Currently in India on a three-day visit, US Secretary of State Hillary Clinton said on Saturday she was optimistic that a defense agreement between India and the US could soon be finalized. The “end-user monitoring pact,” as defense export controls are commonly known, will be essential for US defense contractors seeking to sell advanced weaponry to India. Once it is passed, US firms will be able to bid for a contract — one of the largest arms deals in the world, estimated to be worth US$10.4 billion — to provide India with 126 multi-role fighters as part of the Indian military’s US$30 billion, five-year modernization plan. Russia, France and Sweden, as well as the European consortium behind the Eurofighter Typhoon, are also in the race. Two US firms, Lockheed Martin Corp and Boeing Co, stand to gain from the pact.
Given the strategic competition that has been developing between India and China, compounded by the latter’s perennial fear of encirclement, news of the coming deal will exacerbate apprehensions in Beijing. Ironically, China’s ally and main source of weapons, Russia, could be contributing to that sense of vulnerability should Moscow win the contract with its MiG-35, though the unease would probably be worse if US firms landed the deal. Although in recent years Beijing and New Delhi have settled a number of territorial disputes, a sense of insecurity and mistrust continues to characterize relations between the two rising Asian giants. Part of India’s drive for modernization is also fueled by fears and the many unknowns surrounding China’s “rise,” as a recent article in Indian Defense Review, which claimed China could attack India by 2012, indicates. Meanwhile, with India firmly in the US sphere of influence and increasingly seen as a counterbalance to China, it would not be surprising if Beijing increased the rhetoric as the sale approaches, or used the modernization of India’s military, as well as US-Indian cooperation on nuclear energy (an agreement expected to be signed by Clinton during her visit), as an argument for further investment in its military.
Whether China represents a threat to India is highly in doubt, but in the increasingly realist world of Asian relations, such fears are used by governments, defense departments and arms dealers to justify heavy investment.
One potential victim of this reality is Taiwan, which continues to underinvest in its defense, a trend that has accelerated under the presidency of Ma Ying-jeou (馬英九). The more China feels it is being encircled and the more insecure it becomes, the higher will be its investment in its military, both in terms of modernization and real numbers (i.e., Order of Battle). The implications of this are that even if China’s military development is geared toward India, Japan or the US, part of the growing arsenal will have applications for a Taiwan contingency, not to mention the impact the perception of encirclement would have on Chinese nationalism and its effect on decisionmaking.
Arms races are never good news, as they exacerbate tensions, increase the likelihood of error and ultimately aggravate the cost of war. If the modernization of India’s military prompted more defense expenditure in China, we can expect Japan would follow suit, thus creating a feedback loop similar to the one that made the Cold War such a threat to the human race. An accelerating arms race in Asia would be even worse news for Taiwan, for despite Chinese unease vis-à-vis external opponents, the principal objective of its military remains the tract of land it claims at its own, a mere 140km across the Taiwan Strait. In such a scenario, either Taiwan would maintain defense spending at the same level, meaning that with every year that passes the balance of power in the Taiwan Strait would further tilt in Beijing’s favor, or it, too, would join the arms race bandwagon and thereby make its own contribution to China’s military drive.
See also: Japan's 2009 Defense White Paper.