Beginning of the end for Ukraine   - Asia Times

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China: Rotate from dividend stocks to tech

David P. Goldman sees Chinese tech stocks as poised to benefit as investors anticipate government intervention to boost the stock market. An emphasis on currency stability by the People’s Bank of China (PBOC) raises the likelihood of a shift away from dividend stocks towards tech stocks, aligning with the government’s focus on “quality development.

European support for Ukraine remains a bone of contention

Diego Faßnacht highlights divisions within the European Union on supporting Ukraine militarily, with implications for future political dynamics and European elections. Opposition to military aid has grown within the EU, exemplified by Geert Wilders’ party in the Netherlands, which opposes such assistance.

Kiev in a bind to assign blame for military defeats

James Davis covers recent developments in the Ukraine conflict that have seen significant operational success for Russia. Russian advances are putting pressure on Ukrainian defenses and the worsening situation is leading to political instability in Ukraine, with the opposition criticizing President Zelensky and raising questions about his legitimacy.

US sanctions pushing China down, up and forward

Scott Foster assesses the state of US sanctions on Chinese tech as Huawei reclaims the top spot in China’s cell phone market, overtaking Apple and Xiaomi’s market share trends upwards. Despite sanctions and restrictions, Huawei remains active across multiple technology domains, including components for electric vehicles.

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Trump's 60% China tariffs would roil markets - Asia Times

The announcement by former US president Donald Trump that he would impose additional tariffs on Chinese goods, potentially exceeding 60%, if he were to win the US election in November, is sparking concern among global investors. 

This move, if implemented, could have profound implications across various sectors, causing volatility in financial markets, disruptions in supply chains and fluctuations in currencies.

Sector-specific impact

The technology sector, highly dependent on international supply chains, would face significant challenges. 

According to the Information Technology Industry Council (ITI), a 25% tariff on Chinese imports could result in the loss of 934,000 jobs and a decline in the US GDP by 0.3%. Tech giants, reliant on Chinese manufacturing for components, might see increased production costs, potentially impacting their profit margins and stock prices.

The automotive industry, with integrated supply chains spanning the globe, would also witness disruptions. The Peterson Institute for International Economics estimates that a 25% tariff on auto imports could lead to a decline in global trade by US$600 billion, impacting manufacturers, suppliers and consumers worldwide.

Volatility in financial markets

The mere mention of tariffs exceeding 60% has the potential to trigger heightened volatility in financial markets. Historically, tariff announcements and trade tensions have led to significant market fluctuations. 

A report by JPMorgan Chase indicates that elevated trade-policy uncertainty has a direct correlation with increased market volatility, affecting investor confidence and portfolio performance.

The CBOE Volatility Index (VIX), commonly known as the “fear gauge,” tends to surge during periods of heightened trade tensions, reflecting the concerns and risk aversion among investors.

A substantial tariff increase would lead to a spike in the VIX, impacting the pricing of options and influencing investment strategies.

Supply chain disruptions

The imposition of tariffs on Chinese goods would reverberate through global supply chains. The manufacturing sector, which relies heavily on Chinese components, would face increased costs and potential delays. 

The International Monetary Fund (IMF) estimates that disruptions to global supply chains could result in a 2% reduction in global GDP.

Companies with intricate supply networks would need to reassess their strategies, potentially diversifying suppliers and relocating production facilities. 

This restructuring would be expected to lead to short-term inefficiencies, impacting corporate earnings.

Currency fluctuations

Tariff announcements often influence currency values, affecting international investors with exposure to multiple currencies. 

The tariffs could lead to a strengthening of the US dollar, which has implications for emerging market currencies, potentially triggering capital outflows from these markets.

According to the Bank for International Settlements (BIS), currency markets have historically experienced increased volatility during periods of trade tensions. Investors holding assets denominated in currencies affected by these fluctuations would likely need to re-evaluate their portfolios and risk-management strategies.

There’s little doubt that the potential of tariffs of more than 60% on Chinese goods as suggested by Trump in a Fox News interview would add another layer of complex challenges for global investors. 

They would need to ensure their portfolios are properly diversified across sectors, regions, asset classes and currencies to mitigate the risks and capitalize on the opportunities.

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

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Deterrents to a Hamas-style North Korea border raid - Asia Times

The October 7, 2023, Hamas attack on Israel was surprising in many aspects. The motorized paragliders, despite their slow speed, served as a wake-up call for countries dealing with potential border infiltration issues.

The graphic videos depicting hostages being abducted across the breached “smart fence” were certainly horrifying, particularly for the Republic of Korea (ROK): The Israeli fence is modeled after South Korea’s, with its cutting-edge sensors and closed-circuit TV situated in the Demilitarized Zone (DMZ).

Yet, despite subsequent heated debates in National Assembly hearings, it seems the ROK is safe for now, for several reasons. These include distinct operational environments and recently upgraded defense and radar systems.

The geographical difference between the flat southern regions of Israel and the mountainous DMZ, which is laden with countless landmines and air-defense guns, makes a direct comparison unfeasible.

Also, the ROK does not experience a daily influx of workers crossing the border, a factor that enabled some working visa-holding Palestinians to turn into belligerents on October 7.

Lastly, the ROK’s indigenous TPS-880K multifunctional radar, recently fielded by LIG (a LG subsidiary), can detect very small drones and paramotors within a nine-mile range and a little more than a mile in altitude.

The radar can instantly issue C4 (command, control, comms, and computer) orders to varying types of air-defense guns, as well as the low-altitude combined anti-aircraft weapon (Bi-ho Hybrid) and ROK sentries, serving as the linchpin of the integration of the ROK’s DMZ weaponry.

While human error is always possible, as was evidenced by a North Korean drone that infiltrated Seoul last year, the integrated, automated defense system appears quite sufficient in addressing systematic invasions.

However, the conversation about border security has sparked further debates over the ROK military’s plan to partially revoke the September 19 Comprehensive Military Agreement (CMA), in which both countries agreed to “completely cease all hostile acts against each other” and implement military confidence-building measures in the air, land and sea domains.

To foster inter-Korean reconciliation, the 2018 CMA established no-fly zones around the DMZ, essentially halting aerial intelligence, surveillance and reconnaissance (ISR) activities by the ROK-US alliance.

The CMA’s raison d’être, aimed at decreasing inter-border clashes, has lost its justification due to recent shifts in global security concerns wherein previously unthinkable military moves, like Russia’s illegal invasion of Ukraine and subsequent drone warfare, have become the new norm.

This has required the alliance to reconsider and revoke the clause prohibiting DMZ ISR activities.

North Korea’s launching of its first reconnaissance satellite, condemned by the international community due to its use of illegal ballistic missile technology that threatens the “global nonproliferation regime,” has resulted in a game of brinkmanship, leading to the complete abandonment of the CMA on November 23.

In this volatile security landscape, the rapidly changing demographics of the ROK represent a wake-up call for both the ROK and Democratic People’s Republic of Korea, as the North is formally known.

With roughly 1.32 million foreign residents in the greater Seoul metropolitan area (GSMA) within 50 kilometers (30 miles) of the DMZ, an unprecedented challenge has emerged for both Koreas.

The involvement of numerous countries as prime stakeholders protecting the lives of their citizens transforms potential incidents involving hostages, or casualties in the GSMA, from a purely inter-Korean issue to an international crisis.

For the DPRK, the existence of diverse stakeholders offers strategic advantages, buying time and creating extra room to maneuver. The recent Hamas attack and international hostage abductions resulted in extremely complex multilateral negotiations involving the US, Israel, Hamas, Qatar and Egypt.

An established international entity, preferably a security-related one, would have facilitated the negotiation much more easily, but the lack thereof stalled subsequent hostage release deals.

Remember that old UN Command?

Interestingly, this changing landscape is not actually disadvantageous for the ROK. In fact, while the Yoon Suk Yeol administration’s attempt to revitalize the United Nations Command (UNC) must have been planned long before the Hamas attack, its plan to galvanize the long-quiescent structure has gathered international attention.

A South Korean honor guard stands in front of boxes containing the remains of the UNC and ROK soldiers killed in North Korea in the 1950-53 Korean War during the mutual repatriation ceremony of soldiers’ remains in Seoul, South Korea on July 13, 2018. Image: Pool

The UNC, much like NATO, functions not only as a collective defense mechanism but also to protect the increasing number of foreign nationals in Korea. No longer a pure battle command, the UNC has managed inter-border military and civilian issues over the last several decades under the 1953 Armistice.

On November 14, a ministerial-level conference in Seoul – with all 17 UN sending states, or countries that contributed combat troops or supporting personnel in the 1950 Korean War – reaffirmed the spirit of the 1953 Armistice and pledged that they would repel any future attack on the ROK.

The revitalization of the UNC appears an attractive countermeasure in the event of international-scale hostage abductions or casualties due to DPRK attacks. The UNC, a coherent entity with military and government representatives from around the world, can facilitate international negotiations as the sole conduit to prevent inter-agency and inter-country complications and confusions, drawing on its time-tested experience in dealing with civilian populations.

Of course, some might argue that subtle and sensitive negotiations are not always suited for the military. They might also contend that civilian foreign service officers and personnel specializing in hostage negotiations would be more appropriate. However, such claims themselves further justify the revitalization of the UNC in regard to ramping up its manpower and inviting the presence of such specialists.

This approach addresses legitimate concerns about the need for diplomatic and negotiation expertise within the UNC, ensuring a comprehensive and well-rounded approach to addressing complex international challenges.

The ROK, traditionally a very homogenous nation, is embracing rapid immigration and the presence of foreign laborers due to its birth rate crisis. Next year alone, a record number of approximately 160,000 new, legal foreign laborers will arrive, taking up positions at small local farms and factories, some of which are located within 30 miles of the DMZ.

With the presence of foreign nationals, including those represented by the UN sending states and the UN Command, any DPRK move that jeopardizes their safety would prompt the Yoon administration to reinforce the UNC with support from relevant member states.

Such a scenario goes against the DPRK’s best interests. Despite the traditional DPRK rhetoric calling for dismantling the UNC (given the UNC’s position outside of the UN’s direct purview), the current security circumstances do not favor any reckless actions from the DPRK.

The changing demographic landscape and increased international presence in South Korea make it imperative for the DPRK to tread cautiously.

James JB Park is a former staff member of the Korean Presidential Blue House and National Security Council. A reserve officer of the Republic of Korea Army, he is currently pursuing graduate studies at Columbia University in the United States.

The views expressed are those of the author and do not reflect the official policy or position of the ROK government, the Presidential Blue House or the ROK military. This article was first published by Pacific Forum and is republished with permission.

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Kharkiv luminary takes page out of US governors’ playbook - Asia Times

Just over two years ago, Kharkiv Regional Council chairwoman Tetiana Yehorova-Lutsenko was forced to grab her two sons and go into hiding as invading Russian troops sought to assassinate locally elected officials, especially those aligned with President Volodymyr Zelensky’s Servant of the People Party that the university law professor serves as deputy party chief.

The battle for Kharkiv, Ukraine’s second city located kilometers from the Russian border, was more violent, more deadly than the Russian blitz to take out Zelensky and his government in the capital, Kiev.

The heroic resistance and defense of Kharkiv shocked Russian President Vladimir Putin and his Kremlin henchmen, who fully expected the predominantly Russian-speaking city to capitulate and welcome the invading soldiers rather than fight a block-by-block insurgency, leaving large swaths of working-class apartment complexes in rubble.

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Utah Governor and National Governors Association chairman Spencer Cox speaks with Capitol Intelligence/CI Ukraine along with Colorado Governor and vice-chairman Jared Polis, former NGA chairman and Maryland Senate candidate for governor, Larry Hogan, and Maryland Governor Wes Moore on supporting Ukraine in Washington, DC, during the NGA Winter Meeting on February 22, 2024.

But two years after the invasion, Yehorova-Lutsenko has expanded her role by leading economic development to the region, such as persuading a Canadian company to build thousands of high-quality prefabricated homes for displaced workers from occupied Donetsk that now work in Kharkiv-based factories.

Yehorova-Lutsenko, who became the president of the Ukrainian association of locally elected officials last year, is now copying a page from the highly successful model used by US governors to promote economic investment in their home states: foreign trade missions accompanied by accomplished and dynamic business leaders.

Her direct counterpart in the United States is Utah Governor Spencer Cox, the current chairman of the National Governors Association.

Not only has Utah been the US state most active in Ukraine – leading numerous people to people and business to business missions throughout Ukraine – but the association of Utah defense companies 47G Utah Aerospace and Defense, led by Aaaron Starks, was the first US defense group to sign a memorandum of understanding with Zelensky to establish and promote co-production in the country.

During the National Governors Association Winter Meeting in Washington, President Joe Biden stressed to the governors their important role in helping Ukraine to achieve victory.

Utah, which calls itself “Silicon Slopes,” has surpassed Texas as the best state to do business in thanks to its diverse mix of companies, from high tech to agrochemicals, and a global outlook stemming from the Church of Latter Day Saints’ (Mormons’) tradition of sending its youth out to the world as missionaries.

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Kharkiv Oblast chairwoman Tetiana Yehorova-Lutsenko speaks with Capitol Intelligence/CI Ukraine on her talks with Ohio Governor Mike DeWine to forge a partnership agreement between the Region of Kharkiv and the State of Ohio after the sister-city partnership between Kharkiv and Cincinnati, Ohio, in Kiev on June 8, 2023.

Not only does Cox lead foreign trade missions with the chief executive officers and owners of leading Utah-based companies, but the Salt Lake City-based World Trade Center hosts foreign leaders and their companies. WTC Utah is headed by Ukrainian speaker Jonathan Freedman.

Yehorova-Lutsenko will lead her US investment mission with two Kharkiv-native business owners: Ivan Shvaichenko, the founder and CEO of Boosteroid, the world’s third-largest cloud gaming hosting company after GE Force and xCloud of Microsoft, and Alexander Kroshka, the founder and CEO of Ukrainian green commercial and residential boiler manufacturer EPG-Kolvi Group of Companies.

Boosteroid’s Shvaichenko has just opened his US headquarters in Houston, Texas, where he is investing millions to expand the company’s half-dozen data centers and cementing his business relationships with Advanced Micro Devices and Hewlett Packard Enterprises.

Boosteroid, with its 10-year partnership agreement with Microsoft’s Activision and commercial agreement with South Korea’s Samsung, along with HPE and AMD, has created a group rivaling the giant Nvidia with its market capitalization of nearly $2 trillion.

Kroshka has made EPG-Kolvi into a leading heating-supply company, with its growth mainly due to replacing energy-inefficient and polluting systems of the former USSR. 

Kroshka, like Shvaichenko, is living proof of the resilience and dynamism of the Ukrainian private sector, as both were able to grow their companies even after being bombed by the Russians during the invasion and now facing near daily missile attacks (intercepted by US Patriot anti-missile systems).

“Right at the beginning of the invasion, we, like everyone else, were in shock. The plant was damaged when an aerial bomb fell. Thanks to the fact that the structure was strong enough, everything held together. But it was a serious blow,” Kroshka said in an interview with RBK Ukraine, adding, “Many of the staff have gone abroad [after February 24, 2024]. But we survived the most difficult period, even increasing our production capacity.”

In his spare time, Kroshka invented and built an AI-guided drone capable of delivering an explosive payload 750 to 1,000 kilometers inside Russia. The AI guiding system makes the drone immune to Russian electronic warfare, and the distance between Kharkiv and Moscow is 765km, making the $50,000 drone the cheapest cruise missile in the world.

(President Ronald Reagan’s deployment of US cruise missiles in Europe was the final straw that broke the financial and military back of the Soviet Union.)

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AI-powered drone with 750-1000km range invented by Alexander Kroshka and tested in undisclosed location in Ukraine.

Moore takes a page from Mississippi’s successful mission to Uzbekistan, when then-governor Phil Byrant traveled to the geopolitically important Central Asian nation with number of CEOs and business owners.

Moore can do the same, and even more, with a delegation of Maryland-based companies – led by the CEO of Bethesda-based Lockheed Martin, James D Taiclit – on an official mission to the Baltic state of Estonia and a lower-key visit to Ukraine.

Baltimore, Maryland, civil-rights icon Marvin “Doc” Cheatham said Governor Moore can return from his visit to Estonia with an agreement to staff Baltimore elementary schools with Estonian computer-science teachers. Estonia is the only nation that teaches computer science and cybersecurity at third grade, while only three US states have mandatory computer-science courses for secondary education (ages 12-18).

Boosteroid’s Shvaichenko also won the personal attention of the former Rhode Island governor and venture capitalist, US Commerce Secretary Gina Raimondo, after his talks to build a server data center and software and gaming academy in America’s most economically depressed and segregated city of Gary, Indiana, located a mere 50km from Chicago.

Not only is Raimondo doing everything in her power to promote US corporate investment into Ukrainian companies like Boosteroid and EPG-Kolvi, but Shvaichenko’s willingness to create new tech-sector jobs and a bootcamp in Gary fulfills much of the promise of the $39 billion Chips and Science Act to make the United States self-sufficient in the manufacture of critical semiconductors by 2030 and create “hundreds of thousands of new jobs.”

The bill was passed through the bipartisan efforts of US Senators Mark Warner, a Democrat from Virginia, and Todd Young, a Republican from Indiana.

At a standing-room-only crowd at the Center for Strategic Studies, Raimondo bluntly stated that self-sufficiency in semiconductor chips is vital to US national security and that the world’s largest economy cannot be dependent on one country (Taiwan) for the supply of chips needed for everything from cars to intercontinental ballistic missiles (ICBMs).

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US Commerce Secretary Gina Raimondo filmed by Capitol Intelligence/BBN on achieving a US renaissance in semiconductor production and the first award of CHIPS funding to BAE Systems, Global Foundries and Microchip Technology at the Center for Strategic and International Studies (CSIS) in Washington, DC.

According to US intelligence analysts, one of the top three threats to the national security of the US, the European Union and Asian allies is that Chinese President Xi Jinping will order a two-week blockade of Taiwan and set off a veritable Pearl Harbor on global financial markets.

Raimondo awarded the first tranches of the $39 billion of the CHIPs Act to UK-based BAE Systems to build a semiconductor factory in Nashua, New Hampshire, to supply the US Department of Defense; $1.5 billion to the United Arab Emirates’ sovereign-wealth controlled GlobalFoundaries to produce automotive and sensitive chips in Malta, New York and Vermont; and Chandler, Arizona-based Microchip Technology to produce microcontroller units (MCUs).

While she is fully aware the initial awards did not make her friends with the giants Intel and Nvidia, Raimondo says she is confident industry leaders will be even more motivated in submitting value-added proposals.

But the problems for Ukraine are not the democratically elected leaders of the West, but resentful mandarins who violate CNN founder Ted Turner’s motto: lead, follow or get out of the way. 

“The problem for Ukraine is not support from Western and Ukrainian leadership but the second line of bureaucrats and mid-level executives who do everything to delay or undermine the efforts of their principals,” said the vice-chairman of PKO’s Ukraine unit Kredobank, Adam Swirksi.

Another Biden administration leader in getting private-sector investment into Ukraine is the president of the US International Development Finance Corporation (DFC), Scott Nathan, who said he welcomes the initiative of Yehorova-Lutsenko highlighting investment in Ukraine companies.

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US International Development Finance Corporation (US DFC) CEO Scott Nathan speaks to Capitol Intelligence/CI Ukraine at the rally for Ukraine making the second year of Russia’s aggression at the Lincoln Memorial in Washington on February 24, 2024.

Zelensky is like any successful political leader or CEO, who dream of cloning themselves so they can be everywhere.

But as he cannot clone himself, Zelensky is pushing for regional and municipal officials like Yehorova-Lutsenko to travel the globe to help support the country in its existential battle for survival and create the global economic footprint as it prepares to enter the European Union by the end of 2025.

The question world leaders must now ask themselves whether they want a new Canada as a member of the European Union or a new South Korea where NATO soldiers will be stationed to defend against a new North Korea.

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China’s State Secrets Law to cover high tech - Asia Times

China has amended its State Secrets Law to expand the coverage to high technology industries and improve security in areas near military sites. 

The National People’s Congress (NPC) Standing Committee on Tuesday revised its Law on Guarding State Secrets. The amendment, which will take effect on May 1, said the nation encourages and supports the research and application of new technologies that can help protect its secrecy science and technology. 

“Currently, a new round of scientific and technological revolution is rapidly evolving,” An unnamed spokesperson of the National Administration of State Secrets Protection told Xinhua on Wednesday. “New technologies and applications such as big data, cloud computing, and artificial intelligence are emerging, resulting in higher requirements on self-reliance and self-reliance in information security technologies.”

He said the amended State Secrets Law will provide a legal basis for the protection of the intellectual property of information security product makers.

He said the revision can also strengthen the connection between the State Secrets Law and the Data Security Law.

Established in June 2021, the Data Security Law prohibits foreign judicial authorities from requesting data on Chinese citizens without first seeking permission from Chinese authorities. 

Military facilities

Passed in 1988 and amended in 2010, the existing State Secrets Law forbids the unauthorized opening of military restricted and management areas, as well as other places with state secrets.

The amended law says government departments should strengthen their confidentiality management in areas surrounding classified military facilities and other important secret-related units.

The Chinese Communist Party (CCP)’s Central Military Commission will implement confidentiality work in the People’s Liberation Army (PLA) and People’s Armed Police (PAP) in accordance with the new law.

The spokesperson of the National Administration of State Secrets Protection said the latest amendment will send a message to the public that everyone in the country has the responsibility to protect state secrets. 

“The amended State Secrets Law clarified that all aspects of the production, copying, publishing, and dissemination of online information must comply with it,” he said.

“Secondly, internet and network operators are required to report to the authorities promptly if they identify suspected leakage of state secrets,” he said. “They should also remove the related content from the internet and cooperate with the investigators.”

The amendment was announced on the same day when former Foreign Minister Qin Gang “resigned” from his position in the NPC Standing Committee. 

Politico, which frequently publishes leaks from US intelligence services, said on December 6 that Qin had already died, either from suicide or torture, in a military hospital in Beijing in late July.

Citing two unnamed people with access to top Chinese officials, the report said Qin and relatives of top rocket force officers had helped pass Chinese nuclear secrets to Western intelligence agencies. The Chinese government has not yet commented on the report. 

Some commentators said Beijing tried to use Qin’s “resignation” from his position in the NPC Standing Committee to dismiss the Politico report that the former top diplomat had died. But they said the public will be convinced only if Qin can appear in public.

Declassification

According to the existing law, China’s state secrets are classified as top secret, highly secret and just plain secrets and should be automatically declassified after 30, 20 and 10 years, respectively, if they were created after January 1, 1991. 

But in real practice, the government has not yet declassified any of its classified political documents.

In June 2020, the National Administration of State Secrets Protection published a set of temporary rules about the declassification of state secrets to ensure the public right to know. It added that government units should consider the impact on national security and social stability when declassifying any state secrets.

In contrast, Taiwan’s Legislative Yuan last December amended its State Secrets Law to change the confidentiality period of 4,500 political documents from “indefinite” to 30 years. Due to this amendment, about half of these documents will be made public in 2024. 

According to the amended law in Taiwan, a government department needs to give reasons to extend the confidentiality period of a classified document by 10 years. If a document has been kept in secret for 60 years, a government unit needs to seek an approval from its superior in order to further extend its confidentiality period. 

‘Work secrets’

The latest amendment of China’s State Secrets Law also included a new section about the protection of unclassified information known as “work secrets,” a term that refers to the government’s internal documents and discussions related to policy formation. 

The amended law says precautions taken for state secrets should also apply to “work secrets,” which are not state secrets but can result in an adverse impact if leaked. 

Jens Eskelund, president of the European Union Chamber of Commerce in Beijing, told Reuters on Wednesday that China’s increasing focus on national security has raised uncertainty for business.

He said the scope of “sensitive information” seems to be expanding, which makes it more difficult for foreign firms to access necessary information.

In 2020, the central government published a set of temporary regulations to protect “work secrets.” It urged local governments to implement them.

Read: China’s next top envoy promises new US approach

Follow Jeff Pao on Twitter at @jeffpao3

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The time has come to regulate cyber warfare - Asia Times

This is part two of a series, ‘Lessons from the first cyberwar.’ Read part one.

As the internet connects more people, businesses, governments and military systems, it also becomes a gateway for cyberattacks. National infrastructures, government systems and financial institutions, all linked by networks, are at risk.

The growing number of potential cyberattack vectors means that ordinary citizens can also become involved in waging cyber warfare, like Ukraine’s volunteer IT Army, or they can become targets.

The 19th-century wartime strategist Carl von Clausewitz defined war as “an act of force to compel our enemy to do our will.” This perspective also views war as a state-directed effort to achieve political objectives.

Central to Clausewitz’s theory is the “warfare trinity”: the people, the military and the government. Historically, this trinity operated in the physical realm, predominantly through physical force – a characteristic of the industrial age. Clausewitz argued that, while the nature of war remains constant, its manifestation evolves over time with advancements in technology.

In the transition to the information age, the principles of Clausewitz’s warfare trinity remain relevant but the battlefield has transformed. Cyber warfare now represents a new domain where physical force is replaced by information and digital tools. This form of warfare simultaneously impacts all aspects of the trinity – people, military and government – almost instantaneously, and often with global scope.

The rise of cyber warfare illustrates Clausewitz’s belief that, while the nature of war is immutable, the methods and arenas of warfare continue to evolve. Today, cyber warfare aims to achieve political and strategic objectives through cyberspace, extending the battleground beyond physical spaces.

Cyber warfare blurs traditional lines between combatants and non-combatants, as civilians – either willingly or unwittingly – become part of cyber conflicts. Russia also uses organized crime for cyber operations against the West.

Carl von Clausewitz and Vladimir Putin. Image: US Naval Institute

In the past, there was a clear difference between civilians and soldiers, often marked by uniforms. Civilians were usually away from the battlefield, which had defined boundaries.

However, in modern conflicts, this distinction has faded. Today’s enemies often include nonstate actors who blend in with civilians, making it hard to tell them apart, and the concept of a specific battlefield has vanished; military actions can now happen anywhere.

Cyber norms and international agreements

As the internet interconnects more facets of our lives it opens up new arenas for nation-states waging war, making the establishment of international cyber norms and agreements more relevant.

The shift from traditional battlefields to cyber warfare necessitates a re-evaluation of how international law and wartime strategies apply to the digital domain due to the increasing involvement of civilians in cyber conflicts and the blurring of lines between combatants and noncombatants.

Initiatives such as the Tallinn Manual and the Red Cross Cyber Norms have emerged as critical efforts to adapt existing legal frameworks to the realities of cyber warfare, aiming to mitigate the impact on civilians and ensure a degree of accountability and restraint in cyberspace.

The Tallinn Agreement stems from the work done in the Tallinn Manual, an influential guide on how international law applies to cyber warfare.

The Tallinn Manual, initiated by the NATO Cooperative Cyber Defense Center of Excellence (CCDCOE) in Estonia, was developed by an international group of legal scholars and practitioners. It has become an influential resource for scholars and policymakers to use as a framework to deal with cyber warfare.

The Tallinn Agreement was created following Russia’s first large-scale cyberattack, against Estonia in 2007. The process began in 2009 when the NATO CCDCOE recognized the growing importance and unique challenges of cyber operations in international law and initiated a project to clarify the legal landscape.

The necessity for such a manual became clear due to the growing incidence of cyber operations that potentially crossed the line into armed conflict, or at least had significant international legal implications.

The manual addresses issues including sovereignty, state responsibility, the applicability of international humanitarian law in cyberspace and the conduct of hostilities.

The first version, known as Tallinn Manual 1.0, was published in 2013 and focused specifically on the most severe forms of cyber operations – those that would be considered equivalent to armed attacks under international law and the laws of armed conflict.

Tallinn Manual 2.0, published in 2017, expanded this scope to include a broader range of cyber operations, especially those occurring outside the context of armed conflict. This included considerations of sovereignty, state responsibility and human rights.

Image: National Security Archive

Red Cross Cyber Norms

The International Committee of the Red Cross (ICRC) has been advocating for the application of existing international humanitarian law to cyber warfare, especially emphasizing the need to protect civilians and civilian infrastructure.

One theme that has featured prominently in the Russo-Ukrainian war has been the rise of civilians engaging in digital warfare. Some of these civilians are minors, which may complicate the classification of them as enemy combatants in the cyber realm.

The Red Cross Cyber Norms seek to clarify how principles like distinction, proportionality and necessity apply in the digital sphere – particularly given the potential for significant civilian harm due to cyber operations targeting critical infrastructure such as hospitals, power grids and water systems.

Like the Tallinn Manual, the ICRC’s positions on cyber operations are interpretative. They are advisory and non-binding. They don’t create new legal obligations but aim to influence states and other actors to consider humanitarian principles when engaging in cyber warfare.

As countries such as Russia expanded their efforts to conduct cyber warfare against other countries, the need to create international norms and frameworks began to take shape.

However, even as these agreements and frameworks were being created, Russian attacks against the West and Ukraine became more brazen and destructive, with many of Russia’s attacks in recent years targeting critical infrastructure.

David Kirichenko is a Ukrainian-American security engineer and freelance journalist. Since Russia’s full-scale invasion of Ukraine in 2022 he has taken a civilian activist role.

These articles are excerpted, with kind permission, from a report he presented at the UK Parliament on February 20 on behalf of the Henry Jackson Society.

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Western sanctions often hurt innocent bystanders - Asia Times

After Ukraine was invaded in February 2022, countries and major corporations around the world quickly responded by trying to inflict financial pain on Russia through economic sanctions.

As Putin’s war rages on, opinions vary as to how effective those sanctions have been. But their enforcement shows how they are still widely considered to be a useful tool of coercive foreign diplomacy.

Exerting economic pressure on a target country to achieve a specific political or strategic goal remains a commonly used measure. Since 1966, the UN Security Council has established 31 sanctions regimes around the world, in places including Sudan, Lebanon, Iran and Haiti. The EU even has an online map of all the countries where it has imposed various types of sanctions.

In terms of their effectiveness, plenty of research has explored this, revealing strong evidence that sanctions reduce the economic activity of a targeted nation.

But what about the potential for unintended consequences of sanctions on their neighbors? What happens to a nation if it borders a country being punished by members of the international community?

Our recent research examines the effects of economic sanctions on 177 countries that had neighbors under sanctions at some point between 1989 and 2015.

We found that, on average, neighboring countries experienced a significant decline in trade – around 9% – following the imposition of economic sanctions nearby. In most cases, proximity to a country under economic sanctions brings disruption to trading routes and relationships. It also leads to extra transportation and transaction costs.

Previous research reveals further evidence of this effect. Some studies show how economic sanctions hurt neighbor countries due to the great disruption they inflict on trading routes and relationships with suppliers or customers. For example, 21 countries reported economic hardship as a result of the sanctions imposed on Iraq.

So sanctions imposed on a country to damage its economy often tend to do economic harm to its neighbours. But not always.

In some of the cases we looked at, sanctions actually have a positive effect on neighboring countries.

For example, following economic sanctions against Haiti in 1987, the Dominican Republic saw an increase in import trade. The same benefit – in both cases possibly due to cross-border trafficking – was experienced by Kenya when Somalia was hit with sanctions in 1992.

Even among a group of countries sharing a border with the same targeted state, we observed varied responses. Following the sanctions imposed on Yugoslavia in 1991, Albania experienced a sharp increase in imports, while Bulgaria initially witnessed an increase, followed by a decline for the subsequent three years, and then a rebound over the following six years.

Unintended consequences

It seems then that economic sanctions can create significant opportunities for neighboring countries as global manufacturers need to relocate their production facilities out of the target state. Some companies in Russia are said to be looking for ways to move their activities to neighbouring countries such as Kazakhstan.

We found that sanctions can also benefit neighboring countries by providing them with an opportunity to trade on behalf of the target country or smuggling goods across the border.

A demonstration with placard calling for Russia to be 'cut off'.
Sanctions are a popular response. Photo: Sandor Szmutko / Shutterstock via The Conversation

In this way, EU-sanctioned goods could be re-routed through third countries and then shipped to Russia. There is evidence that countries not necessarily bound by the sanction regime, such as Kazakhstan and Kyrgyzstan, have increased their trade with Ukraine’s invader.

Overall then, while economic sanctions can be effective in pressuring the targeted country, our findings indicate that they can have unintended consequences such as harming innocent bystanders.

By thoroughly examining those potential consequences, politicians can attempt to strike a balance between pursuing foreign policy goals and taking into account their broader economic effects.

Recognizing these effects should be part of imposing sanctions in the first place – and would help create more robust policies to ensure that they are effectively implemented.

Vincenzo Bove is Professor in Political Science, University of Warwick; Jessica Di Salvatore is Associate Professor, University of Warwick, and Roberto Nistico is Associate Professor of Economics, University of Naples Federico II

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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How Trump's foreign policy would differ from Biden's - Asia Times

Should American allies be worried that if Donald Trump returns to the White House next year, he will tear apart treaties, recast decades-old international arrangements and adopt a go-it-alone approach to global affairs?

Recent comments from Trump disparaging NATO allies have put this question on the front burner in Washington and other world capitals.

Trump is, of course, in the middle of a presidential campaign and is seeking to show he would be a very different president from Joe Biden. Given Biden’s difficulties on foreign policy, it is easy to see why.

Biden’s mixed foreign policy record

Biden’s approval numbers are near historic lows – just under 40% of Americans approve of the job he is doing. In particular, Biden’s foreign policy has been a problem. His plunge in popularity began around the time of the catastrophically mismanaged US troop withdrawal from Afghanistan two and a half years ago.

Israel’s war against Hamas in Gaza – and the Houthi attacks in the Red Sea and Iranian proxy attacks against American forces in Iraq and Syria that followed – have only made Biden look weaker. In fact, recent polls show only a third of American voters approve of his foreign policy.

A resurgent Iran reminds older Americans of the more than 50 Americans taken hostage in Tehran in 1979 and then-President Jimmy Carter’s failure to free them – one of the main reasons why Carter lost the 1980 presidential election to Ronald Reagan. The hostages were freed the day Reagan took office.

Today, Biden faces the same potential election-year problem with the Gaza war. Younger, progressive Americans, as well as Arab Americans, are more likely to be aghast at Biden’s support for Israel’s assault on Hamas in Gaza and the consequent civilian deaths.

US President Joe Biden and his Israeli counterpart Benjamin Netanyahu haven’t always seen eye to eye since the Gaza war erupted. Image: Handout / GPO

Many Biden supporters are concerned this could affect his chances against Trump in November’s election, particularly in swing states like Michigan, which has a large number of Arab American voters.

Also working against Biden is the war fatigue felt by many Americans. After 20 years of fighting in Afghanistan and Iraq, many Americans are ready to take a break from global leadership responsibilities.

A long tradition of placing America first

Biden’s foreign policy weaknesses opens the door for Trump to show voters he will take a different approach.

Over the past four decades, starting with Reagan, successful presidential candidates have criticized foreign adventures, instead emphasizing domestic investment. Political scientists use the term “strategic retrenchment” to describe this, but politicians are more likely to use a phrase like “America First.”

In 1984, for instance, Reagan ran one of the most effective presidential campaign ads in history called “Morning in America”, which depicted a return to domestic tranquillity and prosperity.

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Reagan’s ‘Morning in America’ ad from the 1984 presidential campaign.

In 1992, Democratic strategist James Carville coined another famous phrase, “It’s the economy, stupid”, which then-candidate Bill Clinton’s campaign evoked successfully to focus on domestic economic issues in his race against President George H W Bush.

Then, in 2000, then-Republican challenger George W Bush sharply criticized the Clinton administration’s focus on “nation building”, comparing it to “international social work.”

When it comes to Trump, bombast is a feature, not a bug. When he ran for the White House for the first time in 2016, he outlined his isolationist, “America first” approach, criticizing President Barack Obama and his secretary of state, Hillary Clinton, for their “reckless, rudderless and aimless foreign policy.” He said, if elected,

I will return us to a timeless principle. Always put the interest of the American people and American security above all else.

He has returned to this rhetoric in the current campaign, even encouraging Russia to invade NATO countries that don’t spend the required 2% of their GDP on defense. While offensive at first blush, these comments serve the very useful purpose of showing a huge difference from Biden.

19th-century populist worldview

It is also important to understand a deeper truth about these comments. In his bones, Trump does not truly value any formal alliances formed before his ascent to power. Call it narcissism or isolationism if you must (and neither is entirely inaccurate), the former president sees formal alliances as a lower priority than fair play and power politics.

Andrew Jackson portrait. Wikimedia Commons

In this, Trump is a prime example of the Jacksonian tradition in American politics. Described best by the scholar and columnist Walter Russell Mead, the Jacksonian tradition is based on the political beliefs of former President Andrew Jackson, who was president from 1829 to 1837.

Jacksonians, like Trump and his most ardent supporters today, have a highly skeptical view of America’s involvement in global affairs. As Mead writes:

They prefer the rule of custom to the written law and that is as true in the international sphere as it is in personal relations at home. Jacksonians believe that there is an honour code in international life […] and those who live by the code will be treated under it. But those who violate the code – who commit terrorist acts in peacetime, for example – forfeit its protection and deserve no consideration.

For Jacksonians, when a country welches on its obligations (such as, in Trump’s view, the level of defense spending of many European NATO nations), it is morally right to punish them by calling into question treaty obligations.

Seen as a liar and fabulist by his opponents, Trump embodies this Jacksonian tradition of “customary honor” for his supporters, whose contempt for global elites and international institutions is deep and profound. (Trump was so enamored with Jackson, in fact, he had a portrait of the former president hanging in the Oval Office.)

This means, if Trump becomes president again, America’s allies, whether in NATO or the Indo-Pacific or elsewhere, will have to de-emphasize lawyerly arguments about international obligations and adapt quickly to the Trump-Jacksonian customary honor approach to diplomacy.

Superficially, this will mean global leaders offering praise for Trump’s various political performances. Going deeper, it also means finding a way to demonstrate that their relationship with the US is congruent with his sense of customary honor (and is also materially beneficial to the US and maybe even to Trump himself).

Then-US president Donald Trump and now deceased former Japanese prime minister Shinzo Abe take in a round of golf. Image: Twitter Screengrab

The model for this is the late prime minister of Japan, Shinzo Abe. Within days of Trump’s surprising election win over Hillary Clinton in 2016, Abe visited him at Trump Tower in New York and gave him a gold-plated golf club worth almost US$4,000. Trump immediately identified Abe as “friend.”

After then-Australian Prime Minister Malcolm Turnbull had an unpleasant phone call with Trump in 2017, the Australian ambassador to the US, Joe Hockey, took to the links with Trump.

With good humor and some personal charm, Hockey helped restore the diplomatic relationship – not by emphasizing legalistic constraints but by developing a personal relationship that was grounded in common sense and customary honor.

Lester Munson is Non-resident fellow, United States Studies Centre, University of Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Why the BOJ won't rain on the Nikkei's parade - Asia Times

TOKYO — With the Nikkei 225 surging to 34-year highs, the conventional wisdom is that the Bank of Japan (BOJ) now has greater confidence — and political cover — to raise interest rates and end decades of quantitative easing (QE).

But what if the opposite is true? Might the Nikkei boom luring tidal waves of capital toward Tokyo actually dissuade the BOJ from normalizing monetary policy? A walk down memory lane suggests BOJ Governor Kazuo Ueda might be too worried about spoiling the Nikkei’s party to tighten.

Consider the BOJ’s track record of hitting the monetary brakes during stock rallies of the past. Case in point: the central bank’s December 1989 rate hike, which signaled the end of the Nikkei’s most infamous bull run.

No one really knew at that moment, least of all then-BOJ governor Yasushi Mieno, who pulled the fateful trigger on Christmas day. That half-percentage point increase in short-term rates to 4.25% seemed like a rational response to upward inflation pressures at the time.

Even then-finance minister Ryutaro Hashimoto said the increase would help maintain price stability. But years later, when Hashimoto served as prime minister from 1996 to 1998, it was clear that the BOJ’s tightening move marked the top tick of Japan’s “bubble economy” era. And the start of a deflationary nightmare from which Japan is only now starting to recover.

Today, economists know that on December 25, 1989, Mieno’s team pulled out the financial equivalent of a precarious Jenga piece, destabilizing everything above and below. Fair or not, Mieno’s BOJ was roundly criticized for collapsing the stock market and setting Japan’s lost decades in motion.

Granted, the titanically large rallies in real estate and stocks might have been better tamed with macroprudential policy tweaks by the Ministry of Finance and regulators than blunt-force BOJ rate hikes. At the time, though, Tokyo’s politics were going through a unique period of volatility.

In 1989 alone, Japan had three different prime ministers: Noboru Takeshita, Sosuke Uno and Toshiki Kaifu. Distracted elected officials left asset bubble management duties to the BOJ.

Once Mieno retired in 1994, it fell to successor Yasuo Matsushita to deal with the economic fallout. That included mountains of bad loans on bank balance sheets. By the time Matsushita passed the torch to Governor Masaru Hayami in 1998, Japan had already fallen into deflation.

In 1999, Hayami became the first major central bank leader to slash rates to zero. In 2000 and 2001, the Hayami BOJ pioneered quantitative easing, or QE. In 2003, it was Toshihiko Fukui’s turn to manage Japan’s QE experiment.

Fukui decided Japan was ready to rip out the monetary intravenous tubes and ended QE. Then in 2006 and 2007, the Fukui-led BOJ managed to hike official rates twice.

The backlash was fast and furious. Politicians and corporate chieftains groused early and often about Fukui yanking away the proverbial punchbowl.

Yet when the economy slid into recession soon afterward and the Nikkei stumbled, the Tokyo establishment blamed the BOJ for messing up – again.

When Fukui’s replacement arrived in 2008, Masaaki Shirakawa quickly restored QE and returned rates to zero. In 2013, Governor Haruhiko Kuroda arrived to turbocharge QE in hyper-aggressive ways. Kuroda’s BOJ cornered the government bond market and nearly nationalized the stock market, becoming the biggest investor by far.

Bank of Japan Governor Haruhiko Kuroda. Photo: AFP / Kazuhiro Nogi
Bank of Japan governor Haruhiko Kuroda walked away without ending QE. Photo: Asia Times Files / AFP / Kazuhiro Nogi

That sent the yen down 30%, boosting exports and generating record corporate profits. In 2013 alone, the Nikkei surged 57%. In the years since then, ultra-loose BOJ policies, coupled with government efforts to strengthen corporate governance, sent the Nikkei to its current highs. The benchmark is up 45% over the last 12 months.

Yet the market’s current bull run, which began last year, appeared to make the BOJ timid about stepping away from QE.

In December 2022, Kuroda tiptoed up to the line by letting 10-year yields rise as high as 0.5%. Global markets quaked, sending the yen and Japanese yields skyrocketing. Kuroda’s team spent the week after December 20, 2022, racing to make large and unscheduled bond purchases to cap yields. After that, Kuroda didn’t attempt to “taper” again.

Enter Ueda, who grabbed the BOJ’s controls last March. Ueda also tested the waters here and there, letting 10-year rates rise to 1% and beyond. Once again, markets took it badly and the BOJ scrambled to reassure bond traders that no big policy changes were afoot.

Since then, Ueda has avoided any hints that QE might be dismantled, that negative yield policies might be abandoned or that an official rate hike might be in the cards. This, of course, is not how global markets saw the Ueda era going.

As 2024 began, the overwhelming conventional wisdom was that Ueda’s team would be hiking rates by next month. But the fact Japan entered 2024 in recession has made the timing of BOJ tightening a moving target.

Analyst Ipek Ozkardeskaya at FXSteet.com speaks for many when she says “the Bank of Japan is in no rush to hike rates this April.”

Etsuro Honda, former special advisor to Japan’s Cabinet, tells Reuters that “while uncertainty is high, I oppose ending negative rates. It’s too early.” Honda adds that “negative rates are used for inter-bank operations, which apply risk premiums when it comes to corporations where no one’s asking for borrowing with negative rates.”

Earlier this month, BOJ Deputy Governor Shinichi Uchida tamped down expectations for near-term tightening moves. Speaking in the western city of Nara on February 8, Uchida said: “If sustainable and stable achievement of our 2% inflation target comes in sight, the large-scale monetary easing will have fulfilled its role and we’ll explore whether it should be revised.”

Complicating the many “if’s” confronting the BOJ is uncertainty about whether inflation is slowing or accelerating. Japan’s consumer prices slowed less than expected in January, with “core” inflation rising at a 2% rate year on year. On the price trend front, “recent data have been extremely disappointing,” says Stefan Angrick, an economist at Moody’s Analytics.

Japan’s inflation is a mixed bag. Image: Facebook

As Hiroshi Yoshikawa, professor emeritus at the University of Tokyo, tells Bloomberg of Ueda’s plight: “I wish him the best of luck. Financial markets and the government are making the BOJ’s exit into a special event and fixating on if the bank is going to act and when. As the governor in charge of the policy, he may have little choice but to be cautious.”

Many are still betting on the BOJ acting. “This means that inflation remains above the Bank of Japan target, validating market expectations for a rate hike in the first half of the year,” says Francesco Pesole, economist at ING Bank.

This view, however, ignores how the ghosts of 1989 are colliding with the economic uncertainties of 2024 — and, to some extent, the ghosts of the mid-2000s, too. Not only did Japan’s crash in the early 1990s and the resulting bad loan crisis cause deflation — it also pushed the financial system to the brink.

In November 1997, Yamaichi Securities collapsed. The failure of a then-100-year-old Japan Inc icon shook markets everywhere, coming amidst the Asian financial crisis slamming Indonesia, South Korea and Thailand. Japan, punters worried, wasn’t too big to fail, but was too big to save. Thankfully, officials in Tokyo kept the episode from becoming a systemic shock globally.

But that near miss might also be factoring into Ueda’s calculus as he mulls withdrawing liquidity. The year since the demise of Silicon Valley Bank in California has put a spotlight on Japan’s vast network of profit-starved regional banks.

Across this aging nation of 126 million people are 100-plus regional institutions serving less economically vibrant regions. These banks have long been reluctant to consolidate or fully embrace the digitalization trends disrupting the globe.

As the population ages and the corporate exodus to Tokyo accelerates, there’s less demand for loans from rural lenders. And the trauma from 20 years of deflation left mid-size lenders more conservative than ever.

Rather than use BOJ liquidity to increase lending, many regional banks spent the last decade buying government and corporate bonds, leaving balance sheets vulnerable to higher long-term rates.

This pivot will sound familiar to students of last year’s SVB collapse in California. Ueda’s BOJ worries that rate hikes could push some fragile rural lenders toward insolvency as longer-term yields surge, SVB-style. 

For these reasons and others, Ueda hasn’t been the maverick some thought the Massachusetts Institute of Technology-trained economist might be. A big one could be the BOJ not wanting to be blamed again for wrecking a bull market in stocks.

As Kei Okamura, portfolio manager of Japanese equities at Neuberger Berman, notes, “we are still at the very beginnings for foreign fund inflows.”

Jean Boivin, a managing director at BlackRock, says “Japan’s equity rally has room to run” and that the market “can best their all-time highs.”

JPMorgan strategist Rie Nishihara adds that the Nikkei boom “will spur corporates to increase growth investment and improve capital efficiency and make institutional and individual investors take more interest.”

If the BOJ is perceived to be the spoiler once again, the risk is that the political empire in Tokyo might strike back.

Japanese Prime Minister Fumio Kishida isn’t very popular these days. Photo: Wikimedia Commons

The extent to which the ruling Liberal Democratic Party’s leadership is unpopular with voters can be seen in the 17% approval rating with which Prime Minister Fumio Kishida entered 2024. The LDP and its actions would surely push back hard on any hints Ueda might shock global markets.

There’s an argument that the feel-good factor from the Nikkei rally could improve Kishida’s support numbers and impart a “wealth effect” that makes businesses and households feel better about the economy.

But the Nikkei’s surge could also be the tail wagging the dog at BOJ headquarters. Remember how wrong the conventional wisdom was about the BOJ last year? It could be even more wrong about what’s afoot in 2024.

Follow William Pesek on X, formerly Twitter, at @WilliamPesek

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Is NATO really ready for war with Russia? - Asia Times

The French president, Emmanuel Macron, has said sending Western troops to fight in Ukraine “could not be ruled out.”

After hosting a meeting of 25 European leaders in Paris on February 26, Macron said that there was “no consensus” on committing ground troops to the conflict in Ukraine but added: “Nothing should be excluded. We will do whatever it takes to ensure that Russia cannot win this war.”

Until now, NATO has confined itself to training Ukrainian military forces and supplying them with defensive weapons. Member states fear that directly confronting Russian forces in Ukraine would risk a massive escalation. And Vladimir Putin and his senior ministers have regularly issued threats that Russia could resort to using its nuclear arsenal in the case of a larger conflict.

At present, NATO is also conducting its largest military exercise since the Cold War. Steadfast Defender runs from January until May and involves all 31 member states. Aimed at enhancing the alliance’s collective defense capabilities and readiness, it is the largest exercise since Reforger in 1988, which involved 125,000 troops from the US, Germany, Canada, France and Denmark.

General Christopher Cavoli, NATO’s supreme allied commander for Europe, said: “Steadfast Defender 2024 will be a clear demonstration of our unity, strength and determination to protect each other, our values and the rules-based international order.”

Importantly, one aspect of the exercises is the involvement of US and Canadian forces, which is designed to demonstrate the speed and size of NATO’s reinforcement capabilities.

It acts both as a reassurance to European NATO member states and as a demonstration to potential enemies of the ability NATO has to put large forces into the field. Exercises are part of the communication of deterrence.

The exercise is meant to simulate an, “emerging conflict scenario with a near-peer adversary.” This is a thinly disguised reference to Russia, which shows that NATO is beginning to take the threat of direct conflict with that country seriously.

During the Cold War, NATO undertook regular large-scale exercises. For example, Exercise Lionheart, led by the UK in 1984, involved nearly 58,000 British soldiers and airmen of a total force of 131,565, including troops from the US, the Netherlands and what was then West Germany.

Since the dissolution of the Soviet bloc, NATO has searched for a new identity. Its focus shifted in the 1990s from protecting common territory to protecting members’ common interests, as it did by intervening in the wars in Bosnia in 1995 and Kosovo in 1999 when it officially approved this new strategic concept.

Unity or disunity?

A demonstration of NATO unity and military capacity is important, coming after two years of disunity over how to respond to the war in Ukraine and amid wrangling over supplies of arms by Ukraine’s Western allies.

It has become more significant following recent remarks by former president Donald Trump that NATO members who did not meet the spending guidelines would no longer be protected by the US.

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‘I would not protect you’: Donald Trump threatens Nato members over defense spending.

Members are supposed to spend at least 2% of their annual GDP on defense – but it’s more complicated than that. Some nations’ defense spending is wholly allocated to NATO. Others, meanwhile, might set their defense spending at less than 2% but their spending per head is greater than that of those who meet the NATO guideline.

For example, Luxembourg falls short of the 2%, spending only 0.72%. But in per head terms, it spends US$921, which is more than Poland (3.9%) or France (1.9%).

The US may spend 3.5% of GDP on defense but not all of that is allocated to NATO. Much of the US’s strength is deployed in the Pacific and on its home territories. So it’s misleading to judge the value of NATO membership in these terms.

The key clause in the NATO treaty is Article 5, which governs collective security and compels members to respond if a fellow member is attacked by a hostile third party. The US is the only NATO member state to have invoked Article 5, following the 9/11 attacks.

It received assistance from other NATO members in Afghanistan and more widely in the “war on terror.”

Is Nato battle-ready?

A significant problem NATO faces, however, is not in deploying the troops it has, but in supplying them. As has been demonstrated by the efforts to provide equipment and ammunition to Ukraine, NATO has neither the stockpiles nor the manufacturing capacity to supply a lengthy modern war.

This is because NATO has long planned on what’s known as a “come as you are” war, which means it has the capacity to fight for only as long as the equipment and supplies last. For this reason, NATO’s strategy has always been, in the event of a conflict, to bring it to a conclusion as quickly as possible.

Turkish soldiers fire the AK40-GL Bombaatar during exercise Steadfast Defender near Cincu, Romania, May 23, 2021. NATO officials are planning to bring together more than 40,000 troops for the exercise in 2024. Photo: US Navy / Brett Dodge

Admiral Rob Bauer of the Royal Netherlands Navy, NATO’s most senior military commander and military adviser to its North Atlantic Council, spoke at the Warsaw Security Forum in October 2023.

He said: “We need large volumes. The just-in-time, just-enough economy we built together in 30 years in our liberal economies is fine for a lot of things – but not the armed forces when there is a war ongoing.”

A number of European countries have already distanced themselves from Macron’s remarks, including Poland, the Czech Republic and Sweden, whose NATO membership has finally been approved by Hungary and which is set to become the alliance’s 32nd member.

But Russia has seized on Macron’s remarks, with Kremlin spokesman Dmitry Peskov telling reporters that even discussing the idea of Western troops being sent to fight in Ukraine represents a “very important new element.” He added: “In that case, we would need to talk not about the probability, but about the inevitability (of a direct conflict).”

Kenton White is Lecturer in Strategic Studies and International Relations, University of Reading

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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