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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.”


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.


Should the UK follow its allies’ lead and ban Huawei?

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CapX, 22 November, 2018

The news this week that the EU has provisionally agreed to screen foreign investments into its digital sector is an indication that worries about Chinese state-driven investment into the West’s digital infrastructures are growing.

The fact that Germany is now thinking of following India, Australia, and the US in banning the Chinese electronics firm Huawei from deploying or taking part in the construction of its 5G network puts immense pressure on the UK to follow suit. While the Department of Digital Culture, Media and Sport and the National Cyber Security Centre sent telecoms companies a letter earlier this month warning of changes that might take place after Spring 2019, when a security review is completed, media reports have played down the idea that it is aimed at Huawei or other Chinese telecoms companies.

However, the timing is auspicious, since according to media sources, the review was begun in July. While it is not clear the two events are connected, the Huawei Cyber Security Evaluation Centre Oversight Board also released its annual report in July, 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”. Naturally, if the two are connected, it puts at risk the £3 billion that the Chinese telecoms giant has promised to spend in the UK over the next five years.

That such a review comes in the middle of the Brexit crisis seems ludicrous. Can Britain really afford to look this particular gift horse in the mouth?

This debate – one that is taking place between those who seek the nation’s fortune and those who commit to its security – is at full tilt this year, not only in Whitehall, but in the City as well. The possible ban is only the tip of the iceberg as the Government considers a proposal organised by the Business, Energy, and Industrial Strategy Department, to tighten restrictions around investments into sensitive sectors of the UK economy.

However, while the UK’s actions might seem perverse, it is actually behind the herd as various countries have begun to do the same. In July 2017, Germany tightened its investment restrictions over foreign firms attempting to take over companies that possess key technologies or to acquire parts of Germany’s “critical infrastructure”. This autumn, after a year’s debate, the EU provided similar investment screening standards and a mechanism for cooperation.

While this might look as though President’s Trump’s protectionist policies are having an effect across the global economy, the problem actually lies with China. Under President Xi Jinping, the Communist Party has begun to roll back economic reforms, particularly those around its state-owned enterprises. While they only make up five per cent of Chinese companies, such is their size that they account for one third of China’s economy and play a direct role in state strategy.

The controversial Made in China: 2025 policy – now absent from Xi’s speeches – revealed a bold strategy for China to fund its national champions to go out and acquire sector dominance in the supply chains of critical technologies. Many of these – like AI, quantum computing, and machine learning – have multiple usages, including those in military and security sectors. Were China to fund its companies to buy up or dominate its Western competitors, it would not only be breaking WTO rules, it would also have grave geostrategic implications for the future of the rules-based order.

There are those who see Xi as making a colossal strategic mistake by pushing state control over the Chinese economy. In his 2016 book China’s Future, noted China scholar David Shambaugh argues that  that Beijing’s existing policies amount to a “terminal cancer”. For Carl Minzner, an expert on Chinese law, the current situation “makes it easy to imagine Chinese politics devolving into a steady spiral of elite infighting, economic decline, ideological polarisation, and rising social unrest”.

Does this have anything to do with Huawei in the UK? Well, that’s the main question that the review is shirking, as it attempts to look at technical vulnerabilities. What it won’t consider is the wider domestic situation in China, where a new intelligence law requires Chinese companies and individuals to cooperation with Chinese intelligence organs at home and abroad. Article 11 from the legislation reads: “National intelligence work institutions shall lawfully collect and handle intelligence related to foreign institutions, organisations or individuals carrying out, directing or funding foreign or domestic institutions, organisations, or individuals colluding to carry out, conduct activities endangering the national security and interests of the People’s Republic of China”.

According to Australian intelligence sources, there is already evidence of Huawei collusion with Chinese intelligence in accessing a third country’s network. For British officials in Whitehall, this is all well and good, but the economic pressures of Brexit are difficult to ignore. There may yet be a halfway house that allows the UK to protect its infrastructure while reaping the benefits of Huawei’s technology.

The big question is whether the watchers can catch everything they are supposed to? What are the repercussions if malign code or back-door components are allowed into Britain’s digital infrastructure? What happens to Britain’s place in the Five Eye’s intelligence network if it is found to have been compromised? Outside the EU, London would not want to lose yet another important grouping over which it is able to understand global events and exert leverage in the “special relationship”.


Spying Chinese microchips give the West an electric shock

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The Times, Red Box, 9 October, 2018

Last week’s Bloomberg story that the Chinese military has been interfering in computer supply chains was like a bolt of lightning — and we are bound to hear the thunder rumble for some time yet. Around the world national security services will be scrambling to see if their own systems have been similarly compromised.

The fact that the infected parts made their way to CIA drones — presumably a highly-controlled procurement environment — means that the vulnerabilities were extremely well-hidden. Since they also allegedly went to online shopping firm, Amazon, China’s tiny chips are a giant Trojan horse wheeled directly into the international community’s trading gates and let loose. It is yet another example of how Beijing and Moscow are approaching the new Cold War against the west.

The question for governments like Britain that depend on Chinese-manufactured goods – is have they also been penetrated? Certainly, the prime minister’s concerns over letting China gain access to our nuclear sector in 2016 now seem justified. But what of our dependence on Chinese supply chains? All of our iPhones are made in China, and while the company’s press release sought to reassure us that none of their systems were compromised, it’s too soon to know for sure. All we know is that this is the beginning of a long investigation of Chinese-manufactured electronics. After all, If they could pull one over on the CIA . . .The story is not exactly new for the UK. In 2013, a report from the parliamentary intelligence and security committee warned that Chinese electronic giant Huawei’s provision of digital hardware to BT presented clear risks to British security. The report noted that while a compromise had been found while checking Huawei components at a centre in Oxfordshire, the amount of code involved would make it impossible to verify every bit of software. Now it seems the company might be in the running to help build Britain’s 5G network, despite having been blocked from providing digital infrastructure in the US, Australia, and India.

For those who don’t know, 5G entails a faster, tighter bundling of data that will massively improve the capabilities of the mobile internet, and in turn the use of artificial intelligence in transport, health, education, not to mention the development of “smart” cities. One reason that Huawei has been so instrumental in developing the technology is their championing of a Turkish code developer.Since 2008, when Dr Erdal Arikan invented polar codes, a number of countries have raced to develop the infrastructure indigenously. Not all are confident about the state’s role in rolling out this new technology: In the US, for example, the Trump administration rejected proposals for a “national effort” to develop 5G.

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In many ways, this has been an “I told you so, moment” for many security and tech experts. Chinese-owned technology has long been viewed with scepticism amid concerns over its close links with the state. George Osborne’s “golden era” of Chinese investment into the British economy — and the inclusion of its companies in sensitive parts of the UK infrastructure — is truly at an end. As Bloomberg reports, the US counterintelligence operation has found the Chinese government directly culpable, with individuals and two factories in China identified.

The impact is likely to be serious. It will destroy already-crumbling domestic support inside the US for halting the trade war — and will strike a fatal blow for Chinese electronics firms trying to enter the US market. Most of all, it will be a serious stain on the reputation of Chinese manufacturing firms and a major justification for the Trump administration’s insistence that manufacturing in critical industries needs to be brought home.

The next step in this saga is for the US intelligence community to share its findings with its closest intelligence allies. This primarily means Australia, Canada, New Zealand, and the UK; but also NATO allies in Europe and treaty allies in the Indo-Pacific like Japan, South Korea, and the Philippines. Washington should also share the technical data with non-ally security partners like India, Singapore, and Vietnam.

The most difficult part will be setting up mechanisms to screen electronic parts coming into the UK – after all, what isn’t made in China these days? What is now up for discussion — no matter how improbable — is the exclusion of certain Chinese firms from the UK and a search for other partners to develop the next generation of digital infrastructure. To do otherwise and to bury one’s head in the sand would jeopardise our national security, our personal data, and, ultimately, our intelligence partnerships.


What Kim Jong-un really wants hasn’t changed

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The Interpreter, with Jimmy Amedeo, 7 August, 2018

The news that US and North Korean generals met for talks for the first time in nine years to discuss the possible repatriation of 200 American soldiers lost during the Korean War was a step in the right direction. While it’s true it has the appearance of giving North Korea added leverage over the US in future negotiations, this is not, in itself, cause for concern.

First, such meetings institutionalise bilateral meetings more than brief interactions, such as that between US Secretary of State Mike Pompeo and North Korean Foreign Minister Ri Yong-ho at Singapore at the weekend, and help build working-level relations and trust. And there is much trust to build.

The ultimate question is whether Kim intends to really give up his weapons in exchange for a lifting of sanctions and an opening of the North’s economy to foreign investment, or whether he intends to have his cake and eat it too.

Second, the fact that North Korea is seeking to bolster its leverage could be read as a sign that it is serious about the upcoming negotiations.

Yet it is too soon to say whether Pyongyang is sincere in its stated intention of denuclearisation, or simply intent on getting optimum returns from empty promises. Understanding North Korea is in itself a cottage industry. However, there are a number of indications that understanding what Kim Jong-un wants is not so difficult after all.

If we look back over the past few years, there are strong signs of change to North Korea’s motivations. On 31 March 2013, Kim Jong-un announced the Byungjin policy, which set two national goals – to pursue a powerful nuclear deterrent, and create a vibrant economy. Five years later, in April, Kim was able to declare “victory” on nuclear deterrence – confident in his ability to reach targets on the continental US – and announce a shift in focus towards economic growth.

In 2015, North Korean media reported that Kim could not sleep for worry over his country’s poverty. In 2016, he announced his new “Five-Year Plan”. His emphasis on economic growth was repeated in his 2018 New Year’s Speech, when he highlighted ten industries he wanted to see expand: electric-power, metallurgy, chemical production, machine-building, natural resources, transportation, manufacturing, agriculture, tourism, and technology.

Kim has also expressed his desire for economic growth outside of North Korea. In the Panmunjom Declaration, he called for steps “to promote balanced economic growth and co-prosperity of the nation”. In Singapore, he remarked on the city’s “social and economic development”, noting its cleanliness and beauty. Both the remarks and the KCNA-filmed documentary  – showcasing the Singapore skyline, luxurious settings, and universal access to electricity, all unheard of in North Korea – were shown to North Koreans at home.

China has doubtless been pleased. President Xi Jinping said during his third meeting with Kim in Beijing:

We are happy to see that the DPRK made a major decision to shift the focus to economic construction, and the development of the DPRK’s socialist cause has entered a new stage in history … Comrade Chairman has made positive efforts for realising denuclearisation and maintaining peace on the Peninsula.

Xi’s praise to the young Chairman is highly relevant. After all, Xi might have been the catalyst for these changes.

The Chinese leaders seemingly successful attempts to build a technological surveillance state, while harnessing capital to strengthen the state and the military, might have persuaded Kim that reform needn’t mean giving up control. No doubt, Xi’s decision to scrap term limits in February had as much impact in Pyongyang as it did in the West.

Historically, North Korea’s leaders have criticised China’s post-Mao leaders for going soft. Now it looked as though the People’s Republic of China had pulled off a miracle: harnessing capitalism to fortify authoritarian rule.

As a result, Kim might feel that opening up North Korea economically is not only viable, but necessary. Rason and Sinuiju, special economic zones in North Korea, could become the next Shenzhen and Zhuhai. The main question is whether Kim wishes to get sanctions lifted, encourage foreign investment, and keep the first part of his Byungjin policy.

To some extent, the Trump administration still has options. Despite the recent loosening of sanctions by Moscow and Beijing, Pyongyang still craves recognition and investment from the US and its allies.

This is the leverage Trump needs. Pyongyang wants something he has. The conditions seem perfect for a “grand bargain”. The ultimate question is whether Kim intends to really give up his weapons in exchange for a lifting of sanctions and an opening of the North’s economy to foreign investment, or whether he intends to have his cake and eat it too.

So far, it is difficult to tell. Pyongyang’s current strategy seems to offer symbolic gains instead of denuclearisation – returning of remains, and site visits – in order to get the Trump administration to declare victory and loosen economic restrictions. It has also done a bait-and-switch with a peace treaty as the path to denuclearisation. The peace treaty option has traditionally had drawbacks from the US and South Korean side, as it would disband the UN mission in South Korea and perhaps lead to a bring-the-boys-home sentiment arising inside the US.

If Washington is able to exploit Kim’s desires for economic development, it could negotiate a denuclearised Korean Peninsula, partially stabilising the region, bolstering international norms, and removing at least one source of US–China friction. But if Trump is easily waylaid by Kim’s tactics, and allows Kim to win economic benefits without verifiably removing all of his nuclear capabilities, then once more we will see why policy wonks call the country the “impossible state”.

Jeremy S. Maxie

Energy & Political Risk Consultant

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