March 4, 2022-Stealth War 78: Can China Help Russia Dodge Sanctions?; Abe Mulls U.S. Nuclear Deployments in Japan; Major COVID Outbreak in Hong Kong Spreads to Shenzhen; PLA Landing Drills in South China Sea

By: Jamestown Foundation

Mon March, 2022, Age: 1 year



March 4, 2022

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Stat Du Jour 
This issue’s number to watch$83 billion

Total value of projects in Russia funded by the China Development Bank and China Exim Bank. Despite Ukraine’s invasion of Russia, these loans remain in effect. The Asian Infrastructure Investment Bank (AIIB), which is more in line with international standards, announced it had frozen its $800 million worth of projects in Russia. 

This Week: 

Can China Help Russia Dodge Sanctions? 

* Abe Calls to Discuss Hosting Nuclear Weapons to Deter Growing Threats

Major COVID Outbreak in Hong Kong Spreads to Shenzhen

China’s Satellite“Megaconstellation”

China Promotes Image of PLA Strength Through New Landing Drills and Assault Ship

Top Stories

(source: Euronews)

Can China Help Russia Dodge Sanctions? 

On March 2, Chinese Foreign Ministry spokesperson Wang Wenbin stated that “China resolutely opposes the use of illegal unilateral sanctions.” Chinese banking leaders stated that business with Russia would continue as usual. Such statements follow increased international sanctions on Russia due to its invasion of Ukraine, including the removal of Russian financial and business entities from SWIFT; a process announced by the US and Europe on February 26 after much hesitation. SWIFT is an organization that facilitates encrypted communications for over 11,000 financial institutions across 200 countries and territories, processing over $400 billion worth of transactions every day, making it the dominant means of financial communications in global transactions. While SWIFT does not handle payments itself, it is the backbone of the international economy, which is why banning Russia from it has been called a “nuclear option.” Since sweeping sanctions were imposed last week, Russia’s economy has plummeted. Russia is largely unable to trade, pay loans, or access over half of its $640 billion sovereign wealth fund. This has put the country at risk of defaulting on its payments and worsening its brand recently applied B3 credit rating (non-investment grade status) by Moody’s.

Many speculate that China may pick up the slack through trade, investment, aiding Russia financially, allowing it to use China’s version of SWIFT, or by following through on earlier designs to create a joint-alternative. However, many of these measures are unlikely to occur or be effective. First, while Russia has its own, almost exclusively internally used SWIFT alternative and China has a slightly more widely used version, neither country seems particularly enthusiastic about relying on the other side’s system. Second, there has been no progress on the mutually developed system, and it might be too little too late. Third, in spite of increased trade and currency exchanges between their central banks, recently both China and Russia decided to continue using Euros in bilateral trade, which indicates that neither side’s currency was sufficiently internationalized to support economic exchange. Fourth, if China were to attempt to help Russia circumnavigate SWIFT and the West imposed similar sanctions, its own banks and the global economy would  likely incur extensive secondary sanctions. In short, Beijing was already wary of ending up with a dependent Russia before the Ukraine crisis began, and now it is worried about Russia dragging it down as well, with several Chinese banks and companies quietly ceasing or pausing business relations with Moscow.

(source: Japan Times)

Abe Calls to Discuss Hosting Nuclear Weapons to Deter Growing Threats

On Sunday, Former Japanese Prime Minister Shinzo Abe called for Tokyo to seriously consider a nuclear-sharing arrangement with the U.S. as Russia’s invasion of Ukraine has stoked fears over possible Chinese aggression toward Japan and its neighbors. Abe affirmed Japan’s current posture as a signatory to the Nuclear Non-Proliferation Treaty and its three non-nuclear principles—that it will not possess, produce, or permit nuclear weapons on the country’s territory. However, he stated that Japan, which relies heavily on the U.S. nuclear umbrella, “should not treat as a taboo discussions on the reality of how the world is kept safe.” He believes that NATO’s nuclear-sharing arrangements could deter the growing security threats in Asia, including China’s assertive behavior and North Korea’s burgeoning nuclear program. The statement sparked a fierce debate among Japanese politicians, and pushback from other leaders in the LDP. Both Prime Minister Fumio Kishida and Defense Minister Nobuo Kishi quickly dismissed Abe’s call, stating the suggestion was unacceptable and reaffirmed the country’s commitment to its three non-nuclear principles. Then, yesterday, Abe reiterated his position and referred to the strategic reasons for former Soviet Union countries to join NATO after independence. “It is only natural to discuss how to protect the independence of our people and Japan in this reality that we live in,” he said.

In response, Chinese Ministry of Foreign Affairs spokesperson Wang Wenbin accused Japan of militarism. “We strongly ask Japan to deeply reflect on its history” and it should “be cautious in words and deeds on the Taiwan issue to stop provoking trouble,” he said. Chinese state media said Abe’s remarks were “unlocking Japan’s militarism,” through a “complete release of its military capabilities, and perhaps an escape of militarism from the cage that has trapped it for nearly 80 years.

Russia’s invasion of Ukraine has also stimulated the debate over nuclear deterrence elsewhere in East Asia. South Korean presidential candidate Ahn Cheol-soo suggested the country needs a nuclear-sharing agreement with the U.S. (largely to increase deterrence against the North Korean nuclear threat). Taiwanese media has also speculated on the benefits of the nuclear-sharing agreement for increasing effective deterrence against Chinese aggression in conjunction with strategic clarity.

Major COVID Outbreak in Hong Kong Spreads to Shenzhen

Last month, President Xi Jinping ordered Hong Kong to manage the Omicron outbreak inside the city at all costs. So far, it has failed, and the mainland is now stepping in to provide essential medical personnel and expertise to stem the epidemic. Despite the startling quickness with which the CCP has gained control over the city’s health sector, the Carrie Lam led Hong Kong government is continuing to extol the mainland for its “staunch” national support  – all the while insisting that they are in control. Despite this praise, most Hong Kong residents express concern and deep mistrust in authorities. Hong Kong’s reported 38,073 new cases per day raise the total number to 350,557 of the 7.5 million residents of the city. Some experts are predicting that March will yield a staggering 180,000 new cases per day.

Hong Kong’s case numbers are double that of the mainland China’s at present (approx. 109,526), but that is soon to change. Hong Kong’s omicron wave is already spreading to the massive neighboring city of Shenzhen in Guangdong province. In response, authorities in Shenzhen have begun to put cross-border traffic under greater scrutiny, pledged to crack down on illegal border crossings, and required residents in the neighborhoods of Shatou and Shuiwei to self-isolate. Regular tests and checks have been issued to stop the spread before it’s too late. Blanket searches are also being used in areas where Hong Kong residents are known to frequent. Even if drivers are let inside the city, they are not allowed to visit communities or public places on the mainland. Despite all the hysteria, only 125 cases have been detected so far in Shenzhen, up 25 cases from Wednesday. The outbreak has contributed to fears that the outbreak could lead to the implementation in Hong Kong of China’s dynamic Zero-Covid strategy and an extended lockdown.

(source: News NCR)

China’s Satellite “Megaconstellation”

On February 27, Xinhua reported that “China launched a Long March-8 rocket in order to place 22 satellites into space setting a domestic record for the most spacecraft launched by a single rocket.” The stated purposes of these satellites included commercial remote sensing services and the monitoring of the environment and disasters. The launch is notable in the context of China’s “megaconstellation” low earth orbit satellite project, comparable to SpaceX’s Starlink program. These systems operate by creating a vast network of relatively small satellites around the entire earth, offering complete communications coverage for consumer and governmental purposes alike, including 5G (and possibly 6G) services. In the case of China, an estimated 13,000 satellites will be deployed. For the West, the global integration of everyday technology with servers linked to the Chinese government is concerning, especially as 5G becomes the new standard. A Chinese global satellite network only amplifies these concerns. Nonetheless, small spy satellites capable of optical and signals intelligence gathering, furthering global panopticons, are the future. With nations and corporations attempting to create their own satellite megaconstellations, it will be almost impossible to reliably discern who has put what kind of satellite where and when, and very difficult to disable such systems in times of war. For better or worse, it is unlikely that anyone can prevent the Chinese megaconstellation from coming to fruition. The only real alternative is to make sure that the world relies on friendly satellite systems, as once people start using one service provider or approach en masse, it can be harder to switch to a new provider, even if desirable.

(source: China Daily)

China Promotes Image of PLA Strength Through New Landing Drills and Assault Ship

Last week, China’s People’s Liberation Army (PLA) carried out military landing exercises in the East China Sea. The amphibious landing mission reportedly used a new type of utility landing craft in an integration training with a large landing ship. A Chinese military expert explained that utility landing crafts—often used to transport armored vehicles, troops, and equipment to shore—can be significant for large-scale landing missions, such as those involved in a Taiwan contingency. In another show of strength, China announced its first type 075 amphibious assault ship, the Hainan, has achieved initial operating capability and is expected to start a “world tour,” visiting harbors and ports across the globe. Launched in September 2019, President Xi Jinping commissioned the Hainan last April, along with the Changzheng 18, a nuclear-powered strategic ballistic missile submarine, and the Dalian, a type 055 large destroyer. The Hainan can carry helicopters, amphibious armored vehicles, and tanks, and is capable of launching both horizontal and vertical landing missions. Chinese military experts believe the new assault ship will be valuable for force projects in the Taiwan Strait and South China Sea, as well as for far seas operations.

The new assault ship and landing drills were announced by China Central Television (CCTV) and the PLA Eastern Theater Command Navy’s Sina Weibo account, respectively. Both media sources cultivate a strong image of China’s military forces and party among the public, and the latter is often used for military intimidation and psychological warfare aimed against Taiwan. In response to China’s increasing military pressure on the island through large-scale amphibious and air drills, China’s Ministry of National Defense Spokesperson Senior Colonel Tan Kefei blamed Taiwan’s independence movement and the Democratic Progressive Party (DPP). The PLA activities “are intended to resolutely crack down on the rampant arrogance of Taiwan independence separatist forces and their attempts for independence,” Tan said. This development comes as analysts predict that China’s defense budget will increase about 7 percent in 2022, citing national security and defense threats posed by the U.S. and allies through “provocative” operations in the Taiwan Strait, and East and South China Seas.




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