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Is China's "Carrier-Killer" Really a Threat to the U.S. Navy?

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It seems tomorrow will be a big day for China-military watchers around the world: the mighty DF-21D, or “carrier-killer” anti-ship ballistic missile (ASBM) will likely be one of the features of Beijing’s end of World War II celebrations. But how much should America or anyone else in Asia fear this supposed killer of carriers?

The “carrier-killer” has been a favorite topic of mine for some time now. The weapons are launched from a mobile truck-mounted launcher into the atmosphere, with most likely over-the-horizon radar, satellite tracking and possibly unmanned aerial vehicles each providing guidance to a target in the open oceans. It also incorporates a maneuverable warhead, or MaRV, to help find its target.

The DF-21D would be instrumental in striking a vessel in the open ocean or denying access to a potential opponent in transiting to a conflict zone, like in the East or South China Seas. An August 2011 report by Taiwan’s Ministry of National Defense warned that: “A small quantity of the missiles [was] produced and deployed in 2010.”

When looking at this weapon, there are really two basic questions I have been asking for years: How capable is it? And if capable, can U.S. Navy vessels defend against it?

Capabilities:

First, to its capabilities. According to the most-recent and up-to-date open-source materials I can find, the weapon indeed has been tested, however, never against an ocean-going, noncooperative target. As frequent TNI contributor Andrew Erickson pointed out in his 2013 study of the DF-21D (the best open-source resource on the “carrier-killer”  to date):

“Additional challenges and tests remain before the DF-21D reaches its full potential; however, senior U.S. and Taiwan officials in the last two years have confirmed separately that the ASBM is in the field. Additionally, the basic support infrastructure is already sufficient to provide basic targeting capabilities against U.S. aircraft carriers operating in the Western Pacific (if countermeasures are not considered).”

As Erickson also noted, from the same text:

“The ASBM’s physical threat to U.S. Navy ships will be determined by the development of associated information processing systems and capabilities. This is part of a larger analytical challenge in which Chinese “hardware” continues to improve dramatically, but the caliber of the “software” supporting and connecting it remains uncertain and untested in war. The missile components of the DF-21D already are proven through multiple tests, but China’s ability to use the missile against a moving target operating in the open ocean remains unproven. The supporting command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR) technologies probably still lag behind the requirement to identify and track a U.S. aircraft carrier in real time under wartime conditions. Improving C4ISR capabilities, however, is a high priority in China’s military modernization program. U.S. countermeasures are another matter entirely: there is every reason to believe that they are already formidable.”

With the above analysis done in 2013, we have every reason to assume that China has worked hard to perfect this weapon. In multiple conversations I have had with U.S. defense officials over the last year, most are working under the assumption that the DF-21D would in wartime conditions be able to at least initially target an ocean-going vessel and track such a vessel through its course to the target. Keeping in mind that Beijing would not fire just one of these missiles in combat—​and would likely attack its target with other types of missiles in a saturation-style strike—​there is certainly reason for concern. 

Can America Defend Against the DF-21D?

Assuming the DF-21D is ready for battle, can America defend against China’s mighty missile?

While opinions are clearly mixed—in speaking to many sources over the last several years on this topic—it seems clear there is great nervousness in U.S. defense circles. However, as time has passed, initial fears have turned towards a more optimistic assessment.

Back in 2012 when I spoke to noted defense expert Roger Cliff, he explained that:

“[O]ver-the-horizon radars used to detect ships can be jammed, spoofed, or destroyed; smoke and other obscurants can be deployed when an imagery satellite, which follows a predictable orbit, is passing over a formation of ships; the mid-course updates can be jammed; and when the missile locks on to the target its seeker can be jammed or spoofed.”

He continues, noting an actual kinetic strike on the missile in flight might be the hardest part:

“The SM-3 has an exoatmospheric kill vehicle, meaning that it can only intercept the missile during mid-course, when it’s traveling through space, so an Aegis ship escorting the target would have to fire its SM-3 almost immediately in order to intercept the missile before it reentered the atmosphere, or else there would have to be an Aegis ship positioned right under the flight path of the missile. The DF-21D may be equipped with decoys that are deployed in mid-course, making the SM-3’s job harder. U.S. Aegis ships are also equipped with the SM-2 Block 4 missile, which is capable of intercepting missiles within the atmosphere, but the DF-21D warhead will be performing some high-G maneuvers, which may make it impossible for the SM-2 Block 4 to successfully intercept it.

How all this would work in reality is impossible to know in advance. Even after China has tested its missile against an actual ship, it won’t have tested it against one employing the full range of countermeasures that a U.S. ship would throw at it and, as you say, the U.S. Navy will never have tested its defenses against such an attack. Somebody is likely to be surprised and disappointed, but there is no way of knowing who.”

Indeed, as Cliff points out, U.S. carriers do have defenses, albeit against more traditional threats. However, it is important that we keep in mind that American carriers have been a target going back decades, and their defense has been something U.S. naval planners have been working on for many years.

Perhaps my favorite response to the DF-21D challenge is from the widely read blog Information Dissemination, that explains:

“Warships will continue to face new and challenging threats. If the past 125 years is a guide, naval weapon designers, and operational and tactical theorists will be ready to develop systems and operational and tactical measures to counter them. The DF-21D is a new threat, but it is not likely to be an operational and tactical surprise as were the Japanese A6M Zero fighter and the 24 cm Type 93 Long Lance surface torpedo to the U.S. Navy at the outset of World War 2. Open source reporting to date indicate the DF-21D has been tested against fixed land targets but not against a large moving target at sea. The U.S. Navy on the other hand has been working to counter the ballistic missile threat for over 20 years. There is certainly time to develop an effective counter to the DF-21D.”  

China’s “carrier-killer,” just like many of Beijing’s weapons systems must be thought of as part of a larger anti-access strategy. If a conflict with Washington or another great power ever occurred, China is betting on using such weapons platforms to make any sort of intervention in the Taiwan strait, East or South China Seas as painful as possible. With that said, there is much we don’t know about the DF-21D, or how well it would work in an actual shooting war.

In the end, the weapon might not be the great “game-changer” that many point it out to be, but a great complicator. Let’s just hope the only times we see this missile are on a parade route.  

Harry J. Kazianis serves as Executive Editor of The National Interest and a Senior Fellow for Defense Policy at the Center for the National Interest. He is the co-author and editor of the recent Center for the National Interest report: Tackling Asia’s Greatest Challenges - A U.S. Japan-Vietnam Trilateral Report. You can follow him on Twitter: @grecianformula and on Linkedin.

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This Is Why Ties Between South Korea and China are Growing Stronger

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Many Western observers are likely to raise their eyebrows tomorrow when they see that South Korea’s President Park Geun-hye is standing alongside Xi Jinping and Vladimir Putin on the reviewing stand at Tiananmen Square to mark China’s newly established holiday commemorating the end of World War II (WWII). As China’s next-door neighbor and a military ally of the United States, Park may seem to be a big catch for Beijing, which has been lobbying hard for the attendance of Park and other leaders of countries that experienced Japanese aggression during WWII. Some critics have already suggested that Park’s visit is evidence that South Korea cannot resist the growing centripetal pull of Beijing’s orbit. But Park’s presence alongside Xi is less about Park being snared by Beijing than it is about Park pressing to consolidate China’s support for Korean unification in the context of unprecedently weak ties between Beijing and Pyongyang.

Despite marathon inter-Korean negotiations to pull back from an escalating military conflict less than two weeks ago, Park’s policy of Trustpolitik has hardly engendered much trust in the inter-Korean relationship. Red Cross talks scheduled for next week may break down, if they are held at all. Inter-Korean family reunions could be upstaged by a future North Korean provocation, in the form of a missile launch or a nuclear test.

But one striking outcome of the inter-Korean talks is that North Korea under Kim Jong-un has now logged far more intensive high-level interaction with Seoul than with Beijing. This marks a major change from North Korea’s diplomatic strategy under Kim Jong-il, who assiduously cultivated relations with Beijing as a counter-weight to dependency on Seoul. Even prior to the historic June 2000 inter-Korean summit, Kim Jong-il made a pilgrimage to Beijing before hosting Kim Dae-jung in Pyongyang.

Xi Jinping has made his displeasure with Kim Jong-un known by visiting Seoul but not yet Pyongyang, but he has not yet embraced strategic coordination with Seoul at the expense of Pyongyang, at least not at the level that South Korea has always sought to achieve. One of South Korea’s main strategic rationales for pursuing normalization of diplomatic relations with Beijing in 1992 was that a stronger relationship with Beijing would complement South Korean efforts to improve relations with Pyongyang, a policy formulated by Park’s predecessor Roh Tae-woo known as Nordpolitik. (Nordpolitik, by name if not in spirit, provides a clear precedent for many elements of Park’s Trustpolitik.)

From this perspective, Beijing’s wooing of Park appears to have been tailor-made opportunity for South Korea to pursue its longstanding objectives. Taking advantage of a sumptuous welcome, Park expressed gratitude for Beijing’s “constructive role in defusing [recent] tensions on the Korean peninsula” in a banquet with Xi on the eve of the parade, and joined with him to urge North Korea to refrain from renewing tensions through nuclear and missile provocations and to return to the six-party denuclearization talks.

Sino-ROK normalization has brought enormous economic and trade benefits to both countries, but over two decades of ever-closer “partnership” between Beijing and Seoul, South Korea has never gained the level of strategic support from Beijing that it has desired as leverage in dealing with North Korea. To fill the space left by Kim Jong-un’s absence is, for South Korea, an important step toward gaining Beijing’s blessing for the holy grail of Korean unification that Seoul has sought for over two decades. In this respect, Park’s presence may be perceived less as a big catch for Xi than a lure through which Seoul hopes to finally hook Beijing.

This piece first appeared courtesy of CFR and Forbes. 

http://blogs.cfr.org/asia/2015/09/02/parks-decision-to-join-xi-jinpings-world-war-ii-commemoration/Image: Creative Commons 2.0. 

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America's Nightmare: The Soviet Union's (Almost) Super Aircraft Carrier

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Had she ever sailed, the Soviet supercarrier Ulyanovsk would have been a naval behemoth more than 1,000 feet long, with an 85,000-ton displacement and enough storage to carry an air group of up to 70 fixed and rotary wing aircraft.

With a nuclear-powered engine—and working in conjunction with other Soviet surface warfare vessels and submarines—the supercarrier would have steamed through the oceans with a purpose.

Namely, to keep the U.S. Navy away from the Motherland’s shores.

But the Ulyanovsk is a tantalizing “almost” of history. Moscow never finished the project, because it ran out of money. As the Cold War ended, Russia plunged into years of economic hardship that made building new ships impossible.

The Ulyanovsk died in the scrap yards in 1992. But now the Kremlin is spending billions of rubles modernizing its military—and wants a new supercarrier to rival the United States.

Big Goals, Bad Timing:

Builders laid the keel for the Ulyanovsk in 1988, just as the Soviet empire began to break apart. The ship was such a large project that builders wouldn’t have finished her until the mid ’90s.

Construction took place at the Black Sea Shipyard in Ukraine—often called Nikolayev South Shipyard 444. It’s an old facility, dating back to the 18th century when Prince Grigory Potemkin signed orders in 1789 authorizing new docks to repair Russian naval vessels damaged during the Russo-Turkish War.

The famous Russian battleship Potemkin—scene of the famous 1905 naval mutiny and the subject of Sergei Eisenstein’s classic film—launched from the same shipyard.

Early in the Soviet period, the shipyard constructed battleships. During the ’60s and ’70s, workers built Moskva-class helicopter carriers and Kiev-class carriers at South Shipyard 444.

But none of these ships came close to the Ulyanovsk.

Named after Vladimir Lenin’s hometown, everything about the supercarrier was huge, even by Russian standards.

Her propulsion system would have comprised four KN-3 nuclear reactors, a model originally used to power enormous Kirov-class battlecruisers, such as the heavy guided-missile cruiser FrunzeUlyanovsk could have easily reached 30 knots while under way.

The carrier would have carried at least 44 fighters on board—a combination of Su-33 and MiG-29 attack jets configured for carrier operations. Ulyanovsk’s two steam catapults, ski-jump and four sets of arresting cables would have created a bustling flight deck.

The ship’s designers planned three elevators—each capable of carrying 50 tons—to move aircraft to and from the cavernous hanger deck. Plus, the carrier would have had helicopters for search-and-rescue work and anti-submarine warfare missions.

The Soviets planned a complement of 3,400 sailors—roughly half of the crew aboard an American Nimitz-class carrier, but sizable compared to other Soviet vessels.

Why Build It?:

That the Soviets even wanted a supercarrier was remarkable. The massive ships have never figured significantly in the Soviet or Russian naval inventory.

Currently, Russia has only one carrier—the significantly smaller Admiral Kuznetsovlaunched in 1985. Multiple mechanical problems have plagued the ship ever since, and she doesn’t go anywhere without an accompanying tug vessel.

But there was a logic behind the Ulyanovsk. James Holmes, a professor of strategy at the U.S. Naval War College, explained that the Soviets wanted to create a defensive “blue belt” in their offshore waters.

The “blue belt” was a combination of land, sea and air power that would work together to thwart U.S. carrier and submarine forces. Russia could defend the homeland while providing safe patrol areas for ballistic-missile subs performing nuclear deterrent missions.

“Those ‘boomers’ need to disappear for weeks at a time into safe depths,” Holmes said. “Soviet supercarriers could have helped out with the air- and surface-warfare components of a blue-belt defense, chasing off U.S. Navy task forces that steamed into Eurasian waters.”

But pride and national honor also prompted the decision to build the Ulyanovsk.

“There’s also the keeping-up-with-the-Joneses aspect to carrier development,” Holmes continued. “If the U.S. is the world superpower and the U.S.S.R. wants to keep pace, then Soviet leaders want the same toys to demonstrate that they’re keeping pace. It sounds childish, but there are basic human motives at work here.”

“It’s not all about the roles and missions carriers execute,” he said. “It’s about national destiny and dignity.”

But by the mid ’90s, Russian naval vessels were rusting at their moorings, sailors served without pay and the United States stepped in to help deactivate Soviet-era nuclear submarines and provide security for the Russian nuclear arsenal.

“The Soviets weren’t dumb,” Holmes explained. “They wouldn’t spend themselves into oblivion to keep up with the Joneses, and as a great land power, they obviously had enormous claims on their resources to fund the army and air force. There was only so much to go around for ‘luxury fleet’ projects.”

“Bottom line, if you can’t afford to keep the existing fleet at sea, where are you going to get the money to complete your first nuclear-powered supercarrier, a vessel that will demand even more manpower that you can’t afford?”

Moscow’s Military Rises Again…or Not?:

But Russia now seems willing to revive its supercarrier dream. “The navy will have an aircraft carrier,” Russian navy chief Adm. Viktor Chirkov recently said. “The research companies are working on it.”

Other Russian media reports indicate that designers are in the early phases of planning a new carrier class that would be slightly larger than the Nimitz class—and capable of holding an air wing of 100 planes.

But economic problems — including a looming recession — and the expense of maintaining and modernizing the rest of the nation’s aging fleet makes it doubtful whether Russia can build such an expensive ship.

Holmes estimates the cost of a new Russian carrier could be as much as $8.5 billion and take up to seven years to complete. But the professor also said the Russian quest for a carrier is serious.

Great nations have carriers, Russia considers itself a great nation, and therefore the ship would be a symbol of national revival and destiny. In other words, a new carrier would be one more reason to forget the bad old days when the Soviet Union disintegrated.

“We think of the Soviet Union as a dreary place, but Russians also remember that it wielded great power,” Holmes continued. “That’s a potent memory.”

For Moscow’s navy, the failure of the Ulyanovsk project is one of the biggest, baddest memories of them all.

This piece first appeared in WarIsBoring here

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Would America Lose the Great Naval War of 2020 to China?

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Back in the Winter 2010 edition of Orbis, the always smart James Kraska, at the time an investigator at the Woods Hole Oceanographic Institution, presented his readers with a terrifying prospect: the possibility that China would be able sink a U.S. Aircraft Carriervirtually at will. In professional publications, the possibility had been raised before. However, thanks to various mentions in more-mainstream media, the rise of China’s military mightand specifically advanced missile technologywould soon become a dominant topic of conversation in national-security circles around the globe.

America now faces a very real threat to its ability to project power in the Asia-Pacific; and it’s a problemconsidering how fast Beijing’s missile technology is progressingthat will likely only get worse as the years go by.

A Frightening Scenario

The scenario Kraska presents in his article “How the United States Lost the Naval War of 2015,” which I have discussed at length before, is quite interesting to say the least:

“George Washington was conducting routine patrols off the coast of China to send a signal of U.S. resolve. China responded with a signal of its own—sinking the massive ship. The ship broke in two and sank in twenty minutes. The Chinese medium-range ballistic missile had a penetrator warhead that drilled through all fourteen decks of the ship and punched a cavernous hole measuring twenty-feet wide from the flat-top landing deck through to the bottom of the hull. Ammunition stores ignited secondary explosions. Two million gallons of JP-5 jet fuel poured into the sea. The attack was calamitous and damage control was pointless.”

China’s pre-planned reaction, while cleaver but certainly far-fetched, is too long to excerpt for limitations of time and space. And while there is a great deal of substance and information worth reading in the article’s full text, it is what happens next that is even more interesting:

“A month would pass before the United States was able to position more than three aircraft carriers in the region, and then what?”

To be fair, the actual article does not depict a “naval war” in the sense of ship-on-ship engagementsbut more a Chinese attack and carefully crafted response that gives Beijing deniability. In such a scenario, as presented by the author, U.S. allies or partners in the region would have a hard time coming to Washington’s aid. Nevertheless, Kraska presents us with a unique question to ponder: How should America respond to the growing anti-access/area-denial (A2/AD) challenge presented by China, Iran and now Russia?

Now might just be the time to think of what a real U.S.-China “naval war” would look like in the near futureand if Washington has truly worked to preserve its power-projection capabilities in Asia and beyond over the last several years. Would the United States fare any better against China looking out five years from now (just as Kraska did) in 2020?

Over the next several weeks, I will lay out various different thoughts on this issue. The one theme you will see throughout this occasional series: America is presented with quite a challenge when it comes to Chinese military might and specifically A2/AD challenges. However, today’s post focuses on the positive.

The Good News: America’s War Fighters Understand the Problem

While Kraska’s article certainly introduced this issue to a much broader audience, America’s armed forces had been aware of the problem for some time. Over the last ten years (or possibly more), the U.S. military has been working to ensure that various types of anti-access technologiesnot just the much-discussed DF-21D carrier-killer missile Kraska depictswon’t limit or altogether negate American power-projection capabilities across all domains of possible conflict, kinetic or otherwise.

Enter Air-Sea Battle/JAM-GC

Take, for example, the operational concept formerly known as Air-Sea Battle, now known as JAM-GC. The Pentagon clearly sees what the future may hold, where the fog of war is back with a vengeance, thanks to A2/AD.

In a recent January article for TNI that lays out the founding vision of JAM-GC, members of the Air-Sea Battle Office and Joint Staff explained that “based on recent assessments, current doctrinal command-and-control methodologies will likely be inadequate to address A2/AD environments where beyond-line-of-sight communications and other connectivity between units can be disrupted or denied by an adversary.” Things seem to get worse, as the authors articulate that “U.S. and allied forces must be able to operate with only localized domain control,” a scary thought to say the least. They go on to note that “a joint or combined force may not be able to achieve either theater-wide domain superiority or an enduring and constant superiority, but that it can achieve operational objectives with control that is limited in time or space.” It seems we have come a long way from the days when American forces could automatically count on cross-domain superiority against any military on the planet.

While we might not have all the details yet, the Pentagon’s successor to the Air-Sea Battle concept seems to be quite bold in its approach to the problem of retaining U.S. power-projection capabilities in an era of denied access to possibly large stretches of the global commons. JAM-GC, at least as of January of this year,

“will include capabilities to: deploy into a theater of operation to a position where Joint Forces can be employed effectively, and with acceptable levels of risk; effectively command and control Joint Forces in a heavily disrupted electromagnetic-spectrum environment; deter an adversary from proscribed action through demonstration of capability, presence and will; conduct operational maneuver (movement in combination with fires) in an operational area with acceptable levels of risk; project power as needed to achieve objectives; and sustain and supply operations in the face of determined opposition.”

Clearly, Pentagon planners understand the problem on the most intimate of levels and are working on ways to ensure America retains its power-projection capabilities in the future. U.S. military planners have been hard at work developing future weapons platforms, operational know-how and eventual strategies to combat Chinese or any other nation’s A2/AD capabilities. You can’t solve a problem unless you understand itand America’s military clearly understands this one.

Sadly, things only get uglier from here. More to come...

Harry J. Kazianis serves as Executive Editor of The National Interest and a Senior Fellow for Defense Policy at the Center for the National Interest. He is the co-author and editor of the recent Center for the National Interest report: Tackling Asia’s Greatest Challenges - A U.S. Japan-Vietnam Trilateral Report. You can follow him on Twitter: @grecianformula and on Linkedin.

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Beware: China Has Opened an Economic 'Pandora's Box'

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There's a rule in economics called Goodhart's law: when a measure becomes a target, it ceases to be a useful measure. If a government chases a particular economic variable, then it becomes influenced by policy, and so loses its meaningfulness as an input. 'Information value' is lost in the interference. Because managing economies is hard and good information is scarce, that's a big problem.

The last few tumultuous weeks of action in Chinese financial markets shows Beijing struggling with Goodhart's law. 

First, state institutions are actively supporting equities, reportedly on Chairman Xi’s personal order to push prices up. Second, after long controlling the exchange rate, policy-makers briefly let it go, only to rush back in days later to fix it again. These panicked interventions have cost Beijing dearly in both money and credibility and jeopardies its entire reform process.

About a year ago, it became apparent that policymakers were aiming to boost the stock market, presumably to raise consumer confidence and hopefully some new equity along the way. It's understandable that leaders viewed share prices as a signal of their good stewardship. But by manipulating those prices—either through boosterish or direct intervention—they distorted the rationality of the market.

That bubble then popped, wiping out U.S.$4-5 trillion, triggering a 'national team rescue fund' and a witch-hunt. Some academics think that until the politicians started tampering with it, China's equity market was doing okay interpreting information from the real economy (inputs) and converting those signals to sensible prices (outputs). They recommend the control freaks step away and let the market do its magic.

That is easier said than done. The market is a capricious master. When Beijing devalued its currency two weeks ago, ostensibly in response to supply and demand, the reaction was so violent that the central bank was forced back in to support it. They've opened Pandora's box. As FT's Asia bureau chief David Pilling marvels: “In order to convince markets the bank was seeking a market-friendly exchange rate regime it has been obliged to intervene on a massive scale. How perverse is that?” The reason Beijing is 'tied in knots' is because it is vainly trying to defy Goodhart's law: targeting prices while trying to persuade market agents that those prices are right. According to Pilling, that's what China's leadership means by 'a decisive role' for markets alongside a 'dominant role' for the state.

These recent episodes tell us a lot about the reform challenges ahead for China's policy-making elites. They want the discipline of capitalism, to avoid the imbalances that systematic targeting causes: huge piles of wasted or misallocated money. There's nothing inherently wrong with targeting outcomes. Many governments target inflation using (inter alia) inflation itself as a signal. That's just a simple feedback mechanism: inflation as both an input and an output. Yet even something as straightforward as inflation is actually hard to measure.

It's telling that China's national statistics bureau keeps the exact constituents of its inflation basket a state secret. So we have to take the bureau at its word. Likewise, it confidently churns out curiously smooth GDP data, which never fall short. China's aggregate output must be a bogglingly complex thing, embedding a vast amount of private information. Yet the bureau knows it for certain just days after the quarter's end. How can this be? Essentially, Beijing can 'target' these CPI and GDP results because they are unchallenged: they are whatever Beijing says they are. Others don't get a vote.

But others do get to vote in the contested space of financial markets, where no single actor has a monopoly over information and the clearing price is continuously reached by consensus. Social systems like markets have to incorporate the perceptions, expectations and actions of millions of 'voters.' In the case of the foreign exchange market, they might be literally voting with their feet. Financial markets are a popularity contest, like elections are. Ruling elites may dislike the result. But compulsion (a.k.a. 'financial repression') is a resentful substitute. 

China's not collapsing. Most people on the street care about more mundane matters than the markets, and domestic press coverage has been silenced. Xinhua blames the West for the market turmoil, and the yuan devaluation probably was forced by external events like oil, Fed signaling and competitor devaluations.  Foreign commentators criticize Chinese actions as non-transparent or 'clueless'. But all the complaining overlooks one simple reality: a market-driven model will mean a huge decline in Beijing's control over its own economy.

China reached middle-income status with the central authorities determining the most critical variables in the economy while letting private markets prosper in the gaps. Now on the brink of liberalizing the big stuff like interest rates and currency—possibly even relinquishing controls over cross-border money flows—they are flinching.

Previously they possessed almighty powers to establish economic facts without heed for others' opinions. They commanded the public media narrative and always had the casting vote. It's said that the first casualty of war is the truth. Their 'war on the market' will destroy precious sources of independent economic information. Their latest financial smash-up highlights Goodhart's paradox: by 'saving' the market they risk burning it down.

This piece first appeared in the Lowy Interpreter here

Image: Creative Commons/Flickr. 

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