What we REALLY need to understand is how much China is REALLY spending on their military. We can say that they can't catch up by spending $200
billion a year on their military, and that is DIRECT funding which seems fairly low for a country that has 4.33x the number of people than the US that
spent $681 billion, so 3.4x as much.
Now there are many factors that make distort these numbers drastically, in favor of the Chinese.
One is over-charging and wasteful government projects that end up with expensive white elephants, semi-useless platforms and even totally scrapped
multi billion (and tens/hundreds of billion dollar projects!). The no bids and outrageous charging for parts and equipment really puts a dent in that
$681 billion. The Chinese seem to have these things a little more under control than the US and it is due to the centralized form of government and
the control of various industries by the CCP. If a project "fails" in china, I suspect the CCP is going to extract their pound of flesh in utilizing
the tech in some other application, where in the US, much of that tech is proprietary knowledge of a single company (yeah, capitalism - but it does
have some excellent benefits socialism/communism certainly doesn't). Now that company may incorporate the new tech into another application, but not
necessarily. It can also sell the rights (again, costing another company MORE even though it's already been paid for by the US military - so the
military would end up paying 2x in the long run for the same tech).
The purchasing power parity (PPP) is almost 2:1, meaning a dollar goes 2x as far in China, and that is at a cash level.
Per capita income for china is ~$10,100 vs $62,500 which is a 6.2:1 ratio which means that a person would make A LOT less working in China doing the
same job. If an engineer is making $120K in the US, they might expect to make $20-30K in China. This allows for many more engineers/workers to be
hired for R&D, production, etc in that $200 billion. When coupled with the 2:1 PPP, this comes out to 8:1 to 12:1 disparity in spending, meaning that
$200 billion would be equivalent to $1.6-2.4 TRILLION in spending and if you factor in the other efficiencies described in the above paragraph
(basically getting more results per money spent), this number is even higher - to what degree, IDK.
Now we have to look at intellectual property theft, which puts the two countries on distinctively unequal footing. The theft of IP allows for much
less spending on R&D, again allowing that "$200 billion" to go MUCH further.
Finally there is the "subsidies" that are given to various industries such as steel, aluminum, titanium, production, electronics manufacturing,
chemical industry (explosives and such). IDK how their subsidies work, IIRC they don't pay a direct subsidy to these industries but give them in an
indirect form which is why calculating a real tariff for exports from China is difficult. They may provide subsidies in the form of providing
extremely low cost electricity (or oil/gas) or even builing power stations for manufacturing - or by doing the same for raw materials, especially
those that come from within the country (such as ores mined in China). This has a huge impact on how far their $200 billion will go as well.
We also don't know how much of a hidden tax is factored into companies that serve a dual role in manufacturing Chinese military components and
manufacturing products meant for their civilian marketplace and exports. This can work by making the products for the civilian market slightly more
expensive to produce than those for the military. If the company makes 1million products at $100 each for the civilian market, there may be a %10
hidden tax ("overhead costs..?") which would amount to $10million. Now the company could make the same item for the military, say 100,000 units and
that hidden tax would have paid for that entire production of that item - or maybe the make a better item that costs $200 each, so that would turn out
to cost them half the price.
These types of factors all come into play when looking at other countries military spending, and their spending has a direct impact on how willing
they are to be the "worlds workshop" b/c they get so many hidden benefits and even more if they are willing to be sneaky about it (I sure couldn't
imagine them being dishonest in any way....).
So I would like to see what this $200 billion actually buys when all the above factors are brought into consideration. I suspect that with everything
listed above a closer comparison would be that the US would have to spend $2-3trillion/yr to get the same output.
edit on 1 16 2019 by DigginFoTroof because: (no reason given)