China has an aircraft carrier -- and it's making a lot of people nervous.
In fact, depending on whom you believe, China may be well on its way to building a second aircraft carrier. Or a third. Or even a fourth.
Over the weekend, DefenseNews.com reported that construction of a sister ship to China's Liaoning (PLAN CV-16) carrier has definitely begun. Liaoning Provincial Communist Party Secretary Wang Min told delegates to the 12th Provincial People's Congress last week that China's second aircraft carrier is now under construction in the port city of Dalian. According to the South China Morning Post, China aims to complete the carrier by 2018. With China's military budget having tripled over the past decade, plans are in place to arm the People's Liberation Army Navy, or PLAN, with as many as four aircraft carriers by 2020.
According to Richard Fisher, senior fellow at the International Assessment and Strategy Center, China could begin work on its third aircraft carrier at the Jiangnan-Changxin shipyard in Shanghai "very soon."
This, says DefenseNews, has experts "wary" over China's intentions. But what are these intentions, exactly?
Crisis and opportunity
There are three possible scenarios to describe China's sudden interest in joining the world's aircraft-carrier club. And while some of these scenarios might worry some people, when viewed in the most positive light, each scenario also offers us reasons to be optimistic, and to welcome China's aircraft-carrying ambitions.
Scenario No. 1: China as global superpower
Under the first scenario, China's desire to build aircraft carriers, plural, suggests a desire to assume global superpower status -- to challenge the U.S. for supremacy of the seas.
Maybe that's their aim. U.S.-China Economic and Security Review Commission member Larry Wortzel, for one, sees China's carrier-building activities as proof positive that "the PLA and the party are serious about operating carrier battle groups in the near and far seas by about 2020."
Yet according to Hong Kong's Ta Kung Pao newspaper, PLAN Senior Capt. Li Jie says China's new carriers will be only "medium-sized" vessels "of about 53,000 tons displacement" -- smaller even than the Liaoning. Placed side-by-side with the class of new 100,000-ton Gerald R. Ford-class supercarriers that America is building, China's mini-carriers would seem veritable bathtub toys, half the size of the Ford class, and carrying only one-third the fighter aircraft. That hardly sounds like a threat.
Wortzel notes that building a carrier fleet would permit China to "project power more effectively in the South China Sea." Chinese People's Liberation Army Deputy Head Zhang Junshe reinforced this theoryin an article in China Daily USA over the weekend. He directly tied China's desire for multiple aircraft carriers to fears of a "remilitarization" next door in Japan, which he says "already has two Hyuga-class [helicopter destroyers] which the Western media call "aircraft carriers in disguise."
Roger Cliff, senior fellow with the Asia Security Initiative at the Atlantic Council, agrees that "four carriers would give China a real, albeit limited, blue water capability" to counter perceived threats from Japan, and to "project air power against lesser countries outside of the range of China's land-based aircraft."
Scenario No. 3: China as a partner for peace
The third theory for why China wants carriers sounds disturbing, but also potentially reassuring. Junshe noted that "having two or more aircraft carriers is normal for a regional or global power." What's more, because China is "one of the five permanent members of United Nations Security Council, it has to shoulder global responsibilities."
What kind of "responsibilities"? Citing the string of natural disasters that have struck Japan, the Philippines, and other countries in the Asia-Pacific region in recent years, Junshe pointed out: "U.S. aircraft carriers played a vital role in the rescue and relief operations. ... Aircraft carriers will allow China, too, to play such a role in the future."
Farther abroad, China is a major investor in Africa and has a vested interest in ensuring freedom of the seas, and safe transit of merchantmen in the Indian and Atlantic Oceans. In early 2010, three Chinese warships began working in conjunction with American and other warships, patrolling the Gulf of Aden to combat the scourge of Somali piracy. Cliff (the Atlantic Council representative) noted that "for missions like counterpiracy patrols off of Somalia, having a carrier around would be nice, because it can cover a lot more area and more targets than a surface combatant."
The upshot for investors
Whatever China's intentions for its aircraft carrier(s), "wariness" among the experts has already proved a boon for investors in U.S. defense contractors Boeing (NYSE:BA), Lockheed Martin (NYSE:LMT), and Huntington Ingalls (NYSE:HII), which have enjoyed an upsurge in interest from regional buyers of their missiles, F-35 fighter jets, and warships, respectively. As China's carrier-building program gets under way, and attracts ever more attention from world media, expect that interest to continue and increase.
As for America, though, we have 104 years of naval air operations under our belt. I doubt we have any immediate need to worry about a country that's still figuring out how to land planes on an aircraft carrier safely. Building an aircraft carrier is one thing. Figuring out how to use it effectively is going to take a whole lot longer.
Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of Lockheed Martin. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.