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Viktor Orbán: China has overtaken the West, America Losing Tech Siege of China, BRICS multilateral security cooperation, Powerplay in the Pacific
UPDATE: According to Viktor Orbán, "China has shifted the balance of the world". The prime minister pointed out that never before has there been such a rapid and tectonic global shift in the balance of power as we are living in today.
It is simply too late to try to suppress China. The United States must either spend seriously on research and development, along with industrial policy, or it will lose the race for twenty-first-century technological supremacy.
The increasing importance of the BRICS amid rapidly changing geopolitics is being reflected in the grouping's role in global security. BRICS National Security Advisors are meeting in South Africa as part of the build-up to the highly anticipated summit of the bloc next month. Political and security cooperation is one of the original objectives of BRICS cooperation, and it is also one of the pillars of the current BRICS agenda.
In 2012, Hilary Clinton smiled at Pacific leaders gathered in Rarotonga's cavernous National Auditorium and delivered a rehearsed and soothing line. The US Secretary of State told the assembly all nations, including the United States and China, had an "important stake" in the region's prosperity and security. She stressed the importance of Beijing being "transparent" in the Pacific, but her overall message was about boosting cooperation to help island nations prosper.
Viktor Orbán: China has overtaken the West
By Mariann Őry
The rise of China and the emergence of a new, multipolar world order was an important topic of Hungarian Prime Minister Viktor Orbán's speech at the 32nd Bálványos Summer Free University and Student Camp in Tusnádfürdő (Băile Tuşnad, Transylvania, Romania).
According to Viktor Orbán, "China has shifted the balance of the world". He added that this was a long-standing fear of the Western world. Even Napoleon said "let China sleep, when it wakes up it will shake the world." The prime minister pointed out that never before has there been such a rapid and tectonic global shift in the balance of power as we are living in today.
China is rising differently than the United States, he explained, adding that in China's case, "we are talking about a comeback, we are talking about the return of a five thousand year old civilisation of one billion to four hundred million people."
The prime minister pointed out, "China has become a powerhouse of production, in fact it has already overtaken the US, or is overtaking it at this very moment. Car manufacturing, computers, semiconductors, pharmaceuticals, infocommunications systems: they are the strongest in the world today in all of them."
"China has completed some three hundred years of the Western industrial revolution and the global information revolution in thirty years. As a result, it has lifted hundreds of millions out of poverty, and today the overall prosperity and knowledge of humanity is greater than it was," he pointed out.
According to Orbán, "current developments are in favour of Asia and China - be it in terms of the economy, technological development or even military power (...) changes are also taking place in international institutions, and we all know that whoever creates international institutions has an advantage. Therefore China has quite simply created its own. We have the BRICS, One Belt, One Road, and we have the Asian Investment and Infrastructure Bank, whose development resources are several times greater than the development resources of all the Western countries".
"Asia, or China, is standing in front of us in full superpower gear," he said.
"It has a civilisational creed: it is the centre of the universe, and this unleashes inner energy, pride, self-respect and ambition. It has a far-reaching plan, expressed as: to end the century of humiliation, that is, to make China great again, to paraphrase the Americans. It has a medium-term agenda: to restore the dominance in Asia that existed before the West came. And it has a counter to the main US weapon. The soft power weapon of the US, which we call universal values. Now, the Chinese simply laugh at these and say that this is a Western myth, and in fact the talk of universal values is a philosophy hostile to other non-Western civilisations, and from that point of view there is some truth in it," he explained.
The prime minister said the "million-dollar question" is whether an East-West confrontation can be avoided if the United States loses its hegemonic role. In this connection, he also recalled the theory of the Thucydides Trap: "in the last three hundred years, there have been 16 instances in which a new champion has risen to replace or precede the world's leading power. The bad news is that of the 16 cases identified, 12 ended in war and only four were peaceful'.
Orbán stressed that to avoid war, the world needs to be able to find a new balance instead of the shifting balance of the world.
"The great powers should accept that there are two suns in the sky. This is a radically different mindset from the one we have lived in for the last few hundred years. Opposing sides should recognise each other as equals, whatever the current balance of power," he stressed.
Read more here.
America Losing Tech Siege of China
By David P. Goldman (edited)
It is simply too late to try to suppress China. The United States must either spend seriously on research and development, along with industrial policy, or it will lose the race for twenty-first-century technological supremacy.
The United States and China approach AI differently. The trillion-dollar valuations of the great American technology companies mainly come from consumer entertainment. China, as Huawei’s Zhang said, has no time for poetry. Rather than guess when the machines will become sentient or when AI will replace human beings, China has focused on the automation of drudge work: inspecting parts on a factory conveyor belt, checking the bins near the coal face for foreign objects, detecting anomalies in machines, picking containers out of ships and placing them on autonomous trucks, and so forth.
China’s plan to assert leadership in the Fourth Industrial Revolution—the application of AI to production, logistics, and services—appears to be on track.
Except for large manufacturers who already maintain large-scale operations in China, American manufacturers have shown little commitment to Fourth Industrial Revolution technology. To my knowledge, the only U.S. manufacturing firms that have installed private 5G networks to support factory automation are General Motors (which made 2.3 million cars in China in 2022), Ford (which made 500,000 cars in China in 2022), and John Deere (which rolled its 70,000th Chinese-made tractor in February). These firms have joint ventures with Chinese manufacturers and can be considered auxiliaries of Chinese industry.
The trouble is that what is left of American manufacturing after the great decline of the 2000s often does not have the scale to realize the benefits of AI applications. The installation of private 5G networks does not coincide completely with AI applications; wifi and fiber optic cables can transmit information just as well in certain factory environments. But 5G has obvious advantages over cable-based communications in environments with fast-moving heavy machinery, especially in robot-intensive manufacturing, mines, ports, and warehouses.
According to a count by the European 5G Observatory, about sixty factories, ports, and airports have built private 5G networks, prominently including automakers like Volkswagen, Porsche, Saab, and Toyota. Again, most of the manufacturing and transport firms applying this Industry 4.0 technology have a major presence in China.
As a Western consumer technology, 5G has been a disappointment. As the Wall Street Journal headlined a January 2023 report: “It’s Not Just You: 5G is a Big Letdown.” With download speeds of about 150 mbps per second, moreover, American 5G networks are half as fast as China’s. And some U.S. 5G networks have higher latency than the 4G networks that preceded them, making them less useful for applications like autonomous vehicles. Reduced spending on 5G infrastructure pushed Ericsson into a loss during the second quarter of 2023.
China, by contrast, views 5G as an industrial technology, and expects 5G2B (5G to business) to drive sales. The relative stock price performance of Western vs. Chinese companies contains some forward-looking information. Huawei, the largest provider of telecom infrastructure, is a private (employee-owned company) and has no listed stock price, so no insight can be gleaned there. But China’s number two telecom company, ZTE, provides a rough proxy for Huawei. Its stock price has doubled over the past five years, while the second and third-ranked global firms, Ericsson and Nokia, have lost about 30 percent of their market value (price performance calculated in U.S. dollars). That is noteworthy considering that the broad European market rose 23 percent between July 2018 and July 2023 while the Chinese market (CSI 300) is almost unchanged. American pressure has excluded the Chinese firms from the U.S. market and many European markets as well, but the Chinese firms dominate their home market and most of the Global South.
China thus has a distinct advantage in 5G broadband, a critical element in business automation. Transmitting large amounts of data (for example, thousands of photos of a factory conveyor belt per minute or real-time video of underground mining operations) is more of a bottleneck than chip speed. Last month, China was the first country to allocate spectrum in the 6GHZ band to 5G and 6G services, to promote “global or regional division of 5G/6G spectrum resources” and provide the groundwork to “promote mobile communications and industrial developments at home.”
U.S. spectrum allocation favors wifi over mobile broadband, allocating virtually all of the 6GHz band to “unlicensed use,” that is, Wi-Fi. As the industry website Lightreading observed, “the ruling represented a win for the cable industry and other Wi-Fi proponents ranging from Apple to Cisco. But for 5G network operators – which continue to argue they don’t have enough spectrum for high-bandwidth services like fixed wireless – the FCC’s ruling came as a setback.”
In other words, U.S. policies continue to favor consumer-oriented Big Tech over industry applications.
Telecom infrastructure and related applications have also buoyed China’s exports to the Global South, which have risen 50 percent since 2019 in ASEAN, nearly 100 percent in Brazil, and 250 percent in Turkey. Broadband has a transformational impact on countries with a high proportion of informal employment. It puts payment systems onto smartphones and opens banking and credit to previously marginalized people, and provides information and sales opportunities to entrepreneurs. It reduces the cost of delivery of services, including education and healthcare, and fosters new industries.
Because of all of these efforts, China in 2023 became the world’s leader in the largest manufacturing industry, automobiles, with $3 billion in global sales. High-tech manufacturing and economies of scale are likely to increase China’s edge. In 1908, Henry Ford defined an era of mass ownership of personal cars by pricing the Model T at $800, then America’s per capita GDP. China now produces electric vehicles with adequate range and power at around $11,000, just below China’s per capita GDP. China’s cheap but full-featured electric cars may dominate the low end of Europe’s auto market. Once China’s best-selling brand, Volkswagen’s market share has fallen, with annual sales down to 3.2 million units in 2022 from 4.2 million before the coronavirus pandemic. The benefits of 5G2B and artificial intelligence are thus tangible and visible: Cheaper industrial products, more efficient ports, deployment of automated vehicles, and so forth.
Meanwhile, in the West, how LLMs will drive profitability is less clear. Generative AI may find more lucrative uses in the future, especially in the automation of software, but how the existing technology justifies the trillions of dollars of additional equity valuation inspired by ChatGPT remains something of a mystery. OpenAI’s ChatGPT model meanwhile appears to have peaked as an object of popular curiosity, with a 10 percent decline in website visits in June.
As for present usage and estimates, the picture is sanguine. An Asia Times studynoted that replacing every help desk employee in the United States with a chatbot would save a mere $1.6 billion a year, while replacing the bottom 25 percent of computer programmers by earnings would save just $2.5 billion.
Why Have U.S. Tech Sanctions Failed?
For several reasons, U.S. sanctions are ineffective in constraining AI development in China.
First, as noted, China’s home designs are competitive in industry applications, which typically require less computing power than LLMs and may already offer performance equivalent to the Nvidia and AMD offerings
Second, China’s SMIC can produce 7-nanometer chips, albeit with much higher costs and lower efficiency. It can certainly meet the requirements of China's military for 7-nanometer chips. These are probably quite small; existing military systems overwhelmingly use older chips, which are more robust and easier to harden, as the RAND Corporation explained in a 2022 study.
Third, Nvidia’s fastest AI chips are readily available in China through third-party sellers although at higher prices. Slower versions designed by Nvidia to stay within U.S. guidelines are still sold to China, although Washington reportedly may ban these as well.
Stopping Chinese firms from using American AI computing power via cloud services won’t accomplish much, according to US industry leaders. Amazon CEO Andy Jassy was asked by CNBC July 6: “One of the things the administration has floated is the idea that Chinese companies wouldn’t have access to kind of AI-grade cloud computing resources through hyper scalers, through cloud providers, like Amazon. Do you have a sense of how that would affect Amazon if Chinese companies couldn’t access AI scale computing on [Amazon Web Services]?” Jassy replied: “Well, the reality is that there are some very strong cloud providers who are Chinese cloud providers in China. So Chinese companies in China are going to have access to AI capabilities, whether they come from U.S. companies, European companies, or Chinese companies.”
Compete Seriously or Perish
U.S. limits on technology exports to China do not appear to have stopped or even slowed the rollout of the AI applications that have the greatest strategic impact. At the same time, restrictions on sales to China reduce the revenues of U.S. semiconductor companies and endanger their R&D budgets. In December 2019, the Defense Department vetoed a Trump administration plan to ban the export of high-end chips to Huawei on the grounds that the loss of Huawei as a customer would impinge on chipmakers’ ability to sustain R&D. President Donald Trump initially backed the Pentagon position, but reversed this later in 2020 after the coronavirus epidemic hit with full force.
Read more here.
BRICS multilateral security cooperation
By Global Times (edited)
The increasing importance of the BRICS amid rapidly changing geopolitics is being reflected in the grouping's role in global security. BRICS National Security Advisors are meeting in South Africa as part of the build-up to the highly anticipated summit of the bloc next month. Political and security cooperation is one of the original objectives of BRICS cooperation, and it is also one of the pillars of the current BRICS agenda. The Meeting of National Security Advisers and High Representatives on National Security serves as the main platform for the BRICS countries to discuss and carry out cooperation in the field of politics and security.
The current global security governance is undergoing systemic shocks with turbulent factors in the international situation increasing. The US is creating an atmosphere of confrontation and tension worldwide, utilizing the so-called Indo-Pacific Strategy and NATO to simultaneously encircle and contain China and Russia. Its aim is to maintain the old global order that the US monopolizes. To achieve this, the US has strengthened its various security cooperation mechanisms, coercing other countries to align with its interests. Song Zhongping, a Chinese military expert and TV commentator, told the Global Times that this approach is actually using a security mechanism to hijack the interests of others. In contrast, BRICS security cooperation emphasizes multilateral security and common security, which is greatly different from what the US advocates.
Zhu Tianxiang, director at the Center for BRICS Political and Security Studies, Institute of BRICS Studies of Sichuan International Studies University, told the Global Times that the BRICS mechanism has different ways and methods from Western-dominated mechanisms when dealing with global and regional hotspot issues. The discussion of all issues, including security issues, by the BRICS countries is based on consensus. There is no so-called dominance, and everyone is on an equal footing. The solutions to specific problems are also different from those in the West. Western countries often impose sanctions or even use military means, while under BRICS cooperation, peaceful methods such as promoting diplomacy, dialogue, negotiation and mediation are used. This has provided new ideas for regional and global security. At this meeting of BRICS National Security Advisers and High Representatives on National Security, Zhu said the Russia-Ukraine conflict is likely to be the focus of discussion, and "promoting peace and talks" will certainly take center stage.
Now, the security differences between Western countries and emerging countries, including developing ones, are widening, and ideological disputes on a global scale are intensifying. In order to make the BRICS cooperation mechanism more long-term and developmental, corresponding security mechanisms to ensure cooperation among BRICS countries must be established. This is also crucial for economic cooperation. Meanwhile, the deepening economic cooperation can in turn promote mutual trust among member states in their security cooperation.
Song believes it's difficult to maintain multilateralism and a multi-polar world through economic cooperation alone. In the field of traditional security, some countries in the West have suppressed emerging and developing countries in various ways; at the same time, in the process of economic cooperation, developing countries also face constraints in non-traditional security, such as terrorism, extreme nationalism, and separatist forces. All of these hinder economic development. This is why the BRICS should strengthen cooperation in the field of security.
The Global Security Initiative put forward by China advocates adapting to the changing international situation with a spirit of solidarity and responding to complex and intertwined security challenges with win-win thinking. It aims to eliminate the root causes of international conflicts and improve global security governance. This coincides with the multilateralism and common security pursued by the BRICS. Within the BRICS, although each country has its own national conditions, there is a broad consensus on jointly maintaining international security cooperation. Multilateralism is needed by emerging and developing countries. This is also the reason why more than 40 countries have expressed interest in joining the BRICS. It has a centripetal force, which is to promote a multi-polar world and allow emerging and developing countries to have more discourse power. Within BRICS, there is no one country that dictates and can erode the interests of other countries at will. In the early days of the BRICS, there were many voices badmouthing the prospect of the group, pointing out the different political systems, social systems, and ideologies of the member states. Zhu said although this is true, however, the way the BRICS has developed to this day, and the way economic and security cooperation has steadily advanced under the mechanism, show that those differences do not affect the unity and attractiveness of the BRICS and its role in the international system.
"This is the essence of multilateralism," said Zhu.
Read more here.
Powerplay in the Pacific
By Stephen Dziedzic and Tim Swanston (edited)
The United States is now reopening embassies throughout the Pacific, expanding its aid program, ramping up US Coastguard operations in the region, and unveiling a host of initiatives — sometimes with partners — which it says will help the region tackle its mounting list of threats, from climate change to illegal fishing.
The US also promised to triple funding for the South Pacific Tuna Treaty, which could funnel some $US600 million ($850 million) to Pacific nations over the next decade — although so far the money remains locked up in lengthy budget negotiations in a deeply polarised Congress.
The diplomatic flurry shows no sign of slowing.
This week, US Secretary of State Antony Blinken will land in Tonga to formally open a new diplomatic mission in the capital. His counterpart, US Defence Secretary Lloyd Austin, will land in Port Moresby around the same time, to discuss the implementation of a wide-ranging and contentious Defence Cooperation Agreement (DCI) that the US and Papua New Guinea signed in May.
It's not just about strategic denial. But there's no doubt that Washington has been moving with more urgency and purpose in the wake of China striking a security pact with Solomon Islands last year — a move which sent shock waves through both Washington and Canberra.
Since then, China has rapidly stepped up police cooperation with Solomon Islands, much to the unease of the West. And while Chinese development assistance to the region has fallen away, Beijing has intensified efforts to court Pacific political elites, while Chinese companies with deep networks in the region continue to win major infrastructure projects bankrolled by multinational organisations like the Asian Development Bank.
Meanwhile, Chinese diplomats in the region are also making increasingly confident claims about being an exemplar and model for Pacific development, despite Pacific leaders making it crystal clear last year that they were not ready to sign a sweeping trade and security pact with Beijing.
In May this year, China's Ambassador to Solomon Islands told the Global Times that Pacific island nations had struggled with "development stagnation" because they had adopted "Westernised" political models in the wake of colonisation.
"The great practice of Chinese modernisation abandons the old Western modernisation path and provides a new modernisation reference model for PICs, providing a Chinese solution to achieve long-term stability and eradicate extreme poverty," he said.
It's not only the United States and China, of course. A quick glance at the list of visitors to Papua New Guinea in just the last three months gives you a clear sense of just how many players are now intent on building up their political stocks in the blue Pacific — which keeps the red-carpet runners at Port Moresby's APEC terminal increasingly busy.
UK Foreign Affairs Secretary James Cleverly travelled to Papua New Guinea in April to sign a renewed Status of Forces Agreement in Port Moresby. Less than one month later, PNG also hosted Indian Prime Minister Narendra Modi and Antony Blinken, along with NZ Prime Minister Chris Hipkins and almost a dozen Pacific Island leaders.
The country backed it up again earlier this month with Indonesian President Joko Widodo. And by the end of next week, both Lloyd Austin and French President Emmanuel Macron can be added to that long catalogue. Macron's main focus will be spending time in the French territory of New Caledonia, which is grappling with complex and fraught political issues around independence and the status of its ties with Paris. But Macron will then travel on to Papua New Guinea and Vanuatu — the first time a French president has left home soil while in the region — to promote what his office has called a "French alternative" to the brewing contest between Washington and Beijing.
Meanwhile, Mr Austin will be firmly focused on defence ties and shoring up the defence cooperation — which might still face a tricky path through PNG's parliament and legal system. PNG Prime Minister James Marape has faced hurdles in selling the agreement at home, and PNG's opposition leader is seeking legal advice for a possible Supreme Court challenge.
The Lowy Institute's Mihai Sora said the DCA "came at some expense to Prime Minister Marape domestically".
"Secretary Austin will be looking to reinforce the US's interest in contributing to PNG's security needs and to increase local support for the DCA so that it passes through the Papua New Guinean system," he said.
The deal might also come at some expense to Canberra, even though it has been officially welcomed by the federal government. Mr Marape's struggle to sell the US defence agreement is also contributing to delays with Australia's proposed Bilateral Security Treaty with PNG, which was already meant to be finalised and signed.
In that way, the DCA also serves as a neat reminder that while Canberra is very glad to see Washington re-engaged in the Pacific, the two nations do not always have identical interests.
If it's approved, the agreement will firm up a possible military foothold for the United States at key bases in Papua New Guinea — although the Pentagon and Mr Marape have been at pains to stress that it does not specifically authorise a permanent US presence in the country.
"It's important to remember that the [DCA] will respect PNG sovereign decisions," a Pentagon spokesperson said this week.
"All activities must be mutually agreed upon."
But the deal will inevitably still feed into existing anxieties throughout the Pacific that strategic competition between the West and China — as well as other players — risks driving a rapid militarisation of the region.
And perhaps nowhere is that anxiety more acute than in Papua New Guinea's neighbour, Solomon Islands.
Manasseh Sogavare was in a pugnacious mood on Monday when he landed back in Honiara from a week-long trip to China.
The Solomon Islands prime minister once again berated Australia and the US for questioning his country's growing police cooperation with China, including a police "implementation plan" he signed while in Beijing.
He also angered Australian officials by accusing both Australia and New Zealand of mysteriously "delaying" direct budget support and putting the Solomon Islands budget in a precarious position — an allegation both Canberra and Wellington have denied outright.
The stoush created plenty of headlines, but a throwaway comment by the prime minister near the end of the press conference might prove to have much more consequence over the long term.
Mr Sogavare gave the clearest public indication yet that he wants to push ahead with developing an armed forces, declaring that the 1,500-strong Royal Solomon Islands Police Force was simply too small to guarantee either internal or external security for the country.
He also revealed he had "sounded out" Australia's Deputy Prime Minister, Richard Marles, about the idea during Mr Marles' visit to Honiara a few weeks ago.
The timing was probably no accident. Mr Sogavare has mused in the past about getting China to help him set up a military, and Australia will be desperate to ensure that does not happen.
When he was asked about Mr Sogavare's comments a few days later, Mr Marles declared that Australia would be "very keen" to help Solomon Islands if it decided to press ahead with the plan.
That's likely to take Australia into a very fraught space.
Any move to set up a standing Solomon Islands army would likely prove deeply contentious in the Pacific Island which has been repeatedly roiled by ethnic strife and violence, and which already lacks the money to properly fund health and education services.
Some civil society groups and Pacific officials have already expressed deep concern about the idea in private.
It's likely to split opinion in the Canberra bureaucracy as well.
Anna Powles from Massey University said Mr Marles was probably intent on both denying China a role in any military set-up in Solomon Islands and "managing alliance expectations with the US".
"Recent talk of standing up militaries in Solomon Islands and Vanuatu has been doing the rounds for months and has intensified over the past year with US and Chinese security assistance on offer in the region," she wrote on Twitter.
"Canberra will need to tread very carefully."
But the episode also shows how Mr Sogavare — for all his bluster and braggadocio — has proven very adept at leveraging Australia's anxiety about China to get what he wants. Whether that chimes with what people in Solomon Islands want and need is a separate question. And the risk is that as the geopolitical contest intensifies, that distinction blurs or disappears entirely. And even Pacific leaders who are also skilfully navigating the same shoals with nothing but the interests of their people in mind face growing risks as global tensions rise.
Read more here.