"U.S. Stockpiles Cost-Effective Anti-Ship Missiles to Counter China: What This Means for Your Portfolio"
By Gerry Doyle and Mike Stone
SINGAPORE (Multibagger) - The United States is ramping up its arsenal of affordable and easily manufactured anti-ship weapons in a strategic move to deter China in the Indo-Pacific region. This pivot, driven in part by the lessons learned from Russia's invasion of Ukraine, signifies a shift towards a philosophy of "affordable mass," as one missile industry CEO put it.
The Shift Toward Affordable Mass
This new strategy aims to counter China's vast array of ships and conventional ballistic missiles designed to target vessels. According to Euan Graham, a senior analyst at the Australian Strategic Policy Institute, this approach is a natural counter to China's military capabilities.
The U.S. is focusing on developing and deploying the QUICKSINK weapon, a cost-effective bomb equipped with a low-cost GPS guidance kit and a seeker that can track moving objects. A recent test saw a B-2 stealth bomber successfully strike a target ship in the Gulf of Mexico using QUICKSINK.
Bridging the Missile Gap
While China maintains a numerical advantage with its anti-ship missiles, the U.S. aims to narrow this gap by increasing QUICKSINK production. This would place China's 370 warships at greater risk in any future conflict. QUICKSINK, developed by Boeing with a seeker from BAE Systems, can be adapted to the existing Joint-Direct Attack Munition (JDAM) kits, turning "dumb" bombs into precision-guided munitions.
The U.S. Indo-Pacific Command has expressed a need for thousands of these weapons to overwhelm Chinese ship defenses. In a potential conflict, the strategy would involve using more expensive Long Range Anti-Ship Missiles (LRASM) and SM-6 missiles to disable Chinese warships, followed by a barrage of lower-cost QUICKSINK weapons.
A Diverse Arsenal
The U.S. is also deploying a variety of anti-ship weapons in Asia. In April, the U.S. Army introduced new Typhon mobile missile batteries during exercises in the Philippines. These batteries, capable of launching SM-6 and Tomahawk missiles, are designed to be produced quickly and cheaply.
Stockpiling for the Future
Government documents indicate that the U.S. plans to procure over 800 SM-6 missiles in the next five years, with thousands of Tomahawks and hundreds of thousands of JDAMs already in inventory. According to Graham, China's strategy aims to restrict U.S. Navy movements in the Western Pacific and the First Island Chain. The U.S. response is to make operations more difficult for the People's Liberation Army Navy (PLAN).
Strategic Deployments
Positioning anti-ship weapons in locations like the Philippines would extend their reach across much of the South China Sea, a region heavily claimed by China. Collin Koh from the S. Rajaratnam School of International Studies in Singapore suggests that this strategy levels the playing field, similar to how Iran-aligned Houthi forces use low-tech weapons to disrupt civilian traffic in the Red Sea.
Breaking It Down: How This Affects You
- Investment Opportunities: Defense contractors like Boeing and BAE Systems may see increased demand, potentially boosting their stock prices.
- Market Dynamics: The ramp-up in defense spending could shift market focus towards the defense sector, affecting stock portfolios.
- Global Stability: Increased military tensions in the Indo-Pacific could lead to market volatility. Investors should stay informed about geopolitical developments.
Conclusion
The U.S. shift toward cost-effective anti-ship weapons aims to counter China's growing naval power. For investors, this strategy highlights potential opportunities in the defense sector while also underscoring the importance of staying attuned to geopolitical risks. Understanding these dynamics can help you make informed decisions to safeguard and grow your investments.