October 15, 2021 – Stealth War 59: Naval Presence; Looking Outward for Energy; Resolving Longstanding Border Dispute; Sino-Russian Naval Drills; Belt and Road Challenges

By: Jamestown Foundation

Wed October, 2021, Age: 1 year


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October 15, 2021

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

Strategic Indicator
This issue’s number to watch54 million

Number of Linkedin users in China. The Microsoft-owned career-oriented social network announced it is ending service in China due to the “challenging environment” and difficulty  meeting “compliance requirements.” 

This Week:

* Potential Chinese Naval Presence in Cambodia Raises Concern

* China Looks Outward for Energy Ahead of Winter Crunch

* China and Bhutan Agree on Roadmap to Resolve Longstanding Border Dispute 

Joint Sino-Russian Naval Drills Underway in the Sea of Japan

BRI Roundup: Belt and Road Faces Challenges and Takes New Forms

Top Stories

(source: PLA Daily)

Chinese Interest in Cambodian Naval Base Stirs US Concern

The U.S. recently raised concerns with Cambodia over increased Chinese military activity at the Ream Naval Base located near Sihanoukville. Washington questioned Phnom Penh’s transparency on the matter after the Center for Strategic and International Studies (CSIS) think tank published satellite imagery detailing new Chinese infrastructural developments at the base including new buildings and an entry road. If the construction is related to a possible Chinese naval presence at Ream this would contravene Cambodia’s constitutional amendments prohibiting any foreign state to base forces in the country.

The development at Ream, along with clear indications of a growing Chinese security presence abroad elsewhere on its periphery, e.g in Tajikistan, have to some extent justified concerns that mass investment in physical infrastructure serves a “dual use” purpose in supporting China’s expanding overseas military footprint. The move is not only likely to worry the US, but also India, which is concerned the base could enhance China’s ability to project power in to the Indian Ocean region.

(source: Xinhua)

China Looks Outward for Energy Sources to Avoid Winter Crunches

Early winter chills have caused coal prices to skyrocket in China leading to nationwide power crunches. More than 30 regions in China’s mainland have been forced to ration coal since September. The National Development and Reform Commission (NDRC), however, promised that China would both strive to meet its carbon reduction demands while also ensuring adequate energy supply for winter heating.

China’s coal crisis has been fueled in part by nationwide power cuts to meet carbon reduction targets, which is challenging for a country still reliant on coal. As China struggles to simultaneously meet energy demands and carbon reduction goals, China is in talks with several overseas firms to import energy supplies such as U.S. liquid natural gas and Russian coal. In addition, government regulation of electricity prices has also caused electricity shortages as the mismatch between artificially low electricity prices and elevating coal prices caused electricity producers to operate at a loss, incentivizing producers to close production instead of operating in the red. As a result, the NDRC announced that it would loosen its regulations over coal-fired electricity prices in response to market forces, accelerating a sharp increase in electricity costs as well. China’s coal crisis has widespread implications for the global economy, as factories scale back or even temporarily arrest production due to the energy shortage, disrupting supply chains.

(source: Global Times).

China and Bhutan Agree on Roadmap to Resolve Longstanding Border Dispute 

This week, Bhutan and China reached a memorandum of understanding on a “three step roadmap” to accelerate negotiations on their disputed boundary. The area of the disputed boundary between China and Bhutan lies near the border trijunction with India. China’s construction of a road in the contested area sparked the 2017 Doklam standoff, when Chinese and India forces faced off with one another at high altitude for over seventy days.

Bhutan’s Foreign Minister Lyonpo Tandi Dorji and China’s Assistant Minister of Foreign Affairs Wu Jianghao signed the agreement, which was hailed by China’s state media as a breakthrough in boundary talks that have taken place on and off since 2017. India, which has long prized its historical role as the guardian of Thimpu’s foreign relations, reacted with caution to the deal, merely noting that New Delhi was aware of negotiations, and observing that talks with Beijing, not only over the demarcation of the Sino-Bhutan border, but also the Sino-Indian boundary, have been ongoing for decades.

(source: TASS)

China and Russia Launch Joint Naval Drills in the Sea of Japan

China and Russia kicked off a joint naval drill off the eastern coast of Siberia this week called Joint Sea 2021. The military exercise will run from October 14-17 and includes communication, anti-air and anti-submarine operations, and destroying enemy mines with artillery.

Both China and Russia have pulled out the big guns for the exercise. China debuted its Type 055 destroyer for the first time in an exercise with a foreign navy. This is the first time that China has sent anti-submarine warplanes and destroyers over 10,000 tons for overseas exercises. For its air-defense practice, Russia pulled out its SU-30SM fighter jets and helicopters.

The exercises are speculated to be in direct response to increased Western presence in the Pacific, especially Quad and AUKUS. According to China’s Global Times, these regional security organizations are serious threats to China and Russia, and joint drills are necessary to ensure peace in eastern waters.

The exercise is an example of increasing military cooperation and strategic partnership between Moscow and Beijing. In addition to naval exercises, the two countries, in part of due to concern over the impact of  the Taliban’s takeover on regional terrorist threats, conducted joint anti-terrorism drills in mid-September.

(sources: Global Times)

BRI Roundup: Belt and Road Faces Challenges and Takes New Forms

China’s Belt and Road Initiative (BRI) has been losing momentum. Even though China now outspends the U.S. and other major powers on international development finance commitments, 35% of projects have encountered major implementation problems. These include scandals related to corruption, the environment, labor rights, and public image. Increasing levels of credit risk and the growing role of state-owned commercial banks has had a huge impact on state-owned companies and banks, which are now facing underreported debts worth approximately $385 billion. China’s choice of high-risk countries and projects help to explain this phenomenon. Last week, the Taliban expelled Pakistani separatist groups and Uyghur rebels under China’s direction, in exchange for economic cooperation and humanitarian assistance from both Pakistan and China.

China is also seeking new strategies to expand the BRI in to potentially more promising markets. For example, China has signed an agreement with Hungary to build Europe’s first smart railway hub in cooperation with UK-based Vodafone.This will be the “largest intelligent multi-modal railway hub and Europe’s first railway port to use a 5G private network for internal communication and technical equipment networking management.” This may set a precedent for the BRI, which may be shifting to countries like Hungary which offer less risky investments, more stable economic and political environments, and many enthusiastic collaborators. China’s interest in more secure investments may also be a response to its increasing debt and hence reduced willingness to take risk abroad. This will have consequences on the states that benefit from BRI infrastructure projects, and may not be able to find comparable alternatives for infrastructure funding, if and when China shifts away from them.

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