Future PLAN orbat discussion

An interesting thought exercise on military spending (using nominal exchange rates instead of PPP)

Situation Today 2019

USA
$686 Bil
39.1% is labour related ($268Bil)

China
Approx $282 Bil
Est. 33% is labour related ($93Bil)

So today, outside of labour costs, the USA spends $417 Bil whilst China spends $188 Bil

Scenario Tommorow 2020

But let's say China were to increase military spending from 2% and match the USA in spending 3.2% of GDP on the military.
And that the overall manpower of the Chinese military stays the same.
The revised figures for non-labour military spending becomes:

USA: $417 Bil (the same)
China: $358 Bil (up from $188 Bil)

Analysis

In other words, the Chinese government already knows it can match the USA in terms of military spending (on an exchange rate basis), but has chosen to not to.

And this doesn't take into account the following factors:
1. Chinese R&D, procurement and maintenance costs can be much cheaper than their US equivalent eg. Main Battle Tanks, AEGIS Destroyers, Submarines etc etc
2. Future economic growth eg. China growing to 2x the US economy by 2035, as per the Australian government.
3. Chinese systems can be smaller because they're operating on home turf, rather than having to travel across the Pacific.

AndrewS said:

An interesting thought exercise on military spending (using nominal exchange rates instead of PPP)

Situation Today 2019

USA
$686 Bil
39.1% is labour related ($268Bil)

China
Approx $282 Bil
Est. 33% is labour related ($93Bil)

So today, outside of labour costs, the USA spends $417 Bil whilst China spends $188 Bil

Scenario Tommorow 2020

But let's say China were to increase military spending from 2% and match the USA in spending 3.2% of GDP on the military.
And that the overall manpower of the Chinese military stays the same.
The revised figures for non-labour military spending becomes:

USA: $417 Bil (the same)
China: $358 Bil (up from $188 Bil)

Analysis

In other words, the Chinese government already knows it can match the USA in terms of military spending (on an exchange rate basis), but has chosen to not to.

And this doesn't take into account the following factors:
1. Chinese R&D, procurement and maintenance costs can be much cheaper than their US equivalent eg. Main Battle Tanks, AEGIS Destroyers, Submarines etc etc
2. Future economic growth eg. China growing to 2x the US economy by 2035, as per the Australian government.
3. Chinese systems can be smaller because they're operating on home turf, rather than having to travel across the Pacific.

Click to expand...

You should be including PPP calculations too. There is a widespread consensus that for China it is a more accurate reflection than nominal spending.

Problem is no one really knows what China’s real military spending is so that we can even adjust it to PPP.

Assuming 2.1% of GDP for 2020 (about 15% higher than the 2019 estimate from SIPRI) then:

China military spending is ~$624 billion

US military spending is $748 billion (FY2020)

Again, this does not include any removal of personnel/labor costs and the like. If you include such things, then really China and the USA are spending effectively equal amounts on their militaries.


But the estimate of 2x NOMINAL GDP of the US by 2035 sounds a bit crazy. Sure that was going to be true when the estimates of China surpassing the USA in nominal GDP were ~2020-2021, but due to the growth deceleration and RMB losses that date is now expected to be ~2030. What year was the Australian estimate given in? It might be outdated.

So how do you go from same as US size in 2030 to double US size in 2035? That’s like a 120-130% growth rate over 5 years.

sinophilia said:

You should be including PPP calculations too. There is a widespread consensus that for China it is a more accurate reflection than nominal spending.

Problem is no one really knows what China’s real military spending is so that we can even adjust it to PPP.

Assuming 2.1% of GDP for 2020 (about 15% higher than the 2019 estimate from SIPRI) then:

China military spending is ~$624 billion

US military spending is $748 billion (FY2020)

Again, this does not include any removal of personnel/labor costs and the like. If you include such things, then really China and the USA are spending effectively equal amounts on their militaries.


But the estimate of 2x NOMINAL GDP of the US by 2035 sounds a bit crazy. Sure that was going to be true when the estimates of China surpassing the USA in nominal GDP were ~2020-2021, but due to the growth deceleration and RMB losses that date is now expected to be ~2030. What year was the Australian estimate given in? It might be outdated.

So how do you go from same as US size in 2030 to double US size in 2035? That’s like a 120-130% growth rate over 5 years.

Click to expand...

We had the discussion on PPP a few months back in this thread.
But for those who don't believe in PPP, this makes the same point using nominal exchange rates.
That point being: China can already outspend the USA in an arms race, if it CHOOSES to.

We should see more rational and less aggressive behaviour from the USA, as this point becomes more widespread.

---

The Australian government figure is China growing to twice the size of USA in the 2030-2035 timeframe - in terms of PPP.
But economic theory suggests that in the long-run, the nominal exchange rate should catch up to PPP, so eventually there is no difference.
It also means GDP per capita (PPP) of $35K-$40K in China.

It's in the latest Foreign Affairs white paper, and their assumptions are still valid today.

AndrewS said:

We had the discussion on PPP a few months back in this thread.
But for those who don't believe in PPP, this makes the same point using nominal exchange rates.
That point being: China can already outspend the USA in an arms race, if it CHOOSES to.

We should see more rational and less aggressive behaviour from the USA, as this point becomes more widespread.

---

The Australian government figure is China growing to twice the size of USA in the 2030-2035 timeframe - in terms of PPP.
But economic theory suggests that in the long-run, the nominal exchange rate should catch up to PPP, so eventually there is no difference.
It also means GDP per capita (PPP) of $35K-$40K in China.

It's in the latest Foreign Affairs white paper, and their assumptions are still valid today.

Click to expand...

The nominal rates for countries like South Korea or Taiwan or even Japan are not caught up to PPP. Decent seem like an expectation should be made that they will entirely for China.

As for PPP I’d be slightly disappointed if China wasn’t already more than double in 2030. Standard Chartered puts China at $64.2 trillion and USA at $31 trillion.

Also if you could link me to the PPP discussion I’d appreciate it. If it’ll take too long no worries.

AndrewS said:

This Soviet Bastion diagram could reach further because there is nothing except empty ocean, and no opposition.

The nearest opposition is isolated Keflavik airbase on Iceland, which is 2400km from Murmansk.
So of course the Soviet military could easily create a "Bastion" at a greater distance.
It looks like a radius of 1000km from Murmansk, which corresponds to fighter jet range.
So you could operate small Corvettes in this area, because they were theoretically covered by airborne assets, and wouldn't expect to encounter other surface ships. So their primary role was ASW.

But if Japan was sitting 800km off the coast of Murmansk, the Soviet "Bastion" strategy would have to shrink to 400km and would be stuck on the coast.
That is the parallel to China's geography.

Click to expand...

??? Bases from Iceland and the UK can cover much of the Atlantic since WW2 using long range maritime patrol aircraft and bombers, not to mention the fleets of aircraft carriers both the US and the UK has.

Only long range aircraft assets from the Soviets would be the Bears. You only have one dysfunctional aircraft carrier, some hybrid helicopter cruisers; the few Slavas and Kirovs are the only things approximate to a 052C/D in terms of air defense, followed by a handful of Sovremennys that are only approximately that of a 054A in terms of air defense.

ASW corvettes operating hunter-killer at the edge of the first island chain and on the bottleneck straits would have to be led and covered by frigates and destroyers for their air defense, as well as air patrols. You cannot use land based SAMs to create some kind of protective bubble. The PK for a SAM goes down considerably at the edge of its range envelope and is at its highest around half and less of its ballistic range. At best long range coastal and OTH radars can create a bubble of situational awareness to the ships, with data communicated via satellite.

Given that the US submarine fleet is the biggest threat to the PLAN there is, you can start to see the justification for a new advanced frigate and upgrading existing frigates and light frigates in the future, as well as hurrying up on the PLAN's own submarine production.

AndrewS said:

The entire Tomahawk inventory is estimated at 3000 missiles.
That is not enough to keep Coastal China down.
Plus what is to stop China from building an even larger stock of missiles?

Click to expand...

What makes you think they are not going to build more?

Precision striking can result in damages far greater, such as shutdown of ports and naval facilities.

And who said anything about a 400km buffer being the end goal?

I'm saying that 400km from the Chinese coastline represents a "Bastion" where Chinese aircraft and ships can operate in relative safety.
Commercial shipping and older Chinese Navy vessels can operate here.

Click to expand...

What are commercial shipping going to do for trade then? What about those that need to go to Africa, Australia, and the Middle East?

But you need a different set of capabilities beyond this distance eg. Destroyers, ASBMs, HGVs, SSNs, Stealth Fighters, Stealth Bombers, Satellites etc etc

Click to expand...

That is what China has to invest on, both a strong navy and a longer ranged projection of power.

source to:

Tam said:

..., and OTH-T (Over the Horizon Targeting) will be part of the FFG(X) requirement ...

Click to expand...

Tam said:

??? Bases from Iceland and the UK can cover much of the Atlantic since WW2 using long range maritime patrol aircraft and bombers, not to mention the fleets of aircraft carriers both the US and the UK has.

Only long range aircraft assets from the Soviets would be the Bears. You only have one dysfunctional aircraft carrier, some hybrid helicopter cruisers; the few Slavas and Kirovs are the only things approximate to a 052C/D in terms of air defense, followed by a handful of Sovremennys that are only approximately that of a 054A in terms of air defense.

Click to expand...

I don't understand what point you're trying to make with the description above.

Your question is why the Chinese "control bastion" only extends 400km from the Chinese coastline, but in the Soviet map, it extends out to 1000km.

The answer is because there are numerous opposing airbases (eg. Japan) within 800km, which all create an opposition "bastion" because they have their own AWACs, fighter CAP and SAMs. In comparison, Murmansk faces empty ocean for 2400km until the airbases on the Greenland-Iceland-UK line.

But the Chinese area-denial zone extends to Guam some 3000km away.

This is what is termed "area denial - bastion defence" in the Soviet map, which extends 2400km from Murmansk

Tam said:

ASW corvettes operating hunter-killer at the edge of the first island chain and on the bottleneck straits would have to be led and covered by frigates and destroyers for their air defense, as well as air patrols. You cannot use land based SAMs to create some kind of protective bubble. The PK for a SAM goes down considerably at the edge of its range envelope and is at its highest around half and less of its ballistic range. At best long range coastal and OTH radars can create a bubble of situational awareness to the ships, with data communicated via satellite.

Given that the US submarine fleet is the biggest threat to the PLAN there is, you can start to see the justification for a new advanced frigate and upgrading existing frigates and light frigates in the future, as well as hurrying up on the PLAN's own submarine production.

Click to expand...

I agree with this, but China will be building a lot of new frigates, which would be suited for high-risk ASW/picket/screen beyond the 1st Island Chain.

That leaves the Type-56 and Type-54A mainly for low-risk and medium-risk areas.

A definition of medium-risk might be the Taiwan straits where China has air and maritime superiority, but which will be subject to constant and intense attacks from missiles, aircraft and submarines.

The Type-56 and Type-54A would be relying on AWACs and fighter cover, along with nearby air defence destroyers. That is what happens with higher-value amphibious ships, and that is deemed acceptable.

The original point of disagreement was your assertion that the existing Type-56 and Type-54A are already obsolete.

Tam said:

What makes you think they are not going to build more?

Precision striking can result in damages far greater, such as shutdown of ports and naval facilities.

Click to expand...

Yes, this is the problem.

From a defensive standpoint, medium-range SAMs, short-range SAMs and CIWS are a lot cheaper than incoming LRASMs or Tomahawks.

But if you can detect these missiles at the radar horizon, you get at least 4 full length SAM engagements which means all those incoming missiles get shot down.

That is a tolerable situation.

From an offensive standpoint, it is much better to prevent the platforms from launching missiles in the first place. That has a much better cost-benefit ratio.

Historically, this is where China's very limited military budget was spent, and China had to accept that its ports and cities would be vulnerable.

It's only very recently that China's military budget could support a symmetric blue water competition in the 2nd Island Chain far from China's Coast. And for stronger coastal air defences to make sense from a cost-benefit point of view