2 August 2022

Big Tech Can’t Stop Obsessing Over Apple and TikTok

EVERY THREE MONTHS, Wall Street watches with anticipation for bumper results from Big Tech companies. Over the course of a little more than a week, Snap, Alphabet, Microsoft, Meta, Spotify, Amazon, and Apple all announce to investors how well they’ve performed.

For years, it’s been a tale of untrammeled success, with earnings, profits, and user numbers generally heading in one direction: up. This time though, as they announced their second quarter results in recent days, large tech companies have been speaking of stagnant growth or declines and revising their future forecasts in the face of what they expect to be a challenging economic downturn. And in every earnings call, two names kept coming up: Apple and TikTok.

The two firms loomed large over the others’ results because of their increasingly integral role in the world of tech. TikTok’s user base rose to a billion users within five years, far outstripping any previous app, including Meta-owned Facebook and Instagram, both of which took eight years to reach the same goal. From Apple comes the threat of changes that could impact the others’ customer reach and competition in the metaverse.

[Research Reports] China's Strategic Culture Hypothesis: Pursuing the Mystery of a Unique


This is part of a speech Xi Jinping gave to a large group of foreigners on May 15, 2014. Dignitaries and intellectuals in the People's Republic of China (hereafter referred to as "China") often engage in self-righteous discourse unabashedly. When Li Jijun and Yu Qifen, who have discussed strategic culture in China, talk about Chinese strategic theory, they invariably emphasize the peaceful aspects of Chinese civilization.2 Simply explaining China's words and deeds using historical or strategic theory alone may not be enough to understand them. Therefore, this paper will borrow from "strategic culture theory" to take a closer look at the Chinese conception of security.

Originally, strategic culture theory had its origins in Jack L. Snyder's questioning of nuclear strategy theory, which was built on the assumption that the Soviet Union was a "rational actor". Behind the focus on China's strategic culture is the practical needs that China's growing influence has made the interpretation of its black box foreign perceptions and actions more important.

The Greater Bay Area: China’s ‘next big thing’

Alfonso Ballesteros

The Greater Bay Area (or GBA) is a Chinese government project to connect 11 cities in the South of China: Hong Kong, Guangzhou, Shenzhen and Macau plus another seven supporting cities on Mainland China into a single economic and business hub. With an area slightly larger than the Netherlands, a population greater than Germany and a GDP equivalent to South Korea, the block has a larger economy than either Spain or Russia. If it were a country, it would be among the world’s top 10 economies.

The GBA project is one of the most notable developments in the global economic playing field. It can be better understood as part of a push to make China a technological powerhouse. It brings together the factory of the world (Guangzhou), China’s Silicon Valley (Shenzhen), one of the world’s main financial centres (Hong Kong), the ‘Las Vegas of Asia’ (Macau) and a hinterland of various industrial cities, all within a short distance of each other, to create a megalopolis of 86 million people. China’s plan is to turn the region into a new engine for growth and innovation with a GDP that could reach the size of Germany’s in less than 20 years and set the standards in many advanced industries, such as 6G, AI, FinTech, Smart Cities, robotics, biotech and ESG, among others.

China and Russia bring NATO and the Indo-Pacific together

Helena Legarda

The Indo-Pacific is a long way from Madrid, but at the most recent NATO summit held in the city, it played a very prominent role. The leaders of NATO’s four Indo-Pacific partners—the “Asia-Pacific Four” (AP4) South Korea, Japan, Australia, and New Zealand—were invited for the first time to attend this decisive summit, where allies endorsed a new Strategic Concept. This roadmap for NATO’s next decade maintains a strong focus on Russia as the most direct threat to the alliance, but it also addresses the “systemic challenges” posed by China, which is a first.

Despite the focus on Russia amid the ongoing war in Ukraine, the Indo-Pacific has now firmly entered the NATO horizon. China’s partnership with Russia, together with Beijing’s decision not to distance itself from Moscow after the invasion, have played a key role in highlighting the linkages between the European and Indo-Pacific theaters. This may lead to an increased presence of individual NATO allies in the Indo-Pacific, in cooperation with regional partners—an outcome that China had sought to prevent.

Financial Incentives May Explain the Perceived Lack of Ransomware in Russia’s Latest Assault on Ukraine

Dr. Valentin Weber

In early May 2022, a state of emergency was declared in Costa Rica following a ransomware attack against government systems. The hacking group linked to the attacks–Conti–is thought to work from Russian territory. In a dramatic message, the gang even encouraged Costa Ricans to overthrow the government if officials do not transfer the ransom. In Italy, a ransomware attack that security officials believe is linked to Russian actors disrupted railway ticket vending machines. In Austria, Russian hacking group Black Cat demanded $5 million to unlock encrypted servers and refrain from leaking sensitive information.

What about Ukraine? Ukraine has, in recent years, not suffered large financially motivated ransomware attacks. This might have been because, Ukraine has been historically more a provider of ransomware operators (e.g. Maksim Yakubets) rather than a target. In 2020 and 2021, Ukraine suffered less than 1 percent of ransomware attacks globally. This aligns with a trend where criminal groups avoid attacking systems on territories of the former Soviet Union.

Russia's war against Ukraine and its consequences

After the annexation of Crimea in 2014 and the covert war in the Donbas, Russia openly attacked Ukraine throughout its territory on 24 February 2022. Moscow's original plan to gain control over the entire territory of Ukraine by quickly seizing Kyiv has failed. Instead, a prolonged war of attrition is emerging. The brutality of the Russian warfare and Moscow's maximum demands make a negotiation process difficult. In Russia, the war is accompanied by ever stronger domestic repression. At the same time, the effects of the sanctions, coupled with military setbacks and high casualty figures, may increase the pressure on the political leadership in the future. In Ukraine, on the other hand, the war reinforces the national identity and the country's course towards the West.

Russia's war against Ukraine calls into question basic assumptions of German and European policy towards Russia and Eastern Europe. It is proving to be a catalyst for a reorientation of the European security order and European energy policy. But the war also has repercussions beyond Europe, for example on the global balance of power with China or on food security.

Terrorism is Less of an Existential Threat than Russia and China

Tim Willasey-Wilsey CMG

The 9/11 attack was so huge that it blew Western foreign policy off course for two decades. 9/11’s impact derived not only from the large number of deaths (almost 10 times the next largest terrorist incident), but also from the fact that it was viewed as a new form of particularly dangerous Islamist terrorism. The extraordinary television footage, both enthralling and horrifying, together with the iconic targets, produced a vision of terror in a league of its own.

Until 9/11, the world had always regarded terrorism in a similar manner to crime or poverty: as something we would wish to eradicate, but might have to endure and manage forever. In fact, the main factors which distinguish terrorism from crime are the political motive, the intention to kill and maim, and – often – the covert hand of foreign countries behind the terrorists. That is why security services around the world take the lead on counterterrorism (CT), with police forces in support.

Timing is the key to the Gulf replacing Russian oil

Nikolay Kozhanov

US president Joe Biden’s recent trip to Saudi Arabia as a part of his Middle Eastern tour was not a failure as the Russian propaganda tried to present it.

On the contrary, the US and Saudi Arabia seem to come to certain terms regarding their vision of the global oil market prospects and, most probably, steps which can be taken by Riyadh to mitigate the negative impact of high oil prices on Western economies.

While the details of US-Saudi negotiations are kept secret, the oil market expects that on 3 August – when OPEC+ members meet to discuss production quotas – Saudi Arabia may try to persuade the cartel to increase supplies.

Everything is up in the air domain

Military air and space power is at a crossroads, and there are now multiple paths that air forces can follow. The issues now demanding prioritisation and direction include crewed or uncrewed combat aircraft (most likely both but in what mix); automated, highly automated or autonomous air systems; the pace of introducing artificial intelligence (and in which roles); and managing the military space environment. All these issues are being debated as the use of real-world air power, and the importance of control of the air, is being played out as part of Russia’s invasion of Ukraine.
Integrated thinkingUnderpinning the exploitation of the above are the notions of integration and interoperability. All the aforementioned issues featured in discussions at the Royal Air Force’s (RAF) Global Air and Space Chief’s Conference 2022, held in London from 13–14 July. United States Air Force (USAF) Chief of Staff General Charles Q. Brown told the attendees he was looking for ‘day zero interoperability’. Improving interoperability with allies has been a leitmotif of Brown’s tenure as USAF chief.

The UK chief of the air staff, Air Chief Marshal Sir Mike Wigston, also stressed the importance of interoperability, noting it ‘doesn’t happen by accident, and it cannot rely on systems integration alone: it is the result of the hours of training we do together, the investment decisions we make as a collective’. Brown also reiterated his aim of greater technology sharing and development with alliance partners under the banner of being ‘integrated by design’.

Mended Ties Between Japan and South Korea Would Boost Regional Security

Frank Aum

Japan and South Korea normalized relations in 1965. But since then, bilateral ties have been checkered due to unresolved historical issues stemming from the colonization and World War II periods. The two countries made strides during the 1990s, when the Japanese government made groundbreaking statements apologizing for Imperial Japan’s colonial rule and aggression and its involvement in running “comfort women” stations — a system that forced Korean women into sexual slavery for the Japanese military.

For many observers, the 1998 joint declaration by South Korean President Kim Dae-jung and Japanese Prime Minister Obuchi Keizo to forge a new “future-oriented” relationship represented the high point of bilateral relations.

However, efforts by Japan’s Liberal Democratic Party (LDP) to reverse the negative views of Imperial Japan have complicated aspirations for a new Seoul-Tokyo relationship. Critics argue that the nationalist faction of the LDP — which had been led by former Prime Minister Shinzo Abe until his recent assassination — is pursuing revisionism of Japan’s wartime past to soften what it views as a “masochistic” history. This has meant defending Japan’s colonization of Korea as legal at the time; honoring the war dead, including Class A war criminals, at Yasukuni Shrine in Tokyo; and supporting school textbook revisions that gloss over wartime atrocities.

What You Need to Know About the I2U2

Daniel Markey, Ph.D.; Ambassador Hesham Youssef

As part of his visit earlier this month to the Middle East, President Biden participated in the first leaders summit of a new grouping made up of Israel, India, the United Arab Emirates and the United States. Known as the I2U2, the countries’ foreign ministers formed the bloc in the fall of 2021 to deepen technological and private sector collaboration in the region and tackle transnational challenges in six focus areas: water, energy, transportation, space, health and food security. Beyond the announcement of a food security initiative and a hybrid renewable generation facility for India, little was revealed about what’s next for I2U2.

USIP’s Ambassador Hesham Youssef and Daniel Markey look at the vision animating I2U2, what each country aims to achieve and the potential areas of cooperation.

The Defense Impact of the Ukraine War on the Visegrád Four

Matej Kandrík

When it comes to their defense sectors, the Visegrád Four are now confronted with the consequences of long-term problems such as the downsizing of their armed forces, general neglect, underinvestment, corruption-ridden acquisitions, and the ever-changing priorities of modernization programs.

Under the pressure of the war, the Visegrád Four will over the coming months tackle their defense shortcomings with the utmost seriousness. This will likely mean speeding up ongoing modernization, getting rid of all hardware of Soviet or Russian origin, and looking for new capabilities based on lessons learned from Ukraine. But in doing so they will face severe external and internal challenges.

Poland is the natural center of gravity of Visegrád Four and NATO’s eastern flank, and one of the staunchest supporters of Ukraine. In 2016, it decided to create territorial forces as a new branch of its armed forces. This decision was heavily influenced by Russia’s annexation of Crimea and the subsequent armed conflict in Donbas.

The CHIPS Act: Far From Perfect, But Still Very Good

Klon Kitchen

The U.S. Senate has passed a $250 billion plan to boost American semiconductor manufacturing and the House of Representatives is scheduled to vote on this bill later today. Thoughtful people are divided over the bill, including conservatives who share concerns about China’s rise and our own nation’s ability to produce technologies that are essential for economic strength and national security. The House’s Republican Study Committee (RSC) has issued a memo laying out its objections to the bill and Heritage Action for America (HAFA)—the political action arm of the Heritage Foundation—is demanding that conservatives who want to remain in its good graces must vote “no” on the legislation.

I disagree and would like to briefly explain how, despite some of my own concerns, I’ve come to believe the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act meaningfully advances U.S. interests.

There’s a lot in CHIPS but the three most important provisions are as follows: $52.7 billion in grants to support domestic semiconductor research, manufacturing, and production—including $2 billion for chipsets that are essential to the U.S. auto and defense industries;

Slow growth exacerbates China’s financial stability risks

Hung Tran

China’s growth has nearly halted as its GDP edged out a 0.4% year-over-year increase in the second quarter of 2022. The slowdown will threaten the country’s 2022 growth target of around 5.5%, especially since Omicron infections have flared up again in several cities, necessitating local lockdowns. Many international financial institutions have downgraded China’s growth estimates for 2022 to a range of 3.5%-4.3%, and projections are not optimistic for a rebound in 2023.

More importantly, visible growth slowdown has spread losses in the real estate property sector to the banking sector, mostly among small and medium-sized provincial banks. For now, the magnitude of damages is manageable, but a sustained period of slow growth would generate greater losses in more economic sectors, banks, and companies. This pattern raises the risk of a financial crisis and economic recession, unless authorities act now to resolve, recapitalize, and consolidate weak, small banks and highly indebted developers. China’s government should also establish a robust resolution and recapitalization framework for banks and companies to replace the current ad hoc approach.

Cooperation with China: Challenges and opportunities

Michael Schuman and David O. Shullman


In recent months, China’s relations with the United States and its European and Asian allies have deteriorated significantly. While engagement with Beijing continues across many different areas, these efforts have produced little in terms of concrete results. It is all too easy to reach the unfortunate conclusion that talking to Beijing is a waste of time and effort. Over the past four decades, the United States and its European and Asian allies pursued a strategy with China based on the assumption that cooperation and engagement would encourage China to become a responsible stakeholder in a rules-based international system. On the contrary, Beijing has grown more assertive in its efforts to subvert those rules and norms that it feels constrict and constrain China’s global ambitions. Therefore, like-minded allies and partners will need to defend against China’s violations of international norms, impose costs on irresponsible behavior, and strengthen themselves, their alliances, and the institutions of the current world order to be able to compete effectively and uphold liberal values against China’s continued pressure.

What to Know About Sanctions on North Korea


World powers have pursued economic and financial sanctions on North Korea for more than a dozen years to pressure it to denuclearize. They have also deployed sanctions to punish the regime for cyberattacks, money laundering, and human rights violations.

While these measures have exacted a heavy toll on the North Korean economy, experts say their effectiveness has been undermined by the failure of some countries to enforce them and the willingness of some companies to flout them. Even if the sanctions were tightened, however, many question whether they would achieve the desired outcome.

China’s Sanctions Strategy and Its Implications

In June 2021 the Chinese government passed the Anti-Foreign Sanctions Law, allowing Chinese authorities to enact countermeasures on entities they believe have harmed China. This law marks an increasingly visible trend where China uses sanctions to communicate its unhappiness with other countries, particularly the United States and its allies. Laurel Holley spoke with Yukon Huang, a senior fellow with the Carnegie Endowment for International Peace’s Asia Program, to discuss the factors that influence China’s decisions to implement economic sanctions.

What guidelines, including written regulations and unwritten norms, does the Chinese government abide by when deciding whether to use sanctions?

Several regulations and rules have been passed in recent years. The most threatening is the Anti-Foreign Sanctions Law, which came into play around a year ago. It states that if foreign or Chinese entities implement sanctions that hurt China, then they can be subjected to penalties. A couple years ago, Beijing approved Chinese versions of several U.S. regulations—an export or trade law, an entity list—allowing China to penalize foreign companies for actions interpreted by Beijing as contrary to its interests.

The Awakening of Geopolitical Europe?


There is almost unanimous agreement that Russia’s invasion of Ukraine has catapulted the European Union toward greater geopolitical assertiveness and unity. The war seems to have unlocked more progress on EU foreign and security policy in a few months than was achieved in previous decades. High Representative Josep Borrell has boldly declared “the awakening of geopolitical Europe.”

However, the EU’s steps are only geopolitical if an extremely loose notion of that concept is used, and while unity has tightened between member states on some issues it has splintered on others. Despite the step-change in the EU’s external action, there is limited evidence so far it will project a stronger or different form of power internationally—that is, as an emergent geopolitical actor—than it did before the war. For now, there is no dramatic birth of any radically new European geostrategy.

Sanctions, Cyber, and Crypto: How Pyongyang Can Exploit the War in Ukraine

Jason Bartlett

According to North Korean state media, Foreign Minister Choe Son-hui recently acknowledged the People’s Republic of Donetsk (PRD) and the People’s Republic of Luhansk (PRL) in eastern Ukraine as independent states. As a result, Kyiv severed diplomatic ties with Pyongyang, citing North Korea’s efforts to undermine the sovereignty of Ukraine on behalf of Moscow.

Located in the Donbas region of eastern Ukraine, the two rebel-controlled territories have significantly contributed to Russian efforts to assert its ideological, political, and military influence over Ukraine for years, with a particularly important role in the ongoing Russian invasion starting in February 2022. Choe expressed Pyongyang’s intent to develop “state-to-state relations with those countries,” following a series of official government statements and convenings seemingly codifying diplomatic relations between the two breakaway states and North Korea.

Cyber Deterrence with Imperfect Attribution and Unverifiable Signaling

Jonathan W. Welburn, Justin Grana, Karen Schwindt

Motivated by the asymmetric information inherent to cyberwarfare, we examine a game of deterrence between an attacker and a defender in which the defender can signal its retaliatory capability but can only imperfectly attribute an attack. We show that there are equilibria in which the defender sends noisy signals to increase its expected payoff. In some equilibria, the defender can use signaling to deter an attacker and increase its payoff. In a different and somewhat counter-intuitive equilibrium, the defender can increase its expected payoff through signaling by luring the attacker to attack more.

China's Pacific Push Is Backfiring

Derek Grossman

The Pacific Islands region hasn't had so much international attention since World War II. Thank China for that.

A document leaked in March revealed Beijing's plan to ink a secret security agreement with the Solomon Islands. The deal authorizes China to regularly make warship visits and provide training and assistance for Solomon Islands policing. Worried that Beijing might leverage the deal to acquire its first military base in Oceania, the United States and Australia quickly dispatched envoys to dissuade Solomon Islander Prime Minister Manasseh Sogavare from signing the agreement. He inked it anyway.

Then, in late May, Chinese Foreign Minister Wang Yi embarked (PDF) on a whirlwind 10-day, eight-country tour of the South Pacific to win concurrence on “China-Pacific Island Countries Common Development Vision,” a sweeping multilateral development and security agreement that would permanently enmesh Beijing in the region. In the end, Pacific Island foreign ministers rebuffed Chinese overtures, and Wang returned to Beijing empty-handed.

The Great Rewiring: How Global Supply Chains Are Reacting to Today’s Geopolitics

Sujai Shivakumar, Gregory Arcuri and Charles Wessner

Global supply chains, particularly in technologies of strategic value, are undergoing a remarkable reevaluation as geopolitical events and trends weigh on the minds of decisionmakers across government and industry. The rise of an aggressive and revisionist China, a devastating global pandemic, the disruptive churn of technological advancement, and—most recently—Russia’s invasion of Ukraine, are prompting a dramatic rethinking of the value of lean, globally distributed supply chains. Efficiency is now being recast in terms of reliable and resilient supply chains that are better adapted to emerging geopolitical uncertainties rather than purely on the basis of lowest cost. Given its globalized operations, the semiconductor industry is at the forefront of these challenges. How it responds may well set the tone and pace for economic cooperation and globalization in the twenty-first century.
End of the “Washington Consensus”

To many, the end of the Cold War heralded the triumph of open societies and democratic institutions, allowing for efficiencies that could be realized from the globalization of production. The potential for this globalization was secured through a commitment to common international governance structures and a shared recognition among policymakers in the United States, Europe, East Asia, Latin America and elsewhere on the value of a general liberalization of global trade and the relaxation of state control over national economies. The so-called Washington Consensus emerged as the byword for a new age where economic efficiency and specialization were paramount and supply chains that spanned previously intractable geopolitical fault lines were now searching for lower costs in wage and other inputs across the globe.

Aiming for a Quasi-alliance Building a More Robust Japan-Philippines Security Partnership

Japan and the United States have introduced strategies to maintain regional stability and prosperity by realizing a Free and Open Indo-Pacific region, and enhancing cooperation with Southeast Asian partners such as the Philippines is critically important to those efforts. Japan has a long history of engagement with the Philippines rooted in economic cooperation, but gradually expanding the agenda to include defense cooperation and capacity building is critical to managing an increasingly complex regional security environment. Japan should further develop its security partnership with the Philippines to reflect its geopolitical importance and address its security vulnerabilities in coordination with the United States and other regional partners. This report details ways to sustain momentum for bilateral security cooperation between Japan and the Philippines as a step toward multilateral security cooperation with the United States and other partners in the future, all aimed at contributing to the stability and prosperity of the Indo-Pacific region.

The Semi-Conductor Bill And The Moderna Billionaires

Dean Baker

It’s pretty funny that we continually debate the causes of inequality when we routinely pass bills that redistribute income upward. The semiconductor bill about to be approved by Congress is the latest episode in this absurd charade.

To be clear, the bill does some good things. It has funding both to subsidize manufacturing capacity for semiconductors in the United States and also for further research in developing better chips in the future. Both of these are positive developments even if the benefits of the former are overstated.

It was common in the pandemic days to tout the supply chain problems as evidence that we needed more manufacturing in the United States in a variety of areas. However, that story ignored several factors.

Poland: Europe’s Newest Military Superpower?

Julian McBride

The Russian Invasion of Ukraine has caused a wind of change in Europe. A continent in which many states gradually lowered their military spending after the Cold War, governments are now looking to remilitarize, realizing that the Russian threat of expansion will remain for the foreseeable future. One of those European nations is Poland, which is now on-pace to become Europe’s largest and most sophisticated non-nuclear military power.

The sense of urgency from Poland comes from broken treaties and the renewed Russian ultranationalism coming out from Vladimir Putin’s United Russia party. Poland’s remilitarization is not solely based on preparing for whatever threats come from the Kremlin, but also reflects a desire to no longer rely on word powers which, in the past, promised to protect Warsaw but never did.

In the wake of the Russian invasion of Ukraine, Poland has embarked on the largest procurement of conventional American weapon shipments in history. In March, Warsaw signed off on $4.75 billion worth of Patriot missiles, bolstering the nation’s anti-missile defense system.

US Providing Hefty $8.2 Billion To Ukraine To Battle Russia

Thalif Deen

The five largest recipients of US weapons have traditionally included Saudi Arabia, Australia, South Korea, Japan and Qatar.

Ukraine, which was ranked as the 50th largest importer of US arms, according to the Stockholm International Peace Research Institute (SIPRI), is now set to make a giant leap upwards.

During 2017-2021, Saudi Arabia accounted for 23% of US arms exports, Australia 9.4%, South Korea 6.8%, Japan 6.7% and Qatar 5.4%.

But these were all paying customers compared to Ukraine which has received billions of dollars in US weapons gratis—in its five-month-old battle against one of the world’s major nuclear powers.

The distribution of weapons, including large donations from Western Europe, are being coordinated by the International Donor Coordination Center, which has moved over 78,000 tons of arms and ammunitions worth more than $10 billion, both from US and Western allies, according to the New York Times.

Security Dialogues with Chinese Characteristics

John S. Van Oudenaren

This summer, the People’s Republic of China (PRC) organized two multilateral security dialogues with African nations, which highlight Beijing’s efforts to promote an alternative model of international security. In June, representatives of the PRC and six East African states convened in Addis Ababa, Ethiopia for the first China-Horn of Africa Peace, Governance and Development Conference, which is an initiative that was originally proposed by Foreign Minister Wang Yi during his January visit to Kenya (Guangming Daily, June 27; PRC Foreign Ministry, January 7). At the meeting, PRC Special Envoy to the Horn of Africa Xue Bing said that Beijing sought a greater role in the region, “not only in trade and investments but also in the area of peace and development” (South China Morning Post, June 23). The conference resulted in a joint statement committing to utilize confidence building, dispute resolution, dialogue and negotiation to achieve a “lasting peace” in the region (China News Service, June 23). In doing so, the parties pledged to uphold the “common, comprehensive, cooperative and sustainable security concept,” which was first laid out by President Xi Jinping in 2014 as a core element of his vision for a new international security architecture (Xinhua, May 24). Xi cited the need to remain committed to this concept as motivation for the PRC’s new Global Security Initiative, which he introduced in April (China Brief, May 13). Earlier this week, the Ministry of National Defense (MND) hosted the second “China-Africa Peace and Security Forum,” which was virtually attended by senior defense leaders from nearly fifty African countries (Gov.cn, July 26). In his keynote remarks, State Councilor and Defense Minister Wei Fenghe read a congratulatory letter from Xi, which hailed the resilience of Sino-African friendship in a challenging international landscape and called for the implementation of the Global Security Initiative (People’s Daily, July 26). Although somewhat short on specifics, Beijing has promoted the Global Security Initiative as a positive-sum, “common security” model in contrast to the militaristic, zero-sum approach it ascribes to the United States (China Brief, July 15).

ISIS is a Problem of Yesterday, Today and Tomorrow

Sarhang Hamasaeed
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More than three years after its military defeat in Iraq and Syria, ISIS is a downgraded threat thanks to the collective efforts of the U.S.-led global coalition that coalesced to defeat it along with Iraqi and Syrian partners. While the extremist group’s capacity has been drastically reduced and millions of people have returned home, ISIS has managed to continue attacks year after year despite no longer holding territory. Meanwhile, some of the most difficult human legacies — the challenges facing the people the ISIS conflict left behind — are still with us, with no end in sight.

While the number of people still affected by the conflict undoubtedly reaches into the millions, the nuances of each group are important when it comes to understanding their status and formulating a response to address their problems and the lessons learned to inform future action.

Regulations or Restrictions: China’s Foreign Exchange Control

Harry He


On June 10, the China Securities Regulatory Commission (CSRC) released a ministerial order to amend the Several Provisions on the Interconnection Mechanism for Transactions in the Mainland and Hong Kong Stock Markets (hereinafter referred to as “Provisions”), six months after its announcement requesting public comments on the intended changes (CSRC, June 10; CSRC, December 17, 2021). The amendment outlines eligibility to participate in the Shanghai-Hong Kong Stock Connect (沪港通, Hu Gang Tong) and Shenzhen-Hong Kong Stock Connect (深港通, Shen Gang Tong), restricting Chinese nationals from purchasing and selling domestic shares (also known as A-shares, or A股, “A” gu) with Hong Kong accounts. The amended Provisions, which went into effect on July 25, give investors currently in violation of the new stipulations a one-year grace period to sell off their shares.

Launched by the CSRC in November 2014 and 2016, the two Stock Connects created four channels between stock exchanges in mainland China and Hong Kong. Two northbound connect links allow foreign investors to open brokerage accounts in Hong Kong and trade stocks listed in Shanghai and Shenzhen. The two southbound connect links, on the other hand, enable domestic investors in China to access Hong Kong’s stock market. To maintain government control over cross-border capital flows, both northbound capital (北上资金, beishang zijin) and southbound capital (南下资金, nanxia zijin) are kept within closed loops (Caixin, November 17, 2016). This means that after the transactions are settled, money is automatically debited from or credited to investors’ accounts denominated in local currencies—the renminbi in mainland China and the Hong Kong dollar in Hong Kong—thereby preventing investors from exploiting the Stock Connect to transfer capital into and out of China.

The Real U.S.-China 5G Contest is Just Getting Started

Philip Hsu


On June 6, China declared the three-year anniversary of its business deployment of 5G, with the country having invested nearly 185 billion yuan in related infrastructure in 2021 alone (Xinhua Baoye, June 5). However, China’s 5G ambitions, which continue to form a substantial component of its national and international development policies, began years ago with Huawei. After Apple revolutionized the smartphone, demand for sophisticated computer “chips” and other components skyrocketed. Companies like Taiwan Semiconductor Manufacturing Corporation (TSMC) and Foxconn capitalized on this shift to become the main pillars of Taiwan’s economy. In addition to supplying Samsung, Apple and HTC, a lesser-known, nominally private Chinese company, Huawei was also starting to make smartphones around this time using Taiwanese hardware (Nikkei Asia, 2016).

Although in recent years up to 60 percent of 5G-capable Huawei phone components have been manufactured in China, which is due in large part to U.S. sanctions against it and other Chinese technology companies, a new technological Cold War is unlikely to materialize over 5G. The economic stakes over advanced computing and a new generation of telecommunications infrastructure are too high for the international community to afford any one nation or corporation primacy across the deep and diverse set of software, hardware and human capital requirements this technology will demand.