China Eyes Low-Cost Munitions After Watching US Struggle Against Cheap Drones

There's a peculiar war happening in the Red Sea: million-dollar missiles hunting thousand-dollar drones. It's a mathematical nightmare for any defense budget, and China has been taking notes.

A Chinese military journal Ordnance Science and Technology published an analysis this month arguing that Beijing should follow Washington's lead in developing low-cost guided munitions. The reason? Watching the US burn through expensive interceptors against Houthi drone harassment and struggle to sustainably support Ukraine against Russia's cheap but relentless air strikes.

The assessment reveals something profound about modern warfare: sometimes the side with the cheaper weapon wins, even when they lose every individual engagement.

The Economics of Modern Air Defense

The math is brutal. US Navy ships in the Red Sea have been firing $2 millionSM-2 missiles to down $1,000 Houthi drones. Each successful interception is technically a victory but economically a defeat. It's like using a Ferrari to catch a bicycle thief – effective but unsustainable.

Ukraine faces a similar challenge. Russia's Shahed drones cost roughly $20,000 each, while the Western air defense systems shooting them down burn through interceptors costing hundreds of thousands of dollars apiece. The Ukrainian military has had to develop creative solutions, including using small arms and even nets to bring down the slow-moving but numerous Iranian-designed drones.

The Chinese analysis frames this as a fundamental shift in military economics. Quality once trumped quantity decisively, but mass-produced, expendable weapons are now capable of overwhelming even the most sophisticated defense systems through sheer numbers and cost asymmetry.

America's Strategic Pivot

The Pentagon isn't blind to this problem. The Replicator program, announced last year, aims to deploy thousands of low-cost drones within two years. Defense Secretary Lloyd Austin has called it essential for maintaining military superiority against China's growing arsenal.

This represents a philosophical shift for the US military, which has long prioritized technological superiority over cost efficiency. The F-35 fighter program, with its $1.7 trillion lifetime cost, embodies the old thinking. The new approach acknowledges that future conflicts might be won not by the most advanced weapons, but by the most economically sustainable ones.

China's military analysts see this American pivot as validation of their own strategic thinking. For years, the People's Liberation Army has emphasized "winning local wars under modern conditions" – a doctrine that prizes overwhelming local superiority achieved through mass deployment rather than technological perfection.

The Democratization of Destructive Power

What makes this trend particularly significant is how it lowers barriers to military capability. Building a stealth fighter requires decades of research, specialized manufacturing, and billions in investment. Building effective attack drones requires commercially available components and relatively modest engineering expertise.

Iran has demonstrated this principle effectively, supplying both Russia and various proxy groups with drone technology that, while not cutting-edge, proves devastatingly effective in large numbers. The country has essentially industrialized asymmetric warfare, turning drone production into an export industry.

This democratization of destructive capability worries traditional military powers. When a $1,000 drone can mission-kill a $100 million warship, the fundamental assumptions about military investment and deterrence start to crumble.

Strategic Implications for Global Powers

The Chinese analysis suggests a two-track approach: maintain technological edges in key areas while simultaneously building mass-production capabilities for expendable systems. This mirrors how the US is trying to balance continued investment in advanced platforms like the B-21 bomber with rapid deployment of cheaper, more numerous systems.

For other nations, the implications are profound. Countries that can't compete in the high-end technology race might find viable alternatives in mass-produced, lower-cost systems. This could reshape alliance structures and regional power balances in unexpected ways.

The challenge extends beyond military planning into industrial policy. Success in future conflicts might depend less on having the most advanced defense contractors and more on having the manufacturing capacity to rapidly produce and replace large numbers of relatively simple systems.