How Will Digital Currencies Change Wallets?

RAJESH BANSAL, SOMYA SINGH

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Central bank digital currencies (CBDCs) are essentially the digital version of cash. Like cash, they are issued by and have their value guaranteed by central banks. For example, an Indian CBDC would be denominated in rupees, with one digital rupee having the same value as a one-rupee coin.

These digital currencies are the latest innovation in payments technology and could change the way financial transactions are done. Whether the task is sending money abroad in a jiffy or making digital financial transactions without using the internet, CBDCs can help solve many of today’s payment issues like long transaction times and high fees.

If and when CBDCs become widely used, people will be able to exchange currency with each other digitally in real-time using mobile phones, computers, smartwatches, bar code scanning, and so on. In China, the digital yuan—which is already circulating on a trial basis—can be exchanged with authentication procedures using facial recognition.

While no major country has fully launched its own digital currency yet, China has already taken the lead, and several other countries are scrambling to catch up.

The Unlikelihood of a War With China and Russia

By George Friedman

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Much has been made of China’s seemingly unending potential to invade Taiwan – nearly as much as Russia’s buildup near Ukraine, which many believe is little more than a pretext for a future war. Lurking behind this is the age-old fear that Russia and China will team up to undermine the United States, say, by launching simultaneous attacks. This isn’t inconceivable, but neither is it likely.

Let’s begin with China. An invasion of Taiwan would obviously be an amphibious operation. One of the principles of war is the value of surprise. Surprise is particularly important in an amphibious assault. At Normandy, for example, the U.S. and Britain mounted a massive disinformation campaign to convince the Germans they were not going to land where they did. If defenses are concentrated on the point of disembarkment, the attack could be a slaughter. Even if China had a superior force, the force multiplier of correct deployment and preparation could devastate its soldiers.

There’s also the issue of distance. Some 100 miles (160 kilometers) of water lay between China and Taiwan. Assuming a direct line of attack, the attack force will be at sea for about five hours. Apart from alerting defenders to planned positions, the force would be subject to air and missile attacks and more dangerous submarine attacks. The probability of the Chinese reaching the landing zones without enduring heavy losses is low. Even if U.S. space-based reconnaissance were completely neutralized – and I doubt it would be – submarines could provide targeting information to U.S. missiles distributed globally.

If Chinese troops successfully land, and if Taiwanese troops are forced to cede ground, supply and reinforcement will pose an enormous problem for the Chinese. At this point, the landing point would be known, and the routes needed to resupply Chinese infantry mapped. Resupply and reinforcement by aircraft would not be enough. So even if the initial landing took the beach, the resupply problem would cripple Chinese operations.

The Taliban Are Ready to Exploit America’s Exit What a U.S. Withdrawal Means for Afghanistan

By Carter Malkasian

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In September of last year, peace talks between the Taliban and the Afghan government finally opened in Doha, only to immediately stall. Negotiators have been unable to address even the most basic issues, such as an agenda for a political process, let alone the tougher ones, such as what type of government the country should have. But as representatives of both parties have talked in circles in the Qatari capital, events in Afghanistan have taken a dramatic turn.

The United States has withdrawn thousands of troops from the country in accordance with a deal it struck with the Taliban in February 2020, leaving a security vacuum that the militants have readily exploited. Over the last six months, the Taliban have won major battles and recaptured large swaths of territory, likely incentivizing them to fight on and to shun compromise at the negotiating table. Why agree to share power when you can take it by force?

On Wednesday, April 14, U.S. President Joe Biden is expected to announce that all remaining U.S. troops will depart Afghanistan by September 11, 2021. His administration faced a difficult choice between completing the U.S. withdrawal as agreed with the Taliban and digging in for the long haul with the minimum number of troops needed to suppress the terrorist threat. Both would have been viable strategies. But the worsening situation on the ground, coupled with the poor outlook for the peace process, makes an American withdrawal more compelling. Regardless of what the Biden administration does, it can expect that the Taliban will resist compromise and that the war will continue to rage.

Yes, the Atrocities in Xinjiang Constitute a Genocide

BY PETER MATTIS

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Uyghurs demonstrate for news of their relatives and to express concern over an extradition treaty’s ratification between China and Turkey near the Chinese consulate in Istanbul, on Feb. 22. OZAN 

On his way out of office on Jan. 19, then-U.S. Secretary of State Mike Pompeo issued a determination that China “has committed genocide against the predominantly Muslim Uyghurs and other ethnic and religious minority groups in Xinjiang.” Nobody in the U.S. policy community seriously disputes that atrocities are occurring in Xinjiang—but some analysts have zoomed in on the term “genocide.” Sometimes it seems to be a way of trying to force policies back toward the failed engagement of the past rather than confronting what’s happening in China and rethinking policy accordingly.

This debate over terminology has high stakes. It’s not just how Washington engages, competes, and cooperates with Beijing but also about how the United States understands China’s policies and intentions and how they manifest on the ground. The United States, however, cannot have a successful China policy if it is not grounded in a realistic assessment of the Chinese Communist Party’s (CCP) ambitions and methods—and the atrocities that have resulted because of them.

Beyond U.S.-China Technology Competition

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April 15, 2021, By Akinori Kahata

As explored in previous blog posts, competition over the production and sale of advanced technologies like semiconductors and 5G networking equipment has increasingly become a matter of national security. Technology competition itself is nothing new. During the Cold War, the United States was engaged in a similar competition with the Soviet Union. However, in contrast with that period, today’s competition places a greater emphasis on attaining economic leadership as opposed to military strength.

Success in this new environment will depend more on our ability to leverage private sector innovation than on government planning. Even though technology competition has become a national security issue, this does not mean that our policy response can ignore market-economy rules and the principle of international trade. We should respect market-driven competition, while acknowledging where the weaknesses of a purely market-based approach may demand a modified approach to address security concerns. Importantly, this modification should be coordinated with allies.

Around the world, nations are reacting to intensifying technological competition with new plans to bolster their domestic capacity for innovation and production. The European Commission’s 2030 Digital Compass report laid out a series of steps to help Europe achieve digital sovereignty, including goals like having 20% of global semiconductor production occur in Europe by 2030. In the United States, an executive order issued by President Biden directed federal efforts towards securing critical supply chains in sectors like semiconductor manufacturing, battery production, and rare earth mining. In March 2021, President Biden proposed a $2.3 trillion infrastructure plan, which includes $50 billion for supporting semiconductor manufacturing and research. Meanwhile, China’s 14th 5-year-plan proposes sweeping new goals meant to help China achieve technological self-reliance. Chinese investment in R&D has increased rapidly over the last 20 years. In particular, its government R&D spending as a percent of GDP has been growing steadily, in contrast to the United States where public R&D spending has been falling continuously since 2009.

Behind all of these measures is a growing awareness of the importance of technological leadership for national security, and of the fact that innovation and production capacity for many strategic sectors is concentrated in a small number of nations. These concerns are important, but it is necessary to consider why these issues have arisen in the context of our current market-based global innovation ecosystem, and what that means as policymakers consider how they should respond.

Alibaba fine, Huawei and Ericsson, and public opinion on military

https://www.neican.org/p/briefing-alibaba-fine-huawei-and

12 April 2021, Yun Jiang and Adam Ni


Chinese authorities hit Alibaba with a ¥18.2 billion fine on Saturday for abusing its market dominance, restricting competition and stifling innovation.

Last November, Beijing torpedoed Alibaba’s sister firm Ant Group’s IPO at the eleventh hour. In December, the State Administration for Market Regulation announced its investigation of Alibaba.

Alibaba should be counting its stars if this is the end of the story. The fine is small change for the tech giant, only amounting to 4 per cent of its 2019 revenue from China. But more likely Beijing is just getting warmed up.

The Chinese leadership has designated “strengthening anti-monopoly work and preventing disorderly capital accumulation 强化反垄断和防止资本无序扩张” as one of the eight economic policy priorities for 2021. The targets are tech giants that run the most prominent internet platforms in China. Tencent will likely be the next in line to be roughed up.

Beijing’s new zeal for “anti-monopoly” has several drivers. China’s super internet platforms (such as WeChat) pose actual market competition, innovation, and consumer rights issues. More broadly, China is grappling with how to regulate new technology like most countries.

But more interesting for us, this is about political economy. In Xi’s words, “the foundation of [China’s] political economy can only be Marxist political economy, not other economic theories”. In practical terms, this means that “the leading role of the state-owned economy must not be altered.” Beijing’s campaign to rein in China’s tech giants is part of a broader trend towards tighter state control over the economy.

Joe Biden calls time on America’s longest-ever war

https://www.economist.com/asia/2021/04/13/joe-biden-calls-time-on-americas-longest-ever-war

America leaves behind a weak state and struggling army

Apr 13th 2021

The first American forces to enter Afghanistan in 2001 arrived on September 26th, when a cia team dropped into the Panjshir Valley in the north. At the peak of the war a decade later, America had more than 100,000 troops battling the Taliban.

Another decade on, all of them will be gone and the longest war in American history will be over—for the Americans, at least. On April 14th President Joe Biden announced that every American soldier would leave by September 11th, the 20th anniversary of the attacks that prompted America to invade in the first place.

American withdrawal need not return Afghanistan to the Taliban

https://thehill.com/opinion/international/548378-american-withdrawal-need-not-return-afghanistan-to-the-taliban

The Taliban’s decision to back out of attending a peace summit, scheduled to start later this week in Turkey, seems to have prompted the Biden administration’s announcement of a full withdrawal of American forces from Afghanistan by Sept. 11. The Taliban will now most likely take even less interest in talks, as their goal all along was to secure a U.S. military withdrawal.

The Biden administration was hoping that, at the conference scheduled to be held in Turkey, it would get the Taliban’s agreement to an extension of the May 1 deadline for withdrawal of U.S. troops. By refusing to show up, the Taliban forced President Biden, who opposes keeping troops in Afghanistan, to announce a final withdrawal date.

The Taliban have always sought to run out the clock on the U.S., reflecting Taliban founder Mullah Omar’s belief that “Americans have all the clocks, but we have all the time.” They have shown little interest in sharing power, ending violence or defining the terms of a lasting peace.

Instead of betting everything on an elusive deal with the Taliban, U.S. interests would have been better served by working more closely with the Kabul government while planning for an American military withdrawal. That option can still be exercised instead of chasing an agreement with the Taliban.

The Afghan National Security Forces (ANSF) are not the South Vietnam army, which collapsed soon after American military withdrawal. Over the last three years, Afghan forces have undertaken more than 90 percent of all military operations, depending on NATO forces only for air support, technical intelligence and special operations capability.

Japan Faces Growing Pressure to Rethink Releasing Fukushima’s Wastewater into Ocean

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By Thisanka Siripala

April 16, 2021

China and South Korea have reacted strongly to the Japanese government’s decision to release contaminated water from the crippled Fukushima nuclear reactor.

Biden Is Done with Afghanistan. Is Afghanistan Done With America?

https://foreignpolicy.com/2021/04/14/afghanistan-biden-troop-withdrawal-forever-wars/

Biden Is Done with Afghanistan. Is Afghanistan Done With America?

Pulling out all U.S. troops is the administration’s risky plan to pressure Kabul and the Taliban to makE peace. ELISE LABOTT | APRIL 14, 2021, 

U.S. President Joe Biden’s expected announcement Wednesday afternoon that all U.S. troops will be out of Afghanistan by September is a recognition, at long last, that there was no U.S. victory to be found in the country’s craggy landscape.

In his speech, Biden said four U.S. presidents have wrestled with Afghanistan—and he would not pass the problem onto a fifth.


How Will Biden Pivot on South Asia?
After the U.S. withdraws from Afghanistan, its rivalry with China is likely to define the new administration’s…

“We cannot continue the cycle of extending or expanding our military presence in Afghanistan, hoping to create the ideal conditions for our withdrawal [and] expecting a different result,” Biden said.

Biden’s new timeline for U.S. withdrawal is only a few months later than the deal that former U.S. President Donald Trump signed up for early last year, when he reached a so-called peace agreement with the Taliban. Charitable observers would call Biden’s unconditional withdrawal an early example of what the president and his national security team have promised would be a foreign policy with “humility.” Critics would—and have—called it a humiliating defeat that leaves the United States less secure and abandons the Afghan people to a terrifying future.

The Most Urgent North Korean Nuclear Threat Isn’t What You Think

https://carnegieendowment.org/2021/04/15/most-urgent-north-korean-nuclear-threat-isn-t-what-you-think-pub-84335?utm_source=ctw&utm_medium=email&utm_campaign=buttonlink&mkt_tok=MDk1LVBQVi04MTMAAAF8dqJ9dlhI4p7N5_vCKXCQSRpwTDrb1GcEQery_kFtsLOJc6tistDolrgj9SFBXwmySfpbspk7_qrHlyaMvtWgm6Bl0WqB-ZCDkBoccNmZkxkg

North Korea’s resumed nuclear missile testing generates understandable hand-wringing in Seoul, Tokyo, and Washington. Such tests demonstrate Pyongyang’s growing prowess with nuclear weaponry and are a frightening reminder that a crisis on the Korean Peninsula could erupt at any time.

Yet, as troubling as missile tests are, the chances of a war on the Korean Peninsula remain very low. Policymakers should be more concerned about the likelier possibility of North Korea selling nuclear and missile technology to countries in the Middle East.

A NUCLEAR POWER WITH A CASHFLOW PROBLEM

For three decades, neither diplomacy nor increasingly stringent economic sanctions have reversed North Korea’s ambition to possess nuclear weapons. Nor have they diminished North Korea’s illicit trade relationships with Iran, Syria, and other states in the Middle East. Even during the heady days in 2018 and 2019 of North Korean leader Kim Jong Un and former president Donald Trump’s love letter diplomacy, North Korea’s arsenal of nuclear weapons and missiles continued to grow. Over the same period, the UN Panel of Experts, which assesses compliance with economic and trade sanctions on North Korea, reported numerous times when North Korean entities sold technology for missiles or weapons of mass destruction (WMD) to buyers in the Middle East

Should NATO Admit Ukraine?

https://carnegieeurope.eu/strategiceurope/84332?utm_source=ctw&utm_medium=email&utm_campaign=buttonlink&mkt_tok=MDk1LVBQVi04MTMAAAF8dqJ9dtXYZ6XyzszvAo8GK9NG1gQYyoJdxOi9PCoeSSqxVeCqqLEDtbTnVr0ZiOcOLvlDfoMMGu7aAbMPG3vo20b-JzHLjQHk9Pr9RczvM72q

April 15, 2021
There is no consensus in NATO in favor of Ukraine’s membership. What the most determined Western countries can do is provide intelligence and military support to Ukraine, including weaponry and capability building.

If you’re Ukrainian President Volodymyr Zelenskiy, these days the case seems obvious: yes, it should. The real question is whether doing so makes sense for NATO. By admitting Ukraine, the alliance would clearly gain an enthusiastic member. It would also gain a conflict that’s mostly frozen but regularly flares up. Given that only states that are not involved in territorial conflicts with their neighbors are allowed to join NATO, Russia can de facto prevent Ukraine’s accession by keeping the country in this conflict.

That raises the question of whether NATO should take a compassionate turn and admit Ukraine anyway. It would be a nice gesture, but it would also be less beneficial than it seems. Sure, Ukraine would be inside the alliance, but this would give Russia an excuse to act even more aggressively. NATO, in turn, would find its attention nearly completely devoted to this conflict. That would not serve the alliance well.

Strategic ambiguity is a much better course of action. Russia can’t know how NATO may respond to aggression toward Ukraine, so Moscow has to assume a muscular response. Remember: in deterrence, fear and surprise are the decisive factors.

As article 10 of NATO’s founding Washington Treaty notes, “the Parties may, by unanimous agreement, invite any other European State in a position to further the principles of this Treaty and to contribute to the security of the North Atlantic area to accede to this Treaty.” NATO can admit Ukraine, and that opportunity should always remain available, but there isn’t unanimous agreement within the alliance.

U.S. Mounts All-Out Effort to Save Iran Nuclear Deal

BY MICHAEL HIRSH 

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U.S. President Joe Biden is intent on restoring the 2015 nuclear agreement with Iran, and with talks resuming in Vienna on Thursday after a weeklong break, his chief negotiator, Robert Malley, is beginning to develop a road map on how to get there.

According to sources close to European and U.S. negotiators, Malley is expected to offer Tehran a Goldilocks-style deal: just enough sanctions relief so Iran will return to the pact but not so much that it would leave Biden vulnerable to attacks from hard-liners at home, including those in his own party who oppose any concessions at all to Iran.

“Until now, no specific sanctions were discussed, only the broad outlines of ways to establish trust,” said Ali Vaez of the International Crisis Group (ICG), who was senior advisor to Malley when the latter was head of the ICG. “What they’re doing this week is to finalize a list of measures on both sides to come back into compliance with the accord. The next step is to sequence these to allow both sides to save face.”

This involves what a senior U.S. official described as the “painstaking” process of separating out and agreeing to remove or ease some of the sanctions that former U.S. President Donald Trump imposed as “poison pills” to ensure that the 2015 deal, which Trump had repudiated in 2018, could never be restored. These include more than 700 sanctions imposed outside the nuclear pact, known as the Joint Comprehensive Plan of Action (JCPOA), that were levied at the end of Trump’s term to ensure Iran’s isolation and break its economy altogether.

Under the “maximum pressure” campaign, the Trump administration in particular sanctioned the Central Bank of Iran, the National Iranian Oil Co., and the National Iranian Tanker Co. for financing state-sponsored terrorism. The Trump team knew that even if the JCPOA were resurrected, such new sanctions would invalidate the deal’s effects because these companies would be banned from international commerce. Together, they oversee Iran’s oil industry, and the central bank controls most of Iran’s foreign exchange reserves and revenues from the country’s oil sales. And new energy revenues are what Iran most demands if it is to return to compliance with the 2015 pact.

Biden’s Afghanistan Exit Will Strengthen, Not Weaken, U.S. National Security

by William Ruger

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Already proponents of the war in Afghanistan are declaring that President Joe Biden’s promise to exit fully by September 11 is a disastrous mistake. Sen. Lindsey Graham’s verdict is not untypical: “he is paving the way for another 9/11.” But the longer America remains in Afghanistan, the more it weakens its own national security. The truth is that Biden is bowing to the inevitable—and the end of the war cannot come too quickly.

The United States has been fighting in Afghanistan for nearly twenty years. But we committed to withdraw all U.S. troops by May 1 under former President Donald Trump’s February 2020 Doha agreement with the Taliban. While that outcome will have to wait longer due to administration dithering on the decision, according to news reports, Biden has made the decision to pursue a full withdrawal from Afghanistan by September.

Biden had signaled last month that he would like to wind down America’s participation in the conflict. But he stated that it would be “tough” to leave on time despite the Pentagon having over a year to prepare for our departure. Still, the president suggested any extension wouldn’t be a “lot longer.” We now know, absent policy backsliding, that the administration aims to have all troops out of the country by September. Indeed, it could happen even earlier.

Americans should demand that President Biden follow through with his decision to withdraw—and hold him accountable if he doesn’t. It is in our national interest that Biden keep his promise to end our longest war.

War of unreality: Why Russia is threatening to escalate the Ukraine conflict

https://ecfr.eu/article/war-of-unreality-why-russia-is-threatening-to-escalate-the-ukraine-conflict/

Gustav Gressel, 14 April 2021

War of unreality: Why Russia is threatening to escalate the Ukraine conflict

European governments have yet to learn a key lesson from the war in Ukraine. The alternative reality the Kremlin lives in is becoming increasingly dangerous.

Over the past two weeks, Russian military movements and deployments near Ukraine’s border have increasingly caught the attention of the West. In late March, such movements were occurring to Ukraine’s east, north, and south – including through the deployment of some Belarussian troops – but, last week, the centre of gravity of Russia’s military build-up shifted towards the occupied Crimean peninsula and the Krasnodar region, which borders Donbas.

As the situation is still developing, there are varying estimates of the size of Russia’s deployments. But it deployed many of the Southern Military District’s manoeuvre brigades and regiments to the field, each of them deploying at least one battalion tactical group (for a total of over 30). And 16 more have been deployed from other regions across Russia. This roughly correlates with the troop strength the Ukrainian General Staff has indicated. (By comparison, NATO’s rapid response force is intended to be 30 battalions strong.) Because aerial deployments are much harder for civilians to track, there is little publicly available information on the Russian air force’s movements. However, there have been recorded increases in Russian aerial activities in the Baltic region during the time in question, and the Russian Ministry of Defence has stated that all air force and naval aviation units of the Southern Military District will be exercising common operational tasks. There is little doubt that Russia is pulling together an assault force capable of invading Ukraine. But how far will it go

China’s Digital Silk Road and the Global Digital Order

By Richard Ghiasy and Rajeshwari Krishnamurthy

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China’s Digital Silk Road (DSR) was launched in 2015 as a component of Beijing’s vast vision for global connectivity, the Belt and Road Initiative (BRI). Like the BRI, the DSR is not monolithic and involves many actors at all levels across the Chinese public and private sectors. It is amorphous and the line between official and unofficial DSR projects is often blurry. Comprehensive data on DSR investments is difficult to come by. According to one estimate, by 2018, DSR-related investments in digital infrastructure projects outside of China had reached $79 billion.

The DSR aims to improve digital connectivity in participating countries, with China as the main driver of the process. On the macro level, the DSR is about the development and interoperability of critical digital infrastructure such as terrestrial and submarine data cables, 5G cellular networks, data storage centers, and global satellite navigation systems. In one of the most recent moves, China completed the launch of its global satellite system, BeiDou, which, in some regions, is more accurate than the United States’ global positioning system (GPS). In Asia, Pakistan, Laos, Brunei, and Thailand are among the countries that have adopted BeiDou, and there is growing use in West Asia (the Middle East) and Africa. At the micro level, the DSR promotes connectivity between local businesses and consumers and among businesses and consumers. Examples include e-commerce, taxi-hailing, fintech (financial technology), and edtech (education technology) platforms and apps, as well as hardware such as routers, smartphones, and PCs.

What Drives the DSR?

The DSR is far more than just an infrastructure project. For China, the DSR is a solution that engenders a less U.S.-centric and a more Sino-centric Asian and global digital order. China pursues this goal by enabling the opening of new markets for Chinese tech giants such as Alibaba, Tencent, and Huawei, and by strengthening the world’s digital connectivity with China.

The Digital Revolution Is Eating Its Young

MARK ESPOSITO, LANDRY SIGNÉ, NICHOLAS DAVIS

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CAMBRIDGE – As massive online platforms have given rise to numerous virtual marketplaces, a gap has opened between the real and the digital economy. And by driving more people than ever online in search of goods, services, and employment, the coronavirus pandemic is widening it. The risk now is that a new digital industrial complex will hamper market efficiency by imposing rents on real-economy players whose daily operations depend on technology.

The premise of the Fourth Industrial Revolution (4IR) is that the tangible and intangible elements of today’s economy can coexist and create new productive synergies. The tangible side of the economy provides the infrastructure upon which automation, manufacturing, and complex trade networks rest, and intangibles – logistics, communication, and other software and Big Data applications – allow for these processes to achieve optimal efficiency.

More to the point, the tangible economy is a prerequisite for the intangible economy. Through digitalization, tangibles can become intangibles and then overcome traditional limitations on scale and value creation. While heavily transactional and capital-intensive, this process hitherto has been a positive mechanism for growth, providing some equity of opportunities for small and large countries alike.

But this standard account of the 4IR omits the recent decoupling of the digital and real sectors of the economy. Digitally native companies that benefited from the suspension of traditional factors of production have been growing even faster than they did before COVID-19.

America Needs a New Transatlantic Script to Deal with China

by Shada Islam Michael D. Swaine Rachel Esplin Odell

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Battered relentlessly by former President Donald Trump over four difficult years, relations between the United States and the European Union are back on track, with China providing an important spur for the renewed warmth. Expect no automatic and complete U.S.-EU alignment of views on China, however. As it gets underway, the transatlantic conversation will spotlight both convergences and divergences in the United States and EU approaches towards Beijing. For all their enthusiasm for President Joe Biden’s interest in working with allies, EU leaders have no appetite for a China policy based on confrontational zero-sum games, starting another calamitous cold war or a discussion dominated by hard security and references to preserving U.S. primacy in the Indo-Pacific region.

Biden was the online “guest of honor” at the virtual summit of European Union leaders held on March 25. Only hours earlier, Secretary of State Antony Blinken and Josep Borrell, the EU High Representative for foreign and security policy, relaunched the U.S.-EU dialogue on China. Having started hesitatingly and reluctantly with former Secretary of State Mike Pompeo, Borrell has now promised regular consultations with the United States at the senior official and expert level to discuss the “full range of challenges and opportunities” posed by China.

Fresh from his blistering encounter with Chinese counterparts in Anchorage, Blinken’s message to the EU and later to NATO allies was predictably straightforward: Europe and the United States must join hands to fend off China’s “coercive behavior” and attempts to undercut the rules of the international system.

Europe-China Relations Have Reached a New Low

Risks in the Semiconductor Manufacturing and Advanced Packaging Supply Chain

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April 16, 2021

This commentary is a lightly edited version of a comment submitted to the U.S. Department of Commerce.

Western companies benefited for decades from inserting China into their supply chains and by selling to the Chinese market. This occurred during a long period of good relations. But that period ended with the arrival of President Xi Jinping. The United States now finds itself in competition with China because of decisions by Xi’s government.

This September 2019 CSIS report discussed broad policy for managing technology transfer to China. Semiconductors are a technology focal point for this competition. The United States has sought for years to maintain superiority in semiconductor technology over China. China, in turn, has repeatedly launched major investment programs (accompanied by the usual industry espionage) to develop an indigenous industry. 

While China has repeatedly failed to develop an indigenous semiconductor industry, it is persistent, well resourced, and continues to try. Until recently, China was following the same path as other semiconductor producers such as Japan and South Korea in building a domestic industry, starting in less advanced sectors (usually memory chips) and progressing to more advanced chips. U.S. sanctions slowed China’s progress, and it will likely take a decade for China to create an indigenous industry. For now, China is dependent on Western suppliers for “fabless” production services, most chips, and semiconductor manufacturing equipment (SME).

China will eventually succeed in building an indigenous industry, but U.S. decisions can affect the pace of this. China is very unlikely to end predatory commercial policies or adopt a less confrontational international stance. This argues for greater restriction, but restriction must be balanced against the need to protect (as far as possible without damaging national security) the robustness of the U.S. semiconductor industry and that of its allies. As an aside, China is unlikely to observe any agreements on trade or cybersecurity absent strong verification and compliance mechanisms and multilateral support, so they are not worth pursuing at this time.

Incoming! How Iran’s Qiam Missile Destroyed a U.S. Military Base

by Sebastien Roblin

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Here's What You Need to Remember: Tehran employed its ballistic missiles for exactly the mission they were intended for—holding assets at U.S. airbases in the Middle East at risk. Though the operation was clearly foremost of political and symbolic importance to the Iranian regime, it demonstrated Iran’s willingness to use those weapons, and that at least some were capable of landing on target.

For thirty intense minutes at 1:30 AM local time, the skies over Iraq were lit by streaks of fiery light as at least sixteen ballistic missiles streaked from launch sites in Iran (video here) to target two military bases in Iraq occupied by Iraqi, U.S. and other international forces. Tehran’s promised violent retaliation for the U.S.’s killing of Iranian general Qassem Soleimani was on its way.

Five missiles raced towards a base in Erbil in northern Iraq. However, four appeared to malfunction, leaving only one to land near the target.

At least eleven more came plunging down near Anais al-Asad airbase, located west of Baghdad. Radar-guided robotic Centurion C-RAM Gatling cannons—though designed to shoot down more primitive artillery rockets and mortar shells traveling at much slower speeds—hosed the night sky with thousands of 20 millimeter cannon shells (video capture here) attempting to shoot down missiles plunging towards them at several times the speed of sound.

Competition and Cooperation in the Maritime Domain

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Competition over the world’s maritime resources and territorial disputes over maritime borders are becoming increasingly prominent in international affairs. At the same time, depleted fish stocks and polluted waters make the question of how countries can collectively manage maritime resources a central one, particularly in discussions over climate change.

Against the backdrop of heightened competition in the maritime domain, China has been rapidly modernizing and expanding its naval capabilities thanks to an unprecedented shipbuilding effort. By contrast, the U.S. Navy is struggling to meet its ambitious goals toward expanding its fleet while nevertheless maintaining a demanding operational tempo.

Meanwhile, the resources that lie beneath the ocean’s surface are increasingly at risk of overexploitation. Illegal fishing is devastating already diminished global stocks and may soon present a severe crisis to countries whose populations depend on seafood for their diets. In the South China Sea, competition over fishing rights as well as offshore oil and gas reserves has been a major driver of tensions and conflict.

The maritime domain highlights the tensions between national sovereignty and transnational challenges, between the ocean’s littoral regions as exclusive economic zones and the high seas as a global commons. While often ignored in coverage of international affairs, it features prominently in bilateral, regional and multilateral diplomacy, particularly when it comes to resolving boundary disputes.

How the U.S. Navy’s Ghost Fleet of Drones Is the Future of Warfare

by Kris Osborn

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These unmanned systems will perform high-risk surveillance operations under hostile fire and find weak points for attack along enemy coastlines. Moreover, these drones will be able to descend into undersea ocean depths to attack enemy mines and submarines and even perform forward positioned ballistic missile defense missions.

The Navy’s future fleet plans envision a force with hundreds of drone boats on the surface and undersea to support manned vessels across the full range of mission possibilities, a reason why the service is well underway in various stages of testing and development. Plans include small, medium and large undersea and surface drones to in large measure support fleets of manned vessels performing command and control.

Likely to be enabled by artificial intelligence (AI), emerging Navy unmanned systems will operate with various levels of autonomy to include real-time information sharing, cross domain targeting, submarine hunting and mine neutralization. With the advent of large numbers of these drones, the Navy is working vigorously to adapt its tactics and concepts of operations to optimize their value in maritime warfare.

How to get this right is a topic of concern for the House Armed Services Committee. One of the committee’s members is Rep. Rob Whitman (R-VA), who is the ranking member on the HASC Subcommittee on Seapower and Projection Forces.