SMA Publications

Authors | Editors: Ahmadzai, S. (University of Nebraska, Omaha); Bolger, D. (North Carolina State University); Kaltenthaler, K. (Case Western Reserve University & University of Akron); Liebl, V. (US Marine Corps University, Center for Advanced Operational and Culture Learning); Pantucci, R. (Royal United Services Institute); Rubin, B. (New York University); US Army Training and Doctrine Command, G27 Modeling & Simulation Branch; Whiteside, C. (Naval Postgraduate School)

Executive Summary

It is not yet clear whether reconciliation in Afghanistan is possible. But what has become increasingly clear is that certain critical elements must be addressed and overcome before any semblance of longterm stability in Afghanistan can emerge. This report is structured into three main sections: 1) contextualizing the current pressure toward reconciliation in terms of what Afghans want, 2) breaking down a potential negotiated settlement into its essential component parts, and 3) looking at some of the spoilers that make this process particularly difficult in Afghanistan.

This report does not seek to establish the ground truth from an objective perspective—such an effort is not possible in the context of competing interests of stakeholders both inside and out of Afghanistan. Instead, it seeks insights from leading experts from a variety of viewpoints that hopefully lead to a more nuanced understanding of the critical paths and roadblocks to a grand bargain in Afghanistan.

Part One: Contextualizing the Potential for Grand Bargain in Afghanistan

In Chapter 1, Dr. Barnett Rubin, Senior Fellow and Associate Director of New York University’s Center on International Cooperation, outlines the historical dimensions of great power competition in Afghanistan starting with the Great Game and ending with a pessimistic view of a potential grand bargain. He argues that the perceived US intent to establish permanent hegemony over Afghanistan since 2005 has revolutionized the strategic balance in Eurasia, putting regional stakeholders further at odds with the United States. As an “offshore power in [relative] decline” and without a single cooperative relationship with regional powers (China, Iran, Russia, or Pakistan), stabilization is unlikely. The result is a balancing act in which the states of the region, in accord with their differing interests and capacities, try to assure that the US neither consolidates its position nor leaves abruptly.

In Chapter 2, Dr. Thomas Barfield, Professor of Anthropology at Boston University and President of the American Institute for Afghanistan Studies, notes that the biggest obstacle to a negotiated settlement in Afghanistan is the highly centralized, monopolistic government that has characterized all national Afghan governments since the late 19th century. Now at a hurting stalemate, Taliban fighters, the Kabul government, and the population are increasingly tired of war. A “grand bargain” in Afghanistan would entail changing the constitution so that power between the center and periphery is shared as was the case when kings ruled from Kabul over regions that held a considerable degree of autonomy—not unlike the United States. Regardless, any effort that does not account for the will of the Afghan people will not succeed.

In Chapter 3, Dr. Homayun Sidky, Professor of Anthropology at Miami University, questions whether a resolution to the conflict in Afghanistan is even possible given US missteps in the region. These include no coherent US strategy, support for what many see as an illegitimate central government, pushing democratic governance, and not doing enough to support multi-ethnic representation in governance. Complicating these issues are Afghanistan’s dependence on foreign aid, a failing economy, and unrestricted opium cultivation. In a society that is tired of war—and of both the central government and the Taliban—perhaps the only way forward is through a federated system of governance.

Part II Elements Critical to a Negotiated Settlement

In Chapter 4, Mr. Raffaello Pantucci, Director of International Security Studies at the Royal United Services Institute, discusses China’s potential role in a negotiated settlement. With the view that Afghanistan is the graveyard of Empires, China’s main priority is to establish workable relationships with as many regional stakeholders as possible to ensure that their own economic and security interests are covered. China lacks the power many ascribe to it to bring Pakistan and the Taliban to the negotiating table. While China is not adverse to a negotiated settlement, it will only invest in the effort once it is clear it is going to work and that all the other actors are on board.

In Chapter 5, Mr. Sher Jan Ahmadzai, the Director of the Center for Afghan Studies at the University Nebraska at Omaha, addresses demands to rewrite the Afghan constitution. He notes two groups that are calling for reform: those that want a more decentralized form of government and the Taliban, which claims that the constitution lacks Islamic values and norms. Mr. Ahmadzai fears that rewriting the constitution will exacerbate political instability and instead advocates for revising the constitution gradually through existing mechanisms. With regard to elections, Mr. Ahmadzai emphasizes the importance of holding elections, even if they are imperfect. However, he suggests that electoral reforms should better take into account traditional Afghan ways of choosing their representatives and leaders.

In Chapter 6, the US Training and Doctrine Command G27 Models and Simulations team describes how its Athena course of action analysis tool assesses the political and social effects of a potential power sharing agreements in Afghanistan. The team found that both of the power sharing structures studied—power shared at the ministerial level versus a decentralized regional government structure—resulted in increased Afghan governmental control geographically as well as increased popular support for the government. While the latter structure was a superior outcome in both control and population support, it comes with a potential downside. Recent Afghan history has shown that regional leaders often chafe under centralized control and will not hesitate to ignore the national government at best or plunge the country into civil war at worst.

In Chapter 7, Mr. Vern Liebl, analyst at the US Marine Corps University Center for Advanced Operational Culture Learning (CAOCL), paints a somber prospect for settlements that involve sharing power with the Taliban. The primary obstacle is that the Taliban is not willing to compromise on its prime objectives of expelling all foreigners and the reversion of governance completely into its own hands. Furthermore, he warns that ceasefires should not be read as a symbol of hope but as a tactic used by the Taliban to further alienate the National Unity Government. Finally, while Afghans largely want an ethnically representative and pluralistic state, they lack a unifying and charismatic leader that could lead such a movement. The preponderance of the evidence in Afghanistan suggests that a grand bargain is an unrealistic expectation at this time.

In Chapter 8, Dr. Karl Kaltenthaler, Professor of Political Science at the University of Akron and Case Western Reserve University, describes Afghanistan and Pakistan as locked in a complex security dilemma, which leaves Pakistan with little interest or motivation to support a negotiated settlement. Amongst Pakistan’s concerns is rising Pashtun nationalism, encirclement by India, and persistent US presence in the region. In fact, Pakistan has many reasons for intransigence in regard to any effort that moves Afghanistan in the direction of reconciliation. In particular, Pakistan fears that even a reconciled Afghan government would not be strong enough to control anti-Pakistan groups in the country. Pakistan’s best strategy remains strategic patience as it waits for the US to eventually withdraw.

Part III Spoilers

In Chapter 9, Dr. Gina Ligon and Mr. Michael Logan, University of Nebraska at Omaha, conducted a study of fragmentation and consolidation within violent extremist organizations (VEOs) within Afghanistan. By looking at periods of instability—defined by high of violence—in Afghanistan, Dr. Ligon and Mr. Logan found that three factors likely drive this behavior: organizational uncertainty, fractionalization, and consolidation. This has implications for successful counterterrorism strategies. With regard to organizational uncertainty, counterterrorism efforts like decapitation increases friction between group members as organizational influence and control is delegated from senior leaders to foot soldiers. Fractionalization occurs when new VEOs emerge from inter-group rivalry after the death of a senior leader. Consolidation occurs when new VEOs emerge (e.g., ISKP) and threaten the preexisting extremist organizations. A follow on study will evaluate how changes in leadership impact regional stability.

In Chapter 10, Dr. Craig Whiteside, professor at the Naval War College at the Naval Postgraduate School, discusses whether Islamic State Khorasan Province (ISKP) could act as a spoiler in any potential reconciliation effort. While ISKP could make gains that destabilize the region—by making gains in northern provinces, which could motivate Tajikistan or even Russia to intervene by aiding the Taliban OR by becoming popular among the youth in Kabul, driving urban terror—the greatest threat ISKP poses is in its potential to draw in disaffected Taliban. This could be particularly relevant if the Taliban enters into talks with GIRoA. While ISKP remains a low risk threat in the region, a worstcase scenario would be a large swing from the Taliban to ISKP.

In Chapter 11, LTG (ret.) Daniel Bolger, professor at North Carolina State University, concludes the white paper with an essay opining that while the US may prefer a grand bargain, the ugly reality is a choice between open-ended stalemate and outright withdrawal. He notes that Afghanistan has a warfighting culture that will never accept foreign interventions. This encourages strategic patience on the Taliban’s part to continue the insurgency and reject any form of negotiated settlement. Prospects for stability may be outside the capacity of the USG to facilitate.

Author | Editor: Aviles, W. (NSI, Inc.)

Executive Summary

Data

Two datasets on wealth and status distribution in Afghanistan were analyzed: the 2015 wealth factor scores and distribution of agricultural land from the USAID Demography Health Survey (DHS).

Results

Despite Afghanistan’s poverty, it does not have severe overall inequality. However, there is severe inequality in agricultural land ownership, making this segment of the population extremely risk acceptant.

Significance for Risk Taking and Stability

The distribution of agricultural land touches on a defining issue of Afghan inequality, namely the urban- rural divide that heavily impedes Afghanistan’s progress in modernization. A poor, highly risk acceptant rural population is ripe for Taliban recruitment, where it has the most allegiance, and directly contributes to the rampant illicit opium economy.

Implications for US Interests

Urban-rural inequality dynamics are of significant concern to US interests in Kabul’s stability, because they serve to undermine the legitimacy of President Ashraf Ghani’s administration and the abdication of hostilities with the Taliban. Minimizing inequality in rural areas can increase the popularity of the Ghani government, reduce the Taliban’s recruitment ability, and diminish the informal and black economies of Afghanistan.

Implications for China’s Interests

China shares similar interests to the US, insofar as advancing general political stability and counter- terrorism. Urban-rural inequality will be of concern to Beijing in the context of safeguarding China’s agenda of integrating Afghanistan into the Belt and Road Initiative (BRI), and destitute, risk-acceptant rural populations do not help in this regard. Furthermore, China is also concerned with Taliban recruitment among such rural populations.

Implications for Russia’s Interests

Afghanistan’s inequality is of less concern to Russia than either the US or China, and risk acceptant populations are favorable to Moscow in the context of undermining US presence, and unfavorable with regard to increased terrorist activity within their geopolitical periphery.

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Author | Editor: Kuznar, L. (NSI, Inc.)

Executive Summary

Data

Five datasets on wealth and status distribution in Iran were analyzed: 2017 World Bank quintile and decile estimates of income, and Iranian government income data for years 2015 and 2006 for both urban and rural populations.

Results

Iran has moderate levels of inequality compared to most countries, although inequality is gradually increasing and there is growing concentration of wealth in cities and a corresponding impoverishment in the countryside. Inequality is exacerbated by sanctions.

Significance for Risk Taking and Stability

In general, Iran exhibits moderate levels of risk acceptance, although losses in the business sector are beginning to result in riots and demonstrations which culminated in 2018. While inequality appears to be fueling unrest, the Iranian government has a strong capacity for suppression of dissent.

Implications for US Interests

Social unrest weakens the Iranian government, potentially distracting it from its regional objectives and US sanctions are exacerbating this unrest. However, the Iranian population is overall not very risk acceptant and the Iranian state’s capacity for repression probably means that dissent will not really weaken the Iranian state. There is no evidence that Iran has been distracted in its regional activities, including operations in Syria, Yemen, and the Persian Gulf.

Implications for China’s Interests

Iran is an important node in China’s Belt and Road Initiative (BRI) and China has been investing heavily in Iranian infrastructure. Inequality and social unrest threaten these investments.

Implications for Russia’s Interests

Iran is Russia’s key ally in the Middle East for countering US influence. Inequality and social unrest that can weaken the Iranian government would be problematic for Russian interests in the region.

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The Character of Global Competition and Conflict, 2019-2029 – A Future of Global Competition and Conflict Virtual Think Tank Report

Author | Editor: Astorino-Courtois, A. (NSI, Inc.); Popp, G. (NSI, Inc.)

Subject Matter Expert Contributors

Dr. Gawdat Bahgat (National Defense University), Lieutenant Colonel Jeffrey Biller (US Naval War College), Dr. Patricia J. Blocksome (US Naval War College), Dr. David T. Burbach (US Naval War College), Dr. Ryan Burke (US Air Force Academy), Dean Cheng (Heritage Foundation), Dr. Nicholas J. Cull (University of Southern California), Dr. Michael W. Fowler (US Air Force Academy), David C. Gompert (US Naval Academy), Dr. Barry B. Hughes (University of Denver), Dr. Dr. Molly M. Jahn (University of Wisconsin-Madison), Dr. Buddhika Jayamaha (US Air Force Academy), Dr. Peter Layton (Griffith University), Dr. Martin Libicki (US Naval Academy), Dr. Julia Macdonald (University of Denver), Dr. Jahara Matisek (US Air Force), Dr. Sean McFate (National Defense University), Dr. Lukas Milevski (Leiden University), Robert Morgus (New America), Linda Robinson (RAND Corporation), Dr. Jacquelyn Schneider (Hoover Institution), Dr. Peter Schram (Vanderbilt University), Dr. Robert S. Spalding III (US Air Force), Nicolas Véron (Bruegel and Peterson Institute for International Economics), Valentin Weber (University of Oxford), Dr. William C. Wohlforth (Dartmouth College), Ali Wyne (RAND Corporation), Dr. Jen Ziemke (John Carroll University)

Question of Focus

[Q1] How will the character of global competition and conflict change over the next decade, and which emerging global trends and conditions will drive this change? What are the implications of expected future global conditions for developing integrated US strategy and plans to defend US interests over both short- and long- term timeframes?

Summary Overview

This summary overview reflects on the insightful responses of twenty-eight Future of Global Competition and Conflict Virtual Think Tank (ViTTa) expert contributors. While this summary presents an overview of the key expert contributor insights, the summary alone cannot fully convey the fine detail of the expert contributor responses provided, each of which is worth reading in its entirety. For this report, the expert contributors consider how the character of global competition and conflict will change over the next decade, and the implications of those changes on United States policy and planning.

Please see the PDF below for the complete summary overview.

SMA Quick Concepts Series: Extended Deterrence

Authors | Editors: Dorondo, D. (Western Carolina University) & Stevenson, J. (NSI, Inc)

Summary

Extended deterrence encompasses pledges of military protection by a deterrent power to its allies and/or partners against a common potential aggressor. In the US case, these pledges constitute formal military commitments. These commitments can be, and have been, both nuclear and non-nuclear in nature. They imply, and typically reflect, not only common security concerns but also political and operational coordination between the deterrent power and its allies and/or partners.

Quick Concept: Competition

Authors | Editors: LTC D. Doran & J. Stevenson (NSI, Inc).

Executive Summary

The conceptual keystone within competition is relative advantage. Due to the fluid, persistent, and continual nature of competition, relative advantage refers to the position between two competitors, (1) either at a given point in time, or (2) in a particular area of competition, or (3) as a generalization of the aggregation of contests within the rivalry.
Countries conduct activity across the competition continuum, from cooperation to conflict. However, competition is that space in the center of the continuum that pits countries in a ubiquitous contest for relative advantage in every conceivable domain and with varying degrees of competitiveness. Traditional concepts of “victory” or “end state” are antithetical to 21st century competition. Gaining and maintaining relative advantage in strategically important areas of competition can be considered as success, but it is a transient state and must be continually reinforced.
Countries can gain relative advantage in a myriad of competitive areas and activities. However, there are key areas within competition that are of more vital, strategic interest. Prioritization is therefore essential, particularly since countries face unique limitations and challenges on an uneven playing field and cannot be competitive at everything. Understanding when and where to apply resources is indispensable. Likewise, knowing when to shift priority away from a competitive area is prudent.
In the global context, there are two ideal types of competition: friendly and adversarial. (In practice, competition types [e.g., gray zone activity] are not always so clear cut as competitors may compete in a semi-restrained way by bending and subverting rules.)
Friendly Competition. Countries compete in a rules-based, structured environment that results in benefit to those who compete most effectively. Countries follow the rules, which are reinforced by the assurance of fair play as a condition for participation. This state has clear winners and losers, but the stakes are generally not high and the objectives are limited.
Adversarial Competition. Countries compete in an unconstrained environment, in which they make and break rules in an attempt to shape the dynamics of the competition to their advantage. They may challenge the status quo and resort to ways that fall completely outside the norms of the rules-based international order. It is in this state that strong competitors will try to achieve maximum benefit and advantage without moving into conflict. This state is characterized by continually maneuvering elements of national power to achieve the broadest possible effects. In this state, gains are exceedingly transient and must be constantly reinforced and maintained.

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Author | Editor: Kuznar, E. (NSI, Inc.)

Executive Summary

Data

Three datasets on wealth and status distribution in Italy were analyzed: 2012 World Bank quintile and decile estimates of income, and International Labor Organization (ILO) income by occupation data for years 2014 and 2010.

Results

Income data provided by the World Bank and occupational data provided by ILO tell similar narratives of a risk acceptant Italian population. The two datasets show that the Italian population is overall very risk acceptant and individuals or occupations attaining more wealth than others are on average more acceptant of risk.

Significance for Risk Taking and Stability

Italy’s risk acceptant population combined with weak economic performance may be fueling a wave of conservative sentiment that has allowed Russia and China to sign economic deals with Rome that worry other EU nations (Poggetti, 2018; Isachenkov, 2018). This coincides with a recent political surge in Italy’s Eurosceptic population, which has occurred due to the country’s weak economic performance and lack of job opportunities for future generations (Pew Research Center, 2017; Lovene, 2018).

Implications for US Interests

Italy’s risk acceptant population poses a risk to the US’ interest of keeping Russia and China out of EU and NATO politics. Italy and the US have maintained a friendly and cooperative relationship in combatting global terrorism, natural disasters including Ebola, and joint humanitarian aid including in Libya (US Department of State, 2019). However, if Russia and China can use a friendly relationship with Italy to insert their own interests into EU politics and decision making, it will greatly threaten a wide range of joint US- EU security interests (Poggetti, 2018; Isachenkov, 2018).

Implications for China’s Interests

China recently signed an economic deal that lays the groundwork for eventually bringing the BRI to Italy (Poggetti, 2018). This opens a vast new array of opportunities for China as Italy is the largest economy to date to sign a BRI deal and is an EU and NATO member state. The downward projecting Italian economy and its slim economic opportunities (especially for the younger population), combined with Italy’s risk acceptant population, grants China the potential for furthering its influence not just into Italy, but also into the EU (Grant, 2019).

Implications for Russia’s Interests

Italy’s risk acceptant population presents a large potential opportunity for Russia as it has ridden a wave of Euroscepticism and weak Italian economic performance to sign multiple economic deals (Isachenkov, 2018). Isachenkov points out that Russia sees the potential for continuing this trend, as former Italian Prime Minister Giuseppe Conte acknowledged Russia as a member of Europe and said that an open dialogue with Russia on European issues is something that should be positive for the economic and political evolution of Europe.

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Author | Editor: Aviles, W. (NSI, Inc.)

Executive Summary

Data

Three datasets on wealth and status distribution in India were analyzed: 2016 World Bank quintile and decile estimates of income, and 2015-2016 USAID DHS (Demographic Health Survey) data on wealth factor score and agricultural land ownership.

Results

India is moderately risk acceptant across all datasets.

Significance for Risk Taking and Stability

Despite the risk-acceptant nature of India’s population, it is a stable democratic country that seeks to forge an independent path to become an emerging global power. However, given this latent risk- acceptant propensity and the soaring levels of economic inequality, some sort of catalyst has the potential to deteriorate national unity along a multitude of societal divisions.

Implications for US Interests

India is a vital strategic partner not only in South Asia but globally, and increasingly more so in the age of great power competition. Encouraging and maintaining India’s political stability and democratic institutions is important in buffering against Chinese influence, and the decay of national socio-political unity has to potential to deteriorate US-Indian relations.

Implications for China’s Interests

China is poised to take advantage of any political instability and unrest inspired by India’s social cleavages and inequality. However, this is only true to the extent that it will distract New Delhi from competing with China.

Implications for Russia’s Interests

Russia is far more ambivalent to India than the US or China and seeks to maintain their security/energy cooperation with New Delhi while simultaneously diminishing US hegemony in the region.

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China’s and Russia’s Approach to Regional and Global Competition – A Future of Global Competition and Conflict Virtual Think Tank Report

Author | Editor: Popp, G. (NSI, Inc.); Canna, S. (NSI, Inc.)

Subject Matter Expert Contributors

Dean Cheng (Heritage Foundation), David C. Gompert (US Naval Academy), Dr. Edward N. Luttwak (CSIS), Dr. Sean McFate (National Defense University), Dr. Lukas Milevski (Leiden University), Dr. Derek M. Scissors (American Enterprise Institute), Yun Sun (Stimson Center), Nicolas Véron (Bruegel and Peterson Institute for International Economics), Valentin Weber (University of Oxford), Ali Wyne (RAND Corporation), Lieutenant Colonel Maciej Zaborowski (US Central Command)

Question of Focus

[Q8] How do China and Russia approach global, not just regional, arenas for competition?

Summary Overview

This summary overview reflects on the insightful responses of eleven Future of Global Competition and Conflict Virtual Think Tank (ViTTa) expert contributors. While this summary presents an overview of the key expert contributor insights, the summary alone cannot fully convey the fine detail of the expert contributor responses provided, each of which is worth reading in its entirety. For this report, the expert contributors consider how China and Russia approach regional and global competition.

Please see the PDF below for the complete summary overview.

Author | Editor: Jafri, A. (NSI, Inc.)

Discussion Details

On 27 February 2019, the Strategic Multilayer Assessment (SMA, Joint Staff, J39) office—with the support of the Office of the Director of National Intelligence (ODNI) and National Defense University (NDU) – convened a panel discussion on China in support of the SMA Future of Global Competition and Conflict effort. The scope of the day’s event was to assess how the United States Government (USG) should consider China’s power in relation to other states for the purpose of understanding the implications for future geopolitical competition.

Panel 1: How does China view strategic competition?

The first panel “How does China View Strategic Competition?” examined the nature of strategic competition, and China’s role therein. Dr. Cynthia Watson, Dean of Faculty and Academic Programs at the National War College, introduced the panel. She underscored the necessity of understanding Chinese intent within a context broader than bilateral relationships. Indeed, Dr. Watson highlighted the relevancy of this examination within the larger arena of great power competition. Additionally, Dr. Watson encouraged both panelists and attendees to broaden the scope of the conversation of strategic competition to include alternative topics, viewpoints, and ideas within the national security community.

Brigadier General (ret) Dr. Rob Spalding, GTRI, began his remarks by challenging the notion that the United States has not been operating with a cohesive top-down strategy. He noted that one of the central themes of the most recent National Security Strategy was that military power alone is insufficient to achieving United States interests; not only is the current force structure insufficient to counter China in the Pacific, but the economic path for strengthening the military has not yet been actualized. Whereas the military has an outsized role in executing national interests because of the resources it is afforded, it is not sufficiently oriented towards an appropriate understanding of the inherent conflict between the United States and China. He cited the example of the primacy of the information domain and suggested that policymakers are not investing the requisite time and energy into competing in this domain. Relatedly, Dr. Spalding suggested that providing for the common defense of the citizenry within the information domain is incumbent on the military. He underscored the necessity of a more expansive toolkit with which to execute national policy by bringing up the nature of alliances and suggested cooperation in economic, diplomatic, and information relationships would undergird security cooperation.

The concept of operating within a set of principles was also highlighted by Dr. Spalding, who noted the shift in such an idea around the Cold War. Prior to the end of the Cold War, the United States’ trade relationships were more ideologically based; however, since that time, the free market has become a more useful determinant of trade patterns. Dr. Spalding conceptualizes this shift as the marriage between democratic and free market principles. Furthermore, he suggested using the strengths of liberal democracies as avenues of attacks on alternative systems and encouraged the panel to no longer rely on 20th century solutions to the problems of today, particularly those that reside within the information domain.

On China, Dr. Spalding suggested reframing thought around the Communist Party, rather than the 1.4 billion citizens of China; the former, according to him, acts as the sovereign of the latter. He noted the particular social contract in China, using President Franklin Roosevelt’s Four Freedoms as a framework. Specifically, Dr. Spalding noted that the Chinese Communist Party satisfies the polity’s “freedom from want” and, in exchange, the population sublimates their remaining freedoms (i.e., freedom of religion, freedom of speech, and freedom from fear).

Following Dr. Spalding’s comments, Mr. Roy Kamphausen of the National Bureau of Asian Research stressed several points. First, Mr. Kamphausen asserted that China has been engaged with strategic competition with the U.S., but in ways that will not resemble what the United States national security community might expect. Not least, Beijing desperately wants to avoid competition that features built-in military conflict, but China’s own actions might be pushing the United States in that direction.

Mr. Kamphausen argued that China’s desire to avoid military conflict as a part of the strategic competition is in great measure reflective of a risk aversion that is part of Chinese strategic DNA. This risk aversion derives from several factors: Chinese view of its own history, particularly the “Century of Humiliation;” real and deep concerns about the capabilities of the People’s Liberation Army, as expressed by Chinese leadership; concern that military conflict could put at risk China’s economic development goals; and finally, a reluctance to precipitate a military crisis prematurely, out of a conviction that time is fundamentally on Beijing’s side.

This principle of competition in areas where the adversary has a perceived weakness is a long-held tenet in Chinese strategic thinking. Mr. Kamphausen noted that eschewing traditional security competition in favor of “gray zone competition” in areas where the United States is unlikely to respond with force is a good example of this approach. Mr. Kamphausen warned of the misalignment between US and Chinese military conceptions on escalation management. Finally, he noted that China will only have occasional partners of convenience, rather than substantive allies. He stated this is the greatest opportunity to create leverage on China: the U.S. both has productive alliance relationships and China most fears the isolation that American-led allies can produce.

Panel 2: What are the capabilities or elements of power China uses to compete and how should we measure them?

Following the first panel was a discussion on the capabilities and elements of power that China uses to compete. Mr. Dan Flynn, Director of the IC Net Assessments Division, introduced the speakers, and offered comments on how to best identify and consider Chinese power. Speaking via videoconference was Dr. Michael Beckley of Tufts University, who suggested that the United States, despite many estimates, remains far ahead of China economically and militarily the competition with China. This assertion was based on analysts using gross indicators (such as gross domestic product (GDP)) that account for resources but do not deduct the costs. This is an analytical trap that befalls those who fail to account for social welfare and security burdens. It also does not account for the asymmetric nature of the Chinese threat. A traditional balance sheet that measures assets and liabilities on opposite sides of a ledger would be a more appropriate way to measure national wealth, according to Dr. Beckley.

Further, he noted that China has the world’s largest number of useless infrastructure projects. Additionally, China also leads the world in capital flight. Similarly, even though China’s input production is high, enormous amounts of money are wasted in research and development, and many Chinese innovators end up relocating to places where they can monetize patents and royalties. Dr. Beckley also characterized China’s role in Asian trade in context (i.e. that many Chinese companies were merely nodes on a continental assembly line). Militarily, while Chinese spending has increased, and it has acquired powerful missiles, China’s military expansion is constrained by China’s relative lack of power-projection platforms and by the anti-access/area-denial (A2AD) forces of its neighbors. Also, the costs of securing the borders of such a large country are very significant and ought to be measured.

Determinants of future national economic growth include favorable geography, institutions, and demographics. On each of these indicators, Chinese future prospects have been scaled back from prior estimates. With respect to geography, China has hostile, or unstable, neighbors and has decimated its own natural endowment in pursuit of the economic growth it is enjoying. Institutionally, China’s track as an oligarchy ruled by a dictator-for-life projects limited long-term growth potential. Additionally, the Chinese system of propping up state firms at the expense of private institutions is problematic for China’s long-term prospects. Demographically, China’s workforce will shrink by 200 million workers, around the same time it will add 300 million senior citizens, for whom the state will have to extend social services, representing a reversal of the demographic trends that have propelled China thus far.

In concluding his remarks, Dr. Beckley explored the implications of a faltering Chinese growth trajectories for United States policy. He noted that as China becomes more vulnerable to the aforementioned indicators, it will likely act more aggressively, as the windows of opportunity to realize its national ambitions will be slowly closing. While recognizing the priority on keeping China in check, he noted that there is no need to gear up for another Cold War. He argued that the United States can maintain checks on China while simultaneously working with them. Indeed, he suggested that the bigger threat to the United States is not China’s rise in and of itself, but a gross American overreaction to that rise.

Interrogating the macroeconomic indicators of Chinese growth was Dr. Derek Scissors of the American Enterprise Institute (AEI). He followed Dr. Beckley’s presentation largely in agreement with his predecessor but provided a more specifically economic look at China’s rise. He derided conventional indicators, specifically purchasing power parity (PPP) and underscored the methodological problems with using GDP. Specifically, since GDP measures transactions, it does not correct when goods get oversupplied. Dr. Scissors presented an example of this, when he noted the number of large, dubious infrastructure projectswhich are often quickly replaced and thus essentially count double towards GDP. In household wealth, the United States enjoys a comfortable lead.

Further, China is vulnerable when examining capital, labor, land, and innovation indicators. Dr. Scissors noted Chinese debt is over 250% of its total GDP, and both corporate and consumer debt levels have been rising. He supplemented earlier points about an aging Chinese population and added that national land use policy can be an impediment to innovation. For instance, the economic model that has powered the shale-gas revolution in the United States is virtually impossible in a state-run economy such as China’s. In general on innovation, the top-down involvement of the state in economic affairs has made it nearly impossible for private entities to innovate, create, and compete with state-owned enterprises.

Looking forward, Dr. Scissors saw three distinct futures for China. The first is a reform path, which, given Xi Jinping’s tendencies towards centralization, seems highly unlikely. The second is crisis, punctuated by China’s debt burden and demographic strain. A full-blown crisis is also highly unlikely, Dr. Scissors postulated; rather, a third scenario of a large but stagnated economy looms. The United States faces its own challenges, principally getting its fiscal house in order. If the United States does so, it will remain tens of trillions of dollars ahead of China in aggregate wealth. Dr. Scissors also noted that China’s ambitious Belt and Road Initiative is technically being built with American money, because the hard currency China uses to fund the Belt and Road now comes exclusively from merchandise exports to the United States.

What followed was analysis by Mr. Dean Cheng of the Heritage Foundation on China’s self-image, how it sees the future, and how it considers information. The Chinese measures their place in the world through the concept of “comprehensive national power,” which is a collection of capabilities and influence in economics, military, political cohesion, diplomacy, science and technology, and cultural security. In pursuit of a greater level of comprehensive national power, China is seeking out natural resources, as well as market access; this is rooted in the failure of Chinese national strategy from the late 19th century, which is remembered as China’s “Century of Humiliation.” Perhaps as a means of preventing yet another sustained period of national malaise, China has been seeking to balkanize global common spaces, such as the South and East China Seas as well as the internet in order to challenge today’s rules-based order.

Discussions about the Chinese future are incomplete if they do not mention the power given to the information domain. The Chinese Communist Party has internalized a shift in the measure of global power from the industrial age, during which time physical assets could be counted and cataloged, to the information age; the latter era is less quantitatively oriented, for measures are made on metrics such as the ability to gather, analyze, exploit, and transmit information more rapidly and more accurately than one’s adversaries. This information is critical in traditional computer technology, but also in outer space. As an example of the shift from prioritizing physical assets, China understands its presence in space as not merely a collection of objects in orbit; rather, it understands the space domain as powerful because of the information that is transmitted between data links in outer space and terrestrially.

Information dominance has proven important on a strategic level and can be understood to be a component of political warfare wherein supremacy in public opinion, legal, and cyber issues can help buttress national power. Particularly in societies such as China, information is seen as a whole-of- society commodity that can be levied and exploited. China has been seeking to use information on an operational level, for example, by linking electronic hardware and data together. On a tactical level, the Chinese have been engaging in a variety of influence activities to create a deterrent climate. In pursuit of this strategy, China has placed a priority on gathering information; the re-direction of a meaningful amount of the world’s internet traffic into China has been a means of achieving this outcome. In many of its national struggles, China is facing a familiar set of adversaries and is on a familiar terrain, whereas the United States is acting as an expeditionary entity. Complicating this dynamic are misalignments in each state’s concept of escalation. Mr. Cheng cited numerous Chinese incursions into India, a large, nuclear-armed neighbor, as an example of a difference in risk perception and escalation control.

Dr. Jacqueline Deal, President and CEO of the Long Term Strategy Group, concluded the panel with comments on Chinese power projection, focused on drivers, observable behavior, and implications for the United States. She noted that China’s journey from a state that thought deeply about how to target US power projection via counter-intervention or anti-access/area denial (A2/AD) capabilities to one that engages in its own power projection merited further discussion. Material drivers of Chinese power projection can be traced to the early 1990s, when, as a result of its rise as a global manufacturing hub, China became a net energy importer and an importer of other key commodities; its reliance on sea lines of communications (SLOCs) for both imports of raw materials and exports of finished goods exposed China to potential delivery disruptions, and Chinese political-military strategists perceived a requirement to protect seaborne commerce to and from the mainland. The choice to not rely on the US Navy as the security guarantor for China’s SLOCs was a reflection of the choice Deng Xiaoping made to reform Chinese trading relationships. That decision to reform and open China to trade was a pragmatic one animated by the Chinese Communist Party’s (CCP’s) desire to stay in power. The party does not trust the United States, which it calls a “hegemon” or “the strong enemy.” Nor does the CCP believe in the free market. Rather, it has a mercantilist understanding of the world.

Accordingly, intellectual drivers of Chinese power projection include CCP strategists’ view of the world as home to a zero-sum competition for wealth and power. By the early 2000s, Chinese foreign policy discourse developed a concept of the “big periphery,” a zone well beyond China’s near-abroad where China would and should be influential, thanks to economic relationships, trade ties, consular links, and terrestrial and/or high-tech infrastructure connections. In concrete terms, then-CCP leader Hu Jintao assigned the PLA the mission of protecting China’s overseas interests in 2004. This mission was further institutionalized at the 18th Party Congress, during which Xi asserted that China should strive to be a “maritime great power.” Not long after that declaration, Xi kicked off the Belt and Road Initiative. PLA textbooks began describing the need for “forward defense” and studying the history of other powers’ overseas basing. By 2015, the Chinese navy announced its first overseas base in Djibouti. Scholars have also identified a range of potential dual-use or paramilitary Chinese facilities, e.g., at Gwadar (Pakistan) and in Tajikistan, respectively.

Dr. Deal identified two main implications of this Chinese strategic expansion, the first being a new set of Chinese vulnerabilities (i.e., the requirement to protect its access to overseas bases and investments, in addition to the bases and investments themselves), and a direct challenge to how the United States operates globally. To minimize its signature, China has been operating through dual- use technology and trying to use light footprint tactics in challenging terrain, but as the Djibouti case shows, in some places the PLA will eventually want to establish a formal presence. Additionally, US policymakers will increasingly have to take into account potential Chinese interference in American efforts to project power in locations far from China; moreover, the United States can no longer see potential conflicts in East Asia (e.g., over Taiwan) as being geographically bound. China’s global footprint means that even “local” issues could have global reverberations.

Panel 3: Summary & Implications for the United States

The final panel of the day was a discussion between Dr. Cynthia Watson and Mr. Dan Flynn, who placed the conversations in a larger context, and considered the implications for US policymakers. Mr. Flynn spoke about how China is attempting to compete in a number of domains, beyond just military and trade. China’s preference appears to be to compete below the level of armed conflict. This partly reflects the People’s Liberation Army’s assessment that it must continue to modernize before it reaches US capabilities. In competing in the “gray zone” short of armed conflict, managing escalation dynamics becomes critically important, particularly given differences in Chinese and US conceptions of deterrence. Looking ahead to China’s future challenges, Mr. Flynn suggested that in assessing China’s foreign policies, analysts must also keep in mind China’s domestic situation. In the past, when the Chinese Communist Party has felt insecure at home, it has been more willing to compromise on foreign policy issues. However, in such situations, it is also possible for the CCP to be overly sensitive and reactive to perceived threats to its security interests.

The primacy of domestic issues within the Chinese mainland was also mentioned by Dr. Cynthia Watson. The Chinese Communist Party does face domestic vulnerabilities, and President Xi is presented with a very complex set of challenges. Since the PLA is a party army, it cannot chart its own trajectory, and is subservient to the party. Therefore, the party may be more inclined to use the PLA as an instrument of state power if it feels threatened. Dr. Watson also challenged the notion that isolated clashes in Asia would encourage China to retreat from its power projection in the continent; she underscored the geographic centrality of China to Asia, and vice-versa, and underscored that competition therein will not be confined to Chinese borders.