Tag Archive for: China

The limits of Capitalism with Communist characteristics

7 March 2016

As US President Barack Obama prepares to embark on an historic visit to Cuba, the future of the communist-ruled island is the subject of widespread speculation. Some observers are hoping that the ongoing shift toward capitalism, which has been occurring very gradually for five years under Raúl Castro’s direction, will naturally lead Cuba toward democracy. Experience suggests otherwise.

In fact, economic liberalization is far from a surefire route to democracy. Nothing better illustrates this than the world’s largest and oldest autocracy, China, where the Chinese Communist Party (CCP) maintains its monopoly on power, even as pro-market reforms have enabled its economy to surge. (A key beneficiary of this process has been the Chinese military.)

The belief that capitalism automatically brings democracy implies an ideological connection between the two. But the dominance of the CCP—which currently boasts 88 million members, more than Germany’s total population—is no longer rooted in ideology. The Party, represented by a cloistered oligarchy, endures by employing a variety of instruments—coercive, organizational, and
remunerative—to preclude the emergence of organized opposition.

A 2013 party circular known as ‘Document No. 9’ listed seven threats to the CCP’s leadership that President Xi Jinping intends to eliminate. These include espousal of ‘Western constitutional democracy,’ promotion of ‘universal values’ of human rights, encouragement of ‘civil society,’ ‘nihilist’ criticisms of the party’s past, and endorsement of ‘Western news values.’

In short, communism is now focused less on what it is—that is, its ideology—and more on what it is not. Its representatives are committed, above all, to holding on to political power—an effort that the economic prosperity brought by capitalism supports, by helping to stave off popular demands for change.

The story is similar in Vietnam and Laos. Both began decentralizing economic control and encouraging private enterprise in the late 1980s, and are now among Asia’s fastest-growing economies. Vietnam is even a member of the incipient 12-country Trans-Pacific Partnership. But the one-party state remains entrenched, and continues to engage in considerable political repression.

Things do not seem set to change anytime soon. In Vietnam, Nguyễn Tấn Dũng, the reform-minded prime minister, recently failed in his bid to become General Secretary of the Communist Party (the country’s supreme leader); the 12th National Congress reelected the incumbent, Nguyễn Phú Trọng.

Beyond providing sufficient material gains to keep the population satisfied, capitalism strengthens a communist-ruled state’s capacity to increase internal repression and control information. One example is the notorious ‘Great Firewall of China,’ a government operation that screens and blocks Internet content, creating a realm of politically sanitized information for citizens. China is the only major country in the world whose official internal-security budget is larger than its official national-defense budget.

In the face of China’s current economic turmoil, control of information has become more important than ever. In order to forestall potential challenges, China’s leadership has increasingly muzzled the press, limiting, in particular, reporting or commentary that could adversely affect stock prices or the currency. Xi has asked journalists to pledge ‘absolute loyalty’ to the CCP, and closely follow its leadership in ‘thought, politics, and action.’ A state-run newspaper, warning that ‘the legitimacy of the party might decline,’ argued that the ‘nation’s media outlets are essential to
political stability.’

Clearly, where communists call the shots, the development of a free market for goods and services does not necessarily lead to the emergence of a marketplace of ideas. Even Nepal, a communist-dominated country that holds elections, has been unable to translate economic liberalization into a credible democratic transition. Instead, the country’s politics remain in a state of flux, with political and constitutional crises undermining its reputation as a Shangri-La and threatening to turn it into a failed state.

Democracy and communism are, it seems, mutually exclusive. But capitalism and communism clearly are not—and that could be very dangerous.

In fact, the marriage of capitalism and communism, spearheaded by China, has spawned a new political model that represents the first direct challenge to liberal democracy since Fascism: authoritarian capitalism. With its spectacular rise to become a leading global power in little more than a single generation, China has convinced autocratic regimes everywhere that authoritarian capitalism—or, as Chinese leaders call it, ‘socialism with Chinese characteristics’—is the fastest and smoothest route to prosperity and stability, far superior to messy electoral politics. This may help to explain why the spread of democracy worldwide has lately stalled.

Obama’s impending Cuba visit should be welcomed as a sign of the end of America’s inapt policy of isolation—a development that could open the way to lifting the 55-year-old trade embargo against the country. But it would be a serious mistake to assume that Cuba’s economic opening, advanced by the Obama-initiated rapprochement, will necessarily usher in a new political era in Cuba.

Solving the China puzzle

29 February 2016

China’s role in the world continues to evolve strategically and economically. For those watching from a safe distance—such as the capitals of Europe—China’s strategic trajectory doesn’t even rate a mention amid the scramble for profit. In contrast, for those of us in Asia, the warm glow of the Chinese economy is tinged by growing strategic uncertainty.

A good many commentators contend that China’s rise necessitates a regional ‘security architecture’. To be honest, the notion escapes me; we already have an alphabet soup of largely ineffective regional summits, and it’s fanciful to think that countries will surrender a skerrick of their sovereignty to a new super-national entity. Asia isn’t Europe. Moreover, references to architecture implies design, yet, in the absence of a grand bargain—like Kissinger and Mao circa 1972—China’s role is more likely to evolve through piecemeal negotiation and, I fear, crises that progressively define the limits of its (and other’s) freedom of action.

While it’s fashionable to ignore the ideological differences between China and liberal democracies such as Australia, I think that the differences matter when it comes to China’s emerging role. I contend that the ideology of the CCP will, in and of itself, predispose it to pursue a particular sort of role for China in the international system.

In the aftermath of WWII, the US led the creation of an international system that broadly mirrored its own domestic constitution. At its heart was a rules based-system built upon the prohibition of economic and physical coercion. Of course, the US has often used its power to go outside of the system it created, though less frequently than it could have, and most usually out of folly rather than self-interest. Indeed, despite the vagaries of US exceptionalism, the US crafted an international system in its own image, one in which the nations of the world are effectively accorded the rights of citizens.

In a perverse way, China appears to have a similar vision of how the world should work; except that the Chinese leadership has a very different relationship with its citizens. While the US recognises clear limits on the power of government—including multiple checks and balances—no such constraint inhibits the absolute power that the CCP exerts over its people. It’s a case of Magna Carta verses Heavenly Mandate. Consistent with a domestic worldview of self-legitimised and unbridled central power, China’s vision for an Asian security architecture centres on its so-called ‘new model of great power relations’, which amounts to turning Asia into a Sino–US power-sharing condominium (and probably only so long as it takes to eject the US holus bolus out of the region).

The US is unlikely to accept a grand bargain based around a G2—such a move would run against its vision of the world and of itself. Instead, to use a hackneyed phrase, we will surely see a mixture of cooperation and competition. Where agreement can be found—such as trade—China will continue to integrate into the global community. Where agreement can’t be found—such as in the South China Sea—there will be competition. By negotiation and sharp-elbowed jostling, the freedom of action of nations large and small will be decided.

So far, in terms of both cooperation and competition, the US and its partners, Australia included, have played their cards poorly—and they were dealt a bad hand to begin with.

On the cooperation side, it’s a story of lost opportunities. In particular, the West has been far too slow in according China a role in global economic governance commensurate with the size of its economy. To make matters worse, the US chose to sell the Trans-Pacific Partnership as a zero-sum blocking of Chinese influence, rather than as a compliment to the other regional trade initiatives. Most visibly, the failed US attempt to block the Chinese-sponsored Asian Infrastructure Investment Bank resulted in an own-goal for the Americans.

As far as competition goes, it’s largely a one-sided affair. China has asserted itself in the South China Sea and the region has wrung its hands. The much vaulted freedom of navigation operations by the US were as tardy as they were ambiguous, and have made no difference to the facts on the (newly dredged) ground. Worse still, nobody else has had the guts to follow suit. In fairness, the limp response reflects the ambiguity of the situation. China has generated a low-level crisis below the threshold that would justify a robust response. Nonetheless, the US has been left looking impotent and the region un-united. Nobody said the game was going to be fair.

There’s no doubt that there’s more the West can and should do to engage China constructively on economic issues. With an emerging-market debt crisis on the horizon, we should be talking with China now about how to contain the damage. We have to do better than the botched Western response to the 1997 Asian Financial Crisis.

In terms of the emerging strategic competition, the game will be won or lost by the extent to which the US and its partners are willing to stand up to China. The critical question is how much risk we are willing to take to impose costs on China. The answer, to date, is very little.

The 2016 Defence White Paper, China and East Asia: the end of an illusion

25 February 2016

The strategic narrative of Australia’s new Defence White Paper contains some interesting new aspects. One is the expression of much greater concern about the emerging maritime order in East Asia and China’s growing willingness to alter the status quo. In fact, the document reflects the end of the illusion in Canberra that somehow China will continue to accept the (predominantly) Western rules-based maritime order.

The previous two Defence White Papers had quite different things to say about China. The Rudd government’s 2009 version used fairly strong language on China’s evolving security challenge for the regional order. The Chinese reportedly weren’t amused. Four years later, the Gillard government markedly toned down the rhetoric, noting that China’s military modernisation was to be expected of a growing major power. It’s reasonable to assume that just like the US-administration of Barack Obama, the Australian government at the time still had hopes that China would emerge as a ‘responsible stakeholder’ in maritime Asia.

However, since then China has made abundantly clear that it doesn’t accept the established rules in maritime East Asia. Evidence for a growing assertiveness includes Beijing’s unilateral declaration of an East China Sea Air Defense Identification Zone in November 2013 which drew a strong response from the Abbott government; the creation and militarisation of artificial structures and disputed islands in the South China Sea (SCS); and attempts to coerce its smaller Southeast Asian neighbours into accepting its massive claims within its so-called ‘nine-dash line’.

Australia’s response has been to demand the freedom of navigation in the air and sea in and around the disputed territories, to call for stop of all land reclamation activities, and to support US Freedom of Navigation Operations (FONOPs). It has also continued its own patrols in the SCS and has supported the Philippine arbitration case against China.

As a consequence, the new Defence White Paper reflects the reality in maritime East Asia that China has moved to re-write the rules to fit its strategic preferences and historical narratives. As Peter Jennings points out, the document overall is ‘measured and restrained’ when addressing China directly, stressing repeatedly that Beijing still has an opportunity to play a constructive role in regional peace and stability. However, not only does the White Paper criticise China directly in some places; it also contains some strong messages on China without using the ‘C’ word, making it unmistakably clear that Canberra’s assessment about Beijing’s strategic trajectory has become more pessimistic.

Central to this assessment is the White Paper’s strong emphasis on the profound challenges to the rules-based global order:

‘The framework of the rules-based global order is under increasing pressure and has shown signs of fragility…newly powerful countries want greater influence and to challenge some of the rules in the global architecture established some 70 years ago…some countries…have sought to challenge the rules that govern actions in the global commons of the high seas, cyberspace and space in unhelpful ways, leading to uncertainty and tensions.’

No genius is required to figure out that China is one of those ‘newly powerful countries’. While Russia’s actions have destabilised Europe, China has started to undermine the regional rules-based order in maritime Asia—and the white paper points this out unequivocally. It states that Australia ‘opposes the use of artificial structures in the South China Sea for military purposes’. While theoretically that includes other claimants such as Vietnam or the Philippines, the document goes on to specify that Australia is ‘particularly concerned by the unprecedented pace and scale of China’s land reclamation activities’.

When it comes to the East China Sea, the White Paper also leaves little doubt, pointing out that ‘China’s 2013 unilateral declaration of an Air Defence Identification Zone in the East China Sea…caused tension to rise. Australia is opposed to any coercive or unilateral actions to change the status quo in the East China Sea’. Moreover, the document stresses that these challenges to the rules-based regional order are by no means trivial:

‘The coercive use of economic or military power can diminish the freedom of countries such as Australia to take independent action in our national interest. The Government is committed to working with the United States and like-minded partners to maintain the rules-based order by making practical and meaningful military contributions where it is in our interest to do so.’

The 2016 Defence White Paper is thus much more specific about the nature of China’s security challenge to regional and Australia’s security than any of its predecessors, without labelling China explicitly as a threat. Yet, that was never the purpose of the document and reading between the lines is more than sufficient.

Heading for confrontation: China’s Paracel play

17 February 2016

Credible reports are circulating that China has deployed an HQ-9 surface-to-air missile (SAM) system and an associated targeting radar to Woody Island, part of the Paracel group of islands in the South China Sea. Woody Island is approximately 400km off the Vietnamese coast (16°53′N 112°17′E) and to the South-east of China’s Hainan Island. In 2015 the Chinese undertook significant lengthening and strengthening of the Woody Island runway, now reported to be 2,920m in length and suitable for Chinese heavy lift military aircraft.

The HQ-9 SAM deployment was first reported by Fox News in the US, which has released commercial satellite imagery of before-and-after images of what’s claimed to be two batteries of eight SAM launchers and a supporting radar system deployed on a beach. Those details have been broadly confirmed both by the Taiwanese and US Defence Departments. The Pentagon has previously publicly claimed that the HQ-9 is a missile system based on the Russian SA-10, incorporating technology from advanced western systems and designed to counter ‘high-performance aircraft, cruise missiles, air-to-surface missiles (ASMs), and tactical ballistic missiles (TBMs)’ (PDF). The missile’s maximum range is reported to be 200km, carrying a warhead of 180kg.

For a number of critical reasons this is a strategic game changer for the Asia–Pacific region, and potentially for China–US relations. The HQ-9 deployment runs counter to assurances President Xi provided to President Obama in Washington last September, and Chinese Foreign Minister Wang Yi repeated earlier this month to Secretary of State John Kerry on the South China Sea that ‘China has given a commitment of not engaging in so-called militarization, and we will honour that commitment’. The deployment also directly challenges a core US policy objective to prevent the further militarisation of the South China Sea, a goal that was endorsed at President Obama’s just-concluded ASEAN Special Leaders’ Summit at Sunnylands in California.

The ink on the Sunnylands’ declaration could hardly have been dry when the Fox News story broke. The summiteers reaffirmed ‘the key principles that will guide our cooperation going forward’, including:

‘Shared commitment to maintain peace, security and stability in the region, ensuring maritime security and safety, including the rights of freedom of navigation and overflight and other lawful uses of the seas, and unimpeded lawful maritime commerce as described in the 1982 UN Convention on the Law of the Sea (UNCLOS) as well as non-militarization and self-restraint in the conduct of activities.’

The statement highlights the distinct incompatibility of China’s approach to South China Sea security with that pursued by the US and Southeast Asian nations.

Although Chinese Lanzhou-class destroyers carry the maritime version of the HQ-9, the deployment to Woody Island is the first permanent stationing of a highly capable SAM in the South China Sea. Such stationing shows a Chinese intent to match, and indeed exceed, any step by the US to assert overflight rights and to undertake Freedom of Navigation operations. The deployment raises the stakes throughout the entire region for any country looking to join the US in undertaking similar operations.

What are the implications of the HQ-9 going forward? First, the Chinese political claim that their islands and artificial facilities would not be militarised has been shown to be nothing more than an exercise in buying time for further military build-up in the South China Sea. Second, President Obama will surely be revising his estimate of the relationship he has with his Chinese counterpart. We are clearly nowhere near achieving a meeting of minds between the two leaders on security issues. A significant trust deficit will be hardening.

A third implication is that all countries over-flying the region will have to factor in the potentially greater risk that comes from the HQ-9 deployment. Its 200km range covers only a small part of the region, but the political intent is unmistakable. If China was prepared to deploy the SAM system to Woody Island it may well plan to locate HQ-9s on other islands in the region. A further Chinese step may be to announce an air defence identification zone over part of the South China Sea, presumably in the approaches to Hainan Island.

For countries in Southeast Asia, as well as Australia, Japan and any others concerned about China’s rapid physical assertion of sovereignty over the South China Sea, the HQ-9 deployment further raises the stakes. Backing down on the importance of freedom of navigation and overflight rights will damage our own credibility after vigorously asserting that such access is a critical strategic interest. Thus the terrain of incompatible strategic interests between China and its neighbours becomes starker, and the risks of miscalculation and potential conflict grow.

ASPI suggests

12 February 2016

Everyone’s favourite hermit kingdom has done much to excite and exercise the world of late, first with last weekend’s rocket launch, and then through the decision to boot 248 South Korean managers from the Kaesong industrial complex, in retaliation for ROK sanctions. For some choice analysis on North Korea’s actions, check out this brief video overview of the North’s nuclear program or this analysis in Time, which manages to hoist-in references to both Beyoncé and Kim Jong-un—hopefully not for the last time. Over at The Washington Post Dan Drezner offers some sage realism on the topic of China and the DPRK. See also this stellar infographic from the Council on Foreign Relations, which ticks off North Korea as part of a veritable smorgasbord of foreign policy issues.

If you’re in need of larger dose of US political analysis, be sure to check out this piece at Vocativ, which ranks the language and style of the presidential candidates’ speeches in New Hampshire according to the Flesch-Kincaid readability test. The Donald came out on the bottom of the list (although, the top of the Republican candidates—true to form), with language suited to third graders. Bernie Sanders, on the other hand, spoke at the level of a tenth grader.

Head over to The New York Review of Books and catch up with Robert O. Paxton’s meditation on the French Resistance during the Second World War.

The CATO Institute has released a fascinating study into how new and improved technology is leading to a range of new capabilities being available to smaller and smaller powers—even to the individual. According to the research, small, smart and cheap weapons will continue to diffuse power, which greatly complicates the policy responses of major powers. Read up here.

Want a glimpse into what goes on at Turtle Bay when the Security Council wraps for the day? This light-hearted piece on the Delegate’s Lounge at the United Nations in New York considers the history of the space through to some of the more recent goings-on.

Podcast

In this week’s Foreign Policy podcast, David Rothkopf, David Sanger, Kori Schake and Yochi Dreazen discuss why the West is more afraid of Daesh than it is of Russia, and ask whether state leaders are taking Russia’s growing influence seriously enough. Listen here (29 mins).

Videos

Brookings this week hosted a cracking discussion and Q&A (1.5 hours) on the potential of female entrepreneurs in Japan and how female-run businesses can be promoted. The distinguished panel provide considerable insight into the state of the Japanese operating environment as Abe pushes forward on his so-called Womenomics agenda to increase female participation in the Land of the Rising Sun.

Across town at CSIS, Australia’s former National Security Adviser, Andrew Shearer, sat down to discuss the challenges and opportunities for Australia when it comes to the development–security nexus. Listen here.

Events

Canberra: All through next week, the ANU’s National Security College will host their week-long cyber security conference, including a public events program with some top international cyber policy thinkers (though not one woman, curiously). More information here.

Canberra: In what’s set to be a fascinating study, Ambassador Charles Ries, Vice President, International at the RAND Corporation, will judge the costs and benefits of various scenarios in the Israel–Palestine conflict, from two-state solution through to violent uprising through continued impasse. Register online.

Sydney: Mark your calendars for 23 March and get along to China Matters’ first public lecture. Bates Gill will speak on Xi Jinping’s China and what Xi’s vision for China means for Australian business and foreign policy. The event will run from 5pm to 7pm at the University of Sydney Business School. Keep an eye on the China Matters website for more information closer to the date.

Is President Xi really all-powerful? (part 2)

29 January 2016

It hardly needs to be said that the name and mind-set of persons who might be persuaded to join some oppositional CCP grouping against President Xi remain entirely obscure. They’re unlikely to raise their heads as long as Xi’s policies appear successful. However, given the possibilities for opposition, Xi cannot avoid further cultivating his own friends and supporters, especially the men who must have served in the decision-making chain that brought him to the presidency in the first place.

It seems safe to suggest that there are at least two senior groups that Xi must be able to rely on in this way. One group will be the senior bankers and currency manipulators in, and beyond, the People’s Bank of China. They constitute, so to speak, China’s special forces not merely in the expansion of China’s global trade but in the continuing effort to increase the reach and power of the Yuan and challenges to the global dominance of the US dollar. The other is the senior officer corps of the Peoples Liberation Army (PLA), on which depends the security of a China that’s remarkably devoid of allies.

The senior people in China’s banking world are also largely obscure to the outside world, although their efforts to cope with serious interrelated problems in their field may well be decisive for Xi’s efforts to modernise the economy and, with it, China’s position in the world. One problem is the management of the large debt problems in China’s banking field without severe difficulties both for the domestic economy and for China’s external financial and trading position. That may include difficulties in achieving wide and ready international acceptance for the Yuan, especially in any kind of competition with the US Federal Reserve, whose increasing stature makes it, in effect, the world’s banker. In this field, Xi’s political fate is likely to depend squarely on the wisdom and skill of his bankers.

Equally decisive roles are played by the PLA. One is the continuing suppression of any signs of domestic unrest. That’s no small matter. The military, as well as the police and security service, have for some years sternly repressed any sign of political dissent. They’ve played an especially notable role in extending road, rail and transport facilities to Tibet, with its largely anti-Chinese population, as well as increasing the number and scope of its Tibetan military facilities. Similarly, various parts of the PLA have played a role in the control of nationalism and dissent among Uighurs in Xinjiang, in the growth of Chinese industry there, and the suppression of any links between the Uighurs and Islamic movements in neighbouring Central Asia. In neither Tibet or Xinjiang have signs of local separatism been tolerated.

Other segments of the PLA, especially the Navy and Air Force, have played vital roles in the perceived need to extend China’s border across the East and South China seas and to curtail, or end, the use of Chinese coastal and near-coastal waters by foreign navies, not least that of the US. In addition, the PLA Navy evidently has the task of asserting dominance in the Indian Ocean and other waters that feature in China’s increasing trade with (and through) the Middle East and Africa. All that in addition to the constant and continuing information, cyber and intelligence ‘war’ with the US, Japan, Germany and others, and the benefits of ‘hacking’ into other countries’ scientific efforts, technologies and procedures.

In both economic and military terms, China under President Xi is clearly determined to make up for its long inferiority to the West in the 19th and 20th centuries and to return to the position of one of the world’s leading states. In that process the old theologies of Maoism have been entirely replaced, on the one hand by the search for wealth and on the other arguably even more important hand by a nationalism that satisfies those present external claims, as well as reinforcing domestic cohesion. In that process the Generals and Admirals of the PLA must to some extent be given their heads. Xi cannot, even if he wanted to, unduly constrain their nationalist ambitions. He certainly can’t risk allowing any minor resentments to congeal into outright opposition even when, as now, the US is patently giving him considerable room for manoeuver.

Quite how the CCP as a whole, and in the longer term, will react to Xi’s efforts to promote nationalism together with wealth and power isn’t yet apparent, though continuing success is sure to garner domestic applause. That he must continue along his present path of carefully balancing the nationalist pride of the military against the need to avoid external hostilities, seems certain. But given the continuing, albeit not obvious, dangers of his position in the midst of such problems, he will in any event have to watch his back. He certainly can’t afford to see his party split or his military commanders help to send him down the same path as Mr Zhou.

Is President Xi really all-powerful? (part 1)

27 January 2016

There’s something odd about the Australian view of the power and aims of China’s President, Xi Jinping. We’re told that he has unprecedented and centralised authority. He’s using that power to, among other things, maintain China’s claims beyond its internationally accepted borders, especially in the East and South China seas. That increases concerns in East and Southeast Asian states, and brings dangers to sea and air communications for maybe 60% of global trade, including Australian exports. The resulting military and security dangers for countries in the region are obvious.

The reality of Xi’s position may be more complex. He’s indeed a markedly active and purposeful leader, but he is also more than that. He assumed personal chairmanship not only of the senior committees dealing with State, foreign and domestic affairs, but ones on security matters and various aspects of fiscal policy, economics, production and of the Central Military Commission, which is the governing body of all branches of the military, naval, communications as well as air and space forces. While he clearly has a large number of reliable assistants, it must be doubtful how far—for all the recent administrative and command changes—he can personally supervise or control all the bodies that he now formally heads.

The most important of those bodies is, of course, the Chinese Communist Party (CCP) itself. It’s not only the political and social glue which alone holds together so large and varied a polity as China but it’s also the chief, if not sole, path for governmental promotion, status and wealth for its 85 million members. Its senior members play decisive roles, among other things, in China’s efforts to change the structure of the economy. This is to move from the principles imposed by Mao’s successor, Deng Xiaoping at the end of the 1970s, to a new reliance on higher domestic consumption, services, the development of infrastructure across the board and more sophisticated controls over Chinese production and trade, as well as a more complex and international role for China’s fiscal and banking systems as well as the Chinese currency, the Yuan.

In pursuing those aims, President Xi has launched a nation and party-wide campaign against the corruption which can, and often does, bedevil dealings with foreign firms and governments, especially with banks, major industrial enterprises as well as food and resource mining companies. Those dealings must support, and not be allowed to limit, the global spread of Chinese economic influence and the other claims and linkages that feature in China’s longer-term plans. In dealing with the difficulties, MR Xi has at least one major domestic problem. Corruption, not just in commercial but in governmental and other matters, has been endemic in China for some 3,000 years. That’s how officials, whether governmental, local or provincial, have normally advanced to wealth and standing. The President’s attempts to halt these practices, and therefore end some of the norms of Chinese society and politics, will continue to prove hugely unpopular in large segments of the CCP and the nation.

The anti-corruption campaign is therefore likely to run into great difficulties, though not all of them will be visible to outsiders, let alone the public. Few things are less transparent in China than the wishes and practices of senior officialdom in the CCP and major institutions like banks and, most particularly, within parts of the Peoples Liberation Army (PLA). Any demand for radically different practices may seem and be dangerous, especially to people who have themselves already gone through several stages of advancement. In that process, they’ll have gathered, or joined, groups of associates, supporters and reliable friends who have linked their own advancement in status and wealth closely to the person around whom the group was formed.

It’s true that Xi has been able to cement his own advancement, and alarm potential dissidents, by taking successful action in a number of spheres. One has been action against the man who was probably his most serious rival. It was Zhou Yongkang, a fellow member of the highest ruling body of the CCP, the Standing Committee of the Politburo, as well as the head of all police and security matters in China. Zhou appears to have been dismissed not only from his post but from the CCP as a whole. However, dismissing Zhou is one thing; dealing with the resentments of Zhou’s long-time supporters and allies, let alone others people who fear they ‘might be next’ could be quite another.

A second piece will comment on President Xi’s influence over, and supporters within, China’s economic and military power structures.

The strategic implications of the Taiwanese elections

21 January 2016

As widely expected, the Taiwanese presidential and legislative elections on 16 January produced a landslide victory for the pro-independence, opposition Democratic Progressive Party (DDP) under the leadership of Tsai Ing-Wen. The first female president in the country’s history received 56.1% of the popular vote, defeating the incumbent Kuomintang (KMT) and its candidate Eric Chu by a 25-point margin—the biggest since Taiwan’s first democratic presidential election in 1996. The DPP for the first time also won an absolute majority in the legislature, securing 68 out of 113 seats, which frees the party up to pursue its legislative agenda and mandate.

The result has a couple of strategic implications. The most important is that a peaceful reunification on China’s terms is an increasingly distant prospect. To be sure, Tsai’s victory was partly due to growing voter frustration with the KMT’s handling of domestic problems which included a stagnating economy, rising labour costs and a widening income gap. However, the DPP’s decisive win also reflects increasing concerns about Taiwan’s growing dependence on China under President Ma Ying-Jeou and the perceived dangers to Taiwan’s democracy. Opinion polls prior to the election showed that a wide majority of citizens identify as ‘solely Taiwanese’ and that there’s hardly any support for reunification with the mainland.

Many voters therefore aimed to reassert their Taiwanese identity and way of life through their electoral choice. Indeed, the incompatibility between the political systems across the Taiwan Straits has grown. Taiwan’s election was the third peaceful transfer of power and ample proof of the vitality of its democratic system. Not only did Taiwan elect a female president but 38.1% of its legislators will be women, which will see the Republic of China (ROC) rank 10th in the world on the question of female parliamentary participation.

In short, the election was a milestone in Taiwan’s political system in that it has become almost structurally impossible for any ROC government to advocate for reunification, or getting closer, with the mainland. Tsai’s victory speech reflected that new reality. She refused to accept the ‘One China’ formula of the ‘1992 Consensus’ between the KMT and the Chinese Communist Party (CCP). Instead, she vowed to ‘build a consistent, predictable, and sustainable cross-strait relationship’ based on the Republic of China’s ‘constitutional order, the results of cross-strait negotiations, interactions and exchanges, and democratic principles and the will of the Taiwanese people’. Moreover, she emphasised that ‘both sides of the strait have a responsibility to find mutually acceptable means of interaction that are based on dignity and reciprocity … Our democratic system, national identity, and international space must be respected. Any forms of suppression will harm the stability of cross-strait relations’.

Thus, while it’s unlikely that Tsai will follow the example of her DPP predecessor in office, Chen Shui-bian, and engage in provocative pro-independence rhetoric, she asks Beijing to respect the ROC’s de facto independence as the basis for the future relationship.

Consequently, the big question is how China’s leadership under President Xi Jinping will react. Predictably, China’s official response reiterated its support for the 1992 Consensus and urged Taiwan to refrain from any secessionist policies that would lead to war. But what’s less clear is how Beijing will seek to manage its relations with a DPP government. Xi, who has so far taken a hard line on sovereignty issues, could seek to punish Taiwan through suspending official exchanges or through trying to diplomatically isolate it even further. Any move to coerce the new DPP leadership could set off a negative spiral in cross-Strait relations. Alternatively, he could recognise the new political realities in Taiwan and quietly work towards a mutually acceptable compromise.

It’s too early to tell which approach China will choose. But it’s likely that the cross-Strait status quo will remain tenuous. That’s also the case because in recent years Beijing has changed the cross-Strait military balance in its favour. Thus, assuming that the US won’t come to the defence of Taiwan, Xi might seek to coerce the DPP leadership into accepting its position. That could be a serious misjudgement as the US is likely to go to war in the event of an unprovoked attack on the island nation. The US State Department’s statement on the election contained a subtle warning to China but also recognised the significance of the result for Taiwan’s democratic system:

‘We congratulate the people on Taiwan for once again demonstrating the strength of their robust democratic system, which will now undergo another peaceful transition of power. We share with the Taiwan people a profound interest in the continuation of cross-Strait peace and stability. We look forward to working with Dr. Tsai and Taiwan’s leaders of all parties to advance our many common interests and further strengthen the unofficial relationship between the United States and the people on [sic] Taiwan.’

The last sentence indicates that the US is willing to support moves to preserve Taiwan’s strategic and political breathing space. As part of the US rebalance to Asia, Taiwan becomes more, not less important to Washington.

It’s time that Canberra puts Taipei back on the radar screen and equally considers ways to strengthen Taiwan’s political and economic position.

Australia must rearm for cyber-enabled war

19 January 2016

Australia’s response to the emerging centrality of cyber space in the conduct of future war has been slow and fragmented. That’s true in different ways of the government, the armed forces, the private sector, and the strategic studies community. If the country is to have any hope of keeping pace with future needs, we need much more attention to international benchmarks for capability development and policy than we’ve seen to date.

We can find essential reference points in the policy of two countries of strategic interest to Australia: China and the US. Throughout 2015, both have taken radical decisions in cyber war policy that threaten to leave the rest of the world, Australia included, even further behind them. In stark contrast to those two countries, the Australian government hasn’t been prepared to canvas in public the centrality of cyber-enabled warfare nor craft policies and doctrines accordingly.

In May 2015, China issued its first ever ‘Military Strategy’ under that title. The paper says that cyber space and outer space are the commanding heights of international security and strategic competition.

By the end of 2015, China had begun a revolutionary transformation of its armed forces to execute the new cyber military strategy. Two examples may suffice. First, it announced changes to the PLA command structure to support greater integration of joint operations and intelligence so essential to cyber war. That was essentially a catch-up policy modelled on the US armed forces. Yet if the reforms are implemented effectively, China’s war fighting power in all domains, including naval operations, could be lightyears beyond what it is today.

Second, as the strategy paper foreshadowed, the recrafting of command structures will take on a uniquely Chinese aspect that has high appeal in light of the traditional doctrines of ‘people’s war’ and ‘active defence’. The armed forces in combat will be expected to operate on a model of distributed authority that assumes a loss of central command resulting from cyber attack by a superior enemy. That’s captured in the strategy when it calls for reducing central command authority to foster the conditions of victory in cyber-enabled war under the rubric of ‘self-dependence’ of military units (‘you fight your way and I fight my way’). But it will be embodied in practice in the rapid development of cyber militias (citizenry cyber forces), which in turn will provide China something of an edge in its race to begin to match US full-time uniformed capability.

For its part, the US has also quickened the pace of its cyber military development with its own radical elements. Its strategy has for some time been premised on information dominance through cyber effect operations as the foundation for what it calls ‘prompt global strike’. This is a strategic objective in war, not just a tactical or theatre-level ambition. In 2015, the Pentagon issued a new ‘Cyber Strategy’ and Cyber Command issued a new planning document, titled ‘Beyond the Build’. A Pentagon Law of War Manual, also issued in 2015, and prepared with input from Australian military lawyers, says it is lawful for a country in wartime to undertake pre-emplacement of ‘logic bombs’ in an enemy country’s networks and information systems.

There are at least two highly significant innovations in ‘Beyond the Build’. First, there’s recognition that combat units must be able to operate with degraded command and control systems and a lack of situational awareness. Second, the paper argues that Cyber Command will need to offer commanders and policy makers ‘cyber tools in all phases of operations’, which means at all levels of combat across all services.

The most important lesson for all middle powers from the 2015 Pentagon documents is that to be effective in cyber-enabled war, a country needs to plan for it, structure and train its forces accordingly, and develop the foundations for public engagement in it. The strategy document makes plain that there are many foundations of cyber war that need to be out in the open, ranging from critical infrastructure protection to industry-based R&D and developing a civilian cyber work force.

The US and China are determined to create conditions in cyber space that in wartime could undermine the effectiveness of weapons systems, deployed units and military-related civil infrastructure of an enemy as quickly as possible. They want to disable enemy cyber systems in the early stages of hostilities, or even on a pre-emptive basis. Such capabilities present almost insurmountable challenges to the security of middle powers.

To respond to the emerging environment, Australia will need to develop complex systems of decision-making for medium intensity war that address multi-vector, multi-front and multi-theatre attacks in cyber space, including against civilian infrastructure and civilians involved in the war effort. Australia doesn’t currently possess such capabilities, nor is it close to achieving them.

Musing on the South China Sea

14 January 2016

The US Navy and the Australian Air Force have recently been at pains to proclaim certain activities in the South China Sea as pursuant to their right to international freedom of navigation. This new twist on familiar activities stems from China’s spectacular creation of seven new islands in this enclosed sea. The new islands undoubtedly symbolise China’s claim to exclusive privileges in this area, but they also invite a question: when was China’s Politburo persuaded that they needed a shock-and-awe event in the South China Sea to secure a positive outcome, that is, to finally suppress resistance to China’s ‘historical’ claim to the greater part of this sea?

The features in the South China Sea—predominantly located in two clusters called the Paracel Islands in the north and the Spratly Islands in the southeast—are too insignificant to have ever naturally attracted permanent inhabitants. Indeed, most of them are below water, permanently or at high tide. As such, they’ve been of keen interest to fishermen and other mariners, especially from littoral communities, as hazards to avoid or take advantage of as circumstances required. China contends that the first of its imperial dynasties—the Han dynasty, roughly 2BC–2AD—took note of those features and that a mindset of ownership toward the South China Sea emerged over the centuries. In other words, China progressively concluded (or confirmed) that its right to or need for ownership of those features (and/or the sea space they inhabited) surpassed that of the other littoral communities. That sounds like a rather precious posture, even from our present vantage point, although no evidence survives from those ancient times that China imposed its claim in a manner that made other communities aware that such a claim existed.

The years haven’t been kind: the claim looks no more natural or understandable now than it would have two millennia ago. Today, China’s claim is expressed as a dashed line that made its debut in the late 1930s, slipped into circulation by the then Nationalist government. China had at last stepped away from the imperial system in 1911 but its first ‘modern’ government soon found itself in a civil war with the newly-established Chinese Communist Party, to which the Japanese invasion, starting in 1937, was added. This dashed line envelopes some 90% of the South China Sea and now takes away most of the exclusive economic zones granted to the other littoral states under the 1982 United Nations Convention on the Law of the Sea (UNCLOS). The status of the features within the sea in contemporary legal terms is rather obscure, and the relevance of an imperial attitude toward this body of water by the most distant of the littoral states is, at the very least, contestable.

The People’s Republic of China has nonetheless progressively intensified its campaign to secure acceptance of its claim. It has alternated between phases of inducement and coercion as well as signalling, as it became wealthier, that its capacity to bring pressure to bear was, for all practical purposes, destined to become unlimited. Beijing has had ample opportunity—even since the end of the Cold War focussed more attention on those ‘regional’ issues—to assess the costs and risks of its policy settings on the South China Sea. We can infer that, for some considerable time, the occasional policy review concluded that the established instruments of policy implementation—both carrots and sticks, all of which were growing in weight and effectiveness—could be expected to suppress opposition to China’s objectives at an acceptable cost and in an acceptable timeframe.

It seems, however, that something happened that shattered political confidence in getting that timely and cost-effective outcome. Something persuaded the Politburo that the parameters of the issue needed a profound shake-up to accelerate progress toward the desired outcome. The Politburo was attracted to a spectacular blizzard of island building as the transformative development. Planning was conducted in complete secrecy. One can assume that the Politburo had to decide what island-building program was neither too small nor too big to achieve its psychological, political and security objectives, and how quickly it had to be put in place to preclude countervailing action. It would also have had to choose which features to transform into islands; decisions that would have been informed by the feasibility of transforming particular features, prospective economic rewards, military considerations stemming from the location of features occupied by other claimants and the full scope of the rights and privileges within its dashed line that China intends, eventually, to claim (but which it has steadfastly declined to elaborate on thus far).

Not long before this development, and possibly even coincident with it, the more strategically-minded within the Party leadership might have lamented that China was now so strongly associated with that claim, had committed so much political capital to it, that failure was no longer an option. It might now be clearer that China’s proximity and the sheer weight of its activities in and around the South China Sea would have delivered de facto ‘ownership’ but it was too late for this: China had at that point no choice but to press its expansive claim and make it stick.

The island-building program ramped up quickly from August 2014 and was declared complete in June 2015. The apparent objective of a political ambush was achieved. Secrecy about the Politburo decision, and preparations to implement that decision, was absolute. No one in the CCP, the legal profession, the media or the National People’s Congress breathed a word, not even to pose a question about the political wisdom, legality or cost of what the Politburo had in mind. That’s just as well, of course. If other states knew, or came to know, what the time-line for Beijing’s decisions on the program had been and then compared it with what China had been saying and doing diplomatically at the same time, the fallout could be rather damaging.

Still, the issue is poisoning the region’s political and security outlook. Not so long ago, it seemed that the majority view among analysts was that the South China Sea was essentially a peripheral issue and that, as this sank in within the ranks of regional governments, the dispute would cool. Now the pendulum is swinging the other way, with analysts thinking they may have missed something, and finding ways of visualising the South China Sea as something closer to the fulcrum of the world in the 21st century. It’s doubtful whether either posture is helpful. But it’s becoming rather urgent that the region’s leaders determine the probable direction of a solution and begin to align the politics of the issue accordingly.

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