Paper #25. Supply Chain Competition & Warfare I: Fundamentals of Advantage

Supply chains are vital to socio-economic well-being and military success. They have become arenas where authoritarians wage complex warfare while democracies compete with inferior strategies.

In an information age where more actors have more access to more means of achieving significant effects, a great power should have a great strategy. Compare the US cutoff of investments and trade with Russia and Iran to China’s cutoff of rare earth minerals to Japan, and to Russia’s cutoff of oil and electricity to Ukraine. When are these actions exercises of economic leverage and when are they acts of war? Authoritarian and democratic security strategies give different answers. Authoritarian economic competition is part of diplomatic, informational, military, economic and social (DIMES) warfare that produces various non-lethal and lethal effects across any contestable domain.

Democracies take a narrower “should deterrence fail” approach to warfare. Lethal effects are for when non-military actions fail. Such idealism may be a social strength, but there is a competitive cost: DIMES elements of strategy are not fully integrated into the National Security Strategy. Indeed, US military doctrine still defines hybrid warfare and armed conflict in terms of violent means.

Understandable, but as a result, joint all-domain operations activities stay in their military lane while broadly strategic adversaries achieve effects via non-lethal means such as narrative warfare. At the same time, US diplomats focus on cooperative effects (such as persuade, dissuade, secure, induce) rather than confrontational effects (such as compel, deter, defend, coerce), seeking “cooperation where our interests align.”

The result is predictable. Authoritarian threats wage all-effects warfare below democracies’ self-imposed thresholds of “wartime” responses. While the Trump administration invoked the Defense Production Act in 2017 (hurricanes) and 2020 (pandemic), the idea of building and blocking commercial supply chains for national security seems like waging war for prosperity. That shatters liberal economic principles. The predicament for democracies is, how can we develop superior effects?

This paper begins a two-part series to answer the question by focusing on a vital ingredient of strategic competition and complex warfare — supply chains. Supply chains provide a complex yet tangible focus on the fundamental advantages that democracies need to muster.

What is a Supply Chain?

A supply chain for a good or service consists of everything from development to marketing to procurement-to-fulfillment and customer service. This broad scope includes buyers and suppliers, infrastructure and regulations, all of which is competitive and strategic. Supply chains provide the logistics of warfare that make strategies more than wishful thinking. During so-called peacetime, supply chains develop through cooperative and confrontational competition the rules of which are also contested. The rules matter because supply chains can create and destroy economic relationships that are the foundation of political and military power.

To account for the conceptual breadth of supply chains yet also draw conclusions for strategy, we will analyze supply chain competition, warfare and strategy in two parts. This paper analyzes fundamental issues of advantage: globalization and protectionism; matters of national security; incentives and risks; and political and technological change. The companion paper (ICSL Paper #26) identifies strategic decisions and recommends integrative options.

Globalization and Protectionism

Contentious arguments still rage over how globalized and how protectionist competition should be. The benefits of globalization today flow from the post-World War II order erected by a relatively un-ravaged United States. Since then, every US National Security Strategy has equated freedom, “the most contagious idea in history” (National Security Council Report, 1950), with liberal economic values.
Two founding principles are:

Non-discriminatory free trade: the World Trade Organization (WTO) lists fundamental principles for multilateral trade based on agreed rules. These are: (a) equal opportunity for most-favored nation status; (b) freer trade via negotiation; (c) predictable, transparent commitments; (d) fair competition; and (e) development with reforms to accept the preceding obligations. Discriminatory actors, however: (a) grant favors to selected partners outside free trade agreements; (b) construct non-negotiable barriers to competition; (c) conceal policies, practices, prices, and promises; (d) export below cost; (e) accept trade concessions without reforming.

Fixed parity among dollar-based currencies: the dollar-based, convertible-to-gold standard that emerged in 1945 (Bretton Woods) was replaced in 1973 by a more flexible arrangement (Jamaica Agreement) to permit limited government interventions yet prohibit predatory manipulations. Today’s mix of free-floating, managed-floating, and fixed-peg currencies includes the International Monetary Fund’s basket for special drawing rights on its international reserve—the US dollar, euro, Chinese renminbi, Japanese yen, and British pound sterling. “”Strong” currencies attract foreign investment; “weak” currencies promote exports.

International institutions such as the International Monetary Fund (IMF), the General Agreement on Tariffs and Trade (GATT) which became the WTO, and the World Bank (WB) cooperate uphold these principles. Institutionalized as rules, they led unprecedented global growth and interdependence. With that came a host of issues: uneven employment; market access; investment transparency; environmental protection; health and welfare, and intellectual property enforcement. Discriminatory competition was one way to deal with such changes.

Protectionism arose from these concerns under a banner of national independence. This movement has gained momentum despite the confrontational protectionism that proliferated between the two world wars—tariffs, quotas, trade blocs and trade wars. Distrust among rivals reinforces desires for self-sufficiency as comparative advantage shifts to different areas. In open competition, climbing up the value ladder requires market-oriented integration. In protected competition, value-added integration is influenced by national security-related fears of over-dependence in critical sectors such as agriculture, defense industry, and health.

Protecting self-sufficiency incurs costs. Consumers in developed economies may pay less for goods, but also depend upon outsourced labor, inventory, and production. Expanding self-sufficiency, even within an alliance, risks political costs. Such as getting replacement parts for the Joint Strike F-35 fighter due to the reduced credibility (induced by Russia) of a NATO supplier (Turkey). Not so clear cases include many that mandate “made in the USA.” Which supplies, food, raw materials, energy sources, and so forth should we pay more to secure this way?

In a competitive global environment filled with state and non-state actors seeking profit margins, market share and influence, businesses constantly adapt. They create partnerships, invest in technology, move production and services, and hire and fire labor. Mandated protectionism would have businesses maintain legacy partners, satisfice with good-enough technology, keep production and services at home, and retain existing labor.

Discriminatory competitors have a solution to this predicament: reap the rewards of interdependent globalization and independent protectionism at the same time. Some competitors discriminate systematically. When does illegal competition become warfare?

When Competition Becomes a Matter of National Security

When competition becomes a matter of national security, mutual legitimacy is replaced by mutual threats. Threats to national and international security wage warfare broadly.Weapons and effects are more than military. They are diplomatic, informational, economic, military and social (DIMES). Their combined effects can be cooperative and confrontational, often at the same time: persuade —dissuade; induce—secure; compel—deter; coerce—defend. This competitive strategy can envelop a narrower (military only) strategy. Why?

Mutual threats are not identical threats when values are different. So, combinations of the above effects impose dilemmas that are not necessarily recognized as threats. This is happening now in western democracies. Our “should deterrence fail” military approach to warfare focuses on winning battles of armed conflict rather than complex wars of cooperation and confrontation. At the same time, the spread of warfare into an all-pervasive information environment is expanding ing what constitutes a matter of national security. The result is a squeezing out of what is regarded as non-security-related competition needed to accommodate change. We are experiencing a proliferation of globalized and protectionist perceived threats to acquired values.

In this environment, a key issue for supply chain security is how to protect benefits of globalization without globalizing costs of protectionism. Any state will try to free ride on globalization’s benefits. However, authoritarians tend to impose protectionism to prevent competition that threatens their regime’s monopoly on legitimate rule. Democracies tend to protect globalization and negotiate protectionism as exemptions from liberal rules. Rules with the consent of the governed, after all, are the basis of a democracy’s legitimacy.

This difference in governance matches the difference in what constitutes a matter of national security. If we understand security as “the absence of threats to acquired values and the absence of fear that such values will be attacked,” then regime type matters very much.

From this comparative perspective, we analyze official (single-Party or government-run/supported) China and Russia as complex threats to democracies’ protected globalization. We focus on these two states for three reasons:

China and Russia are unique in being the only two authoritarian Permanent Member States of the United Nations Security Council. Any permanent member can veto a resolution or decision of the 15-member Security Council.

China and Russia engage in discriminatory trade against each WTO principle mentioned above: (a) granting, de-granting, and buying favors via weaponized investment; (b) setting import quotas and initiating high tariffs, (22); (c) concealing and stealing information; (d) dumping/re-routing dumped exports; (e) benefiting from WTO and WB membership while rejecting diversification, property rights, and reforms.

China and Russia spew massive disinformation while calling for reforming international governance.. China’s strategic use of information uses selective evidence, faulty cause-and-effect, and false dichotomies to persuade targeted audiences that China is a blameless and benign model of global cooperation. Russia weaponizes information to divide audiences by persuading, compelling, dissuading and deterring behavior..

Since joining the WTO as a developing country in 2001, China hoards that special status to fashion an identity which attracts and economically aligns similarly victimized followers. Yet, that status includes seven of the ten most wealthy countries by per capita GDP and purchasing power parity—Brunei, Hong Kong, Kuwait, Macao, Qatar, Singapore, and the United Arab Emirates. Now the second largest economy,China’s national security modernization includes globalizing protectionist supply chains.

Globalizing Protectionism

China globalizes protectionism in two major ways: (a) large-scale industrial policy to enforce modernization priorities, state-owned enterprises and banks to consolidate supply chain control in key sectors; and (b) government-guided investment funds to leverage private capital from development to fulfillment. This end-to-end approach produces supply chains that strengthen China’s domestic industries, extract foreign technology, and induce deficit-ridden and commodity economies into dependence. How?

The New Development Bank (Brazil, Russia, India, China, South Africa) and Asian Infrastructure Investment Bank (AIIB) operate according to opaque relationships and rules. The NDB rules include equal shareholding and voting with China as the largest contributor. China‘s banks hold more assets than US and Europe combined. Its international lending accounts for 16% of cross-border lending and 2/3 of the credit extended to emerging markets (”Credit Clout,” Economist, 7 May 20). The AIIB operates by consensus, with a China veto. The China Development Bank (CDB), established in 1994, is the world’s largest lender for development projects. CDB loan financing serves the Belt and Road Initiative (BRI) strategy’s construction of supply chains across Eurasia.

Beijing’s benevolence is betrayed by its authoritarian flouting of international norms, and in obvious ways. Human rights abuses in China are particularly brutal for ethnic minorities and religious groups. Beijing refuses to abide by the Permanent Court of Arbitration in The Hague that rejected China’s claim to 85% of the South China Sea. Seven claimants, most of whom are WTO developing countries, dispute China’s re-expanded boundaries connected by a growing infrastructure. China’s authoritarian political system is on display during the COVID-19 pandemic, which originated in Wuhan. The shallow deception perpetuated by China’s officials and state-run and sponsored media is tracked by Hamilton 2.0.

As a fellow authoritarian on the UN Security Council, Putin’s Russia also claims to represent developing countries while perpetrating human rights violations, inciting divisiveness in other’s territorial disputes, and using its limited economic leverage for geopolitical advantage.).

Since the dissolution of the Soviet Union, Russia has intervened or supported ethnic enclaves in other states, now occupied by Russian forces: Transnistria in Moldova; Abkhazia on Georgia’s Black Sea coast; South Ossetia on Georgia’s northern border with Russia; and Nagorno-Karabakh in southwestern Azerbaijan.

State-owned oil companies Rosneft, Novatek, Gazprom and Sistema rely on personal connections with the Putin regime to obtain monopoly rights on exports. Moscow secures these supply chains with military force (Georgia, Ukraine) when needed, loans to Euro-skeptic politicians (Moldova, France, Austria), and state-owned energy deals (Europe, Turkey, Egypt, India, Vietnam, Venezuela, Siberia). Moscow then uses this multi-weapon to divide and block rivals.

In this context of contested international rules, supply chains have become more horizontally integrated. Integration refers to competition among producers, storage facilities, and transportation networks not of the same firm (vertical integration). Horizontal supply chain complexity is enormous, consisting of many various interconnections among production orders, inventory levels, capacity and utilization, deliveries, revenues, and lead times. In every sector, companies and governments seek supplier visibility to grasp what an integrated supply chain looks like.

As supply chains have become more globalized in terms of cross-border trade, investment flows and labor markets, China and Russia have undercut transparency and trust. They subsidize, direct and pressure public and private enterprises to create dependencies that can be leveraged.

In February 2020 China threatened to cut off medical supplies and pharmaceuticals to the United States during the pandemic that started in and emanated from China. In March, the state-run Xinhua news media warned of banning medical supply exports to the US. In May 2019, the state-run People’s Daily outlet threatened to cut off rare earth minerals to the US to leverage trade negotiations. Recall that China slashed exports of rare earth minerals to Japan in 2010 in the context of a territorial dispute over the Senkaku Islands (Diaoyutai, according to Beijing).

For its part, Russia seeks lower oil prices to prevent US shale oil from gaining market share. Moscow routinely conducts cyber, disinformation, and sabotage operations to harm economic infrastructure among other targets such as media outlets and government institutions. Short of the “armed conflict” that might trigger an effective western response, energy threats are problematically timed to influence temporarily isolated targets such as Ukraine or Belarus. Putin’s attempt to reverse Saudi Arabia’s reduction of oil supply during the pandemic’s drop in demand failed, driving Russian revenues and market share downward.

The use of trade dependencies to compel behavior reflects a confrontational strategy of supply chain integration. Both China and Russia use such protectionism to attack perceived threats to autonomy and preserve their authoritarian rule. With few shots fired, their security strategies have been broad enough to envelop and render US all-domain military operations ineffective. How has this happened? By constructing broad advantages, especially where democracies are less willing to go. We need to look at incentives for and risks of achieving it.

Incentives and Risks

Incentives for achieving advantage are largely political-economic and technological, and influenced by culture and historical experience.

Political-economic incentives boil down to increasing one’s relative power and prosperity. For authoritarians, the purpose is to create a “stability of limited or non-opportunity” that leverages elites. So supply chain competition is politicized for advantage. Information such as supply schedules, inventory management and distribution networks are closely held. Contrast this to pluralistic political systems, where “stability” is a dynamic of providing more opportunity to a wider variety of actors. Risks are supposed to be spread out and contestable. There is more publicly available external information.

In authoritarian regimes, increasing power and influence requires reducing that of one’s rivals. The rules about what risks are imposed on and assumed by whom, are not negotiable. So, in areas that China and Russia regard as strategic–such as territorial disputes and industrial policy priorities–advantage is not a win-win proposition. The idea is to create a broad industrial foundation for relative gains; win-lose:

• China’s industrial priorities are:
  • equipment manufacturing, shipbuilding, automobiles, iron and steel, non-ferrous metals, construction, petrochemicals, light industry, and textiles
  • new energy, new energy automobiles, energy conservation, environmental protection, info tech, bio-tech, value-added equipment manufacturing, and new materials
    
• Russia’s industrial policy is a continuation of inefficient structures with newish technology:
  
  • heavy reliance on state corporations to restore Russia as an industrial power
  • developing Ust-Luga port in the Gulf of Finland, an ice-resistant offshore platform, the Prirazlomnoye oilfield in the Arctic, the Eastern Siberia — Pacific Ocean (ESPO) oil pipeline, power lines through the Kerch Strait, and the Boguchanskaya Hydro Power Plant near Kodinsk, and the Moscow-Kazan high-speed railway

In both cases, state-owned enterprises and subsidized private conglomerates politicize supply chain competition to serve regime interests. Disinformation campaigns propagate the politics as national identity. For foreign businesses, it’s a struggle to get reliable information. The challenge is to discern the informal relationships driving decisions and constituting trust.

Technological incentives for advantage are a bit clearer. The digitization of information expands connections and enables economic efficiencies, such as reduced transportation costs. From containerization to real-time tracking and predictive delivery, e-commerce and intermodal transfers are making trans-continental supply chains profitable. Automation of routines such as inventory management, and the sharing of information such as departed-enroute-arrived, enhance functional integration.

The same technology that enables instant communication across distributed supply chains also creates vulnerabilities to attacks that used to require a military operation. Businesses and governments face an explosion of diverse threats such as cyber and disinformation attack, outsider-becomes-insider, and the theft of financial and intellectual property. Non-disclosure agreements and standards of practice (such as the US government’s cybersecurity maturation model certification) can reduce the risks of depending on technology and information.

Political & Technological Change

Chinese and Russian supply chain weaponization for advantage must also be understood in terms of political motives and technological opportunities.

China’s post-Mao modernization has achieved unprecedented growth while struggling to maintain single-Party control. All the while, Beijing has waged complex warfare of coercion, compellence and inducements to reclaim imperial borders and suppress human rights. Consider China’s actions in and around Tibet (forced incorporation), Burma – Myanmar (forced border), Xinjiang (Uighurs), India (Aksai Chin, Kashmir), Russia, (Ussuri River), Pakistan (trans-Karakoram), Vietnam (invasion, maritime seizure of territory) , the Philippines (maritime incursions and seizure of territory), Taiwan (missile firings and airspace violations), Japan (Senkakus and airspace violations), Indonesia (maritime intrusions), Tiananmen Square (massacre of students), and Hong Kong (broken agreement).

China’s aggressive territorialism fueled by economic growth and military capabilities subverts international rules and creates problems at home. Nationalism can quickly and on a massive scale backfire on the CPC, which citizens distrust. Russia’s militarist territorialism has led to protests and mistrust of Putin. Both of these vulnerabilities would require a more-than-military US and allied strategy to exploit.

In the absence of that, Russia’s political rearrangement of borders has become more aggressive. Putin employs political and economic coercion, cyber and information attacks, and physical invasion.

In 2008 after a period of Russian and proxy provocations, Georgian forces assaulted South Ossetia to re-take territory from separatists supported by Russian peace-keeping forces. Russian forces counter attacked in strength, halted for the NATO-initiated ceasefire, and recognized Abkhazia and South Ossetia as independent states.

In 2014, Russian forces invaded eastern Ukraine to re-install a pro-Russia government that had fled due to large-scale demonstrations. Russia subsequently annexed Ukraine’s Crimea peninsula. In both cases cyber attacks on government institutions, media, and military forces were part of Russia’s DIMES-wide complex warfare that continues today.

Beijing strategists strive to anticipate how domestic politics play out in democratic systems. Politics, however, do not stay domestic. An example is the China Greece Serbia Hungary high speed rail initiative. A year after China initiated its 16+1 initiative (later, 17 + 1 with Greece) toward Europe with a supply chain from Kazakhstan through Greece, EU and Russia involvement derailed the plan for high speed freight.

Many Russians have experienced the domestic politics of post-USSR liberalization. Moscow is confronted by states in various stages of their post-Soviet freedom. These states are able to navigate among NATO, EU and Russia ties. For instance, Putin’s attempt to securitize the Eurasian Economic Union against Chinese and Western influence is undercut by Russia’s increasing trade and financial dependence.

Competition Becomes Warfare

Authoritarian politics and new technologies incentivize supply chain competition into warfare.

China’s access to foreign-sourced resources are enabled by technologies that reduce transportation costs and require information sharing. To deal with the growing complexity of supply chains, technologies such as artificial intelligence, block chains, 5G networking and quantum computing offer solutions. All of these require decisions about how much control over information should be allowed and by whom.

Authoritarian politics cannot be separated from the use of technology. The 2015 Agreement between President Obama and Chairman Xi and endorsed by the G-20 prohibited commercial spying. As information technology expands China’s massive domestic surveillance, that agreement favors China. Internal controls over citizens and foreign businesses are not considered state espionage in China. Evidence that Chinese hackers and researchers are attempting to steal coronavirus vaccine information are consistently rejected by China’s Foreign Ministry.

Instead, China’s Block-Chain Services network promises to change the world by managing information securely with transparent, trusted information. Yet, the Party’s centralized control, massive surveillance, and persistent disinformation is the exact opposite of a distributed ledger that is trusted and secure because it’s an open peer-to-peer network. Trusting China’s distributed technology is problematic, but a huge domestic market with mobile apps is enticing partners with monitored alternatives to US-centered international banking transactions. As Beijing induces partners to adopt monitored apps and bans technologies with uncensored search engines, its coercive power strengthens.

Other technology that enables Russia and China to weaponize supply chains include the European Union’s Three Seas Initiative (3SI: Baltic Sea, Black Sea, Adriatic Sea) and the Baltic-Black Sea Waterway. Twelve states comprise the 3SI — Austria, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia. New liquid natural gas terminals connected by highways, rail and water corridors are a result of improved intermodal design, autonomous transport, and electro-mobility. A slew of cyber upgrades rely on a supply chain of fiber optics, 5G technology infrastructure, cloud computing integration, and data islands.

Chain weaponization can cut in many directions. The Baltic to Black Sea project would bypass Russia by deepening and building waterways. Opposed by Moscow, the project would enhance Ukraine’s transit position for China’s BRI and orient Belarus toward the EU.

To what extent are Beijing and Moscow weaponizing supply chains against rivals, including each other? China uses the Eurasian Economic Union (EAEU) created by Russia to reshape its own supply chains via selective free trade zones. Moscow’s bilateral trade within the Union is being outpaced by China’s. It’s easy to envision Russia’s Internet Research Agency (troll farm) hacking into China’s digital currency and trading partners for espionage, theft, ransom, and leverage to reduce China’s gains. With China’s rise, Russia is becoming a country of transit points servicing the China market.

Technology, governments, and businesses have a way of creating alternatives. Citing national security concerns, the US Government permitted a subsidiary of Google to open a direct underwater cable connection that avoids rather than includes Hong Kong – China. Cyber security laws in China, Russia and other states prevent the free flow of data, requiring in-country storage to enforce what is private and what is not. Based on that and ongoing Chinese and Russian information operations, foreign businesses have good reason to expect continued state-sponsored theft of intellectual property.

Other tech trends affecting supply chains’ access to energy and information are advances in tracking goods and services, and the containers in which goods arrive and depart. More visibility can enable businesses to prevent some of the surprise stack ups in ports during the coronavirus pandemic. The ability to gain insight into more aspects of multiple supply chains can help develop more sources of supply. This insight, however, may not erase the costs incurred when sourcing from production or labor locations that are not lowest cost for the right match of product and labor expertise.

This brings us to a glaring fundamental question, how can global supply chains be protected against entrenched discriminatory competition that constitutes warfare?

Challenges of Protecting Globalization

Discriminatory practices are not unique to China and Russia, but they are exceptionally less negotiable. Constitutional legitimacy may be weak, but in supply chain language, systematic discrimination occurs as follows. China’s single-Party elites and Russia’s statist elites disrupt the development and marketing of individual freedoms in order to retain control over competitors’ procurement-to-fulfillment efforts. As for customer service, it’s highly selective. The entrenched continuity of this supply chain warfare is reinforced by the entrenched political positions of Xi and Putin.

Xi was “elected” unanimously by the National People’s Congress, a formality eliminated by a Constitutional change in 2018 that allows Xi to serve for life. His selection as Communist Party of China (CPC) Chairman by the Party’s Central Committee in 2012 guaranteed the Presidency anyway. Xi also is Chairman of the Central Military Commission. Putin’s elections as President are more legitimate in terms of democratic process. Putin was President Boris Yeltsin’s Prime Minister, then acting President, upon the latter’s resignation in 1999. He was elected in 2000 and 2004, then elected Prime Minister to due to the 8-year term limit. He was elected again in 2012 and 2018. Russia’s Constitutional Court cleared the way for Putin to serve until 2036.

The types of rights that a political-economic system protects circumscribes its weaponization of supply chains. Protecting individual rights leads to democratic competition and a common basis for property rights that undergird legitimate economic competition. Protecting authoritarian rights leads to coercive competition at home, and stealing property abroad (including territory) where power vacuums permit. While Russian protectionism sputters against resistant neighbors, China’s strategic protectionism and infrastructure-driven development is transcontinental in scale.

A democratic hope is that authoritarian powers become more pluralistic, whether they are a rising China or a declining Russia. Protectionism is here to stay, even if China and Russia become more pluralistic. The roots of protectionism include nationalism, predatory trade and finance, uncompetitiveness, disadvantaged workers, and more broadly, societal differences with respect to adapting to change. Globalization based on agreed non-discriminatory practices is precisely the kind of change that authoritarian protectionism seeks to prevent. We see this play out in the incentives for integrating supply chains.

Supply chains that are regarded as legitimate competition operate according to economic incentives—profit, market share, and added value. In China and Russia these factors are more variously manipulated to achieve national advantage: enhancing corporate pricing with subsidies, foreign-targeted taxes and beneficial land-use policies; compelling foreign firms to divulge private intelligence and technology; coercing board of directors members; and inducing key executives’ resignations with anti-corruption charges. Where judicial systems are not independent of the executive branch, rule of law becomes elite rule by law.

Another democratic hope is that authoritarians’ membership and leadership positions in international institutions will have democratizing effects. For now, having China’s officials in senior posts at the World Bank, Interpol, United Nations Educational, Scientific & Cultural Organization (UNESCO), and International Civil Aviation Organization simply serves authoritarian control:

• The World Bank website devoted to China spins positive narratives about China’s economy, innovation and reforms
• Interpol collected intelligence on anti-CPC activists
• UNESCO is a cover to conduct maritime surveys in support of China’s territorial claims and occupation in disputed South China Sea territory, such as the recent establishment of UNESCO’s South China Sea Tsunami Advisory Center in Beijing
• ICAO induced international compliance via Notices to Airmen (NOTAMs) with an Air Defense Zone announced the day it was put into effect over disputed territories (6-20) in disputed areas of the East China Sea

Multilateral arrangements designed to protect members against outside competitors are vulnerable to China and Russia when divided. With huge capital assets, Chinese businesses buy out the membership’s debt then take ownership of assets. Russian operatives often create compromising information (kompromat) or energy dependencies with which to promote loyalty. We see these patterns in ASEAN and the EUEU, respectively.

Toward ASEAN, China divides state interests to prevent unified positions on territorial disputes and oil pricing. China threatens Australia with boycotts after Canberra’s call for an independent inquiry into the origins of the coronavirus pandemic. Toward the EUEU, Russia’s customs agreements ranging from Kazakhstan to Belarus attempt to enhance Russian identity. China’s integration of trade routes through Kazakhstan circumvents Russia anyway.

Toward Superior Strategy

The origins and impact of globalized and protected supply chains are important because they produce issues that become matters of national security. Authoritarian states are built to weaponize supply chains for national advantage. Democratic states compete with this via a “should deterrence fail” approach to warfare.

In the US, a prevailing idealistic view of warfare fixates on means, not ends. Institutionalized in laws of armed conflict, our focus is on gaining and maintaining military advantage against combatants. We define combatants largely in terms of means (armed forces) and lethal effects (“taking a direct part in hostilities”).

This is not the great “principled realism” (1) called for in the US National Security Strategy. Instead, it is a strategy being subsumed by broader competition that effectively wages complex warfare. Leaders can remedy this shortfall with a broad approach to competition and warfare, and an integrated strategy.

ICSL Paper #26 does that by identifying strategic decisions and recommending integrative options for supply chain competition and warfare.