US officials: China’s economic woes may slow military rise

China’s military may be more aggressive than ever before, but economic woes could force some tough spending decisions that slow its continued rise, two U.S. defense officials said Monday.

Speaking at the Atlantic Council about the Pentagon’s latest China Military Power Report, an annual evaluation of Beijing’s military power mandated by Congress, the officials said China’s economic troubles coincided with higher costs of military modernization. 

“They are getting into areas that are more expensive and more technologically complex,” said Michael Chase, the deputy assistant secretary of defense for China, Taiwan and Mongolia.

Chase said Beijing relied more on the People’s Liberation Army “as an instrument of advancing his foreign policy objectives” than ever before, and that an economic slowdown would not likely change that.

But U.S. officials, he said, were watching “whether a slowing economy imposes some trade offs between different projects that are important components of PLA modernization.” He listed the building of aircraft carriers, nuclear weapons and foreign bases as big-ticket items.

“We’re probably beginning to see some of that evidence, and I think we’ll see more of it over time,” he said. “They’re becoming increasingly technologically sophisticated and, therefore, increasingly pricey.”

Nuclear threat

Released last week, the China Military Power Report says Beijing last year continued to build its nuclear weapons arsenal and may even be considering building missiles capable of reaching the United States.

It also reiterated last year’s report that said China is the U.S. military’s “top pacing challenge” and the “the only competitor with the intent and increasingly the capability to reshape the international order.”

Ely Ratner, the assistant secretary of defense for Indo-Pacific security, told the Atlantic Council on Monday that despite that assessment, he agreed that China’s economic issues had thrown a spanner in the works – both for the military and for its regular diplomacy. 

“We may be seeing some of those trade-offs already,” Ratner said. “We have seen for instance, over the last couple of years, Belt and Road investments by [China] dropping dramatically around the world.”

The Belt and Road Initiative was “one of the top priorities for the leadership in Beijing” when it was launched 10 years ago, he said, but “because of their economic slowdown, you see them less able and less willing to be supporting those kinds of investments overseas.”

“So even things that are high priorities are getting cut in the face of this economic slowdown, and the PLA will be no different over time.”