January 21, 2011

COMMENT on World Sanskrit Book Fair by a visitor

 Young lads taking part in the World Sanskrit Book fair organised by Samskrita Bharati, a non-profit NGO, to mark its 30th anniversary at National College ground, Basavanagudi in Bangalore on January 7, 2011.

Young lads taking part in the World Sanskrit Book fair organised by Samskrita Bharati, a non-profit NGO, to mark its 30th anniversary at National College ground, Basavanagudi in Bangalore on January 7, 2011.

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Namaskaarams to all!

I visited the just concluded World Sanskrit Book Fair at Bangalore and went around the fair on all the four days. It was amazing to find that many samskrita enthusiasts, and especially, youngsters of all colours and bearings!

I experienced some problems which I am sure almost many would vouchsafe. Hopefully, the concerned authorities will look into it and try to minimize it if not wipe it altogether :

1. The area for the Book stalls was undoubtedly small considering the huge turn outs on all the four days. Perhaps the organizers wouldn't have expected such a large attendance.

2. The book stalls where the publishers had displayed their books were congested. A larger stall size will be an eye-catcher.

3. The passage area being narrow there was invariably push-arounds all the time. You could not see the books properly, let alone decide to buy them. There was literally shoulder-clash everywhere.

4. Even the people who bought the books, were seen just bundling their choice without bothering about their utility vis-a-vis their knowledge levels. You practically had no time to decide.

5. I thought the crowd may be less in the evening hours when there was manoranjan karyakrama. But alas, I had no luck that time also.

6. The only day I could somewhat freely move about was the last day. Bad luck here again! The stalls wore an empty look, most of the books having been sold out.

7. Some of the book sellers and publishers I talked to, especially, Sarawathy Mahal Library of Tanjore, and Parimal publications, had openly admitted that they did not anticipate such crowds and had brought only few samples of books.

8. The Exhibition was an eye opener for any proud Indian! How wide the eyes and mouth of the school children and college students opened, perhaps their hearts too, you should have been there to believe!

9. The rest room facilities, of course, could have been better. But given the temporary nature of arrangements, it was the best. The Green Buckets could have been more and maintenance still left much to be desired!

10. Finally, the Indian Motherhood was at its best! What I mean the food arrangements for the delegates and visitors, couldn't have been better! ( Do we not equate 'Anna Dhata' with the Motherhood?)

On the whole, we had a sense of seeing the Real Bharat!

Three cheers to Samskrita Bharati! You have won the hearts of one and all!

A Proud Indian

The Middle East: Selected Key Issues and Options for the 112th Congress

Although the US maintains strong relations with several key Arab and non-Arab states such as Israel, Egypt and Turkey, other state and non-state actors, such as Iran, Hezbollah and Hamas, are aligned against US interests. The US and its regional and international allies continue to work to limit the influence of these actors while advocating for economic and political reform to address ongoing socioeconomic challenges and to promote democracy and a greater respect for human rights in the region.



Casey L Addis, Christopher M Blanchard, Kenneth Katzman, Jeremy M Sharp, Jim Zanotti



Stealth plane

Harsh V. Pant

: Fri Jan 21 2011, 02:07 hrshttp://www.indianexpress.com/news/stealth-plane/740420/0

As Chinese President Hu Jintao visits Washington, the pace of China’s rise is causing consternation across the globe. This is particularly true in the military realm where recent events have underscored growing tensions in Sino-US ties. There was a surprise waiting for US Secretary of Defence Robert Gates in Beijing last week — China welcomed him with its first stealth plane, the J-20. It was the classic Chinese way of showing off its military muscle. Gates was there to restore high-level military contacts with the People’s Liberation Army (PLA) following Beijing’s decision to cut these ties last year when the US announced a $6.4 billion arms sale to Taiwan.
China’s largely secretive military modernisation programme is producing results faster than expected, and is gearing up to challenge US military prowess in the Pacific. It is refitting a Soviet-era Ukrainian aircraft carrier for deployment next year and more carriers are under construction. China’s submarine fleet is the largest in Asia and is undergoing refurbishments that include nuclear-powered vessels and ballistic missile-equipped subs. Its anti-ship ballistic missile (ASBM) system, developed to target US carrier strike groups, has reached initial operational capability much earlier than expected. And this month, photographs appeared on the Internet of what is apparently its first stealth fighter during a runway test in western China.

China has already shown its prowess in anti-satellite warfare and has redeployed its nuclear warheads on to mobile launchers and advanced submarines. In a marked shift in China’s no-first-use policy, its leaders have indicated that they would consider launching pre-emptive strikes if they found the country in a “critical situation”, thereby lowering the threshold of nuclear threats.

China is a rising power, the world’s second largest economy and has a growing global footprint. It would like to have a military ready and willing to defend these interests. But it is the opaqueness surrounding its military upgrade that is the real source of concern. In fact, the PLA follows Sun Tzu who argues that the “essence of warfare is creating ambiguity in the perceptions of the enemy.”

China continues to defend its military upgrade by claiming that it needs offensive capability for Taiwan-related emergencies. But clearly its sights are now focused on the US. China wants to limit American ability to project power into the Western Pacific. It wants to prevent a repeat of its humiliation in 1996 when US aircraft carriers could easily move around in the

Taiwan Strait and deter Chinese provocations. Not surprisingly, the steady build-up of a force with offensive capabilities well beyond Chinese territory is causing consternation in Washington and among China’s neighbours. This comes at a time of Chinese assertiveness on territorial disputes with Japan, India and Southeast Asian countries.

American technological prowess and war-fighting experience will ensure that China will not be able to catch up very easily. China is still at least a generation behind the US militarily. But the Pentagon’s most recent assessment of China’s military strategy argues that despite persistent efforts, the US’s understanding of how much the Chinese government spends on defence “has not improved measurably”. It is clear now that Beijing is configuring its military to fight the US. China’s focus on anti-access and area-denial weapons is designed to prevent the US from operating without fear in the Western Pacific.

As it turned out, Gates’ Beijing visit failed in achieving anything substantive; there was merely a commitment to continue talking. China’s defence minister made it clear that it was up to the US to change its policies if it wanted

better ties with China’s military.

The US secretary of defence has acknowledged that US military and intelligence had been underestimating China’s military build-up. China’s J-20 will rival the US F-22 superfighter whose production was cancelled by Gates on the assessment that China would not deploy a comparable jet until 2020. The US military is stepping up investments in weapons to counter China’s military build-up in the

Pacific, including a new long-range, nuclear-capable bomber aircraft and a new generation of electronic jammer for the navy designed to thwart a missile from finding and hitting a target.

But it might be too late already for the US. China has closed the capabilities gap with the US — enough to pose a threat to US freedom of action in the Western Pacific — with the help of a three-decade-long build-up and a raft of technological secrets stolen through espionage. The US has been consistently underestimating the PLA for more than a decade now. Not surprisingly, the Chinese military has advanced faster than the West thought it could. The US aircraft carrier battle group now stands vulnerable in East Asia.

Chinese ships have increasingly challenged the US navy in the

Pacific in recent months. China might succeed in getting the US out of East Asia without firing a shot by enhancing its deterrence capability in the region, forcing the US to think twice before intervening in the region. And this should be

troubling for those who continue to view the US as the ultimate bulwark against China’s rising assertiveness in the region.

The writer teaches at King’s College, London, and is the author of ‘The China Syndrome’; express@expressindia.com

Kashmir Hindus: Forsaken, forgotten for 21 years

January 19, 2011 14:58 IST

The Kashmiri Hindu community despite homelessness and horrendous ethnic cleansing has survived and will survive. It is the tenacity to weather any storm and belief in its values and morals that has kept the Kashmiri Hindu alive, says Lalit Koul.

January 19 is an insignificant day for most of the people around the world. It comes and goes and nobody notices. But for the last 21 years, for one community, it is the day that brings back frightening and dreadful memories.

It is the day when 21 years ago final nail in the coffin of forsaken community of Kashmiri Hindus was hammered. It was the day when Islamic terrorists and their sympathisers gave 24 hours eviction notice to Kashmiri Hindus. It was the day when the threats ofRaliv, Galiv Ya Chaliv (Convert, die or escape) replaced the sounds of evening Azaan (prayers) from majority of mosques in the valley of Kashmir.

It was the day when so-called secularism died in Kashmir. It was the fateful day when humans lost and beasts took over. It was the day that will remain etched in the memories of Kashmiri Hindus worldwide because on this day they lost the most precious thing they had -- their homeland.

And did rest of the world care?

No. Not then, not now.

It has been 21 years since first shots of Kashmiri Hindus' ethnic cleansing were fired loud and clear from the ramparts of mosques in the Kashmir valley. And it has been 21 long years of neglect, apathy and carelessness on the part of all the successive governments both in the state of Jammu and Kashmir [ Images ] and the capital Delhi [ Images ].

Kashmiri Hindu refugees who were overnight made homeless on January 19, 1990 have been moving from pillar to post, demanding their fundamental rights. But no one cares. No one has time for this community because they are too small a number to matter. It is a shame that the one and only symbol of India [ Images ] in the valley, the Kashmiri Hindus, are treated as pariahs by the government.

If it were not for Kashmiri Hindus and their steadfast belief in the Indian constitution and tricolour, Kashmir would have been lost two decades ago. Sadly that stark realisation is lost on the Indian polity and government.

It is not mere governments that have ignored this refugee community of patriots and nationalists. Even the media has forgotten its responsibility of highlighting the cause of those who do not have a voice. These days, the mainstream media is more interested in knowing what goes on inside the four walls of the Big Boss' house than fighting for the fundamental rights of those who have been wronged.

Some leading journalists instead of focusing on ethnic cleansing issues like those of Kashmiri Hindus' have converted the noble profession of journalism into tabloid yellow journalism and are busy lobbying for political parties. It is a shame that in a free country like ours with free press, half a million Kashmiri Hindus have been hounded out of their homes and hearths and mainstream media has continued to ignore this for 21 years.

But having said that, the Kashmiri Hindu is a survivor. Islamic terrorists thought they could annihilate and eradicate Kashmiri Hindu community from the face of this earth but they miserably failed in their mission.

The Kashmiri Hindu community despite homelessness and horrendous ethnic cleansing survived and will survive. It is the Kashmiri Hindu's tenacity to weather any storm and belief in its values and morals that has kept the Kashmiri Hindu alive. While Kashmiri Hindus are starting their 22nd year in exile, they will never give up their dream and demand of reclaiming their homeland.

In spite of extreme apathy shown by the world, Kashmiri Hindus will continue to fight for their fundamental rights and homeland in the Vale of Kashmir. Indian governments, Human Rights organisations, the media, and other world bodies might continue to ignore one of the largest ethnic cleansing in the recent times, but that will not shake off Kashmiri Hindus from their just path to their dream.

Nothing can or will break their will.

The dream shall live on. The fight will go on.

Lalit Koul is the president of Indo-American Kashmir Forum and editor of Kashmir Herald.



It is hoped that good sense will prevail on the leaders of the Bharatiya Janata Party (BJP) and they will give up their plans to hold their own flag-hoisting function in the Lal Chowk of Srinagar on the Republic Day on January 26.

2. They, like any other Indian, have a right to hold a flag-hoisting function anywhere in the country where Indian citizens are allowed to hoist the national flag without disturbing public peace. Under certain circumstances, this right, however legitimate, cannot be exercised. For example, when there is a curfew at the place where the flag is proposed to be hoisted.

3.One can understand the BJP's determination to go to Lal Chowk to hoist the flag if the local Government or the Government of India or the nationalist political parties of the State refrain from observing the Republic Day by hoisting the national flag.

4. That is not going to be so. The Governments----the State as well as the Central--- the various national institutions such as the Armed Forces and the central para-military and police forces and the nationalist political parties are going to observe the Republic Day by hoisting the national flag.

5. Only separatist elements, which challenge the unity of India, will not be doing so. The successful holding of the flag-hoisting functions by those mentioned in the previous para would be a fitting reply to the attempt of the separatists to organise a boycott of the Republic Day.

6. Yet one more function by BJP elements from outside the State is not going to add to the sanctity and the nationalist significance of the day. On the contrary, it is going to add to the difficulties of the security forces in maintaining law and order in view of possible attempts by separatist elements to disrupt the BJP's Lal Chowk function. If the BJP wants to help the security forces in maintaining law and order, it should refrain from actions such as holding a function of its own in the Lal Chowk.

7. Moreover, the ground situation in the Valley, which looked so pessimistic till a few months ago due to violence by stone-pelting elements in separatist processions, is showing some positive signs. Such incidents have come down. People are once again going about their normal tasks. There is a greater willingness to join the police instead of boycotting it as was often done in the past.

8. It is not yet normalcy in Srinagar, but a trend towards it. All right-thinking nationalist elements, whether resident in Jammu & Kashmir or outside, have a patriotic responsibility to contribute to a strengthening of this trend in order to convince the separatist elements that the time has come for a re-thinking on their objectives and tactics.

9. The separatists and the instigators of violence from Pakistan will be looking for an opportunity to create a set-back for the nationalist forces in order to revert to the kind of situation that prevailed till some months ago. The security forces are hoping against hope that they will be able to sustain the present trend towards an improvement and that political leaderships will come out with appropriate policies, gestures and actions towards the same end.

10. When almost all other political parties sense the delicate nature of the present situation and are conducting themselves with political maturity and a sense of nationalist responsibility, it is a pity that the BJP alone should conduct itself with unwise political opportunism in utter disregard of the advice and entreaties from others to give up the proposed course of action and should refuse to desist from actions that carry the risk of causing a set-back to the improving trend.

11.It is the bounden duty of all of us outside the State to strengthen the hands of the nationalist elements in the State which have been countering the separatists with great courage. By their unwise obstinacy, the BJP elements could end up be creating a situation that could weaken the hands of the local nationalist elements.

12. It is not the time for the BJP to flaunt its patriotism. All of us are patriots. It is time for it to conduct itself with wisdom and a sense of responsibility. ( 21-1-11)

( The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. E-mail--seventyone2@gmail.com )



Annexed below is an interesting article on the Chinese Stealth aircraft J-20 tested by the Chinese on January 11 before the meeting of Robert Gates, the visiting US Defence Secretary, with President Hu Jintao at Beijing. This article has been written by Rear Admiral Yang Yi, of the People's Liberation Army (Navy) who is a research fellow at the Institute for Strategic Studies, National Defense University of China. This article written by him on January 13 was carried by the party-controlled "People's Daily" online on January 21. (21-1-11)


Stealth jet just part of China's peaceful military modernization

The successful test flight of the J-20 stealth fighter in Chengdu is an important achievement for China's national defense industry as well as a landmark in the process of China's military modernization. However, we have no reasons to be complacent and arrogant.

It should be noted a considerable gap still exists between China and the developed Western countries in terms of weaponry. More importantly we should be anticipate and address renewed cries of alarm over the "China threat" that are sure to be raised following the test flight of the J-20.

Special attention should be given to rumors insinuating that the development of the J-20 fighter threatens other countries or will spark an arms race. Ample explanation ought to be made to ensure correct understanding of the fact. Otherwise, it will undermine the external environment for China’s peaceful development, which will be harmful in the long term.

It is the legitimate right of any sovereign country to develop and maintain appropriate military forces for the purpose of safeguarding national security and defending the interests of its national development.

The Chinese government put forward the strategy "make our country prosperous and our armed forces powerful." Being prosperous does not mean dominance, and developing powerful military forces is not equivalent to militarism. The strength of a country's military forces does not constitute a threat necessarily. The things that really matter are a country's strategic intent, the policies it upholds and the way it uses its military forces.
Coping with the "China threat" theory, which is further fueled by China's development of advanced weapons and equipment, requires China’s policymakers to ponder how to assuage the fears of neighboring countries and prevent the United States from being overly sensitive.
To ease the fears of neighboring countries means China will continue to uphold the principle of maintaining harmonious and peaceful relations with neighbors and bring them prosperity. In the 30 years since the Reform and Opening-up, China, has never used its increasing economic strength, political influence and military power to bully those nations that are weaker.

Instead, at critical times, such as the Southeast Asian financial crisis of 1997, it sacrificed local interests to help the neighboring countries through the difficult times. In the future, China will definitely not seek hegemony in the region by its military strength.

To keep the United States from being overly sensitive is not so easy. As the superior military power, the United States keeps a high degree of vigilance regarding the development of other countries’ militaries. One current trend worthy of attention is that the United States is increasingly focusing its strategic attention on China. Inappropriately handled, the Sino-U.S. military and security relations will fall into a "security dilemma."

By adhering to peaceful development and pursuing a defensive national military policy, China does not pose a threat to any country. With the development of new technology and in accordance with the needs of national defense, upgrades to weapons and the replacement of equipment is standard practice in the world. China's weapons and equipment development is entirely based on its own security and defense needs, which serves to the need of defend national sovereignty, security and territorial integrity, instead of targeting any country.

China will never seek hegemony or engage in military expansion, nor will it compete with any country in arms race. In particular, China will not have a "Tortoise and the Hare"-style arms race with the United States.

(The author Yang Yi is a rear admiral of the PLA Navy and research fellow at the Institute for Strategic Studies, National Defense University. The article is translated by People's Daily Online)

January 20, 2011

Chinese Espionage and French Trade Secrets

January 20, 2011 | 0953 GMT

Reprinting or republication of this report on websites is authorized by prominently displaying the following sentence, including the hyperlink to STRATFOR, at the beginning or end of the report

Read more: Chinese Espionage and French Trade Secrets | STRATFOR

By Sean Noonan

Paris prosecutor Jean-Claude Marin on Jan. 14 began an inquiry into allegations of commercial espionage carried out against French carmaker Renault. The allegations first became public when Renault suspended three of its employees on Jan. 3 after an internal investigation that began in August 2010. Within days, citing an anonymous French government source, Reuters reported that French intelligence services were looking into the possibility that China played a role in the Renault espionage case. While the French government refused to officially confirm this accusation, speculation has run wild that Chinese state-sponsored spies were stealing electric-vehicle technology from Renault.

The Chinese are well-known perpetrators of industrial espionage and have been caught before in France, but the details that have emerged so far about the Renault operation differ from the usual Chinese method of operation. And much has been learned about this MO just in the last two years across the Atlantic, where the United States has been increasingly aggressive in investigating and prosecuting cases of Chinese espionage. If Chinese intelligence services were indeed responsible for espionage at Renault it would be one of only a few known cases involving non-Chinese nationals and would have involved the largest amount of money since the case of the legendary Larry Wu-Tai Chin, China’s most successful spy.

STRATFOR has previously detailed the Chinese intelligence services and the workings of espionage with Chinese characteristics. A look back at Chinese espionage activities uncovered in the United States in 2010, since our latest report was compiled, can provide more context and detail about current Chinese intelligence operations.

Chinese Espionage in the U.S.

We chose to focus on operations in the United States for two reasons. First, the United States is a major target for Chinese industrial espionage. This is because it is a leader in technology development, particularly in military hardware desired by China’s expanding military, and a potential adversary at the forefront of Chinese defense thinking. Second, while it is not the only country developing major new technologies in which China would be interested, the United States has been the most aggressive in prosecuting espionage cases against Chinese agents, thereby producing available data for us to work with. Since 2008, at least seven cases have been prosecuted each year in the United States against individuals spying for China. Five were prosecuted in 2007. Going back to about 2000, from one to three cases were prosecuted annually, and before that, less than one was prosecuted per year.

Most of the cases involved charges of violating export restrictions or stealing trade secrets rather than the capital crime of stealing state secrets. As the premier agency leading such investigations, the FBI has clearly made a policy decision to refocus on counterintelligence after an overwhelming focus on counterterrorism following 9/11, and its capability to conduct such investigations has grown. In 2010, 11 Chinese espionage cases were prosecuted in the United States, the highest number yet, and they featured a wide range of espionage targets.

Ten of the 11 cases involved technology acquisition, and five were overt attempts to purchase and illegally export encryption devices, mobile-phone components, high-end analog-to-digital converters, microchips designed for aerospace applications and radiation-hardened semiconductors. These technologies can be used in a wide range of Chinese industries. While the mobile-phone technology would be limited to Chinese state-owned enterprises (SOEs) such as China Mobile, the aerospace-related microchips could be used in anything from rockets to fighter jets. Xian Hongwei and someone known as “Li Li” were arrested in September 2010 for allegedly attempting to purchase those aerospace-related microchips from BAE Systems, which is one of the companies involved in the development of the F-35 Joint Strike Fighter. Similar espionage may have played a role in China’s development of the new J-20 fifth-generation fighter, but that is only speculation.

Five other cases in 2010 involved stealing trade secrets. These included organic light- emitting diode processes from Dupont, hybrid vehicle technology from GM, insecticide formulas from the Dow Chemical Company, paint formulas from Valspar and various vehicle design specifications from Ford. These types of Chinese cases, while often encouraged by state officials, are more similar to industrial espionage conducted by corporations. Since many of the major car companies in China are state-run, these technologies benefit both industry and the state.

But that does not mean these efforts are directed from Beijing. History shows that such espionage activities are not well coordinated. Various Chinese company executives (who are also Communist Party officials) have different requirements for their industrial espionage. In cases where two SOEs are competing to sell similar products, they may both try to recruit agents to steal the same technology. There are also a growing number of private Chinese companies getting involved in espionage. One notable example was when Du Shanshan and Qin Yu passed on technology from GM to Chery Automobile, a private, rather than state-run, manufacturer. In the five trade-secret cases in 2010, most of the suspects were caught because of poor tradecraft. They stored data on their hard drives, sent e-mails on company computers and had obvious communications with companies in China. This is not the kind of tradecraft we would expect from trained intelligence officers. Most of these cases probably involved ad hoc agents, some of whom were likely recruited while working in the United States and offered jobs back in China when they were found to have access to important technology.

These cases show how Chinese state-run companies can have an interest in espionage in order to improve their own products, both for the success of their companies and in the national interest of China. The U.S. Department of Justice has not provided specific details on how the stolen defense-related technologies were intended to be used in China, so it is hard to tell whether they would have enhanced China’s military capability.

First-generation Chinese carried out 10 of the 11 publicized cases in the United States last year. Some were living or working temporarily in the United States, others had become naturalized American citizens (with the exception of Xian and Li, who were caught in Hungary). The Chinese intelligence services rely on ethnic Chinese agents because the services do not generally trust outsiders. When recruiting, they also use threats against family members or the individuals themselves. Second- and third-generation Chinese who have assimilated in a new culture are rarely willing to spy, and the Chinese government has much less leverage over this segment of the ethnic-Chinese population living overseas.

In the 11 cases in 2010, it is not clear what payments, if any, the agents might have received. In some cases, such as those involving the trade secrets from Valspar and Ford, the information likely helped the agents land better jobs and/or receive promotions back in China. Cash does not typically rule the effectiveness of newly recruited Chinese spies, as it might with Western recruits. Instead, new Chinese agents are usually motivated by intelligence-service coercion or ideological affinity for China.

The outlier in 2010 was Glenn Duffie Shriver, an American student with no Chinese heritage who applied to work at both the U.S. State Department and the CIA. His was the first publicized case of the Chinese trying to develop an agent in place in the United States since Larry Chin. Shriver studied in China in 2002 and 2003. The recruitment process began when he returned to China in 2004 to seek employment and improve his language capabilities. After responding to an ad for someone with an English-language background to write a political paper, Shriver was paid $120 for producing an article on U.S.-Chinese relations regarding Taiwan and North Korea.

The woman who hired him then introduced him to two Chinese intelligence officers named Wu and Tang. They paid Shriver a total of $70,000 in three payments while he tried to land a job with the U.S. government. Shriver failed the exams to become a foreign service officer and began pursuing a career with the CIA. He was accused of lying on his CIA application by not mentioning at least one trip to China and at least 20 meetings with Chinese intelligence officers. It is not clear how he was exposed, but customs records and passport stamps would have easily revealed any trips to China that he did not report in his CIA application. On Oct. 22, 2010, Shriver pleaded guilty to conspiring to provide national defense information to intelligence officers of the People’s Republic of China and was sentenced to 48 months in prison in accordance with his plea agreement.

A few Americans have been accused of being Chinese agents before, such as former Defense Department official James Fondren, who was caught and convicted in 2009. These cases are rare, though they may increase as Beijing tries to reach higher levels of infiltration. It is also possible that the FBI has been reaching only for low-hanging fruit and that Chinese espionage involving Americans at higher levels is going undetected. If this were the case, it would not be consistent with the general Chinese espionage MO.

China takes a mosaic approach to intelligence, which is a wholly different paradigm than that of the West. Instead of recruiting a few high-level sources, the Chinese recruit as many low-level operatives as possible who are charged with vacuuming up all available open-source information and compiling and analyzing the innumerable bits of intelligence to assemble a complete picture. This method fits well with Chinese demographics, which are characterized by countless thousands of capable and industrious people working overseas as well as thousands more analyzing various pieces of the mosaic back home.

Another case in 2010 was an alleged China-based cyber-attack against Google, in which servers were hacked and customer account information was accessed. Last year, more than 30 other major companies reported similar infiltration attempts occurring in 2009, though we do not know how widespread the effort really is. China’s cyber-espionage capabilities are well known and no doubt will continue to provide more valuable information for China’s intelligence services.

The Renault Case

Few details have been released about the Renault case, which will likely remain confidential until French prosecutors finish their investigation. But enough information has trickled in to give us some idea of the kind of operation that would have targeted Renault’s electric-vehicle program. Three Renault managers were accused: Matthieu Tenenbaum, who was deputy director of Renault’s electric-vehicle program; Michel Balthazard, who was a member of the Renault management board; and Bertrand Rochette, a subordinate of Balthazard who was responsible for pilot projects. Various media reports — mostly from Le Figaro — claim that the State Grid Corporation of China opened bank accounts for two of the three managers (it is unknown which two). Money was allegedly wired through Malta, and Renault’s investigators found deposits of 500,000 euros (about $665,000) and 130,000 euros (about $175,000) respectively in Swiss and Liechtenstein bank accounts.

Assuming this is true, it is still unclear what the money was for. Given that the three executives had positions close to the electric-vehicle program, it seems that some related technology was the target. Patrick Pelata, Renault’s chief operating officer, said that “not the smallest nugget of technical or strategic information on the innovation plan has filtered out of the enterprise.” In other words, Renault uncovered the operation before any technology was leaked — or it is intentionally trying to downplay the damage done in order to reassure investors and protect stock prices. But Pelata also called the operation “a system organized to collect economic, technological and strategic information to serve interests abroad.”

Renault is convinced a foreign entity was involved in a sophisticated intelligence operation against the company. The question is, what foreign entity? On Jan. 13, Renault filed an official complaint with French authorities, saying it was the victim of organized industrial espionage, among other things, committed by “persons unknown.” French Industry Minister Eric Besson clarified Jan. 14 that there was no information to suggest Chinese involvement in the case, though he previously said France was facing “economic war,” presuming that the culprits came from outside France. The source for the original rumors of Chinese involvement is unclear, but the French clearly backed away from the accusation, especially after Chinese Foreign Ministry spokesman Hong Lei called the accusation “baseless and irresponsible” on Jan. 11 (of course, even if the Chinese were the culprits they would certainly not admit it).

The Chinese have definitely targeted energy-efficient motor vehicle technology in the past, in addition to the Ford and GM cases, and Renault itself is no stranger to industrial espionage activities. In 2007, Li Li Whuang was charged with breach of trust and fraudulent access to a computer system while working as a trainee at Valeo, a French automotive components manufacturer, in 2005. The 24-year-old was studying in Paris when she was offered the trainee position at Valeo. Investigators found files on her computer related to a project with BMW and another with Renault.

The new Renault case, however, is very different from most Chinese espionage cases. First, it involved recruiting three French nationals with no ethnic ties to China, rather than first-generation Chinese. Second, the alleged payments to two of three Renault employees were much larger than Chinese agents usually receive, even those who are not ethnic Chinese. The one notable exception is the case of Larry Chin, who is believed to have received more than $1 million in the 30 years he spied for China as a translator for U.S. intelligence services. Renault executives would also be paid as much or more in salaries than what was found in these bank accounts, though we don’t know if more money was transferred in and out of the accounts. This may not be unprecedented, however; STRATFOR sources have reported being offered many millions of dollars to work for the Chinese government.

Another problem is the alleged use of a Chinese state-owned company to funnel payments to the Renault executives. Using a company traceable not only to China but to the government itself is a huge error in tradecraft. This is not likely a mistake that the Chinese intelligence services would make. In Chin’s case, all payments were made in cash and were exchanged in careful meetings outside the United States, in places where there was no surveillance.

Thus, STRATFOR doubts that the Renault theft was perpetrated by the Chinese. The leak suggesting otherwise was likely an assumption based on China’s frequent involvement in industrial espionage. Still, it could be a sign of new methods in Chinese spycraft.

Higher-level Recruitment?

The Shriver and Renault cases could suggest that some Chinese intelligence operations are so sophisticated that counterintelligence officers are unaware of their activities. They could mean that the Chinese are recruiting higher-level sources and offering them large sums of money. Chin, who got his start working for the U.S. Army during the Korean War, remained undetected until 1985, when a defector exposed him. There may be others who are just as well hidden. However, according to STRATFOR sources, including current and former counterintelligence officers, the vast majority of Chinese espionage operations are perpetrated at low levels by untrained agents.

There is little indication that the Chinese have switched from the high-quantity, low-quality mosaic intelligence method, and cyber-espionage activities such as hacking Google demonstrate that the mosaic method is only growing. The Internet allows China to recruit from its large base of capable computer users to find valuable information in the national interest. It provides even more opportunities to vacuum up information for intelligence analysis. Indeed, cyber-espionage is being used as another form of “insurance,” a way to ensure that the information collected by the intelligence services from other sources is accurate.

If China is responsible for the Renault penetration, the case would represent a change in the Chinese espionage MO, one aiming at a higher level and willing to spend more money, even though most of the cases prosecuted in the United States pointed to a continuation of the mosaic paradigm. Nevertheless, counterintelligence officers are likely watching carefully for higher-level recruits, fearing that others like Chin and Shriver may have remained undetected for years. These cases may be an indication of new resources made available to Western counterintelligence agencies and not new efforts by the Chinese.

One thing is certain: Chinese espionage activities will continue apace in 2011, and it will be interesting to see what targets are picked.

Read more: Chinese Espionage and French Trade Secrets | STRATFOR

Hu-pla around Chinese President's visit centers on American debt

Chidanand Rajghatta, TNN, Jan 19, 2011, 11.53pm IST

WASHINGTON: The Obama White House on Wednesday rolled out the red carpet for Chinese President Hu Jintao months after the US President met Tibetan leader Dalai Lama sans fanfare and photo-ops and showed him out through a side door past garbage bags.

The contrasting receptions, recalled vividly by commentators, pretty much summed up the US approach and priorities at a time when Chinastruts the world stage like an economic colossus with military ambitions to match. It would be a stretch to say China owns the US, but it is no great secret that President Hu is being courted, coddled and occasionally criticized because of Beijing's stranglehold on the US economy.

A 21-gun salute rang out and the marching band played on the South Lawns of the White House at the ceremonial welcome reminiscent of the one President Obama gave Prime Minister Manmohan Singh in November 2009. But the tone of the speeches was different. There was none of the soaring rhetoric and warm fuzzy sentiment that marked U.S-India exchanges. Instead, there was a sense of mild reproach from Obama when he referred glancingly to human rights; Hu huffed about both countries needing to respect each others' development path and core interests. They did not exactly but heads; nor was it a clinch.

There is no mistaking the fact that China's financial and economic clout is clouding, if not dominating, the visit. And notwithstanding token noises about human rights and political freedom, the Obama administration's primary concern is how to wean itself out of its indebtedness to the country that was till recently seen as a brooding Third World giant that produced cheap goods and indulged in large-scale human rights violation.

So Vice-President Joe Biden himself hot-footed it to the Andrews AirForce Base on an icy Tuesday night to welcome the Chinese leader. President Obama hosted him to a private dinner at the White House soon after his arrival -- notwithstanding the formal state banquet slated for Wednesday evening -- with few missing the irony of one Nobel Peace laureate entertaining a man who has imprisoned another Nobel Peace Prize winner.

No word whether Obama raised the issue of the incarceration or any other touchy matter more forcefully in private, but Wednesday morning, following the usual pomp and ceremony, the two leaders are met for talks at the Oval Office following by delegation level exchanges in the Cabinet room. They are also expected to attend a meeting of U.S and Chinese in the Eisenhower Executive Office Building before White House Press Conference in the afternoon.

Shorn of hyperbole and boiled down to essentials, the meeting is akin to one between a banker and a client, with the latter seeking ways to ease the debt burden and the former trying to ensure the borrower remains liquid enough to pay back as per terms agreed. The rest, including disagreements about Iran, North Korea, Taiwan, Tibet etc are minor distractions thrown up to engage various interested constituencies.

The biggest constituency is the debt-trapped American people. For all of Secretary of State Hillary Clinton's feisty declarations about human rights, Washington's worst kept secret is that borrowers can't be choosers. Among the cards the US has is a sort of default or rewriting rules, but they are not seen as viable or necessary just now despite the rants of a few lawmakers. So, for now, Obama has embarked on a course of extracting concessions from China to reduce its gigantic $ 252 billion trade surplus.

In words that echoed what the US President told Indians in Mumbai last year, the White House on Wednesday put increasing exports to China and increasing investment in the United States, "both critical to supporting millions of American jobs," on top of the agenda. Everything else was secondary to that objective.

One analyst likened the visit to a "slap-on-the-back for the national leader of America's biggest foreign lender," pointing out that with over $895 billion in US Government securities, China held 6.4 percent of the US National Debt and "when someone invests that much in your country, they probably deserve an opulent State Dinner at the White House." Whether the back-slapping will be mutual or whether the two sides make a meal of the engagement is something that will be watched with bated breath in many world capitals.



( Collated from news agency reports )


The apparent highlight was the announcement of a raft of successful trade deals worth billions of dollars.

"We will be announcing that $45 billion of US export deals have been concluded, supporting 235,000 US jobs," AFP quoted a senior US official as saying, adding that the total includes a massive $19 billion contract for 200 Boeing aircraft.

According to the Wall Street Journal (WSJ), US and Chinese energy companies announced a variety of partnerships at a conference organized by the Brookings Institution, a Washington think-tank.

Alcoa and China Power Investment Corp said they would collaborate on a broad range of aluminum and energy projects, both inside and outside China, totaling $7.5 billion in investments, the newspaper reported.

Klaus Kleinfeld, Alcoa's CEO, told the WSJ that the Hu-Obama summit had brought the deal home.

"Had the date not been set for the state visit, (the agreement) wouldn't have happened in a speedy fashion," Kleinfeld said.

General Electric (GE) Energy announced a joint venture with Shenhua Group Corp to sell clean-coal technologies.

The two countries will also begin preparing for a jointly financed nuclear security center in China that aims to improve training and security at nuclear sites and to help keep better track of nuclear materials, Reuters reported.

US STICKS FOR HU JINTAO ( From Western agency reports that were not carried by Chinese media)

Hundreds of Chinese and Tibetan protesters loudly demonstrated outside the White House as Hu began his state visit to the US.
The protesters held up banners urging Obama to "admonish Hu" over human rights abuses and the conflict over Tibet.

Secretary of State Hillary Clinton, who shared a private meal with Hu and Obama on Tuesday (January 17) night, said on Wednesday that it was so far unclear whether China was a US friend or foe. "The reason we're rolling out the red carpet" for the Chinese leader "is we think we'll be better (able) to answer such a question as we move forward," Clinton told ABC television when asked whether China is a friend or foe. "My hope is we have a normal relationship," she said.

At a frank press conference, there were few concrete signs the leaders had narrowed gaps on currency, access to markets or strategic issues, despite an earlier announcement of tens of billions of dollars in US export deals. Both sides promised to seek further cooperation on the world's most pressing issues despite their differences, and Obama welcomed China's rise as a key power and looked forward to an era of "friendly competition." The President also candidly laid out US differences with China, demanding a level playing field for US firms, said the yuan currency was "undervalued" and encouraged dialogue with the Dalai Lama's representatives over Tibet. Obama, under pressure because his successor as Nobel peace laureate Liu Xiaobo is in a Chinese jail, acknowledged that China had a different political system than America, but said he would not shirk from raising rights issues. "We have some core views as Americans about the universality of certain rights - freedom of speech, freedom of religion, freedom of assembly - that we think are very important and that transcend cultures," he said.
"I have been very candid with President Hu about these issues."

In a sign of the political sensitivity of Hu's visit, top members of Congress, including John Boehner, the speaker of the House of Representatives, declined invitations to attend the State dinner for Hu.Democratic US Senate Majority Leader Harry Reid branded Hu a "dictator" then withdrew the remark. (20-1-11)

( The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai, and Associate, Chennai Centre For China Studies. E-mail: seventyone2@gmail.com )

January 19, 2011

Paying for India's Defense Policies

A policy of technology transfer and a cap on foreign investment actually leaves India's defense industry more reliant on foreigners.

Last week, India's defense ministry awarded initial operating clearance to the air force's indigenous light combat aircraft, a multirole fighter called Tejas. To the outside observer, this seems to show that the Indian military is on the march, utilizing the greater resources that India's expanding economy has laid at its disposal.

Associated Press

The light combat aircraft India tested this month. The defense industry is not ready for take-off.

The reality is quite different. Indigenous material comprises only about 30% of military equipment, and a lot of it takes decades to become effective; the Indian air force first conceived Tejas, for instance, in 1969. That means a good chunk of the Indian military's weaponry acquisitions must be satisfied from abroad. And New Delhi is still failing to address the underlying reasons for this dependence on imports.

Self-reliance in manufacturing used to be the avowed goal of all Indian planning, and defense was no different. Early on, India invested in government-owned arms manufacturing units, backed up by a network of state-funded research and development laboratories. But to little avail. Indigenous tanks, for instance, didn't work well, and more complex armaments were simply out of New Delhi's reach.

So India relied on foreign arms, particularly from Moscow. Over the last two decades since the Soviet Union fell, New Delhi has diversified its supplier base to include Western powers. The intent was not only to give the armed services the weapons they wanted, but also to establish a local defense industry with foreign help.

In 2001, India permitted up to 26% foreign direct investment in the defense sector, hoping to attract the likes of Boeing into joint ventures with Indian firms. This was followed by India's first-ever Defense Procurement Policy in 2005.

The highlight of this DPP was the concept of offsets. These are binding arrangements written into commercial defense contracts that oblige the foreign vendor to invest a certain portion of their contract back into the home country. So when New Delhi pays Boeing billions of dollars for C-130 transport planes, it expects Boeing to "offset" that cash outgo by pouring money back into India—to either buy Indian parts or give an Indian contractor capital for research and development. Indeed, the policy's official purpose was "to promote defense industrial capability through transfer of technology, increased investment in R&D and licensed production." DPP 2005 proposed a minimum offset of 30% of the contract value for every deal greater than three billion rupees ($70 million).

Later DPPs refined the policy, but the idea remained the same. Under DPP 2008, for example, a foreign vendor couldn't spend its mandated 30% offset in civil infrastructure such as roads. The Indian government was focused on using this policy to deliver on its long-term goal of creating a local defense-industrial base.

DPP 2011, announced earlier this month, suddenly dilutes this focus. It widens the scope of offsets to "include civil aerospace, internal security, training within the ambit of the eligible products and services for discharge of offsets obligations."

The defense ministry in New Delhi won't admit it, but the turn-around is not just a tacit acknowledgment of India's limited capacity to absorb offsets, but also an indictment of the offsets policy itself. If the policy is to succeed, the foreign vendor should want to operate in a country where it actually derives commercial benefits from partnering with locals. But in India, the poor quality of the state-run defense units and ordnance factories rules them out as partners. The country simply does not also have a large enough private defense manufacturing sector that a Boeing or Lockheed could buy parts from or invest in.

The final nail in the offset coffin is India's FDI policy. Which among the decrepit public-sector companies or near-absent private ones would Boeing choose from to invest in? Or, rather, which local manufacturer does it trust enough to share its proprietary technology with? A joint venture could be trustworthy, but because of the FDI cap, a local firm will have to put up 74% equity—no small potatoes in an industry where contracts easily total $100 million and upward. This is why over 10 years the 26% FDI regime brought in only $150,000 of investment.

If the Indian government wants to use offsets as an interim measure to bring in foreign manufacturers, it should do away with the FDI cap. Higher stakes in companies could help add value to the offsets policy: Boeing's purchase of 34% of Aero Vodochody, a Czech firm, as an offset deal in 1998 is a good example.

The FDI regime has wrecked such opportunities. A proposal last year by India's Ministry of Commerce to increase the FDI cap in defense manufacturing was rejected outright by the defense ministry. By both sheltering local firms from real competition and yet requiring foreigners to invest in them with offsets, the government wants the best of the old socialist way of nurturing its infant industries and the new capitalist way of acquiring foreign know-how. So far it has failed to secure either.

India should scrap offsets altogether and remove the FDI cap to provide a better investment climate and attract foreign manufacturers. As defense production becomes a part of larger industrial growth in India, the world's largest democracy will become a stronger power.

Mr. Singh heads the national security program at the Takshashila Institution.

Hu Jintao’s US Visit and Asia-Pacific Region

By Bhaskar Roy


As Chinese President Hu Jintao lands in the USA on January 19 he would have at the back of his mind the leadership transition that would take place in his country in late 2012. It can be said that the elevation of Xi Jinping to replace him as the CCP General Secretary and the President of China has been written in stone. So is the case of Li Keqing as Premier in 2013 to replace Wen Jiabao. But what indication would Hu give to his American interlocutors about the timing of Xi Jinping’s elevation to the Chairmanship of the increasingly powerful Central Military Commission (CMC), a post that he currently holds.

In the last minute preparations for Hu Jintao’s visit, the two sides signalled two very different directions on interests. The Chinese sent Foreign Minister Yang Jiaqi (Jan 3-7), and the US sent Defence Secretary Robert Gates to the respective countries. Economic, trade, and currency (under valuations of the Yuan) issues were discussed earlier between the two sides.

Yang Jiaqi’s portfolio is overall bilateral relations including issues the two countries are closely engaged with currently. Specifically these are the situation related to the Korean peninsula, Taiwan issue and the South China Sea disputes.

Robert Gates’ visit was to further pry open China’s military sector, that is, military development and doctrine. Not only the US, but China’s neighbours from Japan to South East Asia are getting increasingly uncomfortable with the lack of transparency in Beijing’s military doctrine. China’s military development has been very rapid and extensive casting a military cloud over the entire region. Its proclaimed stand is that its defence development is only for national security and not aimed at any other country. Yet Defence Minister Liang Guanglie added they are also in preparation for small regional conflicts. That is shocking news for the small countries especially around the South China Sea which have territorial disputes with China. The sum total of defence assets of all these countries is minuscule compared to that of China.

Two other incidents last year prompted questions over China’s intentions in the region. One was the stand off between China and Japan over an accident between a Chinese fishing boat and two Japanese patrol boats in the Japanese controlled Senkaku Island / Diaoyu Island waters. Although the situation has been controlled, provocations by Chinese ships and submarine in and around Japanese waters continue.

North Korean provocations against South Korea went from small skirmishes and propaganda to physical attacks, last year. A South Korean frigate was sunk by a North Korean torpedo in which 48 South Korean sailors were killed. The next incident in which the North shelled South Korea’s Yeonpyeon island killing another six last November, almost sparked a war.

The Chinese leadership’s protection of and support to the North Korean regime raises questions, especially since there is a growing sentiment in China that friendship with Pyongyang was more of a problem than an asset.

The Chinese leadership definitely sees a compulsive reason to protect North Korea at such costs. Pyongyang’s communist regime is seen as a support to the Chinese Communist Party which does not find itself in a very comfortable position either. But the concerned countries especially Japan and South Korea view the development of North Korean nuclear and missile capabilities as covertly supported by China. Here, they see a fundamental contradiction in China’s stated and working policies on Pyongyang, as blackmailing the region.

The US and China are now joined at the hip where trade relations are concerned. Articles in the Chinese media suggest certain apprehensions about the relationship, hoping the visit will given Hu Jintao’s profile a boost for the rest of his tenure in leadership. Chinese experts have been assuaging American fears, if any, about the possibilities of Beijing dumping US treasury bonds. Such an action, they argue will hurt all including China. On Yuan appreciation, Chinese leaders including Premier Wen Jiabao have tried to explain, that it has to be a slow and incremental process as, otherwise, China’s export based economy will collapse.

The constants during the visit is expected as follows – US will not stop arms sales to Taiwan; President Obama will not move from his position on the Dalai Lama; the US has returned to Asia, especially eastern Asia for a long period of stay; the basic position on human rights will be reiterated.

China’s position on the Yuan exchange rate will remain inflexible; it will continue to use the carrot-and-stick policy with Taiwan; it will continue to build its military for area denial to the US; North Korea will remain its protectorate for quite sometime to come – stability of the Korean peninsula is, in a manner, linked acutely to China’s security and, in the long term , to its territorial integrity. Fears of US led encirclement of China will not be removed by this visit.

Robert Gates’ efforts to widen military relations with China failed. The PLA leaders made it clear they were not going to give the Americans even a glimpse into their strategic military doctrine and modernization.

After an interregnum because of the Iraq and Afghan wars, the Americans are back to Asia Pacific region to stay. They are making friends with old enemies like Vietnam. Secretary of State Hillary Clinton made it clear last year that it was America’s prime interest that the South China Sea remained open waters for international shipping and rejected a Chinese request to accept it as one of China’s “core” interests.

The Chinese have begun to be prone to making some foreign policy howlers. The test flight of the J-20 fighter aircraft during Defence Secretary Gates’ visit was immature. It failed to send any message. Similarly, the leaks on development of the DF-21D aircraft carrier Killer missile. Such demonstrations are only panicking China’s neighbours. Planting of a Chinese flag with a submarine on the South China Sea floor last year did not do any good to China’s so-called “friendship”, approach to the region.

The Chinese moves, which are militaristic in nature and sponsored by the PLA, prompted Australia to revise its military posture last year. Japan’s defence white paper published last December made it very clear that its threat came from China and China-North Korea combine, forcing it to upgrade its defence planning and strengthen alliance with the US. Vietnam has begun its own adjustments.

A G-2 economic relationship between the US and China is welcome in many ways. Such a relationship could persuade China to undertake some serious responsibility. But from all accounts, China is not stopping here. Late last year, China’s veteran diplomat Dai Bingguo, who is State Counsellor for foreign affairs and CCP Central Committee member, made it clear that China will not challenge the USA. In his 9,000 word foreign policy proclamation Dai assured the world that China would continue to follow late Deng Xiapoing’s strategy to keep a low profile and concentrate on development. His declaration came when the Korean crisis was about to boil over.

But there is a disconnect between China’s foreign policy establishment and its military establishment on such issues. It is becoming evident that the military establishment now has the upper hand on policies related to the USA, territorial issues, Japan and India. It is also evident that Chairman Hu Jintao and the military establishment are mutually supportive. If this trend continues when Vice President Xi Jinping takes over, it will not be a very cosy situation for the US. Mr. Xi’s distaste for the developed countries became well known during his visit to Mexico.

President Obama has to take many calls, not one. If the US is serious about a firm policy on China and the Asian region, it will be good for all including China. There can be all round stability. If the US vacillates ,China’s hardliners will overrun their realistic moderates, resulting in turbulence in the region. Both President Barack Obama and President Hu Jintao may ponder on this.

(The author is a veteran China specialist)