BRICS and de-dollarization, how far can it go?

MICHAEL CORBIN

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As the current chair of BRICS, Russia is pursuing a rather extensive agenda related to finance that includes enhancing the role of member countries in the international monetary and financial system and developing interbank cooperation and settlements in national currencies.

BRICS is an intergovernmental organization founded by Brazil, Russia, India, China, South Africa that recently expanded and now includes Iran, Egypt, Ethiopia, and the United Arab Emirates.

There has also been discussion of a potential BRICS currency as part of a strategy of de-dollarization — the substitution of the dollar as the primary currency for international financial transactions. The U.S. trade war with China, as well as U.S. sanctions on China and Russia, are central to this ongoing discussion.

Although much U.S. media attention was paid to the enhancement of military and political cooperation during the summit between Russian President Vladimir Putin and Chinese President Xi Jinping in Beijing earlier this month, financial issues also figured high on the agenda.

Facing up to China’s Hybrid Warfare in the Pacific

Anne-Marie Brady

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This year, for the first time ever, the People’s Republic of China registered 26 China Coast Guard (CCG) vessels to operate in the Western and Central Pacific Fisheries Commission Convention Area. The Convention manages 20 percent of the globe, from the Aleutians in the North Pacific, all the way down to the Southern Ocean.

It is also the area of the First, Second, and Third Island Chains.

The CCG, widely used for gray-zone operations in disputed waters, will soon legally be allowed to board any foreign fishing vessels on the high seas in the First, Second, and Third Island Chains.

Since 2020, China has also had four Coast Guard vessels registered to monitor foreign fishing vessels in the North Pacific Fishing Commission Area. Starting from June this year, China will have the third largest maritime security presence patrolling throughout the whole of the Pacific, after the United States and Australia.

Competing US-China Defense Tactics Dominate Singapore Forum

Philip Heijmans, Peter Martin, and Josh Xiao

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Global defense leaders descending on Singapore this weekend confronted conflicting visions of the region: the US touted expanding military exercises and partnerships across the Indo-Pacific, while China criticized “outside forces” for interfering with peace and stability.

Secretary of Defense Lloyd Austin addressed the Shangri-La Dialogue on Saturday and name-checked nearly every country as US partners or allies. He praised recent joint drills with Indonesia and the Philippines, improved coordination with Japan, India, South Korea and Australia, and strengthened ties with Papua New Guinea, Thailand and Vietnam.

“We are witnessing a new convergence around nearly all aspects of security in the Indo-Pacific,” Austin said. “It isn’t about bullying or coercion — it’s about the free choices of sovereign states.”

Pentagon Chief Says War With China Neither Imminent nor Unavoidable

Feliz Solomon and Chun Han Wong

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Defense Secretary Lloyd Austin said that a war with China is neither imminent nor unavoidable, striking a nonconfrontational tone a day after his first face-to-face meeting with his Chinese counterpart.

Speaking at a security summit in Singapore on Saturday, Austin signaled that the Biden administration is seeking to cool tensions with China, despite an increase in friction following military activities by both countries around Taiwan and in the disputed South China Sea.

“Our goal is to make sure that we don’t allow things to spiral out of control unnecessarily,” Austin said at the Shangri-La Dialogue, an annual gathering of defense officials organized by the London-based think tank the International Institute for Strategic Studies.

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Shanghai firm behind G60 megaconstellation raises $943 million

Andrew Jones

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Shanghai Spacecom Satellite Technology has raised 6.7 billion yuan ($943 million) for the construction of its G60 low Earth orbit megaconstellation.

SSST recently secured the series A funding according to Feb. 1 news reports, citing a major investor. The round was led by a fund set up by the National Manufacturing Transformation and Upgrading Fund (NMTUF), Reuters reported.

Other investors included Shanghai Alliance Investment, a venture capital arm of the Shanghai Municipal Government, CASSTAR, a venture investment and incubator firm ultimately under the Chinese Academy of Sciences (CAS), Guosheng Capital, Hengxu Capital and CAS Capital, also under CAS.

The development comes as SSST prepares to begin construction of its 12,000-satellite strong “G60” constellation. An initial 108 satellites of a total of around 12,000 “G60 Starlink” satellites are to be launched across 2024.

SSST and CAS’s Innovation Academy for Microsatellites (IAMCAS) established Shanghai Gesi Aerospace Technology (Genesat) in 2022 to set up satellite manufacturing facilities.

China’s Next-Gen Fighter Jet Engine Could Surpass US As Scientists Claim Another “Groundbreaking Innovation”

Ashish Dangwal

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According to Chinese claims, this development promises to significantly reduce drag and enhance engine efficiency, potentially propelling China to the forefront of next-generation engine development.

The newly-introduced “shark skin” structure, meticulously crafted from a high-strength, large titanium alloy through precision 3D printing, has been hailed by Chinese researchers as a game-changer in aerodynamics.

According to the South China Morning Post (SCMP), this cutting-edge technology has the potential to slash drag by up to 10%, marking a substantial leap forward in engine performance.

The focal point of this groundbreaking endeavor lies in an engine component known as the intermediate casing. This crucial element, exceeding a meter in diameter, features meticulously designed bionic grooves, each measuring a mere 15 to 35 micrometers in depth — finer than a human hair.

Beijing advances technological self-reliance by all means

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Xi’s geopolitically focused political economy is on full display in the way innovation is being pursued in China, as well as how the country’s innovation dividend is materializing. Considering the remarkable progress that China has made in advancing itself as a technological great power, there would normally be an expectation that total factor productivity would have climbed as the returns on innovation gains kick in. Instead, total factor productivity has trended downward, begging the question of where the dividend has gone.23 Rather than going towards productivity, much of it has gone towards Xi’s tech self-reliance goals. This is because in most technologies, China is playing catch up in terms of tech effectiveness, but it has enjoyed extensive access to foreign technology – in previous years, Chinese firms could simply acquire the foreign technology to maximize their return, which could bring productivity growth. Instead, Xi has set the country on a path where, in many key areas, it is more important that companies expensively develop that tech themselves. Had China instead focused on its own comparative advantages and accepted interdependencies on others in areas where it lagged, the innovation dividend would likely have moved the needle up on productivity, but instead, it has only gone to closing tech gaps.

The tech self-reliance priority has now been cemented in place. Now facing a showdown with the US and its allies, Xi has called for a “New type of whole-of-nation approach” (新型举国体制) in the 2020 Central Economic Work Conference to close technology gaps and rid China of its dependency on the foreign actors he believes intend to contain his country.

The Clash of Constellations

RACHEL CHEUNG

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On one of the last days of 2023, Shanghai officials proudly unveiled what they believe to be a game changer in the ongoing space race with the United States: the new smart factory for Shanghai Gesi Aerospace Technology, also known as Genesat. Genesat's G60 flat-panel satellite, presented at the ceremony for the opening of Genesat's new factory in Shanghai, December 27, 2023. Credit: Genesat With the lights dimmed, a flat-panel satellite the size of a motorcycle appeared on the stage. Altho

CLM Insights Interview with Ya-Wen Lei

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Let me clarify that the focus of my book is economic development rather than narrowly defined technology policy. I use the metaphor of a “gilded cage” to capture two key aspects of China’s socioeconomic transformation since the mid-2000s: first, the success of China in creating the second-largest digital economy and some of the world's largest tech firms; second, the expanding legal and technical instruments established by both the Chinese government and China's big-tech firms during China's shift from a labor-intensive, export-oriented economy to a more high-tech-oriented developmental model. These instruments can be thought of as the rules of the game. Thus, the metaphor of a “cage” reflects how these rules constrain and shape people’s behavior and interactions.

I also want to emphasize that the book examines both a developmental state and digital capitalism, without fitting squarely into either scholarly tradition. The literature on the developmental state focuses on the role of the state in economic development, while the literature on digital capitalism often focuses on the role of big-tech companies, especially in the U.S. context, in imposing instrumental control over a wide range of actors from users to workers, based on their technological capacity and data. In the case of China, one of the most important aspects of the economic transformation since the mid-2000s has been the emergence of a digital capitalist system characterized by the rise of tech capital and an asymmetrically symbiotic relationship between tech capital and the state.

Collaboration for a Price: Russian Military-Technical Cooperation with China, Iran, and North Korea

Max Bergmann, Maria Snegovaya, Tina Dolbaia, and Nick Fenton

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President Putin’s decision to launch a full-scale invasion of Ukraine has embroiled Russia in a long war of attrition, requiring its defense industry to manufacture and send an uninterrupted flow of materiél to the battlefield. Sanctioned by the West and unable to achieve self-sufficiency, Russia has turned to U.S. adversaries—primarily China, Iran, and North Korea—as alternative military suppliers. All three countries have aided the Kremlin’s war effort, albeit to varying degrees and with different geopolitical objectives. This piece, building on the analysis contained in the recent CSIS report, “Back in Stock? The State of Russia’s Defense Industry after Two Years of the War,” assesses the significance of Russia’s military-technical collaboration with these countries and speculates on the impacts these partnerships may have on regional security in the Global South, where U.S. standing has been more equivocal.

Military-Technical Benefits for Russia

Since the start of the full-scale invasion, the Kremlin has directly benefited from increased military-technical partnerships with China, Iran, and North Korea, with these countries mitigating sanctions- and war-induced pressures on Russia’s defense industry. Combined, the three have supplied Russia with much needed dual-use items, arms, and weapon parts. While these goods have generally been of lower quality than their Western alternatives, they have nonetheless kept the Russian Armed Forces relatively well supplied. This has allowed Russia to maintain consistent intensity of attacks on Ukraine and has contributed to Russia’s battlefield successes.

The Quest for Qubits: Assessing U.S.-China Competition in Quantum Computing

Sam Howell

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Introduction

The United States and the People’s Republic of China are locked in a long-term, strategic contest for geopolitical power. One critical and emerging technology area—quantum information science (QIS)—is set to play an outsized role in determining which country prevails.

China increasingly aims to reshape the long-standing U.S.-led international order in its own image and is developing the economic, diplomatic, and military capabilities to do so. The gap in national strength between the United States and China is narrowing rapidly. For the first time since the Cold War, the United States risks losing its position as the global superpower.

Technology is a key battleground of U.S.-China competition. Critical and emerging technologies—including QIS, artificial intelligence, biotechnology, and semiconductors—are tools that help countries promote their interests and maximize their global competitiveness. As National Security Advisor Jake Sullivan acknowledged in a 2022 speech, “Advancements in science and technology are poised to define the geopolitical landscape of the 21st century.”4 The United States cannot prevail in strategic competition without first establishing leadership in emerging technologies.

What has China learned from Russia and Iran’s use of proxies?

MOLLIE SALTSKOG and COLIN P. CLARKE

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China has surely been watching as Russia and Iran have used non-state actors to pursue their strategic objectives in Ukraine, Gaza, and elsewhere. What lessons might Beijing have drawn, and how might we see them applied?

The Kremlin has cultivated a range of non-state actors to do its bidding. In Ukraine, Russia unleashed the Wagner Group, a private military company that was involved in some of the war’s bloodiest battles; the group, since rebranded as Africa Corps, has also been deployed to help “coup-proof” military juntas throughout sub-Saharan Africa. In the online world, the Kremlin has used troll farms such as the Internet Research Agency to sway elections and undermine foreign support for Kyiv.

Tehran, meanwhile, has used its Islamic Revolutionary Guard Corps-Quds Force to develop, support, and fund a broad network of militias and political factions across the Middle East—a so-called “Axis of Resistance” that includes Lebanese Hezbollah, the Houthi movement in Yemen, and various Shia militias in Iraq and Syria. Iran supplies these proxy outfits with sophisticated weaponry and provides hands-on training in how to employ drones, missiles, and other cutting-edge technologies. In return, Hezbollah’s rocket attacks have kept the Israel Defense Forces from being able to concentrate solely on fighting in Gaza, while the Houthis’ relentless attacks on commercial shipping have slowed regional economies and threaten to cause global effects.

Putin’s Hidden Game in the South Caucasus

Thomas de Waal

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On April 17, a column of Russian tanks and trucks passed through a series of dusty Azerbaijani towns as they drove away from Nagorno-Karabakh, the highland territory at the heart of the South Caucasus that Azerbaijan and Armenia had fought over for more than three decades. Since 2020, Russian peacekeepers had maintained a presence there. Now, the Russian flag that flew over the region’s military base was being hauled down.

Although it caught many by surprise, the Russian departure further consolidated a power shift that began in late September 2023, when Azerbaijan seized the territory and, almost overnight, forced the mass exodus of some 100,000 Karabakh Armenians—while Russian forces stood by. Azerbaijan, an authoritarian country that shares a border with Russia on the Caspian Sea, has emerged as a power player, with significant oil and gas resources, a strong military, and lucrative ties to both Russia and the West.

How Israel Avoided Biden’s Red Line

Michael R. Gordon and Dov Lieber

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Israel overhauled its military operations in Rafah following intensive discussion with American officials to avoid crossing the Biden administration’s red line and provoking a crisis in relations with its closest ally, U.S. and Israeli officials said.

Israel shelved its original plan for a two-division sweep through Rafah, an operation that the White House worried would lead to an escalation of casualties in a conflict that has already led to a soaring civilian toll.

Instead, Israel has opted for a military campaign that focuses on sealing the border between Gaza and Egypt as well as raids into Rafah.

Biden’s cease-fire plan tightens political squeeze for Netanyahu in Israel

Shira Rubin, Lior Soroka, Sarah Dadouch and Adela Suliman

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Political pressure is mounting on Israeli Prime Minister Benjamin Netanyahu, as more than 100,000 Israelis flooded the streets of this city on Saturday night demanding he accept a U.S.-brokered deal for a cease-fire in Gaza while members of his far-right coalition threatened that any such move would bring down the government.

The proposal, revealed in a surprise speech by President Biden on Friday, calls for a six-week pause in fighting, during which hostages taken from Israel by Hamas would be released in phases in exchange for hundreds of Palestinian prisoners, and there would be a significant boost in aid shipments to the Gaza Strip. The key sticking point — the same one that has doomed past negotiations — is how and when the war will officially end.

Netanyahu’s office said Friday that it had “authorized” the text of the proposal. On Saturday, however, it added that “Israel’s conditions for ending the war have not changed” and that any deal that does not allow for the complete destruction of Hamas, the release of all hostages and the end of Gaza’s security threat to Israel was a “non-starter.”

`We the People’ are bulwarks against Russian disinformatio

Chris Walsh.

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Americans don’t like to think that we can be easily manipulated, but foreign adversaries have grown adept at it through disinformation campaigns.

The prevalence and endurance of Russian (and other authoritarian) propaganda in the United States is dangerous. And no one is immune from its influence; these lies can even be amplified by members of Congress. No one in the United States is immune from the prevalence and endurance of Russian (and other authoritarian) propaganda. Even members of Congress have amplified their lies.

Accepting disinformation as truth represents yet another threat to already declining trust in our national leadership. Part of the solution is for Americans to strengthen their personal resilience against these tactics – which in turn would make propaganda less effective and buttress our democracy.

Army units won’t all receive the same electronic warfare systems — and ‘that’s OK,’ officials say

MARK POMERLEAU

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With a variety of dynamic threats across the world, the Army is coming to terms with the fact that units across theaters will have different electronic warfare equipment based on region.

“We’re going to have to get comfortable with the fact that some things are going to be good enough for [Central Command], some things are going to be good enough for [European Command], but they may not be good enough for [Indo-Pacific Command] when it comes to the capabilities. I think collectively, the Army is starting to realize that that’s OK,” Brig. Gen. Wayne “Ed” Barker, program executive officer for intelligence, electronic warfare and sensors, said at the Army’s Technical Exchange Meeting in Philadelphia this week.

The service has been on a years-long journey to rebuild its EW arsenal after it divested much of it following the conclusion of the Cold War. Russia’s 2014 incursion into Ukraine spurred a hastening of those efforts, which mostly focused on the European theater.

Now, as the Indo-Pacific has become the priority theater for the Department of Defense, which refers to China as the “pacing threat,” the Army is forced to develop capabilities that will have to span different regions that have their own unique terrain and challenges from an electronic warfare perspective, and address different threats that employ their systems distinct from others.

The Sprint Becomes a Marathon: News from Russia's War

John Carpenter

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Russia does not want real peace. Let’s start with the facts on Russia’s other borders:

• Last week, Estonian buoys marking the riverine border between Estonia and Russia had been removed unilaterally by the Russians in an overnight provocation

• Also last week, the Russian Ministry of Defense announced that it will need to revise its current maritime borders around Kaliningrad and St. Petersburg in the Baltic Sea. Those borders, they claim, are due to inaccurate Soviet calculations from 1985. The revisions, of course, would be to the immediate detriment of Lithuania, Estonia, and Finland, and by swift extension to Sweden and Latvia — as well as any other nation doing business in the Baltic Sea.

• Meanwhile, civilians in the Baltic States are being told to prepare go-bags and set up bomb shelters. That advice, I’m told, is a rare point of agreement between local patriots and the local Russian parties: patriots want people to be as safe as possible in case of invasion, but Putinists hoping for reunion with Moscow benefit from the climate of fear and the instability that such preparations imply.

As the Hamas war proceeds, it’s crucial that Iran’s terrorist proxies be defeated and that our universities remain places of free speech and learning. But it is also vital that we not lose sight of what is happening in the European war to stop Iran’s biggest ally.

NATO flirting with war and extinction in Ukraine

STEPHEN BRYEN

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NATO is flirting with war and extinction. France is now “officially” sending troops to Ukraine (they have been there for some time) and NATO countries are demanding strikes deep inside Russia.

Meanwhile, the US has secretly made a “policy shift” that somewhat falls short of what Ukrainian President Volodymyr Zelensky wanted but opens the door to deep strikes by the US on Russian territory.

US Secretary of State Antony Blinken says that the US deep strike authorization is “misinformation” but he did not deny the change in US policy. He claims it is Russian disinformation but the reports came from Washington and not from Russia.

Europe’s democratic charade - OPINION

NCOLAI VON ONDARZA

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Nicolai von Ondarza is a political scientist and head of EU/Europe research division at the German Institute for International and Security Affairs (SWP).

This summer, the composition of the European Parliament will undergo a significant shift, with changes stemming not only from voters’ decisions but also the maneuvering undertaken by parliamentary groups themselves.

Although EU discourse often treats party groups — such as the European People’s Party (EPP) or the Progressive Alliance of Socialists and Democrats (S&D) — as homogeneous actors, by and large, they remain alliances of national parties that can change at any time, easily altering the Parliament’s make-up.

And this time around, this fluidity is most evident among the EU’s far-right parties, which appear to be gearing up for a significant postelection reconfiguration.

Morocco’s automotive industry shifts gears to prep for electric vehicle era

SAM METZ

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A train that travels from rural northern Morocco to a port on the Mediterranean Sea carries no passengers. Three times a day, it brings hundreds of cars stacked bumper to bumper from a Renault factory outside Tangiers to vessels that transport them to European dealerships.

Business incentives and investing in infrastructure like the freight railway line have allowed Morocco to grow its automotive industry from virtually non-existent to Africa’s largest in less than two decades. The North African kingdom supplies more cars to Europe than China, India or Japan, and has the capacity to produce 700,000 vehicles a year.

Moroccan officials are determined to maintain the country’s role as a car-making juggernaut by competing for electric vehicle projects. But whether one of Africa’s few industrialization success stories can stay competitive as worldwide auto production transitions to EVs and increasingly relies on automation remains to be seen.

More than 250 companies that manufacture cars or their components currently operate in Morocco, where the auto industry now accounts for 22% of gross domestic product and $14 billion in exports. French automaker Renault, the country’s largest private employer, calls Morocco “Sandero-land” because it produces nearly all of its subcompact Dacia Sanderos there.

Building the Future: Center for a New American Security

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Today, the world and U.S. national security policy stand at a critical intersection. An aggressive, revisionist Russia, a rising China, war in the Middle East, profound technological disruption, and deep domestic divisions raise questions about America’s global future. The stakes for the nation are high, and CNAS is committed to developing bold, innovative, and bipartisan policies for the country’s most important national security choices. Never before has the demand for the Center’s work been greater.

Since its founding in 2007, CNAS has stood at the forefront of the most urgent issues, producing rigorous, fact-based analysis and actionable policy recommendations. The Center punches well above its weight in policy impact, outperforming its peers in an array of key metrics. An organization of “futures, not formers,” CNAS has launched experts into government and trained new generations of national security leaders on both sides of the aisle. And there is more—much more—to come.

Today, more than ever, America requires bipartisan policy solutions to the toughest problems. For all of the Center’s impact over the past decade and a half, our work is just beginning.

It Is Possible to Defeat Hamas

Udi Dekel

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There are those who argue, even firmly, that Hamas cannot be defeated. Indeed, it is difficult to annihilate an organization like Hamas, which relies on its foundation of being a social movement and espouses a rigid, extreme religious-nationalist ideology, in addition to having an armed military wing. But it is possible to greatly reduce Hamas’s influence among the public that it purportedly represents and leads, by denying its power to inflict damage and the veto power that it held and still holds.

This requires six combined efforts:

1. Military effort: The operative dismantling of Hamas’s military wing should continue for a while, even after the war officially ends, to ensure that the organization cannot reestablish itself and restore its military power. The purpose of the ongoing military campaign is to prevent Hamas from being able to torpedo the political and civilian measures aimed at stabilizing the Gaza Strip and the Palestinian arena in general after the war.
2. Civilian effort: Wherever it is possible to begin stabilizing and reconstructing the Gaza Strip, an official responsible for civilian control and public order should be appointed, and this measure should be implemented while preventing Hamas’s intervention and involvement. For example, Israel can still stabilize the northern part of the Gaza Strip, allow local authorities to operate, while removing Hamas-affiliated officials, and signal to the residents of the area that they can return and rehabilitate without fear from the organization.Military effort::

Mineral Demands for Resilient Semiconductor Supply Chains

Ryan C. Berg, Henry Ziemer, and Emiliano Polo Anaya

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The Coming Chip Wars

Critical minerals are behind every modern technology, from the latest developments in commercial electronics to the strategic defense equipment required for national security; leading-node semiconductors require over 300 materials, presenting multiple vulnerabilities for adversaries to manipulate their supply. Given that these minerals are indispensable for semiconductors (and the equipment to manufacture them), countries are now more attentive to the necessity of shifting away from trade models that create dependency on strategic competitors. Instead, the United States has pursued a strategy of “friend-shoring” or “ally-shoring,” shifting production to friendlier nations with shared values that are less likely to wield trade as a weapon.

China’s state-sponsored industrial policies, financing, and tax incentives have led to considerable political leverage worldwide over the raw materials required for semiconductor manufacturing; the country has positioned itself as the dominant supplier of raw material inputs for cutting-edge technology. Supply chains are fragile, especially for an industry characterized by its complexity, high-level expertise, and specialized manufacturing chains that cross international borders several times and depend on inputs from multiple private businesses and trusted suppliers. Self-sufficiency in the semiconductor industry is impractical and highly unlikely, but it is possible and desirable to diminish risks and increase resiliency. U.S. allies in the Western Hemisphere are crucial for this undertaking, and the United States should look at all segments of the value chain for the region, not just at assembly, testing, and packaging (ATP).

From Vegas to Chengdu: Hacking Contests, Bug Bounties, and China’s Offensive Cyber Ecosystem

Eugenio Benincasa

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Introduction

The Chinese government has created an elaborate multifaceted “hack-for-hire” ecosystem that is unlike anything we have ever seen before. The system grants Chinese security agencies exclusive access to zero-day vulnerabilities (box 1) identified by China’s top civilian hackers, and allows Beijing to subsequently outsource its espionage operations to private contractors. The author’s understanding of the various facets of China’s hack-for-hire ecosystem draws from prior research and sources, including:

1. Since 2014, the U.S. Department of Justice has been unveiling indictments against Chinese citizens engaged in malicious cyber activities, laying bare the inner workings and coordination of China’s offensive cyber ecosystem, which is characterized by a web of relationships between China’s intelligence agencies, private companies, and academia.

2. Since 2017, the anonymous group Intrusion Truth has exposed over 30 Chinese cyber operatives linked to six Advanced Persistent Threats (APTs). Predominantly based on open-sourceinformation, Intrusion Truth revealed connections between China’s IT sector, academia, and the nation’s intelligence agencies.