For The Wall Street Journal’s China Real Time Report, Gabe Collins and Andrew Erickson discuss the implications of the recent launch of China’s new destroyer, called the Type 052D Luyang III-class, which may signal a move to higher standards as the People’s Liberation Army Navy looks to replace old ships entering obsolescence:

The Type 052D’s emergence suggests that China’s naval shipbuilding capability is maturing further, with China State Shipbuilding Corporation (CSSC) ‘s new shipyard on Shanghai’s Changxing Island becoming a capable facility for constructing modern surface combatants. It offers further evidence that China can produce warships quickly using modular construction techniques and perhaps other advantages such as lower cost labor than its competitors can access. Series production tends to reduce unit costs because shipyard workers and suppliers find ways to increase efficiency as they spend significant time and energy on the same tasks and improve their operational practices.

Analysis by RAND (pdf) demonstrates that doubling the procurement rate of warships in the U.S. decreased unit costs by 10%. Given that Chinese shipbuilders are still building up their modern naval construction industrial base, the efficiency gains in China are likely to be larger as domestic efficiency increases and Chinese manufacturers displace foreign parts that may cost more.

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A host of important questions remain regarding the Type 052D, the answers to which would help military planners and policymakers outside of China better understand the impact that the ship is likely to have. The answers to many of these questions—for instance, how good shipboard electronics systems are and how well crews can use their ship to fight modern battles—will become clearer over time as the PLAN makes decisions regarding operational approaches and training intensity and more Chinese sailors gain experience through both tours in the Gulf of Aden and exercises closer to home.

The Type 052D appears to be a very modern warship that, with continued improvements in China’s maritime surveillance and targeting infrastructure and more intensive training of crews, can help make the PLA Navy even more formidable throughout the Asia-Pacific region. Regional neighbors such as the Philippines, Vietnam, Japan and South Korea are likely to respond by augmenting their own navies and reaffirming diplomatic and security ties with the U.S.

Last month, China also formally commissioned its first aircraft carrier after months of sea trials. Erickson and Collins wrote that the debut of the ship, called the “Liaoning” by China’s Ministry of National Defense, “matters both symbolically and in terms of China’s naval power and regional influence”. From The Wall Street Journal:

China’s maritime neighbors in Southeast Asia, as well as Japan, India, South Korea, Russia, Australia and the U.S. will pay especially close attention. With Liaoning officially in the fleet, the next questions that China’s military and civilian leaders must grapple with are, first, how to use the ship; second, how many more carriers to build; and third, how to protect it from the increasingly capable anti-ship weapons being acquired by neighbors such as Vietnam, which is due to take delivery of its first Russian Kilo-class diesel attack submarine by the end of 2012. The Liaoning’s existence will likely impel China to develop more advanced surface combatants and anti-submarine forces to protect the symbolically valuable, but operationally vulnerable, asset.

At present, the Liaoning remains first and foremost an emblem of future Chinese sea power. All of its 10 sea trials to date have occurred well within Chinese waters. Chinese naval aircraft have not achieved the basic milestone of landing on its deck with the help of arrestor wires, or “traps,” a process that their American counterparts have been perfecting for decades.

Yet, while the Liaoning’s capabilities will remain modest for the foreseeable future, it will be watched carefully as an important symbol of Beijing’s intentions. As Rear Admiral Yang Yi wrote in a commentary published immediately after the commissioning was made public: “In order to counterbalance the theory that its new aircraft carrier is a threat, China must not only continue to make clear its strategies and policies, it must also take practical actions to convince the world that with the development of China’s military strength, especially the strengthening of its overseas projection capability, it will enhance its role as a defender of regional stability and world peace.”