDOPACOM, similarly said China could invade at any point from “today to 2045.” Aquilino said, “My opinion is this problem is much closer to us than most think.”