(November 4, 2009) Yale historian Paul Kennedy, in his “The Rise and Fall of Navies,” wrote, “Those faster-growing economies can afford both guns and butter.” China’s tremendous economic growth has been accompanied by a quantum leap in China’s naval build-up.

Today, more than 1,000 Chinese commercial ships and oil tankers are sailing through troubled waters every day, and China’s commercial sea-borne trade volumes have escalated dramatically. China’s commercial maritime interests exceeded $800 billion by the end of 2008, and more than 60 percent of its oil imports transported by sea.

As Chinese cargo ships and oil tankers are becoming all the time more vulnerable on the high seas, Beijing sees it as vital to safeguard China’s sea-lanes. Last week, the Chinese government vowed to make “all-out efforts” to rescue De Xin Hai, the Chinese ship hijacked by Somali pirates in the Indian Ocean northeast of the Seychelles.

What is perhaps more important, however, is Beijing’s political-strategic ambitions. Chinese rulers are good students of the late Chairman Mao, who once said, “Power of government comes out of the barrel of gun.” As Chinese rulers are becoming more confident and assertive, to modernize China’s People’s Liberation Army (PLA), especially the PLA Navy (PLAN), has become one of Beijing’s top priorities.

China’s defense spending has increased by an average of 16.2 percent a year since 1999. It now is the second-highest in the world. The PLA’s official military budget for 2009 is at $70 billion, but the U.S. published estimates show that China’s military spending as high as $150 billion. In its first annual report to Congress under the Obama administration, the Pentagon has charged China with hiding its real military spending and expressed concern over why China would increase its military expenditure with no apparent external threats. “China’s failure to be transparent about its rapidly growing military capabilities,” according to the report, “has created uncertainty and risks of miscalculation. Much uncertainty surrounds China’s future course, particularly regarding how its expanding military power might be used.”

A major factor that contributes to China’s rapidly growing military expenditure is Beijing’s long-harbored ambition of possessing a blue-water navy, not only to safeguard China’s commercial sea-lanes, but also to advance China’s off-shore territorial claims. Such considerations have ensured the PLAN to receive top priority in China’s military modernization, with a generous budgetary allocation estimated at more than 30 percent of the PLA’s total defense budget.

To build a blue water navy, no expense has been spared. Earlier this year, Chinese defense minister Liang Guanglie confirmed Beijing’s plan to build a new generation of large destroyers and aircraft carrier. From the Yellow Sea to the South China Sea, Chinese shipyards are running flat out. According to the U.S. Congressional Research Service, “By 2010 China’s submarine force will be nearly double the size of the U.S., and the entire Chinese naval fleet is projected to surpass the size of the U.S. fleet by 2015.”

Strategically, China’s leaders have long been saying that the Indian Ocean is not India’s Ocean. Beijing’s new “Pearl Necklace Strategy” is designed to put Chinese naval bases along the shores of the Indian Ocean, and the maritime routes to Malacca: Marao in the Maldives, Coco Island in Burma, Chittagong in Bangladesh and Gwadar in Pakistan. China also is creating coastal bases in Africa, now widely open to Chinese investment.

Beijing sees the Pacific to be the next major strategic contending field in coming decades. Here, China foresees two rivals: Japan and the United States. Beijing has already tested Tokyo’s readiness by repeated submarine incursions. PLAN vessels also are confronting U.S. Navy ships in the Pacific. The Chinese ships jostled with a U.S. Navy surveillance ship in the recent South China Sea confrontation sends a strong signal to countries in the region that they may no longer be able to depend on the U.S. in a conflict with China in the Pacific theater.

One hundred fifteen years ago, Qing Dynasty China’s shiny new armada, North Sea Fleet, was crushed by the Japanese Imperial Navy in the Battle of Yalu. The humiliating defeat accelerated the decline of China. Today, China is flexing its new naval muscle at sea. The Chinese naval build-up still is in its early stages, and it may be years before Beijing has a navy to match that of the U.S., but the trend is clear: Beijing is determined to challenge American hegemony on the high seas and to re-address the postwar balance of power in the Pacific and Indian Ocean.

Dr. Xiaoxiong Yi is a professor at Marietta College and director of the China Program.