The Centre for Strategic and International Studies (CSIS) has published a report about the recent evolution of China’s defence industrial base and how it compares to America’s.
The authors, Seth G Jones, Senior Vice President and Alexander Palmer, Associate Fellow, state with no ambiguity that China is currently outpacing the US Defence Industrial Base. CSIS prides itself as “a bipartisan, nonprofit policy research organisation dedicated to advancing practical ideas to address the world’s greatest challenges.”
In order to write the report, the organisation consulted several high-profile individuals, such as Under Secretary of Defence for Acquisition and Sustainment William LaPlante; Assistant Secretary of the Army for Acquisition, Logistics, and Technology Douglas Bush; Assistant Secretary of Defence for Industrial Base Policy Laura Taylor-Kale; Deputy Under Secretary of Defence for Acquisition and Sustainment RadhaIyengar Plumb; Commandant of the US Coast Guard Admiral Linda Fagan; and Vice Chairman of the Joint Chiefs of Staff Christopher Grady. They also discussed with “numerous individuals from the US government (especially the Departments of Defence and State), several members of Congress and their staff, industry executives, and subject-matter experts.” However, most of these people wished to remain anonymous, and couldn’t be named in the report.
The main finding of the report is that the US defence ecosystem remains on a peacetime working pace, while geopolitics tensions keep rising with wars in Ukraine, in the Middle East, as well as in the Indo-Pacific. This draws an acute contrast with the Chinese defence industrial base, which is operating under wartime conditions. The report highlights the growth of the Chinese defence budget, which increased by 7.2% in 2024. China is also investing in high-end weapons systems and munitions “five to six times faster than the United States”.
The authors also underscore the Chinese shipbuilding capacity, which is “roughly 230 times larger than the United States”. More specifically, the Jiangnan Shipyard is estimated to have higher capacity compared to all of American shipyards combined.
The authors address the issues faced by the US industrial base, such as increasing weapon production, supply chain challenges, a lack of munition and no multiyear procurement. They also blame the “bureaucratic hurdles and inefficiencies in the Foreign Military Sales (FMS) programme, International Traffic in Arms Regulations (ITAR), and other policies and procedures” which hinders relations with allies and partners.
They estimate that the US has not properly invested the full power of its diplomatic connections, despite certain success like AUKUS (a trilateral security partnership for the Indo-Pacific region between Australia, the United Kingdom, and the United States). They comment that “co-development, co-production, co-sustainment” are under-developed with allies, thus isolating the US defence industrial base.
The origin of these challenges lies in the sheer size of the US defence industrial base and the diversity of actors involved in it, such as “the DOD, Department of State, Department of Commerce, Department of the Treasury, Congress, the private sector, and other organisations.” All of them have different perspectives and interests, which makes it difficult to steer the ship in one direction. The authors also blame the risk averse attitude of the legislative and executive branches, which prefer to avoid sharing sensitive technologies even with allies. The report also blames the bad image suffered by the defence industry, with its revitalisation seen as funding “greedy executives engaged in waste, fraud, and abuse.”
The authors advocate for a resolute White House–led initiative to revitalise the defence industry. They recommend to diversify the supplier base and to smooth the technology transfer process to allies.
In March, the Centre for Strategic and International Studies organised an event hosting Hugh Jeffrey, Deputy Secretary of Strategy, Policy, and Industry at the Australian Department of Defence. The guest stressed that the US has to go further in its industrial and military partnership with Australia, in a context of rising aggressive postures in the South China Sea. AUKUS – and especially its second pillar focused on emerging technologies – seems to be the right framework to raise the defence-industrial game in the region. To say the least, he wasn’t barking up the wrong tree…
Written by ADIT – The Bulletin and republished with permission.
