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The inflection point in reversed capital flow from China to the US has occurred and will accelerate

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On the Brownfield side of manufacturing, automotive manufacturers and similar Tier 0 producers; and on the Greenfield side, Venture Capitalists, have driven their respective tier base and investment stable firms to China based solely on piece part or operating cost with no particular thought to what happens when (a) the cost advantage dissolves, (2) the effects of that move - which I call destabilization once its full ramifications become felt (also here and here), and (3) the shifting of money from dollars and treasury notes to investment by Chinese entities at a time when their US/EU competitors are facing relatively higher capital costs.

I wager that many firms don't even have the foresight to look past the piece part cost trap much less the other drivers. With so many sitting ducks, Chinese investors will prosper.

Monaghan speaks of a Chinese inflection point that I submit has already arrived but its structural effects have yet to make a measurable effect:

[B]eneath the excitement of the domestic [Chinese] story emerges the prologue to something perhaps far more important. China and Chinese corporations are no longer simply a destination for capital but a point of origin. A fundamental change has begun. Today, five of the top 10 global companies by market capitalisation are Chinese. We are seeing the first ebb in the tidal flow of capital. China's sphere of influence and responsibility is changing. The fundamentals that created China's success equally pressure China to find new sources of competitive advantage. Chinese capital will flow to those sources as the domestic economy matures. No longer is the local market the sole consideration. China is now actively adjusting focus and capital from internal to international markets. That ebb will become an unstoppable current.

None of the above includes the ultimate destabilizer when the Chinese employ administrative edicts, tariff strictures and noncommutative standards (Chinese products meet the standard but foreign products do not) to force out foreign firms out of China in concert with investments into the home territories of those firms. See Confluence of thinking on Chinese outsourcing and supply chain risks from DSB and USCC.

In any case, Monaghan's inflection point of capital flow had already begun only to be accelerated by weaknesses occasioned by the excesses of the subprime loan fiasco. China and other sovereign state investors will acquire stakes in key US investment banks on the cheap. (Yes, the markets have continued to fall, making some of these investments look less attractive, but were it not for the subprime impact those stakes would not have been available at all, much less than at the negotiated prices.) Monaghan makes what I would call a statement of the patently obvious were it not for the many firms that are unaware:

The implications are as significant as they are far reaching. It impacts everything from talent to technology, capital to competition and revenue to risk. It calls into question the very fundamentals of our investment and strategy in China and the role China will play in our global or regional operations. It implies increasing volatility and the need to ensure our organisations are agile and prepared for change...

It is essential for firms to break out Jack Welch's five strategy review questions:

These should be asked frequently and especially at any change in operating or environmental conditions. (They form a key jump point for our strategic planning and technology forecasting efforts.) Most firms are not doing so with respect to China, or if they are, do not like their implications and so push them aside.

China's Inflection Point
Steve Monaghan
GTNews
15 Jan 2008

Citi Writes Down $18 Billion; Merrill Gets Infusion
Edited by Andrew Sorkin
DealBook/New York Times
January 15, 2008, 6:44 am

The Subprime - Trade Deficit Connection
Thomas Palley
posted on January 7th, 2008 at 9:07

Sub-prime Casualties Who Should Have Known Better
Finding Dulcinea
January 6, 2008 3:05 PM

$9.4 Billion Write-Down at Morgan Stanley
By LANDON THOMAS Jr.
New York Times
December 20, 2007

Case Study: Jack Welch’s Creative Revolutionary Transformation of General Electric and the Thermidorean Reaction (19812004)
Pier A. Abetti
CREATIVITY AND INNOVATION MANAGEMENT
Volume 15 Number 1 2006, pp 74-84

China Investing in Rust-Belt Companies
Auto-Parts Maker Wanxiang Invests in U.S. Partners As Its Ambitions Expand
By PETER WONACOTT
Wall Street Journal
November 26, 2004
Fee archive
Free Mirror

Control Your Destiny or Someone Else Will
James Altfeld's 'Cliffs Notes' version of Jack Stack's A Stake in the Outcome, 2002
PDF
HTML

The GE Way Fieldbook: Jack Welch's Battle Plan for Corporate Revolution
By Robert Slater
McGraw-Hill Professional
ISBN 0071354816
Published 2000

Gordon Housworth



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Obtuse diplomatic blunder and journalistic ignorance: US inadvertently agrees to celebrate al-Nakba, the 1948 destruction of Palestine

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Short of dispensing with the pretence of its role as honest broker in the Middle East by attacking Palestinian Arabs, the US could not have blundered more in Arab eyes. About as bad, the Western high street press has ignored the slight. No wonder that Arabs have such dim views of the US. Most US readers will wonder what happened.

Buried in lower paragraphs on the eve of Bush43's departure from Israel to Kuwait were variations of this snippet:

Earlier, in Tel Aviv, Bush said he would return to the Mideast in May to mark ally Israel's 60th anniversary and to continue pushing for a peace pact between Israel and the Palestinians. It was an indication that hopes to crown his final year in office by putting a personal stamp on peacemaking efforts.

I was astonished. A sitting US president who is claiming a mandate of fairness and seeking an Israeli-Palestinian rapprochement flagged his intent to return on the Levant on the anniversary of Israel's founding which is also the thermonuclear epicenter of Arab humiliation:

May 15th, 1948, was the Palestinian Al-Nakba (the Catastrophe), or what Israel refers to as the "Day of Independence." To Palestinians, it symbolizes the dispossession, displacement, and uprooting of 800,000 Palestinians from their homes in what then became Israel. Many of these refugees and their descendants, who now number more than 4 million, still languish in refugee camps in the West Bank, Gaza, and surrounding Arab countries. While Al-Nakba embodies the first major wave of forced expulsion of Palestinians from their land, Israel's premeditated campaign of ethnic cleansing continues to this very day. [Before Pro-Israeli readers brand me as biased, Israeli historians such as Benny Morris specifically use the term 'ethnic cleansing.']

Where were Bush43's advisors? Where was SecState Rice? She was accompanying POTUS on this trip. And where were Western journalists to flag the offense? I have already given my assessment of Rice in The ventriloquist, the ventriloquist's dummy and SecState Rice, but I find this insensitivity jaw-dropping.

Update: English translations of Arabic displeasure are now appearing, but not in our high street press.

Citing Al-Khalij (UAE), Ma'an News Agency (MNA) is stating:

Arab states are demanding that the United States clarify the purpose of a planned return trip by US President George W. Bush to Israel in May to mark the 60th anniversary of the founding of Israel, an Emirati newspaper reported on Sunday.

The Arab League and a number of Arab governments want the American government to explain the nature of the trip, as May will also mark the 60th anniversary of what Palestinians call the Nakba, the Catastophe of the violent expulsion of Palestinians from 1948 Palestine.

Citing Al Halij (UAE?), Israel National News (IsraelNN.com) is stating:

The Arab League and individual Arab countries have sent a letter of protest to U.S. President George W. Bush following reports that Bush accepted Israeli President Shimon Peres's invitation to participate in Israel's 60th anniversary celebration.

[The] Arab League expressed disappointment and protest over Bush's intention of participating in the celebration and said that the creation of Israel was accompanied by a catastrophe ("nakba") for Arabs and their expulsion from their land.

Al-Nakba and an-Naksah: Israeli victories; Arab humiliation

While Arabs and Israelis have warred in 1948, 1956, 1967, 1973, 1982 and 2006, it was two, the 1948-49 War that formed the Jewish state and known to Arabs as al-Nakba (The Catastrophe) and the 1967 Six-Day War that brought Israel to its current borders and known to Arabs as an-Naksah (The Setback), that together humiliated Arabs and undermined their faith in their governments. It was a third, the 2006 Second Lebanon War, that humiliated Israel and their Prime Minister, Olmert, and brought jubilation to Arabs and a wider Muslim audience even though the Muslim victor was Shia and not Sunni.

Constantin Zureiq [Zurayk] coined Al-Nakba in the aftermath of partition in 1948:

The Syrian historian Constantine Zurayk, who in the early 1950's published Ma'na al-nabka (The Meaning of the Disaster), reflecting on the destruction of Palestinian society and the establishment of Israel. Less than two decades later, he published Ma'na al-nakba mujaddadan (The Meaning of the Disaster Revisited), which discussed the stunning defeat of 1967. His books all stress the urgent need to transform the Arab world "from an emotional, illusionary, mythological and poetic society into a practical achievement-oriented, rational and scientific one." Two reasons for the disaster are singled out by Zurayk--scientific underdevelopment and the weakness of the spirit of activism or militancy. The first lies in the "civilizational differences" between Arab and Israeli societies. He calls Israel a "modern civilization... in the area of science and rationality." But being modern in this sense is not enough; the strength of the spirit of activism enabled Algeria and Vietnam to defeat their enemies in spite of the opponents' scientific superiority. Zurayk traces the lack of a spirit of activism among Arabs to their lack of clarity of purpose, which he attributes to divisiveness and fragmentation into "nationalist," "socialist," and "reactionary" camps.

The 1967 Six-Day War only compounded the losses of 1948, often being described as the second Nakba. Gamal Abdel Nasser had to choose a name of equal gravitas for the debacle of the 1967 Six-Day War in which Israel bested the combined forces of "Egypt, Jordan, and Syria. Iraq, Saudi Arabia, Kuwait, and Algeria," gaining possession of "eastern Jerusalem, the Gaza Strip, the Sinai Peninsula, the West Bank, and the Golan Heights":

[Nasser and Heikal] turned to discuss Nasser's speech and [the] selection of Arabic word Naksah (setback) to describe the 1967 military debacle. Heikal came up with Naksah and when Nasser asked about his choice of a singular word to describe the 1967 War they went down the list of words Hazimah (defeat), Sadmah (shock), and Karithah (catastrophe) as well as the 1948 War that is called Nakbah (another Arabic dialect for catastrophe).

The choice of words to describe a catastrophic military setback for Egyptian arms such as the 1967 War was a matter of great importance. According to Heikal, Nasser was obsessed with the right description of this military defeat; he wanted to leave his successor enough political room to rebuild and place Egypt once again on the offensive. To describe the Six Day War as a Hazimah (defeat) would leave no room for reconstruction and would upset the Soviets who provided the bulk of the military hardware that Syria and Egypt incompetently deployed...

Many of today's readers fail to ask if there is a West Bank, where is the East Bank?

Israel has emerged from being one fragment of the West Bank in Palestine to become the occupier of the West Bank. (To no avail, Israel has asked that the East Bank be included prior to partition in 1948.)

Hisham Melhem (An-Nahar) spoke to Arab shock of the Six-Day War:

Many Arabs convinced themselves that victory would be easy and, in fact, in the first few days of the conflict, the whole military operations were covered with lies, claims about achieving decisive breakthroughs against the Israelis... [Arabs] initially believed all these myths surrounding the military operations at that time. Hence, the shock afterwards, six days later, total humiliation, total disaster. It was an unmitigated disaster, although the leader of Egypt at that time, General Abdel Nasser, called it "an-Naksah," which means in Arabic "setback." It was an unmitigated disaster.

But then the Arabs at that time lived maybe in denial. They were totally humiliated, and they went to Khartoum, the capital of Sudan, for the first Arab summit, in which they said no to the recognition, no to negotiations, no to peace. But at that time, these governments were seen as -- the defeat was seen as a defeat for Arab nationalism and its Nasserite stripe in Egypt and its Baathist stripe in Damascus.

At that time, ironically, the Palestinians came into their own. And from that moment, they projected themselves as the alternative to these weak, corrupt Arab governments. And they gained a tremendous popular support in those countries and throughout the Arab world.

And it was at that time, by the way -- interestingly enough, historically enough -- when the Islamists began their long project of inheriting the Arab world, because they presented themselves as the alternative to these failed so-called secular ideologies that dominated the Arab world at that time.

The seeds of Zurayk's "spirit of activism or militancy" were now planted.

It is interesting to track changes in coverage in the Western press around the pivot point of the Six-Day War. Jeffrey Goldberg spoke to the media coverage in the US, UK and Europe during the Six-Day War, i.e., what the non-Arab world was seeing:

I'll read you something from Time Magazine that was from their June 9 issue, which I guess was published right before the war began [in 1967].

"Tiny dagger-shaped Israel," Time reports, "whose 2.7 million people cling to 7,900 square miles on the shore of the Eastern Mediterranean, faced the implacable hostility and cocked guns of 14 Arab nations and their 110 million people." This sort of blatantly pro-Israel viewpoint was apparent not only in Time but in the other news weeklies and the daily newspapers and on the three networks. And the really amazing thing is if you go back into the BBC archives, you'll see that kind of sympathy as well for Israel.

One of the astonishing things to remember - and this is 40 years ago - was that Israel was considered by the media to be the underdog in this conflict. Israel was seen as this plucky outpost of Judeo-Christian values battling these monstrous Arab dictatorships, and so the coverage remained very, very sympathetic for years to come...

The conflict only slowly began to flip in the non-Arab press in the period after the Six-Day War:

Israel was clearly the underdog in 1967. Palestinians didn't really have a voice yet. Remember, Palestinians had been under military occupation by Jordan and the West Bank and Egypt and the Gaza Strip from 1948 to 1967. But Palestinian nationalism grew and developed, and over the years the conflict has been recast, if you will, instead of one between Israel and 20 different Arab states in which [you] could pretty much easily identify the underdog, to one between Israel and these occupied Palestinians.

Arabs never forgot the ethnic cleansing needed to create the State of Israel

While I could point neutral readers to sites such as Palestine Remembered, The Palestinian Catastrophe, Then and Now, Searching for meaning from the respected Al-Ahram Weekly, Al-Nakba: The Continuing Catastrophe, the pro-Israeli partisan could find cause for offense, thus I prefer to use Ari Shavit's interview of the Zionist historian, Benny Morris, Survival of the fittest (parts one and two), to shape the wounds that Arabs continue to feel so keenly. (Readers should note that I am not making a value judgment; I am merely choosing a largely unimpeachable source to describe the historical record.)

Ben-Gurion was a transferist. He understood that there could be no Jewish state with a large and hostile Arab minority in its midst. There would be no such state. It would not be able to exist."... If he had not done what he did, a state would not have come into being. That has to be clear. It is impossible to evade it. Without the uprooting of the Palestinians, a Jewish state would not have arisen here."...

"From April 1948, Ben-Gurion is projecting a message of transfer. There is no explicit order of his in writing, there is no orderly comprehensive policy, but there is an atmosphere of [population] transfer. The transfer idea is in the air. The entire leadership understands that this is the idea. The officer corps understands what is required of them. Under Ben-Gurion, a consensus of transfer is created."...

"If [Ben-Gurion] was already engaged in expulsion, maybe he should have done a complete job. I know that this stuns the Arabs and the liberals and the politically correct types. But my feeling is that this place would be quieter and know less suffering if the matter had been resolved once and for all. If Ben-Gurion had carried out a large expulsion and cleansed the whole country - the whole Land of Israel, as far as the Jordan River. It may yet turn out that this was his fatal mistake. If he had carried out a full expulsion - rather than a partial one - he would have stabilized the State of Israel for generations."...

[On] October 31, 1948, the commander of the Northern Front, Moshe Carmel, issued an order in writing to his units to expedite the removal of the Arab population... There are circumstances in history that justify ethnic cleansing. I know that this term is completely negative in the discourse of the 21st century, but when the choice is between ethnic cleansing and genocide - the annihilation of your people - I prefer ethnic cleansing."...

"A Jewish state would not have come into being without the uprooting of 700,000 Palestinians. Therefore it was necessary to uproot them. There was no choice but to expel that population. It was necessary to cleanse the hinterland and cleanse the border areas and cleanse the main roads. It was necessary to cleanse the villages from which our convoys and our settlements were fired on."...

"I know [the term 'to cleanse'] doesn't sound nice but that's the term they used at the time. I adopted it from all the 1948 documents in which I am immersed."...

"Twenty-four [acts of Israeli massacre were perpetrated in 1948]. In some cases four or five people were executed, in others the numbers were 70, 80, 100. There was also a great deal of arbitrary killing... "The worst cases [of Israeli massacre] were Saliha (70-80 killed), Deir Yassin (100-110), Lod (250), Dawayima (hundreds) and perhaps Abu Shusha (70). There is no unequivocal proof of a large-scale massacre at Tantura, but war crimes were perpetrated there. At Jaffa there was a massacre about which nothing had been known until now. The same at Arab al Muwassi, in the north. About half of the acts of massacre were part of Operation Hiram [in the north, in October 1948]: at Safsaf, Saliha, Jish, Eilaboun, Arab al Muwasi, Deir al Asad, Majdal Krum, Sasa. In Operation Hiram there was a unusually high concentration of executions of people against a wall or next to a well in an orderly fashion."...

"I feel sympathy for the Palestinian people, which truly underwent a hard tragedy. I feel sympathy for the refugees themselves. But if the desire to establish a Jewish state here is legitimate, there was no other choice. It was impossible to leave a large fifth column in the country. From the moment the Yishuv [pre-1948 Jewish community in Palestine] was attacked by the Palestinians and afterward by the Arab states, there was no choice but to expel the Palestinian population. To uproot it in the course of war...

"Ideologically, I support the two-state solution. It's the only alternative to the expulsion of the Jews or the expulsion of the Palestinians or total destruction. But in practice, in this generation, a settlement of that kind will not hold water. At least 30 to 40 percent of the Palestinian public and at least 30 to 40 percent of the heart of every Palestinian will not accept it. After a short break, terrorism will erupt again and the war will resume."...

"We have to try to heal the Palestinians. Maybe over the years the establishment of a Palestinian state will help in the healing process. But in the meantime, until the medicine is found, they have to be contained so that they will not succeed in murdering us."... "Something like a cage has to be built for them. I know that sounds terrible. It is really cruel. But there is no choice. There is a wild animal there that has to be locked up in one way or another."

Were I Jewish, I might feel relieved; were I Arab, I'd likely be deeply angry. It is easier to understand the what drove Abu Nidal into terrorism when you know what was taken from him:

Multiply that anger by hundreds of thousands and one begins to get a flavor of the hatred, hopelessness, and opportunity void that marks Palestinians and has seeped into the fabric of Arabs and a goodly number of Muslims. Go to the (tame by comparison) English al Jazeera and look at The Sharon Land-Grab Segregation Wall. Look at the maps of proscribed land, the walls, the isolation adjacent to relative plenty, and ask yourself what would you do in their place. I believe that the Security Wall is a failure of imagination, and will not bring Israel long term security as it will insure the economic collapse of what I call "Paltustan," the Palestinian Bantustan on its doorstep.

Update: 14 January, 2008

Part 2: Intersection of al-Nakba, The Second Lebanon War and Ehud Olmert

Maps of Palestine before and after al-Nakba
This map recommended (Note: This is a large map in terms of area so let it load as it opens with text about affected villages)

Arab states seek clarification on Bush visit planned for Nakba anniversary
Ma'an News Agency (MNA)
13 / 01 / 2008 Time: 11:37
Mirror The Palestine Media Unit/Zajel
1/13/2008 5:39:00 AM

Arab League to Bush: Don't Celebrate Nakba
Israel National News (IsraelNN.com)
6 Shevat 5768, January 13, '08

Bush Promises to Return to Israel
By STEVEN ERLANGER and STEVEN LEE MYERS
New York Times
January 12, 2008

11:00News Roundup - Hour 2
Diane Rehm with guest journalists Hisham Melhem (Al-Arabiya TV and "An-Nahar"), Barbara Slavin (U.S. Institute of Peace) and Warren Strobel (McClatchy)
Diane Rehm Show
January 11, 2008

Bush visits Kuwait to promote peace deal
By Terence Hunt
Associated Press
January 11, 2008

Arabic papers react to Bush tour
al Jazeera
UPDATED ON: JANUARY 11, 2008
14:39 MECCA TIME, 11:39 GMT

President Says Mideast Peace Accord Possible Within a Year
JUDY WOODRUFF
NewsHour
Originally Aired: January 10, 2008

Bush Begins Peace Effort Bonded With Olmert
By STEVEN ERLANGER and STEVEN LEE MYERS
New York Times
January 10, 2008

Skepticism, Anger Greet Bush in Middle East
By Challiss McDonough
Voice of America (VOA)
08 January 2008

US uses Arabs to promote itself on Arabic sites
State Dept. team posts pro-US comments
DUBAI (Hayyan Nayouf, AlArabiya.net)
(Translated from Arabic by Sonia Farid)
al Arabiya.net
Tuesday, 18 December 2007

Experts Assess Mideast Progress Four Decades After Six-Day War
Forty years ago, Israel entered the Six-Day War, the beginning of the occupation of the West Bank and Gaza. Two regional experts give their perspectives on the Middle East then and now.
RAY SUAREZ
News Hour
Originally Aired: June 7, 2007

Name This War
BROOKE GLADSTONE and Jeffrey Goldberg
On The Media
June 01, 2007

Him and them
Al-Ahram Weekly
Issue No. 879
10 - 16 January 2007

The Palestinian Catastrophe, Then and Now
By Sandy Tolan
Embeded within Tomgram: Sandy Tolan, Deja Vu in Gaza
posted July 10, 2006 4:09 pm
The catastrophe that never ends, Tolan's release in Salon, Jul. 11, 2006

The Palestinian Diaspora: A History of Dispossession
Global Exchange
last updated October 02, 2005

Searching for meaning
The nakba was not just a tragic moment in the history of Palestinians, but touches the core of the struggle -- now as in the past -- for Arab dignity, identity and justice in the face of power
Azmi Bishara
Al-Ahram Weekly
Issue No. 690
13 -19 May 2004

The Heikal Papers: A Discourse on Politics and the 1967 Arab-Israeli War with Egyptian President Gamal Abdel Nasser
by LCDR Youssef Aboul-Enein, MSC, USN
Strategic Insights
Volume IV, Issue 4
April 2005

Benny Morris's Reign of Error, Revisited
The Post-Zionist Critique
by Efraim Karsh
Middle East Quarterly
VOLUME XII: NUMBER 2
Spring 2005

Al-Nakba: The Continuing Catastrophe
BADIL Occasional Bulletin No. 17
BADIL Resource Center for Palestinian Residency and Refugee Rights
May 2004

Survival of the fittest [Part I]
By Ari Shavit
Haaretz
Last update - 18:18 09/01/2004

Survival of the fittest (cont.) [Part II]
When ethnic cleansing is justified
By Ari Shavit
Haaretz
Last update - 21:45 09/01/2004

Survival of the Fittest (an interview with Historian Benny Morris) [parts I & II]
By Ari Shavit
Haaretz, Magazine Section
9 January 2004
Mirror Deir Yassin (HTML)

HTML version of Parts I & II on the Palestine Remembered site with links to items within the site

text has links to items on Survival of the fittest By Ari Shavit [Parts I & II]
Haaretz, Thu., January 08, 2004
(DOC)

Right of reply / The judgment of history
by Various (Responses to Benny Morris)
Ha'aretz Daily
16 January 2004
Mirror

Traces of poison
Salman Abu-Sitta
Al-Ahram Weekly
Issue No. 627
27 Feb. - 5 March 2003

Flashback: Palestine's catastrophe
BBC News
Tuesday, 15 May, 2001, 08:26 GMT 09:26 UK

The Arab World: Society, Culture, and State
By Halim Barakat
University of California
ISBN 0520084276
1993

Gordon Housworth



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Operational analysis of Chinese 'cyber army' penetration and recovery techniques

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The PowerPoint China Cyber Army documents a classic, highly organized Chinese IP attack/phishing pattern that we have seen previously but China Cyber Army is the first specific unclass description that we've seen on the recent spate of Chinese attacks against France (also here), UK (also here), Germany, the US, but to name a few.

A Taiwanese-American working in the US IT sector who graduated the same year in Taiwan as did the likely author, Chung-Ping Chen, or Charlie Chen, now at National Taiwan University, and has a number of Stanford and Taiwanese friends coming from the same class as Chen had this to say about the PPT: "Those are interesting slides, and probably a known secret for a lot of Taiwanese." These foils (slides) will come as bracing news to too many complacent US and EU corporations and defense entities who believe that they are not at risk at their desk on home soil.

Readers will gain background from:

Global context

It is helpful to place China Cyber Army within the context of rising state on state cyber ops. The third annual VIRTUAL CRIMINOLOGY REPORT, CYBERCRIME: THE NEXT WAVE, points out three trends for 2008 and beyond:

  • [G]rowing threat to national security as Web espionage becomes increasingly advanced, moving from curiosity probes to well-funded and well-organized operations out for not only financial, but also political or technical gain...
  • [I]ncreasing threat to online services because of the growth in sophistication of attack techniques. Social engineering, for example, is now being used in conjunction with phishing techniques-making the situation even more complex and posing an increasing threat to public confidence in the Internet.
  • [E]mergence of a sophisticated market in software flaws that can be used to carry out espionage and attacks on critical government infrastructure networks. The findings indicate a blurred line between legal and illegal sales of software vulnerabilities.

The states most at risk as cybertargets "are those countries which are heavily networked and reliant on the Internet as well as those countries with an unstable political environment."

The commercial and government sector seems to be unaware that a cyber cold war is underway:

The Chinese have publicly stated that they are pursuing activities in cyber-espionage and government white paper, as read by McAfee Avert Labs, they speak of technology being a large part of war in the future. The United States, United Kingdom, Germany and several other countries are likely targets for political, military, economic and technical espionage.

And other nations may have similar plans to conduct online spying operations.

"There are signs that intelligence agencies around the world are constantly probing other governments’ networks looking for strengths and weaknesses and developing new ways to gather intelligence," said Peter Sommer, an expert in information systems and innovation at the London School of Economics.

"Everybody is hacking everybody," said Johannes Ullrich, an expert with the SANS Technology Institute, pointing to Israeli hacks against the United States and French hacks against European Union partners. But it is aspects of the Chinese approach that worry him. "The part I am most afraid of is...staging probes inside key industries. It’s almost like having sleeper cells, having ways to disrupt systems when you need it if it ever came to war."

And with an estimated 120 countries working on their cyberattack commands, in 10-20 years experts believe we could see countries jostling for cyber supremacy."

Sommer warns that countries are undoubtedly gearing themselves up to launch international all-out online attacks. The present political environment is one in which countries are testing the waters to gauge the potential influence (and risks) of such assaults...

"The Chinese were first to use cyberattacks for political and military goals," said James Mulvenon, an expert on China’s military and director of the Center for Intelligence and Research in Washington. "Whether it is a battlefield preparation or hacking networks connected to the German chancellor they are the first state actor to jump feet first into the 21st century cyber warfare technology. This is becoming a more serious and open problem."

High-tech crime is no longer just a threat to industry and individuals...

China Cyber Army architecture and operation

China Cyber Army describes eight discrete operating groups placed in Beijing/TienJing, SiAnn, ShangHai, SiChuan, HuBei, JianSu, FuJian,and GuoDong. As Jun is the word for military troop, an individual group would be known as, say, HuBei Jun. (Unlike official state responses which have been reticent to name Chinese state assets as perpetrator, China Cyber Army pointedly labels China as the relevant actor.) The purpose of the groups is said to be commercial and military espionage as opposed botnet herding or site defacement. No surprise that "Motivation" is said to be "Political Control, Military Operation, and High Tech intelligent properties." Group membership is said to be drawn from university, military, criminal sources and what I would describe as global for-hire hackers, notably from Taiwan.

Hacker group roles are delineated as:

  • Attacker : scan, exploit attack, get control of way-station
  • Mailer: using free mail box or mass mail sender tool on way-station
  • Collector: backdoor master, get useful data from victim, somehow play as internal attack via victim machine
  • Operator: Stable, continuous maintain the latest data from victim
  • Analyzer: depends on language

These hacker groups demonstrate intense organization. A rigorous summer operating schedule of two shifts is described for this cyber army: Start work at 0750 GMT+8, primarily entry hacking and launching data collect commands; lunch at 1200 GMT+8; recover data from the morning effort; break at 1700 GMT+8; first shift ends at 1900 GMT+8 and is replaced by second shift. Attacks are said to be "everyday" which may be interpreted as a seven day week. Encryption keys are "arranged by area," group members employ "the same tool not common seen in the public internet," Chinese military signatures are seen in the tools and extensive use is made of language experts and machine translation.

Prime human targets are in government, defense, military, foreign affairs, media plus any site containing potentially sensitive information. Data target comprise the usual suspects: contact lists, mailbox contents, databases, passwords and keys, MS Office files, Acrobat PDFs, images and internal system settings. Once this data is gathered, relationship databases are constructed, key personnel are identified to receive email Trojans and phishing attacks, malware is inserted at key points, ID-passwords and keys are examined for subsequent targeting, while potentially useful data is routed to language analyzers (machine translation).

The Chinese employ three different attack and recovery processes described as "Type 1: Direct reverse Connect, Type 2: Relay Connect, Type 3: Switching Connect." From the diagrams in the PPT and a fair use PDF:

Direct reverse Connect

Hacker to Way Station Relay Program:

(1) Hacker change the DN
(2) Remote Control the WS through 3389 (TS) or other back door
(3) Open the backdoor controller on WS for victim on 80,53,443,1863

Way Station Relay Program to Victim:

(1) Backdoor on victim, Query the Domain Names or IP
(2) Connect to the way station through normal Ports like 80,53,443,1863 etc.

Relay Connect

Hacker to Way Station Relay Program:

(1) Hacker change the DN mapping to Way-Station
(2) Start the Relay Program on WS
(3) Open the backdoor controller on Hacker’s PC listening

Way Station Relay Program to Victim:

(1) Backdoor on victim, Query the Domain Names or IP
(2) Connect to the way station through normal Ports like 80,53,443,1863 etc.

Switching Connect

Hacker to Way Station Relay Program:

(1) Hacker change the DN mapping to Way-Station
(2) Start the Switching Program on WS
(3) Start the backdoor controller & Connect to WS
(4) Pick the Victim Connection , build a tunnel * Not all the flow will pass to hacker

Way Station Relay Program to Victim:

(1) Backdoor on victim, Query the Domain Names or IP
(2) Connect to the way station through normal Ports like 80,53,443,1863 etc.
(3) Waiting For Select!

Great efforts are taken to prevent discovery and shield attack source: multiple Way Stations, "Leveling" steps involving checking importance of victims and inserting new backdoors, dynamic domain name shifting, and parallel channels for downloads.

An "independent defense analyst," Cheng Ta-chen, was quoted in translation from Taipei Times regarding China's "cyber army":

It is reliant on imports for most of its computer hardware and software. More than 90 percent of the computer operating system used by China's government and military is imported from the US. The overall security of China's informatics and Internet is lacking and it does not have security controls for imported technology and equipment. Also, economic relations between China and the US are becoming more entertwined, so if the cyber army were to wage war on the US economy, it would easily create problems for China. None of these factors are beneficial to the development of China's cyber warfare.

A state of war, or peace, is merely a cost benefit analysis:

Economic and military threads are warp and weft of the same cloth, yet too many continue to believe the fallacy that nations that trade together do not war with one another. The reality is that they trade so long as their national cost-benefit analysis tells them to continue doing so. Tipping points exist. The key is to recognize their immergence and be prepared to prosecute them. Short of that, business must address the uncertainties as their governments jostle for advantage.

Obscured provenance and unusual release mechanism

The content of China Cyber Army is as interesting as its provenance is obscured. The anonymous poster used the name DeepThroat. The poster's join date to Slideshare was October 2007 and has only shared this one slideshow. I'd conclude that this alias came up with the express purpose of posting the cyber set. There are no introductory or closing foils (pages). The foils are atypically clean, i.e., they are not burdened by the typically overwrought graphics that the feds and the military employ.

Many of the foils have rather dodgy spellings and word constructions that are not bad enough, or consistent enough, to be a machine translation but appear to be the hand of a non-native English speaker. (Certain word constructs are tantalizing and cry out for clarification.) The "Asian fan" is the background is not something that an Occidental would generally use, but when I have seen a fan the subject is Japan rather than China. There is a nice touch in having a slide transcript as footer to the foils.

We found it interesting that DeepThroat used a "no download, view only" PPT format as the release mechanism instead of a PDF posted to one of many widely read security forums. As we thought the material of value and were uncertain how long the PPT would remain active, a full screen capture was made of each foil as individual jpg files, rolled into a PDF for better examination and portability, and then posted under a fair use guideline as China Cyber - Fair Use.

At the time of capture, DeepThroat listed only one contact in Slideshare, Jonathan Boutelle, a cofounder of Slideshare. A number of us found it curious that a phantom poster elected to cite Boutelle as a linked friend. For a variety of reasons, I'd first assumed that Boutelle was DeepThroat and had bought some room for plausible denial. I queried Boutelle with the courtesy note that I would cite his response in a forthcoming weblog entry. Boutelle replied:

Not me. But you can message that person through slideshare. Just go to their slidespace and click "send a private message". Regards, Jon [email]

Deciding against a voluntary appeal to DeepThroat to uncloak, I researched the PowerPoint text strings which led me to Charlie Chung-Ping Chen, or Charlie Chen, now at National Taiwan University.

Author search for China Cyber Army

Search for the author of China Cyber Army has focused on Associate Professor Charlie Chung-Ping Chen, or Charlie Chen, recently at University of Wisconsin-Madison and now at the Graduate Institute of Electronics Engineering, National Taiwan University, Taipei. (See personal data in the ICS Group.) Chen has potential motive and certainly has means and opportunity.

Taiwanese by birth, thereby open to an anti-mainland Chinese sentiment, Chen took a BS in computer science and information engineering from the National Chiao-Tung University, Hsinchu, Taiwan, in 1990. Moving to the US, Chen matriculated his doctorate in computer science from University of Texas, 1998.

Between 1997-1999 he was with the Intel Corporation as a senior CAD engineer with Strategic CAD Labs. He was in charge of several important interconnect and circuit synthesis projects in his microprocessor group.

Then assistant professor in the Electrical and Computer Engineer Department, University of Wisconsin-Madison, followed by the Graduate Institute of Electronics Engineering, National Taiwan University.

Searching the Chinese language blog, X-Solve, I found a likely source from an article, China Cyber Army~A!, describing Chinese predation on UK and French networks

The first response to this item is by a "Charlie Chen":

Internet Espionage: The China Cyber Army

Since 2003 Spet, we have found first big scale intrusion event, the victim
is the National Police Agency, attacked by at least 2 groups of china hackers,
from HuBei and JianSu.

2003 Oct. Taiwan Military Missile Plan Leakage. (Lw)
2004 Jan. Executive Yuan 300+ PC compromised.
2004 Apr. Fake Official Dept. E-mail with Trojan found
2004 Sep.
Ministry of Foreign Affairs and embassy compromised.()
2004 Nov.
DPP compromised. (Mh)
2005 May. Big scale: Gov, High-Tech,on-line banking, Science Park(200+ companies compromised)
2005 Jul. Taiwan,
Ministry of Foreign Affairs again.()
2005 Sep. Taiwan, National Security council compromised. ()
2005 Nov. Taiwan, Military Central Command compromised.()
2006 Mar. Taiwan,
Legislative Yaun, Reporters compromised. ()
2007 Apr. Military Operation plan leakage due to USB data collect backdoor. (h
)

The seventh response is by 'Tomato X' who cites a reply made by Charlie Chen to a Securuty Focus post:

Tomato X - 11th, 2007 at 6:59

SecurityFocus

http://www.securityfocus.com/comments/articles/11485/34833#34833
-
The story is on going everyday
Charlie Chen
2007-09-10

While Lemos' originating article in Security Focus is quite short:

China on hot seat over alleged hacks
Robert Lemos
SecurityFocus 2007-09-04

Fresh allegations surfaced on Monday that China's military has hacked other nation's networks to nab sensitive data, charges that the country denied for the second time in two weeks.

Charlie Chen's reply is fulsome with both the content and curious English phrasing reminiscent of the PPT:

the story is on going everyday 2007-09-10
Charlie Chen
Security Focus
Sept 10, 2007

Link to this comment: http://www.securityfocus.com/comments/articles/11485/34833#34833

There are a least 8 China Hacker Groups. we call them as HuBei Jun(Jun for military troop)

ShangHai Jun, Beijing/TienJing Jun, GuoDong Jun, FuJian Jun, SiChuan Jun, JianSu Jun, SiAnn Jun.

Through incidents handling and investigation with law enforcements, we found some evidences to prove the china hackers (targeted attack/ spearing phishing) were come from government (military,intelligent dept and public security).

We have inspect the tools, from the begining trojaned e-mail, backdoor, and realy tools in the way stations.

At first, using Microsoft word (*.doc) file with exploit, to drop backdoors or download spyware from other way stations.And the backdoor connect back to way station, when hacker came from China (fixed IP or ADSL) to remote controlling victims.

What they want is to collect the contact list files (outlook, MSN ...) to build a huge database about relationships for future use,from the contact list, hackers can send a 'well-make' trojaned mail to the others in the contact list, then victims will trust the e-mail's subject and fake e-mail source, open it and been compromised. And, periodically jump back to collect the latest documents in all file types. Even steal your mail account to have a copy of your mail boxes.

From the official document shows, the cyber operation was directly sponsored or supported by General Staff Department Sec. Four. And the evidences shows they:

(1) Organized: have principle, formal check-in/out time,

in our domain name (used by backdoor) observations, they start to work at 0700 GMT+8 Round 1, 1150 Lunch, 1400 Round 2, 1730 Take a break,

then, depends on group, have night team, to hack foreign countries.

(2) the Tools. not common seen in public Internet .some hacker groups using the same military produced/purchased hacking tools.

(3) the source IP we sniffer from incident handling, can be directly mapping to military regions of China.

A quick search on Charlie Chen includes Charlie Chung-Ping Chen, also known as Charlie Chen, at University of Wisconsin-Madison (his most recent position posting to National Taiwan University is far more obscure but still points to the Extended home page at Wisconsin). While there are other Charlie Chen's about, this is the only one online with the pedigree to perform the analysis shown in China Cyber Army:

Chen's posting at National Taiwan University is currently listed as on "leave of absence." The attack profile is familiar but Chen is one of the few that is writing a (semi) public analysis of recent attacks. There must be a network beyond Chen as his Security Focus comment talks about 'we' and working with the authorities. Sounds like a Baker Street Irregular group with symbiotic ties to the defense sector.

Chen is not keeping a sufficiently low profile when, with modest digging, I can get to this point. If the mainland is interested, they know this much and far more. Two emails to Chen to learn more about his research efforts in this area have yet to be answered.

US looks to military to take on cyber threats
Command centre to be offensive and defensive
Tom Young
Computing/vnunet
10 Jan 2008

Researchers map China’s underground cybercrime economy
Posted by Larry Dignan @ 4:20 am
ZDNet
December 6, 2007

Cybercrime agency faces cuts as computer raid threats grow
Rhys Blakely and Sean O'Neill
From The Times
December 4, 2007

Studying Malicious Websites and the Underground Economy on the Chinese Web
Jianwei Zhuge, Thorsten Holz, Chengyu Song, Jinpeng Guo1 Xinhui Han, and Wei Zou
Peking University Institute of Computer Science and Technology Beijing, China
University of Mannheim Laboratory for Dependable Distributed Systems Mannheim, Germany
Reihe Informatik. TR-2007-011
December 3, 2007

Secrets of Shell and Rolls-Royce come under attack from China’s spies
James Rossiter
From The Times
December 3, 2007

World faces "cyber cold war" threat
By Peter Griffiths
Reuters
Nov 29, 2007 8:37am EST

Mirror

Cyber war to escalate in 2008
120 countries developing ways to attack computer networks
Andrea-Marie Vassou
Computeractive/vnenet
29 Nov 2007

Nations must defend against cyber warfare
Problem is getting worse as technology improves methods of attack
Tom Young
Computing/vnunet
29 Nov 2007

VIRTUAL CRIMINOLOGY REPORT
CYBERCRIME: THE NEXT WAVE
By Ian Brown, Oxford Internet Institute; Lilian Edwards, Institute for Law and the Web (UK); Eugene Spafford et al from CERIAS center at Purdue University (US)
The annual McAfee global cyber trends study into organized crime and the Internet in collaboration with leading international security experts
Commissioned by McAfee
2007

Chinese Spying No. 1 Threat To U.S. Manufacturing
By Foster Klug, Associated Press
Manufacturing.Net
November 15, 2007

Panel: China's Spying Poses Threat to U.S. Tech Secrets
By David Cho and Ariana Eunjung Cha
Washington Post
November 15, 2007; 11:57 AM

Cyber war moves up Nato agenda
Increasingly co-ordinated assaults are alarming defence ministers
Tom Young
Computing/vnunet
01 Nov 2007

China behind daily internet attacks on Germany
"Chinese cyber war" looking to bridge corporate and scientific gap
Matt Chapman
vnunet
23 Oct 2007

Malicious code infects Chinese security site
Chinese Internet Security Response Team's Web site is rigged with a malicious hidden window that can allow code to run on a visitor's PC
By Jeremy Kirk
IDG News Service
October 03, 2007

China Cyber Army
DeepThroat
Slideshare
October 2007

China says it's a cyberattack victim, not villain
Reuters
Published on ZDNet News
Sep 22, 2007 1:15:00 PM

Beware lurking PRC cyber army
By Cheng Ta-chen
Translated by Anna Stiggelbout
Taipei Times
Sep 12, 2007

France blames China for hack attacks
Chinese whispers
By John Leyden
The Register
Published Wednesday 12th September 2007 15:49 GMT

France joins Chinese hacking row
Fourth country points the finger at Chinese hackers following breaches
Matt Chapman
vnunet
10 Sep 2007

Chinese hacking row escalates
UK government accused of cover up
Iain Thomson
vnunet
06 Sep 2007

CIO Magazine on IP Theft
Posted by Richard Bejtlich at 19:17
Tao Security
August 08, 2007

Gordon Housworth



Cybersecurity Public  InfoT Public  Risk Containment and Pricing Public  Strategic Risk Public  Terrorism Public  

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Bhutto's assassination and other tribal terminations of "precious American assets"

  #

With the assassination of Benazir Bhutto who was, make no mistake about it, a thief that pillaged her country, aiding and abetting a husband who compounded graft to excess, we now hear all manner of prattle about democracy in Pakistan, even comments to the effect that Pakistan is a democratic country encased in a military state. Rubbish. Bhutto was leading the Pakistan People’s Party (PPP), a party of the poor who expected a spoils distribution in their direction. Understandable as no one else was looking out for them, but one should not confuse that with democracy as we know it. Bhutto was a thief but she was being groomed as our thief. (Alternate view from Harlan Ullman who I respect in other matters. The Economist's obituary is more balanced.)

At root, "Bhuttoism" has "more to do with the mythic, untainted legacy of [Benazir's] father, than anything she had actually done. "Take a pillar, put it in a public square, and write Zulfiqar Ali Bhutto’s name on it... People will vote for the pillar.""

Bhutto had appeared somewhere between obdurate and dismissive of the threats facing her return. It appeared that pre-arrival planning by she and her entourage had underestimated threats against her person. My colleagues and I thought that her slow motion bus tour was idiocy and it was only fortune that she was not taken out on the eve of her return. Modestly chastened, Bhutto held a series of small unscheduled rallies but then held the well publicized, large event which allowed her attackers to carefully plan with great success.

She is now gone but the military, the ISI, and the increasingly radical religious parties remain. (Readers should treat Pakistan's military and the ISI as hierarchies of tribes for the purpose of understanding their motives and actions as well as noting that these tribes view India as the principal enemy over the Taliban.) I noted in 2004:

I am one of those that believe that Pakistan is "one bullet away from regime change" and the change will not be to our liking. We must remember that Pakistan "made the Taliban" in that they funded, trained, and protected it in return for the security of not having to fight a two-front war, access to energy sources in the Stans, and a conservative religious view that was, and is still, shared by many in the Inter-Services Intelligence (ISI), Pakistan's intelligence agency. Musharraf faces significant resistance in his support of the US war on terror, both at home in the south and more so in the tribal areas of Waziristan that have long been a law into their own.

We failed to learn our lesson in Afghanistan, then Iraq, and may now repeat the blunder in Pakistan. We cannot create institutions from whole cloth; we have to work with what is there. Rather than look to a mirror image of democracy that is not there, I repeat my observation that we should establish the Tammany Hall Institute of Graft and Corruption which of course will lead to discretionary enforcement with the Foreign Corrupt Practices Act (FCPA). Countries are not a construct that works in this region. Tribes work, as we are belatedly seeing in Iraq.

Kaplan does a nice short job of tribal value in It's the Tribes, Stupid!:

It is such traditional loyalties existing below the level of the state that historically both Marxist and liberal intellectuals, in their efforts to remake societies after Soviet and Western democratic models, tragically underestimated. A realist like St. Augustine, in his City of God, understood that tribes, based on the narrow bonds of kinship and ethnicity rather than on any universalist longing, may not constitute the highest good; but by contributing to social cohesion, tribes nevertheless constitute a good in and of themselves. Quelling anarchy means starting with clans and tribes, and building upwards from those granular elements.

The tribal nature of Pakistan is even more pronounced than in Iraq. Pakistan, divided among geographically based ethnic groups, is a nuclear Yugoslavia-in-the-making. Our troops are already in Afghanistan. So it is highly conceivable that we will have boots on the ground in Pakistan’s border area with Afghanistan. This is the true frontline in the war on terrorism, where presumably the leadership of al-Qaeda is ensconced. Our troops will find there a deathly volcanic landscape of crags and winding canyons and alkaline deserts 1,000 miles long and 100 miles wide. In this high desert, the tribes rule: Dravidian Raisanis, Turko-Iranian Baluchis, and Indo-Aryan Pushtuns. Neither the British nor any succeeding Pakistani government has managed to subdue them.

The tribes of Baluchistan and the Northwest Frontier Province don’t require Western institutions because they already have institutions of their own. What we call warlords are often, in reality, tribal elders who settle divorce cases, property disputes, and other civil conflicts for which we resort to the courts or government. If the American military deploys to these badlands in numbers large or small, it will follow the Anbar example of working with the tribes, greasing their palms for information on al-Qaeda, while accepting their social and political way of life.

There is nothing wrong or cynical about this. Where democratic governance does not exist, we must work with the material at hand. We have inherited our Anglo-Saxon traditions of liberty and democracy just as other peoples, with different historical experiences and geographical circumstances, have inherited theirs. And these other peoples yearn for justice and dignity, which does not always overlap with Western democracy. Throughout the Arab world, old monarchial and authoritarian orders are now weakening. Keeping societies stable will depend largely on tribes, and the deals they are able to cut with one another. In the Middle East, an age of pathetic, fledgling democracies is also an age of tribes.

Pakistan is a compote of competing tribes

I noted in Pakistan a failed state by 2015? Why not now?:

Think how much we owe to the British [for] their manipulation and balkanization of tribal landscapes in Africa and Asia. The UK handed power in Rwanda to the Tutsis over the Hutu. Whenever one sees a 'straight-line' boundary on maps today, it is generally the work of Colonial powers not perceiving value in a landscape, i.e., it had no military, commercial, or diplomatic value to one or more Colonial states. Those tidy lines repeatedly divided tribal areas and are a bane of the OAU to this day.

At other locations, the British intentionally divided tribal lands in order to weaken them, e.g., the Durand Line which divided ethnic Pashtuns in half, making their dream of a Pashtunistan stillborn, as it drew a boundary between Afghanistan and then British India (this part of which later becomes Pakistan).

By the 1920's, British hold over what is now India and Pakistan was weakening. Muslims, a sizeable majority in these territories, were beginning to push for a separate state. The name "Pakistan" itself was coined in 1933, being the first letters of all the territories the Muslim separatists desired to be included in their state: Punjab, Afghania (now the NWFP), Kashmir, Iran, Sindh, Tukharistan, Afghanistan and Balochistan. The word "Pak" also means "pure" in Persian languages. The official language spoken in Pakistan today, Urdu, is related to the Farsi spoken in Iran and the Dari language spoken in Afghanistan.

Bowing to the inevitable quest for independence, the UK passed the India Independence Act in 1947, creating two dominions, India and Pakistan, that lesser states could join. In order to provide Pakistan with the port of Karachi, Balochistan, over its objections, was 'given' to Pakistan. (Desiring independence from both Pakistan and India, Balochistan was invaded by Pakistani forces after partition.) Kashmir's indecision over which dominion to join causes agony to this day.

Pakistan is a compote of Sindh, Punjabi, Baloch, Pashtu, Bengali (from Bengal and Bangladesh), Urdu-speaking Muslims (muhajirs (refugees) from India), and tribal groups predating British presence such as the Amb, Chitral, Dir, and Hunza. There are no ethnic Pakistanis, but led by a military elite trained by British officers, the compote went to war with India in 1949.

The British bribed them; why can't we?

Some tribes are more ungovernable than others. Pakistan's North West Frontier Province (NWFP) [map, map] lies along the Durand Line.  Opposite Afghanistan's Tora Bora area, the NWFP's southwest rim contains the Federally Administered Tribal Areas (FATA):

The tribal areas had a population of 5.7m according to the 1998 national census. There are seven tribal areas : Khyber, Kurram, Orakzai, Mohmand, Bajaur, North Waziristan and South Waziristan, all inhabited by Pashtun tribes. The tribal areas, or agencies as they are called, were created by the British to serve as a buffer between undivided India and Afghanistan.

The British devised a special system of political administration to govern the freedom-loving Pashtun tribes who resisted colonial rule with a determination unparalleled in the subcontinent. The tribal people were granted maximum autonomy and allowed to run their affairs in accordance with their Islamic faith, customs and traditions.

Tribal elders, known as Maliks, were given special favours by the British in return for services such as maintaining peace, keeping important roads like the Khyber Pass open, and apprehending anti-state and anti-social elements. The system of administration has not changed much [since] Pakistan's independence [in 1947].

Of the FATA districts, North and South Waziristan [map, tribal map] has always been apart, ungovernable by the seat of government, even before partition. The adjoining areas to the north and east are little better. North and South Waziristan districts "are openly controlled by the Taliban" as is the Bajaur Agency to the north (also on the Afghan border). Directly east of the Waziristans, the districts of Tank and Dera Ismail Khan "are under threat" as are the districts of Kyber Agency and Peshawar.

These tribal regions are now home to a complex mix of foreign fighters - Arab as well as the Islamic Movement of Uzbekistan, Pakistani and Afghan Taliban. Intercene warfare among these groups is presented by Karachi as evidence of success of the Waziristan Accord, but in fact Pakistani military elements are either ill trained, demoralized, even sympathetic. The jihadists operate freely across districts and cross-border. It will be interesting to watch the US try its hand at an Anbar-like tribal paramilitaries.

Further problems rise with those 'special tribes', the military and the ISI who are deeply divided in their loyalties. The analogy to Pakistan is the Republic of Korea (ROK). Seoul always saw Japan as its aggressor state, not the DPRK or China, despite sustained US efforts. Karachi sees India as it aggressor state; In its efforts to forestall a two-front war, significant elements of the ISI/Army built the Taliban and now support various jihadists in the tribal areas.

The endgame is Pakistan, not Iraq

US nightly news leads its citizens to dwell on Iraq to the exclusion of other regions. As severe as events on the ground in Iraq may be, the endgame - the next generation of jihadists - are forming in Pakistan. I urge readers to a pair by Saleem Shahzad in Le Monde diplomatique under the rubric Global jihad splits into wars between Muslims:

The takfirism article is a short companion piece to introduce unfamiliar readers to takfirism. US readers unfamiliar with takfirism will remember one of its troublesome adherents in al-Qaida in Iraq, Abu Musab Al-Zarqawi, killed in 2006:

Takfirism is a centuries-old belief that suddenly revived among Islamic militants in Egypt after the Israeli victory in 1967. It claims that the Muslim ummah (the community of believers) has been weakened by deviation in the practice of Islam. Takfirism classifies all non-practising Muslims as kafirs (infidels) and calls upon its adherents to abandon existing Muslim societies, settle in isolated communities and fight all Muslim infidels.

The money piece is Shahzad's analysis of intercene struggles among the activist Muslim fighters:

The confrontation between the two strategies – and two different ideologies – of the Islamist struggle is getting more violent. Many of the foreign volunteers who have flooded into Pakistan and Iraq since 2003 are Takfirists, who regard "bad Muslims" as the real enemy... Indigenous Islamic resistance groups have reacted uncomfortably to the growth of this near-heresy within al-Qaida which, by waging war against Muslim governments, has brought chaos to the populations it claims to defend.

Between 2003 and 2006, across the war zone that is the two Waziristans, Afghanistan and Iraq, the complexity of the situation reinforced al-Qaida’s doctrinaire thinking and reduced indigenous groups to silence. The consequence of Takfirist influence was the emergence in the two Waziristans of a self-styled Islamic state that challenged the writ of the Pakistan government within its own boundaries and fuelled the spread of armed conflict to major cities. The aim was to provoke armed insurrection against the pro-western military regime.

The fierce response of the Pakistani army... fuelled the anger of Takfirist ideologues. But many Taliban leaders privately felt that the Takfirists had lost touch with reality and were distorting the sharply focused anti-western strategy developed during the 1990s by Osama bin Laden. The war of national resistance against foreign occupying forces had been transformed into one aimed at Pakistan’s military establishment...

The Arabs who poured in to join the Afghan resistance fell into two camps, Yemeni and Egyptian. The zealots who went to Afghanistan, inspired by their local clerics, were mostly in the Yemeni camp. In breaks from fighting they spent their days drilling and cooking their food, before going straight to sleep after the isha (last prayer of the day). As the Afghan jihad tailed off, they went home or melted into the population in Afghanistan or Pakistan, where many married. In al-Qaida circles, they were called dravesh, easy-going.

In the Egyptian camp were the politically minded and ideologically motivated. Though most belonged to the Muslim Brotherhood (1), they opposed its commitment to elections and the democratic process. The Afghan jihad cohered these like-minded, often educated, individuals, many of them doctors and engineers or former soldiers associated with the Egyptian Islamic Jihad under Ayman al-Zawahiri, now Bin Laden’s deputy. This group had been responsible for the assassination of president Anwar Sadat in 1981 after he signed a peace deal with Israel at Camp David. All agreed that the US and its puppet governments in the Middle East were responsible for the decline of the Arab world...

"Most Yemeni fighters, simple minded warriors whose only ambition was martyrdom, left Afghanistan after the fall of the Communist government. The Egyptians stayed because they had other ambitions as yet unfulfilled. When Osama bin Laden joined them, after he left Sudan in 1996, they focused on shifting his basic thinking from opposition to American hegemony in the Middle East towards a Takfirist perspective.

Read the entire piece to see what you should be reading in the high street press. Recommended.

Battle lines have now been drawn between the establishment political parties, Musharraf (Pakistan Muslim League (Q) aka PML "Quaid-i-Azam group"), Bhutto/Zardari (Pakistan People's Party) and Nawaz Sharif (Pakistan Muslim League (N) aka PML "Nawaz group"), et al, and the ideologues of al Qaeda, notably an Egyptian cleric Sheikh Essa (alternately Issa, Is'sa) whose given name is Abu Amro Abdul Hakeem.

[An aside on Hakeem is valuable: Researching Hakeem, I found almost all incidences to be reentrant, i.e., they point to Shahzad's posts while not appearing in my standard terrorist/jihadist databases. Contacting Shahzad about the lack of data, he kindly advised that me that there were few citations available on Shiekh Essa. I find it remarkable that an Islamist so central would have such a small footprint in English. I put this as another example of the US failure to focus, at least in the unclass press, on the essential, i.e., while the administration and its senior figures focus attention on Iraq to justify the invasion there, they do nothing to flag the threats rising in Pakistan. (CIA/military assets were aware of Essa as they wounded him in a missile attack the day following Bhutto's assassination.)]

Prior to 2003, the entire al-Qaeda camp in the North Waziristan and South Waziristan tribal areas of Pakistan was convinced that its battle should be fought in Afghanistan against the foreign troops there, and not in Pakistan against its Muslim army.

That stance was changed by Sheikh Essa, who had taken up residence in the town of Mir Ali in North Waziristan, where his sermons raised armies of takfiris (those who consider all non-practicing Muslims to be infidels). He was convinced that unless Pakistan became the Taliban's (and al-Qaeda's) strategic depth, the war in Afghanistan could not be won.

In a matter of a few years, his ideology has taken hold and all perceived American allies in Pakistan have become prime targets. Local adherents of the takfiri ideology, like Sadiq Noor and Abdul Khaliq, have grown strong and spread the word in North Waziristan. Former members of jihadi outfits such as Jaish-i-Mohammed, Laskhar-i-Toiba and Lashkar-i-Jhangvi have gathered in North Waziristan and declared Sheikh Essa their ideologue.

This is the beginning of the new world of takfiriat, reborn in North Waziristan many decades after having first emerged in Egypt in the late 1960s. On the advice of Sheikh Essa, militants have tried several times to assassinate Musharraf, launched attacks on the Pakistani military, and then declared Bhutto a target.

Orchestrating the termination of "precious American assets" in Pakistan

Asia Times maintains consistent coverage of central, west, southeast and southwest Asian matters not seen in the US press. Readers will find many of Shahzad's pieces there:

"We terminated the most precious American asset which vowed to defeat mujahideen." These were the words of al-Qaeda’s top commander for Afghanistan operations and spokesperson Mustafa Abu al-Yazid, immediately after the attack that claimed the life of Pakistani politician Benazir Bhutto on Thursday (December 27)...

At the time of her death, Bhutto was vigorously campaigning around the country, following the November 20 announcement of general elections to be held on January 8. She had returned to Pakistan from exile in October, after a US-brokered deal with Musharraf gave her immunity from charges of corruption during her previous terms as prime minister. In return, her Pakistan People’s Party (PPP) supported Musharraf’s bid to be re-eleted as president...

"This is our first major victory against those [eg, Bhutto and President Pervez Musharraf] who have been siding with infidels [the West] in a fight against al-Qaeda and declared a war against mujahideen," Mustafa told Asia Times Online by telephone.

He said the death squad consisted of Punjabi associates of the underground anti-Shi’ite militant group Lashkar-i-Jhangvi, operating under al-Qaeda orders. The assassination of Bhutto was apparently only one of the goals of a large al-Qaeda plot, the existence of which was revealed earlier this month.

On December 6, a Pakistani intelligence agency tracked a cell phone conversation between a militant leader and a local cleric, in which a certain Maulana Asadullah Khalidi was named. The same day, Khalidi was arrested during a raid in Karachi. The arrest, in turn, led to the arrest of a very high-profile non-Pakistani militant leader, which, it is said, revealed an operation aimed at wiping out "precious American assets" in Pakistan, including Musharraf and Bhutto.

The operation is said to have involved hundreds of cells all over Pakistan to track targets and communicate with their command, which would then send out death squads.

We appear to continue to underestimate the organizational skill and reach of al-Qaeda, or if we do not, are unable to interdict it:

The group accused in Bhutto's killing, Lashkar-i-Jhangvi, was also among the alphabet soup of militant groups that were spawned by the Afghan war. One of the most vicious of these groups called itself Sipah-e-Sahaba and used religious justifications for jihad from an austere sect of Islam called Deobandi, similar to the ideology of the Taliban. Sipah-e-Sahaba and similar groups believe that one obligation of "true Muslims" is to kill so-called apostates like Shi'ites. In the early 1990s, these veterans from the Afghan wars, with no more war to fight, launched a bloody sectarian campaign against Pakistani Shi'ites. In 1996, amid these attacks, Lashkar-i-Jhangvi was formed by a disgruntled member of Sipah-e-Sahaba who named his group after the martyred founder of Sipah-e-Sahaba, Haq Nawaz Jhangvi...

The group has close ties to al-Qaeda. The leadership of Lashkar-i-Jhangvi [LiJ] fought alongside many high-ranking al-Qaeda and Taliban operatives against the Northern Alliance in Afghanistan before Sept. 11, 2001. U.S. intelligence agencies believe many in its ranks trained in al-Qaeda-run camps in Afghanistan during the late 1990s. When al-Qaeda retreated from Afghanistan in 2002, many of its fighters are believed to have joined forces with Lashkar-i-Jhangvi and Lashkar-i-Tayyba [LeT]... Since then, the groups have targeted pro-Western entities of Pakistani society. In March 2002, [LiJ] retaliated against the U.S. invasion of Afghanistan and the resulting fall of the Taliban by launching a grenade attack on the International Protestant Church in Islamabad... The group is responsible for dozens of attacks inside Pakistan over the past decade including sectarian killings of Shi'ites and Christians, a failed 1999 assassination attempt against then-Prime minister Nawaz Sharif, and involvement in the kidnapping and beheading of the Wall Street Journal correspondent Daniel Pearl...

Calibration is useful: Readers should note that Nawaz Sharif, now returned from exile and again running for government office, is not considered pro-US and is too Islamic in his leanings (the US put forth Bhutto over Sharif), but even he is fair game for the LiJ.

Hanging over all jihadist paramilitaries are their founding roots in the ISI and the army. It tries the imagination to believe that ISI-army elements do not maintain de facto or de jure contact:

[Frederic Grare states] "It is probable there are links between Lashkar-i-Jhangvi and al-Qaeda... but it is certain they do have links to the government... If the government itself says Lashkar-i-Jhangvi is involved, it is suicidal because it opens the door to speculation about their own role." Indeed, while Pakistani authorities have had a hand in encouraging groups like Lashkar-i-Jhangvi and Lashkar-i-Tayyba, Islamabad has done little to systematically dismantle these jihadist "armies" now that their original purposes fighting the Soviets and supporting the Taliban in Afghanistan or fighting the Indians in Kashmir are over. [Stephen Cohen notes] "They have nothing else to do... and they are causing mischief... It's like a cancer you've started elsewhere that comes back to eat you up."

Bhutto's assassination was said to 'highlight' the failure of two of Bush43's primary objectives for the region, a "quest to bring democracy to the Muslim world" and the "drive to force out the Islamist militants" from Pakistan. At this point, while I agree on the expulsion target, I see the governance objective as more contrived than genuine, i.e., democracy was conspicuously absent from the region until no WMD were found in Iraq. A soft underpinning not withstanding, I suppose that once the claim has been staked, however belatedly, that the administration can be marked for nonachievement.

Semiprecious assets

It was hard to take Benazir Bhutto's comments at face value that she was firm in her conviction that her children should not go into politics ("Politics in Pakistan is much too dangerous."), preferring her son to become a lawyer. Now the succession strategy said to 'reflect' her wishes has tipped her son, Bilawal Bhutto Zardari, to "lead the party when he finishes his studies at Oxford University" while her husband, Asif Ali Zardari, known as "Mr. 10 Percent" for graft gained from government contracts, acts as regent. (In Bhutto's second term as prime minister, Zardari's nickname was raised to "Mr. 40 Percent.") Only "intense" "pressure to keep the party's leadership in family hands" could promote the unlikeable Zardari (disliked equally by the PPT, the US and European states). It is hard to imagine a more appealing target for the Jihadists than Zardari. One should also not rule out an attack against Bilawal while he is in the UK.

India in the wings

A colleague whose skill in this area I trust remarked, "The unknown wild card yet to be played will be India. Will India move in to fill the vacuum created by a Paki breakdown?" My response was:

India will have no choice. I make it an issue of how and how often as opposed to if. China has been stepping up its military and commercial support to Pakistan. India will have to both secure its western borders as well as check Chinese flanking efforts. If [Pakistani] fissile packages go at risk, we can expect to see US, Indian and Israeli SpecOps assets, [who] alone and in various pairings [a cooperative effort already underway], attempt to secure them. That alone could precipitate interesting Paki reactions. [email]

As I have noted previously, a recovery hierarchy that commences with SpecOps units must ultimately terminate in the decision cycle to detonate fissile packages deemed unrecoverable and about to go rogue. Despite repeatedly revisiting this idea, I do not see how any of the three states in question can do anything to the contrary. Further complicating the matter is that Israel, India and the US may have different trigger points, a noforn release of such sensitive data to their putative partners who will have assets in-country, the targeting information may be highly transitory leading to a 'use it or lose it' state of mind and, once a decision is taken to inform one or more partners, a less than effective communications process may intercede.

The risk calculus for all parties is enormous; It is hard to remove regional nuclear war in SW Asia as an endgame. India is now the Great Imperialist of SW Asia. If someone has to attack Pakistan, I'd rather it be them than us.

Hazarding prediction

Western readers are not getting the point, a lapse that I put that down to the investigative failure on the part of the high street journalists that are supposed to serve them. Take away this central theme:

Democracy, autocracy, junta, or coalition are meaninglessly interchangeable to the takfiri. Each will be attacked with increasing vigor unless the takfiri are interdicted as their only acceptable form of government is a uniformly Sunni Muslim theocracy.

The horrific distraction and dilution of US diplomatic, military and reconstruction attention from Afghanistan to Iraq, having already robbed us of the ability to capitalize upon our early successes in Afghanistan, will now put Pakistan into play as well as Afghanistan.

Further, the defining error of the Bush43 administration will be Iraq which spawned the dropping of Afghanistan, a fragmentation of an extremely fragile Pakistan that may well be beyond our grasp to recover on our terms, put China and Russia into positions of strategic advantage vis-à-vis the US, vastly weakened global US military responsiveness (if nothing else for the replacement and refurbishment demands on the Iraqi Ops tempo), et al. In 1949, conservatives demanded to know, "Who lost China?," then proceeded to a witch-hunt at State in an effort to punish the innocent.

In the coming decades, there will be no surprise as to who lost so much. It will seen as a great sadness, but no defense, that those who acted in error did so with the most patriotic intentions.

Updated 3 Jan, 2008

Pakistan - Nuclear-Related Facilities
Center for Nonproliferation Studies

Pakistan - Special Weapons Facilities [maps at bottom of page]
Federation of American Scientists

MAPS:

Obituary Benazir Bhutto
From The Economist print edition
Jan 3rd 2008

We Are Ready to Die
Nicholas Schmidle
Virginia Quarterly Review
Jan 2, 2008

U.S. Isn’t Ready to Accept Pakistan’s Initial Findings
By ERIC SCHMITT
New York Times
January 2, 2008

Al-Qaeda aims at Pakistan's heart
By Syed Saleem Shahzad
Asia Times
Jan 1, 2008

'Loss of a very great lady'
By Harlan Ullman
Washington Times
January 1, 2008

Bhutto's Son, Husband Named to Lead Her Party
Opposition Parties Announce They Will Participate in Election; Date for Vote Still Uncertain
By Griff Witte
Washington Post
December 30, 2007; 11:58 AM

Shady reputation trails Bhutto's husband
By SADAQAT JAN
Associated Press
Sun Dec 30, 2:15 PM ET

Benazir Bhutto's husband 'Mr. 10 Percent' to head family dynasty in Pakistan
ASSOCIATED PRESS
December 30, 2007

Al-Qaeda claims Bhutto killing
By Syed Saleem Shahzad
Asia Times
Dec 29, 2007

Bhutto's Jihadist Enemies
By Brian Bennett
TIME
Friday, Dec. 28, 2007

Many Had the Desire, Means to Kill Bhutto
By Joby Warrick and Thomas E. Ricks
Washington Post
December 28, 2007

The Traditional Rebel
Benazir Bhutto Was a Woman Of Contradictions and Convictions
By Molly Moore
Washington Post
December 28, 2007

U.S. Brokered Bhutto's Return to Pakistan
White House Would Back Her as Prime Minister While Musharraf Held Presidency
By Robin Wright and Glenn Kessler
Washington Post
December 28, 2007

The Void Left Behind
By Ahmed Rashid
Washington Post
December 28, 2007

Bhutto Murder Fits Pattern of Lashkar I Jhangvi Terrorism, With Nasty Implications
By Jonathan Winer
Counterterrorism Blog
December 28, 2007 02:14 PM

The Nelson Report on Bhutto Assassination
Steve Clemons
Washington Note
Posted by steve at December 27, 2007 09:05 PM

Bhutto Attack Cuts Short an Epic Life
By MATTHEW PENNINGTON and JERRY SCHWARTZ
Associated Press
27 December 2007

Bhutto: Fatal bomb was rigged to baby
By Betsy Pisik
Washington Times
December 14, 2007

U.S. Hopes to Use Pakistani Tribes Against Al Qaeda
By ERIC SCHMITT, MARK MAZZETTI and CARLOTTA GALL
New York Times
November 19, 2007

Al-Qaida: the unwanted guests
As the arc of chaos grows from Afghanistan to Somalia by way of the Middle East, the region’s states are growing weaker and their armed groups gaining in power. But in this battle for competing visions between the US and al-Qaida, the Sunni resistance is now opposing al-Qaida in Iraq, as are the Taliban in Afghanistan.
By Syed Saleem Shahzad
Le Monde diplomatique
July 2007

Takfirism: a messianic ideology
By Syed Saleem Shahzad
Le Monde diplomatique
July 2007

Red-on-red in Waziristan
By Bill Roggio
The Long War Journal
March 21, 2007 3:12 AM

Return of the Taliban
Martin Smith; Ed: Jason Schmidt
Frontline
Airdate Oct 3, 2006

Waziristan accord signed
By Pazir Gul
Dawn
September 06, 2006 Wednesday Sha'aban 12, 1427

Al-Qaeda and Hezbollah look to make up
By Syed Saleem Shahzad
Asia Times
Aug 25, 2006

Lashkar-e-Jhangvi (LeJ)
Aliases: Army of Jhangvi, Lashkar I Jhangvi (LJ)
MIPT Terrorism Knowledge Base

IN THE SPOTLIGHT: Lashkar I Jhangvi
CDI
Mar. 3, 2003

Pakistan Sentences Bhutto To 5 Years for Corruption
By CELIA W. DUGGER
New York Times
April 16, 1999

Gordon Housworth



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Who is encircling whom?: China and the US

  #

Economic and military threads are warp and weft of the same cloth, yet too many continue to believe the fallacy that nations that trade together do not war with one another. The reality is that they trade so long as their national cost-benefit analysis tells them to continue doing so. Tipping points exist. The key is to recognize their immergence and be prepared to prosecute them. Short of that, business must address the uncertainties as their governments jostle for advantage.

It is no secret that the US and China have a multi-faceted relationship, one part of which is China's rise, the US, and lesser EU, effort to shape, even control, that rise, and China's countermeasures. At the moment, I rate China better at playing its hand than has the US. Worse, I feel that the broad US posture in both Washington and the UN has unnecessarily alienated potential allies while allowing China an easier path in its patient pursuit of Asian hegemony at a minimum and perhaps more. Following are some thoughts along that road.

Uncertain containment allies in the Pacific

It should not be a secret to readers that part of US efforts to contain China is the creation of marine defense network linking the US with Japan, Australia and India in order to deliver control of the Pacific and Indian Oceans into western hands.

The so-called "golden age" of US-Japanese relations under Prime Ministers Koizumi and Abe came to an end with the election of Yasuo Fukuda, a man definitely not "on the same ideological wavelength" as Bush43. The US had seen, and still hopes to see, Japan as a key component of its defense planning for a generation:

The key calculation for the Pentagon is whether Japanese military assistance will be available to the US should a crisis erupt with China, perhaps over Taiwan or some other cause... "To put it in stark terms, the question for us is whether Japan regards itself as an offshore island of China or of the US."... The official stressed that the US continues to view Japan as an "extremely reliable" ally with which highly sensitive defense cooperation [will] continue.

The resignation of Japanese Prime Minister Shinzo Abe came as a surprise to the US; the election of Yasuo Fukuda over the preferred Taro Aso came as an unpleasant smack:

"Japan is the crown jewel of [US] Asian defense posture. If Japan becomes less reliable, we will have to rethink our plans." Of special concern are US hopes for a defense network which includes the US, Japan, Australia and India. This idea has been the subject of regular exchanges between US officials and their foreign counterparts, most recently on September 9th..

Bush43 had promoted Japan as a new member of the UN Security Council based upon the expectation that Japan would expand its role in global security and assist the US should relations worsen with China:

"We are taking many measures to promote stable relations with China, but it would be irresponsible not to plan for a deterioration. Japan is a big part of this planning." The US concern is that Fukuda will rule out a role for Japan in an anti-China alliance. Should this happen, the US would, in the words of a Pentagon planner, "have to go back to square one for our Asian policy."

Worse, Japan could yet invite China in:

"A nightmare would be if Japan suggests that China joins the alliance. This would defeat its rationale." On the economic front, the US also has concerns that momentum toward reform is slowing [and that] recent requests on privatization and liberalization will meet resistance. The combined result of the potential setbacks on both the security and economic fronts is that US-Japan relations may become, in the description of a White House official, "problematic."

For its part, the Japanese postwar Jekyll & Hyde of diplomatic runt and economic workhorse is winding up. As part of the postwar Pacific realignment, it is interesting to contemplate a nuclear Japan that is not a "US Japan," that Sancho Panza will ride on his own:

The Six Party Talks are no longer an institutional mechanism to terminate the Cold War structure that persists on the Korean Peninsula. It has now metamorphosed into a detente approach predicated on continuous confrontation and coexistence with Pyongyang's die-hard dictatorship. The aim of this approach is to defuse politico-military tensions created by Pyongyang's confidence in the efficacy of the threat and use of nuclear weapons. Yet any transformation of the tensions is expected to occur only in the form of a series of concessions made by North Korea in response to large-scale international economic assistance given to it. Such economic assistance would be provided synchronous with the creation of a post-Korean War peace regime and the eventual formation of a regional multilateral security framework in Northeast Asia. This means the resolution of the North Korean nuclear and abduction issues will have to wait until Korean unification takes place.

Japan is practically the only country capable of providing such a massive amount of aid. However, Pyongyang's impending nuclear threats and indisputable offenses against sovereignty in the form of repeated abductions of Japanese nationals have convinced the Japanese government not to provide aid until Pyongyang has achieved complete denuclearization, scraped its ballistic missiles, and settled the abduction issue. Since this government policy is rooted in a solid national consensus, Tokyo has little room for making compromises, at least in principle.

Furthermore, the Japanese public is now fully aware that Washington has ceased to speak of complete denuclearization (CVID), the HEU programs and, most crucially, the dozen or more rudimentary nuclear warheads that North Korea is believed to possess. It will not take long before the Japanese public realizes that Washington is extending a de facto, if not de jure, recognition of Pyongyang's nuclear power status.

Consequentially, Washington's detente approach will sooner or later cause a backlash in Japanese public opinion, which will force the Japanese government to rethink its strategic calculations and alliance policy. Now that the opposition Democratic Party of Japan has seized control of the upper house of the Diet, Washington can no longer take Japan's followership in diplomacy for granted. Tokyo has become increasingly less pliable to US security interests...

For China's part, Beijing is doing what it can to unwind the last decade's effort of a US China containment policy. One wonders when Japan hits a tipping point, as much by demographics as defense, in its ability to deter the Chinese.

US relations with India are "awkward":

Of greatest concern to the [US] are indications that there is growing Indian hostility to Washington’s hope of turning India into a "new Japan in South Asia", that is, an ally wholly aligned with US interests. US officials had noted with satisfaction the signing in late 2006 of an India-Japan Global and Strategic Partnership but now see it losing momentum. They are confident that relations with New Delhi will get back on track but concede that opportunities have been missed.

The US had hoped to create a trilateral defense relationship with India and Japan as the US felt that that regional multilaterals such at the ASEAN Regional Forum (ARF) deferred to China. (I would were I them.) The US wants "India to see itself as a maritime power" allied with the US/EU rather than a continental power allied with Russia and China.

The strong US-Australian rapproachment ended or was at least curbed with the victory of Prime Minister Kevin Rudd over the hawkish John Howard. Given Rudd's "strong Chinese connections," observers expect Australia to break away from a foreign policy supportive to the US and specifically move to further accommodation with China.

Elections reverse governments, at least in the West, and so regional policy may swing more towards US interests. My point is that the long tail of postwar certainty in US assumptions is waning while I see that of China increasing. Too much of the difference is a US self-inflicted wound.

China strategy patiently executed

My 2004 short trio summarize the approach that China continues to pursue with consummate skill:

'Peaceful Rise' overcoming 'China Threat' opens:

China's regional and global diplomatic initiative, "peaceful rise" or heping jueqi, literally "emerging precipitously in a peaceful way," is a masterful endeavor to extricate itself from the collar of "China threat" imposed by the US. Heping jueqi shows a level of nuance, patience, and simultaneous flooding of regional and global diplomatic channels with a level of personal diplomacy at which the US can only marvel, if indeed, it has recognized.

Heping jueqi is marked by:

  • Diplomatic drive for regional acceptance of PRC's expanding sphere of influence
  • Enshrining China as Asia's predominant economic force
  • Leveraging economic cooperation into political influence over Southeast Asia
  • Offsetting and eventually diminishing US influence
  • Regional and international acceptance of China as the Asian superpower with hegemony over the region

China's controlled 2004 deployment of police/peacekeepers to Haiti marked its end of diplomatic non-intervention. See China reverses a half-century on diplomatic non-intervention as it becomes a model UN citizen.

Hegemons come and go: a renewing Chinese hegemon eyes a mature US hegemon, also 2004, drew on "Chinese open source literature paint an intriguing view of the Sino American relationship":

  • The US is a hegemonic power that is "a major obstacle and competitor for influence in Asia"
  • The US is a superpower in decline, losing global economic, political, and military influence
  • China aspires to be a "major international power and the dominant power in Asia. To that end, China is actively pursuing a multipolar world where it could align with other rising powers such as Russia, Japan, and Europe in order to check or challenge U.S. power"
  • China can counter US power by its pursuit of a multipolar world "where it could align with other rising powers such as Russia, Japan, and Europe"
  • Maintain stable and good relations with the US as it is "an important market for Chinese goods and an important source of science and technology, financial capital, and foreign direct investment--all central components of Chinas rising status and strength"
  • "Although technologically superior in almost every area of military power, [the US] can be defeated, most particularly, in a fight over Taiwan in which China controls the timing"
  • Al Qaeda's 11 September attack changed only Chinas approach to the US but not the fundamentals of its vision

Beijing has continued to pursue this plan with great success, in which success is defined as many incremental steps that do not draw undue backlash on either economic, diplomatic or military fronts. China needs economic growth to stave off domestic unrest, but that restraint has limits.

In July 2006 the Chinese ambassador to the UN, Wang Guangya, uncharacteristically lost his temper of the Security Council's attempt to word a rebuff of Israel's bombing of a UN Observer mission that killed four, one of whom was Chinese:

Without naming any countries... Wang lashed out at "a tyranny of the minority in the council" and vowed that there would be "implications for future discussions" on other subjects. Once the meeting ended, Wang [complained] that the presidential statement had been "watered down," observing in several different formulations that "we have to take into account the concerns of other countries" and predicting that the "frustration" his country felt "will affect working relations somewhat."...

In an earlier era, when the People’s Republic of China tended to conduct diplomacy by tantrum [but] China cares too much about the international order for such revolutionary shenanigans... China now aspires to play an active role on the global stage... The bad news is that China’s view of "the international order" is very different from that of the United States, or of the West, and has led it to frustrate much of the agenda that makes the U.N. worth caring about...

"First world" mentality in a "third world" body

China plainly wishes to join the international community on its own terms. The People’s Republic is a singular entity, a world-class power almost wholly preoccupied with harnessing its internal energies and preventing domestic conflict. Unlike Russia, for example, China has little wish to use the power at its disposal, save to establish a harmonious environment for its "peaceful rise."... China thus cares a very great deal about matters of little concern in the West "territorial integrity," [and] very little about the burning issues in [the US, UK and France. China supports the view of the now expanded "G77 plus China" that the UN] should pay more attention to economic and social issues and less to matters of peace and security...

China’s economy has made it a global force, and the accompanying need for resources has pushed it to forge new ties throughout Asia, Africa and Latin America. The old revolutionary ardor is gone, and China surveys the world with increasing pragmatism and confidence. China is now a status quo power "an exporter of good will and consumer durables instead of revolution and weapons."... Unlike the United States and the West generally, China views the current global situation as fundamentally benign and malleable a setting conducive to diplomacy...

The impact of that economy on US security can be seen in many areas; here are three:

Returning to the diplomatic front:

China has chosen to enmesh itself in global bodies like the World Trade Organization, regional groupings like the six-member, security-oriented Shanghai Cooperation Organization and a vast range of bilateral partnerships. China has begun routinely signing arms-control agreements and antiterrorism conventions. And it has begun playing a more active role at the U.N., contributing troops almost all of whom provide medical or engineering services rather than front-line patrolling as well as policemen to U.N. peacekeeping operations...

China has become so influential a country, such an object of imitation, respect and fear, that you can no longer talk about an "international community" that does not include it. The West has a profound interest in China’s development as a global power and its acceptance, however gradual and grudging, of the rules by which the West has defined global citizenship...

The great issue that divides the U.N. is no longer Communism versus capitalism, as it once was; it is sovereignty [which flies in the face of those who deride the UN for failing to] defend individuals against an abusive state... But this failing is a Western preoccupation: most developing nations, with their history of colonial rule [object] to all such inroads on sovereign rights. [In China] sovereignty has long been a fighting word...

China and the United States are the twin bêtes noires of the U.N.: the U.S. insists on enlisting the organization in its crusades, while China refuses to let any crusade get in the way of national interest. Washington is all blustering moralism; Beijing, all circumspect mercantilism... It’s a truism that the Security Council can function only insofar as the United States lets it. The adage may soon be applied to China as well...

"We don’t want to make anyone feel uncomfortable."

With some accuracy, I fear, certainly in recent years, UN ambassador Wang told his interviewer (Traub) that "blunderbuss diplomacy is the American way "because America is a superpower, so America has a big say." China would appear to have a big say of its own, but that’s not Wang’s view." Wang virtually encapsulated the paragraphs above by saying, "The Americans have muscle and exercise this muscle [whereas] China has no muscle and has no intention of exercising this muscle."

With continuing understatement and self-effacement, Wang clarified the remark with the CCP's need to protect China's peaceful rise and to "reassure all who fear its growing clout. "We don’t want to make anyone feel uncomfortable."" China is well on its delicate, thoughtful path of replacing the US as the Bretton Woods' model world citizen and in the end taking the UN away from the US.

Without correction by the US, that may well happen:

Japan's Evolving Relations with China
by Yoshio Okawara
Association of Japanese Institutes of Strategic Studies
AJISS-Commentary No. 19
14 December 2007
PDF

Australia and Japan: Both Moving in Beijing’s Direction?
Swoop
Published on: December 8th 2007 14:24:55

East China Sea Dispute: Learn from the Australians and East Timorese
By Yasuhiro Goto
Association of Japanese Institutes of Strategic Studies
AJISS-Commentary No. 17
7 December 2007

America, Don't Count on Our Followership
by Masahiro Matsumura
Online Publisher: Yukio Satoh
President of The Japan Institute of International Affairs
The Association of Japanese Institutes of Strategic Studies
4 December 2007
AJISS-Commentary No. 16
PDF

Japan: End of the Golden Age
Swoop
Published on: December 1st 2007 13:34:13

India: Stable but Awkward Relations
Swoop
Published on: November 17th 2007 17:34:22

Japan: US Trying Not to Worry
Swoop
Published on: November 10th 2007 12:20:05

Japan: US Insists on Reform, Japan Temporizes
Swoop
Published on: November 3rd 2007 16:02:08

India: Problems on the Nuclear Question
Swoop
Published on: October 20th 2007 14:36:44

Japan: Complications on Defense
Swoop
Published on: October 20th 2007 14:36:57

Russia: New Puzzles, Same Answers
Swoop
Published on: October 13th 2007 16:45:55

Strengthening Security Cooperation with Australia: A New Security Means for Japan
By Yoshinobu Yamamoto
Association of Japanese Institutes of Strategic Studies
AJISS-Commentary No. 13
9 October 2007

Japan: Back to the Drawing Board?
Swoop
Published on: September 22nd 2007 08:57:12

Is Washington Losing East Asia?
The Drawbacks of Linking Trade and Security in America’s Foreign Policy
Heribert Dieter, Richard Higgott
Paper prepared for the CSGR/GARNET Conference on Pathways to legitimacy? The Future of Global and regional Governance
University of Warwick, 17 to 19 September 2007

Japan and India: A Joint Defense Destiny?
Swoop
Published on: June 2nd 2007 00:09:54

The World According to China
By JAMES TRAUB
New York Times
September 3, 2006

Bretton Woods Institutions
Ngaire Woods
Oxford Handbook of the United Nations
Ed. by Thomas Weiss and Dam Daws
OUP, 2006

China Engages Asia: Reshaping the Regional Order
David L. Shambaugh
International Security - Volume 29, Number 3, Winter 2004/2005, pp. 64-99

Bretton Woods and the UN system - relationship of the International Monetary Fund and the World Bank to the UN
by Hans W. Singer
Ecumenical Review
July, 1995

Bretton Woods Conference Collection: Photographs
IMF Archives: funding Aids
Date(s): [1940-?]-1944, [May 14, 1956?]

Gordon Housworth



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The triple canopy of infection, birds over cats over pigs cascading feces, urine and DNA, returns

  #

I've appropriated the tropical term triple canopy forest (also here) to describe the triple canopy of infection prevalent in China and Asia, birds over cats over pigs cascading feces, urine and DNA to a new 'forest floor' on traditional wet markets (photo, video) where recombination can work wonders in proximity to man. Similar cage stacking of wild and domesticated animals was widely seen in the SARS epidemic:

SARS, or severe acute respiratory syndrome, first appeared in China in 2002. It spread widely in early 2003 to infect at least 8,098 people in 26 countries, according to the World Health Organization. The disease died out later in 2003, and no cases have been reported since.

A refresher on SARS, including its timeline:

Wet markets run the gammet in quality, cleanliness and oversight:

For some customers, it is important to see the animal live before being sold. Specifically, they may want to check for health condition and quality. This is generally not an option in supermarkets, except in lobster or fish booths. Most wet markets have facilities for allowing a customer to choose a live animal, then either take it home as is or watch it expertly killed and "cleaned" - gutted, etc. - before their very eyes. Some big-box stores, such as Walmart, provide these facilities in their Far Eastern stores, but not in their U.S. stores...

If sanitation standards are not maintained, wet markets can easily spread disease and viruses. Because of the openness, newly introduced animals may come in direct contact with sales clerks, butchers and customers. Insects such as flies have relatively easy access to the food products.

I admit to a fondness for wet markets, having spent much time in them and eaten their street food. Unfortunately I have seen some that are nothing short of an unregulated, unsupervised viral Petri dish, and from those I move along.

As the attention to SARS, even avian flu, has ebbed in China as its economy accelerates, old habits that foster new outbreaks reassert themselves.

"You can eat anything with four legs except the dinner table"

While major cities have upwardly mobile populations concerned about food safety and able to seek out branded items, the balance of the country depends on "traditional wet markets... for the bulk of fresh food sales."

"The concept of buying food once a week and putting it in your fridge doesn't really exist in China yet. It's produced today, bought today, and eaten later today"... And dangerous tastes persist under the radar...

An outbreak of the SARS virus in 2002 resulted in a local gourmet favorite -- the civet -- being banished to the black market. The raccoon-like animal was blamed for spreading SARS, which infected 8,000 people globally and killed 800. But exotic wildlife and squalor have returned to the Qingping market [in Guangzhou], making health officials worried that another killer virus could emerge...

"We face similar threats from other viruses and such epidemics can happen because we continue to have very crowded markets in China... Even though official measures are in place, they are not faithfully followed. We are not talking about just civet cats, but all animals."

"Civet cats are forbidden, and sanitation is an important issue. Most live animals are sold on the city's outskirts. You can see it's more of a normal market now."

While Qingping is dotted with posters such as "Everyone should honor the policy of paying attention to product safety," the reality is far different:

In a dark shop near the new medicine mall, feces and urine drip like goo through stacked cages of squawking chickens and meowing cats... Although Guangdong authorities culled thousands of civets in January 2004, investigators recently found the animals, as well as badgers and pangolins, on the black market and in Guangdong's "wild flavor" restaurants, where diners hope exotic meats will bring good fortune... Among Qingping's cats and chickens were tiger paws, turtles, insects of myriad varieties, and bundled strips of shredded toads -- some food, others medicine.

It was two years after SARS was brought under control, that investigators determined that the Chinese horseshoe bat was the "healthy carrier" and host repository for SARS, and not civets:

SARS now appears to join a number of other infectious agents that bats can transmit. Over the last decade, bats have been found as the source of two newly discovered human infections caused by the Nipah and Hendra viruses that can produce encephalitis and respiratory disease. In the SARS outbreak, attention focused on the role of Himalayan palm civets in transmitting it after scientists identified the virus in this species and in a raccoon dog sold in markets in Guangdong. But W.H.O. officials and scientists elsewhere cautioned that these species were most likely only intermediaries in the transmission, largely because no widespread infection could be found in wild or farmed civets...

"The SARS outbreak was a strong reminder that new viruses can emerge, and whether new or old, pathogens can cause not only significant disease and death, but they can also have a global socioeconomic impact," said Brenda Hogue, [who] has been involved in a big push to uncover some of the key clues behind coronavirus illness.

When SARS emerged, no one could have predicted that a new coronavirus, usually the culprit of nothing more than a common cold in humans, could become so harmful and spread so quickly through health systems from China to Canada.

The stakes are high. One only has to reflect on possible Avian flu variants:

And for the open secret of cutting corners in China, which make for difficulties in many areas beyond wet markets:

Wet Market Renovation
(that's Guangzhou)
Updated: 2004-03-11 15:36
China Daily
December 12, 2007

China Market May Be Breeding Ground For Deadly Viruses
By Joseph Chaney
REUTERS
Dec 10, 2007 10:42am EST

wet market
The Shanghai Show
Posted on Thursday, September 27th, 2007 at 9:33 am

Penang's Gem of a Wet Market
Eating Asia
September 11, 2007

SARS: Getting To The Core Of An Emergent Public Health Threat
Source: Arizona State University
Science Daily
May 16, 2007

What the heck is a wet market?
Posted by The Culinary Chase at 8/25/2006
The Culinary Chase
Friday, August 25, 2006

Chinese avoid wild animals
AP/Gulf News
Published: 04/19/2006 12:00 AM (UAE)

2 Teams Identify Chinese Bat as SARS Virus Hiding Place
By LAWRENCE K. ALTMAN
New York Times
September 30, 2005

The Wet Market
By usabaker
Philippines Through My Eyes
Thursday, August 11, 2005

Klang Valley Streets: Marketing the wet market
By : ZANNA ES
NST Online
2007/12/04

Timeline: Sars virus
BBC News
Last Updated: Wednesday, 7 July, 2004, 15:30 GMT 16:30 UK

W.H.O. Urges China to Use Caution While Killing Civet Cats
By JIM YARDLEY
New York Times
January 6, 2004

Inter-species transmission of SARS being investigated
By Joy Su
TaipeiTimes
Oct 30, 2003

China Lags in Sharing SARS Clues, Officials Say
By LAWRENCE K. ALTMAN
New York Times
August 2, 2003

Gordon Housworth



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Protecting mobile information in your possession and transiting to/from you

  #

Most encryption approaches have failed due to the delta between the security level that a firm's management seeks to instill and the overhead that their employees are willing to endure. As a PGP user since rev 3 (DOS-based), I can sympathize, but once PGP migrated to Windows and Outlook allowed a toolbar add-in, it has become almost easy.

Many now see the issue as protecting mobile machines and their still shrinking, easily mislaid or stolen flash drives. I submit that users must also protect materials transiting to and from them while they are deployed.

Transparent whole data volume encryption

I recommend Schneier's short item on protecting data on a PC, laptop or otherwise, and associated mass storage items such as jump sticks. Not only is Schneier's approach practical and easy to employ, it is now essential, given the number of mobile computers in use and the rising number of opportunistic and premeditated predators, for virtually any firm:

PGP Whole Disk Encryption locks down the entire contents of a laptop, desktop, external drive, or USB flash drive, including boot sectors, system, and swap files. The encryption is transparent to the user, automatically protecting data.

There are added features such as preboot authentication, anti-key logging and one-time use emergency passphrase. A removed disk cannot be booted when inserted into another computer, nor is there any modification to Windows.

Schneier recommends a two-tier encryption strategy:

Encrypt anything you don't need access to regularly -- archived documents, old e-mail, whatever -- separately, with a different password. I like to use PGP Disk's encrypted zip files, because it also makes secure backup easier (and lets you secure those files before you burn them on a DVD and mail them across the country), but you can also use the program's virtual-encrypted-disk feature to create a separately encrypted volume.

Use multiple tiered passphrases

I go beyond Schneier's two tier strategy to use a tiered set of passphrases, one for PGP transmissions, another for full disk encryption and a third or more for reference volumes so that one passphrase does not reveal all.

Know how to turn off your laptop fast

Know how to quickly turn off your laptop and, if you have to hold down a key or key combination to do it, how long it takes. You may not wish to endure bodily harm before surrendering a laptop, such as in a coffee shop theft, but holding onto it long enough to power it down will not leave the PC on and any volumes in use vulnerable to attack.

Minimize data stores on any mobile device, PC or jump drive

Take note of Schneier's comment to not have excess data on the disks to begin with, i.e., why have to encrypt or risk legal or physical demands to decrypt data:

minimize the amount of data on your laptop. Do you really need 10 years of old e-mails? Does everyone in the company really need to carry around the entire customer database? One of the most incredible things about the Revenue & Customs story is that a low-level government employee mailed a copy of the entire national child database to the National Audit Office in London. Did he have to? Doubtful. The best defense against data loss is to not have the data in the first place.

Use 'transit addresses' wherever you are reasonably at risk

I realize that data scrubbing will be considered too great a trouble for most, and certainly those whose laptop has long become their roving desktop machine, but here is one essential process that I urge, especially for those bound to locals where in-transmission capture is possible/probable: use a 'transit address' when you are travelling that only receives a filtered subset of one's normal traffic.

While enroute to, or within, certain countries, by prearrangement with home office, I only look at the transit address traffic and even that transit traffic may be encrypted. (I also reset my email passphrase.) All mail continues to go to my usual address but then pertinent items are flagged and forwarded (often with abstraction) to the transit address, i.e., if you don't send it, they have more difficulty in intercepting it. I alert colleagues that I am deployed for a time window and am only looking at transit traffic.

You cannot imagine the traffic that flows to and from senior executives and senior technical personnel; they effectively make no differentiation between home office and fragile in-transit and deployed locations where key-logging and other government mandated monitoring efforts are in effect. I say again, you can imagine the volume of traffic laid open to collection. Just capturing email addresses of traffic to and from the target lays a trusted group open to targeted phising attacks. See Malicious marketplace uniting espionage, criminal groups, crackers, terrorism, vulnerable systems, commercial and government targets.

Don't do dumb things

Even the best encryption systems will not protect you if Homo Boobus takes over the keyboard, doing things such as leading your cyphertext with the cleartext title from the subject line, using key words from the text in the subject line, or pasting the encrypted cyphertext above or below the cleartext. I have gotten too many of those from amateurs.

Never, ever send or receive faxes. If it is worth sending, encrypt it and send via email.

But do carry any keys on separate media on your person 24/7, carry the laptop with you 24/7 to prevent physical attack with a Linux boot disk, frequently send random encrypted blocks of text to blunt traffic analysis, etc. People's eyes usually glaze when they hear this but intel collectors and criminals depend upon that resistance.

Putting it all together

One client's staff followed the rules such that we had emcon (emission control) to the point that our Asian hosts grew increasingly frustrated in negotiations. (Our presumption was that our host was not getting the expected level of background information needed to design their response to the client.) Turning the tables a bit, well past the halfway point in the visit I had the client announce that we were going to take the last day off for a special sightseeing tour. Now it was our hosts who had to work under compressed timelines.

Plausibly deniable encryption

For the few that must endure the likelihood of coercive interrogation that would force the prisoner to disclose any and all passphrases, there is plausibly deniable cryptography that clouds the very existence of encrypted volumes:

Encrypted filesystems fail against the Rubberhose Attack [because] traditional encrypted filesystems leak information. While the Bad Guy doesn’t know what the encrypted data is, he is able to see that there -is- encrypted data. Thus, he can beat our spy until all encrypted data has been decrypted.

Most processes by which one hides a data volume so that an inquiring police or immigration officer sees nothing to demand access thereto is usually not for the technical faint of heart. The system that I used, Rubberhose, is no longer supported and its creator is not the speediest in responding. The level of effort is higher on the install side but if you are likely to face coercive interrogation, it has its merits:

Deniable cryptography allows a captive or defendant that does not wish to disclose the plaintext corresponding to their cyphertext to be able to that there is more than one interpretation of the encrypted data, i.e., an investigator will likely know that encrypted material exists on the drive, but will not know how much as so there is an opportunity to keep the existence of the most essential data hidden. Designed by Julian Assange, co-author of The Underground, Rubberhose is named after the decryption tactic it attempts to defeat: Rubberhose Cryptanalysis, in which suspects are exposed to repeated beatings or torture until their password is surrendered.

The best product extant in this area appears to be TrueCrypt but if this cloaked approach is necessary, your systems specialists should evaluate its ability to withstand the expected level of forensic analysis for the hostile states through which you expect to travel.

For most commercial environments, disk and associated data volume encryption, a fast off-switch, transit address usage and excising unnecessary data from the mobile unit will stand you in good stead.

How Does Bruce Schneier Protect His Laptop Data? With His Fists — and PGP
Bruce Schneier
Wired
11.29.07 | 12:00 AM
Mirrored as:
How to Secure Your Computer, Disks, and Portable Drives
Bruce Schneier
Schneier on Security
December 04, 2007

Deniable File System
Bruce Schneier
Schneier on Security
April 18, 2006

Defending against Rubberhose Attacks
Christopher Soghoian
JHU Systems Seminiar
March 9 2004

Gordon Housworth



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Confluence of thinking on Chinese outsourcing and supply chain risks from DSB and USCC

  #

Rather than selling US securities, consider China restricting microchip supplies to the west at a critical junction (which would hit Taiwan, the current global producer of electronic componentry). This is no more implausible than Russia restricting energy flows to the Ukraine which despite the repercussions remains a viable distress option. (Think of combining securities with chips.)

Consider a foreign nation-state or its proxy embedding malicious code somewhere in a software developer's global outsourcing tier. (If bugs get in, certainly purpose-crafted malicious code can get in.) The state actor can be camouflaged by the nationality and location of its proxy.

Think of the implications of the Defense Department "inadvertently outsourcing the manufacturing of key weapons and military equipment to factories in China."

These are but three implications of the confluence of thinking from the Defense Science Board (DSB) and the U.S.-China Economic and Security Review Commission (USCC). With its transient task forces drawn from a wide range of industry and commerce, the DSB is as contemplative and low-key as the bipartisan congressional USCC can be public and hawkish.

U.S.-China Economic and Security Review Commission (USCC)

As I consider the DoD to be a harbinger of threats to private industry, I find the concerns of DSB and USCC to have industry-wide significance in both the US and the EU. All the better that this fifth USCC report has shed its historic "harsh rhetoric" in favor of "more objective and supported cooperative efforts" that secured the "unanimous support" of its twelve Democratic and Republican commissioners; Its output defined realistic risks and offered useful responses, starting with industrial consolidation that amounts to a new autarky on the part of the Chinese:

China's consolidation of its state-owned enterprises (SOEs) is guided by a new policy announced in December 2006. The State-Owned Assets Supervision and Administration Commission (SASAC) and China's State Council identified seven strategic industries in which the state must maintain "absolute control through state-owned enterprises," and five heavyweight industries in which the state will remain heavily involved. The strategic industries are armaments, power generation and distribution, oil and petrochemicals, telecommunications, coal, civil aviation, and shipping. The heavyweights are machinery; automobiles; information technology; construction; and iron, steel, and non-ferrous metals. It is estimated that forty to fifty of SASAC's 155 central SOEs fall in the strategic category and account for 75 percent of SASAC's total assets...

The Commission is disappointed that Beijing's efforts to move in the direction of a market economy appear to be slackening. In particular, the government's decision to retain state ownership or control of a large block of the economy is disappointing. In accord with its 11th Five-Year Plan, China has designated a dozen industries, including telecommunications, civil aviation, and information technology, as "heavyweight" or "pillar" industries over which it intends for government to retain control. In addition, 155 of China's largest corporations remain state-owned, including nearly all the nation's largest banks. Much of the economy remains under the Chinese government's strict control. Beijing's provision of subsidies to its pillar industries may damage competitors in other countries - including the United States where companies do not receive such subsidies...

It is precisely these "pillar" and "heavyweight" industries that China will protect to the point of excluding foreign firms. I offered this guidance in an October 2007 advisory but its theme could have been plucked from far earlier work:

China has repeatedly used standards and administrative edicts to hold competitors at bay until Chinese products were in the market, often at established levels that minimized success of any foreign competitor. One that comes to mind is the 'technical issues' barring Blackberries for well over a year until Chinese products were in the market. China has a not so thinly veiled plan to harvest foreign tech, producing indigenous standards which bar foreign standards BUT let Chinese standards compliant products work overseas, i.e., the PRC wants to completely invert all royalty payments while achieving the price volume curves of a global product... I am not the only one to have [observed] that this standards practice is a strategic weapon.

In private - as in group dinner conversations - senior Chinese individuals have specifically stated that US/EU automotive OEMs will be driven out by use of standards, tariffs and administrative rulings. [Personal email advisory]

The USCC is specific with regards to Chinese predation on US Intellectual Property (IP):

[China] enlists engineers and scientists to obtain valuable information from foreign sources ''by whatever means possible - including theft.''

Additionally, industrial espionage provides Chinese companies an added source of new technology without the necessity of investing time or money to perform research. Chinese espionage in the United States, which now comprises the single greatest threat to U.S. technology, is straining the U.S. counterintelligence establishment.

China still is not enforcing its own laws against intellectual property theft.

Of the USCC Commission's 42 recommendations to Congress, ten were seen to be "of particular significance." Of those ten, numbers 2, 3 and 7 are specific to supply chain and IP risk and affect all industrial segments, commercial and defense:

  • Determining the country of origin of U.S. weapon systems components: The Commission recommends that Congress require the Department of Defense to prepare a complete list of the country of origin of each component in every U.S. weapon system to the bottom tier.
  • Ensuring adequate support for U.S. export control enforcement and counterintelligence efforts: In order to slow or stop the outflow of protected U.S. technologies and manufacturing expertise to China, the Commission recommends that Congress assess the adequacy of and, if needed, provide additional funding for U.S. export control enforcement and counterintelligence efforts, specifically those tasked with detecting and preventing illicit technology transfers to China and Chinese state-sponsored industrial espionage operations.
  • Assessing potential Chinese military applications of R&D conducted in China by U.S. companies: The Commission recommends that Congress direct the U.S. Department of Defense to evaluate, and, in its Annual Report to Congress on the Military Power of the People's Republic of China, to report on, potential Chinese military applications of R&D conducted in China by U.S. companies.

The specifics are laid out in the Commission's comprehensive recommendations:

The Impact of Trade with China on the U.S. Defense Industrial Base
8. The Commission recommends that Congress require the Department of Defense to prepare a complete list of the country origin of each component in every U.S. weapon system to the bottom tier...

China's Military Modernization
12. In order to slow or stop the outflow of protected U.S. technologies and manufacturing expertise to China, the Commission recommends that Congress assess the adequacy of and, if needed, provide additional funding for U.S. export control enforcement and counterintelligence efforts, specifically those tasked with detecting and preventing illicit technology transfers to China and Chinese state-sponsored industrial espionage operations...

China's Science and Technology Activities and Accomplishments
20. The Commission recommends that Congress direct the U.S. Department of Commerce to report periodically on the general R&D expenditures of U.S. companies in China, based on protected business proprietary data the Department currently collects.
21. The Commission recommends that Congress direct the U.S. Department of Defense to evaluate, and, in its Annual Report to Congress on the Military Power of the People's Republic of China, to report on, potential Chinese military applications of R&D conducted in China by U.S. companies...

Defense Science Board (DSB)

It would appear that the USCC's 2007 report has been informed by work by the DSB in the 2005-2007 period, notably in the areas of firmware/microelectronics and software outsourcing and tiered manufacturing, encompassing both the buy side and the make side).

By 2005 DSB noted that the US defense side was disturbed by offshoring or "alienation" of critical supply chains, notably for microelectronics:

Pressure on U.S. IC suppliers for high return on invested capital has compelled them to outsource capital intensive manufacturing operations. Thus, the past decade has seen an accelerating trend toward vertical disaggregation in the semiconductor business. Companies whose manufacturing operations once encompassed the full range of integrated circuit activities from product definition to design and process development, to mask-making and chip fabrication, to assembly and final test and customer support, even materials and production equipment, are contracting out nearly all these essential activities...

One unintended result of this otherwise sound industry change is the relocation of critical microelectronics manufacturing capabilities from the United States to countries with lower cost capital and operating environments. Trustworthiness and supply assurance for components used in critical military and infrastructure applications are casualties of this migration. Further, while not the focus of this study per se, the U.S. national technological leadership may be increasingly challenged by these changing industry dynamics; this poses long term national economic security concerns.

[For] DOD's strategy of information superiority to remain viable, the Department requires:

    • Trusted and assured supplies of integrated circuit (IC) components.
    • A continued stream of exponential improvements in the processing capacity of microchips and new approaches to extracting military value from information.

Trustworthiness of custom and commercial systems that support military operations - and the advances in microchip technology underlying our information superiority - however has been jeopardized. Trustworthiness includes confidence that classified or mission critical information contained in chip designs is not compromised, reliability is not degraded or untended design elements inserted in chips as a result of design or fabrication in conditions open to adversary agents. Trust cannot be added to integrated circuits after fabrication; electrical testing and reverse engineering cannot be relied upon to detect undesired alterations in military integrated circuits. [Emphasis in original]

The opportunities for adversarial intervention are great:

Finding: Because of the U.S. military dependence on advanced technologies whose fabrication is progressively more offshore, opportunities for adversaries to clandestinely manipulate technology used in U.S. critical microelectronics applications are enormous and increasing. In general, a sophisticated, clandestine services develop opportunities to gain close access to a target technology throughout its lifetime, not just at inception.

If real and potential adversaries' ability to subvert U.S. microelectronics components is not reversed or technically mitigated, our adversaries will gain enormous asymmetric advantages that could possibly put U.S. force projection at risk. In the end, the U.S. strategy must be one of risk management, not risk avoidance. Even if risk avoidance were possible, it would be prohibitively costly.

By 2007 DSB observed that the US defense side had focused on microelectronics' mating factor, software design, in its concern of "alienation" of critical supply chains, but with a difference. Software and firmware are not parallel "because the microchip fabrication business requires increasingly large capital formation - a considerable barrier to entry by a lesser nation-state. Software development and production, by contrast, has a low investment threshold. It requires only talented people, who increasingly are found outside the United States." (ICG has had a sustaining interest in the supply chain risks and diversion of embedded software within weapons systems. See my 2005, Israel as serial violator, temporarily the chicken killed to scare the monkeys.):

The task force on microchip supply identified two areas of risk in the off-shoring of fabrication facilities - that the U.S. could be denied access to the supply of chips and that there could be malicious modifications in these chips. Because software is so easily reproduced, the former risk is small. The latter risk of "malware," however, is serious. It is this risk that is discussed at length in this report.

Software that the Defense Department acquires has been loosely categorized as:

  • Commodity products - referred to as "commercial-off-the-shelf" (COTS) software;
  • General software developed by or for the U.S. Government - referred to as "Government-off-the-shelf" (GOTS) software; and
  • Custom software - generally created for unique defense applications.

The U.S. Government is obviously attracted by the first, COTS. It is produced for and sold in a highly competitive marketplace, and its development costs are amortized across a large base of consumers, Its functionality continually expands in response to competitive market demands. It is [a] bargain, but it is also most likely to be produced offshore, and so presents the greater threat of malicious modification.

There are two distinct kinds of vulnerabilities in software. The first is the common "bug," an unintentional defect or weakness in the code that opens the door for opportunistic exploitation. [DoD] shares these defects with all users. However, certain users are "high value targets" such as the financial sector and the Department of Defense. These high-value targets attract the "high-end" attackers. Moreover, the DoD also may be presumed to attract the most skilled and best financed attackers - a nation-state adversary or its proxy. These high-end attackers will not be content to exploit opportunistic vulnerabilities which might be fixed and therefore unavailable at a critical juncture. Furthermore, they may seek to implant vulnerability for later exploitation.

DSB reports are recommended reading as, noted above, DoD assets are the 'canary in the coal mine' for the larger set of commercial assets in the US and abroad. (Even when the subject topic seems far afield, the underlying technology discussions have surprising relevance.) Where DoD threats are now, the commercial sector will soon follow. The latest USCC report shows that defense and commercial risks have now substantially intersected.

The full 2007 USCC report is to be released next week. In preparation, I suggest:

ICG's Intellectual Property (IP) Protection Abstracts, September 2006 to June 2007
ICG's Intellectual Property (IP) Protection Abstracts, April 2004 to July 2006

 

U.S. - CHINA COMMISSION CITES SOME PROGRESS YET SOME TROUBLING TRENDS FOR U.S. ECONOMIC AND NATIONAL SECURITY INTERESTS
Press Release
USCC
November 15, 2007

USCC 2007 Report segments, available online 17 November:
2007 Report to Congress Intro
2007 Report to Congress Executive Summary
The Commission's Recommendations

Panel: China's Spying Poses Threat to U.S. Tech Secrets
By David Cho and Ariana Eunjung Cha
Washington Post
November 15, 2007; 11:57 AM

Chinese Spying No. 1 Threat To U.S. Manufacturing
By Foster Klug, Associated Press Writer
Manufacturing.Net - November 15, 2007

National Security and the PC
Posted by Paul Murphy @ 12:18 am
ZDNet
November 14, 2007

Are Foreigners Ruining DOD Software?
Posted by Catherine MacRae Hockmuth
Ares/Aviation Week
10/30/2007 4:02 PM

Building Trustworthy Circuits
Posted by Catherine MacRae Hockmuth
Ares/Aviation Week
10/29/2007 12:48 PM

Report of the Defense Science Board Task Force on Mission Impact of Foreign Influence on DoD Software
Defense Science Board (DSB)
September 2007

Statement of Senator Carl Levin before the U.S.-China Economic and Security Review Commission Hearing on The U.S. China Relationship
Contact: Press Office
Phone: 202.228.3685
February 1, 2007

Satellite surprise highlights U.S.-China gap: official
Reuters
February 1, 2007; 3:12 PM

Russia Bargains for Bigger Stake in West's Energy
By STEVEN R. WEISMAN
New York Times
June 12, 2006

Gas Halt May Produce Big Ripples in European Policy
By MARK LANDLER
New York Times
January 4, 2006

Defense Science Board Task Force On HIGH PERFORMANCE MICROCHIP SUPPLY
Defense Science Board (DSB)
Office of the Under Secretary of Defense For Acquisition, Technology, and Logistics
February 2005

Gordon Housworth



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Intellectual Property and Outsourcing Risk in India

  #

My presentation, Intellectual Property and Outsourcing Risk in India, given to GlobalAutoIndustry's "India: Leading Offshoring Center or Upcoming Manufacturing Power?" on 1 November, 2007, described India's uniqueness which separates it from other outsourcing and manufacturing regions:

  • India is unique in that risks to personnel and facilities coexist with IP risks throughout its regional supply chain.
  • Personnel and facility risk will rise over time despite prodigious efforts by the Indian security apparatus.
  • Commercial IP threat is presently more from foreign collectors and careless outsourcing in the Indian supply chain which will include outsourcing to China.
  • Indigenous commercial IP threat is largely "entrepreneurial."

Long-term readers of this weblog will not be surprised at the conclusions and their time horizons. This speaking request did, however, prompt a revisiting of previous Indian outsourcing, IP and counterterrorism projections. As an aside, I recommend frequent revisiting of projections; it's often humbling but embarrassment is preferable to an opponent's bullet:

It is my want to revisit projections and forecasts, mine and others, to look for accuracy in both substance and timing; are assumptions still accurate and if not, why not; what new players and tools have entered the market; and what has shifted. The assumptions and the development process are more interesting than the answer as too many people treat a situation in time as something fixed, instead of seeing it as a still frame in a motion picture (where the trick is to predict the next scene).

I found the Indian projections holding true and the risks rising as the target environment we've identified becomes irresistible. Consider this 30 October item on Cisco's plan to treble its manning level in India and place a third of its senior executives in its Globalisation Centre East campus in Bangalore by 2012:

The company's plan to have senior vice presidents, vice presidents, and directors, cutting across all corporate functions, in India is not aimed at cutting costs, but at nurturing talent in India, said Wim Elfrink, chief globalization officer for Cisco, who also heads the new center.

Cisco currently employs about 3,000 staff in India, which it plans to increase to 10,000 by 2010. The new center, which currently has 900 staff, is expected to grow to 3,500 staff by October next year, said Elfrink. Some of the technologies developed in India will be rolled out in other emerging economies, and also in developed countries, he added.

As prodigious as the Indian security apparatus is, I do not believe that it can scale to the growth and dispersal distribution of the target sets.

Bangalore is perhaps the prime example of a city rapidly expanding its satellite nodes to offset rampant congestion. Tyler Cowen flagged it nicely in 2004 and it has not improved:

I mean outsourcing from Bangalore, not outsourcing to Bangalore. Apparently production costs are rising out of control in a city that accounts for a third of India's software exports. The major culprit is congestion; a seven-kilometer commute can now take ninety minutes. Population has grown by a third since 1995, and the new metro and airport are badly behind schedule. Bombay has had similar problems.

The remedy? Madras (Chennai) is rising in popularity as is Calcutta, despite its propensity to elect communist governments.

The bottom line: Indian infrastructure is chaos. This economy has only a limited ability to absord outsourcing ventures. For instance it is common for current enterprises to supply their own electricity and other public services.

The presentation proceeded to encapsulate topics such as:

  • Why and how firms outsource - and where it often leaves them exposed
  • What is missing from traditional outsourcing
  • IP and outsourcing
  • Unique Indian characteristics

India's "al Qaeda" - Lashkar-e-Toiba (LeT)

Lashkar-e-Toiba (LeT), The Army of the Pure, is India's al Qaeda or Hezbollah. Were it not restrained by prodigious efforts by the Indian security apparatus, this Pakistani jihadist group would endeavor to destabilize the Indian state as its ultimate goals go beyond regaining Muslim control of Jammu and Kashmir to nothing less than reestablishing Islamic governance of India, forming a Muslim bloc with other predominantly Muslim states surrounding Pakistan.

The presentation proceeds to outline LeT's attack opportunities which I have come to call the "Two Twofers."

The two "twofers"

"Twofer" rose in American English at the close of the nineteenth century as a term for "two for the price of one" or more generally an "arrangement in which a single expense yields a dual return." LeT has recognized that India presents it with two "twofers":

In the first, LeT has recognized that attacks on outsourcers on Indian soil directly damages the Indian state and its economic capacity, while it opens the potential of striking US and European firms that would nominally be out of its reach.

In the second, what I call the "embedded twofer," an attack on a US or European data center or business process outsourcing (BPO) facility offers the potential of interrupting all the customers of the BPO/data center owner, e.g., attack a bank's data center or BPO unit and you impact all the bank's customers.

Forecasting LeT's attack progression

Extending the "twofer" concept, we forecast this attack progression (2005):

  • Personnel and symbolic targets.
  • Expat data and business process outsourcing (BPO) centers.
  • Manufacturing and development centers.

The former is almost all soft targets - gatherings of personnel. The latter two target groups can cause supply chain disruptions as well as personnel loses.

While I called the attack on the Indian Institute of Science (IISc) in Bangalore (2005) as the first iconic or symbolic target attacked by the LeT, outsourcers and their clients should not overlook LeT's 2001 suicide attack on the Indian parliament. Had it not been chance in a missed cellphone surveillance tip and two road collisions, LeT might well have decimated Parliament House and its occupants.

But far worse in my estimation was the effective failure of the western press to cover an Indian disaster that did not include large number of US/EU national casualties. I am speaking of the 2006 LeT attack on first class passenger trains in Mumbai that followed the IISc attack. More than 200 dead in an attack that was the equivalent of an assault on Manhattan or London. Indians companies must have been relieved at our appalling myopia as little or no damage control was required:

  • Mumbai Suburban Railway has highest passenger density of any urban railway system.
  • Seven bombs placed in first-class "general" compartments (some reserved for women) targeting professional classes.
  • Trains were running from Churchgate, the city-centre end of the western railway line, to the western suburbs.
  • Analogous to the Madrid and London train/tube bombings, 209 killed, over 700 injured.

The risks in India are both real and unfamiliar to many US/EU nationals. The only approach that does not carry a charge of fiduciary breach is to conduct a rigorous vulnerability assessment, then implement the appropriate risk mediation interventions for personnel, facilities, data and IP.

While the presentation can be considered an executive overview, readers are referred here for a deeper dive:

Intellectual property theft: the unspoken unknown of offshoring [ 8/11/2004 ]

India Inc. becomes another outsourcing gold rush: unwary firms get red ink [ 10/27/2004 ]

Emerging Information Technology (IT) themes in India and China [ 2/1/2005 ]

The world is flat save for the depression that we occupy: Friedman on global opportunity and competition [ 4/8/2005 ]

Commercial blindness: a "twofer" attack on the Indian state and US and European outsourcing assets [ 6/28/2005 ]

Multisourcing: belated recovery of forgotten first principles [ 10/18/2005 ]

Multisourcing: belated recovery of forgotten first principles, part 2 [ 10/20/2005 ]

Indian pipedream: "Our campuses are physically secure… The entire perimeter is guarded which we believe enable us to be fully secure" [ 1/14/2006 ]

Striking Mumbai is akin to striking financial centers such as Manhattan or London yet many in the west are oblivious [ 7/13/2006 ]

Cisco to have a fifth of its top executives in India
By 2012, India will be company's development hub and a base for technology and applications that can be deployed worldwide
By John Ribeiro
IDG News Service
October 30, 2007

At least 174 killed in Indian train blasts
Prime minister says 'terrorists' behind attacks
CNN
July 11, 2006; Posted: 10:12 p.m. EDT (02:12 GMT)

Outsourcing Bangalore
Posted by Tyler Cowen
Marginal Revolution
November 4, 2004 at 07:10 AM

Indian parliament attack 'bungled'
CNN
December 17, 2001 Posted: 3:52 AM EST (0852 GMT)

Gordon Housworth



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Trends point towards Mexico's destabilization

  #

How will you deal with the assassination of Calderon?: A working example of all-source risk analysis was my quickly assembled presentation when asked to step in and address the monthly meeting of the regional NAPM (National Association of Purchasing Managers) chapter this September.

I chose the title purposefully even though I might be accused of "profiting on assassinations and other terrorist acts" as was DARPA's Policy Analysis Market (PAM) futures market which actually was a superb idea designed to trade in, and gather knowledge of, "things that the US and incidentally the target country would be deeply interested in."

As an all-source risk analyst, I know that supply chain analysis must extend beyond mere commercial aspects, that while commercial calculations are an essential first step in risk evaluation, they are necessary but not sufficient to define total chain risk. Intellectual Property (IP), IT, criminal, terrorist, cyberterrorist and environmental issues - and their interactions - must be included.

In a low cost vacuum, solely commercial decisions lead to vulnerabilities, yet multinational firms habitually do not give politics and other factors sufficient attention in their countries of operation.

Looking beyond commercial issues with regards to Mexico shows the clear need for companies to prepare for tunable Just-in-time Disruption at one or more points (some likely simultaneous) in their Mexican supply chains, that they need to have mitigation strategies in place to address disruption. I take absolutely no pleasure in this forecast as I believe the Mexico's commercial capacity coupled with its engineering capability should make more manufacturers refrain from taking certain manufacturing and assembly operations to Asia (see pages 5-6).

By a show of hands to my questions, there was little recognition that Felipe Calderon was president of Mexico and, further, that he had assumed the presidency contested by Andres Manuel Lopez Obrador under conditions than made Bush v. Gore seem tame in comparison. Although "Tunable Just-in-time Disruption" was in boldface as a predicted outcome, it elicited few questions in the Q&A that followed. It remains to be seen how effective I was.

These purchasing audiences are typical of a system that has compressed its middle rank purchasing officers to focus solely on piece part costing and so has robbed them of the time, the inclination and the support to address a wider risk horizon. I personally saw this relentless pressure at one automotive OEM collapse their buyers' world view, robbing them of strategic flexibility. That pressure drove many tier one and tier two suppliers to China with unfortunate results for many US firms.

In an effort to bridge their world and mine, I took pains to demonstrate that we also dealt with the normal commercial aspects (cost, freight, lean, value-add at tier, et al) but that those criteria were, as Deming and Goldratt were fond of saying, "necessary but not insufficient" for all-source analysis, that one needed to get beyond piece part costing to assess total risk.

One listener in the Q&A said that his company had Maquiladora assets, that he was frequently down at their Mexican sites, but had heard nothing related to my comments. I thought privately that there goes a firm who lives at the whim of a stray bullet; publicly I encouraged him to dig deeper.

(For those not needing to dig deeper, Maquila program firms are Mexican companies open to 100% foreign investment participation and management, permitted special customs treatment allowing duty free temporary import, and whose products are exported, directly or indirectly, through sale to another Maquiladora or exporter. Maquiladoras festoon the Mexican side of the US border.)

It was difficult to escape feeling extraterrestrial as I pointed out that a piece part/commercial focus failed to include key Mexican factors such as:

  • Mexico's $30 billion USD black market.
  • $20 billion from drug smuggling. Balance from kidnapping, protection, bank/casino robbery, prostitution, fake merchandise, arms and gems smuggling and human trafficking.
  • Felipe Calderon's massive military crack down on Mexico's drug cartels (also here).
  • Cartel counterattacks.
  • Resurgence of Marxist EPR, Ejercito Popular Revolucionario (Popular Revolutionary Army).
  • Restive Lopez Obrador supporters (also here).
  • Weakness of PEMEX and Mexican oil production.

A piece part focus would not flag the analogous relationship of the ERP and the drug cartels to that of al Qaeda-in-Iraq and related jihadist groups to the larger assembly of Baathists, nationalists and insurgents:

  • Iraq: Iraqi Baathists, nationalists and insurgents vastly outnumber the jidahists. When it no longer serves the larger interests, the smaller will be exterminated.
  • Mexico: ERP, paid or autonomous, is educating the cartels. When it is in the cartels' interest, the ERP can be exterminated or co-opted by a combination of money and force.

The upshot will be that the cartels will continue on with tunable Just-in-Time Disruption activities once they have decimated or co-opted the EPR.

A piece part focus would not address this thumbnail assessment of drug cartel counterattacks, many of which are already underway:

  • Hyperviolence at the low end (also here).
  • Bribery and threats at the high end.
  • Expand control of local state police assets.
  • Cow and co-opt up the judicial chain.
  • Attack the military intelligence community.
  • Attack incorruptible senior judiciary.
  • Co-opt fractious political opponents.
  • Selective state disruption, damaging businesses.
  • Isolate, emasculate Calderon.
  • Failing that, assassinate him.

I will get the full weblog item up on Calderon in due course. There is so much more to say on the threats to Felipe Calderon and the Mexican government.

Consider the analysis of Mexican petroleum woes, the impacts of failing to replace Cantarell, the popular Mexican resistance to any unwinding of the oil's nationalization in the 1930s, the international pressures that can be applied to Mexico and the US by Russian energy policy, the cartels' awareness of those weaknesses and their willingness to exploit them. Then there is the pan-national destabilization of the interlocked narcotics corridor stretching from Brazil to Columbia, the Isthmus and Mexico, the rise of Mexican cartels at the expense of the Columbians. The cartels have militarized and expanded to the point that they have formed Temporary Autonomous Zones outside control of the Mexican state; those autonomous zones effectively control significant stretches of the US-Mexican border. The cartels have both grown strong even as they have lost command & control over critical assassination and enforcement assets. Either singularly or in concert, the cartels and their enforcers have broached plans to assassinate US journalists on US soil that have reported critically on cartel activities. (Deaths among Mexican journalists already put Mexico among the big three (Iraq, Mexico and Columbia).) Marxist and other splinter groups that fitfully operated in poorer regions well south of the DF (Mexico City) now operate with remarkable effectiveness in the wealthier north. Calderon has undertaken not just a war against the cartels but a war on a failing Mexican social infrastructure all the way down to the national sport of tax evasion.

It is daunting to consider the success of a simultaneous attack on so many elements of the Mexican economy and its elites; it is all too easy to envision entrenched patches of privilege in Mexico that would aid the cartels in a short-term fix of its Calderon problem.

Mexican drug gang attacks government intelligence network
The Associated Press
September 17, 2007

Mexico: A Nation-State Dissolves?
Posted by Jeff Vail jeffvail
The Oil Drum
July 12, 2007 - 10:00am

The War in Mexico
Posted by Mike under 4th Generation Warfare
Net Wars
June 26, 2007 at 10:37 pm

Mexico Purges 284 Police Commanders in Antidrug Effort
By JAMES C. McKINLEY Jr.
New York Times
June 26, 2007

Shooting for the Top
Mexico's Drug Gangs Take Aim at Calderon
By JOHN ROSS
Counterpunch
May 21, 2007

Calderon, Mexico's Drug War Commander in Chief
By Allan Wall
Mexidata
Monday, January 8, 2007

Mexico's New President Sends Thousands of Federal Officers to Fight Drug Cartels
By JAMES C. McKINLEY Jr.
New York Times
January 7, 2007

Plotters Work to Disrupt the Mexican Government
By Barnard R. Thompson
Mexidata
Monday, November 6, 2006

Election Ruling in Mexico Goes to Conservative
By JAMES C. McKINLEY Jr.
New York Times
September 6, 2006

The China Challenge to Manufacturing in Mexico
Ralph Watkins
Program Manager for Foreign Assembly in the Office of Industries
Office of Industries, U.S. International Trade Commission (USITC)
China Challenge
September 2006

Beaten leader plans 'parallel' rule
From correspondents in Mexico City
The Australian
September 09, 2006

Lopez Obrador Supporters Occupy Heart of Mexico City
by Pablo Perez
Agence France Presse
Monday, July 31, 2006
Mirror

Mexico's Uppermost Threat is Organized Crime
By Sam Logan
International Relations and Security Network (ISN)
Center for Security Studies (CSS) at ETH Zurich (Swiss Federal Institute of Technology Zurich)
Monday, May 1, 2006

The Policy Analysis Market: Why It is a Great Idea.
By khallow in Op-Ed
Kuro5hin
Aug 14, 2003 at 09:48:59 PM EST

Poindexter Resigns but Defends Programs
Anti-Terrorism, Data Scanning Efforts at Pentagon Called Victims of Ignorance
By Bradley Graham
Washington Post Staff Writer
Wednesday, August 13, 2003; Page A02

Business intelligence worth betting on
By Dan Farber,
Tech Update
July 31, 2003 9:35 AM PT
Scrolled off

Mirror

Gordon Housworth



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