Miles Yu analyzes Japan’s latest joint military exercises, a series of Japan Air Self-Defense Force drills with Germany, France, and Spain. Miles details why Japan has become such a coveted global partner, and why European countries are taking increased notice of the China threat. Next, he explores China’s activity in the Arctic and what the country’s interests in the polar frontier could be. Last, he discusses what the global CrowdStrike outage reveals about China’s online authoritarianism.
China Insider is a weekly podcast project from Hudson Institute's China Center, hosted by Miles Yu, who provides weekly news that mainstream American outlets often miss, as well as in-depth commentary and analysis on the China challenge and the free world’s future.
Episode Transcript
This transcription is automatically generated and edited lightly for accuracy. Please excuse any errors.
Miles Yu:
Welcome to China Insider, a podcast from the Hudson Institute's China Center. I am Miles Yu, senior fellow and director of the China Center. Join me each week for our analysis of the major events concerning China, China threat and their implications to the US and beyond.
Phil Hegseth:
It is Tuesday, July 30th, and three great topics await our resident expert Miles this week. First, we detail another round of joint exercises involving Japan, but this time it's partnered with Germany, France, and Spain to conduct air drills with its Air Self-Defense Force. Miles details why Japan has become such a coveted global partner and why European countries are taking increased notice of the China threat. Second, we explore a global ambition of China's that often flies under the radar, and that's China's activity in the Arctic. We assess exactly what their interests in the polar frontier could be. And finally, we wrap with the global IT outage caused by CrowdStrike and what it tells us about China's online authoritarianism. Miles, good to see you again.
Miles Yu:
Good to see you, Phil. Always glad to be with you.
Phil Hegseth:
Yeah, happy to be here. So kicking off, I feel like a broken record this week as we're kicking off the show again with news of Japan hosting joint air drills around its territory over the weekend. Last week it was Japan and Taiwan coordinating coast guards for search and rescue, and this week it's Japan's Air Self-Defense Force conducting joint exercises with Germany, France, and Spain. So we've got more drills signaling increased deterrence from Chinese aggression, but this time Japan's partners are from Europe rather than regional neighbors. So take this in any direction you want Miles. But clearly there's a unique significance to Europe's increased presence here.
Miles Yu:
Japan is one of the first countries in Asia that realized the global nature of the China threat. So there was a slogan that said, think globally, act locally. Japan, thinks and acts globally and locally, in this case. Within a matter of like five years, Japan has transformed itself from original security power to a global security leader for several reasons. Number one, as I mentioned earlier, the China threat has gone global. As such, there is a need for global response. Japan is leading that in that part of the world. Secondly, it has something to do with the US defense umbrella. Japan, for decades, since 1950s, relied almost exclusively on the defense umbrella provided by the United States, by the rock-solid Mutual Defense Treaty. That is very important. Still, it's very crucial for Japanese security, but it's not enough because United States, a big country, global country, has a lot of burden-sharing issues over there. So in the last four or five years, Japan has paid more attention to defense self-reliance, strengthening its own defense capabilities, build up. As such, you see this Abe-Kishida revolution in military affairs in Japan. Prime Minister Kishida a couple years ago announced this stunning turnaround in Japan's defense posturing, changing Japan's defense posturing from purely defensive to focusing on developing counterstrike and even preemptive capabilities. That's pretty amazing. And Japan, under the Kishida administration also says it's going to increase its defense budget and raise to 2% GDP. Under normal circumstances for decades, that would've been a big, big source of national uproar because the Japanese constitution even said the Japanese defense budget should never exceed 1% of the GDP. But this time the Japanese country, the Japanese nation has gone along with the Prime Minister Kishida. One of the most important reasons is that because the whole of Japan feels the acute threat posed by China. You know, China’s unfavorability among Japanese citizens is above 90%. Think about that.
Phil Hegseth:
Really, really.
Miles Yu:
That's pretty high. One of the major hallmarks of the Kishida cabinet’s defense restructuring is to forge a much closer alliance with NATO. NATO is a multilateral collective defense pact whose primary focus was on European security, but because of the threat has gone global, because of the coming together of Russia and China, this global source of instability has gone transcontinental. So that's why after Prime Minister Kishida’s announcement of his defense ambition, the first stop he visited was not Washington, but Brussels. And NATO, of course, has responded to this with enthusiasm, I might say with the possible exception of the French. The French have always been the French. So NATO Secretary General Jens Stoltenberg has embraced Japan’s approach to NATO, and I think there is a lot of closer and closer exercise in interoperability among NATO countries and Japanese Defense Forces. That's why you see this pattern is developing very fast. And when we talk about the Japan Taiwan Maritime Corporation last week, but this time you have the key allies of the United States in Europe, Germany, France, and Spain conducting joint exercises in Japan. So this is unprecedented. I think it's the beginning of an emerging pattern.
Phil Hegseth:
Yeah, well, and as you illustrate, I think it's pretty obvious where the urgency for Japan comes from. I mean, the threat is right at their doorstep, but this was for their European partners. This was Spain's first-time sending jets to Japan and only Germany's second time. So you don't hear Spain's name very often in these type of exercises. And Germany has economic entanglement with China. So what gives? What's behind the new Western urgency?
Miles Yu:
I think that there is a growing consensus among Western allies, particularly NATO countries, that China’s threat is also a threat to them. It's not several thousand miles away. You look at just the other day, Russia and China are conducting joint bomber patrol off the coast of Alaska. Alaska is basically in the Pacific, but once again, Russia is a European country. Russia also is an Asian country. So that's a linkage. And China has conducted joint military exercises in Belarus of all places. What you're talking about is a rejoining of the lines between dictatorship and freedom, and it's a (inaudible) democracy versus autocracy. So this line is getting clearer and we should embrace the reality. Reality is not just about trade, it's also about security. Without security, without peace, trade would not exist.
Phil Hegseth:
Have we seen any probably predictable responses from Xi Jinping or the Chinese leadership to these drills?
Miles Yu:
I mean, they do some joint exercises with Russia. I mean Russia and China for the first time conducted joint naval exercise in the South China Sea, for example. But Russia was sort of dragged into this because Russia, because Russia has to consider the feelings of its traditional allies in that region, particularly Vietnam. So China is more gung-ho about this. I think there is still some opportunities left for the West to engage Russia, mostly from a security point of view, but it would be very hard because Russia is far east are also very vulnerable for Chinese aggression as well. Nobody knew this better than Vladimir Putin, until probably very recently he got sanctioned so heavily that he was pushed to the Chinese camp. But Putin is very good at place playing balance of power. He knew that he's not going to put his all his eggs in the China basket. That's why he reached out to North Korea, to Vietnam and to other countries to counterbalance China's preponderance of inference.
Phil Hegseth:
Well, that brings us to our second topic today, which is a new region for the China Insider Podcast, I believe, which is the Arctic. So you sent me an article from Newsweek that was reporting on some suspect Chinese activity in the Arctic, but anyone who can glance at a map would recognize that China has no direct land access to the Arctic. So twofold question here. What arrangement has been set up to bring China into the great polar power struggle? And also what interest does China have there in the first place?
Miles Yu:
China’s strenuous efforts to march into the Arctic region, fits very well into the overall PRC strategy. That is PRC basically views the world into predominantly two camps. One is the oppressors; another one is the oppressed. United States is the leading power of the pack of the oppressors. China is the primary victim and representing the oppressed. So this China's a very cold war-like mentality, which is really, really strange in today's world. However, in the last five or six years, China has developed a third domain besides the oppressor versus oppressed.
Phil Hegseth:
And what is that?
Miles Yu:
That third domain is what China called the Xinjiang, which literally translated into new frontiers. Okay, so what it means this China say, okay, the world is pretty much occupied by the two camps, right? The western dominance is in some key parts of the world. And also, there's a vast area represented by the oppressed. But however, there's also a lot of domains that nobody has claimed predominance, right? Either oppressor or the oppressed. Those new domains would include undersea, space, cyber, and polar. So, there's no sovereignty, there's no preponderance of influence in these areas. And so, it’s first come first serve. China basically is now rushing in at a decent speed to occupy those domains to make the claim of right to these new frontiers.
Phil Hegseth:
Oh, that's interesting.
Miles Yu:
Polar is essential part of that Chinese new strategy. That's one new frontier. So China must control because there's no predominance of influence in this area. As you mentioned, the Arctic is nearly a thousand miles away from China. So China created this phony new concept called the “Near Arctic State.” That means that China claimed itself as a “Near Arctic State.”
Phil Hegseth:
That's generous.
Miles Yu:
This concept is a little bit strange because if that's the case, you are like nearly a thousand miles away that there are so many countries that could claim that even Saudi Arabia could say they’re a “Near Arctic State.” Now, Arctic region of is governed by the Arctic Council, which consists of eight countries, including countries like Norway, Sweden, Finland, United States, Canada, Iceland, and Russia. And China's never part of that. So it will be harder for China to march into the Arctic without facing a lot of resistance. However, in Antarctica where there's no major powers around China's march into Antarctica is really unhinged. They’re a pretty big deal there. They do - a lot of teams go to Antarctica. Leading the efforts was China's big icebreaker. It's called the Snow Dragon. Now, this Snow Dragon was built by Ukrainians. Now, as I said before, Ukrainians were crucial for China's military modernization. This is another example. This is a 20-ton icebreaker built by the Kherson Shipyard in Ukraine. China bought it retrofitted, added a lot of gears over there, some of the surveillance, some of them pretty high-tech satellite tracking stuff. So they go to Antarctica all the time. Yeah, I might also want to add that for a long time, United States obviously being a global power, has paid relatively little attention to Arctic region, although we are a member of the Arctic Council, until during the Trump administration. Secretary of State, Mike Pompeo went to Arctic Council in 2019 and delivered a very powerful speech exposing China's ambition for the Arctic. At that time, 2019, people thought that America just wanted to pick on China. And so very few people believed in us Now, everybody does because that's a far side that few other countries would have had at the time. Right now we are pushing back against China's ambition in an Arctic region. And in that speech, Secretary Pompeo made a very strong point against the ridiculous concept of China's claim of being a “Near Arctic State.”
Phil Hegseth:
I love that. So you talk about it being part of this larger new frontier strategy, but specifically the Arctic and the Polar region. What are China's specific interests there?
Miles Yu:
China's interests in the Arctic region are enormous. Number one, China sees this region as invaluable to its military ambition, global military conquest. The Arctic region can set up ground tracking stations for China's military satellites, and its missile launchings and laser installations. So China wants to set up a ground radar, laser installations, and also listening posts. And those are all key to China's growing long range strike capability. So military-speaking, is very important for China.
Phil Hegseth:
It's a forward operating footprint.
Miles Yu:
That's exactly right. Exactly right. And China saw this vacuum because during the Cold War, the United States did have a very strong military presence there. We had a very big Air Force base, for example, in Iceland, but now, we're not there anymore. So China saw this vacuum and they want to fill it in. Secondly, China sees the Arctic region as a crucial linkage with Russia because as a key corporation linked with Russia, Russia faces a lot of Arctic Council's resistance for its advertisement. Vladimir Putin wants to restore the Soviet era predominantly in an Arctic region. He activated the Arctic brigade, for example, militarized this rather peaceful area. China is joining Russia to counter the West in Arctic along with Russia. So this is basically two aggressive nations joining hands. Those are very important for both countries. Now of course, there's also Arctic region is very important. Most of the countries in Arctic regions, are not really China's friends. Some of them have even become Chinese adversaries. Norway, for example, Chinese-Norwegian relationship took a nosedive after the Norway Nobel Committee granted the Nobel Prize for peace for the Chinese dissident, Liu Xiaobo. China went the berserk caught of its salmon trade and gave some harsh treatment to Norway's diplomats. And also Sweden, another country China kidnapped a Swedish citizen from a neutral country, I believe in Thailand, and sentenced them to death. This guy is still in jail. And the aftermath of diplomatic struggle between Sweden and China totally turned the peace-loving Swedish government and its people against China. So if you conduct a public opinion poll in Sweden about China, the numbers are very, very high. Around the eighties, 80%. And also another key member in their Arctic council is Canada. Now, Canada used to be very friendly to China. And until several years ago during the Trump administration, Canada arrested a Chinese law-breaking business official for Huawei. And that's when China retaliated by arresting two Canadians living in China and sentenced them to death, threatening the Canadians. So Canada turned sour on China. And of course, the United States is a member of the Arctic Council. That's why China wants to increase its influence and status in the Arctic regions and to use this influence, particularly financial infrastructure capabilities, to influence countries, to improve the relationships. And also another thing is economic interest. China's economic interest in Arctic region is also very, very ambitious. China eyes the Arctic region’s minerals, fishing, bioprospecting, and particularly new sea routes. Obviously, that's a new thing. If the Arctic region’s new route is open, that would dramatically shorten the voyages between China and the European market. And of course, there's science. The Arctic region, the area is very pure, it’s a very good [geographic location] to conduct space science and bio-environmental research too. So there are a lot of Chinese scientists who are also interested in that area too.
Phil Hegseth:
Well, if I've learned nothing else in this episode, I’ve learned that Washington DC is a “Near Arctic City,” which is good.
Miles Yu:
Now, I think Miami is too.
Phil Hegseth:
Right, right. The whole region really. So to close us out, our third topic is surrounding the recent global IT outage thanks to the now well-known CrowdStrike update. However, it seems China on the whole was largely unaffected. This logically makes sense since they're often using non-US systems. But I know there's more going on here, miles for you to include this in our lineup today. So what do you want to tell us about this?
Miles Yu:
I think what you referred to was the internet meltdown globally a couple of weeks ago. China was the only country that was not significantly infected at all, which raised a lot of speculation about whether China is culpable. Of course, China is culpable. And if you look at the country, China has built the greatest firewall in human history, completely caught off its own citizens from the rest of the world. So China's internet activities sponsored by the government consists of two parts: one is defensive, another one is offensive. Now the defensive part obviously is a firewall. So if you're a Chinese citizen today, you'll not have access to the following international news organizations: the New York Times, the Wall Street Journal, the Guardian, the Bloomberg News, BBC, CNN, Al Jazeera, Reuters, Yahoo News, Voice of America. So basically, you do not have access to the Western media reports, right? But you can say Western Media is kind of all woke, and then it’s probably better for the Chinese not to have it. I mean, think about this. Not only that, social media and communication platforms are almost entirely denied to the Chinese people. Now, if you're a Chinese citizen living in China today, you'll not have access to the following: Facebook, Twitter, Instagram, Snapchat, WhatsApp. And you'll not have access to Google Search, Gmail, Google Drive, and Google Maps. You definitely do not have access to YouTube. You do not have access to Wikipedia, Dropbox, and Slack. Now, think about as a person living in a free and democratic country like the United States, you do not have access to those things, what your life will be like. So that's defensive. China has created completely separate cyber world, cutting off its citizens from the rest of the world. That's why the Chinese Communist propaganda is so effective because there is no alternative frame of references to any news events. So that's a defensive part. That's a great firewall. Now, there are also an offensive part of the Chinese cyber capability that is China is world's number one hacking country. There's no close second. The Chinese hacking is absolutely effective, and state sponsored. It hacked Canada in 2014. Canada’s National Research Council was hacked by a highly sophisticated Chinese state-sponsored actor. And then in 2020, Australian government was hacked by a sophisticated state-sponsored cyber hack that was from China. And then in 2022, India’s key lab and security apparatus was hacked by the Chinese state-sponsored hacking group. And go back to 2010, right after Norway gave the Chinese dissident Liu Xiaobo the Noble Peace Prize, and the Norwegians were hacked. And they are part of the broader pattern of cyber activities against entities perceived as opposed to the Chinese interest. England, the United Kingdom, was hacked by Chinese hackers in 2015. And that cyber-attack against England was against British telecom giant, The British Airways, and potentially getting a lot of data stolen from millions of customers. So US National Cybersecurity Center was also hacked at some point. In 2015 as well, Germany, German Chancellor, Angela Merkel, Angela Merkel's office, and other German government entities were also hacked by Chinese hackers from China. Now, China built in Africa, a gigantic headquarters of African Union in Addis Ababa, Ethiopia. That African Union headquarters was hacked by China between 2012 and 2017 for five years. And this was released, actually revealed by Wikipedia, WikiLeaks, right? This is insane. African Union also by WikiLeaks. And we know our European Union was also hacked as far earlier as 2011. So those are offensive. Of course, United States has become a prime target of Chinese hacking activities. OPM Records, and the insurance companies, and the Equifax Bridge and Marriot Hotels’ customer registration. And so all this hacking China is expert on now. That's why if you understand China's hacking capabilities, you will not really be surprised. A couple of weeks ago during the global IT meltdown, China was virtually exempt, immune to that kind of disaster.
Phil Hegseth:
But Miles, thank you so much as always, for your analysis today.
Miles Yu:
Thank you, Phil. Glad to be with you again, and see you next week. Thank you for listening to this episode of China Insider. I'd also like to thank our executive producer, Philip Hegseth, who works tirelessly and professionally behind the scenes for every episode to make sure we deliver the best quality podcast to you, the listeners. If you enjoy the show, please spread the word. For Chinese listeners, please check our monthly review and analysis episode in Chinese. We'll see you next time.