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With Prof Peter Varnish OBE, Macdonald Laurier Institute, September 2021

The international environment is increasingly insecure. Under the leadership of Xi Jinping and Vladimir Putin, China and Russia are attempting to reshape the international system and constrain the liberal democratic West. State competition is changing, in a shift towards deniable, intrusive, and non-military threats against all sectors of society and, as a result, liberal democracies are increasingly looking for collective ways to respond. To meet this growing global challenge, Canada could do much more with the historic Five Eyes grouping that also includes the US, UK, Australia and New Zealand.

The Five Eyes began primarily as an intelligence-sharing and technology collaboration arrangement. But in a new joint publication between the Daniel K. Inouye Asia-Pacific Center for Security Studies and the Macdonald-Laurier Institute, authors John Hemmings and Peter Varnish argue that the Five Eyes grouping could be used by Canada and others to expand the ability to counter and deter China and Russia across multiple areas, including technology, information, military, and economics.

According to the report, titled “Evolving the Five Eyes: Opportunities and Challenges in the New Strategic Landscape,” the Five Eyes has many advantages, from its proven history of creating effective personal relationships across all five countries to its ad hoc, fluid informality which makes it an ideal vehicle for expanded security cooperation. The countries share a common language, democratic traditions and legal systems and they have largely compatible militaries and security practices.


Council of Geostrategy, Britain’s World, 19 August, 2021

The dramatic images of the Fall of Kabul have driven rounds of recrimination and finger-pointing in the West. However, as the G7 countries prepare to meet virtually next week for an emergency discussion on Afghanistan, it would do well for them to consider the position of another of the region’s great powers – the People’s Republic of China (PRC). While the PRC’s state-owned media have already leapt on the event as ‘humiliating’ for the United Kingdom (UK) and United States (US), and attempted to draw lessons for Taiwan’s Democratic Progressive Party from the ‘abandonment’, it is also beginning to frame the event as something which will require a ‘deal’ with the US, a potential bargaining chip to reshape its current adversarial relationship with Washington without having to address US concerns or complaints. 

The G7 need not take this Chinese ‘discursive statecraft’ at face-value. It is indeed natural for the PRC to dress up its efforts to stabilise neighbouring Afghanistan as a favour to the West, but American, British, and other allied leaders should understand the PRC’s equities in the country clearly. While the Chinese leadership itself has not yet decided whether to manage this crisis with or against the West, its own interests in the war-torn country are well-documented. G7 leaders should instead use the following baseline assumptions as they think through any attempts at a Chinese-Western settlement.

The PRC has a strong interest in a stable border region: Preventing further unrest in the quasi-colonial territory of Xinjiang is a core interest for the Chinese Communist Party (CCP) as its gross violations of human rights there reveal. Given the fact that Afghanistan and Xinjiang share a border and the fact that the Taliban has maintained links with various international Islamic groups in the past, this is a serious concern. Over the past few years, Chinese intelligence networks inside Afghanistan and Chinese-Taliban diplomacy in Tianjin have spearheaded the effort to detach the Taliban from the East Turkistan Islamic Movement – a group with which it naturally aligns. In his meeting with Mullah Abdul Ghani Baradar, Wang Yi, the PRC Foreign Minister, called for the Taliban to ‘completely sever all ties’ with the group. 

The PRC has a strong interest in Afghanistan as a source of minerals: Afghanistan is the world’s largest unexploited reserves of copper, coal, cobalt, mercury, gold, and lithium, valued at US$1 trillion. Its rare-earth metals may be worth even more. In addition to owning the mining rights to the world’s second largest copper mine in Afghanistan – said to be worth US$1.2 billion in annual output – the PRC is already the Taliban’s largest customer for minerals, a trade that now represents the group’s largest revenue source (US$464 million), outstripping narcotics (US$416 million). This also represents a large chunk of total Taliban revenues, which are said to be around US$1.6 billion, a point made more salient by the freezing of Afghan government reserves held in US banks. Chinese state media has already made a point of stating that it can meet the anticipated fiscal shortfall (a predicted 20% fall from the previous pledge of US$15.2 billion between 2016 and 2020) in Afghanistan’s coffers through official direct investment as part of the so-called Belt and Road Initiative (BRI). 

The PRC has a long-term interest in incorporating Afghanistan into the BRI: Despite a recent focus on domestic infrastructure, the Belt and Road Initiative remains Xi Jinping’s signature foreign policy project. As long as he remains General Secretary of the CCP, that will continue to be the case. The BRI is a quasi-imperial project that seeks to offshore access to industrial capacity and labour, while also tying regional states closer to the PRC’s economy. Dual Circulation theory, the CCP’s current economic strategy, sees the PRC intending to create trade asymmetries between it and other trading powers, so that its domestic economy drives growth, while others remain dependent on Chinese trade and investment. No doubt, the use of infrastructure financingand a debated-but-still-relevant concept, ‘debt-trap diplomacy’, would also give Beijing direct influence over the Taliban’s leadership. 

The PRC has a strong interest in sidelining India in any settlement: Beijing may seek to sideline India from having a major role in Afghanistan, and there are two strong reasons why the G7 countries should again invite India’s leader Narendra Modi to any virtual meeting and any subsequent diplomacy with China. First, India has been developing strong links to Afghanistan over the past 20 years and sees it as a priority issue. Second, while Afghanistan is bound to become somewhat reliant on China for future economic and trade development, India and the Gulf states could and should provide enough economic diversity to soften China’s heft. 

Thus, when the G7 leaders meet next week, they should frame any cooperation with the PRC in terms of the mutual interest all parties have in a stable Afghanistan that does not harbour or export Jihadists. After they have established that, they will have to discuss how to balance cooperation with the PRC in Afghanistan within the greater strategic context of geopolitical competition. No doubt, the CCP leadership will be doing the same. The G7 will have to balance and prioritise their interests within the relationships with the PRC, with the Taliban, and with any resurrected non-Pashtu Northern Alliance group – should one arise. It is a fluid time calling for diplomacy and strategic decisiveness. 


NBR Special Report 90

With Prof Wade Turvold (USN Ret), NBR Special Report, 25 May, 2021

The U.S. and Japan produced the New Defense Guidelines in 2015 that created the alliance coordination mechanism (ACM) to enable the allies to better manage crises. The ACM has proved useful but is showing some limitations in handling the challenges of complex gray-zone activity posed by China. This is in part due to the differing definitions of “gray zone” in Japan and the U.S., which could lead to confusion over appropriate response mechanisms. This uncertainty may have the unintended effect of giving China the power to set the tempo of activities in and around the Senkaku Islands to incrementally wrest control from the Japan Coast Guard. There are also growing concerns that the ACM is insufficient for dealing with kinetic operations above the threshold of gray-zone operations. Therefore, the U.S. and Japan should consider reforming the ACM, reorganizing U.S. Forces Japan, and developing a command and control (C2) structure for crises just below and above the gray-zone threshold.

POLICY IMPLICATIONS
  • Japan and the U.S. must find a common definition of gray zone that will enable them to agree on the threshold where gray-zone activity ends and conflict begins.
  • Japan and the U.S. must strengthen the ACM by constant usage and rehearsal in order to allow it to function properly during a fait accompli gray-zone operation by China.
  • The disjointedness of U.S. C2 in the vicinity of Japan could be a significant challenge in a fast-paced crisis above the gray-zone threshold. The allies should consider creating a unified command structure for the alliance, given that the current “coalition-style” approach to C2 could prove insufficient for dealing with a peer competitor with a unified command in a crisis scenario.

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America’s New Great-Power Problem

With James Rogers, The National Interest, 23 January, 2021

We often seek lessons from history. Thucydides famously wrote that he wished for his History of the Peloponnesian War to be “useful for by those inquirers who desire an exact knowledge of the past as an aid to the interpretation of the future.” Winston Churchill wrote that he sought to make his history, The Second World War, a “contribution to history that will be of service to the future.”  

And yet, no sooner is a comparison made than a critic responds that the historical analogy is malformed, citing major differences between those periods and our own. After all, not all diplomacy with an aggressor leads to a “Munich” moment, not every step, a step “across the Rubicon,” nor every rising power destined for a “Thucydides Trap.”

The imposition of broad sweeping comparisons from the past should, of course, be avoided, but this does not mean that lessons cannot be extracted from history when dealing with certain types of scenarios. So while history does not necessarily repeat itself, it can certainly echo. Structural variables work to influence complex political behaviors in ways that are repeated. The fact that practitioners themselves are immersed in history, accentuates this. So how can today’s policymakerattempting to design policies that deal with China’s risedraw from the past, without making category mistakes or sweeping generalizations? 

When seeking historical instruction, a starting point might be to isolate common structural conditions or variables for comparison. These might include the form of political leadership, regime-type, the form of international polarity, methods of competition, and the impact of specific technologies on escalatory logics (e.g. how do nuclear weapons limit choices?). 

If we apply this typology to the three most recent historical episodes of “rising-power challenges,” then we believe that we can extract lessons in relation to the emerging competition with China. These periods include the European rivalry before World War I, the global competition before World War II, and the era of geopolitical struggle now known as the Cold War. From there, it is clear that there are many commonalities between those periods and the one we are moving into. What do these three eras of competition offer American, British and Indo-Pacific policymakers in terms of insight when dealing with the rise of China

  1. China has a leader around which power has become increasingly centralized to the extent that a cult-of-personality style of leadership has emerged. These behaviors might have been predicted in the first years of Xi Jinping’s regime by looking at his earliest speeches to the CCP cadre. As with other totalitarian leaders, such as Stalin and Hitler, Xi believes in the power of the party-state ideology to drive policy as well as consolidate domestic control. As we saw from those unhappy regimes, as power is centralized, intolerance towards pluralism grows, to the extent that minoritiesespecially those considered hostile by the regimecome under mounting surveillance and discrimination. Here there are echoes between the plight of the Uighurs and various ethnicities in Nazi Germany and the USSR. 
  2. Likewise, under Xi’s authoritarian leadership, more and more of China’s society has fallen under the power of an increasingly expansive party-state structure (similar to the totalitarian party-states of the 1930s), which utilizes an international ideology (socialism), combined with nationalism (with Chinese characteristics), to export the Chinese model abroad to reorder the international system. This approach is not unlike those of past regimes. Like the Kaiser, Xi believes China has the right to shine like the sun. Unlike Hitler, he shies away from open warfare as a means of policy. But, like the party bosses of the USSR, he believes in economic and political warfare to expand China’s power.In terms of regime type, we can see forces at work in China that were also found in Wilhelmian and Nazi Germany. This is because there are few mechanisms for legitimizing the leadership of the party, such as elections or referendums in one-party systems. Therefore, jingoistic nationalism begins to fill that spaceor is deliberately positioned to fill itand if allowed to become too virulent, can lead to domestic pressures for more aggressive, even expansionist, foreign policies.
  3. As an authoritarian state, contemporary China, much like the Nazi and Soviet regimes before it, has proven adroit at integrating the dimensions of state power to the extent that it appears more successful than the fatigued and exhausted liberal democracies. As we know from the struggles with those regimes, the United States, the UK and their allies in the Indo-Pacific region will need to develop greater internal cohesion and overcome many of the “critical” or “core” assumptions that have sapped them of their strength if they are to compete successfully against China. 
  4. In terms of polarity, the previous struggles were more focused. While Japan was a major regional power in the run-up to World War II, the key powers have been concentrated in the Euro-Atlantic region for the past three centuries. In the emerging period of competition, the major powers are spread out. China, India and Japan are in Asia, the United States is in the Americas, and Britain, Germany and Russia are in Europe. American, British and Indo-Pacific policymakers will need to look at an increasingly global theatre, one where the Euro-Atlantic region and the Indo-Pacific region are intrinsically linked. 
  5. Polarity matters, and whether this period is a transition to a bipolar U.S.-China era or a truly multipolar era will impact how states construct their national strategies. If China and the United States are the only superpowersor whether India and the Europeans are able to develop superpower metrics and the political will to use themthen that sill deeply impact alignment behavior, and correspondingly the leadership approach of the United States. 
  6. Methods of competition also have historical echoes. While China is, like the USSR, a communist regime, it has a much higher GDP relative to the leading democracy, the US, than the Soviet Union ever did. It is also, similarly to Wilhelmian Germany, deeply ingrained into global supply chains and the world economy. Therefore, rather than looking for examples of dealing with economic statecraft or coercion from the Cold War, policymakers might consider Wilhelmian Germany in 1914 which utilizeddumping, finance, and trade for strategic ends across Europe. Thus, we should look to the policy options of France, Italy, and the UK for dealing with economic conflict with China.
  7. The West relied heavily on regional alliances to deal with the Wilhelmian and Soviet threats. And now, similar to what occurred in the 1930s, there is an aversion to developing regional alliances or collective defense measures against today’s revisionist: China. This is despite the fact that NATO kept the peace in Europe for nearly seventy years. In addition, there is an allergic reaction to giving Taiwan an open defense guarantee; however, the 1930s showed that the same style of strategic ambiguity by France and Great Britain toward Austria and Czechoslovakia encouraged Nazi ambitions. Indeed, as we think about how Nazi Germany went from attempting to unify German-speaking peoples to absorbing non-Germans, we should think about whether or not a failure to react to more “legitimate” claims can give encouragement to entirely illegitimate ones. While modern-day China is not as aggressive as Nazi Germany, allied weakness and lack of cohesion at critical momentsas when Berlin took the Ruhr region, undermined the governments of Austria and Czechoslovakia before using diplomacy to expand its powermade miscalculation more, not less, likely. When thinking about Hong Kong and Taiwan, this is a relevant lesson. 
  8. In terms of technology, the possession of nuclear weapons remains a huge variable in today’s great-power competition. As we consider the current competition with China, it is clear that the major powers are, as during the Cold War, in possession of nuclear arms, most with fully-established global second-strike capabilities. This means that, unless technology becomes available that can circumvent the danger posed by ballistic or high-speed cruise missiles, escalation can only be “horizontal” and “diagonal,” rather than “vertical.” If we consider how the U.S./UK and USSR were similarly discouraged from escalating to open war with each other, we can see that the emerging era of competition will be pushed into below-the-threshold conflict with conflict taking place in the information sector, the digital sector, technology, space, and across other nonmilitary sectors. 
  9. Despite early Soviet advances during the “space race,”the United States, UK and their western allies were often in the ascendancy in terms of technology during the Cold War. The contemporary era of competition, however, is more likely to resemble the struggles with Wilhelmian and Nazi Germany during the early twentieth century, when the chief revisionist was technologically equal to, or even superior to, the established powers. This is because China has moved forward rapidly with the development of telecommunications systems and other industries of the “Fourth Industrial Revolution”. 

Here are the two takeaway points: First, historical examples are useful but there has been a growing trend in the public arena to criticize such analogies because they fail to precisely match our present day. This approach makes perfect an enemy of the good. We might not be in a “cold war” that equates exactly with the historic events of 1949 to 1989, but by looking for similar variables we can look back to that period for those relevant policies that worked while avoiding those that did not. Second, in this commentary, we have put forward ten lessons from history that we believe are instructional for the contemporary era. No doubt, many will disagree with them or have slight variations. That is wonderful, and such points should be put forward to debate whether we have drawn the right conclusions or not. We have primarily used them to show our variables might inform our analogies, providing perspectives to help policymakers.


South Korea’s Growing 5G Dilemma

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With Sungmin Cho, CSIS Commentary, 6 July, 2020

Recent developments in the information and communications technology (ICT) competition between the United States and China are likely to have caught the attention of South Korea’s Blue House. As a close U.S. ally with a stake in the 5G debate, it has been watching the UK 5G debate very closely. After all, if a close U.S. ally such as the United Kingdom could incorporate Huawei in its 5G network without damaging its alliance with Washington, it would provide Seoul with support for its own inclusion of the Chinese tech company into its networks. However, all of this has changed in the wake of the U.S. announcement on May 15 that it would restrict Huawei’s ability to design and manufacture semiconductors using U.S. technology, with both the United Kingdom and Canada suddenly shifting their apparent willingness to include the Chinese company in their 5G networks.

First, Bell Canada and Telus, two of Canada’s largest telecoms, announced they would be awarding contracts solely to Ericsson and Nokia, Huawei’s Scandinavian rivals, studiously avoiding any mention of the Huawei bid. In London, the shift has been even more prominent, with Boris Johnson calling for a “major rethink” on China. According to media accounts, discussions at the Cabinet Office level began last week looking at ways of replacing Huawei in the country’s 5G network by 2023. As the United Kingdom already has a mixed supplier system incorporating Ericsson and Nokia, they are now searching for a third supplier to replace Huawei and are apparently in discussion with Japan’s NEC and South Korea’s Samsung. The United Kingdom is also leading discussions on the formation of a “D10 Club,” a telecommunications supplier group consisting of the G7 members plus India, Australia, and South Korea, which it hoped to put forward at the U.S.-hosted G7 summit in September. South Korea has already accepted an invitation to the summit, though as of writing the summit’s details have yet to be finalized

Its inclusion in the D10 and in the United Kingdom’s consideration of Samsung as a replacement for Huawei raises South Korea’s profile in the wider 5G ICT supply chain debate, something that the Blue House has, until now, sought to avoid for two reasons. First, this ICT “decoupling” is driving a wedge between technology supply chains, which are deeply integrated for South Korean companies. The growing bifurcation between the PRC and the United States in this new “technology cold war” puts South Korea squarely between its main security provider and its main trading partner: an unsustainable position over the long run. Second, while Samsung is itself a competitor of Huawei—particularly in the space of 5G patents and equipment—there are many South Korean companiesthat still wish to collaborate with Huawei and other leading Chinese technology firms who will resist the growing pressure to decouple in ICT.

This “security-trade dilemma” facing Seoul is not unique. Many U.S. allies are similarly dependent on China for trade and investment—Australia is a major example, having suffered an economic downturn, partly due to Covid-19 and partly due to a deterioration in relations with China. For South Korea, proximity is a serious factor, as 27 percent of South Korea’s exports in 2018 went to China, while only 12 percent went to the United States. As a result, the costs of a Chinese retaliation on South Korea’s economy are larger and have shaped Seoul’s low-profile approach to the debate thus far. Indeed, Chinese authorities have already sent warning signals to South Korea through multiple channels. In June 2019, China’s

National Development and Reform Commission allegedly “called out” Samsung Electronics and SK Hynix with warnings not to block trade with Huawei. China’s tourism boycott of South Korea for hosting the U.S. deployment of the Terminal High Altitude Area Defense system (THAAD) was said to have cost the country $5.1 billion in lost revenues. Therefore, it is not surprising that South Korea’s former Minister of Science and ICT You Young-min has asserted that the 5G issue is not even up for discussion: “Huawei security issues in 5G should not be discussed because China is sensitive to it. I’m afraid that there would be a dispute.”

The issue is hardly simple for South Korea, as it has mixed interests, particularly from companies such as Samsung which could increase market share in smartphones at Huawei’s expense. More importantly, Samsung can become a dominant 5G network supplier if Huawei’s global business in 5G equipment is effectively diminished. However, supply chain integration also means that Huawei is one of Samsung’s biggest customers for SK Hynix’s memory chips. Huawei alone accounts for 17 percent of South Korea’s electronics parts exports to China in 2019. Huawei not only buys parts from South Korea but also provides 5G-related equipment to South Korean companies such as LG U-plus. As a result, South Korean companies are torn. South Korean companies stand to gain long term from Huawei’s lost global market share in 5G-related off-shoots, such as wearable devices, smart infrastructure, and the Internet of Things (IoT), but this will be at the expense of short-term business and growth from Huawei and other PRC tech firms.

As South Korean policymakers are beginning to realize—as indeed many other nations are realizing in the wake of Covid-19—trade dependency on the PRC is increasingly becoming a national security vulnerability. As a result, a shift toward “diversification” is not unwelcome. Like their Japanese counterparts, South Korean firms have been gradually withdrawing from China as Chinese competitors absorb their intellectual property and establish cheaper rival products. This long-term trend became even more pronounced after the 2017 THAAD crisis showed how vulnerable Seoul was to Beijing’s economic coercion. Shortly thereafter, Samsung started to downsize its Chinese manufacturing presence, closing the Shenzhen production line in May 2018, followed by its Tianjin factory in December. As the trade war between the United States and China began to heat up, South Korean firms continued their exodus from China, going to replacements such as Vietnam, where South Korean FDI ($1.97 billion in the first half of 2018) actually exceeded FDI into China ($1.6 billion over the same period).

The prospect of increased South Korean visibility on this issue is not relished by President Moon Jae- in. After all, the overriding issue for the U.S.-ROK relationship has been base support, an issue with sensitive connotations domestically. However, there may be growing realization among South Korea’s leaders that the U.S. position on Huawei—and Chinese ICT supply chains in general—is a bipartisan one across Washington DC. This was the primary message during the Munich Security Conference in Germany held this past February, with senior Democrats such as House Speaker Nancy Pelosi and House Intelligence Committee Chairman Adam Schiff showing a rare example of bipartisanship by echoing the administration’s warnings about the Chinese company in their remarks. Slowly but surely, U.S. allies are beginning to realize that this issue is one where there is little daylight between the two parties in Washington.

While it is true that to date U.S. efforts to pressure their allies have only been reluctantly accepted, there are increasing signs that states wish to avoid the supply chain vulnerability that comes with dependence on China. The recent prospect of a British “D-10 Club” of countries at the next G7 provides a potential breakout for Seoul, Canberra, Tokyo, and other allies from the security-trade dilemma. Speculation that India’s is considering a ban of ZTE and Huawei components from its 5G networks also supports this trend. As a member among 10 major economies, South Korea will have less to fear from a vengeful China; as a collective that includes multiple U.S. allies, it will also be able to balance U.S. policy preferences with the interests of the wider group. Either way, any diplomatic grouping looking at both trade and security in relation to China would certainly bear watching.


Pacific Trident III:  The Strengths and Weaknesses of the U.S. Alliance System Under Gray Zone Operations

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Security Nexus, 30 March, 2020

“What have I come here to learn?” This was the question at the forefront of my mind as I entered a modern, glassy, corporate site on a cold, wet Norfolk day in early February. The large room was cavernous and approximated my vision of a secure control center, with busy people at consoles in a pit facing three massive screens at the front, and a raised deck to their rear, housing an operations control center. I thought of the 1983 film, War Games, and, in a sense, that was an appropriate parallel as I was attending a tabletop exercise, “Pacific Trident III,” created and run by Sasakawa Peace Foundation USA (Sasakawa USA), a think tank based in Washington D.C.

The exercise itself – the set-up – was actually quite interesting for a mid-career East Asia analyst like myself. It was not the usual North Korea crisis or Taiwan-China crisis, but rather a realistic combination of two different scenarios. The starting point was for the China team to 1) expand Chinese influence and authority in East Asia and 2) drive wedges between the United States and its allies. The China team began the game by persuading the North Koreans to “initiate” a minor but ambiguous provocation – a small special operations ground attack on a U.S. base in the South – while China simultaneously landed “humanitarian aid workers” on a Taiwanese-administered island in the South China Sea in the wake of a typhoon.

It was a clever and interesting set-up that confounded the United States and allied players in the initial stages of the game in two fundamental ways. First, it utilized two different crises at the same time, challenging the United States and allied players as to which was the “real” crisis, or which merited prioritization. Second, both crises involved actors using gray zones tactics (operations other than war) to achieve their objectives. In many ways, the fact that there were two gray zone operations at the same time showed the alliance system’s strengths and exposed some of its weaknesses.

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The COVID-19 Crisis and the Coming Cold War

Security Nexus, 30 March, 2020

The COVID-19 Crisis has been a significant global event, putting stress on states in how they respond, exasperating geopolitical tensions between great powers, and impacting manufacturing and shipping. Many are scrambling to understand the long-term consequences, with Foreign Policy’s recent review by 12 leading intellectuals being an obvious example. Notable predictions from them include the possible end of (economic) globalization, or at least the end of US-led globalization; other predictions include the rise of state power, diminishing individual liberties and highlighting the limitations of international organizations (“the state is back”); and others note the implicit ideological struggle between the authoritarian and democratic models of response to the virus.

Fundamentally, the COVID-19 Crisis has reinforced the predominant trend in the global system: the geopolitical competition of the two largest economic and military powers, the United States and the People’s Republic of China. The two have engaged in a war of words over the origins of the virus, which raises three key issues of importance. The first is that the PRC remains a brittle superpower, and in its quest to retain domestic control, it is willing to project blame on external states – including the global hegemon, its foremost competitor – in order to retain legitimacy and social control at home. Second, the ideological component that divides the two – the systemic and values differences, so speak – that so defined US-USSR competition is once more becoming a key characteristic of great power relations at the top tier. Third, that the geopolitical competition between the two is – as with the Cold War – is unlikely to lead to actual warfare. Instead, we are likely to see a discourse battle for “hearts and minds”, aimed at audiences in Europe, the Indo-Pacific, the Middle East, and Africa. This competition is likely to be the most dominant feature of the international system until the middle of this century, simply because of the size of the two countries and the resources they bring to the competition.

While many consultancy reports (and even some banks) breezily surmise that the PRC will surpass the United States by 2050, usually using GDP as a crude marker, the PRC’s rise is not at all clearly ordained (though PRC messaging would have us believe otherwise). Demographic, governance, and structural issues at home, mean that while the PRC will indeed become a formidable power by 2050, perhaps on a par with the US, it lacks the structural features that will continue to give the US an edge. As some have argued, the US is rich in energy resources, buttressed by two seas: its economy several times wealthier and more efficient than that of the PRC, and lacks the welfare and domestic security burdens that the PRC ageing population and system imposes. While superior PRC infrastructure gives an edge, the US’ younger and better educated workforce, drawn from all over the world – keeps it competitive technologically. By contrast, increasing political control over the private sector is reviving state-planning and control of the economy by the PRC’s least-efficient sector. As with the USSR, this will ultimately stifle innovation among the PRC’s larger number of scientists and engineers.

This battle for ideas and for framing will be enhanced by the surge toward increasing online activity of human populations. This is both due to short-term effects of the COVID-19 virus which has forced many millions to work from home and the long-term effects of the ongoing revolution in information communications technology (ICT) – 5G and its basket of attendant technologies in the Internet of Things (IoT) and the 4th Industrial Revolution. Simply put, more and more people are spending more and more time online, they are socializing there, working there, picking up their news there, and carrying out more and more of their commercial activity and both the COVID-19 Crisis and the enhanced broadband of 5G will only increase that shift from the high street to silicon valley. Indeed, the US stock market has been buffeted from the COVID-19 Crisis by heavyweight technology shares and US manufacturing. Both the United States and the PRC are implementing policies that will attempt to revolutionize manufacturing, and are in a data-led arms race that includes big data analytics, machine learning, 3D printing, and quantum computing. As is evident in the PRC’s own policies, there is an awareness that these new technologies are becoming new pillars of state power, enabling order-construction – in finance, in trade, in governance, and in shipping – and thus will be one of the primary methods of order-contestation between the two superpowers.

There are doubtless many other knock-on effects of the COVID-19 Crisis, including the possible vulnerability of states across the developing world, the slight surge of land-transport as sea-based shipping struggles with shut-down ports and over-capacity. Of course, not all of these trends can be viewed only through the lens of great power competition, but as the African proverb has it, “when the elephants fight, it is the grass that suffers”. It is very difficult for medium and smaller states to avoid becoming entangled in a geopolitical competition when (1) it is taking place between the international system’s two largest powers across most metrics; (2) it is diffused cold war-style among various social and state activities, including media, technology, and international order (3) it is based on increasingly-sharper ideological and normative differences, causing both states to advance their system as the better model. As has already been raised, global competition has defined ongoing commercial and technological trends, and it will – of course – do that in terms of responding to the COVID-19 virus itself. In 2019, Henry Kissinger, one of the US leading strategists during the Cold War and a leading architect of the rapprochement with the PRC, said that the two nations were “in the foothills of a new cold war”. As this paper has sought to argue, the COVID-19 Crisis is not halting that movement toward a new cold war, but rather accentuating it.
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Is Canada ready for the new age of power politics?


With Megan Wolf, Macdonald Laurier, 25 March, 2020

The state of the Canada-China relationship is a bellwether for the new international relations. It is – to Ottawa’s consternation – increasingly an age of power politics, rather than an age of rules and order. As the Globe and Mail has lamented, “Canada simply doesn’t have the weight to compel China to stick to terms, as was demonstrated in the wake of Ms. Meng’s arrest.”

The world today is changing and the international stage is facing a dramatic shift as key states, like China and Russia, are substituting accepted standards and norms of the liberal rules-based order for a different, older form of international relations: one in which power is the standard by how things are judged.

China is a clear example of this, brandishing its military power for fait accomplistrategies in the South China Sea and elsewhere. Meanwhile, Beijing has similarly attempted to leverage its growing economic power for attraction and coercion, and discourse power to spin events as the powerful wish. Its increased influence over UN bodies – such as the World Health Organization over the COVID-19 crisis – has been only the most recent example of this newfound sharp power.

For Canada, the rude awakening into this new age began with the arrest of Chinese national Meng Wanzhou in December 2018 and Beijing’s revenge-detention of two Canadian nationals in China, Michael Kovrig and Michael Spavor. The event placed Canada squarely between its ally, the US – the current hegemon – and China, a brash new contender eager to take offence at any lack of respect shown to its new status. Face is everything. Rules are nothing, mere Western tokens – intended to keep Beijing from taking its rightful place at the head of nations. Or so Chinese narrative would have us believe.

For Canada, it is not the first time it has been squeezed between great powers. Prior to the 1950s, Canadian foreign policy consisted of balancing between its powerful southern neighbor and the British Empire, to which it is still aligned. Despite this, it was able to carefully balance between the two powers – a happenchance of history as well as shared legal norms. As a result of this and its status as an archetypal middle power, Canada has long championed a certain type of international relations, and its diplomats have fought to promote liberal values and norms as well as human rights as a way of protecting the weak from the strong.

The 1970s saw an increasingly confident liberal tradition as Ottawa increased its diplomatic footprint in various overseas missions and multilateral institutions. Former Prime Minister Pierre Trudeau increased the number of Canadian peacekeeping missions around the globe in an effort to support the United Nations. At the same time, Canada became one of the first Western countries to officially recognize China in late 1970.

It its quest to balance the massively asymmetrical relationship with its powerful southern neighbor, Ottawa also began to seek trade diversity, since a full 75 percent of Canadian exports were destined for the US. The 2008 recession reinforced this desire to diversify from trade within NAFTA, and with China a rising trading superpower, the primary choice of diversification seemed obvious. The resulting slew of trade dealsbetween Canada and China included 15 Memorandums of Understanding signed by various departments in the Canadian and Chinese governments between 2008 and 2012, the Canada-China Investment Treaty in 2013, and the signing of an MOU on charter flight cooperation in 2015, among others.

Political ties under Prime Minister Harper grew following a 2009 visit to Beijing, in which he oversaw the Canada-China Joint Statement that laid out specific efforts to expand trade and investment. Only one year later, President Hu Jintao visited Canada to cement these ties and encourage further deals. As a result of these machinations, China has quickly risen to become Canada’s second largest trading partner after the United States (the EU is third). China imports roughly $17.5 billion worth of goods, a significant amount despite declining by 17.7 percent due to last year’s events.

While the bilateral relationship had previously weathered the storms of cyber espionage and trade access, the crisis begun with Meng’s detention has of course brought all this progress into the spotlight, and Beijing seems willing to use the economic relationship to coerce Canada into releasing her. While Canadian foreign policy-makers have directed some anger towards the Trump administration , there is also consternation not only about Beijing’s heavy-handed response – but the deeper implications of what it means for state-on-state behavior. China’s arbitrary detention of two Canadians, Michael Kovrig and Michael Spavor, in an act of hostage diplomacy, was unexpected though perhaps not unprecedented. After all, these are not the first Canadian citizens to have been arbitrarily detained by China.

The realization inside Ottawa that this behavior could represent a new type of great power behavior – one in which the rule of law as established after the Second World War is replaced with punitive extra-legal measures. If authoritarian powers are able to detain the foreign travelers for hostage diplomacy, what are the implications for middle powers? Will they have the ability to defend their interest in such an order, or is their role merely to submit to the face-saving antics of the powerful?

Prime Minister Trudeau will also be asking himself some broader questions. Will the Western Alliance respond to these new tactics, and how can Canada lead that discussion? Can Canada use its deep diplomatic reach inside NATO, the EU, and other international agencies to drive the response to great power politics? These are the questions and challenges that are arising in the light of a new global dynamic.

Canada has come to a major fork in the road: one in which it can continue to construct, defend, and project liberal internationalist norms in its foreign policy, another where it can become the pragmatic trading power, utilizing its strong ethnic connections to China to revitalize its economy, or a third, where it can frame Chinese and Russian behavior as unacceptable and mount a defence from within the West. This latter will require Canada to balance authoritarian states alongside the US, something that will requiring finessing.

It is clear that a new age of power politics has dawned on the global scene: it is not yet clear how Canada will respond to this new capricious form of politicking, meekly and submissively, or with a stronger sense of the right of its norms and standards. There are signs that the latter approach may be winning for now. Ottawa has sought the support of allies such as the UK, France, Germany, the US, and various NGOs to speak out against China and to advocate for the release of Spavor and Kovrig.

Perhaps a collective diplomacy is the way forward for middle powers, one which confuses and penalizes Beijing’s bullying tactics. If Ottawa were to get a collective form of censure from a group of like-minded states, it might begin to shift China’s high-handed approach to international diplomacy. However, only time will tell.


The UK risks plunging the Five Eyes alliance into crisis

The Telegraph, 4 March, 2020

The Five Eyes alliance has long been a bulwark of the free world. On one level, it is simply an intelligence-sharing partnership between the US, the UK, Australia, Canada and New Zealand. Yet it is able to function as perhaps the most comprehensive espionage alliance in history because of implicit trust between its members, based on an understanding that they share the same interests and ambitions.

Now it is approaching a crisis. And although the UK’s decision to involve Huawei in its 5G infrastructure is the leading cause, this dispute is a symptom of far more fundamental differences over the alliance’s approach to China.

These disagreements have begun to spill over into the open. Last month Mick Mulvaney, the acting chief of staff to President Trump, warned British officials of a “direct and dramatic impact” on intelligence sharing with the US following the UK getting into bed with Huawei.

Meanwhile, Australian MPs on their parliament’s intelligence committee were said to have leaked details of a tense meeting with Dominic Raab, the Foreign Secretary. New Zealand and Canada have been watching from the wings in dismay – but the time is coming when they, too, will have to pick a side.

In all of this, UK discussion of the issue has focused on risk mitigation – whether the threat posed by China can be contained in the specific matter of 5G. But British efforts to reassure their allies are not working. Australia and the US aren’t impressed by London’s attempts to use technical arguments to fudge what they see as a geopolitical debate for commercial reasons. At heart, they are critical of London’s prioritisation of business as usual with China over their collective security.

They see China as a growing regional and global destabiliser – a revisionist power that must be checked. To them, the UK’s Huawei decision illustrates a wider British willingness to sacrifice security for the sake of its own narrow interests.

Of course the UK is free to ignore such worries, but there could be consequences. Britain has stated that it wishes to sign trade deals with both the US and Australia, and the response has been largely positive. Yet it is not clear that those involved can skirt around the issue for much longer.

This is for three reasons. The first is Donald Trump. Although he views renegotiating the US trade posture as a cornerstone of his presidency, he has not taken the Huawei decision well.

Second, the UK has still not fully understood the scale of the diplomatic damage. Continuing to treat this as a solely Huawei-related problem rather than a broader China issue has annoyed American and Australian foreign policy experts, particularly in their security communities. From their perspective, Britain is ignoring an assumption, built into Five Eyes, that all five are to defend themselves and each other from authoritarian states.

Third, there are troubling signs that China is developing a strategy which draws on the UK’s resources to achieve its ambitions. Consider its investment in the UK fintech and hi-tech sectors and the calls for a “Golden Era” relationship.

It is only becoming more obvious to Washington and Canberra that, while they have adjusted to Beijing’s aggressive stance, the UK – and to a lesser extent, New Zealand and Canada – have not. Such divergence is unsustainable if Five Eyes is to function smoothly – and this on top of the UK’s belief that it should focus more on Russia than on China.

Britain now faces a difficult choice. It can continue its current approach towards China and attempt to reap the economic gains. Alternatively, it might craft a more careful approach, similar to those of the US, Australia and Japan.

Neither option is without cost. The latter means giving up some of those commercial benefits, insisting on scaling back the non-standalone 5G infrastructure which Huawei has already deployed, and realigning foreign policy more broadly. Going ahead with the former, however, risks much graver consequences. The Five Eyes partners are not about to stop working together – but such a deep and special partnership will not last unless all its members trust that they are working for the same ends.


Why Britain’s spooks are wrong to downplay the risks of Huawei

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The Telegraph, 14 January, 2020

Sir Andrew Parker’s assertion that incorporating Huawei components in the next stage of the UK’s 5G network would be unlikely to disrupt intelligence relations with the US or its allies is alarming for a number of reasons. It would appear that the UK’s spymasters have decided – much like Britain’s telecommunications companies – on a policy of asking the right questions in order to guarantee the right answers.

The UK needs Huawei’s 5G tech at its laughably cheap prices. And so ignored is the geopolitical context of an increasingly authoritarian China, funding Huawei’s expansion across Europe. Ignored is the company’s role in Xinjiang. Ignored is China’s place as a leading source of global cyber espionage. Ignored is the 2017 National Intelligence Law which requires Chinese companies to cooperate with China’s intelligence agencies, at home and abroad. Ignored are China’s increasing influence operations inside Western democracies.

Instead, the decisive question in Britain’s 5G debate has become a comically narrow one: will Huawei’s inclusion into Britain’s 5G networks be a threat to the network’s integrity?

The UK’s National Cyber Security Centre (NCSC) argues that it can mitigate this risk by using multiple vendors – a mixture of Huawei, Ericsson, and Nokia – and by restricting Huawei’s components to the periphery or “non-intelligent” bits of the network.

According to the National Cyber Security Centre (NCSC), the telecoms network is structured around three functional parts. The transport layer, the physical nodes that transport data; the routing layer, which works out the best transport route for the data to use; and finally, the edge, where consumers – that’s you and me – interact with it.

Huawei, they tell us, will be kept out of the core, which is a functional name for all the bits that decide who you are, where your data needs to go, and so on. That means they’ll be restricted to antennas, routers, switches, and products at the consumer end such as WiFi boxes, and away from the intelligent bits that have more access to the data.

The NCSC seems to indicate that this has long been a deciding principle, but we know that BT began ripping out Huawei components from its 4G core as late as December 2018, meaning either the principle only dates from then, or the NCSC does not keep a close eye on the network. Neither is very reassuring.

The NCSC has also said that any code used in components in the network – such as antennas and routers – will be pre-checked for backdoors and vulnerabilities at its Huawei Cyber Security Evaluation Centre (HCSEC) in Banbury, Oxfordshire. It sounds rather good, especially since Huawei has agreed to pay for it all.

The problem is that checking code will not work any better than the plan to keep Huawei out of the “core”.

5G will be a virtual network, in which components of the network are “white-boxed”, meaning that network administrators can upload patches for fixes and updates remotely. Think of 5G as something akin to your phone. When an app on your phone is updated, that is because someone in Silicon Valley pushed a button, sending updated code – a patch – to all phones with that app.

As one US cyber official recently stated, it’s what makes 5G so attractive to network administrators – site visits become increasingly unnecessary as more repairs to the network infrastructure can be done remotely. It also gives network administrators the ability to move functionality – including the intelligent bits – around the network to fit requirements.

 

But it is this flexibility that makes the trustworthiness of telecoms vendors so important when it comes to 5G. In a virtual network, an untrustworthy vendor can send the good as well as the bad.

In order to stop such malware, the NCSC would have to watch hundreds of thousands of antennae and components across an entire national network. As with terrorism, we’d have to be lucky every time, but a cyber hacker would have to be lucky only once.

In a report released last March, the HCSEC Oversight Board, tasked with overseeing the Huawei centre in Banbury, noted that it “continued to identify concerning issues in Huawei’s approach to software development, bringing significantly increased risk to UK operators, which requires ongoing management and mitigation”.

The report continues that they can only give “limited assurance that the long-term security risks can be managed in the Huawei equipment currently deployed in the UK”. Imagine if they were discussing airline safety instead of just critical national infrastructure.

Even more damning was a report by Finite State – a private tech consultancy – that sought to replicate HCSEC’s review of Huawei source code. However, instead of using code provided by Huawei, it used code found in Huawei products already on the market. Alarmingly, not only did it find significantly more vulnerabilities than other brands, it found efforts to disguise those vulnerabilities.

This past year, Chinese diplomats have threatened economic retaliation against Germany and Denmark if they exclude Huawei in their 5G networks. One wonders what type of pressure Beijing has exerted on the UK behind the scenes. Certainly, Liu Xiaoming, China’s Ambassador, has already openly said that future investment could be at risk.

However, Britain does not and should not do business at gunpoint. Before this Government makes a very costly mistake, it must thoroughly explain its technical mitigation measures, both to the public, and to its allies.

Anything less smacks of bowing to Chinese pressure. And that’s something we can’t mitigate against.

Jeremy S. Maxie

Energy & Political Risk Consultant

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