By Zhang Jiadong

Considering the protracted Russia-Ukraine conflict, the need to contain China, and many other factors, the US and its NATO allies are talking more about rebuilding the defense industry.

The US military industry shot up during WWII and the Cold War. After the attack on Pearl Harbor in 1941, the US completed its wartime economic mobilization within half a year and turned a lot of civilian industrial enterprises into military enterprises, not only making itself the largest armory for the allied powers, but also debuting its military-industrial complexes . The US spent a colossal amount of money on military development during the Cold War, hitting 9.42% of GDP in 1967. Such a tremendous military expenditure nurtured a gigantic military industry, along with an equally gigantic, new type of interest group that has since held great sway over the country's economic and political circles.

After the end of the Cold War, countries all entered a peaceful state, and the share of America's military spending in GDP shrank, which naturally lent a blow to the military-industrial system. The sharp decrease in military equipment deals caused many American military-industrial enterprises to shift to the civilian track, with some going out of business.

In addition to the "challenge of peace", the US military-industrial system is also faced with the double whammy of globalization and the financialization of the American economy. For one thing, the globalization process has lengthened its manufacturing chain and made its military manufacturing more dependent on other countries. For another, the growing proportion of financial and virtual practices in American economy has pushed a major part of its manufacturing activities to other countries, and the military-industrial complex concept from the Cold War period is gradually replaced by the new concept of financial-military-industrial complex. Both changes have driven the low-value-added links on the military manufacturing chain to move beyond American borders and driven up the proportion of its international procurement.

As a result, the US has to import some raw materials and components from foreign countries, including China, while its military-industrial enterprises depend more heavily on the international market. The reduced military spending exposes those enterprises to the possibility of surplus capacity. In other words, the US military-industrial chain is seriously reliant on the international market both at the upstream and the downstream, getting on the path of internationalization just as other industries do.

This is actually a normal and inevitable result of the globalization process, but now Washington has another idea about its military industry. There are two reasons for this. First, the sustained tension in and deterioration of China-US relations has in a way ruined the mutual dependence between Chinese and American military industries. China used to be an important source of raw materials for America, but now the US doubts the reliability of this source. Second, the protracted Russia-Ukraine conflict, which is likely to prolong further, has created more-than-expected demand for military equipment.

America believes that the superior quality of high-tech weapon systems may be able to secure victories in local wars, but not enough to squash the quantitative advantage of a military power – America's imaginary enemy, and the US armed forces not only need to lead in quality, but in quantity as well. That has effected a change in the philosophy of military equipment development in the US or the entire Western bloc.

The breakout of the Russia-Ukraine conflict has given American military-industrial enterprises new hope, who, a US think tank estimated, have obtained nearly US$22 billion worth of arms deals from US partners from the breakout of the conflict to the end of last year. The production capacity of the enterprise that manufactures the HIMARS system has doubled.

America's renewed emphasis on military manufacturing isn't just an emergency response to the conflict between Moscow and Kyiv. It implies major strategic intentions on the US part. During the Ronald Reagan time, the US kicked Soviet Union out of the picture through an arms race. Many Americans believe increasing military expenditure is a more cost-effective way of dragging a strategic rival down than waging a war. This, however, will send shock waves through the strategic balance and peace in the post-Cold War era. There has long been a balance between the US and other major countries – the former excels in the quality of weapons but not in quantity. Under such a balance, neither side is overwhelming enough to wage a massive war, creating the possibility of a sort of "strategic mutual trust" among them.

If the US military is seeking to shore up its quantitative disadvantage while maintaining qualitative advantage, a more intense arms race will be on the horizon that will erode the already fragile balance among the major countries, increase the risk of war, and spell disaster for world peace and stability.

(The author is a professor at the Center for American Studies, Fudan University.)

Editor's note: Originally published on huanqiu.com, this article is translated from Chinese into English and edited by the China Military Online. The information and opinions in this article do not necessarily reflect the views of eng.chinamil.com.cn.