Since the end of the Second World War, the U.S. has been the strongest military power in the Indo-Pacific. However, China’s rapid military growth in the Indo-Pacific is tipping the scales in regional strength. Too often, Chinese and U.S. military power is compared on a global scale, where the U.S. military, equipped and trained to project power across the planet, has the clear advantage.
But the military balance in Asia is becoming less clear. China has increasingly demonstrated its ability to build modern military capabilities at size and scale, and the ability to project that power regionally.
These shifting scales should be setting off alarm bells in Washington. The latest iteration of the Pentagon’s annual report to Congress on the Chinese military has stated that the People’s Liberation Army (PLA) is evolving its capabilities and concepts to strengthen their ability to “fight and win wars” against the United States. House China Committee Chairman Rep. John Moolenaar (R-MI) has said that China “has enough weapons to overwhelm our air and missile defenses” that protect U.S. bases in the Pacific.
A quick examination of regional military spending helps one better understand the shifting balance of military power in the Indo-Pacific. Despite Beijing’s publically reported topline of $229 billion in 2022, new research suggests China’s real level of military spending was around $711 billion—nearly equal to the U.S. defense budget that same year.
Peer-level military spending with the United States should already be cause for concern, but the advantage is even starker when compared to China’s direct neighbors in Asia.
At $711 billion, Beijing outspends major U.S. allies combined by five-to-one, and the broader significant spenders by a factor of three-to-one. These investments in combat power are manifesting as rapid growth in the size and strength of China’s armed forces. In 2017, Xi Jinping stated he wanted to transform the PLA into a “world class military” by the end of 2049—and his investments seem to be paying off.
China now fields the largest army, navy and ground-based rocket force in the world. Beijing has also been hard at work to build a sophisticated hypersonic missile arsenal and to triple its nuclear arsenal by 2030.
By comparison, while China rapidly builds military capacity, the U.S. military is rapidly shrinking across the services. In President Biden’s current budget request, the Army will be reduced to just 442,300 active duty soldiers, the smallest it has been since 1940. The U.S. Navy is half the size it was 40 years ago, and set to continue to shrink down to just 294 ships in 2030. At the same time, China’s fleet is expected to grow to 425 ships. Similarly, the U.S. Air Force is nearing the smallest it’s been since the end of WWII, as retirement of aging aircraft outpaces the purchase of new replacements. Meanwhile, China is rapidly modernizing its Air Force with domestically produced aircraft, such as the J-20 stealth fighter developed from stolen American technology.
Furthermore, as a global power and to meet the needs of the National Defense Strategy, the U.S. military must balance priorities in the Indo-Pacific with those elsewhere, such as deterring Iran, countering Russian aggression, and shoring up allied commitments. Therefore, only a fraction of American military power is in the Pacific at any given time. While the U.S. military on the whole outmatches the Chinese military, China has the luxury of focusing solely on its neighborhood with much narrower objectives that give its forces far more bang for the proverbial buck.
Beijing knows this and can sense the scales are shifting, evidenced by its increasingly bold attempts to use force against American allies like the Philippines, Japan and Australia. While Washington has ostensibly shifted assets to Asia to counter Chinese aggression, it has been slow and uneven. Recent wars against our allies in Europe and the Middle East should remind Washington that shifting forces while simultaneously shrinking the force results in undeterred adversaries and violent tradeoffs.
Additionally, Beijing’s budgetary advantage over its neighbors highlights the crucial role of U.S. alliances in the Indo-Pacific. Tremendous progress has been made in the last year, including increased dialogue with India, Japan, and Australia through the Quadrilateral Security Dialogue, the AUKUS submarine deal with the U.K. and Australia, and new base access agreements and security cooperation with the Philippines. As AEI’s Zack Cooper writes, further progress remains to continue to demonstrate Washington’s commitment to security ties with potential partners throughout South and Southeast Asia.
The White House’s 2025 defense budget request does little to rectify this, with budget caps limiting defense spending to a one percent increase and forcing the services to make difficult decisions and sacrifice increased capacity for readiness.
Senate lawmakers responded accordingly and worked to rectify this budgetary shortfall with a $21 billion defense boost in their defense appropriations bill for next year. This includes crucial funding to restore deterrence in Asia, including an $8 billion increase over the President’s request in procurement, which includes funding for a new destroyer, advanced procurement for amphibious warships, expanded production of critical munitions across the services, and key investments in base defenses throughout the Indo-Pacific.
The Senate’s additions are important restorative steps to improve the trendlines increasingly turning away from America, but more work must be done to ensure both chambers of Congress can push through this crucial bout of spending. If Washington wants to close the yawning gap between our military’s strategy and resourcing, it must provide more resources to bolster flagging conventional American deterrence in Asia.
