July 15, 2022- Stealth War 96: Nicaragua May Be China’s Key to the Western Hemisphere; U.S. Destroyer, PLA Navy Face Off Near Paracel Islands; China Considers Ending Australian Coal Ban; Chinese Biometric Surveillance Technology Spreading in Myanmar; China, Pakistan Conduct Joint Naval Drills

By: Jamestown Foundation

Fri July, 2022, Age: 11 months


July 15, 2022

Welcome to the Stealth War Newsletter, a collection of the top 5 recent news items, collected on The Jamestown Foundation’s website, stealth-war-org.cdn-pi.com. To continue to receive this weekly collection, click the button below to subscribe. 

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Stat Du Jour 
This issue’s number to watch

Two Percent of GDP

Japan’s defense spending target for 2027. Japan currently spends just over one percent of its GDP on defense. The late Prime Minister Shinzo Abe, who was assassinated last Friday, was a strong proponent of increasing defense spending to at least two percent of GDP.

This Week: 

Nicaragua May Be China’s Key to the Western Hemisphere

U.S. Destroyer, PLA Navy Face Off Near Paracel Islands

* China Considers Ending its Ban on Australian Coal

* Chinese Biometric Surveillance Technology Spreading in Myanmar

* China, Pakistan Conduct Joint Naval Drills 

Top Stories

(source: FMPRC)

Nicaragua May Be China’s Key to the Western Hemisphere

On July 12, Nicaragua and the People’s Republic of China (PRC) signed two documents, as part of the ongoing normalization process between the two nations. The first document is a bilateral Free Trade Agreement (FTA) granting the PRC priority access to Nicaragua’s agricultural products. The second document is a memorandum of understanding between the two nations marking the beginning of negotiations for a comprehensive FTA. In December 2021, Nicaragua severed its 31 year relationship with Taiwan, and established full diplomatic ties with Beijing. This is not the first time that Nicaragua’s President Ortega has cut ties with the island nation; he did so in 1985 before his successor re-established them in 1990. When President Ortega rose to power again in 2007, he maintained the relationship until a combination of increasing U.S. sanctions and enticements by the PRC convinced him to switch allegiances.

Over the past few years, Beijing has intensified its efforts to increase its influence over countries in Central America, South America and the Caribbean. Its focus has expanded from trade, development, and internal security assistance via the Belt and Road Initiative and other arrangements, to growing its military presence in the region and convincing nations to join its vision of “global security.” While Beijing’s concerns over domestic food security are likely behind the prioritization of the agricultural FTA with Managua, and a broader FTA is a significant development for both nations, Nicaragua’s geopolitical value to Beijing is far greater.

A PRC based firm began constructing a canal across Nicaragua in 2013, as an alternative to the Panama Canal. The project stalled as the company faltered, but it was not a total loss. President Ortega gained a “justification” to steal land from indigenous citizens and distribute it as a form of patronage, which helped him to solidify power. Additionally, the project brought the two countries closer together, and likely played a role in Nicaragua switching recognition from Taiwan to China. President Ortega’s son, Laureano, was heavily involved in the canal project and helped lead negotiations with Beijing leading up to the re-establishment of diplomatic relations. In November 2021, Laueano’s friend, who owns the PRC firm behind the canal project, resurfaced to promote it, suggesting inside knowledge. If completed, Beijing would control one of the world’s most important land and sea choke points, meaning that even if its efforts to control the Panama Canal fail, it can still access its growing network of commercial ports throughout the Caribbean. Furthermore, Nicaragua’s flip leaves only three countries in Central America that still recognize Taiwan, and it encourages further defections as nations seek to escape U.S. influence. Finally, President Ortega’s government is one of Russia’s closest partners in the region, including engaging in military cooperation with Moscow. As the PRC and Russia work to expand BRICS and make it a “global community of security for all,” Nicaragua may become a power projection base for both nations to expand their presence in the Western Hemisphere.

(source: Wikipedia)

U.S. Destroyer, PLA Navy Face Off Near Paracel Islands

On July 13, the guided missile destroyer USS Benfold undertook a Freedom of Navigation Operation (FONOP)  in the South China Sea near the Paracel Islands, which are controlled by the People’s Republic of China (PRC), but also claimed by Vietnam and Taiwan. In response to the USS Benfold’s patrol, the People’s Liberation Army’s Southern Theater Command mobilized its air and naval assets to “warn off” the destroyer. PLA Southern Theater Command Spokesperson Air Force Colonel Tian Junli accused the U.S. of violating China’s maritime sovereignty and undermining regional security. In addition, PRC state media further accused the USS Benfold of undertaking “provocative trespassing” in China’s “territorial waters.”

The U.S.-Indo Pacific Command (INDO-PACOM) criticized the PLA’s Southern Theater Command’s response, stating that the PRC was misrepresenting lawful maritime operations and asserting illegitimate claims in the South China Sea. The USS Benfold’s patrol was undertaking a FONOP as part of the U.S. Navy’s effort to reinforce the right of all nations’ vessels to unfettered navigation on the open seas. In 2016, the Hague conducted an arbitration tribunal that declared the South China Sea international waters. China never formally accepted the ruling, and continues to challenge other states’ maritime boundary claims in the South China Sea that are based on the1982 United Nations Convention of the Law of the Sea.

(source: Wikipedia)

China Considers Ending its Ban on Australian Coal

Today, PRC officials gathered to to assess the state of China’s energy grid. What they found worried them. As a record breaking heat wave grips the nation, sanctions limit access to Russian energy, and China’s economy suffers due to Xi Jinping’s Zero-COVID policy, China’s coal reserves are dwindling. Competition is increasing in Asia for coal, with Indonesia, China’s usual supplier, raising its prices. With the heat wave, electricity output in China is increasing dramatically and is going to continue rising, and the Chinese government is eager to avoid a repeat of last year’s power disruptions, especially ahead of the 20th Party Congress this fall. As a result, according to media sources, China is considering lifting curbs on Australian coal imports in order to help address its energy challenges. When asked about the specifics of the plan, China’s top economic planning organ the National Development and Reform Commission declined to comment. 

China used to be a major consumer of Australian coal prior to a series of sanctions and bans on Australian imports, including a ban on coal in late 2020. At the time, hostilities between Australia and China were at an all time high over Canberra’s decision to ban Huawei Technologies from involvement in the country’s 5G network, as well as then-Prime Minister Scott Morrison’s call for an international probe into the origins of COVD-19. Relations remain tense, but there are some modest indicators of improvement. Australian Foreign Minister Penny Wong met with her Chinese counterpart Wang Yi today – the first face-to-face talk between top diplomats from both countries since 2019. In a statement, Wang stated that China hoped to get relations back on track.

By reaching out to Australia and other energy exporters, China is likely attempting to build up stockpiles and ensure provinces will not need to implement curbs on energy supply, hampering industry at a time when tensions with the United States and Japan are at an all time high, and the economy is struggling.  Australia is responsible for 27 percent of global coal exports, which makes it the second largest exporter after Indonesia.

(source: Wikipedia)

Chinese Biometric Surveillance Technology Spreading in Myanmar

Myanmar is drastically expanding its use of biometric surveillance, primarily utilizing the products of three companies based in the People’s Republic of China (PRC); Huawei, Hikvision, and Dahua. The first such network of facial recognition cameras was deployed in the capital, Nay Pyi Taw, in December 2020 via a partnership between Huawei and local entities. Around the same time, it was revealed that a similar plan was to be executed in Mandalay, the country’s second largest city. Now, however, it appears that the recent Aung San Suu Kyi government had either installed or was going to install such systems in at least five other cities. This was all despite senior officials in the country recognizing that, “whenever they receive technological help from other countries, they are expected to provide important information in return,” that while the government itself lacks systematic documentation on its citizens, “Huawei has all of it,” thanks to its prevalence, and, presciently, “in a time of crisis, it could present major problems.”

The military coup in February 2021 did not interfere with this project, and the new government now intends to install facial recognition systems across cities in Myanmar’s seven states and regions. This expansion of surveillance is supposedly for benign purposes, such as fighting crime. However, these tools will undoubtedly be used to track down and neutralize dissidents, deterring others from resisting the military rule, and making the insurgency difficult to sustain as the civil war rages. Furthermore, these systems serve the PRC’s interests. First of all, while the PRC has declared unwavering support for the new regime, it also needs the country to stabilize so that Beijing can continue pursuing its economic and security projects there, while preventing any of the turmoil from spilling over in to Southwestern China. Second, the country’s citizens and government will become even more dependent on the PRC’s technology. This allows Beijing to better collect and leverage intelligence; they can choose to share information with the new rulers, to manipulate them, or to threaten them. Third, if there is another major political shift, Beijing will be able to wield greater influence over its development and whatever government emerges.

(source: Global Times)

China, Pakistan Conduct Joint Naval Drills 

The People’s Liberation Army Navy and the Pakistani Navy recently concluded a series of joint naval drills in the East China Sea. The exercise, known as Sea Guardians-2, was conducted off of Shanghai’s Wusong military port. This is the second joint-naval exercise undertaken by the two countries. The first iteration of Sea Guardians was held in 2020 in the Arabian Sea. This year, the two navies conducted a series of simulations on tactics and command, as well as a comprehensive live fire exercise that consisted of joint missile and main gun attacks against maritime targets, joint replenishment, joint tactical maneuvering, and joint anti-submarine warfare, air defense, anti-missile and anti-aircraft drills. The PLA Eastern Theater Command sent the frigates Xiangtan and Shuozhou, the supply ship Qiandaohu, and one submarine as part of a task force under the command of Rear Admiral Liu Zhigang, while Pakistan sent the frigate Taimur under the command of Commodore Rashid Mehmood Sheikh.

PLA Navy spokesperson Liu Wensheng stated that the goal of Sea Guardians-2 was to enhance maritime defense cooperation between China and Pakistan. This exercise is part of a larger trend of greater naval collaboration between the two countries. Notably, the Taimur is a Chinese-designed Type 054 A/P frigate that was constructed at the Hudong Zhonghua shipyards in Shanghai, China. The Pakistani Navy has already ordered two additional Type 054 A/P frigates. While Liu stated that the drills did not target any specific third party, Sea Guardians 2 coincides with the United States Indo-Pacific Command’s annual RIMPAC exercise.




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