US-China Relations

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China warns US to 'act cautiously'

BEIJING: China warned the United States on Thursday to "speak and act cautiously" to avoid further strains in ties and denied any military involvement in recent cyberattacks against Google.

A defence ministry spokesman also said Beijing's position on suspending military exchanges with the United States over arms sales to Taiwan remained unchanged, after the Pentagon said at least three visits had been postponed.

China has said it will sanction US firms involved in the 6.4-billion-dollar deal announced last month which included Patriot missiles, helicopters and equipment for Taiwan's F-16 fleet, but no submarines or new fighter aircraft.

Beijing views self-ruled Taiwan as part of its territory.

"The Chinese side urges the US side to speak and act cautiously to avoid further damage to bilateral relations and peaceful cross-strait development," ministry spokesman Huang Xueping was quoted as saying by the state Xinhua news agency.

A Pentagon spokesman said Wednesday that several planned exchanges had been put off, including a visit to the United States by China's chief of the general staff, and a trip to China by the commander of the US Pacific Command.

Chinese authorities allowed the USS Nimitz aircraft carrier to visit Hong Kong last week just hours before US President Barack Obama met the Dalai Lama -- which also sparked an angry reaction from Beijing.

US Defence Secretary Robert Gates said this week he still planned to visit China later this year.

Sino-US ties have also been rocky since US Internet giant Google said last month it was considering shutting down its Chinese-language search engine and leaving the country altogether over hack attacks and government web censorship.

Google has said it believes those attacks originated in China, and recent reports said they had been traced back to two schools in China, one of which is linked to the military. Beijing has repeatedly denied any involvement.

Spokesman Huang called the accusations of links between Internet hackers and the Chinese military "baseless and irresponsible", adding they had been "hyped up for ulterior motives".

 

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Obama officials: confusion in China about how to deal with U.S.

The visit of two senior Asia officials to China this week is being hailed as the beginning of a mending of what the State Department has called "a rough patch" in U.S.-China relations. But for those inside the Obama administration, the past weeks' events have put on display a fascinating internal struggle in Beijing about how to deal with the United States.

Deputy Secretary of State James Steinberg (right) and National Security Council Asia Director Jeffrey Bader went to China primarily to persuade Beijing to cooperate on new sanctions against Iran. The meetings come just after the recent spats over new U.S. arms sales to Taiwan and Obama's meeting with the Dalai Lama.

The administration worked hard to minimize the impact of those two events, and sees the Chinese response as about what was expected, two officials told The Cable. Some military-to-military relations were canceled while others, like the visit of the USS Nimitz to Hong Kong, were allowed to go on as planned. The Steinberg trip itself was supposed to happen in early February but was postponed as a sort of protest -- and now China is welcoming Steinberg only weeks later.

One senior administration Asia official said that Chinese behavior in the wake of the two diplomatic spats showed a mounting struggle between hard-liners with increased confidence and more friendly but weakened actors within the Chinese Communist Party.

"The Chinese Foreign Ministry has lost confidence in how to respond and seems to be fighting a rearguard action against those who want a tougher approach," the official said. "There are many inside the Chinese system with an increasingly hard-line view, saying ‘It's our time,' while another group is saying about the U.S., ‘Don't count these guys out, we still need them for a while.'"

The Chinese government's responses to the Taiwan arms sales and the Dalai Lama visit came in waves, suggesting that the initial calculation was to be muted and careful, but then Beijing felt compelled to respond to domestic criticisms, including by its vast and growing online community, and take a stronger stance, the official explained.

Another administration official close to the issue said that one could see the Chinese bureaucracy churning as it sorted out how to respond to the Obama team's actions, with hard-liners and moderates arguing over the best approach.

"Their system is having a hard time right now dealing with all the different issues on the U.S.-China agenda and there's a certain sense of overload complicating the process," the official explained. "We're seeing sparks and bursts as different parts of the system work it through."

For example, the Chinese had threatened to sanction U.S. companies due to the Taiwan arms sale, but there hasn't been any follow-up thus far. "Was that just rhetoric or is there another shoe yet to drop?" the official asked. "We still haven't seen how this fully plays out yet."

Some Asia experts downplay the need to study what's going on inside the Chinese system.

"We're getting to a point where we're treating China like we treated the Soviet Union. It's the new Kremlinology," said Michael Auslin, resident scholar at the American Enterprise Institute. "What's important is not the way China comes to its decisions, but what those decisions are."

China hasn't stepped up to its responsibilities regarding climate change, currency fairness, cyber security, and human rights, Auslin said. Meanwhile, he argues the Obama administration's China policy has lacked a clear, overarching message that could be used to press the Chinese to move farther and faster in maturing as a world power.

"They're so invested in reading the tea leaves, they don't realize there's not a lot of tea in the cup," Auslin said.

The administration official said that Obama made the right move by trying to set U.S.-China relations on a steady path the first year, and in fact China had shown progress on issues like North Korea, nonproliferation, and clean-energy technology.

China's transformation would take decades, not years, the official argued. "It's incremental, it's not satisfactory, but they're moving. Whether they will get to the other side, nobody knows."

 

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Paper in China Sets Off Alarms in U.S.

It came as a surprise this month to Wang Jianwei, a graduate engineering student in Liaoning, China, that he had been described as a potential cyberwarrior before the United States Congress.

Ken Cedeno for The New York Times
Larry M. Wortzel, a military strategist, recently drew attention to the paper.
Larry M. Wortzel, a military strategist and China specialist, told the House Foreign Affairs Committee on March 10 that it should be concerned because “Chinese researchers at the Institute of Systems Engineering of Dalian University of Technology published a paper on how to attack a small U.S. power grid sub-network in a way that would cause a cascading failure of the entire U.S.”

When reached by telephone, Mr. Wang said he and his professor had indeed published “Cascade-Based Attack Vulnerability on the U.S. Power Grid” in an international journal called Safety Science last spring. But Mr. Wang said he had simply been trying to find ways to enhance the stability of power grids by exploring potential vulnerabilities.

“We usually say ‘attack’ so you can see what would happen,” he said. “My emphasis is on how you can protect this. My goal is to find a solution to make the network safer and better protected.” And independent American scientists who read his paper said it was true: Mr. Wang’s work was a conventional technical exercise that in no way could be used to take down a power grid.

The difference between Mr. Wang’s explanation and Mr. Wortzel’s conclusion is of more than academic interest. It shows that in an atmosphere already charged with hostility between the United States and China over cybersecurity issues, including large-scale attacks on computer networks, even a misunderstanding has the potential to escalate tension and set off an overreaction.

“Already people are interpreting this as demonstrating some kind of interest that China would have in disrupting the U.S. power grid,” said Nart Villeneuve, a researcher with the SecDev Group, an Ottawa-based cybersecurity research and consulting group. “Once you start interpreting every move that a country makes as hostile, it builds paranoia into the system.”

Mr. Wortzel’s presentation at the House hearing got a particularly strong reaction from Representative Ed Royce, Republican of California, who called the flagging of the Wang paper “one thing I think jumps out to all of these Californians here today, or should.”

He was alluding to concerns that arose in 2001 when The Los Angeles Times reported that intrusions into the network that controlled the electrical grid were traced to someone in Guangdong Province, China. Later reports of other attacks often included allegations that the break-ins were orchestrated by the Chinese, although no proof has been produced.

In an interview last week about the Wang paper and his testimony, Mr. Wortzel said that the intention of these particular researchers almost did not matter.

“My point is that now that vulnerability is out there all over China for anybody to take advantage of,” he said.

But specialists in the field of network science, which explores the stability of networks like power grids and the Internet, said that was not the case.

“Neither the authors of this article, nor any other prior article, has had information on the identity of the power grid components represented as nodes of the network,” Reka Albert, a University of Pennsylvania physicist who has conducted similar studies, said in an e-mail interview. “Thus no practical scenarios of an attack on the real power grid can be derived from such work.”

The issue of Mr. Wang’s paper aside, experts in computer security say there are genuine reasons for American officials to be wary of China, and they generally tend to dismiss disclaimers by China that it has neither the expertise nor the intention to carry out the kind of attacks that bombard American government and computer systems by the thousands every week.

The trouble is that it is so easy to mask the true source of a computer network attack that any retaliation is fraught with uncertainty. This is why a war of words, like the high-pitched one going on these past months between the United States and China, holds special peril, said John Arquilla, director of the Information Operations Center at the Naval Postgraduate School in Monterey, Calif.

“What we know from network science is that dense communications across many different links and many different kinds of links can have effects that are highly unpredictable,” Mr. Arquilla said. Cyberwarfare is in some ways “analogous to the way people think about biological weapons — that once you set loose such a weapon it may be very hard to control where it goes,” he added. Tension between China and the United States intensified earlier this year after Google threatened to withdraw from doing business in China, saying that it had evidence of Chinese involvement in a sophisticated Internet intrusion. A number of reports, including one last October by the U.S.-China Economic and Security Review Commission, of which Mr. Wortzel is vice chairman, have used strong language about the worsening threat of computer attacks, particularly from China.
“A large body of both circumstantial and forensic evidence strongly indicates Chinese state involvement in such activities, whether through the direct actions of state entities or through the actions of third-party groups sponsored by the state,” that report stated.

Mr. Wang’s research subject was particularly unfortunate because of the widespread perception, particularly among American military contractors and high-technology firms, that adversaries are likely to attack critical infrastructure like the United States electric grid.

Mr. Wang said in the interview that he chose the United States grid for his study basically because it was the easiest way to go. China does not publish data on power grids, he said. The United States does and had had several major blackouts; and, as he reads English, it was the only country he could find with accessible, useful data. He said that he was an “emergency events management” expert and that he was “mainly studying when a point in a network becomes ineffective.”

“I chose the electricity system because the grid can best represent how power currents flow through a network,” he said. “I just wanted to do theoretical research.”

The paper notes the vulnerability of different types of computer networks to “intentional” attacks. The authors suggest that certain types of attacks may generate a domino-style cascading collapse of an entire network. “It is expected that our findings will be helpful for real-life networks to protect the key nodes selected effectively and avoid cascading-failure-induced disasters,” the authors wrote.

Mr. Wang’s paper cites the network science research of Albert-Laszlo Barabasi, a physicist at Northeastern University. Dr. Barabasi has written widely on the potential vulnerability of networks to so-called engineered attacks.

“I am not well vested in conspiracy theories,” Dr. Barabasi said in an interview, “but this is a rather mainstream topic that is done for a wide range of networks, and, even in the area of power transmission, is not limited to the U.S. system — there are similar studies for power grids all over the world.”

 

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Is the West turning on China?

Back in February, Robert Samuelson, one of America's top economic commentators, began his Washington Post column with a critique of China:

It's become apparent from recent events that America's political, business and scholarly elites have fundamentally misjudged China. Conflicts with China have multiplied. Consider: the undervalued renminbi and its effect on trade; the breakdown of global warming negotiations in Copenhagen; China's weak support of efforts to prevent Iran from acquiring nuclear weapons; its similarly poor record in pushing North Korea to relinquish its tiny atomic arsenal; the sale of U.S. weapons to Taiwan; and Google's threat to leave China rather than condone continued censorship.

Samuelson is neither an alarmist nor a reflexive China basher. He is calling it like he sees it. And I think he is correct. American elite opinion has been, for the most part, dead wrong about China. The People's Republic is not liberalizing and it is not aligning itself with the West to resolve the world's most pressing problems. Its military build-up is destabilizing and, in many cases, it is not playing by the rules of international trade.

But does Samuelson's piece reflect a change in elite opinion about China -- and if so, what is going on in China that has led to this change in opinion?

John Pomfret of the Washington Post may have found an explanation - the nature of Chinese politics. In a recent article, he describes the annual meeting of the National People's Congress (NPC), China's rubber stamp legislature. While there are no real legislators who can pass real laws in China, the NPC is a forum for Communist cadres and pretenders to the throne to leak stories to the press, make statements, and jockey for political advantage. This year, Communist Party leaders have taken a decidedly anti-American, anti-Western tone.

The tone of the leaks and public statements is revealing. It seems that in China's domestic politics today, it pays to be populist, nationalistic, and anti-Western. It also shows that political leaders in China believe there is still room to jockey for power before the upcoming 2012 succession from Hu Jintao and Wen Jiabiao to Xi Jinping and Li Keqiang. This succession may not go as smoothly as did Hu's ascension in 2002. As Cheng Li, a typically accurate China scholar, has written:

As many as seven of the nine members of the Politburo Standing Committee, the highest decision-making body in the country, are expected to retire. Within the full 25-member Politburo, at least 14 leaders will vacate their seats to make way for younger candidates. Consequently, the principal figures responsible for the country's political and ideological affairs, economic and financial administration, foreign policy, and military operations will consist of newcomers after 2012.

No Chinese leader today holds the "mandate of heaven": they are all very far removed from the legitimacy bestowed upon past leaders by their participation in the Communist Revolution. Moreover, waiting in the wings are ambitious party leaders, such as Bo Xilai and Wang Yang, who may take advantage of an economic crisis, for example, to challenge Hu and Wen's hand-picked successors.

Two recent opinion pieces argue that China is basically weak internally, but still troublesome.

Ambrose Evans-Pritchard of the U.K.'s Telegraph says that China is "spoiling for a showdown with America." Why? Because it is badly misperceiving the global balance of power. Given the PRC's crippling domestic problems, its arrogance toward the United States is pure hubris. "There are echoes," Evans-Pritchard says, "of Anglo-German spats before the First World War, when Wilhelmine Berlin so badly misjudged the strategic balance of power and over-played its hand."

Evans-Pritchard's basic point is that if Beijing believes that it is overtaking the United States and that Washington, in turn, is willing to accept that fact, we may be in for a Chinese miscalculation of colossal and extremely dangerous proportions.

Another leading American China scholar, Minxin Pei, has been sounding a contrarian note against the "China is ten feet tall" line of argument for some time. Pei has argued that China is not that strong, has almost paralyzing economic troubles, and has a calcified political system that is unable to respond adequately to its people's needs.

See for example Pei's "Why China Won't Rule the World" in a December 2009 issue of Newsweek. Pei examines both the tremendous amounts of waste in China's stimulus package (many analysts asserted that China "did everything right last year"). He also notes the ongoing challenge to the CCP's rule by Uighurs and Tibetans, which in 2008 and 2009 resulted in the bloodiest ethnic crackdowns in China in decades. The CCP is consumed by these problems and unable to find effective solutions. If Pei is correct, and I believe he is, then China's desire to pick a fight with the United States may be driven in part by the need for its leaders to create a distraction from its multitude of regime-challenging internal problems.

On the other hand, two keen observers argue that what in fact explains China's newfound assertiveness is its strength, not its weakness. Its military modernization program continues apace. As King's College's Harsh Pant points out, though China's announced defense budget increase is less this year than it has been in a while, the lower numbers will not reflect what China actually spends. For example, the Chinese never account for foreign purchased weapons systems in their publicly announced budget, even though these systems make up a significant proportion of China's military equipment inventory. Pant adds that China is increasing its power projection capabilities, and its anti-piracy mission in the Gulf of Aden may reflect ambitions to project military power globally.

Like Pant, Martin Jacques, author of When China Rules the World, does not see China as driven by weakness. Instead, he argues that China will one day rule the world and, when that day occurs, its rule will not be benign. According to Jacques, China will become the pre-eminent world power without becoming democratic. Its hegemony will be based on a menacing racialist-nationalist ideology.

Jacques hit on some of these themes in a recent New York Times piece. He argues that China is on the rise, America is in decline, and that the PRC will be a much more "formidable adversary" than was the Soviet Union. Perhaps most noteworthy in Jacques' Times piece is the latter point: he implicitly argues that China and the United States are on their way to a global rivalry akin to what took place during the Cold War. Only this time, the United States is declining, and the PRC is far more sophisticated than the Soviets.

What to make of this small sample of articles -- all by influential writers and analysts -- recently printed in the New York Times, Washington Post, Newsweek, and Telegraph?

All of these pieces were published during a time of demonstrably heightened Sino-American tension. But unlike past periods of Sino-American tension, when opinion-makers blamed America as much as China for bad relations, all of these writers put the blame for tense relations squarely at China's feet. They just disagree on whether China's arrogance is based on strength or weakness. Perhaps it took the departure of Bush-Cheney, so unpopular with elites, for these writers to begin to see China for what the American people know it to be: a growing threat to the United States.

So the answer to the first question is that for a variety of reasons -- including the end of the Bush presidency, the financial crisis, and aggressive Chinese behavior -- there seems to be a trend in elite opinion towards viewing China as a problem.

But what about the second question? Why is China a problem? The sample above provides a range of answers. I believe each writer has a point: China is a rather combustible mix of weakness and strength, arrogance and fear. On the one hand, China has been dealing unevenly with its manifold problems, thus generating considerable domestic public anger at the regime. On the other, national pride abounds as does a growing military force. China scholar Susan Shirk came closest to correctly categorizing the emerging giant in titling her 2007 book Fragile Superpower (though I would quibble with the term superpower).

My own conclusion is that China's external behavior can best be explained by the nature of its domestic politics. The forces with the strongest purchase on Chinese politics push and pull the country in many different directions. Public and elite opinion now consists of a mix of anger at the regime for its corruption, inequality, and brutality; national pride; and aggrieved nationalism. Assuming China does continue its economic growth, which provides for its military modernization, this mix -- of strength and weakness, pride and fear -- makes for an unpredictable and potentially dangerous China, especially in the lead-up to a possibly contested 2012 succession.

 

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Capital Export, Elasticity Pessimism, and the Renminbi (Wonkish)

I got a little snippy with Ryan Avent yesterday over the remminbi issue; I guess I don’t like being compared to Donald Rumsfeld. In any case, however, I think it would be useful for me to explain how I think about the current China syndrome, and why I believe that most of the responses I hear are missing the point. In what follows, I’ll focus on three questions: the macroeconomics of Chinese currency intervention, the fallacies of elasticity pessimism (which I’ll explain when I get there), and the political economy issue of how to deal with Chinese intransigence.


1. Macroeconomics of intervention

Let me start with a proposition: the right way to think about China’s exchange rate is, initially, not to think about the exchange rate. Instead, you should focus on China’s currency intervention, in which the government buys foreign assets and sells domestic assets, on a massive scale.

Although people don’t always think of it this way, what the Chinese government is doing here is engaging in massive capital export – artificially creating a huge deficit in China’s capital account. It’s able to do this in part because capital controls inhibit offsetting private capital inflows; but the key point is that China has a de facto policy of forcing capital flows out of the country.

Now, bear in mind the two basic balance of payments accounting identities:

Capital account + Current account = 0

Current account = Domestic savings – Domestic investment

By creating an artificial capital account deficit, China is, as a matter of arithmetic necessity, creating an artificial current account surplus. And by doing that, it is exporting savings to the rest of the world.

In normal times, you could argue that this policy provides benefits to the rest of the world, by reducing borrowing costs (although given what we did with those capital inflows, maybe not). But these aren’t normal times. We’re currently living in a world in which both central banks and governments are unable or unwilling to pursue sufficiently expansionary policies to eliminate mass unemployment; so it’s a paradox of thrift world, in which anyone who tries to save more reduces demand, reduces employment, and – because investment responds to excess capacity – ends up actually reducing investment. By exporting savings to the rest of the world, via an artificial current account surplus, China is making all of us poorer.

Notice that I didn’t mention the value of the renminbi at all in this account. It’s there implicitly: a weak renminbi is the mechanism through which China’s capital-export policy gets translated into physical exports of goods. But you want to keep your eye on the ball: it’s the artificial capital exports that are the driving force here.

What this means, in particular, is that you can disregard people who offer calculations suggesting that by some criterion – say, Balassa-Samuelson adjusted purchasing power parity – the renminbi isn’t undervalued. We know that the renminbi is grossly undervalued, not through questionable estimates that can be endlessly debated, but on a PPE (proof of the pudding is in the eating) basis: the current value of the renminbi is consistent with massive artificial capital export, and that’s that.

2. Elasticity pessimism

One common response to demands for a rise in the renminbi is that it wouldn’t work: in the past a rising renminbi hasn’t reduced China’s surplus, the United States can’t produce the goods it now imports from China, etc..

People making these arguments may not know it, but they’re engaged in a modern version of the “elasticity pessimism” that was prevalent in the early postwar years, and used to defend the necessity of continuing foreign exchange controls. Then as now, the claim was that changing currency values would have little effect on trade flows, although back then it was used to argue against depreciations in deficit countries rather than appreciation in surplus countries.

There are several, mutually reinforcing answers to elasticity pessimism. The first is that if you think it through, it implies that the overall demand curve for a nation’s products is vertical or even upward-sloping. That’s possible in theory (income effects overwhelming substitution effects), but once you put it that way it seems highly unlikely.

The second is that we have lots of experience with currency depreciations – and they have invariably led to a rise in exports and the trade surplus. Consider the smaller East Asian nations in the aftermath of the 1997-1998 crisis, or Argentina after 2001, or even the United States after 2005, when the weak dollar set off an export boom. Is China really uniquely exempt from the rules that apply to everyone else?

Third, it’s really important not to get caught up in the fallacy of misplaced concreteness. If you can’t think offhand of ways U.S. production might replace imports, that’s probably because you just don’t know enough. There are already stories of “onshoring” as firms discover that overseas production isn’t worth the hidden costs; there would be many more if exchange rates were very different.

Fourth, it’s a mistake to focus only on direct China versus America competition. In many cases, Chinese exports compete with those of other developing nations. If the renminbi rises, those nations would become more competitive – and would also find their currencies appreciating against the dollar, offering new channels for onshoring. This may sound speculative, but it isn’t: remember, if China ends its artificial export of capital, that has to show up in trade flows one way or another.

Finally, don’t make too much of the lack of an obvious relationship between Chinese currency movements over the past few years and the trade balance. China is an economy in the process of rapid transformation – exactly the circumstances in which a real exchange rate that makes sense one year may be way off base just a few years later.

3. Political economy

The final argument I hear about the renminbi is that it’s useless to make demands, because the Chinese will just get their backs up, refusing to bow to external pressure. The right answer is, so?

Here’s how the initial phases of a confrontation would play out – this is actually Fred Bergsten’s scenario, and I think he’s right. First, the United States declares that China is a currency manipulator, and demands that China stop its massive intervention. If China refuses, the United States imposes a countervailing duty on Chinese exports, say 25 percent. The EU quickly follows suit, arguing that if it doesn’t, China’s surplus will be diverted to Europe. I don’t know what Japan does.

Suppose that China then digs in its heels, and refuses to budge. From the US-EU point of view, that’s OK! The problem is China’s surplus, not the value of the renminbi per se – and countervailing duties will do much of the job of eliminating that surplus, even if China refuses to move the exchange rate.

And precisely because the United States can get what it wants whatever China does, the odds are that China would soon give in.

Look, I know that many economists have a visceral dislike for this kind of confrontational policy. But you have to bear in mind that the really outlandish actor here is China: never before in history has a nation followed this drastic a mercantilist policy. And for those who counsel patience, arguing that China can eventually be brought around: the acute damage from China’s currency policy is happening now, while the world is still in a liquidity trap. Getting China to rethink that policy years from now, when (one can hope) advanced economies have returned to more or less full employment, is worth very little.

As I said in yesterday’s column, this has to stop.

 

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Where’s the Tipping Point in U.S.-China Relations?

Posted on Monday, March 22, 2010
by Evan A. Feigenbaum
Some of my old State Department colleagues tell me that the current downturn in U.S.-China relations is nothing new. It’s just countercyclical, they say. “Remember the EP-3 incident? A Chinese pilot was killed and an American aircrew held prisoner.”
True enough. That was pretty bad.
“Or what about when we accidentally bombed China’s embassy in Belgrade and demonstrators trapped ambassador Jim Sasser inside the embassy while also attacking U.S. consulates?”
“Or how about when China bracketed Taiwan with missile tests in 1995 and the U.S. sailed the U.S.S. Nimitz up the Taiwan Strait in response?”
For that matter, what about Tiananmen Square?
My friends’ punch line seems to be this: If you’ve been around long enough, you’ve seen worse in U.S.-China relations. Much worse. Maybe even catastrophically worse. And by their logic, this, too, shall pass.
Maybe they have a point. But I think they’re missing three very significant changes that could make this a tipping point in the up-and-down cycles that have characterized U.S.-China relations in the past.
First, there’s China’s sheer weight in the world, which has now grown to the point that Beijing has acquired the capacity to push back at American policies as never before. China has said “no” plenty of times in the past. But what’s new is the combination of interdependence and a more weighty China. So while the administration has met some of this pushback with American counterpressure, China’s government seems lately to be probing and testing, exploring the possibilities and limits of Beijing’s strengthened capacity to say “no” to the United States.
Second, there’s the ongoing debate in China spawned by the recent financial crisis. This has been a theme at meetings I’ve held in recent months with Chinese colleagues. Some have reached sweeping (but, I think, badly exaggerated) conclusions about shifts in the balance of power, China’s “rise,” and America’s “decline.” But at minimum, this sort of sentiment will feed domestic pressures in China. Many, both in and out of China’s government, want to test what Beijing’s growing weight might yield. They are confident of China’s growing strength. They relish the opportunity to, at minimum, make Washington work harder for Chinese support of ostensibly shared objectives. In some cases, they want to see if Washington will accommodate a wider array of Chinese interests.
Third, the domestic politics of U.S.-China relations seem to be changing. This is true on the Chinese side: Chinese exporters, for instance, are resisting calls for exchange rate revaluation, arguing that many companies will go under and China will suffer massive job losses. But it is especially true on the American side, where the old political and business coalition may be fracturing. Some of my old colleagues, I fear, may not appreciate the degree to which the politics of China policy might get away from this president and his administration.
I’ll be watching three things:
How deep are the fissures in the coalition that sustained U.S.-China relations in the past? The American business community seems particularly conflicted. Few are pulling out of China, but, for example, a new survey from the American Chamber of Commerce in China puts the percentage of U.S. companies that feel unwelcome in the Chinese market at 38 percent, up 15 points from 23 percent just two years ago in 2008. And that sentiment extends beyond technology companies, like Google, into the manufacturing sector, with a variety of companies now complaining about a host of issues, from intellectual property theft to non-tariff barriers to various aspects of China’s regulatory regime.
How supple is the executive branch? In the toughest times, it’s been presidents of both parties, Republicans and Democrats, who have, on a bipartisan basis, put the relationship back onto an even keel. So is the administration strong enough to resist proposals that would ride the relationship completely off the rails? As my former colleague Phil Levy has written, some ideas circulating in the Washington debate go beyond the U.S.-China relationship and would weaken global institutions, including the WTO and the IMF.
Finally, in what directions are the parameters of debate shifting? China policy can’t be made in a vacuum. Indeed, China has become the centerpiece of several debates that are much bigger than U.S.-China relations per se. These include the future of American manufacturing, competiveness, and innovation; whether and how China’s rise challenges U.S. regional and global primacy; and what kinds of alliances, tie-ups, and arrangements best serve U.S. interests, including three decades of economic and commercial tie-ups with China that have included a heaping dose of technology transfer.
What certainly isn’t changing is that the United States and China are deeply interdependent. But what is changing is that a growing number of influential people on both sides find that reality deeply disquieting.

 

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Mongolia: Pentagon Trojan Horse Wedged Between China And Russia


Because of its history, its location and the nations which surround it, Mongolia would seem the last country in the world to host annual Pentagon-led military exercises and to be the third Asian nation to offer NATO troops for the war in Afghanistan.

From the early 1920s until the breakup of the Soviet Union in 1991 Mongolia was the latter nation's longest-standing and in many ways closest political and military ally, its armed forces fighting alongside those of the USSR against the Japanese in World War II. It was not a member of the Warsaw Pact as that alliance was formed in Europe six years after and in response to the creation of NATO in 1949, but Mongolia was a military buffer between the Soviet Union and the Japanese army in China in the Second World War and between it and China during the decades of the Sino-Soviet conflict.

Mongolia is also buried deep within the Asian continent and is the world's second-largest landlocked nation next to Kazakhstan, which is only 21 miles from its western border. Those two countries along with North Korea, impenetrable in most every sense of the word, are the only three that border both China and Russia.

Russia abuts Mongolia along its entire northern frontier and China along its eastern, southern and western borders. There is no way to enter the country except by passing through or over Russia and China.

As such Mongolia would have appeared to be a refuge of non-alignment in a world of rapidly expanding U.S. and NATO penetration of increasingly vast tracts of the earth's surface.

But in the post-Cold War period no country is beyond the Pentagon's reach, either inside or on its borders.

In the last decade alone the U.S. has acquired bases and other military installations and stationed its armed forces throughout parts of the world that it had never penetrated during the Cold War era, including:

Africa: Approximately 2,000 troops and the Pentagon's Combined Joint Task Force-Horn of Africa at Camp Lemonnier in Djibouti in the Horn of Africa.

Black Sea: Seven new air and training bases in Bulgaria and Romania and the de facto control of air, navy, infantry and surveillance bases in Georgia.

Baltic Sea: The activation in April of a Patriot Advanced Capability-3 theater interceptor missile battery in Eastern Poland with an initial contingent of 100 troops to run it.

Middle East: Air bases, forward operating bases, base camps, weapons storage facilities and troops transit centers in Iraq, Jordan and Kuwait and a long-range (2,900-mile) interceptor missile radar facility in Israel staffed by 120 U.S. military personnel.

Central Asia: An air base in Kyrgyzstan through which 35,000 U.S. and NATO troops transit each month for the war in Afghanistan and plans for a new special forces "anti-terrorist" training center in the nation.

South Asia: A proliferation of infantry and air bases in Afghanistan, including the mammoth Bagram Air Field with 25,000 military personnel and contractors. The Bagram military complex has been more than tripled in size since the 2001 invasion and is currently undergoing yet further large-scale expansion.

East Asia: The return of the U.S. military to the Philippines after being ordered to leave by the country's Senate in 1991 with at least 600 troops and two permanent structures in Camp Navarro in Mindanao where the U.S. Joint Special Operations Task Force-Philippines (JSOTF-P) is based.

South America: Seven new military, including air and naval, bases in Colombia agreed upon last summer.

Central America: In addition to the U.S. retaining the use of the Soto Cano Air Base in Honduras for its 550-troop Joint Task Force-Bravo after the military coup d'etat of last June 28, a report surfaced in September of 2009 that U.S. Secretary of State Hillary Clinton had reached an agreement with new Panamanian President Ricardo Martinelli for the opening of two new American naval bases, one each on the Caribbean and Pacific coasts.

Indian Ocean: U.S. Africa Command deployed lethal Reaper "hunter-killer" drones, spy planes and over a hundred service members to Seychelles late last year.

South Pacific: A secretive military satellite base in Western Australia was approved in 2007. The massive expansion of the Andersen Air Force Base and construction of barracks for 8,000 Marines on Guam is underway.

New bases on every inhabited continent outside the Pentagon's own.

Mongolia, however remote it is and previously inaccessible it may have been, is no exception to the wave of worldwide U.S. military expansion.

On March 29 NATO announced that the nation had become the 45th country to contribute troops for the North Atlantic military bloc's International Security Assistance Force (ISAF) in Afghanistan. The 44th nation to be formally dragooned into NATO's first ground and first Asian war was Montenegro, the world's newest (universally recognized) state.

There are in fact more than 45 countries with troops subordinated to NATO in the Afghan war zone in addition to those from all but six European nations, two South Pacific ones (Australia and New Zealand), a Persian Gulf state (the United Arab Emirates), all three South Caucasus nations (Armenia, Azerbaijan and Georgia), Asia's Singapore and South Korea and the U.S. and Canada.

Last November the Financial Times confirmed that Colombia was deploying infantry forces to Afghanistan under NATO command, in December the ISAF website divulged that Egyptian military personnel are operating in the east of the country [1], and this January the U.S. armed forces newspaper Stars and Stripes revealed that troops from Bahrain and Jordan were already in the war zone.

The inclusion of Colombia and Egypt is particularly significant as now troops from all six populated continents are among those of fifty-some-odd nations serving under NATO - soon to number 150,000, with almost all U.S. forces placed under NATO command - in not only a single war theater but in one country. The world has never before witnessed such a widespread military network concentrated on and in one small land.

Mongolia's Defense Minister Luvsanvandan Bold was at NATO headquarters in Brussels on March 29 to formalize his nation's deployment of an estimated 250 more troops for the Afghan war. He was accompanied by his country's chief of the general staff and secretary of the National Security Council.

The delegation met with NATO’s Deputy Secretary General Claudio Bisogniero and the "meeting marked the formal recognition of the Mongolian contribution to the International Security Assistance Force (ISAF)."

NATO's number two civilian leader said on the occasion that "These are important agreements, not just from a legal perspective, but chiefly to mark Mongolia's full recognition as a member of ISAF and a key contributor to the international mission." [2]

The military bloc announced that as Mongolia is now an official Troop Contributing Nation, it will be invited to the 56-nation NATO foreign ministers meeting to begin on April 23 in Estonia.

The Mongolian entourage also visited Supreme Headquarters Allied Powers Europe, NATO's main military command, outside Mons, Belgium, where it was accorded an honor guard reception and met with the Deputy Supreme Allied Commander Europe, General Sir John McColl.

NATO now has a military partner squeezed between Russia and China.

A report from last year placed matters in historical perspective. Deployment to Afghanistan will assist "The Mongolian army, which has not seen major combat since assisting the Soviet invasion of Manchuria in 1945," to "acquire vital, on-the-ground experience." The mission "will mark its largest military presence in Afghanistan since the age of Genghis Khan." [3]

However, the U.S. first secured Mongolian troops for the war in Afghanistan much earlier, in 2003, and Genghis Khan was invoked for the occasion, which should cast in doubt the references to peacekeeping used in subsequent citations. The latest development signals the transition from a bilateral U.S.-Mongolian military partnership to the broadening of NATO's role in Asia and the further consolidation of an Asian NATO.

"The landlocked nation has previously operated artillery training teams in
Afghanistan and sent troops to serve with the U.S.-led occupation of Iraq," and in the course of doing so "Mongolia's involvement in Iraq and Afghanistan has helped cement its alliance with the United States and secure grants and aid." [4]

U.S. Marines were deployed to the capital of Mongolia, Ulan Bator (Ulaanbaatar), "for the first time in the history of the Marine Corps, Aug. 18, 2003 in support of Khaan Quest '03." [5]

The live-fire military exercise, which has been held every year since, is named after Genghis Khan. The announced purpose of the training exercises, run by the Pentagon's Pacific Command, has been to upgrade Mongolian soldiers to United Nations peacekeeping standards. Having little else in the way of exports, the nation's troops are paid comparatively handsomely for missions abroad.

As to the nature of the peacekeeping missions the Pentagon has been training Mongolia's armed forces to conduct, after the first Khaan Quest exercises - in which they were instructed by U.S. Marines in "peacekeeping operations such as check point, patrolling, immediate action drills, riot control and more" [6] - in August of 2003, the U.S. deployed troops they had instructed to Iraq in September and to Afghanistan in October.

The second rotation of Mongolian troops to Iraq occurred in early 2004 and the second Khaan Quest U.S.-led military exercises were staged in Mongolia the same year.

Mongolia was invited to participate in the Cobra Gold exercises in Thailand, Asia's largest war games, in 2004 for the first time. The roster also included the U.S., Thailand, the Philippines and Singapore.

The following year U.S. Marines returned to the nation for Khaan Quest 2005 and almost two weeks of joint training with the Mongolian Armed Forces.

The Marines and 130 local troops engaged in what was described as a mock battle 65 miles west of the capital, a repeat of similar engagements in 2003 and 2004. [7]

Five months after the April exercises Mongolia's President Nambariin Enkhbayar visited Hawaii on his way home from the United Nations to meet with the top commander of the U.S. Pacific Command, whose "vast area of responsibility [consists of] half the surface of the globe that includes half its population spread across 36 countries," [8], Admiral William Fallon.

After the meeting the Mongolian head of state was quoted as saying "We have been discussing how to cooperate to expand and develop the capacity of the Mongolian armed forces and peacekeeping operations," and that he and Fallon “found complete understanding” about collaboration between the Pentagon's Pacific Command and the Mongolian armed forces. [9]

The following month Donald Rumsfeld became the first U.S. secretary of defense to visit Mongolia and addressed soldiers from the nation who had served in Iraq and Afghanistan. Until the last moment he also was to have visited China's and Russia's other joint neighbor, Kazakhstan, to "discuss increasing U.S. help in their [Kazakhstan's and Mongolia's] military modernization programs" on his way to a NATO meeting in Lithuania to meet "with Ukraine's defense minister about that country's effort to join the organization." [10]

Speaking of Mongolian officials' military cooperation with the U.S., he said "Located between Russia and China, they decided that their democracy, stability and future was mostly tied to the relationships they could create." [11]

It was confirmed at the time that six U.S. Marine and one Army officer were assigned to the nation's military and that "With US funding and training, the Mongolian government built a peacekeeping force of 5,000 troops from its current force of 11,000 troops." [12] Almost half its men under arms are available for deployments abroad.

On November 21st of 2005 President George W. Bush followed in Rumsfeld's footsteps, arriving for a one-day visit to Ulan Bator with his secretary of state Condoleezza Rice. As Rumsfeld was the first Pentagon chief, so Bush was the first standing U.S. head of state to visit Mongolia. Both were on recruitment missions, and not just for the wars in Iraq and Afghanistan. A report on the U.S. defense chief's trip included the observation that "In Mongolia, Rumsfeld tried to nurture a relationship that may be a hedge against a shift in China's current path." [13]

Bush's comments while there didn't spare his hosts an ex post facto swipe at the nation's political past (until last May the ruling party's name was still that of the communist period) and an evocation of the Genghis Khan mythos (and ethos): "Free people did not falter in the Cold War, and free people will not falter in the war on terror. The Mongolian armed forces are serving the cause of freedom, and U.S. forces are proud to serve beside such fearless warriors." [14]

Months afterward it was revealed that Rumsfeld had promised impoverished Mongolia (with a population roughly equal to that of Chicago) $11 million worth of U.S. military equipment. [15]

In January of 2006 Mongolia announced that, despite a transition in the nation's cabinet underway at the time, it would keep its U.S.-trained troops in Iraq and Afghanistan.

In the middle of the year the U.S. State Department disclosed that "Rumsfeld said the United States plans to join Mongolia in an upcoming multinational exercise that is intended to strengthen regional cooperation in peacekeeping.

"The exercise, called 'Conquest,' is scheduled for late summer." [16] Once again the alleged peacekeeping nature of America's military role in Mongolia was belied by the name of the operation.

During the summer the Pentagon conducted the Khaan Quest 2006 exercises in which "300 American military personnel [trained] 600 Mongolian troops, as
well as 200 others from Bangladesh, Fiji, South Korea, Thailand and Tonga," at what by that time was a permanent training base at Tavan Tolgoi (Five Hills).

It was announced before the August war games that "The training is part of the millions of dollars that President Bush promised during his visit to Mongolia last year." [17]

During Khaan Quest 2006 "Admiral William J. Fallon, head of the U.S.
Pacific Command, greeted media and soldiers, praising the peacekeeping exercises and stressing the importance of Tavan Tolgoi as an international
training site." [18] The next year Fallon took over Central Command whose area of responsibility includes both Iraq and Afghanistan.

The two-week military exercises were held "on the windswept steppe of Mongolia, a key American ally strategically placed between Russia and China."

To demonstrate its appreciation of the role that Mongolia plays in U.S. geostrategic plans for Eurasia, three months earlier "The U.S. Congress passed a resolution...commending Mongolia on marking 800 years since Genghis Khan forged a nation out of the vast territory inhabited by disparate tribes, and praising its 'commitment to democracy, freedom and economic reform.'"[19]

In late July and early August Mongolian air force officials were invited to Operation Cooperative Cope Thunder in Alaska, "the largest multilateral air combat exercise in the northern Pacific, with about 1,300 personnel participating" from the United States, NATO, Australia, Canada, Germany, Japan, South Korea and Sweden. [20]

In October the seventh rotation of Mongolian troops "left for Iraq on board a special flight" to "join U.S. soldiers on patrol missions and maintaining order in the Iraqi capital [of] Baghdad." [21]

By 2007 the Pentagon's military integration of Mongolia had progressed beyond the point of the latter merely sending observers to U.S. war games and in July Mongolian airmen joined colleagues from the U.S., Spain, Thailand and Turkey for the two-week Red Flag-Alaska exercises in which "80 aircraft and 1,500 service members from the six countries [flew] together in this multinational exercise that provides realistic combat training...." [22]

The same month, at a time when almost 1,000 of its troops had served in the Iraq war zone, The Times of London in a feature called "War earns Mongolia rich peace dividend" summed up the results of four years of direct U.S.-Mongolian military cooperation:

"[Mongolian] soldiers are fed, given new uniforms, battle armour and night-vision equipment when they arrive in Iraq and President Bush has promised
Mongolia $14.5 million to renovate its Armed Forces.

"The country’s readiness to fight in Iraq was also key to winning it a highly sought-after first-round place in Washington’s $5 billion Millennium Challenge Account." [23]

Khaan Quest 2007 expanded to include over 1,000 troops from the U.S., Mongolia and seven other Asian and Asia-Pacific nations - Bangladesh, Tonga, South Korea, Brunei, Sri Lanka, Indonesia and Cambodia - to "improve their interoperability" and the "multinational speed of response, mission effectiveness...and unity of effort. [24]

The 2008 Khaan Quest exercises added troops from France, India, Nepal and Thailand to the U.S. Pacific Command-run operation.

The BBC reported at the time:

"As exercises go, these ones are relatively small - but they are symbolic.

"They represent part of Mongolia's ongoing efforts to build ties that extend beyond its two super-power neighbours." [25]

In July of 2008 Mongolia was invited to participate in the 20-nation Pacific Rim Airpower Symposium held in the capital of Malaysia. Mongolia doesn't border the Pacific or even have a navy. It is separated from that ocean by hundreds of miles of Chinese and Russian territory.

The four-day event was hosted by the Royal Malaysian Air Force and U.S. Pacific Air Forces' 13th Air Force, and included participants from the U.S., Malaysia, Mongolia, Australia, Bangladesh, Brunei, Cambodia, Canada, Chile, India, Indonesia, Japan, Nepal, New Zealand, the Philippines, Singapore, South Korea, Sri Lanka, Thailand and Vietnam. The commander of the 13th Air Force, Lieutenant General Loyd Utterback, remarked at the time: "Through this symposium, we have a great opportunity to share and understand what each nation brings to the battlefield." [26]

Mongolian forces were also part of a U.S.-led military exercise on the order of Khaan Quest in Bangladesh in April of 2008 along with troops from the U.S. and the host nation, Brunei, Cambodia, India, Indonesia, Malaysia, Nepal, South Korea, Sri Lanka and Tonga.

Following by three years what appeared like an attempt at a "color revolution" scenario in Mongolia in March and April of 2005 ahead of a presidential election (on the heels of successful equivalents in Georgia, Ukraine and Kyrgyzstan), riots broke out in Ulan Bator after parliamentary elections in the summer of 2008. The standard "color revolution" technique. Molotov cocktails were hurled into the offices of the ruling Mongolian People’s Revolutionary Party and at least five people were killed and 300 injured, leading to a four-day state of emergency being declared. (The protests were led by supporters of the Democratic Party of Tsakhiagiin Elbegdorj, about whom more later.)

Five months afterward, in early November, Mongolia and Russia held a joint
peacekeeping training exercise in the first country, the only joint maneuvers of any sort since the breakup of the Soviet Union seventeen years earlier. In the interim the Pentagon had led six comparable exercises in Mongolia from 2003-2008.

Mongolia was granted observer status in the Shanghai Cooperation Organization (whose members are China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan) in 2004, but in the succeeding six years has made no effort to gain full membership.

In July of 2009 the nation's military announced that it would expand upon previous deployments to Afghanistan, limited to artillery training units, by sending a full contingent of troops as part of "cooperation that stems from its 'third neighbor' policy to reach out to allies other than China and Russia," meaning the U.S. and NATO. [27]

On August 15 the twelve-day Khaan Quest 2009 exercises were launched under U.S. leadership. In addition to American and Mongolian forces, troops from Cambodia, India, Japan and South Korea participated.

"The exercise is the most visible form of US-Mongolian military cooperation," which "grew out of Mongolia’s participation in the US-led war in Iraq, the first combat action that Mongolian troops had seen since World War II."

"In addition to the Khaan Quest exercise, US military cooperation with Mongolia includes the Marine Leadership Development Exchange Program, an initiative unique to Mongolia in which a small group of US Marines 'embeds' with Mongolian forces full time to help train them in western military methods." [28]

Developing out of the annual Khaan Quest exercises, a Mongolian Expeditionary Force consisting of "elite soldiers selected by Mongolian Armed Forces Maj. Javkhlanbayar Dondogdorj specifically" for Afghanistan are to be deployed to the war front in that country. [29]

The exercises in Mongolia were preceded by a United Nations Staff Officers Course run under the U.S. State Department's Global Peace Operations Initiative with officers from the U.S., Mongolia, Germany, Bangladesh, India, Malaysia, the Philippines, Singapore and Thailand.

Khaan Quest 2009 closed with a ceremony which featured "a parade by the graduating platoons and speeches by the chief of staff of US Pacific Command (which sponsored the exercise), as well as Mongolia’s defense minister and chief of armed forces." [30]

This year's Khaan Quest 2010 "is scheduled to begin August 2010 and event officials are expecting a larger participating force" than in 2009. [31]

Earlier in the year, on May 24, the candidate of the Democratic Party, Tsakhiagiin Elbegdorj, won the nation's presidential election, becoming the first president never to have been a member of the Mongolian People's Revolutionary Party and the first to have been educated in the West. In fact he received a diploma from the University of Colorado at Boulder's Economic Institute in 2001 and a Master of Public Administration degree from Harvard University's John F. Kennedy School of Government the following year.

The nation's military ties with Washington and with NATO can be expected to grow even firmer and more extensive under the Elbegdorj administration.

With its vast expanse (over 600,000 square miles) and its sparse population (less than 3 million people with almost 40 percent living in the capital), Mongolia is the optimal location for U.S. military surveillance (ground, air and satellite) to monitor China and Russia simultaneously. The nation's new U.S.-educated head of state is not likely to deny Washington's requests in that regard.

 

[ajtr]

Journalists’ E-Mails Hacked in China

BEIJING — In what appeared to be a coordinated assault, the e-mail accounts of more than a dozen rights advocates, academics and journalists who cover China have been compromised by unknown intruders. A Chinese human rights organization also said that hackers had disabled its Web site for five days in a row.

The infiltrations, which involved Yahoo e-mail accounts, appeared to be aimed at people who write about China and Taiwan, rendering their accounts inaccessible, according to those who were affected. In the case of this reporter, hackers altered e-mail settings so that all correspondence was surreptitiously forwarded to another e-mail address.

The attacks, most of which began March 25, occurred the same week that Google angered the Chinese government by routing Internet search engine requests in mainland China to Google’s site in Hong Kong. The company said the move had been prompted by its objections to censorship rules and by a spate of attacks on users of Google’s e-mail service, which the company suggested had originated in China.

Those cyberattacks, which began as early as last April, affected dozens of U.S. companies, law firms and individuals, many of them rights advocates critical of the Chinese government.

The victims of the most recent intrusions included a law professor in the United States, a Uighur exile in Sweden, an analyst who writes about China’s security apparatus and several print journalists based in Beijing and Taipei.

“It’s very unsettling,” said Clifford Coonan, a correspondent for The Irish Times and The Independent whose e-mail account was rendered inaccessible last week after Yahoo detected that someone had gained access to it remotely. “You can’t help but wonder why you’ve been targeted.”

Dilxat Raxit, a spokesman for the World Uyghur Congress, an organization that seeks greater autonomy for China’s Xinjiang region, said many of the e-mail messages in one of his two Yahoo accounts appeared to have been read when he logged on in recent weeks. The other account, he said, had been inaccessible for a month.

Mr. Raxit also said that he was unable to reach three Uighur friends in China with whom he previously corresponded frequently.

“I’m 100 percent I’ve been hacked,” he said from Sweden. “I’m angry at the Chinese, but I blame Yahoo for allowing this to happen.”

In an e-mail exchange, Dana Lengkeek, a Yahoo spokeswoman, declined to discuss the incidents, citing company policy. “We are committed to protecting user security and privacy and we take appropriate action in the event of any kind of breach,” she said.

Kathleen McLaughlin, an American freelance journalist in Beijing who is on the board of the Foreign Correspondents’ Club of China, said the group had confirmed that the e-mail accounts of 10 journalists, including her own account, had been compromised. Like the others, Ms. McLaughlin said she had received a message from Yahoo on March 25 indicating that her account had been disabled because, according to an automated message, “we have detected an issue with your account.” Ms. McLaughlin said she had contacted Yahoo but that she had yet to receive an explanation of what happened. “Someone is clearly targeting journalists,” she said. “It makes me feel very uncomfortable.”

Yahoo, which merged its Chinese operations with the Chinese e-commerce company Alibaba, has faced criticism for cooperating with government security officials in the past. In 2006, Yahoo turned over data that officials used to help prosecute several dissidents. One, a journalist named Shi Tao, was later given a 10-year sentence for leaking a secret propaganda directive.

Although the company owns a 39 percent stake in Alibaba, Ms. Lengkeek, the Yahoo spokeswoman, stressed that Yahoo no longer has operational control over the China business.

Unlike services offered by Google and Microsoft, e-mails sent through Yahoo’s Chinese domain, .cn, are stored on local servers and subject to Chinese law, a factor that has driven some privacy-conscious users away from Yahoo’s e-mail services.
Paul Wood, a senior analyst at Symantec, said that a growing number of malignant viruses were tailored to specific recipients, with the goal of tricking them into opening attachments that could insert malware onto their computers. Mr. Wood said his company, which designs anti-virus software, now blocked about 60 such attacks each day, up from one or two a week in 2005. “They’re very well crafted and extremely damaging,” he said.

A report issued by Symantec on Monday found that nearly 30 percent of attacks had originated from computers in China, and about 20 percent of those had come from Shaoxing, in Zhejiang Province.

Mr. Wood and other experts pointed out that attacks that appeared to come from a certain location could just as easily have emanated from computers infected with botnets, viruses that allow them to be controlled remotely by other computing systems.

It is that kind of rogue software that is probably responsible for crippling the Web site of Chinese Human Rights Defenders, a group that has been an assertive critic of China’s human rights record. Since last week, the group’s Chinese-language site has been overwhelmed by hackers flooding it with junk requests, a tactic known as denial of service. Although the site has been attacked before, the previous attacks had not lasted more than a few hours.

Renee Xia, the international director for the human rights group, said the assault had begun the same day that Go Daddy, the American company that is host to its site, announced that it would stop registering domain names in China. “Maybe it’s a coincidence, but we don’t think so,” Ms. Xia said.

Meanwhile, Google’s search engine was inaccessible in much of mainland China late Tuesday. The cause of the disruption was not clear, but it led to speculation that the site was being blocked by the country’s Internet censors.

Google added to the confusion, saying at first that the problem had been the result of a change it had made to the string of characters it sends along with search requests, which may run afoul of China’s powerful Internet filter. Later in the day, Google said that it had actually made that change a week earlier, so the disruption must have been caused by changes on China’s end. It also said that by early Wednesday morning its service appeared to have been restored.

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An earlier version of this article referred incorrectly to the year in which Yahoo turned some data over to Chinese officials, and also to the company's relationship to Alibaba, the Chinese e-commerce company. The data was handed over in 2004, not 2006. In 2005, the company sold its China operations to Alibaba.
Computer security experts say that infiltration of Yahoo’s e-mail service once again highlights the challenges that Internet companies face in protecting their customers from hackers.

 

[ajtr]

China mineral dominance concerns U.S.

Washington (CNN) -- China's dominant position in the production of rare earth minerals has long-reaching implications for the U.S. Department of Defense, according to a recent government report.
The report from the Government Accountability Office was commissioned by Congress amid growing concerns that China's potential reduction on the supply of much-needed rare earth minerals could impact critical military uses.
China has secured 97 percent of the production of these minerals, which are used in nearly every electronic device, cell phones, computer hard drives and guided missiles.
"The longer we neglect this, the longer we don't take steps to counter this, the more it becomes a pressing problem," said Dean Chang, Research fellow at the Heritage Foundation's Center for Asian Studies.
The minerals include ores, oxides, metals, alloys and semi-finished rare earth products and cannot be reproduced artificially. "It's not like the DOD can just say, 'OK, we won't use them,'" said Chang.
There is widespread use of rare earth materials in defense systems, including precision-guided munitions, lasers, communication systems, radar systems, avionics, night vision equipment, satellites and more, according to the GAO.
China has decreased output and increased export taxes on all its rare earth materials to a range of 15 to 25 percent, according to the report. The defense industry's heavy reliance on these minerals has prompted Congress and Pentagon and to examine ways to mitigate should China continue to reduce its exports.
House Armed Services Committee Chairman Ike Skelton, a Missouri Democrat, said he's planning a hearing to discuss the GAO report.
Defense Department spokesman Dave Lapan said the Pentagon has been monitoring this issue for years, and is "looking at options to increase domestic availability of rare earth elements though developing new domestic sources, re-energizing previous domestic sources and transforming the national stockpile to include rare earth materials."
The United States has a rare earth mineral mine in southern California, which is the largest non-Chinese mine in the world, but the GAO says the mine currently lacks the facilities to process the rare earth ore into finished components such as permanent magnets.
Andrew Lubin spent 30 years importing and exporting Chinese metals and taught economics and export-import operations at the online American Military University. He said Chinese in-country demand has increased greatly in the last ten years.
"They have a huge middle class that didn't exist 20 years ago," said Lubin. "It's not that they're trying to screw us. They need it for themselves."
But Chang said, "The big step back for this is that the Chinese are taking a very broad-minded view of their national security and national influence. It's not just the number of their submarines or missiles, or even broad economic power. In this case China is using all of these things as tools to influence everybody, including us."
But Chang said the GAO report is not all doom and gloom.
"The GAO is not saying all is lost," he said. "You could re-establish a domestic industry, from mining through processing, but that's expensive and also that takes time."
Rebuilding the U.S. rare earth industry could take up to 15 years, according to GAO estimates.

 

[ajtr]

Chimera Of Chimerica


The US president and his Chinese counterpart seem to have kissed and made up, at least for the time being. Much is being made of the Chinese president's decision to attend the nuclear security summit in Washington last week and the signals emanating from Beijing that it is considering allowing the yuan's value to gradually increase this year. In anticipation, the US Treasury department has postponed its report on foreign exchange rates that was to label China a currency manipulator. Notwithstanding these developments, the faultlines between the world's pre-eminent power and its most likely challenger are becoming clearer by the day.

The idea of "Chimerica" was always too good to be true. But the rapidity with which US-China ties have unravelled over the past few months has even surprised those cynical about Barack Obama's overtures to China. While the Chinese commerce minister has openly warned the US that it would suffer more if it decided to levy punitive tariffs on Chinese imports, Chinese military leaders have been contemplating the possibility of an all-out war with the US to gain the status of global superpower.

The West, meanwhile, is souring on China. Gone is the talk of China as a responsible stakeholder in the international system. Instead, Google's withdrawal from China is being seen as symptomatic of the problems China's rise continues to generate for global norms set by the West. China's undervalued renminbi is no longer a problem solely for the US but the Chinese behaviour is questioning the very foundations of the global trade regime. China has failed to play a constructive role in finding a solution to the North Korean and Iranian nuclear issues much and has made it impossible for the international community to resolve these dangerous flashpoints. There is a growing fear China might soon become the pre-eminent world power without even the patina of democracy with grave consequences for the global order.

China's rise was always going to be a challenge. But for long it was deemed the West's responsibility to ensure China did not get alienated from the international system. Such assumptions have fallen by the wayside as China's ascent has continued unabated and the Obama administration seems to have signalled that it is more interested in managing America's decline than in preserving its pre-eminence in the global order.

China's growing economic and political clout forced the Obama administration in early days to toy with the idea of G2, a global US-China condominium whereby China was expected to look after and 'manage' the Asia-Pacific. This was enough to shake up US allies in the region. Realising their security concerns were being sidelined, Tokyo, Seoul and Canberra made a concerted effort to make the new administration realise that such an arrangement would permanently marginalise the US in the Asia-Pacific. Moreover, major players in the region started re-evaluating their own security doctrines.

The chimera of "Chimerica" however soon faced its inevitable demise. After the Obama administration notified the US Congress that it planned to sell weapons systems to Taiwan worth $6.4 billion, China was markedly aggressive. Not only was the US ambassador to China warned of serious repercussions if the deal went through, China also cancelled some military exchange programmes with the US and announced sanctions against American companies supplying weapons systems to Taiwan. This announcement was a sign of a new assertiveness that China had been displaying on the international scene for sometime.

In its attempt to court China, the Obama administration was quick to downgrade the burgeoning strategic partnership with India forged during the Bush period. If there is a meta-narrative in Obama's foreign policy approach, it is defined by a desire to court America's adversaries while ignoring friends and potential allies. After rejecting the balance of power politics as a relic of the past, the Obama administration no longer has a strategic framework with which to view and organise its Asia policy. In any case, it has been much too preoccupied with domestic issues to give any serious thought to Asia's rapidly evolving strategic landscape.

China's growing economic and military capabilities and assertive diplomatic posture are a source of worry for India at a time Washington has little clarity about the kind of strategic role it wants to play in the region. Given the heavy US economic dependence on Beijing, a G2 made some sense for the US but it left American allies in the region marginalised in the strategic scheme of things. India was perhaps the worst hit. From being viewed as a rising power and a balancer in the Asia-Pacific, it was back to being seen as a regional South Asian actor whose only relevance for the US is in making sure Pakistan fights the Taliban without getting preoccupied in Kashmir.

The smaller countries of East and South East Asia, not to mention India's immediate neighbours being wooed by China, cannot but note the shifting balance of power that Washington's manoeuvring signals and adjust their own policies. The Obama administration's failure to reaffirm the US-India strategic partnership will not only have consequences for the region but also for the US's own global standing. It is to be hoped that the emerging problems in its relations with Beijing will convince Washington that it needs to take its friends and allies in Asia more seriously.