NIGHTWATCH Extract: China Using Rare Earth Elements (REE) to Test Economic & Technical Pressure Options

02 China, 03 Economy, 10 Security, Commerce, Commercial Intelligence, Earth Intelligence, Government, Military

China and Rare Earth Elements: China's new Five-Year Program will fail to bring any rapid change in export quotas for rare earth elements (REE), Chinese Ambassador to the World Trade Organization Sun Zhenyu said, Reuters reported. He also said China's REE reserves were depleting quickly and that Beijing must conserve them. According to Sun, China's reserves have fallen from 33 percent of the world's total in 1996 to 30 percent presently, and that they will last only for another 15-20 years. He urged other nations to begin developing their own REE reserves.

China-Japan: Japan's stockpile of rare earth elements (REE), if China does not restart REE exporting, could empty by March or April 2011, said Yoshikatsu Nakayama, Japanese vice-minister of the economy, trade and industry, Agence France-Presse reported on 21 October.

China-Germany: German companies have been told by Chinese officials to increase their investments in China if they wish to continue to receive rare earth elements (REE) and two other elements China mines, tungsten and antimony, The New York Times reported on 21 October, citing a spokeswoman for the German engineering federation.

On 21 October, unidentified German industry officials said that Chinese customs officials were for the fourth day blocking the final paperwork approval necessary for REE to be exported to Germany. The officials said China is still exporting REE that had paperwork approved before 18 October.

NIGHTWATCH Comment: The Chinese appear to be using rare earth elements exports for testing economic pressure tactics against potential rivals or adversaries. Rare earth elements are used in many high technology applications.

NIGHTWATCH KGS Home

Phi Beta Iota: This is what happens when government becomes irresponsible, divorced from reality, without a strategic analytic model, and so ideologically insane as to make a lobbyist for Goldman Sachs the National Security Advisor.  This all started in the 1970's, it is not new, but now it is close to a fatal sucking chest wound for the Republic.

See Also:

Election 2008 Chapter: The Substance of Governance

Journal: If China Implodes, What Are the Implications?

02 China
Chuck Spinney Recommends...

… and destroy the Pentagon's dream of finding a new peer competitor to replace the Soviet Union.

Can you give my son a job?

Slavoj Žižek

. . . . . . .

What we have in China isn’t simply a combination of a private capitalist economy and Communist political power. In one way or another, state and Party own the majority of China’s companies, especially the large ones: it is the Party itself which demands that they perform well in the market. To resolve this apparent contradiction, Deng concocted a unique dual system. ‘As an organisation, the Party sits outside, and above the law,’

. . . . . . .

Full Review

A true 20th-century Communist never fully accepts the state: he accepts the need for an agency, immune to the law, which has the power to supervise the state’s activities.

. . . . . . .

But China is no Singapore (neither, for that matter, is Singapore): it is not a stable country with an authoritarian regime that guarantees harmony and keeps capitalism under control. Every year, thousands of rebellions by workers, farmers and minorities have to be put down by the police and the army. No wonder official propaganda insists obsessively on the notion of the harmonious society: this very excess bears witness to the opposite, to the threat of chaos and disorder. One should bear in mind the basic rule of Stalinist hermeneutics: since the official media do not openly report trouble, the most reliable way to detect it is to look out for compensatory excesses in state propaganda: the more ‘harmony’ is celebrated, the more chaos and antagonism there is in reality. China is barely under control. It threatens to explode.

Phi Beta Iota: Emphasis added.  Losing China as a fraudulent “peer competitor” to justify an outrageously incoherent Pentagon budget that is 60% fraud, waste, and abuse is the least of our worries.  If China becomes “the perfect storm” of poverty, infectious disease, environmental degradation, and these spill over to accelerate the remainder of  the ten high level threats within and outside China, there are not enough dollars, or trained personnel, or weapons, or anything, to put Pandora back in the box.

Journal: Flag Officers & Members Fronting for China

02 China, 03 Economy, 10 Security, 11 Society, Commerce, Commercial Intelligence, Government, Military, Mobile
DefDog Recommends...

From Intelligence Online:

Suspected by Congress of being linked to the Chinese army, Huawei is working in the U.S. in partnership with Amerilink, which is headed by a former U.S. Navy admiral.

Trusted third party – In a few weeks’ time the U.S. telecoms operator Sprint Nextel is due to award the $2 billion 7-year contract for the development of its 3G network in the United States. To strengthen its chances of winning the lucrative deal, China’s Huawei Technologies, which is regularly suspected of having links to the Chinese People’s Liberation
Army (IOL 619 ), has placed a joint bid with Amerilink, a small U.S. company founded in 2009. The company employs fewer than 20 engineers and is headed by William Owens, a former vice-chairman of the Joint Chiefs of Staff. Amerilink acts as the interface between Huawei and potential U.S. clients. If Huawei were to win the Sprint contract, Amerilink would handle the integration of Chinese equipment in the U.S. operator’s network.

Powerful support – U.S. parliamentarians have been Huawei’s most vociferous opponents: they prevented the Chinese group from buying the U.S. telephony company 3Com in 2008. To defend its partner in Congress, Amerilink recently added two Democrat personalities to its board of directors, the former World Bank president James Wolfenson and Richard Gephardt, president of the House of Representatives ’ Democratic group from 1989 to 2003.

LINK:
http://www.intelligenceonline.com

Journal: BRICS Innovate Externally Not Internally

01 Brazil, 02 China, 03 India, 06 Russia, Commerce, Commercial Intelligence, Cultural Intelligence

Full Story Online

How BRIC Innovators Will Defeat You

11:13 AM Thursday October 14, 2010

For reasons yet unclear, BRIC companies and entrepreneurs now consume roughly half my professional time. The Brazilian, Russian, Indian, and Chinese (BRIC) managers I meet are as sharp, credentialed, energetic, and hungry as their Silicon Valley or Rte. 128 counterparts. Sometimes their English is even better. They desperately want to be world-class innovators.

These people aren't interested in launching imitations. They're not looking to be even lower-cost suppliers or sub-contractors to a WalMart or HP or JPMorganChase. They want to be valued as much for their ingenuity as for their prices.

Consequently, they appear particularly open to ideas and experimentation. They know they lag so they'll grasp any reasonable innovation edge they can. Measured by brainpower and grit, there's no reason why BRIC enterprises shouldn't consistently out-innovate their richer rivals. Money isn't the vital variable holding them back. So what's the issue?

Read about the BRIC cultural flaws….

Tip of the Hat to  Pierre Levy at LinkedIn.

Journal: China the Adult, US Barely Out of Diapers

02 China, 04 Inter-State Conflict, 07 Other Atrocities, 10 Security, Cultural Intelligence, Military, Peace Intelligence

China-US-Vietnam: Defense Minister Liang Guanglie held talks with US Defense Secretary Gates in Hanoi on Monday on the sidelines of the 1st ASEAN Defense Ministers' Meeting Plus (ADMM-Plus) on bilateral military ties.

Defense Minister Liang invited Gates to visit China early next year, a Chinese official said. Gates accepted the invitation, according to the deputy head of external relations in the Chinese Defense Ministry.

The meeting in which the Chinese made the offer is the first meeting between the two senior defense officials in a year.

NIGHTWATCH Comment: The Chinese characterization of US ties bears attention. Liang said Sino-U.S. relations have maintained momentum of stable development in recent years as China and the United States have agreed to build a positive, cooperative and comprehensive relationship for the 21st century. China-U.S. relations are of increasing global influence, he added.

Liang said military relations constitute an important part of bilateral ties. Currently, the two countries are facing some obstacles in developing military relations, with the U.S. arm sales to Taiwan being the main reason.

NIGHTWATCH Comment: This part of Liang's remarks glosses over the brittleness of the “obstacles” involving Taiwan. The opening part of the comment minimizes the extent of US concern about China's lack of opacity and unwillingness to cooperate. The Chinese definition of a “positive, cooperative and comprehensive relationship” does not match the US definition. In the US definition, a positive, cooperative and comprehensive relationship does not yet exist. To try to develop such a relationship is the reason for Gates' persistence in soliciting an invitation.

NIGHTWATCH Comment on perception management: The US media has made clear that the US is the supplicant seeking a Chinese invitation for the US Secretary, after several Chinese rejections, most sensationally in Singapore by a low ranking Chinese general. Ties were set back by a US decision to sell Taiwan $6.4 billion in defensive arms, to which the Chinese objected strongly and froze defense contacts.

The imagery in Asia is that the rulers of the Central Kingdom finally granted the request for an audience from a recalcitrant supplicant because of his persistence. This is a scenario out of Chinese folklore. The folklore imagery and analogy suggest the Secretary should expect little because he is a player in a modern version of an old folk tale whose primary purpose was to showcase the superiority of the Central KIngdom.

The US is prone to interpret an invitation as a small political breakthrough. That might be an exaggeration. The Chinese are more likely to interpret it as their politicial victory that requires kneeling, head knockings (the imperial kowtow ritual was 3 kneelings and nine knocking of the head) and gifts.

Regarding Southeast Asia, Defense Minister Liang played to the audience and was his most unctuous. His purpose was to reassure China's Southeast Asian neighbors about China' s peaceful intentions. A quick look at Chinese territorial sea claims in the South China Sea puts the lie to China's peaceful intentions, but the Southeast Asian memory of resisting Chinese hegemony is long and fresh.

NIGHTWATCH KGS Home

Phi Beta Iota: China is a perfect and worthy counter-part for thinking about Whole of Government and 21st Century Leadership, both of which escape the US Government and its two-party political monopoly.  Strategic analytics is not something that CIA is capable of, nor is it something that the White House or Congress “compute” as essential to their still-imperial view of hegemony by right and ideological fantasy.  Beyond Chna lie Brazil, India, Indonesia, Iran, Russia, and Wild Cards such as Turkey.  The incapacity of the US Government to get its act together is brutally obvious and viscerally troubling.

NIGHTWATCH Extract: East Prepares for Big War

02 China, 03 India, 04 Inter-State Conflict, 06 Russia, 10 Security, Government, Military, Officers Call, Strategy

India-Russia: India will buy 250 to 300 advanced stealth fighter aircraft from Russian, according to Defence Minister A.K. Antony, as he announced the deal worth nearly $30 billion. Antony and Russian Defense Minister Serdyukov said Russia would supply the Fifth Generation Fighter Aircraft (FGFA) as well as 45 transport aircraft. India also will jointly manufacture the fighters under license for ten years.

NIGHTWATCH Comment: The future of the Indian Air Force appears to be linked primarily to Russian rather than US firms. This agreement thinly hides an Indian strategic judgment about the threats it faces from China and Pakistan, about the US as a supplier for coping with those threats compared to the Russians.

India is making long term preparations to be ready for a major war after ten years that will require fifth generation fighters because the most likely enemy – presumably China – also will have those air capabilities. The Russians are willing to sell India the aircraft and to license the technology. The US is not building significant numbers of fifth generation fighters and will not sell them even to Israel.

The Indians, Russians and Chinese do not share the US strategic outlook favoring small wars and counterinsurgency forces.

NIGHTWATCH KGS Home

Phi Beta Iota: Since the mid-1990's, when the best minds associated with the U.S. Army's Strategic Studies Institute turned decisively away from the two-major theater war model, and we presented the 1+iii (One Plus Triple Eye) strategy, the US has been incoherent with respect to strategic policy, acquisition, and operations.  Ideology is not a substitute for intelligence, and technology is not a substitute for thinking.

See Also:

Graphic: Four Forces After Next (from 1993-1995)

2009 Perhaps We Should Have Shouted: A Twenty-Year Restrospective

2001 Threats, Strategy, and Force Structure: An Alternative Paradigm for National Security

2000 Presidential Leadership and National Security Policy Making

1998 JFQ The Asymmetric Threat: Listening to the Debate

1995 GIQ 13/2 Creating a Smart Nation: Strategy, Policy, Intelligence, and Information

1993 On Defense & Intelligence–The Grand Vision

and some graphics….

Continue reading “NIGHTWATCH Extract: East Prepares for Big War”

NIGHTWATCH: Russian Military & Military Sales Strategy

02 China, 06 Russia, Government

Algeria-Russia: For the record. Russian President Medvedev and Algerian President Bouteflika signed a joint statement on 6 October for more coordination and communication between the two countries, Itar-Tass reported. The statement said the two countries' heads of state will meet regularly and that their foreign ministers will hold at least one meeting a year. The statement also said that there will be more coordination in the energy sector between the nations, considering the problems of energy security and resources in the world. Defense technology and military coordination were also mentioned in the statement.

Russia-Vietnam: For the record. The Russian Navy has proposed to re-establish a logistics base for Russian warships in the Vietnamese port of Cam Rahn Bay, formerly the largest Russian base outside Russian territory, Interfax reported 6 October. The Navy completed a report justifying the base's restoration, the completion of which could be finished within three years should a political decision be made, a source in the navy command said.

The primary purpose of the base is to support Russian naval vessels combating piracy in the Indian and Pacific oceans, former chief of the navy's General Staff Viktor Kravchenko said, adding if Russia still considers itself a maritime power, the restoration of such bases is “inevitable.”

Russia-India: For the record. Russian Defense Minister Anatoly Serdyukov began a two-day visit to India on 6 October to attend the Russian-Indian intergovernmental commission on military-technical cooperation, Itar-Tass reported. A protocol will be signed that will address military-technical cooperation.

Discussions will touch on repairs and upgrade of the aircraft carrier Admiral Gorshkov; production of Su-30MKI aircraft and T-90C tanks in India; the joint development and production of fifth-generation fighter aircraft and of multipurpose transport aircraft; and the joint development and production of BrahMos cruise missiles. Serdyukov will meet with Indian Defense Minister A.K. Antony.

NIGHTWATCH Comment: The timing of the Vietnam, India and Algeria initiatives, infra, indicates the Russians are making a bid to rebuild the weapons client base of the Soviet Union.

NIGHTWATCH KGS Home

Phi Beta Iota: What is striking to us is the obvious evidence every day that both China and Russia have a global strategy and the USA does not.  Extending from that thought, one sees in the USA a government of incoherent stove-piped, ill-informed, over-manned and over-funded, with the Pentagon driving both the budget and the behavior abroad, while the Department of State mutters gloomily to itself (no one really listens to the Americans anymore–they just game them for money).