November 20, 2020 – Stealth War Newsletter 17

By: Jamestown Foundation

Fri November, 2020, Age: 3 years



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November 20, 2020

Strategic Indicator
This issue’s number to watch


More than 200 computer network systems have been infected by malware as part of a massive cyberespionage campaign by Chinese state-sponsored hacking group FunnyDream that has appeared to target Southeast Asian governments.

Top Stories

Last Sunday, fifteen countries signed the Regional Comprehensive Economic Partnership (RCEP) on the sidelines of a meeting of the Association of Southeast Asian Nations (ASEAN), following eight years of negotiations. The deal’s signatories include the ten members of ASEAN, plus China, Japan, South Korea, Australia, and New Zealand. The new free trade bloc created by RCEP will be larger than both the US-Mexico-Canada Agreement and the European Union, and notably marks the first time that China has signed onto a regional multilateral trade pact. India pulled out of RCEP negotiations last year, although at the time of signing the deal’s signatories said that the door remained open for India to join in the future. RCEP is expected to eliminate a range of tariffs within 20 years, and also includes provisions on intellectual property, telecommunications, financial services, e-commerce, and professional services. Although analysts have argued that its importance may be more strategic than economic, the deal may provide a venue for closer cooperation between countries in Northeast Asia (namely Japan, South Korea, and China) which have had prickly diplomatic relationships in the past.

Critics have framed RCEP as a lower-stakes China-backed alternative to the Trans-Pacific Partnership (TPP), which was originally spearheaded by the United States. After the Trump administration pulled out of TPP in 2017, the remaining members formed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The CPTPP includes stricter standards, heavier tariff cuts, and additional provision on labor and environmental protections which are not included in RCEP. A German leader in the European Parliament has warned that RCEP should be a “wake-up call” for Europe and the US to unite against growing Chinese influence in the global economy.

Renewed tensions between Australia and China later in the week have proven the limits of the RCEP deal. Following the Australian Trade Minister Simon Birmingham’s assertion that, “the ball is very much in China’s court” on the issue of de-escalating trade tensions, a Chinese Vice Minister of Commerce responded, “Australia should know…what it needs to do to improve this relationship.” Foreign Ministry spokesperson Zhao Lijian went one step further at a press conference on Tuesday, saying that China bears “no responsibility” for the collapse in bilateral ties.

And as Australian exports to China have continued to languish in customs amid uncertainties about further blocks on Australian goods—ranging from beef, barley, and timber, to wine and lobster—this week the Chinese embassy released a dossier of 14 disputes to Australian media. Its list of grievances included: criticisms of China’s actions toward Taiwan, Hong Kong, and Xinjiang; the Australian government’s pursuit of an independent inquiry into the origins of COVID-19; a 2018 ban on Huawei’s participation in Australia’s 5G networks; government funding for “anti-China” research at the Australian Strategic Policy Institute; and persecutions of Chinese journalists and academic visa cancellations. An anonymous Chinese official who spoke with Australian media following the release of the documents, warned: “China is angry. If you make China the enemy, China will be the enemy.” The document release, coupled with the anonymous official’s interview, represent the boldest effort so far to pressure Australia’s government to reverse course on its foreign policy towards China. While the Australian government has tried to separate its economic relationship with China from security and military concerns, the list of grievances demonstrates China’s diplomatic intractability on perceived criticisms aimed at weakening its power.

The U.S. Department of Justice has released a Year-in-Review report on its “China Initiative,” which was began in 2018 amid an administration-wide push to focus on Chinese misdoings on U.S. soil. The DOJ announced “substantial progress…in disrupting and deterring the wide range of national security threats posed by the policies and practices” of China. Attorney General William Barr said, “in the last year, the Department has made incredible strides in countering the systemic efforts by the PRC to enhance its economic and military strength at America’s expense,” adding that “much work remains to be done.” Although China has long relied on state-sponsored economic espionage to gain access to advanced technologies—many of which have dual-use military applications—awareness of its often coercive efforts to transfer technology from the U.S. was revitalized by a shattering DIUx report published in January 2018. Two years later, the DOJ’s efforts to prosecute knowledge theft and economic espionage have resulted in a number of arrests and charges, several of which have been reported previously in the Stealth War newsletter.

A retired PLA senior colonel revealed this week that Chinese missiles launched in August successfully hit a target ship in the South China Sea. A DF-26B missile was launched from the northwestern Qinghai province, and a second DF-21D missile lifted off from China’s eastern Zhejiang province. While it was initially reported that the missiles fell into the sea, former senior colonel Wang Xiangsui, who now works as a professor at Beihang University, said that they had in fact hit their intended target. If true, the missile drills would demonstrate the first evidence of China’s long-range anti-ship ballistic missile capability. “This is a warning to the U.S., asking it not to take any military risks.” Wang said.

Provocations between China and the U.S.—which have been ramping up dramatically throughout 2020—continued this week. Two U.S. B-1B bombers flew inside China’s Air Defense Identification Zone (ADIZ) on Monday, marking an escalation of the U.S. Air Force’s usual flight activities around China, which consist primarily of military reconnaissance flights. The bombers flew into ADIZ as the PLA mounted massive simultaneous naval drills in the South China Sea, East China Sea, and Bohai Sea.

Three Chinese military aircraft intruded in Taiwan’s ADIZ on Wednesday, marking the thirteenth such incursion in November. China has made almost daily intrusions into Taiwan’s ADIZ for over two months now. China has stepped up its activity in Taiwan’s airspace since the U.S. began making increasingly friendly overtures to Taiwan (which China views as a renegade province) earlier this year, elevating its ties with the island nation through increased arms sales and high-level official visits. The outgoing U.S. administration has doubled down on its Taiwan policy, announcing a third visit to Taiwan by a senior-level official, this time the head of the Environmental Protection Agency, in December.

Finally, Chinese technology company Huawei announced this week that it was selling off its low-cost Honor phone business to “ensure its own survival” as crippling U.S. sanctions take a heavy toll. “Huawei’s consumer business has been under tremendous pressure as of late,” the company said in a statement. “This has been due to a persistent unavailability of technical elements needed for our mobile phone business.” The sale, which Reuters estimated could be valued at over $15 billion, will be made to a consortium of buyers and a technology enterprise called Shenzhen Smart City Development Group Co., which was created by the government of the city of Shenzhen (sometimes called China’s Silicon Valley).

Stealth War Flyover


In the third episode of Stealth War Flyover, Jamestown President Glen Howard and former Senior Director for Strategy to the President Robert Spalding discuss China’s threat to arrest U.S. citizens in China in reciprocity for recent arrests of PLA-affiliated people in the United States; the State Department mulling a ban on American businesses working with the Chinese fintech firm, the Ant Group; what the trial release in Shenzhen of a new Chinese digital currency mean for American interests; Peter Navarro’s recent comments at the Hudson Institute; and Hillary Clinton’s recent article in Foreign Affairs on China and US national security strategy.

Stealth War Flyover is a periodic series featuring Brigadier General (ret.) Robert Spalding and Jamestown Foundation President Glen Howard discussing and dissecting the latest news in the ongoing competition between China and the United States.

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