May 28, 2024No Comments

Beyond Influence: The call for strategic defence in light of China’s interference in Canada

Author: Sandra Watson Parcels – China & Asia Team

The Interim Report

Canada is currently facing a critical moment in its history as it grapples with the urgent need to protect its democratic processes and national security from foreign interference. The release of the Public Inquiry into Foreign Interference in Federal Electoral Processes and Democratic Institutions on May 3rd has prompted focus on this issue. Over the past five years, the Canadian Security Intelligence Service (CSIS) has reported on the increasing international activity of the People's Republic of China (PRC), including efforts directed at democratic institutions, government bodies, and communities in various sectors. The interim report clarifies: "Foreign interference is not done by just one country. However, China currently stands out as the most persistent and sophisticated foreign interference threat to Canada."

Chapter four of the interim report examines China's use of foreign interference tactics, highlighting intelligence data suggesting extensive use of these methods to advance its interests. The chapter details a range of interference activities targeting various entities in Canada, including government officials, political organisations, political candidates, and diaspora communities. CSIS identifies China as a significant challenge to Canada's electoral integrity.

The report focuses on the activities of the United Front Work Department (UFWD), a key entity of the Chinese Communist Party (CCP) with a substantial budget. The UFWD plays a central role in China's foreign interference efforts,focusing on influencing the Chinese diaspora, shaping public opinion, and persuading politicians to support China's policies. It specifically targets individuals with status or influence, such as community leaders, academics, elected officials, and media members. The report describes the UFWD as employing a long-term strategy that utilises both overt and covert methods to cultivate and strengthen relationships over time.

The scope and scale of China's activities in the Canadian elections of 2019 and 2021 are reported to be more extensive than those of any other state, impacting not only federal but also local officials and indigenous communities. The report indicates the UFWD's activities blur the lines between foreign influence and foreign interference. It details clandestine,deceptive, and threatening activity around the world, often by leveraging influence and exerting control over some diaspora communities. Other PRC state institutions involved in foreign interference activities include the Ministry of State Security and the Ministry of Public Security, both of which reportedly operate covertly internationally and remotely from the PRC.

Canada's Reaction

This backdrop underscores Canada's urgency in strengthening its defences against foreign interference across all fronts. Canada recognises the evolving nature of these threats and the imperative to safeguard its sovereignty and interests. While the inquiry into foreign interference represents a significant step forward in Canada's response, whether the issue has been considered with enough timeliness and decisiveness still needs to be addressed. Conservative foreign affairs critic and MP Michael Chong stated that the report is a “damning set of conclusions and findings” and that it “contradicts much of what the government has told us over that period of time.”  New Democratic Party MP Jenny Kwan said there was a “systemic failure of communications by the government to those who are targeted or impacted by foreign interference.” 

The interim report provides a sobering glimpse into the extent of foreign meddling in Canadian affairs, with particular emphasis on activities surrounding recent federal elections. In response to these revelations, the Canadian government is addressing the issue through new legislation, such as Bill C-70, introduced on May 6th, which aims to update existing laws and improve Canada’s capacity to detect, disrupt, and defend against foreign interference. Additionally, the Canadian government's allocation of funds for establishing a National Counter-Foreign Interference Office underscores the seriousness with which Canada regards this issue.

China's Response

China has strongly rejected the allegations of foreign interference. On May 8th, the state-run Global Times published two articles on the subject. 

The first article criticised Canada's efforts to address foreign interference, describing it as "The so-called China's foreign interference is nothing but a lie to serve political purposes and a drama directed and performed by Canada itself." The preliminary report raises doubts about its validity, reflecting a broader trend in some Western states to attribute electoral outcomes to external influences. The article also accused Canada of interfering in China's domestic affairs. The paper also raised concerns about Canada's actions, suggesting they might hinder positive relations. It stated, "Canada's approach risks harming its relationship with China by aligning itself with US criticisms. We urge Canada to act objectively and avoid being misled by unsubstantiated reports."

The second article focused on Canada's introduction of draft legislation to counter foreign interference. Chinese Foreign Ministry spokesperson Lin Jian was quoted saying, "China has never and will never have any interest in interfering in Canada's internal affairs," dismissing claims of foreign interference as politically motivated lies. A Chinese academic commented, "The introduction of the new law based on groundless accusations of Chinese interference in Canada's elections is once again the country's attempt to fuel unfriendliness and hostility toward China domestically and internationally." The article also mentioned that Canada's new draft legislation is driven by domestic political motives, with the opposition party pushing for tougher policies towards China to challenge Canadian Prime Minister Trudeau's leadership.

China's Grand Strategy

Despite China’s reaction, China's growing global influence and its strategic aspirations are a subject of extensive international discussion. It manifests through a multifaceted approach to enhance its global influence and secure strategic advantages. Politically, concerns exist regarding its role in other countries' elections, particularly through the United Front Work Department (UFWD). Allegations of such interference have surfaced in Canada, the US and Australia. Militarily, China's activities in the East and South China Seas create tensions with neighbouring states. These activities are challenging established international maritime norms, and contravening international laws and norms. Economically, the Belt and Road Initiative extends its reach across continents, fostering dependencies through infrastructure while facing criticisms of potentially resembling neo-colonialism practices. This economic outreach often seems to often complement its military ambitions, as infrastructure projects can double as strategic military footholds. Domestically, China's human rights record, particularly in Hong Kong, Tibet, and Xinjiang, is under international scrutiny. Issues surrounding limitations on freedoms are a source of international concern. In cyberspace, its strategic operations involve sophisticated espionage and potential disruptions of global infrastructure, raising international alarms over cyber warfare. China's cultural diplomacy and media expansion aim to shape global perceptions and address Western influence. These efforts can be seen as attempts to manage international reactions to its policies. Collectively, these strategies reinforce China's position on the global stage and intricately interlink to influence its relationships with major world powers, crafting a complex web of influence and control.

Source: Image created by the author.

China's Strategy in Canada

China's approach in Canada shares similarities with its broader strategies internationally. Both utilise a multifaceted approach to cultivate influence and achieve strategic goals. In line with its global political ambitions, China's engagement through the UFWD with Chinese diaspora communities raises questions about potential influence on domestic politics and public opinion. This comprehensive strategy presents significant challenges to Canadian sovereignty, security, and economic interests.

In the economic and technological spheres, China's tactics include cyber espionage and strategic investments in critical sectors, raising Canada's national security concerns. Notable incidents like the Microsoft Exchange server attacks have targeted essential Canadian infrastructure, undermining data security and intellectual property. Moreover, strategic investments in sectors such as natural resources and ports might be seen as signs of China's efforts to extend its geopolitical influence within Canada, mirroring its global economic outreach.

The involvement of Chinese companies like Huawei in Canada's 5G network raised concerns about data security vulnerabilities, prompting Canada to implement restrictive measures to protect its telecommunications infrastructure. Concurrently, Chinese investments in Canadian real estate and potential political influence attempts require careful monitoring.

In the areas of soft power and cultural influence, the presence of Confucius Institutes within Canadian universities raises questions about the promotion of a selective view of Chinese culture, potentially impacting academic freedoms and shaping public perception. These institutes, alongside other UFWD activities within diaspora communities, shape Canada’s political landscape to align with China’s interests. Surveillance efforts, such as monitoring the Chinese diaspora through organisations like the Chinese Students and Scholars Associations (CSSAs), complement China's control operations within Canada.

In response, Canada has taken steps to address these concerns, including updates to legislation, enhanced cybersecurity measures, and the establishment of a National Counter-Foreign Interference Office.

Canada…Moving Forward

As Canada navigates this complex landscape, vigilance in defending its democratic institutions and national interests is paramount. Public Safety Canada has affirmed, "The Government of Canada takes the threat posed by foreign interference seriously and has various tools and mechanisms in place to protect individuals and Canada's interests." CSIS’s recent annual report states, "the PRC’s negative perceptions of select Canadian domestic and foreign policy initiatives may also drive more foreign interference….in 2024.” The evolving nature of these challenges demands comprehensive and multifaceted tactics, which include legislative measures, diplomatic engagement, and international cooperation. By addressing these challenges proactively, Canada will not only be upholding the integrity of its democratic processes but also asserting its sovereignty against external pressures. Canadian Minister of Foreign Affairs Mélanie Joly stated, “As with past crises, multilateralism and diplomacy offer our best hope for maintaining peace and stability.”  While Canada must take decisive actions to counter interference and protect its sovereignty, it should also engage in diplomatic efforts with other states, including China, to address the issue of interference. This balanced approach combines responses to interference with diplomatic engagement where possible. Strengthening alliances with Five Eyes and other global partners, specifically in the Indo-Pacific, is crucial for effectively confronting and mitigating these risks. As these strategies continue to evolve, transparency, accountability, and community engagement are pivotal to ensure that Canadians are protected and that the democratic framework remains resilient against the covert and disruptive tactics of foreign actors. By strengthening its defences and adopting a proactive stance, Canada safeguards its sovereignty and contributes to the broader global effort to preserve democratic values and institutions, consequently enhancing stability in the world order.

Check out another China & Asia Team article on China’s Belt and Road in the Maldives by Carlotta Rinaudo.

April 1, 2024No Comments

Not Just a Vacation Paradise: Unveiling China’s Belt and Road in the Maldives

Author: Carlotta Rinaudo - China & Asia Team

For years, people could only travel between the two islands by ferry. On one side of the shore stood Malé, the capital of the Maldives, a bustling urban hub and a sensory feast in itself, with its markets bursting with colors, exotic fragrances, and the lively chatter of fishermen displaying their daily catch. On the opposite shore lay Hulhumale, an artificial island hosting modern residential facilities and the Maldives’ international airport. Connecting these two islands was vital for daily life, yet the ferry system often proved inadequate to its task – especially during peak hours, when tourists and locals alike had to endure endless queues under the tropical sun.

Things were to change when Abdulla Yameen was elected President in 2013. The half-brother of Maumoon Abdul Gayoom, often referred to as the “dictator” of the Maldives, Yameen had ambitious plans for his island nation. Through a development initiative known as “Greater Male” he aimed to elevate Malé, Hulhumale, and other neighboring islands into a modern hub with upgraded infrastructure, housing, and public services. But this grand vision faced a major obstacle. In 2011 the Maldives had lost its Least Developed Country (LDC) status, which meant that the island could no longer attract funds through international aid. With this avenue closed, Yameen had no other choice but to seek an alternative source of investment. Enter China.

Those were the times President Xi Jinping had started to promote the Belt and Road Initiative (BRI), whose goals largely aligned with Yameen’s vision. It did not take long for Yameen to travel to Beijing, praise China as one of the Maldives’ “closest friends” and join the BRI. Nor did it take long for Chinese companies to establish their presence in the atolls: through Chinese loans, they built 11,000 high-rise buildings in Hulhumale, expanded the Velana International Airport, and extended the local electricity grid. Then came the Friendship Bridge. Built by China Harbor Engineering Company (CHEC), it crossed over 2km of turquoise waters to connect Malé and Hulhumale, facilitating the flow of people and resources at a rapid pace. Commuters no longer needed to endure endless queues during peak times.  

Source: Picture taken by the author “(…) the capital of the Maldives, a bustling urban hub and a sensory feast in itself, with its markets bursting with colors, exotic fragrances, and the lively chatter of fishermen displaying their daily catch.”

The conversation around these megaprojects, like any debate surrounding the BRI, quickly became sharply polarized. While some glorified the megaprojects as examples of “win-win cooperation”, many others disagreed. Given Malé’s significant debt to China, they argued that this scenario represented yet another example of debt trap diplomacy, where Beijing strategically pushes recipient countries into debt to then seize control over their assets. Similar claims have emerged in neighboring Sri Lanka, where Chinese-funded projects led to repayment challenges, eventually culminating in the transfer of the Hambantota port to China. However, simplifying the BRI’s presence in the Maldives to a dichotomy of “win-win cooperation” versus “debt trap diplomacy” is problematic. One only has to explore the urban center of Malé to discover a more nuanced reality. Here, the discontent among the local population towards their ruling élite highlights another crucial yet neglected actor in the BRI: the political leadership of the recipient country. That is, Chinese investors do not operate in a vacuum, but within a context where local politicians are active players rather than passive recipients of debt. In the case of the Maldives, the ruling class functions more like a cabal of corrupt politicians feeding a patronage-based system, and taking every megaproject as an opportunity for personal gain. “It is not really about China pushing the country into debt. It is more about our political class using foreign investors to satisfy their own thirst for cash”, says a local resident who spoke under the condition of anonymity. Take the above-mentioned Friendship Bridge. Initially proposed as a six-lane bridge connecting Hulhumale and Malé at a cost of around $100 million, it was later downsized to four lanes under Yameen’s administration. Despite the reduction in size, the cost of the project was doubled to almost $200 million. “The government initially promised a bigger bridge but later built a smaller one. They then inflated the contract value, pocketed the excess funds, and eventually left our Chinese creditors unpaid” explains the local resident.

Source: “One only has to explore the urban center of Malé to discover a more nuanced reality.” Picture taken by the author

Parallels can be drawn with the Hambantota Port. Here, a consultancy group estimated that constructing a bunkering facility would cost around $33 million, yet the Ports Minister demanded a $100 million loan. In both cases, the contracts were significantly inflated, allowing surplus cash to clandestinely find its way into the pockets of the ruling élite – Yameen’s inner circle in the Maldives, and the Rajapaksa family in Sri Lanka. Presently, Maldivian officials struggle to ascertain the exact amount of debt owed to China and are actively seeking to renegotiate interest rates and repayment plans. Meanwhile, President Yameen was arrested on corruption charges. This only highlights the importance of not overemphasizing China’s control over its projects abroad - it is equally vital to scrutinize the role of the host country’s political leaders, as they too significantly influence the nature of the BRI.  

China is not alone in funding a construction boom in this small yet strategically positioned island nation. India, viewing the Maldives as part of its traditional sphere of influence, is also funding various megaprojects to steer the island away from the Chinese orbit – and back to its own: hospitals, cricket stadiums, ports and airports, and even a sea bridge connecting Malé to other islands in the West, surpassing the Friendship Bridge in both length and scale. Caught in between this geopolitical rivalry, the Maldivian political élite has attempted to capitalize on both Chinese and Indian investments to amass even more personal wealth, leading to rampant and unprecedented construction activity. Airports are being built on islands where only 800 people live, making people question if these developments are really necessary. Needless to say, this is a game with few winners and many losers. 
“The problem is that this construction boom simply does not fit the Maldivian reality” explains another local resident. “All this dredging activity is damaging our coral reef, which is our primary defense from rising sea levels. Yet we continue to destroy it with unnecessary construction projects. Meanwhile, our leadership gains illegal money, while greater powers fight their own geopolitical game on our sovereign territory”. Today, ordinary Maldivian citizens are burdened with debt and environmental devastation. Their nation owes at least $1.4 billions to Beijing – yet unofficially this figure might go as high as $3.5 billions, which accounts for 70% of their GDP. In addition, being the lowest-lying country in the world, many parts of the Maldives could sink by the end of this century, posing an existential threat to its inhabitants. 

Source: “(…)many parts of the Maldives could sink by the end of this century, posing an existential threat to its inhabitants.” Picture taken by the author

During the Third Belt and Road Forum in October 2023, President Xi Jinping emphasized the importance of fighting corruption associated with the Belt and Road Initiative. Premier Li Qiang echoed this commitment, stating that Beijing was committed to achieve a “clean Silk Road” devoid of graft. Yet ensuring a corruption-free Silk Road also necessitates more oversight over recipient countries, as they play a crucial yet underestimated role in determining the inclusivity and sustainability of BRI projects. Beyond simplistic notions of “win-win cooperation” versus “debt trap diplomacy”, the reality of the BRI is characterized by top-down decision-making, secretive negotiations, and limited public involvement. This only perpetuates a cycle of patronage, profit-seeking, and personal interests – all at the expense of human needs. Similar to the Sri Lankan experience, for the Maldivian population the true trap might not be that of Chinese investments - but the rule of a dysfunctional political leadership. 

March 18, 2024No Comments

Japan’s OSA: Balancing Security and Stability in the Indo-Pacific

*Authors: Southeast Asia and Oceania Team

Introduction

Amid escalating tensions in the Indo-Pacific region, exacerbated by assertive Chinese actions, in April 2023, Japan declared a new cooperation framework—Official Security Aid (OSA). Positioned as a strategic departure from its longstanding Official Development Aid (ODA) framework, the OSA marks Japan's commitment to strengthening the armed forces of like-minded nations. This move reflects Japan's response to the evolving security landscape, characterized by Chinese assertiveness in the South China Sea (SCS) and other geopolitical challenges.

From ODA to OSA

For decades, Japan stood as a bastion of ODA, considered as the main reliable partner for Southeast Asian nations. Its aid is granted under a request-based system and reflects a commitment to regional stability via non-military means.In the postwar era, Japan utilized development cooperation to establish relations with neighboring countries and subsequently to support the expansion of Japanese businesses in Asia. It played a role in the transition from socialist regimes and, amid China's rise, contributed to the development of legal systems and the consolidation of democracies.

The OSA, however, underscores Japan's proactive stance in gaining a more dominant role in the region, marking its first attempt in the postwar era, in which this country seeks to directly enhance the capabilities of foreign military forces. Under the OSA, Japan aims to provide not only equipment and supplies, but also support for infrastructure development to the military forces of like-minded countries, thereby bolstering their security capabilities.

Japanese Prime Minister Fumio Kishida's 2022 Shangri-La Dialogue address marked a pivotal moment in this new approach, with an announcement on doubling Japan's defense spending, and on the necessity in a departure from Japan's traditional post-war foreign policy, primarily centered on economic contributions. Japan's move towards OSA fits with its long-standing role as a vital ally for Southeast Asia in maritime security, especially during Prime Minister Shinzo Abe's leadership.

The realization of OSA materialized around the Japan and the Association of Southeast Asian Nations’ (ASEAN) 50th anniversary, culminating in a Joint Vision Statement and an implementation plan which emphasized maritime security cooperation. Subsequently, Japan extended its security assistance totaling $13 million to Bangladesh, Fiji, Malaysia, and the Philippines, demonstrating a commitment to fostering stability beyond its borders.

Furthermore, Japan’s International Cooperation Agency (JICA) is set to play a pivotal role in providing maritime security support to Indonesia, Malaysia, the Philippines, and Vietnam. JICA's plan encompasses capacity-building initiatives and the provision of patrol boats, radar systems, and drones. This comprehensive support seeks to address the security needs of nations grappling with regional power dynamics. This move signifies Japan’s intent to forge a broader international coalition, marking a strategic shift in its diplomatic and security engagements.

Strategic Gains

Amid the delicate balancing acts between superpowers, the OSA offers Southeast Asian claimant states an appealing prospect. With territorial disputes and threats from China in the SCS, Japan’s commitment to enhancing defense capabilities might seem to aim to deter Chinese assertiveness.

In this context, and following the ASEAN-Japan Commemorative Summit, Japan has elevated relations with Vietnamand Malaysia to a Comprehensive Strategic Partnership, and a Security Assistance agreement, including maritime equipment provision, was signed with Malaysia. Additionally, although not a claimant state, Japan plans to build a patrol vessel for the Indonesian Coast Guard. Moreover, coastal surveillance radars will be granted to the Philippines, with discussions on reciprocal troop access and joint military exercises. Japan and the Philippines are also working towards a trilateral alliance involving the US. As Japan has its own territorial dispute with China over its southern islands, the OSA aligns with its ambitions to ensure a Free and Open Indo-Pacific and secure regional supply chain resilience.

Source: AkinoriMatsui "World flags" - https://en.photoac.com/photo/3989789

Japan also might envision the OSA as a means to reduce Southeast Asian countries' dependence on China. As the Belt and Road Initiative remains a significant diplomatic tool, the OSA introduces new areas of cooperation. For Bangladesh, for instance, which heavily relies on Chinese weaponry (70%), the OSA offers an opportunity to diversify suppliers and mitigate risks associated with the quality of Chinese-made military equipment.

Balancing security and stability

In his address at the Hiroshima G7 Summit in 2023, PM Kishida emphasized the potential parallels between the current situation in Ukraine and future challenges in East Asia. Observing global instability stemming from the Ukraine war, the rise of China, US-China tensions, and the Israel-Hamas War, Japan’s proactive foreign policy aims to foster deterrence and regional security. This change signifies a departure from its conventional stance of following US priorities by shifting towards a Japan-led multilateral security collaboration. It should be asked whether this securitization led to more, or less stability in the region.

While Japan's emphasis on maritime security and support to like-minded Indo-Pacific countries aligns with countering China's assertiveness, extending OSA to the military capabilities of developing countries introduces complexities.

The potential reactions from ASEAN nations, particularly considering their neutrality and non-alignment strive, could lead to heightened tensions and disrupt the delicate balance in the ongoing superpower competition. Moreover, concerns over an arms race in the region emerge; due to ASEAN countries' diverse capabilities and stances in the superpower competition, providing security assistance to certain members might increase tension in the region and undermine the current multilateral system. 

The pursuit of a competitive armament approach, rather than creating a secure environment, may contribute to heightened tension, prompting a more assertive Chinese stance and a Chinese armament of its allies in the region. Furthermore, given China’s extensive arms sales to the region, and its lenient restrictions on arms exports, it is essential to question whether Japan's OSA will genuinely serve as an effective countermeasure to China.

Conclusion

Japan's adoption of OSA signifies a proactive response to regional challenges posed by assertive Chinese actions. While enhancing defense capabilities for like-minded developing countries brings strategic gains, potential reactions from ASEAN, fears of an arms race, divisions, and China's extensive influence, warrant cautious consideration. As Japan assumes a broader international role, the delicate balance between security and stability in the Indo-Pacific calls for careful navigation and strategic planning to mitigate potential negative repercussions of such security related initiatives.


*Views expressed in the article belong to the author and do not represent any organization or its affiliates.

March 11, 2024No Comments

Beijing and Washington try to talk to each other about AI

Author: Francesco Cirillo - U.S. Team

The sudden emergence of applications related to artificial intelligence, which combine different fields of work, is at the centre of international agendas and governments. The issue of the possible risks of AI has focused the debate on the need to find common ground, especially between China and the United States, the two major global economic powers and key players in AI research and development, both in the public and private Big Tech sectors, both in the US and in China. 

In recent months, following the San Francisco Summit in November 2023, where a very important bilateral meeting between Joe Biden and Xi Jinping took place, China and the US have started to engage in a dialogue to create global governance on AI. For several experts, Sino-American cooperation is crucial to avoid a political-military race in the AI sector, as was also said by Sam Altman, CEO of OpenAI. From Beijing's perspective, the issue remains a priority due to the delicate diplomatic relations between Washington and Beijing. Between December 2023 and January 2024, two Chinese academics wrote two papers attempting to define the new China-US relationship from Beijing's perspective. 

Da Wei, a professor at Tsinghua University, highlights four key concepts needed to analyse the new 'normal' in Sino-US relations after the San Francisco summit. The paper points out that relations will remain predominantly negative in the long term, but analyses the condition that neither power wants a direct confrontation on the economic level. From the point of view of Chinese academics, there seems to be the idea that both China and the US must find the need to coexist, especially to consolidate dialogue on issues of artificial intelligence. 

Here too, Chinese academics and experts reiterate the need for high-level dialogue to build global governance on AI

Even the world of independent academic research is moving to protect the impartiality of scientific research on AI.

On 5 March, a team of MIT experts published a letter"A Safe Harbor for AI Evaluation and Red Teaming," calling on tech companies involved in generative AI research to implement independent evaluation systems for AI-related risks. The letter, signed by several experts, refers to the confidentiality and corporate security issues that many Big Techs, most notably OpenAI, have within their R&D teams, preventing an unbiased assessment of the risks associated with the sudden development of AI, accelerated from December 2022.

Source: Tara Winstead - Pexels

Artificial Intelligence issues have entered the international debate because of their potential in various sectors, but also because of the competition/cooperation that both China and the United States will have to face in the coming years on issues related to the integration of AI systems in the economic, political and military spheres. 

International competition and the race to dominate AI could change the current status of global governance, but it would not change the game and the competition between the great powers, since technological innovation has always played a key role in the global hegemony of the superpower that would gain a strategic advantage over all the other great global powers.

October 4, 2023No Comments

The tension between China and the US also has an impact on the technological world

Author: Francesco Cirillo - U.S. Team

Washington and Beijing have planned strategies to increase semiconductor production with the advent of Artificial Intelligence. For this reason, Washington is somewhat concerned about China's chip production capabilities; the concern increased after the unveiling of the new Mate 60 Pro smartphone by Huawei. The chip component of this product is unique: in fact, semiconductor companies in Beijing and the People's Republic produce them entirely. US analysts think this demonstrates Beijing's technological capabilities and China's ability to become independent in technology production.


It is crucial for many companies, particularly Nvidia, to maintain a steady relationship with the People's Republic; this is a different view for the US government. To slow the growth of the industry, especially the development of the artificial intelligence field, the White House, Congress, and the defence and intelligence apparatuses should implement a containment strategy in the supply chain of the semiconductor industry. The New York Times states that China has used artificial intelligence tools, in particular, to pursue disinformation actions. This, according to Microsoft researchers, indicates that Beijing is eager to use generative AI to produce images and disseminate them online to apply disinformation actions.


For Beijing, one of the ways China could obtain the resources to compete with the US in that area is through the technology race. In a recent report translated by the CSIS (Political Bureau of the Central Committee of the CCP, 2023), At the Seventh Collective Study Session of the CCP Central Committee Politburo, Xi Jinping Emphasized Comprehensively Strengthening Military Governance and Using High-Standard Governance to Promote High- Quality Military Development [习近平在中共中央政治局第七次集 体学习时强调 全面加强军事治理 以高水平治理推动我军高质量发展]. Interpretation: China (originally published 2023), a working group of the Political Bureau of the Central Committee of the Communist Party of China, outlines guidelines for the integration of HiTech tools into the Chinese armed forces.

Source: https://www.pexels.com/it-it/foto/luce-blu-e-rossa-dal-computer-1933900/


Beijing recently announced the launch of a new approximately USD 40 billion investment fund intending to support the industrial growth of technology companies. The contention between the People's Republic of China and the US has also affected the artificial intelligence sector. The US is trying to impose restrictions on US companies operating and selling technology products to Chinese companies to hinder China's access to the industrial chain.


The Semiconductor Industry Association has stated that China will purchase chips and semiconductors worth around $180 billion in 2022 and only a few companies, including Intel, Nvidia and Qualcomm, have a significant relationship with Beijing. These companies are the only ones authorised by the US authorities to sell chips for Huawei's smartphones. In an economic and technological competition that Washington hopes will limit China's growth and development in the HiTech sector, further trade conflicts could also hurt US companies themselves.

March 6, 2023No Comments

Hambantota: The Epitome of Sri Lanka’s Broken Politics 

Author: Carlotta Rinaudo

“Everybody says Hambantota was ‘invaded’ by the Chinese. Well, just look around… There are probably no more than twenty Chinese people in the whole town. We definitely were not invaded by anyone. If anything, we Sri Lankans are hostages – hostages of our political class”, says Dilshan while sipping his tea. He is an ordinary man that lives in Hambantota, a sleepy town at the Southern tip of Sri Lanka - a remote place where taxis are nowhere to be found, public buses remain rudimentary, and the local residents buzz around the streets on rusty TukTuks, making a living mostly out of fishing and agriculture. Those that visit Hambantota are soon warned by a yellow signal: beware of wild elephants - they might come out of the bush and cross your way. It seems ironic that this forgotten tropical town with only 11,000 residents has recently drawn intense scrutiny from international media, becoming the epicenter of a fierce debate in academic and political circles. At the heart of this debate is a metaphorical “white elephant” – not the one that might come out of the bush - but the giant port that sits on the town’s coastline: the Hambantota Port.

Source: (A common street in Sri Lanka. Credit: Flickr)

The Hambantota Port was part of Beijing’s signature Belt and Road Initiative, and its construction was mostly funded by Chinese loans. When in 2017, the debt-ridden Sri Lankan government decided to lease a 70% stake in the port to the China Merchants Group for 99 years, Hambantota became a symbol fiercely cited by devoted proponents of the so-called ‘debt trap theory’. This narrative depicts China as a predatory investor that invites the Global South nations to join the BRI’s family and then deliberately pushes them into debt through murky loans and contracts. At this point, when the naïve, cash-strapped government is buried in debts it can’t repay, Beijing carries out its calculated master plan and forces its victim to cease its national assets. “Look what happened in Hambantota!”, is a claim that still reverberates in many political discussions, often with a prophetic tone.

Walking in Hambantota today, however, reveals a more complex reality. The discontent of the local people and the semi-abandoned buildings give away a different truth: there is another side of the debt-trap theory - one that is often overlooked. The countries that join the Belt and Road Initiative are not always led by cash-strapped, naïve, unaware politicians that happen to find themselves buried in debt, with no other choice than ceasing national assets to Beijing. Often, these might actually be corrupt politicians, blinded by megalomaniac tendencies left unchecked, that utilize Chinese loans for their own political and material gains.

Source: (The Fishing Market of Hambantota. Credit: Flickr)

For almost two decades, Sri Lanka’s political landscape has been dominated by the Rajapaksa family, a political clan that essentially ruled Sri Lanka like an autocratic family business. When Mahinda Rajapaksa was elected President in 2005, part of his political manifesto promised to deliver economic revitalization by constructing megaprojects and new infrastructure. Unfortunately, Rajapaksa failed to become the architect of Sri Lanka’s economic miracle: instead, he created a ticking bomb. First, he built the foundations of this economic revitalization on unsustainable debt, recklessly borrowing from bilateral lenders, mainly China, India, and Japan, as well as from a wide range of private investors. On this shaky ground, the government erected a wide array of megaprojects without conducting proper feasibility studies – essentially, building pieces of infrastructure that would never be commercially viable. Meanwhile, the Rajapaksa family has been accused of corruption, nepotism, bribes, and money laundering, with its members secretly transferring billions to accounts abroad. The infamous port of Hambantota, therefore, might not be the story of a Chinese masterplan. It is more of a tale of Sri Lanka’s broken politics.

In the early 2000s, many experts frowned upon the decision to build a new port in Hambantota, only 200 km away from Colombo, which hosts the 25th busiest port in the world. For a small island nation like Sri Lanka, this did not seem like a calculated, rational decision. In fact, it was a political one. Mahinda Rajapaksa is from the Hambantota district, a place where he hoped to solidify his grip on power and build a political stronghold. He thus erected a wide array of megaprojects - some of them carrying his name – in an attempt to elevate himself as the strongman that was capable of delivering economic revitalization to his native area. Today, in Hambantota, the signs of Rajapaksa’s megalomania and heavy spending are everywhere – not only in the port itself. Take the cricket stadium, built with a capacity of 35,000 people for a remote town with only 11,000 residents: largely unsuccessful, it is often used as a wedding venue to recover some profit. Alternatively, the airport sits semi-abandoned with no departures or arrivals. Moreover, the huge convention centre that barely hosts any event – at the moment, it has mostly become a playground for Sri Lankan kids, who often play cricket next to the main entrance. These white elephants are the grim legacy of a political dynasty out of touch with reality, unable to comprehend the needs of the people they governed, whom they eventually dragged into bankruptcy in 2022.
“They built a port, an airport, a conference centre, and a cricket stadium, but they forgot that we in Hambantota are mostly farmers. What we really need is agricultural reform – not another empty project,” says Anaya, who used to be a teacher.

Source: (A train in Sri Lanka. Credit: Flickr)

For the much-debated port of Hambantota, China Exim Bank provided 85% of the funding at an unusually high-interest rate of 6.3%. The proponents of the debt-trap theory interpret this as yet another sign of Beijing’s plan to push Colombo into debt. Yet this might be simplistic thinking that once again fails to consider the broader context of the Sri Lankan reality. When construction of the Hambantota port began in 2007, Sri Lanka was still ravaged by one of the bloodiest phases of a decades-long civil war, struggling to generate public revenue. The government presented the port project to many investors, yet China emerged as the only country that was willing to take the risk of financing the megaproject. More than a predatory investor, China was a lender of last resort. Moreover, it demanded a high-interest rate because it essentially offered a high-risk loan to a conflict-torn country.

Once the Chinese loan was granted, the Sri Lankan government failed to plan its spending in a way that could offer quick returns. The Danish firm Ramboll recommended that, during the first phase of construction, the port should only manage the transport of non-containerized cargo, like oil tanks and cars. Once the Hambantota port generated the necessary revenue, Ramboll suggested, new parts could be constructed. Yet the Sri Lankan government took the hasty decision to request new funding and proceed with the second phase of the construction, immediately transforming Hambantota into a container port.
“Experts suggested they constructed different parts of the port at different times, allowing each phase to be profitable and operational. Instead, the government preferred to build everything at the same time, although this implied more borrowing without solid revenues”, says Dilshan. Corruption and self-interest were also widespread. For instance, Ramboll forecasted that building a bunkering facility at Hambantota would cost roughly $33 million, yet the ports Minister submitted a document that demanded a $100 million loan. The extra cash was allegedly poured into the pockets of the Rajapaksa clan.

Source: (A Sri Lankan lady. Credit: Flickr)

By 2014, the Hambantota port was a fiasco and a burden to the Sri Lankan government. The Sri Lankan Port Authority found itself diverting money from the profitable Colombo port because Hambantota’s revenues were too low for the port to sustain itself. In 2016 many Western creditors were also demanding their annual repayments, and Sri Lanka found itself in need of foreign exchange. The ticking bomb created by Mahinda Rajapaksa was about to explode. And this is when Sri Lanka decided to lease out Hambantota to China Merchants Port for a 99-year concession. It was not about a predatory investor attempting to seize its debtor’s national assets: it was more about Sri Lanka getting rid of an inefficient and underperforming port to restore its foreign reserves, which had dried up after years of heavy borrowings and irrational spending.

The debt trap theory fails to consider that recipients of Chinese funding are often autocratic and corrupted leaders seeking to advance their political agenda. Visiting Hambantota and its semi-abandoned buildings suggests that, for the population of a developing country like Sri Lanka, living under these regimes might in fact be the real trap.


*For privacy and security reasons, pseudonyms are being used to de-identify those that shared information and personal opinions with the author

March 2, 2023No Comments

Dr. Stephen J. Blank on Power competition in the Caspian Sea region

Dr. Stephen J. Blank, Senior Fellow at the Foreign Policy Research Institute, discusses power competition in the Caspian Sea region.

The European Union is searching for energy sources around the world to replace the role that Russia once played. They are looking towards Africa, the Middle East, and Central Asia, including Azerbaijan. A trans-Caspian pipeline would need to be built to get energy from Central Asia to Europe. However, this would be met with opposition from Russia and Iran, who would try to destroy it, making a security guarantee necessary.

Interviewers: Fabrizio Napoli & Davide Gobbicchi - Russia & the Post-Soviet Team

February 13, 2023No Comments

The Ba-looming crisis

Author: Gianluca Catucci

Introduction

The undisturbed incursion by the Chinese balloon into American territory and over military sites captured the attention of analysts worldwide, climaxing in a spectacular battle between an F-22 fighter jet and a balloon. After some hesitation by American leadership, the downing was authorised and live-aired but raised many legal and political issues.

Vintage Balloons

The first question is why China, a technological giant, would need balloons to spy on US territory.Compared to drones and satellites, balloons are infinitely less expensive and preferable in an operation at a high risk of loss of the device. Furthermore, balloons float at an altitude significantly lower than satellites, thus potentially capturing audio that the latter cannot intercept, and providing higher-quality imaging. Balloons also allow constant surveillance whilst being much less detectable, as they can hover for long escaping radars, and can even deploy their drones. Lastly, whilst subject to wind patterns, they are more manoeuvrable and their flight altitude can be modified.

The test of International Law

Before addressing the political consequences of the balloon’s destruction, it is important to put the operation to the test of international law. According to the Chicago Convention (ICAO, 1944), articles 1-3, “every state has complete and exclusive sovereignty over the airspace above its territory.” Commercial airliners and balloons both qualify as civilian airships, and thus cannot fly over the territory of another country without permission.

But what constitutes sovereign airspace?

International law is very clear about the horizontal limits of sovereignty, which is established in the 1982 UNCLOS: it extends until the territorial waters of a state (12nm from the baseline). Conversely, there is no agreement over what constitutes the vertical boundary of sovereignty, a matter on which the Montego Bay Convention, the Chicago Convention, and the Outer Space Treaty are silent. States have thus used divergent standards to draw the line between national airspace and outer space. Technically, states could claim as sovereign territory up to 100 km of space above ground (62 mi, the Kármán line).

Image Source: https://unsplash.com/it/foto/GOX3FMgcWK4

The consequences of this distinction cannot be overstated: states have sovereign authority and jurisdiction over their airspace, but no one has authority over outer space, which is an international commons.

China contends that the balloon was a civilian device conducting meteorological research in outer space, while the most credible accounts report the UAV flying at 60.000 feet above the ground. According to US practice, this would be considered within American airspaces, like all aircraft flying below 100.000 feet, and its transit would thus be conditional upon permission by state authorities. Article 3(bis) of the Chicago Convention proscribes the use of force against civilian aircraft. Nonetheless, in the case at hand, international and domestic rules were violated, giving the US the right to restore its domestic law & order via countermeasures and the use of internal force, as long as proportionate and necessary, a test facilitated by the absence of human personnel on the airship.

Moreover, if it were proven that the balloon was a spy device - increasingly likely while it is being dismantled and studied - its status would not be regulated by the Chicago Convention, which deals only with civilian aircraft. Indeed, a spy balloon is considered a state military aircraft. A violation of sovereign airspace by such an airship would thus amount to a use of force in violation of “the territorial integrity or political independence” of the United States, as per art.2(4) of the UN Charter. As similar past episodes showed, the US was entirely within its rights in neutralising the possible threat, again provided that the response was necessary and proportionate.

The Communist Party answered in dismay, alleging a force majeure justification in a note by the Foreign Ministry. Top diplomats have harshly criticized President Biden for his aggressive tone in the State of the Union address. Nevertheless, the official response was not excessively confrontational, and a final answer on the nature of the incursion is yet to arrive. Furthermore, evidence is emerging concerning a larger swarm of Chinese balloons over all five continents, and of a case where China, on the receiving side of a surveillance balloon, shot it down in 2019 alleging similar justifications.

Political Consequences

After having established the legality of the shooting, the next step requires analyzing its political context and consequences. This incident inserts itself into a string of tensions between the two superpowers, the zenith of which consisted in Nancy Pelosi’s visit to Taiwan last August. 

Biden and Xi’s meeting in Bali helped thaw out the situation, with both leaders agreeing on the need for open and direct diplomatic channels to communicate. However, top American military officials have criticized the Chinese leadership for not fulfilling their promise in the case at hand, leaving calls by the Defense Secretary unanswered. Fears are that a lack of communication may make misunderstandings and flare-ups more likely; crisis hotlines during the Cold War with the Kremlin proved vital for averting open hostilities.

While the significance of the data collected is poor, the undisturbed penetration of a Chinese balloon within the US mainland caused a few headaches to American officials. It is a clear signal from the CCP that it has the capacity to trespass on American territory, and not only small atolls in the South China Sea. Moreover, through a grey-zone operation, Beijing has successfully used non-violent means for a clear political goal: destabilising its main adversary while averting an overt military response.

Hence, not only has the incursion shown the disruptive potential of Chinese technology, but it has exposed the vulnerability of American intelligence services, fuelling chaos in American public opinion and halls of power. Hawkish members of Congress, notably Republicans, have lashed out at President Biden for having failed to prevent or act quicker. The live coverage of the balloon’s destruction sought to remedy this fiasco but contributed to exacerbating tensions and Anti-Asian rhetoric, already high in the country, and to fan the flames of a spiralling escalation not only of words.

Conclusion

The balloon incident is just another episode of a saga of a looming US-China crisis. It highlighted the lack of true communication hotlines between the two nuclear powers and the threat this poses to international peace and security. Indeed, misunderstandings between nuclear powers and poor crisis management could lead to apocalyptic scenarios.

While the People’s Republic tested US tolerance, the latter responded by showing that it means business, by annihilating the balloon with a $400.000 missile fired by the most advanced fighter in the world. This adds to its muscle-flexing through a chip embargo and a deal with the Philippines for the use of four military bases.

Overall, both sides seem to ignore conciliatory avenues and through unscrupulous violations of sovereignty, grey-zone operations, discordance in crucial international fora, and muscle-flexing, they keep fanning the flames of strategic competition. Even worse, aggressive rhetoric bounces from Beijing to Washington with little consideration for its consequences.

Through belligerent discourse and the antagonization of the other, the US and China contribute to constructing the idea of the enemy and convincing stakeholders and citizens of the inevitability of conflict, potentially exposing the world to a self-fulfilling prophecy and global catastrophe. While the Bulletin of Atomic Scientists considers this only 90 seconds away, hope is that de-escalation efforts and the Bali agenda return to the central stage.

December 26, 2022No Comments

The Microchip War

Author: Francesco Cirillo.

The geostrategic rivalry between China and the US is affecting the semiconductor and integrated circuit industry.

In recent months, Washington has implemented a clear strategy to contain Chinese geo-economic expansionism, to prevent Beijing from gaining access to semiconductor manufacturing technologies. The technology war between Washington and Beijing has now reached the WTO. A few days ago, Beijing filed a request with the World Trade Organisation, asking it to analyse the restrictive policies imposed by the United States on the export of hi-tech products. This has not stopped companies operating in the sector from moving to protect themselves. First of all, Amazon started to design a new microchip aimed at PCs, with the aim of integrating semiconductor production in-house. In this technology war, other companies are also moving. Nvidia and TSMC have started to design new products for the industry.

Nvidia, as reported by Reuters, has presented a project for a new advanced microchip (called A800), capable of overcoming security controls concerning restrictive rules on the export of high technology to the People's Republic of China. The strategy pursued by TSMC is different. The Taiwanese company, after opening a production plant in the United States, is planning to design new advanced chips to meet Apple's needs. But the companies' business strategies have to cope with the technology war between China and the US. The Biden administration, following in the footsteps of Donald J. Trump's administration, has implemented tools to contain China's geo-economic expansion and prevent it from gaining access to advanced technologies in semiconductor manufacturing. In this scenario, Beijing has started to move. According to the Reuters agency, Beijing has decided to inject some 143 billion dollars into the industrial sector to support its companies. According to rumours, the five-year plan should cover the entire production chain process (from design to production). 

Image Source: pixabay.com

For the Chinese government, this economic aid package is part of its strategy to decouple its economic sector from that of the US, reducing its dependence on Washington in technology sectors. While China is one of the largest exporters of rare earths, it has a strong dependence on the US for hi-tech products, which are essential for its military modernisation project. In this context, Beijing aims to break free from its technological dependence on the US within the next three years, with the target of meeting 70% of its domestic needs.

However, this status in the semiconductor industry would risk putting it under great pressure as many companies, anticipating commercial retaliation from the US, might self-impose to stop doing business with China or cut off contact with Chinese companies. Beijing meanwhile has started its plans to support its companies and help them in the China-US competition. Despite the dialogues and communication channels between Beijing and Washington, the two superpowers maintain a certain distance and mutual distrust between them. The Semiconductor War of this millennium has entered its most delicate phase.

October 10, 2022No Comments

U.S.-China: The New Normal?

Author: Francesco Cirillo.

Tensions between China and the United States seem frozen at the moment, a consequence of domestic commitments of both Beijing and Washington. On the one hand, Xi Jinping will have to pass a Communist Party Congress to secure a third term as General Secretary of the Party, reappointment to the post of Chairman of the Central Military Commission, and reappointment as President of the People's Republic. Xi has several dossiers. The first is the issue of the anti-covid policy that has blocked production chains in recent months due to continuous lockdowns; the second is the delicate relationship with Moscow, which has seen in its Russian partner a greater weakening and consolidation of Beijing's political position in several areas of influence. For Xi, the October Congress is the turning point for the consolidation of his leadership within the Party. The main international dossier facing Beijing during the Congress session will be relations with Washington and the sensitive Taiwan issue. In the previous months several articles have been published by Chinese academics linked to the Party. CSIS, Center for Strategic of International Studies, translated an article by Liu Jieyi, director of the Taiwan Affairs Office of the Central Committee of the Communist Party of China and the Taiwan Affairs Office of the State Council from a seminar on the Taiwan issue held between August 17 and 18. The seminar was attended by several academics close to Communist Party and government positions. Liu Jieyi in the piece titled "Reunification Has Entered an Irreversible Historical Process [统一进入不可逆转历史进程]" described that the reunification process has now entered an irreversible historical process and that not even Taipei's so-called "anti-Chinese forces" and "independence vagueities" will oppose the unification of the Island with the People's Republic.

Image Source: https://pixabay.com/photos/peking-forbidden-travel-china-1908167/

The Diplomatic clash between China and the United States on the Taiwan issue was raised after the visit of House Speaker Nancy Pelosi but two other elements changed the approach of Sino-US relations. The first was the presentation of a new document(Taiwan Policy Act 2022) by the U.S. Senate Foreign Affairs Committee that if approved could allocate some $6.5 billion in aid. If it is approved by both the House and Senate it could further deteriorate Washington-Beijing relations. Another bone of contention is the approval by the U.S. side to sell a $1.1 billion arms package. At the moment, relations between the People's Republic and the U.S. have returned to a certain "new" normalcy, a consequence of the domestic commitments of both Beijing (Party Congress" and Washington ( Mid-Term elections for the renewal of the U.S. Congress) .

On the international context, the war in Ukraine could, in the coming months and early 2023, lead China and the U.S. to engage in consultation given that at the SCO summit in Samarkand a certain Beijing discontent with the war being waged by the Kremlin was noted, a position that after the Party Congress could solidify further reducing Beijing's indirect support for Russia's junior partner.