It’s ConnectSmart week across the Tasman, an event that seeks to raise awareness of cyber security in the New Zealand community. National Cyber Policy Office director Paul Ash has encouraged Kiwis to come up with unique and complex passwords for all of their online accounts and to change them regularly; and Communications Minister Amy Adams noted the need for greater awareness of cyber security threats among small-to-medium sized enterprises, asking them to improve their online security through a few simple measures like securing work tablets and smartphones with passwords. To assist in reducing cyber security incidents, and as part of their contribution to ConnectSmart week, Auckland’s Unitec Institute of Technology and Japan’s National Institute of Information and Communications Technology launched a ‘Red Alert‘ service back in March. The subscription service will help protect any network that’s connected and subscribed to the service by issuing an alert as soon as an intrusion takes place. It’s also National Cyber Week in Israel.

Across the Pacific, the fallout from the Office of Personnel Management (OPM) breach continues. While the US has been careful to not officially name China as the source of the hack, others have pointed towards a Chinese group possibly named Shell Crew, PinkPanther, KungFu Kittens, Group 72 or Deep Panda. Cyber security incidents have had dramatic effects on the US-China relationship in the past, principally the suspension of the bilateral cybersecurity working group after the US indicted five PLA officers for cyber espionage.

Cyber security was reportedly discussed in ‘direct terms’ by Deputy Secretary of State Antony Blinken and China’s Executive Vice Foreign Minister, Zhang Yesui, at Monday’s Strategic Security Dialogue in Washington DC. Treasury Secretary Jack Lew was similarly direct on US concerns about Chinese support for economic cyber espionage at the bilateral Strategic and Economic Dialogue on Tuesday. Those talks precede the visit of Chinese president Xi Jinping to Washington DC in September this year.

Also in DC, the House approved the 2016 Intelligence Authorization Bill that sets requirements for the new Cyber Threat Intelligence Centre, and would compel the administration to provide detail to Congress on the breach at OPM. Several senators have also begun to lobby for cybersecurity information sharing legislation to progress quickly.

Further afield, June marks the one year anniversary of the African Union’s (AU) Convention on Cyber security and Personal Data Convention. The convention established a standard legal framework for conducting electronic commerce, protecting personal data, promoting cybersecurity, and addressing cybercrime. While no AU members have ratified the convention, Kenya, Madagascar, Mauritania, Morocco, Tanzania, Tunisia and Uganda are in the process of adopting national cybersecurity legislation, although these laws may be more damaging to human rights than the AU convention. Overall the future for cyber security in Africa appears to remain dim.

And finally in Australia, the intergovernmental Financial Action Task Force met in Brisbane this week, where discussions on terrorist networks using the internet for fund raising took place, as well as the use of BitCoin and other online currencies to hide terrorist financing. FATF head and former Secretary of the Attorney-General’s Department Roger Wilkins noted that further research on the use of cyberspace to finance groups including Boko Haram and Jemaah Islamiyah was needed, and that exchanges that turned virtual currencies into hard cash should be required to report suspicious transactions in the same way as banks do. In Canberra last week, Defence Minister Kevin Andrews previewed  what’s in store for cyber security in the forthcoming Defence White Paper. At the same conference, other senior Defence leaders spoke about the need for innovative non-traditional recruitment techniques to attract cyber expertise to Defence—and keep it there.

A Fiery Cross to Bear: Interactive on #China construction on Fiery Cross Reef – http://t.co/hntlFrNXUW pic.twitter.com/prkO9in464

— AMTI (@AsiaMTI) April 20, 2015

In the past 12 months, China has provoked considerable attention with its reclamation activities in the South China Sea, particularly in the Spratlys where it controls seven maritime features.

China’s history of salami-slicing presents a dilemma to regional countries as well as external powers with regional interests: do they escalate an incident each time China slices the salami and risk open conflict, or stand down and allow China to augment its territorial claims.

The million-dollar question remains: who or what will freeze China’s reclamation in the South China Sea? The answer: nothing, really.

It has been proposed, for example, that like-minded states carve out a ‘code of practice’ that would stress the rule of law and mirror the 2002 Declaration on the Conduct of Parties in the South China Sea. Another option being considered by the Pentagon is to send US aircraft and ships within 12 nautical miles of the Chinese-built reefs in the Spratlys, to challenge its influence there.

While useful, such proposals won’t freeze or rollback China’s attempts to change the facts on the ground (or the high sea). China’s reclamation seeks to pre-empt any decision that would come from the Philippines’ challenge in the International Tribunal for the Law of the Sea over China’s nine-dash line claim to the South China Sea.

It’s noteworthy that China hasn’t only engaged in salami slicing; it has sought to use the attraction of its economy, trade and aid to offset its high-risk behaviour.

Following the 2012 Scarborough Shoal incident with the Philippines, China launched a charm offensive in 2013, wooing ASEAN with a treaty of friendship and cooperation, stressing that it intended to take China–ASEAN relations from a ‘golden decade’ to a ‘diamond decade’.

This year, when concerns about China’s reclamation have intensified, China has offered a carrot: US and other countries would be welcome to use civilian facilities it’s building in the South China Sea for search and rescue and weather forecasting, when ‘conditions are right’.

China has also used its economic weight to deftly tilt the balance (of influence, at least) in its favour. Its Asian Infrastructure Investment Bank (AIIB) is attracting long-standing American allies such as Great Britain, Australia and South Korea. China has stolen a march on the US in the battle to win friends and influence people.

And the economic offensive doesn’t end with the AIIB. The Regional Comprehensive Economic Partnership—a free trade agreement that would involve ASEAN, Australia, China, India, Japan, New Zealand and South Korea—is seen as a rival to the US-led Trans-Pacific Partnership. China’s Silk Road Economic Belt is also another lure for peripheral countries keen on leveraging on China’s economic ascent.

Concerted and effective opposition to China’s fait accompli in the South China Sea requires an astute mix of diplomacy and deterrence. It might take the form of a regional effort to get China to clarify its nine-dashed line claims based on UNCLOS principles, an ASEAN ultimatum for China to at least freeze its reclamation activities, and joint ASEAN–US patrols near the reefs being reclaimed by China. This looks unlikely to emerge anytime soon.

ASEAN was damaged in 2012, when it failed—for the first time in its 45-year history—to issue a communiqué due to differing views over the South China Sea. ASEAN has recently upped its game by underscoring the dangers of China’s reclamation, but there’s little the group can do apart from pushing for a formal Code of Conduct. A successful conclusion of the code isn’t assured; China dangles the carrot of code negotiations to buy time even as its carries out reclamation.

For all its rhetoric about the need to uphold international law and the freedom of navigation, the US is conflicted when it comes to China. It all boils down to this: will the US risk its extensive relationship with China over a few rocks in the South China Sea? As Hillary Clinton once said: how does the US ‘deal toughly’ toward its banker?

To get a sense of the effect of China’s creeping invasion of the South China Sea, one only need look at Vietnam. Faced with China’s challenge to its claims to the Paracel Islands, Vietnam has purchased Kilo-class submarines, reportedly armed with sub-launched land-attack Klub missiles that could threaten Chinese coastal targets. But Vietnam didn’t fire a shot when China towed a US$1b oil rig into waters claimed by Vietnam last year. On a recent trip to Hanoi, Vietnamese scholars told me that Vietnamese military officers urged sterner action, such as firing on Chinese ships, but senior leaders vetoed them, instead deciding to sit back and let China incur ‘reputational damage’.

Not many people in Asia would agree with what China is doing in the South China Sea. But as it stands, China’s strategy—salami slicing, using offsets to soften risky behaviour and accelerating its reclamation activities in the absence of significant opposition—can be summed up in two words: simply brilliant.

The Asia Pacific is going through a vivid and significant rule-making tussle.

It’s unusual because rule-making and norm formation usually involve inching through decades. Power hierarchies tend to shift gradually and thus rules, by definition, are reasonably static. The international rules and norms based on power hierarchies follow gradually behind power shifts, but eventually adjustments happen. And a bit of adjusting is going on in Asia.

Credit one of the great political wordsmiths of our time for putting this in lights. Step forward Barack Obama in his State of the Union address:

‘China wants to write the rules for the world’s fastest-growing region.  That would put our workers and businesses at a disadvantage.  Why would we let that happen?  We should write those rules.’

Obama is in a rare political space (no more campaigns) where he can wield that most dangerous of political explosives – the big truth.

The context for Obama’s rule-making plea to Congress is two other truths about the US and China that mean rule-writing power is in play.

The United States faces a long-term relative decline in its economic and military power in Asia. Trends don’t get much bigger.

The important word is relative. The US will continue to grow. It’s still an essential player. But its hegemonic role in Asia is fraying.

Obama’s pushback against relative decline has two arms – the Trans-Pacific Partnership and the military pivot to Asia. Both have their problems. Not least because at the sharp end where policy and politics become pointy, these are both responses to China. And the tide is running for Beijing.

China is a status quo-tidal power.

The relative shift is to Beijing. China exults at the way the international tide of trade and power has been running and wants to push along this evolution of the  status quo — stability accompanied by a continued shift of the tide in Beijing’s favour.

China understands this is a rule-writing moment. A previous meditation on Asia’s rules made much of a speech by Xi Jinping that argued it’s time for Asia—led by China, obviously—to set its own standards (and, implicitly, move on from US rules):

‘In the final analysis, it is for the people of Asia to run the affairs of Asia, solve the problems of Asia and uphold the security of Asia. The people of Asia have the capability and wisdom to achieve peace and stability in the region through enhanced cooperation.’

China is acting the bully in South China Sea, remaking the rules with mountains of sand, changing reefs into military islands. Elsewhere, Beijing is buying friends using American techniques: write new rules and get others to sign up. Then everyone else will help entrench your system. And they’ll even pay some of the costs—soft power fuelled by a lot of cash can enlist plenty of supporters.

The initial Chinese response to the Trans-Pacific Partnership was to start negotiations on the Free Trade Area of the Asia-Pacific. The trouble was this was just TPP-lite. It was responding to a US tune and playing by US rules.

In the past two years, Xi Jinping has shifted ground and really started the rules struggle. China’s Asia Infrastructure Investment Bank and the Silk Road strategy play to Beijing’s strengths.

The AIIB and Silk Road reflect Beijing’s system—the government decides and directs while the state owned enterprises deliver. Not everything Beijing is promising will come to pass—or be built, but it’s about making the rules as well as making the roads.

Equally, the economic gains of the US TPP are not as great as boasted, as plenty of fine economists will happily explain. See this Canberra Times piece on the proclaimed trade benefits of the TPP being ‘a lot of nonsense.’

The flaws in the TPP mean it doesn’t shift the economic game as much as promised. As rule writing, though, it makes perfect sense. Create a preferential trade bloc that balances against China by excluding China.

Ignore the stuff about China being welcome to join TPP at some future date. Beijing isn’t going to let the US use a trade treaty to re-write Chinese environmental or labour standards. For China, the TPP is about US rule as well as US rules.

US commitment or insouciance about maintaining US rules will be the way Asia views the Congress vote on giving Obama fast track authority to conclude the TPP. If Congress rejects fast track it will do much more than merely kick the issue downstream to be dealt with by the next President.

Robert Samuelson set out the conundrum well in the Washington Post.

He, too, makes the point that the gains of the TPP are relatively modest in the totality of the Asia Pacific economy (delivering an extra 0.9 percent to the incomes of the 12 countries by 2025). For Samuelson, this is about power in the Pacific:

‘We seek to reassure nations that we’re still a Pacific power and that our proposal represents a useful framework to govern the region’s trade. A collapse would leave a vacuum that China would most likely fill.’

A joint sitting of the US Congress has just heard this message delivered with passion by Japan’s Shinzo Abe, uniting themes of alliance, US pivot and the TPP. Abe made the link between economics and geopolitics with his exhortation that long term the TPP’s ‘strategic value is awesome, we should never forget that.’

If Congress ignores Abe and opts out, Japan will have one more piece of evidence for its fear that the US might no longer be capable of delivering the goods for Asia’s security and system. Should Congress reject the TPP fast track, start counting down to the moment that Japan steps away from the US and Tokyo signs on to be a member of China’s AIIB.

The importance of the TPP for Asia is the answer it will give to the big question posed by Barack Obama: Who rules and who writes the rules?​

In a remarkable public speech at ASPI’s Future Surface Fleet conference last month, the Commander of the US Pacific Fleet—Admiral Harry B. Harris—criticised China for engaging in an ‘unprecedented land reclamation’ effort, creating a ‘great wall of sand’ in the South China Sea (SCS). He went on to point out:

‘When one looks at China’s pattern of provocative actions towards smaller claimant states – the lack of clarity on its sweeping nine-dash line claim that is inconsistent with international law and the deep asymmetry between China’s capabilities and those of its smaller neighbors – well it’s no surprise that the scope and pace of building man-made islands raise serious questions about Chinese intentions.’

As usual, China’s government had a different understanding of the augmentation of large features in the Fiery Cross Reef and seven other such locations. For instance, Foreign Minister Wang Yi declared in early March that Beijing was only ‘carrying out necessary construction on its own islands and reefs’. He insisted the measures did ‘not target or affect anyone’, and that China sought to ‘bring harmony, stability and prosperity to the neighbourhood.’

Such statements ring increasingly hollow to the rest of the region. Indeed, it’s hard to not agree with Admiral Harris’ analysis and worry about the immediate and long-term security consequences for the region. Let’s face it: China isn’t interested in exercising constraint and alleviating regional concerns about its efforts to coerce neighbours into accepting its claims in the ‘nine-dash line’. Instead, Beijing is gradually widening the scope of its military activities in the SCS, turning this vital region into an increasingly volatile and dangerous zone.

The build-up of artificial features in the contested SCS archipelagos has become an increasingly important component in this endeavour. Recent satellite imagery of Chinese activities in the Fiery Cross Reefs and the Paracels show concentrated efforts to build airstrips with runways in the vicinity of 3,000 metres. Similar efforts are appearing at Subi Reef in the Spratly Islands; the disputed Mischief Reef might be the next candidate.

Airstrips of about 3,000 metres will be enable the People’s Liberation Army (PLA) to conduct operations of major military aircraft and other systems. As Andrew Erickson points out, this could include fighter aircraft such as the multirole J-11; electronic intercept; airborne early warning and control; and tanker aircraft. As well, the deployment of long-range radars and advanced missile systems can be expected. The PLA could also increase its anti-submarine warfare (ASW) coverage in the SCS through using ASW helicopter landing pads. Finally, we will probably see the construction of port facilities for logistics, coast guard and navy vessels.

These structures won’t only increase China’s ability to intimidate its smaller neighbours through military coercion. They’ll also strengthen its capacity to impose an ‘Air Defence Identification Zone’ (ADIZ) in the SCS should it choose to do so.

Through its ‘great wall of sand’, China continues to nag away at the foundations of the established maritime regional security order. The likely consequences are far from trivial. First, China’s maritime assertiveness will increasingly turn the SCS into a permanent ‘grey zone’—a tense situation between peace and war, with a high degree of mutual distrust between China and other claimant states, particularly the Philippines and Vietnam.

Second, other claimants will look increasingly to the United States to deter China, inviting Washington to increase its military presence in the region. That’s a positive but comes at the expense of greater US–China strategic competition in the South China Sea. At a minimum, increased PLA activities from its new features will significantly enhance the risk of close calls between US and Chinese military aircraft operating in the area. (PLA pilots have, in the past, displayed very risky behaviour, flying dangerously close to US aircraft and ships.)

Third, regional countries will increase efforts to build-up their own defence capabilities. Finally, the US will look to its Japanese and Australian allies to play a more active defence role in maritime Southeast Asia. This will include planning for possible coalition contingencies in the SCS. For instance, the newly revised Guidelines for Japan–US Defense Cooperation allow Japanese ships to supply and (possibly) protect US warships in the SCS. Despite Chinese protests, many Southeast Asian countries are likely to welcome greater Japanese defence engagement.

Maritime Southeast Asia looks set to become even more crowded and contested, largely due to China’s actions. The building of new airstrips and port facilities in disputed maritime zones will only exacerbate regional fears about China’s real intentions. The possibility of serious miscalculation and conflict could increase. In any event, the US and its allies and partners, including Australia, will have to plan politically and strategically for the emergence of Chinese military installations in the SCS and significantly expanded PLA activities.

For all your international security and defence reading, look no further than ASPI Suggests!

Tomorrow’s ANZAC Day (25 April) will mark the 100th anniversary of the first major military action fought at Gallipoli by Australian and New Zealand forces during the First World War. For a different perspective on the war, here’s an emotive interview with the daughter of a Turkish veteran of Gallipoli, Adil Sahin. This week The Strategist also featured posts about WWI by historian Robin Prior on Churchill’s hand in the strategic case for Gallipoli and Director of the Australian War Memorial Brendan Nelson on the importance of remembrance.

For an American perspective on the Battle of Gallipoli, head over to strategy blog The Bridge for Brett A. Friedman’s reflections on what he sees as a ‘watershed moment in the history of modern warfare’.

A few weeks ago there were reports that India’s new Vikrant-class aircraft carriers could be equipped US technology. With both countries now agreeing to explore joint development of the aircraft carrier, Carnegie’s Ashley J. Tellis argues for greater strategic convergence between the US and India, given the prospects of Chinese naval presence in the Indian Ocean. Tellis also calls for broader cooperation on the Vikrant and for the US to offer India access to the Hawkeye and F-35C. Meanwhile, over on The Diplomat, Robert Farley looks at India’s bright future in carrier aviation despite the challenges of the Rafale deal with France.

‘Western democratic powers are no longer the dominant external shapers of political transitions around the world’, write Thomas Carothers and Oren Samet-Marram. Their new piece tracks how global influence is now dictated by a marketplace of nondemocracies and non-Western democracies, and results from the diffusion of power away from the West to ‘the rest’.

Speaking of which, the BBC’s Carrie Gracie explores the Xi–Putin relationship and Russia’s pivot to Asia. With the signing of a US$200m deal on robotics, seen as ‘a big move for Sino-Russian economic relations’, it appears their ‘borgs will be BFFs as well. But the bear isn’t embracing the panda too tightly; as Artyom Lukin wrote back in March, it’s also reaching out to other partners in East and Southeast Asia.

Hat tip to ASPI researcher Clare Murphy who reports some fascinating insights from a Melbourne-based Kenyan professional about the recent terror attack in Kenya on Australian Outlook.

Shifting to Iran, critics of the recently-brokered nuclear framework deal often cite fears of nuclear weapon proliferation in the Middle East. Dina Esfandiary and Ariane Tabatabai argue that an assessment of probable scenarios suggests that’s not likely to happen. In backing up their position, their piece usefully breaks down the limitations in each Middle Eastern country. A valuable resource for nuclear watchers.

Lastly, back in November 2012 American rapper Waka Flocka Flame declared via Twitter that he was running for president. This week, Flame made it official: #Waka2016. So what would a Waka Flocka foreign policy look like? According to the magazine Foreign Policy, his priorities are #FreePalestine, #FreeKurdistan and that Canada is ‘MADD (sic) real’. The Strategist team wishes Mr Flame good luck in his quest for the White House.

Podcast

Turning to more legitimate political players, former CEO of Hewlett-Packard Carly Fiorina is set to launch her presidential campaign as a Republican candidate on 4 May. For an insight into her thinking on politics, leadership and foreign policy, listen to Nina Easton’s Smart Women, Smart Power interview with Fiorina earlier this month (1hr). For the visually inclined, video here.

Events

Canberra readers, ANU’s Michael Wesley will discuss the big challenge of ‘weak powers’, India and Indonesia, in the Sir Roland Wilson Building, Wednesday 29 April at 12.30pm.

Brisbane-folk, Indonesia expert Tim Lindsey is giving a talk on why the Australia–Indonesia relationship is so difficult, at the Gallery of Modern Art in South Bank, Tuesday 19 May at 6pm.