Category: US/China Relationship

China’s Reaction to Putin’s War

The Daily Escape:

Snow on the Fields of Wrong, March 10, 2022                 Sand on the beaches of Florida, March 2022

(This is the last column for the week. New content next week will be light and variable as Wrongo and Ms. Right make our annual pilgrimage to Florida to visit Wrongo’s sisters.)

Subsequent to the meeting between Putin and Xi Jinping in Beijing at the start of the Winter Olympics, the Chinese government’s statements and actions about Putin’s War in Ukraine have been a kind of doublespeak.

With its public statements, China’s been supportive. The foreign minister has referred to Russia as its “most important strategic partner.” China hasn’t endorsed Russian sanctions and its state media seems to repeat a lot of Russian disinformation about Ukraine.

On the actions side, the Chinese government has called for an end to violence and has promised to send humanitarian aid to Ukraine.

One thing that hasn’t been public is Chinese financial institution’s hesitancy about new deals with Russia. Chief Investment Officer magazine (CIO) quotes Yuan Jiang, a Chinese PhD candidate at Queensland University who specializes in Russia-China relations:

“Currently, the risk is simply too huge…”

Jiang said that traditionally, only state-funded institutions or large corporations would transact or directly invest in Russia, but even these institutions were wary of Russia:

“Russian markets are full of political corruption and other dangers…”

China’s financial sector has been leery of being caught up in the Western sanctions. Two major Chinese state-owned banks are now restricted from financing Russian commodities, according to Bloomberg. Reuters reports that the Bank of China in Singapore stopped financing Russian oil trades.

CIO also reports that some banks with partial Chinese state ownership have also been backing out of Russian deals. The Asian Infrastructure Investment Bank, which has many Asian governments as shareholders, suspended its business in both Russia and Belarus after the invasion. Similarly, the Shanghai-based New Development Bank, which has China as one of its founding members, also has terminated its business with Russia.

Now Russia is barred from participating in SWIFT, the global financial messaging system. In the past, China’s large banks have complied with American sanctions against Iran and North Korea because of the importance of clearing via SWIFT. The Chinese distancing from Russian transactions makes it clear that Beijing intends to continue complying with this Western sanction.

The Russians are looking to China as a lifeline in the midst of the sanctions. And the Chinese government is providing some help. China’s UnionPay card service will serve as an alternative for credit and debit card holders now that MasterCard and Visa have ended the ability of Russian citizens to use their cards abroad. UnionPay is accepted in 180 countries.

But China is shying away from a full rescue. Former US Treasury official Peter Piatetsky said in an interview with RadioFreeEurope:

“China can essentially do one thing here, which is to buy more Russian goods, but they don’t seem to be willing to do that….Russia doesn’t have that many different goods that China is willing to buy….The relationship between Russia and China is very transactional….They both dislike the US and dislike the US-led world order, but aside from that, I don’t think there’s much there.”

China could buy up Russia’s oil that’s no longer going to Europe if it wanted, but it doesn’t appear to be doing so, at least not yet. According to Jiang, ultimately the US has much more to offer China economically:

“Investing in the West is much simpler and more secure. No more unnecessary economic risk, not many political factors, and more transparent…”

And importantly, the US is China’s largest trading partner. The US buys 16.75% of all Chinese exports, creating a relationship that the Chinese government can’t afford to lose. Although ideological differences might dominate headlines, the US-China relationship is strategic for both.

It’s likely China will continue to keep Russia close and expand the relationship should relations with the West shift. And since the stated US strategy is to use Ukraine to destabilize Putin’s hold on power, China worries that it’s next.

Jiang says that Beijing is particularly afraid of “color revolutions,” a phenomenon in which popular uprisings result in regime change:

“Moscow and Beijing share almost indistinguishable views on the potential domestic and international security threats posed by color revolutions, and both nations view these revolutionary movements as being orchestrated by the US and its Western democratic partners to advance geopolitical ambitions.”

Despite the havoc that Western sanctions have brought on the financial system, China’s strong economic relationship with the West will help it keep Russia at arm’s length. If anything, the Ukraine war has shown just how much China relies on the West for its economic prosperity.

China and the US are particularly intertwined financially, and despite ideological differences, China will continue to prioritize its economic relationship with the US.

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Saturday Soother – March 5, 2022

The Daily Escape:

Herring Cove, Provincetown MA – February 2022 photo by Karen Riddett

Wrongo and Ms. Right went to the big box store yesterday. Most of the things on our list were out of stock. We also needed to fill the car’s gas tank. Local prices ranged from $3.65 to $3.92/gal. We filled up at the place with the lower number.

This is before any effects of Putin’s War on prices here at home. One product that will be impacted is wheat. Russia is the largest exporter of wheat in the world, and Ukraine is #2. Reuters says that the two countries account for about 29% of global wheat exports. They also say that US wheat futures rose to a 14-year high earlier this week.

The reason is that major wheat exporters aren’t holding as much wheat in storage as they do usually. Wheat stocks are set to fall to a nine-year low of 57 million tons by the end of the 2021/22 season. The news gets worse: If Russia and Ukraine are excluded from those holdings, other major global wheat exporters account for just 16% of the global stock.

That’s enough wheat to feed the world for less than three weeks.

The majority of wheat stock that isn’t in the hands of major exporters is held by China. China’s expected to account for 47% of global inventories at the end of the year. And last Thursday, China started approving imports of Russian wheat that had been blocked for years over Beijing’s concerns about fungus and other contaminants. The countries had announced that China would begin importing Russian wheat and barley shortly after Putin visited China ahead of the Beijing Olympics.

Emptywheel reports that Russia imports a significant portion of the wheat seed it needs for each growing season:

“…where will Russia buy the wheat seed needed? (Depending on source, there’s a disparity in what percentage of wheat seed Russia imports, but it’s between 18-40% depending on spring, hard wheat, or other type.)”

Will Russia purchase seed from China and India? Will those two countries accept rubles? Or will they look to barter for something else in trade, like natural gas?

Ukraine is in an even worse position. Reuters says that Ukraine has confirmed stoppage of its grain exports until the end of the Russian invasion. There is a chance that supplies for the next season from both Ukraine and Russia could also be in jeopardy, pending the duration and outcome of the war.

They also report that Ukraine accounts for 16% of world corn exports. Ukraine and the US are the only world corn exporters until Argentina and Brazil gear up to export their crops. Apparently, Ukraine still has a good deal of its 2021 corn crop to ship, but given Russia’s closing of Ukraine’s access to the sea, that may be problematic.

As the Northern Hemisphere enters spring, grain planting is right around the corner for both Russia and Ukraine.  Corn is going in for Ukraine and spring wheat for Russia. It’s highly uncertain how Putin’s War will impact crop production this spring. Russia has yet to plant 30% of its 2022 wheat crop.

Brazil imports wheat because it can’t grow enough for its own consumption. After Trump closed soybean exports to China, Brazil moved land into soybean production for the Chinese market. Brazil could try to increase acreage dedicated to wheat, but new Brazilian acreage comes at the expense of further destroying their forests, a terrible tradeoff.

We are looking at the emergence of a global economic war of attrition brought about by the sanctions regime. The target is Russia, but economic costs will spill over to the rest of the world.

On that note, it’s time to unplug from the terrible news that for the moment, is mostly caused by a terrible country.

It’s time for our Saturday Soother. We can’t escape the cold blustery weather in Connecticut, so it’s another indoors weekend here at the Mansion of Wrong. Let’s start by brewing up a mug of Monarch Estate Gesha ($42/4oz.) from Honolulu’s own Monarch Coffee. The roaster says it has subtle, sweet flavors of berries, mango, honeydew, apple, and pear. Note the price. Coffee prices have spiked along with many other items.

Now grab a seat by a big window and listen to Hauser performing the cello solo in “Adagio” by Albinoni, accompanied by the Zagreb Philharmonic Orchestra in Zagreb, Croatia in 2017. This weekend, given the tragedy in Ukraine, it’s nice to listen to music that transports us to a place where there’s peace:

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Monday Wake Up Call – February 14, 2022

The Daily Escape:

Red barn, white snow, in Spatford, NY – 2022 photo by Michael Erb

In last night’s Superb Owl, the LA Rams won. Your guacamole was probably better than the commercials.

Today is Valentine’s Day, a marketing triumph for the greeting card industry. There are no other triumphs to celebrate this morning, so let’s talk about a less than triumphal situation: Is something big about to happen in Ukraine?

Biden says America won’t fight for Ukraine; that would lead to “a world war.” Putin reads that as saying he’s got a free hand there assuming that he’s willing to take on whatever pain the West’s sanctions bring. Assuming Russia has economic support from China, Russia will probably be able to cope with the strain of new sanctions.

Wrongo has no crystal ball but thinks that Russia will formally recognize Ukraine’s disputed Eastern provinces of Donetsk and Luhansk as independent states. Today, Russia acts as if they are a part of the Russian Federation. The people living in these ethnically Russian provinces already speak Russian and carry Russian passports.

But Ukraine doesn’t recognize these provinces as independent. That has been a stumbling block in the current negotiations between France, Germany Russia, and Ukraine around what were formerly known as the Minsk accords, agreed in 2015, but never implemented.

Ukraine could be lured into trying to regain control of both provinces. At that point Russia would help defend them against Ukraine, most likely assuring that they would remain independent, although still technically part of Ukraine. That would be a huge win for Putin since its long been clear that NATO will not accept any new member that has a substantial Russian population.

That would achieve what Putin wants without the US having to put it in the form of a written guarantee.

Finally, it is hard to believe that Russia really wants to become responsible for the economic basket case called Ukraine. Here’s a comparison by Adam Tooze, of Ukraine’s GDP per capita compared to Russia, Poland, and Turkey:

From Tooze: (emphasis by Wrongo)

“Ukraine’s performance between 1990 and 2017 was not just worse than its European neighbors. It was the fifth worst in the entire world. Between 1990 and 2017 there were…only 18 countries with negative cumulative growth and…Ukraine’s performance puts it in the bottom third…. amongst the four countries that delivered less growth for their citizens than Ukraine were the Democratic Republic of Congo, Burundi and Yemen.”

Why are things so terrible in Ukraine? It’s due to corruption, demographic decline, and lack of investment in most industry sectors.

Disputes are negotiated when each side can call it a “win”. It’s obvious that an invasion of Ukraine would not be a win for Putin, so what he’s doing now seems more like a negotiating tactic. If he declares these two breakaway provinces to be an independent part of Russia, look for Belarus to be next.

Since the US and NATO have put up such a big stink, Russia probably won’t try to overthrow the government in Kyiv. OTOH, Putin doesn’t want to be seen as losing in this standoff over Ukraine, so recognizing the disputed provinces is an available middle ground.

And the US has already tacitly agreed to this once before when Russia annexed Crimea.

A Morning Consult Poll — done on February 7th that sampled 2,005 registered US voters showed that if there was a complete Russian occupation of Ukraine, then 42% of Americans support sending in troops. That’s a plurality, but not a majority.

The Morning Consult found a different response in Europe. Respondents in France (31%), Germany (37%) and the UK (37%) support the primary sanction, closing the Nord Stream 2 pipeline. Interestingly, in Germany, another 37% also opposed closing the pipeline if Russia invades.

So viewpoints are more nuanced the closer you get to the front lines.

Time to wake up America! Ukraine isn’t core to US strategy in Europe or in NATO. Yes, Ukraine’s right of self-determination is at stake. But given the GDP rankings above, you could say it’s already a failed state. And what about US support in other low income countries looks like the ticket out of failed state status for Ukraine?

To help you wake up, listen to Billy Bragg perform “Ten Mysterious Photos That Can’t Be Explained” from his 2021 album “The Million Things That Never Happened”.

Sample Lyrics:

I’ve been down rabbit holes
I’ve seen the rabid trolls
Cackling in the twilight
Of the Age of Reason
One thing I’ve noticed
As I get older
Common sense like art
Is in the eye of the beholder

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Monday Wake Up Call – Ukraine Edition, February 7, 2022

The Daily Escape:

Winter in the Palouse, near the town of Oakesdale, WA – January 2022 photo by James Richmond Photography

We talk a lot about a nation’s credibility in foreign policy. The US strives to be credible regarding its positions with allies and foes alike. We have often failed. Russia has also proven many times over that it isn’t a credible partner.

Consider a report from Numbers Stations showing that Russia has invaded its neighbors and a couple of distant countries 58 times since 1917. One element of clear credibility for Russia is its willingness to invade others. How does knowing this history inform the current situation between Russia and Ukraine?

The world is well-aware of Russia’s ostentatious military buildup along Ukraine’s border. Putin added to the tensions by making demands requiring a new European security order. He wants Russia to be allowed its own sphere of influence that roughly corresponds to the old Soviet Union. That means NATO should certainly not expand, and possibly should contract.

Let’s look at history between the US and Ukraine:

  • In 1994, President Clinton asked Ukraine to give up its nuclear weapons. In return, Ukraine got a financial settlement and the Budapest Memorandum which provided non-aggression assurances by both the US and Russia. Ukraine shipped 1700 or so nuclear warheads back to Russia and destroyed the missiles.
  • In 2014, President Obama looked at the big, muddy land called Ukraine and asked if its strategic importance was worth war. Meaning a real war, with an enemy that could fight back. He decided on economic sanctions.
  • In 2020, President Trump attempted to blackmail the Ukrainian president into interfering on his behalf in an American election.
  • In 2022, President Biden rules out military intervention should Russia invade Ukraine, talking mostly about more economic sanctions as the consequence.

Regardless of whether Russia invades Ukraine or not, the US is walking down a perilous path. It faces efforts to divide and neutralize its alliances in both Europe and Asia.

In Europe, Russia wants to bury the post-Cold War order. Putin wants Europe to recognize its sphere of influence in the former Soviet countries. Putin wants to separate Ukraine from NATO permanently. He would like to fracture the European alliance by making Germany a more neutral party as Russia attempts to create its western buffer zone.

Europeans think that Putin won’t invade but will follow a hybrid strategy — keeping a military presence on the border, continuing weaponization of Russia’s European energy supply and increased cyberattacks — which will serve to keep NATO from becoming fully anti-Russian the way an invasion of Ukraine would. From the NYT:

“Before the crisis, Germany was America’s closest ally in Europe, boasted a special relationship with Moscow and was the most important partner for Eastern and Central Europe. Today…Berlin’s relationship with Moscow is fast deteriorating….Germany’s difficulties are a hint of what could come if Mr. Putin continues his brinkmanship, without providing the certainty of an actual invasion.”

The US and Germany aren’t singing from the same choir book right now, so Putin may be on to something.

In Asia, China would like to drive a wedge between the US and some of its Eastern allies. It already has agreed with Russia on the demand for NATO to pull back in Europe.

India tilted toward Russia at the UN Security Council meetings last week. After China and Russia cast “no” votes in the Security Council on whether to hold an official session to discuss the Ukraine crisis, Responsible Statecraft says that India abstained. It was effectively a rejection of the US attempt to hold Russia accountable.

In the Philippines, the front-runner for president says he wouldn’t accept any offer of help from the US in negotiations with China over the South China Sea if elected president in May.

Any person can see what’s coming in cold war 2.0 and should be very wary and worried. We need to learn to navigate in what has become a multi-polar world, one with worthy competitors in Russia and China.

We should remember that during cold war 1.0 in 1962, the stationing of Russian missiles in Cuba let to a great power deal. Russia took its missiles out of Cuba and the US pulled its missiles from Turkey and Italy. Back then, Soviet leader Nikita Khrushchev was willing to consider Kennedy’s fears about Moscow’s missile deployment in Cuba. That became the basis for ending the confrontation.

The enormity of how close the world came to thermonuclear war led to an easing of tensions.  The next 50 years were a period of relative calm in US/Russian relations.

Today’s warlike tensions between the US and Russia over Ukraine have most of the same elements present, with the roles reversed. Now, Putin is telling the West that Ukraine should not be allowed to join NATO. He also demands that the US should not place offensive weapons in Ukraine.

Like Cuba in 1962, is Ukraine now the chessboard for these superpowers? Is there a lesson here from that history?

Time to wake up America! You aren’t uniquely qualified to run the world, and there are competitors who will work really hard to prevent you from trying to continue doing so. To help you wake up, listen to Pink Floyd perform “Dogs Of War” from their album “Delicate Sound Of Thunder” at the Nassau Coliseum, NY in 1988. While the singing is a bit muffled, the band sounds fine, and there’s a great saxophone solo by Scott Paige:

Sample Lyric:

Invisible transfers and long distance calls
Hollow laughter in marble halls
Steps have been taken, a silent uproar
Has unleashed the dogs of war
You can’t stop what has begun
Signed, sealed, they deliver oblivion

The dogs of war won’t negotiate
The dogs of war don’t capitulate

Still relevant, 34 years later!

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Sunday Cartoon Blogging – January 30, 2022

Well, this was predictable. NPR reported that China’s ambassador to the US warned that the US could face a possible “military conflict” with China over Taiwan:

“If the Taiwanese authorities, emboldened by the US, keep going down the road for independence, it most likely will involve China and the United States, the two big countries, in a military conflict.”

It isn’t a coincidence that China raises the specter of war while the US is focused on a possible threat by Russia in Ukraine. This week, 39 Chinese military aircraft flew near Taiwan, including two of China’s most advanced warplanes, their J-16D jets. Military analysts think that the J-16D has capacity to interfere with Taiwan’s defense radar systems and could make a huge difference in combat.

This is more evidence of how strategically fraught America’s legacy global policies are in a multi-polar world. Russia is threatening NATO and our Western allies, while simultaneously, China threatens our strategic position in Asia. We haven’t fought a two-theater war in 77 years, and haven’t won a war since.

It’s ironic that neither Taiwan nor Ukraine are formal mutual defense treaty partners with the US, yet US defense hawks think we should defend either or both. On to cartoons.

Surviving is difficult when you live in the wild:

Some voices on the Right support Russia:

Breyer retires, but opinions differ on who owns the right to replace him:

There seems very little Republicans can do to stop Biden from filling this seat, since there’s no filibuster for Supreme Court nominees. That was taken away by Mitch McConnell, during the nomination of Neil Gorsuch.

Mitch looks for a loophole:

The never-ending Republican hissy fit:

Art Spiegelman’s Pulitzer Prize winning book, “MAUS”, is a memoir about the Holocaust. It was banned last week by a school board in Tennessee. In the book, the cats are the Germans while the mice are the Jews:

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War With Russia? Over What?

The Daily Escape:

Bailey’s Island, ME – January 7, 2022 photo by Eric Storm Photo

Russia has decided the time is right to challenge the balance of power in Europe. The talks between Moscow and the US, and between the EU, NATO and Russia were motivated by two reasons. First, Russia’s long time concerns about NATO encroaching on their Western border. Second, the view in the West that Russia, after massing troops on the Ukraine border, is going to invade Ukraine and absorb it.

Putin told Biden in early December that he was looking for European security guarantees. They were later presented by Moscow in the form of two draft treaties, one a Russian-US security treaty, the other a security agreement between Russia and NATO. That led to the recent talks that seemingly went nowhere.

The pawn in this diplomatic game is Ukraine. The basic options for Ukraine are the same as were discussed in 2014: Alignment with Russia, alignment with the EU/NATO or balancing between the two.

But to Moscow, Ukraine isn’t the problem. Putin thinks it’s Washington.

We should remember that Putin laid out his position to not accept any further eastward expansion of NATO in his speech to the Munich Security Conference in February, 2007. He hasn’t changed his thinking.

Both sides know that Ukraine is an impoverished, de-industrialized, divided, and corrupt mess. Ukraine ranks 117 out of 180 countries on Transparency International’s corruption index. Why would either side want to take over responsibility for Ukraine?

Also, Russia understands that the NATO expansion hadn’t been on the table for years until Putin brought it up. Suddenly, he has the West debating an issue that wasn’t an issue for a long time. Ukraine hardly qualifies as a potential NATO member – it doesn’t have the resources to defend itself. There’s no way it could really contribute to defending other countries in Europe, even though they did send a few troops to Iraq and Afghanistan.

So why would Russia attack Ukraine? Moscow is fully aware that while its troops would be welcomed in Eastern parts of Ukraine they wouldn’t be in others. Yet, we learned yesterday that Russia withdrew its diplomats and their families from Kyiv:

“According to one senior Ukrainian security official, 18 people — mostly the children and wives of Russian diplomats boarded buses from Kyiv back to Moscow. About 30 more Russians left within the ensuing days, from the Kyiv embassy and a Russian consulate in Lviv. The Ukrainian security official said Diplomats at two other Russian consulates have been told to prepare to leave Ukraine.”

Anatol Lieven, writing in Responsible Statecraft, wonders what the US, NATO and the Europeans are thinking. They’ve rejected Russia’s conditions for an agreement since they were not willing to rule out expansion to Ukraine, Georgia, and other former Soviet republics: (emphasis by Wrongo)

“…NATO has no real intention of admitting Ukraine, nor of fighting Russia in Ukraine. Both Washington and Brussels have openly ruled this out. Indeed, NATO could not do so even if it wanted to. US forces in Europe are wholly inadequate to the purpose, as are what is left of the British and French armies.”

It’s possible that Russia is attempting to split Germany from the rest of Europe. Germany is reliant on Russia’s natural gas to a greater extent than other European countries. Assuming that Lieven is correct about NATO military weakness, it’s also possible that Russia is trying to intimidate NATO. According to Adam Tooze, Russia accounts for about 40% of Europe’s gas imports. And a rupture of relations will result in the complete embargoing of Russian gas and oil to European customers.

While the US, NATO, and the EU have all promised “unprecedented sanctions,” against Russia if they invade Ukraine, sanctions only matter if the other side cares. If Russia decides to rupture relations with the West, it will have calculated that it would survive more economic sanctions. The primary Western threat is to block Russia from using the SWIFT electronic payments system. But it’s possible that Russia could survive being blocked from SWIFT for longer than Europe can survive without Russian energy.

Despite that threat, Western allies are sending dangerously contradictory messages about their willingness to impose anything on Russia beyond a financial slap on the wrist. One variable that sums up Russia’s commanding position in a sanctions environment is Russia’s foreign exchange reserves:

With north of $600 billion in reserves, Russia is just behind China, Japan, and Switzerland. This gives Putin the capacity to withstand sanctions on the rest of the Russian economy.

Putin has a timeline. In 2024 he faces a choice as to whether to continue in power or to begin to prepare for his final exit. At that point, he will be 72. We have to assume that by then, he would like to have drawn a line on Western expansion.

Also, 2024 overlaps with the end of Biden’s first (only?) term as president. So, setting the terms of Russia-US relations on the expansion issue must be a priority for the Kremlin. Biden has clearly signaled that his priority is China and that he is willing to pay a political price for retrenching its strategic position (Afghanistan). Perhaps that opens the door for a Russian deal in Europe.

Lost in this discussion is the possibility that directly confronting Russia could drive them to sign a joint defense treaty with China. That would be a world-changing diplomatic move, assuming it included a mutual defense provision.

It would be a balance of power earthquake, a real-life demonstration Mackinder’s Heartland theory, which states that:

  • Who rules Eastern Europe commands the Heartland
  • Who rules the Heartland commands the World Island
  • Who rules the World Island commands the world

Mackinder thought of the heartland as the core of Eurasia, and he considered all of Europe and Asia as the World Island.  Think of such an alliance controlling much of the world’s natural resources, having global leadership in manufacturing, and the best of STEM education. Imagine their combined military and naval might joined in a military pact.

There is still a chance that US flexibility in two areas may avert a diplomatic meltdown with Russia. The first would be a NATO commitment to deploy no new forces in NATO countries close to Russia’s borders, in return for Russian limits on new deployments and the stand-down of the troops now deployed on Ukraine’s borders.

The second would be genuine US support for the failed Minsk II agreement which focused on autonomy for a demilitarized Donbas region within Ukraine. Donbas autonomy within Ukraine would be a serious barrier both to Ukraine seeking NATO membership and would therefore indirectly meet Russia’s key concerns.

NATO, the US, and the EU need to come to a more modest view of themselves and their role in the world. We should abandon the empty and hypocritical false promise of further NATO expansion and seek a reasonably cooperative relationship with Russia.

Otherwise, we can go on living in our world of make-believe, a world that may easily be shattered by harsh realities.

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China’s New Missile Threat

The Daily Escape:

Moonlight on Nantucket Sound, Dennis Port, MA – October 2021 Samsung Note 20 ultra photo by Kelly O. & Bob W.

(We leave Truro, MA today, returning to our workaday lives in CT. It has been a wonderful time on Cape Cod, eating very well, and visiting with both local family, plus a few who traveled to spend time with us.)

From Vice:

“ the Financial Times, citing anonymous US intelligence sources, has reported that China tested a missile capable of carrying a nuclear warhead in August that left the Pentagon stunned.”

They’re saying that China may have launched a Fractional Orbital Bombardment System (FOBS) with a Hypersonic Glide Vehicle (HGV). Opinions differ, but they fired something that orbited the globe and dropped a hypersonic glide vehicle against a target.

Wrongo lost the fob for his car once, they’re expensive to replace. What are we talking about, and why should we care? In August or possibly in July, China tested a missile that might be a FOBS. While Wrongo ran a missile unit in the military, that was 50+ years ago, and the technology has vastly improved – so he’s not an expert.

Let’s define what we’re talking about: “Hypersonic” means that it flies faster than the speed of sound. Hypersonic means speeds from Mach 5 to Mach 25, which is orbital velocity. All ICBMs are hypersonic when they re-enter the atmosphere.

An ICBM can be tracked from launch, and since it can’t be redirected during flight, we will have 10+ minutes warning of the targeted location. But a FOBS can stay in orbit for an indeterminate time. You won’t know where it’s going until it begins its descent, which means that by the time it’s possible to determine the target area, there might only be 2-3 minutes of warning.

This has implications for our missile defense umbrella. A traditional ICBM flies a parabolic trajectory so a missile tracking radar can make projections of where and when it will hit a range of targets, providing “early warning” to our threatened locations.

But as the Drive says:

“The maneuvering hypersonic glide vehicle, descending from high-altitude at extreme speed, could travel thousands of miles to its target, which can be…offset from a normal ballistic track. Complicating things…these systems can attack from the south pole, not just the north where most of America’s ballistic missile early warning, tracking, and defensive apparatus is focused.”

Our missile defense system is designed for launches from the north. Seems like a bad time for us to figure out they can also come from the south.

Regardless, America’s military has little ability to intercept China’s weapons. Our mid-course intercept capabilities are focused on traditional ballistic missile flight profiles. In practice, America’s missile defenses have never been able to stop China’s missiles, so this additional Chinese capability doesn’t change our vulnerability to their nuclear weapons.

From Jeffery Lewis of Arms Control Wonk: (brackets by Wrongo)

“They [the US] have a very poor [anti-ballistic missile] test record…It’s around 50% percent and only in very scripted scenarios. They don’t test in adverse weather. They’ll cancel missile defense tests on account of rain.”

Doesn’t work in the rain? Shouldn’t we have a more legit missile defense system? What if I told you it  cost more than $30 billion?

US spy satellites have revealed that China is constructing hundreds of new missile silos in northwestern China. Their military buildup is, at least in part, a reaction to the perceived threat of America’s pivot to China from the Middle East.

If this report ends up being accurate, one thing is likely: There will be a new profit center for America’s defense contractors! The Pentagon is pushing to deploy a whole new space-based early warning and tracking system for hypersonic and ballistic missiles.

Expect new calls for hugely expensive missile defense capabilities in Congress, as well as demands to do whatever possible to bring China to the bargaining table in hopes of obtaining some type of strategic arms limitation treaty.

Speaking of now wanting a new treaty, China and Russia have both expressed concern, multiple times, about the US abandonment of the Anti-ballistic Missile Treaty. The ABM Treaty was a 1972 deal with the Soviet Union that limited the number of such systems both countries could develop and deploy.

Colin Powell and George W. Bush dismantled that treaty in the wake of 9/11. Perhaps if GW Bush hadn’t unilaterally abandoned it in 2001, we might not be talking about this today.

Our presidents can say whatever they want, but our adversaries have to look at the worst case for their own defense, just as we must. They believe that abandoning the treaty opened the way for a US first nuclear strike.

But don’t be too worried about this.

Rest assured we will have an effective defense/response system just as soon as we can get the parts from China.

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How to Think About Australia’s Nuclear Subs

The Daily Escape:

Pumpkins, Bear River City, UT –  September 2021 photo by John Dodson

Should average Americans care that the French are pissed off at Biden? Should we care that within days after shutting down our Afghanistan adventure, we’re adding a new nuclear capability, girding for a possible war in Asia?

On the surface (pun intended) it’s all about nuclear submarines. Australia just reneged on a $66 billion deal negotiated in 2016 to buy French diesel-powered subs. Instead, on September 15, they signed a new deal with the US and the UK to purchase American nuclear-powered submarines.

Ironically, in order to win the Australia deal, France had to design a conventional power plant for its Barracuda-class submarine that was originally powered, as all French subs are, by a nuclear reactor.

France’s power conversion for the Australian order ran into difficulties and time delays. Vox reported that the French deal had already been unraveling, saying that it had fallen behind schedule while costs nearly doubled:

”In June, Australian Defense Secretary Greg Moriarty signaled…that the original deal was proving untenable…and that Australia was pursuing other options should the pact fall apart.”

There were other issues. Shortly after Australia and France reached their agreement, the French shipbuilder revealed it had been hacked, and documents related to a separate Indian submarine project were exposed. Meaning plans for another Barracuda-class sub were floating around the internet, not a big confidence builder.

On the strategic side, France’s conventional, diesel-powered attack vessels may have made sense before China began its quest for dominance in the South China Sea. But new geo-political realities along a major Australian trade route made the French submarines obsolete before they could be delivered.

FYI, a sub designated an “attack” submarine has only conventional weapons on board. The US-made attack subs are nuclear powered, so they have a far greater range, don’t require refueling, and can stay underwater for months at a time without being detected.

Australia has already sunk some $3 billion into the French contract, and France will likely demand additional compensation for the cancellation. The new contract with the US/UK not only costs more, but it only includes 8, instead of the 12 submarines France was delivering.

Generally, navies require three boats in order to have one at sea full-time, since the other two are often either in training, or in refit. This means that the actual patrolling capacity for Australia’s nuclear navy will only be 2-3 concurrent submarines at sea.

Losing the sub deal places French President Macron in a tough spot. GZero reminds us that France is just six months away from a general election that’s shaping up to be a close race between Macron and his far-right rival, Marine Le Pen:

“Macron, who has increasingly veered to the right on certain issues…knows that he can’t afford to look toothless, and that taking a hard line on the US could reap political benefits come election day (only 44% of French adults now view the US favorably).”

That helps explain some of the anger. Aside from the financial hit from losing the deal, and the slight by the US, France is also miffed because it shows the world something no country wants to admit – that France is not a superpower. And despite its pretensions, it really isn’t a global power.

Most would agree that a nuclear sub strategy is the right choice for Australia. It is a member of the British Commonwealth. Australia and New Zealand are out in the Pacific, much closer to China than to Europe. They seem to think that planning to work with the US and Britain is a better fit.

But the US shouldn’t have excluded the French or lied to them. France has 2 million inhabitants in the Indo-Pacific, and had by 2018 already defined its strategy for the region. Biden must work to mend these fences, and that seems to be underway.

Amid all the pearl clutching regarding France’s anger, isn’t the real question what’s best for Australia’s defense? This is Australia’s way of showing China that if they choose to block Australian trade routes, the Australian navy will have several untraceable attack subs that could deter the Chinese Navy.

China’s massive military buildup is the primary reason for this new arms race in the Indo-Pacific. Australia, along with Biden, are responding. We shouldn’t take seriously the accusation of “sparking” an arms race that is already underway.

For the US however, this amounts to a relatively cost free and significant de-facto expansion of America’s Asian nuclear attack submarine fleet, our most effective deterrent to Chinese territorial expansion.

With this, Biden has executed a masterstroke in Asia.

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Monday Wake Up Call – September 13, 2021

The Daily Escape:

Cliff Palace, Mesa Verde NP, CO – September 2021 photo by David Milley Johnson

Daniel Byman of Georgetown University has the cover article in the WSJ’s Weekend Review: “Why There Hasn’t Been Another 9/11”. He says that while jihadism remains strong globally, the US has been spared a repeat of 9/11:

“Twenty years ago, the 9/11 attacks killed almost 3,000 Americans. Since then, the US homeland hasn’t suffered any comparable terrorist assault, nor even one a tenth of the size. The total death toll from jihadist attacks inside the US over these last two decades stands at 107…”

Byman’s point is that despite losing in Afghanistan, the US has become skilled at limited interventions: a drone strike to kill a terrorist leader here, a raid by special operations forces there, including the killing of Osama bin Laden and ISIS head Abu Bakr al-Baghdadi, among others. This has forced the terrorist leaders to hide constantly and has eliminated their ability to run large terrorist training facilities.

Our abilities to intercept terrorist phone and internet communications, monitor activity from the skies and coordinate in real time with our allies, allows us to be on top of most large-scale attacks that might be planned against us. From Byman:

“A jihadist arrested in Morocco may have made phone calls to an operative in France, who received money from a funder in Kuwait, who is tied to cells in Indonesia and Kenya and operates under the instructions of a leader in Pakistan…”

All of this is tracked. And the US then assembles this giant jigsaw puzzle, encouraging the arrests of suspects, while using drone strikes where arrests are difficult. Byman implies that we’re being kept safe because of our investment in anti-terrorist assets and technology.

He’s planting a stake in the ground for additional funding for America’s successor to the Global War on Terror (GWOT).

Adam Tooze reminds us that US military spending was driven to new heights by the GWOT. Overall spending peaked in 2010 at $840 billion. You might expect that America’s defense budget would have decreased when we got out of full-scale Iraq and Afghanistan operations, and it did. Tooze says that overall DOD spending fell to $629 billion in 2015.

With Trump in charge, the Pentagon’s budget was pushed back over $700 billion. So far, Biden is staying the course. Our withdrawal from Afghanistan in no way signals a retreat from global ambition, as the budgetary request for National Defense in 2022 is $752 billion, a 7.4% increase.

And the amazing part is that the military doesn’t seem to have an articulated strategy to combat future threats. That may explain why it took 20 years, four presidents and $ trillions for America to replace the Taliban with the Taliban in Afghanistan. As the think tank CSIS points out:

“It has been about 15 years since DoD explained, even roughly, how it calculated the force levels that it was proposing….”

Tooze says: (emphasis by Wrongo)

“In other words, America’s grand strategists formulate goals, the Pentagon draws up lists of things it wants…but it is unclear how each of these decisions relates to the other.”

The US military is a giant professional organization run by leaders with postgraduate degrees. Like most large organizations, it is hierarchical and thrives on amassing internal power. The battle for resources between the branches of the military is intense.

The National Defense Strategy of 2018 redefined America’s future security challenge as great-power competition with China, not counterterrorism. The main arena isn’t the Middle East, but the Indo-Pacific. And Biden is doubling down on this strategic blueprint.

This requires transformative technologies: AI, robotics, cyber weapons, and new space technology. The technology will come from Silicon Valley, even though they have somewhat conflicting technological partnerships with China.

We’re no longer training military in Afghan villages in California, we’re planning on building robot submarines. All of this shows that the withdrawal from Afghanistan in no way signals a retreat from our military’s global ambitions, despite our historically mediocre military leadership.

Time to wake up America! The war hawks in each Party along with the defense contractors have no intention of taking their collective feet off the gas pedal of military spending. What animates the alliance between them are buzzwords and money.

Despite what you think, social programs will always need to be paid for by new revenue, while defense spending is always “on the house”.

To help you wake up, listen to “New York Minute” by Don Henley. While it has some deep relevance to 9/11, it was recorded in 1989 for Henley’s solo album, “The End of the Innocence”. It was one of the songs radio stations in NYC played frequently in the weeks after 9/11. The track features Toto members David Paich on piano and Jeff Porcaro on drums:

Lyrics:
Harry got up
Dressed all in black
Went down to the station
And he never came back
They found his clothing
Scattered somewhere down the track
And he won’t be down on Wall Street in the morning

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Senate Authorizes New Industrial Policy

The Daily Escape:

Oro Valley, AZ – 2021 photo by PoohBear512

On June 8, the Senate passed a major industrial policy bill that would direct government investment toward critical technological sectors. The bill is intended to reinvigorate the manufacturing segment of the US technology sector, providing alternatives to supply chains dependent on Chinese microchips. Some argue that it also lays the foundation for long-term economic and technological competition with China. The bill passed with a filibuster-proof 68 votes.

The debate over industrial policy is politically charged because it goes to the heart of a deeper, long-standing controversy over the role of free markets and the role of the government in the economy.

Proponents of a state-directed and funded industrial policy argue that the government has the duty to structure the economy in the national interest, since the free market may fail to do so. We know that manufacturing provides stable, well-paid employment, but that isn’t factored into an individual firm’s decision-making. We can look at American firm’s offshoring of production even though it has cost jobs domestically while also offshoring manufacturing know-how.

As we discovered with Covid, it is very important to produce critical goods domestically. Industrial policy can help a country determine what critical goods it needs to produce domestically, such as medical supplies, or military equipment, for national security reasons. We learned about the automotive chip shortage, which is part of the greater issue of foreign control of global computer chip production.

There is also an argument that the government should fund R&D because the societal benefits go far beyond what companies will ever invest in.

Industrial policy fell out of favor in the US during the 1980s and 1990s with the development of the Washington Consensus, that defined economic development as the result of free-market policies such as the privatization of state enterprises and promotion of free trade.

But because of our competition with China, there’s a renewed interest among DC politicians across the aisle with again doing what Republicans have castigated Democrats for doing: “Betting on winners and losers”.

The bill authorizes the lion’s share of the money, totaling $190 billion, for a major rethinking of federal science, technology and research spending. It creates a new technology division within the National Science Foundation to focus on emerging areas including artificial intelligence. It also gives $10 billion for the Commerce Department to invest in new technology hubs so that other regions and cities across the country can attract the same sort of economic opportunities as Silicon Valley.

If some version of the bill eventually passes both Houses and is signed into law by Biden, it represents a major shift in how the US government manages its relations with the tech sector.

Both Republican and Democrats now suddenly seem interested in government intervention in domestic markets. It turns out that bipartisanship is on the menu whenever the issue is socialism for corporations. We can easily pass legislation that sends $ billions to corporations, but money for voting rights, people’s domestic lives, and infrastructure? Not now, maybe not ever.

China has invested in R&D while the lion’s share of American firms have squandered their money on share buybacks. Shame on us for supporting tax cuts for corporations! If only we had the foresight to know how stupid those things were. Here’s a chart:

Source: Council on Foreign Relations

Oh wait. Many of us had that foresight.

We did this with Japan back in the late 1970s. Earlier, we outspent the Russians in the space race.

This time we will probably give $ billions to the some of the same companies that decided to move their factories to China in the first place. Oversight will be crucially important.

Nothing we do will prevent China from educating its people, building new infrastructure, and focusing on STEM. But we can keep our edge over the Chinese by focusing on education, basic research, infrastructure upgrades, and STEM.

And the Chinese won’t be an easy target.

While we debate whether intelligent design and Critical Race Theory should be taught in our schools, the Chinese will be colonizing the Moon. While we fight about the 2nd Amendment, the Chinese are moving to dominate the global economy.

Most of the bill funds domestic investments to remain technologically competitive and reduce dependence on our economic adversaries. This seems like sound policy.

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