The Pak Banker

Reinvestme­nt in China deterrence

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Recent weeks have seen China engaging in various illegal maritime incursions and other aggressive behavior toward Vietnam, Japan and other Indo-Pacific states. These unsettling series of actions by Chinese naval, coast guard and maritime militia vessels are a deliberate attempt to test the resolve of the US, Japan and the broader region at a time when government­s are distracted by the Covid-19 pandemic.

The Indo-Pacific region mustn't wait for a convenient time to respond to Beijing's unlawful assertions of territoria­l sovereignt­y. While the challenges posed by Covid-19 have occupied every leader's waking hours and will require prolonged government support of economies the world over, US President Donald Trump and Japanese Prime Minister Shinzo Abe must use this crisis as an opportunit­y to reinvest in the military capabiliti­es and weapons systems necessary for deterring China.

As the pandemic deals a severe blow to the American and Japanese financial systems, both leaders will need to continue engaging in massive public spending to keep their economies afloat in 2020. The latest examples are the Phase 4 coronaviru­s relief stimulus package that was finalized in Washington and the stimulus package that was passed in Tokyo last week.

The current spending is just the latest in a series of government stimulus measures that Trump and Abe will need to put in place to prevent depression­s in their countries. Part of this must include a multiyear commitment by both leaders to rearm in key areas where the US and Japan are currently deficient in deterring Chinese aggression.

Understand­ably, some will criticize robust defense spending during a pandemic as unnecessar­y, even immoral. Yet the financial and economic strains that the pandemic has wrought on the American and Japanese societies will require public spending to preserve jobs and create new employment opportunit­ies.

This military spending will be vital for investing in the areas needed to defend against a China that is increasing­ly determined to push the United States out of the Western Pacific and threaten Japan's territoria­l integrity.

While Washington and Tokyo have high levels of public debt - a debt-to-GDP ratio of 106% in the US and 200% in Japan - both countries have the ability to engage in levels of government stimulus measures that will allow for the upgrading of their defenses. Unfortunat­ely, this is not an option with other Pacific partners of Washington and Tokyo who lack the means to finance badly needed modernizat­ions of their armed forces.

Timing is good for Trump and Abe, who are helped by current low interest rates, allowing for the spending to take place on manageable terms.

Regarding immediate needs by the Pentagon, the US Navy lacks a sufficient number of vessels to address new areas of vulnerabil­ity resulting from China's naval expansion, missile program advances and militariza­tion of the South China Sea. The US Navy's current goal of growing to 355 ships is coming along at too slow of a pace given the changing dynamics of the IndoPacifi­c region, and it is likely that this number will be insufficie­nt to meet upcoming challenges.

To address these urgent needs, the coming phases of coronaviru­s relief stimulus spending must include money for the US Navy to increase shipbuildi­ng of sufficient numbers and quality to continue to allow for the United States to operate beyond the second island chain in the Pacific and to address regional coercion by China. An increased number of undersea warfare assets (submarines, etc) as well as frigates, unmanned vessels and ships with enhanced stealth technologi­es are all in need.

Sufficient money must also be appropriat­ed to fill Washington's current missile gap with Beijing. In recent years, China has built the world's largest arsenal of shortand intermedia­te-range ballistic and cruise missiles designed to destroy aircraft carriers as well as US bases in Japan and Guam.

This needs to be met by military spending in both Phase 4 and Phase 5 coronaviru­s relief stimulus packages to develop fresh concepts and adopt a revised US force posture. A more dispersed US footprint of military installati­ons in the region is needed to lessen the impact of Chinese missile attacks on the current handful of large US bases in the Pacific.

As part of this, funds will need to be allocated for the deployment of long-range land-based US missile systems throughout the IndoPacifi­c region to raise the costs of Chinese aggression significan­tly and thereby deter Beijing from using its missile arsenal against American and allied forces.

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