Active Denial: A Roadmap to a More Effective, Stabilizing, and Sustainable U.S. Defense Strategy in Asia

Preface

As relations between the United States and China deteriorate, chances of a military clash are only too real. Multiple factors, including Taiwan, could lead to a major escalatory spiral of conflict in Asia. Such an escalation is undesirable as, among other things, it would be a threat to the security and prosperity of the United States. 

This year-long study by three members of the Quincy Institute’s East Asia Program and seven external partners, spearheaded by former QI Research Fellow Rachel Esplin Odell, is a major undertaking to lay out a safer military strategy for the United States in Asia. The strategy, called Active Denial, lays out the military posture needed to reduce chances of escalation in the event of conflict, while ensuring that any Chinese military offensive cannot succeed. The strategy also has the additional benefit of yielding significant annual savings of roughly $75 billion (about 10 percent) by 2035 compared to the last Trump administration defense plan.

The Quincy Institute was founded in 2019 to advance policy-relevant scholarship to move U.S. foreign policy away from endless war and toward vigorous diplomacy, economic engagement, and the combating of existential threats such as climate change. The focus of this study was to evolve a shorter-term military strategy in Asia for the United States that lowers risk and makes for a more stable military balance. The research group did not aspire to address questions of grand strategy in the longer-term. Consequently, the report does not present a Restraint grand strategy towards China. Rather, it lays out a shorter-term military strategy aimed at reducing the risk of conflict in the region, which in turn can serve as a bridge toward a grand strategy of Restraint for Asia. 

Active Denial’s defense-centered approach reduces chances of escalation in any conflict, including nuclear escalation, while its focus on resilience ensures that the United States will prevail. The strategy challenges multiple assumptions currently rampant in Washington of relying primarily on offense and, as some have argued, maintaining or regaining U.S. military dominance in the region. It also emphasizes the importance of diplomatic tools in achieving a more stable Asia. 

By reducing the U.S. military footprint in Asia, especially Army and Marines ground forces, and eliminating vulnerable or superfluous platforms, active denial will significantly lower costs to the American taxpayer. By mitigating the security dilemma and reducing arms racing in the region, the strategy could foster mutually acceptable compromises in regional disputes and open the door for more inclusive cooperation involving the United States, China, and other Asian nations. In doing so, it can ensure the maintenance of hard-won peace in a region vital to America’s prosperity.

The recommendations of this study, if adopted by the United States, will reduce the risk of a major conflagration in Asia and contribute to stabilizing the currently fraught circumstances in the region. They ought to be taken to heart, and acted upon, in the national interest.

Sarang Shidore

Director of Studies

Trita Parsi

Executive Vice President

Authors

Rachel Esplin Odell, Project Director

Former Research Fellow, Quincy Institute¹

Eric Heginbotham, Director of Conventional Forces Working Group

Principal Research Scientist, MIT

John Culver

Former National Intelligence Officer for East Asia; retired CIA senior analyst

Eric Gomez, Director of Nuclear Issues Working Group

Director of Defense Policy, Cato Institute

Brian Killough

Major General, U.S. Air Force (ret.); Former Deputy Commander, Pacific Air Forces

Steven Kosiak, Budget Assessment Lead

Former Associate Director for Defense and International Affairs, Office of Management and Budget

Jessica J. Lee

Senior Research Fellow, Quincy Institute

Brad Martin

Senior Policy Researcher, RAND Corporation

Mike Mochizuki, Director of Allies and Partners Working Group

Professor, George Washington University

Michael Swaine, Director of China Working Group

Director of the East Asia Program, Quincy Institute

Full biographies of all report authors are available at the end of the report.

The Need for a New U.S. Defense Strategy in Asia

Rachel Esplin Odell was the lead author of this chapter, with contributions from other report authors.

Introduction

A shifting regional military balance

The past three decades have witnessed a steady transformation in the military balance in Asia. As China’s military capabilities have expanded, the United States’ longstanding military dominance in the Western Pacific has eroded significantly. This trend has occurred against the backdrop of the heavy fiscal burden imposed by high U.S. defense spending during two decades of war in the Middle East and Central Asia, as well as the more fundamental difficulty of projecting American military power across the vast expanses of the Pacific Ocean. Taken together, these factors make it increasingly difficult for the United States to maintain a post–Cold War approach to deterrence designed to dominate opponents from the outset of hostilities through offensive action. 

Not only are U.S. efforts to respond to this shifting balance of power by reasserting military dominance through offensive strategies of control unlikely to succeed; they could also endanger U.S. interests and regional peace and stability. At the strategic level, such efforts contribute to the intensity of the security dilemma unfolding in the region between China and the United States and its allies and partners. At the operational level, a U.S. strategy of control and the massing of potent but vulnerable assets in forward locations, juxtaposed against China’s own forward-leaning military strategy, undermine crisis stability by creating incentives for each side to strike first and rapidly escalate in a conflict.

At the same time, the United States and other countries in the region have legitimate concerns about how China intends to apply the capabilities developed during its decades-long military modernization. Beijing’s willingness and capability to possibly use force against Taiwan, or against U.S. allies such as Japan or the Philippines in disputes over islands and maritime jurisdiction, raise the specter of a direct U.S.–China war. More fundamentally, there is  considerable uncertainty and distrust as to how China will use its growing military power, some of which is inherent in any state’s expansion in military capabilities and some of which is exacerbated by Beijing’s behavior when it intends to coerce other states in territorial and geopolitical disputes. 

Calls for a new U.S. defense strategy in Asia

In recognition of these changing dynamics and their serious dangers, a growing number of American analysts have advocated a more defensively oriented U.S. force posture and military strategy in Asia that would be more effective, more stabilizing, and less expensive. These include scholars of grand strategy arguing for a more limited role for the U.S. military in foreign policy, as well as defense analysts and military planners seeking to develop concepts of operations that can deter and, if necessary, prevail without excessive risk and cost.

Proposals for such a defense strategy — variously termed  “mutual denial,” “active denial,” or “defensive defense” — have broad elements in common. One important element is the need for U.S. allies and partners, and Taiwan, to do more for their own defense, especially through cost-effective “hedgehog strategies” that reduce their military forces’ vulnerability to attack, in part through investment in more anti-ship missiles and air defense systems and reforms to military organization and training. The United States, meanwhile, would restructure its force posture in the Western Pacific. It would reduce its forward-deployed ground troops and large surface platforms and increase investment in standoff weapons-delivery systems and smaller surface platforms. At the same time, the U.S. would disperse its forward-deployed forces across a broader area with more strategic depth and employ  passive and active defenses to increase resilience, rather than maintaining forces in highly concentrated and vulnerable forward locations.²

Thus far, however, proposals for an alternative defense strategy have not been fully developed. First, they lack important details about the required changes to force structure and posture, including a detailed assessment of military efficacy as well as an appreciation of the concrete budgetary implications of such changes. These proposals also often lack in-depth awareness of the perspectives of countries within the Western Pacific, and thus fail to lay out the diplomatic and political strategies necessary for transitioning the U.S. military and American allies to a more denial-oriented posture in Asia. Finally, proposals to date are often not accompanied by considerations of the confidence-building, crisis-management, and arms-control measures needed to mitigate the risks of even a more stabilizing, denial-based strategy.

This report endeavors to develop those details to lay out a concrete policy road map for restructuring U.S. defense strategy in the Asia–Pacific around a strategy that we call active denial. Our intent is to chart a course toward a more stabilizing, effective, and cost-efficient means for protecting U.S. security interests in the region. The report includes recommendations that are concrete and actionable for members of Congress and defense planners, and it builds a rigorous budgetary component into the assessment. It also includes specific recommendations for U.S. allies and partners, and Taiwan, and for how U.S. diplomats and defense officials can mobilize them to implement needed reforms.

How a defense strategy of active denial relates to U.S. grand strategy in Asia

This report is first and foremost about defense strategy, rather than grand strategy. Any nation’s grand strategy — its theory of how best to protect its security and other national interests — must include a military strategy that serves as one means by which the ends of its grand strategy can be achieved. (See Figure 1.1.) However, it is possible for a military strategy to be compatible with more than one variant of grand strategy, since military strategy is a means that can be applied to the accomplishment of different ends. This is true for the defense strategy of active denial that we advocate in this report.³

Figure 1.1: Relationship between military strategy and grand strategy

In a report published by the Quincy Institute in January 2021 entitled “Toward an Inclusive and Balanced Regional Order: A New U.S. Strategy in East Asia,” three of the authors of the present study (Michael D. Swaine, Jessica J. Lee, and Rachel Esplin Odell) outlined an overall vision of what a U.S. grand strategy in East Asia should entail.⁴ That report underscored that the future of this region will be determined primarily by economic and diplomatic trends. Thus, if the United States is to protect its interests in Asia and avoid an inexorable marginalization of its access to and influence in the region, it must rebalance its strategy to place greater emphasis on diplomatic and economic means for promoting its interests.⁵ Such a rebalancing toward economic and diplomatic engagement in Asia will require the United States to increase investments in its diplomatic statecraft, join new trade agreements, offer more development aid, invest in initiatives to combat climate change and pandemics, and negotiate new, inclusive rules and norms governing contentious issues such as military activities at sea.⁶

Crucially, the United States must resist the temptation to limit its engagement in the region exclusively to coalitions or initiatives that appear to be aimed primarily at confronting or containing China, given that many U.S. allies and partners are unwilling to participate in such a zero-sum approach. While such an approach will be useful and appropriate on certain issues, Washington must also participate in institutions and negotiate regional agreements that include Beijing, so enmeshing the United States, China, and countries throughout Asia together in a regional, multilateral infrastructure that promotes positive-sum growth and problem-solving. 

While placing an emphasis on diplomatic and economic engagement, the Quincy Institute’s January 2021 strategy report also highlighted the imperative of pursuing a more stable military balance with China by restructuring U.S. alliances and force posture in East Asia around a defense strategy of denial rather than dominance or operational control:

[T]he United States should also seek to tighten its military coordination with U.S. allies and restructure its alliances around a more defensive denial-oriented military strategy. Through such a strategy, the United States should not seek to exercise dominance or control in the waters and airspace of the Western Pacific but should instead work with allies to implement a smarter approach to balancing China’s growing power centered on denying Chinese control over those same spaces. Under this strategy, the United States and its allies should seek to counter potential Chinese aggression by employing some of the same anti-access/area-denial strategies and asymmetric capabilities that China has developed. By enhancing coastal and air defenses, in particular, they can take advantage of regional geography and render such aggression too costly and difficult for Beijing to undertake.

This project is intended to build on the preliminary defense-strategy recommendations in that report and develop them into a detailed road map for how the United States should redesign and restructure its defense strategy and force posture in Asia over a medium-term time frame of the next 13 years (i.e., to 2035). 

At the same time, the focus on defense strategy in this report is not meant to suggest that military means are the most important or appropriate tools for promoting U.S. interests in Asia or elsewhere. On the contrary, we concur with Evan Feigenbaum’s warning that United States forces must not become the Hessians of Asia, providing military power to counterbalance bullying by China but exercising declining political and economic influence.⁷ However, given the rise of China’s own military power and more coercive behavior, the serious risks presented by regional arms racing, and the real dangers of adhering to a status quo U.S. strategy, it is essential that Washington get its defense strategy right.

Differences and consensus among the steering group

To develop this road map for how the United States can shift toward a force structure and posture based on a defense strategy of denial, project director Rachel Esplin Odell convened a steering group consisting of 10 expert analysts. These analysts possess a broad range of deep expertise in numerous areas pertinent to this project, including U.S. military strategy, defense planning, budgetary assessment, alliance politics, nuclear security, and the military strategies and defense politics of China, Japan, South Korea. The 10 steering group members, who collectively are the authors of this report,⁸ do not necessarily agree with all of the arguments made by three of their number (Swaine, Lee, and Odell) in the above-mentioned January 2021 Quincy Institute report. However, each of them has extensive experience in analyzing how the United States can shift toward a more denial-oriented defense strategy in Asia (see biographies at the end of this report). 

Over the course of this project, the steering group analyzed several key questions central to U.S. strategy in Asia, including trends in China, the United States, and the region; U.S. interests and objectives in Asia, and ways and means to promote U.S. interests and objectives. Through this process, the steering group identified some areas of disagreement, even while forging consensus on three key overarching areas. 

Key areas of difference among the authors

First, there are various views among the steering group on some key issues, including the nature of China’s intentions, the scope of U.S. interests in Asia, the underlying purpose of U.S. defense strategy in Asia, and the longer-term goals for U.S. military presence in Asia beyond 2035. 

• The nature of China’s intentions. There are different views among the report authors about the extent to which China is a revisionist power or a status quo power. Although all report authors recognize that China, like all major powers, including the United States, seeks to shape or revise the rules of the international order better to promote its interests, there is disagreement among the group as to how far China likely intends to go in reshaping the present international order or in challenging the territorial status quo, and to what extent that intention challenges U.S. interests: 

° Some of the authors of this report view China’s aims as revisionist in some areas — especially in disputes over Taiwan, small islands and border areas, and maritime claims — while judging that revisionism to be probably limited in nature. That is, they assess that the PRC is unlikely to engage in territorial expansion or military aggression beyond those disputes. They do not see China as bent on forcing the U.S. military to withdraw all forward presence from the Western Pacific or excluding U.S. military or economic access to the region, particularly not within the next 13 years. They judge the People’s Liberation Army’s expanding presence farther from China’s shores as driven by a relatively narrow interest in defending Beijing’s growing overseas investments and guarding against disruptions to the sea lines of communication upon which its economy depends for energy resources and trade. 

° Others in this group of authors assess that China’s revisionist aims may not remain limited. They view Beijing’s increased use of economic sanctions, cyberattacks, and disinformation campaigns to punish other countries for adopting policies distasteful to China — including measures intended for their own defense — as evidence that Beijing is unlikely to exercise restraint in a wide range of disputes beyond the present territorial disputes. China’s growing capacity to coerce other countries militarily, even in the gray zone short of the use of force, is thus a greater cause of concern. 

• The scope of U.S. interests in Asia. The report authors agree that the most fundamental U.S. national interests include the protection of the lives, safety, and well-being of Americans, the defense of U.S. territory, and the defense of the integrity of the U.S. political system — and that U.S. strategy around the world, including in Asia, must be designed to protect these interests. When it comes to how these interests should be understood in the Asia–Pacific region, all of the authors agree that key U.S. interests include regional peace and stability, nuclear nonproliferation, and access to mutually beneficial economic exchange. Beyond these areas of consensus, the report authors prioritize and emphasize different interests:

° Some of the authors place a strong emphasis on U.S. interests in transnational public goods in Asia, especially reducing climate change, limiting the spread of pandemics, and ensuring efficiency and stability in the global economic system. They believe that the well-being of average Americans is most likely to be harmed in coming years by failure to prioritize these interests. While other authors would not necessarily disagree, they would place a greater relative emphasis on more traditional security threats posed by China’s growing power.

° Some report authors view promoting U.S. values, defending democracies, and upholding international law as core U.S. interests — those especially endangered amid a global uptick in authoritarianism. Others express more concern about how U.S. democracy promotion in the context of growing regional security competition has the potential to exacerbate conflict or undermine other countries’ domestic movements for human rights progress.⁹

° Some report authors believe that the defense of treaty allies should be considered a core U.S. interest, given the importance of maintaining the credibility of commitments to U.S. political influence and deterrent capability around the world. Other authors view alliances as a means to protect U.S. interests, rather than interests in and of themselves. They believe other countries judge U.S. credibility more by the weight of U.S. interests in defending an ally than by how the United States has acted in response to other contingencies.

° All of the report authors agree that avoiding war in the Taiwan Strait is in the U.S. national interest. To this end, we support the longstanding U.S. position in favor of any peaceful, mutually agreed resolution to cross–Strait differences. We believe that maintaining the long-established approach of strategic ambiguity, backed by credible capabilities and commitment to the One China policy, is the best way to deter unilateral or aggressive changes to the status quo.¹⁰ However, there are strong disagreements among the report authors as to whether and under what circumstances Washington should actually fight a war with China over Taiwan if deterrence fails, and whether or not encouraging Taiwan and Beijing to engage in unification negotiations would serve U.S. interests.¹¹

• Purpose of U.S. defense strategy in Asia. There are also different ways of thinking among this group of authors about the motivating question of why we need a credible deterrence strategy toward China over the next 13 years.

° Several authors of this report see the present U.S.–China dynamic primarily as a security dilemma, with the most significant dangers in the U.S.–PRC relationship stemming from the insecurity each feels in the face of the other’s military power — which, in turn, drives each side to respond by balancing against the other. Thus, they see an effective U.S. force posture in the region as needed primarily to deter the PRC from using military force in the areas where it has clear revisionist aims in order to maintain regional peace and stability. At the same time, they stress the need for measures to limit arms racing and manage the risk of crises that will accompany any competitive military strategy, even one designed more around denial rather than control. They also see credible U.S. defense strategy in Asia as important for maintaining influence with key allies and partners to prevent them from seeking more escalatory and dangerous capabilities, including nuclear weapons.

° Even while agreeing on the need to deter China from using force for its current revisionist aims, limit arms racing, manage strategic risk, and prevent nuclear proliferation by allies and partners, some report authors also have the structural realist concern that the PRC military could pose a more direct threat to the United States over the longer term. They worry that if the United States does not balance China’s growing power, Beijing could establish regional economic and military hegemony in Asia and on that basis exclude the United States from economic access to the region or punish or threaten the United States, including its homeland, more directly. 

• Longer-term strategic preferences. There are also differences among the authors’ longer-term expectations and preferences for U.S. strategy, and how the medium-term denial strategy recommended in this report for the next 15 years relates to the longer-term outlook beyond 2035. 

° Some authors see the denial strategy recommended in this report as a medium-term approach that could serve as a possible bridge to a much lighter U.S. military footprint and a regional collective and/or cooperative security approach in the future. They believe that it is desirable and possible for the United States eventually to reduce its military presence in Asia beyond our recommendations by supporting increases in the capabilities of other Asian countries to provide for their own defense, strengthening Asian regional institutions, increasing positive-sum U.S.–China diplomatic and economic interactions, and signaling more credibly to China that the United States does not aim to prevent its rise to great-power status.¹²

° By contrast, other authors view a denial strategy as the basis for a longer-term competitive strategy with China, with a core logic that is likely to persist beyond 2035. That is, the need for a strategy that effectively deters Beijing and hedges against the risks of unbalanced PRC military power, even while being less escalatory in nature and more fiscally sustainable, is more likely over time to grow rather than to diminish. They do not believe that a smaller role for the U.S. military in a regional collective security arrangement will be possible or stabilizing in the foreseeable future, even beyond 2035.

We recognize that these disagreements may be unsatisfying to readers who may seek more unanimity and clarity in this report on these first-order questions. The answers to these questions matter for U.S. grand strategy, especially over the longer term, and several of the report’s authors have, in fact, engaged in extensive discussions on these questions in other venues and publications (including the January 2021 Quincy Institute report).¹³ However, we have found through our experience in this project that unanimity on these points is not necessary to reach agreement on the best defense strategy for the United States in Asia. 

In fact, we argue that the diversity of views among this group of authors on the underlying reasons for why we need a defense strategy of active denial reflects the robustness of our recommendations for what a force structure and posture designed around active denial should entail and how this strategy should be implemented. Practitioners in the executive and legislative branches and in the broader U.S. foreign-policy community also disagree over the nature of China’s intentions and the purpose of U.S. defense strategy in Asia in the medium and long terms. The recommendations of this report can appeal to a broad range of those practitioners. This bodes well in a political climate wherein gridlock often poses a formidable obstacle to progress in rationalizing defense policy and controlling debt and spending.

Core points of consensus among the authors

Despite differing views in some areas, the 10 authors of this report have joined to write this report because we all agree that our current strategy, structure, and posture must shift in the direction of active denial. We share a consensus on three core propositions:

• Reforming U.S. defense strategy, force structure, and force posture. First, an active denial strategy is needed to achieve the three goals identified above for a new U.S. defense strategy: (1) to provide a more credible deterrent than the present strategy, (2) to reduce the pressures for rapid escalation that stem from the present strategy and posture, and (3) to improve the fiscal sustainability of U.S. defense strategy and posture relative to current and proposed plans.

° The main elements of this strategy and an analysis of how it is credible, stabilizing, and affordable are detailed in Chapter 2, which develops strategy and operational concepts; in Chapter 3, which gives recommendations for force structure, and in Chapter 4, which includes recommendations for U.S. force posture in the Western Pacific. Chapter 5 describes the benefits of an active denial strategy for nuclear stability, and Appendix A assesses this strategy’s budgetary implications.

• Mobilizing allies, partners, and Taiwan to reform their defense strategies and capabilities. Second, U.S. allies and partners in the region, especially Japan and Australia, must carry more of the load in balancing against China’s power and providing for their own defense, while avoiding highly escalatory doctrines such as deterrence by conventional or nuclear punishment.¹⁴

It is also critical that Taiwan make significant reforms in favor of a denial-oriented strategy and force posture.

° Chapter 4 presents an analysis of the views of various regional allies and partners and recommendations for how to mobilize key allies, partners, and Taiwan to reform their defense strategies.¹⁵

• Restraining military competition and arms racing through robust diplomacy. Finally, a denial strategy must be coupled with efforts to mitigate the security dilemma, improve the tenor of political relations with China, and manage certain areas of the military competition. This will require the United States to pursue active cooperation with China in areas requiring collective action, coupled with persistent engagement in discussions with China over a range of measures to stabilize the U.S.–China security relationship. Those should include discussions about crisis-management mechanisms, confidence-building measures, and mutual restraint in areas of particular concern, such as artificial intelligence, space, and cyber. Such discussions should be conducted with an eye toward formal arms-control agreements should conditions permit. Broader political and strategic initiatives that could help to reduce underlying drivers of conflict should also be explored.

° Chapter 6 presents recommendations in these areas in the context of an analysis of how China is likely to react to a U.S. shift toward a denial strategy, coupled with a discussion of strategic arms control in Chapter 5.

The remaining chapters of this report provide detailed analysis and recommendations in each of these three areas. The following sections of this chapter provide summaries of each of them.

The need to reform U.S. defense strategy, force structure, and force posture

The fundamental argument of this report is that U.S. military strategy, force structure, and force posture require significant changes. They should be redesigned in ways that are more effective in deterring China, while also being less likely to incentivize a first strike during a crisis and thereby undermine stability. In light of the fiscal constraints facing the United States and the urgent imperative to devote greater investments toward domestic revitalization and nontraditional, high-priority security threats such as climate change, these reforms also need to be cost-effective and affordable within sustainable defense budget levels.

This report argues that the United States can achieve these objectives through restructuring its forces around an active denial strategy, a defensively oriented approach designed to first blunt and later defeat a potential adversary’s attack. This is less ambitious than military strategies that aim to control the theater of battle and dominate adversaries from the outset of a conflict through offensive military action. It does not rely upon threats of inflicting massive harm to civilians and civilian infrastructure in the adversary’s country. And it does not require denying China any increase in its power and influence in Asia. Rather, China’s economic importance and political power in the region and the world will likely continue to grow. 

As considered in Chapter 2, our use of the term “denial” derives not from the distinction found in the works of early nuclear theorists between “deterrence by punishment” and “deterrence by denial,” which lumps all non-punishment strategies into one basket called “denial.” Rather, we draw upon the earlier historical tradition that distinguishes military strategies of control, which seek to maintain the unrestricted use of an area or domain, from strategies of denial, which focus on limiting an adversary’s ability to gain such superiority. We argue that this conceptual distinction between control and denial is more useful when considering security challenges in the Asia–Pacific theater, and recent studies that instead are based upon the punishment vs. denial distinction have muddied the conceptual waters.¹⁶ To distinguish our use from that of other recent commentators, as well as to refer more specifically to the concepts of operation we envision, we employ the term “active denial” to describe our recommended strategy.

The key components of an active denial strategy

As described in greater detail in Chapter 2, this strategy of active denial should entail, inter alia, the following overarching imperatives:

• Reject efforts to reëstablish all-aspects military dominance in Asia through strategies that rely upon a highly offensive way of war. 

• Adopt a lighter, more resilient force posture to limit U.S. vulnerability and reduce the incentives for either the U.S. or China to strike first.

• Prepare to conduct phased operations, involving, first, a holding action to blunt an attack, followed later by counterattack as reinforcements flow into the theater.

• Focus operations against the forces directly engaged in offensive action, rather than more ambitious efforts to paralyze and destroy the adversary’s larger military system.

• Limit strikes on the Chinese mainland to bases along the coast and eschew efforts to conduct persistent operations in airspace over the mainland.

• Aim to defeat potential aggression by China, rather than subjugate Beijing or achieve regime change; during any conflict, maintain communication and be ready to negotiate terms to end the war.

• Adjust force structure consistent with this denial strategy and with a tighter focus on capabilities most relevant to Asia: 

° Significantly reduce overall numbers of Army and Marine Corps ground troops, which would not play a major role in U.S.–China conflict; these services should invest instead in more anti-ship and, especially, air and missile-defense capabilities.

° Shift emphasis in naval force-building to a greater proportion of smaller warships (frigates as opposed to destroyers and cruisers), while, over time, replacing half of the large aircraft carriers with a greater number of light carriers.   

° Accelerate the Air Force’s retirement of old aircraft and emphasize organizational and cultural shifts to facilitate agile operations.

• Adjust force posture in Asia consistent with the active denial strategy:

° Reduce U.S. ground troop presence in Japan; hand off most ground-force responsibilities to Japan.

° Reduce U.S. forces deployed in South Korea as part of a coordinated, step-by-step process toward building a peace regime on the Korean Peninsula.

° Together with allies, prepare military infrastructure to maximize operational resilience through mobility, dispersion, hardening, redundancy, and camouflage and concealment.

Such a strategy will help enable the United States to maintain a more stable balance of power in the Western Pacific and provide a more realistic and meaningful deterrence capability, while limiting escalation dynamics and mitigating the security dilemma. However, as we will consider below, such outcomes will also require a greater investment in crisis- management mechanisms, strategic arms control, and diplomatic engagement regarding regional hotspot issues.

Denial strategy and fiscal sustainability

The strategy we recommend is deliberately designed to be sustainable in light of the very real constraints on U.S. economic and financial resources. As is true of all countries, how much the United States can spend on defense is in part determined by the country’s economic, financial, physical, and political health. Likewise, the strategic choices the country’s leadership makes, and specifically the defense strategies, programs, and forces it embraces, affect the level of resources that can be devoted to meeting other critical domestic and international challenges. While there has never been a period in U.S. history when these constraints and trade-offs were not present, they are more significant today than they have been at any time since the fall of the Soviet Union and will become far more difficult to manage effectively over the next several decades. In this context, it is more important than ever that the United States embrace a defense posture that is realistic in its goals, strategy, and force structure and modernization requirements. Perhaps more than anything else, this means adopting an affordable and sustainable strategy for dealing with China. 

Our analysis in Chapters 2 and 3 and Appendix A explains how the denial strategy we recommend fits this bill. Making force structure, modernization, and other changes consistent with an active denial strategy would generate annual savings compared with the last Trump administration defense plan of roughly $75 billion, 10 percent of the Trump plan, by 2035. These savings would result primarily from cuts to the Army’s force structure, reflecting the limited role for ground forces in the event of a conflict with China. Annual savings of as much as $138 billion (18 percent) could be achieved if the United States were, in addition, to adopt a more restrained approach to other missions — for example, accepting a significantly less robust capacity to conduct stability operations and to carry out a second smaller military operation at the same time it is engaged in a war with China.

Denial strategy and nuclear stability

A major impetus for adopting a denial military strategy in East Asia is to improve nuclear stability in the region by reducing the likelihood of U.S.–China nuclear escalation in a conventional conflict. Chapter 5 of this report thus conducts an in-depth evaluation of how a shift to an active denial strategy would affect the risks of inadvertent or deliberate nuclear escalation. It concludes that although there will always be some risk of nuclear escalation in great-power conflict, the approach to conventional deterrence and warfare associated with the active denial strategy reduces the likelihood of escalation compared with the current strategy of control. Active denial is less forward-leaning, particularly at the outset of conflict. It still leaves room for offensive U.S. operations against mainland China in response to an attack by the PRC, but it limits the number, depth, scope, and sensitivity of targets, and adopts a more structured approach to limiting horizontal and vertical escalation. The active denial strategy also has benefits for reducing deliberate nuclear-escalation incentives by providing a better way to signal limited U.S. military objectives during a war. 

Denial, Taiwan, and strategic ambiguity

Although, as described above, the authors of this report differ in the particulars of how Taiwan relates to U.S. interests — including whether or not and under what circumstances Washington should consider fighting a war with China over Taiwan — we share support for the longtime status quo U.S. approach of strategic ambiguity over Taiwan. We argue that the U.S. goal vis-à-vis Taiwan should be to support any peaceful, mutually agreed resolution to cross-Strait differences, whether this implies eventual unification, formal independence, or something else. In the meantime, Washington should rely upon the One China policy and continued strategic ambiguity as to whether or not it would use military force to defend Taiwan to deter conflict. 

The logic of strategic ambiguity requires the United States to maintain a minimum degree of credible military capacity to come to the defense of Taiwan if the United States ends up judging that is appropriate and necessary. However, we argue that a U.S. force posture oriented around the defense of Japan, a treaty ally, through a denial strategy — coupled with Taiwan’s parallel defense strategy of denial, and specifically a hedgehog strategy built around distributed ground, antiaircraft, and anti-ship capabilities — would be sufficient for this purpose. Indeed, this is far better than shifting toward a force posture more explicitly designed around the defense of Taiwan involving greater integration and joint training of U.S. and Taiwan forces. Such a shift would undermine the United States’ longstanding strategic ambiguity, which could, in turn, embolden both Beijing and Taipei to take unilateral actions that move all parties closer to war. By contrast, the separate but parallel denial strategies we recommend would help maintain the uncertainty central to strategic ambiguity and promote mutual restraint on both sides of the Strait.

Although the objective under these parallel denial strategies would be to deter the use of military force by Beijing, it is essential that the United States also explore ways it can apply diplomatic and economic means to deter an invasion, blockade, or other use of force against Taiwan, or to bring China to the negotiating table if deterrence failed. As Patrick Porter and Michael Mazarr have argued, such means provide an important pathway for limiting escalation in a conflict between the United States and China.¹⁷

Above all, the United States must remember that maintaining peace in the Taiwan Strait is first and foremost a political rather than a military problem. At the root of this political challenge is Beijing’s fundamental determination to realize the unification of the two sides of the Strait under its control, coupled with its growing anxiety that the peaceful, uncoerced approach to unification that it has formally espoused since 1979 is losing traction. This anxiety is informed by trends in Taiwan, especially the growing Taiwanese as opposed to Chinese self-identification of Taiwan’s people, the declining popularity of the Kuomintang, the conservative party that still favors a unified China, and the widespread rejection in Taiwan of a “one country, two systems” model for unification, especially in the wake of Beijing’s recent crackdown on Hong Kong’s democracy movement despite guarantees that the territory would enjoy autonomy under such a model. To some degree, there is little that Washington can do on its own to shift these dynamics, given how much they are driven by domestic political developments in China and Taiwan.

Nonetheless, the United States does play a crucial role in shaping Beijing’s perception of the urgency and severity of Taiwan’s drift away from the mainland, which could in turn shape the Communist Party’s decisions as to how and when to apply coercion or force to Taipei. Thus, Washington needs to prevent any further erosion of its One China policy and restore the credibility of that position with both Beijing and Taipei. Changes to how the U.S. articulates and interprets its One China policy — viewed in Washington as necessary responses to increased cross–Strait coercion by Beijing — have likely weakened deterrence in the Taiwan Strait rather than strengthened it.¹⁸ By signaling that the United States views Taiwan as a strategic asset that must be kept separate from China, Washington is likely increasing Beijing’s concerns that a peaceful approach to unification is losing traction and that more coercive and militarized tactics must be brought to bear against the island.¹⁹

Denial strategy and the Korean Peninsula

The primary focus of this report concerns the design of U.S. defense strategy vis-à-vis China. However, we also direct some attention to the defense strategy required on the Korean Peninsula to deter potential North Korean aggression. As explained in Chapters 2 and 4, our basic judgment is that the North Korea problem is a much more limited military challenge to the United States and its allies, in part due to the vast and growing power imbalance between North and South Korea. The ROK’s defense budget is as large as estimates of North Korea’s entire GDP, and the South should, therefore, be able to provide most of the necessary conventional defense capability. If the United States does not wish to see further nuclear proliferation, however, maintaining the alliance, and extended nuclear deterrence against nuclear attack, will be necessary.  

To the extent that America’s conventional capabilities also contribute to deterrence and make its nuclear deterrence credible, they overlap significantly with the air and naval capabilities that would be maintained for deterrence in Asia under the active denial strategy and the reduced ground capabilities that would be maintained for other contingencies. The requirements for the Korean Peninsula can, then, be subsumed under the broader force structure outlined in this report. 

We assess that the present impasse on the Korean Peninsula, even more importantly, is at this point first and foremost a diplomatic and political challenge. We therefore recommend that the United States adopt a diplomatic and political strategy to move toward the establishment of a peace regime on the Peninsula involving Pyongyang’s gradual denuclearization. Such a peace regime should hold to the U.S.–ROK  alliance’s original purpose of maintaining peace on the Korean Peninsula and defending South Korea against potential North Korean aggression. Although South Korea has grown far more wary of China and its intentions and is likely to continue to hedge against security threats from Beijing, Seoul remains reluctant to repurpose the U.S. alliance as part of a broader military network intended primarily to deter or contain China. The United States should respect this reluctance, and this restraint will help constrain the U.S.–China security dilemma in the region and prevent the possibility of a direct U.S.–China military engagement on the Korean Peninsula. It will also help to secure the PRC’s support for a peace regime — should Pyongyang prove receptive — since Beijing, one of the parties to the Korean War armistice, is less likely to accept an outcome that leaves U.S. forces forward-deployed on the Korean Peninsula indefinitely after the resolution of inter–Korean differences.

The importance of mobilizing allies, partners, and Taiwan

This strategy of denial also requires that the United States leverage its position to secure a larger effort from U.S. allies, partners, and Taiwan than they have heretofore made, and a better division of labor within alliances. Conceived of as a unified alliance effort, within which a rough division of labor is agreed,  the denial strategy should work to mitigate the incentives for allies to adopt deterrence by punishment and the acquisition of substantial long-range strike capabilities. As explained in Chapter 4, the current U.S. approach, which encourages allies to do more without an accompanying robust discussion of roles and missions, is effectively green-lighting their pursuit of destabilizing punishment-oriented strike capabilities. If the United States instead coordinates with allies to implement a more thoughtful and deliberate approach to promoting an active denial strategy and effective roles and missions with its allies, it can help shape trajectories in more stabilizing ways.

This should entail efforts to encourage Japan to spend more on its own defense and to encourage Japan and South Korea to spend defense dollars more effectively. Given the most likely contingencies in each case, this should entail Japan investing more in air and naval forces and less in ground forces, while South Korea should enhance its ground-war capabilities. As part of these efforts, the United States should renegotiate the Special Measures Agreement with Japan, reducing some of Tokyo’s expectations of host-nation support in exchange for a larger Japanese defense budget or greater spending on military infrastructure. The United States should also look for win-win solutions to longstanding frictions with local communities. It should, for example, consider a package arrangement in Japan that provides for a reduction of total U.S. numbers and permanent facilities, while expanding access to civilian ports and airfields for training and contingencies.  

To ensure that regional allies are willing to put their trust in a division of labor with the United States and direct their resources to productive — and not destabilizing — capabilities, the United States will have to exercise care not to suggest that an active denial strategy or a lighter footprint means that it is abandoning those allies. The previous administration’s demanding style and lack of concessions provided a tonic to local leaders intent on acquiring long-range strike capabilities and, to an extent, hedging more on nuclear issues. By making the U.S. commitment to the alliance more politically and financially sustainable, an active denial strategy can help unwind some of that damage and encourage allies to adopt denial strategies and capabilities of their own.

To encourage Taiwan to provide more effectively for its own defense, the United States must exercise greater discipline in its arms sales to Taipei. Washington should prioritize selling hardware such as anti-ship cruise missiles, surface-to-air missiles, surveillance drones, and sea mines needed for Taipei to implement a hedgehog strategy of defensive denial. The recent sale of additional Harpoon coastal defense systems and missiles to Taipei is an important step in this direction. Washington should encourage Taipei to shift its domestic industry’s focus toward such capabilities and away from longer-range land-attack missiles. Taiwan should also invest more in ensuring that it has sufficient ground forces to cover potential landing areas, to include airports and port facilities as well as beaches, and that it has credible reserves capable of replacing losses and operating effectively. The United States should privately make arms sales conditional on Taiwan’s willingness to emphasize resiliency and the improvement of its overall defense capability. It should also make clear to Taiwan that U.S. ground troops will not be able to play a role in performing the beach and port defense and guerilla and urban warfare functions that the Republic of China’s army and reserve forces must be prepared to execute.

Finally, even while leveraging existing allies and partners, as well as Taiwan, to provide more for their own defense, the United States should be careful not to exacerbate the security dilemma with China. Expanding its formal alliances in Asia could further stimulate China’s fear of encirclement and provoke reactions that would undermine the security interests of allies and partners as well as the United States.²⁰ Likewise, while boosting security cooperation and the self-defense capabilities of Southeast Asian nations, Washington should avoid seeking to craft more militarized “mini-lateral” groups or a more integrated NATO–like multilateral alliance in the region.²¹ The risks of such formalized defense arrangements in accelerating the security dilemma by further stimulating China’s fear of encirclement would outweigh the potential deterrence benefits. Instead, even while enhancing its security cooperation in the region, it is critical that the United States work with allies and partners to create and pursue opportunities for security dialogues and tension-reduction with China.

The imperative to mitigate military competition

While shifting to an active denial strategy will reduce pressures for rapid or nuclear escalation, this cannot on its own prevent conflict. Rather, such a shift must be coupled with measures to limit arms racing, mitigate gray-zone coercion, and promote détente and policy restraint. As described in greater detail in Chapters 5 and 6, these measures should include efforts to promote strategic nuclear stability, reduce the militarization of key conflict hotspots, limit infeasible or costly commitments, and adopt stabilizing crisis-management mechanisms. These objectives should be achieved through a combination of unilateral restraint and negotiated agreements, as follows:

• Resume track 1.5 strategic dialogue with China on nuclear deterrence and strategic stability, and expand the track 1.5 framework to include other issues as a way to generate innovative ideas for solutions. 

• Enhance technical cooperation among national laboratories on nuclear security, and pursue mutual visits to military units of particular concern to each side.

• Acknowledge mutual nuclear vulnerability with China and express openness to limits on America’s ballistic-missile defense to create opportunities to advance more ambitious arms-control measures with China over time.

• Pursue an agreement with China on limiting the role of artificial intelligence in certain military capabilities, such as nuclear command and control.

• Resume discussions on how to avoid incidents at sea and in the air, and establish stronger crisis-management mechanisms to reduce the probability of crisis and to prevent crises from escalating to war.

• Reduce the militarization of key hot spots such as Taiwan, the Korean Peninsula, the Senkaku islands, and the South China Sea.

° Refocus attention toward pursuing diplomatic and legal ways of managing or resolving these hotspot issues.

° Reduce the currently very high tempo of U.S. military operations, including  formal, announced freedom of navigation operations and other surveillance operations and exercises, in areas close to China’s coast or in disputed areas in the South China Sea to a more moderate tempo, in some cases unilaterally and in others through a negotiated process of quid pro quo measures taken in coordination with China.²²

° Reaffirm that the United States does not take positions on sovereignty over the Senkaku Islands or the South China Sea islands,²³ even while calling for the peaceful resolution of those disputes in accordance with international law. 

° Support South Korea in the pursuit of a peace regime on the Korean Peninsula and eventual denuclearization. 

• Coordinate with China to plan how to deconflict U.S./South Korean and Chinese forces seeking to secure loose nuclear weapons or nuclear material in the event of the collapse of North Korea.

In addition, the various examples of policy restraint noted above will also help to restrain  U.S.–China military competition. This includes a continued rejection of calls for closer integration of the U.S. and Taiwan militaries or joint exercises and training between the United States and Taiwan, together with the reinforcement of strategic ambiguity on the defense of Taiwan. It also includes refraining from efforts to expand formal U.S. military alliances in Asia to include other countries.

Project design and methodology

This project was executed in three distinct phases entailing structured workshop discussions, research-based expert presentations, and drafting and extensive peer review. These phases also included two war games. 

Phase 1: Structured discussions of foundational issues. In the first phase of the project, conducted in January and February 2021, the steering group and two additional project advisers met in a series of workshops focused on foundational strategic issues underlying U.S. defense strategy, force structure, and force posture in Asia. These workshops involved structured discussions of three overarching topics: (1) U.S. interests and objectives in Asia, (2) trends affecting U.S. interests and objectives in Asia, and (3) the ways and means to protect and promote U.S. interests and achieve U.S. objectives in light of those trends. The project director worked with project rapporteurs to synthesize the working conclusions of each of these sessions and integrate them into the next phases of the project. 

War game exercise No. 1. At the end of the first phase of the project, the steering group participated in a war game exercise designed and executed by Eric Heginbotham and Matthew Cancian of the MIT Game Lab. This initial game was intended to introduce a shared awareness of the key challenges confronting the U.S. military in designing a more effective and stabilizing defense strategy in Asia. In so doing, it provided a shared baseline for the group as they divided into smaller groups and entered the second phase of the project to conduct more detailed recommendations. This initial exercise was built around a defense of Japan scenario in the year 2035. (See Appendix B.)

Phase 2: Research-based structured discussions in four working groups. In the second phase of the project, from March to May 2021, four working groups were convened to develop a detailed road map for shifting to a new defense strategy. Each working group addressed one of four different issues: (1) conventional defense strategy, force structure, and force posture, including budgetary assessments of recommended changes, (2) nuclear issues, including escalation risks, extended deterrence, and nuclear arms control, (3) perspectives of allies and partners, the roles and missions of allies, and strategies for leveraging defense reforms in allies and partners, and (4) China’s likely response to a denial strategy and possible confidence-building measures and conventional arms control with China. 

Each working group was led by a member of the steering group, with participation from a subset of other steering group members and several additional subject matter experts. (See the list of working group participants at the beginning of this report.) Each working group held a series of approximately four workshops to address key questions related to the working group’s purview, with research-based presentations by different working group members serving as the basis for structured discussions. The project rapporteur recorded the insights of the working group experts, and the project director coordinated across the different working groups, working with each of the working group leaders individually and in periodic joint coordination sessions.

War game exercise No. 2. At the conclusion of the working group phase, the steering group reconvened for another war game exercise designed to evaluate how a U.S. force structure and posture restructured around a strategy of active denial would fare in a conflict. This exercise was built around a scenario of a PRC invasion of Taiwan in 2035, examining how parallel denial strategies — involving a more robust Taiwan self-defense strategy of denial, coupled with a U.S. denial strategy designed more around the defense of Japan and general first island chain deterrence — would fare in repelling a PRC invasion. This was meant to test the proposition that the United States does not need to abandon strategic ambiguity and to establish that Taiwan and the United States can instead maintain sufficient deterrence capacity by improving their separate capabilities without the need for a major military buildup, major military exercises with Taiwan, or integration between the U.S. and Taiwan militaries that goes beyond present defense talks and low-level capacity building. (See Appendix B.)

Phase 3: Synthesis, drafting, and peer review. In the third phase of the project,  the steering group members worked together to synthesize conclusions from the preceding project phases so as to draft the report manuscript. (See footnotes on each chapter heading for information on the primary contributions of various steering group members.) This phase involved extensive rounds of feedback and revision, including feedback from the members of the four working groups, project adviser and editor Paul Heer, the Quincy Institute’s director of studies, Sarang Shidore, and four formal peer reviewers.

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