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Seth Jones, president of the Defense and Security Department at the Center for Strategic and International Studies (CSIS) and a former senior official in the U.S. Department of Defense, argues that each of the components of the U.S. defense base, including the Oval Office, Congress, and the private sector, is unprepared for the mounting China threat. His March report on the topic, “Rebuilding the Arsenal of Democracy,” warns that without major changes, “the United States risks weakening deterrence and undermining its warfighting capabilities against China and other competitors.” In the following interview, which has been edited and condensed, we discussed how China is catching up to the United States and whether both sides are gearing toward war.

Q: Your report takes its name from a speech U.S. President Franklin Delano Roosevelt gave in 1940, one year before the Pearl Harbor attack. The United States hadn’t yet entered World War II, but Roosevelt urged the country to focus on defense as if it was at war. Why do you view that moment as analogous to now? 

A: At the time that Roosevelt gave his speech on the arsenal of democracy, the U.S. industrial base was not in great shape. In the past up to that point, U.S. presidents had generally slashed the defense industrial base, if not eliminated it, after major wars. So there was not a lot for the U.S. to work with. 

The second is, the U.S. was not at war at that point. It was building capacity in some cases to provide to allies and partners like the British, but also in case the U.S. needed it to further strengthen deterrence or to fight if it had to. If you look at Roosevelt’s speech, he specifically focuses on bringing the U.S.’s defense industrial base up to speed, focusing on plants and managers and workers, trying to limit regulation of the industry and maximize production and even innovation. In that sense, there are some useful takeaways from that period, even if in some ways it’s obviously different from today. 

What are some of the largest problems currently facing the U.S. defense industrial base? Are they similar to those problems Roosevelt was talking about?

One similarity is that there was a significant regulatory environment that was in place in the late 1940s. It came out of the New Deal and made it very difficult for companies in the private sector to contract quickly with the U.S. Department of Defense. So it was slow and very bureaucratic. One of the things that Roosevelt had to do in that 1939-40 period was to find ways to cut through the slowness of bureaucracy. He created a National Defense Advisory Committee and then also eventually a War Production Board in part to do that. 

There are some similarities today. The U.S. defense industrial base is operating largely as it was in that late 1930s period, which is on a peacetime footing, where you do see a lot more regulation. You see a focus on cutting costs and on protecting U.S. technology, so it can’t get in the hands of adversaries. There’s a very bureaucratic process involved in the research, development, and production of defense equipment. 

What Roosevelt had to do is shift the industrial base to something closer to a wartime environment. The U.S. has not really made that decision at this point, even though there are active wars in Ukraine and in the Middle East, where the U.S. has also gotten involved in air defense in the Red Sea. And obviously there is tension and a strong desire to strengthen deterrence in areas like the Taiwan Strait, and the South China Sea, and the Senkakus. 

An overarching recommendation that the report has is for the U.S. to switch from its peacetime to a wartime footing. But the U.S. is not currently at war. Why should it switch now? 

Wartime does not necessarily mean that the U.S. has to be fighting a war. Wartime may very well mean that the U.S. needs to strengthen deterrence so it doesn’t have to fight. 

It is currently a wartime environment, in part because there is growing risk of tension and growing risk of conflict with the Chinese. There’s U.S. aid to a partner in Ukraine, Israel and other partners that are at war right now. So it is an environment where the U.S. is providing assistance to allies and partners that are at war, and there is a growing risk of war [involving the United States] and a need for the U.S. to deter that. 

Do you worry that if the U.S. makes that switch to a wartime footing, China will perceive it as a threat and strengthen its own wartime footing? 

I worry more that a U.S. failure to strengthen its deterrence capabilities will provide an opportunity for China to take action in various locations. There is always a possibility that strengthening the industrial base does trigger a response on the other side. But I think the reality is if the U.S. is able to build its capabilities and continue to have an open relationship with, in this case, the Chinese, then it will strengthen deterrence, not weaken it.

I don’t think either Washington or Beijing wants to fight a war against another nuclear power. So, no, the more serious concern is if the U.S. were to fail to increase its capabilities in, say, long-range anti-ship missiles. And the signal to the Chinese would be that they could successfully conduct an amphibious invasion of [Taiwan]. 

Recent U.S. leaders have tried to pivot to Asia, but problems in the Middle East and Europe keep drawing them back in. How can America make that decisive break to prioritize the China threat, and should it make that break? 

I don’t think it’s an either/or. I see a Russian military that is fighting a war with aid from Chinese systems in a range of different categories, Iranian systems, including drones and artillery, and then North Korean systems, including potentially troops as well. I see a lot of overlap in theaters. I don’t think the U.S. is in a position where it should focus on just one area.

The U.S. has to do a couple of things. First, it has to build capabilities to deter, and if deterrence fails, to fight a war in the Indo-Pacific. And there are some very specific types of systems that are important. So think, for example, of Virginia and Columbia-class submarines. Those become really important. A lot of autonomous systems that can be used either subsurface, surface, or even unmanned aerial systems are important. Long-range strike capability is important too, because China is building its own. Those become important in a war that would be both primarily air and sea. And again, the issue is not building an industrial base to fight a war. It’s to deter an actor from conducting an action. 

The U.S. should be significantly increasing the surge capability of every single air-defense capability it has. That includes THAAD and that includes Patriots, because they can be used in multiple theaters. 

The reality is that China is building a defense industrial base that is on a wartime footing, meaning it is preparing for the possibility of fighting a great power war against not just anybody, but the United States. 

Deterrence is critical in the Indo-Pacific in a couple of key areas. Most important, probably, is deterring a Chinese invasion of Taiwan and continuing to encourage the differences to be resolved through peaceful means and negotiations. 

Donald Trump has cast doubt on whether he would commit U.S. forces to defending Taiwan. Should the United States still spend this money to rebuild and revamp its defense industrial base if it is not prepared to go to war over Taiwan?

It’s unclear what a future U.S. administration would do about defending Taiwan, in part since it would depend on the specific context at the time. The reality is that China is building a defense industrial base that is on a wartime footing, meaning it is preparing for the possibility of fighting a great power war against not just anybody, but the United States. That doesn’t mean that war is imminent or that war is even highly likely. It means that they’re preparing for that. 

If you look at the Cold War, it was a 50-year period that transpired over multiple Republican and Democratic administrations. So this transcends any one administration, whether it’s Trump or anyone else. Chinese capabilities are going to be relevant in the next administration. If any American president is serious about deterring a major war, it needs an industrial base to do that. 

China’s defense spending is growing at a higher rate than the United States. You write that a decade ago, no Chinese firm cracked the world’s top 100 defense companies, and now there are four in the top 10. How did China engineer this turnaround?

One of the advantages that a state-run process with state-owned enterprises has is that it can direct resources to conduct certain types of actions. China under Xi Jinping has directed money to build a range of different capabilities in the major domains of warfare: towards building ships, aircraft carriers, a range of surface vessels, and submarines in the naval arena; in the air dimension, towards fourth and fifth generation aircraft, and also missiles; ground-based systems; space; cyber; and nuclear capabilities. 

China has focused its research, development, and production capacity on developing an industrial base that can equip its military to deter, and if deterrence fails, fight a major power war. 

Spending is one thing, but you also cite a U.S. official who says it takes China seven years to deliver “operational capacity” versus 16 years for the United States. Why is China so much faster? 

What we’ve seen the Chinese do is conduct research, development, and production on a range of different weapons systems and essentially shrink the timeline for making those systems operational. The challenge for the U.S. in some ways is the regulatory environment. The bureaucracy and regulation right now in the U.S. acquisitions and contracting process have lengthened the timeline for how long it takes on average to get some of the complicated weapon systems out. 

There should be a component of contracts with defense companies right now that allow them to spend money on surge capability. So building additional plants, stockpiling key supplies, like energetics or solid rocket motors that would be useful if they were asked to surge in areas. 

When it comes to the regulation of technology transfers, the U.S. can make some judgment calls. Historically, it has allowed more technology transfers to Canada. There’s been a recognition that the U.S. needs to take these kinds of actions with Australia and the United Kingdom as part of the AUKUS agreement. I would broaden it a little bit more to include the South Koreans and the Japanese in the Pacific, and probably a number of other European countries. 

If you look at, say, the U.S. maritime industrial base, there’s a lot of legislation in place, including the Jones Act and other laws that make it very difficult for the U.S. to cooperate in the defense industrial base with some allies that have very good shipbuilding capability, especially the Japanese and the South Koreans. Yet it is impossible for us to leverage the capabilities because of laws that are in place. 

Are there other changes that the U.S. should look to make with its allies in Asia? 

There should be a much stronger relationship with Australia, South Korea, Japan, and other Asian countries on identifying key supply chain vulnerabilities in both defense and broader national security and finding ways to leverage those countries. China dominates the advanced battery supply chain across the globe. Examples of that include lithium hydroxide, electrolytes, lithium carbonate, anodes, cathodes. There is a growing need to find other production areas for getting access to some of those materials.

China has no recent history of combat. Just having equipment, weapons systems, platforms, emerging technology, and not having a military that has used them, makes it difficult to know how well you’re going to do in a combat environment.

If you look at raw materials in the defense sector, so iron and ferroalloy materials — those are raw materials like vanadium — or non-ferrous metals like gallium or germanium or antimony, or industrial minerals like graphite and fluorite, China controls or partially controls all of them. They could potentially be cut off in a conflict. I’d like to see closer partnership on identifying secondary and tertiary sources for a lot of those materials so that the U.S. has a capacity to surge if it needs to. 

Antimony, for example, is used in defense equipment, night-vision goggles, ammunition, explosive formulations, infrared sensors, and semiconductors. So a lack of access to that would be deeply problematic for a protracted conflict. 

Should the United States create a strategic stockpile of critical minerals or related goods? 

Probably. I think there would have to be greater analysis on which minerals and materials should be stockpiled and how much has to be the U.S. stockpiling or how much can be a combination of U.S. and allied partners. 

How big is this risk if the U.S. doesn’t have access to these raw materials?

Countries, including the U.S., may find substitutes if they can’t access what they need. A lot of it would depend on which weapon system we are talking about, what is the workaround solution. But the big point here is that the U.S. really should limit the vulnerability of access to a range of these components and materials within the supply chain as much as it can now. 

It’s also worth noting that there are vulnerabilities on the Chinese side, like access to cobalt, chromium, beryllium, lithium, platinum, boron, or zirconium. So part of this is not just finding access to materials but also potentially finding ways that you limit Chinese access to some raw materials.

Both sides have supply chain vulnerabilities, but how else do the Chinese and U.S. defense bases stack up overall?

The U.S. has very strong capabilities in its naval assets, submarines, surface vessels, aircraft carriers, fifth-generation aircraft, strategic bombers, and missile capabilities, including nuclear weapons. The U.S. has got space-based assets and strong cyber capabilities and obviously land-based systems. So the U.S. is a very competent military power with an industrial base for a peacetime environment. 

The Chinese are catching up. And when it comes to issues like surface combatants, the Chinese have caught up and in some cases have surpassed the United States. The Chinese have a much bigger capacity down the road to build ships. And the Chinese are catching up on aircraft, catching up on land systems. They have surpassed the U.S., and have for some time, on the number of active ground forces. And the Chinese are catching up on their nuclear force.

The U.S. has a lot of advantages, but the gap is shrinking, and I think if the United States is not careful, the Chinese, as they have done in some areas, will surpass them in capabilities. Trendlines are not looking good right now. 

Can China take the same blueprint it has used to make its shipbuilding industry big, and to make its Navy formidable, and apply it to its other branches that lag the United States by wider margins? 

I think it’s trying. Now, again, there are some elements of creativity that go beyond just the platforms themselves. You can build ships, you can build aircraft, you can build submarines, but conducting effective anti-submarine warfare is difficult. It requires a range of technical, complicated activities. If you look at anti-submarine warfare, it involves highly variable acoustic properties. You’ve got to be able to detect, identify, track and engage submarines. It requires joint collection of intelligence across multiple platforms. 

…I do not think that the Chinese have the number globally that the U.S. does when you combine NATO countries and allies like Japan and South Korea and Australia. The Chinese cannot match that. 

Just because China may have platforms and systems doesn’t necessarily mean they can conduct some mission sets particularly well. The big picture is they’re trying in a range of areas. How well they’re going to be able to conduct missions will vary somewhat. 

What are some disadvantages you see China’s defense system having relative to the United States, and what are some other advantages you see it having?

There are a couple of weaknesses in China’s industrial base. One is they’re not very efficient. They’re good at mass and scale, because the government’s basically directing its industrial base to produce at certain levels. Where they’re not always effective is doing it efficiently and innovating, which is why the Chinese defense industrial base has had to rely on espionage. 

A second is corruption. Corruption has plagued China’s defense industrial base. The Chinese removed a number of notable defense industry officials in major corruption purges, so we’ve already seen corruption impact the defense industrial base.

A third area, which we talked about, is supply chain vulnerability. China has problems with high-end chips and integrated circuits. It’s working to try to ameliorate some of the concerns just like the U.S.

There is a fourth weakness, which is adverse demographics. China has an aging population and a low birth rate, which has raised questions about whether its workforce is really going to have enough people in its defense industrial base, including skilled personnel. 

And there’s one last issue to mention, which is that China has what some of its officials have called “peace disease.” China has no recent history of combat. Just having equipment, weapons systems, platforms, emerging technology, and not having a military that has used them, makes it difficult to know how well you’re going to do in a combat environment. The U.S. has had plenty of experience in these areas over the past couple of decades. 

China also has far fewer, if any, formal allies. 

We’ve seen over the last couple of years a warming of relations between the Chinese and the Russians, almost 50 separate meetings between Xi Jinping and Vladimir Putin. A warming of relations in some areas with the Iranians and North Koreans. And yet I do not think that the Chinese have the number globally that the U.S. does when you combine NATO countries and allies like Japan and South Korea and Australia. The Chinese cannot match that. 

What the Chinese at the moment have as advantages is the ability to produce weapons, mass, and scale quickly. They have reduced the timelines in their acquisition system. They also have a lot of capacity and have built a lot of capacity to produce if they need to surge. They’ve got capacity if they need to build more ships. They’ve got the space to do that. The U.S. does not.

Where China has a potential advantage as well, is in virtually any major conflict between the U.S. and China, whether it’s in the Taiwan Strait or in the South China Sea, or in the East China Sea, would likely be in China’s backyard. If you’re in the U.S., you’re talking about a huge expanse from the continental United States or from Hawaii or Guam or from U.S. bases, even in the Pacific, the U.S. logistics chain is a lot more vulnerable in the Pacific than China’s is. 

Is China’s defense base ready for conflict with the United States? 

I don’t think it is right now. There is a strong push to have an industrial base that is prepared to go to war in that 2027 time zone. The Chinese probably have another two to three years to go, but their industrial base is being prepared to fight a protracted war. 

And that would mean that the U.S. needs to make whatever changes pretty quickly because it can take a couple of years to see their effects?

The U.S. Navy is pushing for a revitalization of the maritime industrial base to 2027 for exactly the reason that we just talked about, because that is when the Chinese are pushing to have their industrial base prepared: to strengthen deterrence, and if deterrence fails, for warfighting.

Again, that doesn’t mean war is going to happen. That means the Navy has to be prepared if it does. 

And is the U.S. ready for conflict with China in 2027? 

There’s a real significant challenge with munitions. The U.S. has munition shortfalls in war games that we’ve done in a Taiwan Strait scenario. The United States runs out of its stockpile of long-range missiles, which would be really important in a war like that, in less than a week of conflict. The U.S. at this point, does not have sufficient munitions for a protracted war.

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