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Rather than presiding over another round of double-digit growth in China’s military budget, President Xi Jinping wants to turn the world’s largest military into a truly modern armed force.

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China’s announcement of its planned military spending for 2016 caught many by surprise. The full budget will be released this Saturday at the start of the annual National People’s Congress, but according to Fu Ying, the spokeswoman of this year’s legislative session, spending will rise by only 7 to 8 percent. This would be the smallest increase in six years and far below the expectations of many observers who had predicted the budget to soar by up to 20 percent.

The lower increase can be traced back to the slower overall economic growth. We should also keep in mind that the numbers are slightly misleading as major military expenses, such as the rising costs for social programs to support demobilised soldiers, are hidden in other budgets.

But the large gap between reality and expectation is primarily the result of a profound misreading of Xi Jinping’s military reforms. The widespread image of a power-hungry president who is forcing an unpopular restructuring program down the generals’ throats is simply wrong. Xi does not need to buy his generals’ loyalty, as his PLA overhaul has created more powerful friends than enemies. In fact, the military leadership understands very well that, if implemented effectively, Xi’s reform program would turn the world’s largest army into a truly modern armed force.

A major shake-up of the Chinese military

Xi surprised his country and the world when he announced back in September that the PLA would cut 300,000 military personnel. As it turned out, this was only the beginning of a major shake-up of the Chinese military. Deep structural reforms were, according to Xi, dictated by “profound and complicated changes in the international landscape.” America’s so-called “pivot to Asia”, escalating territorial disputes in the East and South China Seas, and heightened tensions on the Korean peninsula must have been on his mind as much as Taiwan’s increasing flirtations with independence.

The largest army in the world underwent several rounds of reforms in the 66 years since the founding of the People’s Republic of China. These reforms included cutting the troop level, limiting the army’s economic activities, and reducing the number of military regions. But Xi’s predecessors ignored the PLA’s structural deficits. Instead, they sought to secure the loyalty of the generals with ever increasing military spending.

The money bought the PLA some of the most advanced weapon systems in the world. Yet advanced weaponry is no substitute for the most crucial factor in modern warfare: the ability of all service branches (i.e. Army, Air Force and Navy) to conduct joint operations.

The American concept of jointness is not encoded in the PLA’s DNA. As long as this is the case, the PLA will remain an army of the 20th century. Xi, who is also chairman of the powerful Central Military Commission, understands this very well. Thus, achieving jointness is a core objective of his ambitious reform plan.

If implemented according to plan, Xi’s reform package would result in a complete transformation of the PLA by no later that 2020. The reform program is complex, and details are being revealed in a deliberate step-by-step manner. But it is already obvious, that two important military aspects will be crucial for its implementation.

Making All Service Branches Equal

The PLA Army is the beating heart of the entire PLA. Two-thirds of the PLA’s 2.3 million soldiers are Army troops. But the PLA Army didn’t have its own headquarters. Rather, the powerful four General Departments under the Central Military Commission (CMC) functioned as Army headquarters. Their position in the hierarchy just beneath the CMC and above the headquarters of the Navy and the Air Force meant that the Army stood practically above the rest.

This special status has historical reasons: China's founding father Mao Zedong had founded the PLA (or the Red Army, as it was then called) during the Communist Revolution as a military arm of the party. "Political power grows out of the barrel of a gun", he once said. The biggest military conflicts, in which China was involved since 1949, depended on the ground forces: the Korean War (1950-53) and the Chinese-Vietnamese War (1979). But Xi is right to assume that future wars will no longer be decided by ground troops alone.

In order to upgrade the Air Force and the Navy, Xi had to degrade the PLA Army to a certain extent: since January this year, the PLA has its own headquarters and is hierarchically at the same level as the other branches of the armed forces. Putting the Army, Navy and Air Force on an equal footing is the first condition for jointness.

Emulating America’s Joint Chiefs of Staff

Following the American example, the PLA’s service branches will be led by a joint staff. This interdisciplinary leadership team would prepare soldiers and officers for joint operations. The implementation of this reform requires a new mindset, as Xi himself admitted. The success of the reforms will depend largely on whether this change of organisational culture would take place at all levels: from the soldier up to the general. It took other countries decades to successfully implement jointness. Xi, however, has given his troops just five years.

As with radical reforms everywhere, there will be winners and losers within the PLA. Some observers expect unrest within the military, not least because a few powerful generals will be among the losers. However, don’t hold your breath for a military coup.  Xi isn’t forcing the PLA to swallow the bitter pill of reform. On the contrary: for decades, influential people within the military had called for structural reforms. But Xi’s predecessors denied them their wish, choosing to prioritise economic growth.

Xi is now taking advantage of national and international conditions to complete the military part of his “China Dream” of establishing China as a true global power. The international community should prepare to see a PLA that is not only the world’s largest, but arguably also one of its strongest militaries.