Summary and Key Points: Top U.S. military commanders express urgent concern over rapidly expanding Russian and Chinese military-industrial capabilities. Russia, despite heavy losses in Ukraine, is rebuilding combat systems swiftly, outproducing Western arsenals significantly.
-Concurrently, China’s naval expansion far outpaces U.S. capabilities, boasting vastly superior shipbuilding infrastructure.
-Both nations have harnessed economies on wartime footing, vastly increasing defense budgets and military production capacity.
-Simultaneously, Iran and North Korea bolster military supplies, heightening strategic worries.
-With America’s defense spending declining and its military-industrial base needing rejuvenation, U.S. leaders seek urgent bipartisan investment to enhance military readiness, modernize capabilities, and maintain deterrence against growing threats from powerful adversaries.
America Falling Behind? How Russia and China Are Outproducing U.S. Defense
Washington has been put on notice as America’s top military commanders for Europe and Asia are ringing the alarm bells with eerily similar themes confronting both gentlemen.
Russian ground forces in Ukraine have lost “an estimated 3,000 tanks, 9,000 armored vehicles, 13,000 artillery systems, and over 400 air defense systems in the past year—but is on pace to replace them all.”
Mother Russia is not just reconstituting and growing its active duty forces but also building combat vehicles and munitions at “an unprecedented pace,” according to the testimony of the U.S. military’s European command chief, General Christopher Cavoli, before Congress.
The Army general outlined Russia’s methodical nationwide expansion of military industrial production through the opening of new manufacturing facilities and the conversion of commercial production lines for military purposes. The result is a reinvigorated Russian defense industrial base that is expected to roll out 1,500 tanks, 3,000 armored vehicles, and 200 Iskander ballistic and cruise missiles this year. By comparison, the U.S. constructs just 135 tanks per year and no longer builds new Bradley Fighting Vehicles.
Beyond equipment, Russia has vastly expanded its munitions production. The U.S. European Command estimates Russia can produce 250,000 artillery shells per month, which puts it on track to build a stockpile three times greater than the U.S. and Europe combined.
How is Putin achieving all this in short order? According to Cavoli, Russia’s economy is on a “war footing” and “will remain so for the foreseeable future.”
The Kremlin has “established economic policies to restructure its financial institutions and defense industry.” This past autumn, Russia announced a 25 percent increase in defense spending, representing over 6 percent of its Gross Domestic Product (GDP). By some estimates, this means Russia is spending more on its military than all of Europe combined.
This is the fourth straight year Russia has raised defense spending to fund its war in Ukraine, expand its active forces, and resource long-term military plans.
Russia’s military is also busy implementing rapid cycles of tech adaptation while developing new capabilities to accelerate force modernization. Russian forces have employed new, domestically produced electronic countermeasures against Ukrainian jamming technology to improve strike efficacy. Meanwhile, Russia’s army is integrating reconnaissance and one-way attack drones into their battlefield offensives to great success.
Russia’s rapid munitions production trajectory is worrisome on its own but even more troubling given what the Pentagon’s Indo-Pacific command chief warned late last year was his concern about dwindling stocks of precision weapons and missiles. Calling China the “most capable potential adversary in the world,” Admiral Samuel Paparo urged straight talk and highlighted the worrisome lack of American military magazine depth.
While Beijing has thus far avoided becoming entangled in a hot war like Moscow, China’s industry is ready to support war if needed. China has been investing heavily into its shipbuilding industry with tangible benefits.
Intelligence estimates indicate that China now has 200 times the shipbuilding capacity of the U.S.—China can now build more warships in a month than the U.S. can in a year. China’s robust dual-use maritime industry is primed to build and repair ships at a wartime tempo, while the U.S. industry is in decline. In a drawn-out conflict, China would have the clear advantage in building, repairing, and maintaining warships at sea.
Shipbuilding is only one area where China has started to pull ahead of the U.S. in national security. China now fields not only the world’s largest navy, but also the world’s largest army, air force, and strategic rocket force. Beijing’s strategy of military-civil fusion has guaranteed that China’s industries are subservient and available in dual-use capacity for military use.
Similarly, Beijing has accomplished this by supplying its military with year-after-year of real budgetary growth. Over the past 28 years, China’s defense budget has seen a consistent average increase of about 9 percent annually. Deeper analysis shows China’s true military spending is far higher than reported. AEI estimates it reached at least $711 billion in 2022, or 96 percent of the Pentagon’s budget that year.
Between the growing military might of Russia and China, no combatant commander is resting easy these days. But the buildup doesn’t stop there. Iran has dramatically increased drone and missile production, supplying Russia with thousands of systems while scaling its own capabilities for regional power projection. North Korea is now a critical supplier of artillery to Moscow, drawing from deep stockpiles and revitalized factories long-geared for war. These partnerships are accelerating the military-industrial expansion of each regime, forming a resilient Axis of Arms Production that threatens to outpace U.S. and allied arsenals.
Russian Artillery 2S35 Koalitsiya-SV.
The U.S. defense budget fell in real terms last year and represents just three percent of our economy, the lowest proportion since the end of the Cold War. The Pentagon has said the effort to reinvigorate America’s shipbuilding, aerospace, and defense industrial base has only just begun and will take years to correct what took decades of underinvestment to manifest.
There is no escaping the fact that more money is required to strengthen and broaden American industry, which is one reason why Congress is trying to pass a financial shot in the defense arm through a budget reconciliation bill. The multiyear funds are intended to bolster ten lines of effort, including shipbuilding, Golden Dome, munitions, Air Force inventories, space assets, additional investments in the Indo-Pacific region, innovation at scale, and more funds for the border and defense audit.
M109 firing. Image Credit: Creative Commons.
Similarly, the Secretary of Defense has been scrubbing defense plans in order to reinvest in 17 capability areas spanning from the nuclear triad to missile defense, one-way attack and autonomous drones and collaborative combat aircraft, munitions, shipbuilding, and health care. This effort tracks with the unfunded priorities list for Indo-Pacific Command, which includes requests for precision strike stand-off weapons and missiles, military construction, a variety of maritime mines, space sensors, undersea surveillance systems, and much more.
The good news is that both the legislative and executive branches agree: the U.S. must invest in targeted military capabilities to get results now. There is bipartisan recognition that we need to bolster deterrence, modernize the armed forces, and rebuild the workforce, facilities, and supply chains that underpin our defense industrial base. America’s adversaries aren’t waiting, and neither should we. These investments take years to deliver. The sooner Washington moves from plans to production, the sooner the military can rebuild its arsenal, restore deterrence, and ensure America is never outmatched.
About the Author: Mackenzie Eaglen
Now a 19FortyFive Contributing Editor, Mackenzie Eaglen is a senior fellow at the American Enterprise Institute (AEI), where she works on defense strategy, defense budgets, and military readiness. She is also a regular guest lecturer at universities, a member of the board of advisers of the Alexander Hamilton Society, and a member of the steering committee of the Leadership Council for Women in National Security.
