China Iran Russia Convergence

US Needs Assertive Eurasia Strategy

Despite the Ukraine war having reached its first anniversary, the relevance of the conflict is still not recognized. Russia’s assault inaugurated a formal competition for dominion over the Eurasian landmass. Its goal was to create a strategic position from which it could crack NATO. As it stands, it has failed to conquer Ukraine, but now seeks to break NATO regardless.

The fundamental issue in this strategic competition is the incongruity between the Eurasian reality and American strategic balkanization and resource insufficiency.

The US Navy is unlikely to win a major war with China absent extensive support from the US Air Force and Marine Corps and a major allied commitment. Yet even with total “concentration” in the Indo-Pacific region, even if the United States were to subordinate every other strategic question to that of deterring and defeating China, the People’s Liberation Army would have a multi-year window of opportunity.

The PLA outclasses the US Navy by tonnage. It has greater repair and production capacity than the US Navy for both warships and aircraft. This disparity holds even if US capabilities are taken alongside those of America’s allies.

Even if the US wins the first battle of the next war and, alongside Japan and Australia, and likely the Philippines, South Korea, and possibly Vietnam, repulses a Chinese amphibious assault on Taiwan, the damage will be immense. Taiwan’s semiconductor manufacturing capacity will be damaged.

Global shipping costs will skyrocket, and all Asian trade will be disrupted. Moreover, tens of thousands of Americans could perish in the first weeks of a war even if the US is victorious.

US Pacific Fleet Admiral Samuel Paparo told the CBS show 60 Minutes on March 19 that Chinese missiles could hit US carriers. The PLA is also likely to damage dozens of other warships, and hit American bases at least up to Guam.

This is not to mention the knock-on economic and financial costs of the conflict. China’s role in the critical minerals supply chain is lethal.

The People’s Republic extracts relatively few critical minerals and materials but controls an 80%-plus stake in the refinement and processing of these minerals. Hence the PRC has both the stockpiles of various elements to sustain domestic industry and a deep-seated structural advantage in their production given its de facto monopoly on their processing.

This reality, again even in the event of victory, will intensify the economic crisis until the West and its allies can respond. Financially speaking, a conflict would send the price of oil skyrocketing, even more so if a concurrent Middle Eastern contingency developed, and destroy the global financial system as it has existed for the past 40 years.

All the above will occur even if, once again, the US wins the first battle of the next war. There will be subsequent battles. China may expand the war elsewhere, triggering a contingency on the Korean Peninsula or against Vietnam.

China will also seek to blockade Taiwan, forcing the US to sustain it through a massive sealift, and thereby shattering American and allied sealift and merchant marine capacity. Most critically, unless the US can destroy the bulk of Chinese ports and airfields, the PLA will be able to rebuild its combat power in just a few years, if not a few months, depending on the actual damage to its ships.

This balance of forces may shift over the next 15 years.

The cost of catching up

Proper capabilities investments from the US – investments in artificial intelligence (AI), advanced data fusion, secure communications, munitions production, and unmanned systems, along with shipyard capacity for overhaul and repair – would, if large enough, create a Navy, Air Force and Marine Corps capable of deterring Chinese action against Taiwan by credibly denying China a short- or long-term military victory.

This would require a major increase in defense spending, a boost to around $1.6 trillion over the next five years and that same level of spending sustained well into the 2030s.

Spending that sum of money on the US military demands a stable US economy. The US economy at this point is structurally unstable. Two decades of low interest rates, including a decade of no interest rates, has finally created an inflationary spiral alongside setting the conditions for a banking crisis.

A recession is likely in the next 12 months. The US Federal Reserve is disincentivized to a rate increase that would be needed, a full 50 basis points, and continue this discipline for at least two more Federal Open Market Committee meetings before tapering off at the end of 2023.

Rather, it is now incentivized to restrain any anti-inflationary behavior, or risk the complete destabilization of American and global financial markets, a string of bank failures, and a financial crisis far more structurally worrying than the 2008 global financial crisis and subsequent recession.

This is no environment in which to be raising military spending – either these spending increases will be unpopular as a recession sinks in or they will be eaten away by inflation. A combination of entitlement reform, social-spending cuts, and sustained high interest rates is crucial if the US is to right its fiscal ship. But these again create conditions non-conducive for defense spending.

Read the rest at Asia Times.

Seth Cropsey is founder and president of Yorktown Institute. He served as a US naval officer and as deputy undersecretary of the navy, and is the author of the books Mayday and Seablindness.

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