Assessing China's Military Strength - Firing Line

NEW YORK (TheStreet) -- Before the Secretary of Defense's visit to China this week, there were reports that China had entered initial operational capability, or IOC, with its DF-21D missile.

This weapon is a land-based ASBM (antiship ballistic missile) that was designed specifically to target U.S. aircraft carriers. Viewed as the point on the "tip of the spear," the typical aircraft carrier is crewed by close to 6,000 sailors and Marines and carries nearly 100 aircraft of varying capabilities.

Last week the world saw a glimpse of what appears to be a Chinese stealth fighter, called the J-20, conducting taxi tests. I provided some commentary to Fox News about the potential capabilities of this aircraft, which was obviously speculation because I only viewed photos. But I also made some assumptions about where the Chinese are with technology, which will be the most lethal weapon in the next conflict. These assumptions were based on several public events that occurred over the past five years.

Some viewers jumped on my comments, saying they were ill-informed because the aircraft hadn't flown yet and that the plane was months or years away from being able to fly.

It flew yesterday.

Four years ago the world was shocked to learn that the Chinese has successfully shot down an old weather satellite. At the time a Foreign Ministry spokesman said, "China has never, and will never, participate in any form of space arms race."

Right. and Iran only wants nuclear power for "peaceful purposes," one of them being turning Israel into a parking lot.

Also in 2007 we learned that computer specialists from the PLA (People's Liberation Army) hacked into the Pentagon's computer network. Nothing to see here.

They were numerous spying scandals during the Clinton administration (and other administrations) where technology and secrets ended up in Chinese hands.

On a completely unrelated note, in 1999 an F-117 Nighthawk stealth fighter was shot down by a Serbian SA-3 Goa missile. It was reported at the time that Serbian forces turned over the wreckage to Russian personnel. It doesn't take a rocket surgeon to deduce what happened after that.

This seemingly random list of events is what we know, meaning what has been reported publicly. Anyone of average intelligence can assume that much more has happened behind the scenes, and as a military man it's in my nature to assume the worst.

There are things going on 24/7/365 in air-conditioned windowless rooms around the world. If you can imagine something, you can bet someone somewhere is trying to build it, while at the same time someone else is trying to steal it. To pretend that China isn't actively developing high-tech weapons and other ways of crippling a potential adversary is simply foolish.

We can assume the J-20 is inferior to what is currently in the U.S. inventory, or we can assume it's at least equivalent to our best. What would you assume if your life was on the line fighting against this aircraft in combat? In combat, as in business or trading, you need to determine your risk tolerance. Is my opponent trying to make me think its "stuff" is better than mine in order to make me spend more money? Or is it actually better?

If the Chinese keep actively buying our debt they may not need to fire a shot.

We in the U.S. have to slug it out over buying or cutting one F-22 because of budgetary issues, while the Chinese don't have this problem. It must be nice to be our banker.

This is by no means a call to increase defense spending or to lead you to believe we're in serious trouble. We have the best, most highly trained fighting force in the world. My comments on the J-20 were labeled by some as "fear mongering" and an attempt to scare people into believing we need to spend more money. We don't.

I believe there is an excessive amount of waste in the DOD, especially in the procurement process. Cutting wasteful defense spending allows us to focus our efforts and capital on systems that are needed in today's high tech environment.

Secretary Gates has done an excellent job in targeting waste, and the DOD is one of the few federal agencies actively looking to cut costs. We don't need to spend more money on defense, we need to cut waste and spend what is actually required to defend our nation. We need to focus our energy on determining what is required to defend our nation. Is it guys in caves who want to kill us or emerging super powers? Is it both? Could we make peace and "all get along," saving trillions of dollars around the world and focusing instead on eliminating hunger, disease and other preventable nightmares? That would be nice.

Firing line: Currently, military strategy is like "Spy versus Spy" in Mad magazine. We build X. They build Y to counter it. We build Z to counter their counter, and so on. Yeah, I agree that doesn't make sense, but until we can "all get along," it's the nature of humans. We need to decide in this tight economic environment what is absolutely required to defend the nation and reduce wasteful spending.

--Written by Matthew Buckley in Boca Raton, Fla.

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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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