Takshashila Position Paper - India-China Border: Tactics, Talks and Transgressions

Anushka Saxena, Amit Kumar

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Key Judgements

Chinese aggression along the Line of Actual Control (LAC) since April 2020, resulting in an ensuing military standoff with India, has fundamentally transformed bilateral relations, by undermining any ‘mutual trust’ built across years of diplomatic effort since the conclusion of the 1993 Border Peace and Tranquility Agreement.

People’s Republic of China’s (PRC’s) objectives behind assertion along the LAC extend beyond mere territorial claims. Using sustained military pressure under a certain threshold, the PRC is seeking to coerce Indian policymakers into strategic acquiescence, as it seeks to craft a unipolar Asian order. Consequently, tensions and volatility along the LAC is likely to persist for the foreseeable future.

New Delhi, therefore, must not view the situation along the LAC within a limited context and must adopt a diverse set of actions to respond to the strategic gambit along the LAC. These include deployments that signal that India is ready for longer and drawn-out tensions along the LAC, pursuit of asymmetric countermeasures such as electronic and information warfare, development of maritime power, and partnering with countervailing coalitions against China.

Finally, India’s defence spending must account for these requirements. On this front, Delhi must focus much more on capital outlays and combat capability enhancement. A 44 per cent increase in operational spending and a 57 per cent increase in the capital outlay for modernization and infrastructure development in the FY 2022-23 budget point to positive trends in this regard.

(ALMOST) EVERYONE IS DRILLING INSIDE THE NINE-DASH LINE

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China’s military, law enforcement, and militia engaged in regular standoffs between 2018 and 2021 with Southeast Asian neighbors over oil and gas exploration inside Beijing’s nine-dash line claim in the South China Sea. By contrast, 2022 was comparatively quiet when it came to tensions over hydrocarbons, aside from one encounter involving the Philippines. But as several claimants forge ahead with new offshore projects in 2023, oil and gas development could reemerge as a primary flashpoint in the disputes.

This feature details new exploration and development projects by claimants across the South China Sea. Many of the new projects lie in disputed waters, some at the sites of previous confrontations. With the China Coast Guard increasing the frequency of patrols across disputed waters, the prospect of confrontation between Chinese law enforcement and oil and gas operators at many of these locations is high.

All of the projects detailed here and more are available to explore on AMTI’s newly updated map of Energy Exploration and Development in the South China Sea.

China

In the last year, China has begun development at several gas fields south of Hainan. In September, the China National Offshore Oil Corporation (CNOOC) announced that production had started at two gas fields in the Yinggehai Basin: Dongfang 1-1 and Ledong 22-1. In January, CNOOC began drilling at the Lingshui 25-1 gas field, the second deepwater field to be developed by China after the nearby Lingshui 17-2, which began production in June 2021.

Going to War over Taiwan: Who Decides?

Gary J. Schmitt

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Will China invade Taiwan? If so, when?

These questions are now routinely batted around in Washington. Not too long ago such a scenario was routinely dismissed as improbable. But CIA Director William Burns told Congress in early February that Chinese President Xi Jinping has ordered his military to be ready to conduct an invasion by 2027, and Burns warns that Xi’s ambitions to unite the island democracy with China should not be underestimated. While Biden administration officials are often quick to reassure us by arguing that Xi is unlikely to act sooner or that he must know the high cost for doing so, the fact is, U.S. intelligence does not have the most sterling record on predicting the behavior of ambitious autocrats.

Authoritarian leaders habitually believe they have taken the measure of a “soft” and “weak-willed” U.S., overestimate their own military’s capabilities, and act in ways which—in hindsight—appear less than rational. As U.S. Army Pacific Commander Gen. Charles Flynn has noted, Chinese forces “are rehearsing, they are practicing, they are experimenting, and they are preparing those forces for something.” And a leader doesn’t “build up that kind of arsenal just to defend and protect.”

If you are sitting in Taipei and see Chinese naval and air assets aggressively and regularly directed your way, confidence about how Xi will act is hardly firm. With a better than even chance that Taiwan’s Democratic Progressive Party—which strongly rejects any notion of unification with the mainland—might win Taiwan’s presidential election next year, Xi might believe that the time is right to “intervene” on behalf of “Chinese patriots.” Moreover, with Taiwan, America, and allies attempting to beef up defenses in the region, Xi might well believe it is better to act sooner than later and before the window of opportunity to do so possibly closes.

How Severe Are China’s Demographic Challenges?

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For centuries, China boasted the largest population of any country, giving it significant global heft. That is changing as China’s population shrinks and ages at a faster rate than almost any other country. In 2022, China’s population dropped for the first time in decades, and in 2023 India surpassed China to become the world’s most populous nation. China’s changing demographics pose major, prolonged challenges for the country and its leaders. China has for decades reaped the economic dividends that came with having a young workforce to fuel China’s emergence as a global industrial powerhouse. Now, the number of Chinese retirees will soon skyrocket, reducing the size of China’s workforce and putting pressure on China’s social safety net and healthcare system.

The Drivers of China’s Changing Demographics

China’s population grew at a breakneck pace during the mid-twentieth century, swelling nearly 50 percent between 1950 and 1970. Driven by fears of the extraordinary challenges of effectively governing a rapidly expanding population, the Chinese government began to institute population control measures in the 1970s. The “later, longer, fewer” (晚稀少) campaign, which was initiated in 1973, raised the legal age of marriage to 23 for women and 25 for men, encouraged at least a three-year period between births, and limited births to two children. Those who did not adhere to the new regulations faced penalties. This policy proved successful. Between 1970 and 1980, China’s fertility rate (the number of births per woman) plummeted from 6.1 to 2.7.

The government followed up the “later, longer, fewer” campaign with the one-child policy. Launched nationwide in 1980, the policy strictly limited urban couples to a single child. The policy was later relaxed in the mid-1980s to allow ethnic minorities and rural families to have two children if the first child was a girl.

Popping China’s Balloon

JOSEPH S. NYE, JR.

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CAMBRIDGE – When US President Joe Biden and his Chinese counterpart, Xi Jinping, met in Bali last November, they agreed to hold high-level meetings to establish “guardrails” for the Sino-American strategic competition. US Secretary of State Antony Blinken was scheduled to visit Beijing to inaugurate that effort last month. But when China sent a surveillance balloon (visible to the naked eye) over American territory, Blinken’s visit was shot down even faster than the balloon.

Though this certainly was not the first time that China deployed a balloon in such a fashion, the poor timing was remarkable. Still, it might have been better if Blinken had followed through with his visit.

Yes, China claimed, dubiously, that the device was a weather balloon that had gone astray; but intelligence cover-ups are hardly unique to China. Last month’s incident had echoes of 1960, when US President Dwight Eisenhower and Soviet Premier Nikita Khrushchev were scheduled to meet to establish Cold War guardrails. But then the Soviets shot down an American spy plane that Eisenhower initially tried to dismiss as an errant weather flight. The summit was canceled, and real guardrails were not discussed until after the 1962 Cuban Missile Crisis.

Some analysts liken the current US-China relationship to the Cold War, since it, too, is becoming a prolonged strategic competition. But the analogy can be misleading. During the Cold War, there was almost no trade or talks between the US and the Soviet Union, nor was there ecological interdependence on issues like climate change or pandemics. The situation with China is almost the opposite. Any US strategy of containment will be limited by the fact that China is the major trading partner to far more countries than the US is.

Is China’s ‘Straddle’ on Ukraine Coming to an End?

Michael Clarke and Matthew Sussex

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Over the course of the first year of Russia’s war on Ukraine, a consensus view of the calculus behind China’s approach to the conflict has emerged.

This view suggests that Beijing has engaged in a “straddle” on Ukraine where it has sought to balance its desire to maintain the “no limits” partnership with Russia against the collateral damage to its interests that could flow from being too closely associated with an increasingly isolated Moscow. So long as China avoids direct involvement in the conflict, this rationale contends, it will “at most suffer secondary sanctions for its political and economic support,” and Beijing’s continued partnership with Moscow will also remain a useful instrument to dilute U.S. focus and resources from Asia.

Thus far China’s “straddle” has arguably been successful. Its support for Russia – such as repeating Russian disinformation on Ukraine and calling for a “negotiated” resolution to the conflict – has been undertaken “in areas and ways that have incurred minimal cost.” Simultaneously Beijing has also increased its leverage within the Sino-Russian relationship to the extent that some now see Russia as becoming the junior partner. The sanctions and export controls imposed on Moscow, for instance, have undoubtedly left Russia far more dependent on Beijing as a source of technology, like semiconductors, and as a customer for Russian natural resources.

Mounting speculation that Beijing is considering provision of “lethal aid” to Moscow thus raises the question: Why would China shift from this ostensibly successful course?

Why Did China Help Saudi Arabia and Iran Resume Diplomatic Ties?

Jon B. Alterman

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On Friday, March 10, Saudi Arabia and Iran announced their agreement to reestablish diplomatic relations based on talks held in Beijing. China has portrayed itself as the broker of the agreement, and China’s senior diplomat congratulated the two countries on their “wisdom.”

Q1: Why did the two countries reestablish relations now?

A1: The agreement seems to have been moved forward during President Ebrahim Raisi’s visit to Beijing last month. For months, Saudi Arabia has put pressure on Iran through its reported support for Iran International, a foreign-based Persian-language broadcaster critical of the regime that is received in Iran. Since President Raisi took office in August 2021, he announced it was a priority to reduce tensions with regional neighbors. Saudi Arabia and Iran have had a wide variety of differences throughout the region, often fought through proxies. They span from Lebanon to Syria to Iraq to Yemen. Iran has supplied weapons to Houthi forces in Yemen that have threatened Saudi populations both on the border and in interior areas. Saudi Arabia has been increasingly interested in finding a way to end the conflict in Yemen, and this agreement is likely to move that forward.

Q2: What is the importance of China’s role, and what does this mean for China’s presence in the Gulf?

A2: Appearing to facilitate the negotiations adds to Chinese prestige. The not-so-subtle message that China is sending is that while the United States is the preponderant military power in the Gulf, China is a powerful and rising diplomatic presence. This adds to a perception of Chinese power and influence around the world, and it contributes to a narrative of a shrinking U.S. global presence.

Want To Beat China? Let in More Chinese!

KRAZ GREINETZ

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Bipartisan consensus is rare in Washington. But while politicians today seem eager to draw battle lines around everything, from gas stoves to cars to suburbs, they all seem to agree on one thing: It's time to get tough on China.

While many politicians and pundits from across the spectrum are pushing for Congress to ban TikTok, the popular social media app with ties to the Chinese Communist Party (CCP), they'd do better to direct their fury at America's strict immigration laws, not a platform for viral videos.

A complex set of formulas caps immigration from China at about 150,000 people per year. For a country with 1.4 billion people, that's not even a drop in the bucket. Radically increasing or eliminating this limit would do much more to halt China's rise as a global power than harming American users by banning TikTok. Many young Chinese would jump at the chance to move to the U.S.

Why would so many Chinese be eager to leave their homes to move thousands of miles away? For starters, the United States is much, much richer. Despite decades of unprecedented economic growth, China's gross domestic product (GDP) per capita is still 80 percent lower than America's. For all its development and flashy infrastructure projects, China is barely a middle-income country. As of 2022, more than half of the country lives on less than $10 per day, compared to only 3 percent of Americans and about 2 percent of Europeans.

Saudi-Iranian Détente Is a Wake-Up Call for America

Stephen M. Walt

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The détente between Saudi Arabia and Iran—with China playing a facilitating role—is not as momentous as Richard Nixon’s visit to China in 1972, Anwar Sadat’s trip to Jerusalem in 1977, or the 1939 Molotov-Ribbentrop Pact. Even so, if the agreement sticks, it’s a pretty big deal. Most importantly, it is a wake-up call for the Biden administration and the rest of the United States’ foreign-policy establishment, because it exposes the self-imposed handicaps that have long crippled U.S. Middle East policy. It also highlights how China is attempting to present itself as a force for peace in the world, a mantle that the United States has largely abandoned in recent years.

How did China pull this off? Efforts to lower the temperature between Riyadh and Tehran had been underway for some time, but China could step in and help the two parties reach agreement because its dramatic economic rise has given it a growing role in the Middle East. More importantly, China could mediate between Iran and Saudi Arabia because it has cordial, business-like ties with a majority of countries in the region. China has diplomatic relations and does business with all sides: Egypt, Saudi Arabia, Israel, the Gulf States, even Bashar al-Assad in Syria. That’s how a great power maximizes its leverage: You make it clear that you’re willing to work with others if they are willing to work with you, and your ties with others remind them that you have other options, too.

The United States, by contrast, has “special relationships” with some countries in the Middle East and no relationship at all with others, most notably Iran. The result is that client states such as Egypt, Israel, or Saudi Arabia take U.S. support for granted and treat its concerns with ill-disguised contempt, whether the issue is human rights in Egypt, the Saudi war in Yemen, or Israel’s long and brutal campaign to colonize the West Bank. At the same time, our mostly futile efforts to isolate and topple the Islamic Republic have left Washington with essentially zero capacity to shape Iran’s perceptions, actions, or diplomatic trajectory. This policy—a product of the assiduous efforts of the American Israel Public Affairs Committee, the Foundation for Defense of Democracies, etc., and well-funded Arab government lobbying efforts—may be the clearest example of an own goal in contemporary U.S. diplomacy. By demonstrating that Washington can’t do much to advance peace or justice in the region, it has left the field wide open for Beijing.

Massive Abuses of Government Power: Urgent Reform Needed of Data Privacy and Collection

Pete Hoekstra

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[T]he NSA's surveillance network "has the capacity to reach roughly 75% of all U.S. Internet traffic"... the NSA, working with the FBI, engaged in the bulk collection of phone records of U.S. citizens' phone records. Other programs may allow for data collection from Google, Facebook, YouTube and other platforms. These are the alleged capabilities that have been leaked to the media and government watchdog groups. One can only imagine what the federal government's more secretive and advanced programs might be capable of collecting.

We also must consider data collected by the CIA, the Defense Intelligence Agency, and from our constellation of spy satellites.

Then there are the other federal security and surveillance agencies such as the FBI, the Department of Justice, the Department of Homeland Security and the Internal Revenue Service, to name but a few.

[I]t is time for Congress to fully update the laws surrounding data collection and privacy. This also would give us the ability to see what still works, determine best practices to protect American security and civil liberties, and to end the things that do not -- especially those that leave open a backdoor for abuse.

[W]e must examine whether the government has deferred to the rights of American citizens, or has utilized perceived openings to expand its reach and power.

Law enforcement has acted in a way that enhances its capabilities and erodes the rights of American citizens. Three examples include the FBI's use of Section 215, where the FBI can get secret court orders for business records.

Lessons We Can Learn Today From President Carter’s Legacy on China

Stephen Orlins

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As former U.S. President Jimmy Carter enters his final days, those of us who follow China remember the brave and politically risky decision he made in 1978.

At the time, the United States still felt the effects of four decades of war in Asia that killed hundreds of thousands of American soldiers. China had just emerged from a radical leftist period known as the Cultural Revolution that targeted the U.S. as enemy No. 1, and its new leader, Deng Xiaoping, was unproven.

Carter’s decision to establish diplomatic relations with China is widely recognized for laying the foundation for global economic growth in the years since. But it should be appreciated even more for keeping peace in the Asia-Pacific for more than 40 years.

Carter acted despite significant domestic opposition on both sides of the Pacific. I will never forget accompanying my boss, Herb Hansell, then the legal advisor of the State Department, to testify before the Senate Foreign Relations Committee. I sat behind Hansell as Senator Jesse Helms and others excoriated him for the notion of working with China. Hansell ably defended the decision, and history has more than proven Carter right. America, China, and Taiwan have prospered during this period and the world has benefited to an incalculable degree.

The Push to Conserve 30 Percent of the Planet: What’s at Stake?

Lindsay Maizland

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During the 2022 UN biodiversity conference, COP15, countries reached a landmark agreement that aims to reverse the unprecedented destruction of nature. One of the agreement’s twenty-three targets, known as 30x30, aims to protect at least 30 percent of the planet’s land and water by 2030. That goal, which almost doubles the target for 2020 that was set through the UN process more than a decade ago, was the inspiration behind a 2023 UN agreement to protect biodiversity in the high seas, the international waters that comprise more than half the world’s oceans. So far, nearly 16 percent of all land and inland waters have been protected, as have 8 percent of marine areas.

Protected areas are those that are designated and managed in order to achieve conservation goals, according to the UN Convention on Biological Diversity. Human activities, such as farming, resource extraction, and settlement, are generally allowed in these areas as long as they are done sustainably. But there are no formal mechanisms to monitor these activities, and countries report their own progress with limited oversight.

One of the main motivations for the goal is to protect biodiversity, which refers to the variety of all living things on Earth and the natural systems they form. In recent decades, animal populations have plummeted and more species have gone extinct than ever before. This loss has sweeping consequences for livelihoods, economic growth, medicine, food systems, and climate resilience. To put a price on it, the world lost $4–20 trillion per year [PDF] from 1997 to 2011 because of changes in how humans use land, according to the Organization for Economic Cooperation and Development.

Knight Takes Rook in Cold War II

MICHAEL LIND

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Global power politics takes place in multiple dimensions, much like a game of 3D chess. Different players compete on different levels, though some are playing on every board.

Consider the war in Ukraine. This conflict, comparable to the proxy wars in Korea and Vietnam during the original Cold War, can be understood as the first proxy war in the current Cold War between the U.S. and post-Soviet Russia. It can be analyzed on three levels: regional, continental, and global.

At the regional level, the war is a struggle between Ukraine, which seeks to maintain its territorial integrity, and the Russian regime of Vladimir Putin, whose initial war aims failed, and who has since been reduced to trying to break off and annex the regions of eastern Ukraine with Russian-speaking majorities while terrorizing civilians and destroying civilian infrastructure. Ukraine fits into a larger regional pattern for Putin, who openly laments the dissolution of the USSR, and has long engaged in efforts to dominate buffer states around the borders of the post-Soviet Russian Federation. There was Chechnya (whose independence movement was brutally suppressed), South Ossetia (broken off from Georgia in a brief war in 2008), Crimea (which Soviet leader Nikita Khrushchev transferred to the Soviet Republic of Ukraine in 1954, and which Putin seized from Ukraine in 2014 and later annexed to Russia), and Ukraine itself, where Russia has been aiding and financing a war in the eastern provinces of the country since 2014. Belarus, another former Soviet republic, remains nominally independent but is closely allied with Russia under its president, Alexander Lukashenko.

The Future of European Energy

Agnia Grigas

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How has Russia’s invasion of Ukraine affected Europe’s energy mix? How are European states balancing the move towards a green future with their present needs? How are the Baltic states positioning themselves in these European debates? Dr. Agnia Grigas, Senior Fellow at the Atlantic Council, gives us the historical context and future factors that will affect European energy security for decades to come.

Expert Commentary on the 2022 National Security Strategy

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This Occasional Paper is the second issue of the new year. It is devoted to assessing the 2022 U.S. National Security Strategy (NSS) and by doing so provides a variety of analyses of some of the most challenging national security problems.

The NSS communicates the President’s national security priorities and, ideally, provides guidance on how to achieve them. As the number of non-American contributors to this issue demonstrates, the NSS is closely followed by U.S. allies too. The Occasional Paper offers a variety of useful perspectives on the NSS written by some of the best thinkers and professionals in the defense field. We hope you will find them valuable.

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Lessons from the Silicon Valley Bank Collapse

Shankar Parameshwaran

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Silicon Valley Bank (SVB), founded in Santa Clara, Calif., nearly 40 years ago by former Bank of America executives to focus on technology startups, collapsed on March 10 after a run on its deposits over fears that it was running out of money to meet its liquidity requirements. SVB’s failure triggered fears of contagion across the banking system, and over the weekend, New York-based Signature Bank also went under.

The U.S. government and the Federal Reserve acted swiftly to fully protect depositors of both banks. Meanwhile, the Federal Deposit Insurance Corporation (FDIC) set up bridge banks to carry on the operations of both SVB and Signature Bank while it looked for buyers through auctions. Two days before SVB’s collapse, Calif.-based Silvergate Capital, which caters to the crypto industry, announced it was shutting down, and that it would repay its depositors.

Between the three banks, investors have lost a total of $72 billion in market capitalization, according to a Wall Street Journal report. Bank stocks across world markets, including those of JPMorgan and Citigroup, have lost billions in value in the wake of the bank failures, and another bank — San Francisco-based First Republic Bank — looked precarious as its share price tanked.

SVB had been a star performer in recent years, growing its asset base during the pandemic to $212 billion. It became the largest Silicon Valley bank by deposits and the 16th largest in the country. It had parked some of its deposits in bonds, which had lost value as a consequence of the Fed increasing interest rates to tame spiraling inflation. Meanwhile, SVB’s deposit growth had turned negative in the last three quarters, forcing it to sell its bond holdings at a huge loss. After it announced last Wednesday that it had to raise fresh capital, its “investors completely freaked out,” as a Wall Street Journal report put it, causing the run on its deposits.

Consequences of the War in Ukraine: The End and Beyond

Brian Michael Jenkins

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Part seven in a series.

This series takes in the sweep of the war in Ukraine and its downstream effects both regionally and globally. Part one discusses how the war could end; part two deals with the potential for escalation of the war; part three discusses how the war in Ukraine may affect Russia; part four is about the consequences of the war on NATO, part five looks at Turkey and the Balkan states; part six the global economic consequences; and the series concludes with part seven.

We don't know yet know how the war in Ukraine may end. Despite heavy casualties, neither side is visibly falling apart or appears ready to back down. Both sides are digging in, but as the spring mud dries and the ground hardens, new offensives can be expected.

How the war evolves in the coming months and even years could suddenly demand momentous and agonizing policy decisions, most of which will have far-reaching consequences. Hard, politically sensitive, what-if questions cannot be ignored.

The circumstances of the conflict give Moscow the strategic initiative. Russia is the aggressor, free to attack or hunker down. On the defense, Ukraine has no choice but to fight back or surrender. Kyiv's dependence on Western support constrains its military operations, as Western supporters will give Ukraine the means to defend itself but remain reluctant to provide weapons that would enable Ukraine to carry the war into Russia. And while Ukraine has conducted a few limited attacks in Russia, Kyiv is aware that going too far imperils its Western backing. In other words, it can “win” only by imposing unsustainable losses on Russian attackers inside Ukraine. Meanwhile, the West hopes that the continuing Russian military failure in Ukraine, and the mounting economic costs of sanctions, will eventually persuade Russia to quit.

What Will Putin Do Next?

Brian Michael Jenkins

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One does not easily imagine Russian President Vladimir Putin and his generals poring over maps or conferring with his cabinet, gazing at PowerPoints, weighing various options. Surrounded by servile opportunists who depend on his approval, one suspects that Putin may hold his immediate circle in outright contempt. These are, after all, his minions—mere messenger boys talking taxidermy.

At home, Putin faces no elections, no party or state institutions that threaten his rule, no domestic political opposition. He is Russia. And Russia is his—so long as he projects strength. Avoiding defeat is his paramount objective. According to his foreign minister, Putin takes his counsel from Ivan the Terrible: He fires generals, jails dissidents at home, poisons those abroad.

Measuring by his years in power, Western leaders are mere novices. He faces his third president of China, his fourth president of France, his fifth U.S. president, and his seventh prime minister of the United Kingdom. Longevity doesn't make one smarter, but, as the Russian saying goes, Putin “has seen the parade quite a few times.”

Putin's Assumptions

Russia will eventually triumph. Putin, as well as a number of Ukrainian officials, believes that time is on Russia's side. Despite its reported heavy losses, Russia can continue to pound Ukraine's cities and its infrastructure while sending recruits into battle in order to grind down Ukraine's defenses. Putin likely sees himself as more committed to pursuing the war in Ukraine than the West, and thus believes Russia will succeed.

Bad Idea: Equating the Threats Facing Taiwan and Ukraine

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On February 24, 2022, the day Russia invaded Ukraine, worldwide Google searches for “Taiwan” increased five-fold over the previous day, smashing existing records. Comparisons between the situations facing Taiwan and Ukraine have since become commonplace, with pundits questioning whether Taiwan may be “next” after Ukraine. The instinct to compare Ukraine and Taiwan is understandable, and there are critical lessons to be drawn from the war in Ukraine, but the parallels between Ukraine and Taiwan should not be overdrawn.

The deterrence dynamics between the two are fundamentally different. The monumental costs of a large-scale invasion of Taiwan—both economically and militarily—potentially deter China from taking major military action in ways that Russia was not deterred from invading Ukraine. However, while Beijing has thus far been deterred from a full-scale invasion, evolving cross-Strait dynamics may compel China to take dangerous military actions short of war to achieve its objectives in Taiwan. Understanding the intricacies of deterrence is key to avoiding conflict in the Taiwan Strait.

At face value, the deterrence dynamics surrounding Ukraine and Taiwan appear similar. Both are democracies facing existential threats from much larger, more powerful authoritarian neighbors in Russia and China. Crucially, those authoritarian states also both possess nuclear weapons, which drastically increases the costs of escalation and complicates efforts to deter acts of aggression.

Will Geopolitics or Technology Reshape the Global Monetary Order?

BARRY EICHENGREEN

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BERKELEY – When the United States and its G7 partners imposed sanctions on Russia’s central bank and barred Western financial institutions from doing business with Russian counterparties, commentators warned of far-reaching changes in the global monetary and financial order. Other countries would see those sanctions as yet another step in the West’s “weaponization” of finance. Fearing that they, too, might one day be on the receiving end of sanctions, governments and central banks would reduce their dependence on the dollar, US banks, and the US-dominated Society for Worldwide Interbank Financial Telecommunication (SWIFT).

China would be the principal beneficiary, these predictions continued. So far, China has sought to remain above the fray in the dispute between Russia and the West. It has a large banking system. It has created a Cross-Border Interbank Payment System to facilitate renminbi settlement and provide an alternative to Fedwire and the Clearing House Interbank Payments System (CHIPS) through which dollar payments are made.

Russia already accepts renminbi in payment for fully 14% of its exports. Its sovereign wealth fund holds $45 billion worth of renminbi securities and deposits, and Russian companies issued $7 billion worth of renminbi-denominated bonds last year.

Given Russia’s circumstances, none of this should come as a surprise. But will other countries also move in this direction? When President Xi Jinping visited Saudi Arabia late last year, there was talk of the Saudis taking payment for their oil exports in renminbi. China has recently concluded renminbi clearing arrangements with Pakistan, Argentina, and Brazil. Just last month, Iraq’s central bank announced a plan to allow direct renminbi settlement for trade with China.

Lessons From Ukraine Many Don’t Want to Hear

Matthew Van Wagenen & Arnel P. David

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There is no shortage of commentary on the lessons to be learned from the war in Ukraine. There is an understandable debate unfolding given the tremendous amount of sacrifice, human loss, and suffering. The stakes are high and learning needs to occur. War is, and has always been, the best teacher. It has been nothing short of incredible what David has been doing to Goliath on the Steppes of Ukraine.

There are indeed valuable lessons to learn from all sides. Yet, for Western militaries, it is more about the lessons they may not want to hear that will prove to be the most valuable in deterring, preparing, and if necessary, fighting the next war. Much of the West has over invested in other domains (e.g., maritime, air) and niche capabilities, at the expense of combat power on land. The war in Ukraine has validated the need for decisive land combat power to win large-scale wars. These types of wars are far from extinction and finding the right balance of capabilities to wage war in appropriate fashion, remains a fundamental security challenge for Western nations.

Historically, military organizations have been known to cling to capabilities long past their ability to offer decisive returns. Put simply, there is a continual sin to fight the way one might wish rather than the way one should, and equally important, one might not know exactly where they might have to fight and in which domains. Conversely, there are continuities in war that do not change, and therefore, an alignment of military concepts and associated capabilities in a dynamic environment remains key.

What to Do in an Increasingly Bipolar World

COLIN P. CLARKE and MOLLIE SALTSKOG

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Russia’s invasion of Ukraine has caused a global food crisis, worldwide energy shortages, and massive refugee flows throughout Europe. But perhaps its most significant consequence has been more subtle. The war in Ukraine has accelerated the shift from a multipolar world to a bipolar international system, and what might have been a three-horse race between Washington, Moscow, and Beijing is now squarely a strategic competition between two powers.

The invasion has weakened Moscow. Russian casualties to date have been estimated at 200,000 or higher. The Russian military has lost thousands of pieces of armored equipment, squadrons worth of fighter jets and helicopters, and depleted significant amounts of precision strike munitions and artillery shells. Moscow’s vaunted mercenary force, the Wagner Group, has grown so desperate for manpower that it felt compelled to recruit from prisons and jails. The Kremlin has been slapped with major sanctions and is now more isolated diplomatically than at any time in recent memory, with the United States formally accusing Russia of committing crimes against humanity.

These military, economic, and diplomatic struggles have intensified Russia’s relationship with China, which has welcomed the opportunity “to further advance our comprehensive strategic partnership of coordination for a new era,” as one senior Chinese diplomat put it after bilateral meetings in February. China has already supplied Russia with crucial dual-use technology, including smartphones and computer chips, as well as satellite imagery that was used by the Wagner Group. Furthermore, Chinese state-owned defense companies have provided shipping navigation equipment, jamming technology, and jet-fighter parts to sanctioned Russian government-owned defense companies, according to the Wall Street Journal.

Georgia Is a New Front in Russia’s Hybrid War

Therese Raphael

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After two nights of violent clashes with riot police in Tbilisi, Georgian protestors won a victory Thursday when the ruling party announced it was withdrawing the proposal cracking down on civil-society groups and the media, which sparked the demonstrations. But the government has refused to renounce the bill, many protestors have been jailed and opposition parties are rightly worried it is just the beginning of a weakening of democratic freedoms.

The scenes in Tbilisi echo those in the 2014 Maidan Uprising, when Kyiv was filled with Ukrainians demonstrating against President Viktor Yanukovych’s decision to abandon the European Union-Ukraine Association Agreement for closer ties with Russia instead. Georgia’s fragile democracy — one of the few staunch US and European allies in the region until recently — now faces a similarly perilous moment. Georgia’s westward march, like Ukraine’s, is one Putin has been determined to thwart.

The irony of Georgia’s plight today is that Putin’s Ukraine campaign can be said to have started then, when he found a pretext to launch an invasion in 2008 on behalf of separatists in the self-declared republics of South Ossetia and Abkhazia. The war resulted in brutal ethnic cleansing of Georgians in those regions and a strategic victory for Putin, whose forces currently occupy about 20% of the nation’s territory. He also used it as a template for the 2014 annexation of Crimea, the precursor to incursions into Ukraine’s Donbas region and last year’s full-scale invasion.

Why did a Russian jet and a US drone collide?

Svitlana Morenets

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The United States and Russia are blaming each other for an incident which led to an American drone crashing into the Black Sea. Yesterday morning, a Russian Su-27 fighter jet collided with a US MQ-9 Reaper surveillance drone. The US claimed that Russian aircraft struck the drone’s propellors, so US forces had to bring the Reaper down in international waters. Moscow has denied this, saying the US drone flew erratically and collided with the water’s surface.

US general James Hecker said the drone was conducting ‘routine operations’ when two Russian jets ‘dumped fuel on and flew in front of the MQ-9 in a reckless, environmentally unsound and unprofessional manner’. He also said that ‘this unsafe and unprofessional act by the Russians nearly caused both aircraft to crash’.

The collision follows some close shaves: John Kirby of the US National Security Council said that ‘in recent weeks, there have been other intercepts but this one is noteworthy because of how unsafe and professional it was’.

The US said that ‘these aggressive actions by Russian aircrew are dangerous and could lead to miscalculation and unintended escalation’. President Biden and Nato members have been briefed about the incident, and the Russian ambassador has been summoned to the US State Department, which could declassify and release video it has of the collision.

Deepfakes and Disinformation Pose a Growing Threat in Asia

Dymples Leong

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Recent news on the use of computer-generated avatars by a pro-China influence campaign has once again aimed a spotlight at the usage of deepfakes. The influence campaign was first observed by intelligence company Graphika in late 2022. Videos of lifelike AI avatars, portraying news anchors on the fictional Wolf News outlet, promoted the interests of the Chinese Communist Party. The videos commented on topics such as gun violence in the United States and the importance of China-U.S. cooperation for the global economy’s recovery from COVID-19.

Previous investigations by Graphika and other researchers found the use of AI-generated fake faces and edited out-of-context videos aimed to mislead by fabricating an individual’s words or actions. What distinguished this from other previous AI-generated images or media was the involvement of a state-aligned information campaign to generate fake personas using deepfake technologies.

This case brings concerns about deepfakes to the forefront of public discussions, and raises serious questions: What is the impact of deepfakes and disinformation, and what is the significance of deepening commercialization in deepfake technology?

Deepfakes are generated using a specific form of artificial intelligence known as deep learning. Deep learning algorithms can swap faces of a person’s likeness in a video or an image with others. The creation of deepfakes rose to public prominence via face-swapping photos of celebrities online, with deepfake videos of Tom Cruise on TikTok in 2021 captivated the public through the hyper realistic persona of the actor.

Strengthening the Defense Innovation Ecosystem

Brodi Kotila, Jeffrey A. Drezner, Elizabeth M. Bartels

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Technological superiority is vital to U.S. national security and defense. The Department of Defense's (DoD's) direct investment in basic research and development remains critically important, but it is insufficient to retain a technological advantage against near-peer rivals, especially China, which is aggressively modernizing. DoD recognizes that it must leverage relevant private sector–developed technology.

To that end, DoD has created an ecosystem of defense innovation labs, hubs, and centers to help bridge the technology innovation gap between private-sector firms and the U.S. military. These various defense innovation organizations (DIOs)—the Defense Innovation Unit, the Joint Rapid Acquisition Cell, the National Security Innovation Network, the Air Force's AFWERX, and the Army Applications Laboratory, among others—have proliferated over the past two decades and operate independently of one another to address specific but often similar needs.

The authors identify and assess challenges to quickly harnessing emerging commercial technologies for military use within the existing defense innovation ecosystem, especially when much of this innovation is the product of individuals and businesses that have traditionally not worked with DoD.

The authors examine the organizations, authorities, and processes—including innovation organizations, requirements, acquisition, and funding—that form the DoD's commercial technology pipeline (CTP). Then they use game play to test alternative approaches to potentially reform and strengthen the pipeline in ways that would accelerate the military's identification, development, and adoption of commercial technology.

Understanding, Managing, and Reporting U.S. Space Force Readiness

Brian Dolan, Bonnie L. Triezenberg, Emmi Yonekura

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As a branch of the U.S. armed services, the U.S. Space Force (USSF) must understand, manage, and report its readiness. The readiness-related systems of the U.S. Department of Defense, like many systems that support and govern the USSF, were not designed to meet the unique demands of the military space community and characteristics of operations in and through outer space. The newly independent USSF has an opportunity to create systems that work better meet their needs. The authors of this report have created a readiness framework for the USSF and a guide on how to implement it.

Starting with a "blank slate" mandate and a review of the readiness practice of the other services, the authors studied the current readiness system for the USSF and considered the unique needs of the military space community. They found that the current readiness reporting system does not address the range of USSF needs and has failed to objectively report the readiness of the space forces. They recommend a readiness framework that measures the USSF's ability to keep pace with adversary threats. It proposes three distinct "views" of readiness: (1) given today's resources, (2) against the near-peer threat, and (3) progress in transforming to meet the near-peer threat.

Proxy Warfare in Strategic Competition

Stephen Watts, Bryan Frederick, Nathan Chandler

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The authors used both quantitative analysis and case studies of China, Iran, and Russia to examine the causes and likely future trends in proxy wars: civil wars in which at least one local warring party receives material support from an external state. The purpose of the project was to provide insight into the determinants of state support for violent nonstate actors, assess the risks that third-party support poses to U.S. overseas contingency operations, and analyze policy options available to the United States to counter such foreign support.

With the renewed focus in many regions on strategic competition, there seems to be a growing risk that states will feel increasingly threatened by their rivals and take greater steps to counteract these threats in the years to come. The case studies highlight how such an environment can often, though not always, lead to an increased interest in supporting proxy warfare. Of even greater concern is the fact that geopolitical drivers of proxy warfare can often be self-reinforcing.

The states considered in the case studies were usually able to develop at least a rudimentary capability for proxy warfare very quickly, within a couple of years, often building on the capabilities of prior efforts or regimes. Beyond this baseline capability, however, a relatively lengthy period of learning and growth to better develop proxy warfare capabilities appears to be common.

China holds 'military advantage' over US as Washington prepares for conflict over Taiwan: retired general

Caitlin McFall

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White House press secretary Karine Jean-Pierre responded Tuesday to warnings from China of conflict with the U.S., saying, 'We do not want conflict.'

Concerns over a Chinese invasion of Taiwan continue to mount with Beijing now suspected of involvement in damaging some of the island nation's undersea internet cables this week in another show of deliberate harassment.

The disruption to Taiwan’s internet was not only a nuisance for the island’s inhabitants and visitors, it also revealed significant implications for Taiwan's national security.

There is no definitive evidence that China purposefully cut the internet lines, but the incident brought renewed attention to what an attack on Taiwan might look like and whether the U.S. would be able to adequately stop it.

Are Tanks a Weapon of the Past?

Williamson Murray

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From the appearance of the first armored fighting vehicle in 1916, critics of the tank have argued that it is a weapon that would have short utility, given the development of new technologies. In fact, so sure was the German leadership in 1916 that the tank was a useless weapon that it made no effort to design an armored fighting vehicle of its own but continued to pour tons of steel into the construction of useless Dreadnoughts. The devastating British attacks at Cambrai in 1917 and Amiens on 8 August 1918, the latter termed by Erich Ludendorff, driver of German strategy in the last two years of World War I, as “the black day in the history of the German Army,” seemingly certified the tank’s worth. Not surprisingly, given the few that were used during the war, the interwar period was to see a furious debate about the utility of the tank, particularly in the United Kingdom, but also in Germany.

The real innovators in the 1920s and 30s were to be the Germans with their refinement of the combined-arms tactics, which had been so successful in their spring 1918 offensive. Interestingly, given their reputation, the majority of the German generals in the 1920s and 30s held considerable doubts about the utility of the armored fighting vehicle on the battlefields of the future. But exposure to how effective tanks could be in the Polish and French campaigns persuaded most of the doubters. Significantly, one of those doubters, Erwin Rommel, a convinced infantry man who was appointed to command the 7th Panzer Division in March 1940, would prove to be the most effective division commander in the destruction of the French Army in May 1940. That was because the doctrinal framework within which he worked was one that emphasized combined arms, and the armored fighting vehicle proved to be a devastating addition to combined-arms warfare by increasing the speed of exploitation by an order of magnitude.