How the U.S. became the biggest driver of China’s Military Build-up
Visitors stand in front of a J-20, China’s twin-engine all-weather stealth fighter.
By the end of 2024, China has continually demonstrated its growing military strength, from showcasing cutting-edge technologies at the Zhuhai Airshow to conducting test flights of next-generation aircraft and launching the Type 076 amphibious assault ship.
On December 27, China launched its first Type 076 amphibious assault ship, the Sichuan, in Shanghai.
Unsurprisingly, some critics have raised concerns, questioning whether this military spending might be better directed toward improving the lives of Chinese citizens rather than developing more weapons. There are even those who argue that war is too brutal a subject, suggesting that we should stop talking about it altogether. However, such perspectives may overlook a crucial reality: the foundation of everything—from economic growth to the daily lives of a nation’s people—is built upon its military strength. Here’s why:
First, history shows that the order of modern society has been shaped more by war than by industrial civilization. Take ancient China, for instance: the country once enjoyed a flourishing economy and extensive international trade. But its rapid decline can largely be attributed to military defeats, primarily caused by its outdated weaponry. As a result, China’s army of hundreds of thousands was easily defeated by Western forces, who numbered only in the thousands.
The last imperial dynasty in Chinese history, the Qing Dynasty, saw its military equipment fall behind. As a result, China continuously lost wars during this period and was forced to cede large territories to Western countries.
Second, the strength of the U.S. dollar is fundamentally tied to America’s military might. Today, the Chinese people work hard, dealing with environmental pollution and resource depletion, to produce vast quantities of goods. However, these products are often sold at very low prices to markets around the world, especially to the U.S. While China exports these cost-efficient goods, the U.S. doesn’t return the favor with equivalent products. Instead, it sends only U.S. dollars. In reality, the exchange rate between the U.S. dollar and the Chinese yuan is highly skewed, putting China at a significant disadvantage.
Despite the U.S. losing much of its manufacturing power, the U.S. dollar remains the world’s dominant currency. The reason for this lies not in American technology or manufacturing, but in the U.S.’s military strength. The world continues to use the U.S. dollar because it’s backed by the force of the U.S. military. As the world’s largest military power, the U.S. has the ability to act with impunity. But if America’s military power were to weaken, the dollar could lose its dominance just as quickly.
After the Gulf War, the U.S. significantly increased its intervention in global and regional affairs.
Third, it’s important to recognize that the U.S. has never been truly powerful because of its technology. In recent years, the U.S. has waged a tech war with China, particularly in the chip sector, where it has placed strict restrictions on China. Many people assume that the U.S. leads because of superior technology—but that assumption is simply incorrect.
Does the U.S. have its own EUV machines? Can it produce 5nm chips? The truth is, it can’t. These technologies are developed and owned by companies in other countries, like ASML.
In fact, over the past few years, the U.S. has been able to engage in a tech war with China, all thanks to its military power. Take the example of ASML: The U.S. has pressured the Dutch company to stop selling its EUV machines to China. But here’s the catch: China is ASML’s largest market, accounting for nearly half of its sales. While the Dutch government has resisted U.S. pressure several times, it ultimately couldn’t hold its ground. Why? Because the Netherlands, like many other countries, lacks significant military power. When the U.S. flexes its muscles, there’s little other nations can do but comply.
Because of its military might, the U.S. can do whatever it wants. Even though the U.S. no longer has a strong manufacturing base, it can still keep the exchange rate at 1:7. And even if the U.S. lacks certain technologies, it can block other nations from accessing them. All of this is made possible by its military power.
Therefore, China can’t simply expect the world to hand over resources and benefits. It’s naive to believe that strengthening manufacturing capabilities, working hard, or leading in technology will guarantee a better life for the people. That’s not how the world works. In fact, a single exchange rate can place you at a massive disadvantage.
China understands the consequences of falling behind militarily, which is why it’s so determined to build up its armed forces. This is not just about defense; it’s seen as the foundation of the people’s daily lives and the key to the country’s future economic prosperity.
