Matt Turpin's China Articles - February 12, 2023
Friends,
As you’ll notice with the first two articles this week, The Economist and I are in agreement: we are in a new cold war and that has far-reaching implications.
Obviously, there is a lot this week on the PRC’s violation of U.S. and Canadian sovereignty, but I also want to draw your attention to article #32, the decision by SpaceX to curb capabilities available to the Ukrainians as the battle for their existence against Putin’s invasion. This development may appear unrelated to the main theme of this newsletter, but I think there is an important connection.
Elon Musk’s vast business empire is increasingly exposed to pressure by the Chinese Communist Party and Beijing understands just how threatening space-based internet access is to their desires to annex Taiwan. I suspect there is considerable pressure behind the scenes on Musk to ensure this capability is degraded to both assist Beijing’s ally in Moscow and to prevent the same capability from assisting the Taiwanese.
One should keep in mind that the CCP is also fighting hard to prevent the creation of other, alternatives to Starlink that they don’t control (See The corporate feud over satellites that pitted the west against China, Eleanor Olcott, Financial Times, June 22, 2022).
UPDATE – In case folks have lost count, NORAD (the combined U.S.-Canadian aerospace defense command) has shot down THREE objects floating over North America in a week (the first was the unmanned Chinese surveillance airship on Saturday, February 4th; the second was an unidentified object about the size of a small car over Alaska on Friday, February 10th; and the third was an unmanned aircraft over Canada’s Yukon Territory on Saturday, February 11th). Each of these seemed to follow the same general flightpath as the first Chinese airship.
I would also note that the Chinese military refuses to speak it its American counterparts, a fact made public by the Department of Defense this week.
For years, we have heard about the need for some sort of “hotline” between the U.S. and PRC militaries to avoid miscalculation between the two countries militaries. This misses a key fact: so-called “hotlines” already exist, we know each other’s phone numbers, email addresses, and fax numbers… the People’s Liberation Army simply refuses to pick-up the ringing phone and talk.
Additionally on February 11th, the U.S. Federal Aviation Administration closed the airspace over north-central Montana at the request of the Department of Defense. It appears that a radar anomaly prompted this closure, but it shows how these violations of U.S. sovereignty have escalated concern. This is the same area the Chinese surveillance airship loitered over, an area that contains some of the missile silos of America’s ground-based ICBM nuclear deterrent.
(Note to Beijing and Moscow: if you run military operations over the U.S. nuclear deterrent, do not be surprised when the United States acts to prevent those operations)
Several commentators, particularly ones who advocate reassuring and appeasing Beijing, have sought to portray the first event as an innocent weather balloon blown off course. These individuals, who consider themselves “China experts” and bemoan the state of U.S.-PRC relations often assert that the Biden Administration was “forced” to over-react (cancel Secretary Blinken’s trip to Beijing and shoot it down) by partisan political pressure and “hysteria” in the media.
We don’t yet know the details of the second and third objects detected and downed over U.S. and Canadian territory, or the full extent of the communications surveillance gear found on the first airship, but combined these events suggest a far more serious situation than those who sought to dismiss this as mere partisan and media hysteria.
Thanks for reading!
Matt
MUST READ
1. China’s spy balloon: A new cold war unfolds before our eyes
Matt Turpin, The Hill, February 7, 2023
For Americans, this past week should bring into focus an unpleasant reality: The People’s Republic of China (PRC) is engaged in a cold war against us and we are only just beginning to recognize it.
2. The lessons from the Chinese spy balloon: Sino-American mistrust is morphing into a new cold war
The Economist, February 7, 2023
China and America are drifting towards a cold war. Distrust is turning into something far more disruptive: a contest between two irreconcilable powers, each sure that the other is bent on thwarting its rival’s core ambitions and interests. The shooting down of a Chinese balloon off South Carolina is a test of whether the two countries have the wisdom and the will to stop confrontations from spiralling out of control. The results so far are mixed.
Viewed optimistically, the downing of China’s blimp is a stroke of good fortune: an instructive but low-stakes version of a crisis that could have been much worse. In recent years, Chinese fighter jets and warships have taken scary risks as they harass planes and ships belonging to America and its allies, usually when Western armed forces show the flag or collect intelligence in international skies and seas close to China’s shores. Raising the chances of a collision still higher, Chinese commanders have been sending growing swarms of Chinese aircraft to buzz the island of Taiwan.
3. Chinese Balloon Had Tools to Collect Communications Signals, U.S. Says
Edward Wong, New York Times, February 9, 2023
The Chinese spy balloon shot down by the U.S. military over the Atlantic Ocean was capable of collecting communications signals and was part of a fleet of surveillance balloons directed by the Chinese military that had flown over more than 40 countries across five continents, the State Department said Thursday.
The United States used high resolution imagery from U-2 flybys to determine the balloon’s capabilities, the department said in a written announcement, adding that the balloon’s equipment “was clearly for intelligence surveillance and inconsistent with the equipment onboard weather balloons.”
The agency said the balloon had multiple antennas in an array that was “likely capable of collecting and geo-locating communications.” Solar panels on the machine were large enough to produce power to operate “multiple active intelligence collection sensors,” the department said.
The agency also said the U.S. government was “confident” that the company that made the balloon had direct commercial ties with the People’s Liberation Army, the Chinese military, citing an official procurement portal for the army. The department did not name the company.
…
Officials say they took steps at nuclear launch sites and other military bases to try to ensure there was no useful information that the balloon could collect. The U.S. government also took steps to protect official communications in the balloon’s path. While officials say they are confident the balloon did not get any sensitive data on U.S. nuclear sites, they are unsure what it did collect.
It would be relatively easy for signals-collection devices to get data on what mobile phones are in use around a military base, current and former officials say.
COMMENT –The balloon had communications collection equipment and not weather collection equipment. Who could have guessed that?
4. ‘Everyone’s trying to row in the same direction’: Spy balloon saga tests bipartisan China committee
Annie Grayer and Melanie Zanona, CNN, February 7, 2023
After House Minority Leader Hakeem Jeffries announced his Democratic appointments to a select committee on the threat posed by China, the top Republican chairing the panel, GOP Rep. Mike Gallagher of Wisconsin, gave Jeffries some surprising feedback: his stamp of approval.
Gallagher felt like the roster was made up of serious members well-versed on the issue – a sentiment shared by Democrats, who were also pleased that House Speaker Kevin McCarthy did not appoint fire-breathers looking to score political points to the panel.
“(Jeffries) saw the members that Speaker McCarthy appointed, and saw that we’re not going to turn this into a partisan, bomb-throwing committee,” Gallagher told CNN. “Now, there may be meaningful disagreement on the issues. There are plenty of areas where Democrats and Republicans disagree on China, but overall, I think everyone’s trying to row in the same direction.”
The highest ranking Democrat on the panel, Illinois Rep. Raja Krishnamoorthi, told CNN, “I think we don’t have a choice” when it comes to striking a bipartisan tone. “Because the threats confronting us are so serious that only our adversaries would take pleasure in us being divided. And so I think we have to rise to the occasion, and with singularity of purpose, remember that we’re all called upon to defend our country, keep it safe, and counter any threats from any adversarial entities and move forward together.”
COMMENT - For those who bemoan the political divisions in America, the House unanimously passed to resolution on February 9 condemning the Chinese Communist Party for its “brazen violation of U.S. sovereignty” and denounced the CCP’s efforts “to deceive the international community.”
5. Chinese balloon part of vast aerial surveillance program, U.S. says
Ellen Nakashima, Shane Harris, John Hudson, and Dan Lamothe, Washington Post, February 7, 2023
Spy balloon effort operates in Hainan province off China’s south coast and has for years collected information on military assets in several countries, officials said.
The U.S. intelligence community has linked the Chinese spy balloon shot down on Saturday to a vast surveillance program run by the People’s Liberation Army, and U.S. officials have begun to brief allies and partners who have been similarly targeted.
The surveillance balloon effort, which has operated for several years partly out of Hainan province off China’s south coast, has collected information on military assets in countries and areas of emerging strategic interest to China including Japan, India, Vietnam, Taiwan and the Philippines, according to several U.S. officials, who, like others interviewed for this story, spoke on the condition of anonymity because of the matter’s sensitivity.
Officials have said these surveillance airships, operated in part by the PLA air force, have been spotted over five continents.
“What the Chinese have done is taken an unbelievably old technology, and basically married it with modern communications and observation capabilities” to try to glean intelligence on other nations’ militaries, said one official. “It’s a massive effort.”
6. AUDIO – Waiting Games: Is the relationship between China and Russia one of equals?
David Rennie and Alice Su, The Economist’s Drum Tower Podcast, February 7, 2023
It’s been a year since Xi Jinping and Vladimir Putin announced the “no-limits” friendship between China and Russia, but is it one between equals?
In the second episode of a two-part series, The Economist’s Beijing bureau chief, David Rennie, and our senior China correspondent, Alice Su, explore the rocky past of Sino-Soviet relations with historian Joseph Torigian, and hear from locals in Heilongjiang, a border province, about whether the war in Ukraine has changed their view of Russia.
Plus, Alexander Gabuev, of the Carnegie Russia Eurasia Centre, and The Economist’s Arkady Ostrovsky, discuss the power dynamic between Mr Xi and Mr Putin, and what Mr Xi stands to gain from the conflict.
7. What the U.S. can learn from India’s TikTok ban
Russell Brandom and Nilesh Christopher, Rest of the World, February 6, 2023
A permanent split with Chinese apps was less disruptive than many expected.
India banned TikTok and and more than 200 other apps in 2020 after an incident at the Chinese border.
Most users turned to Instagram or YouTube in the wake of the ban.
Political leaders in the U.S. are inching ever closer to a nationwide ban on TikTok, spurred by concerns over its parent company ByteDance. In the first weeks of the new Congress, lawmakers introduced a bill to institute a nationwide ban, and TikTok CEO Shou Zi Chew is expected to defend the platform when he testifies before the House in March. It’s unclear when or if the government will take more aggressive action — but the possibility has sparked a vigorous debate on a possible nationwide ban on one of America’s most popular social networks.
A U.S. ban might seem unprecedented — but there’s a major precedent many overlook. In June 2020, TikTok had more than 200 million Indian users (then ByteDance’s largest market outside China) when the Indian government abruptly banned it, citing issues of privacy and national sovereignty. The decision came two weeks after Chinese military aggression in India’s northern border led to a high-octane tussle resulting in the death of at least 20 Indian soldiers. TikTok was one among over 200 Chinese apps that were blocked from operating within the country.
“I don’t think that anybody has really complained about missing TikTok.”
India’s experience with TikTok is particularly important as U.S. policymakers grapple with potential economic and political fallout from a ban. India’s ban really did result in a long-term split from Chinese technology, as some in the U.S. have worried. But otherwise, Indians have largely taken the restrictions in stride — and there’s been no meaningful political effort to overturn them. Some influencers still miss the joys of the TikTok era, but investors and consumers have largely moved on and adapted to alternatives.
“We haven’t faced any downside,” said Anand Lunia, founder of Indian venture capital firm India Quotient and a prominent tech critic. “I don’t think that anybody has really complained about missing TikTok.”
8. Leaders of Self-Driving-Truck Company Face Espionage Concerns Over China Ties
Kate O’Keeffe, Aruna Viswanatha, and Heather Somerville, Wall Street Journal, February 1, 2023
The Justice Department has been urged by representatives of a U.S. national-security panel to consider economic-espionage charges against leaders of TuSimple Holdings Inc., an American self-driving-truck company with ties to China, according to people familiar with the matter.
The recommendation for criminal charges, made late last year, stemmed from concerns that two founders and the current chief executive of the San Diego-based company were improperly transferring technology to a Chinese startup, the people said. The concerns were based on material gathered as part of a national-security review of TuSimple launched earlier last year.
That review is being conducted by the Committee on Foreign Investment in the United States, known as Cfius. The panel is led by the Treasury Department and includes the Justice and Defense departments as well as other federal agencies. Cfius reviews foreign investments for national-security concerns and has the authority to impose safeguards or recommend that the president block investments.
AUTHORITARIANISM
9. GOP leaders push bipartisan resolution about China balloon incursion
Sarah Ferris and Olivia Beavers, Politico, February 6, 2023
“I think our greatest strength is when we speak with one voice to China," Speaker Kevin McCarthy said.
10. Xi Rejects Westernization in Show of Faith in Self Reliance
Bloomberg, February 7, 2023
China’s successful development shows there is another way to modernize, President Xi Jinping said, rejecting any need to “westernize” and doubling down on his goals of increased self reliance and improved social justice.
China must work to create a path to modernization that is more efficient than capitalism, Xi told top officials this week according to the state-run Xinhua news agency report. Innovation must be placed in a prominent position in overall national development and there should be better balance between efficiency and equity, Xi said.
11. Chinese Consumers Hoard Cash After Confidence Takes a Hit
Cao Li, Wall Street Journal, February 8, 2023
Beijing is trying to kick-start economic growth after lifting its stringent Covid-19 restrictions. One challenge: Chinese citizens borrowed less and saved more last year and it isn’t clear how long it will take to return to freer-spending ways.
12. China Tries to Play Down Balloon Dispute with Censorship and Memes
Vivian Wang and Joy Dong, New York Times, February 7, 2023
Chinese propaganda also appears to be walking a fine line: looking tough for the crowd at home, without further derailing relations with the United States.
On Chinese social media, jokes about the suspected spy balloon have been making the rounds. People quipped that the vessel was a misunderstood attempt at wishing Americans a happy Lantern Festival, the Chinese holiday this past Sunday. Others compared it to a glutinous rice ball, a traditional food eaten during the celebrations.
The wisecracking was, in part, what happens on social media anywhere in the world: current events transformed to memes to attract likes and follows. But it also dovetailed with signs of a broader government strategy to downplay an incident that has potentially embarrassed China and threatened to further derail U.S.-China relations.
The Chinese authorities, who have tried to convince the Americans that their furor over the balloon is an overreaction to a meteorological vessel blown off course, are also deploying their sprawling propaganda apparatus to control discussion at home. By limiting news coverage and curating online conversation, they are working to ensure that the balloon avoids becoming not only an international headache but a domestic one, too.
The approach points to the potentially tricky balancing act China faces. Beijing needs to look strong. Anti-American sentiment has risen markedly in recent years, often fanned by the government, and the downing of the Chinese balloon by an American fighter jet stoked some cries for retribution. On Tuesday, after a spokeswoman for the Chinese Foreign Ministry criticized the United States for saying it had no plans to return the balloon’s parts to China, social media commenters said China now had ample grounds to treat American vessels however it liked.
But China may be eager to put the balloon behind it. Officials appeared to have been caught off guard by the incident, as shown by their rare expression of regret when first publicly confronted about it. In addition, after three years of harsh coronavirus controls, China is looking to restart its economy and re-enter the global stage — an agenda that was supposed to be helped by a visit to Beijing this week by Secretary of State Antony J. Blinken. Mr. Blinken’s visit has now been postponed indefinitely because of the diplomatic uproar over the balloon. The Chinese government may be looking to minimize further damage.
ENVIRONMENTAL HARMS
13. China’s Bid to Improve Food Production? Giant Towers of Pigs.
Daisuke Wakabayashi and Claire Fu, New York Times, February 8, 2023
High-rise hog farms have sprung up nationwide as part of Beijing’s drive to enhance its agricultural competitiveness and reduce its dependence on imports.
FOREIGN INTERFERENCE AND COERCION
14. Ottawa vows to curb Canadian university research with Chinese military scientists
Robert Fife and Steven Chase, The Globe and Mail, February 3, 2023
15. Two-thirds of research-grant requests sent to Canadian security agencies rejected
Joe Friesen, The Globe and Mail, January 26, 2023
Roughly two-thirds of the research-grant applications sent to Canada’s national-security agencies for assessment under tightened rules to safeguard intellectual property from authoritarian governments were deemed to pose an unacceptable risk and denied funding.
The Natural Sciences and Engineering Research Council (NSERC) said it sought advice from federal security agencies on 48 applications for funding under the country’s research partnership framework, about 4 per cent of all applications.
Of the applications sent for review, 32 were deemed to pose an unacceptable risk or a risk that couldn’t be appropriately mediated, NSERC said. Two applicants withdrew before receiving a decision.
Only 14 proposals were approved for funding after being referred to the security agencies.
The reviews stem from guidelines introduced by the federal government in July, 2021, at a time of heightened concern around the protection of Canadian research interests. The guidelines apply to the alliance grants and alliance missions programs, which are a relatively small part of the larger NSERC portfolio. NSERC, which spends more than $1.3-billion a year, is one of the primary research granting councils in Canada.
The rules for research partnerships were created partly to respond to a changing global security environment marked by the rise of China and other increasingly assertive authoritarian regimes.
Canada’s national spy service, CSIS, has amplified its warnings to universities and private-sector research facilities in recent years about the potential risks of collaborations with foreign partners. Some of its concerns were spurred by the desire to protect research launched in the initial phase of the pandemic, others were of long-standing national-security interest such as energy storage, quantum technology, critical minerals or technology with military as well as civilian purposes.
The message from CSIS was that Canada’s traditional attitude of openness in scientific inquiry could unwittingly provide foreign governments with access to cutting-edge Canadian research.
16. Australia to remove Chinese-made security cameras from national war memorial -reports
Lewis Jackson, Reuters, February 8, 2023
Australia's national war memorial will remove several Chinese-made security cameras installed on the premises because officials are concerned they could be used for spying, local media reported on Wednesday.
17. HSBC putting China's interests above exiled Hong Kong customers, UK lawmakers say
Sinead Cruise, Reuters, February 8, 2023
British lawmakers have accused HSBC of mistreating customers who have fled Hong Kong in the wake of China's anti-democracy crackdown, to protect the bank's profits and curry favour with the Chinese government, a report on Wednesday showed.
The All-Party Parliamentary Group on Hong Kong said the lender had blocked some overseas residents of the former British colony from withdrawing pension contributions made to the island's Mandatory Provident Fund, despite deciding to quit Hong Kong.
18. Solomon Islands ousts official critical of close relations with China
Lewis Jackson, Reuters, February 7, 2023
A vocal critic of China and leader of the most populous province in the Solomon Islands has been removed from office after a no-confidence vote by the provincial legislature on Tuesday, Australian state broadcaster ABC reported.
Daniel Suidani, premier of the South Pacific nation's Malaita province, is a longtime critic of the country's deepening relations with China, which culminated in a security pact signed last April. He has banned Chinese companies from the province and accepted development aid from the United States.
Malaita's provincial assembly ousted Suidani in a unanimous vote on Tuesday, said the ABC. Suidani and his supporters boycotted the vote, ABC said, adding he had not yet spoken to the media about the results.
Scuffles broke out after the vote. Police fired tear gas into a crowd of more than 100 Suidani supporters after the scuffle, in which stones were thrown at police, broke out, said eyewitness Samie Waikori, a reporter with Island Sun News. Waikori said the protesters later dispersed.
HUMAN RIGHTS AND RELIGIOUS PERSECUTION
19. Workers Keep Dying at This Chinese Nickel Mining Company in Indonesia
Rachel Cheung, Vice, February 7, 2023
In the year after the factory opened, workers fell into molten waste, got swept into the sea, and took their own lives. Then, after two employees were burned alive, protests erupted—and turned deadly.
When 20-year-old Nirwana Selle got a phone call to work as a crane operator in 2021, the Indonesian vocational school graduate was elated. She had waited months for a job after graduation and was excited to finally start her career. But she didn’t know the job would lead her to TikTok stardom—and then her tragic death.
Nirwana was among some 11,000 locals who worked for Gunbuster Nickel Industry, a Chinese-owned nickel smelting company on the Indonesian island of Sulawesi, churning out a critical metal for batteries that power the world’s growing fleet of electric vehicles.
Inside the overhead operating compartment of her crane at the metal processing plant, Nirwana filmed herself controlling a set of joysticks to lift and move ladles of molten metal. Her videos gave outsiders a glimpse of life in the country’s increasingly important mining and metals industry. Many were watched millions of times, earning her more than 137,000 TikTok followers. In mid-December, she posted footage of her riding a motorcycle across the nickel smelter’s vast industrial site.
That would be the last video she made.
Nirwana’s life was tragically cut short three days before Christmas, when leaked coal dust caught fire at the plant in the middle of the night, when she was working the late shift. Minutes later, it led to an explosion. “Look, there’s someone inside,” a worker said as he filmed the blaze from afar. Nirwana’s control room was on fire; sounds of screaming could be heard in the background of the clip.
Nirwana and her assistant, Made Detri Hari Jonathan, were both trapped and burned to death, according to a company report seen by VICE World News. The report attributed the cause of the accident to an unsealed valve and faulted workers for it.
Spurred by the tragedy, hundreds of Indonesian workers and the union at the factory organized a strike last month to demand justice for the two workers and better labor protections. But negotiations with the company fell apart. From there, an already tense atmosphere at the facility descended into chaos. On the evening of Jan. 14, after four days of peaceful rallies, the strike turned violent as local workers set fire to dormitories and clashed with Chinese workers tasked with guarding the company’s properties.
Indonesian authorities deployed more than 500 security personnel, including police and soldiers, to quell the unrest. By the next morning, 71 people had been arrested and at least two workers—one Indonesian and one Chinese—were dead.
The violent clashes followed a series of fatalities, including deaths from labor accidents and suicides, that have plagued the nickel smelter since it began operating in December 2021 with an inauguration by Indonesian President Joko “Jokowi” Widodo. While top Indonesian officials have blamed the latest unrest on “provocateurs” and are eager to turn the page, workers, advocacy groups, and a local official told VICE World News the company has long neglected labor rights and safety. They also expressed frustration with their failed efforts to hold Gunbuster and its powerful Chinese parent company accountable.
Analysts say this is emblematic of a larger issue—that in its eagerness to leverage the country’s natural resources and court Chinese capital, the Jokowi administration has allowed Chinese companies like Gunbuster to circumvent institutional checks.
“Jokowi only cares about economic development and is sidelining everything, including environment, human rights, and working conditions,” said Muhamad Ikhsan, a senior researcher at the Paramadina Public Policy Institute in Jakarta who has studied the outcomes of Chinese investment on the local nickel industry.
COMMENT – This piece could have also gone under the ‘One Belt, One Road Strategy’ heading, but of course the human cost of the PRC’s abysmal labor practices is the real problem.
20. Cross-party MPs shocked by Foreign Office talks with Xinjiang governor
Patrick Wintour, The Guardian, February 8, 2023
Erkin Tuniyaz ‘played central role’ in persecution of Uyghurs, says inter-parliamentary alliance on China.
The Foreign Office has shocked cross-party opponents of the Chinese treatment of Uyghur groups by revealing that it has asked the Xinjiang governor for talks.
MPs belonging to the inter-parliamentary alliance on China (Ipac) called it “incomprehensible” that “anybody within government would think it appropriate to meet with someone who has played a central role in the persecution of Uyghurs – crimes our own parliament has declared to be genocide”.
COMMENT - What reason would UK and European leaders have to meet with the Xinjiang provincial governor? Beijing is clearly putting this individual on the road in Europe to place governments in a difficult situation… allowing oneself to fall victim to this ploy suggests that European and UK governments remain woefully naive.
21. China Direct: Bonjour, Xinjiang governor — Macron’s plan — Xi vs West
Stuart Lau, Politico.eu, February 9, 2023
EU got an invite: Over the past few days, EU officials were pondering over a rather tricky invitation: The exceptionally controversial governor of Xinjiang will be visiting Brussels later this month, and the Chinese ambassador to the EU wants the representatives of the 27 EU countries to go and meet him.
Common position? As one EU diplomat put it, the issue has fast become a “heated” debate within the countries, with some capitals apparently kept in the dark over what they see as a looming diplomatic hot potato.
COMMENT – Another important newsletter I recommend subscribing to. Politico.eu’s “China Direct” is written by Stuart Lau, the publication’s EU-China correspondent. Stuart always finds some interesting perspectives and this week is no different.
22. UK/EU: Investigate, Sanction Visiting Xinjiang Official
Human Rights Watch, February 10, 2023
Resist Chinese Government Efforts to Whitewash Crimes Against Humanity.
The UK government and European Union should investigate and appropriately sanction rather than meet with a visiting top Chinese official from Xinjiang, where crimes against humanity against Uyghurs and other Turkic Muslims are rampant, Human Rights Watch said today.
Erkin Tuniyaz, the Chinese Communist Party deputy secretary in Xinjiang and chairman of the Xinjiang government, is slated to meet with UK officials in London next week and European Union officials in Brussels on February 21. The United States in December 2021 sanctioned Tuniyaz for his role in Xinjiang abuses.
“The UK and EU should be investigating and imposing sanctions on Tuniyaz and other top Chinese officials for their role in crimes against humanity in Xinjiang,” said Yasmine Ahmed, UK director at Human Rights Watch. “The UK and EU should not be drawn into meetings with senior Xinjiang officials so that China can whitewash its atrocities in the Uyghur region.”
INDUSTRIAL POLICIES AND ECONOMIC ESPIONAGE
23. Hong Kong Targets Prized Aramco Listing with Xi’s Backing
Filipe Pacheco and Kari Soo Lindberg, Bloomberg, February 7, 2023
Two months after Chinese President Xi Jinping visited Saudi Arabia, Hong Kong’s leader John Lee has followed in his footsteps by taking a sizable entourage to the kingdom.
Lee, who wrapped up a two-day trip to Saudi on Monday, made it clear his goal is to persuade oil giant Saudi Aramco to list in the financial hub despite competition from rivals such as New York and London. Such a move would be a major victory for Lee, who, since taking power in July, has focused on reopening Hong Kong after years of pandemic isolation battered the city’s economy and reputation.
Che Pan, South China Morning Post, February 8, 2023
After Japan reportedly agreed to a US request to tighten its export controls of chip-making equipment, Chinese factories are preparing for the worst. While the US and Japan have yet to officially disclose details of their agreement, it could affect suppliers such as Nikon and Tokyo Electron.
25. Companies involved in the making of the Chinese spy balloon could face sanctions
Ananya Bhattacharya, Quartz, February 10, 2023
Washington is confident the manufacturer of the Chinese balloon has a “direct relationship” with the People’s Liberation Army (PLA).
Whoever helped make China’s spy balloon is in big trouble with the US.
Washington is confident that the manufacturer of the Chinese balloon, which had “multiple antennas” for intelligence gathering purposes, has a “direct relationship” with the People’s Liberation Army (PLA), a senior state department official said on Thursday (Feb. 9).
The company, which the official did not name, is apparently an approved vendor of the Chinese military and advertises balloon products on its website as well as hosting videos from past flights, which appear to have entered US airspace and that of other countries.
The balloon’s presence in US airspace adds to mounting geopolitical tensions between the two superpowers. The US has been building pressure on China with its chip ban, crackdown on TikTok, and cracking a deal with the Philippines to access military bases near Taiwan.
26. U.S. Blacklists 6 Chinese Entities Involved in Spy Balloon Programs
Ana Swanson, New York Times, February 10, 2023
The action to cut off five Chinese companies and a research institute from American parts and technologies is part of the Biden administration’s response to the balloon it shot down last week.
The Biden administration clamped down on Friday on sales of some U.S. technology to several Chinese aviation and technology companies, as part of its response to a Chinese spy balloon that traversed U.S. airspace last week.
The Commerce Department added five Chinese companies and one research institute to its so-called entity list, which will prevent companies from selling them American parts and technologies without a special license. Officials said the six entities had supported Chinese military programs related to airships and balloons used for intelligence and reconnaissance.
Alan Estevez, the under secretary of commerce for industry and security, said the action was a direct response to the Chinese government’s use of high-altitude balloons for surveillance.
“Today’s action makes clear that entities that seek to harm U.S. national security and sovereignty will be cut off from accessing U.S. technologies,” he said.
COMMENT – My hat’s off to Under Secretary Alan Estevez and his team for taking quick action on this. Let’s hope the Canadian and other allied governments take commensurate actions.
As for the next article, it would be great if we could see greater collaboration and coordination across the U.S. Government. As this week’s actions unfolded, the Securities and Exchange Commission sat on its hands.
27. Chinese tech group’s Nasdaq IPO signals revival for offshore listings
Nicholas Megaw, Financial Times, February 9, 2023
A Shanghai-based maker of sensors for cars has become the largest Chinese group to go public in the US since 2021, in a development that exchange executives hope will ease almost two years of tensions during which such listings ground to a halt.
Hesai Technology, which supplies laser-based sensors to carmakers and autonomous driving companies, on Wednesday raised $190mn from investors — more than it had originally planned — in an initial public offering on the Nasdaq stock exchange that valued it at about $2.4bn.
The stock rose to $23 per share in early trading on Thursday morning, a 21 per cent increase on the offering price of $19.
Bob McCooey, Asia-Pacific chair at Nasdaq, said he was hopeful the deal would be a “seminal” event after a series of positive developments in recent months “cleared the dark clouds [that] hung over the US capital markets for Chinese companies”.
More than 200 Chinese companies worth a combined $1tn are listed on US exchanges, according to the US-China Economic and Security Review Commission, a group created by Congress to examine the national security implications of trade and economic relations between the two countries.
COMMENT – Unfortunately, the SEC (Securities and Exchange Commission) remains asleep at the switch.
28. Controlling the innovation chain: China’s strategy to become a science & technology superpower
Jeroen Groenewegen-Lau and Michael Laha, MERICS, February 2, 2023
Key findings
Inspired by the idea of the innovation chain, Beijing is accelerating its efforts to optimize and align every step of the innovation process. Several support programs are currently undergoing reform, comprising a degree of recentralization, realignment towards strategic needs (technological self-sufficiency in particular), and a shift in focus towards commercialization over other R&D outputs.
China sees improving its capacity in basic research as part of global tech competition. New policies are incentivizing researchers to transfer technology, link up with industry, and focus on national priority areas.
As part of a shift from quantity to quality, Beijing has reduced the number of project-based funding programs and dramatically slowed the approval of new laboratories and development zones. This reverses decades of decentralization, local experimentation, and greater autonomy of research and business communities, which grew from the principle that markets are better at allocating resources than governments.
China’s innovation system is increasingly hierarchical, resulting in a greater degree of central coordination and control. Centrally supported “national labs” have the highest ranking. Below them are “key labs” at various levels, such as “state key labs” and “provincial key labs”. Similar hierarchies exist for projects and zones.
The Chinese Communist Party (CCP) continues to define the goals of scientific research in ever narrower national terms. This is causing tension with the principles of openness and international collaboration that govern much of the (basic) research carried out in Europe.
This trend will impact the work of heads of university and corporate research and development (R&D) labs and of science and technology policy decision makers in Europe.
China continues to be an attractive innovation partner and will likely remain so for some time. However, successful collaboration will require European companies, researchers, and other innovation players to navigate the shifting priorities of China’s project-based funding programs, laboratory systems, and development zones.
European actors that engage with China’s innovation ecosystem should be aware that their Chinese partners are under growing pressure to contribute to China’s pursuit of technological self-sufficiency and other major strategic goals.
COMMENT – As usual, MERICS (a Berlin-based think tank focused on the PRC) does an excellent job of illuminating the challenges posed by the Chinese Communist Party. In this particular study, it is the Party’s control over the PRC’s research and development enterprise and the ways in which Beijing abuses concepts of openness and transparency. Let’s hope that governments across the European Union take this work by MERICS seriously.
CYBER AND INFORMATION TECHNOLOGY
29. U.S. investors have plowed billions into China's AI sector, report shows
Alexandra Alper, Reuters, February 1, 2023
U.S. investors including the investment arms of Intel Corp and Qualcomm Inc accounted for nearly a fifth of investments in Chinese artificial intelligence companies from 2015 to 2021, a report showed on Wednesday.
The document, released by CSET, a tech policy group at Georgetown University, comes amid growing scrutiny of U.S. investments in AI, Quantum and semiconductors, as the Biden administration prepares to unveil new restrictions on U.S. funding of Chinese tech companies.
According to the report, 167 U.S. investors took part in 401 transactions, or roughly 17% of the investments into Chinese AI companies in the period.
Those transactions represented a total $40.2 billion in investment, or 37% of the total raised by Chinese AI companies in the 6-year period. It was not clear from the report, which pulled information from data provider Crunchbase, what percentage of the funding came from the U.S. firms.
COMMENT – The report was in last week’s issue, but here it is again, U.S. Outbound Investment into Chinese AI Companies
These actions, by some of America’s most important technology companies, will drive the development of an outbound investment screening regime.
Companies, like the ones implicated in this study, will battle strenuously to prevent these measures, spending millions to lobby against them (just as they did during the negotiations for the CHIPS Act), and as a country, we will waste valuable time and resources fighting these domestic battles. But in the end, we will develop restrictions on these activities.
It would just be far preferable if the leadership of these companies, who gain incredible benefits from American taxpayers and whose wealth derives from the security provided by the country, would take actions on their own to cease these activities.
30. India to block over 230 betting and loan apps, many with China ties
Manish Singh, TechCrunch, February 5, 2023
India is moving to block 232 apps, some with links to China, that offer betting and loan services in the South Asian market to prevent misuse of the citizens’ data, the state-owned public broadcaster said Sunday.
The Ministry of Electronics and Information Technology is in the process to enforce an emergency order to ban 138 betting and gambling apps and another 94 that provided unauthorized loan services in the interest of protecting the country’s integrity, the broadcaster said.
The ministry’s move was prompted at the direction of the Ministry of Home Affairs, Prasar Bharati added. The apps sought to mislead customers into taking big debts without realizing the terms and there were concerns that they could be used as tools for espionage and propaganda.
31. TikTok’s Secret Sauce Poses Challenge for U.S. Oversight, Researchers Say
Ryan Tracy and Georgia Wells, Wall Street Journal, February 8, 2023
Concerns mount over TikTok’s plan to address potential Chinese influence over what videos Americans see.
32. SpaceX curbed Ukraine's use of Starlink internet for drones -company president
Joey Roulette, Reuters, February 9, 2023
SpaceX has taken steps to prevent Ukraine's military from using the company's Starlink satellite internet service for controlling drones in the region during the country's war with Russia, SpaceX's president said Wednesday.
SpaceX's Starlink satellite internet service, which has provided Ukraine's military with broadband communications in its defense against Russia's military, was "never never meant to be weaponized," Gwynne Shotwell, SpaceX's president and chief operating officer, said during a conference in Washington, D.C.
COMMENT – This may seem a bit disconnected from the main thread of this newsletter, but the context of Starlink’s decision has to be considered when connected to the pressure that Beijing is placing on Elon Musk’s other, more profitable, businesses (See China military must be able to destroy Elon Musk’s Starlink satellites if they threaten national security: scientists, Stephen Chen, South China Morning Post, May 25, 2023 and Elon Musk: China Doesn't Want Me to Sell Starlink in the Country, Michael Kan, PC Magazine, October 10, 2022)
Starlink is the most obvious way for Taiwan to maintain connectivity and resist a PRC invasion, which is why Beijing is applying a lot of pressure on Musk’s sprawling empire which is increasingly dependent on the good graces of the Chinese Communist Party.
Perhaps, before a crisis, we should see Starlink separated from Musk’s other more exposed ventures.
MILITARY AND SECURITY THREATS
33. VIDEO – Empty Bins in a Wartime Environment
Seth Jones, CSIS, January 23, 2023
34. Empty Bins in a Wartime Environment: The Challenge to the U.S. Defense Industrial Base
Seth Jones, CSIS, January 23, 2023
The U.S. defense industrial base is not adequately prepared for the international security environment that now exists. In a major regional conflict—such as a war with China in the Taiwan Strait—the U.S. use of munitions would likely exceed the current stockpiles of the U.S. Department of Defense.
According to the results of a series of CSIS war games, the United States would likely run out of some munitions—such as long-range, precision-guided munitions—in less than one week in a Taiwan Strait conflict.
The war in Ukraine has also exposed serious deficiencies in the U.S. defense industrial base and serves as a stark reminder that a protracted conflict is likely to be an industrial war that requires a defense industry able to manufacture enough munitions, weapons systems, and matériel to replace depleted stockpiles.
As timelines for a possible conflict in Asia shrink, the goal should be to support the production capacity required to enable the United States and its allies and partners to deter and, if deterrence fails, fight and win at least one major theater war—if not two. “Just in time” and lean manufacturing operations must be balanced with carrying added capacity.
The U.S. Department of Defense, in coordination with Congress, should develop a plan now that involves taking steps to streamline and improve production, acquisitions, replenishment, Foreign Military Sales, ITAR, and other policies and procedures. A revitalization of the defense industrial base will not happen overnight for the United States or its allies and partners. It is time to prepare for the era of competition that now exists.
35. China Has More ICBM Launchers Than U.S., American Military Reports
Michael R. Gordon, Wall Street Journal, February 7, 2023
The U.S. military has notified Congress that China now has more land-based intercontinental-range missile launchers than the U.S., fueling the debate about how Washington should respond to Beijing’s nuclear buildup.
“The number of land-based fixed and mobile ICBM launchers in China exceeds the number of ICBM launchers in the United States,” the commander of the U.S. Strategic Command, which oversees nuclear forces, wrote the Senate’s and House’s Armed Services Committees on Jan. 26.
The notification comes as the U.S. is facing the challenge of deterring Russia’s substantial nuclear forces as well as China’s growing nuclear arsenal. U.S. lawmakers are involved in an increasingly heated debate about how best to counter Beijing, including the Pentagon’s response to the Chinese surveillance balloon that recently traversed the U.S. and hovered over Montana, where a portion of the American military’s ICBM arsenal is deployed.
The U.S., which is modernizing all three legs of its land, sea and air based nuclear arsenal, has a much larger nuclear force than China.
Jacob Stokes, CNAS, February 7, 2023
The Center for a New American Security (CNAS) released a new report, "Atomic Strait: How China's Nuclear Buildup Shapes Security Dynamics with Taiwan and the United States," from author Jacob Stokes, senior fellow in the CNAS Indo-Pacific Security Program.
The report examines the intersection of China’s nuclear modernization and cross-Strait tensions, especially how they might play out during a crisis, contingency, or conflict involving China, Taiwan, and the United States.
Stokes argues that China’s rapid nuclear modernization program will play a major role in shaping security dynamics with Taiwan and the United States going forward.
"China’s expanding nuclear arsenal suggests that the force will be designed to fulfill new missions," writes Stokes. "Some part of Beijing’s buildup surely is meant to bolster its second-strike retaliatory capability in the face of what China perceives as shifts in U.S. conventional and nuclear capabilities and policies. China’s long-term goal for the expansion, however, could be more ambitious and potentially even include seeking to build an arsenal on par with Washington’s and Moscow’s."
The report concludes with several recommendations for U.S. policymakers to respond appropriately to these changing dynamics.
Ralph Jennings, South China Morning Post, February 8, 2023
An American Chamber of Commerce in Taiwan survey found 47 per cent of respondents have changed ‘business continuity plans’ or intend to make changes. Around a third cited business disruptions since the visit to Taipei by former US House Speaker Nancy Pelosi in August
38. U.S. firms in Taiwan making 'contingency' plans amid China tensions
Faith Hung, Reuters, February 7, 2023
Almost half of companies surveyed by the American Chamber of Commerce (AmCham) in Taiwan are revising or plan to revise their business continuity plans amid tensions with China, while a growing number reported being impacted by those strains.
39. China Isn’t Ready to Pick Up Phone After Balloon Incident
Helene Cooper, New York Times, February 7, 2023
Chinese officials rejected a request from the U.S. defense secretary to speak with his counterpart after an American fighter jet shot down a Chinese spy balloon.
40. China Refused U.S. Call After Downing of Suspected Spy Balloon, Pentagon Says
Nancy A. Youssef, Wall Street Journal, February 7, 2023
China’s defense minister rejected a request from Defense Secretary Lloyd Austin to speak immediately after the U.S. downed a suspected Chinese spy balloon, the Pentagon said, indicating how the episode has further inflamed the powers’ fraught relations.
The Defense Department submitted the request for Mr. Austin to speak over a secure line with Chinese Defense Minister Wei Fenghe after the Air Force shot down the balloon Saturday, said Pentagon spokesman Air Force Brig. Gen. Pat Ryder on Tuesday.
“We believe in the importance of maintaining open lines of communication between the United States and the PRC in order to responsibly manage the relationship,” Gen. Ryder said, referring to the People’s Republic of China. “Unfortunately, the PRC has declined our request.”
COMMENT – The next time you hear, “we just need better lines of communication” or “we need to install a ‘hotline’ between our two capitals,” remember that Beijing is the one that almost invariably refuses to pick up the phone.
We have a multitude of “lines of communication”… we know their phone numbers (when we dial them they ring and when we text them, the texts go through), we know how to connect a Video Teleconference meeting, we know their email addresses, and even their fax numbers… we even have Presidential envoys in each other’s capitals (they are called Ambassadors, by the way, and they work in places called Embassies), the lack of a so-called “hotline” is NOT the problem.
The problem is that the Chinese Communist Party won’t answer these ‘hotlines’ and speak to us in a responsible way.
Anyone who has had to deal with bilateral negotiations with the CCP understands this dynamic.
41. Another Chinese Balloon Flew Over Latin America, China Confirms
Emma Bubola, New York Times, February 6, 2023
The Chinese government said the balloon that Colombia spotted in its airspace on Friday was for civilian purposes and was being used for flight tests.
A Chinese balloon floated over Latin America and the Caribbean, the Chinese government confirmed on Monday, adding that it was for civilian purposes and was being used for flight tests.
“Affected by the weather and with limited self-steering capability, the airship deviated far from its planned course and entered into the airspace of Latin America and the Caribbean,” a spokeswoman for China’s foreign ministry, Mao Ning, said at a news conference on Monday.
On Friday morning, before the United States shot down a Chinese spy balloon that had spent the last week traversing the country, the Colombian National Air Defense System detected an object that had entered the northern part of the country’s airspace, the Colombian Air Force said in a statement.
Officials determined that the object had “characteristics similar to those of a balloon,” and that it was flying at an altitude of over 55,000 feet and moving at an average speed of 25 knots.
42. Spy balloons: How would Japan respond?
Nikkei Asia, February 6, 2023
Fighter jets likely would be scrambled but Tokyo vows case-by-case response
U.S. Department of Defense, February 6, 2023
COMMENT – The transcript of General Glen VanHerck’s press briefing.
44. Chinese Balloon Carried Antennas, Other Equipment to Gather Intelligence, U.S. Says
Vivian Salama and Michael R. Gordon, Wall Street Journal, February 9, 2023
The Chinese balloon that crossed the U.S. carried antennas and sensors for collecting intelligence and communications, Biden administration officials said, laying out the most detailed evidence to date about China’s surveillance program.
The new information was described Thursday by a range of officials from the Pentagon, State Department and Federal Bureau of Investigation as the administration prepared to take unspecified action against companies and entities linked to the Chinese balloon program that the U.S. says has spied on more than 40 countries across five continents.
Much of the information came from tracking the balloon over eight days as it traversed the U.S. last week before being shot down off the Atlantic coast Saturday. Images captured by high-altitude U-2 surveillance planes showed that the balloon was equipped with multiple antennas, including an array likely capable of pinpointing the location of communications, a senior State Department official said.
Those U-2 and other reconnaissance flights also found that the balloon carried large solar panels capable of powering an array of intelligence collection sensors. The manufacturer of the balloon has a direct relationship with the Chinese military, the State Department official said.
45. G-7 Weighs Sanctioning Chinese, Iranian and North Korean Firms for Aiding Russia’s Military
Alberto Nardelli and Jennifer Jacobs, Bloomberg, February 8, 2023
ONE BELT, ONE ROAD STRATEGY
46. China Hasn’t Given Up on the Belt and Road
Matt Schrader and J. Michael Cole, Foreign Affairs, February 7, 2023
Beijing’s Development Aid Plan Is Less Flashy—but No Less Ambitious
Sam Olsen, Evenstar Institute, February 2023
48. Dire Straits: China’s Push to Secure Its Energy Interests in the Middle East
Matthew P. Funaiole, Brian Hart, and Lily McElwee, CSIS, February 3, 2023
China is expanding its footprint in the Middle East to meet its vast energy needs. Near the Strait of Hormuz, the world’s most important chokepoint for transporting oil, Chinese companies have invested heavily in ports and energy infrastructure. The People’s Liberation Army (PLA) has also set its sights on the critical waterway.
As Chinese leaders look to further secure their interests in the region, they may draw from the playbook they used in Djibouti for leveraging commercial inroads to further military and intelligence activities.
49. A Strategy to Respond to Extra-hemispheric Actors in Latin America and the Caribbean
R. Evan Ellis, February 2023
This work presents recommendations for a U.S. strategy to respond to the challenges arising from the activities by the People’s Republic of China (PRC), Russia, Iran, and other extra-hemispheric actors of concern in Latin America and the Caribbean, recognizing that their engagement has potentially adverse impacts not only on the region, but on the US, as a function of its strong geographic, commercial, and other connections to it.
The Economist, February 9, 2023
In the early 20th century the Baron of Rio Branco, Brazil’s foreign minister, vowed to make the United States the country’s main ally and trading partner. Today that second role is occupied by China, which buys more than a quarter of Brazilian products. Last year Brazil’s goods exports to China were worth a whopping $89bn. But Brazil’s northern neighbour remains deeply important. On February 10th, after we went to press, Brazil’s new leftist president, Luiz Inácio Lula da Silva, was due to visit President Joe Biden in Washington. It will be the first international trip of this term outside Latin America.
Lula (as he is known) has said he wants to discuss, and presumably cement, Brazil’s role “in the new geopolitics” with Mr Biden. But ensuring Brazil’s place in the global order will be a trickier diplomatic feat than it was during his previous two terms as president, from 2003 to 2010.
COMMENT – Increasingly, the foreign and economic policies of other states are being shoehorned into the contours of the Sino-American rivalry. I’m not asserting that this is either good or bad, simply observing that in a new cold war, these are the things that will happen, whether states or companies want them to or not.
All too often what we see is hand-wringing that this is happening and that it “shouldn’t”… as opposed to simply facing reality and adjusting.
OPINION PIECES
51. What a Cold War spy-plane crisis teaches us about China’s balloon antics
Richard Aldous, Washington Post, February 3, 2023
Richard Aldous, a professor at Bard College, is the author of “Macmillan, Eisenhower and the Cold War.”
Echoes of the Cold War are everywhere right now. The diplomatic row about an alleged Chinese surveillance balloon spotted over Montana brings to mind the U-2 crisis of 1960. An American spy plane downed over the Soviet Union brought the Paris summit between President Dwight D. Eisenhower and Soviet leader Nikita Khrushchev crashing down with it. Lessons from that crisis tell us two things. That unexpected events can destroy years of diplomatic effort; and that the Chinese are likely now scrambling in a panic to get their story straight.
By 1960, the United States had been flying U-2 spy planes into Soviet airspace since the mid-1950s. Both sides knew it was happening, but as the CIA’s Richard Bissell said, the plane was so light there was only “one chance in a million” that it would survive a hit. So when Air Force Capt. Francis Gary Powers was shot down on May 1, everyone assumed that the plane was gone and the pilot dead. NASA put out a statement saying it was a weather plane that had gone off course. Only when the Soviets triumphantly paraded Powers and bits of the wreckage in Moscow did Washington realize the game was up.
Eisenhower and Khrushchev were due to meet at the Paris summit on May 16 — an event it had taken more than two years to organize. Both men still attended, but the Soviet leader demanded an apology from Eisenhower. He “tried to pulverize Ike,” the British prime minister, Harold Macmillan, wrote. Eisenhower said later he almost choked while trying to keep his cool. With no apology forthcoming, the whole thing was called off. It was a humiliation for Eisenhower and dashed his hopes for a breakthrough in the Cold War at the end of his presidency.
Secretary of State Antony Blinken, postponing his trip to China, decided not to take the Khrushchev route in administering an in-person dressing down to his Chinese counterpart. Representatives of the People’s Republic of China on the other hand are doing a passable impression of their American counterparts in 1960. In a carbon copy of NASA’s statement during the U-2 crisis, Beijing has said the balloon flying over Montana was used for weather research and had strayed off course.
C. Douglas Dillon, No. 2 at the State Department in 1960, is said to have audibly gasped when he was told about the NASA statement hitting the news wires. He knew it was a lie and that “the Russians would jump us on it.” There will be a Chinese version of Dillon gasping somewhere in Beijing right now, because the calculation for the Chinese government after its own statement today is the same as in 1960. If this object now turns out to be a spy balloon, then the Chinese government will have been caught out in an obvious lie.
President Xi Jinping faces the same unpalatable choice Eisenhower did. Blame someone lower down the chain of command and admit that you don’t know what’s going on in your own government. Otherwise, take the blame and accept the international consequences. Eisenhower believed owning up was the only viable option. The alternative, Vice President Richard M. Nixon agreed, “would be to imply that war could start without the president’s knowledge.”
On May 11, Eisenhower acknowledged without apology what most had already guessed: that “ever since the beginning of my administration, I have issued directives to gather, in every feasible way, the information required to protect the United States and the free world against surprise attack and to enable them to make effective preparations for defense.” Such measures were “a distasteful but vital necessity,” he admitted. If the Soviets did not like it, then they should end their own “fetish of secrecy and concealment.”
Historians by and large have praised Eisenhower for his integrity in taking personal responsibility at a dangerous moment. The concern about the historical parallel with 1960, however, is that the U-2 crisis marked the beginning of one of the most dangerous periods of the Cold War. Khrushchev pulverized President John F. Kennedy at the Vienna summit the following year, much as he had attempted to do to Eisenhower in Paris. The Berlin Wall crisis that summer and the missile crisis the following year brought the two superpowers close to a nuclear exchange. Spying might well be a “distasteful but vital necessity,” but it is also one fraught with danger. Kennedy concluded after the missile crisis that it was vital for him to be able to speak directly to Khrushchev in person, day or night.
The secretary of state is not traveling, but it might be time for President Biden or President Xi to pick up the phone to stop events from escalating.
52. We Still Don’t Know the Truth About Covid
Jamie Metzel and Matt Pottinger, Wall Street Journal, February 8, 2023
Congress should establish a bipartisan national commission of inquiry into the pandemic’s origins.
More than three years after the start of the global pandemic there has yet to be a comprehensive forensic investigation into its origins. With more than a million Americans dead from Covid-19, and an estimated 15 million dead worldwide, that’s inexcusable. While Chinese obfuscation and misdirection is chiefly to blame for the lack of understanding of how the novel coronavirus swept the globe, the U.S. could do far more to get to the bottom of what happened. Congress should hold hearings to establish a bipartisan Covid-19 commission along the lines of the 9/11 commission.
Beyond the finger pointing and political posturing lies an answerable question: Why was there a pandemic? There are two competing hypotheses. Some believe the novel coronavirus probably escaped from a laboratory in Wuhan. Others maintain the virus first jumped to people from caged animals at a Wuhan seafood market.
Testing either hypothesis would require access to Wuhan lab records, biological samples, and personnel as well as frozen blood samples collected in 2019 by various Wuhan blood banks. The malfeasance of China’s rulers is the primary reason the international community doesn’t have access to these resources and data. Since the early days of the pandemic, Chinese officials have systematically destroyed samples, hidden records, imprisoned citizen journalists asking questions about the pandemic’s origins, and enforced a gag order on scientists. Beijing also has refused to provide requested data to the World Health Organization and condemned calls by WHO Director General Tedros Adhanom Ghebreyesus for a full international audit of the Wuhan labs.
53. AUDIO – 100th Episode: Strategic Thinking about Europe (with Dr. Hal Brands)
The Eastern Front Podcast, January 20, 2023
The Eastern Front celebrates its 100th episode with special guest Dr. Hal Brands who is a Senior Fellow at the American Enterprise Institute, the Henry A. Kissinger Distinguished Professor of Global Affairs at the Johns Hopkins School of Advanced International Studies, and a columnist for Bloomberg Opinion. Brands joins Giselle, Iulia, and Dalibor to discuss changes to strategic thinking and grand strategy making in light of Russia's invasion of Ukraine. Brands reviews World War I, World War II, the Cold War, and Russia's 2022 invasion to make the case that we are living in the "age of Ukraine". Brands explains the implications for security in Europe and Asia and considers how the US should strategize accordingly.
COMMENT – While this podcast and episode may seem a bit tangential to the main theme of this newsletter, Hal Brands helps place in context the broader geopolitical landscape that the Chinese Communist Party’s activities and desires take place in. Well worth listening to (as well as adding this podcast to your weekly listening).
54. Reviving America’s Pacific Deterrent
Wall Street Journal, February 3, 2023
The Philippines and the U.S. agree to four more military sites on the island-nation ally.
America’s friends in Asia are reorganizing to manage the threat from a belligerent China, and a case in point is Japan’s plan to double defense spending. Another important development is this week’s news of a larger U.S. military footprint in the Philippines, which is one more step in rebuilding America’s Pacific deterrent. The Pentagon announced that the U.S. will have access to four new military bases in the Philippine archipelago, for a total of nine, up from the five now allowed under the bilateral Enhanced Defense Cooperation Agreement. Defense Secretary Lloyd Austin, visiting the islands this week, said U.S. cooperation with the Philippines is “especially important” as Beijing “continues to advance its illegitimate claims in the West Philippine Sea.”
Only about 500 rotating American troops are on the islands and the U.S. isn’t putting more boots on the ground permanently. But more equipment and troops rotating through is “a really big deal,” as Mr. Austin put it. The move is a breakthrough with new President Ferdinand Marcos after years of diplomatic whiplash from the erratic Rodrigo Duterte. The Pentagon didn’t name the new sites, though press reports suggest two may be in the country’s north—in other words, near Taiwan.
55. The inside story of how the U.S. shot down the Chinese balloon
David Ignatius, Washington Post, February 4, 2023
The public spectacle of a spy balloon floating over America has been an embarrassment for the Biden administration, to be sure. But the administration can claim that it waited for the most opportune moment to destroy the balloon and capture its secret payload — and that the strange affair was a net intelligence plus for the United States.
56. Record Defense Budget Flunks the China Test
Jeffrey Jeb Nadaner, Real Clear Defense, January 31, 2023
One consolation of the $1.7 trillion 2023 spending bill was a bipartisan Congress providing several tens of billions of dollars over the President’s narrow defense request. While most lines of that $858 billion defense appropriation are necessary, it fails in its totality. The record budget folds before our most important national security test: to rescue our precarious Pacific posture.
The bill rightly seeds pioneering capabilities that will be fielded in quantities in the 2030s. It refills Ukraine-depleted stockpiles, but these weapons, however, are generally short-range and of lesser utility vis-à-vis China.
57. China’s Tech Rectification
Rogier Creemers, The Wire China, February 5, 2023
58. China’s Balloon Could Be America’s Awakening
Richard Fontaine, Foreign Policy, February 7, 2023
If Beijing meant for its spy balloon to float across the United States undetected, then it could not have failed more spectacularly. The airship, which may have never been intended to fly so low or even take the course it did, looked less like a distant satellite and more like the Goodyear Blimp. And so while no one could have predicted it, China’s balloon may well spur America’s awakening.
The episode could hardly have been better designed to prompt U.S. concerns. Start by understanding that, surrounded by two oceans and friendly neighbors, Americans are exquisitely sensitive to physical violations of their sovereignty. National security threats tend to emerge “over there”—in Ukraine, Afghanistan, Iraq, the Balkans, and the Western Pacific. Although they might feel secondary effects—rising gas prices, a higher grocery bill, or a family member in the military—these kinds of threats are intangible for most Americans most of the time. Beijing may fly spy satellites over the United States, conduct regular cyberattacks, cover up the origins of a global pandemic, and infiltrate American infrastructure, but the effects (though real) are largely unseen.
So imagine you could put in the air a tangible, sensational manifestation of Beijing’s menace—an enormous spy balloon, for instance. Watch the threat linger for several days over the heartland, drifting so low it can even be seen from the ground. Stir in fervor among Americans who suddenly wish to take matters into their own hands, even attempting to shoot into the air. Throw in a dash of denial from Beijing and a weak claim that the airship is nothing more than a weather balloon blown off course. Follow it almost immediately, and most inconveniently for China, with the appearance of another errant meteorological airship. End it all with an F-22 firing a missile into the spy balloon, puncturing the notion that U.S.-China friction will be confined to Asia rather than the homeland.
As it turns out, Washington couldn’t carry off such an audacious campaign to change American hearts and minds—but Beijing could. The stirring, rather than any intelligence it gathered or diplomatic friction it produced, will be the lasting effect of this strange stunt.
The notion that the United States is still asleep on China might seem odd to policymakers. China is, after all, the stated top priority of U.S. foreign policy. It is the U.S. military’s pacing threat. Increasingly, it is the explicit focus of government leaders who consistently make the public case.
59. Mystery Invasion Object of the Week
Wall Street Journal, February 10, 2023
The U.S. military shot down what the Pentagon and White House called an “object” flying over Alaska on Friday, and what fresh interloper is this? The details were few by our deadline, but say this of the incident: The Biden Administration sure seems more awake to threats to the American homeland, no doubt informed by the blowback after last week’s Chinese spy balloon imbroglio.