11 September 2013

Syria, America and Putin's Bluff ***

SEPTEMBER 10, 2013
Stratfor
By George Friedman

In recent weeks I've written about U.S. President Barack Obama's bluff on Syria and the tightrope he is now walking on military intervention. There is another bluff going on that has to be understood, this one from Russian President Vladimir Putin.

Putin is bluffing that Russia has emerged as a major world power. In reality, Russia is merely a regional power, but mainly because its periphery is in shambles. He has tried to project a strength that that he doesn't have, and he has done it well. For him, Syria poses a problem because the United States is about to call his bluff, and he is not holding strong cards. To understand his game we need to start with the recent G-20 meeting in St. Petersburg, Russia.

Putin and Obama held a 20-minute meeting there that appeared to be cold and inconclusive. The United States seems to be committed to some undefined military action in Syria, and the Russians are vehemently opposed. The tensions showcased at the G-20 between Washington and Moscow rekindled memories of the Cold War, a time when Russia was a global power. And that is precisely the mood Putin wanted to create. That's where Putin's bluff begins.
A Humbled Global Power

The United States and Russia have had tense relations for quite a while. Early in the Obama administration, then-Secretary of State Hillary Clinton showed up in Moscow carrying a box with a red button, calling it the reset button. She said that it was meant to symbolize the desire for restarting U.S.-Russian relations. The gesture had little impact, and relations have deteriorated since then. With China focused on its domestic issues and with Europe in disarray, the United States and Russia are the two major -- if not comparable -- global players, and the deterioration in relations can be significant. We need to understand what is going on here before we think about Syria.

Twenty years ago, the United States had little interest in relations with Russia, and certainly not with resetting them. The Soviet Union had collapsed, the Russian Federation was in ruins and it was not taken seriously by the United States -- or anywhere else for that matter. The Russians recall this period with bitterness. In their view, under the guise of teaching the Russians how to create a constitutional democracy and fostering human rights, the United States and Europe had engaged in exploitative business practices and supported non-governmental organizations that wanted to destabilize Russia.

The breaking point came during the Kosovo crisis. Slobodan Milosevic, leader of what was left of Yugoslavia, was a Russian ally. Russia had a historic relationship with Serbia, and it did not want to see Serbia dismembered, with Kosovo made independent.

There were three reasons for this. First, the Russians denied that there was a massacre of Albanians in Kosovo. There had been a massacre by Serbians in Bosnia; the evidence of a massacre in Kosovo was not clear and is still far from clear. Second, the Russians did not want European borders to change. There had been a general agreement that forced changes in borders should not happen in Europe, given its history, and the Russians were concerned that restive parts of the Russian Federation, from Chechnya to Karelia to Pacific Russia, might use the forced separation of Serbia and Kosovo as a precedent for dismembering Russia. In fact, they suspected that was the point of Kosovo. Third, and most important, they felt that an attack without U.N. approval and without Russian support should not be undertaken both under international law and out of respect for Russia.

Strategic significance of Daulat Beg Oldie

Vijay Mohan

Located in north-eastern Ladakh on an ancient trade route connecting what is now India’s largest district to Uyghuristan in western China, DBO is a historic camp site for caravans and is now an Indian military post with an airfield. Also known as an ALG in air force parlance it is at an altitude of about 16,600, making is the world's highest landing ground for fixed-wing aircraft. 

Strategically vital, it is situated near the easternmost point of the Karakoram Range in a cold desert region, just 8 km south of the Chinese border and 9 km northwest of the LAC between India and China. A few miles north-west of the airstrip is the Karokoram Pass that links Pakistan with China via a highway. The Karakoram highway and an upcoming rail link would eventually link China with the Pakistani port of Gwadar, giving China at alternate link into western Tibet and there on further into the hinterland for bulk movement of energy supplies from the Gulf. 

The nearest inhabited town is Murgo to the south, which has a small population of Baltis who primarily depend on apricot farming and yak rearing. Murgo in local dialect means “gateway to death”. Temperature at DBO plummets as low as minus 30 degree Celsius in the winters and the weather deteriorates frequently with strong icy winds lashing the area. 

The airstrip, which is still unpaved, was build during the 1962 Sino-Indian conflictand three-engined Packets operated from DBO from 1962 to 1965. In 2008, the airstrip was reactivated by the IAF when an AN-32 twin-engined aircraft touched down. During the interim period of 43 years, helicopters used to operate there. In Aug this year, the IAF landed its recently inducted four-engined C-130J Super Hercules at DBO, which has a payload capability of five times that of the AN-32. The reactivation of DBO, along with two other ALGs at Fukche and Nyoma in Ladakh, for transport aircraft has considerably boosted the logistic support to army formations deployed in the area as well as enhanced the ability for rapid induction and deinduction of troops. 

The DBO sector also came into focus in Apr 2013, when a platoon-sized contingent of the PLA established a campsite in Depsang Valley 30 km southeast of the airfield, about 19 kms on the Indian side of the LAC. The three-week stand-off continued till early May, when both sides withdrew their units further back. Chinese incursions into Indian Territory in Ladakh are said to be frequent. 

DBO: Whose perfidy is the border imbroglio?

Lt Gen Baljit Singh (Retd)

History is witness to the fact that until the proclamation of the People’s Republic of China in 1949, there simply was no presence of the Chinese south of the Karakoram-Kunlun Ranges, nor any objections by any nation-state to the frequent Indian presence in the Daulat Beg Oldie region 

THERE are perhaps more tales about the origin of the place-name — Daulat Beg Oldie (DBO) — than are the number of alphabets in it! Be that as it may, DBO was never a human habitation, nor indeed a place-name in any recognised map-almanac. Nevertheless, DBO per se figures prominently in the vast body of literature related to explorations of the Western Himalayas, including intrigue and murders of a few prominent explorers in the vicinity of DBO and upon the Karakoram Pass. And of course Indian govt documents of the nineteenth century maintained exhaustive reports purporting to frenzied shadow-boxing between the then super powers, Russia and Great Britain, for ousting Chinese presence from and establishing their own political hegemony over the emirates and khanates of Central Asia. 

To begin with, Whitehall opted for Afghanistan as the convenient launch pad for facilitating British entry in to Central Asia. And willy-nilly, the adventure-inclined subalterns of the Indian Army led by Lt Arthur Conolly of the 6th Bengal Native Infantry were inducted in to Central Asia via Mazar-i-Sharif in north-west Afghanistan, ostensibly on a “trek” to Bokhara or Khiva but in essence to check on Russian presence in the region. The Emir did receive Conolly affably in his Bokhara Palace but a few days later the news of sighting of the Czar’s cossacks in the vicinity of Khiva so unnerved the potentate that Conolly was at once thrown inside a vermin infested dungeon and later summarily beheaded. The world learnt of that murder two years later when Alexander Burns, another subaltern, chanced upon Conolly’s copy of the Bible, scribbled inside which was the message from him to his sister which made “Great Game” a part of the English lexicon. “We of the Game are beyond protection. If we die, we die. That is all,” Conolly had written. Much to the dismay of the Rudyard Kipling fans, this exciting new idiom was not of Kipling’s making! 

The Russians were by no means sitting idle. Exploiting the advantage of terrain, they easily neutralised the meager gains made by Connolly and Burns in the north-western Central Asian States. So the British next decided to shift focuseast of Bokhara by circumventing the Karakorams Range from its eastern-most flank and made Leh the pivot, for furthering their Central Asian policy. Over the next two decades, dozens of British operatives crossed the Karakorams and traversed the region from Khotan in the east, to Kashgar in the west, totally unhindered by any other nation. Both to encourage this ongoing effort and to collate the intelligence so gathered, the then Governor General of India appointed and stationed Sir Douglas Forsyth at Leh in 1862 as the first British representative. 

Forsyth at once led three forays to Khotan and Yarkand, each time via DBO but bypassing the Karakoram Pass from farther East, over the Kunlun Range. He learnt that Yakub Beg, the Khan of Kashgar had decisively defeated and driven the Chinese out of western parts of Central Asia as also totally prohibited barter trade with them in this entire region. So in his report to the Governor General, Forsyth emphasised that “…great untapped market lies in Central Asia, especially for Indian tea now that supplies from China had been prohibited.” 

India Will Never Become a Superpower

September 9, 2013

The end of the Cold War and the era of “unipolar” US dominance that followed has led many to wonder about the future of international power. Who will rival, or perhaps even replace, the US?

At least one obvious candidate has emerged. Although it would be premature to categorise China as a global superpower, it is quickly developing into the US’s most plausible challenger. But in discussions of globally important matters – Syria, financial crisis, the NSA fallout and so on – one name is curiously absent: India.

When the dust settles on a rearranged global system, might India also become a global superpower? My answer is no.

To understand why, we need to look at what it means for a state to have “power”. Some international relations scholars, known as neorealists, suggest that nations are able to enhance their power by building up a range of demographic, economic, and military capabilities. John Mearsheimer, a leading theorist in this school, has identified two types of power: military and latent.

If we borrow Mearsheimer’s framework, military power can therefore be measured using existing armed forces and supporting naval and air forces. In his view, dominance over land is essential because success is defined by the ability to conquer and control territory.

Over the past two decades, India has demonstrated its ability to carry out underground nuclear tests and its capability to deliver nuclear warheads using intermediate ballistic missiles. However, it has not yet utilised these newly acquired capabilities to project power effectively. Regionally, a large percentage of India’s armed forces are stationed along the country’s extensive border areas with Pakistan and China. This inefficient allocation of military resources has limited India’s power projection beyond its borders.

Domestic poverty

In addition, the focus on India’s modest nuclear capabilities has detracted attention from weaknesses in India’s conventional forces. For instance, India does not have a strong weapons manufacturing industry, so it imports an overwhelming amount of its sophisticated military hardware from abroad, mostly from Russia. Moreover, India’s existing conventional military equipment is in severe need of modernisation.

Given the massive challenge of domestic poverty and underdevelopment, India simply has not had the resources to enable the development of a modern military arsenal. As such, it has been unable to assert itself on the international stage. In international conflicts, India’s military has only been active in humanitarian assistance and ancillary non-combat roles.

Although other countries, notably Russia and China, have been able to act as veto players on the international stage, India’s presence is of little consequence. For instance, few people would know or care to know what India’s position is on, say, the conflict in Syria.

Clearly India is not at present a global power. The question that remains to be answered is whether India has the potential to become a one in the future. Once again, academic theory guides us to think about a country’s latent power, which is the state’s ability to translate assets of population and wealth into mobilisable power.

Viewed in this way, India is also unlikely to gain a foothold as a major global player. To be sure, it has demonstrated an impressive ability to galvanise the information technology and business process outsourcing industries. However, these growth sectors are the exception, rather than the norm. In a largely agricultural country, there are huge internal wealth and income disparities across India.

Given that India is a democratic state, the government has to be responsive to the demands of its citizens. As such, the existing pressure for the redistribution of wealth limits growth in military expenditure and consequently inhibits the ability of the state to turn India into a global power. It is not surprising to note that India’s military spending as a proportion of GDP has declined since the late 1990s.

How India slid into the morass

Shreekant Sambrani
10/9/13 

SQUANDERING INHERITANCE - II Persistent deficits, galloping inflation, stalled infrastructure showed up a non-functioning government

The first wake-up call for the United Progressive Alliance, keen to shower entitlements on an India it believed was not Shining, came in early 2007. Food grain prices started shooting up. Received wisdom places the start of the food price spiral a year later, but grains went up 15 per cent and all foods by 11 per cent in 2007. I had addressed a farmers' meeting in April 2007 on ABCD (atta-besan-chawal-daal) inflation. A global supply contraction affected India as well, but our economic wizards chose to treat it through their monetary policy toolkit designed to control demand. The alarm met with a snooze response.

The rash of farmer suicides in Vidarbha and Andhra Pradesh that year also tragically highlighted agrarian distress. The government responded to the deep-rooted structural problems by offering a palliative of a one-time debt-waiver of Rs 52,000 crore to 40 million farm families. In its avowed quest for inclusiveness, it also committed simultaneously to spending Rs 20,000 crore annually on 5.5 million families of government employees and retirees. States had to follow suit, staring at bankruptcy, but overdrafts from the central government could come to their rescue! While one hand of the government tightened money to control inflation, the other opened the floodgates.

Two fortuitous (but unintended) results ensued. One, the bumper crop of 2008 temporarily paused food inflation. Food prices continued their upward march the very next year, not checked till date. Between 2007 and 2011, food inflation was 80 per cent, and fruit and vegetables doubled in prices. That trend continues to exacerbate, as is evident from onion prices literally causing tears lately. The government is entirely clueless. More on this in the next column.

The second consequence was that the additional liquidity helped cushion the shock of the global slowdown later that year. The official stimulus of lower service tax and export sops was mild in comparison to the size of India. Growth dropped to 6.7 per cent, quite respectable under the circumstances. Policy makers again highlighted their skills of managing the economy and claimed that India had successfully decoupled itself from the global contagion, because of, you guessed it, its "strong fundamentals" and healthy domestic demand climate. These words haunt them now since they blame the current crisis on the international situation, which is nowhere near as serious as in 2008.

A worse disaster followed the Mumbai terror attacks. Mr Chidambaram moved to the home ministry and that unreconstructed political fixer, Mr Pranab Mukherjee strode into the North Block. His four Budgets from 2009 to 2012 paid mere lip service to sound macroeconomic concerns, but were textbook examples of flouting them in practice. Year after year actual results missed Budget targets. Initially, these were confined to deficits and subsidy spending, explained away with verbal flourish but little logic by the then Chief Economic Adviser, Dr Kaushik Basu, famous for inventing two-handed Sudoku. The growth target of Mr Mukherjee's final Budget, hopelessly high to begin with, went the way his other forecasts did. Dr Basu said growth might not pick up until September 2012, which was considered heresy then, but turned out to be a woefully imprecise forecast in the correct direction. It, of course, matters little that the usually ebullient Dr Basu now sounds gravely concerned from his new perch in the World Bank about the economy he was not too long ago trying to talk up.

China Flies Bombers and Drone Near Japanese Skies

By J. Michael Cole
September 10, 2013

The Japanese Self-Defense Forces were on a high state of alert on September 9 ahead of the first anniversary of Japan’s controversial purchase of islets in the disputed Senkaku/Diaoyu archipelago, particularly after a pair of Chinese bombers flew near Okinawa the previous day.

Japanese Defense Minister Itsunori Onodera has ordered military personnel to strengthen their surveillance around the Senkakus, which are also claimed by China and Taiwan. A source in the Japanese government indicated that the People’s Liberation Army (PLA) and Chinese maritime enforcement could take “outstanding” action in the area on September 11, the first anniversary of the purchase.

The “nationalization” of three of the five islets comprising the Senkakus in 2012 sparked large-scale protests across China, which also claims ownership of the oil- and natural-gas-rich area. Beijing retaliated against Japan’s attempted nationalization of the islets by increasing the frequency of naval patrols in the area, raising fears of accidental clashes and escalation. 

Meanwhile, the Japanese Defense Ministry confirmed in a statement that it had scrambled fighter aircraft on September 8 to shadow two Chinese Xian H-6 bombers that were observed between the main island of southern Okinawa and Miyakojima, an area that Chinese vessels have often used to transit into the Pacific Ocean to conduct exercises. The bombers reportedly did not violate Japanese airspace.

The H-6 is based on the Soviet-built Tupolev Tu-16 Badger. A newer variant comes equipped with intermediate-range cruise missiles.

Itsunori nevertheless described the flight as “unusual” and called for vigilance two days prior to Wednesday’s anniversary. The Chinese Ministry of National Defense confirmed on Monday that the People’s Liberation Army Navy (PLAN) aircraft had recently headed for the West Pacific for routine exercises, which it said were not aimed at any specific country.

Separately, Japan also confirmed that two Chinese warships — Type 054A frigates Yiyang and Changzhou— were observed approximately 100 km northeast of Miyakojima on September 9 heading from the Pacific into the East China Sea.

In another “unusual incident,” an unidentified unmanned aerial vehicle (UAV) was spotted near the Senkakus around noon on September 9. The Air Self-Defence Force dispatched combat aircraft to intercept the drone, whose origin has yet to be confirmed. A Defense Ministry official said the UAV, which never entered Japanese airspace, had come from the northwest and was seen returning in that direction. This was the first reported incident of this kind.

Based on image analysis and unconfirmed reports, the drone is believed to have been a BZK-005medium/high-altitude long-range unmanned reconnaissance UAV from the PLA.

Asked to comment on the incident, Chinese foreign ministry spokesman Hong Lei intially said he was unaware of the situation. The PLA later confirmed that the UAV belonged to China and said it was on a routine mission.


Russia to Sell China Su-35 Multirole Fighter Jets

By Zachary Keck
September 10, 2013

Russia and China are moving closer to concluding an agreement whereby Moscow would sell Beijing advanced 4++ generation multirole fighter jets, a senior official from Russia’s state-run defense industry told media outlets over the weekend.

Viktor Komardin, deputy head of the state-run Rosoboronexport, which is in charge of regulating defense imports and exports, told RIA Novostion Saturday that negotiations for the sale of Russian Su-35 fighter jets to China are ongoing, and an agreement was likely to be reached sometime in 2014.

“Talks are ongoing, but the deal is unlikely to be sealed before the year’s end. The signing will most likely take place next year,” Viktor Komardin said.

The report noted that Komardin did not discuss how many fighter jets China was interested in purchasing, but did say that negotiations included Beijing purchasing ordnance for the advanced, highly maneuverable aircraft.

RIA Novosti also reported that the head of Rosoboronexport recently told Chinese pilots that they would “soon” have the opportunity to fly the Su-35s.

Moscow and Beijing began negotiating the sale of Su-35s in 2010, but progress was slow and talks were temporarily suspended last year over Russian concerns that China would reverse engineer the plane’s engines and passive electronically scanned array (PESA) radar systems, according to The Taipei Times.

China has a long history of developing local variants of Russian military systems it purchases from Moscow. China’s Shenyang J-11B, for example, is believed to be based on the Sukhoi Su-27SK fighter jet. This in part led Russia to drastically reduce the amount and sophistication of its arm sales to China for many years. However, recent years have seen a sharp uptick in Moscow’s defense exports to Beijing.

Ahead of Xi Jinping’s trip to Russia in March, China’s state-run media reported that the two sides had concluded one of their largest defense deals in over a decade when China agreed to purchase 24 Su-35 jet fighters from Russia and jointly develop four Lada Class air-independent propulsion submarines, which China would then purchase.

However, Russia immediately denied that such an agreement had been reached and even claimed that arms sales would not be discussed by Xi and Russian President Vladimir Putin during the visit. This created confusion on the state of the talks and called into question whether Russia was even still interested in selling China the Su-35s. The recent comments by Rosoboronexport officials clarify that Russia is still indeed interested in selling China the jets. Now, it is merely a question of whether the two sides can come to terms on the specifics of an agreement.

Assuming they can, the Su-35 multirole fighter jets should greatly enhance China’s air capabilities. Although the Su-35 is derived from the Su-27 fighters that China already has bought and copied, it comes with significant improvements, leading Russia to refer to it as a 4++ generation aircraft.

According to Air Force Technology, the Su-35 “has high manoeuvrability (+9g) with a high angle of attack, and is equipped with high-capability weapon systems that contribute to the new aircraft's exceptional dogfighting capability. The maximum level speed is 2,390km/h or Mach 2.25.”

Air Force Technology also reports that the Su-35 is capable of carrying numerous air-to-air, air-to-surface and anti-ship missiles. It also says the airplane can be armed with various guided bombs, and that its sensors “can detect and track up to 30 airborne targets with a radar cross section (RCS) of 3m² at ranges of 400km using track-while-scan mode.”

The same source notes that the aircraft are "powered by two Sturn / UFA AL-31F 117S turbofan engines with thrust-vectoring nozzle control, each supplying 86.3kN thrust or 142.2kN with afterburn."

Here's a video from Russia Today (RT) of the Su-35 "rocking" the Paris Air Show this year. The descripton of the video says that "the Su-35 has been dubbed the 'UFO' for its outstanding maneuverability.


Is the Rule of Law Coming to China?

September 10, 2013
By Chun Peng

Some signs bode well, but profound shifts must be completed before the optimism is truly warranted.

The recently concluded first trial of the Bo Xilai case has turned out – quite unexpectedly to many disillusioned Chinese and seasoned overseas China watchers – to be astonishingly transparent and sophisticated in terms of legal reasoning and argumentation. As it is being celebrated as a landmark in China’s legal development, less dramatic but more profound change has already taken place in China on its long march towards the rule of law.

The changed occurred at the 18thParty Congress. One of the two positions dropped from the Politburo formerly belonged to the chief of the Commission for Political and Legal Affairs, the party organ overseeing the making and enforcement of law in China. This is regarded as a loosening of the party’s grip over the legal system. Meanwhile, Zhou Qiang put the emphasis once again on judicial professionalization in his first public speech as newly appointed Chief Justice of the Supreme People’s Court. Based on his words at least, it would appear that the controversial motto of the “Three Supremes,” which prioritizes party interests over the Constitution and law, is finally put to rest.

Rule by Lawyers

Other signs that bode well for the rule of law in China. At their inauguration, incoming President Xi Jinping and Premier Li Keqiang both solemnly pledged that “We will be true to the Constitution,” a promise never openly made by any of the leaders in the history of the People’s Republic. The contrast is all the sharper when viewed in a historical context: half a century ago, President Liu Shaoqi waved his Constitution helplessly and futilely in front of the militant red guards; the supreme law of the land was incapable of protecting even the head of state at that time. It is virtually inconceivable that Xi or Li would permit or face such misfortune nowadays. Unlike Chairman Mao, who once proudly claimed to journalist Edgar Snow that he was above the law, both Xi and Li have degrees in that very subject (although more on this below).

There is more. During the annual sessions of the National People’s Congress and the Chinese People’s Political Consultative Conference earlier this year, among the media headlines were reports on just how many of the national leaders have a background in law. In fact, seven out of the 25 members of the Politburo were reported as either holding a degree in law or as having received legal training. This has been widely appreciated by both the state media and Chinese netizens as a propitious sign for the rule of law in China. Some even declare that China is now entering an era of rule by lawyers.

Whether or not the rule of law can be conflated with rule by lawyers is worth debating. But many Chinese do have good reason to celebrate and be hopeful this time. Many mainland Chinese are convinced that a salient feature of more mature and advanced nations is that they are led by lawyers. Chinese need not look to distant examples like Bill Clinton, Barack Obama, Nicolas Sarkozy or Tony Blair; the two most recent leaders of Taiwan are inspiration enough. Chinese legal scholars often make a historic comparison, noting that more than half of the American founding fathers were lawyers whereas none of the founders of the PRC were trained in law. So a Chinese desire for some of the critical ingredients of the rule of law is not just a recent phenomenon.

As such, the rise of legal education and the emergence of social segments with a legal background in China is sure to be welcomed. Thirty years ago, China had only a handful of law schools and no more than 1000 law graduates each year. Now there are more than 600 law schools producing 150,000 freshly minted legal professionals every year. The total number of practicing lawyers in China has jumped from 8,571 in 1981 to around 230,000 today. And lawyers have made their presence in Chinese public life increasingly felt. Today, 3,976 serve as deputies of the people’s congresses or members of the people’s political consultative conferences at varying levels. Among them, 16 are national deputies and 22 are national members. Ordinary Chinese might hope that these lawyers will bring to policymaking not only legal expertise but, more importantly, a deep commitment to justice. Certainly that is the hope for national leaders with a legal background.

China Needs Beijing to Be Even Bigger

By Yukon Huang Sep 10, 2013 

One of the most critical and controversial economic debates in China today revolves around how the country should urbanize. Already, more Chinese live in cities than on the land, a proportion that is expected to rise to 70 percent by 2030.

Proponents of further urbanization are hoping that Premier Li Keqiang will announce reforms this fall that will make it easier for migrants to move to cities and receive the same rights as locals. This, they believe, will unlock the productivity gains needed to sustain growth over the coming decades. They’re right about the need for more city dwellers -- but not about the need for more cities.

Like many things in China, urbanization policy is driven by the central government, which has sought to discourage growth of the largest cities and instead promote smaller, often entirely new ones. On the surface, this makes sense: If Beijing and Shanghai -- which already host a combined 43 million people -- were to grow even bigger, they could sink under the weight of social and environmental decay, not to mention wasted expenditures.

China is already in a class by itself in accounting for 30 of the 50 largest cities in east Asia. It boasts half a dozen megacities with populations of more than 10 million and 25 “large” cities exceeding 4 million. In fact, though, the only way China will achieve its desired productivity gains is if its leaders allow cities to evolve more organically in response to market forces. They need to let cities like Beijing get bigger.

Agglomeration Benefits

The pressure for cities to grow comes from the combination of rural poverty -- which pushes migrants to seek out better-paying jobs -- and the power of “agglomeration economies.” These are the benefits gained by the concentration of companies and workers. The resulting economies of scale and network effects drive down costs and lead to specialization.

Yet China’s planners continue to see urbanization in terms of developing new cities and facilitating the flow of people into the smaller ones. Incentives for this to happen are reinforced by limited local-level financing options. Provincial governments have relied on the conversion of rural land to urban use to fund their obligations. They have strong incentives to encourage property appreciation and industrialization to strengthen their revenue base. At its worst, this has led to the creation of scores of “ghost” cities based on the mistaken view that once built, residents will naturally come.

Even in megacities like Beijing and Shanghai, incorporating suburban land is more appealing than making rational use of the core, which is replete with dilapidated low-rise buildings from the pre-reform era. As a result, urbanization has ended up dispersing people and activities rather than increasing density. Over the past several decades, China’s urban population has expanded by 2.5 times, but urban land area has increased eightfold.

A Long, Hot Summer for China National Petroleum Corporation

By Eric Setzekorn
September 10, 2013

Over the past three months, China’s flagship state-owned oil company, China National Petroleum Corporation (CNPC) has signed deals worth up to $300 billion for oil assets abroad. At the same time, however, the company has come under increasing political pressure domestically. The deals, which included agreements in Russia, Ecuador, Mozambique, Kazakhstan and Angola, have massively increased CNPC’s equity oil supply but have further involved Chinese national interests in potentially unstable countries. The tension imposed on CNPC operations by the contradiction between strictly business interests and Chinese politics has been further amplified by the recent removal of four experienced CNPC executives in what are likely politically motivated investigations. CNPC’s recent behavior highlights the Faustian bargain of Chinese state-owned enterprises (SOEs), which requires them to fulfill national interests and provide political fealty to senior party leaders rather than make purely business calculations of return on investment.

CNPC began its busy summer in late June by inking a $1.5 billion deal with Angola, buying out Houston-based Marathon Oil’s share of an offshore field. The same day, CNPC and Russia’s state-owned Rosneft signed a twenty-five year deal worth an estimated $270 billion. One week later, CNPC paid $5 billion for a share in Kazakhstan’s Kashagan field. The Kazakh deal was noteworthy because it was arranged through the Kazakhstan government, which bought back shares in the field from U.S. based ConocoPhillips, before re-selling them to CNPC. Lastly, on July 6, CNPC signed a major refining deal in Ecuador valued at more than $12 billion.

The centerpiece agreement of the summer was the CNPC-Rosneft deal, which was concluded as part of the 17th Annual St. Petersburg economic forum and was formally approved by Russian President Vladimir Putin and Chinese Vice Premier Zhang Gaoli. According to the terms of the deal, Rosneft will receive $60-70 billion in pre-payment, which represents a potentially huge drain on CNPC coffers even with easy financing from Chinese policy banks such as China Development Bank and Export-Import Bank of China. In return for this generous pre-payment, CNPC is scheduled to receive 30 million tons per year from Rosneft by 2018, with future pipeline construction raising the delivery rate to 46 million tons per year by 2025. In the context of China’s current import rate of roughly 135 million tons per year, this deal would supply a large percentage, albeit not a majority of China’s oil import needs during the twenty-five year term of the deal.

Politically, CNPC has solidified China’s emerging role as the dominant economic player in Central and North Asia. CNPC’s deal with Rosneft ensures that Russia will devote significant resources to upgrade and improve the crude oil pipeline to Daqing, rather than concentrate solely on the East Siberia-Pacific Ocean pipeline that terminates in Kozmino and exports to Japan, South Korea and the United States. Although the deal was overlooked in the U.S., CNPC’s deal with Kazakhstan received significant media attention in India. Indian national oil company Oil and Natural Gas Corp (ONGC) had been in talks to acquire the ConocoPhillips share of the Kashagan field before the Kazakh government exerted its preemptive rightsand transferred the oil interest to CNPC. The Kashagan deal was perceived in India as a failure of India’s oil diplomacy and another example of Chinese companies unfairly using political clout in business deals.

Insecurity Drives China’s Syria Policy

By Kendrick Kuo
September 10, 2013

Why does China oppose intervention in Syria? This is a question that many U.S. commentators have been asking as the Obama administration continues trying to gain congressional approval for a U.S. military response in Syria. On a parallel track, Chinese leaders are trying to make their case for nonintervention, mustering their own arsenal of arguments. While it is common for the U.S. public to look at Beijing’s positions through a realpolitik lens, China’s opposition is not an example of obstruction of its American rival. Instead, China opposes intervention in Syria primarily because of its own sense of insecurity.

So far, China has consistently blocked all Western efforts to intervene in the Syria crisis and has vetoed three U.N. resolutions. At the same time, according to a 2011 Congressional Research Service report, China transferred US$300 million worth of arms to Syria between 2007 to 2010. Additionally, last June a Syrian official revealed that China, Russia, and Iran have been helping Damascus skirt Western sanctions by providing the Assad regime with US$500 million a month in oil and credit.

The Chinese Case for Nonintervention

Chinese leaders, state-affiliated think tanks and state-owned media have put forth a variety of reasons for the international community to resist U.S. military intervention in Syria. At a press briefing, for instance, Chinese Foreign Ministry spokesman Hong Lei argued, “Unilateral military actions go against international law and the norms of international relations and will further complicate the Syrian issue and cause the Middle East more turbulence.” Hong added that China believes, “a political resolution is the only realistic way to solve the Syrian issue.”

Before the G20 had even begun, China’s Vice Finance Minister Zhu Guangyao warned of the potential economic repercussions to U.S. military action in Syria. “Military action would have a negative impact on the global economy, especially on the oil price – it will cause a hike in the oil price,” he said.

In addition, some Chinese analysts have also questioned whether there is sufficent evidence to prove that the Syrian government and not the rebels were behind the August 21 sarin gas attacks in Syria. More skeptical commentators perceive an ulterior motive in the U.S. campaign to intervene militarily in Syria; specifically, they argue that the proposed attacks against the Assad regime are indirectly aimed at Iran and Russia.

How He Got the Upper Hand -- And How He Will Use It

Putin Scores on Syria
SEPTEMBER 5, 2013

Graffiti in Moscow, March 3, 2012. (Pawel Kopczynski / Courtesy Reuters)

After months of standing firm (and almost alone) against international intervention in Syria, by the end of August, Russian President Vladimir Putin seemed resigned to the prospect of a U.S. strike against Bashar al-Assad’s regime. To be sure, he was not happy about it, but the use of chemical weapons against civilians in a Damascus suburb appeared to have brought the current phase of the Syrian crisis to its inevitable climax. In the face of repeated U.S. and international warnings that a chemical attack was the red line for retribution, coalition strikes on Syria seemed mere days away.

Yet events after the attack unexpectedly worked in Putin’s favor. First came the British parliamentary vote blocking Prime Minister David Cameron’s initiative to join any U.S. military assault. Then came U.S. President Barack Obama’s decision to put the issue to a vote before a reluctant Congress. The French government announced that -- unlike in Mali -- it would not go it alone in Syria. And United Nations Secretary-General Ban Ki-moon stated that the chemical weapons inspection team he had dispatched to Syria would need time to complete its work before determining whether there was sufficient evidence for the UN to approve the use of force.

Now, as Putin hosts the G-20 summit in St. Petersburg, he sees a new opportunity for Russia. Given all parties’ clear reluctance to take assertive action, Putin believes that an attack can be averted, or, at the very least, limited to a unilateral American action. Beyond some French support, and some sideline cheering by the Turks and the Arab League, Obama -- not Putin -- will be out on his own. And Russia will find itself no longer isolated on Syria.

Over the past week, Putin has used a series of carefully staged public appearances and interviews to stoke skepticism about the use of force. He has pushed the idea that the Syrian rebels launched the chemical attack themselves to draw in the United States and regain ground in a civil war that they have been losing. He has engaged in cleverly orchestrated pieces of political theater, including encouraging Russian Duma deputies to reach out to members of the U.S. Congress before they vote. Putin has been judicious in calling for a review of the facts, and pointing to the importance of not doing anything rash. He has also left open the possibility that Russia could play a role in UN action against the Syrian regime -- if the secretary-general obtains irrefutable proof that Assad ordered the use of chemical weapons against his own civilians. Putin has stressed the need for high evidentiary standards to avoid repeating past mistakes, such as sanctioning U.S. intervention in Iraq on the basis of faulty intelligence on WMD.

A decision against using force in Syria, an embarrassed Obama, the prospect of a unilateral U.S. intervention launched without even the imprimatur of the U.S. Congress -- all that can be spun as a Russian victory if Putin keeps his cool.

Will Congress Save America from Syria?


Sometimes history happens at the moment when no one is looking. On weekends in late August, the president of the United States ought to be playing golf or loafing at Camp David, not making headlines. Yet Barack Obama chose Labor Day weekend to unveil arguably the most consequential foreign policy shift of his presidency.

In an announcement that surprised virtually everyone, the president told his countrymen and the world that he was putting on hold the much anticipated U.S. attack against Syria. Obama hadn't, he assured us, changed his mind about the need and justification for punishing the Syrian government for its probable use of chemical weapons against its own citizens. In fact, only days before administration officials had been claiming that, if necessary, the U.S. would "go it alone" in punishing Bashar al-Assad's regime for its bad behavior. Now, however, Obama announced that, as the chief executive of "the world's oldest constitutional democracy," he had decided to seek Congressional authorization before proceeding.

Obama thereby brought to a screeching halt a process extending back over six decades in which successive inhabitants of the Oval Office had arrogated to themselves (or had thrust upon them) ever wider prerogatives in deciding when and against whom the United States should wage war. Here was one point on which every president from Harry Truman to George W. Bush had agreed: on matters related to national security, the authority of the commander-in-chief has no fixed limits. When it comes to keeping the country safe and securing its vital interests, presidents can do pretty much whatever they see fit.

Here, by no means incidentally, lies the ultimate the source of the stature and prestige that defines the imperial presidency and thereby shapes (or distorts) the American political system. Sure, the quarters at 1600 Pennsylvania Avenue are classy, but what really endowed the postwar war presidency with its singular aura were the missiles, bombers, and carrier battle groups that responded to the commands of one man alone. What's the bully pulpit in comparison to having the 82nd Airborne and SEAL Team Six at your beck and call?

Now, in effect, Obama was saying to Congress: I'm keen to launch a war of choice. But first I want you guys to okay it. In politics, where voluntarily forfeiting power is an unnatural act, Obama's invitation qualifies as beyond unusual. Whatever the calculations behind his move, its effect rates somewhere between unprecedented and positively bizarre -- the heir to imperial prerogatives acting, well, decidedly unimperial.

Obama is a constitutional lawyer, of course, and it's pleasant to imagine that he acted out of due regard for what Article 1, Section 8, of that document plainly states, namely that "the Congress shall have power... to declare war." Take his explanation at face value and the president's decision ought to earn plaudits from strict constructionists across the land. The Federalist Society should offer Obama an honorary lifetime membership.

Of course, seasoned political observers, understandably steeped in cynicism, dismissed the president's professed rationale out of hand and immediately began speculating about his actual motivation. The most popular explanation was this: having painted himself into a corner, Obama was trying to lure members of the legislative branch into joining him there. Rather than a belated conversion experience, the president's literal reading of the Constitution actually amounted to a sneaky political ruse.

A Taboo Worth Protecting

Chemical Weapons Are Indiscriminate -- And That's Why They Should be Outlawed
SEPTEMBER 9, 2013

An Iraqi Kurd visits the cemetery for victims of the 1988 chemical attack in Halabja, March 2013 (Thaier al-Sudani / Courtesy Reuters)

Among the many arguments marshaled in opposition to U.S. intervention in Syria, a prominent one is that the chemical weapons taboo is not worth saving. Writing in Foreign Affairs last April, the political scientist John Mueller suggested that the world should “erase the red line,” since chemical weapons generally produce far fewer fatalities than conventional weapons. Echoing this reasoning, the Harvard scholar Stephen Walt asked in The New York Times last week, “Does it really matter whether Assad is killing his opponents using 500-pound bombs, mortar shells, cluster munitions, machine guns, icepicks or sarin gas? Dead is dead, no matter how it is done.” These arguments are troubling. Like the taboo against nuclear and biological weapons, the chemical weapons taboo is well worth protecting -- and inaction in Syria risks eroding it.

It is true that over the past century, conventional weapons have killed far more people than chemical weapons. But if we are keeping score, conventional weapons have also killed far more people than nuclear weapons. Nobody doubts that conventional weapons can and do kill in large numbers -- Hutu extremists in Rwanda demonstrated the lethality of even simple machetes and hoes. But nuclear, biological, and chemical weapons are labeled weapons of mass destruction because they have a higher potential to kill or wound very large numbers of people compared with other weapons. If used to full capacity and under the right environmental conditions, chemical weapons are more lethal than virtually all kinds of conventional weapons. In the August 21 attack near Damascus, sarin gas killed nearly 1,400 people in 90 minutes and injured countless others -- the single most devastating assault in the last two and a half years of war.

But the lethality of chemical weapons is not the main reason to distinguish them from conventional ones. They belong in the same category as biological and nuclear weapons because they are primarily weapons of indiscriminate destruction.

Protecting noncombatants from intentional harm is the basis for much of international humanitarian law and nearly all traditions of just war. And nuclear, biological, and chemical weapons make discrimination between civilians and fighters virtually impossible. This is especially true in modern warfare, which is rarely conducted on clearly defined battlefields.

Civilians are likely to be the main victims of chemical attacks. The reason is simple: Chemical weapons have limited military value. They did not determine the outcome of World War I, and they played an indecisive role in the Iran-Iraq War. Troops that are targeted by chemical warfare have the ability to adapt quickly and immunize themselves with protective gear. Syrian rebels have already been seen carrying gas masks. Civilians generally do not have such protection, and so the main reason a country would use chemical weapons is to terrorize civilian populations and thereby divert resources from an insurgency and sap the morale of opposition fighters.

Why Chemical Weapons Are Different



SEP 9 2013

Blistering skin, eye damage, and excruciating deaths were just some of the reasons nations decided to ban these substances after World War I.

A UN chemical weapons expert holds a plastic bag containing samples from one of the sites of an alleged chemical weapons attack in Damascus. (Mohamed Abdullah/Reuters)

The current global—and Congressional—debate about whether to deploy force against Syria for its use of sarin gas on civilians will depend, in part, on whether the reasons for a post-World War I agreement banning the offensive use of chemical and biological weapons continue to be honored.

The 1925 Geneva Protocol did not focus on World War I's terrible new 20th-century technologies that made 19th-century military tactics obsolete and led to mass slaughter: advancements in barbed wire, machine guns, and artillery led to incomprehensible and horrible effects on combatants. It was the impact of gas use on both the Western and Eastern fronts that led to the prohibition on chemical and biological warfare, even though it had led to only about one percent of the deaths there. The protocol viewed gas warfare as different from the other methods of mass killing, and banned the use of "asphyxiating, poisonous or other gases" as well as "bacteriological methods."

At least three strains of reasoning were advanced by the International Red Cross, religious leaders, the military, and politicians to help mobilize public opinion in favor of a special prohibition against chemical and biological warfare.

First, there were the unique methods of killing—and the special suffering—caused by the gases of World War I, which were first used by the Germans in the battle of Ypres in 1915 and then by all the armies. Chlorine damaged ears and eyes and caused death by asphyxiation. It was subsequently replaced by phosgene, a colorless gas that damaged the lungs and caused suffocation in a delayed reaction after exposure. Mustard gas caused blistering of the outer body and internal organs, especially the lungs. Death might come only after prolonged agony. And those who survived often had serious respiratory and other health issues for the rest of their lives.

Second, there was the "indiscriminate" impact of gas warfare. It was diffused broadly in the atmosphere—and could blow back into the offensive users or affect civilian populations. This uncontrolled aspect of gas warfare led to opposition among some military leaders on all sides.

Finally, there was a fear of an unknown future. Despite the relatively small number of actual deaths and casualties from chemical warfare compared to the horrific total, there was worry about its much broader use in the future. The inhuman, terrifying images of soldiers in gas masks fed these emotional concerns.

Together, these reasons led to a special strain of public fear and loathing that prompted the collective action embodied in the 1925 protocol. It stated that such warfare "has been justly condemned by the general opinion of the civilized world." Forty nations originally agreed to the protocol. Today that number is more than 130—although the United States did not officially adopt the protocol until 1975. And Syria adopted it in 1968.

Syria Matters Less Than Everyone Thinks

Posted By Stephen M. Walt 
September 9, 2013

I don't know how the Syria business is going to turn out, and neither do you. But I think everyone ought to take a deep breath and ratchet down their forecasts of how deep, significant, and meaningful this event is.

On one side, advocates of military strikes have been using increasingly overheated rhetoric over the past week, employing the familiar tropes and arguments that hawks have relied on ever since World War II. Comparisons to Hitler and the Holocaust? Check. Obligatory reference to Munich? Got it. Lurid warnings about a loss of American "credibility"? Uh-huh. Repeated attempts to portray opponents of a military strike as "isolationists" or worse? Roger.

This approach makes it appear that what is at stake in the Syria debate is nothing less than America's Future Role in the World. If the United States doesn't act, so the argument runs, this one decision heralds a progressive retreat of the United States from its global responsibilities (whatever those are), its steady decline as a great power, and the onset of a new era of global anarchy. But if the United States can just find the will to send some cruise missiles into Syria, then all those terrible things can be avoided and American leadership will be restored (until the next time it is hanging by a hair, of course -- probably a few months from now).

Dire warnings can be just as lurid on the other side. Opponents warn that bombing Bashar al-Assad's forces will start the United States down a slippery slope to a major ground-force commitment (it might, but it's unlikely). They suggest that attacking Assad will bring al Qaeda extremists to power (a possibility, but far from certain). Or they believe it will just reinforce America's tendency to use force first and do diplomacy later, a tendency that has gotten the United States into trouble repeatedly over the past two decades. And some more overwrought doves worry that attacking yet another Middle Eastern country will further intensify Islamic radicalism and produce a lot of nasty blowback down the road.

I remain opposed to military intervention because I do not think it will advance U.S. strategic or moral interests, and because I do not believe we have a magic formula for solving the Syrian civil war. But I also believe that both sides in this debate need to take a deep breath and to stop portraying this moment as an all-important fork in the road that will shape world events for decades to come.

In fact, what happens in Syria is not going to affect America's overall position in the world very much. Syria is a small and weak country, and what happens there isn't going to alter the global balance of power in any significant way. It's not even clear it will alter the regional balance all that much. (Israel will remain the region's strongest power no matter what happens in Damascus.) America's global position will be determined primarily by the state of the U.S. economy and by what happens in places like China, the European Union, India, Turkey, and Brazil in the years ahead.

To be more specific: If America's economic recovery continues and if the advent of hydraulic fracking and cheaper energy gives the U.S. economy an additional boost, then America will remain the world's No. 1 power no matter what happens to Assad, the Free Syrian Army, or the al-Nusra Front. If China's economy hits a wall, if Brazil, Turkey, and India hit economic headwinds, and if the EU remains hampered by its various economic woes, then the United States will be in relatively good shape whether it bombs Damascus or not.

Russia’s Absurd Proposal on Syria’s Weapons


The debate over Syria took a new turn on Monday when Secretary of State John Kerry suggested that Bashar Assad could avoid American airstrikes if he would “turn over every single bit of his chemical weapons to the international community in the next week — turn it over, all of it, without delay and allow the full and total accounting.” Kerry added that Assad “isn’t about to do it, and it can’t be done.”

But that didn’t stop Russia and other nations from jumping on the idea after the Syrian government said it welcomed the idea. Now this seemingly offhand suggestion–which Kerry apparently did not mean to float as a serious proposal–is being seriously debated as an alternative to American military action.

If Assad were serious about turning over his entire chemical weapons stockpile–not to mention destroying all capacity to manufacture more such weapons in the future–this might conceivably be a deal worth taking even at the risk of Assad rebuilding his chemical weapons capacity sometime in the future. But the odds of Assad assenting to such a deal are slight: Why should he when he knows that, worst case, he faces an “unbelievably small” American airstrike, as Kerry himself has said?

Chemical weapons are an important source of power for the Assad regime, not only for the threat they pose to Israel but, more immediately, for the threat they pose to Assad’s rebellious subjects. He is unlikely to give up such an advantage, which is so crucial to his regime’s survival, unless he were convinced that his regime would crumble otherwise. But nothing that President Obama or his aides have said would lead him to come to that conclusion.

Even if Assad claimed to be serious about such a deal–and he has said no such thing yet, in fact he hasn’t even acknowledged that he possesses chemical weapons–it is hard to know how such a deal could be implemented or enforced. It is one thing for inspectors to travel to Libya in 2003 to make sure that Gaddafi was giving up his entire WMD program. Libya then was a peaceful if despotic place. It is quite another thing to do so now in Syria where violence is commonplace–in fact UN inspectors looking for evidence of chemical-weapons use have already been shot at. How on earth could international inspectors possibly roam Syria in the middle of a civil war to confirm that Assad has no more chemical weapons left?

The task is daunting, indeed nearly impossible, in no small part because of our lack of knowledge about the whereabouts of his arsenal. The New York Times reports: “A senior American official who has been briefed extensively on the intelligence noted in recent days that Washington has firm knowledge of only 19 of the 42 suspected chemical weapons sites. Those numbers are constantly changing, because Mr. Assad has been moving the stores, largely for fear some of them could fall into the hands of rebels.”

Even if we knew where all the stockpiles were, removing them and destroying them–presumably a process that would have to occur outside the country–would be an enormous undertaking that could easily involve thousands of foreign workers along with thousands, even tens of thousands, of soldiers to protect them. It is hard to imagine such an undertaking occurring in wartime; few if any nations will risk their troops on the ground in Syria to make the process possible and Syria’s government would be unlikely to grant them permission to do so.

This, then, is not a serious alternative to military action. It is a stalling tactic to allow Assad to retain his chemical-weapons capacity–and other weapons that have killed far more people. It is also a distraction from the real issue, which is not Assad’s chemical-weapons stockpile but the continuing existence of the Assad regime itself.

More than 100,000 people have already died in the Syrian civil war and more will continue to die as long as the Assad regime remains in power. There are admittedly real dangers in what post-Assad Syria will look like, but we already know what Syria under the Assad regime looks like today–it is a disaster, not only from a humanitarian but also from a strategic standpoint, because al-Qaeda is already consolidating control over parts of northern Syria while Iran is able to maintain a client regime in power in Damascus.

The U.S. policy should be not just the removal of the chemical-weapons stockpile but of the Assad regime itself. In fact Obama has said that is his goal–but he is not willing to take the actions necessary to bring it about. In the face of this leadership vacuum, it is hardly surprising that all sorts of odd ideas are being floated.