President Trump recently announced that he is seeking $54 billion more dollars for the U.S. military, although the U.S. already outspends the next seven countries, including China and Russia, combined. What will the increase in the defense budget go to? Perhaps more tanks, planes, and aircraft carriers to fight another conventional war. However, this seems illogical when the U.S.' true adversaries remain international terrorist organizations that do not have fixed armies and standard conventional military equipment. Potential adversaries that do have conventional military forces are Russia, China, North Korea, and Iran. If President Trump is ruling out Russia as a threat, as misguided as that may be, then our principal future adversary would appear to be China.
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China spent about 1.02 trillion yuan or $147 billion dollars in 2016, compared to U.S. spending at $603 billion, should the $54 billion increase take effect. China's increase in defense spending is about 7% over the last year and roughly 1.3% of its gross domestic product. If we assume that the public number is inaccurate and low, add another 1% and still, China spends vastly less than the U.S. Its economy is still growing at 6.5% which means its military spending is in line with its growth in GDP. Meanwhile, the current modernization of the Chinese military will prevent Beijing from having the ability to significantly project power away from its shores for a long time.
So why is President Trump taking an adversarial approach to China on trade, on currency, on regional influence, and on reining in North Korea? The United States is the biggest single national economy and the fastest-growing major economy that is most open to imports. As the largest and richest market in the world, the U.S.' trade imbalance is not a major contributor to its national debt. The sale of Chinese goods to America actually creates jobs. China is not stealing American jobs in steel manufacturing or coal production — rather, those industries have become less and less competitive due to automation and cheaper alternative sources of energy like natural gas. Cheap labor-intensive Chinese goods do not displace our exports. Capital-intensive technology segments of the U.S.' manufacturing economy (telecommunications, pharmaceuticals, semiconductors, machine tools, farm equipment, and industrial chemicals) are immune to Chinese imports and make up a considerable part of trade shortfalls with China.
China's economy has been growing by double digits over the past six years, although it has shifted to trying to become less dependent on exports and more focused on selling to its own vast domestic market. China still holds nearly a trillion dollars in U.S. treasuries, making it not very likely that China will threaten an American economy that feeds them by buying a majority of their imports.
At the same time, Russia has weaponized information through Wikileaks, directly interfered and influenced U.S. elections, and has run an exhaustive and consistent anti-American campaign globally. President Obama threw out 31 Russian “diplomats” in December of last year. President Trump, meanwhile, called for a 37% cut in the State Department's budget for FY 2018 and has eviscerated the senior levels of that institution, which is the U.S.' front line of defense against threats and challenges by first utilizing diplomatic engagement.
The U.S. needs China a great deal more than it does Russia in order to minimize the security threats from the unstable and threatening North Korean regime and to maintain regional stability in Asia. The U.S. also needs China at the UN, where it is supporting UN peacekeeping operations in Africa and helping to promote the value of the United Nations to countries around the world. Rather than pursuing a friendship with a leader who seeks the resurrection of the Soviet Union, the U.S. should focus on building a cooperative partnership with China to address the world's most daunting challenges.
