World War 3 Watch 05: China's navy upgradation

How is China modernizing its navy? This article provides some perspective about China's navy modernization.

New ships are being put to sea at an impressive rate. Between 2014 and 2018, China launched more submarines, warships, amphibious vessels, and auxiliaries than the number of ships currently serving in the individual navies of Germany, India, Spain, and the United Kingdom. Eighteen ships were commissioned by China in 2016 alone and at least another 14 were added in 2017.² By comparison, the US Navy commissioned 5 ships in 2016 and 8 ships in 2017. Should China continue to commission ships at a similar rate, it could have 430 surface ships and 100 submarines within the next 15 years.

According to the Department of Defense (DoD), a significant focus of the PLAN’s modernization is upgrading and “augmenting its littoral warfare capabilities, especially in the South China Sea and East China Sea.” In response to this need, China has ramped up production of Jiangdao-class (Type 056) corvettes. Since being first commissioned in 2013, more than 41 Type 056 corvettes had entered service by mid-2018.

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 Source: China Power

Further, as pointed out by GPF, the US Naval War College released a research paper worth looking at titled Surging Second Sea Force: China’s Maritime Law-Enforcement Forces, Capabilities, and Future in the Gray Zone and Beyond.

As per the report, China has merged few of its departments that had its own patrolling capabilities into a Chinese Coast Guard. China has also used commercial fishing vessels to further its scouting and minor naval defense capacity. GPF shows this graphic about changes to Chinese Coast Guard. 

 From GPF.

I remember there is a law that China flagged vessels are required to maintain capacity and design to aid and assist Chinese forces if required. It means these commercial vessels too may be deployed in naval conflict. The scale of Chinese Navy - PLAN and China Coast Guard CCG both needs to be reassessed.

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World War 3 Watch 04: Indian Defense Equipment strategy

India needs to up its defense game. India is dealing with potential conflicts on two fronts. On both these fronts we have belligerent neighbors engaged in asymmetric multi-dimensional confrontation. Pakistan is more of warfare and China is more of competition. Yet, India must prepare for the potential conflict. And in this we need to improve our preparation substantially.

Airforce

Just cursory look at the Air force in the region will set us back. Pakistan Air Force generally known combat strength is about 500 aircraft. China is about 1600 aircraft. India is about 600. While the numbers are not exactly a way to differentiate - but considering the length of border and our defense requirement India should aim for 2000 combat plane air force.

This means HAL cannot produce 16 aircraft per year. It has to produce 16 aircraft per month. Using private participation we need to improve this number quickly. Second, it appears we need full Rafale deal AND a F16 manufacturing line at the same time.

IAF should also think of getting larger number of combat drones. These drones should be able to manage to fly with manned aircraft. This one manned aircraft (M) -coupled with around 10 drones (D) or more. Thus one mission unit with M-D combination. Then you can add mission units with xM-yD.

These mission units will need to collaborate and coordinate with share intel. That will require a robust ICT interface.

Airforce needs support from ground and space in the form of missiles and information. We should develop mechanism for coordinated launch of missiles controlled by the aircraft pilot herself. We can augment it with coordinator based ground support too.

Army

The future soldier will be an augmented information soldier. 

We need to up our game in terms of equipping the soldier with top-class equipment. AK-203 is a step in the right direction. But we need to lighten the soldier and get every soldier a robo-buddy. The buddies could be in multiple form - carrier mules, terrain mapping drones, communication bots and combat drones (sniper buddy). For this we need very intense development in robotics and again the ICT component will also play a role.

We should experiment with augmenting the soldiers with exoskeletons and other techniques to improve battleground performance.

Air-cover has been neglected part of the army. Apache helicopters in air support is essential. 

Navy

Future of navy is stealth platforms. As the US stealth ship Zumwalt goes for a maiden mission, China is developing aircraft carrier buster missiles. The Chinese missiles are hyper-sonic and thus almost impossible to intercept. In this context any above surface ship will find it difficult to beat the defenses. Hence reliance of submarine platforms should be increased.

Sub-marine drone tech is actually quite interesting. It can be used on sink-and-forget  wait mode. Thus we should be able to plant and move around many depth assets on wait and watch basis. Without humans on board this is (a) easier and (b) safer. It also improves the counter-strike and defense capability. These drones should be easy to manufacture in large numbers and low cost. These drones need not be large they can simply be attachments to ammunition that can help the ammunition to navigate and activate.

Deep sea surveillance and AGAIN ICT is also going to be critical.

So Navy must develop platforms but also develop choking -technologies for anti-ship systems.

Space wars

Space is important front for information wars. The satellites form critical part of the ICT infrastructure we need to deploy across the forces.

Satellites should be able to perform twin functions - jamming enemy satellites and keeping ICT infrastructure working for our forces.

The ability to quickly and rapidly restore downed satellites is very important. We should also explore possibility of smaller satellites that can last only for 5/6 months and then disintegrate. The smaller the satellite the costlier it is to destroy. Also because of size, you can build for redundancy. It is also possible to launch 100 satellites in one launch. These satellites are more relevant for theater coverage rather than country coverage.

Cyber war

Most of modern warfare is quite destructive and hence preventive techniques are more important than remedial measures.Cyber war allows for information and processing delays in enemy retaliation and gives us additional time and information to respond better.

Many times it is better for cyber initiatives to operate in bleeding mode than in crippling mode. Thus, it is better for cyber initiatives to delay the enemy communication rather than cripple it. Thus introducing delays and errors is better than crippling the infrastructure for short time. These cyber initiatives can also provide advanced information about enemy maneuvers. The aim is to destroy combat assets of the enemy.

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Indian Foreign Policy

Since last month's attack on Indian Security forces in Pulwama by the Jaish-e-Mohammad terrorist group, I have been thinking about the changes required in the national policy. Today we get the news that China once again blocked the proposal to declare Masood Azhar, the leader of JeM as a terrorist. In light of these developments here are some thoughts about Indian policy. 

Note: Many sound quite conflicting but that is the reality. I miss Narasimha Rao.

With Israel

India MUST announce a proper strategic deal with Israel including multi-faceted cooperation including defense, technology, agriculture, business, banking etc. 

We must improve integration with its defense network. A Multi-track developments must take precedence -

1. Designed in Israel, made in India, (avionics and defense info-tech subsystems)
2. Jointly designed and made by Israel and India,  (missile, interception & drone tech)
3. Designed in India and made for Israel - (aircraft and other equipment)
4. Joint Cyber warfare development cell.
5. We should have joint training - allowing Israeli forces to train in various conditions and set up training with them in Israel too.

We should aim for Agriculture and water management technology collaboration. We should explore policies that should allow Israel-India manufacturing companies to go global - compete across the world. We need to have 3 such companies be global brands like say ikea.


With Russia

India MUST announce a proper strategic defense deal with Russia as well. Russia is a long-term partner and we must improve the interaction with Russia. We must engage with Russians for heavy equipment - fighter aircraft, ships and submarine.  We should further the missile development cooperation and aim for joint technology development in defense space.

Economically, we have to help Russia ween itself from Chinese dependence. Russia should be able to stall and deny China without a huge economic cost.


With United States

That India and US are not friends is first the fault of India and then the fault of US. Unfortunately, today there a little bit of mistrust still left. 

India MUST have strategic partnership with US and must join the Quad.

1. This will include setting up bases
2. We must join the information sharing treaty with US
3. We must have/develop defense ICT that is interoperable one with US. 
4. We need cyber defense cooperation with Quad.
5. We need to step-up and take our responsibility in Indo-Pacific. 
6. We also need deeper collaboration and joint exercises between US and Indian defense forces.

With Japan

India must enhance partnership with Japan on following fronts:

1. Fighter aircraft development
2. Ship-building tech.
3. New Drone tech

 With Japan, India must set up ventures to develop infrastructure in the Indo-Pacific region. Japan has the capital and technology and India will need to give its man-power.


France
In general, it is not well-understood that France has been a long-standing defense ally of India since independence. More than Britain which somehow finds more sympathy than France. India and France need to improve the cooperation on defense as well as non-defense sectors.  We need to improve the status of France in the Indian economic and defense scheme.


South East Asia/ Asean / Asutralia New Zealand
We have to play very pro-active role in this region. We can work on the food side trying to reduce the cost of food and other goods in this part of the world.


About Pakistan
Pakistan will continue to remain an irritant unless we take proactive effort to eliminate the terrorist setup. It can be eliminated by imposing very high economic costs on the Pakistani Army. To this end, India needs to be part of Afghanistan solution. If US cedes Afghanistan to Taliban or to Pakistani Army backed group, we will soon have trouble on Indian soil.


Working in Middle East

India must UNDERSTAND and ACT on the fact that we are Hindu majority country AND we are the largest democracy of Muslim at once. India must use this to influence a lot of things in the Islamic sphere and give it a better direction. We must champion the reforms taken up by other middle eastern countries and overcome the regressive developments taking place. 

Africa

India should be able to collaborate with Africa much better than any other country. We should provide the institutional support and help African companies develop as suppliers to India. Japan and other countries will surely help us in this process. We have to showcase a credible alternative to Belt and Road but with good clean reformist credentials.

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Oil trade routes and India's geo-political advantage

Here is a picture about oil trade routesfrom Geopolitical futures:

You can see the Geo-political importance of India. India has access choke-points carrying about 40 million barrels per day - 4X flow at all other choke points put together. Guarded by a decent navy that can go against the best.

You will realise why China is interested in this area and interested in encircling India with string of pearls. More so if you have read Daniel Yergins The Prize. (If not read it now for understanding of oil industry).

For more details of balance of naval presence in the Indo-Pacific region look at the map below:

Naval Bases in Indo-Pacific - Rahul Deodhar (data from public sources)

These maps are important tools to understand Geo-politics and George Friedman of Geopolitical Futures has a great compilation. Head over there to check it out.

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World War 3 watch 03 - The North Korean challenge

North Korea has suddenly become active. In the past few years, it has acquired missile technology, nuclear technology and is making and weaponizing missiles with nuclear warheads. Now Japan, a nation whose constitution calls for peaceful, non-aggression is developing first strike capabilities.

First, I doubt North Korea got this technology by itself. I suspect China behind the rise of North Korea. It could also be Pakistan at the prodding of China. I include Pakistan because of the noise in US circles for a radical reset with Pakistan. Ignore the reasons cited in that article for some time. It appears that Pakistan, China and Russia are forming closer ties. That is primary reason US may be considering a radical reset. In 2004, China applied for MTCR membership, but its membership was rejected due to concerns that Chinese entities continued to provide sensitive technologies to countries developing ballistic missiles, such as North Korea.

Second, China may be using North Korea as a strategic piece to test US and its intent in the Pacific, particularly closer to China. China may have used the Philippines for this purpose earlier this year. China is sea-locked and is intent on breaking that stranglehold. 

Third, it is possible US knows this. The THAAD deployment cannot be simply for North Korea. South Korea already has enough arsenal to obliterate North Korea two times over. Further, South Korean forces already possess Patriot systems for point defense and Aegis destroyers capable of stopping ballistic missiles. Huffington Post highlights a possible reason why China is wary of THAAD deployment. 

The United States and South Korea have repeatedly asserted that the deployment will be “focused solely on North Korean nuclear and ballistic threats” — not Chinese missiles. The possibility remains, however, for THAAD’s radar to be covertly switched into a longer range mode that feeds into the broader U.S. missile defense — giving Washington earlier notice of Chinese launches.

In countering the THAAD deployment to South Korea, two existing Chinese missile programs are likely contenders for accelerated development — hypersonic glide vehicles and multiple, independently targetable re-entry vehicles known as MIRVs. 

Fourth, Japan, a nation protected by the US with a full defence presence needs no protection. Yet, Japan last year inducted a pseudo-aircraft carrier, raised constitutional limitations on its armed forces and now is developing first strike capability.

This is a power game between China and US. The strategic pieces used are North Korea, South Korea and Japan. In south China sea, the US did not have a piece in play after Philipines sided with China. These developments do not bode well. But these are the facts.

From the perspective of India and Singapore, China remains a threat. Singapore has conclusively sided with the US and it is the best possible backstop against Chinese domination. India however, has not been decisively in favour of US. It may help to side with the US clearly and unequivocally. At the same time, given the US policy, both Singapore and India need to ramp up their self-defence protocols. Indian missile defence shield is completely inadequate in comparison with what Chinese are capable of. It is time to ramp up the Missile Defences.

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Tax as a destabilising force - Border Adjustment Tax

John Mauldin, a prolific commentator, is well connected to the Republican establishment. He has recently concluded a three-part series titled Tax Reform: The Good, the Bad, and the Ugly on the coming tax reform in the US. The parts can be found here - first, second and third. It is a must read. 

The US is trying to simplify tax structures. This, by itself, is nothing new. All the countries have been trying since time immemorial to simplify tax codes. Surprisingly, they keep getting more complicated. I do not think "simplify" means what you think it means. But this time, it does seem simpler. Let us not jump the gun, it is still early days. Let the bureaucrats have a go at it and it will come out as complicated as it has ever been. Nevertheless, the intent seems to be right.

The disturbing part is the way BAT or Border Adjustment Tax is supposed to work. John paints a pretty grim picture and rightly so of the adverse consequences of ill-thought out Border adjustment tax. Mauldin and his friend Charles Gave, both seem to suggest that this move will disturb the present equilibrium. Other republicans do not think so. But there is merit in Mauldin-Gave arguments.

And then I read the US intelligence’s ‘Global Trends, Paradox of Progress’ report. That is another bleak report. What is disturbing is that the world seems to be in a precarious balance at present and 5 years out. Some situations in next 5 years as highlighted by the report:

Now the timing of BAT by Trump has become exceptionally crucial. At times in history you get amplified impact because historically small acts happened at unstable times. Here we are faced with a big act at unstable point. In effect, we are beholden to Trump's good sense, pragmatism and sense of leadership.

Interesting times these.

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World War 3 watch 02 - Gorbachev thinks World is heading for war

Former President of Soviet Union Mikhail Gorbachev has written a piece in Time Magazine titled "It All Looks as if the World Is Preparing for War".

The article, however, is sparse on details. He based the possibility of war on some statements that go like this:

the militarization of politics and the new arms race. 

More troops, tanks and armoured personnel carriers are being brought to Europe. NATO and Russian forces and weapons that used to be deployed at a distance are now placed closer to each other, as if to shoot point-blank. 

While state budgets are struggling to fund people’s essential social needs, military spending is growing. Money is easily found for sophisticated weapons whose destructive power is comparable to that of the weapons of mass destruction; for submarines whose single salvo is capable of devastating half a continent; for missile defense systems that undermine strategic stability. 

Politicians and military leaders sound increasingly belligerent and defense doctrines more dangerous. Commentators and TV personalities are joining the bellicose chorus. It all looks as if the world is preparing for war.

I do not doubt the ability of that man to sense the war is around. Each of the statement made above is quite loaded. But it can be argued it is nothing new.

But is he right?

A fire is caused only when certain conditions - the presence of fuel or inflammable material (base), spark (trigger) and oxygen (enabler) are present. Take away one and there cannot be fire. Similarly, war too only happens when certain conditions are met. We get a sense of war from a few things. 

First, there must be a technical capability to wage a war. The capability comes from technology. War tech is not about technology itself but how much of it is deployed. It is not easy to manufacture and deploy it quickly. So there is necessarily a lead time where powers of the world deploy advanced weapon systems. 

The second element is people to fight the war. Large unemployed mass of youth means there are people. If people feel wronged then such population may be volatile. 

Third, there should be mutual hostilities. Absent the hostilities, no amount of tech and people can enter into the war. Thus, say around 2001 there were no hostilities between countries. So when 9/11 happened it was a bit of a surprise and it was not a national act. Today, we have certain hostilities emerging. US middle class feels wronged by China. China feels wronged by the US intervention in the South China Sea. The western world has been targetted by the ISIS and its affiliates. ISIS believes US is to blame for all its ills.

Fourth, there should be a trigger. The trigger is the last and essentially the most dangerous bit of the whole deal. If the peoples of the world have made up their mind to go to war they will find a trigger. It cannot be avoided. Thus the doctrine of peace should rest on disabling the first three. Obama fought ISIS with capability attrition doctrine.

Are we there?

In a sense, we are at the threshold of major war. But the tech is not yet in place. Hostilities are rising, people factor is primed. Technical capability exists but lead time is not enough. The fellow who will get ready first will look for the trigger. 

Russia, it seems, is not inclined to wage a war against anyone. It may go to assist Turkey and Syria and stuff but that is more operation than a war. Russia is tough when it is in trouble. But I doubt it will want to engage with the US.

In the present scenario, ISIS will not have the technical capability to wage conventional war. It can wage unconventional war. It is already waging this war. The counter strategy for such attacks is not well-evolved. The most development of these strategies was done by Israel. But Israel is small and homogenous and thus the strategies are simpler. At a large scale, we still do not have well-evolved strategy.

China has the technology to wage a conventional war with the US. But it is short of numbers. It needs more weapons. It is possible that China is developing them secretly. It is possible for China to do it. It is the only capable power which can threaten the US. 

It is also possible that Chinese augment the ISIS capabilities with superior tech. In fact, that would be the most efficient way for China to attack the US. China does the tech and manufacturing and ISIS does the fighting. The problem is ISIS does not have the people scale to engage in conventional war. 

Let us be careful

The conditions are fast approaching the break-point. The political leaders have the duty to step back from this brink. Looking at the political rhetoric and the media discussion, it does not seem likely. Brinksmanship is the new game in town, apparently. Let us hope sense prevails. War benefits no one.

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World War 3 watch 01 - Some developments

Actually, this should the third post but I summarise what I observed in the past.

Monday, May 18, 2009

Probability of war seems to have increased. It is still small but definitely increased. Though it is unlikely that India will be involved in one (we never invaded any country in 5000 years - so we dont have the mindset) But, look how different war-indicating trends are catching up.

1. China has more males in its population - typically when the pop ratio gets skewed the chances of war increases. Further, income polarization is very high in China. 
2. Recession will make more people (mainly youth) unemployed and in financially distressed situation - implying combative etc
3. US-china have classical debtor-creditor problem any strong arm by China will not be taken lightly by US. China believes it may be wronged by the US. If US dollar devalues then you can be sure things wont be easy on this front.
4. War is by far the biggest domestic stimulus one can give - creates domestic jobs and stuff hence politicians are ok with war in such times.
5. The typical flash points are visible - Afghanistan Pakistan is now a flash-point. If Us forces are attacked or get in some trouble then we could see drastic actions. Earlier North Korea, Malaysian protests, Demonstrations in Greece were some flash points ( though none as big as Af-Pak)
6. Religious alignments are getting more stricter - talibanization of SWAT valley in Pakistan is an indicator. To certain degree, Obama election has reduced any polarization along religious lines that we saw earlier in US.
7. US policies and other global stimuli are going to result in more income polarization. As global inflation strikes the differences will become more evident - I can foresee Mary Antoinette - "if you don't have bread eat cake" statements. 
8. Usually such conditions are off-set by economic growth (that promotes peace) - but that has near about halted in past few months. Now if things do not improve we could be in for much tougher times.

In October 2016 I reiterated this issue 

1. In 2015 Japanese parliament permitted their army to go aggressive( with US blessings). They have been making ships and aircraft carriers since few years ago displayed in Aussie, Singapore, Japan and US joint exercise - small allegedly helicopter carrier or something. 
2. Last week I was seeing Singapore Air Force Fighter planes on evening patrols. Also every day they have the another surveillance plane - it is not the boeing posiedon in the air. 
3. On friday, India announced surgical strikes on terror bases in Pakistan Occupied Kashmir. 
4. Last week, Singapore PM met Japanese PM Abe. Last month he met Obama. Chinese news paper is accused Singapore of siding with US. This week Singapore PM is meeting Narendra Modi.
5. Last week Japanese PM Abe met Narendra Modi and promised him some military tech and other assistance including manufacturing assistance.
6. Phillipines has abandoned US and is courting China. Durtete made a statement that he received encouragement from China and Russia on his anti-US remarks.
7. Last month the International Arbitration Tribunal restrained China from claiming rights on South China Sea.
8. Last month Austrailia published a white paper on maritime defence highlighting the need to protect the interest in the northern coasts and in the Pacific. Australia does not have any threat from any country in the Pacific save China. It is way far out and super friendly with most of the major powers. It has a love-hate relations with some island countries where China has become active.
9. US is offering F-16 (yeah the old ones) to India for make-in-India option. (The tech is old but the offer is quite lucrative)

A few more developments are have taken place since then,

1. Russia unveiled Satan -2 ICBM range exceeding 11,000kms
2. India successfully tested Smart Anti-Airfield Missile (Bunker busters)
3. Israel has received its F35s which will be fitted with Israeli tech
4. Russia launched massive war drill involving civilians.
5. Russia has also deployed nuclear missiles in Kaliningrad.
6. Great Britain stated that it will sail its ships through south China Sea in 2017 and station ships and aircraft in 2020.
7. The US activated the missile shield in Europe last year. 
8. The US will be deploying THAAD systems in South Korea soon.
9. Japan's helicopter carrier seems to be a disguised aircraft carrier.
10. Chinese second aircraft carrier a replica of first one will be commissioned in 2017 or 2018. The third carrier may be equal to the biggest aircraft carriers of US.
11. http://www.popsci.com/chinese-cargo-ships-get-military-optionChinese government issued directions in 2015 that certain civilian ships may be used by navies in an emergency to augment its naval supply chain.
12. US-India have finalised a deal for M777 Howitzer.

While these military developments are taking place, Trump is busy questioning one-china policy, the trade arrangements with China and anti-dumping duties. China detained 9 armoured vehicles headed to Singapore after Singapore conducted some military exercises with Taiwan.

Another event is sustained Japanese visits to countries across the Asia-Pacific. These are being made at the highest level and with consistency.

All these developments are not healthy. Unless there is concerted effort to diffuse this situation, it can quickly get out of hand.

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Destabilised Eurasia and possibility of War - The SE Asia - East Asia equation

The events of the past few weeks and years have had a decisive geo-political point to them particularly concerning South-East and East Asia. Let me enumerate a few here. 

1. In 2015 Japanese parliament permitted their army to go aggressive( with US blessings). They have been making ships and aircraft carriers since few years ago  displayed in Aussie, Singapore, Japan and US joint exercise - small allegedly helicopter carrier or something.  
2. Last week I was seeing Singapore Air Force Fighter planes on evening patrols. Also every day they have the another surveillance plane - it is not the boeing posiedon in the air. 
3. On friday, India announced surgical strikes on terror bases in Pakistan Occupied Kashmir. 
4. Last week, Singapore PM met Japanese PM Abe. Last month he met Obama. Chinese news paper is accused Singapore of siding with US. This week Singapore PM is meeting Narendra Modi.
5. Last week Japanese PM Abe met Narendra Modi and promised him some military tech and other assistance including manufacturing assistance.
6. Phillipines has abandoned US and is courting China. Durtete made a statement that he received encouragement from China and Russia on his anti-US remarks.
7. Last month the International Arbitration Tribunal restrained China from claiming rights on South China Sea.
8. Last month Austrailia published a white paper on maritime defence highlighting the need to protect the interest in the northern coasts and in the Pacific. Australia does not have any threat from any country in the Pacific save China. It is way far out and super friendly with most of the major powers. It has a love-hate relations with some island countries where China has become active.
9. US is offering F-16 (yeah the old ones) to India for make-in-India option. (The tech is old but the offer is quite lucrative)

So what is happeneing?

China is being encircled. Japan south Korea Taiwan Singapore, Australia and India are coming together step by step. South Africa is in the mix too. Philippines has chosen to side with China - or so it seems. Vietnam is on the fence blowing hot and cold. Laos is stuck between Vietnam and China but I sense it is more pro-china. Thailand is becoming more democratic but depends on their king who is about to die or may have died. 

Since China is being encircled, it thinks it can break the mix by encircling India. China thinks it can corner India because of its alliance with Pakistan. So Pak will keep India engaged on west and china will keep it busy on the east taking India out of the equation. So a day after announcement of surgical strikes we had reports of China reducing Bramhaputra waters for dam construction.

But, on day of surgical strike Iran attacked pakistan (which is weird). Afghanistan is already sick of  Pakistan. Now Pakistan thinks it too is being encircled by adversaries. Tajikistan is not really happy with Pakistan either. But it is more worried about China. So goes for Kyrgyzstan and we come to Mongolia and Russia which surround China. 

Within China too,  in Hong Kong separatist sentiment is acting up, mostly without encouragement of the west. Then there are other prennial problems in China - including Tibet, Uyghurs and others.

So we have China trying "string of pearls" strategy around India. World trying "string of pearls" around China. 

Why India is crucial element in the mix?

India is important because it is a navy that controls the major trade routes to Europe and East america. It saves a trip across Africa. So China wants to circle indian ocean by involving Africans - twin benefits resources and strategic support. So this is a move-counter move strategy. India is but small player if you ask me. I think US is the big bro here. We are seeing Obama's east pivot in action. 

Why is China all riled up?

China is being choked economically by all - sort of as a payback for its merchentilist begger thy neighbour policy. Actually when Milton Friedman was asked about dumping of low cost products, his argument was simply it benefits the importer. It means (to me, Milton did not say it so) that after the value is over you can reverse the equations by ring-fencing the excess capacity from creating problems for you.

The second narrative Chinese use is that its almost $4Trillion US Dollar reserves may lose value and thus cause wealth loss. This narrative is easy to sell to general pulic and it will make for a good anti-US story.

This has a lot of implications for China. It may wreck it from within. An empowered peasantry   / rural-folk may bring down the corporates to its knees using exactly the same arguments that Mao used. The citizenry may become subversive when faced with no jobs, or rapid decline in wealth as a result of capacity destruction. These will be difficult to control in a country of 1.6 billion. The cost of political unrest for Chinese Communist Party is too high. That could be one reason for Chinese aggression.

The first narrative fits the bill better because of the related developments. There was no reason for announcing a "make in India" policy when there is excess global supply. Not unless the Chinese capacity was suddenly going to be unavailable. And someone could pick up the slack. Indian PM Modi saw an opportunity in this and embarked on the picking up pieces. FYI none of the Chinese investments into Make-in-India have materialized. Foxconn which promised to set up an iPhone factory has backed out. Others are mostly European and american cos who continue on.

Is China a potent threat to US?

At present China is not a threat to the US. 

It does not have a wherewithal to pick up a fight with US. At least that is the public view. China needs at least 5 aircraft carrier units to be as aggressive as they are trying to be. It has none at the moment. Big daddy US has five major assets in Pacific including Okinawa. US also has two Aircraft carrier groups in Mediterranean Sea and Indian Ocean. India has two in the Indian ocean. 

China is a threat to India. It is an ally of Pakistan and has a long border-dispute with India. India needs to be wary and after fall of Soviet Union there is no regional counter-balance. India must ally with US. There is no other way. US knows this and promoting technology transfer to Indian defence. 

China is also a threat in South China sea. It is here that US is more worried. It is claiming more land and nautical area and becoming more assertive.

The least-expected strategy for China will be to challenge US. That will be a surprise and alter the military-power equations. For this it needs some greographical spread. By itself, China has tough geography which makes it difficult for it to create big trouble that could alter global balance of power equations.

The solution - A China circle

The Chinese circle comprises China, Pakistan, North Korea, some countries in Africa, some in Pacific Oceans including Laos. These countries have received heavy Chinese aid and China supports some questionable regimes in certain regions. Phillipines is becoming a China ally. The Burmese junta enjoys some support from the Chinese.

Clearly with this motley crew China cannot take on US or other major country. But what it can do is create strategic assets in these countries from where it can create trouble. The dirty work still comes to China's share. 

The tools

If China wanted to be a credible threat it should be building at least 10 Aircraft carrier units (including cruisers, frigates, destroyers, submarines, logistics ships). A better strategy would be to build them inland somewhere in Hainan (lake) or more likely in Sichuan (totally on dry land). Then one fine day plonk these in the sea. An event like that could alter the geo-political equations quite rapidly.

Yet such kind of shifting of balance of power is not possible easily. There are pretty unpredictable players in the mix.

The no-nonsense player -Russia

Russia is sitting on the fence. The Russian approach is just like in world war 2 - corrupt but away from the mess. It will take sides when it is forced to take sides. It has hinted that it may start supplying aircrafts to Pakistan and may have helped china build their J20 fighter which is copy of the F22 raptor. Russians are playing both sides as of now. They are cooperating with the West in Arabian geographies and counter-balancing them in Asian geographies.

Their problem is that they are too close to conflicts but not too powerful to force a resolution anywhere. Even Soviet Russia would have found difficult to contain China in its present state.

Pakistan the unpredictably-unpredictable player

The issue was easy to solve if Pakistan was not a long-term US ally. Because Nehru sided with Russians, Pak went to the US and US is feeling guilty of abandoning pak even when it housed Osama. If Pakistan was just another country in the equation, the US policy would have tilted pro-India by now and we would have been in a new stable-stalemate situation. The world would be chugging along by now.

The problem is that US would always help build Pakistani capability to counter-balance India. To the US, pakistan-India parity was the policy objective. US realised it late that Pakistan was playing double game. With US technology seeping into China and the inventory falling into the terrorist hands, US realised Pakistan is not a strategic asset but a mere pawn. It is China that was the new threat.

My guess

It is possible that the China is using the uncertainity related to US presidential election to test some destabilisation strategies. They see a window of opportunity and it expires on November with elections in US as the new president (even if Trump wins) will be briefed about all important issues and most likely toe the usual line. The uncertainty will reign till November as Obama may not be able make longer term commitments right now. So we have to sit tight for 1or 2 months. This is peak of crisis as we get to see. Then big daddy will be back in the saddle and world will be back to its normal stalemate situation. If this is indeed correct, then we should see a major policy decision by the new US President immediately upon taking office. It could be a pro-India change or opening of a full-functional base in South East Asia augmenting the one in Singapore and Okinawa.

In Sum

Something is definitely going on in the SE Asia / East Asian region. 

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An increased (though very small) probability for War

Probability of war seems to have increased. It is still small but definitely increased. Though it is unlikely that India will be involved in one (we never invaded any country in 5000 years - so we dont have the mindset) But, look how different war-indicating trends are catching up.

1. China has more males in its population - typically when the pop ratio gets skewed the chances of war increases. Further, income polarization is very high in China.
2. Recession will make more people (mainly youth) unemployed and in financially distressed situation - implying combative etc
3. US-china have classical debtor-creditor problem any strong arm by China will not be taken lightly by US. China believes it may be wronged by the US. If US dollar devalues then you can be sure things wont be easy on this front.
4. War is by far the biggest domestic stimulus one can give - creates domestic jobs and stuff hence politicians are ok with war in such times.
5. The typical flash points are visible - Afghanistan Pakistan is now a flash-point. If Us forces are attacked or get in some trouble then we could see drastic actions. Earlier North Korea, Malaysian protests, Demonstrations in Greece were some flash points ( though none as big as Af-Pak)
6. Religious alignments are getting more stricter - talibanization of SWAT valley in Pakistan is an indicator. To certain degree, Obama election has reduced any polarization along religious lines that we saw earlier in US.
7. US policies and other global stimuli are going to result in more income polarization. As global inflation strikes the differences will become more evident - I can foresee Mary Antoinette - "if you don't have bread eat cake" statements.
8. Usually such conditions are off-set by economic growth (that promotes peace) - but that has near about halted in past few months. Now if things do not improve we could be in for much tougher times.

Since last year I have been advising small businesses (even if uncalled for many times - and often at risk of being sounding intrusive) to preserve cash and lower debts. This is time to tighten the seat belts and check the gun in glove compartment for bullets just in case.

So I say it again - better prepared than sorry!