Should you be worried about a nuclear war with North Korea?

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The Telegraph, 10 August, 2017

Thursday’s news that the Democratic People’s Republic of Korea (North Korea) has announced that it is preparing an attack plan on Guam, a US territory with forces has heightened fears across Asia and the West of a catastrophic conflict.

The past few days contain all the elements of a crisis moving inexorably toward a tragic end. For many, that end seems to be hastened by a US president intent on matching DPRK’s emotive threats.

How close are the United States and North Korea to actual warfare though? Should we be looking to “doomsday prepper” property websites or making another cup of tea and changing channel, safe in the knowledge this crisis, like all before it with North Korea, will die down when both sides really consider their options (and the terrifying outcomes).

As always, with these kinds of black-and-white choices, the truth is probably somewhere near the middle. Looking past the “fire and brimstone” rhetoric, something very real did happen this week and that was the unanimous decision by the United Nations Security Council to impose the most severe set of sanctions yet on the North. They will cut the DPRK’s GDP of $3bn by a third.

This is an astonishing diplomatic victory, if one considers that Nikki Halley, the US Ambassador to the UN not only managed to persuade China to vote “yes”, but that she also persuaded Russia to vote “yes”, only a week after Congress strengthened sanctions against it. This is an incredible diplomatic coup and hints at the long-term strategy of the Trump administration all along.

Trump has predicted that despite their rhetoric, North Korea still needs growth
Like many previous presidents, Trump has used carrots and sticks on North Korea, but this time with Beijing. This is because he believes – correctly, as it happens – that the DPRK’s economic survival depends on China’s benevolence.

Since the regime is ideologically extreme, it seems resistant to low-bar pressures – on reputation, for example – that sometimes drive other middle-sized states. So, Trump – ever the businessman – has predicted that despite their rhetoric, North Korea still needs growth. After all, it has been the regimes secondary policy since Kim Jong-in came into office, after the pursuit of nuclear weapons. Trump’s gambit has been to say, “you can have one or the other, but not both.”

Traditionally, getting China to actually put pressure on the regime (and actually enforce previous sanctions regimes on the North) has always been problematic, and nearly no other president has been willing to risk the trade relationship or good relations. So confident did China become, that it began actively undermining sanctions, in 2011 and 2012.

In his heavy-handed way, Trump has brushed all of the diplomatic considerations aside to apply staunch pressure on Beijing. He has threatened a conflict on China’s doorstep by deploying naval forces to the seas around Korea, while also threatening sanctions on Chinese banks doing business with the DPRK. While China has criticised Trump’s approach and protested its innocent, it has quietly begun shifting its behaviour.

We are where we are because of China’s historical support for the North Korean regime. The first – given the importance of sanctions in Trump’s strategy – is whether China adheres to them at the border. Its past behaviour has been to sign on to sanctions when the pressure is high, and then to undermine them later when Washington was no longer focused on Korea.

If this is Beijing’s intention now, then a DPRK crisis will continue for the next two years, every time Pyongyang develops a technological piece of the puzzle to being able to strike the US mainland. If, however, Beijing decides that it will have to really live up to its sanctions commitments, then all eyes will turn to the DPRK.

While Kim Jong-un’s regime sees much of its own population as “wavering” and “hostile”, it deeply values and depends upon the “loyal” class of Pyongyang-based elites who populate the military, the bureaucracy, and other branches of government. If those elites see that even Beijing has turned against them, and that they begin to suffer real economic hardship, it is likely that they would turn on the Kim family.

While this might sound unlikely, it is precisely the strategy (Operation Matrix) that helped bring down the Milosovich government in Serbia behind the scenes of the 1999 air war over Kosovo. It is also the strategy that took down the de Klerk Apartheid-era government of South Africa. A leadership that is separated from the masses can survive if it keeps the loyalty of the ruling elite and the military – see Assad – but one who is separated from the military cannot last long.

 


Risky Business: Keeping an Eye on Chinese Investment

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Politico.eu, 26 July, 2017

If money talks, Chinese money is particularly loud these days. In the past five years, Chinese investment abroad — largely dominated by the country’s giant state-owned enterprises — has tripled. Today, China accounts for nearly 10 percent of global foreign direct investment outflow.

In an era of austerity, influxes of investment are often appreciated. But not all Chinese money receives a warm welcome — as evidenced by Germany’s recent decision to limit investment into its strategic infrastructure. This is especially true when it comes to granting China access to Western infrastructure and sensitive telecoms and high-tech companies.

Western countries are right to pay careful attention to what Chinese companies do with their money. The trouble, however, is there is no agreed-upon standard for determining when an investment poses a security risk — and no coordination even among the closest Western allies in deciding which investments should be blocked. As Chinese money continues to flow westward, the future of European and North American security could depend on governments in those regions coming up with a common policy on where that money can be spent.

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The Interpreter, 26 July, 2017

The recent exposure of Chinese influence-peddling inside the Australian political system is just one example of China’s growing influence and willingness to act in Western states. In these days of austerity for many Western nations, money speaks loudly and in recent years Chinese investment into Western liberal democracies has surged.

Chinese foreign direct investment is shifting from commodities in the developing world to high-tech acquisitions, equity stakes and mergers in advanced economies. In Europe alone, Chinese investment increased 44% between 2014 and 2015, when it reached €20 billion. For the most part, these funds have been welcomed by cash-strapped Western states seeking to reinvigorate their economies. However, there are also risks associated with Chinese investment in telecommunications and other mainstays of modern commerce.

Research carried out by the Henry Jackson Society suggests that Chinese investment in national infrastructure is taking on critical proportions, and Western states – particularly the five countries involved in the Five Eyes intelligence alliance – are responding in piecemeal fashion with each screening investments in different ways. A number of incidents in recent years have underlined the need for better co-ordination between nations, particularly those that share intelligence, and improved understanding of China’s investment strategy into the West.

In 2016, for example, a Chinese consortium that included a subsidiary of the Chinese defence industrial giant AVIC, bought a large stake in the UK’s largest data centre operator, Global Switch. Whitehall approved the deal, only to see the Australian Department of Defence pull out of future business with Global Switch, citing the AVIC buy-in. Then came the Canadian government’s approval of a Chinese takeover of the Canadian satellite communications company, Norsat.  After the Trudeau administration confirmed that change in ownership, the Pentagon announced it would have to re-examine its contracts with the Vancouver firm.

MERICS research suggests China’s state owned enterprises (SOEs) accounted for more than 60% of China FDI in Europe in 2015. While this is not as high as it has been, the trend is upward which adds to the argument that much of the investment surge is strategic in nature. Beijing has also recently announced its intention to become the global leader in artificial intelligence (AI), a cutting-edge technology upon which the defence of the West will depend. One can see China’s intentions in its Made in China: 2025 strategy that was announced in 2014. The strategy involves subsidising Chinese firms targeting acquisitions and mergers of Western AI, IT, and telecoms firms and using non-tariff barriers to provide a sanctuary for Chinese firms inside China so they can advance safely away from the harsh glare of competition. The goal is to give China strategic dominance in the technologies of future warfare.

Such goals are alarming, and it’s not just policy analysts who think so.The Trump administration, for example, demanded an investigation in Chinese investment into Silicon Valley start-ups and the resulting report indicates that many of the Chinese firms operating in this field have state support and direction.

The recent decision by Berlin to restrict Chinese investment into parts of its digital economy and infrastructure is another indicator of how critical this issue has become. As one of the West’s most open economies, this action demonstrates Berlin is taking the situation very seriously indeed. While London mulls over a body similar to the Committee for Foreign Investment in the United States or Australia’s Foreign Investment Review Board to supplement its current ad hoc system, it is imperative that the Five Eyes alliance members systemically overhaul the range of sectors open to Chinese investment. Some practices that could assist include:

  • Instituting a regular Five Eyes meeting between the heads of their investment review boards.
  • Use this process to build a ‘common operating picture’ of Chinese investment practices and targets.
  • Sharing more information on what Chinese firms are doing in each of the Five Eyes economies, their ownership structures, and any past instances of serving Chinese national security objectives.
  • Considering an overhaul of the Five Eyes working groups in telecoms and AI, giving them greater prominence than they now have, and creating stronger links between private sector actors and security agencies.
  • Developing better monitoring by Ministries of Economy; presently, governments capture statistics without giving much background. They can and should provide more information to regulatory bodies.

The surge of Chinese SOE-led interest into Western infrastructure and high-tech can help bridge the gap between supply and demand for investment dollars. However, we need to be realistic about Beijing’s own industrial goals and objectives and the nature of its investment strategy. A common assessment system for the Five Eyes allies would assist in safeguarding our interlinked telecommunications and high-tech sectors.


Pushback: Why the Five Eyes Intelligence Alliance Should Keep Chinese Investors at Bay

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The National Interest, 25 July, 2017

There has been a dramatic shift of investment into the West, which may have a deep impact on U.S. security and the country’s future way of life. According to a report recently published by the Henry Jackson Society, China is making massive investments into Western digital and critical national infrastructure, and Western states are not reacting in a coordinated or rational way. This article argues that those states can and should coordinate a collective reaction through the Five Eyes intelligence alliance. The Five Eyes—arguably one of the strongest and long-lasting intelligence coalitions in history—consists of five of the most robust liberal democracies in the West: the United Kingdom, Canada, Australia, New Zealand and the United States.

Bound by strong cultural links, these five states have seen off authoritarian communist dictatorships and global conspiracy theories from a range of directions. Following the collapse of the Soviet Empire and its satellites, the men and women who worked in the shadows to keep us safe during that time turned their attention toward failed and failing states. They also began defending us from corporate espionage and, now, the rise of domestic-based Islamist terrorism. While the members of this shadow group still work on those issues, a new one has presented itself, and from an unusual and unlikely direction—Chinese malicious investment.

To finish this article, click here.


HJS Report: Safeguarding our System: Chinese Investment into the UK’s Digital and Critical National Infrastructure

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Henry Jackson Society, 18 July, 2017

China’s investment into Western advanced economies – including that of the UK
– is increasing and changing in scope surging from EUR 14 billion in 2015 to EUR
20 billion in 2016, a 44% jump since 2014. More than 60% of the value of deals has been by state-owned enterprises, indicating this push is led by state strategy than commercial
interests.
• In 2016, China invested $11.15 billion into the UK. More than double the amount in
2015 and the most in any one year going back to 2005.
• China’s economic strategy, Made in China: 2025, might threaten the long-term
survival of UK businesses unless some sort of government protection is afforded to
them or unless China affords British businesses more access to China’s home market.
• Because of cyber vulnerabilities, critical national infrastructure will be at the forefront
of any future war.
• The current review system could be improved and rationalised:
– It has allowed access to the UK’s digital and critical infrastructure with elements
of China’s defence industrial concerns
– It has allowed deals that have affected the UK’s closest military allies
– It allows for domestic and foreign pressure on the government of the day
• A formal investment screening regime is both necessary and desirable to protect the
UK’s economic interests and its national security.
• A new regime should be built, which is adequately resourced to carry out the difficult
task of tracking foreign direct investment (FDI) into the sensitive parts of the UK’s
economy.
• The new regime should begin to coordinate more closely with the UK’s closet military
and intelligence-sharing allies, including the Five Eyes partners and NATO member
states.
• Any new regime should carry out its review process in a judicious but swift manner so
that foreign investment in the UK is not hampered or harmed. This report suggests
that the regime should be sufficiently able to pass its decisions within 30 days of
receiving an inquiry.
• Ideally, any regime should be overseen by a special committee in Parliament to ensure
that it is sufficiently funded and resourced to carry out its activities, and that it is
carrying them out in a legal, expedient and sufficient manner

To read the full report, please click here.


 

The Sydney Morning Herald, 4 July, 2017

This is not “just another North Korean missile launch”. The “successful” testing of what North Korea’s state news agency KCNA called an “inter-continental ballistic missile” takes the Korean Peninsula one step closer to a conflict that could drag in the world’s great powers and cost millions of lives.

This time is different, and potentially much worse than those that have gone before, because it threatens to bring a reaction from the United States. The US closely monitors North Korea’s ability to strike cities on the West Coast, and significant progress towards that goal is unlikely to go unanswered.

According to Chad O’Carroll, Managing Director at Korea Risk Group, a North Korean nuclear missile that can reach the West Coast – though similar to Russian and Chinese capabilities – is deeply problematic for any sitting US president, “the extremely acrimonious nature of relations between…

To continue reading, please click here.


Panama Has Ditched Taiwan. Here’s Why It Matters for America.

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The National Interest, 22 June, 2017

Last week’s sudden announcement by Panamanian president Juan Carlos Varela that Panama would henceforth be shifting its diplomatic relations from Taiwan to mainland China was not entirely unexpected in Taipei. Tsai Ing-wen had deliberately avoided visiting the country during her visit to the region after Panamanian leaders had delayed the acceptance of Taiwan’s new ambassador there for more than six months. For Taipei, it was clear that the writing was on the wall. Varela’s decision to favor Beijing came as another hit for Taiwan after it lost two other allies in the past year.
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So what lies behind the recent moves of Taiwan’s allies to recognize Beijing instead? Part of the story relates to Taiwanese president Tsai. Coming from the independence-minded Democratic Progressive Party, President Tsai’s decision not to affirm the 1992 Consensus (on One China) and her congratulatory telephone call to president-elect Donald Trump in December of last year were poorly received in Beijing. Shortly after the telephone call, one of Taiwan’s African allies, Sao Tome and Principe, suddenly announced that it was dumping Taipei in favor of Beijing. According to Zhang Baohui, an academic at Lingnan University in Hong Kong, the shift by the small African country indicated that “Beijing has a new Taiwan strategy: they’re going back to their confrontational style, and the truce with Taiwan over the past eight years is over.”

Given the fact that the United States sits astride this precarious status quo, any increase in Cross-Strait tensions directly impacts U.S. national interests. While the official U.S. policy is to support the “One China” policy and maintain close diplomatic and economic ties with China, it is also committed by domestic law to protecting Taiwan from unification-by-force. Regardless of their preferences, U.S. presidents are obliged by the Taiwan Relations Act of 1979 to protect Taiwan and supply it with adequate military arms.

To finish this article, click here.

 

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