The new US Navy Shipbuilding Plan has arrived. It is lavishly produced, rich in operational color, and bracingly confident in its own ambition. Reading it, one encounters the language of generational transformation, the promise of a Golden Fleet, and the vision of an American navy reborn—larger, more lethal, ready to fight tonight. Read in isolation, it is a compelling document. Read in the context of American naval acquisition history, and of the tensions in this administration’s naval program, it is something more complicated: A plan whose best instincts are undermined by its own contradictions.

What’s the Problem?

Let me start with the diagnosis, because the plan deserves credit for it. The US Navy currently operates 291 battle force ships against a legal requirement of 355. The shipbuilding budget has doubled over two decades while fleet size has flatlined. Requirements crept during construction, cost estimates were systematically optimistic, and the acquisition bureaucracy—spread across disaggregated chains of command that the plan traces, with some pride, all the way back to the Bureau of Construction, Equipment, and Repairs in 1842—produced delays as reliably as it produced paperwork. None of this is new analysis. The Government Accountability Office has been saying versions of it for 30 years. But it is rare for a shipbuilding plan to lead with so frank an admission of institutional failure, and the reforms it proposes in response deserve genuine attention: Portfolio Acquisition Executives with real authority, stricter requirements discipline, the ShipOS production management platform, the Vessel Construction Manager model. These reflect a serious attempt to change how the US Navy does business, not merely what it buys.

The plan’s most coherent thread is the hedge strategy, the framework outlined by CNO Adm. Daryl Caudle in his recent Fighting Instructions that pairs high-end, multi-mission platforms with modular, attritable, lower-cost systems capable of being produced at volume. The logic is sound: A force that can deter peer adversaries while meeting the relentless daily demand for presence and crisis response cannot be built exclusively from expensive, exquisite platforms, each of which spends roughly a quarter of its service life in maintenance. The hedge strategy recognizes that the character of naval competition has changed, that distributed lethality and unmanned mass offer genuine operational advantages, and that the unforgiving economics of modern naval warfare demand a more diversified force. What distinguishes Caudle’s framework is the attempt to embed this thinking structurally into fleet design rather than treating it as a doctrinal afterthought. I remain cautiously optimistic about it. American naval circles have been discussing variants of distributed lethality for decades without the concept making it off the page, and some healthy skepticism about whether this iteration fares any better is entirely warranted, but the intellectual architecture is correct.

Playing Battleships

Where the May plan parts ways with that framework—and where the tensions in this administration’s naval policy become most visible—is in the battleship program. I have written at some length about the BBGN already, and nothing in this shipbuilding plan has done much to assuage my concerns. The document requests advance procurement funding in FY27 for a nuclear-powered guided-missile battleship, with the lead ship of three to be procured in FY28. It describes this vessel in terms that would embarrass the most intense naval enthusiast: a platform for high-volume long-range fires, theater nuclear weapons, directed-energy systems, hypersonic missiles, and a Maritime Operations Centre. It is simultaneously a strike platform, a command ship, a strategic delivery vehicle, and an air defense asset. We should remember that ships designed to do everything are likely to do nothing on schedule and nothing within budget.

When I wrote about the battleship concept earlier this year, I made two observations that the May plan has done nothing to answer. First, the ship uses enormous displacement for negligible marginal gains in missile firepower compared to smaller ships. Second, and more damagingly, it replaces the DDG(X) program—which for all its limitations was at least sized to fit existing shipyards and represented an evolutionary step built on proven industrial foundations. The battleship resets the clock entirely: a clean-sheet design for a vessel the size of an Iowa, developed by a navy that has been delegating in-house design capability to shipbuilders for the better part of three decades, requiring yards that are not currently configured to build at that scale. The plan acknowledges, in a passage that deserves attention, that foreign module fabrication will likely be required for the BBGN—a significant concession from an administration whose public posture on restoring American shipbuilding has been decidedly triumphalist.

The deeper problem is strategic rather than industrial. I remain concerned that there is a serious conceptual tension that sits uncomfortably underneath both this plan and the Fighting Instructions: Caudle wants a navy of distributed lethality and attritable mass, but the battleship concept is the apotheosis of the high-value platform. A battleship is precisely the kind of asset that the hedge strategy seeks to move away from—large, expensive, crewed by hundreds of sailors, dependent on technologies that are not yet operational, and almost certainly not reaching the fleet until the late 2030s at the earliest. The shipbuilding plan asks us to believe that the US Navy can pursue distributed, unmanned-centric hedge operations while simultaneously committing billions to a program that embodies the opposite philosophy. It does not resolve this tension because it cannot. The battleship is a political program. The hedge strategy is a warfighting program. Printing them in the same document does not reconcile them.

Growing the Fleet

The frigate story illustrates a different but related pathology, and one I have been watching with a mixture of professional interest and professional despair. Last December, I wrote about the cancellation of the Constellation class as an autopsy of how a program that began with genuinely sound premises—buy a proven European design, exercise restraint on modifications, field hulls quickly—collapsed under the weight of the very institutional habits that it had explicitly been designed to avoid. The May plan confirms the cancellation of Constellation and introduces a new frigate, FF(X), with a lead ship in FY27. It presents the speed of this transition, accomplished “in a matter of weeks, not years,” as evidence of reformed acquisition culture. I want to believe this, but Constellation’s collapse was not principally a structural failure: It was a behavioral one. The May plan provides no convincing mechanism for preventing the same thing from happening a third time, after Constellation and after the Littoral Combat Ship. My conclusion stands: America’s ability to get the small surface combatants it needs depends solely on the US Navy’s willingness to pick a design and leave it alone long enough for a shipyard to actually build it. Announcing a new frigate is the easy part. The hard part comes when the first requirements review convenes.

The unmanned programs are where I find myself most genuinely encouraged, which is perhaps a function of having spent considerable time cataloguing everything else that has gone wrong. The shift to a mission-driven competitive gauntlet model—in which companies deliver prototypes and production-ready capabilities for evaluation against operational requirements, rather than chasing technology demonstrations—reflects a real lesson from the early unmanned acquisition era. The procurement profile provides a meaningful demand signal. If the US Navy can resist the temptation to add a hundred extra requirements to these platforms before the first hulls are delivered, it may finally field unmanned systems at the scale that operational concepts have assumed for years. That is a significant if, but at least the structural conditions are more propitious than they have been before.

The submarine program is the plan’s least controversial element, which is not a coincidence. Columbia-class and Virginia-class procurement follow well-established industrial logic. The Direct Reporting Program Manager for Submarines provides the single-point accountability that programs have historically lacked. The ShipOS results—reducing schedule planning from 160 manual hours to under ten minutes, cutting material review times from weeks to under an hour—are exactly the kind of mundane industrial progress that rarely generates headlines but genuinely moves the needle.

The industrial base section contains the plan’s most honest passage, even if it is not framed that way. As well as encouraging overseas investment into US shipbuilding, the US Navy is seeking legislative authority to allow American prime contractors to subcontract the building of large-scale non-sensitive modules to allied overseas shipyards for programs including the BBGN, DDG-51, LHA, and LPD. These are pragmatic choices, and I support them as such—American shipbuilding capacity genuinely cannot support the construction of the Golden Fleet at the pace and scale the plan demands, and pretending otherwise would be more dishonest than the plan’s actual approach. But there is an obvious tension between this admission and the administration’s loudly America-first public narrative about shipbuilding and maritime dominance. That tension matters not just rhetorically but politically, because the durability of foreign shipbuilding arrangements depends on a congressional and executive mood that could shift with the political headwinds.

Papering Over the Cracks

The plan’s conclusion returns to the language of accountability it established at the outset: success measured by ships delivered on time, an industrial base strengthened, a fleet ready and globally present. This is the right measure. Applied honestly, and applied retrospectively, it would produce some uncomfortable scores. The Constellation class failed it. The Littoral Combat Ship failed it on an extended schedule. The Zumwalt class, which the plan cheerfully incorporates as a “bridge” between existing destroyer technology and the battleship—as though that framing erases the program’s history—failed it in ways that should give the administration pause before betting the next generation of surface combatant development on another clean-sheet design stuffed with immature technology.

The reforms the plan proposes are, in places, genuinely serious. The investment in unmanned systems reflects correct strategic instincts. The maintenance reforms—digital twins, predictive scheduling, smaller and more frequent availabilities—address one of the most persistent drains on operational readiness. The industrial base investments, ShipOS, the PAE structure: these are not window dressing. But the plan is compromised by a political program that contradicts its own operating concept, leaving a gap between the CNO’s hedge strategy and the Golden Fleet’s capital-ship ambitions that the document papers over rather than resolves.

Naval force structure does not care about spectacle. It does not care about Golden Fleets or concept art or quotes from Mahan. It cares about usable combat power delivered on schedule and within budget, available to combatant commanders when they need it.

The plan’s authors know this—the plan says so, repeatedly and with evident conviction. And then it funds three battleships.

That tension, more than any single program decision, is the most revealing thing in the document. Whether this administration has the discipline to resolve it in favor of the warfighter, rather than the press release, is a question that only time will answer.

Featured image: US Navy

 Zimbabwe created a US dollar-denominated exchange in Victoria Falls, the Victoria Falls Stock Exchange (VFEX), to offer issuers and investors a rules-based “hard currency land” for capital raising and secondary trading, in an environment where domestic currency instability and exchange controls have historically deterred long-term investment. VFEX has the potential to become a credible conduit for hard currency capital into Zimbabwe and regional firms, particularly exporters and mining/tourism firms, but only if the country sustains a predictable exchange control regime, deepens market liquidity, and builds a governance framework that global investors can trust. Its relationship to the Zimbabwe Stock Exchange (ZSE) in Harare is both complementary and competitive. It could modernize market infrastructure and widen investor choice, but it could also drain liquidity and “best issuers” from the domestic equity board, entrenching a two-track financial system, unless domestic currency credibility improves.

Why VFEX Was Created and What Is Unique About It

In the summer of 2020, after allegations that ZSE transactions were contributing to currency instability, the government of Zimbabwe suspended trading. In August of that year, the government created the VFEX, and issued Statutory Instrument (SI) 196 of 2020, titled Exchange Control (Special Provisions for Securities Listed on Victoria Falls Stock Exchange) Regulations, under Section 2 of the Exchange Control Act (Chapter 22:05). The purpose of the regulations was to set out exchange control rules for companies listed on the VFEX, to ensure currency stability and reduce local currency risk, regulate the source of capital raised on the exchange, and encourage reinvestment of foreign capital. Securities listed on the exchange must be tradable and settled solely in US dollars or a convertible currency.

Zimbabwean and foreign companies can list on the exchange if their capital is raised from offshore sources or free funds, and capital raised on the exchange can be held in approved local or offshore accounts with an internationally recognized bank.

The exchange was launched to leverage Victoria Falls’ global profile and attract foreign investment to Zimbabwe. This is part of a broader government framework to manage capital flows and ensure that foreign currency-denominated listings contribute to local economic activity.

Victoria Falls is now being considered a special economic zone and, recently, as an international financial services center. VFEX is intended to be an “anchor tenant,” an institutional signal to investors that Zimbabwe is willing to create a fenced-off, internationally oriented set of rules for selected activities, even when the domestic economy is in turmoil. The Victoria Falls Special Economic Zone (SEZ) is designed to be a multi-sector, tourism-driven hub, somewhat parallel to China’s Shenzhen Special Economic Zone model, albeit with a different regional and economic context. In addition to expanding and upgrading the tourism and hospitality infrastructure and offering international financial services, the SEZ will include satellite towns and areas to house commercial, power-generation, and tourism facilities, rather than the industrial, export-driven manufacturing approach of Shenzhen. Rather than aiming to become a manufacturing hub, the SEZ aims to make Victoria Falls a regional conference, finance, and leisure capital.

What Is VFEX? 

VFEX is as much a policy instrument as an equities market. One of its main objectives is to reassure investors, foreign and domestic, that there is a safe place to invest in Zimbabwe free from the turmoil that has roiled the domestic economy. As of December 2025, Zimbabwe’s economy was projected to grow by 6.6 percent, driven by recovery in agriculture and manufacturing, high inflation and public debt remain challenges. Inflation has averaged between 100 and 150 percent due to currency instability and supply-side disruptions. The country has substantial public debt and external arrears, constraining access to affordable financing. The high debt service costs crowd out essential investments. Politics also poses challenges to the economic situation. President Emmerson Mnangagwa’s efforts to reset relations with the United States have the potential to increase American assistance and investment, but also pose a risk of alienating Zimbabwe’s traditional allies within the Southern African Development Community (SADC). Policy consistency and investment in key sectors will be crucial if Zimbabwe is to sustain the gains it has made. VFEX has the potential to be the strategic platform not only to sustain but also to expand its economic gains.

One of VFEX’s main goals is to lower the cost and increase the feasibility of raising capital for firms whose investment needs are naturally dollar-linked. This includes exporters, miners, regional retailers, tourism operators, and firms with imported input chains. In Zimbabwe’s volatile domestic currency environment, raising equity in local currency can produce financing that is quickly eroded in real terms. By offering settlement in US dollars, VFEX aims to align financing currency with investment currency, improving corporate planning horizons and facilitating project underwriting.

To compensate investors for Zimbabwe’s country risk, VFEX offers several incentives, including a 5 percent dividend withholding tax, exemption from capital gains withholding for foreign investors, and reduced exchange control restrictions. Even though organizationally it is a subsidiary of ZSE, it offers lower trading costs than ZSE.

By January 2024, VFEX had a market capitalization of over $1.2 billion and had traded more than $26 million worth of shares. VFEX’s goals are aligned with Zimbabwe’s National Development Strategy 1 (NDS1), a five-year plan that aims to achieve macroeconomic stability, inclusive growth, and social development.

VFEX is organized along a hybrid public-private line, as part of Zimbabwe Stock Exchange Holdings Limited (ZSE Holdings), the investment holding company for Zimbabwe’s capital markets. The Government of Zimbabwe has a controlling 32 percent interest in ZSE Holdings. While this might raise concerns about political interference if market governance is seen as an extension of state policy rather than a neutral utility, it can also help align VFEX with national development priorities and make fund repatriation commitments more credible if government authorities are seen as invested in success.

On May 5, 2026, Zimbabwe announced Statutory Instruments 62 and 63, which shifted VFEX from the oversight of the Securities and Exchange Commission of Zimbabwe (SECZ) to the Victoria Falls International Financial Services Centre (IFSC). While this is not an iron-clad guarantee of no government interference in VFEX’s operations, the creation of the IFSC seems to indicate the government’s desire to establish firewalls between the Victoria Falls Special Economic Zone and the turmoil of Zimbabwe’s domestic economy. The real test will be whether rule changes in IFSC and VFEX are consultative, transparent, and predictable over time, particularly during times of currency or fiscal stress.

Performance to Date

Public reporting indicates that VFEX has grown, albeit from a small base. Despite a challenging environment, according to Zimbabwean media, VFEX market turnover rose 117 percent, going from US$26.3 million in 2023 to US$57 million in 2024. Market capitalization increased by 6 percent to US$1.3 billion in 2025. In 2024, the number of trades increased by 31 percent.

Growth in turnover, however, does not translate directly into deep liquidity, or a market with high volume and a narrow bid-ask spread, where there are many buyers and sellers ready to execute trades at close-to-identical prices, which creates a deep market. While VFEX might not entirely fit the definition of a deep market, trades are not concentrated at the high and low extremes, with little activity in the middle, creating a barbell structure. VFEX offers a diverse range of securities, suggesting a multi-tiered market with top gainers and top losers showing wide price dispersion, with no evidence of a sharp drop in trading volume or liquidity at the extremes. It also includes a mix of asset classes and maturities to further avoid a barbell structure.

VFEX is a “frontier market,” an equity market in a developing country that is more advanced than the least developed countries (LDCs) but less developed than mainstream emerging markets. It is in that middle ground between LDCs and emerging markets, offering high long-term returns with somewhat higher risks and lower liquidity.

Implications for US-Zimbabwe Relations

For US investors and corporations, the principal advantage of VFEX is operational: securities are denominated and settled in US dollars or other convertible currencies, reducing currency exchange complexity. If repatriation procedures are credible, VFEX can serve as a cleaner channel for Zimbabwe exposure than local currency assets. This matters to frontier-market portfolio managers, diaspora-linked investors with US dollar resources, and corporations exploring strategic stakes in Zimbabwean firms with export earnings, such as mining, agribusiness, tourism, logistics, and energy services.

A key impediment to US investment or other business ventures in Zimbabwe has been the Zimbabwe Democracy and Economic Recovery Act of 2001 (ZIDERA), enacted on December 21, 2001 in response to political violence and democracy suppression in Zimbabwe in the late 1990s, which directs US executive directors at international financial institutions to oppose certain lending and debt relief to the Government of Zimbabwe unless certain specific conditions are met. Although it was not a blanket prohibition on private investment, it created an environment that led many American investors to adopt more conservative de-risking policies toward Zimbabwe. In September 2025, H.R. 5300, a bill to guide US foreign policy, was introduced in the House of Representatives. Section 303 of that bill repealed ZIDERA, but left significant conditions in place, including the requirement that Zimbabwe remit all outstanding arrears owed under the Global Compensation Deed, inflation-adjusted to the date of enactment, and compensation shall not be in the form of Zimbabwe-issued securities. While this bill (that has not yet been signed into law) represents a symbolic victory for Zimbabwe’s government, with an external debt of over $14 billion, the cash-strapped government is unlikely to be able to satisfy the conditions.

This matters because if American investors remain wary, VFEX might struggle to attract US currency even with the firewalls separating it from the domestic economy. If, on the other hand, VFEX becomes a credible, rules-based channel that attracts reputable foreign investment (including US-linked firms), it can create stable operating conditions, transparent regulation, and credible dispute resolution, providing a platform for pragmatic dialogue even when bilateral political relations are tense. Conversely, if VFEX is perceived as an institution that benefits a narrow elite, it will intensify skepticism in Washington and among US investors.

How to Get From Where We Are to Where We Need to Be

The following are some thoughts on how to attract greater US participation in VFEX without raising bilateral political tensions.

The Government of Zimbabwe should:

1. Publish clear, routine data on currency repatriation timelines;
2. Strengthen anti-money laundering and countering the financing of terrorism (AML/CFT) controls and communicate them clearly;
3. Minimize discretionary rule changes;
4. Provide transparent dispute resolution mechanisms for the Victoria Falls International Financial Services Centre (IFSC); and
5. Prioritize and enhance investor experience (account opening, settlement, etc.) so that US intermediaries can assess operational risk.

US investors and intermediaries should:

1. Treat VFEX exposure as a governance and operations problem, not merely an asset selection problem;
2. Conduct enhanced due diligence on counterparts, beneficial ownership, and sanctions screening; and
3. Consider phased entry (small allocations, co-investments, or sector-specific exposures with high US dollar earnings and strong disclosure.

US policymakers should:

1. Clarify the permissible channels for compliant private investment; and
2. Encourage transparency benchmarks on issues such as anti-corruption, governance, and disclosure to reduce de-risking behavior without signaling unconditional normalization.

VFEX appears to be a serious institutional attempt to solve a real macro-financial constraint: the difficulty of mobilizing long-term capital in an unstable currency environment. An equally unstable political environment further hampers it. If Zimbabwe can protect the exchange’s hard-currency rulebook, ensure predictable mechanics, deepen liquidity, and maintain the firewall between VFEX and the turbulent domestic situation, it could become a significant contributor to investment and export growth, and a potential bridge to more normal investment relations with US capital. Improvement of Zimbabwe’s economy could potentially lead to progress in resolving its domestic political problems. This, in turn, could lead to a pathway to normalization of the overall US-Zimbabwe relationship.

Featured image: Adobe Stock

The Foreign Policy Research Institute (FPRI) is pleased to welcome Jessica C. Liao, Prashanth Parameswaran, and Raghvendra Kumar as Fellows.

Jessica C. Liao is a Non-Resident Senior Fellow at FPRI, an associate professor of Asian Studies in the Department of National Security and Strategy at the US Army War College, and an Adjunct Professor at Georgetown University’s Walsh School of Foreign Service, Asia Pacific Program. Previously, she was an associate professor of political science at North Carolina State University’s School of Public and International Affairs.

Prashanth Parameswaran is a Non-Resident Senior Fellow at FPRI. Born and raised in Southeast Asia, he is also a senior columnist at The Diplomat, an advisor at the strategic consultancy BowerGroupAsia, founder of the weekly ASEAN Wonk newsletter, and a course instructor at the State Department and the Pentagon.

Raghvendra Kumar is a Non-Resident Fellow in FPRI’s Asia Program and a Postdoctoral Fellow at the School of International Relations and Peace Studies, Nalanda University, Rajgir, Bihar, India. His research lies at the intersection of geopolitics, geoeconomics, and security studies, with a focus on the strategic landscape of the Western Indian Ocean (WIO). He examines India–China engagement in maritime Africa, the geopolitics of resource extraction, traditional and non-traditional security threats, and the evolving regional maritime security architecture.

For more information or media inquiries, please contact Leah Pedro at lpedro@fpri.org.

On April 10, after coalition forces had fired at least 1,700 Patriots in just five weeks, the Pentagon announced a $4.76 billion contract to accelerate production. While a seemingly forceful response, the move only highlighted the core problem. At the current build rate of 600 missiles per year, it would take three years to replace what was used in a little over a month. Replenishment runs on an industrial clock, and that clock is measured in years, not days.

Patriot missile expenditure by the United States and its allies in the 2026 Iran War is the clearest case study in command of the reload. The problem is not simply how to fire more missiles, but how to sustain missile defense once the opening magazine is gone. That requires three things:

1. Buying time through multiyear demand that gives industry room to invest;
2. Buying redundancy across the sub-tier bottlenecks that pace production
3. Buying efficiency through defensive doctrines that preserve premium interceptors for premium threats.

For decades, US grand strategy was what Barry Posen famously called “Command of the Commons,” the ability to dominate every war-fighting domain to shape the terms of a conflict. That advantage still matters, but the Iran war exposed the harder foundation beneath it. The United States can expend advanced precision-guided munitions in weeks, while the defense-industrial base takes years to replace them. Command of the commons now depends more heavily on “Command of the Reload.”

Time-money mismatches are not a budget glitch; it is a structural crisis that we describe as the “Iron Triangle of the Defense-Industrial Base.” Unlike the classic management triangle of cost, time, and performance, this is a supply-side triangle where time, capacity, and cost are in constant tension. Constraints at any point within the defense-industrial base ecosystem (e.g., sub-tier suppliers, specialized test infrastructure, long qualification cycles, etc.) means that industry cannot “make it now” just because Washington policymakers want more missiles. The Patriot interceptor is the perfect example: It’s expensive, low-density, and indispensable. The shortage did not begin with Iran; by July 2025, US Patriot stocks had already fallen to 25 percent of the Pentagon’s minimum requirements due to transfers to Ukraine. The conflict did not create the deficit; it merely exposed a fragility that many think tanks like the Center for Strategic and International Studies, the Payne Institute for Public Policy, and RAND had been warning about for years.

The strongest indicator that Washington understands the constraint is what it is doing outside the traditional defense sector. The Pentagon is now asking major US manufacturers, including automakers and other industrial firms, to explore expanding weapons production, which appears to be a return to the World War II “Arsenal of Democracy” playbook. You don’t start calling Detroit unless the existing defense-industrial ecosystem cannot reload fast enough.

The PAC-3 Missile Segment Enhancement (MSE) interceptor surge announcement should be viewed through that lens. The contract action allows work to start while final terms are still being negotiated, which is the Pentagon admitting urgency while also admitting that the pipeline cannot be rebuilt instantly.

Achieving command of the reload requires more than buying missiles after stocks run low. Washington must buy time through consistent multiyear demand that allows industry to invest. It must buy redundancy to break single points of failure in the supply chain. And it must buy efficiency through layered defensive doctrines that preserve premium interceptors for premium threats. The United States is trying to buy back an endurance that war revealed cannot be surged on command.

Buy Time: The Clock of War

The first requirement for command of the reload is time, and the Patriot interceptor missile illustrates this timing problem. Every PAC-3 MSE interceptor carries a production lead time of 24 months for the missile and 30 months for the solid rocket motor. Such timelines are due to physical industrial constraints, such as the lengthy curing time required for solid rocket motors and the complex, multi-year process of qualifying any new component supplier. Interceptors funded under the April 2026 contract will probably not arrive until mid-2028 at the earliest. The contract is large and urgent, yet its timeline exposes the paradox of modern defense procurement: Even an emergency response moves at a pace that is strategically irrelevant in the short term.

That is why the significance of the contract is less about the money and more about the demand signal it sends to the industrial base. A one-time infusion of money does little to persuade suppliers to hire specialized labor or expand tooling. As Pentagon leaders and congressional counterparts increasingly argue, defense firms make those long-term investments only when they receive a stable, multiyear demand signal. In that sense, consistent demand must be paired with industrial policy.

Washington has begun moving in this direction. In January 2026, the Pentagon and Lockheed Martin signed a seven-year framework agreement to raise PAC-3 MSE production from 600 missiles annually to 2,000 a year by 2030. This is a serious effort to buy time before the next emergency. Still, the scale of the gap remains striking. Lockheed delivered only 620 interceptors in 2025, or about 1.7 missiles per day for a global network of allies. While the production curve is improving, its industrial slope cannot match modern combat.

The Iran war simply revealed how little slack remained in the system. The failure to maintain a robust industrial pipeline after the Cold War, when the defense industry was hollowed out following the 1993 “Last Supper” meeting, offers a cautionary tale. Countries sustain combat by treating munitions demand as a long-term signal rather than a crisis response. Industrial capacity grows only when governments buy time before they need it.

Buy Redundancy: The Weakest Link

Buying time is not enough. The second requirement for command of the reload is redundancy, especially below the prime contractor, where output is truly determined. Modern missile production moves at the speed of its weakest indispensable supplier. Lockheed Martin assembles the final PAC-3 MSE interceptor, but actual throughput depends on a fragile network of producers for seekers, rocket motors, energetics, and specialized test infrastructure.

The scale of that vulnerability is easy to miss in peacetime and impossible to ignore in war. During the first four days of the Iran war, coalition forces expended Patriot rounds at an estimated rate of 225 missiles per day, while Lockheed’s Camden facility produced just 1.7 per day. This consumption-to-production ratio of roughly 132:1 highlights a massive warfighting endurance gap.

The primary bottleneck sits one level below the prime contractor. Boeing produces the active radar seeker for every PAC-3 MSE from a single facility in Huntsville, Alabama, and in 2025 it delivered only around 650 to 700 seekers. Recognizing this choke point, the Pentagon signed a framework in April 2026 to triple seeker production, an admission that final assembly capacity is irrelevant if the sub-tier cannot keep up. The same logic applies to the missile’s solid rocket motor, manufactured by L3Harris’s Aerojet Rocketdyne. The Pentagon’s recent $1 billion investment in that firm underscores its unique vulnerability; its motors are a critical input not just for the Patriot but for the THAAD, Tomahawk, and Standard Missile programs as well.

For decades, Washington favored lean supply chains and peacetime efficiency. That approach saved money, but under the pressure of conflict it is revealed as fragility dressed up as discipline. A country that depends on one qualified source for a key missile component does not possess surge capacity; it possesses hope. The answer is selective redundancy where it matters most: second-source qualification for critical components, pre-cleared technical data packages, and a standing surge architecture built before a crisis begins. This work is unglamorous, but it is what determines whether the United States can sustain a fight once its opening stockpile runs low.

Buy Efficiency: The Defensive Economy

Command of the reload requires efficiency. Even an expanded industrial base cannot match a risk-averse air defense doctrine. The US Army’s revised acquisition objective for 13,773 PAC-3 MSE interceptors, at a total program cost of over $53 billion for 60 US Army Patriot batteries, underscores a simple truth: these assets are too valuable to waste.

The solution is a defensive economy: reserving premium interceptors for the high-end threats, such as ballistic missiles. Cheaper threats, such as one-way attack drones, must be pushed down to more sustainable layers, including guns, short-range missiles, and “anti-drone” drones. A layered defense architecture does more than improve tactical performance; it stretches finite magazines and buys the industrial base time to replenish what combat consumes.

The economics of failing to do so are stark. Firing a $4 million PAC-3 MSE at a $35,000 Iranian drone creates a ruinous 114:1 cost ratio. The reality on the battlefield can be even worse; Ukrainian military advisors in the Gulf were shocked to see coalition batteries firing eight interceptors to shoot down a single Iranian drone. A defensive posture built on that exchange rate becomes financially and industrially exhausting. The answer is not simply to manufacture more interceptors, but to preserve them for the threats that justify their cost, a trend already visible in our Payne Institute proprietary ledger tool, which shows the wartime use of over 450 Raytheon Coyote “anti-drone” drones against Iranian drones.

This need for efficiency is intensified by overwhelming global demand. Of the April 2026 contract, 94 percent of the funds came from Foreign Military Sales. Allied governments are the primary customers driving industrial expansion, and the combined demand queue from over a dozen countries, like Saudi Arabia, Germany, and Poland, represents a backlog of over 4,300 Patriot rounds. This is basically seven years of Patriot output at 2025 production rates.

Ultimately, layered defense is industrial preservation by other means. Better sensor discrimination and a more efficient shot doctrine at the battery level now shape strategic endurance at the national level. Buying more missiles without changing doctrine simply creates a larger arsenal to be consumed inefficiently. Better doctrine without industrial depth, conversely, eventually collides with the hard reality of finite supply. Command of the reload requires both: one expands the arsenal, the other preserves it.

Reloading American Power: The New Grammar of War

The Pentagon’s use of emergency authorities to accelerate arms sales is not a sign of strength; it is a confession of weakness. Washington has realized, mid-conflict, that the US military does not have the industrial endurance it assumed. But these are policy stopgaps, not solutions. The fundamental problem is governed by the iron triangle of the defense-industrial base: munitions can be good, fast, or cheap, but never all three. Surging production under wartime pressure means sacrificing “cheap,” a reality starkly illustrated when the US Navy required over $2 billion to replenish $1 billion in munitions after its Red Sea operations.

This new reality demands a focus on the command of the reload. It is the ability to keep fighting after the opening exchange, to defend allies without emptying one’s own magazines, and to win a war of industrial attrition without watching tactical success turn into strategic exhaustion. When it comes to deterring China and Russia, industrial endurance is becoming a core element of military power itself.

To achieve industrial resilience, Washington must pursue three interconnected policy reforms. First, it must buy time through consistent, multiyear demand, including subsidies and tax credits that give industry a stable footing. This would transform the industrial base from a reactive job shop into a proactive strategic asset, capable of anticipating future needs. Second, it must buy redundancy by investing directly in the sub-tier supply chains for critical materials, chemicals, and components. Dependence on a single factory for a vital missile component stifles surge capacity and creates a strategic vulnerability. Finally, Washington must buy efficiency by enforcing layered defense doctrines and tactics that preserve premium interceptors for premium threats. A smarter shot doctrine is the most effective way to stretch finite magazines and prevent adversaries from winning a war of attrition through cost-imposing attacks. Unlike a reactive emergency appropriation, these reforms are a proactive investment in lasting industrial power and credible long-term deterrence.

The lesson of the Patriot missile goes beyond just a single weapon system. For decades, American power was measured by its ability to strike anywhere on the globe. The Iran war has shown that it will now be measured by its ability to reload.

Featured Image: Michigan Army National Guard photo by Spc. Aaron Good

The much-anticipated meeting in Beijing between Donald Trump and Xi Jinping ended without any significant tangible breakthrough in relations between the United States and China. Behind the facade of cordial relations between the leaders, the differences between Washington and Beijing over trade, Taiwan, and Iran became apparent at the end of the two days. 

The summit also made clear that neither side has a clear upper hand over the other either economically or politically and that whatever decisions are made between the world’s two largest economies will have repercussions far between the borders of their countries. 

With President Trump facing political pressure back home ahead of the midterm elections, expectations had been high that he would push for a breakthrough in trade relations with Beijing and clinch a deal for China to buy more US goods that would be touted as a win. That speculation had been particularly high as the president was accompanied by some of the biggest titans of US industry including Nvidia chief executive officer (CEO) Jensen Huang, Apple CEO Tim Cook, and Tesla’s Elon Musk. Yet no such deal was to be seen, and even the agreement for China to purchase 200 Boeing aircraft fell far short of the 500 that investors had been expecting. 

Meanwhile, the structural challenges for trade relations between the G2 remain. While a truce between the two sides over escalating tariffs remains in place until November 2026, the possibility of the return of the tariff war persists. Uncertainties remain about the United States’ own tariff policy after the Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act and the US Court of International Trade subsequently ruled that the tariffs imposed by Section 122 of the Trade Act of 1974 were unlawful. As Washington now continues to pursue Section 301 investigations to retaliate against foreign governments pursuing unfair trade practices, how this could impact US tariffs on China moving forward was not made clear during the summit. 

What’s more, strategic challenges for US economic relations with China persist, as China continues to have a chokehold on key US industries by dominating the global supply chains for critical minerals and magnets in particular. So long as China has over 90 percent of the world’s magnet manufacturing capacity and dominates the refining process of rare earths, US competitiveness will be in jeopardy and US industries will remain vulnerable to Beijing’s coercive actions. 

Trump will no doubt reciprocate the hospitality proffered by Xi with much pomp and circumstance when the Chinese leader visits the White House in September. But while both sides will want to avert a military conflict, economic warfare is well in play.  A clear roadmap on what a US win should look like in managing economic relations with China needs to be drawn before then. That vision needs to prioritize resilience to Chinese economic coercion, which must include investing more in domestic capabilities.  

For Indo-Pacific Deterrence, What Happens Next Matters Most – Chris Estep

Ahead of last week’s meetings in Beijing between US President Donald Trump and People’s Republic of China President Xi Jinping, many observers accurately predicted Indo-Pacific security issues would take a backseat to the day’s headlines: war in the Middle East, a fragile US-China trade truce, and more. 

The exception, as many expected, was Taiwan, which the Chinese side described in a readout as “the most important issue” in the US-China relationship, warning the United States (and, indirectly, Taiwan) about potential conflict if the situation is not “handled properly.” Before last week, Beijing was reportedly preparing to push Washington to adjust longstanding US rhetoric on Taiwan toward more favorable language for Beijing. But an initial White House readout did not mention Taiwan at all. While US Secretary of State Marco Rubio told reporters later that US policy regarding Taiwan remains unchanged, the US government missed an important opportunity to publicly reiterate the US position in its official readout. 

The agenda in Beijing may not have covered many Indo-Pacific security issues at length, but the calendar ahead will prove critical.

First, when will the US government use its full toolkit for strengthening Taiwan’s self-defense capabilities? Media reports suggested that the administration has waited to unveil a new $14 billion foreign military sales package until after Trump and Xi met. On Friday, Trump even described the package as a “very good bargaining chip” with China. But will the administration finally accede to lawmakers’ growing demands and approve the sales? Additionally, will Congress fund the administration’s budget requests for Presidential Drawdown Authority and the Taiwan Security Cooperation Initiative?

Second, how will the administration manage its strategic priorities in the Indo-Pacific amid renewed conflict in the Middle East? The US military has expended thousands of critical munitions against Iran and undertook massive deployments in the Persian Gulf and the Caribbean this year. Can upcoming US senior leader travel, military exercises, and other activities in the Indo-Pacific restore confidence in Washington’s ability to deliver on its regional goals?

Third, will regional players stay the course and increase defense spending this year? In Washington, the Trump administration has proposed record military funding levels. After protracted debate, Taiwan’s legislature recently passed $25 billion in additional defense spending. Japan, South Korea, and Australia are each aiming to spend more on defense in the near term. But the war in Iran is creating fiscal strain across the region; will Indo-Pacific leaders be able to follow through?

The Beijing summit raised these questions and more. The Trump administration, Congress, and regional capitals all have consequential roles to play in answering them, and what happens next matters most of all.

The Trump-Xi Summit and Taiwan: Narrative Hype vs. Reality –  Thomas Shattuck

After months of questions, analysis, and hype surrounding what Donald Trump would say about Taiwan at the delayed summit with Xi Jinping, the two leaders met, and Trump did not make any major changes to longstanding US policy. Chairman Xi reportedly centered the entire summit and progress in the US-China relationship around Taiwan by saying, “The Taiwan question is the most important issue in China-US relations. . . . If mishandled, the two countries could face confrontation or even conflict, pushing the entire China-US relationship into a highly dangerous situation.” With such stark remarks, one would expect Trump to react to his host’s statement, as it was a clear sign that Xi expected some movement on Taiwan in exchange for the desired trade and investment deals. Instead, according to the Washington Post, “In the meeting, Trump did not respond to Xi’s comments about Taiwan and moved on to the next topic without acknowledging them at all.” 

The narrative in the weeks prior to the summit emphasized the People’s Republic of China’s hopes that Trump would make changes to longstanding US policy, and that narrative devolved into an expectation that the administration would have to do something on Taiwan to appease Xi. Trump’s position at the summit had diminished given the state of the Iran war and its effects within the United States and around the globe. Prior to the summit’s delay, Trump may have had the upper hand in negotiations, but that dynamic flipped. Despite the power shift, Trump did not abandon Taiwan, nor did he publicly agree to delay or end arms sales to Taiwan. The administration did change its language to “oppose” Taiwan independence. 

One his way from Beijing on Air Force One, Trump reaffirmed his usual response to the question of the US defense of Taiwan: “That question was asked to me today by President Xi. I said I don’t talk about that.” This has been Trump’s version of the longstanding US policy of strategic ambiguity. And on arms sales, Trump said, “I’ll be making a decision.” Secretary of State Marco Rubio emphasized: “US policy on the issue of Taiwan is unchanged as of today.” Nothing major seems to have changed, and there are no leaks contradicting anything that Trump or Rubio said publicly.

And for its part, Taiwan’s Legislative Yuan approved its long-delayed special defense budget, which would fund two large US arms sales packages, last week before Trump departed for Beijing. The budget—lower than the Lai Ching-te administration originally proposed—prioritizes the US arms sales over domestic Taiwanese defense industrial investment.

Now, it is important to see what Trump does after coming home from his summit in Beijing. He had previously delayed a second arms sale package to Taiwan that Congress approved in January so as to not derail the summit negotiations. Republican and Democratic senators have urged Trump to finalize the approval after he returns from Beijing. How quickly or slowly Trump approves the second arms package—which Taipei already has funded—will be the most telling indicator of how Trump perceives the outcomes of his meetings with Xi.

Trump-Xi Summit Spotlights Southeast Asia Hedging Bets and Economic Futures – Prashanth Parameswaran

The outcomes from the Trump-Xi summit are mixed for Southeast Asia. On the one hand, much of the region will hope leader-level engagement can extend a period of temporary stability between the superpowers—as opposed to undesirable extremes of conflict or a G2 condominium—which in turn gives Southeast Asian states space to engage Beijing and Washington while also hedging their bets across wider multialignment approaches. Seen from this perspective, any advances on developments such as China’s proposal to make a new vision of a “constructive China-US relationship of strategic stability” and changes in economic ties will be carefully watched. We can expect to hear more about this dynamic in the next few weeks across major regional engagements including the Shangri-La Dialogue in Singapore and the Association of Southeast Asian Nations (ASEAN) Future Forum in Vietnam.  

Generally, added temporary stability in US-China ties would be welcomed in key regional capitals given the wider global economic fallout from Middle East conflict that has already affected growth prospects in what is collectively the world’s fifth-largest economy. At the recent ASEAN summit meeting convened by the Philippines, leaders called for urgent measures to strengthen regional resilience, including in energy, supply chains, and macroeconomic policy. 

On the other hand, much of the region will also keep the development in perspective given that it is unlikely to change the long-term structural competitive dynamics between China and the United States. Singapore Prime Minister Lawrence Wong captured a sentiment often heard from officials in the region when he said that the Trump-Xi engagements dominating 2026 ought to be viewed at best as part of a “temporary truce” to establish “guardrails” around the relationship even as “the rivalry” remains.

Looking ahead, Southeast Asian states will also be assessing how evolving US-China summitry is affecting US China policy, US–Southeast Asia ties, and implications for regional economic prospects. Some Southeast Asian countries have already been included in the Trump administration’s economic initiatives, be they Malaysia and Thailand, which signed critical mineral pacts with Washington, or the Philippines and Singapore, which are part of the “Pax Silica” umbrella. But the region has also seen the more coercive side of US policies, including tariff imposition and scam center sanctions. As such, much of Southeast Asia will be carefully assessing datapoints during the second half of 2026 including US-China engagement at the next round of ASEAN summitry as well as US-China twin hosting of the G-20 and the Asia-Pacific Economic Cooperation, respectively. 

Featured image: White House/Flickr

In this episode of Baltic Ways, Dr. Indra Ekmanis speaks with Professors Violeta Davoliūtė and Ene Kõresaar about their contributions to a special issue of Slovak Ethnology. Co-edited by Davoliūtė, the issue focuses on slow memory. Kõresaar, together with colleague Kristi Jõesalu (who contributed to this episode outside of the recording), brought comparative research on slow conflict in Baltic history museums and the representation of Russophone minorities to the issue. The discussion also explores the academic value of slowing down in research and how this contrasts with the broader pressures to publish quick results.  

Find the special issue of Slovak Ethnology here.

Baltic Ways is a podcast from the Association for the Advancement of Baltic Studies, produced in partnership with the Baltic Initiative at the Foreign Policy Research Institute. The views and opinions expressed in this podcast are those of the authors and do not necessarily reflect the official policy or position of AABS or FPRI.

Image: Wikipedia | Nacionalinismuziejus

Executive Summary

China’s latest Five-Year Plan signals that it has become more pessimistic about the global environment, seeing it as uncertain and unstable. However, the Chinese Communist Party sees opportunity in that instability to promote the Community of Common Destiny, their new model of global governance. The Five-Year Plan also signals that the Chinese will continue to use the United Nations to advance this new global governance system.

As a result of Beijing’s growing pessimism, the United States could see a China that retrenches itself in the Western Pacific, hoping to stabilize its economy and its borders. Although worried, China could also see an opportunity in the chaos to shape its neighborhood without US interference, with further island-building in the South China Sea or other aggression toward its neighbors. This China will also use the worry and malcontent of nations to advance its vision for global governance, using the United Nations and its four Global Initiatives.

China adopted its first Five-Year Plan in 1952, copying heavily from the Soviet system of five-year plans.^[1] As the highest-level plans in the Chinese Communist Party (CCP) system, the Five-Year Plans provide centralized coordination to focus and guide the People’s Republic of China’s (PRC’s) efforts. The final product is referred to as an “Outline” as it is the highest-level plan that will guide lower-level plans throughout the ministries, agencies, provinces, and municipalities.^[2] The latest Five-Year Plan will guide the PRC from 2026 to 2030, setting goals and benchmarks for the entire government to achieve by 2030. While it is an economic roadmap, a China watcher not reading the Five-Year Plan is akin to a US military watcher not reading the US National Security Strategy given the security implications of China’s economic ambitions.

Significant Changes Between Initial Recommendations and Final Outline

How the plan is drafted remains a secret. Nonetheless, there are some noteworthy milestones. The process begins two years before publication, with preliminary planning starting in March 2024. The “Recommendations for Formulating the 15th Five-Year Plan for National Economic and Social Development” (“Recommendations”) were presented during the Fourth Plenary Session of the CCP Central Committee meeting in October 2025.^[3] Throughout this process, the Recommendations are the first draft that is available to the public. After refinement, the “Outline of the 15th Five-Year Plan for National Economic and Social Development of the People’s Republic of China” (“Outline”) was presented and approved at the National People’s Congress in March 2026.^[4]

^[5]

While there are many evaluations of the 15th Five-Year Plan itself, including the finer details of its industrial, technological, and economic plans, this paper explores the significant changes between the Recommendations published in October 2025 and the Outline from March 2026. Much of the text in the Outline is an exact copy of the language used in the Recommendations. But as the Outline is twice the length, it obviously adds more detail. However, as Recommendations are issued by the CCP Central Committee—the CCP’s leading body—any changes between the Recommendations and the Outline should reflect a change in the party’s thinking, not merely a difference of opinion between bureaucratic offices. These changes could help us understand the CCP’s thinking and its approach for the next five years.

Shifts in Global Risk Assessment and Chinese Domestic Priorities

Most of the differences between the documents are elaborations and explanations of the brief introductions in the Recommendations. However, there are three major changes between the two documents that give us a window into CCP thinking. In the five months between publications, the CCP changed its outlook on the international situation, elevated the Community of Common Destiny, and added a focus on the United Nations.

Five-year plans open with an assessment of the situation. Both the Recommendation and the Outline start with an optimistic outlook, saying, “Our country possesses many favorable factors for proactively managing its international space and shaping its external environment.”^[6] Both documents start with identical language for the international situation.

From an international perspective, the profound global shifts unseen in a century are accelerating in their evolution, the balance of international power is undergoing deep adjustments, and a new round of scientific and technological revolution and industrial transformation is achieving rapid breakthroughs; consequently, China possesses numerous favorable factors enabling it to proactively navigate the international landscape and shape its external environment. At the same time, the world is characterized by an intertwined mix of change and turmoil, with intensifying instability and frequent outbreaks of geopolitical conflicts.^[7]

After this preface, the documents diverge. The Recommendation continues:

Unilateralism and protectionism are on the rise; the threats posed by hegemonism and power politics are mounting; the international economic and trade order faces severe challenges; and the global economy lacks sufficient momentum for growth. Meanwhile, strategic rivalry among major powers has become increasingly complex and intense.^[8]

In contrast, the Outline posits a much more uncertain future:

The global governance deficit is widening, and security issues are becoming more acute. Furthermore, unilateralism and protectionism are on the rise, while the threats posed by hegemonism and power politics are mounting; the international economic and trade order faces severe challenges, and the global economy suffers from insufficient growth momentum and accumulating risks. The strategic rivalry among major powers has become more complex and intense, leading to a marked increase in the uncertainty and instability of the external environment.^[9]

Both documents then end their assessment by referring back to the original optimism: “Changes bring opportunities, and challenges inspire fighting spirit.”^[10]

In the five months between versions, however, China’s view on the world situation soured, with it now seeing a “marked increase in the uncertainty and instability of the external environment.” The October 2025 Pakistan-Afghanistan border clashes certainly weighed on the CCP’s changing view of the global situation. But the many changes coming from the United States probably had more impact on the Chinese assessment. The US National Security Strategy,^[11] released in December 2025, and the National Defense Strategy from January 2026 both signaled massive changes to US objectives.^[12] Similarly, the American interventions in Venezuela (Operation Absolute Resolve, January 2026) and in Iran (Operation Epic Fury, February 2026) likely changed the CCP outlook on the opportunities ahead.

In the second major change, the CCP moved the chapter on the Community of Common Destiny (CCD) from chapter 60 of 61 in the Recommendations to chapter 24 of 62 in the Outline. Given China’s focus on the importance of protocol order, this shows a dramatic increase in prioritization. The elevation of the Common Destiny vision that espouses China’s broader foreign policy goal shows how the CCP sees the “widening deficit in global governance” as an opportunity to advance its alternative to the US-led global governance system. Launched globally in 2013 by General Secretary Xi Jinping, the CCD aims to use China’s growing power to reform the global governance system to advance a model more supportive of its authoritarian system.[13] Xi has not been shy in this goal, calling in 2018 for China to “lead the reform of the global governance system.”[14]

The CCP has long explained the common destiny vision through its contrast to the US-led system. In his 2018 speech at the Xiangshan Forum—Beijing’s alternative to the Shangri-La Dialogues—then-Minister of National Defense General Wei Fenghe said that Xi “puts forward the major initiative to build a community of shared future for mankind,^[15] which has been widely acclaimed by all countries and peoples.” He then laid out a series of choices for the nations: “We should seek mutual benefit instead of playing a zero-sum game… we should pursue openness and inclusiveness instead of alliances and confrontation… we should pursue wide consultation and joint contribution instead of unilateralism… we should pursue mutual respect instead of bullying the weak.”^[16] The CCP now sees an increased contrast between the current system and its proposed CCD, providing an opportunity to win others to its side.

In the last major change, a possible response to unilateral actions around the world, the Outline added a UN and multilateral focus to the section on the CCD. 

We advocate and practice genuine multilateralism, firmly uphold the international system with the United Nations at its core, the international order based on international law, and the basic norms of international relations based on the purposes and principles of the UN Charter.

It is clear that the PRC sees the United Nations as part of its toolkit in managing the shifts in the global governance system.

Granted, the PRC’s use of the United Nations to advance its interests and the CCD is not new.^[17] In his 2019 Xiangshan Forum speech, former Vice Chairman of the Central Military Commission Gen. Xu Qiliang said,

As a founding member of the United Nations and a permanent member of the Security Council, China always upholds the international order with the UN at its core, supports and implements multilateralism, and strives for peace, development and win-win cooperation. China will continue to build world peace, contribute to global development and maintain the international order. We have offered China’s approach. President Xi Jinping has put forth the initiative of building a community with a shared future for mankind, calling for all countries to jointly build an open, inclusive, clean, and beautiful world that enjoys lasting peace, universal security, and common prosperity.^[18]

It is clear that the United Nations holds a key position in the CCP’s promotion of its alternate global governance system, lending the CCD legitimacy through multilateralism. Rather than directly confronting the current global order, China aims to co-opt organizations when it can, reforming them to advance their goals and alternative system.^[19]

These three major changes—a changed outlook on the international situation, an elevation of the CCD, and a focus on the United Nations—clearly demonstrate that the CCP sees opportunities in growing instability worldwide.

Why China Leveraging Global Uncertainties Matters for the United States

The changes have three implications for the United States. There are opportunities and challenges, but the United States will see China aggressively promoting its vision across the world using the four Global Initiatives.

A pessimistic CCP offers opportunities. A CCP worried about the international environment could retrench itself in the Western Pacific, prioritizing its economy and focusing its security apparatus on keeping its borders stable. Xi has recently put a focus on security, saying, “Security is the precondition for development.”[20] A CCP focused on its periphery provides the United States with the space to achieve its goals in the Western Hemisphere. The 2026 US National Security Strategy calls for the United States to “restore American preeminence in the Western Hemisphere,” and a worried CCP is unlikely to be able to challenge the US goal to become “the Hemisphere’s economic and security partner of choice.”

This worried CCP also presents challenges. The CCP could see the United States as too distracted to focus on the Pacific. This CCP could fish in the troubled waters (混水摸鱼 húnshuǐmōyú) of the international situation, using the confusion to distract from its activities and to advance its objectives in nearby locations like Taiwan and the South China Sea. This may already be playing out, as China has recently renewed island construction in the South China Sea at Antelope Reef.^[21] This is the first significant island-building by China since 2017, and it is on track to potentially be the largest of China’s man-made features in the South China Sea.^[22]

This worried-but-opportunistic CCP could be further encouraged by US weapons stockpile depletions and weakened US deterrence. While Taiwan announced it plans to form a fourth Patriot air defense battalion,^[23] the United States continues to expend Patriot missiles at a rate that far exceeds production. It is estimated that the United States fired hundreds of Patriots in the first weeks of the conflict with Iran.^[24] Lockheed Martin plans to more than triple production, but the plan will take at least seven years.^[25] With production unable to keep pace with expenditure, it is unlikely that Taiwan will receive missiles for its new Patriot battalion any time soon. This depleted capability also reduces the ability of the United States and Taiwan to deter China’s coercive actions toward Taiwan.

Lastly, the United States can expect the CCP to accelerate the push for its alternative global governance system—the CCD—using the United Nations. The United States should pay close attention to the CCP’s use of its four Global Initiatives: the Global Development Initiative, Global Security Initiative, Global Civilization Initiative, and Global Governance Initiative. Together, these initiatives form the backbone of the CCD and the CCP’s international push to change the global order. Both the Recommendations and the Outline link the CCD with the CCP’s four Global Initiatives:

We will implement the Global Development Initiative, Global Security Initiative, Global Civilization Initiative, and the Global Governance Initiative, actively advance major-country diplomacy with Chinese characteristics, and make Chinese contributions to building a community with a shared future for mankind.

The four Global Initiatives go beyond just monetary investments and include multilateral forums, such as the Global Public Security Cooperation Forum (Lianyungang) (GPSCFL).^[26] At forums such as this, the CCP will propagate its norms, standards, and practices, furthering its alternative global governance system. According to the PRC’s State Council, in 2025 the GPSCFL brought in participants from 120 countries, regions, and international organizations.^[27] The GPSCFL is one of many forums started or revamped in the name of the four Global Initiatives, each attracting an increasing number of participants, and each looking to spread and legitimize CCP ideas and norms.

With these three implications—opportunities, challenges, and promotion of the CCD—the United States cannot fall into the black-and-white fallacy, deciding that China will either retrench or be active. A pessimistic China can retrench into the Pacific while also pursuing its goals with a distracted United States. This is most likely in the CCP’s pursuit of the CCD, as it will push the four Global Initiatives throughout the world but will mainly focus near its borders.

 Deciphering China’s Mindset

But what if this assessment is wrong? What indicators would suggest we have read too much into the changes between the Recommendations and the Outline? While the Five-Year Plan states that there is growing global instability, what if the CCP does not see this as a significant problem?

A CCP that was not worried about growing instability would not hold itself near its borders. Worried or not, the CCP will certainly continue with some investments around the world. But an unworried CCP will push large investments through the four Global Initiatives throughout the Western Hemisphere, western Africa, and the Middle East. Identification of increased Chinese resources being spent on the four Global Initiatives outside of the Pacific would suggest that the assessment of a worried CCP was incorrect.

Policy Recommendations 

In an environment of limited resources, not every Chinese activity can—or must—be countered. China’s four Global Initiatives will mobilize hundreds of activities in the Western Pacific and around the world. As such,

• The United States must understand Chinese and US objectives to identify where they are complementary, neutral, or conflicting. As China focuses on its borders, the United States will need to decide where CCP goals and US goals conflict in the Pacific and prioritize its limited capital and time.
• As the CCP shifts its efforts to its periphery, the United States may find success closer to its own borders. The United States should plan for “catastrophic success” for competition with China in the Western Hemisphere, or at least plan for dwindling Chinese resources. The CCP shifting its efforts from the Western Hemisphere could also allow the United States to free up resources for allocation elsewhere. 

The changes between the Recommendations and the Outline show that China has become more concerned about growing instability in the world. But this worried China also sees opportunities in this turmoil. The CCP will focus its efforts closer to home, while also continuing its aggressive actions near the border. But the CCP’s worry also offers the United States opportunities and challenges as the CCP tries to advance its alternative global governance system.

The views in this report are those of the author.

^[1] Central Intelligence Agency, “Comparison of the First Five Years Plans of Communist China and the USSR,” June 1959, https://www.cia.gov/readingroom/docs/DOC_0000313443.pdf.

^[2] Bert Hofman, “Deciphering the 15th Five Year Plan,” Mercator Institute for China Studies, March 19, 2026, https://merics.org/en/comment/deciphering-15th-five-year-plan.

^[3] “The CPC Central Committee’s Proposal on Formulating the 15th Five-Year Plan for National Economic and Social Development,” Xinhua News Agency, October 28, 2025, https://www.news.cn/politics/20251028/08920d9f557c432e99459f8f468504db/c.html.

^[4] “Outline of the 15th Five-Year Plan for National Economic and Social Development of the People’s Republic of China,” Xinhua News Agency, March 13, 2026, https://www.spp.gov.cn/spp/tt/202603/t20260313_723954.shtml.

^[5] Translations by author. “国家“十五五”规划(2026-2030)” The National 15th Five-Year Plan (2026–2030), The People’s Government of Jingtai County, 景泰县人民政府, March 13, 2026,

https://www.jingtai.gov.cn/zfxxgk/bmhxzxxgk/xzfzcbmzsjgml/xfgj/fdzdgknr/ghjh/art/2024/art_ba28a29cdf814e259abdb0cae949e858.html

^[6] “我国具备主动运筹国际空间、塑造外部环境的诸多有利因素.” “Outline of the 15th Five-Year Plan for National Economic and Social Development of the People’s Republic of China,” Xinhua News Agency, March 13, 2026, https://www.spp.gov.cn/spp/tt/202603/t20260313_723954.shtml.

^[7] “从国际看，世界百年变局加速演进，国际力量对比深刻调整，新一轮科技革命和产业变革加速突破，我国具备主动运筹国际空间、塑造外部环境的诸多有利因素。同时，世界变乱交织、动荡加剧，地缘冲突易发多发.” “Outline of the 15th Five-Year Plan for National Economic and Social Development of the People’s Republic of China,” Xinhua News Agency, March 13, 2026, https://www.spp.gov.cn/spp/tt/202603/t20260313_723954.shtml.

^[8] “单边主义、保护主义抬头，霸权主义和强权政治威胁上升，国际经济贸易秩序遇到严峻挑战，世界经济增长动能不足；大国博弈更加复杂激烈.” “The CPC Central Committee’s Proposal on Formulating the 15th Five-Year Plan for National Economic and Social Development,” Xinhua News Agency, October 28, 2025, https://www.news.cn/politics/20251028/08920d9f557c432e99459f8f468504db/c.html.

^[9] “全球治理赤字加重、安全问题凸显；单边主义、保护主义抬头，霸权主义和强权政治威胁上升，国际经济贸易秩序遇到严峻挑战，世界经济增长动能不足、风险积累；大国博弈更加复杂激烈，外部环境的不确定性不稳定性明显增强.” “Outline of the 15th Five-Year Plan for National Economic and Social Development of the People’s Republic of China,” Xinhua News Agency, March 13, 2026, https://www.spp.gov.cn/spp/tt/202603/t20260313_723954.shtml.

^[10] “变局蕴含机遇，挑战激发斗志.” “Outline of the 15th Five-Year Plan for National Economic and Social Development of the People’s Republic of China,” Xinhua News Agency, March 13, 2026, https://www.spp.gov.cn/spp/tt/202603/t20260313_723954.shtml.

^[11] White House, National Security Strategy of the United States of America, November 2025, https://www.whitehouse.gov/wp-content/uploads/2025/12/2025-National-Security-Strategy.pdf.

^[12] Department of War, 2026 National Defense Strategy, January 23, 2026, https://media.defense.gov/2026/Jan/23/2003864773/-1/-1/0/2026-NATIONAL-DEFENSE-STRATEGY.PDF.

[13] Liza Tobin, “Xi’s Vision for Transforming Global Governance: A Strategic Challenge for Washington and Its Allies,” Texas National Security Review 2, no.1 (2018):154, http://dx.doi.org/10.26153/tsw/863.

[14] “Xi urges breaking new ground in major country diplomacy with Chinese characteristics,” Xinhua News Agency, June 24, 2018, https://www.xinhuanet.com/english/2018-06/24/c_137276269.htm.

^[15] “Community of shared future for mankind” is the PRC’s preferred English translation for CCD, to distance it from its negative English connotations.

^[16] Wei Fenghe, “Address by General Wei Fenghe, State Councilor and Minister of National Defense, China,” in Building a New Type of Security Partnership of Equality, Mutual Trust, and Win-Win Cooperation; Speech Collection of the 8th      Beijing Xiangshan Forum, 8th      Beijing Xiangshan Forum Secretariat, 2018.

^[17] Kristine Lee and Alexander Sullivan, “People’s Republic of the United Nations: China’s Emerging Revisionism in International Organizations,” Center for a New American Security, May 14, 2019, https://www.cnas.org/publications/reports/peoples-republic-of-the-united-nations.

^[18] Xu Qiliang, “Speech at the Welcoming Dinner of the 9th Beijing Xiangshan Forum by Gen. Xu Qiliang, Vice Chairman of the Central Military Commission,” Beijing Xiangshan Forum Secretariat, October 20, 2019, https://xiangshanforum.cn/speech.html?speechcode=5SeA8e4C6Kh8840K&currPage=1.

^[19] Courtney J. Fung and Shing-hon Lam, “Mixed report card: China’s influence at the United Nations,” Lowy Institute, December 18, 2022, https://www.lowyinstitute.org/publications/mixed-report-card-china-s-influence-united-nations.

[20] “President Xi Jinping’s keynote speech at the opening ceremony of BFA annual conference,” The State Council, The People’s Republic of China, April 21, 2022. https://english.www.gov.cn/news/topnews/202204/21/content_WS62616c3bc6d02e5335329c22.html.

^[21] Mike Cherney, “China Is Building Another Massive Base in the South China Sea,” Wall Street Journal, April 1, 2026, https://www.wsj.com/world/china/china-south-china-sea-military-base-3ebf3dc2.

^[22] “Antelope Reef Could Now Be the Largest Island in the South China Sea,” Asia Maritime Transparency Initiative, March 19, 2026, https://amti.csis.org/antelope-reef-could-now-be-the-largest-island-in-the-south-china-sea/.

^[23] “Patriot-3 extended-range missiles will begin delivery this year; the Air Force Air Defense Department will establish its fourth Patriot battalion,” Liberty Times, April 23, 2025, https://def.ltn.com.tw/article/breakingnews/5020578.

^[24] Stavros Atlamazoglou, “US on Track to Triple Patriot Missile Production, Pentagon Says,” The National Interest, April 4, 2026, https://nationalinterest.org/blog/buzz/us-on-track-to-triple-patriot-missile-production-pentagon-says-sa-040426.

^[25] J.D. Simkins, “Pentagon, Boeing agree to triple PAC-3 seeker production,” Defense News, April 1, 2026, https://www.defensenews.com/industry/techwatch/2026/04/01/pentagon-boeing-agree-to-triple-pac-3-seeker-production/.

^[26] Sheena Chestnut Greitens, Isaac B. Kardon, and Cameron Waltz, “A New World Cop on the Beat? China’s Internal Security Outreach Under the Global Security Initiative,” Carnegie Endowment for International Peace, August 6, 2025, https://carnegieendowment.org/research/2025/08/a-new-world-cop-on-the-beat-chinas-internal-security-outreach-under-the-global-security-initiative.

^[27] “2025 Conference of Global Public Security Cooperation Forum opens in east China,” The State Council of the People’s Republic of China, September 17, 2025, https://english.www.gov.cn/news/202509/17/content_WS68caaf45c6d00fa19f7a286e.html.

Image: Unsplash | Sou Jest

FPRI Africa Program Chair Charles A. Ray will be joined by Ambassador Aïssatou Clémence Baré of the Republic of Niger, Ambassador Sékou Berthé of the Republic of Mali, Ambassador Kassoum Coulibaly of Burkina Faso, and Michael Walsh of Future Continuum to discuss the short and long-term prospects for improved US relations with the Sahel states.