MeiZhongTai

Thursday, June 30, 2005

Chinese AWACS

In November 2004, the Washington Post reported that China had domestically produced its first airborne warning and control system (AWACS) platform, built atop an IL76 Candid. A detailed look at this new system and its significance is in order. The Russian AWACs platform, the A-50 Mainstay, is also built atop an IL76 frame. Sinodefence offers more information:
Unconfirmed reports claimed that so far two KJ-2000s [the Chinese designation for their AWACS aircraft] (one based on A-50I, one converted from a PLAAF/CUA IL-76MD Candid) have been delivered to the PLAAF for operational evaluation and tests. A total of four aircraft may eventually be built, either on new A-50s purchased from Russia, or directly converted locally from the existing IL-76s in service with the PLAAF.
Significance
According to Richard Fischer (quoted in WaPo article):
After the 2000 Israeli fiasco [discussed below], the PLA made it a matter of high pride to prove to the Americans they would not be denied AWACS.
In addition to the prestige issue, AWACS improves China's early warning and command and control (C2) capabilities. It is too early to know definitively the capabilities of this new platform, but this much is sure: If the KJ-2000s turn out to be even remotely as capable as the American E-3 Sentry or even Taiwan's E-2 Hawkeye, then we can expect to see significant improvements in the capabilities of the PLAAF and PLANAF, especially in air interdiction. We also may see the PLAAF training more frequently in poor weather, something they rarely do at present.

Phalcon Downed
The "2000 Israeli fiasco" mentioned above was when America discovered plans for Israel to provide Phalcon phased-array radar systems, mounting them in IL76 aircraft already in Chinese possession. The Clinton administration impressed upon Israel the negative impact the deal would have on US-Israel relations causing Israel to cancel the deal, which was worth 250 million US dollars per plane. Israel removed all Israeli technology from the aircraft and returned the aircraft to China, by way of Russia, in their original condition. (For more on America, China, and Israel triangular relations, see my previous post on the subject.)

Indigenously Produced AWACs... Really?
China claims to have indigenously developed the AWACs technology on its KJ-2000s at the Nanjing Electronic Technology Research Institute (also known as the 'Number 14 Institute'), but there is ample cause for skepticism.
One possible explanation is that the research institute was able to get a copy of a functional AWACs system and simply reverse engineered the system. China is currently in the process of purchasing Russian A-50s. According to the WaPo article above:
It is not known whether any of the Russian craft were ever delivered, which would have provided a look at the technology, or whether the technicians obtained help from Israeli or Russian counterparts.
Another possibility is that the PLA bought the system piece-by-piece or simply had a significant amount of foreign help in research, development, and production of the system. As noted by a Jane's Defence Weekly report (available here):
[T]here is a strong possibility of outside assistance, perhaps from Russia.... Taiwanese sources allege that a secret A-50Eh deal was concluded with Russia last year.
A third possible explanation is represented by Bill Gertz would likely attribute this advanced capability to China's espionage capabilities, which may also have played a role in the development of this system.

Conclusion

However China acquired this capability, it supports the assertion of the report quoted in the Gertz article:
Predictions a decade ago of slow Chinese [science and technology] progress have now proved to be false.
For those that view China as a threat, the only thing more threatening in this news than China's improved warning and C2 capabilities is the possibility that China's research, development, and acquisitions (RD&A) capabilities have improved to the point that they did truly develop this technology indigenously. Unlikely, but worrying all the same.


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Tuesday, June 28, 2005

Fisking Gertz

Bill Gertz of the Washington Times has written a pair of articles entitled 'Chinese Dragon Awakes' and 'Thefts of U.S. Technology Boost China's Weaponry', both of which are in serious need of a good Fisking.

Article I

China is building its military forces faster than U.S. intelligence and military analysts expected, prompting fears that Beijing will attack Taiwan in the next two years, according to Pentagon officials.
Simply put: Capability does not equal intent... not that I am trying to argue China's innocence, but I'd like the author of a piece predicting a world war to at least take a go at convincing me there is a reason for said conflict. For more on the 'faster than expected' aspect, see my previous post here.
Gertz, without wasting a minute trying to convince the reader of the legitimacy of his predictions, starts to discuss the war between Beijing and the Washington will result from this all. That China does have one way out of a war with America (Not attacking Taiwan in the first place) doesn't appear to occur to him.
After a brief regurgitation of many of the points from his previous article, in which he described scary advances without giving much of anything in the way of specifics, he jumps into the PRC's recent economic growth. He then ties all of this together masterfully:
The combination of a vibrant centralized economy, growing military and increasingly fervent nationalism has transformed China into what many defense officials view as a fascist state.
WHAT? Maybe drawing this up as a math equation will help me understand:
Vibrant Centralized Economy + Growing Military + Fervent Nationalism = Fascist State
Nope. Still doesn't click. I think I'll just stick with Wikipedia's definition.
Additionally, I wholeheartedly second Asiapundit's comment:
It disturbs me that a right-wing newspaper would buy into the concept of a "vibrant centralized economy," that should be an oxymoron.

Gertz continues:
The release of an official Chinese government report in December called the situation on the Taiwan Strait 'grim' and said the country's military could 'crush' Taiwan.
Ever thought of some 'context'? What is this supposed to tell me? That Chinese reports include lots of monosyllabic words?
Earlier this year, Beijing passed an anti-secession law, a unilateral measure that upset the fragile political status quo across the Taiwan Strait. The law gives Chinese leaders a legal basis they previously did not have to conduct a military attack on Taiwan, U.S. officials said.
How did the law 'upset' or change anything? The political status quo is the same as it was last year and the year before. If there was a change in the balance, I would argue it was the visit of Taiwan's opposition leaders to the mainland, not Beijing granting itself the authority to invade Taiwan. If Taiwan is part of China then Beijing already had the right to use force to defend itself from separatist groups. If Taiwan is independent then Beijing can't grant itself the legal right to invade a foreign country. How has anything changed?
"We left the million-man swim behind in about 1998, 1999," the senior Pentagon official said.
I would love to see any information Gertz or anyone has to support this. Everything I have seen on the subject supports David Shambaugh's analysis in Modernizing China's Military, which concludes:
At present, an amphibious landing and full invasion of Taiwan remains far beyond PLA sealift and airlift capabilities. The conventional wisdom is that, in such landings, a 5:1 numerical advantage is needed (irrespective of terrain): thus the PLA would have to land approximately 1.25 million troops on Taiwan within the first few days of the invasion. This is, of course, impossible. At present, it is believed that the PLAN only has the sealift capability to transport one or two divisions and about 300 tanks at a time, far short of the numbers necessary to establish a beachhead on the heavily fortified western approaches of the island. It would take approximately 600 landing crafts nearly two weeks to transport twenty infantry divisions to Taiwan. (325)
Granted, MCM was published three years prior to Gertz's piece, but if China has the hundreds of landing crafts required for such an invasion why hasn't Gertz just given us the numbers? Maybe he could even provide the pictures of the crafts, instead of the worthless pictures currently accompanying his articles (A, B). Later in the article, Gertz actually gives us the reason why:
[It is] difficult to penetrate Beijing's "veil" of secrecy.
So basically, he doesn't know what is really happening. One wonders if Gertz speaks Chinese. Shambaugh seemed to be able to find plenty of information and mentions repeatedly throughout his work wealth of information available.
These [referenced] books and periodicals represent just the tip of the iceberg of available material on the PLA in China, and they also belie the common belief that there is no military transparency in China. All one has to do is be able to read Chinese and physically gain access to these materials. (MCM, xxvi)
Next he starts to list all the advances the People's Liberation Army has made in the last decade or so, treating them all as if they happened last night when no one was looking. Nothing in the article is new to anyone who has made the even a slight attempt to keep up with the advances of the PLA. Among those listed:
Beijing also has built a new tank for its large armed forces. It is known as the Type 99 and appears similar in design to Germany's Leopard 2 main battle tank. The tank is outfitted with new artillery, anti-aircraft and machine guns, advanced fire-control systems and improved engines.
It is hard to nail down statistics on the Type 99 because of confusion in the classification/naming system (Some say the 90II/96/98/99 are all the same; others disagree). Whatever the stats, I fail to see why Gertz feels the need to call the tank "new" or or sees sudden cause for alarm. The tank debuted in 1999 (hence the name) and was the subject of an article in Jane's Defence Weekly in November 2000 by the name of 'New Chinese Tank,' which discussed many of the same improvements noted by Gertz five years later.
Next, Gertz rediscusses the report by the eccentric Office of Net Assessment on Chinese needs for oil. He concludes:
The [Net Assessment] report stated that China will resort "to extreme, offensive and mercantilist measures when other strategies fail, to mitigate its vulnerabilities, such as seizing control of energy resources in neighboring states.
So a combination of growing demand for oil and a failure of other strategies (would buying the oil be included in the 'other strategies' category?) for unknown reasons will lead to China attacking Russia and taking over the South China Seas. I guess I shouldn't expect anything more in the way of an explanation from a man who throws out ideas like a 2007 timeline for an invasion without any more rationale than 'analysts expect...".

Article II

This article is reminiscent of his China Threat in that it accuses China of all kinds of outrageous things that have one of two possible explanations:
  1. It is something that every country in the world does. A good example is his comment on China's foreign espionage.
    [T]he Chinese are prolific collectors of secrets and military-related information.
    What country isn't?

  2. It is a completely logical action for any country that is growing economically and seeks the international prestige to match. One clear example is China sending:
    [T]he Chinese use hundreds of thousands of Chinese visitors, students and other nonprofessional spies to gather valuable data, most of it considered 'open source,' or unclassified information.
    Basically Gertz is warning us that Chinese people are coming to America and learning as much about the country and its industry, systems, and so forth as possible short of breaking the law. I guess Gertz isn't a big fan of the 'city upon a hill' idea. When they commit espionage, David Szady, chief of FBI counterintelligence operations, (quoted in this article) will find them and expel or arrest them. When they breach copyright laws, America's lawyers (public and private) will fight them in court and make them pay. Otherwise, where is the problem?

Now that I have covered my general reaction, let me respond to a few specific sentences:
The danger of Chinese technology acquisition is that if the United States were called on to fight a war with China over the Republic of China (Taiwan), U.S. forces could find themselves battling a U.S.-equipped enemy.
'I would hate for my grandson to be killed with U.S. technology' in a war over Taiwan, senior FBI counterintelligence official Tim Bereznay told a conference earlier this year.
Clearly, this is a powerful image (aside from wondering how old this FBI agent must be if he has a grandson who will be fighing in the war that Gertz is promising will occur in two years time). I doubt anyone would argue that American servicemembers would welcome the news that China is now fielding sophisiticated American weaponry. I suspect much of this threat, however, is hype no different from Gertz's previous discussion of '
Chinese version of the U.S. Aegis battle management technology' (discussed here). A few successes in espionage doesn't miraculously give one the ability to produce weapons systems that took America decades to design and refine.
China gleans most of its important information not from spies but from unwitting American visitors to China, from both the U.S. government and the private sector, who are "serially indiscreet" in disclosing information sought by Beijing, Mr. Moore said in a recent speech.
Is it really fair to hold China accountable if an American citizen flies all the way around the world on their own initiative to chat with them and some secrets slip? At that point, I would argue it isn't even espionage (I'm not saying it is a good thing, mind you, just that we can't blame China for the incompetence of some of those with privileged information).
China's government also uses influence operations designed to advance pro-Chinese policies in the United States and to prevent the U.S. government from taking tough action or adopting policies against Beijing's interests, FBI officials said.
China (or those working on its behalf) is trying to lobby decisionmakers in order to achieve favorable outcomes relevant to its interests. Anyone who finds this alarming should ask themselves what country doesn't do such a thing. Taiwan, for example, certainly has people in Washington lobbying on their behalf.
The real danger to the United States is the loss of the high-technology edge, which can impair U.S. competitiveness but more importantly can boost China's military.
I couldn't agree more, but I would argue that counter-espionage alone won't protect us from losing our edge. The bigger threat comes from too few Americans studying in scientific and engineering fields. For more information on this, see chapters seven ('The Quiet Riot') and eight ('This is Not a Test') of Thomas Friedman's The World is Flat. The solution to this problem comes from either convincing America's youth that the fields are interesting and worth pursuing or from some more innovative approach:
People who graduate in these very technical fields [eg: photonics & optics engineering] should get a green card stapled to their diploma.[Tracy Koon, Intel's director of corporate affairs, quoted in TWIF, 273]
Personally, I think the former is a better long term strategy, but the the two ideas are not mutually exclusive and the latter also deserves serious consideration.

Update: Arms Control Wonk analyzes Gertz's article as it compares with the report Chinese Military Power from last year and makes some interesting conclusions.


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Saturday, June 25, 2005

Farley's China Series

Dr. Robert Farley of Lawyers, Guns, and Money has started a six-part series on China-US relations. I'll add links (and comments) to them as they become available.
Part I: Foreign Policy Conflict
I think that oil scarcity will no more be a source of conflict between China and the US than it will between Japan or Europe and the US.
I agree completely. (See my post on CNOOC and Unocal).
The one issue on which China and the United States might end up fighting, Taiwan, has been a point of contention for the past fifty years, and has nothing whatsoever to do with China’s increasing power. A period of mutual hostility may be on the way, but it certainly hasn’t hit yet.
While I agree that this issue is not new, I don't find that limiting my belief that the area is worrying. Until now, China has been militarily incapable of invading the Republic of China's offshore islands of Quemoy and Matsu, much less Taiwan... but alas that will soon no longer be the case.

One additional point, I didn't see mentioned in Dr. Farley's post that may be relevant to add: While the national government and the Chinese Communist Party (CCP) are the same entity, the needs and goals of the nation and that of the party are not the same. It is not hard to conceive of a scenario where the CCP takes action detrimental to the nation in order to save itself from challenges to its leadership. To illustrate this point, let me quote from Natan Sharansky's The Case for Democracy:
Propaganda, state control of the media, personality cults, and so on will only go so far... Accordingly, fear regimes look to other methods to stay in power. One of the oldest and most effective is the creation of external enemies. (82)
(Fear regimes is his phrase for any non-free society, which would certainly include the People's Republic)
In times of war, even in free societies, people are prepared to accept both economic hardships and curtailment of their freedoms... The people who live in fear societies are no different. They too will make sacrifices if they are convinced that their safety demands it. That is why nondemocratic rulers find the threat of war a particularly attractive device for justifying the repression that is necessary to control their subjects and remain in power. (emphasis added, 83)

Part II: In Defense of Ambiguity
I think that any clarification of the policy of ambiguity will serve to either make Taiwan more likely to declare independence or to make the PRC more likely to attack.
In the above statement, Dr. Farley appears to be assuming that were America to give the go-ahead, Taiwan would declare independence. I don't believe that to be the case. Taiwan isn't unified in support of independence and just waiting for America and/or China's permission. While President Chen Shui-bian's administration has been widely seen as favoring independence, the electorate has other plans. You can find the latest poll data at the Mainland Affairs Council's site and evaluate the situation for yourself. I read that poll much the same way I read the 2004 referendum (keep in mind that the purpose of the referendum itself was more important than the actual questions asked): Don't do it President Chen!
The obvious rebuttal, which I have often heard and was kind of alluded to later in Dr. Farley's post is this:
...I would be quite surprised if Taiwan declared independence anytime soon. A US security guarantee, however, might change that. The electoral landscape might shift in response to PRC intimidation, or for some other cause.
Basically, were the threat of war removed or the American security guarantee clarified, those numbers would change and more people/everyone would support independence. I have tested that hypothesis through an unscientific but extensive (for a private, unfunded blogger) survey of the people of Taiwan on my own and found it lacking. Most of the people who answer 'status quo' are waiting to see how the People's Republic grows and/or reforms in the long term and many hope to one day reunite with China under friendly terms. Simply put, currently a majority of Taiwan's people are not ready to support a declaration of independence no matter what American and/or China do.
The material gains for Taiwan following a declaration of independence are minimal compared to the losses China could inflict.
Agreed. Especially since Taiwan already has de facto independence.
I don't believe that a failure to defend Taiwan would create a reputation for weakness or irresolution that might affect the behavior of other allies. [Farley expands on this idea in this post, which is certainly worth reading.]
I disagree on this one. Hopefully we will never know which of us is right, but I can see South Korea (just as an example) rethinking the value of America's security guarantee. Japan wouldn't be far behind, especially in light of this (note Taiwan is on the list).
[T]he freedom of the Taiwanese people is, to me, worth the lives of American soldiers and sailors.
I agree, as do nearly all of the men and women in uniform I know.
I also believe that any such [clear security] guarantee would remove Taiwanese incentive to spend in their own defense, which remains crucial to deterring a PRC attack.
Sad, but true. One might even argue that situation has already arrived (see here).
Also, make sure to read the comments section, especially David's explanation of why 'there is no realistic possibility of Taiwan declaring independence.'

Part III: China's Growing Military Power
Part IV: China and the Republican Party
Part V: A New Cold War?
Part VI: Chinese Democracy

UPDATED TO INCLUDE PART II OF THE SERIES


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CNOOC's Unocal Bid

On 23 June, China's state-owned China National Offshore Oil Corporation (CNOOC) made an unsolicited $18.5 billion cash bid for the American oil firm Unocal. If Unocal shareholders (and regulators) accept the offer from CNOOC, and not the bid from Chevron valued about 10% less (which is reportedly still under consideration even after the larger bid was made), this would be the largest ever overseas acquisition by a Chinese firm. This may, however, all turn out to be a non-issue:
'Given the regulatory hurdles and longer approval time, the 9% premium may not be enough incentive for Unocal to terminate the Chevron agreement,' Bruce Edwards, analyst at AG Edwards, said in a research note - adding he was confident Chevron would win out in the takeover tussle. [from the BBC]

This acquisition attempt has quite a few people riled up. This attempted purchase is the intersection of a few different sensitive issues in American politics, notably oil security and the rise of China. On the petroleum side, the price of oil recently reached $60 a barrel. In light of oil prices and an obvious mistrust of China, Gal Luft, the executive director of Institute for the Analysis of Global Security, has called a CNOOC acquisition of Unocal "suicidal," explaining:
It's not the government of Japan or France... We want to think about the fact that an American company falls in the hands of the Communist government of China.

Others are worried about it as yet another sign of China's economic rise. The concern and resentment from Americans over China's rise is identical to America's feelings toward Japan's rise two decades earlier. An implicit accusation of not playing fair is never far behind.
Mainland China's top companies are becoming increasingly ambitious and aggressive in their pursuit of foreign assets, their competitiveness boosted by ready access to (effectively free) state cash. [from The Economist; for more on accusations of government support, see here]

Its not just pundits and talking heads that are concerned:

A letter to Treasury Secretary John Snow was circulating in Congress on Thursday calling on the Bush administration to investigate the national security implications of the proposed deal. It was signed by Reps. William J. Jefferson, D-La.; Al Green, D-Texas; Bobby Jindal, R-La.; and Kevin Brady, R-Texas. [from the Washington Post]

The WaPo article continues, quoting C. Richard D'Amato, chairman of the U.S.-China Economic and Security Review Commission:
It's not a business transaction at all... This is not a free market deal. This is the Chinese government acquiring energy resources. This is not a free market deal. This is the Chinese government acquiring energy resources.

This protectionist panic, however, is entirely unnecessary. The underlying concern for energy security is that China, who many American policymakers view as less than friendly, might try to deny America access to the oil the United States needs to keep its economy running. This is absurd. To quote a three year old article from the Christian Science Monitor about why an Arab embargo wouldn't work (keep in mind that the Arab nations control a vastly greater segment of the world's oil reserves than China could ever imagine):
As a general rule, embargoes won't work, energy analysts say, because there is basically one world market for oil, the New York Mercantile Exchange. That means countries that cut back on their shipments of crude to the United States can still end up having their oil arrive in US ports."Oil is fungible," says Adam Sieminski of Deutsche Banc Alex. Brown in Baltimore. "Once it is produced and loaded on a tanker, the buyers can change its port of call."

That oil is a fungible commodity is a very simple concept, but a very important one often overlooked. Therefore, unless you are a neo-Malthusian, there is no cause for concern. If you are a neo-Malthusian, read this CATO report (PDF) and join the rest of us in not worrying.

Updates
:
  • China Matters has a good post on this subject, which includes this quote from the LA Times:
    Not long ago, China was a net exporter of oil, but its growing need for imported oil is one reason crude is trading at $60 a barrel. As the nation emerges from poverty into the global middle class, it is natural that China's consumption of global resources starts mirroring its one-fifth share of global population. For well over half a century, ensuring sufficient reserves and a steady flow of oil has been a cornerstone of U.S. foreign policy. China now has to think in similar ways. Rather than leading to a zero-sum showdown, this affinity of interests between the two nations, if handled properly, could strengthen the relationship

  • Cranky Neocon humorously and pictographically represents the balance of trade between the US and China.

  • Respected economist (and not so respected political columnist) Paul Krugman addresses the CNOOC bid.

  • The House voted 398-15 for
    a resolution stating that Chinese ownership of Unocal would 'threaten to impair the national security of the United States' and that approval by Unocal's board of the bid should result in a 'thorough review' by President George W. Bush.


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Friday, June 17, 2005

Triangular Relations: US, China, & Israel

An 11 June article from the Jerusalem Post (article is no longer available from the JPost site but is available here) discusses the Israel-US friction over Israeli arms sales to China and indicates a solution has been found:
Israel has agreed to a de facto US veto on some defense sales by Israel.
Lest one misunderestimate the significance of this agreement:
Reporting on Israeli sales of arms to Washington represented the first time Israel would do so to a foreign power.
If true, this will go a long way towards healing the fissures that have formed in the last few months. An article from Voice of America, however, indicates that this issue hasn't been laid to rest just yet.
Israel says its dispute with the United States over its sales of military technology China will soon be worked out... After several days of silence on the issue, Israeli government officials told journalists that Israel is, as one put it, "attentive to American concerns."
Background
As this matter has been underreported in the American news media from the start, allow me to recap how the three powers got to this point. A Power and Interest News Report (PINR)report titled "Return of the Red Card" does a great job of covering the history of this issue as of mid-May including the sale by Israel of Phalcon Airborne Warning and Control Systems (AWACS) to China, which America convinced Israel to back out of at the last minute and accusations that Israel shared various American-developed defense technology and know-how with China.
This particular spat began when some Chinese-owned Harpy unmanned aerial vehicles (UAVs) were spotted in Israel receiving repairs and/or upgrades. Israel had sold the Harpys to China a decade ago, but had not informed America. The Chinese Harpys were spotted in an exercise last year by American intelligence.
In retaliation for such Israeli sales to China and citing a lack of trust, the United States cut Israel out of the group of countries cooperating to develop the F-35 Joint Strike Fighter. The developing countries are also to be the first to receive JSFs when it comes into service around 2008.
Shortly after that news broke, Israel and America worked out a compromise. From the PINR report:
Israel, however, eventually bowed to American dictates. After weeks of wrangling, pressure tactics and behind the scene negotiations, the issue was resolved. While China was keen to upgrade the Harpy assault drone, the U.S. demanded Israel "confiscate" it. Israel settled for a compromise and, according to a senior Chinese official, returned the drone without upgrading.
Update:It appears the problem has been worked out.


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Monday, June 13, 2005

New to US-China-Taiwan Issues?

I stumbled across a website today that I thought might be of use to some who are new to US-China-Taiwan issues (or just enjoy a good debate). It is called the IDEA Debatabase and is intended for use with debating teams. There are quite a few interesting issues listed with pros and cons of each issue presented in a fairly balanced manner and some sources at the bottom for more information. They have one or more topics for each of the three countries under discussion here.
  • Is the USA a threat to world stability or a political force for good? (link)
  • Does China give the rest of the world reasons for fear, in political, economic or social terms? Or is the 'Terror from the East' merely a myth? (link)
  • Should Taiwan declare independence? (link)
Take a look.


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Killing a Carrier

There has been a lot of talk of China sinking an American aircraft carrier since Richard Fischer of the Jamestown Foundation set the China-watching community ablaze in 2002 with his article "To Take Taiwan, First Kill a Carrier" (Jamestown Foundations' China Brief, Volume 2 , Issue 14; only the introduction is available online). Would China sink a carrier? Can they do it? What would happen if they did?
Intention
America has twelve aircraft carriers with more sitting in mothballs awaiting reactivation. Taiwan is an "unsinkable carrier," as is Japan. America is not going to run out of platforms from which to launch its aircraft. So why all the talk of sinking a carrier? From the American Prospect, comes this:
China's strategists think they may have the key to overcoming the United States: sinking a U.S. aircraft carrier. Chinese Major General Huang Bin explained the reasoning: 'Once we decide to use force against Taiwan, we definitely will consider an intervention by the United States. The United States likes vain glory; if one of its aircraft carriers should be attacked and destroyed, people in the United States would begin to complain and quarrel loudly, and the U.S. president would find the going harder and harder.'
This same quote was in Fischer's original article and has played a large role in convincing Americans that this is something to worry about. It might be worthwhile to find out if this is actual policy or just one general running off at the mouth (Unrestricted Warfare (pdf) comes to mind, in which two PLA colonels go on and on about every possible way they can dream up to hurt the United States, international law and reality be damned). On what was presumably a different occasion, the same PLA general elaborated:
Once a military conflict occurs in the Taiwan Strait, the United States certainly will intervene, but the scale will be limited. The United States may send several aircraft-carrier battle groups, but they will never dare to sail to the Taiwan Strait [itself, as this would put them] into a dangerous position. Missiles, aircraft and submarines are all means that can be used to attack an aircraft carrier. [In 1996] U.S. aircraft carriers arrived but suddenly fell back by 200 nautical miles, because Chinese nuclear submarines were operating close to the U.S. aircraft carriers.... Once [the carriers are] threatened, [the United States] will run away.
It seems that this idea (that killing a carrier is enough to sink America's desire to defend Taiwan) is held by at least one general. To what degree this is institutionalized is unknown (at least to this blogger). It has been mentioned as one aspect of ShaShouJian research (eg: this article (PDF) by Michael Pillsbury). On the other hand, it didn't make the cut for one of the cut as one of the "three attacks & three defenses”. For more information on "three attacks & three defenses”, see this post on Chinese anti-stealth research, which did make the list. So maybe China has the desire (if a war arose) to sink a carrier, but can they do it?
Capability
The Russian-made Sovremenny destroyer is equipped with the Sunburn anti-ship missile (ASM), an air breathing version of the Moskit which travels up to Mach 3 and is three-times faster in the water than the American Harpoon (details here). The Sunburn-armed Sovremenny has been nicknamed the "Aegis Killer" or "Aircraft Carrier Killer" because its speed makes it so hard to defend against.
As if the situation weren't already worrying enough, "China's 'Tsushima' Anticarrier Strategy" reports:
Moscow recently agreed to sell China the supersonic SS-N-26 Yakhont missile, which is even more awe-inspiring than the Sunburn and, once launched, cannot be intercepted. (link added)
At the present, China has two Sovremennys (or is it Sovremennies, I don't know Russian grammar) and will take the delivery of two more before 2006 ends. Granted, in the event of a war, the Sovremennys would likely rank high on the American target list and certainly wouldn't be allowed in the vicinity of the USS Kitty Hawk and whatever other carrier(s) is called upon for the mission if America could help it.
Submarines are a trickier issue. Rather than diving straight into one of the most worrying trends in PLA modernization this deep in a post, I will refer you to a fantastic article on the subject by Lyle Goldstein and William Murray in International Security (Spring 2004) named "Undersea Dragons: China's Maturing Submarine Force" (8USD download). I hope the publishers of IS won't mind if I offer a little preview:
A Chinese appraisal of future naval warfare concludes, "The prospect for using submarines is good, because of their covertness and power... Submarines are menaces existing anywhere at any time." According to another Chinese analyst, "Submarines are the maritime weapons posing the greatest threat to an aircraft carrier formation. Submarines are also our navy's core force." (ellipses in original)

Effect of Sinking a Carrier
That leaves one major question remaining: How would an America that loses an aircraft carrier respond? Would it be reminiscent of Pearl Harbor or Somalia? Those on both sides find their answer in Iraq. The Pearl Harbor School claims that the current war in Iraq has disproven the myth of a Vietnam Syndome of casualty aversion. The Somali School claims that the United States is so tied up in the Middle East that it would have no choice but to cut its losses if challenged elsewhere in the world. I'll leave the answer up to you, but hopefully we will never know the answer to that question.


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CCP is China's Kryptonite

An entertaining piece from the always amusing and often thought-provoking Mark Steyn. Excerpts:
"If I were a young journalist today, figuring out where I should go to make my career, I would go to China," said Philip Bennett, the Washington Post's managing editor, in a fawning interview with the People's Daily in Beijing a few weeks back. "I think China is the best place in the world to be an American journalist right now."
Really? Tell it to Zhao Yan of the New York Times' Beijing bureau, who was arrested last September and has been held without trial ever since.

If the People's Republic is now the workshop of the world, the Communist Party is the bull in its own China shop
And if that wasn't clear enough...
Anti-Americans betting on Beijing will find the China shop is in the end mostly a lot of bull.


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Sunday, June 12, 2005

Big Mac Index & China

The Economist has released Big Mac Index 2005. For those of you not familiar with the concept, a pair of Wikipedia links are in order: The Big Mac Index is a measure of Purchasing Power Parity (PPP). Since the article accompanying this year's index doesn't explain it well, allow me to quote the explanation with the 2004 Index:
How fast is the world economy growing? How important is China as an engine of growth? How much richer is the average person in America than in China? The answers to these huge questions depend crucially on how you convert the value of output in different countries into a common currency. Converting national GDPs into dollars at market exchange rates is misleading. Prices tend to be lower in poor economies, so a dollar of spending in China, say, is worth a lot more than a dollar in America. A better method is to use purchasing-power parities (PPP), which take account of price differences.
Using a Big Mac to measure PPP may seem too simple to be real economics, but in fact it is one of the most accurate measures of PPP. Why? The Big Mac's ingredient list (two all beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun) is the perfect identical "basket of goods." Again from the 2004 writeup:
The theory of purchasing-power parity says that in the long run exchange rates should move towards rates that would equalise the prices of an identical basket of goods and services in any two countries. This is the thinking behind The Economist's Big Mac index. Invented in 1986 as a light-hearted guide to whether currencies are at their “correct” level, our “basket” is a McDonalds' Big Mac, which is produced locally in almost 120 countries.
For those of you who need formulas and economics jargon to trust its authenticity, you can find a research paper on the subject here (PDF).
The impetus for the economics lesson is one of The Economist's conclusions (from this year's report):
If he could keep the burgers fresh, an ingenious arbitrageur could buy Big Macs for the equivalent of $1.27 in China, whose yuan is the most undervalued currency in our table, and sell them for $5.05 in Switzerland, whose franc is the most overvalued currency.

Why Does It Matter?
The proper exchange rate between the yuan and the dollar has been a hot topic of conversation in the last year. The finding that the yuan is "the most undervalued currency" of the nearly seventy studied should support the American position. Many, including some American politicians, have blamed the exchange rate being favorable to Chinese exports as a cause of the large, and growing, trade imbalances between the two nations.
What Do We Do (If Anything)?
Senator Charles Schumer (D, NY) has been most vociferous in criticizing the policy and has offered a solution. According to the WaPo article:
Schumer is co-author of a bill that threatens China with a 27.5 percent across-the-board tariff on U.S. imports of Chinese goods if it does not revalue its currency, the yuan.
Could such a bill pass? Is there support for it in the Senate? Again from the WaPo article:
That measure attracted 67 votes in the Senate this year before it was withdrawn. Schumer and Sen. Lindsey Graham, a South Carolina Republican, have been promised a second vote on the bill before the end of July.
The popularity of this bill has led The Economist to wonder if Congress is turning protectionist. As The Economist article points out:
Not only is the legislation utterly against WTO rules, it would cause havoc for the American economy. But Mr Schumer has been promised a vote by July, and his bill may well pass the Senate.
Whether in the form of this bill or some other coercive measure, it appears the United States is determined to have China revalue its currency. But that just brings about another question...
Will It Solve The Problem?
According to the Cleveland Fed's Economic Trends report (pdf) answering this question involves "non-deliverable forwards." Since I haven't a clue what that means, I will just quote from another part of the report:
The question, of course, is in what direction and to what degree the currencies will depart from the present fixed exchange rate, when - and if - the Chinese government alters the peg. Some market observers are convinced... (emphasis added)
I take that to mean that they don't know the answer either.
Will There Be Side-Effects?
There is a twist to this talk of cheap exports (as explained by The Economist):
Today, America is the world's biggest debtor, with China as an important creditor. A sharp reversal in China's appetite for American Treasury bonds could send interest rates soaring.
For a worst-case scenario of where such a loss of appetite would lead, I refer you to Paul Krugman:
Here's what I think will happen if and when China changes its currency policy, and those cheap loans are no longer available. U.S. interest rates will rise; the housing bubble will probably burst; construction employment and consumer spending will both fall; falling home prices may lead to a wave of bankruptcies. And we'll suddenly wonder why anyone thought financing the budget deficit was easy.

Others have speculated that China would just be opening itself up to currency speculation, which has been a dirty word in Asia since 1997. Hong Kong's The Standard offers a solution to the latter problem: pegging the yuan to gold.
Addendums
And now for a few extra links that just didn't fit in the above:
In a post entitled "Reevaluating a Renminbi Revaluation," Cynic's Delight points out that in addition to the peg, we should be watching the rates of inflation inside China.
To keep track of this issue in the days and weeks ahead, just click here for all the latest courtesy of Google News.
Conclusion
My conclusion is that I don't know the answer. Therefore, my question to you, my wonderful readers, is two-fold: (A) Is this really a problem? Phrased more generally, is a trade deficit inherently bad? (B) What, if anything, should be done about it?


Updates
:
  • The Economist has an article (subscription required) wondering if the yuan isn't as undervalued as we think. Excerpt:
    Using a range of yardsticks, the International Monetary Fund reckons, like the BEER studies, that it is hard to find strong evidence that the yuan is much undervalued.
  • Wen Jiabao says no to revaluation.
  • Senators back down.


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Saturday, June 11, 2005

ShaShouJian

ShaShouJian is often translated as "killer application" in computer circles, but to PLA-watchers it represents a class of weapons sought by the Chinese for use, or threat of use, against a superior adversary (read 'America') in the event of a war. In the defense field, ShaShouJian is often translated to "silver bullet weapons" or "trump cards," or more literally "Assassin's Mace" weapons, or (translated character-by-character) "Kill-Hand-Mace" weapons. Some people, who think that ShaShouJian is all smoke and mirrors translate it as "magic weapons."

One of the clearest and most concise explanations of this concept I have found was at a blog named Knight of the Mind:
Based on a doctrine called "The Inferior Defeats The Superior" when roughly translated from Chinese, this doctrine calls for the Chinese military to develop a series of weapon systems that enable it to neutralize the C4I advantages of a superior, more modern, military force so that the battle can occur on a lower technology battlefield.

Additionally, it seems that Mr. Jason E. Bruzdzinski of MITRE has done extensive research of the topic, presenting his results in this testimony and this briefing (PDF). I'm glad to see that not everyone is settling for:
What actually classifies as an "assassin's mace" weapon is unclear.
-FY04 Report to Congress on PRC Military Power (PDF)

No one seems to know for sure if ShaShouJian is a weapon, a doctrine, or an RD&A program. Bruzdzinski's briefing supports the notion that this is a PLA research program seeking to find any weapon system that will give them a leg up on the United States militarily (which seems similar to earlier discussion of "pockets of excellence"). I find this to be the most likely explanation of ShaShouJian. It isn't a weapon or doctrine, but rather a program aimed at finding the silver bullet that they know they need if they seek to compete with the far superior American military.

Update: The 2005 Report to Congress on PRC Military Power again mentions ShaShouJian. The Jamestown Foundation, however, determines that the concept isn't all that unique:
Leveraging one's advantages while exploiting enemy weakness is not a unique insight into the conduct of war. While "Assassin's Mace" weapons are often perceived to be exotic technologies, such as high powered microwave weapons, electromagnetic pulse, or maneuverable warheads, the Chinese consider a much broader range of weapons to be "Assassin's Mace," including fighter bombers, submarines, anti-ship missiles, torpedoes, mines, nuclear weapons, and even rapid runway repair equipment. One American observer quoted a PLA officer that sha shou jian can be "whatever the PLA needs to win future local wars" [...] In this regard, the Chinese concept of "Assassin's Mace" is not that remarkable.


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Friday, June 10, 2005

Rumsfeld's Remarks & Gertz's Gibberish

RUMSFELD
If you have glanced at any newspaper, blog, or nightly news program in the last couple days, you have undoubtedly seen the news about Secretary Rumsfeld's comments on China while he was in Singapore. The best coverage is this article in this week's Economist entitled "Casus Belli." The article posits that Rumsfeld concerns
may be the cause for the last-minute delay in the release of an annual Pentagon report on Chinese military capabilities.
As it is unlikely that this is a stunt aimed at driving up the readership of the upcoming report, I will be interested to read the new report to see what new it has to say. I'll hold off on analysis until I read the report. (The full text of Rumsfeld's address can be found here.)


GERTZ
Adding fuel to the fire is this article by Bill Gertz of the everything-China-does-is-a-threat school (his book China Threat earned him that title).
A highly classified intelligence report produced for the new director of national intelligence concludes that U.S. spy agencies failed to recognize several key military developments in China in the past decade, The Washington Times has learned,
writes Gertz. He lists six key "failures" and comments that:
the word 'surprise' is used more than a dozen times to describe U.S. failures to anticipate or discover Chinese arms development.
While I won't criticize a report written by highly respected China analysts the likes of Robert Suettinger and John Culver without having read the paper itself, I will say that the WaTimes article's description of the "failures" without giving a time frame or specific weapon systems makes it hard to refute or verify. It is worthwhile to examine each "failure" individually.
The First "Failure"
China's development of a new long-range cruise missile.
This brings a couple questions to mind:
Was this a failure to anticipate or a failure to discover? Did we not know it existed or not know it was deployed or not guess accurately the week in which it would be first shown to the public or what?
Which long-range cruise missile are we talking about? This article for example, mentions two relatively new additions to China's long range cruise missile forces (one "based on the Russian Kh-65SE air-launched cruise missile" and the other "a derivative of the Chinese C-802 ASCM"). Is it one of those or some other missile that we don't even know about?
The Second "Failure"
The deployment of a new warship equipped with a stolen Chinese version of the U.S. Aegis battle management technology.
Always be wary of anyone describing something as the "Chinese version of" anything! Taiwanese are fond of calling betel nuts "Chinese chewing gum." I don't think, however, the average American fan of Bubblicious would like the nutty carcinogenic stimulant. Likewise, just by calling something Aegis-esque doesn't mean that it has been shown to have similar capabilities with the American system. (For those unfamiliar with the Aegis Combat System, see explanations by Wikipedia and FAS.) A little internet searching leads me to believe he is speaking of the Lanzhou Class Destroyer (Type 052C). An article at China Defence Today likewise attributes to it: "four-array multifunction phased array radar (PAR) similar to the U.S. AN/SPY-1 Aegis." Without more explanation of in what regard it is similar to the Aegis Combat System, it is hard to evaluate the system (and how afraid the US Navy should be). It has the same mission, does that qualify it as "similar"? Is it as capable as the Aegis? Can it simultaneously find and track one hundred moving targets and seamlessly interact with the weapon systems to destroy them? The closest the article comes to an answer is claiming that the Lanzhou's PAR has a "similar arrangement" to Aegis. Back to the Gertz article, did we fail to recognize the development of this system or its deployment? (Note: This system has only been deployed on one ship, the DDG170 Lanzhou, with one more due for commissioning this year, the DDG171.) Basically, the latest Arleigh Burke destroyers are operating on version, known in navy talk as Baseline, 7.1; how about the Chinese system?
The Third "Failure"
Deployment of a new attack submarine known as the Yuan class that was missed by U.S. intelligence until photos of the submarine appeared on the Internet.
This one seems particulary embarassing. The original story was broken by the WaTimes according to Janes and Stratfor. Here is a little more information from the Stratfor article:
China also has produced a new type of attack submarine that U.S. defense and intelligence officials say their agencies had not realized was under construction. The submarine appears to be a hybrid of Chinese and Russian technology. It was spotted for the first time several weeks ago and has been designated by the Pentagon as the first Yuan class of submarine. A photograph of the completed submarine in the water at China's Wuhan shipyard was posted on a Chinese Internet site this week and -- according to the Washington Times -- was confirmed by a defense official as the new Yuan class.
That is quite an embarrassment. More information on the Yuan class submarine can be found here.
The Fourth "Failure"
Development of precision-guided munitions, including new air-to-ground missiles and new, more accurate warheads.

That is believable and I have no information to offer to either confirm or deny. My guess is that it just means their missiles are getting better (which shouldn't surprise anyone), but don't fool yourself into thinking that the Chinese definition of "precision" and America's are the same.
The Fifth "Failure"
China's development of surface-to-surface missiles for targeting U.S. aircraft carrier battle groups.
This is an extremely interesting topic and I will refrain from addressing it in this post so as to address it in more detail in a later post.
The Sixth & Final "Failure"
The importation of advanced weaponry, including Russian submarines, warships and fighter-bombers.
I find this one particularly hard to believe. Is there a specific weapon system that we didn't know Russia was selling them? We know there is a Russian yardsale on military weaponry and China is buying like mad. That condition hasn't changed for more than a decade. If he wanted to discuss how the Israeli sale of Harpy unmanned aerial vehicles (UAVs) caught us by surprise (news was first broken by Gertz in 2002 and finally confirmed in 2004) or before that the Israeli attempt to sell AWACS, then I would find him completely justified but to make it out like Russian sales of "submarines, warships, and fighter-bombers" on the whole was a surprise is beyond absurd.
Update: For more information about the Israeli attempt to sell China AWACS, see this post.


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USAF vs. Sukhoi's Best

The United States is currently building two fifth generation fighters: the F-22 Raptor and the F-35 Joint Strike Fighter. The features (some of which are undoubtedly classified) are a hot topic of discussion because it appears that the F-15 (our current front-line fighter) might not be able to best the latest our possible opponents have to offer.

Cope India
It appears that in the 2004 Cope India exercises, the Indian Air Force (IAF) taught the USAF that it can't afford to rest on its laurels. According to Global Security's Cope India page, the American and Indian air forces conducted
Dissimilar Air Combat Training, otherwise known as DACT [which] is simulated combat flying between two different types of aircraft.
The DACT included our fourth generation fighters (specifically F-15C Eagles), which didn't perform as well as one might hope against IAF fighters. The specific IAF aircraft participating, according to Global Security, were the Mirage 2000, MiG-21, MiG-27 and SU-30. Of those, the Sukhoi fighter is the one keeping American pundits up at night.
According to the captain coordinating the exercise (quoted in this article),
The U.S. Air Force has never flown with or against the SU-30 Flanker before.
For further discussion of these exercises, see these posts from Lawyers, Guns & Money here and here

Flanker Family of Fighters
Some background information on Sukhoi's fighters is in order. The Flanker family of fighters has numerous variations (enough to be quite confusing, see here for a dated and not necessarily authoritative account of all the variants of the Flanker), but can be divided into three main categories:
Flanker (Su-27, Su-30)
This fighter was first flown in 1977 and designated the T-10. The Super Flanker and Berkut are updated versions of the same basic design. Currently, Russia, China, India, and other assorted countries including Ethiopia fly the Su-27.
Super Flanker (Su-37)
The key improvement over the Flanker is "The aircraft's 3-D thrust vectoring engine nozzles allow for increased maneuverability in combat" according to Wikipedia's entry on the Su-37.
Berkut (Su-47)
The Berkut is new enough that not much is known about it. It is not currently in service in any country.

Conclusion
From David Shambaugh's Modernizing China's Military comes some good news on this front:
Chinese pilots, including those flying the Su-27, receive less than 100 hours of air time per year, rarely practice with live ammunition or in close combat, and almost never fly in bad weather conditions. (265)
It seems this isn't a crisis just yet, but it is clearly an issue worth watching. Expect continuing discussion of this and related issues here at MeiZhongTai.


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China's Petrodiplomacy

Almost two weeks back, Taipei Times had an article entitled "China's 'energy diplomacy' hurts Taiwan, experts say." China's moves to secure a reliable energy supply to feed their rapidly growing energy consumption is considerably more interesting and important than that short article would lead a reader to believe.
If I could offer a sentence from Thomas Friedman's The World is Flat to set the scene:
China's foreign policy today consists of two things: preventing Taiwan from becoming independent and searching for oil. China is now obsessed with acquiring secure oil supplies from countries that would not retaliate against China if it invaded Taiwan, and this is driving China to get cozy with some of the worst regimes in the world. (409)
This is an issue of growing importance in the world. Don't worry about Neo-Malthusian predictions that America and China will be competing for a limited oil supply, thus leading to conflict. More worrying to non-Malthusians is China's growing dependence on oil imports, which has caused it to seek to strengthen its relations with oil producing nations, often through the use of arms sales. This increased consumption and geopolitical positioning will increasingly draw China into competition with the United States, but any resulting friction will likely have originated with arms trade, not issues specifically related to oil.
For an in depth examination of China's energy consumption, see Bernard Cole's Oil for the Lamps of China from NDU's McNair Papers series (available in HTML or PDF).


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Tuesday, June 07, 2005

Anniversary of the Tiananmen Square Massacre

I was away for the anniversary (June 4th) itself, but as I can't top the commemoration roundup at Simon World, I'll just link to his post. I'm also blogrolling Simon effective immediately.


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