Luttwak attack

For your amusement and edification, a link dump of interviews with, and an essay by, the great strategist Edward Luttwak, aka the Machiavelli of Maryland.

First, an interview with Japanese newspaper Sankei Shimbun in four parts: part 1, part 2, part 3, and part 4.

The interview addresses the emerging US-China Cold War and the role Japan will/can play in it. Excerpt:

Maybe China is trying to make allies and friends through One Belt One Road Initiative?

Good luck to them. Good luck to them because that will not help them with Malaysia — Malaysia has caused them a bit of a problem — nor with Indonesia, nor with the Philippines, nor with Japan.

The only country which the Chinese can get is Korea — South Korea. The South Koreans do not like being independent. They were under Chinese rule, then they were under Japanese rule, then they were under American rule, and they don’t like to be independent. They just don’t.

Not everybody likes to be independent. They are too divided themselves. They are more comfortable having somebody else. So, the South Koreans are willing to go under the Chinese rule.

The only reason they don’t do it is because of North Korea. North Korea is the protector of Korean independence, not South Korea.

If the South Koreans were interested in being an independent power, they would not be quarreling with Japan, given the fact that their security depends on Japan 100%. The Americans could do nothing in Korea without Japanese cooperation. So, the fact that they are anti-Japanese means that they are not interested in real foreign policy, they are not interested in being independent, and so they can afford to shout about comfort women and this and that because they are not serious. They are not serious about it.

One of our problems in Korea is that we don’t like North Korean nuclear weapons, but North Korean nuclear weapons guarantee the independence of North Korea and therefore guarantee that Chinese influence cannot extend over the Korean Peninsula. Because if it were up to South Korea, it would [allow Chinese influence].

You know, the South Koreans are not interested in resisting Chinese domination because they are not interested in being independent. The Vietnamese are determined to be independent of China and they are quite confident that they can defeat any Chinese action against them. The South Koreans are not confident, but also they are not interested in defending. They are really not interested in being independent. Otherwise, they wouldn’t behave the way they do.

Right. That might not be not good news for the United States and Japan. The common perception is that, in order to deal with the North Korean nuclear issue, we need some kind of trilateral cooperation including South Korea.

Listen, South Korea faces immediate military dangers from North Korea. For example, their rockets — there are cheap rockets aimed at the Seoul area. Today, there are anti-rocket systems that are not expensive and work very well. South Korea doesn’t buy them. Today, you can buy anti-rocket interceptors.

Like Iron Dome?

Like Iron Dome. You can go and buy it, okay? You can go to Lawson’s and you buy it.

Why don’t they buy it? Because they are not really interested in self-defense.

When they have money, they do something like build a helicopter carrier and call it “Dokdo.” Do they need a helicopter carrier against North Korea? No.

So, in other words, their actions are not the actions of people who either want to defend themselves or to be independent. They don’t.

They just want to transition profitably from being protected by the United States to being protected by China. That is the only thing that they are interested in.

Not everybody wants to be independent. In that sense, the North Koreans are. Because of the politics of the Kim family, they want to be independent.

But South Korea does nothing.

Luttwak’s intriguing conclusion: a divided Korean peninsula with North Korea in possession of nukes may be the best possible scenario for the US.

Next, a review of the book Japan in the American Century in the London Review of Books:

With [Prime Minister Shinzo Abe] that means much more than phrase-making, as Pyle explains in detail: his Japan now accepts real responsibilities, e.g. to repel any attempt by China to act on its fanciful claim to the Senkaku Islands in the East China Sea instead of begging the Americans to do so, e.g. preserving a dialogue with Putin in order to give him a reason for limiting Russia’s support for China (at one point Obama called Abe to try to persuade him to cancel an upcoming meeting, but he didn’t budge). It was not just a question of asserting personal leadership. To change long-settled habits of passivity, Abe established a National Security Council that is not just a gathering place for representatives of the foreign, defence and intelligence bureaucracies, as in most other countries, but an actual policy-making body operated by its own staff, the National Security Secretariat. It has been remarkably effective from the start, formulating Japan’s first post-1945 national security strategy and leading successful negotiations with the Chinese.

Finally, a lengthy interview on China and the logic of strategy in War on the Rocks. Excerpt:

Brad: So you’re the National Security Advisor to the new president, we see what China has done over the time that Xi has been in power, what should the U.S. policy toward China be?

Edward: Well it has to be engagement, but of a new kind. It’s an engagement in which United States simply becomes extremely positive on everything positive, and extremely harsh on anything negative. The famous, or perhaps not-so-famous Micron case in Taiwan, where a Fujian regional authority invests money to build a copy of a Micron plant, a shadow plant. And then they go and hire, offer triple salaries to any Micron employee who comes over to them carrying a laptop or server, or memory stick or whatever it is with Micron information. They get caught by doing all …

That should have led to a drastic response while at the same time trying to be positive when anything can be positive. In other words, one has to have a duality.

Brad: What would a drastic response look like?

Edward: Well a drastic response is very simple. To this day, the People’s Republic of China, with its many accomplishments, cannot produce an integrated circuit that is even remotely competitive. No Chinese intellectual property, integrated circuit or chip … as you know super computers, laptops, phones, all of what we call electronics, anything you’re going to build artificial intelligence on, does rest on integrated circuits or microprocessors or chips or whatever you call them. Those things, in order to be competitive, not just commercially but functional, for things like don’t generate so much heat that they melt down your battery kind of thing, those things, the Chinese are not able to do without using foreign intellectual capital and they can’t manufacture them. They have to be manufactured by Taiwan Semiconductor Corporation or the other people who can work on what’s called 7 nm, which is seven nanometers, which is seven billionths of a meter, right? They can’t do it.

Running the numbers

Professor Balding does the math on US/China tariffs and finds that there may be somewhat less to the “trade war” than meets the eye:

Playing with some numbers here. YTD US exports to China are down 19% and imports from China are down 12%. To the horror of sky is falling people, these are borderline irrelevant numbers set against the US and global economies. Let’s have some perspective. For instance, 1/n

If US exports to China rose by an unprecedented amount of 19% rather than falling 19%, this would raise US GDP 0.1%. Just for illustration, imports and exports rising by those amounts rather than falling are equal to only 0.4% of US GDP. As a percentage of world GDP this 2/n

Amounts to 0.1% of world GDP. Put another way. This might be having a small impact on US and Chinese economies, it is irrelevant to the global economy. To put this number in perspective for China. If Chinese exports rose by 12% instead of falling by that amount you the US, 3/n

The Chinese economy would have grown by $63 billion. This would have added 0.45% to their economy. However this is a tiny number compared they reliance on credit. By comparison, China has added more $3 trillion in new credit since this time last year. In other words, 4/n

The marginal difference in trade is equal to 2% of rapidly expanding credit flows. Whatever your thoughts on the state of affairs a wee bit of reality is needed when blaming all nature of phenomenon on the not a trade war trade war. Done.

Meanwhile, in Thailand:

Thai officials glimpse a silver lining in the U.S.-China trade war as companies such as Sony Corp. move production to Southeast Asia’s second-largest economy.

At least 10 firms are in the process of relocating some production to Thailand from China, according to the National Economic & Social Development Council. More than a dozen others could potentially choose Thailand, it said in a statement.

“We may not see the impact on the economy now, but in the second half of 2019, it could become a positive factor for growth,” the agency’s Deputy Secretary-General Wichayayuth Boonchit said Monday.

Manufacturers are trying to escape US tariffs on imports from China.

The 10 firms moving some manufacturing to Thailand include Sony, Sharp Corp., Harley-Davidson Inc. and Delta Electronics Inc. Most have finalized locations near Bangkok or in the so-called Eastern Economic Corridor development zone, according to the economic and social development agency.

The coming scramble for Greenland

Now that the status of Greenland is a live political issue, I wonder if China will make its own play to acquire the world’s largest island before the US does:

It’s not just America who acknowledges the strategic importance of Greenland, either. Look no further than China, which has repeatedly attempted to gain infrastructure on the island.

In 2016, a Chinese company attempted to buy a former U.S. military base in Greenland, and the government in Denmark stepped in, vetoing the deal. At the time, Danish officials were quoted anonymously in the press, saying they had resisted the deal as a favor to its longtime American ally.

Then in 2018, a Chinese government-owned firm was announced as a likely winner for a contract to build a new airport. The 3.6 billion Danish krone (U.S. $560 million) contract would have given China major economic power over the local government, and decision makers in both Washington and Copenhagen worried it could lead to the U.S. being pushed out of Thule – or give Beijing a ready-made airport that could accommodate Chinese military planes in case of a conflict.

Eventually Copenhagen and Nuuk reached an agreement, with generous financial support from Denmark’s coffers, to pick a different contractor. But it is likely that China will continue to push for entry into Greenland, underlining its strategic importance once again.

I can only guess that the US put considerable pressure on the Danes to squash these Chinese attempts at gaining a foothold in Greenland.

More from Reuters:

The Arctic region sits at a geopolitical intersection of renewed rivalry between world powers China, Russia and the United States, and – with its melting ice cap – is a major symbol of the growing impact of climate change.

Russia has been raising its profile in the Arctic, creating or reopening six military bases shut after the Cold War ended in 1990, modernizing its Northern Fleet, including 21 new vessels and two nuclear submarines, and staging frequent naval exercises in the Arctic.

Russia also hopes that as the polar ice cap retreats, a shipping lane north of Russia will develop as an alternative route for goods from Asia to Europe.

The Trump administration last year began re-establishing the U.S. Second Fleet, responsible for the northern Atlantic, to counter a more assertive Russia. […]

China has also shown interest in Greenland after Beijing laid out its ambitions to form a “Polar Silk Road” by developing shipping lanes opened up by global warming and encouraging enterprises to build infrastructure in the Arctic.

Greenland, which plans to open a representative office in Beijing later this year to boost trade ties, has courted Chinese investors and construction firms to help expand three airports to allow direct flights from Europe and North America.

Greenland, which is three times the size of Texas, has vast mineral reserves including uranium and rare earths, as well as 50 billion barrels of still-untapped offshore oil and gas reserves, according to the article.

Strategic real estate?

Why the hell would the US want to own Greenland? The semi-autonomous Danish territory is already home to the US military’s northernmost installation, Thule Air Base, which hosts a vital space monitoring system as well as a deep-water seaport and airfield. What would be the advantage in actually owning 836,300 square miles of empty, mostly ice-covered land?

I’m thinking there could be a strategic advantage, and it has something to do with this:

In 2016, a Chinese company attempted to buy a former U.S. military base in Greenland, and the government in Denmark stepped in, vetoing the deal. At the time, Danish officials were quoted anonymously in the press, saying they had resisted the deal as a favor to its longtime American ally.

Then in 2018, a Chinese government-owned firm was announced as a likely winner for a contract to build a new airport. The 3.6 billion Danish krone (U.S. $560 million) contract would have given China major economic power over the local government, and decision makers in both Washington and Copenhagen worried it could lead to the U.S. being pushed out of Thule – or give Beijing a ready-made airport that could accommodate Chinese military planes in case of a conflict.

Eventually Copenhagen and Nuuk reached an agreement, with generous financial support from Denmark’s coffers, to pick a different contractor. But it is likely that China will continue to push for entry into Greenland, underlining its strategic importance once again.

See also my previous post. If the US owned Greenland, it could put the kibosh on any attempted Chinese (or Russian) projects in the territory, no questions asked. That could throw a serious wrench in the “Arctic strategies” of America’s principal rivals in the decades ahead.

Besides, we’d have Canada surrounded.

You should’ve listened

GreenlandGreenland is suddenly all over the news. ‘Member that time, in December 2017, I wrote that the autonomous Danish territory “increasingly seems like a place to watch”? I ‘member.

Consider this your periodic reminder that in 2013, a controversy stemming from a proposed Chinese-backed iron ore project resulted in a change of government in Greenland.

Also, that China has tried to surreptitiously build a satellite ground station with military applications in Greenland’s capital (emphasis mine):

In May 2017, a project to set up a dual-use satellite ground station in Nuuk was “officially launched” on Greenlandic soil. The ceremony was attended by Cheng Xiao 程晓, the leading remote sensing expert in charge of the project, and a hundred Chinese visitors, including retired PLAN Rear Admiral Chen Yan 陈俨, former political commissar of the South China Sea fleet and NPC delegate between 2003 and 2008. A Beidou pioneer with a military background spoke at the event. The trip to Greenland was also used to fly the first Chinese remote-sensing drone in Greenland, the Jiying 极鹰 3. Although these events were reported in Chinese, the Greenlandic government remained unaware of the project months after its official launch. First mentioned in English on my blog, the project’s existence only became known to the Greenlandic public and their elected representatives after it was covered in a story by Andreas Lindqvist for the local paper AG, using my translations from Chinese sources. My full account, including the background of the main individuals in attendance, was posted in December.

The project illustrates the PRC’s double messaging in the Arctic. It was possible to organise a discreet event with a hundred participants in a town with a population of 493 by bringing them as a tour group. After the event, the tourists continued on an eight-day cruise of eastern Greenland. The tour was organized by Souluniq, a high-end tour operator long associated with communicating the importance of the polar regions to China’s national interest. The fact that the Chinese public for the event was a tour group attending this ‘launch’ as a patriotic-themed attraction, after lunch in a restaurant, was not disclosed in Chinese media accounts: indeed, the phrasing allowed readers to imagine a joint ceremony with the Greenlandic government, marking the actual start of the station’s construction. In fact, no date had been fixed for the actual construction of the station, a 7m antenna to be installed outside Nuuk; the required authorisation had not been sought with the Greenlandic authorities. To a Chinese audience, this was the launch of a major project in Greenland; for the locals, it was just another group of Chinese tourists. The project’s local partner saw its leader as just a fellow scientist, a perception that can help the project’s chances with the local authorities. Relevant Chinese audiences, on the other hand, have been made aware of Cheng Xiao’s key role in China’s polar strategy. A global network of satellite receiving stations is of strategic importance to the PRC; in the Arctic, one opened in Kiruna, Sweden, in 2016, to be followed by another one in Sodankylä, Finland. The dual-use Beidou satellite navigation system, in particular, needs more ground stations. The military aspect of the PRC’s polar strategy is clear to Cheng, who warns that “China’s threats come from the Arctic” and, according to a participant, discussed the military significance of the project during the Greenland tour. […]

Had it remained confined to the local domain, the project might have proceeded smoothly, perceived as cooperation between fellow scientists, then presented as a fait accompli for the approval of the local authorities. Its exposure, attracting the wrong kind of attention, could complicate its prospects. No further information on the project has emerged since its ‘official launch’ was revealed and it remains unclear when it will be built.

I referenced this project on my blog here.