Assumptions and Force Planning
Why we are unprepared for "managed competition" and shouldn't set our sights so low
Friends,
This past week, I participated in a call with someone who had held very senior positions in two different Democratic Administrations. This individual made what I thought were two really important observations:
1) the cost of underestimating threats is greater than the costs of overestimating threats; and
2) the trend line of our defense spending is dangerously low given even the most optimistic scenarios we face.
Here are two charts that help illustrate the second point:
Now I think spending as a percentage of GDP is the right metric to use when we think about these issues. Fixating on a large number is a bit meaningless unless we put that number in context.
I can almost hear the exclamations and gasps as I write this:
“But the United States spends more on Defense than Education, we can’t possibly spend more! Think about the children!”
“The United States spends more on Defense than nearly every other country! It’s insane to consider spending more!”
“We are spending nearly a trillion on the military, isn’t that enough?!? We should focus on reducing waste and fraud.”
“We just can’t afford more defense spending, haven’t you seen the debt?!?”
All interesting questions and points, not all of which are true and some of which are beside the point.
Let me take the first one.
The United States spends about 6.1% of GDP on Education (3.6% on elementary and secondary education, 2.6% on postsecondary education) and it spends about 2.9% of GDP in Defense.
If this seems contrary to everything you have been led to believe, it is because education and defense spending are almost always framed through the lens of the “Federal Budget” and the Federal Departments in charge of these things:
FY 2024 Budget for the U.S. Defense Department = $883.7 billion
FY 2024 Budget for the U.S. Education Department = $79.1 billion
Therefore, the United States MUST be spending 10 times as much on Defense, right? No.
If you just think about it for a moment, you remember that the vast majority of education funding in the United States takes place at the State and Local level, none of which is accounted for in the Federal Budget (the Federal Government doesn’t collect property taxes). And if you remember your civics class, you remember that State and Local Governments spend almost zero on defense because it is a federal responsibility. States potentially could raise and support a militia, but since the reforms of the late 19th Century, they don’t anymore.
A more accurate understanding of U.S. Education spending doesn’t start with the Education Department’s Budget or the grants they control, but on the combination of Local, State, and Federal funding. When you sum all that up (12,546 school districts, 571 county-dependent school systems, 227 municipal systems, 50 U.S. states, and 3,982 degree granting postsecondary institutions), you get total public spending on education at about double defense spending.
Now I’m not arguing we should spend less on Education, but I am pushing back on the false impression that we spend vastly more on the military in the U.S. than we do on education. [Don’t even look at what we spend on healthcare, in 2019 (the year before the massive uptick from COVID), the U.S. spent $3.5 trillion, approximately 17.7% of GDP and 30% more than we were spending in constant dollars in 2009.]
As for the U.S. outspending every other country combined…
Perhaps this was true a decade or two ago, but it isn’t true now. The PRC defense budget has been growing at a higher rate than the United States, just as its growth in GDP has been growing at a higher rate. Officially, the PRC says it spends just over $200 billion on defense but conservative estimates place that at over $300 billion and that does not account for Purchasing Power Parity (PPP), meaning things and personal cost less in the PRC.
As Professor Peter Robertson and Wilson Beaver pointed out a few months ago in Foreign Policy (China’s Defense Budget Is Much Bigger Than It Looks), the starting salary for a truck driver in the United States is $40,000 per year and 54,000 yuan (or $7,600 at the current currency conversion) in the PRC. The same applies to goods and services that the PRC buys with its defense budget. So if the PRC can spend one quarter less than the United States and get an equivalent output, then the U.S. and PRC defense budgets look evenly matched (as Mackenzie Eaglen at AEI, Senator Dan Sullivan (R-AK), and General Milley, the former Chairman of the Joint Chiefs of Staff have all argued).
We also need to account for Russia. Over the past 18 months, Putin has overhauled the Russian economy and put it on a war footing, transitioning the 11th largest economy to maximize military output. While it is true that in 2022, the Russian economy took a hit due to sanctions, the hit wasn’t as big as many think. In 2022, economists estimate that the Russian economy shrank between 1.2%-2.1%, but since that first year, the Russian economy has grown (largely due to energy sales that provide Moscow with increasing revenue). Some estimate that in 2023, the Russian economy (with massive assistance by Beijing) grew by 3.6% and the IMF estimates it will grow by 2.6% in 2024.
Analysts estimate that Moscow spent over $350 billion on its military in 2023 (a 25% growth over their 2021 military spending). Many expect that figure to grow again in 2024-2025 and the same purchasing power parity benefits accrue to Moscow as they do to Beijing, as it costs significantly less to pay Russian soldiers, purchase Russian war material, and make weapons in Russian factories.
So if we estimate Beijing’s military budget as equivalent to $800 billion and Moscow’s to $600 billion, then we are facing a Sino-Russian entente with a combined military budget of $1.4 trillion in today’s dollars.
[You will notice that I haven’t even included the fiasco that is the Middle East and the significant resources that theater still demands from the United States.]
Let’s go back to that first point raised by the former senior official:
“The cost of underestimating threats is greater than the costs of overestimating threats.”
Americans are underestimating the threats we face from our principal adversaries, and we are not prepared for multiple, simultaneous conflicts. Our support to Ukraine and efforts to maintain deterrence in the Middle East (two missions we MUST do) are straining our current resources and there is no plan to increase those resources in a meaningful way by the Biden Administration or Congress.
Our adversaries observe this lack of preparation and are taking advantage of it.
They can see that we are not making the difficult trade-offs to build the kind of serious military power that is appropriate to the threats we face. Both Beijing and Moscow judge that U.S. military power is at an historical low point and there is good reason to believe that it does not deter them from military adventurism (it certainly did not deter Putin in February 2022). They see that we have delayed our nuclear modernization for over three decades, meaning that our strategic nuclear forces are brittle. And they see that our allies are even less prepared to defend themselves (though Tokyo is making some admirable progress… but from a pretty low starting point).
Xi and Putin exchange an unusual hug in Beijing during Putin’s State Visit last week. I think it is clear that the relationship between Putin and Xi is closer than any relationship that the U.S. President has with an American Ally.
It is entirely possible, that during their meeting last week in Beijing, Xi and Putin concluded that they have a unique opportunity to use military force to overturn the international system. They may also have concluded that when push comes to shove, Washington will backdown because it has not begun to take serious actions to repair its military position and it no longer has an industrial base to support a crash defense build-up.
This brings us to the title of today’s newsletter on why assumptions and force planning matters, and how they impact our grand strategy.
At the end of the first cold war, the United States underwent a long process of analysis and planning to determine what kind of military it needed after the collapse of the Soviet Union. While this planning took place at the Pentagon, it involved members of the various Presidential Administrations and leaders from Congress.
I won’t go into the byzantine history of that, but by the end of the first decade of the 21st Century we had largely settled on a set of assumptions about the future, and we settled on a consensus of the resources that the nation would be set aside for national defense (between 2% and 3% of GDP).
Assumptions as of 2010 (the beginning of the Obama Administration):
The military threats facing United States would come primarily from rogue states and non-state actors.
The United States should be prepared to fight two simultaneous regional conflicts (Iran and North Korea, both isolated rogue states with few resources or industrial capacity).
The United States could rely on its own existing military power projection capabilities, as well as a globalized transportation and logistics network run by commercial entities, should the need arise.
Both the PRC and Russia would support the United States in isolating North Korea and Iran and help prevent those rogue states from acquiring nuclear weapons.
The U.S. military involvement in Iraq and Afghanistan would end shortly giving the military services the time and resources to implement modernizations and reforms.
While there were tensions, Russia and the PRC would likely support the United States in maintaining a liberal, rules-based international order because it is in their best interest to do so.
Russia and the PRC will not join forces to challenge the United States and the risk of conflict with either of those two countries is very low.
The current nuclear posture (2010) is sufficient and should be reduced to encourage further disarmament from other nuclear powers, therefore nuclear modernization should be delayed or scrapped altogether.
Should the unexpected happen, the United States will still be the most technologically advanced country, will possess an industrial base that can rebuild military power relatively quickly, and can rely on an increasingly civilian/commercial transportation and logistics network for military operations around the globe (this last assumption was never really stated explicitly because it was so deeply held in the minds of elected officials, military leaders, and civil servants).
Consensus about Defense Resourcing in the early 2010s:
Given the threats and other budgetary requirements (skyrocketing healthcare costs, the Global Financial Crisis, raising cost of education, rising cost of entitlements, etc.), U.S. defense spending should settle between 2% and 3% of GDP, essentially half of what it had been in 2007 when it approached 6% during the simultaneous conflicts in Iraq and Afghanistan, facing non-state actors with minuscule resources of their own.
The United States encouraged its NATO allies, and other allies like Japan, to match U.S. defense spending with a floor of 2% of GDP, most had been well beneath 2% of GDP for more than a decade, yet we assumed we could persuade them to spend more and share the burden.
Based upon these assumptions and the resources available, the Department of Defense and the military services planned their forces accordingly.
From a “force planning” perspective (the system that the Pentagon uses to match the size and capabilities of the Joint Force to the scenarios they are likely to face), the United States expected that over the next 2-3 decades it would only face two relatively weak regional powers simultaneously and could therefore build a force that could fight in one theater, while deterring the other adversary in another theater until the first was completed. This became a two regional war capability and the military services implemented reforms following the Global War on Terror to create a Joint Force based on these assumptions.
[Of note, this is why the Navy built the Littoral Combat Ship (LCS)… a class of vessels that is so ill-suited to today’s threat environment that the Navy is decommissioning them less than a decade after they were built, just read this from ProPublica: “The Inside Story of How the Navy Spent Billions on the “Little Crappy Ship””].
Unfortunately, things didn’t turn out the way we had hoped.
Our assumptions proved to be too optimistic, which isn’t surprising… that is quite normal for all humans. But more importantly, we failed to revise our resourcing to match a vastly more dangerous international environment, something that should have been obvious when Putin annexed Crimea in 2014 and the PRC became more aggressive in the South and East China Seas. But those warning signs did not spur a significant change in resources (instead we started implementing cuts through continuing resolutions (CRs) and sequestration).
This is probably not surprising either given human tendencies. Americans were tired of war (remember how popular the “forever war” trope was/is) and it is always easier to avoid sacrifice, if one can reasonably hope that things will turn out better.
Which brings us to what our assumptions are today.
Assumptions (2024):
The United States faces possible simultaneous conflicts with multiple nuclear powers, including both the PRC and Russia, as well as a nuclear North Korea and a near-nuclear Iran.
The PRC and Russia will cooperate to defeat the United States and are seeking to overturn the liberal, rules-based international order.
Both the PRC and Russia will rely on their full suite of conventional and nuclear forces to coerce and intimidate the United States and its allies.
Both the PRC and Russia support North Korea and Iran in their conflicts with the United States and its allies.
The PRC and Russia are rapidly modernizing their strategic and tactical nuclear forces, as well as learning operational lessons from the conflicts in Ukraine and the Middle East.
Allies of the United States are ill-prepared to defend themselves without significant U.S. support and none are pursuing a crash defense build-up similar to what Beijing and Moscow are pursuing.
The U.S. technological dominance has eroded more rapidly than had been assumed 15 years ago given U.S. economic policies towards the PRC. U.S. technological dominance is no longer assured.
The United States lacks the industrial base to rebuild military power and its existing industrial base is dwarfed by what the PRC can and does produce (the PRC’s shipbuilding capacity 230 times greater than the United States).
Much of the global transportation and logistics networks are owned and operated by our principal adversary and that is unlikely to change.
The energy transition from coal, oil, and natural gas to renewable energy sources will consume vast economic resources making it more difficult to allocate resources for defense spending (healthcare and education costs which have been rising at high rates are unlikely to level off).
Our principal adversary controls the “commanding heights” of this new energy system, creating vulnerabilities and driving up costs.
Resources available today for defense (2024):
The FY 2024 Defense Budget was $883.7 billion which was 2.9% of GDP.
Most analysts expect future defense spending to drop as a percentage of GDP to 2.5% by 2034.
Inflation since 2021 has been three times the rate it was 15 years ago, further sapping the buying power of the Department of Defense.
In terms of “force planning,” we are still stuck in the early 2010s because making a significant change to the size and capability of the Joint Force to match the threats we face today would require significantly more resources than we have allocated over the past 15 years.
Instead, we have been reducing the available resources and costs have increased.
So even though our assumptions about the military threats facing the United States were wrong (and have become vastly more dangerous, with multiple ongoing conflicts and hotspots that could flare at any moment), we are essentially spending half of what we did in 2007 as a percentage of our GDP.
At the same time our adversaries have been increasing their military spending each and every year as a percentage of their GDP, while, in the case of the PRC, their GDP has been growing faster than ours.
Additionally, the United States no longer has the industrial base that once made us the “Arsenal of Democracy.” Our largest and most innovative companies have spent the last three decades reducing labor costs for short-term profitability by moving manufacturing to the PRC and turning China into the “Arsenal of Authoritarianism.” And to make matters worse, we have build a global transportation and logistics system around the PRC and given them control of it (shipbuilding, port operations, railways, telecommunications, etc.)
It does not appear to me that we have a plan to address these problems and I see few folks in either party making the case for facing these challenges head on.
What I see folks advocating falls into one of three categories:
Category #1 – We spend too much on defense already and we need to find the fraud and abuse so we can spend less (here is Representative Ro Khanna’s (D-CA) rationale for voting against the 2025 NDAA).
Category #2 – We will employ “Integrated Deterrence” with our economic sanctions and cooperation with allies to make up the shortfall in our hard power and we will conduct “managed competition” with our “competitors” to ensure we don’t provoke them (as best as I can tell after reading the Biden Administration’s published documents and seeing three years’ worth of lower defense budget requests, this is their approach to the problem… hope things don’t get worse).
Category #3 – We should drastically reduce our interests to match our reduced resources, in essence, these folks advocate strategic retrenchment (this comes from Republicans, but also some Democrats who view America’s military activities as the primary driver of instability).
When Matt Pottinger (former Deputy National Security Advisor) and Mike Gallagher (former Chair of the House Select Committee on the CCP) raised some of these issues in their April Foreign Affairs article (No Substitute for Victory: America’s Competition With China Must Be Won, Not Managed), folks from across the political spectrum jumped on them with immediate criticism.
Whether it was Fareed Zakaria in the Washington Post (The dangerous new call for regime change in Beijing), Evan Medeiros, Obama’s NSC Senior Director for Asia, on a Foreign Policy Podcast (“China’s Attempt to ‘Divide and Conquer’ Europe” from minute 20:00 onwards), Elbridge Colby in the Financial Times (America must face reality and prioritise China over Europe), or the Quincy Institute’s event last week at the Hart Senate Office Building with Senator J.D. Vance (R-OH), Senator Rand Paul (R-KY) and Vivek Ramaswamy (What a Foreign Policy For the Middle Class Looks Like: Realism and Restraint Amid Global Conflict), we get the same argument:
The United States can’t and shouldn’t fulfill the role as guarantor of the post-WWII order.
In fairness to Fareed and Evan, they advocate for maintaining the role but are completely unserious about the resources required to do it. They pretend that this high-stakes balancing and “managed competition” can be done while the United States massively underspends on its own hard power. And for the others, they don’t hide their rejection of that role and question whether it is in America’s interest to do it. For them, retrenchment is the answer.
Sorry for the Sunday downer.
***
Mike Gallagher gets sanctioned by the Chinese Communist Party this week
On Tuesday, Bill Bishop ran two statements from Mike Gallagher in his excellent newsletter Sinocism (May 21)… if you don’t subscribe to Bill’s offering, you should.
First is the statement former Congressman Mike Gallagher made from his new position at the Hudson Institute in response to CCP sanctions on him:
These sanctions reveal at least two important things about the CCP and the New Cold War. First, we are dealing with a perpetually paranoid, Marxist-Leninist regime fully committed to an ‘extended struggle’ and victory against such hostile foreign forces as Western constitutional democracy, universal human rights, and freedom of speech. Second, there is no moral equivalence between the CCP and America. We sanction CCP officials for committing genocide and trafficking deadly fentanyl precursor chemicals. They sanction American officials for speaking their mind, or seeking truth from facts, to borrow a phrase.
“Additionally, the irony of this is that for over a year the CCP and its American apologists have criticized me for traveling to Taiwan instead of China. Now, I’m not allowed to travel to China. I shall instead look forward to returning to Taiwan in the near future to discuss how we can enhance peace and stability across the Taiwan Strait.
“As the CCP attempts to silence defenders of freedom, we should continue to shine a light on the CCP’s growing authoritarian repression at home and aggression abroad and stand firm in promoting the security, freedom, and prosperity of America and its allies
Then Mike provided Sinocism with a little spicier statement:
I’d like to thank China’s Ministry of Foreign Affairs for this incredible recognition. When I started the journey of public service, and even when I became Chairman of the Select Committee, I never dreamed of such an accomplishment. To be sanctioned by a genocidal, communist regime is truly the honor of a lifetime. Of course I could never have done it without my incredible colleagues and staff on the Select Committee, who truly deserve the credit.
I just hope somewhere out there some young kids from Northeast Wisconsin see this news and start to believe that as long they work hard enough, subscribe to Sinocism, and ignore the advice of Wall Street and corporate America, they too can be sanctioned by America’s foremost adversary. My only regret is that am no longer allowed to travel to China, as that has been the consistent demand of all the useful idiots who have criticized the Committee’s work. My only request is that the MFA send a formal sanction certificate so that I laminate it and put it on my refrigerator for motivation.
***
Apple helps Beijing with censorship.
Statistic of the week: 97%
From the newsletter International Intrigue last week, they had a statistic that caught my eye:
“In 2022, Apple removed 1,474 apps from its store at the request of governments, the majority of which came from China (1435), India (14), and Pakistan (10)” with an additional 10 from other countries.
That comes to 97% of apps removed by government decree in 2022 resulted from demands by the Chinese Communist Party.
***
United Nations and Taiwan
As various news reports poured in this week of actions taken by countries and the United Nations to support Palestine, I found myself asking this question: If it is legitimate for countries to recognize an independent Palestinian state, establish formal relations with them, and for Palestine to participate in the United Nations as a “Non-Member Observer State” since 2012 (even becoming a UN Member State as the General Assembly voted for two weeks ago), then why is it wrong to do the same for Taiwan?
It seems to me that for sake of consistency, if the Palestinian people deserve a voice at the United Nations, certainly the Taiwanese people do as well.
I don’t expect that to happen any time soon and of course the Chinese Communist Party will exercise its UNSC veto, but it would be great to see UN officials be a little less hypocritical.
***
I’m off to Singapore to attend the Shangri La Dialogue, so there won’t be an issue of this newsletter next week. I’ll return on June 9.
Perhaps if I can get any cool photos or a hot take, I’ll send a short update next Sunday.
The Shangri La Dialogue is hosted by the think tank IISS (International Institute for Strategic Studies) and the Singaporean Government. It is the premier regional security conference and the one place where we can regularly expect the U.S. and the PRC militaries to interact with one another (other than in unprofessional encounters by PLA aircraft and ships in the South and East China Seas).
The U.S. Secretary of Defense and the PRC Defense Minister routinely provide dueling plenary addresses and at least one Head of State provides a keynote address.
This year, the Head of State keynote will be President Bongbong Marcos of the Philippines, so it promises to be fraught with geopolitical tension as the PRC delegation stews in its seats.
I will have my 🍿 ready.
Last year, the Shangri La Dialogue served as the venue for this fascinating photo:
Then PRC Defense Minister Li Shangfu shaking hands with U.S. Defense Secretary Lloyd Austin on June 2, 2023 weeks before General Li was disappeared by the Chinese Communist Party.
Weeks after it was taken, the Chinese Communist Party disappeared General Li (essentially at the same time the Party disappeared their Foreign Minister, Qin Gang). The Party formally removed Li from his position in October and he has likely been swallowed up by the Party’s secret discipline apparatus.
Neither of Li nor Qin Gang have been seen or heard from since.
Someday Li and Qin will emerge dressed in a drab track suit and flanked by serious looking guards.
Or perhaps they have already met their demise and we will never know the full story.
Beijing’s purge of two of its most senior officials last year sent shockwaves through diplomatic and military circles (to say nothing of the fear that permeated the PLA and the Foreign Ministry… not a good time to be associated with the boss).
In December, Beijing appointed Admiral Dong Jun as the new Defense Minister and he spoke with Secretary Austin for the first time in April.
No pressure Admiral Dong…
Thanks for reading and happy Memorial Day,
Matt
MUST READ
1. Russia begins nuclear drills in an apparent warning to West over Ukraine
Associated Press, May 22, 2024
Russia’s military has begun drills involving tactical nuclear weapons that were announced by Russian authorities earlier this month in an apparent warning to senior Western officials who had spoken about the possibility of deeper involvement in the war in Ukraine.
It was the first time Russia has publicly announced drills involving tactical nuclear weapons, although its strategic nuclear forces regularly hold exercises.
According to a statement by the Defense Ministry released Tuesday, the first stage of the new drills envisioned “practical training in the preparation and use of non-strategic nuclear weapons,” including nuclear-capable Kinzhal and Iskander missiles.
The maneuvers are taking place in the Southern Military District, which consists of Russian regions in the south, including on the border with Ukraine; Crimea, illegally annexed from Ukraine in 2014; and four Ukrainian regions that Russia illegally annexed in 2022 and partially occupies.
COMMENT – Less than a week after Xi warmly hosted Putin in Beijing for a coordination meeting on his war (aka a “state visit”), Moscow has commenced drills involving tactical nuclear weapons.
Apologists for Beijing over the past two years have stressed how Xi has strongly influenced Putin against using nuclear weapons, but this provides yet more evidence that Beijing’s efforts have either failed or were never as robust as many had hoped.
I for one don’t think that Xi has done much at all on this front.
Those who hold Xi’s statements up about not fighting a nuclear war are desperate to convince themselves that Xi and Putin really are divided and that Beijing doesn’t want to support Russia.
This is a fantasy that folks want to convince themselves of… because accepting the alternative means that all of this is much, much worse and that Europe and the United States would need to treat Beijing and Moscow as a hostile alliance.
2. UK defence minister says China working to supply lethal aid to Russia
Andrew Macaskill, Reuters, May 23, 2024
British defence minister Grant Shapps accused China on Wednesday of providing or preparing to provide Russia with lethal aid for use in its war against Ukraine.
Western nations have provided Ukraine with billions of dollars in weapons and aid since Russia launched its full-scale invasion in 2022. Britain for the first time is accusing China of working to supply Russia with lethal aid for use in Ukraine.
Shapps told a conference in London that U.S. and British defence intelligence had evidence that "lethal aid is now, or will be, flowing from China to Russia and into Ukraine, I think it is a significant development".
3. US challenges British claim China is sending ‘lethal aid’ to Russia
Luke Harding and Shaun Walker, The Guardian, May 23, 2024
Joe Biden’s administration has challenged a claim by the British defence secretary, Grant Shapps, that China is sending “lethal aid” to Russia for use in its war in Ukraine.
Speaking on Wednesday, Shapps cited “new intelligence” that suggested Beijing was giving Moscow deadly “combat equipment” for the first time. On Thursday, the Ministry of Defence in London said it would not give further details.
Russia has begun a new offensive in Ukraine’s north-east and relentlessly targeted Kharkiv, Ukraine’s second city, with missiles and glide bombs. On Thursday, a strike on a printing house in the city killed seven and injured many more.
Previously, China has been accused by Washington of providing critical components used by Russia’s military since its 2022 full-scale invasion of Ukraine. These include microelectronics that have been fitted in tanks, missiles and other weapons.
Shapps’s comments at the London Defence Conference went further. “Today I can reveal that we have evidence that Russia and China are collaborating on combat equipment for use in Ukraine,” he said.
Calling for Nato to “wake up” and bolster defence spending alliance-wide, he added: “US and British defence intelligence can reveal that lethal aid is now flying from China to Russia and into Ukraine.
“And this is new intelligence, which leads me to be able to declassify and reveal this fact today. I think it’s quite significant.”
Shapps did not provide evidence to support his assertion. But he said there had been a 64% increase in trade between the countries since the start of the war in Ukraine and that they were “covering each other’s back”.
“It’s time for the world to wake up. And that means translating this moment to concrete plans and capabilities. And that starts with laying the foundations for an alliance-wide increase in spending on our collective deterrent,” he said.
After its failure two years ago to seize the Ukrainian capital, Kyiv, the Kremlin sought military supplies from authoritarian partners. It sourced “kamikaze” drones from Iran and artillery shells and short-range ballistic missiles from North Korea. Some of these missiles have been used in Moscow’s bombardment of Kharkiv.
Biden’s national security adviser, Jake Sullivan, appeared to take issue with Shapps’s remarks on Beijing’s alleged role. He said the possibility that China might “provide weapons directly – lethal assistance – to Russia” had been a concern earlier, but that “we have not seen that to date”. The US did, however, have a “concern about what China’s doing to fuel Russia’s war machine – not giving weapons directly, but providing inputs to Russia’s defence industrial base,” he added.
COMMENT – What a mess…
Why would the Biden Administration continue to insist on this hairsplitting and why would it discredit its ally publicly?
The Brits have been responsibly carrying the load on Ukraine and have their own intelligence capability.
Why not just remain silent or refer to Blinken’s earlier remarks?
Beijing is clearly supplying massive military support to Russia and as Secretary of State Blinken has said before, the Russians likely could not have stayed in the war last year without that support.
The Russian defense industry is more than capable of producing its own finished weapons (since the U.S. prohibits Ukraine from striking those factories), as long as it can get the electronic components and other raw materials that Beijing supplies as inputs.
To insist that Beijing isn’t supplying “weapons” is a distinction without a difference.
It seems like the Administration’s plan is to:
A) Pretend that supplying the components to make a cruise missile is completely different from supplying a completed cruise missile (even though the Russians would far prefer to produce and employ their own missiles rather that go through the logistical and technical difficulties of fielding two different types of missiles… same goes for every other piece of equipment). Quote from Blinken: “Here's the problem: What China's doing now is not providing weapons to Russia for use in Ukraine, as, for example, North Korea and Iran are. But it is the number one supplier of the critical components for Russia to rebuild its defense industrial base-- machine tools, microelectronics, optics and other things that are going right into a massive production of munitions, of weaponry, of tanks, of armored vehicles, which in turn are going into Ukraine.”
B) Threaten Beijing that the U.S. will take strong action against Beijing unless they end their support to Moscow (as Washington did early in 2022). When Beijing increases its support to Moscow (as it did in early 2023), fly to Beijing and plead with Beijing to stop or else.
4. Traces in the Land
Sim Chi Yin and Ian Johnson, ChinaFile, May 6, 2024
In August 1967, Dao County in Hunan Province saw over 9,000 murders amid the Cultural Revolution. Victims, deemed "five black elements," were brutally killed and thrown into rivers. The relatively recent research, conducted by Tan Hecheng, reveals these killings were orchestrated by Communist Party cadres, exposing a suppressed chapter in the PRC's dark history.
COMMENT – What an amazing set of photos, truly haunting.
5. Remarks by Secretary of the Treasury Janet L. Yellen on the Importance and Strength of the Transatlantic Alliance at Frankfurt School of Finance and Management in Frankfurt, Germany
U.S. Department of the Treasury, May 21, 2024
Treasury Secretary Janet Yellen highlighted the importance of the transatlantic alliance in her speech at the Frankfurt School of Finance and Management. She called for transatlantic cooperation in dealing with Beijing’s harmful trade practices and coordinated implementation of tariffs on PRC overcapacity.
COMMENT – It would have been great if Yellen could have delivered this message to the Europeans three years ago.
Better late than never, I guess.
6. A citizen journalist imprisoned for 'provoking trouble' by reporting on COVID in China is released
Huizhong Wu, Associated Press, May 22, 2024
Zhang Zhan, a citizen journalist, was released from prison after serving four years for reporting on the COVID-19 outbreak in Wuhan.
Despite her release, concerns remain about her freedom. Zhang was sentenced for "picking quarrels and provoking trouble," a charge often used in political cases. In a video statement, Zhang thanked supporters but indicated she had limited freedom.
COMMENT – As reported last week, we need to tell Zhang Zhan’s story.
7. Analyzing Lai Ching-te’s Inaugural Address: More Continuity Than Difference
Rush Doshi and David Sacks, Council on Foreign Relations, May 21, 2024
In his inaugural address, Taiwan’s new president Lai Ching-te signaled broad continuity on cross-strait issues. China, however, is likely to respond with increased pressure.
On May 20, Lai Ching-te assumed the presidency in Taiwan and gave an inaugural address scrutinized in Beijing, Washington, and capitals around the world. The speech provided the most authoritative signal to date of his approach to cross-strait relations. The core question for observers: would a Lai administration depart from the course set by his predecessor, Tsai Ing-wen?
The speech gave a clear answer: Lai signaled broad continuity with Tsai and committed to maintain the status quo. He also called for dialogue with Beijing and demonstrated an openness to resuming cross-strait tourism and student exchanges. Even so, Beijing denounced Lai’s speech in particularly harsh language. That reflects China’s concerns about Lai’s history on cross-strait issues. But it also reflects disappointment that Lai departed in some places from Tsai, for instance by not explicitly pledging to conduct cross-strait relations in accordance with the Republic of China (ROC) Constitution, which embodies a one-China framework.
COMMENT – Its worth reading Lai’s speech, it is the appropriate mix of standing up for oneself and reaching out to a hostile and threatening foreign power.
Responsible countries around the world should call on Beijing to drop its coercion and threats and enter into a dialogue with Taiwan’s elected leaders without precondition. That is the best way to find a peaceful solution.
The fact that Beijing refuses to do this suggests strongly that Beijing, despite its rhetoric to the contrary, has no interest in a peaceful solution if they don’t get what they want.
Speaking of coercion and threats…
8. China Launches Military Drills Around Taiwan as ‘Punishment’
David Pierson and Amy Chang Chien, New York Times, May 22, 2024
China said the sea and air drills were meant as a “stern warning” to its opponents after Taiwan’s new president asserted the island’s sovereignty in defiance of Beijing.
China launched two days of military drills surrounding Taiwan on Thursday in what it called a “strong punishment” to its opponents on the self-governing island, after Taiwan’s new president pledged to defend its sovereignty.
The drills were the first substantive response by China to the swearing-in of President Lai Ching-te, whom Beijing dislikes, in Taipei on Monday. Mr. Lai’s political party asserts Taiwan’s separate status from China, and in a high-profile inaugural speech, he vowed to keep Taiwan’s democracy safe from Chinese pressure.
China, which claims Taiwan as its territory, had mainly responded to Mr. Lai’s speech with sharply worded criticism. But it escalated its response Thursday by announcing that it was conducting sea and air exercises that would encircle Taiwan and draw close to the Taiwanese islands of Kinmen, Matsu, Wuqiu and Dongyin in the Taiwan Strait.
From the start of the exercises until the afternoon, 15 Chinese navy vessels, 16 Chinese coast guard vessels and 42 Chinese military aircraft were detected around Taiwan’s main island and smaller outlying islands, according to Taiwan’s Defense Ministry. Officials at a briefing in Taipei said that so far none of the Chinese aircraft and vessels had entered Taiwan’s territorial waters.
COMMENT – Where is the United Nations? Where is Secretary General Antonio Guterres? His primary job is to “maintain international peace and security.”
9. Vatican makes fresh overture to China, reaffirms that Catholic Church is no threat to sovereignty
Nicole Winfield, Associated Press, May 21, 2024
The Vatican made another big overture to China on Tuesday, reaffirming the Catholic Church poses no threat to Beijing’s sovereignty and admitting that Western missionaries had made “errors” in past centuries in their zeal to convert the Chinese faithful.
The Vatican hosted the head of China’s bishops conference for an unprecedented, high-level commemoration of a landmark 1924 meeting in Shanghai that affirmed the need for foreign missionaries in China to give way to local church leaders.
The presence of Shanghai Bishop Joseph Shen Bin alongside the Vatican secretary of state, Cardinal Pietro Parolin, at the Pontifical Urbaniana University was in itself noteworthy. It marked the first time in memory that a mainland bishop has been allowed by Beijing to participate in a public Vatican event as the keynote speaker.
It was also significant given the controversy over Shen’s 2023 appointment. Pope Francis in July was forced to recognize China’s unilateral appointment of Shen as bishop of Shanghai. The appointment seemingly violated the Holy See’s 2018 accord with Beijing over bishop appointments.
COMMENT – I said it last week and will say it again: I fear the Vatican is on the road to establishing formal relations with the PRC.
Last week the Vatican Secretary of State, Cardinal Pietro Parolin, hosted Shanghai Bishop Joseph Shen Bin, marking a rare high-level Vatican-China meeting. Shanghai Bishop Joseph Shen Bin is the President of the Catholic Patriotic Association, a PRC state-managed organization in which the Chinese Communist Party controls Chinese Catholics.
The Vatican appears to be abandoning Chinese Catholics, like Hong Kong Cardinal Joseph Zen, who was arrested by the Chinese Communist Party two years ago and convicted of challenging Beijing’s destruction of Hong Kong’s governance.
Instead of that abuse of one of the Church’s own cardinals, Pope Francis and Cardinal Parolin appear to be throwing Zen under the bus and cutting their own deal. These are dark times for the Church and Chinese Catholics.
Authoritarianism
10. Censors Delete Tale of Police Overreach in Anti-Fraud Case
Alexander Boyd, China Digital Times, May 20, 2024
Last week, Weibo censors took down a post by a popular food blogger describing how all her bank accounts were frozen due to a local police department’s arbitrary and unprofessional “anti-fraud” case work.
Her Kafka-esque account described how her accounts were shut down without any explanation, leaving her forced to “do all of the detective work” herself—only to learn that she was under investigation for fraud under the barest of pretenses. Her account is but the latest example of anti-fraud overreach.
11. How China Will Squeeze, Not Seize, Taiwan
Isaac Kardon and Jennifer Kavanagh, Foreign Affairs, May 21, 2024
12. Taiwan’s Presidential Inauguration
Antony J. Blinken, U.S. Department of State, May 19, 2024
The United States congratulates Dr. Lai Ching-te on his inauguration as Taiwan’s fifth democratically elected president. We also congratulate the Taiwan people for once again demonstrating the strength of their robust and resilient democratic system.
The partnership between the American people and the Taiwan people, rooted in democratic values, continues to broaden and deepen across trade, economic, cultural, and people-to-people ties.
The United States commends President Tsai Ing-wen for strengthening ties between the United States and Taiwan over the past eight years.
We look forward to working with President Lai and across Taiwan’s political spectrum to advance our shared interests and values, deepen our longstanding unofficial relationship, and maintain peace and stability across the Taiwan Strait.
COMMENT – I’m very glad to see this statement from Secretary Blinken.
13. SCSNW Advisor Ray Powell Targeted by Chinese State Media
South China Sea NewsWire, May 18, 2024
14. Putin and Xi pledge a new era and condemn the United States
Bernard Orr, Guy Faulconbridge, and Andrew Osborn, Reuters, May 16, 2024
15. Microsoft Asks Hundreds of China-Based AI Staff to Consider Relocating Amid U.S.-China Tensions
Raffaele Huang and Yoko Kubota, Wall Street Journal, May 16, 2024
16. VIDEO – China’s New World Order - How dependent is the West?
DW Documentary, YouTube, May 15, 2024
17. Behind Putin Visit, Unease in Beijing Over His Potential Next Stop: North Korea
Lingling Wei, Ann M. Simmons, and Timothy W. Martin, Wall Street Journal, May 19, 2024
18. Why a Tactic Used by Czars Is Back with a Vengeance
Amanda Taub, New York Times, May 17, 2024
19. She Devoted Herself to Teaching About the Tiananmen Massacre. Hong Kong Shunned Her.
Elaine Yu, Wall Street Journal, May 19, 2024
Environmental Harms
20. Philippines blames China for loss of giant clams in disputed shoal and urges environmental inquiry
Jim Gomez, Associated Press, May 20, 2024
21. Siemens Energy boss says there can be no energy transition without China
Christoph Steitz, Reuters, May 16, 2024
22. Why the African Union Stopped the Donkey Hide Trade with China
Lauren Johnston, ChinaFile, May 10, 2024
Foreign Interference and Coercion
23. Mystery in the Alps: A Chinese Family, a Swiss Inn and the World’s Most Expensive Weapon
Drew Hinshaw, Joe Parkinson, and Liza Lin, Wall Street Journal, May 16, 2024
24. Putin's Turn to East Boosts Demand for Chinese Language Expertise and Fears of China
Paul Goble, Jamestown Foundation, May 14, 2024
25. Barbarians at the gate: Von der Leyen makes foreign influence a key campaign topic
Clothilde Goujard, Politico, May 14, 2024
26. China furious at arrest of ‘UK spies’
Robert Mendick, Max Stephens, Albert Tait, and Charles Hymas, The Telegraph, May 14, 2024
27. Now armed with AI, America's adversaries will try to influence election, security officials warn
David Klepper and Eric Tucker, Associated Press, May 15, 2024
28. UK charges three with working for Hong Kong intelligence
Al Jazeera, May 13, 2024
29. Japan protests Chinese envoy's 'inappropriate remarks' over Taiwan
Jessie Johnson, Japan Times, May 22, 2024
30. China Hits Boeing Defense, Two Others with Symbolic Sanctions
Bloomberg, May 19, 2024
31. How Germany lost the battle to prevent tariffs on Chinese cars
Hans Von Der Burchard and Julia Wacket, Politico, May 21, 2024
32. Chinese Business Group Warns of Tariff Increases on Car Imports in Response to U.S., EU Moves
Wall Street Journal, May 21, 2024
Human Rights and Religious Persecution
33. DHS Announces 26 Additional PRC-Based Textile Companies to the UFLPA Entity List
U.S. Department of Homeland Security, May 16, 2024
34. US bars imports from 26 Chinese textile firms over suspected Uyghur forced labor
Karen Freifeld and Susan Heavey, Reuters, May 16, 2024
35. Mass Relocations of Tibetans Not Voluntary
Human Rights Watch, May 21, 2024
36. The Vatican to sponsor unprecedented conference on its relations with China
Loup Besmond de Senneville, La Croix International, May 14, 2024
37. Pontifical Urban University hosts conference on Church in China
Lisa Zengarini, Vatican News, May 14, 2024
38. Insufficient Diligence: Car Makers Complicit with CCP Forced Labor
Senate Finance Committee, May 20, 2024
39. Senate Inquiry Finds BMW Imported Cars Tied to Forced Labor in China
Ana Swanson and Jack Ewing, New York Times, May 20, 2024
40. Xinjiang Authorities Are Retroactively Applying Laws to Prosecute Religious Leaders as Criminals
Darren Byler, ChinaFile, March 8, 2024
Industrial Policies and Economic Espionage
41. Top China chipmakers SMIC and CXMT push to scrap foreign inputs
Cheng Ting-Fang and Shunsuke Tabeta, Nikkei Asia, May 21, 2024
42. Short Positions Show Waning Confidence in China Stocks Rally
Srinivasan Sivabalan, Bloomberg, May 21, 2024
43. Even Xi Jinping is struggling to fix regional inequality
The Economist, May 21, 2024
44. China’s overcapacity so ‘deeply rooted’ at local levels that analysts say its ebbs and flows have underpinned economy for decades
Ji Siqi, South China Morning Post, May 21, 2024
45. USTR Issues Federal Register Notice on New Section 301 Tariffs on Chinese Products and Machinery Exclusion Process
David J. Ross, Jeffrey I. Kessler, Lauren Mandell, and Neena Shenai, WilmerHale, May 22, 2024
46. FACT SHEET: President Biden Takes Action to Protect American Workers and Businesses from China’s Unfair Trade Practices
The White House, May 14, 2024
47. Time to Reset the U.S. Trade Agenda
Peter Harrell, Carnegie Endowment for International Peace, May 20, 2024
48. Chinese Regulator Flags Synopsys Acquisition of Ansys
Dean Seal, Wall Street Journal, May 16, 2024
49. AUDIO - Has the US declared economic war on China?
Michael Froman, Rachman Review Podcast, May 15, 2024
50. China Is Winning the Minerals War
Jon Emont, Wall Street Journal, May 21, 2024
51. The U.S. Finally Has a Strategy to Compete with China. Will It Work?
Greg Ip, Wall Street Journal, May 20, 2024
52. U.S. Seeks to Join Forces with Europe to Combat Excess Chinese Goods
Alan Rappeport and Liz Alderman, New York Times, May 21, 2024
53. EU trade deficit with China shrinks to lowest level since 2021
Martin Arnold, Financial Times, May 21, 2024
Cyber & Information Technology
54. China replaces imported quantum computer component with domestic product immediately after US sanctions
Dannie Peng, South China Morning Post, May 18, 2024
55. How China is using AI news anchors to deliver its propaganda
Dan Milmo and Amy Hawkins, The Guardian, May 18, 2024
56. French government bans TikTok in overseas territory amid violent protests
Clothilde Goujard, Politico, May 15, 2024
57. China’s GPS rival BeiDou prepares to take off as Beijing moves to strengthen home-grown satellite navigation
Dannie Peng, South China Morning Post, May 21, 2024
58. Statement from NSC Spokesperson Adrienne Watson on the U.S.-PRC Talks on AI Risk and Safety
The White House, May 13, 2024
Military and Security Threats
59. China Taiwan: Beijing really doesn't like Taiwan's new president
Rupert Wingfield-Hayes, BBC, May 23, 2024
60. China an ‘epoch-defining challenge,’ new UK spy boss warns
Tom Bristow, Politico, May 14, 2024
61. Dmitri Alperovitch on the New Cold War with China
Michael Isikoff, SpyTalk, May 6, 2024
62. Historian. Activist. Spy?
Tara McKelvey and Jane Tang, RFA, May 9, 2024
63. Tracking China's 'grey zone' balloon flights over Taiwan
Jackie Gu and Yimou Lee, Reuters, May 16, 2024
64. Putin’s China Visit Highlights Military Ties That Worry the West
David Pierson, New York Times, May 17, 2024
One Belt, One Road Strategy
65. China Dumps the Largest US Treasuries in History
Vinod Dsouza, Watcher Guru, May 17, 2024
66. Report to Congress on China’s ‘One Belt, One Road’ Initiative
U.S. Naval Institute, May 21, 2024
The People’s Republic of China (PRC or China) in 2013 launched an ambitious and multifaceted foreign economic policy initiative—One Belt, One Road—to expand China’s global economic reach and influence. In 2015, China’s leaders changed the English name to the Belt and Road Initiative (BRI), possibly to deflect from the initiative’s focus on developing China-centered and controlled global ties in a hub and spoke format.
The Communist Party of China (CPC) incorporated the initiative into its Charter in 2017 and reaffirmed the effort’s significance in 2022 at its 20th Party Congress. Some participating governments say they value the initiative for filling infrastructure gaps. Other governments, and some in Congress, assess that One Belt, One Road projects advance PRC geopolitical and economic goals while undercutting U.S. influence and interests.
67. Enabling a Better Offer: How Does the West Counter Belt and Road?
Daniel Runde, CSIS, May 16, 2024
68. China woos Argentina, Bolivia, and Peru to advance Belt and Road Initiative
KrAsia, May 22, 2024
Wang Yi, foreign minister of China, met with counterparts from Argentina, Peru and Bolivia in late April, as Beijing intensifies efforts to court Latin American countries through its infrastructure-building Belt and Road Initiative (BRI).
Wang met with Argentine foreign minister Diana Mondino in Beijing on April 30, the Chinese Foreign Ministry reported. This is the first trip by Argentina’s top diplomat to China since President Javier Milei took office in December.
Wang urged greater aerospace and maritime cooperation and bilateral trade to advance the international BRI. China supports Argentina’s efforts to maintain economic and financial stability, and is willing to continue providing assistance within its capacity, he said.
Amid protracted tensions with the US, China looks to diversify its partners in trade and investment. US President Joe Biden’s administration has raised concern over excess production of electric vehicles in China and is weighing additional trade tariffs.
Milei, who is a libertarian, said during his 2023 campaign that he would not work with communists, signaling that he intended to keep a distance from China. After taking office, he withdrew Argentina’s planned entry into the BRICS club of nations, made up of Brazil, Russia, India, China, and South Africa.
But Argentina relies heavily on China economically. Around 20% of Argentine imports in 2023 came from China, more than from any other country except neighboring Brazil. China was also Argentina’s third-largest destination for exports.
Mondino told Wang that Argentina’s friendly policy toward China will not change. She signaled an interest in bilateral cooperation on trade and investment, finance, tourism, space, and maritime issues. She also urged greater investment in Argentina by Chinese companies.
69. China’s ‘Belt and Road Initiative’ is hurting us and other countries
Sabina Grala and Adam Hudson, CT Mirror, March 21, 2024
Opinion Pieces
70. American students have soured on China. That’s bad for the U.S.
Keith B. Richburg, Washington Post, May 22, 2024
71. Taiwan Is the New Berlin
Dmitri Alperovitch, Foreign Affairs, May 15, 2024
72. Putin's Preparing Better Than Us for a Long War
Marc Champion, Bloomberg, May 13, 2024
73. Tariffs against China hamstring the transition to a clean energy future
Editorial Board, Washington Post, May 16, 2024
74. How China’s New Left Embraced the State
David Ownby, China Books Review, May 16, 2024
75. Two China Questions
Andy Rothman, Matthews Asia, May 10, 2024
76. America Hits the Global Snooze Button
Walter Russell Mead, Wall Street Journal, May 20, 2024
77. Weakness Invites War with Iran
Seth Cropsey, Wall Street Journal, May 21, 2024
78. Why China is reluctant to make a much-needed shift
Yanmei Xie, Financial Times, May 20, 2024