31/05/2020
- China’s leadership has made it clear to its people that the world will become more dangerous and they must be prepared for hard times
- Beijing’s relatively small stimulus response to Covid-19 suggests it wants to save its economic policy ammunition for a bigger battle
China opted not to set a GDP target for 2020. Photo: Xinhua
Beijing’s decision not to set an annual GDP target for 2020 – for the first time since 2002 – is a sign it is putting stability ahead of growth as part of its preparations for an escalating conflict with the
United States.
Economic development has always been the central theme for Beijing since it established diplomatic relations with the US in 1979. But this year it has given priority to job creation and tackling poverty. The coronavirus outbreak might appear to have been the reason for the shift, but the underlying factor is the tension with the US.
Covid-19 offered a preview of what a decoupling of China and US might look like: aircraft grounded, cargo flows disrupted, value chains broken, goodwill and cooperation lost, blame games started.
Both countries have suffered heavy human and economic losses from the coronavirus, yet that did not inspire them to work together. Instead, hostility and rivalry has thrived, and neither wants to blink first.
The Chinese leadership has made it clear to its people that the world will become more dangerous and they must be prepared for hard times. As such, the government is saving its economic policy ammunition.
While the stimulus plans introduced in the US, Germany, Japan and France exceed 10 per cent of their national GDP and interest rates have been cut to the bone, Beijing stopped at just 1 trillion yuan (US$140 billion) worth of special treasury bonds and 1.6 trillion yuan of additional local government bonds. In total, about 2.6 per cent of GDP.
Interest rates in China – 2.7 per cent on 10-year bonds – are some of the highest among major economies.
China’s 6.6 per cent defence spending boost lowest in three decades
China’s budget fiscal deficit has increased to 3.6 per cent of GDP for 2020, but the larger deficit is mainly from tax and fee cuts instead of increased fiscal expenses, except for an increased military spending.
Beijing is calling on provincial and local authorities to tighten their belts, which is unusual for a government that has huge assets and can increase spending at any time through quantitative easing.
So why is the government, which is known for intervening in the economy, being so restrained?
It is bracing itself for a perceived period of turbulence and hardship as its relationship with the US turns sour. It is putting jobs and social stability on top of its agenda, instead of growth.
Beijing is refraining from excessive spending, eliminating sources of potential instability, making appeals to the most vulnerable social groups, and saving its power for a bigger test.
Against that backdrop, the National People’s Congress passed the national security legislation on Hong Kong. Beijing knew the bill would anger the US, but did it anyway.
Hong Kong is known as China’s gateway to the international capital market and the largest offshore yuan market, but Beijing is ready to trade losses on the financial and economic front for potential gain on a fortified national security fence.
All this points to the suggestion that Beijing is preparing for the possibility of decoupling from the US, even if it doesn’t necessarily want to.
The threat of a new Cold War is clouding the world. The theme of life for one or two generations of people on both sides of the Pacific may shift from growth and prosperity to struggle and confrontation.
China and the US have yet to collide totally, but that moment is drawing near.
Source: SCMP
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10/06/2019
- With a defence budget second only to the US, China is amassing a navy that can circle the globe and developing state-of-the-art autonomous drones
- The build-up is motivating surrounding countries to bolster their own armed forces, even if some big-ticket military equipment is of dubious necessity
Chinese President Xi Jinping reviews an honour guards before a naval parade in Qingdao. Photo: Xinhua
The Asia-Pacific region is one of the fastest-growing markets for arms dealers, with economic growth, territorial disputes and long-sought military modernisation propelling a 52 per cent increase in defence spending over the last decade to US$392 billion in 2018, according to the Stockholm International Peace Research Institute.
The region accounts for more than one-fifth of the global defence budget and is expected to grow. That was underscored last week by news of
’s bid to strike a
to purchase US tanks and missiles.
Taiwanese Soldiers on a CM11 battle tank, jointly developed with US arms manufacturer General Dynamics. Photo: EPA
The biggest driver in arms purchases, however, is
– responsible for 64 per cent of military
spending in the region. With a defence budget that is second only to the
, China is amassing a navy that can circle the globe and developing state-of-the-art autonomous drones. The build-up is motivating surrounding countries to bolster their armed forces too – good news for purveyors of submarines, unmanned vehicles and warplanes.
It is no coincidence that the recent
in
, a security conference attended by
chiefs, was sponsored by military contractors including Raytheon,
and
.
Opinion: How the Shangri-La Dialogue turned into a diplomatic coup for China
Kelvin Wong, a Singapore-based analyst for Jane’s, a trade publication that has been covering the defence industry for 121 years, has developed a niche in infiltrating China’s opaque defence industry by attending obscure trade shows that are rarely advertised outside the country.
He said the US is eager to train allies in Asia and sell them arms, while also stepping up its “freedom of navigation” naval operations in contested waters in the
and Taiwan Strait. It has lifted a ban on working with
’s special forces over atrocities committed in
. And it is considering restarting arms sales to the
.
In his speech at the Shangri-La Dialogue, acting US Defence Secretary Patrick Shanahan touted American advancements in technology “critical to deterring and defeating the threats of the future” and said any partner could choose to win access to that technology by joining the US defence network.
Wong said the message was clear: “Buy American.”
Analysts say Chinese soldiers have less training, motivation and lower morale than their Western counterparts. Photo: Reuters
The analyst said there is a growing admission among the Chinese leadership that the
has an Achilles’ heel: its own personnel.
He said one executive at a Chinese defence firm told him: “The individual Chinese soldier, in terms of morale, training, education and motivation, (cannot match) Western counterparts. So the only way to level up is through the use of unmanned platforms and
To that end, China has developed one of the world’s most sophisticated drone programmes, complete with custom-built weapon systems. By comparison, Wong said,
US drones rely on weapons originally developed for helicopters.
Wong got to see one of the Chinese drones in action two years ago after cultivating a relationship with its builder, the state-owned China Aerospace Science & Technology Corporation. He viewed a demonstration of a 28-foot-long CH-4 drone launching missiles at a target with uncanny ease and precision.
“Everyone knew they had this,” Wong said. “But how effective it was, nobody knew. I could personally vouch they got it down pat.”
China unveils its answer to US Reaper drone – how does it compare?
That is what Bernard Loo Fook Weng, a military expert at Singapore’s S. Rajaratnam School of International Studies, told the author Robert Kaplan for his 2014 book, Asia’s Cauldron, about simmering tensions in the South China Sea.
He was describing the competition for big-ticket military equipment of dubious necessity.
is littered with examples of such purchases.
owns an aircraft carrier without any aircraft. Indonesia dedicated about one-sixth of its military budget to the purchase of 11
Su-35 fighter jets. And
splurged on two
submarines it could not figure out how to submerge.
“It’s keeping up with the Joneses,” Wong said. “There’s an element of prestige to having these systems.”
Submarines remain one of the more debatable purchases, Wong said. The vessels aren’t ideal for the South China Sea, with its narrow shipping lanes hemmed in by shallow waters and coral reefs. Yet they provide smaller countries with a powerful deterrence by enabling sneak attacks on large ships.
Nuclear-powered PLA Navy ballistic missile submarines in the South China Sea. Photo: Reuters
Asia and
are home to 245 submarines, or 45 per cent of the global fleet, according to the US-based naval market intelligence firm AMI International.
The Philippines remains one of the last coastal nations in the region without a sub – though it is in talks with Russian builders to acquire some.
Singapore recently received the first of four advanced
Type 218 submarines with propulsion systems that negate the need to surface more frequently. If the crew did not need to eat, the submarine could stay under water for prolonged periods. Wong said the craft were specially built for Asian crews.
“The older subs were designed for larger Europeans so the ergonomics were totally off,” he said.
Singapore, China deepen defence ties, plan larger military exercises
Tiny Singapore plays a crucial role securing the vital sea lanes linking the Strait of Malacca with the South China Sea. According to the
the country dedicates 3.3 per cent of its gross domestic product to defence, a rate higher than that of the United States.
State-of-the-art equipment defines the Singapore Armed Forces. Automation is now at the centre of the country’s military strategy, as available manpower is shrinking because of a rapidly ageing population.
Wong said Singapore is investing in autonomous systems and can operate frigates with 100 crew members – 50 fewer than they were originally designed for.
“We always have to punch above our weight,” he said.
Source: SCMP
Posted in artificial intelligence (AI), Asia, Asia-Pacific region, Australia, autonomous drones, BAE Systems, China Aerospace Science & Technology Corporation, East Timor, French, frigates, German, Indonesia, Lockheed Martin, Malaysia, military spending, naval parade, navy, People’s Liberation Army, President Xi Jinping, Qingdao, Raytheon Co, ripple effect, Russian, Shangri-La Dialogue, Singapore, Singapore Armed Forces, South China Sea, Southeast Asia, Stockholm International Peace Research Institute, Strait of Malacca, submarines, Taiwan Strait, Thailand, the Philippines, Uncategorized, unmanned vehicles, US Reaper drone, warplanes, World Bank |
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