Lowy Institute

As Ross Burns said in the introduction to his piece on The Interpreter this week, the brutal execution of Syrian archaeologist Khaled al Asad and the destruction of the Temple of Baalshamin by ISIS seem to have caught the worlds attention. Ross runs a website, Monuments of Syria, that is documenting the damage of Syria's antiquities in the conflict. The site is regularly updated and worth a visit. Ross wrote this week on how ISIS is using Syria's ruins and monuments as weapons:

Having moved on from blowing up remote rural shrines, treasured for decades by local villagers, ISIS has advanced to bigger-picture stuff. And there is no bigger picture than Palmyra. This jewel of the desert was an elusive destination for seventeenth century European adventurers and for scholars tracing the cross-currents shifting across the poorly defined frontiers between Classical and Persian (even Chinese) worlds. Its temples, columned streets and tower tombs, stamped with a mixture of Greco-Roman, Mesopotamian and Semitic traditions, were largely left to slumber quietly over centuries.

ISIS sees them differently. The ruins are hostages in a war where savagery on all sides has redefined the unthinkable. We have seen how ISIS videographers contrive events such as the explosion of the Baalshamin Temple. They will continue their efforts to choreograph shock, to keep the world off guard and to use the ruins as weapons.

We had another great piece from new Research Fellow Jonathan Pryke on a story in The Australian about fraud in Australia's aid programs:

Clearly, fraud should never be tolerated, and the government should strive to take all reasonable attempts to minimise fraud. But is fraud as rampant in the aid program as The Australian implies? The answer is a resounding 'no'. In 2012-13 the Australian aid program (then AusAID) reported net losses of $865,730 to fraud, equating to about 0.017% of annual aid expenditure. The Independent Review of Aid Effectiveness found that fraud in AusAID over the 2004-10 period averaged 0.017%. So not only are levels of fraud extremely low, they are also consistently low.

Rodger Shanahan covered the news this week that the US has asked Australia to expand its military campaign in Iraq against ISIS into Syria:

But for Australia to take such a course, an announcement about our willingness to contribute to the Syria campaign would need to be accompanied by a diplomatic and media campaign urging regional states to do more. When the Government releases its its legal guidance about bombing targets in Syria, it should also advise Australians whether the Arab League is committed to meeting the ISIS threat, what assets regional states are contributing to the air campaign in Syria, and what pressure Australia will put on them to be an active participant against an enemy that has already attacked them, and attracted thousands of their countrymen to fight with them. The Australian Government may also want to urge Gulf states to sign up to the Refugees Convention rather than salve their consciences by simply providing funding.

What is being said about China in the 2016 US presidential campaign so far? Bonnie Glaser:

Sometimes, promises to 'get tough' with China during the campaign simply became irrelevant as presidents, once in power, confront the demands of real-world policy challenges. When George W Bush ran for president in 2000, he criticised his predecessor Bill Clinton for calling China a strategic partner, and instead said China should be viewed as a 'strategic competitor.' After becoming president, however, Bush dropped that label. When a Chinese jet collided with a US surveillance plane over the South China Sea, Bush worked hard to avert a US-China political crisis, and after the September 11 attacks, he welcomed Beijing's proposal to fight together against terrorism.

Leon Berkelmans threw some cold water on the belief that China is undergoing an economic crisis:

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Am I foolishly saying 'This time is different'? Ken Rogoff, a former Chief Economist at the IMF who wrote the book on financial crises, may suggest that I am. I could look silly in six months. What I am not saying, however, is that China is certain to grow steadily, without incident, for years. It would be remarkable if China did not encounter turbulence. I just think we are some way from a full blown crisis.

Are Taiwans's recent protests primarily to do with an emerging unique Taiwanese identity? Marie-Alice McLean Dreyfus thinks so:

Democracy is one of the key pillars of this contemporary sense of Taiwanese self. In the case of the protests around changes to the curriculum, a key concern (aside from the content) is that changes were being implemented without adequate consultation. According to protesters, in keeping with Taiwan's democratic system, any major decisions affecting the institutions or laws of Taiwan should be made transparently and with adequate consultation with Taiwan's population, and not decided solely by the executive.

Sebastian Strangio wrote an update on recent political maneuvering in Cambodia where an opposition senator was recently arrested:

The arrest of Hong Sok Hour, despite the immunity he technically enjoys as a member of the senate, formed the exclamation point on a crackdown which has unfolded over recent weeks in Cambodia. It follows the 21 July conviction and jailing of 11 members of the opposition Cambodia National Rescue Party (CNRP) on the charge of 'insurrection' resulting from a minor clash with security forces in July 2014. Hun Sen has since warned of further arrests of opposition lawmakers and described CNRP President and long-time nemesis Sam Rainsy as the leader of 'a gang of thieves destroying the stability of this country'.

Eve Warburton from ANU weighed into a string of responses on The Interpreter to a recent Lowy Analysis, Trade Protectionism in Indonesia: Bad Times and Bad Policy:

My experience of doing research in Indonesia on resources policy has driven home how economic nationalism is undergirded by a deeply-held developmentalist ideology that is pervasive among policy makers, elected officials, and civil society. Of course, statist economic thinking has a long history in Indonesia. But as Patunru and Rahardja explain in their paper, the post-crisis neoliberal reforms Indonesia undertook in the early twenty-first century were painful. Memories of that pain have hardened the dirigiste resolve of politicians and lawmakers, who already maintained a healthy suspicion of markets, foreign capital, and liberal models of economic development.

Have you ever flown out of an airport in China? Then you may relate to a piece this week by Julian Snelder:

Here is a typical day at a major terminal. Weather permitting, the first flights embark from 6am, with delays steadily building through the morning. An 8am flight may actually take off at 10 or 11am. With luck, the backlog subsides a little in the early afternoon, but starts building again from 4pm until 10pm, with the crescendo at dinner time. On a good day, factor in two hours extra. On a bad day, with delays accumulating over time and the cascade effects of late connections, passengers could be home eight hours late. By that time, at a Chinese airport far from town, taxi drivers are scarce, surly and extortionate.

Bernard Cole on China's growing fleet of naval replenishment ships:

The increasing number of RAS ships entering China's fleet will also allow greater employment of the PLAN's aircraft carriers, the first of which, Liaoning, will within the next decade be joined by at least the first indigenously built Chinese flattop. Carrier operations require the near-constant presence of RAS ships, primarily to replenish aircraft fuel and ordnance, as well as being on-hand to refuel escorting destroyers and frigates.

Massive protests may be in store for Kuala Lumpur and other Malaysian cities this weekend. Anneliese Mcauliffe:

On Thursday, in a worrying sign for freedom of speech, Malaysia's Communications and Multimedia Commission (MCMC) banned all websites 'that promote, spread information or encourage the public to join the Bersih 4.0 demonstration.' Public universities have also warned students not to attend the rallies, saying that students could be expelled or suspended if they attend. Also on Thursday, the Malaysian military warned it will intervene if a state of emergency is declared. While this appears to be a scare tactic aimed at persuading people to stay at home, the government nonetheless seems intent on doing everything it its power to prevent a mass demonstration.

Photo courtesy of Flickr user Ed Brambley.

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The Malaysian Government has blocked internet coverage of a large anti-government rally planned for the weekend and threatened to send in the army to restore order as it scrambles to contain what is likely to be a massive public show of disapproval in the government of Prime Minister Najib Razak.

Malaysia's biggest civil society group, Bersih, is hoping that hundreds of thousands of people will take to the streets of Malaysian cities this weekend to protest against the political and financial scandals that have rocked Malaysia.

Bershih 4.0 is shaping up to be a huge rally in Kuala Lumpur on August 29-30, with satellite rallies in Kuching, the capital of the state of Sarawak, and Kota Kinabalu, the capital of Sabah. Starting at 2pm local time on Saturday, the rally will run for 34 hours with the aim of shutting down the capital, Kuala Lumpur, ahead of Merdeka Day, Malaysia's national holiday marking independence from Britain.

Bersih, which means 'clean' in Malay and refers to the Coalition of Free and Fair Elections, is an umbrella group of 84 NGOs and civil society groups. They are calling for institutional reforms and for the resignation of Prime Minister Najib Razak. Officially, Bersih 4 has several key demands: clean elections; clean government; the right to dissent; strengthening parliamentary democracy and saving the economy.

Between 2007 and 2012, Bersih organised three street protests in the capital. Organisers say 300,000 people attended in the last rally in 2012. It ended with street scuffles and police responding with water cannons and tear gas. Hundreds of protesters were arrested.

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Malaysians have been transfixed by the unfolding political and financial scandals besetting Prime Minister Najib Razak and his inner circle for the past several months. The planned protest comes amid allegations of Najib's mismanagement of the debt-laden 1 Malaysia Development fund (1MDB) and allegations of impropriety over a RM2.6 billion (US$700 million) 'donation' deposited into Najib's personal bank accounts.

The sacking of the country's most senior lawmaker, Attorney General Abdul Gani Patail, and other key ministers who spoke out about the 1MDB scandal has further incensed many Malaysians.

The political fallout is also having a financial impact. The Malaysian currency, the Ringgit, has shed 20% in value over a year as the oil-exporting country suffers from a prolonged oil price rout and escalating political scandals.

Malaysian authorities, worried that the impetus is building towards an embarrassing public spectacle, are cracking down in the hope of preventing mass participation. Malaysian police have declared the rally in Kuala Lumpur illegal, stating that proper permissions for routes and venues were not submitted for approval. The rally in Sabah has also been deemed illegal. Lawyers disagree, and the most prominent human rights legal group, Lawyers for Liberty, has posted short instructional films on Twitter to explain legal issues surrounding the protest and to offer advice for dealing with arrest and interrogation (see above). 

On Thursday, in a worrying sign for freedom of speech, Malaysia's Communications and Multimedia Commission (MCMC) banned all websites 'that promote, spread information or encourage the public to join the Bersih 4.0 demonstration.' Public universities have also warned students not to attend the rallies, saying that students could be expelled or suspended if they attend. Also on Thursday, the Malaysian military warned it will intervene if a state of emergency is declared. While this appears to be a scare tactic aimed at persuading people to stay at home, the government nonetheless seems intent on doing everything it its power to prevent a mass demonstration.

Despite these efforts, large crowds are expected. A sophisticated social media campaign has been in action for weeks and the opposition-friendly media has promoted the rallies. The hashtag #Bersih4 is trending on Twitter in Malaysia. 

If the number of protesters is large, the rallies will be seen as a public vote of no confidence in Najib. However, if the ultimate aim is to unseat him, the protests seem likely to fail. Malaysian politics has shown time and time again that the prime minister does not need the people's support to survive.

Najib seems determined to stay, perhaps worried about the legal action he could face if he stepped down. He looks increasingly likely to lead his ruling Barisan Nasional coalition into the next general election in 2017. Perhaps the best result that the Bersih 4.0 rally can hope for is to instill in the ruling UMNO leadership a sense that the Prime Minister is no longer electable. But the UMNO party leadership conference, the forum that could vote him out as leader, has been delayed for 18 months.

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I started my job at the Federal Reserve three weeks before Lehman Brothers declared bankruptcy.

I wish I had kept a diary of my initial months at the Fed, so I could recall clearly what we thought was happening each day. I do remember there was a discrete point where suddenly everything felt like it was in free-fall. It brought to mind the comment of Don Russel, Paul Keating's economic advisor, claiming there was a moment in his office when he heard the Australian economy snap, sometime in late 1989. I think I heard the US economy snap in my Washington office in 2008.

Judging by the headlines, many people heard the Chinese economy snap this week. I didn't. The stock market continues its fall, but I'm not too concerned. As I said in an earlier post, 'The stock market does not look to be of systemic importance to the Chinese economy. It is relatively small, it is not a major source of finance for firms, and stocks are not widely held.'

I do think China's next GDP numbers, to be released in October, will be disappointing. One reason is that financial services, which had accounted for a lot of growth earlier in the year (growing by 17.4%), will likely have had a poor quarter.

But there some good news stories too. Many people were concerned about low government revenue growth earlier this year, suggesting this was a sign of a weak economy. That figure has bounced back nicely, growing at 12.6%, year on year in July, and as far as I'm aware, tax rate increases are not responsible. A poor manufacturing Purchasing Managers' Index (PMI; an index gauging manufacturer's sentiment) seemed to kick off the recent round of hand wringing, but the PMI for the non-manfacturing sector has held up so far.

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This relates to a general point made by one of my favourite China experts, Nick Lardy of the Peterson Institute. Lardy thinks services are growing quite quickly. Moreover, he has this rebuttal to those who doubt the data:

Naysayers question government economic data, continuing to focus on weakness in China's industrial sector and the extremely slow growth of electric power output. But steel production, for example, is significantly more energy intensive than entertainment, so the demand for electricity has fallen sharply as the structure of the economy has evolved.

It's fair to say there is an entire industry based on the claim that Chinese GDP has long been overstated. But we don't often hear about the fact that China underestimates housing services in GDP, which is documented in the appendix of Lardy's book Sustaining China's Economic Growth After the Global Financial Crisis.

I digress. Yes, the Chinese economy faces risks. Debt has ballooned over the last eight years. The IMF, in its 2014 Article 4 consultation, had these words to say:

Looking at a sample covering 43 countries over 50 years, staff identified only four episodes that experienced a similar scale of credit growth as China's recent TSF growth. Within three years following the boom period, all four countries had a banking crisis.

That's a worry. But it does not imply that crisis is a certainty, or even the most likely result. The IMF, in its 2015 consultation, was more upbeat. And this is money the Chinese owe to themselves in their own currency. That takes off the table many of the risk factors that have plagued other emerging economies.

Am I foolishly saying 'This time is different'? Ken Rogoff, a former Chief Economist at the IMF who wrote the book on financial crises, may suggest that I am. I could look silly in six months. What I am not saying, however, is that China is certain to grow steadily, without incident, for years. It would be remarkable if China did not encounter turbulence. I just think we are some way from a full blown crisis.

Photo courtesy of Flickr user Kevin Dooley.

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A month ago, international trade was in the headlines. President Obama had just obtained Trade Promotion Authority for the Trans-Pacific Partnership (TPP), and in Australia, the China-Australia Free Trade Agreement (ChAFTA) was signed. But then all went quiet.

Trade Minister Andrew Robb.

The ministerial meeting in Hawaii that was supposed to finalise the details of TPP didn't reach full agreement. ChAFTA's passage through the Australian parliament is not without opposition. Both these initiatives, however, are still very much alive.

The TPP negotiations are being held behind closed doors, but there seem to be three problems:

  • Canada doesn't want to open up its milk market, while New Zealand (the world's biggest exporter of processed milk) sees this as an important issue.
  • In automobiles, the US wants better access to the Japanese market. Interaction between TPP and NAFTA rules are also complicating this trade.
  • The US pharmaceutical industry wants to keep its biologics testing results secret for 12 years, but Australia thinks five years would be enough.

There may be other issues as well (Australian sugar producers are still hoping to open up the US market), but these are the main stumbling blocks. None of them look insurmountable.  It's hard to see further protection for pharmaceuticals as a deal-breaker for Australia even though our trade minister has given assurances that the TPP will not undermine Australia's pharmaceutical benefits arrangements, a key component of social welfare.

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Nor will the deal be lost because of US-Japanese auto trade. Some observers would regard US manufacturers' hopes of shipping lots of cars to Japan as a conceit and a delusion. But even if there is substance in this trade-opening initiative, it's too small to stand in the way.

It seems just as unlikely that dairy trade will torpedo the agreement, although it might mean that Canada joins late (or New Zealand, as one of the initiators of the TPP, goes away very disappointed). It's just not substantive enough to stop the broad-reaching TPP from going forward.

Given Obama's high-profile commitment to the TPP and the need to put substance into the US rebalance to the Asia-Pacific, he is not going to lose this one without a very serious fight.

The wild card in all this is the US Congress. With the various delays, Congressional consideration is unlikely to take place until next year, while the presidential election is in full swing. There will be the usual Congressional histrionics in defence of local interests, and the vote could be lost, almost by accident. This is the main threat to the TPP. 

The pity of the current debate is that it largely misses the substance of the TPP. Most of this horse-trading has been old-fashioned guerrilla resistance to the longer-term inevitability of integrated global markets. The essence of the TPP is not in trade-opening measures (although they are present, of course), but rather in its effort to lay down a set of broad rules to cover general aspects of international trade, with intellectual property (IP) rights the most prominent. 

IP (and the other behind-the-border issues) are not the win-win issues which usually characterise reductions in global trade barriers. Instead, the rules around IP arbitrate the division of the benefits of innovation between owners and users – a zero-sum game. This should be settled not by an arm-wrestle between trade negotiators, but by a technical consideration of which rules offer the greatest incentives to ongoing innovation. Giving past inventors a monopoly may not be the best way to foster future innovation.

Australia's stand on pharmaceutical data secrecy is on the side of the angels. It's inefficient to keep testing data secret, because it ends up either lost to the wider community or duplicated by other researchers. But it's inconceivable that we would take our principled stance to the stage where we walked away from the negotiations. There is too much else at stake to want to infuriate the US over this issue.

If the TPP goes ahead, the outcome on these rule-setting issues (not just IP but also investor-state dispute settlement) will be a measure of how successful our negotiators have been. 

In the longer term, history may judge the most important issue to be the exclusion of China from the negotiations. Does this tactic allow a superior set of global trading rules to be put in place, with China coming to adopt these later, to everyone's benefit? Or will this turn out to be a missed opportunity to make China a responsible stakeholder in global economic infrastructure, helping to convince it that cooperation within such a framework is better than confrontation?

We don't know if Australia's negotiators ever explored this issue. But we now have the example of the Asian Infrastructure Investment Bank, which suggests that where China is blocked from full participation (as it has been in the IMF and World Bank), it seeks alternative arrangements where its role, for good or bad, will be exercised more individually.

Photo courtesy of Flickr user TPP Media Australia.

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The Asia Pacific is the most dynamic digital landscape in the world, home to the fastest adopters of new technologies and the largest concentration of mobile and social media users. An escalation in online activism, changing cyber dynamics, developments in digital diplomacy and the exploitation of big data are shaping the region's engagement with the world.

  • As Cambodia's politicians are locked in a fierce Facebook battle for influence, a string of recent arrests due to Facebook posts is causing alarm.
  • A sophisticated cyber espionage campaign is after high-profile Japanese targets.
  • Social media is shaping up to be a key front in Singapore's upcoming general election.
  • Increasing numbers of Indian youth are connecting with ISIS via social media accounts managed out of the Gulf.
  • Indonesia's 30 million+ mobile gamers are the target of a new range of app games that promote wildlife conservation.
  • How does a Bitcoin transaction work and can the technology behind it help eradicate corruption in Asia?
  • New research on the implications of social media analysis tools for disaster preparedness in the Asia Pacific. 
  • An interesting blog post about how ICT tools are being used to solve agriculture problems in Bangladesh.
  • Why Chinese electronics manufacturer Xiaomi is Apple's largest threat in China (and soon everywhere else). 
  • How NGOs are using mobile apps and social media in Cambodia to counter gender-based violence.
  • In light of the government's decision to block websites spreading information about a major anti-government rally, Al Jazeera details the battle for Malaysia's cyberspace
  • Indonesia's digital economy could be world class if the right policies and incentives were put in place.
  • This short documentary on cyber security and civil society in India tackles privacy, surveillance, anonymity and free speech:

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The view from Jakarta

Jakarta this week watched the rupiah slide to its lowest point since 1998, recalling the trauma of financial crisis. Meanwhile, it was business as usual in the capital as the governor set about making friends and enemies with work on large-scale infrastructure projects.

Indonesia surpassed Malaysia for having the worst-performing currency in the region as the rupiah this week fell past 14,000 per dollar, its weakest performance since the 1998 crisis. As economies across Southeast Asia suffered losses in recent days as a result of China's devaluation of the yuan, Indonesia's finance minister and newly installed trade minister both suggested that the use of Chinese yuan for trade among ASEAN nations could help lessen the impact of regional currencies dropping in value against the US dollar.

President Jokowi called a meeting with business representatives at his residence in Bogor to discuss further strategies for overcoming Indonesia's economic challenges. Yet the finance minister was positive that Indonesia's currency slide did not signal impending crisis for the nation's economy. Minister Bambang Brodjonegoro said that despite the downturn, Indonesia's economy was still growing and that other indicators, such as inflation, growth and the trade balance, showed a much better situation to that faced in 1998.

In Jakarta, Governor Basuki 'Ahok' Tjahaja Purnama came under fire this week for his approach to various infrastructure projects in the capital. Loved and loathed for his brusque approach to governance, Ahok made one of his least sensitive moves yet by forcibly evicting residents of a neighbourhood called Kampung Pulo to make way for a revitalisation project along the banks of the Ciliwung River, with the aim of prevent flooding in the city.

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A 2000-strong security force armed with tear gas, water cannons and riot gear forced the alleged squatters from their homes this week as civil society groups prepared a legal case proving residents' ownership of the land. Several residents reportedly held Dutch-era deeds to the area where hundreds of houses had been established for generations. Evictees received no compensation from the city government after a plan to build an 'elevated village' (kampung susun) near the river was scrapped. Low-cost apartments (rusunawa) were provided for about half of the 1000-plus families evicted.

Despite criticism over the way the eviction was handled, including from the Jakarta Police, Ahok reportedly plans to push ahead with further evictions in Bukit Duri and Bidara Cina in the near future.

The governor nonetheless retains a strong support base in Jakarta, where he plans to run for re-election on an independent ticket. A group called Teman Ahok ('Friends of Ahok') is aiming to collect the required 1 million copies of supporters' identity cards to allow Ahok to run as an independent in the next local election since he quit Prabowo's Gerindra party last year.

Support for Ahok over Gerindra was demonstrated on social media this week when a Gerindra-affiliated singer publicly criticised the governor. Rock singer Ahmad Dhani, best known outside Indonesia for his Nazi-themed contribution to presidential contender Prabowo's losing campaign last year, took to Twitter this week to question Ahok's commitment to overcoming traffic congestion on one of the city's toll roads. From his account @AHMADDHANIPRAST, the singer tweeted '(Ahok)...If you can't overcome congestion on the TB Simatupang toll road...just call me...I'm waiting'.

The singer's comments caused a stir online, particularly in light of the involvement of his underage son in a fatal traffic accident on a Jakarta toll road last year. Netizens rushed to the defence of the governor, who later responded by saying that with the amount of work he was putting into Jakarta's roads and transport, things would get worse in the short term, but would bring long-term results.

Photo by Flickr user Dino Adyansyah.

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Taiwan's Ministry of National Defense on Wednesday announced that sluggish recruitment figures were once again forcing it to delay its plans to end military conscription next year, one of the major goals of the Ma Ying-jeou Administration.

Convincing enough qualified young men and women to forsake the comforts of civilian life and enlist in the armed forces will always be a great challenge, one that has been made more formidable by recent controversies such as the July 2013 death of Army conscript Hong Chung-chiu and the 'Apache-gate' scandal earlier this year. At the very least, the Government should not make matters worse by sending contradictory signals about the nature of the threat facing Taiwan to potential recruits.

Sadly, such a signal is exactly what the Chinese Nationalist Party (KMT) is about to broadcast after it allowed its honourary chairman, Lien Chan, to attend a series of events in Beijing commemorating the 70th anniversary of Japan's defeat in World War II, which will include a goose-stepping military parade on 3 September of such proportions as to bring to mind the very fascism that was defeated in the war.

The Ma Administration doesn't seem to realise that it is shooting itself in the foot. The main issue isn't the KMT's longstanding disagreement with the Chinese Communist Party over the latter's historical revisionism and the role that communist forces supposedly played in the war, a battle of ideas which is of little interest to most Taiwanese (Taiwan was part of the Japanese empire during World War II).

The real problem is that Lien's participation in the events — even if he is going as a 'private citizen' — plays directly into Beijing's propaganda campaign (it has also extended invitations to retired generals in the Taiwanese military as well as a number of politicians on the island) and risks undermining the willingness of young Taiwanese to join the military. After all, why should young men and women adopt a lifestyle of hardship and risk their lives if the nation's political leadership doesn't take the Chinese military threat seriously?

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Mr Lien, a former KMT chairman and vice president, is also expected to hold a meeting with President Xi Jinping during his 'low-key visit'. All this comes a little more than a month after footage simulating a People's Liberation Army (PLA) assault on a mock-up of Taiwan's Presidential Office was made public, and on the heels of a new recruitment video for the PLA Navy whose bombast and militarism has caused concern among China's neighbours.

Yet by attending, Lien — and by extension the KMT — will be signaling that such belligerence, which again will be on display during the Victory Day parade, is of little concern to Taiwan. Never mind that the Second Artillery Corps continues to threaten the island nation with approximately 1500 ballistic missiles, that the PLA has held several exercises practicing amphibious assaults of the kind that would be launched to invade Taiwan, or that the efforts by China's intelligence agencies to penetrate Taiwan have intensified. All of this is happening in a period when, according to President Ma, relations between the two sides are the best they've been in sixty years.

As editorials such as this one in the state-run Global Times make amply clear, an authoritarian, expansionist, and nationalistic China remains an existential threat to democratic Taiwan, a situation that could get worse in light of the trend lines in Taiwanese society and the high likelihood that the opposition Democratic Progressive Party (DPP) will return to power next year.

Besides alienating the young Taiwanese whose faith in the military establishment hangs in the balance, Mr Lien's presence in Beijing will hardly be reassuring to Taiwan's security allies, chief among them the US, where doubts about Taipei's commitment to self-defence have never been entirely dispelled.

That isn't to say that China should always be treated like an enemy and that no efforts at conciliation should be made. Quite the contrary. But such diplomacy should never occur in isolation of the optics that those exchanges generate. Sending a high-profile representative to an event that celebrates militarism by a regime that refuses to let go of the past and which continues to threaten war against Taiwan's 23 million people for expressing their legitimate right to self-determination is not a wise decision. (Although James Soong, the third presidential candidate in the 2016 elections, will not attend the ceremony, it is reported that a representative of his party will do so.)

There is no doubt that young Taiwanese men and women are dedicated to defending their country and way of life. But whether they choose to do so by enlisting in the military will be largely contingent on how seriously their government takes national defence. Cavorting with a militarist regime at a time of rising apprehensions over China's belligerence and disregard for international law accomplishes just the opposite.

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PW Singer, Strategist and Senior Fellow at the New America Foundation and author of the recently released Ghost Fleet, was at the Lowy Institute yesterday. He sat down with Michael Fullilove for a conversation about the book, his thoughts on Edward Snowden and the future of cyber relations between the US and China.

Afterwards I interviewed Peter about the Ghost Fleet and its broader themes (here's my own review of Ghost Fleet). I asked him about how the fog of war might be changing for modern, networked militaries, and whether they in fact might be becoming too confident or reliant on their access to information on the battlefield. Peter's novel also speculates on the role global technology and internet companies might take in a conflict between the US and China. In the interview, Peter talks about the differences between modern multinational corporations and their predecessors in World War II, and how the reactions of modern corporations might differ:

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Australia's Ambassador in Washington, Kim Beazley, recently said that Australia's alliance with the US had reached a level of importance greater than during the Cold War, and more akin to its crucial importance during World War II. Recent developments in the realms of security and trade, however contested, seem to underline his claims. This at a time when change is coming for Australia's representation in Washington. Coming months will see increasing speculation over who will succeed Beazley, whose extended term expires at the end of this year.

The situation gives pause for thought: what kind of attributes do we look for in Australians who can serve as Ambassador to the US?


Kim Beazley presents his credentials to President Obama, January 2012. (White House.)

At one level, the question logically incorporates generic qualities of those who are suited to serve anywhere overseas and represent Australia's interests. And the desired traits – among them, integrity, energy, acumen, fine judgement, high powers of observation and interpretation, advanced interpersonal and relationship-building skills – are, we trust, cultivated within DFAT. But with certain posts, such as London, Paris and Washington, the question takes on another dimension due to the frequency of appointments from outside the Department, and primarily from the ranks of retiring politicians.

In the case of Washington, the question of who best serves the government's representational needs is especially timely for reasons that invite looking back as well as forward. This year marks the 75th anniversary of Australian diplomatic representation in Washington. From 1940, when RG Casey headed the new Legation with a staff of five, the Embassy (embassy status came in 1946) has grown to boast more than 250 staff today, and the building is about to be rebuilt to meet expanded needs.

The work of Australia's senior diplomats in Washington was the subject of a two-day seminar held at Deakin University in October last year, the results of which will be published soon. Certain patterns emerged from the exercise, including the long-term profile of ambassadors.

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Beazley, of course, is a former Labor Party leader. Before him were two senior public servants who were trained in External Affairs/DFAT, Michael Thawley and Dennis Richardson. Before them was former Liberal Party leader, Andrew Peacock. The mix is the same when surveying Australia's Ambassadors over the whole 75 years: of the 20 Australian ambassadors to the US*, ten have been professional appointees, moving to Washington either directly from External Affairs/DFAT or from another senior public service post, and ten have been from beyond the career service**: seven former politicians, one judge, one diplomatically experienced public servant (Frederic Eggleston) and one senior public servant in Don Russell, who emerged not from DFAT but Treasury prior to his becoming principal adviser to Treasurer Paul Keating.

There is great variety among those who have held Australia's most senior post in Washington. Our first, Richard Casey, has been described as a model diplomat, winning confidences and networking brilliantly with Washington's policy-making elite in the early 1940s. His successor, former Labor politician Norman Makin, was an abstemious man whose integrity was admired, but who hated the cocktail circuit and was reluctant to engage on key policy issues. Makin's successor, Percy Spender, former senior politician in the Liberal Party and Australia's most activist ambassador, loved Washington parties as much as he loved the idea of being a second Australian Minister for External Affairs, telling Canberra what to do.

In other words, even between three early political appointees, the variability between ambassadors makes it clear that the professional/political line has limitations as a means of distinguishing the characteristics and performances of Australians in Washington.

Similarly, during the turbulent years from the mid-1960s to early 1980s, Australia's ambassadors were the cream of the Department's professional diplomats, including three former permanent secretaries: Sir James Plimsoll, Sir Alan Renouf and Sir Nicholas Parkinson. Yet their experiences varied hugely, with the consequences of withdrawal from Vietnam, searching questioning of the ANZUS Treaty and difficult dynamics between the two countries' leaders shifting the ground beneath their feet.

Among the themes to emerge from the October 2014 seminar, which featured former senior members of the embassy, was the rise of Congress as a focal point for Australian diplomats and the relative decline in opportunities for meeting with Washington's most senior members of government. Instead of Percy Spender advancing Australia's interests in the 1950s over one of his semi-regular dinners with US Secretary of State John Foster Dulles, today Ambassador Beazley might work hard to meet with a Congressional power-broker in relation to legislative measures affecting Australia's interests.

While discussion did not focus on the issue of political vs professional appointees, it was a question that was never far from the surface, and one that looms more prominently now, thinking towards Beazley's successor.

One former senior Embassy official has suggested that we might do well to tilt the balance towards professional diplomats: to the extent that ambassadors can be agents of change, diplomats' agendas tend to more ambitious and longer-term than former politicians', especially when the diplomats are not at the end of their careers. Against this view, some would argue that gravitas matters a great deal in Washington and former politicians bring a lot of this with them. If the Abbott Government is going to ready us for an announcement some time soon, we might start to see traces of one or other of these views.

* This includes the three Ministers of the Legation between 1940 and 1946: Casey, Owen Dixon, and Frederic Eggleston.

** While I have counted Casey as one of the non-career appointees, on the basis of his having been an elected member of Australian governments prior to his posting, he could also be said to represent professional diplomats, having served earlier and very successfully in Australia's High Commission in London, before a professional Australian diplomatic service existed.

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The Indo-Pacific is a strategic system encompassing the Indian and Pacific oceans, reflecting the expanding interests and reach of China and India as well as the enduring role of the US. The Lowy Institute's International Security program presents a weekly selection of links illuminating the changing security picture in this increasingly connected super-region.

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In his wide-ranging address to the Lowy Institute Media Award dinner earlier this month, News Corp CEO Robert Thomson took umbrage with Google, Facebook and LinkedIn, which he termed 'distributionists'.

These companies, Thomson argued, have ushered in an 'age of content distribution' which was 'hostile to investment in reporters and reporting':

For the distributionists do indeed have powerful distribution channels, Google and Facebook, and pretenders like LinkedIn, which is spam central. None of them actually create content, and they certainly have little intention of paying for it, but they do redistribute the content created by others – they would argue that such redistribution is a natural extension of their role as social networks. I would argue that much of the redistribution is an unnatural act. But there are broader issues that are still unfolding for media companies, who are themselves struggling to profit from their news and other content, while the distributionists are helping themselves to that content, coopting and corralling audiences and consciously devaluing brands. The supposed idealism of these companies is in stark contrast to their actual behavior. That Google’s newly conceived parent company is to be called Alphabet has itself created a range of delicious permutations: A is for Avarice, B is for Bowdlerize, through to K for Kleptocracy, P for Piracy and Z for Zealotry...

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...More relevant to our discussion is the digital divot; the deficit in reporting resources created by the egregious aggregation of news by distributors for whom provenance is an inconvenience and who are contemptuous of copyright. The words Intellectual Property don’t appear in the Google alphabet. Without proper recognition, without proper remuneration, well-resourced reporting will be ever more challenged. When I arrived in Beijing, many a US newspaper had China correspondents – now some of those papers no longer exist in printed form. Mismanagement played a role, as did journalistic hubris, but the digital age has been hostile to investment in reporters and reporting. Why pay professionals when you have UGC, user-generated content? And why pay when you can purloin? 

The address prompted a considerable amount of coverage and reaction from figures such as Mumbrella's Miranda Ward, internet venture capitalist David Pakman, and media academic  and commentator Jeff Jarvis, who wrote:

[News distributors] didn’t create this “divot.” News publishers who didn’t manage to stay ahead of digital did. And besides, who said that having a single correspondent to cover, say, Asia, as some newspapers did, was ever adequate or sensible. Now we can hear many voices from around the world. That is a better system.

In a letter to The Australian today entitled 'Google hates piracy too',  Google Australia Managing Director Maile Carnegie objected to Thomson's distinction between user-generated content and professionally generated content:

In a colourful speech delivered at the Lowy Institute Media Awards, and reported on in The Australian, News Corp chief executive Robert Thomson had some clever language about technology and journalism (“Google a pirate: News chief ”, 14/8).

The digital divot he describes positions user-generated content against what he calls premium content. But his definition of premium content seems admirably simple: anything produced by a traditional news organisation. Might I suggest a broader definition?

Australians have shown that anyone capable of producing compelling content — premium or otherwise — can live off their talents. We’ve developed algorithms to allow copyright holders to control their content on YouTube so they can chose to block uploads, or they can chose to make money off re-use of their content.

Meanwhile, our search engine points people to the original sources behind news stories, and to the news stories themselves. We hate piracy as much as Thomson does. And we remove hundreds of millions of links that point to infringing content every year. But none of that is news. We have been doing this for years.

What is news is anyone in Australia capable of producing a great story, video or movie should surely have access to the same global audience, the same copyright controls, and even the same advertisers as more traditional news organisations.

Even if Thomson doesn’t consider these people as premium, millions of Australians do, and so do some of the world’s largest advertisers. It is not either/or. It is both and more. And since we so enjoy his speeches, may we suggest Thomson would be a natural on YouTube?

Photo by Flickr user Long Zheng.

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On Monday, The Australian published an exposé on Australian aid that would lead the layperson to believe fraud was endemic and chronic within the now defunct AusAID. That was followed on Tuesday by an editorial justifying the merger of AusAID into DFAT on grounds of rampant fraud.

This line of criticism is nothing new for the aid program, which has been subjected to years of criticism from the media on the issue. It also completely misses the mark for the public discussion we need in order to improve the delivery of Australian aid. 

Clearly, fraud should never be tolerated, and the government should strive to take all reasonable attempts to minimise fraud. But is fraud as rampant in the aid program as The Australian implies? The answer is a resounding 'no'. In 2012-13 the Australian aid program (then AusAID) reported net losses of $865,730 to fraud, equating to about 0.017% of annual aid expenditure. The Independent Review of Aid Effectiveness found that fraud in AusAID over the 2004-10 period averaged 0.017%. So not only are levels of fraud extremely low, they are also consistently low.

The fact that fraud accounts for one tenth of a percent of our aid expenditure should be grounds enough to argue that it garners too much public attention, but let's dig a little deeper.

First, how does Australia compare to other donors? Comparable data across countries is limited; it seems Australia is unique in its fixation on this issue. This 2012 University of Portsmouth study identifies rates of fraud in the US aid program in 2008 at 0.85% of total expenditure, and 1.13% of the EU's aid program in 2009. By international comparison, then, 0.017% looks like it should earn Australia a gold star.

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The singling out of Australia's aid program from all government spending might be justified if it is an outlier or poor performer when it comes to fraud. But this is hardly the case. Take Centrelink, for example. Of the $86.6 billion spent on welfare in 2008-09, over 0.13% was reclaimed through fraud investigations, 13 times higher than the rate of all identified fraud in the Australian aid program. In another recent case, the Defence Department was scandalised when a single case of fraud was only discovered after $585,000 was racked up on a fuel card.

So it's remarkable that The Australian justifies the merging of AusAID into DFAT based on a tiny amount of fraud in the aid program. By all accounts AusAID was managing fraud exceptionally and consistently well, and there has been no proof that DFAT can or will do any better. In fact, with the aid program suffering its largest ever single-year budget cut, a major cultural shift occurring after the merger of departments, the loss of experienced aid program managers, and development spending decisions now being made by an agency with foreign, security and consular policy priorities, it's hard to see how DFAT will improve the already excellent rate of fraud minimisation.* It will be interesting to see if DFAT is as transparent about the rate of fraud in the aid program in the future. 

With all of this in mind, it's worth asking why the media keeps pursuing the issue of fraud in the aid program.

A simple answer is that it's easy. Because AusAID had sound fraud policies, the documents are easy to access through an FOI request and are bound to lead to a headline (I have to admit, it would be hard to walk away from a story on fraud that includes contracts paid to 'Joke Shipping Services'). Another reason is that stories like this appeal to those that don't support aid. Without mentioning how isolated and infinitesimal these individual cases are, it would be easy for a reader to infer that all aid is wasted (a quick look at the comments section of the exposé illustrates this point). 

But if we really want to talk about improving Australia's aid program, this conversation is a distraction. Fraud will never be completely removed from any aid program; aid is delivered in some of the harshest environments in the world and some degree of (and indeed appetite for) risk must be accepted. This is particularly the case if the focus on innovation Foreign Minister Julie Bishop has been encouraging in the aid program is to be realised. There are instead a myriad of topics that investigative journalists could address, such as what impact the merger has had on the effectiveness of Australia's aid projects, how transparency of the aid program has changed under DFAT, and how the 20% cut to the aid program has affected relations with our aid partners.

It's time for The Australian to start asking the right questions. 

UPDATE: DFAT Secretary Peter Varghese sent a letter to The Australian in response to its story; the letter has now been published on the DFAT website.

Photo by Flickr user Department of Foreign Affairs and Trade.

*The DFAT website published this report in June claiming fraud in the aid program had jumped to 0.029% in 2013-14, almost double the rate of fraud in AusAID’s final year of operation.

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  • The second India-Pacific Island Conference was held in Jaipur last Friday. Indian Prime Minister Narendra Modi announced plans to increase engagement with the Pacific, with a focus on renewable energy, human resource development, IT infrastructure and assistance for disaster management using space technology. He also signaled future goodwill visits by the Indian Navy.
  • With the recent debate over the mandate and capacity of regional institutions in the Pacific, Nic Maclellan analyses the contesting views and issues influencing the transformation of regional architecture in the Pacific.
  • In the Saturday Paper, Martin McKenzie Murray argues that the violence and sexual assault suffered by female refugees on Nauru constitutes a humanitarian crisis.
  • On Devpolicy, Bryant Allen explains the risks to food production from the El Nino-driven drought in PNG's highlands.
  • Violence against women is a major issue in Solomon Islands, where one in three women have reported that their first sexual experience was forced.
  • In a speech at the Lowy Institute last week, Peter Varghese, Secretary for the Australian Department of Foreign Affairs and Trade, said that 'more than any other single relationship the state of our relationship with PNG is seen as a barometer of Australian foreign policy success'.
  • Today is Repentance Day in PNG, and Parliamentary Speaker Theodore Zurenuoc has sparked controversy by announcing plans to burn all the 'demonic' cultural artifacts in parliament.
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Ross Burns' website, Monuments of Syria, chronicles the historic sites damaged in the present conflict.

The brutal beheading of Khaled al Asad, former Director of Antiquities in Palmyra, and the detonation of the beautiful little Temple of Baalshamin, built just after the Roman emperor Hadrian visited the desert city in AD 130, appear to have caught the world's imagination in a way that has had few precedents for some time in the savage conflict in Syria.

In light of the prolonged barbarity conducted by all sides in the conflict it may seem strange that these two events have rocketed to the top of the agenda of a conflict well into its fifth year. As the shock waves of the war have spread — with tens of thousands of victims of the conflict flooding Macedonian railway stations; a generation of children spending their formative learning years in a world of normalised violence; fatalities of the conflict reaching well over 240,000; a good half of Syria's population displaced; a sizeable proportion of the country's housing stock in ruins — why does one death and one 2000 year-old temple give us pause?

The answer is because ISIS has successfully opened a new front which it hopes will hasten the fall of the Assad regime. The threat of destruction of Syria's great array of significant ruins — treasures not only appreciated by connoisseurs of Classical civilisation or scholars of arcane Neo-Hittite palaces but by ordinary Syrians — is now pressed into service to stoke the conflict.

In the years before ISIS spread across Syria from Iraq, many monuments disappeared, with little to mark their passing. The loss of the only Seljuk-era structure in Syria, dated in the decade before the Crusades, caused a mild ripple, but a number of other notable buildings in frontline Aleppo disappeared into the caverns of the Islamist tunnel bombs with barely a mention. The funeral mosque of the most successful of the sons of that great Islamic hero Saladin lies in a pile of rubble at the foot of the Aleppo Citadel. Two of the major early works of the Suleiman the Magnificent's architect, Sinan, are either pulverised or reduced in part to tumbled stones.

ISIS's arrival in Syria's historic heartland, notably their seizure of Palmyra, brings a new dimension to this apparently mindless destruction. The fact is, of course, that it is not mindless at all; it has a very specific purpose.

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In the distant past, iconoclasm was a selective tool of both Byzantine and Islamic regimes intent on effacing the memory of earlier cultures. Much of the destruction in Syria for the first three years of the conflict, however, was a by-product of the fighting and the loss of any framework of government to keep petty or major crime at bay. With the rise of ISIS to supremacy in many parts of the country, stage-managed destruction is itself the message.

Having moved on from blowing up remote rural shrines, treasured for decades by local villagers, ISIS has advanced to bigger-picture stuff. And there is no bigger picture than Palmyra. This jewel of the desert was an elusive destination for seventeenth century European adventurers and for scholars tracing the cross-currents shifting across the poorly defined frontiers between Classical and Persian (even Chinese) worlds. Its temples, columned streets and tower tombs, stamped with a mixture of Greco-Roman, Mesopotamian and Semitic traditions, were largely left to slumber quietly over centuries.

ISIS sees them differently. The ruins are hostages in a war where savagery on all sides has redefined the unthinkable. We have seen how ISIS videographers contrive events such as the explosion of the Baalshamin Temple. They will continue their efforts to choreograph shock, to keep the world off guard and to use the ruins as weapons.

We don't know precisely why Khaled al Asad died but he represented a concept of Syria that ISIS cannot allow to survive. He was an archaeologist far removed from the Indiana Jones mock-heroic tradition. He was a doer and a scholar of integrity. He didn't excavate a patch of ground and then retire to his study. He was out and about every day, running his museum with its incomparable range of crisp limestone tributes to the dead, directing the conservation of new tomb finds. He was the picture of the archaeologist writ large, determined to show that there was much more to Palmyra than pretty columns or towering tombs. Under his direction, the city's Byzantine churches, early Islamic suqs and houses and even its first mosque were exposed. He showed Palmyra in all its complexity, its mixture of civilisations and faiths; and for that he had to die.

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China's navy, from its founding in 1949 to the 1996 Taiwan Strait crisis, was focused on preventing Taiwan from becoming formally independent. This goal did not require long-distance operations that would require an at-sea resupply capability. Now, however, Beijing has declared its status as a global maritime power. 

Amateurs, it is said, talk about tactics, but professionals study logistics. The leaders of China's navy, the People's Liberation Army Navy (PLAN), apparently have finally understood the vital role played by logistics in any effective military force. The PLAN's current modernisation program may be dated to the mid-1990s, but until recently it failed to include expanding replenishment-at-sea (RAS) capabilities. 

Before the turn of the century, the PLAN included just one Soviet-built oiler and two relatively limited Fuqing-class oilers for its entire fleet. The ex-Soviet Komandarm Fedko-class replenishment ship began construction in the Ukraine in 1989, was purchased by China in 1992, and joined the PLAN in 1996 as the Qinghai-Hu (AO 885). It is a large ship, displacing 37,000 tonnes, making it almost as big as the most numerous US oilers currently operating. The Qinghai-Hu has four replenishment stations and China added a small flight deck and hangar capable of operating one Z-8 transport helicopter. The ship is reportedly underpowered, with an engineering plant based on just one diesel engine, but has supported ships deploying to Guam and on Gulf of Aden counter-piracy operations.

The two Fuqing-class ships that joined the PLAN in 1980-1982 displace just 21,000 tonnes. They are equipped with four refueling stations, but have minimal stores replenishment capability. These ships have a small flight deck but no hangar, severely limiting their ability to operate helicopters.

China's lack of emphasis on underway refueling capability before 2005 is highlighted by the fact that Beijing actually built four Fuqing-class ships in the 1980s, but sold one of them to Pakistan in 1988, while assigning the fourth to commercial service.

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But additional oilers joined the PLAN in 2005, when two Fuchi-class ships were commissioned. The Fuchi oilers are the first modern RAS ships in China's navy; two improved versions of this class joined the fleet in 2014. This has meant that the PLAN counter-piracy task groups deployed to the Gulf of Aden and beyond have depended almost entirely on the first two Fuchi-class oilers; they were for the most part tasked with 'port and starboard' deployments, assigned away from homeport six of every 12 months. 

The improved Fuchi-class vessels now in the PLAN have four refueling and two stores transfer stations, providing the capability to deliver significant quantities of dry goods and ordnance at sea. They thus should be classified as a replenishment oilier or 'AOR,' rather than the standard 'AO'. This is the class of RAS ship required to support long-range operations, although their relatively small size – 22,000 tonnes – means that they require frequent replenishment from relay tankers. 

The PLAN in 2015 includes seven RAS ships. At least one additional Fuchi-class AOR is preparing to join the fleet and the PLAN should be expected to budget for additional ships of this class, or an improved version.

PLAN RAS ships have proven their capability at both astern and alongside refueling. Additionally, they all have flight decks capable of helicopter operations, though only the Qinghai-Hu and the Fuchi-class ships are equipped with the hangars necessary to embark Z-8 logistics support helicopters.

The Chinese navy's experiences in long-range deployments has increased significantly since December 2008, when the first counter-piracy task group departed for the Gulf of Aden. The past seven years of 'far seas' operations have brought home to Beijing the fleet's need to be logistically self-supporting if it is to be an effective tool of statecraft and able to support China's national security priorities at sea. These include disputes in the East and South China Seas, of course, but extend to defending the global trade routes on which China's economic well-being depends. 

China's recognition of the importance of logistics support for the PLAN's far seas operations is also recognised in its move to establish a relatively permanent facility at Djibouti. Establishing an overseas logistics system will support, rather than take the place, of RAS ships.

The increasing number of RAS ships entering China's fleet will also allow greater employment of the PLAN's aircraft carriers, the first of which, Liaoning, will within the next decade be joined by at least the first indigenously built Chinese flattop. Carrier operations require the near-constant presence of RAS ships, primarily to replenish aircraft fuel and ordnance, as well as being on-hand to refuel escorting destroyers and frigates.

The PLAN in 2015 has an adequate RAS force to support continuous far seas operations. Increased defence funding and support illustrate Beijing's recognition of the need for improved RAS capability. Additional replenishment ships will be built to better support both those operations as well as future aircraft carrier operations.

Photo courtesy of China Defense Blog.

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