Armed build-up means extraterrestrial warfare no longer in the realm of fantasy

The Telegraph, 4 January, 2019

The news that China has landed an explorer robot on the dark side of the Moon has echoed across the global media, a sign of the country’s growing prominence on the international stage. Let’s face it, space is still a sexy topic. And there is something rather fascinating about China – a non-Western global power – making the achievement. It feels like a turning of the page.

Western powers have dominated modern economics, sciences and political ideologies for so long that they implicitly set standards for what marks a civilised power. Space exploration remains a benchmark.

The Chinese government has sought to draw attention to the robot Moon landing, celebrating it as a step forward not just for China but for all mankind. However, while the rise of its space programme is indeed a positive development, it comes at an odd time in China’s own history, a moment when the country seems beset by historic contradictions and tensions. It is an age when the economic relationship between the US and China – once the engine of global growth – has become dominated by a trade war and military competition.

While China has long insisted that its rise would be a peaceful one, the Moon landing and the technology that undergirds it have been driven by what some scholars have called techno-nationalism. Accordingly, under the terms of President Xi Jinping’s “China Dream”, national rejuvenation will be the result of technological prowess – something that has driven its cyber-hacking and mercantilist policies.

We cannot ignore the fact that China has the most rapidly growing military presence in space. A US defence department report noted last year that, since it tested anti-satellite weapons in 2007, China’s ability to take out American satellites has burgeoned, with unmanned aerial vehicles, satellite jammers and a “vast ground infrastructure”. Many of these systems are developed as “counter-space” technologies, in which China might deny other powers the ability to use space in a crisis or conflict.

The Trump administration announcing last summer that it would create a “space force” reveals the seriousness with which Washington views such developments. Outer space is a new frontier for warfare.

Given President Xi’s insistence that Taiwan “must and will be” reunited with the mainland, and the US commitment to defend it, a space conflict may no longer be merely in the realm of imagination. So, while we should all celebrate human progress in space, I can’t help but wonder if we’re simply taking our problems up there.

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Business Insider, Alex Lockie, 14 December, 2018

“It’s amazing that they’ve backed down because Xi personally put his name on it,” John Hemmings, the director of the Asia Studies Centre at the Henry Jackson Society told Business Insider.

“The fact that Xi is dumping a policy that has his name all over it is huge,” Hemmings said of the policy reversal.

He added that the new willingness to play ball with Trump on trade could amount to a “very slow incremental cave-in on the tariff war.”


To ban or to Banbury?

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RUSI Commentary, 7 December, 2018

The surprising announcement that Meng Wanzhou, deputy chair of Huawei’s board and daughter of company founder Ren Zhengfei, was detained in Canada on an extradition request from the US over allegations that the Chinese telecommunications giant may have exported US–licenced technology to Iran in contravention of US sanctions has come at a tumultuous time for the company. Earlier in the week, British Telecom stated that it intends to strip out Huawei components from the core of its 4G network. And this comes on the heels of a speech by Alex Younger, Chief of the Secret Intelligence Service, who warned against the use of the Chinese telecommunications firm in the development of Britain’s 5G network. Given the ongoing review being undertaken by the Department for Digital, Culture, Media and Sport (DCMS) and the National Cyber Security Centre (NCSC) seeking to ensure that Britain’s ‘critical national infrastructure remains resilient and secure’, it is clear that there has been a significant shift in both global and UK stances towards the company.

The perception that Huawei might be too close to the Chinese government – and its military signals department – has been there from the very beginnings of the company. It is partly a legacy, perhaps, of founder Ren Zhengfei’s prior career as a military technologist in the PLA’s Information Technology research unit. According to Philippe Le Corre, an expert based at the Harvard Kennedy School, Chinese state banks have been extremely generous to the company as it expanded its operations across key sectors of the European telecommunications market.

However, Huawei is perhaps also the victim of the past reputational damage caused by the first wave of Chinese companies and their international behaviour. Concerns about how private Chinese companies moved hand-in-hand with the Chinese state first arose in the late 1990s, when a US Congressional study – the so-called Cox Report – revealed how the Chinese state used family ties, social connections and party membership to get Chinese corporations to carry out industrial espionage across the US defence and information technology sectors. Unlike the Soviet model, which gave primacy to the official intelligence organs, the Chinese model preferred a widely dispersed approach, using front companies, non-intelligence agencies and individuals, educational research exchanges, and friendly Chinese companies.

It is only a small leap for those same companies to be pressed from carrying out industrial espionage to transferring data – especially when their business model is handling data. Indeed, Huawei was accused of hacking the African Union (AU) IT system it helped build – including computing, data storage, and WiFi. Servers were transferring data from inside the AU’s Addis Ababa headquarters to servers in Shanghai every night between 12 midnight and 2am. The fact that such practice has been codified in Chinese law, whereby Chinese companies are obliged to assist the nation’s intelligence agencies, puts paid to the idea that Huawei could resist pressure from Beijing.

This very concern was uppermost in the mind of Malcolm Rifkind when he oversaw the publication of an Intelligence and Security Committee report in 2013, Foreign Involvement in the Critical National Infrastructure: The Implications for National Security. This report and one published the year before by the US Congress Permanent Select Committee on Intelligence identified a number of systemic risks in allowing Huawei or ZTE – another Chinese telecommunications giant – to insert technology into the national network. First, it would allow the entity to modify or steal data from the government, private citizens, and corporations. While one might argue that China could simply hack those entities, the 2013 report quotes the Joint Intelligence Committee’s argument that network access ‘would be very difficult to detect or prevent and could enable the Chinese to intercept covertly or disrupt traffic’. Second, insertion of backdoor code or malicious hardware could allow an entity to shut down or degrade critical national security systems in a time of crisis or war. When one thinks of the importance of data on the UK financial network, one realises what a capable weapon this network access would be. Nor would this be a one-time risk, when 5G infrastructure is being laid down. Huawei also offers a service known as systems maintenance. This provides technicians with authorised access in the form of software updates and patches to glitches. Such access offers additional avenues for inserting malicious code.

Until this year, the British answer to such concerns was the creation of a Huawei Cyber Security Evaluation Centre (CSEC) at Banbury, which was staffed by employees and technicians from GCHQ who checked over all code and hardware used by Huawei in the United Kingdom. This has sought to mitigate risk and identify threat somewhat successfully for over eight years – until this past summer. This July, just prior to the announcement of the DCMS/NCSC review, the evaluation centre at Banbury issued a report which found that ‘shortcomings in Huawei’s engineering processes have exposed new risks in the UK telecommunication networks and long-term challenges in mitigation and management’. Whether this means that Huawei will be banned from developing 5G in the UK – as it has in the US, India, Australia and New Zealand – is unclear. It might well be that the UK mitigation model can adjust to the more severe levels of scrutiny required by 5G code. If we were to read into Younger’s speech this week, it would appear that the intelligence agencies have – for the moment, anyway – come to their own conclusions about the future viability of the CSEC system.

While there are no easy answers to the debate over Huawei, it is important to note that in asking for Meng Wanzhou’s detention and extradition, the US is sending its allies a strong signal about doing business with the company. Whether or not those reasons are fully substantiated remains to be proven. However, the conclusions of the 2013 Intelligence and Security Committee report are worth bearing in mind: ‘The Government’s duty to protect the safety and security of its citizens should not be compromised by fears of financial consequences’. While the chances might be low, the consequences of malicious infiltration by the Chinese state into our network would be disastrous.


Huawei CFO’s arrest could torpedo Trump and Xi’s cease-fire and rock the smartphone giant

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Business Insider, 6 December, 2018

  • The news that Meng Wanzhou, the CFO at the Chinese electronics giant Huawei, has been detained by Canadian authorities and is facing extradition to the US to face charges over illegal trade to Iran is much bigger than it might first appear.
  • It comes at a time when the Western intelligence agencies are reconsidering Huawei’s presence in their countries’ digital infrastructure.
  • It may also put at risk the delicate trade cease-fire created by China and the US at their leaders’ dinner last weekend.
  • In April, a congressional bill punished the Chinese company ZTE for the same behavior Huawei stands accused of — and the company’s stock dived 30% at a cost of nearly $7 billion in market value.

The news that Meng Wanzhou, the CFO at the Chinese electronics giant Huawei, has been detained by Canadian authorities and is facing extradition to the US to face charges over illegal trade to Iran is much bigger than it might first appear.

First, it comes when the West, particularly the so-called Five Eyes partners (Australia, the UK, the US, Canada, and New Zealand), are reconsidering Huawei’s presence in their digital infrastructure.

Second, it may put at risk the delicate trade cease-fire created by China and the US at their leaders’ dinner last weekend.

The UK has been reviewing its use of Huawei to build its 5G architecture. As Huawei has long been accused of maintaining links — through its founder, Ren Zhengfei — to China’s military industrial complex, the willingness of Western countries to allow it to develop their networks has waxed and waned. Philippe Le Corre, a French expert based at the Harvard Kennedy School, has tracked how Beijing has extended state support, in the form of cheap loans, to the company as it expanded its operations in Europe.

This year alone, India and New Zealand have moved to ban the Chinese firm, following in the footsteps of the US and Australia. Germany, like the UK, is reconsidering its options. While Canada is at the center of Meng’s arrest, the Trudeau government has been fairly friendly toward Chinese investment and is sure to go through its own debate.

While Meng’s arrest is not directly tied to the issue, it could affect how the US deals with Huawei as a company. If, for example, Huawei is found guilty of intentionally allowing US-licenses technologies to be exported into Iran, then US companies and suppliers could be prohibited from dealing with the firm.

Could Huawei go the way of ZTE?

In the wake of a congressional bill that punished the Chinese company ZTE for the same behavior in April, ZTE’s stock dived 30% and the company lost nearly $7 billion in value. While a political settlement allowed the company to continue operating, it is a stark warning to what could befall its bigger rival, Huawei.

A ban from US supplier chains would also put an unofficial nix on the company and make it increasingly difficult for countries like the UK to continue operating as they are. The current arrangement, developed after a 2011 parliamentary report on Huawei, was for UK government technicians to inspect Huawei components and code at a site paid for by the Chinese firm in Oxfordshire.

That risk-mitigation approach could be said to already be in trouble in light of a report this summer that said Huawei’s engineering processes allowed for grave vulnerabilities to be inserted into UK infrastructure. While no issues have been found, experts say finding such backdoor code in the immeasurably more complex 5G system will be nearly impossible.

Second, the US is no stranger from carrying out moves from one side of its government that contradict delicate negotiations.

In the past, we saw the US Treasury nearly destroy delicate Six-Party Talks with North Korea when it froze North Korean financial assets. However, with the Trump administration, it might well be a type of pressure.

This president is, after all, the most Chinese-style leader the US has, using a mixture of charm and blunt coercion to shape the negotiations with other powers. While China has moved troops onto India’s border as New Delhi hosted President Xi Jinping, so has President Donald Trump overseen the arrest of a prominent Chinese scion of a major global tech company.

How Beijing reacts, and its willingness to put Huawei on the table — before the tariffs freeze — will say much about where it sees the US relationship going and how important the tech giant is to its geopolitical strategy.

Time will tell.

Jeremy S. Maxie

Energy & Political Risk Consultant

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