Patrick Watson of Mauldin Economics says the assumption that the US has the military upper hand on China is just that - an assumption - and no one really knows if it is true, though some of the signs aren’t good

Patrick Watson of Mauldin Economics says the assumption that the US has the military upper hand on China is just that - an assumption - and no one really knows if it is true, though some of the signs aren’t good

By Patrick Watson*

Five years ago this month, Ukraine’s “Euromaidan” Revolution led to Russian forces occupying the Crimean peninsula and parts of Eastern Ukraine. The US and Europe imposed economic sanctions in response. Pundits like me proclaimed a new Cold War.

Fast-forward to 2019. That standoff is still in progress and has intensified in some ways… and we have another one brewing with China.

The two conflicts differ, mainly due to China’s deeper trading relationship with the West. Trade frictions make that cold war economic as well as geopolitical. So it’s really double-trouble.

A cold war is certainly better than a hot one. Despite all its industrial strength, most analysts think China is a long way from presenting a credible military challenge to the US. Our well-trained, technologically superior navy can easily handle China, we’re told.

What if that assumption is wrong, though?

Among other things, it would mean some of our macroeconomic assumptions are wrong too. So maybe we ought to question it.

Photo: Pixabay

Death at Sea

On June 17, 2017, the destroyer USS Fitzgerald collided with a civilian cargo ship just after leaving port in Yokosuka, Japan. Seven American sailors died and dozens more were injured. It was the US Navy’s worst accident at sea in decades.

As if that hadn’t been awful enough, two months later it happened again. The USS John S. McCaincrashed into an oil tanker near Singapore. Ten more sailors died.

Both ships belonged to the storied 7th Fleet, our navy’s largest, most powerful, and arguably most critical battle force. It defends our allies in Asia and guarantees free navigation for the entire Pacific.

And two of its high-tech ships, equipped with every imaginable defensive technology, were disabled by… unarmed civilian vessels.

Official investigations blamed the two ships’ captains and crew, as well as the admiral commanding the 7th Fleet. Certainly they made serious mistakes. But a new, in-depth review by ProPublica says the blame goes much higher—and worse, very little is happening to fix it.

ProPublica’s two-part series (Part IPart II) is lengthy, dramatic reading. It recounts great heroism as sailors fought to save their ships and each other’s lives. It also shows the accidents happened because the Navy handed expensive technology to poorly trained, exhausted sailors and assumed everything would work perfectly.

It didn’t.

That part matches my own long-ago military experience. The Army would send us fancy new equipment we had no idea how to use or maintain. I don’t think this was just me. I’ve heard similar stories from veterans of all branches, going back to the Vietnam era and before.

The 7th Fleet may have those same issues now. This is a problem, since we depend on it to keep global free trade humming.

Photo: US Navy

Hollow Navy

To be blunt, how is it even possible for a modern naval vessel to collide with a large, slow-moving cargo ship? They’re not hard to spot.

I talked to someone who served on a similar destroyer in the 1980s. He found it baffling. In his day, in addition to sonar and radar, they had human lookouts posted on all sides of the ship. The lookouts were in constant communication with other sailors who plotted every nearby vessel’s location and course on a map. Collisions like these were inconceivable.

According to ProPublica, at some point in recent years the human lookouts became optional. The Fitzgerald had none that night. It had a radar system that wasn’t working right while the only repair technician was away on medical leave.

The sailors on duty did what they could. It wasn’t enough.

The Pentagon and defense contractors say our forces have the latest and greatest technology. The fleet is ready to face any foe… except, apparently, those pesky container ships and oil tankers.

In fact, we appear to have an expensively equipped Navy that skimps on people and training. That’s not so surprising if you think about it. New radar systems generate revenue for someone. Human lookouts don’t. Guess which one the government favors.

We could talk about whose fault this is, and there’s plenty of blame to go around, but the result is the same. The assumption that the US has the military upper hand on China is just that—an assumption. No one really knows if it is true… and some of the signs aren’t good.

Photo: Pixabay

Perceptions Matter

The problem here is that China has a history of “leapfrogging” ahead of US technology. That’s partly because the US frog slows down. Former Deputy Assistant Defense Secretary Mara Karlin recently told Axios,

"It can be very easy to keep doing what we’re doing, especially when it has borne at least some fruits, and profoundly difficult to shift away from our institutionalized, regimented processes."

Unburdened by such legacies, China is advancing quickly in key defense technologies like drones, quantum computing, and cyber warfare… some of which could render our destroyers and aircraft carriers irrelevant.

Perceptions matter. Whether China is really superior is one question. But if the Chinese government believes itself superior, it will behave differently in trade and other negotiations.

The Fitzgerald and McCain incidents gave China good reason to suspect US power is hollow—and the US isn’t doing much to counter that perception.

Throwing more money at defense contractors probably isn’t the solution. It may be part of the problem.

Economic power depends on military power. This suggests the balance could change sooner and more profoundly than many of us think. That’s not a certainty, by any means. But it’s not impossible either.

*Patrick Watson is senior economic analyst at Mauldin Economics. This article is from a regular Mauldin Economics series called Connecting the DotsIt first appeared here and is used by with permission.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.


"The peace behind me, the war in front of me"

Chinese recruitment videos are awesome:

Hey look, Zachary Smith - the resident apologist for the worst mass-murderer of the 20th century - is talking about how 'awesome' he finds communist recruitment videos.

Nothing to contribute then? Mao was one of the most influential people of the 20th century.

“Mao was one of the most influential people of the 20th century” says Zachary Smith
You really are revealing your lack of empathy for humanity there Zach

I’m off for a dive it’s beautiful here in Barbados
Good day kiwis

So I would be "lacking empathy" if I claimed that Henry VIII, Constantine and Alexander the Great were influential would I? This is ridiculous.

Chairman Mao said “political power grows out of the barrel of a gun.” Whether one likes it or not, there it is.

US has never actually taken on a large military force head on since World War Two. They have only been involved in proxy wars involving third world countries (Vietnam, North Korea, Iran, Iraq, Afghanistan, Syria etc).

American strategy has always been to weaken the opposition via sanctions and trade embargos for decades before military action. China has now grown to become a huge economy that this strategy is not going to work this time.

Actually, it'a all about energy. The biggest bang most often, wins. And the USA is still sitting on some, with the Canadian tar-sands up it's sleeve. It currently imports about half what it consumes, but it could go on an internal diet. China, on the other hand, has sod-all.

No point in being a 'growth economy' if the tank read 'E'.

Hence China invaded and occupied the Spratley Islands.

The Spratly Islands have also been invaded by the Vietnamese, Filipinos, Malaysians and Taiwanese. They all have airports there. Why can't China play too?

North Korea was a pretty full on conflict with MacArthur calling for nukes to hit the Chinese mainland when things were getting desperate. This got him fired. The Chinese with the North Koreans managed to push US forces to a tiny pocket in South Korea. It was disastrous really.

As will be another war with China. The US would see their carriers burning in the South China sea.

WW2 involved the US unfairly using weapons of mass destruction against civilian centres in a true campaign of terror because they feared invading the Japanese home islands.

They teamed up with the truly dreadful Soviets to outnumber the Germans six to one. Even then they made hard work of it and resorted to terror raids against civilians.

If you have to get voted in then it's important that you are seen as a winner. The USA likes winners and yet they keep getting handed failure after failure, it's internal failure too. China doesn't have that problem and nor does Russia but a lot of Europe does. May needs be seen as a winner in the Brexit deal or it's curtains.
China can fight but it cannot win, it's energy dependent and it needs buyers for it's stuff, it needs it's economic miracle to continue but much of that is built on asset bubbles. There would be no winners but China could be the biggest loser.
Too many people are getting left behind in this information age, too many are missing out on the promised prosperity. The next age is the AI age and we are definitely not able to face that is our present state.
Perhaps the big problem is something much deeper?

I think any US involvement in a land battle would go poorly, but US involvement in an air or sea battle would go incredibly well. Their navy and air force are without peer.

Thankfully, that's exactly what any conflict in the Taiwan Strait or South China Sea would come down to. International trade routes are safe.

The USA has a belief that technology will solve all problems all you have to is keep spending. It was disaster in Vietnam unbelievable in the Balkans, defied belief in Iraq on and on.

In Kosovo they rolled out black plastic to simulate roads and used microwave ovens to deploy decoy signals on the same wavelength as SAM missiles. Drones give you a picture so bad the the Taliban learnt to hide under leafy trees. They give a picture like looking through a straw from 11,000ft.
The belief in technology is ruining the US armed forces while enriching the industry built around it.

Technology worked against the US as it meant they couldn't justify pattern bombing to ensure hitting the target and everyone else for miles around. The Taliban pretty much control most of Afghanistan to this day. The technology was worse than useless really.

two factors would count against the USA in a conflict with China;

American public have no appetite for deaths of soldiers - they have become used to small wars where there have been very few casualties. They will not stand for another Vietnam with thousands and thousands of deaths. China on the other hand doesnt give a stuff about its population and public opinion - theyll simply send another 100000 troops to the meat grinder if necessary.

Secondly, the US has been reducing its count of weapons and relying more on a 'technological edge' since the 1990's - if this ends up being misplaced confidence and the US finds itself losing some aircraft or naval vessels its depths of reserves will quickly be drawn down. China is has/is created a military which is getting more modern in its tech but they are also keeping up their numbers. Not only are their counts of weapons great and still growing but their industry is capable of replacing loses quickly - unlike the US where their industry has degenerated into a 'slow rate/low volume/high tech' model.

There is a world of difference between the average American and Chinese grunt. In terms of actual battlefield prowess, go forward and militancy, if Korea still stands as an indication, you would put your money on the latter. There is though little likelihood of the two armies meeting as such. For example, whereabouts? Either country is too massive and distant to invade. Still China could perceivably revisit and repay the 1930’s to Japan, that would bring the whole world in though wouldn’t it. War games a go go!

Your access to our unique content is free - always has been. But ad revenues are diving so we need your direct support.

Become a supporter

Thanks, I'm already a supporter.