American Shipbuilding Association

DOD Releases Annual Report on China

In late July, the Department of Defense finally released its much anticipated Annual Report to Congress on the Military Power of the People’s Republic of China.  This report was originally scheduled for release in April/May of this year, but was delayed due to disagreement within Departments of the Executive Branch as to the purported “bluntness” of the original report.  The result is a watered-down version compared to past reports on China issued by DOD, particularly pertaining to the build-up of China’s naval fleet which has been widely publicized in the past year.  The public edition of the report fails to “connect the dots” of China’s build-up of strategic networks along major sea lanes of commerce and build-up of a naval fleet that could control these sea lanes relatively unopposed.  

According to the report, the United States identifies China as presently having 64 major surface combatants, around 55 attack submarines, and 40 medium and heavy amphibious lift ships.   Included in the highlights of the report:

-        China has deployed its first two Russian made SOVREMENNYY-class guided missile destroyers; with two more under contract.  These ships, dubbed the ‘carrier killers’, are fitted with advanced anti-ship cruise missiles and ship borne air defense systems.

-        The country is acquiring eight additional KILO-class diesel electric submarines from Russia.  These submarines will be equipped with advanced anti-ship cruise missiles and torpedoes.

-        The SONG-class diesel electric submarine has entered serial production in China.  This submarine is designed to carry anti-ship cruise missiles, capable of submerged launch.

-        Last year China launched its newest diesel electric submarine, the YUAN-class.

-        China’s newest nuclear attack submarine, Type-093, will enter service this year. 

While arguably, these vessels, produced domestically and purchased from Russia (ships that were designed specifically to counter the United States), are not as capable as the ships in the U.S. naval fleet, the report fails to point out that the Chinese are focusing on volume of production and are concentrating on building a force that will overwhelm any opponent in sheer numbers, if not capability.  Nevertheless, the technical capability of China’s naval fleet continues to be enhanced at a rapid pace.    

One hindrance to China’s military development has been the reliance on foreign suppliers for key technologies.  Presently, China has the capability to produce 40% of critical ship systems and components domestically, but is striving for 100% self-sufficiency.  In a Lloyd’s List International article excerpted in the May 2005 issue of American Shipbuilder, the President of the China Association of National Shipbuilding Industry was quoted as saying that “the government should plan in entirety for this [shipbuilding] industry, and create some enterprises which are able to innovate and compete with international rivals.”  While Russia has been the primary contributor to the rise of China’s military industrial complex, the rest of the world has indirectly, or intentionally augmented this expansion.  Though an arms embargo imposed after China’s use of force on protestors in 1989 has prevented the direct sale of military technology, the sale of “dual use” technology – technology that can have both a commercial or military application - has continued unabated.  Additionally, the Chinese continue to aggressively lobby the European Union to lift this prohibition on military sales.

The analysis by DOD only makes brief mention to China’s meteoric rise in the commercial shipbuilding industry in the last two decades.  However, the rapid ascension in commercial shipbuilding provides a probable blueprint for the naval shipbuilding industry.  China has gone from occupying virtually zero commercial shipbuilding market share at the start of the 1990’s to 18% today.  China is expected to occupy 25% of the global market share by 2010, and with construction already underway on what will be the world’s largest shipyard, China will eventually become the world’s dominant shipbuilder.  While the focus has been on commercial  shipbuilding, resources are steadily being devoted more and more to naval shipbuilding.  Conversely, China could also accelerate military development further by using civilian capacity for the construction of naval ships.    

The DOD report does make the admission that the United States does not know all it should about China’s military size and defense expenditures, either due to secrecy on the part of the Chinese or our own lack of detailed intelligence.  The Chinese are reportedly displeased with the content of the DOD report, stating that it characterizes them as building a military primarily for aggressive purposes.  However, the report notes that “China does not face a direct threat from another nation.  Yet, it continues to invest heavily in its military, particularly in programs designed to improve power projection.”  This is supported by several statements from Chinese government and military officials alluding that the only way to become a world power and remain there is to have a strong military, and primarily, control of the seas.

Skeptics may argue that China will not act in any way that would impair its trade relations with other nations, or is decades behind U.S. military technology.  However, there is simply too little the U.S. knows about China’s plans and intentions to willfully ignore or discount the military build-up.  America has a limited opportunity to evaluate and respond to China’s explosive economic and military development.  As this country allows the U.S. naval fleet to decline and the shipbuilding industry atrophy, the United States is most likely going to find that China has the financial and military might to dictate the terms of a new world order in this decade.  Finding ourselves powerless, the Nation will be left to collectively wonder - when did it happen, and why didn’t we do anything to stop it?

Become a Sea Power Ambassador

Protection of the United States - Support of U.S. Armed Forces abroad - The rapid rise of China’s naval fleet - These are just a few of the reasons why you should be a Sea Power Ambassador – a citizen grassroots campaign to educate Americans and political leaders on the need for a strong naval fleet. 

The U.S. naval fleet presently numbers only 286 ships.  This is the smallest naval fleet since 1917.  This ever shrinking fleet coincides with a Navy operating tempo that has increased exponentially.  You can help ensure the decision makers in the country know that a robust Navy is vital to national security.  Join the Sea Power Ambassador Program today! 

Registration is easy.  Go to www.seapowerambassador.org and fill out the electronic form.  Once registered, you will receive periodic new releases via email discussing the state of the U.S. Navy and shipbuilding industry, reports monitoring the steady rise of the Chinese fleet, and alerts on decisions being made by the President and Congress that impact the Navy.  You will also have the opportunity to voice your opinions to your Senators and Representatives. 

Be informed!  Make a difference!  Join today!

www.seapowerambassador.org

Senators Champion Increase in Naval Shipbuilding

Though failing to complete work on the FY 2006 Defense Authorization Bill before leaving for the August recess, two prominent members of the Senate advocated their ardent support for a larger Navy, and a more robust U.S. shipbuilding industry.  During floor debate of the bill, Senate Armed Services Committee (SASC) Chairman, Senator John Warner (R-VA) voiced his grave concern over the decline in the number of new ships that are being procured by the Navy.  In remarks made on July 20th, Warner stated:

We [the Senate Armed Services Committee] do not believe the current or projected level of funding for shipbuilding is adequate to build the numbers of ships our Navy needs to perform and continue to perform its global missions… It takes a decade or more from the concept of a new ship through the years to prepare the plans to test the ship, to test the system, and to finally slip it down the ways of the shipyard, and then for a period of time to further test it before it gains its ability to join the fleet.  That is a long time. 

In many respects that was as true years ago as it is today, so we must learn the lesson that it takes time to maintain our Navy.  As a maritime nation, that presence of our Navy is often displayed in the form, not only of our ships, not only through ensuring open sea lanes of communication and training in international waters, but also the inherent diplomatic mission of visiting our ports and proudly showing Old Glory…

I believe the shipbuilding budget must be reviewed by the Administration as a matter of utmost urgency in the coming year…

Senator Susan Collins (R-ME), also a member of the SASC, echoed her support to ensure adequate shipbuilding budgets and increased procurement.  In comments made on July 21st,  Senator Collins noting the concern over the increasing cost of naval ships stated:

… one of the primary drivers of cost growth in shipbuilding is instability.  This lack of predictability in shipbuilding funding only increases the cost to our Nation’s shipbuilders because they cannot effectively and efficiently plan their workload.  And, of course, ultimately, it increases the cost to the American taxpayer. 

The Congress and the Administration should be trying to minimize shipbuilding costs by ensuring a predictable, steadier, year to year level of funding.  Regrettably, that has not been done…   It is crucial that we not only have the most capable fleet but also a sufficient number of ships – and I add, shipbuilders – to meet our national security requirements…

The Senate will resume consideration of the FY 2006 Defense Authorization bill when it returns after Labor Day. 

Industry News

Navy Awards $109.8M for LHA(R) Program

In late July, the Navy awarded to Northrop Grumman Ship Systems (NGSS), Ingalls Operation,  a contract valued at $109.8 million for advanced planning, long-lead materials, and systems engineering for the LHA(R) amphibious assault ship program.  This contract award is the first LHA(R) construction related contract award, and will permit Ingalls to begin engineering and construction planning, in addition to purchasing long-lead materials.  If all contract options are exercised, the total contract value will be $264 million. 

The LHA(R) is intended to replace the LHA 1 class of amphibious assault ships.  A variant of the LHD 8, LHA(R) will be longer and wider, with increased aviation capabilities, vehicle lift, cargo magazine capacity, better survivability, and increased habitability standards. 

Well Said!

“Always remember, the Constitution of the United States directs this Congress to raise its armies, but ‘maintain’ a Navy.  The Founding Fathers were specific in that direction to the Congress and it is our duty to fulfill it.  They had the foresight to realize that a Navy cannot be quickly constituted or reconstituted.”

Senator John Warner (R-VA)

July 20, 2005