Future PLAN orbat discussion

FriedRiceNSpice said:

For one, I actually have deep knowledge of economics. But for an article that goes over this exact same issue in depth:

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So this article is written by a journalist making the argument for PPP adjustment to military spending based on this reasoning:

First, the standard comparisons of international defense spending — like the graph above — convert everything to US dollars at market rates. That’s fine if you’re comparing countries’ power to buy military equipment with hard currency on the global market.

But countries like Russia and China buy most of their equipment from domestic suppliers, which they can pay in local currency. As Milley points out, most of these domestic defense firms are also either officially government-owned or heavily government-influenced, and their products are generally much cheaper than their US equivalents.

So instead of using market rates, a better measure (albeit still imperfect) would be

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(PPP), which tries to account for prices being different in different countries. That gets you this chart

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So not only does he admit it's an imperfect measure, his reasoning for WHY it's allegedly a better measure is basically that the Chinese military buys its equipment from local firms. Well, duh. Locally-produced Chinese military armaments are obviously cheaper, but how does that get you to being able to use PPP's full adjustment, especially since I've already established with White Noise that PPP calculations don't include almost ANYTHING even remotely related to military products? I think you can do better than using a journalist with not even a basic knowledge of PPP.

Iron Man said:

So this article is written by a journalist making the argument for PPP adjustment to military spending based on this reasoning:

So not only does he admit it's an imperfect measure, his reasoning for WHY it's allegedly a better measure is basically that the Chinese military buys its equipment from local firms. Well, duh. Locally-produced Chinese military armaments are obviously cheaper, but how does that get you to being able to use PPP's full adjustment, especially since I've already established with White Noise that PPP calculations don't include almost ANYTHING even remotely related to military products? I think you can do better than using a journalist with not even a basic knowledge of PPP.

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When did I say use a full PPP adjustment? If you read my post, I specifically said you CANNOT use a full adjust. I said the real value lies in between PPP and nominal values, but will be CLOSER to PPP. And yes, a journalist wrote it, but as the article states, it's based on analysis US generals gave in a Senate committee hearing. On other hand, can you find a single article claiming using nominal is a better measurement for defense expenditure? Because there are plenty advocating for PPP...

FriedRiceNSpice said:

When did I say use a full PPP adjustment? If you read my post, I specifically said you CANNOT use a full adjust. I said the real value lies in between PPP and nominal values, but will be CLOSER to PPP. And yes, a journalist wrote it, but as the article states, it's based on analysis US generals gave in a Senate committee hearing. On other hand, can you find a single article claiming using nominal is a better measurement for defense expenditure? Because there are plenty advocating for PPP...

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Neither you, nor the journalist, nor the latest article, has made any kind of economic case why Chinese military capacity or spending is closer to PPP than to nominal. They seem to have been lazy and just went full PPP, contrary to even what you claim. My claim requires no proof of any kind, namely that I agree the true number will be somewhere between nominal and PPP, but I have no idea where inside this range the "true" capacity lies. You on the other hand are making a definitive claim, that it is closer to PPP. Well ok, prove it.

Iron Man said:

Neither you, nor the journalist, nor the latest article, has made any kind of economic case why Chinese military capacity or spending is closer to PPP than to nominal. They seem to have been lazy and just went full PPP, contrary to even what you claim. My claim requires no proof of any kind, namely that I agree the true number will be somewhere between nominal and PPP, but I have no idea where inside this range the "true" capacity lies. You on the other hand are making a definitive claim, that it is closer to PPP. Well ok, prove it.

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Big items that are absolutely best measured with PPP include anything related to human capital. This includes: cost of actual military personnel, cost of R&D, cost of labor across the entire supply chain related to each and every final platform. Basically, the only inputs worth measuring in nominal are actual raw materials and perhaps fuel. And again, saying PPP is a more accurate measure is not equivalent to saying the actual PPP conversion rate uses for GDP is going to be exactly precise for military goods and services, it is just a more accurate approximation than using currency exchange rates. Does the fact the CNY depreciated relative to the dollar this year mean the Chinese spent 10% less on defense?

Also, let's fix the scope of discussion to only include nominal vs PPP for actual military spending. To discuss, "true military capacity," is a much larger and far more complex issue, one for which using either GDP figure will be utterly insufficient.

sometimes naval buildups defied economy; Japan in the interwar period and the Soviet navy under S. G. Gorskhov come to mind

food just above starving level, but amazing ships

I quickly add China won't go into this type of nonsense and I've accordingly made a prediction which is rather low by standards of this thread, LOL
#267 Jura, Jul 28, 2017

#136 Jura, Oct 13, 2019

FriedRiceNSpice said:

Big items that are absolutely best measured with PPP include anything related to human capital. This includes: cost of actual military personnel, cost of R&D, cost of labor across the entire supply chain related to each and every final platform. Basically, the only inputs worth measuring in nominal are actual raw materials and perhaps fuel. And again, saying PPP is a more accurate measure is not equivalent to saying the actual PPP conversion rate uses for GDP is going to be exactly precise for military goods and services, it is just a more accurate approximation than using currency exchange rates. Does the fact the CNY depreciated relative to the dollar this year mean the Chinese spent 10% less on defense?

Also, let's fix the scope of discussion to only include nominal vs PPP for actual military spending. To discuss, "true military capacity," is a much larger and far more complex issue, one for which using either GDP figure will be utterly insufficient.

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I do agree that cost of military personnel, R&D, labor, etc. is less than as measured by nominal GDP, but you still have not demonstrated that PPP is a better (I suppose you mean "closer") measurement than nominal. I should point out (yet again) that even if military spending IS closer to PPP than to nominal, this does absolutely nothing for the argument that double GDP by PPP equates to double the size of your navy relative to the compared country, which after all is the surreal impetus for this entire surreal discussion.

Iron Man said:

I do agree that cost of military personnel, R&D, labor, etc. is less than as measured by nominal GDP, but you still have not demonstrated that PPP is a better (I suppose you mean "closer") measurement than nominal. I should point out (yet again) that even if military spending IS closer to PPP than to nominal, this does absolutely nothing for the argument that double GDP by PPP equates to double the size of your navy relative to the compared country, which after all is the surreal impetus for this entire surreal discussion.

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Yes, but my posts from several days ago indicate that I do not agree with that point of view (double size fleet). There is correlation between GDP and size of fleet a nation can afford, but it's not a direct relation, and it is definitely not the only variable that needs to be considered. However, I do still believe PPP GDP will be a better predictor than nominal GDP, though neither will give you an entirely accurate measure. The true economic predictor will lie between the PPP and nominal figures. Another factor that is not mentioned is that just because economy A can afford to spend x% of its GDP on a navy does not mean economy B can also afford so. My own assessment is that China can support a larger fleet than the US would be able to by maybe 30-60% (very rough estimate) in about 15yrs time. However, I don't see China attempting to surpass the US in numbers or large naval combatants in peacetime, I feel it is much more likely that China will try to maintain a rough parity with the USN, or even a slightly smaller fleet.

EDIT: In additional to numbers of current rules of ships, it'd be interesting to see if the PLAN inducts any completely new ship types, types such as: arsenal ships, fast UCAV carriers, rail gun equipped fire support / bombardment ships. Or something truly fantastic like large submersible carrying UAV/UCAV/UUVs or an electromagnetic catapult for launching long range hypersonic missiles!

now just not to forget a factor which favors China though in a naval buildup (if there's such thing),

which is in the US shipyard workers are hired and fired again and again
Jun 20, 2018

Jura said:

The Navy’s acquisition boss has a plan to get fleet maintenance back on track
me watching

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while I expect China to distribute orders between naval and merchant vessels

(I wouldn't write about planned economy, socialism with Chinese characteristics and other ideological stuff, but this is what's in play here -- I hope my wording is careful)

and this way I guess China keeps its workforce in place, and its shipyards up-to-date

(last year I read some tragicomic info about 1930s lathe still in use in some US public shipyard etc., in short tens of billions are needed, not sure if the Pentagon has them)

Iron Man said:

especially since I've already established with White Noise that PPP calculations don't include almost ANYTHING even remotely related to military products?

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You've established nothing, Rusted Iron Man. I actually bothered to check the literature to assuage the minuscule iota of doubt I had, and look what I turned up:

Let me quote the relevant passage:

What products are used to calculate PPPs?

The sample of products used to calculate PPPs is drawn from the whole range of final goods and services comprising GDP. Countries collect prices for consumer goods and services, government services and capital goods. The final product list from which countries select items to price covers around 2500 consumer goods and services (including housing, pharmaceuticals, and Overview Eurostat-OECD Methodological Manual on Purchasing Power Parities 17 other medical goods and services), 26 occupations in government services, 230 types of equipment goods and 8 construction projects. Prices are not collected for education, and in some countries for housing, because the PPPs are derived indirectly with volume measures. The volume measures are computed with the quantity and quality data that countries report instead of prices.

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Your attempt at a list is about 2450 items short, and that's just the consumer goods.

@Iron Man I think other members have a point when they say PPP has the upper hand in determining the "economics" of military procurement rather than GDP. This is true especially for a country like China, which focuses on indigenizing on all levels. There have been multiple reports on the "actual size of Chinese military spending viz-a-viz US spending" conducted by think tanks in the US and elsewhere almost always concludes with two key points
1. The Chinese actually spend 25 to 15% higher on military than officially stated - and this is simply GDP (not PPP). This is not so out of malicious intent. There are many dark spending by the chinese on strategic arsenals ( read nukes and stuff) and secret projects. This is quite similar to US spending on Department of Energy.It is also difficult to account for the massive spending on internal security. The chinese do however try to insure that less attention is given to the military spending figures. It makes them " uncomfortable". Quite pragmatic considering the fragile regional balance.
2. A huge part of military budget goes towards personnel costs - remuneration, pensions, public services discounts, rebates, tax concessions etc. ( One quarter of the budget) It is very much the open truth that US spends a lot on the very large military it has. Considerably much more than what the Chinese or Russians spend on their soldiers. Truth is, PPP is better suited to evaluate atleast these personnel costs. The US does not, however, include all the military personnel support expediture in its Defence budget ...so it is actually bigger than what is stated. China's is quite the reverse. Almost everything is accounted for BUT the internal security forces expenditures.

@ZeEa5KPul - What's with the name calling? No one wins by calling names. There is nothing to win or lose here btw.