Important Takeaways:
- China has been supporting Russia’s economy since the start of the Ukraine war by buying its oil while supplying it with everything from microelectronics to washing machines.
- Meanwhile, Beijing has been getting its own strategic benefit: a real-world case study in how to circumvent Western sanctions.
- Russia’s economy has been surprisingly resilient throughout the Ukraine war, but it has shown fresh signs of cracking under Western pressure recently. In the past week, the Russian ruble plunged to its lowest point since the early days of the conflict after the U.S. imposed new banking sanctions.
- Moscow owes much of its economic durability to its oil exports and its cooperation with Beijing, as the leaders of both countries seek to challenge the U.S.-led world order.
- “Sanctions can be really disruptive for any production sector that is enmeshed in global supply chains,” Fishman said. “That makes China highly vulnerable.”
- While the U.S. has already imposed sanctions on China, including export restrictions on advanced semiconductors and measures against telecommunications giant Huawei, a crisis over Taiwan could lead to an economic war of a different magnitude.
- Full-scale financial sanctions by the West would disrupt the country’s financial system, interrupt trade and put $3.7 trillion in Chinese overseas bank assets and reserves at risk, according to a report last year by the Atlantic Council and Rhodium Group think tanks.
- One major lesson for China from Russia’s experience has been the importance of preparation, analysts say. Before the war, Russia had sought to diversify its foreign reserves, de-dollarize its economy and build domestic financial plumbing. Even though its success was mixed, those moves helped shield the Russian economy and buy it time to adapt.
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Important Takeaways:
- The Biden administration has secured the release of three Americans from detention in China in exchange for unnamed Chinese persons held in the U.S.
- China released Mark Swidan, Kai Li and John Leung after years of diplomatic negotiations between the administration and Chinese officials.
- The U.S. government considered the trio to be wrongfully detained on bogus charges. Mr. Swidan had been detained since 2012 on a drug conviction, while Mr. Li and Mr. Lueng were accused of espionage.
- Senate Majority Leader Charles E. Schumer, New York Democrat, said Wednesday he worked for years to release Mr. Li, a Long Island resident. He also credited President Biden for raising the detainees’ plight with Chinese President Xi Jinping.
- “For the families of those Americans newly freed by the Chinese government, this Thanksgiving there is so much to be thankful for,” Mr. Schumer said. “Soon, Kai Li will finally be reunited with his family because President Biden and his Administration also kept the faith and never stopped working to secure Mr. Li’s release and the release of other Americans wrongfully detained by the Chinese government.”
- The Congressional-Executive Commission on China in September said there are more Americans held in China than anywhere else in the world.
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Important Takeaways:
- A top NATO military official on Monday urged businesses to be prepared for a wartime scenario and adjust their production and distribution lines accordingly, in order to be less vulnerable to blackmail from countries such as Russia and China.
- “If we can make sure that all crucial services and goods can be delivered no matter what, then that is a key part of our deterrence,” the chair of NATO’s military committee, Dutch Admiral Rob Bauer, said in Brussels.
- Speaking at an event of the European Policy Centre think tank, he described deterrence as going far beyond military capability alone, since all available instruments could and would be used in war.
- “We’re seeing that with the growing number of sabotage acts, and Europe has seen that with energy supply,” Bauer said.
- “We thought we had a deal with Gazprom, but we actually had a deal with Mr. Putin. And the same goes for Chinese-owned infrastructure and goods. We actually have a deal with (Chinese President) Xi (Jinping).”
- Bauer noted western dependencies on supplies from China, with 60% of all rare earth materials produced and 90% processed there. He said chemical ingredients for sedatives, antibiotics, anti-inflammatories and low blood pressure medicines were also coming from China.
- “We are naive if we think the Communist Party will never use that power. Business leaders in Europe and America need to realize that the commercial decisions they make have strategic consequences for the security of their nation,” Bauer stressed.
- “Businesses need to be prepared for a wartime scenario and adjust their production and distribution lines accordingly. Because while it may be the military who wins battles, it’s the economies that win wars.”
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Important Takeaways:
- Senate Intelligence Committee Chair Mark Warner says he’s stunned by the scope of China’s breach into the U.S. telecommunications system, which went further than was described by the Biden administration.
- “The barn door is still wide open, or mostly open,” the Virginia Democrat told The New York Times on Thursday. “We’ve not found everywhere they are.”
- The Chinese hackers, which Microsoft named Salt Typhoon, have been able to monitor Americans’ cell phone calls and texts, including those made by people such as President-elect Donald Trump and Vice President-elect J.D. Vance.
- Warner, a former telecommunications executive, said that it can’t be concluded that the hackers are now blocked from the nation’s systems or whether investigators know how deep the breach reached.
- Chinese hackers have been a concern for two decades, but their recent activity has taken the problem to new levels, Warner said.
- “This is far and away the most serious telecom hack in our history,” Warner said. “This makes Colonial Pipeline and SolarWinds look like small potatoes,” he added, referring to Russia’s intrusions into U.S. security.
- He added that investigators must be allowed to continue their work to learn the extent of the hacking, and that the public must understand that the Chinese were targeting far more than just Washington targets.
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Important Takeaways:
- The Chinese navy is hard at work on a huge new amphibious assault ship – a combination troop transport and aircraft carrier that could carry hundreds of troops toward Taiwan, and then launch helicopters to deposit those troops behind Taiwanese defenses.
- Why would the Chinese need a third type of big-deck amphibious ship?
- The most chilling answer is that Chinese officials anticipate losing a lot of ships in any attempt to land troops in Taiwan – and they’re planning in advance to replace sunk or damaged Type 075s and Type 076s with smaller assault ships they can build fast and cheap. Or they may want to add numbers to their invasion fleet as quickly as possible.
- Shugart noted it in satellite imagery going back “a few months” prior to October. In those few months, workers completed the ship’s hull and deck.
- In shipbuilding terms, that’s fast. It took Chinese shipbuilders a year to complete the first Type 075; construction of the Type 076 might also take a year.
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Important Takeaways:
- China’s air force announced it is about to unveil its newest stealth jet fighter, the J-35, which U.S. officials say was built with the help of stolen American military technology.
- The J-35 will be declassified and shown for the first time at the annual Zhuhai air show scheduled to begin Nov. 12, Chinese military officials announced Tuesday. The aircraft has been in development for more than 10 years.
- “For the first time, new equipment such as the medium-weight, stealth multi-role fighter J-35A, the HQ-19 surface-to-air missile and a new type of reconnaissance and strike unmanned aerial vehicle will be on display,” Col. Niu Wenbo, a military spokesman, told CCTV state television. A photo of the J-35 was released but no other details were provided.
- It is the second radar-evading stealth jet in the Chinese military arsenal, after the J-20.
- Both jets are viewed as an effort by China to match the U.S. military’s F-35 and F-22. The J-35 will also be used on China’s growing fleet of aircraft carriers. Two are deployed, and a third is being built.
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Important Takeaways:
- China Weaponizes Supply Chain, Sends America’s Largest Drone Maker Into Crisis
- America’s largest drone company and supplier of unmanned aircraft to the Ukrainian Armed Forces has been thrown into a supply chain crisis after Beijing imposed sanctions, barring it from sourcing drone parts from Chinese suppliers, according to a new Financial Times report. This is another wake-up call for American companies heavily reliant on China, highlighting the urgent need to ‘friend-shore’ or ‘reshore’ critical supply chains away from the world’s second-largest economy.
- Sources familiar with the situation told FT that Beijing imposed sanctions on Skydio to prevent it from sourcing battery components from Chinese firms.
- On Wednesday, Skydio said the sanctions by China were “for selling drones to Taiwan, where our only customer today is the National Fire Agency.”
- Skydio CEO Adam Bry met with US Deputy Secretary of State Kurt Campbell and senior White House officials last week to discuss the dire situation as the Chinese paralyzed part of the drone company’s supply chain.
- Bry continued, “This is an attempt to eliminate the leading American drone company and deepen the world’s dependence on Chinese drone suppliers.”
- China initially unveiled the sanctions on October 11 as retaliation for Washington’s move to sell attack drones to Taiwan. The FT noted that the company recently secured a contract with Taiwan’s fire agency.
- FT sources did not mention which of Skydio’s Chinese suppliers were affected by the sanctions.
- Using public trade data compiled by counterparty and supply chain risk intelligence firm Sayari, about 94.44% of Skydio’s drone component shipments came from Vietnam, 4.9% from Hong Kong, and .65% from China.
- One official told FT, “We suspect Skydio was targeted by Beijing because it is likely seen as a competitor to DJI,” adding, “If there is a silver lining, we can use this episode to accelerate our work to diversify drone supply chains away from . . . China.”
- It seems like a tit-for-tat-sanction war between America and the Chinese to weaken each other drone-manufacturing capabilities.
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Important Takeaways:
- Russia has been on a roll: the 2008 invasion of Georgia, the seizure of Crimea in 2014 and the February 2022 invasion of Ukraine. Ukraine surprised an overconfident Vladimir Putin, yet the war continues, with Russian casualties exceeding 500,000.
- From the time Russia invaded Ukraine, Mr. Putin has threatened to use tactical nuclear weapons. He recently announced a new nuclear doctrine: Aggression against Russia by any non-nuclear state, but with the participation or support of a nuclear one, should be considered a joint attack.
- [meanwhile] China is building more missile silos: 120 in Gansu province and about 110 in Xinjiang province. China’s Rocket Force, established by President Xi Jinping, receives significant resources for the nuclear modernization program. China is not a member of New START and continues to refuse to discuss its nuclear program with the U.S.
- China continues to encircle and threaten Taiwan and claim sovereignty over the South China Sea despite a 2016 U.N. Permanent Court of Arbitration ruling in favor of the Philippines that said China’s actions were unlawful. China continues to ignore the ruling.
- North Korea has about 50 nuclear weapons and enough fissile material to produce seven nuclear weapons per year. It also has a chemical and biological program, and in 2002, it was the only country that withdrew from the Nuclear Non-Proliferation Treaty.
- Since the failure of the February 2019 Hanoi Summit, North Korean leader Kim Jong Un has been in a race to build more nuclear weapons and ballistic missiles to launch them as far as the U.S. with the Hwasong-17, a road-mobile intercontinental ballistic missile capable of carrying multiple reentry vehicles, with a range of 15,000 kilometers (over 9,320 miles), capable of reaching the entire U.S.
- Iran is in a category by itself.
- Iran enriches uranium to 60%, enabling it to produce weapons-grade uranium in a few weeks. The International Atomic Energy Agency monitors Iran’s nuclear-related activities and has expressed concern about not getting the access its monitors require to certify that Iran is in compliance with IAEA safeguards.
- Moreover, Iran’s ballistic missile program is impressive — 12 types of medium-range and short-range ballistic missiles. It is only a matter of time before Iran has ICBMs capable of targeting Europe and the U.S. This is in addition to its support of its proxies Hamas in the Gaza Strip, Hezbollah in Lebanon and the Houthis in Yemen. Iran’s goal: to annihilate Israel.
- This is the axis of authoritarian states. The nations’ goal is to change the world order.
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Important Takeaways:
- China is expanding the number of road-mobile DF-26 intermediate-range ballistic missiles that Beijing has called the “Guam killer” for its ability to attack American forces on the Pacific Island, according to a Defense Intelligence Agency report on foreign nuclear threats.
- Chinese officials said the U.S. withdrawal from the Intermediate-range Nuclear Forces Treaty between the United States and Russia in 2019 has hurt strategic stability between the world’s top nuclear powers. In response, China has “fielded thousands of weapon systems, including the DF-26, that would be covered by the treaty if China were to participate,” the report said.
- Actual numbers of single-warhead DF-26s were not included in the report. Private defense analysts estimate there are 250 launchers along with additional reload missiles.
- The missile is also said to be capable of attacking U.S. aircraft carriers at sea.
- The DIA said in 2020 China’s total warhead arsenal was estimated to be in the “low 200s,”… It now has more than 500 warheads and is on track to have over 1,000 warheads by 2030. The warheads will be deployed on missiles and bombers capable of reaching the United States, the report said.
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Important Takeaways:
- China is expected to double its nuclear arsenal to 1,000 warheads over the next five years, according to a new Defense Intelligence Agency (DIA) report.
- In 2020, the DIA assessed China had acquired 200 nuclear warheads and would double that by the end of the decade. Now, the intelligence agency says China has already reached 500 warheads and will have more than 1,000 by 2030.
- “China is undergoing the most rapid expansion and ambitious modernization of its nuclear forces in history,” the report said, while noting China’s capabilities are still far behind that of the U.S. or Russia.
- At the same time, China carried out another “combat control” near the island over the weekend as Beijing threatens countermeasures for the U.S.’ $2 billion arms deal with Taiwan.
- The Pentagon has lately been grappling with how to prepare for 2027 – the point at which Chinese leaders have told their military they should have the capability to invade Taiwan.
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