Comparing American and Chinese Perceptions of the World's Strategic Evnironment

Within approximately a month of each other this year, both China and the United States published official documents detailing their respective views of the current security environment. China’s assessment was captured in its 9th biennial defense white paper, published in late May, and officially titled China’s Military Strategy. The U.S. view is presented in the National Military Strategy of the United States of America, 2015 (hereafter, U.S. National Military Strategy), published in June. The authoritative nature of each document provides an interesting opportunity to comparatively assess how both nations see the international military and security situation, more clearly understand their similarities and differences, and draw out any relevant implications.

Before comparing the views contained within the two documents, however, it is important to clarify that this is not a perfect comparison. Although both documents are official and therefore represent the approved views of the respective government, they are not exact equivalents. China’s defense white paper, while drafted by the Chinese military, the People’s Liberation Army (PLA), is actually coordinated with and vetted by China’s foreign policy making community, to most importantly include the Chinese Communist Party.1 Therefore, it represents the view of the Chinese Party-State, not just the PLA. On the other side of the ledger, the Joint Chiefs of Staff is responsible for producing the U.S. National Military Strategy. This document draws closely from other U.S. government statements, most importantly from the President’s National Security Strategy. However, ultimately the U.S. National Military Strategy is a U.S. military document, not a whole-of-government product. As a result, comparing it with China’s Military Strategy is imperfect at best. However, such an exercise is still of value, particularly given the authoritativeness of the two documents combined with the general lack of publicly released official Chinese statements on national defense issues.

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If we Went all in for Bitcoin (or Other CryptoCurrency): Costs and Benefits to Phasing Out Paper Currency

Costs and Benefits to Phasing Out Paper Currency

Author:

Rogoff

Abstract:

Despite advances in transactions technologies, paper currency still constitutes a notable percentage of the money supply in most countries. For example, it constitutes roughly 10% of the US Federal Reserve’s main monetary aggregate, M2. Yet, it has important drawbacks. First, it can help facilitate activity in the underground (tax-evading) and illegal economy. Second, its existence creates the artifact of the zero bound on the nominal interest rate. On the other hand, the enduring popularity of paper currency generates many benefits, including substantial seigniorage revenue. This paper explores some of the issues associated with phasing out paper currency, especially large-denomination notes.

China Pushing its "New Security Concept for Asia"

If there was any doubt, last week’s Shangri-La Dialogue in Singapore made it clear that China is unhappy with the behavior of the United States in Asia. Following speeches by Japanese Prime Minister Shinzo Abe and U.S. Defense Secretary Chuck Hagel that criticized Chinese actions, General Wang Guanzhong departed from his prepared speech to accuse the two countries of revealing a “taste of hegemony” and trying to “stir up trouble." But his scripted remarks highlighted something which may be an even more fundamental challenge to the U.S. role in the region: China’s “New Security Concept for Asia.” This concept appears to be an effort to redefine the idea of security on terms that cast China as a regional security provider and the United States as an over-assertive outsider that threatens to undermine regional security. Official Chinese interpretations of the argument largely accords with a headline from the online edition of the People’s Daily: “The Shangri-La Confrontation is a Clash Between Old and New Security Concepts.”

The core of the New Security Concept, introduced by Chinese President Xi Jinping in a May 21 speech at the Conference on Interactions and Confidence-Building in Asia, is the idea that “development is the greatest form of security.” As the largest trading partner of most countries in the region and a major contributor to infrastructure investment, China already has a good claim to be the chief driver of the region’s development. If security is development, China is therefore also the main provider of Asian security—killing two birds with one stone. But to make this argument persuasive, China must refute understandings of security that emphasize traditional concerns such as territory and national sovereignty. This means contesting international norms with the United States. Ultimately, like the earlier Five Principles for Peaceful Coexistence, the New Security Concept will “gradually become a universal norm of international relations.”

This concept is more than a bit of rhetorical slight of hand—it is both an application of the Deng-era verdict that the goal of security policy should be to “maintain a peaceful external environment for development,” and an effort to promote this understanding abroad. It most likely represents beliefs genuinely used in Chinese policy-making: A similar effort is simultaneously underway in China’s domestic security sphere. Xi has recently emphasized the concept of “overall national security,” a comprehensive view of security which has been defined to include both fairly conventional matters such as military and territorial security, and non-traditional fields such as economic, cultural and ecological security

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Are Chinese Policy Priorities Shifting From Economics to Defense?

Domestic and international security concerns have dominated the on-going session of China’s legislature, the National People’s Congress. This is despite high expectations that Premier Li Keqiang will unveil thorough-going economic reforms in his maiden Government Work Report (hereafter Report), which was delivered at the Great Hall of the People on March 5. A substantial portion of the Report was devoted to issues relating to foreign-policy, military and weiwen (“uphold stability”) measures, which fall within the purview of President Xi Jinping. Following supremo Xi’s oft-repeated dictums, Li indicated that the People’s Liberation Army (PLA) and the People’s Armed Police (PAP) “must ceaselessly raise their deterrent and actual combat ability under conditions of informatization” (Xinhua, March 5; China News Service, March 5). The weiwen imperative has also been thrust into the limelight in the wake of the terrorist attack in Kunming on March 1, in which 29 Chinese residents were killed by a handful of suspects that Beijing has identified as Uighur extremists (People’s Daily March 4; Ming Pao [Hong Kong], March 4). “We must speed up the construction of a modernized armed police capacity,” Li said in the Report, adding that this force would be deployed to fight terrorism, maintain stability and tackle emergency incidents at home.

It was announced at the parliamentary session that the 2014 defense budget would be RMB 808.2 billion ($132 billion), or 12.2 percent over that of 2013. By contrast, military expenditure in 2013 rose at the slightly lower rate of 10.7 percent. While Premier Li’s portfolio is the economy, not military affairs, his Report methodically laid down the rationale for a leap forward in defense modernization. Li put priority on modernizing the PLA’s logistics facilities and military R&D, especially “the development of high-tech weapons and equipment.” Most significantly, the premier noted that a strengthened military capacity was needed to defend China’s expanded core national interests. “We will resolutely safeguard China’s sovereignty, security and development interests,” Premier Li said. “We must place war preparations on a regular footing and boost ... the defense of [land] borders, as well as maritime and air boundaries.” The premier also highlighted China’s ambitions to become a “strong maritime power” and the commensurate goal of “protecting China’s maritime rights.” Li’s emphasis on “developmental interests”—which include a reliable supply of oil and gas—as well as “maritime rights” seems to indicate that Beijing will substantially boost its hard power projection in the East China Sea and the South China Sea.

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If Government or Other American Networks are Destroyed, This is an Act of War

On the day that China’s president took personal charge of his country’s new cyber body, pledging to make the People’s Republic of China a “cyber power,” the outgoing head of America’s Cyber Command laid out a clear red line that, if crossed, could lead to war.

“If it destroys government or other networks, I think it would cross that line,” Army Gen. Keith Alexander, head of both Cyber Command and the National Security Agency, told the Senate Armed Services Committee today when asked what level of cyber “attack” would potentially cause America to go to war.

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President Xi Takes Personal Leadership of Chinese Cyber Forces

President Xi Jinping will head the central Internet security and informatization leading group, according to a statement released after the first meeting of the group on Thursday.

Xi presided over the meeting, stressing that Internet security and informatization is a major strategic issue concerning a country's security and development as well as people's life and work.

"Efforts should be made to build our country into a cyber power," he said.

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Canada to Regulate Bitcoin

Canada will bring in new anti-money laundering and anti-terrorist financing laws aimed at preventing abuses of virtual currencies such as Bitcoin, the finance minister confirmed Wednesday.

Asked about Bitcoin, a so-called "cryptocurrency" that is gaining in popularity both as an investment and as a way to make online payments, Jim Flaherty said: "We're going to have a look at it."

The Canadian government had announced its plan to tighten rules around the use of virtual currencies in the federal budget a day earlier, but no details were provided.

The budget document said Canada would "address emerging risks, including virtual currencies, such as Bitcoin, that threaten Canada's international leadership in the fight against money laundering and terrorist financing."

The proposed legislation follows recommendations in a March 2013 report by a senate banking committee.

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What Should the European Union's Maritime Strategy Look Like?

The European Council’s December session on security policy offers only one remarkable result: In June 2014, the EU will endorse a new European Maritime Security Strategy (EMSS). After years of economic crisis, geopolitical decline and military constraints, an EMSS could give the EU a new push to adapt to the evolving security environment. Such a push is more than necessary. Ten years after the European Security Strategy (ESS), Europe drifted from large ambitions into a strategic no man’s land: as seen in the Middle East and East Asia soft power has become more and more irrelevant, while great power competitions and geopolitics are back on the stage. In consequence, nobody is talking about a more secure Europe nor about the EU building a better world.

However, in the maritime domain Europe could come back on track. Therefore, the EMSS must address three key points. First, it has to define Europe’s strategic-maritime aims and set out the means to implement them. Second, due to its capabilities, there has to be a clear work-sharing with NATO, because the Alliance is much stronger in maritime security than the EU. Third, the EMSS must outline how the EU wants to adapt to a geopolitical/strategic environment that will not only develop to Europe’s disadvantage, but also to the advantage of other powers.

In the EMSS’ development, there is no need for a long debate about security challenges, risks and threats, because the problems are well known: Terrorism, piracy, proliferation, organized crime, energy security, choke points, critical infrastructure, disaster relief and so forth. Not war-fighting or deterrence, but rather military operations other than war (MOOTW) are likely to dominate the operational agenda. What changed, in contrast to ESS 2003, are not the security challenges, risks and threats, but rather the players and theaters.

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