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Just over a century ago, in the run-up to World War I, Britain and Germany were locked in a naval arms race. Inspired by the strategic thinking of U.S. Adm. Alfred Thayer Mahan, German Kaiser Wilhelm decided to build a huge battle fleet that could credibly challenge the dominant British on the high seas. He wanted both increased ship numbers, as well as the new “dreadnought” fast battleships. Both fleet size and technology drove the naval race. There are echoes of that competition today between the United States — the established global naval power — and China.

What are the key decisions coming in terms of the size of the U.S. fleet, its mixes of capability and readiness? How will those decisions be influenced by the rise of a true peer competitor over the coming decades?

Let’s start with what is officially known as the Chinese People’s Liberation Army Navy. It is currently optimized for regional sea control and power projection. However, what the Chinese see as their “region” is expanding and will soon encompass the Indian Ocean. Over the longer term, they envision fully global operations, similar to the U.S. Navy.

Today, the Chinese have only six nuclear-powered ballistic missile submarines, 10 nuclear-powered attack subs, two aircraft carriers and a single cruiser. The vast majority of their naval forces are optimized for working in littoral waters — those near a coast — and in the South China Sea: destroyers, frigates, corvettes and missile boats, alongside diesel submarines. China has more than 550 warships — far more than the U.S., although they aren’t nearly as individually capable. Still, as Soviet leader Joseph Stalin is said to have remarked, “quantity has a quality all its own.”

China is also rapidly adding what are known as “anti-access” capabilities designed to keep the U.S. at a significant distance from Chinese regional interests, principally in the South China Sea. The most notable are hypersonic cruise missiles that move at five to seven times the speed of sound; super-quiet diesel submarines; aviation drones for over-ocean surveillance; land-based attack aircraft designed to strike U.S. surface ships; and a satellite command-and-control network that can tie it all together. The idea is to make the waters of the South China Sea too dangerous for the U.S. to bring its vulnerable aircraft carriers to bear, and above all to protect vital supply lines for energy and raw materials from the Middle East and Africa.

To meet the growing Chinese challenge, the U.S. Navy began pursuing a detailed shipbuilding plan three years ago. It calls for 355 ships (up from the current 289) by 2034, a goal enshrined in law by the 2018 National Defense Authorization Act. This mix of existing ships and new construction will include 12 nuclear-powered aircraft carriers, 66 nuclear-powered attack submarines, 14 nuclear-powered ballistic missile submarines, and 100 conventionally powered cruisers and guided-missile destroyers.

At the moment, the recently submitted budget has insufficient funding to move toward the 355-ship goal. What makes it particularly challenging is the need to allocate money for not only the ships themselves, but the manning, maintenance and operations for such a robust force.

Two particular issues are central to the 355-ship debate in the U.S. The first is the absolute need for a new generation of ballistic-missile submarine, known as the Columbia Class and due to enter service in about a decade. This will preserve the seagoing leg of the strategic nuclear triad, which remains the most secure and least globally controversial of the three (the other two are long-range aircraft and land-based intercontinental missiles). Because these are very expensive ships, the cost will tend to crowd out other platforms, particularly other big ships, such as the larger amphibious vessels (which carry significant aviation capability, including F-35 strike aircraft and helicopters).

The second key issue is updating the navy’s Force Structure Assessment, the 2016 study that arrived at the mix of the proposed 355-ship fleet. A new version is due to come out this spring, and it is widely assumed that the mix of ships will change significantly from the original document — a rare occurrence for a conservative organization like the navy. Most likely, there will be less emphasis on large platforms (carriers, amphibious ships, cruisers) and increased emphasis on what is known as “distributed lethality”: smaller, offensively armed vessels that can be spread widely across a conflict area, complicating the enemy’s target-planning.

These might include a new class of frigate (small, fast, versatile vessels that are the “eyes of the fleet” in coastal waters); large unmanned surface vessels with long-range cruise and anti-air defense missiles that could be remotely controlled from manned platforms or from space; and underwater drones that could provide both surveillance and offensive capability.

I vividly recall working for the chief of naval operations (the service’s highest-ranking officer) as a strategic planner during the Cold War, when U.S. Secretary of the Navy John Lehman developed the 600-ship navy. That lofty goal was nearly achieved, peaking at 594 in 1987, before sharply declining after the end of the Cold War in 1989-1991.

For the new U.S. naval rival, the key lies not in the number of ships — the right answer will probably be around 390 over the long haul — but in the capability in each hull, the ingenuity to securely link them together, and reducing the number of sailors on each. There is still a need for the big nuclear aircraft carriers, with their powerful punch and ability to cover 1,200 km a day, but how we surround them with better-distributed, more lethal platforms will make all the difference in facing China’s growing fleet and global aspirations.

James Stavridis is a Bloomberg Opinion columnist. He is a retired U.S. Navy admiral.

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