Indian Strategic Studies

12 September 2023

ILO's G20 Sherpa, Richard Samans, advocates for social security coverage for gig workers

Parikshit Luthra

India achieved a significant diplomatic victory during the G20 summit as the participating countries reached a consensus declaration, effectively addressing major disagreements related to the Russia-Ukraine conflict. Richard Samans, the G20 Sherpa for the International Labour Organization emphasised that the G20's New Delhi declaration outlines key policy priorities aimed at extending social protection to workers in the gig and platform economy.

Richard Samans, the G20 Sherpa for the International Labour Organization (ILO), in an interview with CNBC-TV18, emphasised that the G20's New Delhi declaration outlines key policy priorities aimed at extending social protection to workers in the gig and platform economy.

He stressed that even though gig workers may not have formal employee status, it is essential to provide them with some form of social security coverage.

“The declaration was significant and helpful to working people on a number of fronts. I would say that there are some significant outcomes in relation to the agreement on a set of policy priorities for extending social protection to gig and platform economy workers, who in many countries are not covered well by social security systems.

So there is a policy roadmap – a series of actions that countries can pick and choose from but with an agreed, aligned purpose to make sure that those workers even if they are not formal salaried employees, nonetheless are covered by basic social security protections or more is a good step forward,” Samans said.

India achieved a significant diplomatic victory during the G20 summit as the participating countries reached a consensus declaration, effectively addressing major disagreements related to the Russia-Ukraine conflict.

Samans also pointed out that the Indian government placed a strong emphasis on skill development. Moreover, they tasked both the ILO and the Organisation for Economic Co-operation and Development (OECD) with the responsibility of creating a comprehensive jobs and skills database covering all G20 member countries.

Is the US getting Asia wrong?

ROBERT A. MANNING

At first glance, President Biden’s upcoming state visit to Vietnam this weekend — coming on the heels of a successful trilateral summit last month, where it forged new defense and high-tech cooperation with South Korea and Japan — appears to underscore Biden’s efforts to deepen U.S. ties in the Asia-Pacific.

Hanoi and Washington are poised to declare a “comprehensive strategic partnership,” another Asian partner seeming to line up to counterbalance China. This is part of a larger pattern. For example, earlier this year, the U.S. cemented deals with the Philippines, a treaty ally, to gain access to four military bases, and with Papua New Guinea, as tensions mount over Taiwan and disputed territorial claims in the South China Sea.

But things are more complicated than that. Biden’s stop in Vietnam after the G20 Summit in New Delhi may come at a cost to wider U.S. credibility in the region. Why? Biden is skipping two inclusive institutional summits; the ASEAN Regional Forum and the East Asia Summit. Both are hosted by Indonesia, the world’s fourth-largest nation, a democracy, the largest Muslim state and arguably, the most important actor in Southeast Asia.

Most Asia-Pacific nations want a greater U.S. security and economic role in the region, but fear being forced to choose between the U.S. and China. But a perpetual concern is how reliable America is. As Woody Allen once said, “Ninety percent of life is just showing up.”

With regard to the Asia-Pacific, the U.S. is fighting geography (the “tyranny of distance”) and economics. Though in absolute terms, the U.S. economic role in Asia is growing, it is shrinking in relative terms because Asian economies grow faster than the U.S. China borders 14 countries and is the largest trading partner and major investor in all U.S.-allied and partner nations in the region.

The ASEAN Regional Forum and East Asia Summit are inclusive regional institutions that emerged after the Cold War ended in the early 1990s. While they have been largely process-oriented talk shops, they provide a venue for high-level bilateral diplomacy and a ritualistic comfort level of U.S. engagement.

One reason why Biden’s absence raises hackles in Jakarta and other Asian capitals is that like the elevated ties to Vietnam his visit will cement, and the recent Camp David U.S.-South Korea-Japan trilateral summit, the U.S. is fashioning a network of defense cooperation and new supply chains, eclipsing the forum and the summit.

These include the Quadrilateral Security Dialogue (known as the Quad), composed of the U.S., India, Japan and Australia, and AUKUS (U.S.-United Kingdom-Australia), a defense industrial Anglosphere alliance initially created to provide nuclear submarines for Australia.

Unlike existing Asian regional groupings, this new U.S.-driven network is exclusive, aimed at countering China and functional rather than process-centered. Taken together, these and other U.S. bilateral defense upgrades, like the new base access in the Philippines and Papua New Guinea, are a formidable counterbalance to China.

But this gets to the different approaches to world order between the U.S. and many Asia-Pacific nations. Where U.S. efforts are designed to shape a regional coalition to oppose and confront China’s assertive, provocative behavior toward Taiwan, the East and South China Seas and South Pacific islands, ASEAN and others in the region are hedging, multi-aligning with and against both the U.S. and China.

This is in part, the “two Asias,” problem: a U.S.-led “security Asia” of competing nationalisms, Chinese military ascendance and territorial disputes versus “economic Asia.” This is a dynamic, integrating, tech-driven region focused on bolstering market access, trade accord and investment. The business of Asia is business. These two forces are pulling in opposite directions. Hence, Asians impulse to hedge.

Deterrence in Taiwan Is Failing

Hal Brands

“My gut tells me we will fight in 2025,” U.S. Air Force Gen. Mike Minihan wrote in a January memo to officers in the Air Mobility Command. The memo, which promptly leaked to reporters, warned that the United States and China were barreling toward a conflict over Taiwan. The U.S. Defense Department quickly distanced itself from Minihan’s blunt assessment. Yet the general wasn’t saying anything in private that military and civilian officials weren’t already saying in public

How American Institutions Went From Trust to Bust

Gerard Baker

At the heart of America’s political and cultural turmoil is a crisis of trust. In the space of a generation, the people’s confidence in their leaders and their most important institutions to do the right thing has collapsed. The federal government, big business, the media, education, science and medicine, technology, religious institutions, law enforcement and others have seen a precipitous decline.

As public faith in the performance, credibility and integrity of these institutions has collapsed, so too has mutual trust—the social glue that holds the country together. Americans have become suspicious of one another, distrusting their fellow citizens as much as they distrust foreign adversaries.

Think about the controversies that have played out in the past few years—allegations from both parties of stolen elections, false claims by mendacious presidents and other politicians, politically motivated federal law-enforcement decisions, questionable advice and mandates from public-health officials, news coverage that skews in one political direction, a succession of corporate scandals and financial crises, and the various social dysfunctions caused by social media and emerging technologies.

All reflect and exacerbate a climate of deep popular distrust. This rapid loss of confidence is startling and unprecedented. It has ominous implications for the cohesion, prosperity and even survival of the U.S. Trust is the essential feature that allows society to function—more important the more modern and complex society grows.

Since 1979 Gallup has measured trust among the public in the most important American institutions—from the presidency and the Supreme Court to big business, science and the media. Its latest survey, published in July, found that across the nine key institutions Gallup has tracked consistently, the proportion of Americans who said they had “a great deal or quite a lot of confidence” averaged out at 26%. That is the lowest figure ever recorded.

“Confidence has generally trended downward since registering 48% in 1979 and holding near 45% in the 1980s,” the report finds. “It averaged closer to 40% in the 1990s and early 2000s before dropping to the low 30% range in the 2010s. Last year was the first time it fell below 30%.”

Of the 16 institutions Gallup has tracked over the past decade, 11 recorded their lowest-ever level of popular trust in 2022 or 2023. Only two institutions, the military and small business, enjoy the confidence of a majority of Americans.

The Pew Research Center has conducted similar surveys for 30 years. The General Social Survey is conducted by NORC—formerly the National Opinion Research Center—at the University of Chicago and the American National Election Studies at Michigan and Stanford. Both have found the same broad decline in trust.

Middle powers, big impact: Africa’s ‘coup belt,’ Russia, and the waning global order

Theodore Murphy

Coups d’états have returned to Africa. In the 1990s and 2000s, the number of forced takeovers of power on the continent fell; but the figure began to creep back up around 15 years ago. This deterioration has come to particular prominence with the emergence of a ‘coup belt’ spanning from Sudan to Niger (and mostly recently Gabon), where eight coups have taken place in the last three years.

The drivers behind coups range from state fragility to weak economic development. But such factors were also a constant in the decades immediately after the end of the cold war – when Africa experienced fewer coups.

The overlooked factor is the weakening of global order and the coup-enabling international environment it has created. Policymakers should consider, in particular, the role that activist ‘middle powers’ and Russia are now playing in taking advantage of an increasingly lawless international setting.

US retrenchment, selective AU enforcement

As the United States retrenches to pursue its strategic competition with China, its capacity to invest seriously in both strategic imperatives and values-led foreign policy objectives is coming under strain. With the essential taking precedence over the good, upholding democracy in Africa has slipped down the list of America’s strategic priorities.

Africa’s own system for deterring takeovers has also weakened considerably. The African Union’s enforcement of its coup-prohibiting rules grew increasingly inconsistent during the same period, during which time it began to enforce only selectively, due to the whims of powerful AU member states. This started with the coup in Mauritania in 2008, and was followed by President Sisi’s post-coup election in Egypt, and more recently by coups in Chad and Sudan.

Japan’s Defense Ministry Plans to Launch Permanent Joint Headquarters in March 2025

Takahashi Kosuke

Japan’s Defense Ministry has decided to establish a Permanent Joint Headquarters in March 2025 that will centrally oversee the nation’s Ground, Maritime and Air Self-Defense Forces to prepare for any possible emergencies – especially with a Taiwan contingency in mind.

On August 31, the Defense Ministry requested 10.5 billion yen ($71.2 million) for fiscal year 2024 to fund initial costs for setting up the permanent joint operational headquarters at the ministry’s headquarters in Ichigaya, in central Tokyo.

The Defense Ministry explained at its press briefing on the budget request for the next fiscal year that the new permanent joint command will start with about 240 members initially, and that it will be established at the end of fiscal year 2024, which is March 2025 in Japan.

The announcement came after the National Defense Strategy and the Defense Buildup Program, both approved by the National Security Council and the Cabinet in December 2022, called for reinforcing effectiveness of the joint operational posture of Japan’s three Self-Defense Force (SDF) services.

“A Permanent Joint Headquarters will be established in order to build a system capable of seamlessly conducting cross-domain operations at all stages from peacetime to contingency, with the aim of strengthening the effectiveness of joint operations among each SDF services,” the Defense Buildup Program states.

“In this regard, in light of the rapidly increasing severity of the security environment surrounding Japan, MOD/SDF will make every effort to pursue the establishment of a Permanent Joint Headquarters as soon as possible,” it added.

Expanding on the reason for establishing this new joint headquarters, a defense official said at the press briefing in August, “We recognize that it is essential to organically integrate the domains of space, cyber, and electromagnetic waves with the domains of land, sea, and air, and to conduct flexible and sustainable activities through integrated operations.”

The Truth About Pakistan-Russia Ties

Muhammad Sarmad Zia

Pakistan’s relationship with Russia, especially following the outbreak of the Russia-Ukraine war, needs some serious analysis, but not with regards to whether relations have potential or should be improved or downgraded. Rather, it is important to assess the relationship as it is without aggrandizing or relegating any of its aspects.

While working on a research paper some years ago, I sought to probe into the real prospects of the relationship between Pakistan and Russia, two erstwhile adversaries. This was a time when zero-sum relations were being set aside and independent policies were being pursued – tales of another lifetime for another life, perhaps.

Back then, there was a need to establish how Russian policymakers viewed Pakistan and how Russian diplomats were geared toward achieving the targets and objectives set by the Kremlin. As someone who always looks at the practical rather than whimsical side of the story, I inquired into this dynamic of Pakistan-Russia relations. Fortunately, the answers were straightforward and not left to be deciphered or read between the lines.

That Pakistan does not fall into the first, second, or third tier of Russia’s important relationships should be understood and taken as a reality check. As seen in “The Concept of the Foreign Policy of the Russian Federation,” published by the Russian Foreign Ministry in early 2023, Pakistan does not figure in or even get an honorary mention in the rundown of basic principles, strategic goals, major objectives, and priority areas of Russian foreign policy. This information should by no means be seen as disappointing, disconcerting, or a fact to be exploited against the current or former governments. It is just a fact that needs to be appreciated as it is.

Of course, there are plenty who will cite examples of former trade and investment deals, current projects which have long been approved, and military engagement between the two states. And they are not wrong; these elements of Pakistan-Russia ties do exist. That said, it is important that relations are judged by the quality and quantity of interactions, engagements, and shared objectives.

So, what are some of the objectives shared by Pakistan and Russia? These are both short-term and long-term interests, which are placed on different levels of priority or urgency depending on their implications for Russia and for Pakistan. Of these, training against militancy, one of Russia’s main concerns owing to its own domestic security imperatives has helped Pakistan foster friendly ties with the Russian military. Similarly, in 2014 Russia lifted a self-imposed arms embargo on Pakistan, which further opened the room for arms trade and allowed Pakistan to import Mi-35 attack helicopters to meet its defence requirements. Similarly, Pakistan and Russia have a counternarcotics partnership that is facilitating the training of Pakistan officials to prevent the illegal drug trade in the region.

Middle powers, big impact: Africa’s ‘coup belt,’ Russia, and the waning global order

Theodore Murphy

Coups d’états have returned to Africa. In the 1990s and 2000s, the number of forced takeovers of power on the continent fell; but the figure began to creep back up around 15 years ago. This deterioration has come to particular prominence with the emergence of a ‘coup belt’ spanning from Sudan to Niger (and mostly recently Gabon), where eight coups have taken place in the last three years.

The drivers behind coups range from state fragility to weak economic development. But such factors were also a constant in the decades immediately after the end of the cold war – when Africa experienced fewer coups.

The overlooked factor is the weakening of global order and the coup-enabling international environment it has created. Policymakers should consider, in particular, the role that activist ‘middle powers’ and Russia are now playing in taking advantage of an increasingly lawless international setting.

US retrenchment, selective AU enforcement

As the United States retrenches to pursue its strategic competition with China, its capacity to invest seriously in both strategic imperatives and values-led foreign policy objectives is coming under strain. With the essential taking precedence over the good, upholding democracy in Africa has slipped down the list of America’s strategic priorities.

Africa’s own system for deterring takeovers has also weakened considerably. The African Union’s enforcement of its coup-prohibiting rules grew increasingly inconsistent during the same period, during which time it began to enforce only selectively, due to the whims of powerful AU member states. This started with the coup in Mauritania in 2008, and was followed by President Sisi’s post-coup election in Egypt, and more recently by coups in Chad and Sudan.

Ukraine war: Cyber-teams fight a high-tech war on the front lines

Gordon Corera

Ukraine cyber-operators are being deployed on the front lines of the war, duelling close-up with their Russian counterparts in a new kind of high-tech battle.

"We have people who are directly involved in combat," says Illia Vitiuk, the head of the Ukrainian Security Service's (SBU) cyber department.

Speaking inside the heavily protected SBU headquarters, he explains how his teams mix the skills of hackers and special forces - getting inside Russian systems, working alongside snipers and deploying the latest technologies.

The department uses Artificial Intelligence (AI) visual recognition systems to analyse information gathered from aerial drones (alongside intelligence from human sources, satellites and other technical sources) to provide targets for the military.

"We understand which type of military weapons they are about to use and on what direction," Mr Vitiuk says.

His teams will also hack into surveillance cameras on occupied territory to watch Russian troop movements. And they direct kamikaze drones to take out Russian cameras spying on Ukrainian movements. Doing this often requires teams working undercover, close to the target.

Drones - sometimes used for surveillance and sometimes to act as weapons - have been at the leading edge of innovation in this conflict.

We understand which type of military weapons [Russian forces] are about to useIllia Vitiuk

Head of Ukraine's cyber security department

The SBU cyber-team flies its own drones and plays a cat and mouse game to disrupt those belonging to Russia. It deploys sensors to detect drones so operators cannot just jam them but try to take control, sending commands to make them land.

Meet the man leading the front-line effort in Ukraine's cyber war with Russia

Jenna McLaughlin

KYIV, Ukraine — In the first days after Russia launched its full-scale invasion into Ukraine, Illia Vitiuk and his colleagues feared the worst: the fall of Kyiv.

Vitiuk, the head of the cyber department at Ukraine's top counterintelligence agency, had already been battling Russian hackers and spies for years. Inspired by James Bond films and a life of adventure, he says he'd been studying all his life for this kind of work.

But on Feb. 24, 2022, members of that agency — Ukraine's Security Service, or the SBU — took on another role: physically hauling important servers and technical infrastructure away from Kyiv to protect it from Russian invaders.

"Just imagine what happened here on the morning of February 24," he said during an interview with NPR at the SBU's headquarters in Kyiv. "Missiles hit Kyiv, and people were running away from here. We tried to contact some of the ministries and critical infrastructure. And sometimes there were answers like, 'The system administrator is gone because his family is in Bucha and he needs to take them from Bucha,' " he recalled.

"There was the risk of Kyiv to be surrounded," Vitiuk continued. "So we needed to take the most important databases and hardware and relocate it from Kyiv. And so we literally helped to do this with rifles."

The so-called "cyber war" experts foretold in Ukraine may not have come to pass: Despite Russia's best efforts, its hackers were unable to single handedly destroy Ukraine's digital infrastructure in the early days of the war.

However, Ukraine's defenders have been under a near constant barrage of cyberattacks, almost 3,000 this year so far, according to Vitiuk.

Coupled with missiles and drone strikes, those operations have allowed Russia to weaken Ukraine's infrastructure, most concerningly the power grid, as well as steal sensitive information that supports their military campaigns. Vitiuk and his team are constantly investigating and responding to Russian state hackers, and they believe they serve as a "shield to the whole Democratic world," by sharing what they learn with their allies, Vitiuk said.

Future of Defense and Deterrence in 21st Century Security

So, here’s something new. RealClearDefense is partnering with Lockheed Martin on a special series to evaluate the future of defense and deterrence in the 21st century. To make this series mission-focused, we have centered our content on the Department of Defense’s (DoD) 2022 National Defense Strategy. This document lays out the national priorities for strengthening deterrence and maintaining our competitive advantage:

1. Defending the homeland, paced to the growing multi-domain threat posed by the PRC

2. Deterring strategic attacks against the United States, Allies, and partners

3. Deterring aggression, while being prepared to prevail in conflict when necessary, prioritizing the PRC challenge in the Indo-Pacific, then the Russia challenge in Europe

4. Building a resilient Joint Force and defense ecosystem.

How will the U.S. military accomplish these priorities in the context of Joint (Air Force, Army, Navy, Marines, and Space Forces) and Combined (U.S. allies) Multidomain Operations (MDO)? This is a major question for policymakers, strategists, and industry. Whatever the answer, the U.S. military and its allies will succeed only if they demonstrate a capability to operate and communicate without interruption across all domains, no matter the clime or place.

When we discuss JADC2 (Joint All-Domain Command and Control), we’re referring to the systems architecture to provide command, control and communications across all services in a contested environment, both in deterring potential adversaries and defeating them on the battlefield. This is difficult to comprehend in theory, and even harder to effect in practice. As the U.S. military experienced during the wars in Iraq and Afghanistan, communications between service branches were difficult and often inadequate to the speed and scope of operations. The current Russo-Ukrainian War has further shown the importance of JADC2, as Ukraine has successfully utilized satellite imagery and communications to direct operations on the ground, including through the use of drones or uncrewed systems.

Cybersecurity in the age of generative AI

In the latest McKinsey Global Survey on AI, 40 percent of respondents said their organizations plan to increase their overall AI investment because of advancements in gen AI. Nevertheless, few companies seem fully prepared for the widespread use of gen AI—or the business risks these tools may bring: 53 of organizations acknowledge cybersecurity as a gen AI-related risk, but only 38 percent are working to mitigate that risk. To help your company approach generative AI most constructively, check out the survey results from Michael Chui, Bryce Hall, Alex Singla, Alexander Sukharevsky, and Lareina Yee. Then dive into more insights to help with your cybersecurity strategies, including:

prioritizing risk modeling and risk assessment scoring
establishing new cyber-incident reporting and regulation requirements
partnering with cybersecurity providers to implement next-generation security products
tapping new or upskilled talent to build a strong cyberrisk team
considering social, humanitarian, and sustainable risks, as well as technology ones

Battle for Semiconductors: Will There Be Winners?

Leonid Kovachich

On the eve of U.S. Secretary of Commerce Gina Raimondo’s visit to China on August 27-29, the White House took some conciliatory steps. The U.S. removed 27 Chinese companies from the so-called Unverified list compiled by the Bureau of Industry and Security at the U.S. Department of Commerce. This list includes companies for which the agency cannot verify information on their transactions and whose exports from the U.S. are restricted in some way. While the Chinese Foreign Ministry certainly welcomed that move, the basis of U.S. technology policy toward China remains unchanged. The regional fragmentation of the semiconductor industry will only increase over time. However, the degree of supply chain interdependence and global division of labor in this area is so great that the creation of technological regional blocs under the influence of geopolitical considerations will inevitably lead to supply chain disruptions, multiplied costs, and possibly a slowdown in the growth of technological capabilities for all parties.

Key players

Semiconductors form the backbone of all modern electronics. They are used not only in computers and smartphones, but also in household appliances, cars, children’s toys, military equipment, etc. In other words, semiconductor circuits are indispensable in the production of almost any modern good containing electronic components. Historically, the semiconductor industry evolved in the United States in the mid-1950s. It was there that the first operable integrated circuit was invented and produced. Up until the mid-1980s, Silicon Valley in the U.S. state of California had retained its undisputed global leadership: the U.S. share in global semiconductor production exceeded 50%. However, gradually, under the sway of globalization and international division of labor, as well as with the growing technological complexity of the semiconductor circuitry, the production chain was lengthened to become dispersed across different countries. In the mid-1980s, Japan took over some of the key production processes in this area. Later, Taiwan secured a strong position in the mass final production of semiconductors. Finally, in the 2000s, the Netherlands became an absolute leader—and later a monopolist—in the production of advanced equipment required for lithography of semiconductor circuitry on a silicon wafer. As a result, the current production chain may involve thousands of suppliers scattered around the world, many of them being absolute monopolists on the market. For example, U.S.-based companies such as Cadence Design and Synopsis control 90% of the market for electronic design automation tools (EDA Tools), essential at the initial stage of microchip design. The Netherlands-based ASML is the world’s only supplier of equipment for ultra-deep ultraviolet (EUV) lithography on silicon slabs or wafers. Japan’s Tokyo Electron supplies state-of-the-art equipment for plasma etching, a necessary process for removing layers of material from the wafer surface after lithography. Finally, Taiwanese companies account for more than 50% of the entire global semiconductor end-market, as well as more than 90% of the market for advanced chips made in the 10nm process and below. Meanwhile, South Korean manufacturers control up to 64% of global production of dynamic random-access memory (DRAM) chips.

It is important to realize that China, too, plays a key role in the global semiconductor industry. First, the country is the world’s largest consumer of chips, as it dominates the global production of electronic products. Approximately one-third of all consumer electronics in the world are manufactured in China. In 2022, semiconductors worth $573.5 billion were produced globally, with China accounting for 53.7% of all sales of these products. It is natural that global chip makers have sought to localize production closer to their markets. Thus, both the largest Taiwanese contract manufacturer TSMC and South Korean SK Hynix and Samsung have their own production facilities in China. For example, Chinese plants produce up to 40% of the total volume of NAND chips (non-volatile memory chips) manufactured by Samsung and 40% to 50% of DRAM chips put out by SK Hynix. In addition, it was profitable for global manufacturers to locate less technologically advanced but more labor-intensive production stages in China. For example, China still accounts for more than a quarter of the global chip testing and packaging market. Intel, Texas Instruments, and many others have located their respective facilities in China. Finally, China is the largest producer and supplier of rare metals (gallium, germanium, etc.) required for semiconductor production.

From globalization to technological sovereignty

Therefore, the semiconductor industry has become one of the most globally dispersed production sectors. At present, no country can ensure the production of a microchip from start to finish by solely relying on its own resources and production base. Until a certain time, such a global mode of division of labor had suited everyone. Moreover, Washington had long winked at China’s development of its military-industrial complex due to interpenetration of civilian and military capacity. The leakage of U.S. technologies to China occasionally worried the United States, only in the context of these technologies being transferred to Iran, which at that time had been under sanctions for decades. That negligence had lasted until the mid-2010s, when China first published its Made in China 2025 import substitution program for key technologies, followed by Next Generation Artificial Intelligence Development Plan, which recognized the leading role of emerging technologies, including artificial intelligence (AI), in achieving global dominance and developing the military potential. It was then that the issue of China’s technological development and threats to U.S. national interests came to the fore in America’s political and expert community.

Strict export control measures against Chinese technology companies were first adopted in 2018. At that time, the U.S. accused telecommunications company ZTE of supplying Iran with products containing U.S. semiconductor technology in circumvention of the U.S. sanctions. The United States banned ZTE from purchasing chips created with American technology. This brought the company to the brink of bankruptcy, as there were no other alternatives for ZTE: as was discussed above, U.S. technology is used in the production of any modern chip, one way or another. The ZTE case was settled rather quickly after personal talks between Chinese President Xi Jinping and U.S. President Donald Trump. The company was ordered to pay a $1.3 billion fine, replace its top management, and introduce U.S. Compliance officers into the team. It is important to realize that the U.S. sanctions against ZTE had been imposed even before a full-scale trade war between the U.S. and China broke out. Yet, this was a turning point for both the U.S. and China.

The Americans realized that they had a powerful leverage of technological pressure in their hands. China, in turn, realized its own vulnerability. At that same time, in 2018, Keji Zhibao, a newspaper affiliated with China’s Ministry of Science and Technology, began publishing a series of articles reviewing Beijing’s vulnerabilities in key fundamental technologies. Chinese officials also began to speak more frequently about the need to ensure technological sovereignty.

The U.S. has become more active in using the technological leverage for putting more pressure. In 2019, the Trump administration put Huawei on the U.S. Department of Commerce’s blacklist; among other things, the sale of U.S. chips and other components was banned, as well as the use of Android OS for Huawei. However, this measure did not have a serious impact on Huawei’s business.

First, the Trump administration immediately introduced temporary export permits for Huawei so as not to create economic shocks for American companies, which in 2018 alone supplied Huawei with products $11 billion worth.

Second, nothing could deter Huawei from procuring critical components in third countries. Just a few months later, the company announced its own Harmony OS as an alternative to Android. By the end of the year, the company reported revenue growth of 18%. The following year, the Trump administration extended the sanctions imposed on Huawei. The company fell under the so-called Foreign Direct Product Rule, which prohibits the supply of equipment and components, including from third countries, if they contain American technology. At that time, Huawei was cut off from receiving advanced chips in any way, because contractors from third countries refused to cooperate with this company, fearing secondary U.S. sanctions. As a result, Huawei was forced to sell Honor, its smartphone division.

In the meantime, the sanctions imposed on China by the Trump administration were fragmented. A grace period was introduced for most export restrictions, which, in fact, deferred the enforcement of sanctions for a long period. In addition, Trump’s technological crackdown on China was a pinpoint strike. Huawei, whose name was already on the rumor mill, including among U.S. political figures, was hit hard. However, other Chinese technology companies continued to grow relatively unhindered. Sales of Chinese chip makers and developers rose 18% to $150 billion in 2021. China’s largest contractor SMIC reported sales growth. Although SMIC did not escape being blacklisted by the U.S. Department of Commerce, this did not prevent the company from mastering the production of chips in the 14-nm process. In addition, according to some media reports, SMIC was able to master the 7nm process via reverse engineering of a chip from TSMC. Chinese memory chip maker YMTC has caught up with its American and Korean competitors. The company has developed its own fourth-generation 3D NAND chip, consisting of 232 layers. Apple was even going to make YMTC the exclusive supplier of memory chips for the iPhone.

War of technologies

All these factors forced the U.S. to take a new look at the technology standoff, given that China’s progress in semiconductors has since been tied directly to U.S. national interests. In its technology policy, Washington began to focus on two fronts simultaneously: first, restricting China’s access to advanced technologies as much as possible, and second, stepping up government support for its own innovations and encouraging the repatriation of production capacity to the American soil. Washington understands that semiconductors are the basis both for the development of civilian technologies (and hence economic growth) and for the development of modern weapons systems, i.e., ensuring the interests of national defense.

In October 2022, the Biden administration imposed unprecedented export restrictions on China. Under the new rules, U.S. companies are prohibited from supplying China with high-performance chips and computer goods containing such chips (e.g., GPUs used to develop AI systems). In addition, exports of components that are used in the manufacture of supercomputers or for the development of semiconductor manufacturing have been banned. Supplies of certain equipment for chip production are prohibited. The Foreign Direct Product Rule applies to 28 Chinese companies (this list includes China’s all leading technology companies as well as specialized research institutes). Finally, third-country companies operating in China require special licenses from the U.S. Department of Commerce to supply logic chips with FinFET (fin-shaped field-effect transistors) architecture – 14nm and below; with DRAM – 18nm and below; NAND FLASH – with 128 layers and more – if such products are manufactured using U.S.-developed technology. In addition, professionals with U.S. citizenship and green cards are prohibited to perform certain work that directly or indirectly supports the development and production of semiconductors at certain facilities in China.

In August 2023, the U.S. released a draft of new measures aimed at restricting the flow of U.S. capital into China’s technology sector. If these measures take effect, U.S. private and venture capital investors will be prohibited from investing in Chinese companies that are involved in quantum computing, AI and advanced semiconductors. This being said, a complete ban on investments in the AI industry, as follows from the draft decree of the U.S. President, will apply only to Chinese companies that supply products to enterprises of the military-industrial complex. In other cases, U.S. investors will only need to notify the relevant U.S. regulatory authorities of their intention to invest in respective Chinese companies.

In parallel with prohibitive measures against China, the U.S. authorities are introducing incentives to develop America’s own competencies in the semiconductor industry and to build up the national production base. In 2022, the CHPIS and Science Act was passed, which envisages the allocation of $52 billion in government subsidies for the development of production within the United States. These subsidies will be available to all companies, including the ones of foreign jurisdiction, that decide to develop semiconductor production in the United States. An important condition for receiving support: potential recipients must commit not to invest more than $100,000 in China over a 10-year period if these investments result in the expansion of existing production capacity in China by 5% or more. It is also now prohibited to introduce new product lines or expand existing production with mature technologies by more than 10%. Companies that fail to meet these terms will have to repay the subsidies provided to them within 10 years.

Living under sanctions

U.S. technology restrictions would have had a very limited impact upon China unless key semiconductor technology suppliers from other countries had joined them. Therefore, considerable efforts of U.S. diplomacy were aimed at convincing its partners, mainly the Netherlands, South Korea and Japan, to join the technology restrictions. To a certain extent, the U.S. succeeded in doing so. On July 23, 2023, Japan announced export restrictions on 23 types of equipment needed for semiconductor manufacturing. Moreover, unlike the U.S. sanctions, the Japanese barriers apply to the equipment required for the production of chips using more mature technologies starting with the 45-nm process. Following Japan, the Netherlands also joined the export control measures: as early as 2019 it did not only ban supplies of the equipment for ultra-deep ultraviolet (EUV) lithography, but, starting in June 2023, also some machines for deep ultraviolet (DUV) lithography. Taken together, these restrictions should deny China the opportunity to rapidly develop its own semiconductor industry.

Export bans imposed by the U.S. and its allies are seriously hampering China’s technological development. China is being deprived of the necessary equipment to produce chips. Chinese companies have managed to establish mass production of chips in the 28nm process and are actively mastering the 14nm process. Of course, China cannot produce the most advanced chips, which are used, for example, in the latest generation of smartphones. Nonetheless, the bulk of consumer demand for semiconductors falls on the chips of previous generations. It is important, however, that China still produces these chips using foreign equipment. For example, China bought lithography equipment from ASML even in the 28nm process. The development of such equipment is surely underway in China, but a domestic lithography machine for the 28-nm process can only be expected by the end of this year at best. Moreover, Chinese companies do not have sufficient competencies to create automation design tools for the latest generation of electronics. Huawei this year said it has developed its own EDA tools to create chips in the 14nm process. However, the experimental software and hardware still need to be scaled up for mass production, as well as to ensure interoperability and compatibility in process setup.

Consequently, to produce its own chips, even using mature technologies of previous generations, China needs to build the entire supply chain of raw materials, hardware and software support. No other country at the current stage of technology development has been able to accomplish this incredibly complex and costly exploit. China is certainly ready to invest huge amounts of money in semiconductor technology development, but this does not guarantee success. China’s State Semiconductor Development Fund, or the so-called Big Fund, has accumulated more than $30 billion, but it has not been able to grow a single technology startup into a competitive semiconductor company. For example, Wuhan Hongxin Semiconductor Manufacturing Co, which received almost $20 billion, including from the fund, had gone bankrupt before it could launch any production.

Restrictions on chip imports to China also affect the development of related technologies and related industries. In the first half of 2023, China’s semiconductor imports fell by 22%, while imports of chip-making equipment fell by 23%. Inspur, a leading Chinese manufacturer of server hardware used for AI development, has already warned investors about difficulties with chip supply. The company forecasts a 30% drop in revenue as a result of U.S. semiconductor restrictions. Leading U.S. chip makers have responded to the export restrictions by developing chips specifically for China that are not subject to the export ban. NVIDIA, for example, released the A800 and H800 GPUs for China instead of the banned A100 and H100. Chinese companies have purchased $4 billion worth of these processors to be delivered in 2024. However, the development of new AI products, including generative AI, requires more processing power. According to various estimates, a complex model with as many parameters as ChatGPT requires about 30,000 of the most powerful A100 GPUs. No Chinese company currently boasts such computing power. While American tech giants such as Microsoft, Google and Amazon are freely investing billions in artificial intelligence platforms, Chinese companies are bound by both technological and investment constraints.

Nevertheless, containing China does not guarantee the successful evolution of the U.S. semiconductor industry. First, $52 billion in subsidies for all companies in the semiconductor sector is a very insignificant amount. For example, the construction of only the first phase of the TSMC plant in Arizona is estimated at $12 billion, while the entire project is expected to exceed $40 billion. In the meantime, the economic feasibility of building semiconductor plants in the US is questionable. The plant in Arizona, according to the project, will be able to produce up to 600 thousand chips per year by 2026. TSMC put out more than 14 million chips last year. And by the time the Arizona plant is expected to set up the 3nm process in 2026, such chips will have already been produced in Taiwan for two years. It is not known whether massive government subsidies will ensure U.S. technological leadership and independence from Asian partners. In addition, China as a key supplier of raw materials for the semiconductor industry also has serious leverage. For example, China has introduced export licenses for gallium and germanium. With China accounting for about 80% of the world’s total gallium exports and 60% of the world’s germanium exports, restrictions on the export of these metals could already lead to a significant increase in the costs of chip production and will subsequently reduce the growth potential for the entire industry.

Conclusion

The semiconductor industry is one of the most dispersed global industries. No single country currently possesses the full range of manufacturing chains required to manufacture finished semiconductor products. China, as the largest market for semiconductors and the source of raw materials essential for their production, plays an important role in global supply chains. The U.S. and China standoff, mounting export restrictions, and providing incentives for artificial relocation of production facilities will inevitably lead to the transformation of global production chains. Both the pace of development of Chinese capabilities in this area and the economic well-being of U.S. partners depend on the intensity of new export restrictions introduced by the United States. Given that, according to various estimates [1], semiconductor companies around the world are losing from 15% to 40% of their revenue from the existing export restrictions, an increase in U.S. sanctions pressure may lead to the degradation of innovation potential, including among the world’s industry leaders due to a sharp decline in their income levels. On the other hand, dependence on the Chinese market creates strong incentives for companies to seek ways to circumvent existing sanctions, so their fragmentation may limit the effectiveness of U.S. technology policy toward the PRC. In the long run, China will increase investment in basic research and development to ensure technological independence. The U.S. faces the challenge of balancing its technology policy to keep a hold on the existing gap with China in semiconductors for generations to come but, on the other hand, not to destroy key drivers of growing technological competencies for itself and its allies. Yet, as Chinese technological capabilities further evolve, it will become increasingly difficult for the U.S. to keep the right

The Terrorism Potentials of ChatGPT & Related Generative AI Models

Robert J. Bunker and Keaton O.K. Bunker

ChatGPT (Chat Generative Pre-Trained Transformer) represents a newer software program—an artificial intelligence (AI) based Chatbot—offered by the company OpenAI in both free (GPT 3.5) and paid (more advanced GPT 4) versions. Increasing concern exists, some founded and some unfounded, over the utility of ChatGPT for terrorist applications, especially when the software’s ethical inhibitors have been ‘jail broken’ with techniques such as DAN (‘Do Anything Now’).[1] Competitor software programs to ChatGPT exist and are actively being developed by both American and Chinese technology companies such as Meta, Google, Alibaba, and Baidu. As the capability and use of AI chat, image, audio, and video bots (e.g. generative AI) increases, the terrorism use potentials of this informational technology will become more pronounced—though likely limited in the near term.

Emerging Cybersecurity Challenges from AI-Powered Threats

DIEGO LAJE

In the midst of the Ukraine crisis, the ever-expanding digital frontier faces a new breed of threats, empowered by artificial intelligence, as nations collaborate to fortify their cyber defenses.

Larger attack surfaces, with a growing amount of critical services online, as well as an larger pool of nefarious actors leveraging artificial intelligence, have shaped how defenders cooperate and operate. Still, this is only part of the puzzle, as adversaries also team up to empower their activities.

Poland shares borders and history with Russia and its cyber experience during the ongoing Ukraine invasion places the nation at the forefront of this crisis.

“The war is not one-on-one, it's not like that, it's more coalition-on-coalition,” said Maj. Gen. Karon Molenda, commander of the Polish cyber command.

Efforts have crossed the Atlantic and support for Kyiv has also meant mutual support within the larger coalition.

“The Ukraine crisis has shown us that coalitions do matter and we have demonstrated examples of where we have come together and support of Ukraine,” said Sami Khoury, head of the Canadian Centre for Cyber Security.

The cold war holds lessons for America’s rivalry with China, say Condoleezza Rice and Niall Ferguson

THE INTENSIFYING rivalry between America and China has led many to speak of a second cold war. Others reject the analogy. We can say this: the world’s two largest economies seem to have little space for co-operation and a great deal of room for conflict.

The greatest difference with the first cold war is, of course, the origin of this rivalry. After the second world war, the two superpowers settled quickly into confrontation. They had little in common. The Soviet Union was a military giant but an economic recluse, isolated from most of the global economy.

China, conversely, was brought into the international economy by its own choices under Deng Xiaoping and by the decisions of global capitalists. For 30 years it benefited from integration and access to foreign capital and know-how. Along the way, China acquired an aptitude for indigenous innovation, not just intellectual-property theft.

China had been chipping away at American power for years. But it took the more frontal approach of Xi Jinping, who speaks of surpassing America in frontier technologies and calls the Taiwan Strait Chinese national waters, to shock America and its allies into fully understanding the challenge ahead.

China has built an impressive global network of telecommunications infrastructure, underwater cables, port access and military bases (or rights to build them) in client states. With each project, Chinese influence has evolved from pure mercantilism to a desire for political influence. If nothing else, the scale of China’s market has a magnetic attraction.

America has been slow to react. Too often it resorts to public cajoling of other countries to resist Chinese investment, while offering too few alternatives.

The truth is, though, that China’s foreign-investment strategy is beginning to show cracks. Its “loan-to-own” approach, its reliance on Chinese rather than local workers and infrastructure construction failures—including some spectacular accidents—are arousing resentment in Latin America, Africa and elsewhere.

US ‘Increasingly Concerned’ With Ukraine Battlefield Tactics Against Russia

JOE SABALLA

US officials have expressed concerns regarding the battlefield tactics Ukraine is using to combat invading Russian forces.

Speaking on condition of anonymity, the officials told The New York Times that Kyiv has been deploying too many troops in the wrong places.

They said the country’s best combat units are being sent equally to the east and south when they should concentrate more in the south where heavy fighting normally occurs.

By not consolidating its power in the right areas, the war-torn nation is reportedly struggling to achieve its main goal of cutting off Russian supply lines in southern Ukraine by damaging the bridge connecting Moscow and the Crimean Peninsula.

The officials urged Ukraine to concentrate on Melitopol and Berdiansk in the south, which are “far more strategically significant fronts” than Bakhmut in the east.

‘A Change of Tactics’

Ukraine’s counteroffensive has been under strict scrutiny due to its slow progress and “small gains.”

Despite the help of billions of dollars in Western military equipment, “not much” has changed as Moscow still occupies nearly one-fifth of Ukraine, according to an analysis by BBC.

China’s military seeks to exploit U.S. troops, veterans, general warns

Dan Lamothe

China’s military is conducting a sophisticated exploitation campaign designed to “fill gaps” in its capabilities by targeting current and former U.S. service members and harvesting specialized knowledge they’ve gained, a top general warned in a message obtained by The Washington Post.

The document was distributed to Air Force personnel on Friday. It marks the Pentagon’s most direct attempt yet to call out and counter what U.S. officials characterized as an aggressive ploy by Beijing to leverage international firms that hire Americans to teach advanced military skills and tactics.

Gen. Charles Q. Brown Jr., who heads the Air Force and is President Biden’s nominee to lead the Joint Chiefs of Staff, said in the message that foreign companies doing business with the Chinese government are “targeting and recruiting U.S. and NATO-trained military talent across specialties and career fields.”

“By essentially training the trainer, many of those who accept contracts with these foreign companies are eroding our national security, putting the very safety of their fellow servicemembers and the country at risk,” Brown wrote, appealing to the recipients’ sense of responsibility, even after leaving the armed forces, to protect “our national defense information.”

Officials declined to identify how many U.S. troops and veterans are thought to have been surreptitiously recruited by the Chinese, saying only that they have seen a worrisome rise in such activity.

A spokesman for the Chinese Embassy in Washington, Liu Pengyu, did not deny Brown’s assertions, saying in a statement that the Chinese government urges the United States “to respect the normal business activities carried out by relevant companies, and not to generalize and abuse the concept of national security and smear relevant companies.” U.S. officials in recent years have been “quick to accuse China,” he added, affecting “normal exchanges and cooperation” between the two countries in a way that is “not conducive to the healthy development” of bilateral relations.

11 September 2023

Main Afghanistan-Pakistan border crossing closed after guards exchange fire

The main border crossing between Afghanistan and Pakistan has been closed after security forces from both countries exchanged fire, officials said.

Local residents on the Pakistani side reported the sound of gunfire by the Torkham crossing on Wednesday and said people around the busy border area near the Khyber Pass had fled once the firing started.

There were no reports of casualties, and it was not immediately known why the border guards from the two sides exchanged fire, said Nasrullah Khan, an official in Torkham, a town in Pakistan’s Khyber Pakhtunkhwa province.

He said Pakistani government and military officials were in contact with their Afghan counterparts to defuse tensions.

The Torkham border point is the main point of transit for travellers and goods between Pakistan and landlocked Afghanistan.

The crossing has been closed several times in recent years, including a closure in February that saw thousands of trucks laden with goods stranded on each side of the border for days.

How to beat Russia: Here’s what Ukraine is doing right on the battlefield

JONATHAN SWEET AND MARK TOTH

Winning — or at least the perception of winning — is changing the narrative of many naysayers in the national security sphere who had previously been saying that Ukraine’s counteroffensive had stalled or even failed.

Similarly, the Biden administration appears to be changing course as well. Notably, a senior State Department official told reporters last week that, “It’s very important that Ukraine win this war. And by ‘win,’ I mean as President Biden said, Russians leave all of Ukraine.”

Just like that, as Secretary of State Antony Blinken arrives in Kyiv to “assess how the counteroffensive is going” and to announce a new package of “U.S. wartime assistance worth more than $1 billion,” words like “winning” have become fashionable again.

Or have they?

In a change of tone, the administration recently supported Ukraine by stating, “President Biden has been clear that any decisions about a negotiated settlement to the war are going to be up to Ukraine and President Zelensky. We have been clear about the principle of ‘nothing about Ukraine without Ukraine’.”

This is all good, but substantive commitments and actions must back up such words. Otherwise, they risk being hollow, narrowly intended merely to placate critics.

Unfortunately, White House actions up to now have pointed in that direction. The Biden administration has been secretly working behind Zelensky’s back with the Kremlin for a political solution “about Ukraine, without Ukraine.” Chairman of the Joint Chiefs of Staff General Mark Milley foreshadowed this in November 2022 when he said, “When there’s an opportunity to negotiate, when peace can be achieved, seize it.”

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