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WAR WITH CHINA: THINKING THROUGH THE UNTHINKABLE

by David C. Gompert, Astrid Cevallos, Cristina L. Garafola.

The RAND Corporation.

(Continued)

CHAPTER THREE

Weighing the Costs: Military, Economic, Political, and International

With the understanding that the consequences of world war and of nuclear war fall outside our scope, we can now examine possible effects, losses, costs, constraints, pressures, and responses that could occur during Sino-U.S. war, depending on its severity and duration.

Military Losses

Calculating expected military losses in a Sino-U.S. armed conflict is exceedingly difficult. For purposes of understanding the major issues surrounding whether and how such a conflict might be fought, it is sufficient to estimate indicatively the nature and seriousness of losses of each side, how they might compare, how they might vary according to the severity and duration of the conflict, and how they might affect decisionmaking on both sides. Accordingly, the method used here is to meld the broad judgments of several analysts. 1 Of interest are losses relative to prewar capabilities, losses of each side compared with the other, and residual warfighting capabilities, all of which would bear on both the ability and will to continue fighting.

1. The judgments here are informed by the Sino-U.S. conflict scenarios from RAND Arroyo Center research by Terrence K. Kelly, David C. Gompert, and Duncan Long, which will be presented in Smarter Power, Stronger Partners: Exploiting U.S. Advantages to Prevent Aggression, Santa Monica, Calif.: RAND Corporation, RR-1359-A, forthcoming.

Severe cases for both 2015 and 2025 are considered, anticipating Chinese A2AD improvements.2 Losses in brief conflicts (up to T1) are among forces engaged and targetable from the outset. Additional losses in prolonged conflicts (from T1 to T2) could include reinforcements—perhaps nearly all extant Chinese air and naval forces and those U.S. air and naval forces not deemed indispensable for missions elsewhere (e.g., in Europe or the Middle East).

Prospective losses in forces during a severe Sino-U.S. conflict would depend on the counterforce capabilities and operations of the two sides, of course. To expand on an earlier observation, advances in information technology and other targeting systems—sensors, onboard and off-board precision weapon guidance, global positioning, and data networking and processing—are making weapon platforms, such as surface ships and manned aircraft, increasingly vulnerable at greater distances. In addition to increasing the reward of attacking first and the penalty of not doing so, these capabilities point to the potential for heavier, faster losses among vulnerable forces than at any time in modern conventional warfare. 3

The assessments that follow try to capture this dynamic. They include broad-brush narratives of the cases and graphs that illustratively depict losses. The categories covered include combat aircraft, surface naval vessels, submarines, missiles and missile launchers of all types (land, sea, and air), and C4ISR. Aircraft losses could result from loss or degradation of air bases and aircraft carriers, as well as air combat and air defense. Surface ship losses could result from attacks by other surface ships, submarines, air, or missile attacks. Submarines are vulnerable to anti-submarine warfare (ASW), including opposing submarines, and strikes on bases. Losses in missile launchers could occur from air or missile strikes or destroyed platforms (e.g., ships), as well as from missiles expended. Mobile land-based missile launchers, which Chinese forces possess in greater abundance than U.S. forces, might be less vulnerable. C4ISR losses could result from cyberwar or ASAT attacks. Cyberwar and ASAT attacks could also compound losses of forces that depend on C4ISR for their effectiveness. Additional details are in Appendix A.

2 U.S. force improvements are assumed to be those provided for in the exiting long-range U.S. defense program.

3 This counterforce phenomenon does not apply to cyberwarfare or ASAT warfare, in which attacks do not diminish the other side’s capability to attack.

An important consideration in estimating U.S. losses and comparing them with Chinese losses is the share of total (global) U.S. forces engaged. The greater that share, the better the U.S. would do militarily. However, committing more U.S. forces to the theater would also increase those that are targetable and vulnerable to Chinese A2AD. Very broadly speaking, more U.S. forces would mean a larger and more violent war, with higher losses on both sides but higher expectations of U.S. victory. The share of U.S. forces committed would be determined by trading off the demands of the war against the effect on security in other regions of diverting U.S. forces. The latter, in turn, could be affected by the extent to which U.S. allies, notably NATO, could “cover” for the diversion of U.S. forces elsewhere. Our main interest is in naval, air, land-based missile, air-defense, and intelligence, surveillance, and reconnaissance (ISR) capabilities, since Sino-U.S. war presumably would not involve large land combat. The U.S. Department of Defense has said that 60 percent of U.S. air and naval forces will be based in the Pacific by 2020. 4 Accordingly, the assumption here is that in the course of a prolonged war with China, the United States would commit 60 percent of its global capabilities; U.S. military losses are estimated relative to that. If the figure were higher in the event, losses on both sides could increase.

4 Robert Work, Deputy Secretary of Defense, statement to the Council of Foreign Relations, Jan. 20, 2015.

Table 3.1 provides estimates of military losses for cases of severe fighting for one year, more or less. It is assumed that cases of tightly restricted fighting would involve minor and roughly equivalent military losses.

Table 3.1

Estimated Military Losses, Severe Case, 2015

Figure 3.1

Estimated Aggregate Loss in Military Capability, Severe Case, 2015

NOTES: Losses are shown from top to bottom, starting with full capabilities when the war begins. The green band signifies modest losses; yellow, significant losses; orange, heavy losses; and red, very heavy losses.

RAND RR1140-3.1

Estimated losses can be presented graphically, similar to the earlier graphs of hypothetical losses in 2015 and 2025. Figure 3.1 shows aggregate cumulative losses, with graphs for each of the force categories discussed in Appendix A. Losses are shown from top to bottom, starting with full capabilities when the war begins. The green band signifies modest losses; yellow, significant losses; orange, heavy losses; and red, very heavy losses. 5

5 Depending on the category, decline in effective capabilities could be measured in ships or aircraft lost, in missiles used or destroyed, or in the degradation of C4ISR performance because of loss of space assets or networks.

Illustratively, each band might be thought of as roughly a tenth or so of effective capabilities committed. These estimates are based on raw judgments of several analysts, rather than on calculations predicated on detailed war games or computer simulations. The width of the curves signifies uncertainty, which increases the longer fighting lasts. Note that China would suffer significantly greater losses than the United States by T1, as its weapons are expended and its platforms and bases are struck. Thereafter, as more U.S. strike power is committed and Chinese defenses are degraded, the differential in losses continues or expands. Though large, this gap has been reduced by Chinese deployment of advanced A2AD capabilities, prompting the U.S. military to consider striking those capabilities, which are mainly on Chinese territory.

At present, if the United States were to discount the risk of escalation and unleash its strike power at the stroke of T0, Chinese losses at T1 and beyond could be even greater than shown in the figure. Likewise, China might be able to reduce the gap in losses at T1 and beyond by attacking U.S. strike forces preemptively. The potential difference in losses depending on which side strikes first (though not shown graphically) underscores the instability inherent in counterforce capabilities and concepts on both sides.

Presumably, China would be as aware as the United States that the gap in losses at T1 would keep growing in a prolonged war (as shown). Using our scale, the decline in Chinese capabilities (as defined earlier) by T2 could be extremely heavy, whereas U.S. losses could be significant but less heavy. Apart from a preemptive attack on U.S. forces, China’s best chance, though perhaps not a very good one, is to seek a quick end to severe fighting. The wide gap in losses from outset to finish suggests that Chinese planning for a short war is wishful, perhaps based on a belief that the United States would not have the stomach to fight after suffering significant losses (which would be a misreading of the history of U.S. war making). 6

By 2025, China will likely have more, better, and longer-range ballistic missiles and cruise missiles; advanced air defenses; latestgeneration aircraft; quieter submarines; more and better sensors; and the digital communications, processing power, and C2 necessary to operate an integrated kill chain. The United States, it is assumed here, will have modernized versions of the platform-centric force-projection capabilities on which it has relied for some decades, despite their growing vulnerability to Chinese A2AD. Prospective losses in a severe war would change accordingly, as shown in Table 3.2 and Figure 3.2.

6 Think of World War II (after Pearl Harbor), the Korean War, the Vietnam War, and the recent wars in Iraq and Afghanistan.

Table 3.2

Estimated Military Losses, Severe Case, 2025

Improved Chinese A2AD would increase losses of U.S. strike forces, which in turn might lower Chinese losses. Note especially that while the United States would still have an advantage at T1, it could be less pronounced. Because actual losses at T1 and expected losses thereafter do not indicate a clear winner, there could be a greater inclination on both sides to continue hostilities. If so, the gap between U.S. and Chinese losses could be smaller in 2025 than in 2015, and could even shrink after T1. The overlap of the loss curves by T2 indicates that the U.S. might not be able to gain a decisive military-operational advantage in 2025 even with the prolongation of fighting.

Figure 3.2

Estimated Aggregate Loss in Military Capability, Severe Case, 2025

RAND RR1140-3.2

Apart from the gap between them, note that U.S. and Chinese military losses in a long, severe 2025 war would both be very heavy—U.S. losses because of China’s improved A2AD, and China’s losses despite its improved A2AD. By T2, Chinese losses could remain very heavy, whereas U.S. losses in the region could be heavy (notably, heavier than in 2015). This implies a sizable depletion in overall U.S. military capabilities and an even larger depletion in overall Chinese military capabilities, with implications for postwar security in this and other regions. Yet with no clear winner, neither side able to gain control, and heavy losses causing deep anger on both sides, prospects for agreement to foreshorten the war could be lower than they are now.

Economic Costs

Owing to the size, interdependence, and global integration of the U.S. and Chinese economies, a Sino-U.S. war could be immensely costly for the belligerents, East Asia, and the world. These vulnerabilities are a major reason why war, at least a premeditated one, is so unlikely, even though the two states are and likely will remain at odds over a number of regional disputes. Should a war nevertheless occur (perhaps from a mismanaged crisis), the scale of economic costs would depend on its severity and duration. In contrast to military losses, even a mild level of hostilities, if prolonged, could inflict serious economic harm. But the focus here is on the economic effects of severe hostilities.

Estimating economic costs of a Sino-U.S. war is, if anything, more difficult than estimating military losses, for such costs depend not only on military developments but also on the response of sundry economic actors and markets with limited degrees of state control: government policy responses, possible economic warfare, the fate of industrial enterprises, the effect on and reactions of consumers and workers, international financial institutions, debt and equity markets, and third parties (i.e., trading partners). Accordingly, the analysis that follows is meant not to be definitive but instead illustrative of the sorts and scale of costs in the different cases.

To summarize current economic conditions:

• China’s GDP is about $9 trillion and has been growing at 7 percent annually, although many economists believe that growth will slow, and some argue that growth rates are exaggerated. 7

7 International Monetary Fund, World Economic Outlook Database, October 2014. For more information about projections of future growth and the accuracy of reported growth rates, see Center for Strategic and International Studies, “Long-Term Growth Rates: Can China Maintain Its Current Growth?” Washington, D.C., October 2009; Bob Davis, “China Growth Seen Slowing Sharply over Decade,” The Wall Street Journal, October 20, 2014; Yukon Huang, “China’s Misleading Economic Indicators,” Financial Times, August 29, 2014; and Derek Scissors, “China’s Real GDP [Growth] Is Slower Than Official Figures Show,” Financial Times, January 20, 2015.

• U.S. GDP is about $17 trillion and is growing at 2 percent annually.8

• China’s exports to the United States were about $440 billion in 2013—roughly 20 percent of U.S. imports, 20 percent of Chinese exports, and 5 percent of China’s GDP.9

• China’s imports from the United States were about $122 billion in 2013—roughly 6 percent of Chinese imports, 8 percent of U.S. exports, and under 1 percent of U.S. GDP.10

• China holds about $1.7 trillion in U.S. securities, including about $1.3 trillion in U.S. Treasury bonds—about 25 percent of all U.S. Treasury debt held by foreign countries.11

• Total Chinese direct investment in the U.S. is roughly $8 billion, compared with total U.S. direct investment in China of over $60 billion.12

• International trade is about 45 percent of China’s GDP and 25 percent of U.S. GDP.

• Chinese consumption is one-third of GDP (and climbing); U.S. consumption is two-thirds of GDP. 13

8 International Monetary Fund, 2014.

9 U.S. Census Bureau, “2013: U.S. Trade in Goods with China,” 2013; World Trade Organization, “China,” trade profile, September 2014.

10 U.S. Census Bureau, 2013.

11 U.S. Department of the Treasury, Federal Reserve Bank of New York, and Board of Governors of the Federal Reserve System, Foreign Portfolio Holdings of U.S. Securities, April 2014.

12 U.S. Bureau of Economic Analysis, “Balance of Payments and Direct Investment Position Data (U.S. Direct Investment Position Abroad on a Historical-Cost Basis and Foreign Direct Investment Position in the United States on a Historical-Cost Basis),” n.d.

13 World Bank, “Household Final Consumption Expenditure, etc. (% of GDP),” World Development Indicators, 2014b.

Key asymmetries include China’s greater reliance on international trade in general (especially with regard to energy supplies), reliance on exports to the United States in particular, and holdings of U.S. debt; U.S. reliance on imports from China; U.S. direct investment in China; and higher U.S. consumption as share of GDP. In considering the economic costs of war, perhaps the most significant asymmetry is that intensive and extensive combat in the Western Pacific would disrupt nearly all Chinese trade (95 percent of it being seaborne), whereas the United States would mainly suffer the loss of bilateral trade with China and, to a much lesser extent than China, trade with the rest of East Asia. 14 This might be thought of as the war-zone effect on trade.

This particular asymmetry between China and the U.S. is depicted in concentric circles in Figure 3.3. The center circles represent bilateral (Sino-U.S.) trade, the middle circles represent other regional trade, and the outer circles represent other global trade. The percentages shown in each circle indicate the share of that country’s global trade. The depiction is intended as impressionistic, not to exact scale. The difference in size represents China’s greater dependence on trade than the United States.

14 China’s access to the rest of East Asia would be affected much more than would U.S. access.

Figure 3.3

Illustrative War-Zone Effect on Trade

NOTES: The center circles represent bilateral (Sino-U.S.) trade, the middle circles represent other regional trade, and the outer circles represent other global trade. The percentages shown in each circle indicate the share of that country’s global trade. The difference in size represents China’s greater dependence on trade. Red indicates extreme vulnerability of trade in the event of a major war; yellow, signicant vulnerability; and green, minor vulnerability.

RAND RR1140-3.3

The figure also shows the potential vulnerability of trade in the event of war. Red indicates the extreme vulnerability of trade in the event of a major war; yellow, significant vulnerability; and green, minor vulnerability.

Thus, China’s bilateral trade with the U.S. and other regional trade could be extremely vulnerable, whereas for the U.S., only trade with China would be greatly affected. Overall, most of China’s trade (except for the small overland fraction) is vulnerable to disruptions in seaborne trade in the Western Pacific, whereas most U.S. trade is not. 15 This, as we will see, has asymmetric effects on GDP in the event of war.

The vulnerability of Chinese trade begs a further question: Would the United States forcibly blockade nonmilitary sea and air transport to and from China? Keep in mind that both sides have large arrays of capabilities to destroy ships and aircraft—anti-surface and anti-air missiles, air strike power, submarines, and surface-naval strike power, not to mention cyberwar—as well as incentives to use them. Also, while the United States has sophisticated sensors to distinguish military from nonmilitary targets, during war it will focus on finding and tracking the former; moreover, Chinese ISR is less sophisticated and discriminating, especially at a distance. This suggests very hazardous airspace and sea space, perhaps ranging from the Yellow Sea to the South China Sea. Assuming that non-Chinese commercial enterprises would rather lose revenue than ships or planes, the United States would not need to use force to stop trade to and from China.16 China would lose a substantial amount of trade that would be required to transit the war zone. The United States expressly threatening commercial shipping would be provocative, hazardous, and largely unnecessary. So we posit no U.S. blockade, as such.

15 China could expand its overland trade during a war, especially with Russia. But that would hardly make a dent in China’s loss of access to the rest of the world for markets, capital goods, and materials.

16 The U.S. could inflict significant damage on Chinese shipping, as it has done in previous severe conflicts against other countries. For example, U.S. submarines exacted tremendous losses on Japanese shipping vessels in World War II; these losses were arguably critical to Japan’s economic collapse during the war.

The analysis that follows assumes severe fighting, the duration of which (from T0 to T1 to T2) would determine the magnitude of economic effects. Rough costs are estimated in terms of effect on GDP from disruptions of three economic functions: trade, consumption, and income from overseas investments. The effects of energy-supply disruption to China are considered as a component of the contraction in trade, because most natural gas and crude oil consumed by China are imported. It is assumed that the current conditions, importance, and relationships of the U.S. and Chinese economies will not change in character by 2025 (unlike expected changes in military capabilities over that time). 17

Only direct GDP losses are considered; no attempt has been made to estimate the effect of war on the regional and global economies and, in turn, the rebound impacts on the U.S. and Chinese economies. Also not included are costs with little immediate effect on GDP per se (e.g., damaged infrastructure, lost military systems, prompt and longterm care for casualties, seized assets), though any of these costs could be enormous.

Neither have we quantified a factor that could make China’s losses substantially worse than those indicated below: the deepening integration of the East Asian economy. The economies of China and its neighbors (Japan, South Korea, Taiwan, and, increasingly, Southeast Asia) are highly interdependent, owing to production value networks. Much of East Asian trade is composed of intermediate goods and components: Inputs produced in one country are shipped to another country to be married with parts made elsewhere and assembled into a final product before being fed into market distribution systems. While such integration has contributed to the efficiency and productivity that have enabled China and its neighbors to prosper, it also heightens East Asian economies’ vulnerability to disruption, more so than traditional end-product trade would. China could reduce its dependence on such interlocking regional production only with great difficulty and cost.

17 Consummation of new East Asian or transpacific trade pacts will, if anything, deepen economic integration and trade expansion in the coming decade.

The primary effect on GDP is from loss of trade. We are most confident in the estimated collapse of Sino-U.S. bilateral trade, which empirically falls to virtually zero between belligerents in the course of war. But it is important also to take account of China’s loss of regional and other global trade, given the war-zone effect. As shown in Figures 3.4 and 3.5, whether losses are confined to bilateral trade or may include all trade makes a big difference in China’s GDP loss. Figure 3.4 shows the GDP impact from losses in trade, consumption, and income from investment, albeit with only bilateral Sino-U.S. trade affected. Figure 3.5 shows the GDP impact from losses in trade, consumption, and income from investment, with Chinese trade with the United States, the region, and the rest of the world affected. The widths of the curves suggest uncertainty. As with military losses, T2 is posited to be one year.

Figure 3.4

Estimated Aggregate Effect on GDP from Losses in Bilateral Trade, Consumption, and Income from Investment

NOTES: This graph illustrates the percentage by which GDP may decrease during war as a result of losses in bilateral trade, consumption, and income from investment. The upper limit of the y-axis indicates GDP at the start of war; as the war continues, GDP at each point in time is given as a percentage of GDP at the start of war. The widths of the curves suggest uncertainty.

RAND RR1140-3.4

Figure 3.5

Estimated Aggregate Effect on GDP from Losses in Overall Trade, Consumption, and Income from Investment

NOTES: This graph illustrates the percentage by which GDP may decrease during war as a result of losses in overall (bilateral, regional, and global) trade, consumption, and income from investment. The upper limit of the y-axis indicates GDP at the start of war; as the war continues, GDP at each point in time is given as a percentage of GDP at the start of war. The widths of the curves suggest uncertainty.

RAND RR1140-3.5

Now, consider what could happen to GDP if China’s non-U.S. regional and global trade, nearly all of it seaborne, were also affected by widespread fighting in the Western Pacific. We assume that China’s regional trade drops by 80% and its other global trade drops by 50%. (One reason regional and global trade do not drop even more is that Chinese shippers might be ordered by the state to continue operating.)

Indicative estimates of U.S. and Chinese economic costs of a prolonged severe war are summarized in Table 3.3, the analysis and sourcing for which can be found in Appendix B.

Table 3.3

Estimated Economic Costs After One Year of Severe War

The estimated decline in China’s GDP can be compared with Germany’s 29 percent decline in real GDP during World War I, when Germany itself was spared heavy damage, as well as Germany’s 64 percent GDP decline and Japan’s 52% GDP decline during World War II, when both were heavily attacked. 18 Of course, to suggest that the Chinese would be unwilling or unable to fight on despite such costs is to ignore that the Germans and Japanese withstood much greater costs, along with widespread destruction, and did not surrender until left with no choice. Moreover, the Chinese state would presumably work to limit the impact on consumption, as we have estimated. Still, the effects on China and its citizens of a one-third reduction in GDP would obviously be grave and lasting. In contrast, the effects of a protracted and severe conflict on the U.S. and its citizens, while severe, would also be the equivalent of a serious recession.

18 Robert J. Barro, “Rare Disasters and Asset Markets in the Twentieth Century,” Quarterly Journal of Economics, Vol. 121, No. 3, August 2006.

In a restricted and mild conflict, economic costs from lost trade, consumption, and income from overseas holdings would be similar in kind, substantially less in magnitude, and asymmetrically harmful to China.

In a more speculative vein, both China and the United States would be vulnerable to economic costs in the event that cyberwar, which is likely to occur in a severe conflict, leapt from the military domain to civilian domains. While each nation would have a strong aversion to “general” cyberwar and so might be mutually deterred from attacking the other’s nonmilitary computer networks, the ability to contain cyberwar, once begun, is unknown—if not unknowable.19 Certain network infrastructure supports multiple computer systems, and certain computer systems that support military operations are also used for commercial or other civilian purposes. As an example, the supply of U.S. forces in a major armed conflict might depend on logistics firms, which rely mainly on open data systems, perhaps Internetbased, to manage and move material. Would China refrain from trying to degrade such systems in the event of war? Would the U.S. refrain from attacking, say, systems that support the transport of Chinese troops? Would both countries not be tempted to crash telecommunications or air-traffic control or energy-distribution systems that support fighting, or interfere with government-service networks? In short, the “firebreak” separating military-operational cyberwar from national-economic cyber could prove weak; once crossed, cyberwar could spin out of control, affecting all sorts of critical information infrastructure, the Internet, and commercial systems.

Very roughly speaking, China and the U.S. are equally vulnerable to the harm such civilian cyberwar could cause, because both economies and societies rely heavily on computer networks. Estimates of the economic damage from a series of large-scale cyberattacks on the United States range from $70 billion to $900 billion. 20 With at least 200 million more Internet users than the U.S., China might have just as much to lose from targeting civilian cyber infrastructure as does the United States. China’s economy has become very integrated internally and with the rest of the world, and that integration is enabled by potentially vulnerable data networking. Disruption of both internal and external commerce resulting from cyberattacks could aggravate China’s economic costs of war. Both countries are capable of patching, working around, and otherwise containing the effects of cyber attacks; however, the cumulative effects of multiple shocks in different sectors could cause appreciable reductions in production, commerce, and consumption. While we offer no estimate of the possible costs of escalating cyberwar, it is evident that they could be very large on both sides in the event of a severe and protracted Sino-U.S. conflict.

19 For analysis of the potential and possible paths of cyberwar escalation, see Lawrence Cavaiola, David Gompert, and Martin Libicki, “Cyber House Rules: On War, Retaliation and Escalation,” Survival: Global Politics and Strategy, Vol. 57, No. 1, February–March 2015.

20 Scott Borg, “How Cyber Attacks Will Be Used in International Conflict,” paper presented at the USENIX Security Technology Symposium, Washington, D.C., 2010.

In sum, the economic harm caused by a Sino-U.S. war, unless brief or mild, would be substantially greater to China than to the U.S., an asymmetry likely to persist if not grow by 2025. Unlike the military balance, there is little China can do, given its need for global markets and resources, to mitigate the economic risks of a war with the U.S.. 21 The economic integration that has made China’s development possible exposes China to the risk that war could bring that development to a screeching halt. While this should darken any encouragement that China’s military might feel or convey about a brightening military picture, it does not mean that the Chinese would be unwilling or unable to bear such a price. Losing great powers have endured much worse.

21 Because China is currently a large net importer of food, the question arises whether its population is vulnerable to hunger in the event a war severely constricts seaborne trade. In fact, China keeps large grain reserves in the event of catastrophic events, such as crop failures or, in this case, war. In addition, in normal years, China remains domestically self-sufficient in rice and wheat, the most important staples in the Chinese diet. As a result, according to the World Bank, China’s food self-sufficiency will remain above 90 percent through and beyond 2030. China could easily reduce consumption of meat and other agricultural products that depend on imported feeds and still provide sufficient food for all its citizens in the event of a conflict. See World Bank, China Economic Update: Special Topic—Changing Food Consumption Patterns in China; Implications for Domestic Supply and International Trade, Beijing, June 2014a, p. 26.

Political Effects

Domestic political responses effects of war would differ considerably between China and the U.S. because their political conditions are so different. We assume that those conditions would basically be the same in 2025 as in 2015. The nature, scale, and timing of political effects are, if anything, even harder to predict than military losses and economic costs. Whether those effects described below would occur during or after a conflict of one year (the period posited for a long war) is unknowable, but it is nonetheless worth considering.

China is a single-party authoritarian state with, at present, a powerful chief executive.22 That leader is working to strengthen civilian control over the military.23 Divisions among top civilian officials or between them and military chiefs or economic elites are slight or well masked. Public opinion, though an important source of pressure and potential cradle of dissent, is not critical to the regime’s survival: The middle class is mainly patriotic in sentiment, the rural poor are voiceless, migrant factory workers are formless, and dissidents are a small minority and more concerned with political or religious freedom than foreign policy. Debate and protest are at the sufferance of the state. Access to information can be controlled, up to a point, given widespread Internet access. The state and its internal security apparatus have ample means to suppress opposition and the will to use those means. However, Beijing’s commitment to domestic order reflects its fear of the sort of instability that China has experienced in the past and that could again engulf the country, threaten the regime, and leave China weak and vulnerable.

22 See Elizabeth C. Economy, “China’s Imperial President: Xi Jinping Tightens His Grip,” Foreign Affairs, November–December 2014.

23 There have been grounds for doubt that recent Chinese civilian leaders have as much control over the PLA as earlier leaders. However, Xi Jinping has taken steps to regain such control, without indications of PLA resistance.

U.S. domestic politics are nearly the inverse of China’s. At present, U.S. politics are polarized and the government is divided. Virtually any issue, even war and peace, can bring on criticism, partisan squabbling, and partial paralysis. 24 The ability of the president to be an effective commander-in-chief could be impaired by politicization; opposition could come from peace factions, war factions, or both. Unless the country’s security is directly threatened, the wholehearted support of the general public and the elite cannot be assumed, especially after costly wars with disappointing results in Iraq and Afghanistan. U.S. administrations persist in unpopular wars at their own peril. Neither patience nor continuity can be assumed, especially with elections every two years. At the same time, there is no doubt about the state’s survival in the event of a war with huge losses and costs, as there might be in China’s case.

24 As this is being written, the polarization along partisan lines that has dogged U.S. attempts to negotiate a nuclear-enrichment deal with Iran suggests erosion of the principle that politics end at the water’s edge.

Political responses, constraints, and consequences in the two countries could be strongly influenced by perceptions of the stakes of war. Matters concerning Chinese territorial claims, historical injustices, and sovereign rights would have strong purchase among Chinese elites and the public. Yet many Americans could regard such matters as peripheral to U.S. vital interests and not worth a costly war, unless unified leadership could convince them otherwise. As fighting lasts, these original interests could be altered by how the war is going in terms of casualties, economic impact, attacks on civilians, and popular anger or revulsion, making internal politics volatile and unpredictable.

The U.S. government could experience acute “tactical” political problems (e.g., partisan and popular polarization) throughout a conflict, whereas the Chinese government would have few such problems and the muscle to manage them. But China could face “strategic” political problems that the regime would have to confront in the event of a long and severe conflict. China’s “rally round the flag” impulse could be stronger at first but then give way to instabilities that the United States does not face.

The president of the United States could be criticized from the outset for involving the country in a war over less-than-vital interests. Such criticism could be intensified by significant losses, especially casualties, in severe fighting. On the other hand, the president could be criticized for timidity if he or she held back the U.S. military to limit hostilities and losses. Although civilian control of the military would not be in doubt, strains could appear over presidential micromanagement, driven by concern with costs. While it is possible that mounting casualties could rally public support, especially if injected with anti-Chinese sentiment, it is also possible that opposition to war would grow. Depending on the stakes and reactions to losses, a long and severe war could divide the United States and aggravate problems of uncompromising partisanship and dysfunctional government.

While U.S. military advantages have until now offered the chance to win a war swiftly and so avoid such political pressures and pitfalls, this might be less likely in the future. The commander-in-chief could be in a vise between war-winning military logic and cost-containing political-economic logic. Whether its internal politics would permit the United States to fight a long, costly, and possibly inconclusive war with China would depend in part on the war’s origin and the U.S. stake in its outcome. History suggests—and China should not overlook—that the United States is capable of considerable political stamina during war.

Political support, state control, and stability in both countries could also be subject to the effects of cyberwar, were it to escalate into civilian domains. Here, too, China could be more vulnerable insofar as the Chinese government relies more on influencing popular sentiment through media, the Internet, and other communications channels than does, or can, the U.S. government. If Beijing’s ability to manipulate information, maintain support, and avert disorder is degraded, spontaneous and opposing opinions could roil segments of the population. Expectations of how U.S. domestic politics would affect and be affected by war, depending on intensity and duration, are summarized in Table 3.4.

Strains on China’s political system and cohesion would probably be manageable in the event of mild hostilities. Social networking could empower opposition to some extent, though the regime’s ability to restrict and manipulate information and to contain dissent should prevail. A choice by the regime to limit hostilities to avoid major losses, attacks on China, and escalation could produce military grumbling but not outright defiance. Assuming that Chinese leaders and elites feel strongly about the conflict’s stakes (e.g., matters of national sovereignty and honor), any opposition among the populace would not compel the regime to cease fighting.

Table 3.4

Potential Effects on U.S. Domestic Politics in the Four Cases

However, severe hostilities, if prolonged, could generate domestic political turbulence and centrifugal forces. The danger of unrest derives from the dependence of the regime’s legitimacy on economic well-being and patriotic pride; to the extent both are fractured by war losses and costs, segments of the society (e.g., elites, middle class, workers, and peasants) could sour on the leadership. Not just capital but also capitalists might flee the country. While domestic turmoil might not imperil the regime, it could force it to crack down on large swaths of an angry public, further undermining its legitimacy. The danger of separatism lies in the opportunity separatists in Tibet or Xinjiang might see if the state were preoccupied with a damaging and demanding war with the U.S. Because significant PLA ground forces and other internal-security forces would presumably remain available even in the event of a major conflict with the U.S., the regime would be able to crush separatists, but at a cost of resources and of domestic and international legitimacy at a time when both could be in short supply.

Expectations of how Chinese domestic politics would affect and be affected by war, depending on intensity and duration, are summarized in Table 3.5.

Juxtaposing possible U.S. and Chinese political effects, it seems that Chinese leaders would face little internal opposition in a brief conflict, regardless of its intensity, whereas U.S. leaders could face vehement opposition, partisanship, and polarization from the outset.25 Moreover, Chinese leaders are able and willing to suppress domestic opposition. While patriotic support can be expected in both cases, it could be more fervent in China, especially if most Chinese feel more strongly than most Americans do about the national interests at stake in the conflict. However, in the event of a prolonged and costly conflict, China could face more-serious domestic upheaval than the U.S. would, which could motivate Beijing to seek peace.

25 Whether domestic political opposition impairs a U.S. administration’s ability to wage war is mainly a function of the degree of congressional-executive disharmony, which might reflect public disharmony or opposition. It was not until well after a majority of Americans soured on the Vietnam War that Congress began implementing serious roadblocks against the U.S. war effort. The U.S. effort in Iraq, toward which the public became disenthralled, continued without effective congressional opposition. Having said this, a U.S. administration might be self-restrained if a war encounters major public opposition and exacts a major political cost.

Table 3.5

Potential Effects on Chinese Domestic Politics in the Four Cases

International Effects

International effects of Sino-U.S. war can be thought of as concentric circles: general world opinion is outermost and least consequential; in the next circle, responses of major nonregional actors, including allies of either side; in the center and most important, East Asian states. Irrespective of their positions on the causes, merits, and favored side in a conflict, countries, institutions, and enterprises worldwide, fearful of economic harm, would appeal for an immediate end to Sino-U.S. combat. But such views are unlikely to sway either belligerent.

Of more significance than world opinion would be reactions of other powers, notably Russia, India, and European (NATO) states. India and Russia, China’s most powerful land neighbors, are likely to be sympathetic to the United States and China, respectively. Although India would want to refrain from direct military intervention, it might increase readiness of its force along the frontier, especially if it felt its vital interests could be affected. This could cause China to do likewise with PLA ground forces (which would in any case not be heavily used against U.S. forces).

Russia is more of a wild card. While it lacks capabilities to conduct effective military operations in the Western Pacific, it could exploit U.S. preoccupation in the Pacific to increase threats to former Soviet states in Eastern Europe (e.g., Ukraine) and the Caucasus (e.g., Georgia), and even try to intimidate its Baltic neighbors despite their NATO membership. Another possibility—less likely but with very different significance - is that Russia could seize the opportunity of a Sino-U.S. war to strengthen its position in central Asia and Siberia at China’s expense. Geopolitics aside, Russia would be eager to help China make up for lost oil and gas supplies, though not for free. In addition, Russian arms could make up somewhat for Chinese military losses and expenditures (e.g., aircraft and air defense), though it would take time for them to be operationalized, and most would fare badly against U.S. forces. Overall, though, Russia’s economic weakness, military limitations, and dangers on or within its own frontiers reduce the importance of its support for China and the likelihood or significance of its intervention.

Assuming that its European allies see the United States as justified, they would likely back it politically, while urging that the conflict, end lest it escalate or ruin the world economy. Short of direct combat involvement, NATO itself might pledge support for U.S. efforts to oppose Chinese aggression. One of the most important European contributions would be to preempt or respond to any increased Russian pressure on Eastern Europe. In the course of a lengthy conflict, Europe might be willing to join in an embargo of export to China of any goods, technologies, and services that could aid its war effort.

As for other Chinese “allies,” North Korea is even more unpredictable than Russia. Although North Korea no longer has the conventional military capability to invade and defeat South Korea, it could use missiles against South Korea or Japan; although Seoul would almost certainly not enter a war against China in any case, Tokyo’s options would be complicated by North Korean belligerence.

A conflict between China and the U.S. could disturb the greater Middle East by providing an opening for heightened violence from Islamist-extremist and anti-Israel groups (ISIS, al Qaeda, Hamas, and Hezbollah). Middle East difficulties could place additional demands on U.S. naval and air forces at a moment when more of them are needed in the Western Pacific. Conversely, a shift of significant U.S. forces from U.S. Central Command to U.S. Pacific Command could add to the potential for instability in the Middle East. Increased violence, extremism, and instability in the Middle East could also be damaging to China, which gets much of its oil from there (though most oil would not ship through the war zone anyway).

East Asian states would have the most to lose from a Sino-U.S. war: Much of the region could be a war zone; its trade-intensive economy could go into depression; China might emerge either dominant or unstable; the region’s extraordinary gains in security and prosperity could be threatened. Most East Asian states would want to see war end swiftly in military victory for the United States, but with China intact. Most of China’s neighbors have edged toward closer security relations with the United States. This drift could be accentuated in a conflict perceived to result from Chinese bellicosity.

The most critical state is Japan, with its growing military strength, its antagonistic relationship with China, and the strong possibility that China would attack U.S. air bases on Japanese territory. Recent reinterpretation of Japan’s constitution, at the initiative of the Abe government, effectively legalizes military support for the United States in a war with China. 26 Of course, the probability of significant Japanese involvement in the war would be greater if Japan was involved in the issue or confrontation that triggered conflict (e.g., in the E. China Sea). Japanese military participation would be virtually assured if China were to attack Japan, including U.S. bases in Japan, or Japanese forces. While China has the option of not attacking U.S. bases on Japanese territory, such a decision would involve major operational drawbacks.

As for capabilities, Japanese submarines, surface combatants, combat aircraft, strike weapons, and ISR could make a material difference in a severe war by 2025. The longer a Sino-U.S. conflict lasted, the greater the potential effect of Japanese military contributions on the U.S. side. In a long, severe war, China would find it difficult to contend with combined U.S. and Japanese forces, as the latter made up for the former’s attrition. Moreover, Japanese involvement would reduce the need for the United States to strip its forces from elsewhere for reinforcement.

Overall, Japanese combat involvement could increase Chinese losses and offset or even reduce U.S. losses in a long, severe conflict. Because Japan’s forces are being steadily improved, its entry could widen the gap between U.S. and Chinese losses in 2025 that was depicted above. This possibility reinforces the observation already made that even with improved Chinese A2AD and reduced U.S. military superiority, China cannot be confident of winning a long, severe war. At the same time, Japanese intervention would enrage the Chinese and could enflame, extend, or expand the conflict. It might cause China to fight longer and endure greater costs than it would otherwise. China might widen attacks on Japan, though at the price of diverting forces already under heavy attack and stress.

Depending on the cause and locus of the conflict, other East Asian states would mostly side with the United States in varying degrees: from support ranging from permission to use bases to the possible commitment of forces (e.g., Australia, New Zealand, the Philippines), to cautious support for the United States among countries with strong ties to China (notably, South Korea) or significant Chinese populations (e.g., Singapore, Malaysia, Indonesia, Thailand), to support for China (only North Korea). The participation of Australian forces, because of their quality, could have military significance despite their small size. Apart from military contributions, the longer and more severe the conflict, the more and perhaps more permanently China could become isolated from the very region it aspires to lead. This, in turn, could strengthen pro-peace voices in Beijing (e.g., in the Ministry of Foreign Affairs). 27

26 This assumes adequate domestic political support for Japanese intervention. Notwithstanding the reinterpretation of the constitution, polls suggest that a majority of Japanese continue to oppose involvement in wars other than in self-defense. See, e.g., Kamiya Matake, “Japanese Public Opinions About the Exercise of the Right of Collective Self-Defense,” Discuss Japan, September 25, 2014.

27 In terms of sheer mass, the combined GDP (approximately $10 trillion) of Asian states that would favor the United States is roughly equivalent to China’s, and the combined defense spending of those states (approximately $150 billion) is nearly as great as China’s (Stockholm International Peace Research Institute, SIPRI Yearbook 2014: Armaments, Disarmament and International Security, Oxford, UK: Oxford University Press, 2014).

Prognostications about the reaction of third parties are fraught with uncertainty even now, let alone ten years from now. Much would depend on the cause of war: For example, a Chinese move to gain control of the East or South China Seas flagrant enough to force U.S. armed intervention would be more likely to produce a significant anti- China international response than would a conflict over Taiwan, especially if it appeared that the Chinese were provoked. It is conceivable that many U.S. friends, near and far, would lay low or that Russia or North Korea would act in ways that added to U.S. military risks and burdens. Yet another possibility, touched on in the earlier discussion of “upper limits” of war, is that many states would be dragged in or enter opportunistically, leading to a quasi–world war. However, we think the more likely international reaction would be for regional states with direct and critical interests, such as Japan, to get involved, mainly to the disadvantage of China.

In sum, world public opinion would favor the immediate cessation of fighting. Russia might growl, posture, and exploit a Sino-U.S. conflict by taking initiatives elsewhere, whether or not in sync with China. Some East Asian states, in varying degrees, would line up behind the United States. Japan’s involvement could make a long, severe conflict more costly for China but could also increase the dangers of escalation.

These international effects would be amplified, to the advantage of the United States, the longer a severe war persisted. Possible international responses are summarized in Table 3.6.

Table 3.6

Possible International Responses in the Four Cases

The Four Cases and Their Effects

Each category of effects is important in its own right and in its implications for other effects:

• Military losses can affect the ability, especially of China, to keep trade going, prevent destruction of infrastructure, and maintain access to energy supplies.

• New domains of warfare—cyberspace and space—can have both a military and economic effect, given that dual-use systems (e.g., communications, logistics networks, GPS) could be disabled.

• Cyberwar, if not confined to military networks, could hinder political responses to war, affect third parties, and compound economic disruptions.

• Economic costs, whether from hostilities or from disruption of commerce, would affect the ability of combatants to make up for military losses in a severe and protracted conflict.

• Economic hardship, such as reduced consumption of and access to essentials, could affect political support, stability, and cohesion, and thus the ability and resolve of each side to continue fighting at a high intensity.

• Adverse world public opinion directed at one or both parties would make little difference in their ability and will to fight, at least in the short term. However, the reactions of important third parties could eventually help one side or the other in major ways: direct combat, war supplies, trade, energy access, and, in the case of the United States, support in other theaters that enables concentration of forces.

Table 3.7 integrates the four categories of effects on both states in the four conflict cases. (The “Military” column includes 2015 and 2025 cases to reflect the effects of improvements in Chinese A2AD.) The “General” column and row summarize the four cases and the four sorts of effects, respectively, providing a very rough sense of the impact on and relative advantage of the sides.

Overall, the decline in U.S. warfighting advantages does not mean China can win a war that the United States is willing to fight. By 2025, a war could be a military standoff, with major weapon-platform losses on both sides, in addition to losses in cyberspace and space. Yet neither side would fare so much worse than the other that it would feel compelled to concede, raising the probability that a war would be both severe and long. Such a war could be decided by economic costs, domestic political effects, and international responses. Japan’s entry could offset the decline of U.S. military superiority, especially in a prolonged conflict. All these factors, taken together, would strongly favor the United States.

Table 3.7

Possible Effects on the United States and China in the Four Cases and Overall

Recall the earlier observation that war between China and the United States could be worse than the long, severe case, as described here. In the 20th century, two great-power wars became world wars, and a third could have followed the same course, or even worse. The possibility of a Sino-U.S. war drawing in other powers and many states cannot be excluded: In addition to Japan, perhaps India, Vietnam, and NATO would be on the U.S. side; Russia and North Korea would be on China’s side. Fighting could spread beyond the region. War aims could expand, and as they did, so would the costs of losing. Even if nuclear weapons were not used, China might find other ways to attack the United States proper. Use of space and cyberspace could be severely curtailed. As long as fighting remained inclusive, destruction and hardship could fuel determination and further mobilization. In sum, both the duration and severity of war could exceed the upper case used here for purposes of analysis. If so, losses and costs would be even greater for both sides and the world, and the outcome would be no more favorable for China, despite the expansion of its power.

CHAPTER FOUR

Findings, Recommendations, and Concluding Observations

Findings

Unless both U.S. and Chinese political leaders decline to authorize their militaries to carry out their counterforce strategies, the ability of either state to control the ensuing conflict would be greatly impaired. Both would suffer large military losses from the outset and throughout a severe conflict: In 2015, U.S. losses could be a relatively small fraction of forces committed, but still significant; Chinese losses could be much heavier than U.S. losses and a substantial fraction of forces committed. This gap in losses will shrink as Chinese A2AD improves: By 2025, U.S. losses could range from significant to heavy; Chinese losses, while still very heavy, could be somewhat less than in 2015, owing to increased degradation of U.S. strike capabilities. A severe and lengthy conflict would leave both with substantially reduced total military capacity and thus vulnerable to other threats.

China’s A2AD will make it increasingly difficult for the U.S. to gain military-operational dominance and victory, even in a long war. However, provided the U.S. is nonetheless willing to fight, China cannot expect to win militarily. Thus, the two could face the prospect of an extremely costly military standoff.

This outcome implies that a conflict could be decided by domestic political, international, and, especially, economic factors, all of which would favor the U.S. in a long, severe war:

• Although a war would harm both economies, damage to China’s would be far worse (perhaps 25–35 percent of GDP after one year). Because much of the Western Pacific would become a war zone, China’s trade with the region and the rest of the world would decline substantially. China’s loss of seaborne energy supplies would be especially damaging. Although consumption is a smaller share of the Chinese economy than the U.S. economy, it is expected to grow, leaving the Chinese economy vulnerable to further contraction in the event of war.

• Politically, a long conflict, especially if militarily severe and economically punishing, could expose China to internal division—taxing and testing the state.

• The entry of Japan and, to a lesser extent, other U.S. partners in the region could have a considerable influence on military operations. The responses of Russia, India, and NATO are less important. However, NATO efforts to preserve security in other regions (at least Europe, if not also the Middle East) would permit greater, or less risky, commitment of U.S. forces to war with China. Such a combination of international responses could increase Chinese losses in a long, severe conflict, despite improved A2AD.

In a nutshell, despite military trends that favor it, China could not win, and might lose, a severe war with the United States in 2025, especially if prolonged. Moreover, the economic costs and political dangers of such a war could imperil China’s stability, end its development, and undermine the legitimacy of the state.

Yet in the event of war, the military capabilities, motivations, and plans of both sides make a severe, prolonged, and exceedingly costly conflict a distinct possibility. Of the many reasons the United States should not want such a war, the most important are the immense military losses and economic costs to itself and the implications, for the country, the region, and the world, of devastating harm to China. Such prospects underscore the importance of both the United States and China contemplating how to control and restrict fighting should a crisis turn violent, which shines the spotlight on principles and procedures for political control and communication.

Recommendations

The findings confirm what is widely thought: A Sino-U.S. war would be so harmful that both sides should place a very high priority on avoiding one. While such prospects make premeditated war highly improbable, they also dictate effective individual and bilateral crisis management, as well as other measures to avoid misperceptions and mistakes.

Because the United States might be unable to control, win, or avoid major losses and costs of a severe conflict, it must guard against automaticity in implementing immediate attacks on Chinese A2AD and should have plans and means to prevent hostilities from becoming severe. Establishing “fail safe” arrangements will guarantee definitive, informed political approval for military operations.

Likewise, China has much to lose from a severe conflict, and even more from a prolonged, severe one. Notwithstanding favorable military trends, China has as much reason as the United States to avoid automatic execution of military plans for a sharp and immediate counterforce exchange, including a parallel requirement for unambiguous political control. Again, if either state executes its military plans to strike the forces of the other, a severe war would likely ensue.

Thus, it is necessary but not sufficient for the United States to be able to refrain from full execution of military plans once fighting begins, for it could not hesitate to strike hard if China does or is about to do so. Given the extreme penalty for allowing one’s forces to be struck before they strike, creating mutual forbearance at the outset of hostilities could be as difficult as it is critical. It requires an ability to cooperate at a moment of intense pressure to attack, which in turn makes clear, direct, and prompt political communication as important after as it is before hostilities begin. Together with ensuring that U.S. and Chinese political leaders alike have military options other than immediate strikes to destroy opposing forces, having the means to confer and contain a conflict before it gets out of hand is the most important recommendation coming out of this analysis.

Along with measures to prevent crises from becoming violent and violence from becoming severe, the United States should try to reduce the effect of Chinese A2AD in the coming years. Work at RAND and elsewhere increasingly stresses the need to invest in more-survivable force platforms (e.g., submarines) and in counter-A2AD (e.g., theater missiles). Such efforts would buttress deterrence, help prevent increased China’s confidence of prevailing in a severe conflict, and improve stability in crises, as well as in the critical initial stage of a conflict. But the efforts would not dramatically reduce U.S. military losses or economic costs of a severe conflict.

Even as China’s military capabilities improve, it would suffer huge losses in a long, severe conflict. Moreover, the economic, domestic, and international effects of a long, severe conflict work against China. The U.S. needs to be sure that the Chinese are specifically aware of the potential for catastrophic results even if a war is not lost militarily.

While not losing sight of the grave harm to the United States of a lengthy and severe conflict, prudent U.S. preparations for one would help disabuse the Chinese of expecting victory at acceptable cost. However, a heavy dose of common sense is needed in contemplating such preparations. As stressed from the outset of this study, war with China is improbable, in part because both sides know that the costs would outweigh the gains, even for the winner—if indeed there is one. Moreover, the costs of being completely prepared are prohibitive—undoubtedly greater than the costs of war when discounted by the low probability of one.

With this in mind, U.S. preparations fall into several categories:

• Improving the ability to sustain severely intense military operations: The Department of Defense should analyze critical “consumables” (weapons and provisions) that could run out and tip the balance in the event a protracted war.

• Shifting toward more-survivable platforms: The Pentagon should not increase stocks of vulnerable platforms (surface ships and manned aircraft) that are expected to take significant losses, because of China’s A2AD. Rather, the Pentagon should undertake a purposeful long-term program to substitute more-survivable systems, at least for this region.

• Improving U.S. and allied warfighting capabilities: In addition to improve survivability, U.S. and allied forces should exploit more strategically the technologies that China is exploiting in its A2AD, including targeting, theater-range missiles, advanced extend-range air defense, and submarines.

• Conducting contingency planning with key allies: Japan is the most important but also the most controversial ally; however, existing low-profile U.S.-Japanese military planning is an established framework (well known to the Chinese) that could begin to touch on issues regarding low-probability and high-consequence conflict with China. Similar planning with other East Asia allies is encouraged. NATO planning should be stretched in the direction of how European allies would respond to a Russian threat if the United States were in a major war with China. Again, this is a delicate matter and best done with no fanfare.

• Undertaking measures to mitigate the interruption of critical products from China: Here again, sound judgment must prevail. For the U.S. to slash Chinese imports in the off chance of a war would be to harm its own economy in anticipation of an unlikely event, which, though economically painful, would not be catastrophic. It would suffice for the U.S. government to identify alternative domestic and foreign sources of only the most critical products and parts made in China. This could include stockpiling especially vital materials.

• Developing options to deny China access to war-critical commodities and technologies in the event of war: Although a general U.S. blockade would not be needed to harm the Chinese economy, the U.S. could take measures that would make it difficult for China to sustain long and severe combat. Cutting off Chinese access to seaborne supplies of oil and liquefied natural gas would have the most dramatic effect. Although Russia would probably be eager and able to supply China with military hardware during a war, Chinese access to more-sophisticated Western systems could be stopped.

Such U.S. measures could reinforce Chinese perceptions that the United States is determined to encircle and isolate China, as well as create perceptions that the United States would seek to devastate China and destroy its state in the event of war. The distinction worth making is that the United States does not seek to isolate China unless war requires it to do so. The risk of harm to Sino-U.S. relations can be mitigated, though to only some extent, by patient and persistent efforts by the United States to engage Chinese political and military counterparts in discussion of cooperation and crisis management.

The U.S. Army, as a Title X service and in its joint responsibilities, has important roles to play in many aspects of such preparations. It should do the following:

• Invest in land-based A2AD capabilities (e.g., mobile theater-range missiles and advanced air defenses) to contribute to high Chinese military losses.

• Encourage and enable East Asian partners to mount strong defense, including missiles and air defense.

• Improve interoperability with partners, especially Japan.

• Contribute to the expansion and deepening of Sino-U.S. military-to-military understanding and cooperation to reduce dangers of misperception and miscalculation.

Because a Sino-U.S. war, in the construct used here, would not include a major ground combat, the U.S. Army’s expected losses would be proportionately less than those of the Navy and Air Force. Therefore, this analysis does not change current planning factors concerning overall end-strength or mobilization requirements—albeit with important investments in technology and platforms and shifts in force structure to enhance long-range fires and air defense, as noted. However, a major conflict on the Korean peninsula would alter this presumption.

Concluding Observations

As China’s military improvements neutralize the military advantages of the United States, and because technology favors conventional counterforce, war between the two countries could be intense, last a year or more, have no winner, and inflict huge losses and costs on both sides. The longer such a war continued, the more significant economic, domestic political, and international effects would become. While such nonmilitary effects would hit China hardest, they could also greatly harm the U.S. economy and the U.S. ability to meet security challenges worldwide. The U.S. should make prudent preparations to be able to wage a long and intense war with China. Of no less importance is the ability of the United States to limit the scope, intensity, and duration of a war with China through its planning, its system of civilian control, and its ability to communicate with China in peace, crisis, and war.

Likewise for China, political control and good wartime top-level communications are imperative. True, Chinese military improvements have lessened the danger of losing decisively to the U.S. Yet China cannot count on a short war, and a long one could leave China weak, unstable, insecure, and impoverished.

To paraphrase Frederick the Great, evenly matched well-armed powers considering war will want to weigh whether possible gains would even “pay the interest” on probable costs. As the United States and China become more equal in their ability to destroy each other’s forces, neither can be confident of winning at an acceptable price. Should a confrontation or incident nonetheless lead to hostilities, it would be better if both sides had thought through how to limit the harm, not just how to win.

APPENDIX A

Military Losses

Mild Case

Brief, Mild

• The conflict trigger event results in immediate losses for both sides.

• China suffers slightly more losses as a result of its lower levels of modern combat experience and less capable systems and platforms. Long, Mild

• Protracted hostilities result in additional but relatively infrequent losses over the length of the conflict.

• China suffers slightly more losses because of less modern combat experience and less capable systems and platforms.

Severe Case, 2015

Table A.1 displays the expected military losses in the severe case for 2015.

Aircraft

U.S. Losses

• No specific judgment is made here about whether China would damage or sink a U.S. aircraft carrier with an accompanying air wing.

• The U.S. would likely lose substantial forces initially in the region because of Chinese missile forces more so than Chinese aircraft. China has relatively few modern aircraft, and the newest generation would not yet be deployed.

• U.S. regional air bases would also come under attack, but China has limited aerial refueling to sustain operations against regional bases.

• The United States would have the edge in air-to-air combat.

• U.S. aircraft carriers would be vulnerable to Chinese submarines.

China’s Losses

• Once China’s most modern aircraft are incapacitated, China would be heavily dependent on outdated and aging airframes that have limited data relay capabilities. This means that Chinese aircraft would become increasingly vulnerable to U.S. aircraft during a conflict.

Table A.1

Military Losses in the Severe Case, 2015

• However, China has a lot of places to hide aircraft, such as inland bases and tunnel facilities, and might choose to do so rather than have them shot down.

• China also has no modern experience sustaining air operations over long periods of time and has limited aerial refueling capabilities, which would affect sortie rates.

Surface Ships

U.S. Losses

• No specific judgment is made here about whether China would damage or sink a U.S. aircraft carrier with an accompanying air wing.

• The United States is likely to lose substantial forces initially in the region because of missile forces and, possibly, swarming techniques by PLA Navy (PLAN) and nonmilitary ships.

• Regional naval bases would also be under attack.

• U.S. ships could hide out far from the conflict in the deep Pacific. China’s Losses

• Chinese ships would be vulnerable to attack by U.S. submarines, particularly given Chinese weakness in ASW, as well as U.S. surface ships, planes, and so on.

• Chinese naval bases would be vulnerable as well, given that all are relatively near the potential theater of conflict, and Chinese ships would have nowhere to hide where they could also resupply.

• Although China has huge numbers of shipbuilding facilities and would likely be able to ramp up production as losses accumulated, no new ships would come online in time to affect the conflict.

Submarines

U.S. Losses

• U.S. submarines are relatively quiet and difficult for China to find.

• China has noted weaknesses in conducting ASW.

• U.S. submarine-launched missiles have a longer range than Chinese submarine-launched missiles, so the United States could participate farther from the fight.

China’s Losses

• Even the newest Chinese submarines are still relatively noisy and easy to find. They would survive “well” (only in a comparative sense), but after they were incapacitated, the older, noisier ones would be easier to hunt down and destroy.

• The depletion of the Chinese submarine capability would make the U.S. submarine force even more survivable.

Missiles

U.S. Losses and Use of Missile Inventories

• The United States has large quantities of a variety of missiles, as well as a relatively diverse set of platforms from which to launch them.

• Some U.S. missile launchers (e.g., surface ships) are increasingly vulnerable. Air-to-surface missiles are only as survivable as the platforms that carry them.

• U.S. land-based missiles between 500 km and 5,500 km are prohibited by the Intermediate-Range Nuclear Forces (INF) treaty, whereas the Chinese missiles are not, giving China a significant advantage.

• Chinese long-range multiple launch rocket systems (MLRSs) have ranges that approximate those of U.S. land-based missiles. U.S. MLRSs do not have ranges that would make them useful.

China’s Losses and Use of Missile Inventories

• China would use many missiles in initial waves and would eventually have to rely on older missiles with shorter ranges and morelimited capability.

• However, launchers would be relatively survivable given Second Artillery’s extensive tunneling system.

• China might also hide some launchers to prevent the United States from targeting them and later deploy them in short bursts.

C4ISR

Both countries have some cyberwar and ASAT capabilities. However, China’s capabilities are less tested and rugged and would likely wear down faster.

U.S. Losses

• China would be able to disable some U.S. satellites and broader C4ISR capabilities.

• However, the U.S. C4ISR capability is more robust and redundant than China’s, so the United States would suffer lower degradation of capability after it survived the first wave.

China’s Losses

• China depends less on C4ISR than the United States, but China would also have a much less robust capability once initial C4ISR capabilities were knocked out.

• The United States would focus attacks on Chinese sensors.

• The United States would also be able to knock out a lot of Chinese satellites in initial waves, and China would be hard-pressed to defend its remaining satellites.

• On the organizational side, China already suffers from command issues because of its stultified military organizational structure and hierarchical command authority, both of which would likely exacerbate problems in wartime. 1

Severe Case, 2025

Table A.2 displays the expected military losses in the severe case for 2025.

Aircraft

U.S. Losses

• Fifth-generation Chinese aircraft would be coming online and would represent a bigger threat to the United States, along with larger Chinese missile inventories.

1 For more information on organizational weaknesses within the PLA, see Michael S. Chase, Jeffrey G. Engstrom, Tai Ming Cheung, Kristen Gunness, Scott Warren Harold, Susan Puska, and Samuel K. Berkowitz, China’s Incomplete Military Transformation: Assessing the Weaknesses of the People’s Liberation Army (PLA), Santa Monica, Calif.: RAND Corporation, RR-893-USCC, 2015.

Table A.2

Military Losses in the Severe Case, 2025

NOTES: Green signifies modest losses; yellow, significant losses; orange, heavy losses; and red, very heavy losses. A mix of two colors in one cell indicates a range (e.g., green/yellow means we expect there would be modest to significant losses). T1 = a hypothetical moment, within days of the start of the conflict, when the sides decide whether to continue fighting; T2 = one year. In the categories where the assessments appear similar for both countries (aircraft for both T1 and T2 and C4ISR for T1), we assess that Chinese attrition would be relatively greater than that of committed U.S. forces.

• China would be more likely to damage or sink a U.S. aircraft carrier (or multiple carriers) and any accompanying air wings.

• The U.S. would likely lose a lot of forces initially in region, though still as a result of missile forces more so than Chinese aircraft.

• U.S. regional air bases would come under attack given that China would have a robust aerial refueling capability.

• The U.S. is still likely to have a qualitative edge in air-toair combat but would have to fight a larger number of relatively new Chinese planes.

• U.S. fourth-generation aircraft would be in significant danger from Chinese fifth-generation aircraft.

China’s Losses

• U.S. next-generation aircraft would be online.

• Newer Chinese planes would be equipped with data links and networked, improving information sharing and likely reducing losses.

• Depending on production rates of new aircraft, China would likely have a deeper bench of new aircraft than in 2015 and would therefore depend less on outdated and aging airframes.

• China would likely still lack modern experience sustaining air operations over long periods of time.

• However, China would also still have many places to hide aircraft, such as inland bases and tunnel facilities, and might choose to do so rather than have them shot down; or China might rotate them in and out of well-defended interior areas. By 2025, China would have two to three aircraft carriers and accompanying air wings that could be disabled or destroyed.

Surface Ships

U.S. Losses

• China is more likely to damage or sink a U.S. aircraft carrier (or multiple carriers).

• The United States is likely to lose substantial forces initially in region as a result of attacks by Chinese aircraft, missile forces, and, possibly, swarming techniques by PLAN and nonmilitary ships.

• U.S. regional naval bases would also be attacked.

China’s Losses

• The United States is still likely to sink Chinese aircraft carriers.

• China has likely dealt with at least some ASW weaknesses, so Chinese surface ships would be less vulnerable to U.S. submarines.

• Chinese naval bases would still be vulnerable, given that all are relatively near the potential conflict theater, but ships might be able to resupply at foreign ports.

• However, the United States might be able to knock out Chinese ships in third-party locations, given its superior global military posture.

• China would be even better equipped to ramp up shipbuilding production, but few new ships would come online in time to affect a conflict.

Submarines

U.S. Losses

• U.S. submarines are quiet and difficult for China to target, despite improved ASW.

China’s Losses

• The newest Chinese submarine classes would be much quieter, but there would be only a few of each class, and older submarines would still be detectable.

• Missile ranges on the new submarine-class missile will be longer, so these submarines will be able to participate in a conflict farther from the fight. The newest Chinese submarines would survive well, but the older ones would still be easy to hunt down and incapacitate.

Missiles

U.S. Losses and Use of Missile Inventories

• The United States would still have large quantities of a variety of different missiles, as well as a relatively more diverse set of platforms from which to launch missiles, with the exception of landbased missiles.

• However, the United States would face more-severe initial and protracted losses as a result of attacks on regional U.S. bases.

• The U.S. would not be able to bring enough tactical strike power or ISR to find and take down Chinese launchers, and U.S. survivability would be a problem.

• U.S. land-based missiles from 500 km to 5,500 km are prohibited by the INF treaty, whereas the Chinese missiles are not, giving China a significant advantage.

• Chinese long-range MLRSs have ranges that approximate those of U.S. land-based missiles. U.S. MLRSs do not have ranges that would make them useful.

China’s Losses and Use of Missile Inventories

• China would have significantly more missiles and launchers in 2025.

• China’s missile inventories would last longer, but China would still eventually have to rely on older missiles with shorter ranges and more limited capability. Chinese launchers would be even more survivable and difficult to disable when hiding in the tunnels but would still largely be viable targets during above-ground launches.

C4ISR

Compared with 2015, C4ISR losses in 2025 could be worse for both sides, because both could take down C4ISR with systems that are relatively invulnerable.

U.S. Losses

• The U.S. would lose a lot more general C4ISR capability initially than in the 2015 scenario. China would also likely be better in 2025 than in 2015 at incapacitating U.S. satellites, and with improved sensing and long-range fires, China could do significant damage to ground components of the C4ISR networks.

• After the initial onslaught, China would have more-robust surviving capability to continue attacking U.S. C4ISR than in 2015, so the degradation of U.S. capabilities would continue.

China’s Losses

• China would still depend less than the United States on C4ISR, but China’s capability would also be more robust and networked than in 2015, so C4ISR losses would affect Chinese combat capability more. China is also likely to have many more satellites in 2025.

• Some reforms would likely have been made to the PLA’s organizational structure and hierarchical command authority, but weaknesses in these areas would likely continue, especially if the PLA has not gained any recent combat experience.

APPENDIX B

Economic Effects in the Severe Case, 2015

Trade

• Glick and Taylor found that, on average, there is an 80 percent immediate drop in trade between adversaries when war commences. 1

• There was a 96 percent drop in trade in World War I and a 97 percent decline in trade in World War II; trade between adversaries in these wars was “almost totally destroyed.”2

• Therefore, we assume a 90 percent drop in bilateral trade (between the United States and China) after one year of severe conflict.

• Every 1 percent increase in trade, divided by GDP, equals a 1.97 percent increase in GDP per capita.3

U.S. Losses

• Total bilateral trade in 2013 equaled $562 billion.

• U.S. GDP in 2014 equaled $17.4 trillion.

• For the United States, a 90 percent loss in bilateral trade equals a 3 percent decrease in trade, divided by GDP, which leads to a 6 percent decrease in GDP per capita (per year). (See Figures B.1 and B.2.)

• The United States would suffer a 6 percent decrease in GDP after one year as a result of a 90 percent bilateral trade loss.

1 Reuven Glick and Alan M. Taylor, “Collateral Damage: Trade Disruption and the Economic Impact of War,” Review of Economics and Statistics, Vol. 92, No. 1, February 2010, p. 108.

2 Glick and Taylor, 2010, p. 109.

3 Jeffrey A. Frankel and David Romer, “Does Trade Cause Growth?” American Economic Review, Vol. 89, No. 3, June 1999, p. 385.

China’s Losses

• Total bilateral trade in 2013 equaled $562 billion.

• China’s GDP in 2014 equaled $9.2 trillion.

• For China, a 90 percent loss in bilateral trade equals a 5 percent decrease in trade, divided by GDP, which leads to a 10 percent decrease in GDP per capita (per year). (See Figures B.1 and B.2.)

• China would suffer a 10% decrease in GDP after one year as a result of a 9% bilateral trade loss.

Figure B.1

Estimated Effect on GDP of Bilateral Trade Losses Because of War

NOTES: This graph illustrates the percentage by which GDP may decrease during war as a result of bilateral trade losses. The upper limit of the y-axis indicates GDP at the start of war; as the war continues, GDP at each point in time is given as a percentage of GDP at the start of war.

• China would suffer a 30 percent decrease in GDP after one year as a result of a 90 percent bilateral trade loss, an 80 percent East Asian regional trade loss, and a 50 percent global trade loss (because of the postulated “war zone” effect on seaborne trade in the Western Pacific).

Consumption

• Because the trade effects described above take account of some of the consumption effects, this analysis of consumption effects presents an upper bound.

Figure B.2

Estimated Effect on GDP of Overall Trade Losses Because of War

NOTES: This graph illustrates the percentage by which GDP may decrease during war as a result of overall (bilateral, regional, and global) trade losses. The upper limit of the y-axis indicates GDP at the start of war; as the war continues, GDP at each point in time is given as a percentage of GDP at the start of war.

U.S. Losses

• Hess found that there is a 4 percent decline in consumption because of war away from home.4

• U.S. consumption in 2013 equaled 68 percent of GDP.

• The United States could suffer a 3 percent decrease in GDP after one year as a result of a decline in consumption.

China’s Losses

• Hess found that there is a 4.4 percent loss in consumption because of war at home. 5

• China’s consumption in 2013 equaled 34 percent of GDP.

• China could suffer a 2 percent decrease in GDP after one year as a result of a decline in consumption.

• With a higher consumption share (60 percent of GDP), there would be a 3 percent decrease in GDP after one year because of consumption loss.

4 Gregory D. Hess, “The Economic Welfare Cost of Conflict: An Empirical Assessment,” Working Paper No. 852, Munich, Germany: Center for Economic Studies and Ifo Institute for Economic Research, February 2003, p. 12.

5 Hess, 2003, p. 12.

Abbreviations

A2AD anti-access and area denial

ASAT anti-satellite

ASW anti-submarine warfare

C2 command and control

C4ISR command, control, communications, computing, intelligence, surveillance, and reconnaissance

EEZ Exclusive Economic Zone

GDP gross domestic product

INF Intermediate-Range Nuclear Forces

ISIS Islamic State of Iraq and Syria

ISR intelligence, surveillance, and reconnaissance

MLRS multiple launch rocket system

NATO North Atlantic Treaty Organization

PLA People’s Liberation Army

PLAN People’s Liberation Army Navy

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Premeditated war between the United States and China is very unlikely, but the danger that a mishandled crisis could trigger hostilities cannot be ignored. Thus, while neither state wants war, both states’ militaries have plans to fight one. As Chinese anti-access and area-denial (A2AD) capabilities improve, the United States can no longer be so certain that war would follow its plan and lead to decisive victory. This analysis illuminates various paths a war with China could take and their possible consequences.

Technological advances in the ability to target opposing forces are creating conditions of conventional counterforce, whereby each side has the means to strike and degrade the other’s forces and, therefore, an incentive to do so promptly, if not first. This implies fierce early exchanges, with steep military losses on both sides, until one gains control. At present, Chinese losses would greatly exceed U.S. losses, and the gap would only grow as fighting persisted. But, by 2025, that gap could be much smaller. Even then, however, China could not be confident of gaining military advantage, which suggests the possibility of a prolonged and destructive, yet inconclusive, war. In that event, nonmilitary factors—economic costs, internal political effects, and international reactions— could become more important.

Political leaders on both sides could limit the severity of war by ordering their respective militaries to refrain from swift and massive conventional counterforce attacks. The resulting restricted, sporadic fighting could substantially reduce military losses and economic harm. This possibility underscores the importance of firm civilian control over wartime decisionmaking and of communication between capitals. At the same time, the United States can prepare for a long and severe war by reducing its vulnerability to Chinese A2AD forces and developing plans to ensure that economic and international consequences would work to its advantage.

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Related feature:

Q & A: An Unthinkable War Between the U.S. and China

A diplomatic delegation waits for China's President Xi Jinping

to arrive at Joint Base Andrews, Maryland, March 30, 2016,

to attend the Nuclear Security Summit

Photo by Jonathan Ernst/Reuters

A new RAND study titled “War with China: Thinking Through the Unthinkable” found that improving Chinese military capabilities challenge the assumption that the United States would emerge an early and decisive victor in a war with China. The report noted that the advanced strike capabilities of each side, combined with the shrinking of the military gap between them, could make such a war intense, highly destructive, and yet protracted.

David C. Gompert, the lead author of the study and an adjunct senior fellow at RAND, recently participated in a Q & A on what the study does, and does not, say about the potential for a Sino - U.S. war and its possible outcome.

Are you predicting that the United States and China may soon go to war?

We do not predict a war between the United States and China. Rather, it is plausible that such a war could arise out of a mishandled crisis and, given improvements in the strike capabilities of both countries, could be intense, destructive, and protracted.

What kind of spark might ignite a Sino-U.S. war?

Tensions exist between the United States and China on a number of issues, and a crisis could occur and involve incidents or miscalculations that lead to hostilities. For example, China could try to intimidate its neighbors below the threshold of U.S. intervention and misjudge where that threshold is, or underestimate U.S. willingness to back Japan militarily in a crisis over disputed territory in the East China Sea.

How might a war scenario play out?

At present, Chinese military losses would significantly exceed U.S. losses during a war. However, the unrelenting improvement of Chinese “anti-access” capabilities could increase U.S. losses and, as U.S. strike capabilities are depleted, reduce Chinese losses. But even as China improves its military abilities, it could not be confident of gaining military advantage. This suggests the strong possibility of a prolonged and inconclusive war.

Could a Sino-U.S. war go nuclear?

Nuclear war is highly unlikely. Even in an intensely violent conventional conflict, neither side would regard its losses as so serious, its prospects so dire, or the stakes so vital that it would run the risk of devastating nuclear retaliation by using nuclear weapons first.

If such a war were to break out, how might Japan react?

We do not predict that Japan would enter such a war. Rather, we say it could be militarily significant if Japan were to do so. It is more likely that Japan would enter a conflict between the United States and China if it was threatened or attacked. U.S. use of bases in Japan could well lead to Chinese threats or attacks against Japan. Likewise, if China attacked Japanese forces, Japan would presumably be more likely to resist. While we would not predict how Japan would react in circumstances such as these, the very possibility that Japan might enter a conflict on the side of the United States would weigh heavily on Chinese decisionmaking. Thus, a strong U.S.-Japanese alliance and capable Japanese forces could be major deterrents against a war.

What about other U.S. allies in the region?

In addition to Japan, the United States has several other important allies in East Asia, including the Philippines, Australia, and New Zealand. It is inherent in these ties that any conflict in the region would trigger consultations and possible joint action. This being the case, military planning for a variety of contingencies is prudent. We do not speculate on whether such planning would result in any particular U.S. ally entering a conflict.

Would Russia and NATO join the fray?

Internationally, Russia might line up behind China and NATO might back the United States, but it is unlikely that either power would have a significant bearing on the fighting.

How might North Korea react?

Predicting the behavior of North Korea in the event of a Sino-American war is fraught with uncertainty. However, if it involved attacks against Japan, the ballistic-missile defenses currently under development and construction could provide considerable protection.

Why think the unthinkable?

A Sino-U.S. war may seem unthinkable, but the course and consequences need more thought in both countries. History suggests that wars that are very destructive to both combatants have a way of persisting as long as neither side faces complete defeat. A Sino-U.S. war would be so harmful that both sides should place a very high priority on avoiding one. While such prospects make premeditated war highly improbable, they also dictate effective individual and bilateral crisis management, as well as other measures to avoid misperceptions and mistakes.

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