Australia test-fires short-range ballistic missiles

Australia continues to stock up on long-range precision firepower to deter China’s rapidly growing military footprint in the Pacific, with the first test-firing of the US Army Tactical Missile System (ATACMS) in its territory underscoring that effort. 

This month, The Warzone reported that the US Army fired the ATACMS for the first time in Australia during the ongoing Exercise Talisman Saber 2023 in the latter’s territory.

The source notes that a High Mobility Artillery Rocket System (HIMARS) from the US Army’s 17th Field Artillery Brigade fired the ATACMS, with a US Air Force MC-130J Commando II aircraft moving the rocket launcher into position from eastern Australia to the Northern Territory. 

The Warzone notes that the HIMARS is designed to be air-transportable and have good cross-country mobility, since moving military assets within Australia, much more than in the Pacific, requires significant logistical effort. 

As for the ATACMS variant fired during the test, the source notes that the missile flew 260 kilometers to the Bradshaw Field Training Area target area, hitting the target with a high-explosive unitary warhead.

It says the ATACMS version used in the test was the MGM-161A, introduced in the early 2000s, which has a 226-kilogram warhead with a range of 300km. The Warzone notes that that missile can be used against static fortified targets with high terminal speed, enabling it to burrow into the ground and destroy underground structures. 

HIMARS tested

Aside from the ATACMS, the US has also recently tested the HIMARS system in Australia. Early this month, Australia Defence Magazine reported that two HIMARS rocket launchers from the US Army’s 17th Field Artillery Brigade were deployed for Exercise Highball in Western Australia, aiming to develop how the Australian Defense Force (ADF) employs long-range land-based precision rocket systems for land and maritime strike roles.

Australia Defence Magazine also said that Exercise Highball responded to the Defense Strategic Review’s direction to accelerate and expand the introduction of long-range land-based maritime strike capabilities, particularly the HIMARS acquisition. 

The source noted the urgent need to integrate long-range fires into the ADF’s operational capability and mentioned that using by US Army HIMARS strike package already in Australia for Exercise Talisman Saber 2023, the ADF would accelerate its understanding of employing and projecting the weapons system.

It also said Exercise Highball would enhance US interoperability with the ADF’s targeting capabilities and the operational employment of land-based, precision multi-domain fires.

In connection with that, Asia Times reported in January that Australia had finalized the purchase of 20 HIMARS rocket launchers to be delivered in 2026 while signing a separate agreement for Norwegian naval strike missiles (NSMs) to replace the aging US-made Harpoon anti-ship missiles on its Hobart-class destroyers and Anzac-class frigates in 2024. 

Those purchases are intended to improve Australia’s long-range strike capabilities, with ATACMS and HIMARS enabling it to hit targets 300km away. Also, Australia has a joint program with the US to develop a precision-strike missile that can hit targets beyond 499km.

The deployment of HIMARS by Australia in Southeast Asia or the Pacific is being considered, following the US Marine Corps example. The USMC has been exercising with the system under the presumption that it would need to be deployed somewhere in those regions during a clash over Taiwan or the South China Sea.

Also, the stealthy sea-skimming NSMs would double the range of Australia’s warships to 185km. 

Moreover, Asia Times reported in July 2022 that aside from the HIMARS and NSM, the US has approved the US$235 million sale of 80 units of the Joint Air-to-Surface Standoff Missile – Extended Range (JASSM-ER) to Australia. Those stealthy cruise missiles could be launched from the Royal Australian Air Force’s F-35 Lightning II or F/A-18F Super Hornet fighters, giving Australia much-sought-after long-range strike capabilities.

China’s perceived risk to Australia’s strategic security may have figured heavily in the latter’s decision to acquire long-range strike capabilities.

China’s rapidly improving long-range strike capabilities centered on bombers, submarines and missiles have put US military facilities in Australia within striking range, and its increasing footprint in Solomon Islands may be a prelude to a more significant military presence that can cut off Australia from the US and New Zealand. 

Refueling challenge

The RAAF’s F-35 Lighting IIs do not have the range to reach the South China Sea and Taiwan without aerial refueling. Also, aerial tankers may not always be available over contested airspace.

Using Indonesian airspace to support Australian aerial refueling operations may be a hard sell, as the former does not allow its territory to be used as a military facility base for any other country. Hence Australia needs long-range strike capabilities that can operate from its own or friendly territories in the Pacific to impose unacceptable costs on potential adversaries. 

However, Australia might blind-fire its long-range missiles without long-range intelligence, surveillance, and reconnaissance capabilities.  

In a January article for The Strategist, Malcolm Davis notes that while Australia urgently needs long-range strike capabilities, it needs to see far to shoot far. However, Davis points out that China’s improving anti-access/area denial (A2/AD) capabilities can put Australia’s  P-8A Poseidon maritime patrol aircraft and MQ-4B Triton drones at risk and reduce their time on station.

At the same time, he says Australia’s nuclear attack submarines (SSN-AUKUS) will not be ready until the 2030s. Davis notes that surface warships would be increasingly vulnerable to long-range missiles and surveillance systems. 

Given those threats, Davis advocates space-based ISR (intelligence, surveillance and reconnaissance) capabilities for hemispheric surveillance and long-range strike, recommending Australia have its low Earth orbit (LEO) satellite constellation to provide high-resolution imagery and precision tracking.

He also says that such an LEO satellite constellation would follow a “small, cheap, and many” design philosophy, making it difficult to attack and easy and cheap to maintain, and would ensure strategic independence when it comes to that critical military capability while allowing for interoperability with allies and partners. 

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ITER fiasco will accelerate the progress of fusion

The International Torus Experimental Reactor (ITER), a gigantic tokamak fusion device, has been hailed as the greatest single cooperative scientific endeavor in history, involving thousands of scientists and engineers from 35 nations.

A marvel of engineering, when completed ITER is intended for the first time to demonstrate large-scale net energy production by fusion reactions and provide the last stepping-stone to a prototype fusion power plant.

But from the outset the mind-boggling size and complexity of the system should have sounded alarm bells. Also the danger of creating a bureaucratic monster.

Since its construction began in 2010, ITER has been plagued by a virtually endless series of problems and delays, pushing the target date for completion back again and again. The reactor was originally supposed to go on line in 2016, but today construction is still ongoing.

The last official target was 2025. But in November 2022, the newly appointed ITER Director Pietro Barabaschi informed the public that the target date of 2025 was no longer realistic, and that additional problems had emerged, whose resolution would be “not a question of weeks, but months, even years.”

Last year defects were reported in two of the most important components of the reactor: the sector plates that are to be welded together to form the vacuum vessel of the reactor (its “combustion chamber”) and the reactor’s thermal shielding.

The French Nuclear Safety Authority ordered a halt to assembly of the vacuum vessel after discovering misalignments between the welding surfaces of the first two 440-ton vessel sections. These apparently had been damaged in transit from South Korea, where they were manufactured. Reportedly, the defects in the thermal shielding of the reactor will require removal and replacement of 23 kilometers of cooling pipes.

Difficulties of this sort are not unheard of in projects with many first-of-the-kind features. But when they come on top of an endless series of hitches and delays in ITER’s decades’-long history, one can only regard the project as a fiasco.

The ITER might yet have a happy end, but it will be different from the one originally intended. Even assuming operation were to begin in 2025, the official ITER scenario foresees an additional 10 years of experiments before the reactor begins operating with fusion-reaction-generating deuterium-tritium fuel.

If all goes well, it might take another five-to-10 years before ITER achieves the promised goal of a ten-fold “return on power” (500 MW of fusion power from 50 MW of input heating power).

Even then, ITER is designed not to generate electricity but only to lay the basis for constructing a first prototype electricity-generating fusion power plant – referred to as the “DEMO.” If successful, the “DEMO” would then provide the jumping-off point for commercial fusion plants, which might go on line early in the second half of this century.  

Needless to say, this scenario – if realizable at all – is intolerably long.

A blessing in disguise?

How will the sad story of ITER affect the prospects for fusion?

Ironically, I am convinced that the ITER fiasco will actually accelerate, rather than slow down, progress toward the practical realization of fusion power.

On the background of the world’s energy and environmental challenges, it is spurring governments and private capital to invest more in alternative scenarios which – taken together – hold the promise of realizing commercially viable fusion power on a far shorter timescale.

One indication is accelerated plans by China and Japan to build their own national “DEMO” plants, without necessarily waiting for the results of ITER to come in. Both nations have reactor projects underway, which could in effect substitute for the role of ITER and accelerate development on the basis of  knowledge and technologies that did not exist when the final design of ITER was approved, in 2001.

South Korea is designing a “K-DEMO” reactor, intended to generate approximately 2.2 GW of thermal power and supply over 500 MW to the electricity grid.

As these nations are participants in ITER, pronouncements concerning national DEMO reactors still present them, diplomatically, as successors to the ITER project. But there is an obvious effort to find ways to skip over the endless wait for ITER to go on line while, at the same time, drawing on the theoretical and experimental work carried out under the umbrella of ITER.

Wikimedia Commons Schema of a hypothetical DEMO plant based on the “classical” large-tokamak approach. Graphic: Wikimedia Commons

Unfortunately, in my view, the plans of various nations to build DEMO reactors all embrace the same basic model as the ITER: They are all giant, scaled-up tokamak devices.

Drawing on 70 years of experience with tokamak reactors, this ultraconservative approach has low risk as far as producing large net amounts of fusion energy is concerned – but a very high risk of ending up with systems that are useless as models for commercially viable power plants.

The latter risk can only be avoided by introducing revolutionary innovations into the “classical” tokamak approach, or shifting to alternative designs.

The realization that the ITER scenario is a long blind alley, as far as commercially viable power production is concerned, no doubt is a factor contributing to the unprecedented flood of private capital into alternative fusion technologies. These range from compact high-field tokamaks to revolutionary designs such as Helion Energy’s magneto-inertial fusion reactor and ultrashort-pulse laser-driven proton-boron reactors.

The last 3 years have seen over $4 billion in private money flow into fusion – more than the US government spent for all civilian fusion activities in the same period.

Naturally, investor enthusiasm has been further encouraged by the reported achievement, in December 2022 of “scientific breakeven” in laser fusion experiments at the US National Ignition Facility. Although this achievement constitutes more a milestone than a real breakthrough, it has transformed the public perception of fusion, conveying a sense that fusion power is in the process of becoming a concrete reality rather than a mere remote possibility.

It is worth noting that the rapid growth of the private fusion industry would have been impossible if fusion “old-timers” had not emigrated from government labs into the private sector, carrying invaluable expertise and ideas with them.

In many cases the privately-funded projects are outgrowths of experiments on promising alternative reactor types, originally carried out in government-sponsored labs but then cast aside in the context of budget-cutting and the growing priority given to the “big tokamak” approach to fusion, leading to ITER.

Background

In my view, the ITER project was ill-conceived from the beginning, predestined more to hinder than to promote the speedy realization of fusion power. Among other things, the preeminent status accorded to ITER in international fusion research has provided an excuse for defunding work in other directions.

Adopting the unwise policy of “putting all the eggs in one basket”, the US and the European Union have come to regard participation in ITER as a substitute for pursuing independent programs on a national level. Presently the largest part of government support for fusion research worldwide goes to activities connected with the ITER project.

From the start ITER was closely linked with high-level international politics, which is not conducive to unbiased decision-making.

The concept of an international project to develop fusion energy for peaceful purposes was raised at the famous Geneva summit meeting between President Ronald Reagan and Soviet General Secretary Mikhail Gorbachev in November 1985 and included in their joint statement.

The idea was concretized in a 1986 agreement by the US, USSR, EU and Japan to design jointly a large fusion reactor. Later China, the Republic of Korea and India joined the project.

11/19/1985 President Reagan and Soviet General Secretary Gorbachev at the first summit in Geneva, Switzerland, November 19, 1985. Photo: Wikimedia Commons

Unfortunately, the decision in favor of building a “classical” tokamak reactor of gigantic dimensions came about under the influence of a powerful lobby within the fusion community, at the expense of a broad-based pursuit of alternative approaches. Politically speaking, a single spectacular endeavor is more attractive than a “faceless” research program however well-conceived.

Granted, there is a reason to expect that ITER, once completed, will eventually succeed in achieving a large net production of thermal energy by fusion reactions. It is highly implausible, however, that a system of this size and complexity could ever become a commercially viable source of energy.

Here it is important to keep in mind that – contrary to its public image – the primary mission of ITER was not to serve as a realistic model for commercial fusion power plants, but rather to generate scientific knowledge and to develop and test components and technology judged important for the future design of power-producing fusion reactors.

Unfortunately, the decade-long delays have greatly reduced ITERs relevance to the ongoing fusion race. And by the time ITER goes on line, it will be obsolete in many respects.

ITER reactor construction site in 2018. Photo: Wikimedia Commons

Recall again the history of the ITER project: Conceptual design work on the reactor began in 1988, followed by a series of engineering design phases with the final design approved 15 years later, in 2001.

In the meantime fusion-related science and technology has progressed enormously. If one were to design the same sort of reactor today, it nearly certainly would look quite different.

This would not have been so problematic if the reactor had gone on line in 2016. But today, two decades after the final design, the reactor is still not finished and the projected total cost has increased many times over, reaching a figure variously estimated as between 22 and 50 billion dollars.

Chronic underfunding of fusion

That may sound like a great deal of money, but even taking the cost-explosion of ITER into account, fusion research has long been underfunded in relation to its importance for tomorrow’s world. Ironically, the ITER fiasco is to a considerable extent a product of this chronic underfunding.

Currently US government support for fusion research – including both magnetic and inertial confinement fusion – amounts to less than 0.005% of GDP. At its highest point, in the early 1980s, the fusion budget corresponded to approximately 0.008% of GDP.

The difference is more significant than the mere figures would indicate, however. In contrast to today, up to the middle of the 1980s the U.S. government had funded a wide array of different approaches to fusion in addition to “classical” tokamak and laser fusion. Indeed, fusion – in contrast to fission – can in principle be realized in a great variety of different ways.

But starting around 1985 – the same year as the Reagan-Gorbachev summit – the US fusion budget was drastically reduced. The program was progressively “thinned out.” Projects were defunded, one after the other, and even shut down outright.

Graph comparing the U.S. government magnetic confinement fusion research budget to five funding scenarios from the 1976 Energy Research and Development Administration fusion development plan, with actual government funding through 2011. Image: Wikimedia Commons

(In this article I concentrate on magnetic confinement fusion. The domain of inertial confinement, of which laser fusion is only the most well-known example, was also subjected to a disastrous “thinning out” process. That story runs on a separate track, and I shall not go into it here.)

A horrifying example of thinning out is the fate of the Mirror Fusion Test Facility (MFTF) at Lawrence Livermore National Laboratory, a promising magnetic confinement fusion device with a configuration radically different from that of a tokamak.

The MFTF project was shut down in 1986 – on the very same day the construction of the reactor was completed. With no operating budget, the staff members lost their jobs overnight. No experiments were carried out on the device, which had cost the equivalent of over $1 billion in current dollars to build. 

The Mirror Fusion Test Facility (MFTF) under construction at the Lawrence Livermore National Laboratory (December 1983). Photo? Wikimedia Commons

In 1997 budget cuts led to the premature shutdown of the Tokamak Fusion Test Reactor (TFTR), which had achieved record levels of fusion power generation. Two years before its shutdown, TFTR also achieved a world-record temperature of 510 million °C.  Fortunately, the results gained in 15 years of operation served as a basis for subsequent devices, such as Japan’s JT-60.

The TFTR fusion reactor at the Princeton Plasma Physics Laboratory (1989). Photo: Wikipedia

A more recent case is the Alcator C-Mod reactor at MIT, a tokamak device radically different from tokamaks of the “classical” type and characterized by compact size and extremely high magnetic fields. This device was the latest in a whole series of devices, going back to the early 1970s, based on the work of the brilliant Italo-American physicist Bruno Coppi. Although extremely successful –  having achieved the world record for plasma pressure in a magnetic confinement device, for example – Alcator C was shut down in 2016 with no follow-on project.

Fortunately work on compact high-field tokamak approach has been taken up again, with the help of private capital, by the company Commonwealth Fusion. I have written about the current project in an earlier article (https://asiatimes.com/2020/10/changing-the-rules-of-nuclear-fusion/ ).

MIT graduate students in the Alcator C-Mod control room (2008). Photo: Wikimedia Commons

The policy of the US, European and other governments, to put all (or most) of their eggs into the single ITER basket, is both a result and a cause of abandoning a broad-based approach to realizing fusion, which would include adequate funding for both “mainline” and alternative approaches.  

ITER’s difficulties are no cause for pessimism

Some skeptics will point to the difficulties of ITER as further evidence that fusion power is at best a very distant prospect – or even not realizable at all. This is nonsense.

Since the late 1960s, thanks to decades of work on dozens of tokamak devices, the experimentally achieved value of the so-called fusion triple product – the crucial parameter measuring progress toward net energy generation by fusion reactions – has doubled on average every 1.8 years. That is even faster than the famous “Moore’s Law” for the development of semiconductor chips.

In the early decades of fusion research, the triple product was many orders of magnitude below the minimum level for so-called scientific breakeven (more energy released from fusion reactions than input energy from plasma heating systems).

Today, experimental reactors have come to within a factor of 10 of the threshold value. If the doubling trend continues – and there is no reason to think it cannot – the threshold value will likely be exceeded in a few years and the higher values required for viable power production will be only another few years away.

Naturally this assumes well-funded, broad-based efforts by the leading fusion nations, involving a multitude of devices, as opposed to “putting all the eggs in one basket.”

Meanwhile, the generation of substantial amounts of energy by fusion reactions, at multimegawatt power levels, was demonstrated already back in the 1990s by the two tokamak reactors: the Tokamak Fusion Test Reactor (TFTR) at Princeton and the Joint European Torus (JET) in Culham, England.

In 1997 JET generated a record 16 MW of fusion power from deuterium-tritium (DT) reactions at temperatures of 100-150 million degrees. The input heating power was larger – about 24 MW – but the system thereby came to within a factor of 1.5 of scientific breakeven. In 2022 JET produced a record energy output of 60 megajoules, at an average power level of 11 megawatts.

Today a number of tokamak experimental devices, such as China’s EAST, operate routinely at temperatures of 100 million degrees and higher,  sufficient for “burning” DT fuel. Currently, most of them are conducting experiments without tritium, in order to avoid large neutron radiation and the need for tritium handling. Otherwise the previous records surely would have been exceeded by now.

Naturally these remarks do not constitute “proof” that viable fusion power plants can soon become a reality. But they give reasons to be skeptical about the skeptics.    

The future of ITER

Aerial view of ITER site imn 2020. Photo: Wikimedia Commons

I am not suggesting that the ITER project – which is approximately 80% finished – should be abandoned. But it will be necessary to shift priorities and redefine the role of ITER in the context of the global fusion effort.  What must be abandoned, above all, is the scenario according to which ITER would serve as the basis for constructing a prototype electricity-generating fusion power plant. It is practically certain that such plants will be completely different from ITER. 

But money spent on ITER is not going out the window. Already now, years before the reactor goes on line, the ITER project has stimulated the development of fusion science, technology and engineering in a variety of ways, and has contributed to the development of an industrial supply-chain for fusion reactors.

Once completed, ITER will generate a wealth of knowledge in plasma physics and other areas, and serve as an invaluable test-bed for fusion-relevant technologies.

Granted, fusion research is costly, the ITER project excessively so. But rather than complaining about the expense, governments should ask themselves: isn’t it worth investing a few thousandths of a single year’s GNP in order to create an unlimited energy source?

Jonathan Tennenbaum (PhD, mathematics) is a former editor of FUSION magazine and has written on a wide variety of topics in science and technology, including several books on nuclear energy. He is also an international collaborator of the Institute for the Philosophy and History of Science at the University of Lisbon, working on alternative approaches to quantum physics.

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‘Collective ambiguity’ on Taiwan needs shoring up

Since the United States terminated its formal alliance with Taiwan in 1979, Washington has & nbsp, adhered & nbsp, to a strategy known as” strategic ambiguity”.

The Taiwan Relations Act, which Congress passed in that same year, declares that the United States did” regard any effort to determine the future of Taiwan by another than quiet indicates… a threat to the peace and security of the Western Pacific area and of grave concern to the United States”.

It also specifies that” the President and the Congress may determine the appropriate action in response to any such hazard”. This language & nbsp, resembles & nbsp, the United States ‘ formal alliance treaties with its Indo – Pacific allies, but falls short of an explicit defense commitment.

In order to communicate to Beijing that Washington might defend the self – governing island, US presidents and officials have & nbsp, routinely & nbsp, referred to the US policy towards Taiwan as being rooted in the Taiwan Relations Act and made general references to its interest in peace and stability across the Taiwan Strait.

In the last few years, however, President Biden has explicitly declared on & nbsp, four & nbsp, occasions that the United States would defend Taiwan. That said, the White House walked up Biden’s remarks each moment saying that there had been no change in US plan, adding more confusion to” proper ambiguity”.

On top of this shift, the Biden administration has pursued a new strategy that could be termed” collective & nbsp, strategic ambiguity”. Piece of Washington’s effort to bolster punishment across the Taiwan Strait has involved signaling to China that there could be a combined allied effort to defend the status quo.

Since Biden entered office, Washington has released joint statements with nine of its formal treaty allies– Australia, & nbsp, Canada, & nbsp, France, & nbsp, Germany, & nbsp, Italy, & nbsp, Japan, & nbsp, the Philippines, & nbsp, South Korea, and the & nbsp, United Kingdom– that include a line in the vein of” we emphasize / underscore / reaffirm the importance of preserving peace and stability in / across the Taiwan Strait”.

In June 2021, Kurt Campbell, the White House Coordinator for the Indo – Pacific, indicated the Biden administration’s intention with these comments. Discussing the references to Taiwan in the & nbsp, US – Japan & nbsp, and & nbsp, the & nbsp, US – South Korea & nbsp, joint statements issued earlier that year, he & nbsp, declared & nbsp, that” we are seeking to take these concerted actions to send a clear message of resolve that we are determined to maintain that peace and stability” across the Taiwan Strait.

These joint statements have resulted from various types of diplomatic engagements at different levels of seniority, including bilateral & nbsp, leadership – level & nbsp, summits, bilateral 2 2 & nbsp, ministerial dialogues, & nbsp, trilateral & nbsp, ministerial meetings, and a & nbsp, G7 & nbsp, summit.

Importantly, some of these combined claims mentioned Taiwan for the first time always or in decades. For instance, in April 2021, when Japanese Prime Minister Yoshihide Suga made an official visit to Washington, the leaders & nbsp, released & nbsp, a joint statement that referenced their shared interest in the” importance of peace and stability across the Taiwan Strait”, marking the & nbsp, first time & nbsp, since 1969 that Taiwan was mentioned in a joint statement by the two countries.

In June of that year the G7( made up of 6 NATO members and Japan ) & nbsp, published & nbsp, a joint statement in which they referenced Taiwan for the very & nbsp, first time, declaring that they” underscore the importance of peace and stability across the Taiwan Strait”.

New Philippine President Marcos Jr is resetting his world’s relations with China. Photograph: Twitter

More recently, when Philippine President Ferdinand Marcos Jr. made an official visit to Washington in May of this year, a US – Philippines joint statement & nbsp, declared & nbsp, that” they affirm the importance of maintaining peace and stability across the Taiwan Strait”.

Even outside of mutual claims with the United States, officials and senior leaders of US allies have made responses suggesting that their countries may get involved in a Taiwan disaster.

For example, Taro Aso, the deputy prime minister of Japan, said in July 2021 that if Taiwan experiences a significant event, it is not at all uncommon to view it as an existential threat. Japan and the US will need to cooperate in this situation to justify Taiwan.

It would be” inconceivable” for Australia not to participate in a US defense of Taiwan, according to Australian Defense Minister Peter Dutton & nbsp in November 2021. Given” our geographical location ,” President Marcos & nbsp stated in February of this year that it is” very difficult to imagine a scenario in which the Philippines will not somehow get involved” in the Taiwan conflict.

In addition to these emails, US friends in the Indo-Pacific are working to strengthen their military abilities in ways that may aid in Taiwan’s defense. US defence teamwork is essential to these initiatives.

For instance, the United States will sell Australia three to five nuclear-powered attack submarines( SSNs ) as well as share its nuclear propulsion technology to assist Australia in developing its own SSN through the AUKUS partnership between Australian, British, and American nations that was & nbsp, formed & msb, in 2021.

This will help Australia to travel to the waters surrounding Taiwan to carry out operations like anti-submarine war against China’s subsurface andnbsp, ship, which poses a threat and an threat to US carrier groups that would be essential to defending Taiwan.

Similar to this, Japan announced plans for counter-strike functions this season, including the purchase of 400 intermediate-range Tomahawk cruise missiles from the US. These do allow Japan to attack China’s weapon missiles and command and control facilities, which would lead to an intrusion of Taiwan.

Additionally, the United States has started preparing with its allies for possible joint actions. For instance, in April 2021, the interim US ambassador to Australia Michael Goldman andnbsp asserted that the US and Australia were” strategic planning” for a” range of contingencies ,” of which Taiwan is an” important component.” Similar to this, it was reported andnbsp that the United States and Japan had developed a joint operation schedule in December 2021 in response to an emergency in Taiwan.

President Biden expressed assurance that the United States and its allies are willing to maintain the status quo when he spoke at the G7 summit in May of this year. ” There is clear understanding among most of our allies that, in fact, if China were to act unilaterally, there would be a response ,” He & nbsp stated. The United States had 34 proper treaty allies at the time of this statement, including five in the Indo-Pacific and 29 in NATO.

G7 summit in 2023. Office of the Hiroshima G7 Summit

Despite this sign, there is still uncertainty regarding not only the kind of support that allies would offer, but also whether they would also offer support. Some analysts, for instance, are deeply and skeptically skeptical of any potential contributions from NATO allies as to whether they & nbsp, couldn’t, and would & nfspp, make significant military contributions.

Analysts are uncertain as to whether US supporters in the Indo-Pacific would offer any significant military assistance, even as there is confusion.

Only two US allies in the Indo-Pacific, Australia and Japan, could be expected to support the United States, according to a recent report by the RAND Corporation & nbsp. The authors also draw the conclusion that this support would likely only fall under the category of” limited support” rather than” operations support ,” which would entail offering the” full range of its capabilities.”

As a result, it may be more logical to assume that allied support had mostly consist of sanctions regimes resembling those that Washington and its allies imposed on Russia in response to their conquest of Ukraine.

However, given that China probably anticipates sanctions and would have factored these anticipated expenses into its calculations, the threat of sanctions may do little to discourage China. Additionally, sanctions and nbsp may be deemed unnecessary due to the expensive global economic and consequences that may result from a conflict, suggesting that US allies may not see much benefit in sanctioning China.

Prescriptions

The United States may take the following steps to support this shared signaling to China that Taiwan may be defended jointly:

  • First, the US should develop thorough plans with its allies that specify certain roles for how they can support US forces in an emergency, whether they be in operational, reconnaissance, or combat.
  • Second, in order to lessen China’s propensity to retaliate against” provocations” to appease public nationalist sensibilities, Washington and its allies should privately inform Beijing of the existence of some sort of contingency planning.
  • Finally, the United States and its allies may eventually start to do joint exercises drilling these plans, depending on the willingness of some US ally to withstand prospective pushback from China.

Together, these actions might persuade China’s command that US allies are sincere about taking part in a US defence of Taiwan, which might increase deterrence against probable aggression.

Additionally, in the event of a punishment failure, organized planning may lead to an outcome that is more likely to deny China its goal. The culmination of peace across the Taiwan Strait may be better ensured by the United States and its allies in this way.

( rupert @ schulenburg.co ) Rupert Schulenburg Uk) is an scientist who focuses on US-China competitors, US alliances, force posture, and Indo-Pacific security. He holds a BA( hons ) in international relations from the School of Oriental and African Studies( SOAS ) at the University of London as well as an MPhil in global security studies from St Andrews University. On Twitter, he can be found at & nbsp, @ R _ Schulenburg.

This content was first released by Pacific Forum, and it is being reprinted with their consent. A previous version was released by <a href="https://www.lowyinstitute.org/the-interpreter/emergence-collective-strategic-ambiguity-taiwan”>The Lowy Institute, & nbsp.

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Marcos squeezed between allies

After a surprise meeting this week between President Ferdinand Marcos Jr. and past Philippine president Rodrigo Duterte, Presidential Communications Office minister Cheloy Garafil stated that the former leader” gave some nice pieces of advice to President Marcoses.”

Without offering any specifics, Malacaang Palace said that the two men talked about” another problems” as well as the former president’s recent trip to Beijing. & nbsp,

The contentious vacation last month, during which Chinese President Xi Jinping requested Duterte’s help to improve diplomatic relations, was unsuccessful in Manila. Rumors of a falling out between the two were fueled by Deuterte’s outspoken criticism of Marcos Jr. ‘ military cooperation with the West as well as his choice to omit his subsequent State of the Nation Address( SONA ) last week. & nbsp,

But, Duterte and Marcos both expressed 1 during their meeting this year, reiterating their long-standing ally as the de facto ruling alliance in the Philippines. According to reports, Deuterte pushed Marcos to change his foreign coverage, particularly his harsh position against China in the South China Sea. & nbsp,

However, Marcos has also been put under increasing pressure to maintain his lessons by his friends in the West. Ursula von der Leyen, president of the European Commission, traveled to Manila this week to advocate for a new age of EU-Philippines security cooperation with an attention toward China. & nbsp,

The US Embassy in Manila, however, openly criticized a Chinese company’s involvement in an ongoing, massive renewal project in the Spanish cash. The infamously conflict-averse Marcos Jr., who is now in his second month in business, has all of a sudden found himself caught between rival friends, both at home and abroad. & nbsp,

Duterte has been more vocal with his views on foreign policy in recent months, despite his earlier promise to leave from office completely. Marcos Jr. visited Beijing without consulting with Philippine officials after openly criticizing his choice to increase military cooperation with Washington under the Enhanced Defense Cooperation Agreement( EDCA ). & nbsp,

Duterte was asked to” continue to play an important role in the pleasant participation” between the two places during a high-profile conference with Xi. The incident caused a commotion at apartment, with Marcos backers and opponents criticizing the journey. & nbsp,

The trip to Beijing by Duterte raises questions.

Duterte allies have attempted to portray the contentious explore as a proper exercise in covert diplomacy in an effort to counter accusations of the original president interfering with foreign policy. & nbsp,

Given the author’s” good position” with the Beijing management, Senator Alan Peter Cayetano, former foreign minister to Duterte, was quick to describe his former benefactor as a positive contribution to bilateral diplomacy. & nbsp,

” President Duterte has never been seen to compromise and sell the Philippines. In response to reviewers who claimed Duterte was acting as Beijing’s proxies, Cayetano told the media that although his eloquent tongue is different and he speaks separately,” he never sold out and will not sell out the Philippines.” & nbsp,

Marcos himself attempted to downplay the event in an effort to avoid a fight with an important ally. & nbsp,

The president told the media in advance of his meeting with Duterte this week,” As long as there will be someone who can aid, I am sure that he shall be able to tell us what happened during their talk and see how that affects us.”

The former president even met with Executive Secretary Lucas Bersamin, Defense Secretary Gilbert Teodoro, and special aide to President Secretary Antonio Lagdameo during his visit to Malacaang. & nbsp,

Marcos’ corporate calculus appears to have been impacted by Duterte’s treatment. He just had a meeting with Senate President Juan Miguel Zubiri to talk about the South China Sea’s aggressive behavior against Spanish ships, which were just proposed to be” highly condemned” by China.

The Philippine Coast Guard( PCG) accused Chinese ships of & nbsp earlier this year after directing a military-grade laser at the PCG crew.

The Senate ultimately decided on a watered-down resolution, which eschewed opposition Senator Risa Hontiveros’ call for the & nbsp, Department of Foreign Affairs to immediately take China’s actions to the United Nations General Assembly ( UNGA ), likely as the result of the president intervening. & nbsp,

West seduces Marcos Jr.

Von der Leyen discussed the need to” promote a new age of teamwork” between the Philippines and the European Union during her visit to Manila, emphasizing how the two” share so many values and interests” as other democracies, including the necessity of maintaining” the global rules-based get.” American allies have intensified their efforts to win over Marcos Jr.

During her meeting with Marcos, she criticized China for failing to” assume fully its responsibility under the UN Charter to uphold the sovereignty and territorial integrity of Ukraine” as well as” China’s more assertive stance in your region ] Southeast Asia.”

In the midst of rising tensions in the South China Sea, she emphasized the EU’s commitment to” strengthen cooperation with the Philippines on maritime security ,” including by improving” the capacity of your National Coast Watch Center( NCWC ) and your Coast Guard.” & nbsp,

The US Embassy, which is situated in the Manila Bay region, has even publicly criticized a Taiwanese firm that has been blacklisted for its role in restoration efforts there. & nbsp,

According to ambassador official Kanishka Gangopadhyay,” we have expressed concerns about the potential long-term and catastrophic impacts on the culture, the tenacity to biological hazards of Manila and adjacent areas, and to commerce.”

The embassy focused in particular on & nbsp, China Communications Construction Co ( CCCC ), a business that has received US Department of Commerce Entity List sanctions for” assisting the Chinese military construct and militarize artificial islands in the South China Sea.” The World Bank has also placed the Chinese firm on a blacklist due to dubious business techniques. & nbsp,

The Duterte administration, which approved large-scale allows between 2019 and 2021 for a total of 13 restoration projects covering 5, 000 acres in the Manila Bay region, left behind the presence of CCCC. & nbsp,

The US, which is possible even worried about its own security, hopes that the Marcos Jr. administration will rethink Duterte-era projects given to Foreign businesses. Due to a lack of funding and high interest rates, Manila suspended two large-ticket railroad jobs next year under the auspices of Beijing. & nbsp,

Antonia Yulo Loyzaga, the current culture minister, vowed to examine the projects based on concerns voiced by the relevant sectors. & nbsp,

Restoration has a certain value, evidently in terms of the economy, in my opinion. Loyzaga emphasized the Marcos government’s willingness to examine contentious Duterte-era projects, including those with Chinese connections, while stating that” we need to do the cost-benefit analysis in terms of the effect to the biodiversity and the longer-term impact, possibly what could result from climate change.” & nbsp,

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Intel expands in China despite sanctions

Within the parameters of US federal restrictions on the Chinese semiconductor market, Intel continues to promote its business in China. The Chinese industry, which made up 27 % of its sales in 2022, is not something it wants to give up.

The recent opening of the Intel Greater Bay Area Innovation Center in the Nanshan city of Shenzhen, the southern Chinese town just across the inside borders from Hong Kong, is an example of how the company is determined to conduct China business as usual, as quietly as possible. WeChat made this announcement at the end of July.

The facility, a collaboration between the Nanshan government and Intel, may grow Intel’s presence in China while advancing the high-tech industrial policy of the city. Artificial intelligence ( AI ), edge computing, server and PC applications, energy efficiency, and other technologies are anticipated to be included in its activities. According to reports, six nearby businesses have already registered.

According to Wang Rui, senior vice president and head of Intel China, the organization will” leverage Intel’s systems and habitat, facilitate the inclusion and growth of emerging sectors in the Greater Bay Area, and help develop the digital business.”

That is to say, for local businesses using its technology, Intel will offer professional support and marketing help. It won’t be expanding China’s manufacturing capacity, which is prohibited for recipients of US CHIPS Act grants.

Pat Gelsinger, the Director of Intel, has already made two visits to China this year. He met with Tsinghua president Li Bin and H3C CEO Yu Yingtao in Beijing during the first quarter of July to examine their organization partnership.

The Xeon Scalable computer, the Habana Gaudi2 deep learning and conclusion computer from Intel, and the new energy-efficient servers from H3C are even based on Intel technologies. Gaudi2 was introduced to China by Intel on July 11 at a media event in Beijing.

Gaudi2 will also be used by Inspur Group’s AI machines, a H3C rival. Gaudi2 is exempt from trade restrictions, but Inspur, an IT company with interests in fog technology, big data, and hypervisor software, is on the Commerce Department’s institution list.

Gelsinger also met with Liu Hongyun, president of xFusion Technologies, to talk about AI technology and energy-saving information center technology. More than 200 Fortune Global 500 companies and other customers in the telecoms, financing, online, state, and various financial sectors are served by xFusion, a site and software provider, which is present in 130 countries and regions worldwide.

CEO Pat Gelsinger of Intel. Featured image: Market Watch.

Gelsinger reportedly spoke with China’s State Administration for Market Regulation as well, but no further information has been made public. The skill of Tower Semiconductor, which was announced in February 2022, is still pending approval from China, according to Intel. The bargain might not be finished until the end of June, according to Intel’s announcement in January 2023. According to reports, August 15 is the ultimate date.

Gelsinger attended the 20th anniversary celebration of the opening of Intel’s IC promotional material and test center in Chengdu prior to these discussions. There were also the provincial government of Sichuan and the secretary of the Chengdu group.

Gelsinger met with Chinese Vice President Han Zheng, Chinese Minister of Commerce Wang Wentao, and Jin Zhuanglong, China’s pastor of business and information technologies, while also attending an Intel conference in Beijing in April. They officially talked about the security of the supply chain, the investment climate in China, and Intel’s plans to grow its operations there.

Local businesses that have joined the Greater Bay Area Innovation Center include Chipsea Technologies, another IC style business, Ugreen, a manufacturer of batteries, USB centers and other products, the Senary Technology Group, which consists of the electronic component distributor and design firm Serarytech.

Senarytech creates audio / video codec SoCs for commercial displays, virtual reality, auto dashboards, and other applications. For what purposes does China design Incident?

Power management, car, customer, and different applications, as well as professional measurement and control.

In Shenzhen, there are also the following partners and clients for Intel:

  • Shenzhen Innovation Technology specializes in industrial and road traffic data, situation applications, and automated control of roadside infrastructure. It develops products, manufactures them, integrates systems in the fields of video detection and analysis.
  • Video insights for safety and security surveillance, according to Shenzhen Extreme Vision Tech. Cutlery, guns, fireworks, and other suspicious objects are found by the Intel Open VINO profound learning conclusion kit examination algorithm.
  • Shenzhen Eii Tech specializes in audio / video technology for Windows office tablet and notebook computers, industrial control, security, medical, education, networking, etc.
  • Shenzhen Decenta Technology: Manufacturer of terminals and top servers for a variety of applications, including retail, online banners, industrial power, and stability systems. Custom creator of embedded components solutions based on X86 and ARM.

One of China’s largest amounts of high-tech businesses can be found in Shenzhen, including a number of start-ups, telecoms equipment manufacturers Huawei and ZTE, the technology and entertainment business Tencent, and the Southern University of Science and Technology in China. There are about 13 million people living there.

Nine places in the province of Guangdong, including Shenzhen, the mill town of Dongguan, and the capital city, are part of the Greater Bay Area, which also includes Hong Kong and Macau. They encircle the river of the Pearl River. Greater Bay Area has a population of more than 86 million people, and its GDP is significantly higher than that of South Korea — more than US$ 1.8 trillion. It plays a significant role in Intel’s presence in China.

Wang Rui. Iijwei picture

Wang Rui earned a PhD in architecture and nbsp at Columbia University after graduating from the South China University of Technology’s Electronics Engineering School in Guangzhou. She worked at electronic design automation ( EDA ) company Cadence and Intel rival AMD before joining Intel in 1994. In the current political climate, it would be very challenging, if not impossible, for a Chinese student to do such an occupation.

Wang spoke at the Baidu World 2020 technology conference in 2020 while serving as vice president of Intel’s Sales & amp, Marketing Group, and China country manager. At the conference, Intel and Alibaba announced their joint efforts in AI, 5G telecom, data centers, cloud computing infrastructure:

The most crucial factor in creating an business ecology in China, she said, is to firmly establish roots in the local business and its users’ needs. With the full-speed construction of” new equipment” and 5G, China has moved into the phase of accelerated industrial web development. In order for technology to improve everyone’s life, Intel and Baidu will work closely together to develop endless possibilities for the future through ongoing advancement.

Since 1985, Intel has been based in China. It’s likely to last longer than the existing anti-China panic in Washington, DC.

@ ScottFo83517667 is the author’s Twitter account.

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US leaders split on China policy

China has evolved into the United States’ main economic rival and therefore army, so US scheme aims to restrain its economic, political, and military development. On the other hand, US scheme aims to ensure that its businesses’ business with and investments in China will benefit the United States in a variety of ways.

The US’s disagreements over” decoupling” the two nations’ economies from the more moderate version of the same thing,” De-risking ,” show how divided US policy is toward China on both sides.

The challenging real for the United States is its economic reliance on the No. 2 economy in the world, which only gets worse as China continues its relentless march to overtake it. Similar to this, China’s astonishingly rapid economic growth over the past few years has complicated its relationship with the US market, US dollar, and US interest charges.

Contrarily, neither the Soviet Union nor Russia always provided the US with similar economic opportunities or aggressive challenges as China does today. Consider the following World Bank 2022 GDP data for Russia, Germany, China, and the US:$ 14.7 trillion,$ 1.5 trillion; and$ 29 billion, both, in this context.

The military-industrial advanced and the political right arms of both main US political parties have long dominated how US mainstream media portrays the nation’s international policies.

Particularly over the past ten years, China has been accused by the media more and more of sharply increasing its influence abroad, domestic authoritarianism, and policies that target the United States.

Great business interests have pushed for a very unique US foreign policy in recent decades, prioritizing profitable cooperation between China and the US. The US’s foreign legislation vacillates and veers between these two wires. While President Joe Biden refers to Xi Jinping as a” dictator ,” Jamie Dimon of JPMorgan Chase Bank and US Treasury Secretary Janet Yellen travel to Beijing one day to support mutual interests.

Due to the Cold War’s record and legacy, US media, politicians, and academics have become accustomed to exponential criticisms of communism as well as the parties and governments they associate with it.

Right-wing political forces have always been willing to upgrade anti-Soviet and Cold War justifications and catchphrases to use as ongoing foes against China’s authorities and Communist Party. An ongoing strategy is marked by both fresh problems( Uighurs ) and older ones( Taiwan and Hong Kong ).

Richard Nixon and Henry Kissinger, however, reconnected with a China that had already started on an economic growth wave that never stopped as the Cold War wound down and finally collapsed with the fall of the USSR.

” Communist” China feeds capitalists’ profits

Investors from the Group of Seven( Western Europe, North America, and Japan ) capitalists poured into China to take advantage of its comparatively much lower income and its rapidly expanding domestic market. Consumer products and investment products have been flowing out of Chinese companies over the past 50 years to markets around the world.

Global supply chains became very intertwined with China. Bills in US dollars began to flow in as a result of imports from China. To cover its expanding budget shortfalls, China lent many of those dollars up to the US Treasury. The United States, the largest debtor nation in the world, has two main creditors in China and Japan.

China’s expense of its accumulating funds in US Treasury securities over the past 50 years has aided in the rapid growth of the US national debt. In order to support US economic growth and recoveries from a number of financial crashes, this contributed to keeping interest rates reduced.

China’s somewhat low-cost exports were a reflection of its lower wages and lively government development initiatives. Over the majority of those centuries, those exports to the US contributed to preventing prices. Lower prices consequently eased employee forces to demand higher pay, supporting US capitalists’ profits.

The working and accomplishment of US capitalism were greatly influenced by US-China relations in these and other ways. Cutting those contacts would put the United States at great financial risk.

Additionally, many of the proposals that support for cutting are illogical and ineffectual fantasies. If Washington may compel US and other foreign corporations to shut down operations in China, they would probably relocate to another low-wage Asian countries. Because American income and additional costs are too high and non-competitive, they would not go back there.

Where they do get will require them to import goods from China, who is already their most prolific manufacturer. In other words, making businessmen left China may only slightly benefit the United States and slightly harm the Chinese.

It is also a false story to shut off the China industry for US chip manufacturers. US-based businesses won’t be able to compete with different bit manufacturers based in nations that are not cut off from the Chinese market if they lack access to the booming market in China.

The majority of Chinese exports must come in for US socialism to compete in China’s areas. European, Japanese, and Chinese banks may eventually outpace US megabanks if they don’t have access to China’s rapidly expanding areas.

China’s banks and those of its allies in India, Russia, Brazil, and South Africa( the BRICS ) would have control over access to the profitable financing of Chinese growth, even if the US could coerce or force G7 banks to join a US-led exit from China. The BRICS now outperform the G7 in terms of overall GDPs, and the gap between them continues to grow.

becoming” hard” on China

Without nuclear war, the United States was chance significant dislocations, losses, and expensive adjustments for US socialism if it continued its resumed Cold War campaign against China. Of all, the dangers associated with nuclear war are also higher.

No one wants to take such challenges, with the exception of the most serious aircraft groups in the US. The G7 supporters of the United States most certainly do no. They are currently visualizing their ideal futures in a manic world divided between hegemons that are on the decline and those who are rising, as well as possibly opposing groups of other countries.

The majority of the planet understands that China’s unrelenting expansion and growth are the main forces behind the global market of today. Most people also believe that the United States is the main enemy working against China’s ascent to power status on a global scale.

Some observers of the China-US conflict overlook the factors and determinants of this conflict, which are found in the extreme conflicts and inconsistencies plaguing the disputes between the employer and employee classes in both superpowers.

Whose prosperity, income, and social standing will have to endure the heavy burden of covering the costs of declining hegemony? is the fundamental question that those class conflicts in the United States address. Will there be a continuation, cessation, or reverse of the upward wealth distribution over the past 30 to 40 years? Are the growing workers violence in the US and the quasi-fascist right wing’s resurgence foretastes of future conflicts?

A remote, underdeveloped agrarian economy was quickly transformed into an urban, middle-income, and industrial economy by China’s remarkable ascent. It took centuries for the horizontal change in Western Europe to result in significant, acrimonious, and harsh class conflicts. Because the transformation in China took a few years, it was probably the most deeply distressing.

Will there be identical group conflicts? Are they already constructing beneath Chinese society’s edge? Could the Global South be the place where international capitalism, as defined by its employer-versus-employee productive core, suddenly plays the finale of its profit-maximizing fetish?

Both China and the United States have workforce systems that are centered on working organizations where a small number of employers control the majority of newly hired workers.

These work businesses are primarily secret businesses in the United States. China has a hybrid program where businesses are both privately and publicly owned and run, but where both types of working organizations share the employer-versus-employee relationship.

In that business, the company class normally has much more wealth than the worker class. Additionally, that rich school of employers may and frequently does purchase powerful political influence. Conflicts, conflicts, and social change are brought on by the resulting blend of economic and political injustice.

In both China and the United States, that truth is now well-established. As a result, since 2009, the federal minimum wage of$ 7.25 per hour has not increased in the United States. Both significant social events are to blame.

Janet Yellen delivers remarks lamenting the escalating inequality in the United States, but it keeps getting worse. American capitalism has a history of placing the blame for the poor’s plight on the sufferer.

Xi Jinping also expresses concern about escalating inequality, which is probably more pressing in countries that identify as socialistic. China’s just severe socioeconomic disparities continue to be a major cultural issue despite significant efforts to reduce them.

The conflict between the US and China is influenced by both countries’ inside class conflicts and struggles as well as their interactions with one another.

China adjusts to the complexities of the split-police strategy used by the United States. It is ready for both scenarios: fierce economic nationalism encouraged by military conflict or a jointly planned quiet economic coexistence.

China’s growth will likely continue as it waits for America to decide how to shape the United States’ financial future, matching and finally outpacing that of the US.

China’s amazing hybrid business of private and state businesses supervised by and subordinate to a strong political party is ensured by its astounding economic growth success over the past 30 years.

The upcoming chapter in capitalism’s perilously odd mix of class and regional conflicts is eagerly anticipated by a worried world.

The Independent Media Institute’s Economy for All task, which was provided to Asia Times, created this content.

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US dollar’s decline could benefit Asian economies

The major credit rating for the US government was downgraded from AAA to AA on Tuesday by the global standing agency Fitch. Additionally, Fitch repeatedly engaged in down-to-the-wire debt-ceiling negotiations that put the government’s ability to pay its charges in jeopardy and predicted financial decay over the following three years.

There are serious, legitimate questions to be asked about the long-term trajectory of the dollar because this is the second major rating agency( after Standard & amp, Poor’s) to deprive the US of its triple-A rating.

Read also: The$ 3.2 trillion in Asia is at risk due to Fitch’s lowering of the US.

Past firmly teaches us that little lasts permanently, despite the fact that no one can predict the future. Previously, global supply economies have come and gone. It may occur once more.

In fact, I think we are seeing the world start to leave a dollar-dominated economic program in real time.

This is due, among other things, to the huge amount of desperate money printing that has been done to monetize these debts and the astronomical levels of debt that have resulted in a significant decline in the long-term value of the currency.

As Russia and Saudi Arabia pursued the Taiwanese yuan for fuel deal earlier this year, I was one of the first to raise concerns about the US currency’s supremacy.

One of the most significant and frequently traded commodities worldwide, crude has historically been priced and traded in US cents. Due to the fact that nations that want to buy oil must first obtain US dollars to do so, this has given the US money a strong position in international financial markets.

The desire for the money may be drastically reduced if petrol trading shifted away from the US dollar, which may result in a decline in the value and dominance of the greenback.

For Asian markets, a transition away from the impact of the money may be advantageous.

Asian nations stand to gain from reduced reliance on the dollar as the most populous and commercially diverse region in the world. & nbsp, It would give them more freedom to choose their monetary policies.

Now, several Asian nations, including China, must consider the US Federal Reserve’s actions when deciding on their own interest rates and financial policy measures. They would be able to implement policies that are more suited to their home economic conditions if their reliance on the dollar was reduced, probably fostering stability and growth.

Asian economies may probably diversify their reserve currencies as the dollar lost its hold, opening up more opportunities for local trade and investment. & nbsp,

A international currency system would encourage the widespread use of local currencies like the Indian rupee, Chinese yuan, and Japanese Yen, increasing the accessibility and effectiveness of trade within Asia. This would strengthen intra-regional economic cooperation and lessen the dangers of being exposed to a single strong money.

Asia has long struggled with the fluctuations of the dollar, which can have a negative effect on their cash flows and business balances. A lessening of the dollar’s potency may result in more stable exchange rates, lowering the uncertainty and uncertainty of cross-border transactions.

Eastern companies could therefore make more confident plans and investments, which improved the region’s financial stability and growth.

Additionally, as a precautionary measure, Asian economies have frequently accumulated sizable foreign exchange reserves, mainly in dollars, due to the dollar’s dominating status. This practice does have an opportunity cost, though, as those resources could be used to invest in more profitable home projects or different currencies.

Asian nations may be encouraged to diversify their reserve holdings as the dollar’s dominance declined, which would improve resource allocation and boost investment in creative industries.

Adopting a more varied and balanced currency system, in my opinion, could be crucial to realizing the full potential of Asia’s active economies as the world becomes more connected and multipolar.

Nigel Green is the CEO and founder of deVere. Follow him @ nigeljgreen on Twitter.

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Jammu & Kashmir on the cusp of sustainable growth  

Content 370 of the American constitution was repealed four years ago, on August 5, 2019. A momentary clause in Article 370 allowed Jammu and Kashmir to have its own charter. It was developed in the particular historical perspective of India’s division and the territorial dispute between the two post-colonial states, India and Pakistan. & nbsp,

There was a lot of debate over the years as to whether Article 370 had outlived its usefulness. There were worries that its culmination in Jammu and Kashmir was obstructing the basic rights of women and children as well as immigrants. & nbsp,

All rules of the Indian Constitution and other liberal laws could be applied to Jammu and Kashmir after Article 370 was repealed. Additionally, Jammu and Kashmir’s state was split in two, giving rise to the Union Territories of Ladakh( J & amp, K ) and Jamp, Kashmir. In addition, & nbsp,

There was a lot of speculation at the time that Article 370 was repealed that the action had cause hostilities between India and Pakistan to suddenly rise and the entire area to be engulfed in assault. The previous four years’ experience has been the exact opposite.

To make predictions about the financial repercussions of the repeal of Article 370 in August 2019 is a little to first. According to Professor Durgesh K Rai, the global Covid – 19 pandemic that followed the abrogation in early 2020 limited the Indian government’s ability to swiftly implement a number of policy measures to revitalize J & amp, K.

However, there has been a noticeable increase in economic activity in J & amp, K. & nbsp, during the post-pandemic phase.

It was estimated that an unprecedented 18.8 million tourists visited J & amp, K in 2022, the highest number in 75 years, as a result of the perception that overall terrorist incidents have decreased. The increase in visitors led to new job opportunities in the hospitality industry as well as related fields like travel and hospitality. & nbsp,

In J & amp, K., there has been a rise in hotel construction and an increase in paying-guest accommodations over the past two years. The tourist infrastructure is also being renovated.

As part of the” Tourist Mission” initiative, the government is developing” 75 new destinations, 75 new Sufi / religious sites, 75 % new cultural / heritage sites and 75 percent new tracks” to ease congestion in well-traveled tourist areas and provide travelers with a wide range of experiences.

A Film Policy – 2021, with provisions such as a time-bound single-window permission mechanism, financial incentives, easy access to transport infrastructure, and revival / upgradation of cinema halls, was also approved in order to encourage” film tourism” in picturesque J & amp, K.

Administrative allocations to the hospitality industry have significantly increased. The number of visitors to J & amp, K will continue to rise in the upcoming years thanks to improvements in tourist infrastructure and government initiatives. & nbsp,

The agricultural exports from J & amp, K., which produces more than 75 % of the nation’s total apple production, have increased by 55 % in recent years.

Despite an increase in apple generation, there have been difficulties due to price fluctuations in the market yards. An” Apple Cluster” is being established in the Shopian city in order to overcome these obstacles. In order to compete on international markets, this clump may promote price improvement close to farms and improve branding and marketing initiatives.

The planting industry is also prepared to take off in the area. Lavender from J & amp, K, and other medicinal plants are highly sought after in international markets. The colored trend initiative has increased lavender cultivation over the past few years. & nbsp,

Similar to this, crops like lemon grass, thyme, rose, and wild flower have been grown more successfully thanks to aroma missions. Additionally, there has been a rise in the production of yellow over the last two years.

The craft industry has seen solid advancements. A unique credit-card system was introduced in 2020 to make it simple for artisans and weavers to obtain financial resources.

The Karkhandar program was introduced by the central government two years ago with the goal of reviving dwindling crafts through talent advancement by imparting new skills and raising the wages of the workers. Between the fiscal years 2021 – 22 and 2022 – 23, the export of handicrafts from J & amp, K., such as shawls and carpets, nearly doubled. & nbsp,

The Kashmir Valley is being connected to the rest of India by massive infrastructure projects being implemented in J & amp, K. Indian Railways. The rail line between Jammu, Udhampur, and Katra in the Jamdu area and Baramulla, Banihal, Kashmir Valley, has so far been operationalized. The Chenab River in the Himalayas will be the site of the world’s tallest railway bridge, according to & nbsp. & nbsp,

Large construction projects have also been started, including the longest road in Asia, the Zojila Tunnel, which will guarantee all-weather connection between Kashmir and Ladakh. J & amp, K’s economic interactions with India and the outside world will be fundamentally changed by the operationalization of the railway line and new road projects.

In terms of foreign immediate assets, the EMAAR class, a Dubai-based company with offices all over the world, is building an all-purpose tower and shopping mall in Srinagar, Kashmir. One of the first investments made in Kashmir by a foreign business is this job. The Third G20 Tourism Summit, which was successfully held in Srinagar in May, demonstrated J & amp, K., and nbsp’s potential as a tourist destination.

Sustainable peace in post-conflict situations, like J & amp, K., necessitates a wide range of economic and political actions. Many financial and system initiatives are being rapidly implemented in the federation territory despite the difficulties caused by the pandemic.

However, Pakistan’s actions will also have an effect on the future trajectory of peace and prosperity in J & amp, K. The international community needs to persuade Pakistan to stop encouraging violence and taking reckless behavior in the area.

After all, India will be able to project power to its north, which is also in the best interests of New Delhi’s strategic partners, thanks to sustainable economic growth and the successful completion of its infrastructure projects in J & amp, K. In addition to & nbsp,

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Fitch downgrading US puts Asia’s $3.2 trillion at risk

It’s a story of two devaluations, and the response in international markets couldn’t be more dissimilar.

All hell broke loose in international markets in August 2011 when S & amp, P Global Ratings stripped Washington of its AAA status. Fitch Ratings & nbsp’s downgrading of the US in August 2023 was met with a much calmer response.

However, Fitch’s decision and the logic behind it are a much bigger problem for Asia than the lack of retaliation in the bond and stock industry suggests.

For starters, it serves as a reminder that confidence in the cornerstone of the global financial system is waning. Another possibility is that, as Washington fiddles, this place will soon be consumed by more than US$ 3.2 trillion in state wealth.

The US Treasury securities held by major Asian authorities are the subject of this allusion, which is enormous. The interactions surrounding these traditional ends are very different here as well.

The conventional wisdom twelve years before was that Eastern central bankers had the purchase. The concept was that Washington could make history’s most impressive margin call if they took its best bankers for granted. It is evident this week that Asia is essentially trapped by its peaks of money.

This explains why neither China, the second-largest country with$ 860 million in debt, nor Japan, which holds the largest US Treasuries with a$ 1.1 trillion balance, have dumped significant amounts of dollar-denominated loan. The same is true for South Korea($ 106 billion ), Taiwan($ 235 billion ); India($ 232 billion; Hong Kong ($ 277 ); Singapore($ 188 billion ).

The global financial system would collapse at the slightest hint that Washington’s Eastern bankers are bailing on the US Treasury business.

Not that Eastern officials aren’t being tempted by the US to do just that. Fitch cited turbulent politics as much as America’s financial flight toward the$ 33 trillion national debt amount in its justification for downgrading Washington. The ratings firm claimed that Republicans were tampering with the loan roof.

Despite the June bipartisan agreement to suspend the debt limit until January 2025, Fitch believes that standards of governance, including on & nbsp, fiscal, and debt matters, have steadily declined over the past 20 years.

Due to a” high and growing” government debt burden, Fitch emphasized” expected financial decay.” However, it also stated that a significant factor was the mob at the US Capitol on January 6, 2021.

We’ve seen a very steady decline in governance over the past couple of years, according to Richard Francis, co-head of Fitch’s Americas republic ratings division, who spoke with CNBC. A few crucial components may be highlighted. January 6 would be one.

At Oanda, strategist Edward Moya asserts that the schedule” certainly caught all off guard.”

So far, serene has prevailed.

Global markets are currently handling the Fitch downgrade much better than they did S & amp, P’s in 2011.

According to researcher Tan Kai Xian at Gavekal Dragonomics, investors should accept the drop in pace because Uncle Sam can easily meet his near-term payments. However, as US fiscal deficits increase to 6 % of Economy during a growth phase, focus should still be paid to debt sustainability.

Tan continues by citing three factors that indicate the US Treasury market is responding with a” everyday sigh.”

Even after a debt-limit agreement between Congress and US President Joe Biden was reached in June, One, & nbsp, Fitch, and the US kept the country on” negative watch” in May.

Second, violent business repricing wasn’t required because investors already knew the causes of the downgrade.

Additionally, it is unlikely that the upgrade will have an impact on how US Treasuries are used as a base advantage.

After all, Tan contends,” US Treasuries continue to be the Federal Reserve’s preferred form of collateral for its borrowing services.” Tan claims that because the parliamentary agreement suspends the US’s borrowing restriction until January 2025, it can easily make payments for the following 17 months.

The real question right now is whether the US Treasury’s planned large-scale debt issue can be absorbed by international markets without experiencing a sharp increase in yields, which would also mean that funding costs for Washington would increase.

In its so-called weekly refunding auctions next week, the Treasury announced earlier this week that new debt issuance would increase to$ 103 billion, substantially more than most dealers anticipated.

In the midst of discussion about the direction US yields are taking, strategist & nbsp, Benjamin Jeffery & ndrp at BMO Capital Markets, says,” The question from here is whether investors will be willing to buy the dip” or” if the selloff has room to extend.”

On the plus side, the group led by Fed chair Jerome Powell is no longer predicting a downturn. Bank of America dropped its forecast for the a & nbsp, or recession this year, this week, making it the first major bank to do so.

In a word, BofA economists stated that” new incoming data has forced us to reevaluate our earlier belief that the US economy is most likely to experience mild recession in 2024.” The poverty rate has remained close to all-time highs, economic activity growth over the past three rooms has averaged 2.3 %, and income and price pressures are moving in the right direction, albeit slowly.

The largest US secret payment provider, ADP, announced on Wednesday that 324, 000 new jobs had been added by private employers in July, much exceeding the 175, 000 that some economists had anticipated.

According to ADP analyst Nela Richardson, the business is performing better than anticipated and household spending is still supported by a strong labor market. Without widespread job losses, give growth is still slowing down.

As a result, some well-known economics concurred with US Treasury Secretary Janet Yellen that the rationale behind the Fitch drop is” obsolete.” The choice was described as” ridiculous and incompetent” by former Treasury Secretary Larry Summers. The chief financial advisor to Allianz, Mohamed El-Erian, was” baffled” by Fitch’s timing and justifications.

More to follow?

However, if you look at it more broadly, Fitch’s upgrade is the edge of the proverbial iceberg when it comes to the US.

According to Lawrence Gillum, chief fixed-income strategist for LPL Financial, continued fiscal expansion / deficits could lead to additional downgrades from rating agencies. Therefore, there will probably be more downgrades until the US government’s financial house is in order.

The last thing Washington’s major Asian financiers want to think about is that scenario. The ability of American consumers to power in Asia’s export-driven economies may be severely hampered by rising US borrowing costs. And the state’s prosperity, in the billions, is at stake.

It’s a situation that Chinese officials have flagged in the past, more so than Wen Jiabao, who served as leading from 2003 to 2013.

Wen urged Washington to maintain its AAA standing in 2009, in the wake of the consequences from the 2008 collapse of Lehman Brothers. He & nbsp said,” We have made a huge amount of loans to the United States.” ” Of course, we are worried about our assets’ security. To become completely fair, I’m a little concerned.

Washington, Wen & nbsp, and others emphasized that the country must” honor its words, remain a credible nation and guarantee the safety of Chinese assets.”

Cui Tiankai, China’s adviser to the US at the time, hinted that Beijing may one day walk to reduce Treasuries assets amid worries about costs almost a century afterwards, in 2018. He stated,” We are considering all choices.”

Fan Gang, a prominent advisor to China’s northern bank, also discussed diversifying away from the money in 2018. Fan remarked,” We are a low-income land, but we are high-wealth country.” ” We ought to & nbsp, make better use of money.” It is preferable to invest in some authentic goods more than US government debt.

De-dollarization

The Fitch report showed why efforts to remove the money from its rod are being made more aggressively. A free alliance of countries is working to find a new supply money, including China, Russia, Brazil, Saudi Arabia, the United Arab Emirates, and people.

For instance, Brazil began trading in various currencies like the Chinese yuan and the Russian ruble this time. President of Brazil, Luiz Inacio Lula da Silva & nbsp, pledged his support in April for the development of a BRICS & dbSP, or monetary unit, to be used by members of South Africa, China, Russia, and Brazil.

Why can’t a bank, BRICS & nbsp, or an institution have access to A & NBSP, currency, and NBPSP to finance trade relations between Brazil and China as well as with all the other BRIC nations? Lula enquired. After the end of golden parity, who made the decision that the money was the trade, currency, and nbsp?

Or, as Lula’s finance minister Fernando Haddad puts it,” The advantage is to avoid the shackles imposed by having business operations settled in the forex andnbsp of a country non-participant to the deal.”

In Beijing, Xi Jinping finds Lula’s support to be music to his ear. The Chinese president is rapidly increasing efforts to strengthen the Global South‘s position in political decision-making. During his second term in office, Xi is putting developing nations in the areas from Latin America to Africa to Asia to Oceania at the top of the list for becoming a more powerful economic and diplomatic power.

Anwar Ibrahim, the prime minister of Malaysia, stated this year that China is willing to talk about creating an Asian Monetary Fund, a shift that would lessen the impact of that organization in the area.

This would bring back a long-forgotten idea that most splendidly surfaced during the Asian financial crisis in the late 1990s. Asian leaders suggested a loan portfolio at the IMF’s annual conference in September 1997, which was held in Hong Kong. IMF and US Treasury leaders were the ones who came up with this idea. Anwar served as Malaysia’s fund minister and deputy prime minister at the time.

However, as China’s money becomes more and more important in international business and finance, there is a drive for an Asian monetary fund. & nbsp,

The globalization of Yuan coincides with a rush of new international trade agreements that exclude the money, including Beijing and Moscow dealing in yuan and rubles, China and Brazil agreeing to negotiate trade in the currency and reais, India and Malaysia increasing use of the rupee andnbsp in diplomatic trade.

The 10 associate Association of Southeast Asian Nations is working together to increase local trade and investment in nearby assets rather than cash. The largest economy in ASEAN, Indonesia, collaborated with South Korea to increase pound deals and prevailed.

Pakistan wants to start using renminbi to pay Russia for fuel imports. The United Arab Emirates and India are discussing expanding their non-oil industry in pounds. Lately, Argentina increased its currency-swapping relationship with China by about$ 10 billion. It is a reference to the burgeoning anti-dollar activity in South America.

In addition to Washington’s fiscal outlook, Biden made the decision to” politicize” the money to condemn Russia over Ukraine, which further damaged investors’ confidence in the US dollar.

According to Frank Giustra, co-chairman of the International Crisis Group, de-dollarization will continue despite America’s good opposition because the majority of non-Western nations want a trading method that does not expose them to nbsp, money weaponization, or hegemony. ” The question is no longer if, but when.”

In addition to the 3.2 trillion reasons already given to Asia, Fitch’s upgrade is yet another cause for concern for the money.

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Israel should reassess its relations with China

Benjamin Netanyahu, the prime minister of Israel, has made plans to visit China, which has prompted such a trip. Netanyahu was in charge of enhancing diplomatic ties and assisting in opening up the sizable Chinese market for Israeli goods.

China, a global powerhouse, wants to gain more recognition in the Middle East and is particularly serious in Jewish systems.

It is time to reevaluate Jerusalem’s ties to Beijing, even though the visit is currently in fear due to Netanyahu. China is a sizable industry, but it is also one of the United States’ competitors.

The US and China’s rivalry is a key element of the modern worldwide scene. It is difficult to imagine that Israel won’t support the US in this conflict between the political world’s leader and an ascending dictatorship. Israel must express some reluctance toward China in order to maintain its strong aid for the US, the State of Israel’s most significant friend.

Beijing is also not likely to take Washington’s place as a proper friend.

It is noticeable that the US and Europe are attempting to sever their ties with China on a political and economic level. There are efforts to reduce imports from China, particularly in goods where reliance on China poses a threat to national security.

Additionally, steps are being taken to cut back on Chinese assets. In order to stop Foreign industrial and technological spy, the West is becoming more and more vigilant. Israel is even moving in this direction, primarily as a result of Washington’s stress.

So, it would be wise to rethink your trip to China. Second, it is viewed by many as a show of defiance against US President Joe Biden, who, eight months after taking office as prime minister once more, has yet to extend an invitation to Netanyahu to attend the White House. On a number of problems, particularly Iran, settlements, and constitutional reform, the Biden presidency disagrees with the Israeli state.

For the State of Israel, it is unwanted to aggravate tensions with the US over a non-existentential problem. Additionally, the Democratic and Republican parties in the US both harbor hostility toward China. One of the few problems that the divided American political system does agree on is the plan toward China. A trip to China may be postponed.

Additionally, Israel is now receiving criticism for its approach to Ukraine, and European nations anticipate that it will support Kiev more effectively in its conflict with Russia. Even though Jerusalem’s circumspect approach to Kiev makes sense, it is not a good idea to portray Israel as departing from European democracy because its prime minister travels to China.

The I2U2 initiative, which connects India with the Middle East and the Mediterranean via the United Arab Emirates and Israel, could be negatively impacted by a journey. Although it is marketed as an economic span, it strengthens the Abraham Accords on a political and corporate level. Additionally, it might be viewed as an American substitute for the Chinese Belt and Road Initiative.

relationships to the Indo-Pacific

Israel may, in fact, take into account its ties to the nations of the Indo-Pacific area, which serve as the primary stage for the American-Chinese power struggle. India, Japan, South Korea, Australia, the Philippines, Vietnam, and Singapore all have a heightened sense of threat from China as result of Beijing’s extreme coverage in the region.

Israel and the Asian region have substantial economic ties and crucial national security cooperation. Israel may be careful not to sour the connections it has worked so hard to forge in order to boost Israeli product selling to the Chinese market.

Given that the economic growth rate is slower than anticipated, there are many concerns about the Taiwanese economy’s resilience in the wake of the crisis. Large export dependence, high levels of state and business debt, stark economic disparities between China’s regions, ecological issues, and an aging population are among the structural issues that plague the Chinese economy.

The enormous state ownership of businesses and government legislation are, without a doubt, the biggest issues facing the market. All of this is not encouraging for the Foreign business.

China has never been Israel’s political ally. Beijing has angry voting habits at the UN and other international organizations.

China and Iran, a ferocious foe of Israel, entered into an agreement in March 2021 that promised sizeable Chinese assets in exchange for crude materials for 25 years. Although the words of the agreement was not made public, Tehran was able to lessen the US and its allies’ financial loneliness by signing it.

The Islamic Republic’s position in the region was strengthened in March when China mediated a deal between Iran and Saudi Arabia.

China is a steadfast ally of the Palestinians as well. China voted in favor of the UN General Assembly resolution in December 2022 asking the International Court of Justice to provide guidance on the effects of Israel’s activity of Arab lands. In June, it also entered into a” proper relationship” with the Palestinian Authority.

The development of missile and nuclear systems in the Middle East is also a result of China. It is difficult to believe that China did not notice North Korea’s cunning part in transferring destabilizing solutions to Iran and Syria.

Why does Israel recognize China’s success in its desire to become more well-known in the Middle East? A re-evaluation of Israel’s place toward Taiwan, a democratic and prosperous nation, is also required in illumination of the dangerous Chinese policy toward Israel. Maybe it’s time to warn China that there is a cost to its unfavorable perception of Israel.

Israel is forced to explicitly and strongly support the US in the fight against the world. Even though it sells less to China, that is necessary. Netanyahu should include more capital places in Asia in his journey if he still believes that going to China is worthwhile.

The Jerusalem Institute for Strategy and Security ( JISS) is led by Professor Efraim Inbar.

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