1-Jan-13 WV-2013 Forecast: Financial Crisis and China Threat

[Reality Check]

Japan was losing the peace in 1941 and had a long shot at winning the war.

China is winning the Peace in 2013 and is much more likely to lose a war started in 2013, than Japan was in 1941.

While the United States and Westerm Europe are busy destroying themselves, why interrupt them ?

[Reality Check]

I know you are quoting me but I assume you are doing that out of convenience since I said pretty much what you said in my previous two posts:

My apologies, I did not fully read your previous posts, and you are correct I am mainly referring to John's suggestion that 2013 is a likely time for China to initiate a major war.

John has in the past made one point which I believe is a strong argument. History does not tells us how a nuclear war would start, how it would be waged, or what would constitute victory or at what point one should decide to surrender before all the nukes are used.

John has also convinced me that it is highly probable that the U.S. and China would use strategic size nuclear weapons in a war, I am just not sure they would be used strategically against civilian targets. I am also not sure every last one on both sides would be used.

China does, however, have another opportunity to miscalculate when planning to win using nuclear weapons.

[solomani]

John has in the past made one point which I believe is a strong argument. History does not tells us how a nuclear war would start, how it would be waged, or what would constitute victory or at what point one should decide to surrender before all the nukes are used.

John has also convinced me that it is highly probable that the U.S. and China would use strategic size nuclear weapons in a war, I am just not sure they would be used strategically against civilian targets. I am also not sure every last one on both sides would be used.

China does, however, have another opportunity to miscalculate when planning to win using nuclear weapons.

Based on my first hand experience of the quality of Chinese "engineering" and "ingenuity" not sure many nukes would even reach the USA (if any at all)...

[vincecate]

Japan was losing the peace in 1941 and had a long shot at winning the war.

China is winning the Peace in 2013 and is much more likely to lose a war started in 2013, than Japan was in 1941.

While the United States and Westerm Europe are busy destroying themselves, why interrupt them ?

If China gradually stops supporting the US dollar they could help the US destroy itself without getting too much blame. Much lower risk than starting a hot war.

[John]

I'd like to add some context to the discussion of whether the Chinese
are being "irrational."

I used the analogy of sex. A person who has an inappropriate sexual
relationship is not an irrational person. He may be perfectly
rational, he may know that it's dangerous, he may know that he's
risking losing his marriage and his home, he may be aware of the
probability of being caught, etc., but he goes ahead with it anyway
because he can't help himself.

The Chinese leadership, especially the WW II and Communist Revolution
survivors, certainly understands all the arguments why starting a war
is a bad idea. But it's not entirely up to the leadership.
Everything I read indicates:

• There is a very high degree of nationalism among the younger
  generations. VERY high.
• There is a very high desire, especially among younger generations,
  for blood revenge against the Japanese for the latter's invasion of
  China, for the 1937 Massacre at Nanking (Nanjing), and for the use of
  Chinese women as "comfort women" during WW II.
• After years of dithering over Taiwan, there is enormous impatience
  with further delays in making Taiwan a province of China. For
  comparison, think about how Beijing has reacted in recent years to
  separatist demonstrations in Tibet.
• China has shown that it will not tolerate challenges to its claims
  in the South and East China Seas. People in all generations understand
  that China's survival depends on importing huge amounts of oil and gas,
  and the South/East China Seas are a key to that. Younger generations are
  particularly insistent that all of these islands belong to China, and
  were stolen from China in wars before China was a military power.
• China has already said that it will board and seize ships in the
  South China Sea in 2013. This alone is a very dangerous doctrine,
  and China's younger generations will now demand that the military
  fulfill that threat.
• Pakistan is China's Israel, in the sense that China will support
  Pakistan no matter what. China blames India for the trouble
  in Tibet. Furthermore, China and India have already had border
  wars, and tensions are high on the mutual border. China has had
  a huge military buildup along its border with India, with obvious
  intent to invade.
• China is extremely nervous about the Obama administration's "pivot
  to Asia." The Chinese do not see this as a sign of increasing
  weakness by America. Rather, they see it as an active challenge to
  China, with the possibility that America will become strong in the
  Asia Pacific region.
• Japan is preparing military for war with China.

In addition to all that, the Chinese have a very different concept
of warfare than the Americans.

China has been focusing on "asymmetric warfare" techniques designed to
strike at weak points in America's military, and overcome America's
military superiority. These include heavy investment in ballistic and
cruise missile systems; undersea warfare systems, including submarines
and advanced naval mines; counterspace systems; computer network
operations; special operations forces; and the "Three Warfares"
concept. Cyber warfare is particularly important. There are many
Chinese who believe that they could win a war today. From 2009:

** New Pentagon report shows China continues to prepare for war with US
** http://www.generationaldynamics.com/cgi ... 29#e090329

So you have a whole list of issues here. Some issues call for delay,
other issues call for urgency. There's a balance scale, if you will,
and at any time the balance could go in either direction.

The point is that there is no doubt whatsoever that an attack is
coming, and it would be a perfectly rational decision to attack now,
rather than attack later, and it would take only the appropriate
trigger -- some insult or some military confrontation -- to trigger a
decision to attack now.

[Reality Check]

I'd like to add some context to the discussion of whether the Chinese
are being "irrational."

So you have a whole list of issues here. Some issues call for delay,
other issues call for urgency. There's a balance scale, if you will,
and at any time the balance could go in either direction.

Very Good Points and an Excellent List of Chinese goals, but I would point out that some of those goals are much more important to China, and much more urgent to China, than others, and China is winning on those important and urgent goals without the need to start a war with the United States.

Resource Starved - China is today exploiting natural resources in Africa, South America, Australia, North America ( Canada ), and Asia ( Siberia and Central Asia and Afghanistan ). They are also winning the peace in terms of exercising ever increasing control over the South China Sea ( via military threats ) and in Siberia ( via economic and demographic power ).

China can use it's threat of boarding ships to discourage development of natural resources in the South China Sea by civilian companies under the authority of leases issued by countries like Vietnam and the Philippines, without interfering with commercial shipping transiting through the South China Sea. China does not have to be stupid and board ships that would start a war with the United States, when it can use threats and boardings of non-allied ( non U.S. allied ) shipping to discourage exploitation of South China Sea oil and fisheries by anyone other than China.

China uses free passage of the Seas to exploit natural resources in Australia, Africa, South America and Canada. China has no interest in inviting reciprocal treatment by the navies of the United States or Japan in other bodies of water.

China can cause trouble for Russia through Sunni Muslim proxies arming and supporting ever growing Sunni Muslim minorities within Russia, without risking war with the United States. Such actions would not engage the U.S. and as long as they worked through proxies like Pakistan, Saudia Arabia and the Gulf States they would likely avoid provoking Russia.

China can intimidate other countries in the South China Sea militarily, including provoking military attacks from such countries as Vietnam and India in the South China Sea, with little chance of Military action by the United States, if China punishes those countries with a military response, provided the response is proportional, even if it were to occur on the land border between China and Vietnam, or the land border between China and India.

China is steadily building up it's military power at a sustained and massive rate.

Japan has made small increases in their military and are talking about slightly larger increases in the future, but nothing on the scale of what China is doing month in and month out. China believes, correctly, that they could eventually win a war of attrition with Japan alone, and that balance of power is moving in China's favor every year.

Taiwan is not going to leave China. The United States and the United Nations recognize Taiwan as part of China. The United States has made clear to Taiwan that they should not expect the U.S. to save them if they provoke China by declaring themselves an independent nation. Taiwan is serving the same economic purpose as Hong Kong for China right now, no need to mess around with success.

The U.S. Pivot to the Pacific is a joke and China knows it. The U.S. is downsizing the U.S. Navy to it's smallest level since before World War I ( nearly 100 years ago ) and shifting 60% of that downsized U.S. Navy to the Pacific is not a threat to China's ever increasing share of military naval power in the Pacific. Obama is talking about stationing 500 Marines, sometime in the future, on an Australian base in North Western Australia. The U.S. Air Force is at it's smallest size in history ( it has only existed since 1947 ) The Air Force is even smaller than it was after the rapid DE-mobilization, following World War II, and before the Cold War re-arming began.

A far bigger threat to China than 500 marines, are 100s of U.S. strategic bombers that can launch from any continent on Earth and carry one (1) Mega-Ton Therm-o-Nuclear bombs and cruise missiles to any Ocean China's Navy is operating in. Every year China waits to start a war there will be fewer such bombers and fewer such bombs, unless China does something stupid and starts a war with the U.S.

The point is that there is no doubt whatsoever that an attack is
coming,

Agreed, but when ???

and it would be a perfectly rational decision to attack now,
rather than attack later, and it would take only the appropriate
trigger -- some insult ...

China is achieving their most important goals right now, China is winning the peace. The U.S. is rapidly disarming while China is rapidly arming. It would not be rational to risk what is clearly working well by attacking a massively superior strategic nuclear power while that power is in the process of disarming.

[psCargile]

The best time to attack is when your opponent least expects it and is unprepared to retalitate in kind.

[Higgenbotham]

The best time to attack is when your opponent least expects it and is unprepared to retalitate in kind.

That's what the ancient Chinese said, and the Chinese leadership is still paying attention to the ancients today.

SUN TZU ON THE ART OF WAR
THE OLDEST MILITARY TREATISE IN THE WORLD
Translated from the Chinese
By LIONEL GILES, M.A. (1910)


16. All warfare is based on deception.

17. Hence, when able to attack, we must seem unable; when using our forces, we must seem inactive; when we are near, we must make the enemy believe we are far away; when far away, we must make him believe we are near.

22. Attack him where he is unprepared, appear where you are not expected.

http://www.au.af.mil/au/awc/awcgate/artofwar.htm

June 07, 2006
Flunking the Art of War
Master Sun-Tzu, President Hu and Bush
by JOHN WALSH

At the very least China’s President Hu displayed a sense of humor in presenting a book, of all things, to George W. Bush on his recent visit to the United States. And the choice of Sun-Tzu’s fifth century B.C. classic, "The Art of War" was tantalizing. Since Dubya certainly will not penetrate too far into it, I decided to have a look, so that at least one American would honor the Chinese gift by actually reading it.

http://www.counterpunch.org/2006/06/07/ ... -and-bush/

About 18 months ago, we had this debate about whether China would attack. Lily said they would attack soon and I thought not yet for many of the reasons given in this thread. I believe over the past 18 months the US has reached a tipping point of having a population too dependent on electronic printed money transfers. This population has marginal productive skills, essentially no survival skills, is racially divided, is heavily armed, and is tired of being screwed around with by the top 1%. There's no patriotic feeling. Meanwhile, the politicians and the country in general are distracted by the "fiscal cliff" and "debt ceiling" debates. They have only recently become vaguely aware of the closeness of the looming threat to the bond market and the looming cyber threat. The 30 year US Treasury bond has lost about 8 points recently as interest rates have backed up.

In 2013, I believe the Chinese will launch a financial attack and a cyber attack on the United States and I believe they will win hands down. The financial and cyber vulnerabilities are at their maximum point and the US has done the minimum to close those vulnerabilities. If the Chinese can exploit that soon, they can create maximum internal disorder inside the US.

Chinese Cyberattack Continues
DHS warns about new ‘watering hole’ cyber attack vulnerability as a high-tech firm also reportedly is hit

BY: Bill Gertz
January 3, 2013 6:45 pm

Tkacik, director of the Future Asia Project at the International Assessment and Strategy Center (IASC), said the company probably was among hundreds of U.S. companies targeted for technology acquisition.

“The whole episode is yet another chapter in the ongoing morality play of America’s inability, unwillingness, or both, to confront the Chinese cyberthreat,” Tkacik said. “Alas, U.S. law prevents American intelligence and military cyberwarriors from conducting the same sweeping attacks against Chinese networks, but perhaps the time has come for Congress to fund a major expansion of [the National Security Agency's] and Defense Department’s network warfare capabilities and mandate them to go after Chinese financial, social, media, energy, and industrial networks in a big way. Otherwise we’re fighting the last war.”

Richard Fisher, a China affairs specialist with IASC, said the government should require publicizing information on Chinese-origin cyber attacks. “The time has come for Congress to demand annual reporting from the Departments of Defense and Homeland Security highlighting China’s global cyber war and its security and economic impact on Americans,” Fisher said. “Such a report required in order to galvanize both defensive and retaliatory policies."

http://freebeacon.com/chinese-cyberattack-continues/

State-sanctioned cyberattacks on the rise – Kaspersky
GMA News Online – Thu, Jan 3, 2013

However, a more urgent concern was the rise of nationally authorized cyberattacks that could usher in an era of cold "cyber-war", according to Kaspersky's Director of Global Research & Analysis, Costin Raiu.

“We expect more countries to develop cyber weapons - designed to steal information or sabotage systems - not least because the entry-level for developing such weapons is much lower than is the case with real-world weapons,” he cautioned.

Prime targets of such attacks include energy supply facilities, transportation controls, financial systems, telecommunications, and other critical infrastructure.

Government response to the increased threat of cyberattacks is likely to be heightened monitoring, a potential privacy breach that may put the role of law enforcement into question.

“Legal surveillance tools has wider implications for privacy and civil liberties. And as law enforcement agencies, and governments, try to get one step ahead of the criminals, it's likely that the use of such tools - and the debate surrounding their use - will continue,” Raiu pointed out.

http://ph.news.yahoo.com/state-sanction ... 13689.html

Still others say the whole concept is overblown.

"Digital Pearl Harbor is just a funding term, a way to get money for military and cybersecurity budgets," says John Robb, a former Air Force pilot who served in Special Operations Forces and is author of "Brave New War" about new modes of warfare. "It has no real relevance because we still live in a world dominated by nuclear weapons."

http://news.yahoo.com/cyber-pearl-harbo ... IAmxrQtDMD

Makes sense, but I think he's wrong.

Two in three Brits feel cyber enemies should be attacked before they pose security threat

London, Dec. 26 (ANI): Two in three people believe Britain should draw 'first blood' in the cyber war and attack state or hackers before they target their country.

The majority of the public believe pre-emptive strikes are justified if enemy states or hi-tech criminals pose a threat to national security.

Earlier this year, a committee of MPs and peers said Britain should declare cyber war on those who target the country through aggressive retaliatory strikes to destroy their operations, the Telegraph reports.

Hackers and foreign spies are bombarding government departments and businesses, which has become one of the 'greatest challenges' of modern times.

http://in.news.yahoo.com/two-three-brit ... 13823.html

The above article I found interesting from a GD standpoint.

Financial terrorism suspected in 2008 economic crash
Pentagon study sees element

The Washington Times
Monday, February 28, 2011

"The new battle space is the economy," he said. "We spend hundreds of billions of dollars on weapons systems each year. But a relatively small amount of money focused against our financial markets through leveraged derivatives or cyber efforts can result in trillions of dollars in losses. And, the perpetrators can remain undiscovered.

Regardless of the report's findings, U.S. officials and outside analysts said the Pentagon, the Treasury Department and U.S. intelligence agencies are not aggressively studying the threats to the United States posed by economic warfare and financial terrorism.

"Nobody wants to go there," one official said.

Because of secrecy surrounding global banking and finance, finding the exact identities of the attackers will be difficult.

Asked by The Times who he thought to be the most likely behind the financial attacks, Mr. Freeman said: "Unfortunately, the two major strategic threats, radical jihadists and the Chinese, are among the best positioned in the economic battle space.

The third phase is what Mr. Freeman states in the report was the main source of the economic system's vulnerability. "We have taken on massive public debt as the government was the only party who could access capital markets in late 2008 and early 2009," he said, placing the U.S. dollar's global reserve currency status at grave risk.

"This is the 'end game' if the goal is to destroy America," Mr. Freeman said, noting that in his view China's military "has been advocating the potential for an economic attack on the U.S. for 12 years or longer as evidenced by the publication of the book Unrestricted Warfare in 1999."

A few pieces of the article are quoted - there's lots more at the link.

http://www.washingtontimes.com/news/201 ... ash/print/

Supposing a war broke out between two developed nations already possessing full information technology, and relying upon traditional methods of operation, the attacking side would generally employ the modes of great depth, wide front, high strength, and three-dimensionality to launch a campaign assault against the enemy. Their method does not go beyond satellite reconnaissance, electronic countermeasures, large-scale air attacks plus precision attacks, ground outflanking, amphibious landings, air drops behind enemy lines ... the result is not that the enemy nation proclaims defeat, but rather one returns with one's own spears and feathers.

However, by using the combination method, a completely different scenario and game can occur: if the attacking side secretly musters large amounts of capital without the enemy nation being aware of this at all and launches a sneak attack against its financial markets, then after causing a financial crisis, buries a computer virus and hacker detachment in the opponent's computer system in advance, while at the same time carrying out a network attack against the enemy so that the civilian electricity network, traffic dispatching network, financial transaction network, telephone communications network, and mass media network are completely paralyzed, this will cause the enemy nation to fall into social panic, street riots, and a political crisis.

There is finally the forceful bearing down by the army, and military means are utilized in gradual stages until the enemy is forced to sign a dishonorable peace treaty. This admittedly does not attain to the domain spoken of by Sun Zi, wherein "the other army is subdued without fighting." However, it can be considered to be "subduing the other army through clever operations." It is very clear who was superior and who inferior when comparing these two methods of operation. This is, however, only a thought. However, it is certainly a feasible thought. Based on this thought, we need only shake the kaleidoscope of addition to be able to combine into an inexhaustible variety of methods of operation.

http://www.c4i.org/unrestricted.pdf

From Unrestricted Warfare, p. 145.

[solomani]

Interesting back-and-fourth. I think I may leave HK earlier rather than later. One point, I can confirm that mainlanders are pretty nationalistic however the southerners, in particular those in and around HK are not in the last nationalistic. I am not sure what if any impact that would have on any decision making. Finally the entire culture values money/economics above everything else. If a war risked economic collapse or failure they would do everything they could to avoid it. China is always only a few steps away from distinergration and one of the pins that keeps things united is a relatively healthy and growing economy. This is assuming nothing stupid happens like an accidental hot-war due to hubris.

Is there anything official on Japan expanding its forces or at least preparing for war?

One last point, the USA is still a potentially economic and military giant even if it reduced its forces down to pre-WW2 levels. WW2 showed the USA could gear for total war in 1 to 2 years. And in WW2 the USA did not have any kind of miliatry advantage (size, might, logistics, training, technical etc) over the Axis powers yet it still prevailed.

Finally, demographically, China has a small window of opportunity if it wants to assert a military presence. China's population is aging and dying as well. By the end of the century it will be in the same position as Russia is today. I don't expect the USA to be in this position as it still tends to have a relatively high replacement rate (though its generally concentrated in certain demographics). The USA would also win the demographic war. Not sure the Chinese government understand this but they may which would lead them to act sooner rather than later.

And lets not forget that Chinese society has slowly been shifting to a much more macho society over the last century. Essentially the numbers of women have dropped and I hazard to guess a more masculine society would be much more likely to risk war than one that is balanced.

But its all speculation at this point.