In Other News: US-China Bilateral Meeting, Suez Canal Traffic & More – March 26, 2021

March 26, 2021

A contentious start to a bilateral U.S.-China meeting in Alaska, in which senior diplomats from both sides exchanged heated words in full view of the press, has sparked concerns that Washington and Beijing are heading inexorably toward conflict. Just days later, U.S. Secretary of State Antony Blinken called on NATO to join U.S. efforts to counter Beijing in an address to the organization in Brussels. These outward-facing statements suggest a new and more confrontational U.S. approach to China, one that emphasizes issues such as human rights (specifically as pertain to China’s Muslim Uighur minority) and Beijing’s continual buying of Iranian and Venezuelan oil in violation of U.S. sanctions. U.S. officials have reported that Beijing is actually upping oil purchases from the two countries and is expected to take around 1 million barrels per day from Iran alone this month. These are worrying signs of more trouble to come. At this stage, the U.S. and Chinese economies remain inextricably linked – the U.S. is the world’s largest buyer of Chinese exports and the source of specific goods with strategic value to China, namely products like natural gas and semiconductor technology. That link will likely stave off a bigger confrontation in the near term. However, over a longer time horizon, both countries are taking steps to reduce their reliance on the other, which may offer more wiggle room for riskier behavior, such as confrontation over Taiwan or the South China Sea. Neither the U.S. nor China has an interest in such a confrontation, which would undermine global stability, as well as the benefits of the trade relationship. That said, U.S. efforts to build a coalition against Chinese aggression are a prudent bit of contingency planning that will hopefully ensure that if Beijing crosses a red line, it does so at very high cost.

Suez Canal traffic ground to a halt this week when poor visibility caused by a sandstorm and high winds caused a 200,000-ton container ship to get stuck sideways in the channel, highlighting the risk of chokepoints to the smooth functioning of global trade. Roughly 12% of all global trade (including around a million barrels a day of oil and 8% of global liquefied natural gas shipping) transits the 120-mile canal, and the blockage has delayed passage of more than 100 ships. This in turn is affecting shipping times, extending them in some cases by more than a day, with knock-on effects in availability of goods as basic as food, clothing, and furniture. Threat analysis of chokepoints like the Suez Canal and the Strait of Hormuz often focuses on the potential for military action – around a fifth of the world’s oil flows through the Strait of Hormuz, which sits at the southern coast of Iran, whose regime has frequently threatened to block it amid disputes with oil-importing countries (including as the U.S.). However, this is the second time this year that weather has caused a major disruption to activity, with the first being a freeze in Texas that knocked out power to thousands for several days. While cyber and military threats to the functioning of critical infrastructure dominate headlines, everyday occurrences can prove just as disruptive if steps are not taken to develop plans and systems to ensure continuous, reliable operations under a host of circumstances. As we shift our national security focus to efforts to penetrate the cyber systems underpinning our critical infrastructure, we must also maintain a strong focus on ensuring physical system reliability, wide-ranging contingency planning, and redundancy.

North Korea launched four short-range ballistic missiles into the Sea of Japan this week, in another provocation from Pyongyang. Japanese Prime Minister Yoshihide Suga issued a statement condemning the action this week and noting that it “threatens the peace and security of Japan and the region.” The missiles landed in the sea between North Korea and Japan and were the first tests since March 2020 by the North Koreans and considered to be smaller than previous tests. Observers believe that North Korea is looking for concessions from the United States – as well as attention – while also fueling tensions ahead of the Tokyo Olympics scheduled for this summer in Japan. North Korea launched the missile tests this week after refusing recent overtures for dialogue with the Biden administration and citing “U.S. hostility.” It is noted that North Korea has a history of missile launches at the start of a new administration in the United States and South Korea. The international community condemned the action by North Korea as a violation of UN Security Council resolutions, but it is unclear what more the United States, South Korea, or Japan can do without assistance from China.