11 June 2013

Discomforts with China

Jun 10 2013

Its military adventurism and economic uncertainty open opportunities for India 

The Chinese incursion into our territory was disturbing. The world is troubled by the nationalism and authoritarianism of China. Yet, going by feedback from senior executives in American and Japanese corporations, it offers great opportunities for India. 

China's rise as an economic superpower has been a source of concern for the West and for neighbours like India. The accusation levelled against China is that it has not played fair on the economic battlefield. Through a combination of artificially undervalued exchange rates, subsidies to state enterprises routed through its state-controlled banking system, rigid wage controls and dubious trade practices, it has decimated one industry after another in competing economies. 

Things have changed over the last three years. Wages have increased, international pressure has forced it to ease its draconian control on the exchange rate. The possibility of its financial system imploding has forced it to reconsider its usual policy of using massive doses of credit to ward off any downturns in its business cycle. Rising political and social tensions, underpinned by growing inequality, have forced China's politicians to focus more on domestic markets and buttressing domestic consumption, instead of devoting all their attention to exports. While this transition in its basic economic model is incomplete, it has slowed growth to 7-8 per cent for a while to come. 

With its economic momentum slowing, Chinese politicians appear to be repackaging the Chinese dream through a mix of strident nationalism and regional authoritarianism based on military might. It seems to be a throwback to the days of imperial China. The fracas with Japan over the disputed Senkaku/Diaoyu islands in the East China Sea is an example of China's new military adventurism. The recent military incursion into Indian territory is yet another. 

For India, this presents a massive economic and business opportunity. China has been among the biggest recipients of global FDI. In 2012 alone, it received $112 billion. This could change in future. The world, particularly the US and Japan, seem deeply troubled by China's rising nationalism and its aspirations to hegemony in the Asia-Pacific region. 

Japanese and American commercial interests are re-evaluating China, appraising the impact of concentration, uncertainty and geopolitics. They are, in fact, looking at alternatives and India is a major destination under consideration. We need to get our act together as this is a big opportunity to get FDI to meet our capital and employment needs. We must make the Japanese comfortable and the Americans enthusiastic. 

While China's shifting political and foreign policy stances (and associated geopolitical risks) affect its viability as an investment destination, there are economic considerations like rising wages and an appreciating currency that justify a shift away from China. Recent surveys show average industrial wages in China, at $300 a month, are the highest in the region. Despite inflation and the shortage of skilled workers, India's average organised-sector wage level, at about $270 a month, is still considerably behind China's. Besides, unlike the Chinese yuan, which is likely to appreciate further, the Indian rupee could see a period of sustained depreciation, making the manufacturing sector that much more competitive. 

Capital scours the world and India does have competition. Indonesia's average industrial wage is lower than $200 a month, Vietnam's is even lower. However, two things work for India. First, it has a much larger labour pool and this is likely to put a lid on long-term wage inflation. Second, the large and young labour pool offers huge market opportunities that our smaller Asian peers lack. 

China's regional ambitions alone cannot pull FDI into India. The investment environment has to improve and this involves not just improvement in infrastructure but also a better regulatory and policy environment. We cannot afford to forget that while China ranks 91 in the World Bank's much quoted "Ease of doing business" survey, India ranks 132. Besides, there has been growing concern among potential investors about the instability of our policy regime in areas ranging from telecom licence allocations to tax policy. All this needs to be addressed before we can even aspire to benefit from FDI flows switching away from China. 

Contemporary Naxal Movement in India: New Trends, State Responses and Recommendations

By Rajat Kumar Kujur 


15-Years after Pokhran II: Deterrence Churning Continues

June 10, 2013 

http://www.idsa.in/idsacomments/15YearsafterPokhranII_avkumar_100613

For over two decades, a dominant section of western analysts harped on the volatilities of the India and Pakistan nuclear dyad, often overselling the ‘South Asia as a nuclear flashpoint’ axiom, and portending a potential nuclear flare-up in every major stand-off between the two countries. The turbulence in the sub-continent propelled such presages, with one crisis after another billowing towards serious confrontations, but eventually easing out on all occasions. While the optimists described this as evidence of nuclear deterrence gradually consolidating in this dyad, the pessimists saw in it the ingredients of instability that could lead to a nuclear conflict. Though there is no denial of the fact that the three major crises since the 1998 nuclear tests – Kargil (1999), the Parliament attack and Operation Parakram (2001-2002) and the Mumbai terror strike (2008) – brought the two rivals precariously close to nuclear showdowns, not once had their leaderships lost complete faith in the efficacy of mutual deterrence. Fifteen years after the nuclear tests, it is relevant to examine if deterrence remains weak in this dyad or has consolidated towards greater stability. 

A complex deterrence matrix 

With its history of deep-rooted hostility, the South Asian binary went through a tumultuous evolution of deterrence structures and postures. The early years were marked by limited war and terror strikes literally validating the western notion of an unstable region. India’s perceptibly transparent no-first-use (NFU) doctrine was met with a policy of strategic ambiguity from Pakistan, which preferred to keep its nuclear first-use option open and at the same time refusing to declare its threshold(s). The proclaimed aim was to deter India at all levels of military action – sub-conventional, conventional or nuclear. India’s military might was cited as justification for such postural asymmetry. The unprofessed objective though was to carve out a space to sustain the low-intensity conflict (Kashmir insurgency and terror strikes in Indian heartland) while mitigating any Indian retaliation. With its nuclear brinkmanship behaviour fuelling global paranoia, the early years of nuclearisation and its primal instability was proving to benefit Pakistan with no decisive Indian challenge to its sub-conventional influx. 

Many Indian analysts highlighted this as evidence of the doctrinal imbalance, with some questioning the efficacy of nuclear deterrence against Pakistan and a few others even demanding a review of India’s NFU posture. Though the Indian leadership upheld the NFU as sacrosanct, the need to challenge the status quo began to be felt after the 2001-2002 crises. Largely attributed to the ‘lessons’ of Operation Parakram (which proved to be a costly mobilisation effort with scope for rapid escalation), the Indian Army initiated a major doctrinal shift at the conventional level through what is termed as the ‘Cold Start’ strategy. With its plan for rapid battle-group thrusts into Pakistani territory without hitting its perceived nuclear tripwires, the military leadership conceived the possibility of calling Pakistan’s ‘nuclear bluff’ by taking its response to Pakistani soil. Though backed by an incipient belief that the space for a limited conventional war exists, Cold Start embodied India’s resolve to alter the deterrence landscape without disturbing the nuclear doctrinal framework. 

Albeit the feasibility of this strategy was consistently doubted, its signalling spin-off was immense as Pakistan began to doubt the credibility of its brinkmanship behaviour and ability to sustain the LIC without inviting India’s retaliation. Through an assortment of political campaigns (by hyping the Cold Start as escalatory) and technological responses (Nasr tactical nuclear missile, Babar and Ra’ad cruise missiles), Pakistan struggled to project confidence in its deterrent. The lack of a unitary effort from the security establishment to promote the Cold Start and the Indian Army eventually having to disown it (by renaming as proactive strategy) largely denoted the efficacy of Pakistan’s campaign, aided in some measure by the western alarmists. 

Will India go whole hog to play the balance of power in Asia?

By Prof. B. R. Deepak 
10-Jun-2013 

http://www.southasiaanalysis.org/node/1286

There are speculations that Prime Minister Manmohan Singh’s trip to Japan was a tit for tat to Chinese Premier Li Keqiang's visit to Pakistan. However, the fact is that Manmohan Singh could not visit Japan in November 2012 owing to parliamentary elections in Japan. 

There are speculations in China that a third day was added to Singh’s Japan visit in the backdrop of border ‘face off’ between India and China to demonstrate that there are converging strategic interests in the relationship. Though China understands that India’s reaching out to Japan is part of India’s ‘Look East’ policy, however, China sees India’s diplomatic expansion in East and Northeast Asia, especially the forging of strategic relationship between Vietnam, Japan, and South Korea essentially as ‘containment’ of China. It also sees India and above mentioned countries along with the US working in tandem and extending a helping hand to the US’s ‘pivot’ to Asia. India’s oil explorations in the South China Sea are also viewed as India conniving with Vietnam and undermining its sovereignty in the region though India has long made it clear that its presence in the region is primarily commercial in nature and also owing to the energy security needs. 

Notwithstanding the language of the joint statement issued at the close of Li Keqiang’s India visit that envisages that both India and China ‘view each other as partners for mutual benefit and not as rivals or competitors, and also that the ‘two sides are committed to taking a positive view of and support each other's friendship with other countries’ it was China who was first to raise eyebrows about India’s relationship with Japan (emphasis added) albeit India has been expressing its concern over the ‘all weather’ friendship between China and Pakistan every now and then. The Chinese apprehensions, rather paranoia over India-Japan bonhomie is visible in the Chinese print media. Some articles with headlines such as “India gets close to Japan on its own peril” by Global times, a sister paper of CPC’s People’s Daily known for its nationalistic fervors; “Warming of India-Japan relation is to compete with China” by Cankao Xiaoxi; “Enemy’s enemy is my friend” by takungpao.com; People’s Daily cautioning New Delhi against ‘petty burglars’ and ‘provocateurs’ among Japanese politicians who were out to target Sino-Indian ties and scores of other articles reflects the Chinese state of mind. 

China is aware of the fact that the global political architecture is undergoing a fundamental transformation with power increasingly shifting from the West to East, and also that the 21st Century is going to be an Asian Century. It is also aware of the fact that the future of this century hinges on the relationship between India, China, Japan and also the US. Therefore, as the centre of gravity shifts from the Atlantic to the Pacific, all above stakeholders are calibrating their strategies in the Pacific. Shinzo Abe’s ‘Democratic Security Diamond’ between India, Japan, Australia and the US has also been seen as the one directed against China. China has warned the US that the latter needs to be cautious in its approach as regards China’s core interests in the region. As far as US’s commitment to support Japan in case of military conflict, under the Treaty of Mutual Cooperation and Security Between Japan and the United is concerned, China wishes that the US must recognize that the treaty is a product of the Cold War, and has no relevance under present circumstances. In a veiled warning to the US, it has stated that the comprehensive national strength of China has increased manifolds since then, therefore the US should not be burning its fingers by taking the Japanese chestnuts out of the fire. 

India-Japan relationship though multifaceted having huge potentials in trade and investment and defense and security, but is nascent, especially in the realm of security cooperation. For example the bilateral trade between India and Japan stands just at $14 billion. This is abysmal if compared with India’s $70 billion trade with China, and China’s $300 billion plus trade with Japan. It is generally believed that India and Japan have been slow in building the strategic partnership; if one analyses the trend, we can say that it was only since 2008 that the direct investment from Japan started to register an increase. It was $5.5 billion in 2008 and reached $13.5 billion in 2010. Secondly, the Official Development Assistance (ODA) from Japan to India has been impressive, especially after 2003 when Japan stopped its ODA to China. The ODA in India has been utilized in areas such as infrastructural development, poverty alleviation programs, sanitation and environmental protection etc. 

As far as defense and security relations are concerned, these have undergone tremendous changes ever since October 2008 when India and Japan signed a Joint Declaration on Security Cooperation. With the establishment of ‘India-Japan Strategic and Global Partnership’ and the practice of annual summits at the highest level since December 2006, India-Japan relations have witnessed all round growth. During Manmohan Singh’s recent Japan visit between May 27 and 30, 2013 the news of Japan showing interest in selling US-2 amphibious planes found a wide coverage in Chinese as well as Indian media. Lü Yaodong, a researcher at the Institute of Japanese Studies at the Chinese Academy of Social Sciences, suggested that it would mark a strengthening of the alliance between Japan and India in terms of defense and military cooperation, and that Japan is trying to take advantage of the border conflicts between India and China and to contain the latter with the possible sale. China has been keeping a close eye on India-Japan naval exercises, Han Xudong, professor at the National Defense University, Beijing wrote an article saying that the ‘the dagger of India-Japan military exercises was pointed towards China.’ A new dialogue for discussing maritime affairs, including maritime security challenges have equally invited the ire of Chinese strategists and scholarship alike. India’s intervention in the South-China Sea has been looked by China time and again through the prism of ‘containment theory’ notwithstanding the fact that India, Japan, the Republic of Korea and China coordinate escort schedules for merchant ships as well as the anti-piracy operations in the Gulf of Aden. China is also aware that India and Japan are keen to expand the dialogue on civil nuclear cooperation, India has shown interest in reactors vessels produced by Japan Steel, however, India is also aware of the Japanese sensitivities on nuclear front, especially after the Fukushima disaster in 2011. 

The G-2 dilemma

Jun 11 2013

The current dynamic between the US and China poses challenges for Delhi 

The informal California summit over the weekend between the US and Chinese presidents, Barack Obama and Xi Jinping has unveiled a new phase in great power relations and demands a significant recalibration of India's recent foreign policy assumptions. Although the summit did not produce any major breakthroughs, its very conception is based on the American recognition that a measure of political understanding with China is necessary for the management of the challenges confronting Asia and the world. 

Any talk of US-China collaboration makes India rather nervous. Two recent occasions come to mind. In June 1998, barely weeks after the Indian and Pakistani nuclear tests, presidents Bill Clinton and Jiang Zemin declared the intent to build a strategic partnership and promote non-proliferation in the subcontinent. New Delhi went into a paroxysm denouncing the prospects for a Sino-US "condominium" in Asia. 

In a Beijing summit in November 2009, Obama and Hu Jintao declared their commitment to seek stability in the subcontinent. Travelling to the US three weeks later, Prime Minister Manmohan Singh sought assurances from the US president that Washington's partnership with Beijing will not be at the expense of Delhi. Looking back a little further, in the early years of the Cold War, India continually urged America and the Soviet Union to end their confrontation and seek peaceful coexistence. When America and Russia sought to achieve precisely those objectives in the 1970s, Delhi became anxious about superpower hegemony and protested nuclear agreements between them that constrained India's strategic options. 

The current dynamic between America and China will pose even greater challenges to Delhi. In the 1970s, Delhi neutralised the impact of Sino-American rapprochement by a tighter embrace of Soviet Russia. Today, Moscow is much closer to Beijing and is not eager to balance a rising China. 

Even more important, communist China, unlike Soviet Russia, is the second largest economy and the largest trading partner of the United States and all its major allies. China, then, has far greater leverage over America than Russia ever did in the Cold War. 

India's response to the new Sino-US engagement must be based on a number of factors. For one, Delhi must recognise that China today is at the very top of the international power hierarchy. Three decades of rapid economic growth has made China the second most important power in the world and given Beijing unprecedented influence on global affairs. While Washington is under pressure to explore common ground with Beijing, it will not be easy constructing a comprehensive accommodation between a rising China and a US that has shaped the international system since the middle of the last century. The American version of the G-2 is not the same as the Chinese conception of a "new type of great power relationship". Given the deep contradictions between the interests of the dominant power and the rising one, the process of reconciling them will be a long and difficult one. 

In the new phase of the Sino-US relationship, which will see both conflict and cooperation, India must seek more intensive cooperation with both the US and China rather than less. In the last three years, India held back on cooperation with the US to avoid provoking China. It now finds Beijing discussing terms of endearment with Washington. Mercifully, the Chinese intrusion in Ladakh in April has reminded Delhi of the folly of distancing itself from Washington in order to placate Beijing. It will be equally unwise now for Delhi to stop potential cooperation with China because of the new tensions on the border. India's ability to manage the boundary problems with China will improve only if there is a deeper basis for cooperation with Beijing in other areas. 

Will Islamabad behave differently under Nawaz Sharif?

By T V Rajeswar
10 June 2013

http://orfonline.org/cms/sites/orfonline/modules/analysis/AnalysisDetail.html?cmaid=52905&mmacmaid=52906

Nawaz Sharif has assumed office as the Prime Minister of Pakistan after a historic election, with the army sitting back and watching the electoral process go ahead. Soon after the election results were out, showing his party, the PML (N), winning a majority in the National Assembly Nawaz Sharif said that he looked forward to visiting India even if he was not invited. Dr Manmohan Singh promptly responded with an invitation to the Pakistani leader to visit Delhi. Dr Singh went a step ahead and despatched veteran diplomat Satinder K Lambah as a special envoy to meet Nawaz Sharif and work out the visit. Lambah is popularly known as a veteran diplomat on Indo-Pak matters for over a decade. He was involved in the back channel discussions with so many Pakistan leaders, including General Musharraf. 

Satinder Lambah was born in Peshawar and he is thereby a continental expert on Indo-Pak affairs as well as Afghanistan issues. His return to Delhi from Islamabad after a discussion with Nawaz Sharif was eagerly awaited. 

What are the issues which Pakistan has to face while discussing with India? Stephen P Cohen, the veteran American political analyst and an authority on Pakistan and South Asian affairs, has said that Pakistan’s well-known problems continued and there was a race between growing incompetence and problems. The challenges facing Pakistan are serious internal insurgency, sectarianism, a struggling economy and an uncertain civil-military relationship. 

Cohen went on to say that the whole world now wanted to see a Pakistan that is stable and willing to further normalise relations with its neighbours. India and Pakistan should take the lead in promoting regional cooperation which will include trade, energy and environmental issues, let alone an understanding of how to manage their nuclear weapons programmes. 

Cohen also said that India needs a stable and forward-looking government in Pakistan, one that has the confidence of the Pakistan army and can move forward. New Delhi should provide assurances and inducements to Pakistan, and this should become the agenda of their shared future and not another 65 years of hostility. 

While on a visit to Saudi Arabia, External Affairs Minister Salman Khurshid was asked whether there was a possibility of Dr Manmohan Singh’s visit to Pakistan, now that Sharif had planned to visit to India. Khurshid said that it was too early to say if the Indian Prime Minister would visit Pakistan but Dr Manmohan Singh had an open mind on the subject. Obviously, everything would depend on the outcome of the visit of the Pakistan Prime Minister to India during this year. 

During the electioneering campaign in Pakistan, Nawaz Sharif had said that insurgency had no role in Indo-Pak affairs and all outstanding issues, including Kashmir, would be resolved peacefully. There was a report from Pakistan that Sharif was reviewing the progress made in prosecuting those involved in the 26/11 attack in Mumbai. If true this was a good sign. Hopefully, it will be taken to its logical conclusion. 

Speaking to media persons after elections were over, Sharif said that the Pakistan constitution made it clear that the army was under the control of the civilian government and he would ensure that it would remain that way. It will, therefore, also imply that the ISI would be effectively monitored by the government and that it would not be at liberty to conduct any rogue operations in India. 

At another level, Sharif would be judged on what he does to rein in the Lashkar-e-Taiba and Jamat-ud-Dawa and their chief Hafiz Saeed as well as the training centre of Lashkar-e-Taiba at Muridke. 

A report from Islamabad in April said that some of Pakistan’s best educated men were being dispatched to die in the unending conflict with India over Kashmir with Punjab providing the bulk of cannon fodder. Based on historical precedents, the study on "The Fighters of LeT Recruitment Training, Deployment and Death’ warns that the reduction of the US footprint in Afghanistan could bring them back to Kashmir. 

It may be noted that this study was conducted with the support of the Combating Terrorism Centre at the US Military Academy, West Point. According to the study, the expansive and overt presence of LeT throughout the country and its ability to recruit from schools, mosques and madrasas besides circulate its publications continued. 

China’s Stealth Wars

By Brahma C 
10/6/13


China is subverting the status quo in the South and East China Seas, on its border with India, and even concerning international riparian flows ― all without firing a single shot. Just as it grabbed land across the Himalayas in the 1950s by launching furtive encroachments, China is waging stealth wars against its Asian neighbors that threaten to destabilize the entire region. The more economic power China has amassed, the greater its ambition to alter the territorial status quo has become.

Throughout China’s recent rise from poverty to relative prosperity and global economic power, the fundamentals of its statecraft and strategic doctrine have remained largely unchanged. Since the era of Mao Zedong, China has adhered to the Zhou Dynasty military strategist Sun Tzu’s counsel: “subdue the enemy without any battle” by exploiting its weaknesses and camouflaging offense as defense. “All warfare,” Sun famously said, “is based on deception.”

For more than two decades after Deng Xiaoping consolidated power over the Chinese Communist Party, China pursued a “good neighbor” policy in its relations with other Asian countries, enabling it to concentrate on economic development. As China accumulated economic and strategic clout, its neighbors benefited from its rapid GDP growth, which spurred their own economies. But, at some point in the last decade, China’s leaders evidently decided that their country’s moment had finally arrived; its “peaceful rise” has since given way to a more assertive approach.

One of the first signs of this shift was China’s revival in 2006 of its long-dormant claim to Indian territory in Arunachal Pradesh. In a bid to broaden its “core interests,” China soon began to provoke territorial disputes with several of its neighbors. Last year, China formally staked a claim under the United Nations Convention on the Law of the Sea to more than 80 percent of the South China Sea.

From employing its strong trade position to exploiting its near-monopoly on the global production of vital resources like rare-earth minerals, China has staked out a more domineering role in Asia. In fact, the more openly China has embraced market capitalism, the more nationalist it has become, encouraged by its leaders’ need for an alternative to Marxist dogma as a source of political legitimacy. Thus, territorial assertiveness has become intertwined with national renewal.

China’s resource-driven stealth wars are becoming a leading cause of geopolitical instability in Asia. The instruments that China uses are diverse, including a new class of stealth warriors reared by paramilitary maritime agencies. And it has already had some victories.

Last year, China effectively took control of the Scarborough Shoal, an area of the South China Sea that is also claimed by the Philippines and Taiwan, by deploying ships and erecting entry barriers that prohibit Filipino fishermen from accessing their traditional fishing preserve. China and the Philippines have been locked in a standoff ever since. Now the Philippines is faced with a strategic Hobson’s choice: accept the new Chinese-dictated reality or risk an open war.

China has also launched a stealth war in the East China Sea to assert territorial claims over the resource-rich Senkaku Islands (called the Diaoyu Islands in China), which Japan has controlled since 1895 (aside from a period of administration by the United States from 1945 to1972). China’s opening gambit ― to compel the international community to recognize the existence of a dispute ― has been successful, and portends further disturbance of the status quo.

In Asia’s waters, an assertive China means long-lasting disputes

June 7, 2013


Yomiuri Shimbun/AFP/Getty Images - A Japan Coast Guard vessel, right, sprays water against Taiwanese fishing boats in the East China Sea near the islands known as Senkaku in Japanese and Diaoyu in Chinese, on Sept. 25, 2012. 

TOKYO — These are tense times in Asia’s waters. In just the past month, Vietnam accused a Chinese vessel of ramming one of its fishing boats, damaging the hull. The Philippines protested that a Chinese warship and two surveillance vessels had intruded into its territory. Farther north, Chinese boats darted around Japanese-controlled islands for five straight days, staking claim to an area Japan considers its own. 

Over the last few years, China’s maritime conflict with its neighbors has taken the shape of such minor but contained skirmishes: standoffs between ships, boat collisions, arrests of fishermen, cat-and-mouse games between aircraft over disputed territory. But the quickening pace of these encounters points to what experts see as China’s fundamental strategy — using the seas as the stage on which to prove itself as Asia’s dominant power. 

Interactive: Island disputes in Asia


TOKYO — These are tense times in Asia’s waters. In just the past month, Vietnam accused a Chinese vessel of ramming one of its fishing boats, damaging the hull. The Philippines protested that a Chinese warship and two surveillance vessels had intruded into its territory. Farther north, Chinese boats darted around Japanese-controlled islands for five straight days, staking claim to an area Japan considers its own.

Over the last few years, China’s maritime conflict with its neighbors has taken the shape of such minor but contained skirmishes: standoffs between ships, boat collisions, arrests of fishermen, cat-and-mouse games between aircraft over disputed territory. But the quickening pace of these encounters points to what experts see as China’s fundamental strategy — using the seas as the stage on which to prove itself as Asia’s dominant power.

China has set off on a bold mission to control the waters around it, sparking regional tensions that could last decades, policymakers and security experts say. Amid recent signals that Beijing’s new leadership views maritime power as a fundamental national goal and is willing to spar over a massive area of water that swings from Southeast Asia to Japan and reaches into the Pacific Ocean, those experts increasingly warn that China’s rise will be contentious, not peaceful.

China’s maritime disputes with its neighbors had been expected to be discussed during meetings Friday and Saturday between President Obama and his Chinese counterpart, Xi Jinping, in California, part of a broader security conversation that will also include the expanded U.S. military deployment to the region.

While the latest incidents on the seas haven’t provoked violence, they have added to an already risky environment in which countries are modernizing their militaries, have little appetite for backing down and are raising the odds of a bloody miscalculation that could draw in the United States, which has defense treaties with Japan and the Philippines.

Kachin State in Myanmar: China’s Objectives and Strategies

By Asma Masood

China’s mediation in the Kachin-Myanmar conflict is harvesting results, as the parties reached a tentative truce on 31 May. Although no ceasefire has been declared, a breakthrough is evident in deciding Myitkyina as the venue of peace talks. A seven-point agreement on de-escalating fighting and holding political dialogue has been signed. 

How is China balancing its objectives in Kachin state with local dynamics? What has been China’s strategy to achieve its interests? 

Chinese Interests in the Kachin State

On the economic and investments front, the Kachin state is important from China. The China Power Investment Corporation’s Myitsone Dam project provoked Kachin protests against Yangon in September 2011, for permitting a threat to local socio-environmental harmony. With a ceasefire imminent, China hopes the shelved hydropower scheme will reopen in 2016. Slated as the first of seven more Irrawaddy proposals, it will generate 90 percent of its electricity to feed Yunnan in exchange for $17 billion over 50 years. The general population resents intrusions, but the Kachin Independence Organization invited China for hydropower projects. KIO’s stake in China’s Datang Corporation project on Tarpein River was sidelined by the regime, leading to obstruction efforts. 

The nearby Shwe oil and gas pipelines due to operationalize this month are vulnerable to crossfire. The oil-pipeline with an annual capacity of 12 million tones reduces transport costs. Ceasefire would ensure no more stray shells landing inside Chinese borders.

Economically, China also needs the Kachin to sustain an informal economic boom. The entire state being cut off from Naypyidaw depends on Yunnan for its entire subsistence: from rice to cars, from cell phones to university education. Chinese currency is used in standard bank transfer procedures. Jade smuggling took a new avatar since the days when a Chinese party could buy a Kachin mountain for mining. Hpakant now teems with Chinese businessmen armed with bulldozers displacing locals. They work as contract labourers for the million-dollar jade industry. PLA allegedly indirectly sells unused channels to KIO for satellite communication. The gain is mutual as seen in Kachins’ entrepreneurship. Casinos here offering international entertainment draw crowds from Yunnan directly or by videophone. Gamblers and traders pay KIA immigration officials for daily visas. Opium farming in Kachin supplying cross-border clientele is a burgeoning crop-substitution industry. 

Internally, the Kachin conflict threatens to spill into China’s domestic social fabric- Jingpos, as Kachins in Yunnan are known, form a network of 100,000 Chinese citizens. The desire for peace does not imply Chinese interest for complete settlement in Kachin. A disbanded KIA may redirect anarchy; an integrated Kachin will mean collapse of unofficial albeit significant links. 

The Kachin Peace Roadmap

21st century China projects an image as an international conflict intermediary. Diplomatic pressure was apparent in oil-rich Darfur. Similarly a significant role was played by hosting earlier Kachin peace talks at Ruili- a Yunnan border town. Security guarantees were assured for both warring factions’ officials. Chinese influence conceived the May discourse. 

CPC’s apprehension on US and UK attending talks scheduled for April forced delays until their attendance was shunned. The UN and the United Nationalities Federal Council were allowed as witnesses. Appeasing the UNFC- the union of Myanmar’s ethnic organizations- is vital for dealings with Kachin- surrounding provinces. 

Yunnan forced most Kachin refugees to leave camps in August 2012. China is sure to have swayed the homecoming provision for displaced Kachins in May’s agreement. Jingpo demonstrations approaching the border were returned to avert an overarching cultural connection. 

Japan Is a Model, Not a Cautionary Tale


The Great Divide is a series about inequality. 

http://opinionator.blogs.nytimes.com/2013/06/09/japan-is-a-model-not-a-cautionary-tale/

IN the five years since the financial crisis crippled the American economy, a favorite warning of those who have urged forceful government action, myself included, has been that the United States risked entering a long period of “Japanese-style malaise.” Japan’s two decades of anemic growth, which followed a crash in 1989, have been the quintessential cautionary tale about how not to respond to a financial crisis. 

Now, though, Japan is leading the way. The recently elected prime minister, Shinzo Abe, has embarked on a crash course of monetary easing, public works spending and promotion of entrepreneurship and foreign investment to reverse what he has called “a deep loss of confidence.” The new policies look to be a major boon for Japan. And what happens in Japan, which is the world’s third-largest economy and was once seen as America’s fiercest economic rival, will have a big impact in the United States and around the world. 

Of course, not everyone is convinced: though Japan reported a robust 3.5 percent annualized growth rate for the first quarter of this year, the stock market has dipped from a five-year high amid doubts about whether “Abenomics” will go far enough. But we shouldn’t read anything into short-term stock fluctuations. Abenomics is, without a doubt, a huge step in the right direction.

To really understand why things look good for Japan requires not only looking closely at Mr. Abe’s platform, but also re-examining the popular narrative of Japanese stagnation. The last two decades are hardly a one-sided story of failure. On the surface, it does look like there’s been sluggish growth. In the first decade of this century, Japan’s economy grew at a measly average annual rate of 0.78 percent from 2000 to 2011, compared with 1.8 percent for the United States. 

BUT Japan’s slow growth does not look so bad under close examination. Any serious student of economic performance needs to look not at overall growth, but at growth related to the size of the working age population. Japan’s working age population (ages 15 to 64) shrank 5.5 percent from 2001 to 2010, while the number of Americans of that age increased by 9.2 percent — so we should expect to see slower G.D.P. growth. But even before Abenomics, Japan’s real economic output, per member of the labor force, grew at a faster rate over the first decade of the century than that of the United States, Germany, Britain or Australia. 

Still, Japan’s growth is far lower than it was before its crisis, in 1989. From our own recent experience in America, we know the devastating effects of even a short (albeit much deeper) recession: in America, we’ve had soaring inequality (with the top 1 percent securing all of the gains of the “recovery,” and even more income), increased joblessness, and a middle that has been falling farther and farther behind. Japan’s example shows that full recovery doesn’t happen on its own. Luckily for Japan, its government took steps to ensure that the extremes in inequality that happened in the United States weren’t manifest there, and now is finally being proactive about its growth. 

And if we broaden the range of metrics we consider, we see that even after two decades of “malaise,” Japan’s performance is far superior to that of the United States. 

Consider, for instance, the Gini coefficient, the standard measure of inequality. Zero represents perfect equality, and 1 stands for perfect inequality. While Japan’s Gini coefficient stands today at around 0.33, the number for the United States is 0.38, according to the Organization for Economic Cooperation and Development. (Other data sources put the United States’ level of inequality at even higher levels.) In the United States, the average income of the top 10 percent is 15.9 times that of the bottom 10 percent — compared with 10.7 times for Japan. 

The reasons for these differences are political choices, not economic inevitability. Also according to the O.E.C.D., the Gini coefficient before taxes and transfer payments is about the same in the two countries: 0.499 for the United States, and 0.488 for Japan. But the United States does only a little to modulate its inequality, bringing it down to .38. Japan does much more, reducing the Gini coefficient to 0.33. 

To be sure, Japan’s situation is not perfect. The country needs to do better in caring for its “older old,” those over 75. This cohort constitutes a growing share of the world’s aging population. In 2008, the O.E.C.D. estimated that 25.4 percent of Japan’s “older old” lived in relative poverty — that is, with incomes less than half the national median — a figure only marginally better than the United States’ (27.4 percent), and far above the O.E.C.D. average of 16.1 percent. While neither we nor Japan may be as rich as we once thought we were, it is unconscionable that such a large fraction of our elderly should face such hardship. 

LONG LIVE TOTTENHAM

The enduring merits of the colonial filing system 
By Ashok V. Desai

Communication today is quick and cheap. People make phone calls all the time in India, even though they cost a little bit; for anyone who has an internet connection, sending an e-mail is free of cost. The result is that people in offices spend much of their time communicating. Bosses have to find time to work without interruption, and worry about how much of the time their subordinates spend on internet is fun and how much is work. It is difficult to imagine administration in an age when communication was slow and infrequent. 

But that was not so long ago. An administrative manual was written by Richard Tottenham when he was collector of North Arcot in Madras Province in the last years of World War II. It was meant to instruct officials in small, out-of-the-way offices in work procedures. At that time, the prime medium of communication was the post — tappal, as Tottenham called it. The postman delivered it in the morning. It contained information and instructions from the secretariat in Madras and other government offices. If it was not dealt with expeditiously, letters would be stacked away and get lost. Hence it was important to handle it correctly, with dispatch. It could be dealt with only if staff were present. So everyone was supposed to come not more than 10 minutes later than the office opening time of 10 o’clock. 

The tappal was received by a clerk in the presence of an officer. As soon as he opened the letters, he had to do two things: he had to list them in the personal register and give them numbers based on which section of the office was to deal with them. The number began with the file in which the letter was to be filed; if it related to new business, a new file was opened for it. But the clerk could not create a new subject on his own; he could only choose one out of a common index. Then the personal register together with the letters went to one section clerk after another; he acknowledged receipt of the letters relevant to his section, and passed on the rest. The personal register was closed and a new one opened on 1 April every year, but its first few pages were left blank to enter matters from the old register that would flow into the new year. 

A file had a hole in the top left corner. All papers filed in it had similar holes; they were all strung in the file, but could be removed or reshuffled with ease. Every file was really two files under one cover: a current file, and a note file. It had two sets of pages in it: the current file contained letters and other outside documents, and the note file contained comments and instructions, called notings. Documents were paginated in red ink, and notings in black or blue ink. Government decisions had to be consistent with laws, orders and precedents. References to them were entered in the margin of the notes in pencil. If a previous file was relevant, it was put together with the current file in a single pad, and “flagged” — that is, a stiff little piece of paper was attached to its top. It had to bear an alphabetical letter; this letter was entered where the reference file was mentioned in the current file. But flags were not to be attached to durable documents such as acts or books; they were to be preserved intact. 

The file went to the clerk of the relevant section, who made notings and passed it on to his superior. This went on till the file reached the highest officer in the place. If no further action was required, he would initial the notings page, and the file would go back down the way it came up. But anyone might propose action on the file’s way up; if the top officer approved it, the file went down to whoever was to act. The action could be a letter, a memo or a summary of proceedings; if so, the clerk made a draft, and the file passed up for each officer to approve or modify. The draft had to bear a title related to the file, followed by references to relevant files and to documents received from outside. 

Once the draft was approved by the concerned officer, it went to the superintendent of the fair copying section, who would get one of his clerks to copy it out on white paper in a good hand. It then went to the relevant officer, and once he signed it, to the dispatch clerk. He entered the details in a fair copy register, and passed it on to the postal clerk. He would put the letter in an envelope, put a stamp on it, and enter the fact in a stamp register. 

All mailed documents would be listed in the dispatch register. But if documents were sent within the same town, they would not be posted; for them, a separate local delivery book was to be maintained. 

DF Unit 8200 Cyberwar Veterans Developed NSA Snooping Technology

OpEd
June 9, 2013

http://www.eurasiareview.com/09062013-idf-unit-8200-cyberwar-veterans-developed-nsa-snooping-technology-oped/


A little known footnote to the brewing PRISM scandal, in which the NSA has for years harvested Americans’ personal data via eight of the largest social media and technology companies in the world, involves special technology developed by two Israeli companies founded by veterans of the IDF’s cyber-warfare Unit 8200:

If America’s tech giants didn’t ‘participate knowingly’ in the dragnet of electronic communication, how does the NSA get all of their data

One theory: the NSA hired two secretive Israeli companies to wiretap the U.S. telecommunications network.

Verint and Narus created programs which offered the NSA backdoors to all the major U.S. telecommuications and technology companies including Facebook, Microsoft, Google. That’s how the companies could deny that they explicitly knew or approved of PRISM’s harvesting their data:

Both Verint and Narus were founded in Israel in the 1990s. Both provide monitoring and intercept capabilities to service providers and government organizations, promoting claims that their equipment can access and retain large amounts of information on a vast number of targets. 


Narus’ product, the Semantic Traffic Analyzer, is a software application that runs on standard IBM or Dellservers using the Linux operating system. It’s renowned within certain circles for its ability to inspect traffic in real time on high-bandwidth pipes, identifying packets of interest as they race by at up to 10 Gbps. 

“*Anything that comes through (an internet protocol network), we can record,” Steve Bannerman, marketing vice president of Narus, a Mountain View, California company, said. “We can reconstruct all of their e-mails along with attachments, see what web pages they clicked on, we can reconstruct their (voice over internet protocol) calls.” 

With a telecom wiretap the NSA only needs companies like Microsoft, Google, and Apple to passivelyparticipate while the agency to intercepts, stores, and analyzes their communication data. The indirect nature of the agreement would provide tech giants with plausible deniability. 

And having a foreign contractor bug the telecom grid would mean that the NSA gained access to most of the domestic traffic flowing through the U.S. without technically doing it themselves. 

This would provide the NSA, whose official mission is to spy on foreign communications, with plausible deniability regarding domestic snooping. 

Thus, the arrangement is nifty for all those involved…except for those Americans who are victims of this intelligence shell game.

Inside the NSA's Ultra-Secret China Hacking Group

Deep within the National Security Agency, an elite, rarely discussed team of hackers and spies is targeting America's enemies abroad. 

BY MATTHEW M. AID 
JUNE 10, 2013 

http://www.foreignpolicy.com/articles/2013/06/10/inside_the_nsa_s_ultra_secret_china_hacking_group?print=yes&hidecomments=yes&page=full

This weekend, President Barack Obama sat down for a series of meetings with China's newly appointed leader, Xi Jinping. We know that the two leaders spoke at length about the topic du jour -- cyber espionage -- a subject that has long frustrated officials in Washington, and is now front and center with the revelations of sweeping U.S. data mining. The media has focused at length on China's aggressive attempts to electronically steal U.S. military and commercial sectrets, but Xi pushed back at the "shirtsleeves" summit, noting that China, too, was the recipient of cyber espionage. But what Obama probably neglected to mention is that he has his own hacker army, and it has burrowed its way deep, deep into China's networks. 

When the agenda for the meeting at the Sunnylands Estate outside Palm Springs, California was agreed to several months ago, both parties agreed that it would be a nice opportunity for President Xi, who assumed his post in March, to discuss a wide range of security and economic issues of concern to both countries. According to diplomatic sources, the issue of cyber security was not one of the key topics to be discussed at the summit. Sino-American economic relations, climate change, and the growing threat posed by North Korea were supposed to dominate the discussions. 

Then, two weeks ago, White House officials leaked to the press that President Obama intended to raise privately with Xi the highly contentious issue of China's widespread use of computer hacking to steal U.S. government, military, and commercial secrets. According to a Chinese diplomat in Washington who spoke in confidence, Beijing was furious about the sudden elevation of cyber security and Chinese espionage on the meeting agenda. According to a diplomatic source in Washington, the Chinese government was even angrier that the White House leaked the new agenda item to the press before Washington bothered to tell them about it. 

So the Chinese began to hit back. Senior Chinese officials have publicly accused the U.S. government of hypocrisy, and alleged that Washington is also actively engaged in cyber espionage. When the latest allegation of Chinese cyber espionage was leveled in late May in a front page article in the Washington Post , which alleged that hackers employed by the Chinese military had stolen the blueprints of over three dozen American weapons systems, the Chinese government's top Internet official, Huang Chengqing, shot back that Beijing possessed "mountains of data" showing that the U.S. has engaged in widespread hacking designed to steal Chinese government secrets. This weekend's revelations about the National Security Agency's PRISM and Verizon metadata collection from a 29-year-old former Central Intelligence Agency (CIA) undercover operative named Edward J. Snoden, who is now living in Hong Kong, only add fuel to Beijing's position. 

But Washington never publicly responded to Huang's allegation, and nobody in the U.S. media seems to have bothered to ask the White House if there was a modicum of truth to the Chinese charges. 

It turns out that the Chinese government's allegations are essentially correct. According to a number of confidential sources, a highly secretive unit of the National Security Agency (NSA), the U.S. government's huge electronic eavesdropping organization, called the Office of Tailored Access Operations, or TAO, has successfully penetrated Chinese computer and telecommunications systems for almost 15 years, generating some of the best and most reliable intelligence information about what is going on inside the People's Republic of China. 

Hidden away inside the massive NSA headquarters complex at Fort Meade, Maryland, in a large suite of offices segregated from the rest of the agency, TAO is a mystery to many NSA employees. Relatively few NSA officials have complete access to information about TAO because of the extraordinary sensitivity of its operations, and it requires a special security clearance to gain access to the unit's work spaces inside the NSA operations complex. The door leading to its ultra-modern operations center is protected by armed guards, an imposing steel door which can only be entered by entering the correct six digit code into a key pad, and a retinal scanner to ensure that only those individuals specially cleared for access get through the door. 

Joint Force 2020 and the Human Domain: Time for a New Conceptual Framework?

 June 10, 2013 

“The effects of physical and psychological factors form an organic whole which, unlike a metal alloy, is inseparable by chemical processes.” Carl von Clausewitz[1]

The fundamental nature of war is a clash of wills between organized socio-political entities. This understanding about war emphasizes its iterative and competitive nature, but American strategic culture often overlooks Clausewitz’s insight that strategy is not an exercise with inanimate matter, but with living opponents with interests, passions, decision options, and above all else, a will and goal of their own. It is a profoundly human activity, inspired by human emotions (fear, honor, and interest), guided by human genius and imagination, and conducted by groups and institutions shaped by human leaders and occupied with human actors. 

However, our doctrine and approach to war often overlooks this essential depiction of war as a human enterprise. This article explores how to rectify this misconceptualization within the context of supporting the evolution of the U.S. military towards Joint Force 2020. 

Despite rhetoric about the human and moral components of warfare, much of Western military theory focuses on physical domains (air, sea, land, and space). These are actually spatial regions or locations in which human activity occurs. Despite the previously cited Clausewitzian injunction that physical and moral forces are fused, American security institutions are largely organized around these physical domains, increasingly now connected by a cyberspace domain. Even the latter is still disputed in some military circles. These domains create a frame of reference that defines the preparation and conduct of war. Each military institution and Service crafts doctrine and platforms that are designed to operate or maneuver in their dominant domain. Little preparation is made to conduct war beyond them. Because of this focus on the physical domains, Americans tend to overlook, and underinvest in, the more important aspects of war and warfare—those best defined as human.[2]

This paper explores alternative and competing constructs to better capture the human aspects of war. It examines the fundamental nature of war and the evolving characteristics of contemporary conflict that are influenced by human dynamics. This paper identifies and assesses current concepts on the human dynamics of war and shows why the emerging concept of the Human Domain should be added to the U.S. Military’s conceptualization of battlespace domains. It also explores existing Joint concepts to determine how they could better integrate human factors into Joint Force 2020. The paper concludes with a number of recommendations for consideration by the Department of Defense (DOD) and the Chairman of the Joint Chief of Staff (CJCS). 

The Enduring Nature of War 

Since war is a contest of human wills, not just technology or machines, our ways and means must reflect that reality in order to ensure we have the requisite capabilities to achieve victory. There is no doubt that science and the application of advanced technology and enabling logistics is involved. But in the world we face now and for the foreseeable future, our ways and means are likely to be more complex, and the circumstances in which ends are secured will be shrouded by greater ambiguity. The human element of war will remain relevant to conflict. A military strategy and force posture that does not grasp (or even worse evades) this fundamental challenge will be an irrelevant and expensive illusion. 

This tendency to overlook human factors has a long history, and reflects a tension in American strategic culture which values science, technology, and logistics over other strategic dimensions.[3] The proverbial American Way of War emphasizes analysis of the ‘physical sciences’ of warfare at the expense of the contributions of history and relevant human elements of warfare. Two senior military theorists and practitioners noted a decade ago: 

DoD Sheds First Clear Light On AirSea Battle: Warfare Unfettered

June 03, 2013 

Like the Holy Trinity or the designated hitter rule, the concept known as AirSea Battle has been much discussed but little understood. The Defense Department released an official and unclassified summary of the concept for the first time this evening on a Navy website . (BreakingDefense got the document before it was made public). AirSea Battle would break down longstanding barriers: barriers to cooperation among the four armed services, barriers separating domains of conflict like submarine warfare and cyberspace, and, most problematically, barriers that have kept past crises from escalating to greater destruction and even, ultimately, to nuclear war

Over a decade ago, Chinese military theorists started talking about “unrestricted warfare.” AirSea Battle is unrestricted warfare, American style. It’s central to a Pacific nightmare scenario with China, to reopening the Persian Gulf if it were blockaded by Iran, and to waging interservice budget battles in Washington. It’s been dissected by thinktanks, criticized by Sinophile strategists, and alternately envied and imitated by the Army. Yet unlike its acknowledged inspiration, the Army-Air Force concept of AirLand Battle against the Soviet Union, AirSea Battle remains more vague than vivid. Part of the problem is so much of it is classified, part is that the idea is still evolving, but some of the blame must fall on the Air Force and Navy, the concept’s chief proponents, who have never articulated it all that well in public – that is, until now: 

Back in September, Rep. Randy Forbes, an advocate of AirSea Battle and chairman of the House armed Services seapower and emerging forces subcommittee, wrote an op-ed for us urging the services to come out with “an unclassified version of the AirSea Battle concept.” Nine months after Forbes’s entreaty and almost four years after then-Secretary of Defense Bob Gates officially tasked the Air Force and Navy – joined belatedly by the Army and Marines – to develop the AirSea Battle idea, we finally have an unclassified explanation of what it actually is. Better yet, with some context and a little parsing of military jargon (which we’ll try to do here), this summary is remarkably lucid. 

Start with the basics. AirSea Battle began as, and remains, an attempt to solve the operational problem known in clunky Pentagon jargon as Anti-Access/Area Denial or (even worse) A2/AD. In essence, anti-access is how an enemy keeps US forces out of a region altogether, area denial is how they bog us down once we get there, but the two inevitably overlap. 

Adversaries have obviously tried to keep us out and bog us down before. The new danger, however, is that technologies that were once an American monopoly are now proliferating to China and then onwards to anyone who can buy weapons from China, which is basically anybody who’s got the cash. So after decades of US forces being able to fly, sail, and drive more or less anywhere they wanted (even roadside bombs, for all the casualties they inflict, never actually stopped us moving around Afghanistan or Iraq), we increasingly have to worry about sophisticated weapons that can reach out and touch us at long range, from “a new generation of cruise, ballistic, air-to-air, and surface-to-air missiles” (in the summary’s words) to anti-satellite and cyber attacks. 

That said, the summary goes on, “even low-technology capabilities, such as rudimentary sea mines, fast-attack small craft, or shorter range artillery and missile systems” can keep us from stopping aggression “in certain scenarios” which they decline to name. (One much-discussed example, though, would be an Iranian attempt to close the Strait of Hormuz to oil shipping). But it’s the high-tech threats, especially ballistic missiles and cyberattacks, that worry strategists most, not only because they could keep the US from intervening in a regional crisis but because they could enable an enemy to strike the United States itself. As the summary warns, “even the U.S. homeland cannot be considered a sanctuary.”