The type 052C destroyer Changchun of the Chinese People's Liberation Army (PLA) Navy participates in a naval parade in eastern China's Shandong Province on April 23, 2019. (Mark Schiefelbein/AFP/Getty Images)
The Treaty of Versailles that ended World War I prohibited Germany from creating an air force. So, before plunging the world into the cataclysm of World War II, Adolph Hitler engaged in a massive, clandestine, determined, effort to build Germany’s air force, the Luftwaffe, under the guise of building out Germany’s civil airline, Lufthansa.
By 1935, Hitler revealed his new air arm to the world. The allied victors of World War I protested, but could do nothing. Within five years, the Nazis had intimidated Austria to give in to the Anschluss and had walked into Czechoslovakia. Then, they rolled up rapid conquests over Poland, Denmark, Norway, Belgium, Holland, Luxembourg, and France.
By 1940, Hitler and his Nazis controlled much of continental Europe and were preparing to invade Britain.
Just as Hitler used the guise of Lufthansa to build out his air force, Xi Jinping is using China’s massive merchant ship building facilities to rapidly build out the Peoples’ Liberation Army Navy, or “PLAN.” It has gone largely unacknowledged by the Western media.
What we consultants call “cross functionality” in businesses, the Chinese apply to their military, intelligence, and commercial operations into what they call “military civil fusion” (pdf). This means that China applies the expertise and competitive advantage it gleans from China’s civilian activities to its military activities and vice versa. In ship building, the Center for Strategic and International Studies (CSIS) recently reported the confluence of China’s enormous state-owned merchant ship building business, China State Shipbuilding Corporation (CSSC), with its extraordinarily rapid pace of building naval vessels by the same company. In at least one instance, satellite imagery shows the PLAN’s latest Type 003 aircraft carrier being built directly next to what appears to be a container ship for Taiwan’s Evergreen Marine Corporation.
The benefits of this military-civilian fusion in ship building are clear: economies of scale, shared services, a common pool of workers, and ready access to the kind of “shop floor innovation” that increases efficiency and improves quality in all manufacturing processes.
Of course, all societies that produce arms have some confluence of civil and military production. The Boeing 767 airliner, built around the airframe of the U.S. Air Force KC-46 Pegasus tanker and transport, comes to mind as an example.
A U.S. Air Force KC-46A Pegasus jet takes off at Paine Field, near Boeing's production facility in Everett, Wash., on April 23, 2021. (Elaine Thompson/AP Photo)
But for most countries, the convergence in building weapons platforms and building out their civilian counterparts are at risk from market forces. China’s CSSC is state-owned in an authoritarian government and answerable, ultimately, to China’s political leadership, not shareholders. For China, shipbuilding is a central element of its military spending and industrial policy; all costs are essentially military spending. All ships that China builds for foreigners are, essentially, a contribution to the PLANs ship building program.
Just as Hitler used his built-out Luftwaffe to train combat pilots, China’s military-civil fusion extends to developing skilled seafarers. China’s merchant fleet is second only to Greece by Dead Weight Tonnage (DWT) and the speed at which it is growing—55 percent in just five years—is extraordinary.
Dr. Kori Schake of the American Enterprise Institute, writing in the March/April issue Foreign Affairs magazine, highlighted the importance of the merchant marine in maintaining naval hegemony in a recent book review. She reminds us that, at the apex of U.S. power in the early 1950s, the United States accounted for 43 percent of global shipping. By 1994, we were down to just four percent. The U.S. merchant fleet now ranks 27th in DWT.
Our Navy is in even worse shape, according to Dr. Schake: “The U.S. Navy had more ships in 1930 than it does today; China supplanted the United States as the world’s largest naval power in 2020. And the Pentagon’s goal of increasing the size of the fleet from 306 to 355 ships has a target date of 2034—a far-off objective for which Congress has not yet provided funding.”
I’ve been concerned with the growth of China’s sea power for years. In a 2011 letter to the New York Post, I wrote that “We should use every means at our disposal, including trade policy, economic sanctions, and diplomacy, to derail China’s (naval) plans.” But I noted that with the fiscal challenges we faced even then—and now far exacerbated today—neither of the two major political parties were prepared to seriously address the challenge. That continues to this day.
The fiscal challenge of the United States maintaining a maritime force to counter the PLAN is insurmountable, given the U.S. national debt. China has already built out the biggest navy in the world, with 355 ships as of last November, according to the U.S. Naval Institute.
Most worrisome in the PLAN fleet is a formidable amphibious invasion fleet, including eight Type 071 “Qilianshan” (NATO: “Yuzhao”) Class LPDs (Landing Platform Dock) and a scheduled eight Type 075 “Hainan” (NATO: “Yushen”) Class LHDs (Landing Helicopter Dock).
Artist's concept illustration of the Yushen Class LHD, dated April 25, 2020. (星海军事, Wikimedia Commons, CC BY 4.0)
Writers at Naval News speculate that the aim of the Yushen Class LHD “is likely to increase the ‘vertical’ amphibious (i.e., helicopter) assault capability with the very mountainous East Coast of Taiwan in mind.”
The Yuzhao Class of LPDs are capable of “Multidimensional troop delivery, air defense, and precision anti-ship and land attack,” according to the prototype’s captain. Multidimensional troop delivery includes infantry delivered ashore via transports, hovercraft, armor, and landing craft.
A PLAN Type 71 Changbaishan (LSD-989) at Nieuwe Waterweg, Rotterdam, on Jan. 30, 2015. (Kees Torn on Flickr, via Wikimedia Commons, CC BY-SA 2.0)
As with Hitler’s Luftwaffe signaling Germany’s expansionism in the 1930s, all this formidable buildup of Chinese naval assets should be clearly read as the long-simmering belligerence of Xi Jinping and the Chinese Communist Party (CCP) as approaching a boiling point. China is set upon an expansionist foreign policy that includes asserting control over Taiwan and, likely, other Pacific islands and nations.
There is an exigent need to deter China from moving toward an invasion of Taiwan and plunging the region into kinetic war.
But that deterrence cannot be borne by the United States alone. Instead, we must act to maintain the stability of the Indo-Pacific Region. That will require the United States to lead an alliance of Indo-Pacific democracies and NATO to proactively deter China from engaging in the kind of aggression we’ve seen this year against Ukraine.
The United States and other allies should engage in an exercise to deploy a corps—two divisions—at Taiwan’s government’s request—for a few weeks, as quickly as possible. Then, we should cycle division-sized units—First Marines, 101st Airborne, 1st Cavalry—all our most combat-ready units—in and out of the island over several months so that we maintain a division there. Then, while one of the divisions is deployed, the United States should renounce our now obsolete policy of “strategic ambiguity,” given the CCP’s clear belligerence. We and our democratic allies must state, clearly and unambiguously, that we are “all-in” to defend Taiwan to deter China’s belligerence and deploy the same kind of “tripwire defense"—a relatively small force deployed by a far larger power so that any attack on the small force will implicate the larger force—that we’ve used to defend South Korea for 70 years.
To further ensure the stability of the region, the alliance should create a multilateral shipbuilding consortium among its members akin to the European consortium that built Airbus Industrie. The consortium’s mission would be to grow civilian and naval ship building and develop ship building technology to match the astounding level of productivity of the PLAN shipyards. (The PLAN shipyard can produce a new Yushen Class LHD every six months.) The consortium’s plans should include building smaller, cheaper, LHDs and LPDs, small aircraft carriers with VSTOL (vertical and short takeoff and landing) aircraft, diesel attack submarines, and older classes of U.S. nuclear-powered attack and strategic submarine platforms. Closely guarded classified U.S. technology could be maintained by building classified components using American expatriates overseas and deploying foreign ships with a small contingent of U.S. Navy personnel on secondment to foreign vessels’ crews.
Finally, the alliance should expand their training and recruitment of seafarers. The U.S. Naval Academy should expand to add 500 more foreign midshipmen to the brigade. We should provide much higher funding for Naval Reserve Officer Training (NROTC) scholarships at civilian colleges. We should triple the enrollment of the U.S. Merchant Marine Academy at Kings Point, New York, and double the size of the U.S. Coast Guard Academy classes. We should provide “full ride” scholarships for associate degrees for superior students in sciences, technology, engineering, and math (“STEM”) in exchange for three years of enlisted service in the U.S. Navy with additional enhancements to maintain recruitment.
World geopolitics is at a critical juncture, akin to 1938, and the Indo-Pacific is in a classic Thucydides Trap caused by China’s belligerent expansionism and stated intention to overthrow the existing global order. As Henry Kissinger noted in “A World Restored,” “Whenever there exists a power which considers the international order ... oppressive, relations between it and other powers will be revolutionary. ... Diplomacy, the art of restraining the exercise of power, cannot function in such an environment.”
Kissinger goes on to say, “Those who warn against the danger are considered alarmists; those who counsel adaptation to circumstance are considered balanced and sane. ... ‘Appeasement’ ... is the result of an inability to come to grips with [an adversary’s] policy of unlimited objectives.”
I will cast my lot with Kissinger’s “alarmists.” The United States and our allies in the Indo-Pacific region are in a contest for hegemony that will depend on naval and maritime assets. The United States, NATO, and the Indo-Pacific democracies need to act now to deter Xi Jinping’s ambition to make the South and East China Seas—the world’s shipping lanes—Chinese territorial waters.
We either act now to deter his ambitions or surrender the region to the harsh dictates of Beijing’s criminal class of rulers.
J.G. Collins is managing director of the Stuyvesant Square Consultancy, a strategic advisory, market survey, and consulting firm in New York. His writings on economics, trade, politics, and public policy have appeared in Forbes, the New York Post, Crain’s New York Business, The Hill, The American Conservative, and other publications.
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