Future PLAN orbat discussion

Jura said:

Andy how exactly did you get "78%" in the context of Yesterday at 5:15 PM

I mean there're programs which balloon up to the Nunn–McCurdy level,

so I'm unable to grasp what "cost savings" you're talking about using your link

(which presumably is

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since you "look at the 2017 report");

as before, no sarcasm, I'm interested to see your point

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It's a theoretical exercise to see how much more it would cost for the US Navy to buy twice as much equipment.

US Navy Total
R&D Total: $61B
Procurement Total: $241B
Total spend: $302B

Now, if you double procurement:

US Navy x2 Total
R&D Total: $61B (the same)
Procurement Total: $241B (x2) = $482B
Total spend = $543B

% Cost Increase = 78%

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This doesn't take into account Nunn-McCurdy.
Nor how a larger purchase typically results in additional units costing less.

FriedRiceNSpice said:

Side note, PHD in non STEM field is actually a rather weak credential. Especially those econ PHD working for think tanks, non profits, etc. If they were any good they'd be working on Wall Street or corporate, not the SIPRI. The ones at SIPRI are there because they failed to get a real six figure salaried job doing real work. This may sound conceited, but it's the truth.

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I'm going to leave aside whether think-tank PhDs are any good at their job.

But if you look at the mechanics of actually calculating military PPP, you don't actually need a PhD.

1. Make a list of Chinese military inputs (labour type / equipment type / fuel etc)
2. Count how much they use.
3. Assign a cost to each item. You may have to estimate the cost.

4. Then compare against the equivalent US list of inputs and costs
5. Adjust the Chinese price to reflect how comparable it is to the US equivalent, which requires judgement, not a specific formula.

So I don't see any fancy economic formulae or calculations.
Just gruntwork in gathering quantities and costs, then making judgements on equivalency.

This requires a deep knowledge of the structure and composition of both the US and Chinese military.
How many PhD students have either of these topics as their main subject?

Plus it has been noted that there is a huge dearth of China experts in the US.
So it's not surprising everyone is still using the exchange rate to compare the military.

For example, Erickson at the US Naval War College is probably the best informed on Chinese naval shipbuilding.
Yet he still thought (thinks?) that China would struggle financially to sustain a Navy only half the size of the US.

AndrewS said:

@Iron Man

All those 200 Phds are going to have to change and start using PPP as well.

The latest is below from Australia (1st October 2019). It looks like the first published analysis of Chinese military costs, and their military PPP equivalent.
And Australia has a very keen interest in determining what the future Chinese military will look like.

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You're going to have to argue with him as well, and then the CSIS report when that is released

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Your unrelenting hubris is a mixture of mildly amusing and massively surreal, I must say.

Ok, they surely will have to change and start using PPP because an expert like you is right and they are wrong. And that Australian prof is someone you already trotted in here, and someone I already pointed out doesn't actually make military expenditure estimates for a living. As for the CSIS report, I love how you're so desperate for affirmation that you're already counting on it to use PPP before it even comes out.

FriedRiceNSpice said:

Side note, PHD in non STEM field is actually a rather weak credential. Especially those econ PHD working for think tanks, non profits, etc. If they were any good they'd be working on Wall Street or corporate, not the SIPRI. The ones at SIPRI are there because they failed to get a real six figure salaried job doing real work. This may sound conceited, but it's the truth.

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And yet a econ undergrad major and non-military expenditure econ PhD can somehow outdo the PhDs who actually do this for a living? Well that's not even remotely biased right there, is it? LOL

AndrewS said:

It's a theoretical exercise to see how much more it would cost for the US Navy to buy twice as much equipment.

US Navy Total
R&D Total: $61B
Procurement Total: $241B
Total spend: $302B

Now, if you double procurement:

US Navy x2 Total
R&D Total: $61B (the same)
Procurement Total: $241B (x2) = $482B
Total spend = $543B

% Cost Increase = 78%

---
This doesn't take into account Nunn-McCurdy.
Nor how a larger purchase typically results in additional units costing less.

Click to expand...

thanks for explaining what you meant, LOL I'll even press 'Like' to one of the most ludicrous quote/unquote reasoning I've ever seen seriously posted, you're detached from reality of manufacturers trying to stuff their pockets; egregious cost overruns; projects getting axed and so on and so fort

Iron Man said:

And yet a econ undergrad major and non-military expenditure econ PhD can somehow outdo the PhDs who actually do this for a living? Well that's not even remotely biased right there, is it? LOL

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Econ major? What a totally uncalled for insult. I got a real degree... A STEM one. You don't need an advanced degree to understand differences between PPP and nominal and what each measure is relevant for.

And if you reread what the SIPRI wrote about using PPP for comparison, you will see nowhere do they say that they believe nominal figures are more accurate for comparison between the spending of two countries. It's been repeated already, but SIPRI directly acknowledges the merits of using PPP, but ultimately release their figures in nominal due to statistical variances and consistency.

The biggest issue with using nominal is the differing salaries and wages between the US and China. It's not just a factor when it comes to laborers building the ships. It also affects the cost of sailors and naval officers, cost of maintenance personnel, and cost of R&D. These costs are 3-4 times higher in the US than China, while PPP adjustment factor is only around 1.9.

AndrewS said:

In a Taiwan scenario, a large enough Chinese fleet would deter the US from trying to intervene.

Enough said.

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"Large enough" is pretty vague. How large is large enough? How large is more than enough? How large is not enough? Is there a size too large?

You guys has been arguing about the economics of this forever. I don't think the economics of this actually affects political decision making in the CCP Politburo as much as you guys seems to imply. I think political/strategic need in national defense/security affects decision making much more than economic feasibility.

I simply don't see why there would be a need for a fleet more than half (60% at most) of the USN. 21st century warfare is not that one dimensional. Wasting resources to produce a bigger number of ships won't guarantee the results you desire. In fact, I would think that if the PLAN is too big, it will cause US and Japan to give up competing in conventional naval warfare and instead focus resources on asymmetrical capabilities for deterrence and even sabotage. This will actually increase US's chances to intervene in the Taiwan scenario.

In fact, now I think it is more likely for the US to intervene in the Taiwan scenario if the PLAN become larger, or even the same size as the USN. Think about it, if the PLAN is too big, what it will mean for the Indo-pacific region? It will make the US a just and heroic underdog that is looking to usurp and bring down the powerful paramount demon lord that is oppressing weaklings in the region. The USN will be David, and PLAN will be Goliath. The tide will turn against China.

Therefore, I vision a PLAN fleet size that seeks balance with the US Indo-pacific forces, with the help from the other branches of the PLA. This would mean somewhere approaching 50% of the fleet size and capability of the USN. I would envision 4-6 heavy CATOBAR carrier, 4-6 LHA, their escort fleet, 40-50 advanced conventional (AIP) subs and no more than 24 advanced SSN's. That's more than enough, if the USN remains the same in terms of structure and fleet size.

I think this naval arms race will be a complicated game and it will not be played out like the simple size/number game like you guys are arguing. I think the Politburo wants a naval size and capability that is in a sweet spot:
1. Not enough to challenge the entire USN.
2. More than what Japan can take on alone (unless Japan going into wartime command economy mode).
3. Numerical parity with USN in the Indo-Pacific region, in terms of surface fleet, capital ships, and SSN.
4. Full spectrum of capabilities, including asymmetrical, unconventional.
5. A very large advanced conventional AIP submarine force, as large as the entire region's conventional subs combined.

Jura said:

thanks for explaining what you meant, LOL I'll even press 'Like' to one of the most ludicrous quote/unquote reasoning I've ever seen seriously posted, you're detached from reality of manufacturers trying to stuff their pockets; egregious cost overruns; projects getting axed and so on and so fort

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I have no doubt this sort of stuff happens.

But as a framework, it makes perfect sense to say that:

1. R&D costs are fixed
2. A larger production run means unit costs should remain the same or, more likely decrease.

This is the overall picture.

Iron Man said:

Your unrelenting hubris is a mixture of mildly amusing and massively surreal, I must say.

Ok, they surely will have to change and start using PPP because an expert like you is right and they are wrong. And that Australian prof is someone you already trotted in here, and someone I already pointed out doesn't actually make military expenditure estimates for a living. As for the CSIS report, I love how you're so desperate for affirmation that you're already counting on it to use PPP before it even comes out.

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The Australian professor has actually done the data and calculations, and publicly announced that on average, the Chinese military only pays half as much as the US military.
To my knowledge, no one else in the world has done this.
Therefore the onus is to debunk his data and methods, which does not appear to have happened.

You would think that the 200 PhDs working for CIA, DIA, RAND etc - would have kicked up a fuss by now if they thought the analysis was blatantly wrong.

Plus you seem to be unaware that this is how the scientific world operates.
New ideas are proposed which are controversial.
Then everyone else either successfully reproduces the results or tries to debunk the data/methodology.

As for the CSIS report on Chinese military costs, I see it as unnecessary confirmation of what we already know. But it is useful, because many don't realise this.

Over the years, we've come across so many examples of huge cost disparities between the US and Chinese military.
So that is why I see these studies as simply confirmation of something we already know, but have been unable to quantify.

AndrewS said:

I have no doubt this sort of stuff happens.

But as a framework, it makes perfect sense to say that:

1. R&D costs are fixed
2. A larger production run means unit costs should remain the same or, more likely decrease.

This is the overall picture.

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Andy have you ever heard of "procurement death spiral"?

what you described isn't "the overall picture", but it's the opposite of what happens,

which is after costly development a program is truncated or axed (PR Depts then spin it like 'tremendous amount of data gathered', 'exciting challenge', 'great opportunity to learn' LOL)

your points 1. and 2. are unvarnished sales talk