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The United States Department of Defense recently published its annual report “Military and Security Developments Involving China.”

This “China Power” report provides a detailed description of the People’s Republic of China‘s military as well as its capabilities and likely objectives. The section on China’s rapid nuclear weapons expansion created a particular stir – especially as it caught many observers by surprise.

A friend asked what this writer made of it all.

But is there really a Chinese military buildup?

American analysts now mostly agree there is a rapid expansion of China’s nuclear arsenal. It reflects the broader, rapid growth of People’s Liberation Army (PLA) capabilities over the last 20 years. 

That growth is fairly considered the biggest, fastest military buildup seen in any country since World War II – possibly the fastest in human history.  

For many years the expert consensus on China’s nuclear warhead inventory was it numbered around 300 or even fewer. Then, in 2021, that estimate changed – all of a sudden – to over 400. And now it’s estimated to be 500 warheads, with that number expected to double by 2030.

As importantly, the PRC is developing more and increasingly effective and accurate delivery systems for its nuclear weapons.

It’s worth noting that “expert consensus” has usually underestimated the rate at which Chinese military capabilities of various sorts develop. In fact, the experts collectively often miss by a decade or two.  

Take PLA Navy aircraft carriers. The thinking was that the Chinese would need decades to even begin to master carrier operations. Indeed, such was the lack of concern – if not condescension – on the US side that the then-PACOM commander, Admiral Timothy Keating, noted in 2009 that he saw nothing wrong with the PLA Navy having aircraft carriers. And that he would do what he could to help, if asked.  

Well, now it has three carriers and is rapidly figuring out how to use them.

What does it mean for Chinese nuclear options? 

One fairly asks if something similar has taken place with estimates of Chinese nuclear weapons. At least, one should consider the possibility that US intelligence has slipped up. (It’s not exactly unusual.) Acknowledging that the PRC in fact might have far more nuclear warheads than currently estimated would also help.  

However, such questions are unwelcome by the China experts – and have been for a long time.

Around 2011, Phil Karber, who had served as strategy adviser to Ronald Reagan’s secretary of defense Caspar Weinberger, suggested that China just might have far more than a small arsenal of a few hundred warheads. 

That was based partly on the fact that China’s 2nd Artillery Rocket Force (responsible for nuclear weapons operations) had several thousand miles of underground tunnels in which one might hide nuclear weapons.

For this prudent, commonsensical suggestion Karber was savaged and ridiculed by the “‘China hands.” Reportedly, senior-most US intelligence officials instructed that he be discredited.  

There are still too many “China experts” who seem to be bending over backward to downplay PRC military capabilities. They insist that there is nothing to worry about – especially when it comes to Taiwan. And they claim that we have plenty of time to prepare before China becomes a real threat.  

But how serious is the Chinese nuclear threat in terms of fighting and winning wars?

It’s very serious. China will have a huge nuclear arsenal – if it doesn’t have one already. And it’s not just a question of numbers. It’s as much a question of “will” and of whether your enemy (the Americans mostly) think that you just might use your nukes.  

The more ruthless side has the advantage. I expect the Chinese to use their nuclear weapons to intimidate both the United States and US partners and allies. 

Are you listening, Japan, Australia and South Korea?  

Would Beijing actually use nuclear weapons? I do not care to bet my pension that they wouldn’t.  

Don’t forget that China’s “no limits” partners, the Russians, have a huge nuclear force. And they just might align it with China’s – at least for purposes of coercion. North Korean, and eventually Iranian nuclear weapons are similarly best regarded as part of the PRC nuclear toolkit.

These nations are not perfect allies, but their strategic interests versus the free world align.

But, since the DOD Report notes that the CCP’s goal is to have a ‘world-class’ military by 2049, don’t we have some time?

By 2049? The PLA is already a capable military that has caught up with and surpassed the US military in certain areas. For example, it has a bigger navy, a massively bigger shipbuilding capacity and a more capable missile force. That includes hypersonic missiles.

And remember that a military need only do a certain thing at a certain time and at a certain place. Indeed, if China picks its time and place, it could give the Americans a bloody nose, if not defeat them. This is particularly the case in the South China Sea where the PLA achieved “de facto” control at least five or six years ago.  

Chinese military power projection for an outright war drops off quickly once one gets, say, 1,000 miles from Chinese borders. But they are aiming to correct this shortcoming – as well as building up a global port and airfield infrastructure to which they will have access – and be able to operate globally, just like the US military.  

Just wait five or ten years and see how far they’ve gotten. Probably a lot farther than the “China experts” imagine.

This is not just a shooting war

But while we’re talking about a future war, the Chinese reckon they are already at war with the United States.

Indeed, the PRC has been attacking us on economic, financial, biological (think Covid), chemical (think fentanyl), cyber, political, psychological and media/propaganda fronts for a few decades.  

The “kinetic” war will come in due course, if it’s even necessary. The US elite and political classes by and large refuse to recognize what China is doing and what it has in store for us. China aims to defeat us and to dominate us.

Even more maddening, Wall Street and the US business class have been funding the Chinese buildup. They have been pressuring successive administrations – and US politicians – not to respond, arguing that we should do nothing that the Chinese won’t like and that might threaten their own gravy trains.

We’re at war and we just might lose.

Grant Newsham is a retired US Marine officer and former US diplomat. He is the author of the book When China Attacks: A Warning To America. This article was originally published by JAPAN Forward and is republished with permission.

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After five years of intense negotiation, the proposed preferential trade agreement (PTA) between Australia and the European Union is in trouble. On October 29, 2023, talks were suspended with little immediate prospect of resumption. 

This setback, plus other recent developments in EU preferential trade policy, offer some broad lessons – for both Australia and the region.

The failed negotiation is, in part, a victim of current times. With liberal trade policy in retreat, government-fueled industrial policy is on the rise, and, according to the Eurobarometer Poll of July 2022, the majority of Europeans now view protectionism positively.

The immediate cause of the breakdown in the talks was, unsurprisingly, agriculture. This is the sector that, given EU intransigence, was a key factor in the failure of the Doha Development Round of multilateral trade talks. Agriculture is still the beneficiary of massive industry assistance within the European Union.

Though there has been some reform of the Common Agricultural Policy, according to the World Trade Organization (WTO) Common Agricultural Policy outlays remain largely unchanged, at roughly one-third of the European Union’s budget. And tariffs on EU farm imports remain three times higher (at some 20%) than those on non-agricultural goods.

Australia’s particular concerns during negotiations with Brussels arose from EU resistance to opening up its market to Australian beef and sheepmeat, and protective geographical indications that would restrict the labeling of Australian feta cheese and prosecco.

As highlighted by the WTO Trade Policy Review of the EU, the number of products subject to EU “geographical indication protection” continues to rise.

Looking ahead, there are still some broad strategic factors that might favor a deal. For the European Union, this includes gaining secure access to Australia’s critical minerals, such as lithium and copper.

For Australia, there is interest in reducing trade dependence on China while gaining greater participation in EU-centred supply chains. For both parties, there is a shared interest in promoting investment, skilled labor movement and trade in services.

But immediate prospects for the early and fruitful resumption of talks between Australia and the European Union are slim.

This is because of a fundamental asymmetry in respective tariff levels. Australia has an applied tariff of just 2.6% on non-agricultural goods — an EU priority for export gains. In contrast, the European Union value-based duty on beef — a key Australian export priority — is 43%. 

Tariff “concessions” will have a higher political cost for Brussels than for Canberra. With elections for the European Parliament due in June 2024, that political cost is very unlikely to be incurred soon.

Two clear lessons can be drawn for the Asia-Pacific region from this setback in trade diplomacy. First, gains in agricultural exports through PTAs with the European Union will be elusive. This is particularly so where EU protection is highest – that is, according to the OECD, poultry, rice, beef and veal. 

Second, where geographical indications are in play, their use must be subject – as in the Regional Comprehensive Economic Partnership (RCEP) trade agreement – to strict transparency and due process obligations.

But there is another, and potentially more worrying, lesson that might be drawn from recent developments in EU PTA policy. The latest EU preferential agreement was concluded with New Zealand in June 2022. 

It is the first that provides explicitly for trade sanctions for noncompliance with the labor and environment standards as contained in the International Labour Organization’s Fundamental Principles and Rights at Work and the Paris Agreement on climate change, respectively.

However worthy the social and environmental objectives here, it is better that they be pursued directly rather than through the blunt instrument of the trade weapon. This only heightens the ever-present risk of protectionist capture and stunted growth.

With the EU-New Zealand PTA as a potential standard setter, the threat of labor standard or environmental sanctions is very real – albeit differentiated – for Asia-Pacific nations. 

This applies to those with existing agreements with Brussels – Japan, South Korea, New Zealand, Singapore, Vietnam, Fiji, Papua New Guinea, Samoa and the Solomon Islands. It also applies to those where PTAs are planned — namely India, Indonesia and Australia.

Against this risk, there are potential gains in economic welfare from entering into preferential deals with the European Union. But PTA gains should not be exaggerated. 

It is estimated that the EU-Japan trade agreement will increase long-term GDP for the European Union by just 0.76% and by an even more modest 0.29% for Japan.

Preferential trade agreements are second best to multilateral liberalization. This is because of the detrimental effect of trade diversion at the expense of non-PTA members. 

This diversion is compounded by the risk of regulatory proliferation and confusion – exemplified by US agreements focusing on science-based regulation, in contrast with the precautionary approach embodied in EU accords.

Rather than shed tears over the troubled Australia-EU talks, it is better to reinvigorate efforts within the WTO, in the lead-up to its 13th Ministerial Conference, to strengthen the trading system on a multilateral, nondiscriminatory basis. 

It will be better still if such efforts are backed by widespread, unilateral, productivity-enhancing reforms at the domestic level.

Ken Heydon is a former Australian trade official and senior member of the OECD Secretariat, and Visiting Fellow at the London School of Economics and Political Science.

His latest book is The Trade Weapon: How Weaponizing Trade Threatens Growth, Public Health and the Climate.

This article was originally published by East Asia Forum and is republished under a Creative Commons license.

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Nepal is a land of extremes.

Home to the tallest mountain in the world and arguably the most beautiful landscape on Earth, nonetheless it is susceptible to terrifying earthquakes. 

Its multi-ethnic people are renowned as much for their constancy and stoicism as their friendliness, but also grinding poverty.

But politically, the country is more often seen as a basket case, none more so than in the current violent movement to restore the monarchy.

Modern-day Nepal saw the Shah Dynasty founded in 1768, but during the Rana Oligarchy from 1846 to 1951 the monarchs were purely titular.

With collaboration from the highly revered King Tribhuvan, the Ranas were displaced and an era of what was promised to be parliamentary sovereignty was ushered in, mainly under the aegis of the Nepali Congress Party, which the Ranas had banned.

Surprise, surprise, the politicians could not get their snouts in the trough fast enough, and so in 1961 King Mahendra abolished the nascent 1959 constitution and replaced it in 1962 with the party-less Panchayat System. 

This placed all power in the hands of a politically astute king, despite which the wily politicians still managed to game the system to their personal advantage.

The accession of overseas-educated King Birendra in 1972 oversaw a marked move toward establishing a constitutional monarchy, and he did not resist the establishment of full democratic rule in 1990. 

However, universal suffrage did not weed out all the poison plants in Shangri-La, and many were the voices not merely whispering but shouting in the king’s ear that he should restore the power of the throne, yet he was adamant that the people had chosen democracy and they must learn how to handle it.

Rise of Gyanendra

This light-touch monarch’s reign was cruelly ended when he was assassinated by his son in June 2001. That led, inescapably, to the accession of Birendra’s brother Gyanendra, a monarch of a very different metal whom many Nepalis hold responsible for his brother’s murder.

Gyanendra wasted little time seizing back power for the throne.

The public perception of the character of Gyanendra and his son Prince Paras precipitated a violent movement spearheaded by guerrilla leaders who labeled themselves Communist Party (Marxist) of Nepal.

Ostensibly aimed at overthrowing the monarchy and restoring democracy, in reality it simply put power in the hands of another bunch of greedy, self-serving politicians who purported to be Communists. 

After a bloody insurrection that cost many lives and further polarized the population, on May 28, 2008, a newly elected Constituent Assembly declared a Federal Democratic Republic and abolished the monarchy. 

Its first grievous error was not to banish the king but to allow him to reside in the capital city and provide him with half a battalion of Nepal Army soldiers for his personal entourage.

Since 1965, I have observed, first hand, successive waves of Nepalese politicians of all creeds and colors, and a rose by any other name would smell as bad.

The disease of unaccountable power quickly seizes hold of those who become politicians in Nepal, no matter what promises they make, and they soon attract a supporting cast of acolytes who want a share of the pie.

I must declare an interest here. Having invested much of my life in Nepal, quite apart from considerable sums of money – not one dollar of which even entitles me to own a plot of land there – I have a life-long love affair with its people and an unquenchable thirst to see it prosper.

From a purely historical perspective and despite cruel regimes and a feeble judiciary, relatively speaking, more economic progress was achieved under the Ranas and the Panchayat System than any of the soi-disant democratic iterations since then. 

Nepal has prospered under honest, dynamic leaders and still could do so if that leadership were allied to an independent judiciary that oversaw essential human rights.

By definition, an absolute monarchy does not provide a guarantee of the essential freedoms, which include the fundamental freedom from systemic corruption and equality before the law.

The Nepali people yearn for competent and incorruptible government, and inevitably one suspects that the royalist politicians who have been biding their time are behind the current violent unrest with the call for restoration of the monarchy.

If I tell people that they are being fed a false picture, I will also run counter to the belief that the king is a reincarnation of Lord Vishnu, one of the principal Hindu deities. Hence the mob calling for restoration of the description of Nepal as the only Hindu kingdom.

My lawyer’s cynicism prompts me to cast a wary eye across Nepal’s southern border toward that other politician who is politicizing religion for his personal benefit. India has a long history of meddling in Nepal’s internal affairs.

That Nepal urgently needs competent, principled and conscientious government is beyond question. 

Ironically, of all the politicians I know, the one who would make the best leader of Nepal was a pro-royalist. But unless I have seriously misjudged him, he would never have subordinated his principles to the whims of a capricious king.

To suggest that ex-King Gyanendra would or could fulfill the country’s  needs is as absurd as thinking that Boris Johnson could do the same for the United Kingdom.

In the words of the old hill song, let the sun of decency and single-minded patriotism chase these shadows away from the Nepalese dawn. 

Neville Sarony is a noted Hong Kong lawyer with more than 50 years at the Bar.

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