China Eye September 10 Issue10 by China Energy Fund Committee

China Energy Fund Committee (CEFC) is a nongovernmental, nonpartisan, not-for-proﬁt Chinese think-tank registered in Hong Kong. It has Special Consultative Status with the United Nations Economic and Social Council (UN ECOSOC). CEFC is dedicated to fostering international dialogue and understanding of cultural values, regional cooperation, energy security, and issues relating to China’s emerging place in the world. We aim to promote international cooperation and mutual respect through public diplomacy. We believe an enhanced understanding of one another’s historic legacy and cultural values would lead to a more accurate interpretation of our respective actions.

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Editorial Board ( ) Chairman: YE Jianming Vice Chairman: CHAN Chau To Member: HO Chi Ping Patrick Member: LO Cheung On Member: ZHANG Ya Editor-in-Chief HO Chi Ping Patrick Deputy Editor LO Cheung On Executive Editor ZHANG Ya Editorial Assistants Daniyal NASIR LEE Ching Hang Koch David Wen RICCARDI-ZHU LI Shengnan --------------------------------Published by China Energy Fund Committee 34/F, Convention Plaza Oﬃce Tower, 1 Harbour Road, Wanchai, Hong Kong , China Visit our website at www.cefc-ngo.co --------------------------------For enquiries of distribution in the United States, Please contact CEFC U.S. Oﬃce 25/F, 1100 Wilson Boulevard, Arlington, VA 22209, U.S. --------------------------------Editor’s Note The authors whose original contributions were written in Chinese have given their permission for the articles to be translated into English, although not necessarily having vetted the English translation. -------------------------------All rights reserved. No part of this publication may be reproduced in any form or by any means without the written permission of the publisher. ISSN 2311-2506

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Editor’s Note

Expectation of 2016 in an Interconnected and Turbulent World: Some Recent Signiﬁcant Events, Trends and Themes

We live in interesting times. 2015 has been a busy year, filled with political challenges and international incidents, from sunken ferries and disappearing planes to the Ebola outbreak and mass protests, from the bloody rise of ISIS, the Ukraine crisis, and the terrorist attacks in Paris, to the Iran Nuclear Deal, the migrant crisis, and the uncertain integrity of the European Union. I would say that we live not only in interesting times, we live in dangerous times. 2015 is now history while 2016 is the future. What will this New Year bring? What can we expect from the next 11 months? Will the world be safe? We live, today, in an increasingly interconnected and turbulent world, where traditional and nontraditional security challenges have appeared one after the other. Indeed, in today’s world, modern warfare does not always take on a military coat. Unconventional warfare can be psychological, covert, or by proxy. It can involve currency, trade, and cyberspace or, in more extreme cases, even weather-modification, biological and chemical agents, and pre-emptive annihilation. Therefore, even though our topic of focus is security in the context of the Sino-U.S. relationship, the security of all regions and fields of development must play a part in our assessments. We must have a firm understanding of the global context of the Sino-U.S. relationship. Furthermore, in today’s world, the economy, the environment, politics, technology, and health all have security implications that must be considered. We face increasingly complex problems, and we must respond by expanding our breadth and acuity of our vision, and also the sensitivity and depth of our concern.

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To give context to the discussions that will follow, allow me to highlight some of the recent events, trends, and themes which I think are significant – which reached and impacted the lives of people around the world. Undoubtedly, in the context of security, the situation in Syria comes to mind first and foremost. The conflict has spawned, beyond the violence and instability in the region, a refugee crisis in Europe, terrorist strikes on three continents, and the military intervention of major superpowers. What can we expect in 2016? We are seeing the formation of a more united international community against ISIS. In response, it is possible that ISIS may tone down its activities, decentralize its operations – relying more on cell and lone wolf type guerilla warfare – and move into North Africa. For some analysts, ISIS might present a worst case scenario: an attack on the strategic infrastructure of oil producing countries could potentially ignite a global energy crisis. However, given the present fact that no country, or countries, seems to be willing to assume leadership position against the ISIS, we should be prepared to accept the reality that ISIS will not be wiped out from the face of the Earth in the near future. The international cooperation trying to take on ISIS is at best half-hearted and at worst merely empty slogan. Countries may want ISIS to go away, but none are willing to place the issue at the top of their agenda, and to dedicate to it the necessary resources. Terrorism will continue to be a problem. Boko Haram continues to shed blood in Nigeria. In Afghanistan, although the US is expected to finally move towards withdrawal by the end of 2016, we do not foresee peace, prosperity, and stability in the country. Terrorism, a violent manifestation of ethnic separatism, often linked as a corollary of religious zealotry and fundamentalism, presents untold threats to our lives, to social stability, and to national security. It has affected countries in all the continents. No country is spared. Nobody is left unaffected. Led by the US, the global community has been fighting terrorism for the last few decades with ever increasing commitment, resources and determination. But I am sad to say that despite all these efforts, terrorism has not only failed to be eliminated or subdued, but has been more rampant and disastrous than ever before. I cannot for once stop but to ask “are we doing something not right? Are we barking up the wrong tree?” Nonetheless, it is high time that we should join hand

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in reviewing this issue so critical to our future well-being and development in a peaceful global environment. Perhaps we should adopt a new paradigm in our overall anti-terrorism strategy. In Latin America, another non-traditional threat continues to threaten the security of the region: drug related crime. Bloody killings continue, and in some countries one is not certain who is running the show: the government, or the cartel of organized crime.

The most prominent non-traditional security concern has, however, been cybersecurity. While recently this had been overshadowed by territorial issues, in 2016 a returned attention to this issue is guaranteed. The issue will certainly play an important role in the Sino-U.S. relationship, and may even make the top of the agenda. Cybersecurity is, after all, closely linked to energy and economic security. Looking ahead, we can see that potential security problems are brewing across the globe, particularly in Europe, the Middle East, and Asia. Europe is facing a variety of non-traditional security concerns: the refugee crises, the integrity of the Union – being tested by the upcoming referendum in the United Kingdom and the Catalan independence movement – and the Eurodollar. The Ukraine crisis and terrorism continue to cast a long shadow over the continent. Having said that, some analysts maintain that the situation in Europe is, although difficult, might still be under control, and not going to go anywhere anytime soon. The Middle East continues to present a host of security challenges. Unfortunately, it does not look like we can expect any drastic or immediate changes on the horizon. Therefore, it’s the Asia-Pacific that will be the place to watch for geopolitical changes in 2016. Territorial disputes are often mentioned as having the potential to trigger conflicts between China and its neighbors. The situation in the South China Sea has caused some littoral states to be concerned, including, from across the Pacific, the United States.

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Indeed, some observers often argue that China is no longer maintaining its decades long “Tao Guang Yang Hui” (

) approach (meaning “not to show oﬀ one’s capability but to keep a

low profile”), and it has adopted a more assertive foreign policy, supported by its behavior in recent territorial disputes. So is China likely to resort to force over territory as many have argued? According to Taylor Fravel of MIT, the short answer is that Beijing has always exhibited a preference for peacefully resolving territorial disputes through negotiations. In fact, since 1949 China negotiated compromises in 17 of 23 territorial disputes,1 often agreeing to accept less than half of the territory being disputed. In 15 disputes, the compromise created conditions for a final territorial settlement through bilateral agreement. 2Fears that China’s rise will lead to territorial conflicts are unsupported by its historical record. North Korea recently fired its alleged hydrogen bomb, catching everyone off-guard. As usual, everyone reacted with rehearsed rhetoric of wanting to do something about it, but nobody seems to know what. In the meantime, Japan amended its Constitution, and is reorganizing its defense strategy. It has begun to upgrade its defense regiment and machinery, funded by four consecutive years of increased defense expenditures.3 Japan’s 2016 budget is its largest ever, and would place the Japanese defense budget as the seventh largest in the world.4 The whole exercise has been conducted under the pretext of upholding stability in the region. China, too, has been undergoing its own major military reorganization for similar reason but was met with a different treatment by the Western community. In Taiwan, just last week, a new leader was elected. It may be too soon to predict if it bears any serious consequences, requiring an altering of the temperature across the Strait. It will depend on what is to be said, and what is to be done.

http://dspace.mit.edu/openaccess-disseminate/1721.1/92742, page 14. Id. 3 http://www.huﬃngtonpost.com/huﬀ-wires/20150831/as--japan-military-budget/. 4 http://www.theguardian.com/world/2015/aug/31/ japan-plans-largest-ever-defence-budget-to-counter-chinas-reach. 1 2

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The many geopolitical security problems in the Asia-Pacific will also be further subject to the changing winds of the global economic situation. The IMF has downgraded its predictions for global growth from 3.6 to 3.4%, and from 2.2% to 2.1% for OECD countries.5 WTO has also readjusted global trade growth from 4.0% to 3.9%.6 Economic uncertainty will definitely be another major topic of concern for security in 2016. A major area of concern seems to have been kicked off at the end of 2015, when the Federal Reserve decided to increase interest rates. Money is expected to be sucked back into the United States, which will present further challenges to new and developing economies, many in the AsiaPacific region, and most of which are already experiencing difficult times. It’s very likely that inadequate market fluidity will cause their money to depreciate. China’s overall financial stability is of concern not only for all Chinese, but also the pundits who seek to profit from yet another major financial crisis, which many have predicted will hit Asia again after 18 years of relative stability. Or will history be repeated that China would be subjected to a similar fate as Japan had with the Plaza Accord? One thing that is noteworthy is that while the Fed is increasing its rates and pulling money in, the Central Banks in Europe and Japan have continued to adopt policies of quantitative easing.7 These actions will add further uncertainty and unpredictability to financial markets in 2016. Another major area of economic uncertainty pertains to oil prices. In 2015, oil prices jumped off the cliff, largely due to dwindling demand. OPEC nevertheless decided to hold onto its market share, and remained adamant about not reducing production. As a result, oil has been at record low prices. 2016 does not promise stability: to add insult to injury, the United States has lifted the 40 year ban on crude oil exports and, with the lifting of international sanctions, Iran will also return to exporting oil in a big way. This will further increase global oil supply at a time where it remains difficult to see new demand going forward. Goldman Sachs predicts oil may, therefore, drop down to even 20 US dollars per barrel.8

5 6 7

http://www.imf.org/external/pubs/ft/survey/so/2016/RES011916A.htm https://www.wto.org/english/news_e/pres15_e/pr752_e.htm http://www.bloombergview.com/quicktake/europes-qe-quandary and http://www.economist.com/news/ﬁnance-economics/21684516-central-bank-joins-eﬀort-getjapanese-companies-spend-their-cash. http://www.bloomberg.com/news/articles/2015-09-11/-20-oil-possible-for-goldman-asforecasts-cut-on-growing-glut.

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In 2016 we will also continue to see increasing competition between new and old energy. In the long term, this will be an increasing area of concern, as it may be destabilizing for traditional oil producing countries, many of whom may already begin to see difficulties with low long-term oil prices. Given all these issues, it is high time that China, the second largest economy, and the United States, the largest economy and most powerful country, join hands, and begin to tackle all of these challenges. In 2015, the two countries took the whole world by surprise when they issued a common stance on climate change and reduction of greenhouse gas emissions. We addressed, together, a common foe and challenge of the human race. There is no reason why we cannot do this again in 2016, against other predicaments. The individual circumstances of the two countries in 2016 are also likely to favor cooperation. 2016 will be an election year for the United States, and it is likely that the Obama administration will not want to end its last year with major problems or confrontations. It will, instead, be seeking cooperation. In other words, we’re unlikely to see an assertive administration, or one that will go out of its way to flex its muscle. It’s the same outlook for China. 2016 will be the first year of the 13th Five-Year Plan, and China will be busy with its implementation. China has its hands full with domestic issues: urbanization, financial stability, economic restructuring, and cleaning up the environment, just to name a few. It’s safe to say that China, too, will not be looking for deliberate challenges beyond its bound. Competition in geopolitics between major countries will always exist. Differences will always be there. We hope, however, that 2016 will not be a year where we will see escalating tension and conflict. Nobody wants that. Competition, after all, can be friendly and amicable. Differences can be managed and accommodated. And while we may have different backgrounds and different pasts, we have a common future to face, a common destiny to share and behold. We live in an increasingly interconnected world, which has recognized that cooperation and trust yields better results for all. We can ensure the stability and prosperity of the Sino-U.S. relationship by promoting dialogue, understanding, respect, trust, and cooperation. The importance of this task cannot be understated.

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Because the Sino-U.S. relationship is not only a bilateral relationship – it is a global one, aﬀecting the whole world and the entire human race. The challenges this world faces are overwhelming, and may not be addressed or solved overnight, nor by our two countries alone. We should join forces to rally the whole wide world to come together for a common cause. This and many other challenges are all the more a reason to work hand-in-hand, rather than double guessing, excluding, or oneupping one another. There are no guarantees that China and the United States will transcend the operation of great power rivalry. But, as Dr. Kissinger once said, we owe it to ourselves, and the world, to make an eﬀort to do so. How do we go about doing so? We should keep an eye on it.

Editor-in-Chief Dr. HO Chi Ping Patrick Deputy Chairman and Secretary General China Energy Fund Committee

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CONTENTS Editor’s Note Expectation of 2016 in an Interconnected and Turbulent World: Some Recent Signiﬁcant Events, Trends and Themes

HO Chi Ping Patrick

An Outlook on Sino-US Relations and Corresponding Suggestions

SU Ge The Tasks of Both America and China to Get Things Done

R. James WOOLSEY Sino-US Relations in the “Digital Forevermore”

Tom RIDGE

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A 21st Century Energy Policy: Lessons from China

John HOFMEISTER Are China and The United States Headed towards The Thucydides Trap?

HO Chi Ping Patrick China’s Internet in Its 13th Five-year Plan

JIANG Qiping Reducing Tensions and Ensuring Sino-US Cooperation in the Western Paciﬁc

Douglas J. FEITH Securing the Cyberspace: Stabilizing the Sino-US Strategic Relationship in a Networked World

SHEN Yi China and America’s Eﬀorts Towards Stability in the Western Paciﬁc Region

ZHANG Tuosheng Nuclear Power in China: Challenges and Opportunities

Jonathan A. CHANIS Retrospect and Prospect of the Global Nuclear Power Market HUANG Xiaoyong

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An Outlook on Sino-US Relations and Corresponding Suggestions SU Ge

An Outlook on Sino-US Relations and Corresponding Suggestions SU Ge President, China Institute of International Studies

ooking at the international situation

Their relations are linked to the prospect and

in 2015, we can ﬁnd that there were

destiny of both countries, the Asia-Paciﬁc and

continuous regional turmoil and the world’s economy

remained

the

the world.

doldrums.

Some of our American friends seem not

However, in general, peace, development and

so willing to, or actively, talk about the new

advancement are still the world’s trend. There

type of major power relationship, so I would

is a three-fold eﬀect in the world: 1. changing

like to state that, ﬁrst, China does not stress

world situation; 2. changing world order; 3.

this tag deliberately, but win-win cooperation

changing economy.

is known as the greatest common ground of

Looking back on the Sino-US relations

the two countries under new conditions. Not

last year, the most signiﬁcant is President Xi

conﬂict or antagonize can be regarded as a

Jinping’s state visit to the United States in

basic and at least a kind of strategic consensus.

September. That visit contains much strategic

We do not want hostility or confrontation, do

content and signiﬁcance, because it is in

we?

the period in which the Sino-US relations is

In a new historic period, the two countries

entering a new stage of transition, and China’s

should avoid repeating the Thucydides’

“four comprehensive” is in a crucial period.

trap with all strength, avoid the loss of both

The visit actively and positively approved

countries. I think it is not about whether we

the direction and strategic value of the bilateral

like it or not, want it or not. It is a certain choice

relations, promoted a new type of major power

that conforms to both countries’ fundamental

relationship between China and America,

interests and the common interests of the

which is based on mutual respect and win-win

international community. Of course, we can

cooperation. The world is greatly changing

discuss in depth and clarify the connotation

in complexity, while the trend of Sino-US

and denotation of a new type of major power

relations has signiﬁcant impact on the world.

relationship.

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An Outlook on Sino-US Relations and Corresponding Suggestions SU Ge

SU Ge at “Sino-Us Colloquium (IX) Sino-US Security Relations: an Agenda for the Next U.S. President”

Second, there is potential progress in the

political wisdom, to act frankly, to discuss

Sino-US relations in 2016. I agreed with Mr.

problems directly, to resolve conﬂicts, and to

Robert McFarlane’s opinion on the Sino-US

deal with diﬀerences. The following are my

relations and the probabilities of dialogue and

suggestions in six aspects.

cooperation in the future. The Sino-US relations

are the most complicated and important

1. There is a good dialogue system between

bilateral relations in today’s world. There is a

the two countries, and our communication

wide range of mutual interests among the two

channels are still improving. These secure

countries, as well as profound frictions and

our bilateral relations eﬀectively. Our

diﬀerences. Therefore, to ensure the Sino-US

communication channels are set at diﬀerent

relations are going on the right track conforms

levels and departments, so we can reach a

to the aspiration of both countries’ people and

set of consensus pragmatically, in order to

the development trend. If China and the United

reduce our misunderstanding to each other,

Sates cooperate, they will beneﬁt each other.

and expand our cooperation. Therefore,

If they conﬂict, they will both lose. Their

the two countries should insist on the

consensus is more signiﬁcant than diﬀerence.

communication between our senior oﬃcials

Both countries should have broad mind and

through various channels, in order to give

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An Outlook on Sino-US Relations and Corresponding Suggestions SU Ge

full play to the role of high-level strategic

rather than enemies, so constructing the

communication.

new type of major power relations conforms to the fundamental public opinions of both

2. China and the United States should expand

peoples.

and deepen pragmatic cooperation, because the foundation of our relations is the

4. China and the United States need mutual

concrete economic cooperation and trade

respect and learn from each other. There

over the years. If one of them gains, the

are diﬀerences between them in the

other will also gain. If one of them loses, the

aspects of history and cultural traditions,

other will lose too. This situation is ﬁxed,

social systems, economic modes, as well

unchangeable and is going to be deeper.

as development stages, thus we have to

This is not only a fact, but also a continuous

respect to each other’s interest and our

progress. Business and trade has already

relationship, and abide by our promises.

been the an important bond between China

The issues concerning China’s sovereignty

and the United States, so in the future,

and territorial integrity, such as the Taiwan,

the two countries should conduct more

Tibet, Xinjiang and Hong Kong issues,

negotiation, in order to reach an agreement

should be handled carefully and in an

earlier on the Bilateral Investment Treaty

appropriate manner.

(BIT). China and the United States should also extend their cooperation to other

5. The Asia-Paciﬁc issues can help strengthen

aspects, such as military. The military

dialogue and cooperation. China and

relationship is an important part of the

the United States should join together to

Sino-US relations. Since the two countries’

promote peace, stability and prosperity

armies have achieved more exchange in

in the Asia-Paciﬁc region, and to solve

recent years, this has greatly contributed to

regional and global problems like the

the construction of major power relationship

Korean Peninsula issue. China’s stand on

between the two countries.

the Korean Peninsula issue is clear and ﬁrm, there are three points: 1. agreement;

3. Frequent cultural exchange brings beneﬁts.

2. peace; 3. communication. Besides the

Civil exchange has become the energy

Korean Peninsula, there are also issues

to improve the two countries’ relations

like climate change, internet security, anti-

continuously.

American

terrorism, humanitarian relief, energy,

people are always friendly to each other.

hazards and diseases, international stability

They hope their countries to be friends

maintenance.

Chinese

and

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An Outlook on Sino-US Relations and Corresponding Suggestions SU Ge

6. The

current

international

economic

from Japan according to the “Concession

recovery is weak, so the cooperation of

Law” of the United States. During President

China and the United States, which are

Xi’s visit to America last year, China, the

the world’s two major economies, is very

United States, Philippine and Vietnam

meaningful. The two countries can improve

reached a consensus in the South China

their communication and coordination in

Sea issue. We all hope to settle the issue in

macroeconomic control policies, and join

a constructive way.

together to improve the region’s or even

Some of the U.S. departments doubt and

the world’s economic growth and ﬁnancial

accuse China’s construction on the South

stability.

China Sea Islands. Thus, the U.S. navy entered the South China Sea because of it.

Third, there are some outstanding issues in

These only made the South China Sea issue

their bilateral relations, thus both China and

more complicated. In contrast, both China

the United States should handle carefully.

and the United States should improve constructive control, and implement risk

1. South China Sea Issue. China and the United States should interact with each

prevention mechanism, in order to avoid accidental discharge.

other positively. Since they are both Paciﬁc

countries, issues in Asia-Paciﬁc aﬀect

2. Taiwan Issue. The Straits have become

the interests of both countries. President

unstable after the election in Taiwan.

Xi Jinping has said that there is enough

Taiwan’s recently elected leader has said

space at both sides of the Paciﬁc Ocean

to keep the present situation. However,

for China and the United States. China

everyone should remember that when Lee

always respects America’s reasonable

Teng-hui propose the “Two-State Theory”,

interest and relationship in the Asia-Paciﬁc

who is the person that drafted it. The

region. China also welcomes the United

meaning might have changed in diﬀerent

States to put eﬀorts on the peace, stability

period, but the fact is that the Taiwan Issue

and prosperity of that region. On the other

is China’s internal aﬀair. And, there is only

hand, China wants the States respect

one China including the Mainland and

China’s interest and relationship. Islands

Taiwan in the world. The election result of

and territorial sea related to South China

Taiwan’s leader did not change this basic

Sea are part of China’s territory. This is a

fact and the international consensus. A

basic fact. After the end of World War II,

former U.S. Deputy Secretary of State has

the Chinese navy recaptured the islands

recently visited Taiwan. China is concerned

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An Outlook on Sino-US Relations and Corresponding Suggestions SU Ge

about it. China restated that Taiwan is an

to various parties.

inseparable part of China’s territory. We urge the U.S. to adhere to the One China

To conclude, continuous expansion of

policy, conform to the principles of the

international coordination and cooperation is

three Sino-US joint communiques, oppose

the basic requirement and power of constructing

Taiwan independence, not interfere in

the new type of major powers relationship for

China’s internal aﬀairs in any way, do more

China and the United States. Both countries

things that improve the Sino-US relations

are members of the United Nations Security

and peace at the cross-strait.

Council, located at both sides of the Paciﬁc Ocean, so we should take the major and unique

Fourth, China and the United States, as great powers, have their responsibility.

responsibility to maintain the regional and international security, peace and prosperity. The Sino-US cooperation cannot solve all

1. Great powers should implement responsible strategy and safe policy. The principle of

problems in the world, but it is essential in the process of solving those problems.

their policies should be cooperation rather than confrontation; win-win rather than zero-sum; ensuring security rather than making conﬂicts; maintain regional peace, stability and cooperation; not disrupt

* This article is excerpted from the author’s

regional security and order; abandon Cold

speech at “Sino-Us Colloquium (IX) Sino-

War mentality; building win-win and

US Security Relations: an Agenda for the

secured relations through cooperation.

Next U.S. President” held by the China Energy Fund Committee on January

2. Great powers should have great powers’ responsibility, strategy and policy. Their

24, 2016, at Hong Kong Convention and Exhibition Centre.

bottom line should be no conflict or confrontation, and mutual respect to each other’s core interest. 3. Great powers should act like great powers. They should be innovative to create new frameworks, construct inclusive security system in the Asia-Pacific that is beneficial

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The Tasks of Both America and China to Get Things Done R. James WOOLSEY

The Tasks of Both America and China to Get Things Done R. James WOOLSEY Former Director of Central Intelligence Agency

will try to raise the issues that we ought

in Paris and it involves capitals were taxis.

to be working together on. I think it is

And so Gallieni went to the head of the taxi

important to try to focus on what is practical

organization in Paris and said, “we need all

and important, and to get something done. We

the taxis right away.” Then, they put 5 French

can get together to ﬁnd consequences, and to

soldiers into each taxi, plan how to get on

talk about overall objectives, but I think our

the German ﬂank. They raised 50 miles per

task as soon as possible is to get something

hour which is a very rapid speed for that time.

done, so I will focus on that.

The French army reached the German ﬂank,

In 1914, not a good year, we were getting

attacked, blew it up, and saved Paris. This

into World War I. There was an interesting

saved France and the allies from the defeat in

incident. In early September that year, just 3

the beginning of World War I.

weeks after the war started, the German armies

What Gallieni saw was the possibility of

were 45 miles from Paris, but there were only

using an item of transportation and energy

few French forces to protect the capital. They

infrastructure in a way that no one had ever

were just about to resign to losing the capital

thought of using it before. What about our

or basically losing the war. At that time, an

taxis here? We may ﬁgure out how to work

elder general Gallieni, a veteran of the Franco-

for the relationship between industry and

Prussian War decided to suggest a crazy idea.

producers and our national security of China

If the French forces could move at a very rapid

and the United States and other states, to help

way, not just 20 miles per day but rather 3 to

an infrastructure to contribute to our security

4 times faster than usual, they could hit the

rather than the one that is vulnerable.

Germans on the ﬂank and blow up the German

Now both China and the United States have

ﬂank to save Paris. The problem was how to

several very serious problems in heading the

ﬁgure it out.

kind of energy we need. In the production of

In 1914, the only vehicles fast enough

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electricity, the United States still uses some

Issue 10

The Tasks of Both America and China to Get Things Done R. James WOOLSEY

R. James WOOLSEY at “Sino-Us Colloquium (IX) Sino-US Security Relations: an Agenda for the Next U.S. President”

coal, but it is decreasing because we are

that has splendid case in the past on these

moving quickly toward natural gas. However,

problems?

China still requires using a substantial amount

In terms of generating electricity, it is not

of coal, and this creates sorts of problems. The

only the concerns of the environment, but also

production of electricity is a serious problem

the concerns of stability. The national grid

for both of us, just at diﬀerent degrees.

in the United States and a number of other

We also have a situation in which producing

countries is highly vulnerable to terrorism

liquid fuel for transportation creates a whole

or other attacks. We have the kind of grid

host of geo-political diﬃculties. Being able to

that we do and most countries do, in part

keep open the supply lines to the Middle East,

because Tesla won an argument against his

being able to purchase oil from the Middle East

boss Thomas Edison at the beginning of 20th

when we need it, are attractive. Of course, it is

century. We have ended up in most countries

very cheap right now because of what happen

with an electric grid composed of alternative

to the oil prices. But over long run. We need

current transmissions and a set of transformers

to make sure that oil is aﬀordable and that we

that boost up the voltage so that the electricity

have access to it. That is far from guarantee.

can be transmitted and taken down again to

So what can we do to begin to do a better job

distribute and use. It was the result of the fact

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The Tasks of Both America and China to Get Things Done R. James WOOLSEY

that back to the end of 19th century. It was

of the Cold War between the United States

unfeasible to think of sending electricity with

and the Soviet Union. We had an adversary,

direct current for any great length, so we need

the Soviet, in the Cold War for 45 years, but

to construct a large number of direct current

the Soviet was an adversary that we could talk.

power plants, probably with coal ﬁre, at every

I negotiated 4 times with the Soviet sold for

20 to 40 miles. Then, the whole world would

weapons reputations. I have participated in a

have a large number of coal ﬁre power plants.

delegation for 2 years. We were not close or

That was just the way from direct current to

friendly, but we got along reasonably well,

alternative current.

and we could work on the speciﬁc problems

But with alternative currents, we have

at most time. I got to know some rational

other problems. Transformers can be taken

diplomats and military people and engage with

up easily by any terrorist with right types of

them moderately well. I have to say that none

weapons. Electric grid has a great deal of other

of them was so ideological. They want to live

forms of abilities, because it controls systems,

for the principle “for each calling to the ability

operates over the internet. The internet in

to each calling to as need”. They wanted to

most countries has very ready access. And the

have nice vacation homes. But because they

sharing spirit of the internet is a good thing

were not frenetic, in the same sense that we see

for the United States that people can exchange

freneticists are coming out from the Middle

information and their life, while it is not a good

East. Freneticism ruled for current right.

thing from the point of view of protecting the

In June Movements, Sunni and Shiah have

security. Better mention that one might have

been acted on one another in many cases for

the ability to cause total destruction. There is

some 13 centuries. This is not a problem that is

one risk in the energy system. If the electric

going to dissolve easily and early, and is going

grid goes down in a country, a lot of other

to get more diﬃcult, as the Sunni countries want

systems operated from electricity, such as the

the possession of nuclear weapons, following

light, water and a number of infrastructures,

Iran’s acquisition of nuclear weapons which I

will be aﬀected.

feel will come much sooner in 10 years. We

So, we have diﬃculties and risks from the way we generate electricity, move it around,

can deal with these problems unless we talked about them clearly and objectively.

and the way we have access or don’t to the

What type of energy systems might be

liquid fuels we need derived from petroleum.

moved to, that would give us a better chance

What might one do about this? First, this is a

of having a survivable and resilient energy

diﬀerent kind of problem in the world we live in

system, not only the United States and China

today. It was only a short time ago in the midst

but throughout the world? And one is not easily

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Issue 10

The Tasks of Both America and China to Get Things Done R. James WOOLSEY

attacked by terrorists from ISIS or any other

gasoline, and I could drive about 100 miles

terrorist organizations.

with a gallon of gasoline. The electricity costs 2

There are a couple of points. First, electricity

cents a mile. This is a ten-year-old technology.

can be generated in a number of ways. We

A great deal more can be done by integrating

may imagine what might happen with today’s

the use of solar and that of liquid fuels in a way

technology if Edison would win instead of Tesla

as to export the advantages of both. As one

in the late 19th century. That means we might

moves in that direction, we can start to utilize

use direct current instead of alternative one.

the district heating generation of electricity

Then, we might put the source of electricity as

storage with new battery capabilities and some

much as possible right where it is needed, and

utilization of liquid fuels in such way as to

to do it safely and securely. How might that be

have vehicles that get hundreds of miles per

done? There are 2 technologies at a row. One

gallon of gasoline when one is utilizing other

which is being pursuit in China is solar. Solar

liquid fuels with.

is getting better steadily particularly with the

How might we get those fuels without

rebirth of a fuel. The possibility of heading to

the problems that we now see in dealing

building that you live in, the school that you go

with the Middle East, and other problems in

to, the institution where you work, all directly

the generation of liquid fuels derived from

able to the generation of electricity on roof or

petroleum? There are several new technologies

nearby ﬁelds or whatever.

coming along in the prototype stage that will

It would be possible to make considerably

be in the market. They make it possible to

great progress on the district heating generation

utilize waste in general, not just speciﬁc type of

of electricity, and to do it from largely solar,

plants or plastics but everything in the garbage

or other types of renewable energy. If one

dump, including tyres, plastic bags, turn it

can add improvement into solar, some of

into carbon and utilize to form liquid fuels

the improvements are starting to occur in

in a small vessel. One of these technologies

batteries. One can do a ﬁeld indeed, because

works with very high power steam, and the

solar-generating electricity during the daytime

other one works with liquid sodium heated

can then be stored by the batteries in the

to 1,100 degree centigrade. There are several

basement of a building. And the electricity is

chances that we have to utilize everything in

used at night as well as at the daytime. This is

a waste dump of a hospital, university, farm

not feasible. 11 years ago, I had a vehicle. Its

or community to produce liquid fuels. Starting

battery charges all night, and then I can drive

with natural gas, these technologies can turn

20 to 25 miles each morning on electricity

the gas to liquid, so the liquid does not have to

from the sun. Before this, I started driving on

come from the Middle East. It can come from

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Issue 10

The Tasks of Both America and China to Get Things Done R. James WOOLSEY

the junkyards of New York City and Shanghai.

don’t, we will not have the kind of energy

That technology utilizing waste for fuel

security or essentially positive movement or a

together with the district heating generation,

world in which we can all live comfortably.

solar and electric power derived from solar and

The spirit of solving problems is the one

stored in batteries can head us in the direction

I urged from the ﬂoor. Only by working

that makes it much hard for anyone who

concretely on speciﬁc problems and getting

with an electric grid on our infrastructure to

things done will input ﬂesh on bones. I think

undertake successfully circumstance. With

it is a generally positive direction in the U.S.-

direct current utilization at single cite, there

Chinese relations.

is very few terrorists can ﬁnd to attack or anything that can be done to interfere with separate systems of that sort. As the time goes on, we need to work with one another in China, the U.S. and other

* This article is excerpted from the author’s

countries on speciﬁc programs to get speciﬁc

speech at “Sino-Us Colloquium (IX) Sino-

improvements done, and done relatively

US Security Relations: an Agenda for the

quickly. We are facing a myth that is coming

Next U.S. President” held by the China

into the world of nuclear weapons. We have

Energy Fund Committee on January

to ﬁnd a way to deal with it both China and

24, 2016, at Hong Kong Convention and

the U.S., to deal with it in a way that calms

Exhibition Centre.

down the existing religious and other tensions. It is in both our interest not to depend on the Middle East, and be able to deal with the Middle East in a calm and sensible fashion. As I am afraid we will see more and more Sunni countries join Iran in being a nuclear power, I think that all of us could do a great service to the understanding of how we might use the abilities of infrastructure to improve our national security that rivals Gallieni’s insight about using taxis to defeat the Germans and win the ﬁrst mechanized infantry battle in history. We need to think with Gallieni’s ingeniousness and spirit of innovation. If we

CHINA EYE

Issue 10

Sino-US Relations in the “Digital Forevermore” Tom RIDGE

Sino-US Relations in the “Digital Forevermore” Tom RIDGE First US Secretary of Homeland Security

s a private citizen now, as I take a

geographic nor political boundaries; it has an

look at the world in which we live and

ever expanding cohort of attackers – those who

operate, and as I take a look at my country’s

would abuse the system: nation states, activists,

responsibility to continue to provide security

organized crime and individuals. We all know

as well as prosperity for its citizens, I look

this because, and all countries experience it,

around the world and say: Of all the nations

the attack surface increases every day, and so

with whom we compete and have a relationship,

does the level of sophistication and complexity

is there a more important bilateral relationship

of the malicious code. Cyber-attacks are a

than the one we have and must maintain with

menace to the United States, they are a menace

China? And I have concluded, not as a public

to China – Cyber-attacks are a global menace.

ﬁgure, but as a private citizen of the world, that

Meeting the challenge to manage those risks

that relationship is critically important to our

and reduce those threats to build a culture of

national security and our economic prosperity.

resiliency within a country or organization is

I have also concluded that the nature of that

critical to its survival and its success.

relationship is equally important to the rest of the world.

I am old enough to have witnessed the dawn of the internet, the growth and ascendency of

I don’t pretend to be an expert on Cyber

the hyper-connected, interdependent digital

Security, but I do have some thoughts based

world; and bold enough to stand before you to

on my experience particularly as Secretary

predict that the opportunities and challenges

of Homeland Security, and a little bit as

of the ‘digital forevermore’ between our two

Governor, with regard to its importance in this

countries are and will be permanent. The

relationship, again, not only to ourselves but

digital sun will never set. And it is in the

the rest of the world.

best interests of China and the United States

As we all know, the digital world is full

to accept the responsibility to address the

of both promise and peril. It has neither

challenges associated with its use and abuse in

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Sino-US Relations in the “Digital Forevermore” Tom RIDGE

Tom RIDGE at “Sino-Us Colloquium (IX) Sino-US Security Relations: an Agenda for the Next U.S. President”

a meaningful and constructive way. It was not

within the network, bring our countries

long ago that the original computer-based data

together every minute of every single day. The

transmission protocol was simply to facilitate

ubiquity of the internet is its strength and the

communication between the US Department

ubiquity of the internet is its weakness. And

of Defense and major research universities.

both countries are exposed to the potential

While certainly primitive compared to the

malicious and malignant use of this global

digital global ecosystem that drives commerce

network. Both countries have a role and need

and culture throughout the world today, its core

to combat its improper use. Both countries

features remain the same. The same features

understand that risk escalates every day. And

that oﬀer the promise to both countries but also

both must understand, without cooperation and

create the peril to and within both countries.

collaboration, it remains a clear, present and

The internet is an open system and is based on anonymity. It was not designed to be a secure

permanent danger or impediment to improve relations between the two countries.

communication platform. The opportunities

We all know who the malicious actors are,

and vulnerabilities within the global network,

as mentioned above, and some governments

with electrons racing everywhere, and the

are complicit with these actors, some are

capacity, the uncertainty and the dependency

indiﬀerent to their activity. Others are fully

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Sino-US Relations in the “Digital Forevermore” Tom RIDGE

aware of their activity but are absolutely

holding that actor accountable, be it a nation,

unable to control it. We know their motivations

company or individual, in a meaningful way,

– disruption, sabotage, theft, espionage. We

is very diﬃcult, and I suspect, sometimes,

also know that these digital trespassers are

nearly impossible. Therefore, let us be clear, a

motivated, resourceful, focused and often

digital fence put up by a country or company at

very well ﬁnanced. I think a comparison with

one time may have been a barrier to an attack,

contemporary war-ﬁghting, particularly with

but is now just part of a multi-layered defense

special operations, illustrates the challenges

strategy. In the 21st Century, there is only two

faced by those responsible in the United States

kinds of organizations, be they companies or

and China to defend their country against

nation states – those that have been hacked and

digital attacks. Cyber soldiers are asymmetric

know it, and those that have been hacked and

ﬁghters. They can often camouﬂage their

don’t know it yet.

identity and activity in the vast open and

There is a Chinese proverb that states:

often undefended spaces of the internet. Their

‘Flies never visit an egg with no crack.’ Well,

reconnaissance capabilities are both varied

the internet is full of cracks. The barbarians

and eﬀective. They constantly probe for

are no longer at the gate. They are inside

weakness, unauthorized pint of entry, a crack

and often exquisitely concealed. That is the

in the defense. The hackers often use low-

chilling and permanent reality of the digital

tech weapons to inﬂict damage, and they are

universe, forevermore. So, if this is the reality,

able to design and build high-tech weapons

how to companies and governments organize

to overcome speciﬁc defenses that companies

themselves to deal with it? Are governments

and even countries design, so that they may

designed to play oﬀence, defense, or both? Let

hit very speciﬁc targets. Attackers have the

us be very clear. For centuries, governments

ability to adapt, and defenders, be it countries

have fought to gain information about their

or corporations, must do so as well.

adversaries. As Sunzi once wrote, ‘It is only

One of the challenges that we have in

the enlightened ruler and the wise general

what I call the digital forevermore, is that it

who will use the highest intelligence of the

is a little bit more diﬃcult to hold those that

army for purposes of spying, and thereby

attack you accountable. Holding you enemy

achieve great results’. I must say, some time

accountable from the air, land or sea is easier

ago the US Chairman of the Joint Chiefs of

than an attack from the digital space. A

Staﬀ oﬀered the following as well: ‘All nations

military centurion guard at the perimeter can

on the face of the planet always conduct

eliminate the aggressor on sight. Attributing

intelligence operations in all domains’. Think

a digital breach to a very speciﬁc actor, and

about it for a moment. First the eﬀort was to

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Issue 10

Sino-US Relations in the “Digital Forevermore” Tom RIDGE

intercept written messages or letters. By the

launched Spudnik, the fourth developed –

19th Century, the eﬀort included telegraph

Space. Now, in the 21st Century, there is a ﬁfth

messages. And, in the 20th Century – radio

dimension – digital warfare. Those countries

and telephonic communications. Electronic

with the capability of either an oﬀensive

capabilities, however, in the 21st Century,

ﬁrst strike or retaliatory capability must at

far exceed anything ever designed to gather

least try to establish some guidepost, some

information.

restraints around such behavior, to avoid

What is more important for our discussion

misinterpretation or miscalculation. Sadly,

today is that cyber traﬃc is more than just

there have never been any international norms

communicating

getting

around such behavior, and the possibility of

information to promote or protect your

cyber-attacks escalating into conﬂict, digital

country’s national interests. The digital world is

or kinetic, is real – All the more reason for

connected to critical industrial control systems,

country engagement and military-to-military

ﬁnancial systems, life-sustaining systems,

dialogue between our countries.

and

spying

and

and more. Given that critical infrastructure

Ultimately, I would suggest that the

in both China and the United States is, more

problem is not just the digital technology.

likely than not, connected to the internet,

The problem doesn’t revolve around ones and

then, by deﬁnition, all are vulnerable to attack

zeros or bits, bytes or platforms. The problem

and possible destruction. So we have to ask

is people. The problem is leadership. How

ourselves, as leaders of both countries, what is

far are leaders willing to go to advance their

the bright line between intelligence gathering

economic or political interests? Many global

operations for national security purposes and

citizens have concerns about miscalculations

oﬀensive digital operations in the ‘digital

in the digital space. When does one country

forevermore’. In the Internet of Everything,

interpret another’s aggressive exploitation

how clear is the distinction between seeking

of its military or corporate secrets with the

information for national security reasons and

clandestine insertion of malicious malware

the probing, for reconnaissance purposes, of

into the industrial control systems of critical

vulnerabilities, say, in the ﬁnancial services

infrastructure as either a pre-cursor to an

sector, or the energy sector, or any other sectors

attack, or an actual act of war? Does the aﬀected

that control critical infrastructure absolutely

country respond with an equally severe digital

essential to the health and prosperity of our

attack, or does it use conventional weapons?

respective countries?

These types of situations give rise to political-

Historically there were three theatres of

military tensions, charges and counter-charges.

war – Air, land and sea. After the Russians

It is the unfortunate reality of our time, and I

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Issue 10

Sino-US Relations in the “Digital Forevermore” Tom RIDGE

say the unfortunate reality, at least present day,

D.C. was a small and signiﬁcant ﬁrst step

of the relationship between our two countries.

toward a meaningful dialogue about our

It may be the unfortunate reality for all future

digital relationship. I would oﬀer that, in my

time, unless we address it a signiﬁcant and

recollection, this was the very ﬁrst time during

substitute way.

this bilateral relationship that has evolved over

I am neither naive nor cynical. Even if

the years, that the issue of economic espionage

common ground is found, and these types of

was publicly addressed. It may have been a

issues are addressed, it may never alter how

small step, but it was a critically important one.

countries aggressively use the Internet. One

The model for eﬀective great power relations

can only hope that such success would open a

includes frequent communications, which lend

path to honest discussion about such use, and

themselves to the identiﬁcation shared interests,

the means to reduce the risk and the dangers

which lend themselves to the identiﬁcation of

associated with it. Information technology has

shared goals, which in turn require the goals

generated enormous wealth for both countries.

to be achieved in a compliance regiment to

It has accelerated the transformation of the

be developed. There is no long-term value

Chinese economy, and certainly improved

in a bilateral relationship permanently mired

the quality of life for citizens of both of our

in grievances, accusations, and mistrust.

countries. Unfortunately, the advanced digital

If the two countries cannot reconcile any

capabilities of both countries are also the basis

of our digital cyber diﬀerences, we must

for an extreme level of mistrust and anxiety

begin the conversation recognizing that our

between us. That notion underscores the value

countries recognize diﬀerent interpretations

of this forum, the Sino-US Colloquium, and

of cybersecurity, as well as diﬀerent roles our

the important this forum attached to the need

respective governments play in achieving that

to confront this critical issue directly between

goal.

the two countries.

In the US, cybersecurity at its very core

China and the US will always be

involves our national eﬀort to preserve the

competitive. We will always have diﬀerent

integrity of our digital network and reduce the

cultural, political, social and diplomatic

number of attacks and technical threats to the

diﬀerences. There is much to be gained in

entire system, through a variety of presidential

certain areas, however, if we narrow some of

orders and directives from multiple presidents

those diﬀerences, particularly around the use

both democrat and republican. The task is

of the Internet. Many observers in the United

assigned to multiple national agencies and

States concluded that the meeting between

includes

our two Presidents last fall in Washington

cooperation between the federal government,

CHINA EYE

Issue 10

considerable

collaboration

and

Sino-US Relations in the “Digital Forevermore” Tom RIDGE

state and local government, and our private

It is absolutely critical that the bilateral

sector. From my perspective, it is shared by

dialogue include our military, given the

many China experts. The Chinese government

oﬀensive capability that both countries have.

views cybersecurity somewhat diﬀerently,

Every conceivable eﬀort must be undertaken

through a diﬀerent prism. The government

to limit misinterpretation of each other’s

although certainly concerned about hacking

intentions during their use of the Internet.

and attacks, seeks to maximize digital

We can also be assured that the countries will

network and technical capability, to enhance

publicly deny such practices exist. The ﬁction

the economic and military strength of the

is accepted by friends and foes alike.

country and support the party and government

There is another form of digital conduct that

leadership. President Xi has been very clear

greatly complicates the relationship between

about his desire to build China into a digital

our two countries. Network exploitation can be

superpower. He believes it is critical to

done for competitive economic reasons as well.

building and modernizing his economy and

Economic espionage is rampant in the global

his military, and protecting and preserving the

marketplace. Accusation about such activities

government’s authority.

between our two countries is clearly one of

Both countries have signiﬁcant cyber-

the most important issues to be addressed by

capabilities. It is the endless array of charges

our next President, if he seeks to improve the

and counter-charges about each other’s use or

relationship with China. It is very interesting

abuse of those capabilities that are at the heart

and I think it is also very important to note

of this seemingly permanent digital discord

that the issue of economic espionage was

between our two countries. For the purpose

raised when President Obama and President

of our conversation today, let us just stipulate

Xi met in Washington D.C., and it is certainly

that the words of Sunzi and General Dempsey

appropriate for us to discuss it today. It is

are as true today as they were when they

unquestioned that our two economies are the

were uttered centuries or even years ago, that

largest in the world. They are interdependent

the US and China and many other countries

and interconnected. Foreign direct investment,

use digital agents to collect information they

supply chain dependencies, joint ventures,

believe is absolutely critical for national

emerging technology companies etc. – the

security interests. I suspect that if we look back

list of economic dependencies is virtually

in the records of ancient times, Athens spied

endless. Our economies are not only critical

on Sparta and Sparta spied on Athens. That is

to our respective futures, but to global growth

what nation states have historically done and

as well. The stress in one of our economies

continue to do.

normally translates to distress in not only the

CHINA EYE

Issue 10

Sino-US Relations in the “Digital Forevermore” Tom RIDGE

other economy but to global growth as well.

ubiquitous and can’t possibly be secured, and

It is in our mutual interest then to ensure

attackers can fairly well disguise themselves

that the discoveries, the innovations, and the

within the Internet. How do we, ﬁrst, identify

intellectual property developed in any country

the attacker, and second, how do countries

is protected against exploitation by any other

hold each other accountable. Think about that

country of any of its citizens. The good news

for a moment, the problems that exist in trying

is that our Presidents recognize that and they

to deal with economic espionage regardless of

both agree to clamp down and halt economic

the source. We’ve said before that attribution

espionage. It is certainly indisputable that

is pretty diﬃcult, but for the agreement to

since the turn of the century China has been

be eﬀective, what’s the accountability? What

extremely aggressive and eﬀective in building

are the protocols? I am not here to oﬀer any

economic relationships with countries around

answers, I am here to suggest it is enormously

the world. It is equally clear that the role and

problematic. What are the standards of proof?

inﬂuence of the Chinese government in global

Who is the arbiter of facts? Who is to administer

geopolitical activity has also been considerably

punishment? What is the nature of the penalty

enhanced. At the heart of any relationship,

to be paid by the institution responsible for

economic or political, is conﬁdence that

espionage? How will the oﬀender be punished?

countries mean what they say and say what they

It is all about compliance and consequences.

mean. Herein lies the next greatest challenge

There can be nothing more important to future

in Sino-US relations. If the presidents agree

negotiations between our two countries to

to crack down on economic espionage, what

see whether or not they can develop mutually

are the means by which we do so? The fact

agreed upon terms that establish a protocol,

that economic espionage was the subject of

and that meet the goals that the President set

bilateral talks, perhaps for the ﬁrst time, was

in 2015 to end economic espionage between

regarded by many observers in the US as very

our two countries. The US takes President Xi’s

good news. Regrettably, it was also greeted

commitment to end economic espionage as

with considerable skepticism. The language

very real. It acknowledges that delivering on

of the agreement was fairly imprecise, which

the promise is far more diﬃcult than making

one can argue, and very appropriately so, that

it. Now our President has the authority to

meaningful dialogue and tough negotiations

issue sanctions against people, companies or

are needed in the future so the language can

countries that engage in such activity. I do

be far more speciﬁc. Herein lies the greatest

believe it’s unlikely that any of these sanctions

challenge, I believe, for both of our countries.

will be imposed in the foreseeable future. We

We understand that

the internet is

need to see whether or not we can translate

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Sino-US Relations in the “Digital Forevermore” Tom RIDGE

words into action, but I think we also need to

know that on top of all those digital devices, all

understand that while patience may be a virtue,

that technology, on top of all those servers and

unlimited patience in the face of continued

routers and digital tools rest governments and

espionage is not. And as we undoubtedly

millions of companies and billions of people.

struggle to ﬁnd satisfactory solutions, and

All are dependent upon it, all are connected

both countries must do so, to the complexity

with and through it, and all beneﬁt enormously

around holding those responsible for economic

if we restrict the abuse and ﬁnd common

espionage accountable, I think there are less

ground to ensure that it is properly used to

contentious digital issues that lend themselves

advance our mutual interests. Make no mistake

to conﬁdence building measures that can

about it, the national security in the US is tied

enhance our cooperation and collaboration.

implicitly with its economic prosperity and

Even when countries’ oﬀensive capabilities

the same within China, interconnected and

are a point of friction and concern, there are

interrelated. There is no doubt in my mind,

numerous defensive actions that China and the

that our ability to comprehend the importance,

US can take together, and should take together:

fragility and the dependency of the Internet in

combatting organized crime that prays on our

our two countries is something that can never

respective companies and citizens, terrorists

be underestimated. We are more connected

that recruit and ﬁnance, drug cartels and money

and more intertwined digitally that I think we

launderers. Bilateral and multilateral eﬀorts to

will ever know or perhaps even understand

confront these digital trespassers should be an

and appreciate. We must commit ourselves to

international priority. And certainly, ﬁnding

the constructive use of the internet. We know

common purpose and goals between the US

the world is full of bad actors, and we must

and China can eﬀectively lead the international

work together to combat them within our own

community in dealing with these abuses of

countries as well. We must remind ourselves

the Internet and the information world within

that an attack against one another may be an

which we live.

attack against our own self interests. This

I truly suspect that most of you in this

is the nature of the hyper-connected digital

room have a signiﬁcant appreciation and

world. As the saying goes, ‘Though my left

understanding of the World Wide Web may

hand defeats the right, who wins?’

exceed your fellow citizens around the world.

There are many answers to the questions

Unlike most, I’d like to think you could

raised and challenges discussed. Most or at

visualize in all its complexity, the digital

least many of these answers can be found by

web that blankets the earth and connects our

working together, though the path will involve a

countries’ security and economic interests. We

long and very complicated journey. But I think

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Issue 10

Sino-US Relations in the “Digital Forevermore” Tom RIDGE

it is the duty of both countries to try. I certainly

country can aﬀord a misinterpretation of the

believe that our next President, regardless of

intent of some action taken by the other in

the party, regardless of who is elected, view

furtherance of its national security interest.

this as their most important priorities.

This is one of the highest challenges for both

I am often reminded by an expression that

countries, and quite hopefully the leadership

is attributed to Native Americans, and it also

in both countries will accept and meet that

applies to the broader global community, ‘we

challenge in the years ahead.

do not inherit the earth from our ancestors, you borrow it from your children.’ So it is up to us to ensure that it is a better and safer place. As the proverb says, ‘The journey of a thousand miles begins with a single step.’ Our

* This article is excerpted from the author’s

Presidents took the ﬁrst step, but the countries

speech at “Sino-Us Colloquium (IX) Sino-

continue the journey together.

US Security Relations: an Agenda for the

In conclusion, when I was Secretary for

Next U.S. President” held by the China

Homeland Security, one of our tasks was to

Energy Fund Committee on January

oversee the development and implementation

24, 2016, at Hong Kong Convention and

of cybersecurity strategies throughout the

Exhibition Centre.

United States. It is a task that is undertaken by multiple agencies. The primary emphasis is in our military, but clearly individual companies have developed those offensive and defensive capabilities as well. Frankly, in the digital age, it is much easier to take the offence than to defend, but the consequences of offensive actions in the long term are not in the best interests of either country. So it is my sincere hope that our leader, and I truly believe it will happen, will be prepared to engage at the highest level, not just the law enforcement community, not just the public safety community, around the whole question of the abuse of the internet, and economic espionage, but that the military communities will be engaged as well. Neither

CHINA EYE

Issue 10

A 21st Century Energy Policy: Lessons from China John HOFMEISTER

Former President of Shell Oil Company; Founder and CEO of Citizens for Aﬀordable Energy

e are really here to celebrate the

This country has failed miserably to even

China Energy Fund Committee’s

have a proper conversation about the future

introduction of its study on nuclear energy, not

of nuclear. And, in recent years, has only had

only to China, but to the world.

more diﬃculty, not less, in conducting that

When we look back, 75 or 100 years from now, I think the leaders of the 21st century,

But let me just say a word of congratulations

who have done what they need to do, will have

to the US as well, because during the years

focused on four major topics, and will have

1950s, 60s, 70s, and 80s, the United States

resolved them for the good of the world.

led the way on the commercial adaptation of

Those four include food, water, information,

nuclear to its economy. We are still living the

and energy. Because on the basis of those four

legacy of the brilliant moves, the decisions,

the world could know prosperity, the joy of life,

the technologies, the endeavors, of tens of

the purpose of life, and the means by which to

thousands of people to make that possible.

achieve what anyone seeks to achieve. I’d like to congratulate China on completing this study. This is very important.

conversation.

But now, of course, having done little in the last thirty years with respect to the future of energy in this country, we are living with the

Since Fukushima, the world has wondered

world’s oldest energy system. And age in an

and scratched its head about the future of

energy system leads to higher risk. Worst of

nuclear energy. It has worried itself sick in

all, we have no plan for the way forward.

many parts of the world, about what to do.

This is where China distinguishes itself in

The Germans have made a very bold decision

the world of energy. We are not here to address

to walk away from nuclear. We’ll see if they

the food, the water, and the information today;

can persist in that endeavor. The French have

those are for other occasions. But when it

recommitted; the British are betwixt and

comes to energy there is no nation on Earth

between.

that has an energy plan that is homogeneous,

CHINA EYE

Issue 10

A 21st Century Energy Policy: Lessons from China John HOFMEISTER

John HOFMEISTER at the “Publication Release of CEFC China Energy Focus 2015: Nuclear Energy”

that is ubiquitous, that is forward looking, that

about the United States -- if we had the two

builds upon the past, but has the imagination

largest economies in the world able to speak in

of the future, that has the governance to make

similar fashion? Imagine what that would do to

it possible and to make it happen, as China,

the prosperity of the world in the 21st century.

which is proceeding apace.

The US will be surpassed by China, is

Yes, critics could argue, that it had better,

my prediction, because I see no basis for

because living oﬀ of the coal legacy is seriously

compromise, I see no basis for shedding

problematic. But something had to be done in

misinformation for information, when it

the short term, and so it was done for the sake

comes to energy. I see no basis in the political

of economic development, on the basis that,

leadership of the nation, from any part of

and on the theory that, it will be corrected. The

the political spectrum, to come to grips with

plan we see today is a major step forward on

decisions that need to be made.

that path of correction.

That’s a serious indictment, ladies and

But, I repeat, the imagination, and the

gentlemen. I don’t make it lightly. I make it as

cleverness, and let me add the risk management,

a consequence of years of study and practice,

to deliver a 21st century energy system for

in the energy marketplace, and in the halls of

the 21st century. Imagine if we could say that

Washington D.C. When you can put forward to

CHINA EYE

Issue 10

A 21st Century Energy Policy: Lessons from China John HOFMEISTER

students, as I do every semester, the fact that

something as important as 20% of our current

eight consecutive Presidents have in one way or

electricity marketplace -- at nuclear -- to start.

another articulated the goal and the ambition of

We need that 20%, as a minimum, baseload,

energy independence in this country, starting

to our energy system. We’ve had it, for half a

with Richard Nixon in November 1973, and

century. We need it, for the next half century,

every single one of his successors, including

as we go forward, and then, we probably need

the current incumbent, have made the same

more, when we think of the subsequent half-

promise to the American people, and to see

century.

where we are?

And so, we can learn from China in this

To see that the United States Congress is struggling even as we speak because the

instance. I hope we will.

energy bill put forward in this congress, the ﬁrst, by the way, since 2007, has not made progress. And it is not a salutary bill. It is simply pick up the pieces, and make some sense out of the current irrational mix of what

* This article is excerpted from the author’s

we have not been doing, as opposed to a clear,

speech at the “Publication Release of

forward looking resolution, of the debate over

CEFC China Energy Focus 2015: Nuclear

traditional energy and the mix of new energy,

Energy” held by the China Energy Fund

with traditional energy, as we look at the

Committee on July 15, 2016, at the National

decades to come.

Press Club, Washington DC.

We can solve all these problems, but I think we have to look across the Paciﬁc Ocean to get a better view. And to see how a plan has come together elsewhere in the world. I don’t think we can rely on our middle 20th century system for decades to come as we have in the past three. We do have solutions, we do have the people, and most of all we have the ﬁnancial resources to do what needs to be done. I think what we need are ideas. Since those ideas are not generated internally, let’s look externally. And I can’t think of a better place to look, then as

CHINA EYE

Issue 10

Are China and The United States Headed towards The Thucydides Trap? HO Chi Ping Patrick

Are China and The United States Headed towards The Thucydides Trap? HO Chi Ping Patrick Deputy Chairman and Secretary General, China Energy Fund Committee

he Sino-U.S. relationship is the most

secret that some people in each country view

important bilateral relationship in the

the other often through a lens of suspicion and

world, a bedrock of global prosperity that

distrust.

impacts the well-being of billions of people around the world. Since

the

do have fundamental diﬀerences. The two Shanghai

countries subscribe to diﬀerent ideologies, and

Communique 44 years ago, China and the

descend from very diﬀerent cultural, moral,

United States have proclaimed, on numerous

and religious traditions.

occasions,

signing

China and the United States, after all,

shared

the

commitment

These diﬀerences, together with concern

positive and cooperative relationship. The

for recent events, seem to provide evidence to

two countries’ leaders have often spoken

analysts and scholars who believe that China

of their commitment to developing a stable

and the United States are headed towards the

and prosperous relationship, and both sides

Thucydides trap, a theory which presupposes

have worked closely to implement one that is

inevitable conﬂict between existing and

based on mutual trust, respect and win-win

ascending major powers.

cooperation.

But this is an incomplete and simplistic

Nevertheless, the events of 2015 have

picture of the Sino-U.S. relationship.

raised concerns about the health of the Sino-

First, we should acknowledge that, despite

U.S. relationship. We have seen tension,

the complex nature and geopolitical and

among other things, over cybersecurity, the

cultural variety of the Asia-Paciﬁc – peace is

remilitarization of Japan, and the South China

and has been prevailing. Compared to much

Sea. The Obama administration is pursuing

of the rest of the world, there is a notable

a “Pivot to Asia”, and has sent its warships

absence of active warfare in the region. Trade

through waters China claims as its own. It is no

and cooperative projects are extensive, in

CHINA EYE

Issue 10

Are China and The United States Headed towards The Thucydides Trap? HO Chi Ping Patrick

HO Chi Ping Patrick at “Sino-Us Colloquium (IX) Sino-US Security Relations: an Agenda for the Next U.S. President”

the region as well as between China and the United States.

Some of these opportunities are already

Second, we should recognize that China and

being pursued. China and the United States

the United States maintain a communicative

have, for example, been leading global eﬀorts

relationship. Both Beijing and Washington

to combat climate change. At their meeting in

have realized that engagement is important.

September, President Xi and President Obama

The importance of this cannot be underscored:

found consensus on cybersecurity, nuclear

the two sides are talking to each other, often

security, peacekeeping, and reconstruction and

and regularly. Our Presidents are meeting one

economic development in Afghanistan.

another more than once every year, and they will be meeting again very soon this year.

present opportunities for cooperation.

We ourselves have discussed some of these opportunities today, identifying further areas

Third, there are numerous areas of

of potential cooperation in global security,

agreement and cooperation. China and the

cybersecurity, and counterterrorism, as well

United States share common foes, challenges,

as potential ways to resolve disputes in the

predicaments, and needs. Terrorism, the

Western Paciﬁc. There are, certainly, many

environment, the economy, energy, global

more ways and issue areas where China and

stability – these are among the many areas that

the United States can cultivate a more uniﬁed

CHINA EYE

Issue 10

Are China and The United States Headed towards The Thucydides Trap? HO Chi Ping Patrick

and harmonious relationship. Ladies

and

gentlemen,

is human touch. And the third is common building

experience.

meaningful major country relationship requires

Dialogue, the ﬁrst pillar, is indispensable

constant communication, cooperation and

in mitigating and resolving conﬂicts. Dialogue

partnership. This can only be brought about

is essential in making sure that the parties

through goodwill, and built upon a foundation

involved understand one another’s experiences,

of mutual trust and respect.

needs, and diﬃculties. Dialogue is the gateway

But how do we go from communicating

to understanding.

to understanding, and from understanding to achieving mutual trust and respect?

China, as a modest nation which has not been familiar with expressing herself openly

Beijing and Washington have realized

in the past, can improve on this front. Perhaps

the importance of communication. They

we need to do more self-reﬂection, to actively

have established more than sixty regular

engage with others in dialogues to let ourselves

government-to-government dialogues between

be understood, and be able to tell a China story

agencies in the two countries every year.

in ways that are easily received. But dialogue

But this alone is not enough. As one observer

requires more than meeting in the same place.

wittily stated, between the U.S. and China,

It requires listening, and caring for what the

there have been numerous meetings, and many

other side has to say.

engagements of dialogue, but there remains

This underscores why the second pillar

too little understanding, scarce empathy,

is human touch. A relationship can only be

dwindling mutual trust and respect, a deﬁcit of

successful if it is personalized. Trust and respect

goodwill, and practically no cooperation.

require shifting how one perceives the other.

The question, then, is, what has been missing?

Why has trust been so slow to

develop?

Understanding with empathy can place us in the other’s shoes and help us realize why and how the other side acted in the way it did, and

It was in my previous capacity as the

took the decisions it made. This shift requires

Secretary for Home Aﬀairs of the Hong Kong

human qualities – like empathy – and genuine

Special Administrative Region Government

interaction. It cannot be brought forward

that I ﬁrst came to appreciate the importance

merely by oﬃcial reports and declarations.

of mutual trust and respect in conﬂict

This is why it is essential to provide venues,

management and resolution. My experience

for personal relationships among the parties

in this position revealed that there are three

involved – in our case government oﬃcials,

pillars to developing trust and respect.

military oﬃcers, and stakeholders. Presidents

The ﬁrst pillar is dialogue. The second

Xi and Obama’s meeting at the Annenberg

CHINA EYE

Issue 10

Are China and The United States Headed towards The Thucydides Trap? HO Chi Ping Patrick

Retreat, held in Sunnyland, California in 2013 is an excellent example.

The three pillars of dialogue, human touch,

The third pillar is common experience,

and common experience are fundamental to

which is the basis for true and lasting friendship.

improving mutual trust and respect between

Indeed, one of the ways, and perhaps the best

the two countries. And we can all do more

way, to alleviate international tensions and

to strengthen these pillars. Every one of us, I

resolve political conﬂicts, is for the parties

believe young and old, rich and poor, Chinese

to enter into joint projects and business

and American, from the Forbidden City to the

ventures with one another. People should be

White House, has a role to play in building a

busy making money together instead of wars,

more harmonious relationship between China

learning from each other, and collaborating to

and the US.

make the world a more prosperous place for

This is why the China Energy Fund

all people. By working together on common

Committee

causes, and thereby developing common

colloquium, which meets for the ninth time

experiences, China and the United States can

in its ﬁfth consecutive year. Through these

grow together as nations and as peoples, and in

colloquiums, CEFC has been working to

time, embrace a common destiny.

strengthen the three pillars of mutual trust

has

organized

the

Sino-US

From here on, Sino-U.S. relations can

and respect. Our commitment to this cause

evolve in one of two ways. One is through

demonstrates our desire to facilitate the

geopolitics of a unipolar system built on

building of a new type of relationship between

asymmetric military relations, and involving

our nations and peoples. We hope that our eﬀort

tug-of-wars on issues pertaining national

will inspire others to accomplish the same.

interests, sovereignty, and territorial rights. It is a model of a zero sum game. The

all.

other

through

We are truly living in historic times, and this opportunity to build new conﬁdence and

geo-economic

trust is one of the greatest challenges facing

approach of a multipolar system, which provides

the Sino-US relationship. The way ahead will

both countries with ample opportunities

not be easy, and we cannot underestimate

for partnerships, business ventures, and

the diﬃculties that lay ahead. The issues are

cooperative and collaborative projects of all

numerous and formidable, and the complexities

kinds. This multifaceted, multidimensional

extensive and challenging. But I am conﬁdent

model, which is the core of the third pillar of

that our two peoples and their leaders will have

common experience, creates stability, harmony

the wisdom and courage to truly grasp this

and peace. It is a model from which everyone

moment and begin to build a better world in

stands to beneﬁt, with win-win outcomes for

the years ahead.

CHINA EYE

Issue 10

Are China and The United States Headed towards The Thucydides Trap? HO Chi Ping Patrick

This is the year the American people will

* This article is excerpted from the author’s

elect their President, we would like to tender

speech at “Sino-Us Colloquium (IX) Sino-

three pieces of suggestion to the American

US Security Relations: an Agenda for the

Presidential candidates for their consideration.

Next U.S. President” held by the China

First, China and the United States are

Energy Fund Committee on January

friends. We have been friends in the past, and

24, 2016, at Hong Kong Convention and

we will be friends in the future. We may, at

Exhibition Centre.

times, be friendly competitors. But we are not and will not be enemies. Second, China and the United States have much in common, and more in common than in difference. We must work together on what we have in common, and manage our differences. Third, if we do so, if China and the United States work together, the whole world will benefit. If we do not, the whole world will suffer. China and the United States have been friends for forty years. We are friends today. And we will be friends for a long time to come. We share common challenges, common predicaments, and common needs. But most importantly, we face and behold a common destiny, a destiny that presents itself as a mission to redefine our mutual values, signifying the awakening of a modern humanity, and which will ultimately lead to a Renaissance of modern times.

CHINA EYE

Issue 10

China’s Internet in Its 13th Five-year Plan JIANG Qiping

China’s Internet in Its 13th Five-year Plan JIANG Qiping Secretary General of Center for Informatization Study, Chinese Academy of Social Sciences

n the past ﬁve years, China has achieved

physical economy; 3. Support internet-based

great success in the internet and caught

innovations and facilitate ﬂexible employment.

the world’s attention. Among the world’s top 20 internet companies, more than a half

I. FROM THE PAST TO THE FUTURE,

are Chinese companies, such as the famous

INTERNET IN CHINA IS A STORY

Alibaba, JD.com, Baidu, Tencent, Sina,

OF GROWTH

Huawei, ZTE, as well as Lenovo. China is at the forefront of the world in terms of network size,

The greatest signiﬁcance of China’s “13th

number of internet users, mobile penetration,

Five-year Plan”, compared to its “12th Five-

network industries and network economy.

year Plan”, is the emphasis on “innovation

Internet technology has been widely applied to

drives development”. It is predicted that in the

various aspects like business, communication,

next three years, the investment on information

transportation, ﬁnance and service, and made

infrastructure will exceed 1.2 trillion RMB.

a profound impact on the economic and social

The new technologies and energy derived

development.

from the “Internet+” will bring out a lot of

China’s

13th

Five-year

Plan

faces

new investment hot spots. The “Internet+” will

challenges from the economic transformation

stimulate new kinds of consumption. China’s

in the new-normal economy, and internet will

amount of information consumption was 2.8

have a three-fold eﬀects in promoting supply-

trillion RMB in 2014, and is estimated to be

side structural reform: 1. Preemptively lay

over 3.2 trillion RMB in 2015. Recently, the

out the plan for the next-generation internet,

industry directly related to the internet has

expand cyber economic space and improve

contributed more than 7% to China’s GDP.

the quality of economic growth; 2. Implement the Internet Plus Initiative and better serve the

CHINA EYE

Issue 10

China’s Internet in Its 13th Five-year Plan JIANG Qiping

JIANG Qiping at “A China’s Story (IV) Building a Moderately Prosperous Society – China’s 13th Five-Year Plan and Its New Role in the World”

1. The past of internet: Inherit cultural traditions and carry forward spirit of the times

in Industry 4.0, i.e. the complexity of simplicity, or making complexity easier). The key of making complexity easier is Yin-yang, or simplifying the world to black

The fast growth of internet in China owes

and white and making them interchangeable.

to technologies developed in the U.S., as well

China accepts the computer culture of 0

as to Chinese cultural heritages. Two traditions

and 1 without any psychological barriers,

of Chinese culture have been inherited and

just like they view yin-yang. For example,

encouraged in internet: the Yi ( ) culture and

the Chinese naturally accepted Deng

the Confucianism.

Xiaoping’s theory that ‘White cat or black cat, whoever catches the mouse is a good

(1) Yi culture is interconnected with computer culture

cat’. Gottfried Wilhelm Leibniz, one of the inventors of calculus, found out 300 years

Yi is one of the origins of Chinese

ago that binary system shared the same

culture. Yi means to treat simplicity

principle with the Yi in Chinese culture.

easily (corresponding to the Simplexity

He then presented the world’s ﬁrst binary

CHINA EYE

Issue 10

China’s Internet in Its 13th Five-year Plan JIANG Qiping

calculator to the Chinese emperor as a gift.

(1) Preemptively laying out the plan for internet technologies

(2) Interconnection of the Confucianism and computer culture

China’s 13th Five-year Plan lays out plans for the development of internet in

Confucianism,

interpersonal

China in the next ﬁve years, including

relationship should be handled in point-

pushing forward research in the 5th

to-point complexity network (small world

generation mobile communication (5G)

network). This kind of relationship is

and ultrawideband key technologies and

similar to Open Shortest Path First (OSPF).

beginning commercial use of 5G. By

During the Chinese New Year in 2015,

2020, optic network will have covered all

WeChat distributed more than one billion

urban areas in China, providing access

yuan worth of gifting red envelopes within

to service with capability of 1,000 Mbps,

a day. On mid-Autumn Festival, more

bandwidth of over 100 Mbps for household

than 2.2 billion yuan worth of gifting red

users in big and medium cities, coverage

envelopes were sent on WeChat. Number of

of optic networks in 98% of administrative

WeChat public account exceeded 80,000,

villages, and, bandwidth of over 50 Mbps

providing about 800 public services to

for household users in rural areas. By the

approximately 200 million people in 68

last year of the 13th Five-year Plan, the 5G

cities. Averagely each account has 36,000

technology will have been popular and for

active subscribers. There are at least 3

commercial use.

billion interactions each quarter.

It is predicted that in the next ﬁve years, the demand for IP address of mobile

2. The future of internet: Sticking to

internet will rise to 1 billion, while that of

technological innovation and service

the Internet of Things will rise to 10 billion,

innovation

leading to 34.5 billion of total demand for IP address. To preemptively lay out plans

The developmental trend of internet in

for next-generation internet and begin

China in the next ﬁve years can be observed

full-scale upgrade to IPv6, China needs

from

Corner-

to grasp the opportunity of IPv6 to realize

overtaking in technology; Transformation and

corner-overtaking and secure dominance

upgrading in economy.

and control over fundamental research and

these

two

perspectives:

key technologies of internet.

CHINA EYE

Issue 10

China’s Internet in Its 13th Five-year Plan JIANG Qiping

(2) Use internet economy to improve quality

Co-building brand by company and

and eﬃciency

private

investors,

e-businessman

Changhe developed the gauze brand Chinese government hopes to push

Qiaoyifang in small batches, multiple

forward development, keep the economic

varieties and personalized tailoring, and

momentum with moderated rate of growth

made into top 100 e-businesses in 2012.

and raise both the quantity and quality of the Chinese economy, so as to realize an

II. FROM REALITY TO VIRTUAL

upgraded Chinese economy with improved

REALITY, INTERNET IS A STORY

quality and eﬃciency.

ABOUT THE STABILITY IN CHINA

This is the ﬁrst time for China’s Five-year Plan to state its plan on the development of

Detachment of virtual economy from

internet with so many details. This is also

physical economy is one of the main reasons

the ﬁrst time to propose the “expansion of

for economic instability, especially currency

the cyber-economic space”, which includes

instability. During China’s 13th Five-year

mainly four aspects: 1. building ubiquitous

Plan period, internet will help bring about the

and eﬃcient information networks; 2.

eﬀective integration of virtual economy and

developing contemporary system of internet

physical economy, making contribution to

industry; 3. implementing the strategy

economic stability.

of China’s big data; 4. strengthening the security of information.

Implementation of Internet+ Initiative will help China’s industries better ﬁnd their

The biggest diﬀerence between the

customers through internet, so as to achieve

increase pulled up by internet and traditional

stability in supply and demand through

increase is that the overall economy is

information transparency.

transformed from quantitative increase to qualitative increase. The economic space

1. Expand cyber-economic space with

expanded by internet is mainly the space

Internet+

of quality. The 2015 e-Commerce transaction

In March, 2015, Mr. Ma Huateng, a deputy

volume in China reached 18 trillion RMB,

to the National People’s Congress of China,

which means China has become the biggest

presented a proposal about “Suggestions to

online retailing market in the world. Internet

use Internet Plus to drive up the innovative

can improve economy and quality through

development of China’s economy and society”.

innovatively reducing diﬀerentiated costs.

On March 5, 2015, Premier Li Keqiang ﬁrst

CHINA EYE

Issue 10

China’s Internet in Its 13th Five-year Plan JIANG Qiping

brought up the term Internet+ Initiative in his

ﬂattening,

Report on the Work of the Government at the

in enterprise development, so as to reduce

Third Session of the Twelfth National People’s

enterprise

Congress. On July 4, Guiding Opinion of the

development. Based on its advantages of

State Council on Pushing Forward Internet

ﬂat structure, scale and intensity, Internet

Plus Initiative, and on May 8, Made in China

accelerates the integration and innovation of

2015 by the State Council, were promulgated.

industrial chains and injects new vitality into

The “Internet+ Initiative” and “Made in China 2025 Strategy” will promote

and cost

concerted and

transformation

promote

intensive

the innovative development of industries in R&D, manufacturing and service modes.

deep integration of the internet and real economy,

such

Internet+manufacture,

Internet+agriculture,

Internet+transport,

2. Change as per demand, internet serves the need of physical economy

Internet+education, etc. This will promote the deep and widespread application of

China’s internet leaders are changing

internet, drive the transformation of modes of

from simply focusing on information to

production and organization, and thus lead to

demand-based service provider. For example,

a new form of the industry development with

by Internet+Transportation, the problem of

network, intelligence, service-oriented, and

mismatch between drivers and passengers

collaboration. In the wave of “Made in China

can be solved. With increased information

2025”, intelligent manufacturing will bring

density, China’s Didi Driver has realized the

a huge amount of investment opportunities.

matching and practically solved the problem of

The industry chain will comprise high-end

allocation of resources, and this possibility is

Computer Numeric Control machine tools,

much higher than before.

industrial robots, automatic (digital) factories,

In Internet Plus ﬁnancing development,

personalized manufacture. It is generally

ﬁnancing is required to serve physical economy.

believed in the industry that industrial robots

On July 18, 2015, ten ministries and committees

and automatic equipment are worth paying

of Chinese government jointly promulgated the

attention to by investors. Service like Didi

Guiding Opinions on Promoting the Healthy

Chuxing (a mobile app providing transport

Development of Internet Finance, marking the

service), which was not imaginable many

beginning of internet ﬁnancial supervision in

years ago, has become popular among Chinese

China.

people. Internet leaning,

accelerates manufacturing

industrial

chains

organizational

CHINA EYE

Issue 10

China’s Internet in Its 13th Five-year Plan JIANG Qiping

III. FROM REALITY TO DREAM,

After Alibaba was listed on the capital

INTERNET IN CHINA IS A STORY

market, its market value became 238.3 billion

ABOUT PEOPLE’S LIVELIHOOD

USD (1,463.2 billion RMB), equivalent to the GDP of Scotland (234.4 billion USD), more than

The issue of livelihood is transforming

Shenzhen’s GDP in 2013 (1450 billion RMB).

from employment to mass entrepreneurship

Jack Ma shares virtual shops and counters for

and innovation. In order to let the internet

free, facilitating small capital operation for

beneﬁt the public more, the 13th Five-year Plan

app. Alibaba is becoming the dream factory

states “raising the speed, lowering the price”.

for Chinese young people.

By September 2015, the three major telecom

On the other hand, government shares

operators have invested 259 billion RMB into

data and platforms through public service

constructing network and raising speed. The

platforms, to sustain “All for one and one for

annual fee of ﬁxed broadband has decreased by

all” social and personal services.

30%, while the fee of 50 Mbps and 100 Mbps

There are 56 poor counties among the 86

broadband have decreased by 30% and 20%

counties in China’s Gansu Province. To reduce

respectively. In the next ﬁve years, the network

the problem of poverty, the government set

speed in China will be faster, service will be

up a precise information platform for poverty

better, and price will be lower. During the 13th

alleviation. They can look into any household’s

Five-year Plan, the people’s livelihood-related

situation of poverty in the province with a

industries, such as education, tourism, health

computer. If a household was out of poverty

care and sports, will be top priority.

in the previous year and become poor again because of disease, the platform can even ﬁnd

1. The integration of commercial service

out who is the patient that makes the household

and public service improves people’s

poor. This platform also utilizes information

livelihood

and network technology to calculate and transfer alms, and to correct the details of

The

internet

provided

opportunities

those households living in poverty.

of livelihood. On one hand, e-Commerce

Government shares platform resources,

provides platforms to change employees

implements New Concept of Governance:

from traditional jobs to (non-employed, but

Beyond Regular Services.

in-job high-income), “ﬂexible employment” (non-traditional employment), such as app development.

CHINA EYE

Issue 10

China’s Internet in Its 13th Five-year Plan JIANG Qiping

2. During the 13th Five-year Plan period,

driven to innovation-driven.

people’s livelihood will depend on the development of sharing economy “Develop sharing economy” is becoming a new trend in the 13th Five-year Plan period.

* This article is excerpted from the author’s

China’s sharing economy is about 1 trillion

speech at “A China’s Story (IV) Building a

RMB, and it will probably increase 10 times in

Moderately Prosperous Society – China’s

the next ﬁve years.

13th Five-Year Plan and Its New Role in

The Communique of the ﬁfth Plenary

the World” held by the China Energy Fund

Session of the 18th Communist Party of China

Committee on April 20, 2016, at United

Central Committee proposed to “develop

Nations Headquarters, New York City.

sharing economy”. It was announced that “We must ﬁrmly establish and thoroughly implement the innovative, coordinated, green, open and sharing concepts for development. This is a deep reform concerning the overall development of China.” Premier Li Keqiang said in his Report on the Work of the Government to formulate the Internet+ Initiative and invest on the two engines of building mass entrepreneurship and innovation and increasing public products and public services. On September 26, the Guiding Opinions on Accelerating the Building of Support Platforms for Mass Entrepreneurship and Innovation was promulgated During the 13th Five-year Plan, the integration of internet and every industry will become the greatest power for China’s economic development. It will help change the engine of development while China is heading towards the world’s biggest economy, and change the development mode from material-

CHINA EYE

Issue 10

Reducing Tensions and Ensuring Sino-US Cooperation in the Western Paciﬁc Douglas J. FEITH

Former US Under Secretary of Defense for Policy

he security issues in the Western Paciﬁc

sensible, we had no desire to try and prevent

that I’d like to spend a few minutes are,

China from becoming more prosperous, or

ﬁrst, the issue of the Chinese claims in the

from rising as an important world power. We

East and South China Seas, secondly, a few

remembered that it was a previous Republican

thoughts on proliferation of nuclear weapons,

administration – that of President Nixon –

and third, a few thoughts on energy security..

that opened diplomatic relations with China.

Regarding the Chinese territorial claims,

The US worked cooperatively, including in

controversies over the last few years have

the military ﬁeld, during the administration

given rise to Chinese complaints about US

of Ronald Regan – the administration in

policy – that it is a policy that is allegedly

which Bud McFarlane served as National

aiming at containing China. And there is a

Security Advisor. We in the George W. Bush.

lot of discussion of a historical narrative in

administration did not think of ourselves as

which these alleged eﬀorts at containment are

heirs to a long policy of hostility to China.

viewed as a long policy of hostility by the US

On the contrary, our goal was to ﬁnd ways to

government towards the rise of China. I don’t

ensure that China and the United States would

think that those complaints are supported by

not become enemies, that they could continue

the facts. They promote the same hostility that

to cooperate and do business with each other.

they purport to criticize.

Now, the Obama administration has in my

When I was the Under Secretary of Defense

view made many errors in its National Security

for policy in the G. W. Bush administration,

policies, but it is not guilty of provoking

we took a strongly conservative view of US

hostility with China. Chinese policies in the

interests and national security; we worked to

East and South China Seas have made regional

strengthen our defense capabilities, alliances

states nervous. They have been conducted in

and defense partnerships around the world;

(an) aggressive and challenging fashion that

but we did not have the goal of containing

has created enormous agitation throughout the

China. We didn’t think that it would be

region. And these regional states have naturally

CHINA EYE

Issue 10

Reducing Tensions and Ensuring Sino-US Cooperation in the Western Paciﬁc Douglas J. FEITH

Douglas J. FEITH at “Sino-Us Colloquium (IX) Sino-US Security Relations: an Agenda for the Next U.S. President”

sought support from the United States. This

unbroken hostility going back decades. That

has become a troubling source of tension in

is historically not accurate and I think it’s the

the US relationship with China, but there is

wrong way to look at the problem.

strong bipartisan support in the US for a policy

The second topic I wanted to address very

that upholds Freedom of Navigation and the

brieﬂy here is the nonproliferation issue. The

sovereignty and territorial integrity of our

spread of nuclear weapons is arguably the

friends in the Western Paciﬁc. So, I strongly

gravest security threat in the world. Reference

agree with the many comments made by all

has already been made in a number of the

of our various speakers on the importance of

comments about the danger of the spread of

approaching these problems in a cooperative

nuclear weapons in the Middle East. I agree

spirit, with a clear goal of avoiding conﬂict

with Jim Woolsey that the deal that the United

and resolving the dispute diplomatically.

States just made with Iran and some other

But it’s important to understand, I believe,

countries is likely to produce an Iranian nuclear

that the problems we have here are not the

weapon in the near future. I think it was a very

problems the United States created as a result

unfortunate deal. One of the consequences

of an aggressive attitude towards China and

of that deal is an increase in the danger that

they are certainly not part of a narrative of

other countries in the Middle East are going to

CHINA EYE

Issue 10

Reducing Tensions and Ensuring Sino-US Cooperation in the Western Paciﬁc Douglas J. FEITH

seek nuclear weapons capabilities themselves.

proliferation of nuclear weapons throughout

One can imagine not only the Saudis but the

the whole region. If anybody believes that the

Egyptians, the Turks, and others in the region

kind of proliferation that I myself and other

deciding that the era in which nuclear weapons

speakers have talked about today that is a

are controlled by a handful of great powers

danger in the Middle East, where, as I said,

is over, and that any self-respecting middle-

you could wind up with nuclear weapons in

seized power may decide it needs its own

the hands of a number of countries. If anybody

nuclear weapons capability.

thinks that the spread of nuclear weapons like

This is a problem gravely aggravated by

that in the Middle East would not also help

the North Korean nuclear weapons program.

trigger, especially in light of North Korea’s

China could be the key to constraining North

program, the spread of nuclear weapons

Korea, but it hasn’t played such a role. This

to South Korea, Japan, Australia, possibly

appears to me to be a strategic error on China’s

Taiwan, I think that you are not taking the

part. I had discussions with Chinese oﬃcials

problem seriously enough. The world will

abut this when I was Under Secretary. I don’t

be an enormously more dangerous place, if

understand the attitude that China has to the

we ﬁnd that as a result of ill-advised policies

North Korean nuclear weapons and why China

towards Iran (in which the US, I think, is very

has nor exerted itself more vigorously against

guilty), and ill-advised polices against North

North Korea’s nuclear ambitions. The combined

Korea (where China, I think, is very guilty),

danger of the Iranian nuclear program going

that we are, down the road, living in a world

forward despite this agreement (which as I

not with a handful of nuclear weapon states but

think, if anything, is an endorsement of the

dozens of nuclear weapons states, then we will

Iranian program rather than a termination of

be living in a much more dangerous world.

that program) and the North Korean nuclear

Finally, a quick word on energy security. In

program is to do severe damage to the

particular, I’d like to say a word about Chinese

architecture of nonproliferation in the world.

investments in oil-exporting states – countries

And why China seems to be more interested

like Venezuela, Angola, Sudan and elsewhere,

in denying cooperation to the US on the North

and I want to make these remarks with

Korean issue, rather than exerting itself in this

reference to the One Belt One Road policy,

area, is a mystery to me. Because the danger

the controversy over the Asia Infrastructure

is that Chinese oﬃcials could wake up one

Investment Bank (AIIB). In the 1970s, there

day, not only witnessing the development of

were many experts after the 1973 Arab-

integrated missile defenses throughout the

Israeli War who believed that US access to

whole region, but also the possibility of the

oil required the United States to forge special

CHINA EYE

Issue 10

Reducing Tensions and Ensuring Sino-US Cooperation in the Western Paciﬁc Douglas J. FEITH

economic and political relations with oil-

I think erroneous view of what China needs

exporting countries. There was an enormous

to do for its own energy security. China has

literature produced making that argument. In

embarked on its One Belt One Road Initiative

retrospect, that literature looks wrong to the

and part of the rationale is that loans- which

point of being foolish. You didn’t need to have

is to say, Chinese foreign aid – may help

friendly cooperative, let alone obsequious,

developing countries become better trade

relations with oil-exporting countries to

partners for China. Part of the rationale also

purchase oil. Oil is a commodity. It is traded in

is to help China increase its energy security.

the world. If you have dollars, if you have hard

The Obama Administration has taken steps

currency, you can buy oil. You didn’t need to

that are seen as opposing the One Belt One

have special relationships with oil-exporting

Road policy as it did the AIIB. In my view, the

countries to purchase oil on the world market.

Obama Administration is making an error by

That was a gigantic mistake. There were also

opposing, or appearing to oppose, these Chinese

people who compounded that mistake by

initiatives. This apparent US opposition

arguing that it would be extremely important

contributes to the unobstructed fear in China

to line-up long term supply contracts. Studies

that the United States is trying to contain or

have been done that show that if the United

resist Chinese growth or the rise of China. At

States had actually taken the advice of the

the same time I think that China is making an

people that advocated those long term supply

error in thinking that foreign aid investments

contracts (which were based on completely

will actually beneﬁt its economy, or improve

false ideas that didn’t take into account the

its energy security. There is a formidable

kinds of technological developments that

historical basis for my skepticism. The United

Jim Woolsey was highlighting about how the

States has a lot of experience with foreign

higher oil prices created enormous incentives

aid, and it doesn’t produce prosperity and it

for lower-cost production of petroleum and

doesn’t produce increase trade in countries

non-petroleum substituted for oil). Had we

that have bad economic policies. There is an

made the long term supply agreements that

inﬁnite amount of foreign aid you can put

many people advocated in the period of 1973

into countries with bad economic policies and

to 1975, we would have spent hundreds of

they will remain poor and unattractive trade

billions of dollars more on energy than we

partners. You do not convert a country into an

needed to spend relying on market forces. So

attractive trade partner by pouring foreign aid

these were very common errors.

into a place that doesn’t respect property rights,

It appears that some Chinese oﬃcials are

that doesn’t have an independent Judiciary, that

recreating those errors, and have a similarly

is not a hospitable environment for sensible

CHINA EYE

Issue 10

Reducing Tensions and Ensuring Sino-US Cooperation in the Western Paciﬁc Douglas J. FEITH

businessmen to voluntarily choose to conduct

into war, which would not serve the interest of

their trade and investment. Countries that lack

either party.

Rule of Law and that lack the legal and policy

That concluding thought of mine is widely

Infrastructure that makes them attractive

held by foreign policy people in the United

to international business do not become

States across the political spectrum.

prosperous because of foreign aid. And so my view is that, even though it is a mistake for the United States to appear to oppose the Chinese – because we are just creating needless tension and a basis for misunderstanding about our

* This article is excerpted from the author’s

attitude toward China’s prosperity (which

speech at “Sino-Us Colloquium (IX) Sino-

I think should be positive), I also think it’s

US Security Relations: an Agenda for the

a mistake for China to have the illusion that

Next U.S. President” held by the China

these kinds of aid programs are going to be

Energy Fund Committee on January

enormously beneﬁcial to them.

24, 2016, at Hong Kong Convention and

I think that it’s important that we not let

Exhibition Centre.

disagreements about Chinese foreign aid damage our relations. I think the theme of this conference from all the speakers, and there have been different points emphasized and different attitudes shown here, but there is a common thread. And the common thread is, with all the serious differences that exist between the United States and China, there really is an enormous incentive that both countries have to work out their differences in a responsible, constructive way that minimized tension, contradicts narratives about hostility and efforts by the United States to oppose China’s rise. I think it’s important that we recognized that we have differences but we work them out in a way that ensures that we resolve them without the kinds of tensions, conflicts and disagreements that could escalate

CHINA EYE

Issue 10

Securing the Cyberspace: Stabilizing the Sino-US Strategic Relationship in a Networked World SHEN Yi

Securing the Cyberspace: Stabilizing the Sino-US Strategic Relationship in a Networked World

SHEN Yi

Associate Professor, School of International Relations and Public Aﬀairs, Fudan University

t’s my great honor to stand here, to share

said this sentence. “There was no destruction

my personal understanding and research

of data or manipulation of data, it was simply

on this very interesting topic. My lecture topic

stolen, so that’s a passive intelligence collection

is, Securing the Cyberspace---Stabilizing the

activity, just as we do.” That’s the fact. The

Sino-US Strategic Relationship in a Networked

state entered the cyberspace, duplicated their

World. Cyber security is a tough issue because

normal activities including these intelligence

it is the mixture of diﬀerent concepts. Generally

activities in the cyberspace, but it’s very

speaking, it covers those technical aspects and

diﬃcult for normal people to face these facts.

also covers those behaviors and content issues

That’s part of our normal lives, but before we

in the ﬁfth domain we live.

enter this information age, we don’t know that

And here I’d like to share you several

or we neglect that. But here comes a question,

examples of the complexity of cyber security.

we have to learn to coexist with this new

In 2015, one of the hottest issues among

phenomena, actually not that new, in our lives

Sino-US cyber security agenda is the Oﬃce

in the cyberspace.

of Personnel Management (OPM) issue, how

Second, on the intelligence activities on

to understand that OPM issue? Actually we

commerce or related to commerce. About

have diﬀerent voices of views, one thing we

15 years ago, the European Union and the

neglect is that the voice from Clapper. When

United States encountered that issue when the

he replied inquiries in the congress, he said

Airbus found that maybe the Boeing abused its

that this OPM issue was not an attack. And

national intelligence activities, a system got the

then he was questioned by the congressman,

commercial secret dialogue between the airbus

why you said it was not an attack. And then he

and people from some middle east countries,

CHINA EYE

Issue 10

Securing the Cyberspace: Stabilizing the Sino-US Strategic Relationship in a Networked World SHEN Yi

SHEN Yi at “Sino-Us Colloquium (IX) Sino-US Security Relations: an Agenda for the Next U.S. President”

and then got the contract ﬁnally. And the U.S.

Hayden

said

same

things, “we

collect

responded to that issues that we spy on our

intelligence information for the purpose of

alliance to ensure that our companies can have

politics and security of the state, we don’t use

a fair competitiveness in these commercial

that directly into this competition.” So here

activities. It’s part of that normal lives.

comes a question, I think the real challenge

And this sentence is also very interesting.

between China and the United States is that

“When we have caught you at it, you might

they need to build a rule or code of conduct,

be interested, we haven’t said a word to the

how to regulate and categorize diﬀerent

U.S. companies in the competition. Instead we

kinds of activities. It’s a tough job. It’s full of

go to the government you’re bribing and tell

complexities and uncertainties and we need

its oﬃcials that we don’t take kindly to such

to deal with it in a pragmatic way. A realism

corruption.” Here we need to compare these

attitude will be necessary to manage these

sentences. When Mr. Hayden, the former CIA

diﬀerences.

director was questioned what’s the diﬀerence

And here is the background, the so-

between the U.S. surveillance activities in

called rising of a networked world. What’s

the present projects and China’s so-called

a networked world? It’s undersea cable that

commercial espionage in the cyberspace,

linked the world into a so-called cyberspace.

CHINA EYE

Issue 10

Securing the Cyberspace: Stabilizing the Sino-US Strategic Relationship in a Networked World SHEN Yi

It’s like a nervous system that links diﬀerent

eﬀective cooperation to ensure this process

continents, diﬀerent parts of the world into

will heavily aﬀect the future of our lives. At

together. And all those data and information

the end, the report says that the future is ours.

across these borders in that system. And here

But I have to add one sentence on that--- if we

comes a question. It’s so easy to launch a so-

can ensure the cyber security between China

called attack or surveillance in that complex

and the United States. If someday because of

system. And the development of the system,

some reason, a sudden so-called either conﬂict

the spread of the system, its speed is far more

or warfare breaks out between China and the

faster compared with the speed of decision-

United States in the cyberspace, everything

making process of public policies and national

will be a kind of diﬀerent process and scenario.

security strategies. Before the state of the

And the general view of this complexity of

government understands what really happened,

the Sino-US relationship. When we discuss the

they already happened. And the state wants

Sino-US relations, either on cyber security or

to catch up these developments, they need to

other issues, we need to understand diﬀerent

ﬁght for the gap between their perceptions,

aspects. First, China and the United States

knowledge and the fast-developing facts.

are interdependent on each other. And this

And here is some data proving that we

inter-dependency, just as honorable Ridge

are closely connected with each other and

mentioned, is more complex than we can

we still have a lot of improvements to these

imagine. It’s not a single inter-dependency

information infrastructures. And the Gartner,

based on the trade of products. It’s a kind of

one of the most famous companies on ICT,

inter-dependency based on the whole supply

predicts big changes for digital business in

chain or the chain of production.

the world and says that in the coming two or

Here is the second picture, the general

three years, more and more we will depend

distribution of power between China and the

on the ICT development in our lives. Our

United States. The blue line is referred to

whole society will keep changes with the

the GDP, the total amount of US economies.

development of digital issues, technologies

The red line is referred to China’s. Its quick

and we will more and more depend on each

change comparativeness of the total amount

other. In this report, there is a very interesting

of economies produced anxieties, raised

question. In a networked world, what do an

new uncertainties. Quite unfortunately or

advanced ﬁghter jet, pizza, and digital business

fortunately, the cyber security issue became

all have in common? The answer is, they all

the main target to release these anxieties

depend on this deliberately unstable process.

emotionally.

To which extent, the government can launch

CHINA EYE

Issue 10

Securing the Cyberspace: Stabilizing the Sino-US Strategic Relationship in a Networked World SHEN Yi

And then we’ll talk about the threat. What

developed by a U.S. company. The duty of

kind of threats will threaten the cyber security

that company doesn’t include developing this

and Sino-US strategic stability? The ﬁrst is the

tool. So here comes a question. If the Chinese

spread or the proliferation in the cyberspace.

government has been attacked by this tool

It’s the proliferation of the oﬀensive cyber

from hackers located in Vietnam, how to make

capacities. CNN produced a short video clip in

a proper attribution behind that operation? It’s

2007 about a test named Aurora Test. This test

very easy for NGOs, individuals and hackers

is about how to launch a cyber attack toward

to accidentally trigger a war between great

a power generator. Within the test, a simple

powers in special scenarios, if these great

computer program completely destroyed a

powers don’t have enough strategic conﬁdence

single isolated power grid, a power generator

towards each other.

in just three minutes. It’s one of the evidence

Second, scenarios or threats in the cyber

that the cyber attack can cause destruction of

wars triggered by those unilateral actions. This

infrastructure very quickly. The function of

is a report published in last July in New York

that program is not a pure attack, just close and

Times. The ﬁrst time anonymous people inside

reopen that power generator very quickly. In a

the White House told reporters the United

real oﬀensive operation in the cyberspace, such

States already placed thousands of implants

kind of attack can get the ﬁnal result paralyzed

in Chinese computer network. Of course

of the whole power grid.

these implants are not weapons, but they are

The problem is that not we have this

sensors. They collect information and warn of

oﬀensive capacity. The problem is the

these impending attackers. But, how to explain

proliferation of this oﬀensive capacity is

the operation to plant that implants? It is that

much easier compared to the proliferation of

kind of intrusion, penetration or attack toward

weapon of mass destruction (WMD) in the real

mainland China’s computer network? Is that a

world. This is a report produced by a Chinese

behavior of war? If that is, how to realize it

company in 2014. They detected an APT

from China’s side will be properly dealt. We

attack towards the Chinese government from

need cautions. We need very serious strategic

certain Southeast country, frankly, the country

cautions to do those unilateral actions in the

is Vietnam, during the South China Sea

cyberspace. Otherwise, like 1914, maybe no

dispute. When the tension arose, the hackers

one wanted a war, but the conﬂict ﬁnally broke

from Vietnam used an internet tool to attack

out.

the Chinese government related to the South

Third, how to understand the digital

China Sea issue to steal that information. The

economic cooperation? This is also a coverage

question here is that tool is a commercial one

of New York Times. The title is very interesting,

CHINA EYE

Issue 10

Securing the Cyberspace: Stabilizing the Sino-US Strategic Relationship in a Networked World SHEN Yi

saying that U.S. Tech giants may blur national

States is whether we can develop a code of

security boundaries in China deals. Microsoft,

conduct to ensure we can produce responsible

Cisco and IBM were criticized for their

behaviors in the cyberspace to deal with these

cooperation with the signature of agreement

diﬀerences.

with the CETC, a state-owned enterprise

Fifth, oﬀensive use of the internet. This is

during the Seattle Internet Forum. They said

an old secret report which has been declassiﬁed

that such kind of cooperation will do damage

in 2007. It says that the U.S. might be able

to U.S. national security as well as the stability

to employ this internet employ the Internet

of this bilateral relationships.

oﬀensively to help achieve unconventional

Fourth, there are preventive actions. The

warfare objectives, which otherwise they

U.S. Department of Defense (DoD) has recently

might have to set our own special forces to

published a special report “The DoD Cyber

accomplish. Beijing has been criticized for

Strategy”. In the report, it listed ﬁve strategic

focusing too much on the information security,

goals of these new strategies concerning cyber

on the contents. They have some reasons.

attacks. The fourth goal is to build a cyber

Without these stimulation, it will be not so

option for the president to manage escalation of

easy to focus on the information security that

conﬂicts and build an environment that is ﬁt for

much.

the U.S. during the whole crisis management

How to stabilize the cyber security and

process. Imagine, next time when tension

strategic stability between China and the U.S.?

between the Two Straits rises, the U.S. doesn’t

Let’s have a brief review on what we did in 2015.

send its aircraft battle groups, but threatens

Why the cyber war did not break out between

to paralyze the energy system of Shanghai or

China and the United States in 2015? We let the

the stock exchange system. Unless mainland

digital economic cooperation move ﬁrst. We

China keeps cautious on everything inside

tried to ﬁnd our common cooperation between

Taiwan, what will happen? A new war or a new

the government and the companies. We built

cyber war? Or will cohesive mainland China

this closed-door forum in Seattle. When Xi

also develop its own capabilities to deter such

Jinping met the I.T. giants on the third ﬂoor,

kind of activities and trigger a cyberspace arm

we had this closed-door forum on the second

race between China and the United States? Do

ﬂoor. In the closed-door meeting, we debated

we want that? Frankly speaking, no. But the

very candidly. We argued. We criticized each

fact is the door is already open. The concept

other. We put ﬁngers towards each other. But

of the deterrence has been imported into

on the third ﬂoor, all the cooperation moved

the cyberspace. Here comes a question. The

on. And ﬁnally we found that compared to

common duty between China and the United

the cooperation, our diﬀerences and conﬂicts

CHINA EYE

Issue 10

Securing the Cyberspace: Stabilizing the Sino-US Strategic Relationship in a Networked World SHEN Yi

maybe minor. We need to pay more attention

categories of actives in the cyberspace, and

to the cooperation and quite fortunately, we

negotiate more precise rules that govern

made that deal. Of course no one felt satisﬁed

diﬀerent activities properly. Last of course not

with that deal. Not only people in Washington,

least, we need to ﬁght against the new common

but also in Beijing. But the fact is that we need

threat presented by the ISIS. I think China and

to coexist.

the United States need to negotiate seriously,

And the issues to be done, if we talk

how to manage those issues concerning the

about the agenda for the next government in

cyberspace pragmatically, properly in the real

Washington. There are several main goals.

world. We need to ﬁnd a compromise between

First, we need to build consensus on cyber

general values and real threats.

security and categorize diﬀerent activities in cyberspace properly. Second, we need to build and exchange the list of priorities in the cyberspace and respect the list in a way that could encourage the strategic stability in

* This article is excerpted from the author’s

the cyberspace, just something like we did

speech at “Sino-Us Colloquium (IX) Sino-

to get the ABM ensure the strategic stability

US Security Relations: an Agenda for the

between the United States and the former

Next U.S. President” held by the China

Soviet Union in the Cold War period. Third,

Energy Fund Committee on January

producing a code of conduct to regulate the

24, 2016, at Hong Kong Convention and

necessary national security activities in the

Exhibition Centre.

cyberspace. And more details. First is shaping the perceptions. The second is the principal building, whether it’s possible for us to build a common understanding on the so-called cyber sovereignty. The third is confidence building. We need to keep communication, exchange information and technology, explore the mechanism of intelligence sharing and facilitate the exchange of information on these incidents. The fourth is the code of conduct that refers to the experience of MOU On the Rules of Behavior for the Safety of Air and Maritime Encounters and we need to define different

CHINA EYE

Issue 10

China and America’s Eﬀorts Towards Stability in the Western Paciﬁc Region ZHANG Tuosheng

China and America’s Eﬀorts Towards Stability in the Western Paciﬁc Region ZHANG Tuosheng Chairman of Academic Committee and Director of the Center for Foreign Policy Studies, China Foundation for International and Strategic Studies

or China and America, the peace and

armament race and security dilemma, and even

stability in the Western Paciﬁc Region

military confrontation and conﬂict. This will

is the most important. First, the Asia-Paciﬁc

seriously damage the peace and development

is the center of today’s world economy,

in East Asia, Asia-Paciﬁc and even the world.

while the East Asia is the center of economic

After the end of Cold War, there have been

development in Asia. They are all in the

two regional hot spots in Western Paciﬁc for

Western Paciﬁc. Therefore, it is signiﬁcant to

years: 1. Korean Peninsula; 2. Taiwan Strait.

keep the Western Paciﬁc secure and stable,

In the mid-1990s, the tension in Korean

in order to maintain the Asia-Paciﬁc or even

Peninsula once eased, but later on the Peninsula

the world’s stability and development. Second,

was shrouded in a cloud of increasing possibility

the geo-political frictions between China and

of military conﬂicts, because of the intensiﬁed

America over the years mainly occurred in this

North Korean nuclear issue, as well as the

region. Therefore, whether the Western Paciﬁc

tensed relations between South and North

is secure and stable or not can be considered as

Korea and between America and North Korea.

a main benchmark of the situation of the Sino-

In January 2016, North Korea conducted a so-

US relations

called “hydrogen bomb” test, thus pushed the

What made us worried is the increasing

Peninsula into a severe risk. In the early 1950s,

security risk in the Western Paciﬁc in recent

China and America were once embroiled in

years. This is shown in the expansion and

a war on the Peninsula. Now, both countries

intension of security hot spots, as well as the

have important common interests and serious

intensiﬁed geo-political frictions between

disagreement on the Peninsula. Therefore,

major powers and the imbalance of major

how to deal with the deteriorating security on

powers relationship. If these situations cannot

the Peninsula is a great and urgent challenge to

be controlled eﬀectively, it will lead to regional

both China and America that they must face it.

CHINA EYE

Issue 10

China and America’s Eﬀorts Towards Stability in the Western Paciﬁc Region ZHANG Tuosheng

ZHANG Tuosheng at “Sino-Us Colloquium (IX) Sino-US Security Relations: an Agenda for the Next U.S. President””

From the early 1990s to 2008, due to the

Progressive Party (DPP)’s Tsai Ing-wen, who

development of the Taiwan independence

adheres to the stand of Taiwan independence

forces in Taiwan and the upgrading America-

and does not accept the “1992 consensus”, was

Taiwan relationship, there were intensiﬁed

elected as the so-called “President” of Taiwan.

tension and continuous risk in the Taiwan

In addition, it was the ﬁrst time for the DPP

Strait. The Taiwan Strait became a regional

to win a majority in the so-called “Legislative

hot spot that may possibly lead to a military

Yuan”. This change of the politics in Taiwan

conﬂict between China and America. In 2008,

implies reversed Cross-Strait relations, thus

after the beginning of the Kuomintang’s Ma

tensions and confrontations may occur again in

Ying-jeou administration, on the political

the Strait. This will be another serious challenge

foundation of adhering to the “1992 consensus”

to the deteriorating Sino-US relations.

and opposing Taiwan independence, the Cross-

Besides the Korean Peninsula and Taiwan

Strait relations was improved obviously, thus

Strait, some new security hot spots have

the trend of peaceful development appeared in

appeared in Western Paciﬁc in recent years,

the Taiwan Strait. However, Taiwan’s situation

i.e. the East and South China Sea disputes.

has changed again in the past two years. In

There have been maritime disputes between

the election on 16 January, 2016, Democratic

East Asia countries for a long time, but the

CHINA EYE

Issue 10

China and America’s Eﬀorts Towards Stability in the Western Paciﬁc Region ZHANG Tuosheng

situation has been rather stable in a quite long

strategic balance began to exist in Western

period after the end of Cold War. Nevertheless,

Paciﬁc region. This change made China put

since 2009, the maritime disputes in East Asia

more eﬀorts on protecting its sovereignty

have become more and more obvious; the

and territorial integrity in Western Paciﬁc,

security risk has increased; the Sino-Japanese

strengthen its ability against foreign military

and Sino-Vietnamese crises even once came

intervention (Anti-Access/Area Denial, A2/

to the edge of military conﬂicts. Although

AD), and ask for greater voice in the regional

America professed that it has no stand on

aﬀairs. On the other hand, America is trying to

the regional disputes of sovereignty, in fact

stop this change. It proposed and implemented

it has been favoring those countries which

the

have disputes with China, has been promoting

strengthens its bilateral military alliance and

bilateral military alliance in that region, and

existence in the region, actively promotes

strengthening coastal military reconnaissance

American concept of operations and strategies

to China. In 2015, America even opposed

such as “AirSea Battle”, “Oﬀshore Control”,

China’s construction activities on islands in the

“Pursue Deterrence by Denial”, etc. Under this

name of maintaining “freedom of navigation”.

circumstance, the Sino-US strategic mutual

It has become a direct participant in the

doubt was intensiﬁed. Then, their geo-political

maritime disputes in East Asia, thus start the

frictions extended from the Korean Peninsula

security game in regional maritime dispute

and Taiwan Strait to East and South China

between China and America.

Sea, thus brought out the ﬁrst time of friction

rebalancing

policy

Asia-Paciﬁc,

There are several reasons for the increase of

in sea power. China has determined to become

frictions and risk in Western Paciﬁc in recent

a great maritime power. The Chinese navy is

years. The most obvious two are: 1. the rise

trying to break through the ﬁrst island chain.

of China; 2. the America’s rebalancing policy

This is what America, a long-time maritime

in Asia-Paciﬁc. After the Cold War ended,

power, cannot accept. In fact, both China and

based on China’s advantage on land power and

America are paying more close attention to

America’s advantage on sea power, China and

each other in the aspects of new security in

America created a kind of balancing power

network and outer space. This is also much

in Western Paciﬁc along China’s territory

related to the increasing tension in Western

and maritime belt. However, with the rise

Paciﬁc region.

of China’s integrated power, especially the

Following this trend, America entered the

strengthening of defense capability, the original

year of election in 2016, thus a new president

balance of power was broken in the beginning

will be elected. China will hold its 19th

of the new century. A new type of Sino-US

National Congress in 2017, thus a new group

CHINA EYE

Issue 10

China and America’s Eﬀorts Towards Stability in the Western Paciﬁc Region ZHANG Tuosheng

of central leadership will form. The next two

the Korean Peninsula problem, China and

years will be a critical transition period of

America should lead the related parties to

the Sino-US relations. In this period, the two

propose a series of schemes to solve the North

countries’ interaction in Western Paciﬁc will

Korea nuclear issue and ensure the peace and

greatly aﬀect the regional situation and the

stability of the peninsula. This measure is

Sino-US relations in the future. In the next

diﬀerent from the previous progressive scheme

four to ﬁve years of administration of China

which is “words for words, action for action”,

and America’s leadership, the two countries

and is more suitable to the current situation of

should control their disagreement and friction

the peninsula, which consists of high tension

in Western Paciﬁc, thus increase cooperation

and is close to the critical point.

gradually, to make positive interactions in

Third, China and America should focus on

the region. If they do, not only the peace and

the long-term situation, start communication

development will be maintained in Western

about the change of strategic balancing in

Paciﬁc region, the stability and progress of

Western Paciﬁc, to reach a consensus on

Sino-US relations will also be secured. In

how to maintain the security and stability of

order to fulﬁl the above goals, I have three

Western Paciﬁc in this new situation as soon as

suggestions.

possible. The themes of their communication

First, both China and America should

can include: 1. The changing trends under

recently set their ﬁrst priority to strengthening

the strategic balancing in Western Paciﬁc,

disagreement control and crisis control,

and China and America’s positions, roles and

especially prevent the Korean Peninsula crisis

responsibilities in Western Paciﬁc; 2. The

becoming military conﬂict, as well as prevent

eﬀects of maintaining security and stability in

the provocation of Taiwan independence forces

Western Paciﬁc on the peace and development

aggravating the situation of Taiwan Strait

of Asia-Paciﬁc and on the construction of the

again. The America’s leadership should change

new type of Sino-US major powers relations; 3.

its policy of “strategic patience”, and cooperate

With the changing regional balance of power,

with China and other countries to resume the

how China and America can avoid the worst

security talks on the Korean Peninsula, in

case scenario and attain the best prospects; (The

order to stop North Korea from nuclear testing

former is to prevent the increase of frictions

and ease the tension on the peninsula.

leading to conﬂict and confrontation, while the

Second, based on the crisis control in

latter is to construct Sino-US relations with

better conditions, China and America should

mutual adaptation, mutual tolerance, healthy

join together to ease and solve the regional

competition, and active cooperation.) 4. How

disputes, to have some achievements. As for

to facilitate the solutions to regional disputes

CHINA EYE

Issue 10

China and America’s Eﬀorts Towards Stability in the Western Paciﬁc Region ZHANG Tuosheng

and strengthen cooperation in unconventional security; 5. Regional multilateral security cooperation mechanism and its relationship with the bilateral military alliance with America. Certainly, it is not that easy for the two countries to reach a consensus on the above significant issues, but it is necessary for them to put efforts on it together. It is because to maintain the security and stability in Western Pacific, not only conforms to the common and long-term interests of both China and America, but also conforms to that of every country in Asia-Pacific.

* This article is excerpted from the author’s speech at “Sino-Us Colloquium (IX) SinoUS Security Relations: an Agenda for the Next U.S. President” held by the China Energy Fund Committee on January 24, 2016, at Hong Kong Convention and Exhibition Centre

CHINA EYE

Issue 10

Nuclear Power in China: Challenges and Opportunities Jonathan A. CHANIS

Nuclear Power in China: Challenges and Opportunities Jonathan A. CHANIS Member of the National Committee on American Foreign Policy; Managing member of New Tide Asset Management, LLC

grew up in the United States in the years

Germany on nuclear power are a good example.

following Three Mile Island, a time when

Germany is a wealthy, developed country.

the atmosphere in the country was extremely

As such, it can aﬀord policy options which

anti-nuclear. This background makes it all

might not be economically rational, such as

the more interesting for me to see the nuclear

closing down its nuclear power ﬂeet – by most

renaissance happening today, and to explore

accounts an economically irrational decision.

the updates presented in the China Energy

A transitioning, less developed country like

Fund Committee’s Energy Focus 2015.

China, on the other hand, does not have that

The report is an excellent and thorough

luxury.

review of where nuclear power stands today,

Those who, like myself, grew up in

and I highly recommend it. Here, I highlight

developed countries, need to keep such

some of the report’s ﬁndings in three areas:

diﬀerences in mind. People who complain,

economics, public support, and Sino-U.S.

for example, about coal in China and coal in

cooperation.

India, need to remember that these countries do not have levels of wealth and development

ECONOMICS

comparable to a country like Germany. Nevertheless, their people still need to eat,

When we think about energy policy,

need jobs, and need places to live. Developing

across the spectrum – from alternatives to

and transitioning countries simply cannot

petroleum, gas, and nuclear – we have to

aﬀord to ignore the economic fundamentals of

diﬀerentiate between developed, developing,

an energy policy.

and transitioning countries. It is a mistake to advocate for a one-size-ﬁts-all solution. The

diﬀerences

between

The CEFC Energy Focus establishes a very clear economic case for nuclear power

China

and

in China. Nuclear power is a smart option for

CHINA EYE

Issue 10

Nuclear Power in China: Challenges and Opportunities Jonathan A. CHANIS

China because it is a low-cost, economically

nuclear power today is the discount rate. When

rational option. CEFC’s report cites work

interests rates are low, nuclear power projects

done by the International Energy Agency,

become more aﬀordable. Low rates, like those

which found nuclear power to be the second

we are experiencing today, are a tailwind for

most eﬃcient energy option for China, behind

nuclear power, dropping the upfront costs of

hydropower, when carbon costs are accounted

building facilities.

for.

All these factors combine to make a very Hydropower, while a solution China has

pursued to some success, is severely limited

favorable overall economic situation for nuclear power development in China.

by geography, both in terms of siting and the viability of construction. The remoteness of

PUBLIC SUPPORT

potential hydropower locations left in China present

considerable

construction

costs

The report mentions the popular resistance

and require major transmission projects.

to nuclear power in China. There have been

Furthermore, since China faces potential

demonstrations against nuclear power in

water shortages, it must protect remaining

China, as there have been in the United States.

supplies. These factors limit the practicality

Nuclear power remains unpopular, and is likely

and economics of hydropower in China.

still experiencing blowback from Fukushima.

Thus, if China wants to electrify its country

Nevertheless, it is worth noting that the

and provide energy for its citizens, and if it is

majority of scientists, in polls conducted in

going to act rationally and economically, it has

the United States, believe in nuclear power.

to pursue nuclear power.

The generally held view among experts is that

Fortunately for China, it now has the

nuclear power is safe. Indeed, the death record

experience needed to deliver nuclear power

for nuclear power is substantially better than

projects on time and on budget. This is a key

other forms of power, particularly fossil fuels.

feature of China’s nuclear power economics.

Another important point to consider is

Nuclear power projects in the United States

climate change. The 2014 IPCC report was very

and Europe are notorious for being over-budget

pro-nuclear. James Hansen, a vocal advocate

and late. Even more successful companies, like

for action on climate change, has expressed

Areva, frequently run into diﬃculties. China’s

strong support for nuclear power, stating that

proven record of completing projects on time

we cannot overcome climate change without it.

and on budget is impressive, and only adds to

The vigorous backing of nuclear power

the economic case for nuclear power in China.

among experts and scientists is promising in

Another factor favoring the development of

securing a possible reversal of public opinion

CHINA EYE

Issue 10

Nuclear Power in China: Challenges and Opportunities Jonathan A. CHANIS

in the future.

nuclear power in the world with the obstacles posed in domestic development.

SINO-US RELATIONSHIP

In other words, since the United States knew it was exiting the nuclear power business,

The United States has put itself out of

it at least helped to promote the progress of

the business of nuclear power construction.

industries elsewhere. In 2006, for example,

The policies that the country pursued after

the United States Department of Energy and

1979, depending on your point of view, either

Westinghouse signed a series of agreements to

destroyed or abandoned the industry. By

help China start on the road it is today. In 2010,

stopping and slowing the construction of new

Westinghouse handed over 75,000 documents

nuclear plants, these policies made it diﬃcult

relating to the AP1000 nuclear reactor, the

for the United States to remain competitive in

basis for today’s Gen-III reactors. This is not to

the sector.

minimize what China has done and continues

Again, the economics were determinative. If you are going to build cars, it helps to have a

to do, but it is an interesting background to the Sino-U.S. relationship.

large domestic market in which you can sell the

Today, the United States’ position on

cars. The same goes for nuclear power plants.

China’s nuclear program is complex, and there

A large domestic industry promotes eﬃciency

are obstacles to continued cooperation.

and innovation. This is what China has now achieved.

The United States still has some intellectual property issues with China, including in the

By comparison, the United States is very ill

nuclear sphere. This is a signiﬁcant irritant and

prepared for the coming renaissance in nuclear

obstacle not only to nuclear power cooperation,

power. The United States is now 20 to 30 years

but the general relationship as a whole.

behind China. It is true that the United States

A second obstacle is presented by export

has the advantage of the shale gas revolution,

control laws on dual use. The United States

but this might not be as long term a solution as

maintains a vigorous military nuclear program.

nuclear power.

Equipment that has dual use will thus still be

What is also interesting is the role the

subject to export controls.

United States played in encouraging the

There are other military concerns as well.

development of China’s nuclear power industry.

For example, China has an agreement with the

The government was instrumental in helping

Areva to conduct fuel reprocessing to create

to transform China from a customer into a

plutonium. The United States is very much

competitor. Arguably this was done out of

against reprocessing, and is not pleased with

necessity, as a way of reconciling a vision for

the arrangement, but it has yet to complain to

CHINA EYE

Issue 10

Nuclear Power in China: Challenges and Opportunities Jonathan A. CHANIS

Areva and the French. Cybersecurity and military espionage also disturb the United States to a very high degree, as does concern for third party reliance on Chinese products – witness the controversy over government use of Lenovo computers earlier this year. All these are legitimate obstacles to future cooperation on nuclear power between China and the United States. To a large extent, how supportive the United States is towards China’s program is largely going to be conditioned by overall U.S.-China relations. If, in the next 10 or 15 years, U.S.-China relations have not been doing well, if they continue to deteriorate, I would expect to see more resistance from the United States to China’s expansion overseas. In other words, the nuclear power issue is hostage to the overall relationship. Hopefully, with enough good work on both sides, the overall relationship can be improved, which would allow us to move forward in a way that would beneﬁt everybody.

* This article is excerpted from the author’s speech at the “Publication Release of CEFC China Energy Focus 2015: Nuclear Energy” held by the China Energy Fund Committee on July 15, 2016, at the National Press Club, Washington DC.

CHINA EYE

Issue 10

Retrospect and Prospect of the Global Nuclear Power Market HUANG Xiaoyong

Retrospect and Prospect of the Global Nuclear Power Market HUANG Xiaoyong President of the Graduate School of the Chinese Academy of Social Sciences

n 2015, the global nuclear power industry

THE GLOBAL NUCLEAR POWER

exhibited a slight recovery from the

INDUSTRY IS SLOWLY RECOVERING

aftermath of the 2011 Fukushima incident. Notably, emerging economies – such as China,

According to the International Atomic

India, and Brazil – have begun to join, and in

Energy Agency (IAEA), there are 446 nuclear

some cases surpass, the traditional leaders of

power plants in operation worldwide (as of June

the industry. China, in particular, now leads

20, 2016), with a combined installed capacity of

in global nuclear power development, with 24

388.05GW. Two nuclear power plants are in the

plants under construction – one third of the

process of permanent shut down, while 63 are

world’s total.

under construction. These numbers indicate a slight recovery in nuclear power development since Fukushima.

Global nuclear power capacity in operation since 1995 (Unit: GWh)

Source: International Atomic Energy Agency CHINA EYE

Issue 10

Retrospect and Prospect of the Global Nuclear Power Market HUANG Xiaoyong

HUANG Xiaoyong at the “Publication Release of CEFC China Energy Focus 2015: Nuclear Energy”

According to British Petroleum, in 2014,

power is experiencing around the globe.

electricity generated through nuclear power

Competition is increasingly ﬁerce in the

increased by 1.8%. This was the ﬁrst increase

nuclear power industry. Traditional nuclear

since Fukushima. The upward trend continued

power nations, such as the United States,

in 2015, when the combined installed capacity

Russia, France, and Japan, are trying to

of nuclear energy was 376.34GW, a slight

expand their market share, while emerging

increase compared to 2014, at 371.79GW.

nuclear power nations, like China and South

More notably, in August of 2015, the

Korea, are striving to catch up. Cooperation

Japanese Kyushu Electric Power Company

between traditional nations and emerging ones,

resumed operations at Sendai Nuclear Power

however, is also becoming increasingly crucial

Plant Unit 1. Unit 2 followed in October of

to future success, and cannot be avoided.

that year. The return of these units ended nearly two years of suspended nuclear power

CHINA’S NUCLEAR POWER MARKET

generation in Japan. The reactivation is thus

IS ON THE RISE

a remarkable indicator of nuclear power’s

enduring public acceptance in Japan, as well

After Fukushima, China suspended the

as representative of the rejuvenation nuclear

approval process for new nuclear power plant

CHINA EYE

Issue 10

Retrospect and Prospect of the Global Nuclear Power Market HUANG Xiaoyong

construction. It also suspended construction of

lacks a domestic fossil fuel supply, importing

approved nuclear power plants, and tightened

nearly 60% of its oil, and over 30% of its

safety standards. After the launch of Phase II of

natural gas. This threatens the country’s long-

the Tianwan nuclear power plant in December

term energy security. Nuclear power, which

2012, the Chinese government did not approve

promises a high degree of self-suﬃciency, thus

any project for 26 months.

presents an important alternative for China.

In March 2015, China oﬃcially resumed nuclear

power

development

with

the

Third, like high-speed rail technology, China’s nuclear power technology has proven

construction of the ﬁfth and sixth reactors of

mature

enough

receive

international

the Phase II project at the Hongyanhe nuclear

recognition. This will help Chinese industries

power plant. Signiﬁcantly, China’s return to

“go global” and export products and services

nuclear power development was accompanied

abroad. A long term focus will be crucial here,

by an accelerated pace of construction. China

since China will need to demonstrate a decade

is seeking to make up for lost years.

or more of nuclear power operation – with high

Although there are still voices against

levels of safety and an impeccable record – to

nuclear power, among experts it is generally

truly gain the trust and support of overseas

considered an essential and realistic option for

customers.

China. There are three main reasons behind this view.

PROSPECTS FOR THE GLOBAL

First, nuclear power is a comparatively

NUCLEAR ENERGY MARKET

clean source of energy. This is desirable for China today, because the environmental

With the new objectives and obligations set

carrying capacity of the country is almost at its

forth at the COP21 Climate Summit in Paris,

limit. Coal, which makes up nearly two-thirds

governments will be under great pressure to

of China’s energy mix, is a serious contributor

reduce greenhouse gas emissions. This will

to the country’s air pollution problems. Thus,

create an incentive for the implementation of

China is now striving to optimize its energy

nuclear energy, and promote its construction

structure by using less fossil fuels and moving

and development.

towards clean energy sources such as wind,

According to China’s climate plan, released

solar, hydro and nuclear. In China’s case,

in June 2015, the country pledges to peak

nuclear is more eﬃcient, cost eﬀective, and

greenhouse gas emissions in 2030, and cut the

stable than other clean energy sources.

level of emissions per unit of GDP 60-65%

Second, nuclear power is crucial for

from 2005 levels.

safeguarding China’s national security. China’s

CHINA EYE

Today, nuclear power represents only

Issue 10

Retrospect and Prospect of the Global Nuclear Power Market HUANG Xiaoyong

around 3% of the total amount of electricity generated

power plant constructions on their agenda.

China – far behind the

The future of nuclear power is very bright.

international level of 16%. In order to meet

With the continuous improvement of nuclear

its pledge to cut emissions, China will have to

power technology, and especially as Gen-III

increase the share of renewables and nuclear in

and Gen-IV nuclear power technology matures,

its primary energy consumption mix. To do so,

nuclear power will become increasingly cost-

China is expected to fast-track nuclear power

eﬃcient and safe.

development, by installing ﬁve to six nuclear

the carbon footprint of national and global

reactors per year during the 13th Five Year

energy production will promote nuclear power

Plan (2015-2020) period.

development. Finally, the promise of fast

Requirements to reduce

Globally, the prospect of nuclear power

reactors, fusion reactors, and spent nuclear fuel

development is also promising. The United

reprocessing indicate the potential for nuclear

States

example.

to become the foremost source of energy in

Although the country will shut down three

the future. We are conﬁdent in the promises of

nuclear power plants by 2019, ﬁve new

nuclear power technology.

presents

interesting

nuclear plants will be constructed and put into operation by the same date. Overall installed capacity will therefore increase in the United States over the next 5 years. Similarly, the United Kingdom will have eight new nuclear

* This article is excerpted from the author’s

power plants under operation by 2030, while

speech at the “Publication Release of

Russia plans to increase the share of nuclear

CEFC China Energy Focus 2015: Nuclear

power to 25% of the country’s energy mix.

Energy” held by the China Energy Fund

Thus, even traditional nuclear nations are not

Committee on July 15, 2016, at the National

giving up on nuclear power development, but

Press Club, Washington DC.

rather speeding up expansion and boosting the share of nuclear power in their energy mix. Nuclear power is also expected to grow strongly in some emerging countries. The government of India intends to draw 25% of its energy from nuclear power by 2050, up from less than 4% today. Other countries, like Belarus, Egypt, Bangladesh, Jordan, Lithuania, Poland and Vietnam, have also put nuclear

CHINA EYE

Issue 10

Retrospect and Prospect of the Global Nuclear Power Market HUANG Xiaoyong

Call for Papers China Eye is an international academic journal on geopolitics, energy security, economy and culture. It is published by China Energy Fund Committee (CEFC) – a non-governmental nonpartisan Chinese think-tank registered in Hong Kong. This English publication aims to facilitate a better understanding of China by providing a forum for diverse views, carrying Chinese as well as non-Chinese perspectives. Would-be contributors should forward their proposed original contributions with a synopsis, to include: (1) title; (2) author’s aﬃliation, and (3) e-mail address, phone and fax numbers. Our contact details are: E-mail: Phone number: Fax number: Address:

com@chinaenergyfund.org (852)-2655 1666 (852)-2655 1616 Room 3401-08, 34/F, Convention Plaza Oﬃce Tower, 1 Harbour Road, Wanchai, Hong Kong

CHINA EYE

Issue 10

Retrospect and Prospect of the Global Nuclear Power Market HUANG Xiaoyong

CHINA EYE

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