We Need Our Mojo Back Vis-à-Vis China
(David P. Goldman) Bill Gertz is the dean of American defense journalists, and brings vast knowledge and an abundance of sources to his latest book. His review of China’s efforts to gain a decisive edge in military technology is indispensable reading for anyone concerned with the rapid rise of a prospective adversary. Gertz is a reporter first and foremost, and Deceiving the Sky: Inside Communist China’s Drive for Global Supremacy distills the thinking of America’s military and intelligence establishment in a terse and highly readable presentation.
What We Don’t Know
The book’s lacunae are less the fault of the senior defense correspondent for the Washington Times and Washington Free Beacon than of the American national security establishment itself. Our institutions lack a clear understanding of what China is doing and what we should do in response. Amid the impressive mass of detail, readers are left to wonder what the Chinese really want. If they were to take over the world, what would they do with it? In the case of Nazi Germany or the Soviet Union, we know the answer, because we saw Germans and Russians at work as occupiers. China reached its present borders for the most part by 800 C.E. under the Tang Dynasty and has shown little interest in sending troops to occupy other countries.
A related question involves China’s order of battle. What does China hope to achieve with its anti-satellite weapons, carrier-killer missiles, anti-submarine devices and so forth? Gertz presents the sort of war scenario that staff officers grind out as a matter of course, without explaining what Chinese war aims might be.
A key issue is the distinction between China’s notorious theft of U.S. technology and its homegrown innovations. Not until page 185 do we read of the most striking and strategically important Chinese invention:
A major worry for American defense planners and intelligence strategists is China’s drive to deploy extremely secure quantum communications. This development was announced by China in August 2016 . . . Quantum communications for the Chinese are designed to produce encryption that is unbreakable—a capability that would hamper what has been a strategic advantage for the United States in relying on the very capable code breakers at the US National Security Agency.
Earlier in the book, Gertz had spent four pages recounting China’s theft, in 2013, of U.S. plans for the C-17 military transport plane. Reprehensible as that may be, it was not a game-changer. Quantum communications, a Chinese innovation, inaugurates a revolution in signals intelligence.
Gertz discusses Washington’s campaign to dissuade its allies from buying fifth-generation (5G) mobile broadband technology from China’s national champion Huawei Technologies. By the time the book went to press, it was evident that the initiative was a humiliating failure; not a single country on the Eurasian continent bent to American threats, which included the suspension of intelligence-sharing. Quantum communications help explain why.
About to Go Dark
Not only the Chinese, but South Korean, Japanese, British and other teams are building the capability to embed quantum communications in the new 5G networks. Not only will China go dark to U.S. signals intelligence; the rest of the world will, too, and in short order. Huawei’s 5G systems will wipe out America’s longstanding advantage in electronic eavesdropping. The U.S. intelligence community spends $80 billion a year, mostly on SIGINT, and the whole investment is at risk. Washington’s view, dutifully reported by Gertz, is that Huawei’s dominance in 5G systems will allow China to steal everyone’s data. The reality is far more ominous, as I understand it. China will enable the rest of the world to cut off America’s access to everyone else’s data. When Secretary of State Mike Pompeo urged a senior German official not to buy Huawei’s broadband, the German replied that China hadn’t eavesdropped on Chancellor Merkel’s cell-phone conversations, as had the United States.
Huawei owns 40 percent of the patents related to fifth-generation broadband, largely because it spent twice as much on research and development as its two largest rivals (Ericsson and Nokia) combined. The strategic challenge to the United States comes not from Chinese technology theft, obnoxious as that is, but from Chinese innovation backed by state resources. The American intelligence community realized too late that China had gained the upper hand, and convinced the Trump administration to try to postpone the 5G rollout until it could work out what to do next. The failure is of such catastrophic proportions that no one in a position of responsibility dare acknowledge it for fear of taking the blame.
Domination of E-Commerce and E-Finance
Huawei’s vision of a global broadband market under its domination is hardly a secret. This is a case where China has advertised its intentions while the US ignored the issue. Since 2011, the company’s website has promulgated an “eco-system” enabled by broadband networks that in turn would bring in Chinese e-commerce, e-finance, logistics, and marketing—in short, the whole array of business and financial services that will integrate the labor of billions of people into the greater Chinese model.
The world will become a Chinese company store: Chinese banks will lend the money, Huawei will build the broadband network and sell the handsets, Alibaba and JD.Com will market the products, Ant Financial will make micro-loans, and Chinese companies will build airports and railroads and ports. As an investment banker for a Hong Kong boutique from 2013 to 2016, I saw this first hand, and reported it here. Among other things, Huawei is building most of Mexico’s new national broadband network, including 5G capability, in a consortium with Nokia financed by a group led by Morgan Stanley and the International Finance Corporation. Huawei also dominates telecommunications infrastructure in Brazil and other Latin American countries. China’s tech dominance in America’s neighborhood, remarkably, has occasioned no official comment from Washington.
In my view, this is far more alarming than what Gertz envisions. He writes, “China will control all deals and win any business arrangements it seeks by dominating the information domain and thus learning the positions of bidders and buyers. All Chinese companies will be given advantages in the marketplace.”
That simply isn’t the way things work. China will lock whole countries into Chinese hardware through state-financed national broadband networks, including Brazil and Mexico, where construction is underway. It understands the network effect that made Amazon and Facebook dominant players in the U.S. market, and will use its financial and technological head start to establish the same sort of virtual monopoly for Chinese companies throughout the Global South.
China envisions a virtual empire, with military deployments to protect key trade routes, starting with oil from the Persian Gulf. China’s navy established its first overseas base in Djibouti last year. Meanwhile China has invested heavily in high-tech weaponry, including satellite killers. During the first minutes of war, the United States and China would destroy each other’s communications and reconnaissance satellites. But China has a network of thousands of high-altitude balloons around its coasts, too many for U.S. forces to destroy.
Why a Shooting War Is Unlikely
The dog that doesn’t bark in this particular night is China’s land army. China has about 40,000 marines and an additional 60,000 seaborne mechanized infantry, enough to invade Taiwan. Otherwise its ground forces are feeble. China spends about $1,500 to arm an infantryman, as compared to $17,500 for his American counterpart. China owns no ground-attack aircraft like the American A-10 or the Russian SU-25. Unlike the United States, China hasn’t equipped its forces for any foreign expeditions, excepting of course the threat against Taiwan. With few exceptions its military priority is control of its own coastline. That in my view is why a shooting war is not likely. America cannot win a war on China’s coast, and China has scant interest in fighting anywhere else.
As we examine the details, the picture of a Soviet-style communist regime bent on world domination falls apart. China’s concept of world domination is so different from what we imagine that it has halfway come to fruition before we noticed it. The broader issues are too complex to address in a review, but I feel obliged to add that there is quite a different way of looking at present-day China, as an imperial system with a 3,000 year history.
In extensive contacts with Chinese officials, I haven’t met a single dedicated communist, except for the distinguished professor of Marxist-Leninist studies who asked me to help his child find a job on Wall Street. I do not believe in Gertz’s distinction between the good Chinese people and the wicked communist leaders. The emperor (the leader selected by the Mandarin caste that today masquerades as communists) is the capo di tutti capi, whose job is to limit the depredations of local power centers and maintain order. Most mainlanders will tell you blandly that, without an emperor they would kill each other, as they indeed have done after the fall of every Chinese dynasty.
No one should minimize the brutality of the present dynasty by any means; but it is no more reprehensible than the Ming, who buried a million forced laborers in the Great Wall, or the Qin, who destroyed the whole literary record of the Chinese kingdoms that preceded it and buried alive hundreds of scholars to ensure that no memory of the past survived. Every Chinese in a position of influence, when asked about the Muslim Uyghur minority in China’s far West, will say matter-of-factly, “We’re going to kill them all.” China has been exterminating “unruly barbarians” on its borders for thousands of years. That is why the Huns came to Europe and the Turks came to Asia Minor: Chinese punitive expeditions against these peoples forced them to migrate westward.
In China’s view, the “Century of Humiliation” that lasted from the First Opium War of 1848 to the Communist Revolution of 1949 was a temporary aberration that displaced China from its dominant position in the world economy, a position the present dynasty seeks to restore. If we do not want this to happen, we will have to dominate critical technologies, including quantum computing, quantum communications, broadband, Artificial Intelligence, and missile defense.
The recommendations that Gertz offers at the book’s conclusion do not convince me. He proposes to disengage economically from China; I should think that our object should be to introduce innovations that disrupt and discredit China’s state planning. We have none at the moment, but that is because American high-tech industry has invested overwhelmingly in software and left the manufacturing to Asia. We require a revival of American R&D on the scale of our response to Sputnik. Gertz also proposes “covert financial warfare” to disrupt China’s overseas borrowing. He does not seem to realize that China is a net creditor to the extent of $1.6 trillion, which means that it can finance its own requirements readily. He wants to crack down on Chinese nationals abusing their position in the United States, and so forth.
None of this will make a difference. Our problem is far graver. China now graduates four STEM bachelor’s degrees to every one of ours, and the ratio is rising. Foreign students earn four-fifths of all doctoral degrees in electrical engineering and computer science at U.S. universities. Because we have so few engineering students (just 5 percent of undergraduate majors), engineering faculties are small, which means that most of the foreign students return to teach in their own countries. The United States has trained a world-class engineering faculty at Chinese universities, such that the best Chinese students stay home. I know Chinese IT managers who will not hire Chinese students with a U.S. bachelor’s degree, because the Chinese programs are more rigorous.
We can only best China through innovation, and we are losing our edge in that regard. Nothing short of a grand national effort on the scale of the Kennedy moonshot or the Reagan Cold War defense buildup will get our mojo back.