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+title : France Strategic Review 2022
+author: SGDSN
+date  : 2022-11-07 12:00:00 +0800
+image : https://i.imgur.com/Ypnu8Rt.jpg
+#image_caption: ""
+description: ""
+excerpt_separator: <excerpt/>
+---
+
+_The last few years have brought tragedy back into our lives and questioned the destiny of our nation._ <excerpt/> _Exacerbated revisionist ambitions, uninhibited opportunism, the health and climate crises and the return of high-intensity warfare on European soil remind us of the profound interdependence between the national and international scenes, in the food, economic and energy fields. The question of our sovereignty and resilience in an interdependent world takes on a new twist._
+
+_Since 2017, France has chosen to reinvest in its armies, to deploy a French and European strategy of sovereignty in the face of an upheaval in global balances. The last two years have accelerated and intensified the transformations._
+
+_The fracturing of the world order brings with it challenges and risks that we must address if we are to retain our freedom. Faced with this phenomenon of globalised hybrid warfare, I therefore wanted a national approach in continuity with and in addition to the European Union’s strategic compass adopted under the French Presidency, and the NATO strategic concept launched at our request in 2019, which was also adopted this year._
+
+_Our findings and conclusions from 2017 remain relevant. We were not mistaken, so there is continuity in our vision, but continuity does not mean inertia in the face of an history that is hardening and accelerating. The time has come for a more comprehensive mobilisation to better equip us in all respects for the historic challenges of a world where strategic competition and confrontation are merging. It is a question of refining our analyses in order to draw operative conclusions._
+
+_By 2030, I want France to have consolidated its role as a balancing, united, radiant, influential power, a driving force for European autonomy and one that assumes its responsibilities by contributing, as a reliable and supportive partner, to the preservation of multilateral mechanisms based on international law._
+
+_The conclusions of the National Strategic Review make it possible to increase the independence and strength of our Nation in the new strategic context in which we live._
+
+> #### Emmanuel MACRON
+
+
+## Strategic Analysis
+
+> ### Assessment of the strategic environment
+
+1) Russia’s invasion of Ukraine on 24 February 2022 represents a strategic shift. On the one hand, combined with other structural developments, it confirms the observation of changes in the threat assessment described in the 2017 national defence and security strategic review, updated in 2021. On the other, it calls for an adaptation of our strategic response to build up our moral strength and resilience, consolidate our alliances and accelerate the modernisation of our defence mechanisms.
+
+2) Confirmation. As described in the 2017 strategic review, increased strategic competition, the weakening of the tools of the collective security architecture, the effects of intimidation or aggressive strategies, combining military and non-military actions, manipulation of information, and even nuclear threats for the purpose of intimidation, have become apparent to the world, and particularly to our fellow citizens. The disinhibition of global and regional powers pursuing revisionist agendas and opportunistic military policies is combined with a growing trend towards isolationism or identity-based withdrawal. In addition, the consequences of proliferation, technological or otherwise, and the persistence of the terrorist threat also remain prevalent. Other major global challenges likely to cause significant imbalance must be added to this picture, such as the impact of climate change: access to water, food insecurity, migration, demography, pandemics, etc.
+
+3) This observation requires us to rapidly adapt our global response, to accelerate our efforts to promote the emergence of a common and shared conception of European defence, as well as of its strategic autonomy, to modernise our national defence mechanisms, and to boost our moral strength, resilience and alliances. The war in Ukraine further justifies the decision of the President of France, made in 2017, to modernise our defence mechanisms.
+
+4) Consolidation. We must continue the efforts made while also accelerating, adapting and completing our strategic posture in the face of threats that are changing in pace, nature and space. Without replacing terrorism or crisis-management threats, these threats are part of a framework that is increasingly marked by the high intensity of potential confrontation between conventional forces and so-called “hybrid” (cyber, digital and space attacks) or — access denial strategies that challenge our interests (exploitation of the vulnerabilities of logistics flows or infrastructure, air and sea spaces).
+
+5) By strengthening its resilience, by giving itself the means to move towards a war economy, by adapting the areas in which it is present according to its strategic interests and by pivoting towards conflict in new areas and of high intensity, France takes a global approach to entirely fulfil its role as a balancing power and to promote a stable international order based on the respect of the law and on multilateralism. It also intends to support the strengthening of the sovereignty of its partners in order to enhance the stability and security of the regions concerned.
+
+6) This observation makes it all the more necessary to pursue our efforts to promote the emergence and implementation of a common and shared conception of European defence, as well as of its strategic autonomy, complementary to our active participation within the North Atlantic Treaty Organisation (NATO) and our various partnerships, while guarding against the side effects of the sometimes changing strategic or geographical priorities of these allies.
+
+7) Objectives. While they do not call into question the strategic analysis that has prevailed since 2017, the acceleration of the overall deterioration of our environment and the war in Ukraine nevertheless justify a reassessment of the current military programming law based adjusted and structuring strategic objectives (SO) described in this national strategic review.
+
+8) First, the fundamentals remain: France is and will remain a power with a robust and credible nuclear deterrent [SO no. 1], a structural asset for strategic dialogue and for the protection of our vital interests.
+
+9) At the other end of the spectrum, what sustains our model and gives it credibility is our moral strength: that of the French people, namely, that of a united and resilient France [SO no. 2], that of an economy capable of turning itself into a war economy [SO no. 3], that of leading cyber resilience [SO no. 4], which are the conditions that underpin national sovereignty.
+
+10) However, our weight in the world cannot be based on the principle of sovereignty alone. The principle of solidarity is essential, all the more so in a deteriorated context. France wants to be an exemplary and demanding ally within the Euro-Atlantic area [SO no. 5] while also being one of the driving forces for European strategic autonomy [SO no. 6] and a reliable partner in its diplomatic defence relations and, a credible provider of security [SO no. 7].
+
+11) Influence has been given a strategic function. This new function, now an essential part of the expression of power, is a key element of our ability to promote France’s interests and counter the actions of our competitors across the entire spectrum of hybridity.
+
+12) Supporting deterrence and backed by our moral strength, in support of our alliances and partnerships, our military capabilities enable us to have an operational impact that benefits our defence. Our military capabilities are based on sovereign capabilities, autonomy of assessment and appreciation — an essential step that gives meaning to acts and intentions —, anticipation and decision-making [SO no. 8], a willingness and ability to act in hybrid fields in the face of increasingly aggressive strategies and the will to bypass our competitors [SO no. 9], as well as a proven ability to conduct high-intensity military operations in extensive areas of conflict [SO no. 10].
+
+13) Perspectives. The strategic objectives thus described serve to structure a project, both political and military, for the development of the army model which will form part of the future programming law.
+
+14) This national strategic review explains the underlying factors that guide the work on reassessing the military programming law that is currently in progress. It offers an action-oriented consideration of the changes necessary in terms of, for example, moral strength, the resilience of the Nation through National Service (SNU), the war economy and with regard to the future armed forces model. Finally, it enables the principles on which these changes will be transcribed into the next military programming law (2024-2030) to be established.
+
+
+### 1. A WORLD OF RENEWED TENSION
+
+#### 1.1 FROM STRATEGIC COMPETITION TO STRATEGIC CONFRONTATION
+
+15) Identified in the 2017 national defence and security strategic review and then in the 2021 strategic update as a long-term trend, the renewal of the phenomenon of strategic competition is now taking place at both a global and a regional level, in configurations that expose us more visibly and are becoming more widespread. Revisionist ambitions have intensified, giving rise to numerous displays of uninhibited opportunism from the eastern Mediterranean to the Sahel and the Pacific. We are thus moving from latent competition to open confrontation on the part of Russia and, increasingly, to greater competition with the People’s Republic of China (PRC). The pandemic, the climate crisis, the migration crises and the return of a high-intensity war on European soil remind us of the far-reaching interdependence between the national and international arenas, in the areas of politics, economics, energy and food. These crises illustrate how the fracturing of the world order can restrict our freedom of action. The 2022 national strategic review is therefore in line with and complementary to the European Union’s strategic compass and NATO’s strategic concept, which were adopted this year. It aims to apply these strategies while integrating our national characteristics.
+
+16) The practice of challenging and circumventing the international order, based on multilateralism and the rule of law, whether reflected in the United Nations, the Organisation for the Prohibition of Chemical Weapons (OPCW) or in the reactivation of territorial disputes, is becoming more commonplace and diverse, and follows in the footsteps of past breaches (Helsinki principles, INF and Open Skies treaties, Budapest Memorandum, etc.). The body of agreements and laws built since the end of the Cold War is crumbling and, although the causes are not recent, this phenomenon has accelerated sharply since 2014. By way of illustration, out of the agreements that until recently maintained a balance in the Euro-Atlantic area, only the New START Treaty remains; furthermore, it is due to expire in 2026 without a clear successor. Bypassed and hollowed out if not denounced head-on, this arms control architecture is now more necessary and more weakened than at any time in almost forty years.
+
+#### 1.2 CRYSTALLISATION OF THE MAIN ANTAGONISMS
+
+> #### Russia: assumed revisionist ambitions
+
+17) Russia is pursuing a strategy that seeks to undermine European security, of which the war against Ukraine, launched on 24 February 2022, is the most open and brutal manifestation. During the implementation of its ambition of power conceived as an opposition to what Russia calls “the collective West”, Moscow had for a long time privileged a more indirect approach, focusing on undermining the West on a politico-diplomatic level: information warfare and interference, types of action whose perpetrator is difficult to name, search for transatlantic division, etc. Without having disappeared, this strategy is now accompanied by a desire to engage in a direct military confrontation, materialised by the war of aggression against Ukraine. Rewriting history and the national narrative, the Russian government is increasingly open about its imperial ambitions based on a balance-of-power approach.
+
+18) The future of Russian military power after this ordeal will be an important issue for the Atlantic alliance and Europe over the coming decades, as the strategic concept adopted at the Madrid summit and the strategic compass adopted under the French presidency of the Council of the EU (FPCEU) strongly underline. Regardless of the outcome of the war, it will have seriously debilitated the human and material potential of the Russian forces. The need to regenerate this potential will come up against the effects of sanctions on the Russian economy and defence technological and industrial base (DTIB), but should continue to be financed to a large extent. The weakening of its conventional forces over the long term could lead Moscow to privilege more indirect modes of confrontation while boosting the role of its non-conventional weapons in its strategy.
+
+19) In light of the split caused by the war and the irreversibility of Russia’s strategic choices, it is necessary to anticipate a confrontation with Moscow based on the trio of competition, challenge and confrontation, taking place over a long period of time, in multiple regions and spaces. This move towards confrontation is already taking place in Africa, through offensive diplomatic manoeuvres combined with anti-Western information-based attacks and the use of mercenaries. Moscow sees in this globalised hybrid war substantial leverage in external theatres and in environments where new types of action are now being taken. Thus, the Mediterranean, the Black Sea, the Baltic area, the Balkans, and the North Atlantic, but also Africa and the Middle East, offer the possibility of prolonged confrontation and the risk of incidents that could escalate.
+
+> #### People’s Republic of China: the affirmation
+
+20) In addition to staying in power, the goal of the Chinese Communist Party (CCP) and the People’s Liberation Army (PLA) is still to supplant the United States as the world’s leading power. Considering American power and the Western model to be in decline, the Chinese regime believes that Western leadership of the international order has weakened and that it can weaken it further by using its new influence. The CCP is therefore banking on the passivity of a majority of non-Western countries over the war in Ukraine to fuel a discourse that portrays an opposition based on “the West against the rest”. However, beyond ideology and the war in Ukraine, such questioning irrigates fields which are political (propaganda on the decline of the West), economic and technological (predation, trade war), military (growth of the nuclear arsenal, modernisation of the PLA, areas of support abroad) and diplomatic (a more assertive attitude in international forums, recourse to a bilateral balance of power or to alternative multilateral formats, such as the 14+1 or the Forum on China-Africa Cooperation) in nature.
+
+21) The modernisation of China’s military apparatus continues and enables the PLA to support an increasingly assertive strategy, including on the military front, whether in the Indo-Pacific region, particularly with regard to the status quo in the Taiwan Strait, or in other regions of the world where Chinese diplomacy calls to clients, especially in Africa. The political nature of the PLA and the civil-military integration deployed in the technological, economic and information fields enable an unprecedented scope of hybrid actions. The latter is only constrained in practice and, at this stage, by the PRC’s decision to challenge the international security architecture from the inside.
+
+22) The growing strategic convergence between the PRC and Russia opens up the prospect of greater contestation within international bodies, directed against the expression of Western objectives and offering opportunities for political alignment against the West and the United States in particular. The common desire to set aside or silence differences in order to challenge Western influence, particularly in the context of the war in Ukraine, gives rise to occasional forms of cooperation. This situation is primarily visible at the diplomatic level and in information warfare. On a structural level, the imbalance in China-Russia relations in favour of Beijing is set to grow with the Ukrainian crisis. The political, strategic and technological implications could be enormous for global governance.
+
+23) Examining Western cohesion and the impact of sanctions against and embargoes on Russia over time will also provide the PRC with a valuable insight into the scope of economic coercion methods that could be used against it in a major crisis.
+
+#### 1.3 CONTESTED AND WEAKENED DEMOCRACIES IN THE BATTLE FOR INFLUENCE
+
+24) In a context of increasingly intense strategic competition and confrontation, the position of liberal democracies has been weakened because they defend an international order whose foundations (international law, multilateralism, values, etc.) are openly challenged by several states. This dynamic is sustained by resentment towards political legacies, sometimes colonial, and perceptions of unfair development, which dovetail with the consolidation of authoritarianism and illiberal regimes around the world. These dynamics make it more difficult to understand the changing environment of our operations and to anticipate crises.
+
+25) This situation manifests itself in the fields of influence and perception. Russian and Chinese operations in these areas seek to undermine our own political systems and national cohesion, while fuelling or even creating alignments against us, as the war in Ukraine demonstrates. Our opponents are counting on the discrediting of Western discourse based on humanist values, and asymmetry in the relationship with laws and in the respect for international humanitarian law.
+
+26) Our competitors use the law as a weapon against our interests to ensure their ascendancy. A tool of hybridity, the strategic use of laws (or lawfare) can be broken down into three major areas: the growing instrumentalisation by certain states of their own laws, in particular through extraterritoriality; the use, misuse or circumventing of international laws; and the exploitation of legal and judicial vulnerabilities resulting from our domestic laws or European commitments.
+
+27) Finally, Western states must consider the inevitability of technological catch-up and dissemination, which are now taking place. This form of technological equalisation helps to make numbers important again. By sometimes taking a more agile approach and having larger volumes, our strategic competitors have the capacity to tip the regional balance, such as Iran in the ballistics field. At the same time, multilateral regimes that fight against dissemination have become less effective, undermined from the inside by Russia in most cases. GAFAM, or other private players, are emerging as non-state players whose active or passive contribution must be included as input data as from the challenge phases.
+
+#### 1.4 CONFLICT BETWEEN THE RETURN OF NUCLEAR REALITY, HIGH INTENSITY AND HYBRIDITY
+
+28) Initial lessons from the war in Ukraine are characterised, in particular, by the threat of nuclear escalation and its trivialisation by a nuclear-weapon state. Combined with the collapse of arms control architecture and the persistence of proliferation crises, Russia’s use of nuclear rhetoric for offensive purposes in support of the invasion of Ukraine has the potential to undermine strategic balances and, in the longer term, to exacerbate proliferation. A successful coercive manoeuvre backed by nuclear weapons would set a dangerous precedent. Russian intimidation and threats of coercion under the shadow of nuclear weapons also undermine the efforts of the P5 states in the area of doctrinal transparency.
+
+29) The next-generation war waged by Russia is characterised by a return to an integral strategy combining far-reaching hybrid actions and high-intensity operations. The lessons of this major engagement under the nuclear umbrella of the aggressor underline the importance of perfect multi-domain operations, known as the multi-environment and multi-field manoeuvre (M2MC), as well as the need for joint action that is significant in terms of its mass and density. They also remind us of the need to create an international approach to strategic competition, allowing us to signal our determination, to prevent and channel the escalation options of competitors operating under different constraints and in different registers from our own.
+
+30) Nuclear multipolarity that has been relatively contained until now, could take a more deregulated form. This is due, in particular, to the undermining of the international frameworks and security guarantees, the expansion pathways of already established nuclear powers and the emboldening of regional players. On the one hand, the quantitative and qualitative growth of China’s nuclear arsenal, combined with Russia’s actions, could jeopardise further efforts to preserve nuclear arms control agreements governing the arsenals of the main holders. On the other, aside from the cases of North Korea and Iran, the non-proliferation regime could be subject to renewed tension. The proliferation of their delivery systems (ballistic and cruise missiles, drones, etc.), a hardening of military postures and the development of access denial capabilities will provide many regional powers with greater capacity to cause harm.
+
+31) Hybrid strategies have shown their impact on multiple theatres. Their effects continue to spread in Africa, the central and eastern Mediterranean, and the Indo-Pacific region. These strategies exploit the difficulty for Western states to provide an effective response that is compatible with respect for the political commitments, treaties and principles that underpin the international order. Using a variety of levers, they are adapted to the geography of the interests of the players implementing them, enabling these players to affect France’s interests at the lowest possible cost, in mainland France and its overseas territories, and abroad. Common spaces (cyber, space, seabed and, air and sea) are now the subject of a renewed competition for power. The actions that have already been taken in these spaces reflect the appropriation by all states of an approach that is applied to these spaces on the basis of the entire trio of competition, challenge and confrontation. Their operational and geographic importance is growing while the common rules governing them are insufficient, weakened or contested.
+
+32) In terms of hybridity, states are increasingly systematically using cyber as a weapon to defend their strategic interests or in the context of geopolitical tension. In addition to the development of offensive capabilities, sophisticated off-the-shelf, cyber-espionage weapons and tools are gradually being developed by private companies. This cyber-arms race increases the risk of escalation, the stages of which are not equally understood. Finally, cybercrime, a threat that has reached an unprecedented level of sophistication and disinhibition, constitutes a strategic challenge for our national security.
+
+#### 1.5 CRISIS AREAS AND REGIONAL OPPORTUNISM
+
+33) The refocusing of the United States on the strategic competition with the PRC is accompanied by a shake-up in the balance of power between regional powers. In the Near and Middle East, the diplomatic and military emboldening of certain regional powers is concomitant with the destabilisation of already fragile countries. The persistence of proliferation crises (Iran, North Korea, Syria in the case of chemical weapons) helps fuel these sources of regional destabilisation. These dynamics affect our strategic interests because they are accompanied by a rearrangement of intra-regional agreements, alliances and power relations. The distrust of the West and the laws it promotes provides the basis for Russia’s and the PRC’s policies of influence in Africa and the Near and Middle East. Within Europe itself, the Western Balkans are likely to be an area of fragility in the short term which these countries may seek to exploit to divide and weaken Europe.
+
+34) The international jihadist movement will continue to spread and pose a security challenge for the next decade, both for the West and for the fragile countries of the Muslim world, from Africa to Southeast Asia. Exploiting favourable conditions (poor governance, endemic corruption, lack of social justice, strategic competition), it will help fuel areas of crisis and destabilisation in the Levant, North Africa, the Sahel and West Africa, for which a military response, in support of local partners, will continue to be sought.
+
+35) The war in Ukraine is also a reminder of how regional crises and global challenges can interact and reinforce each other. Energy has once again become a key issue and a geostrategic lever. The — potentially changing — geography of producers and supply routes fuels energy rivalries that redraw the balance of power. The strategic nature of energy flows complicates the challenges of resource management as many terminals and pipelines (gas and oil) are located in areas of tension. Similarly, the COVID-19 pandemic and the war in Ukraine have highlighted the importance of food as a lever of influence and coercion for certain regimes. Food security has re-emerged as a domestic political stability imperative for many states. The acceleration of the effects of global warming, possibly coupled with a global food crisis, will exacerbate migration phenomena, manipulated or not, and create new areas of tension, likely to weigh on both Western cohesion and each country. Our overseas territories will be increasingly exposed to the security consequences of these underlying trends (increased predation, more violent and destructive natural disasters, migration pressure, etc.), which may require a greater commitment from the armed forces.
+
+36) The war in Ukraine also poses the risk of a return to state terrorism. It may be assumed that given Russia’s uninhibited actions, weapons of all kinds are being recovered in the Ukrainian theatre to serve proxy or terrorist groups. These weapons could be used against our interests, alongside a disinformation campaign.
+
+
+### 2. STRATEGIC SOLIDARITY FACED WITH THE CHALLENGE OF CONFRONTATION
+
+37) The acceleration of the risk of conflict and the rapid expansion of the fields of confrontation confirm the need for strategic alliances and the principle of solidarity that structures them. This strategic solidarity must be assessed according to whether France is the beneficiary, the sole provider or one of its components, whether within the EU, NATO or ad hoc coalitions, for example against Daech or in the Sahel-Saharan strip.
+
+38) The deterioration of the international environment, the risk of opportunistic strategies in the face of the stretching of our interests and the diversity of areas of action highlight the immense difficulty for France to respond alone to all the challenges (Eastern and Northern Europe, Mediterranean-Red Sea, Near and Middle East, Indo-Pacific, Africa, Arctic, etc.). The robustness of our partnerships, the maintenance of a high level of interoperability with the United States, and our ability to build permanent or temporary strategic alignments in a changing environment will more surely condition our global influence and our weight in the development of a more stable environment. They will also allow us to anticipate — and thus prevent — potential side effects of competition, or even rivalry between allies.
+
+#### 2.1 EUROPE AT A CROSSROADS TO BECOME A STRATEGIC PLAYER
+
+39) A great deal of progress has been made in recent years in the field of European defence, both in the area of capabilities — creation of the European Defence Fund (EDF), implementation of Permanent Structured Cooperation (PESCO), strengthening of the European Capability Development Plan — and in the operational area with the creation of the European Peace Facility, or in the social area with the handling of migratory crises.
+
+40) The adoption of an ambitious strategic compass in March 2022 is a first step, symbolising a shared desire to strengthen coherence in defining and pursuing our strategic objectives. Its implementation will be key to strengthening the Union’s capacity to act by 2030, in particular in the operational area and in contested strategic spaces. Furthermore, the lifting of Denmark’s opt-out from the Common Security and Defence Policy (CSDP) is a positive signal.
+
+41) The development of a real politico-military action capability for Europe in its immediate environment remains an objective. In terms of capabilities, the decisions taken at the Versailles summit (10 and 11 March 2022) have made it possible to launch a new effort, which must be pursued with all European partners. A great deal of work will have to be done to continue to develop a common strategic culture, which is essential for the emergence of a European defence. The joint declaration of 21 September 2021 on a European strategy for cooperation in the Indo-Pacific and the adaptation of the European maritime system in the north-west Indian Ocean have the long-term objective of establishing the EU as a credible player and provider of maritime safety and security to the States of the region. This dynamic is already at work in the Arabian Gulf (EMASoH/AGENOR) and the Eastern Mediterranean (QUAD MEDOR).
+
+42) Deepening cooperation between the EU and NATO will be essential to further strengthen European strategic autonomy and the transatlantic relationship.
+
+43) Finally, our cooperation efforts on a European scale have been intensified, by focusing on a wider range of partners with whom large-scale sectoral cooperation has been launched, whether in terms of capabilities, operations or through the establishment of strategic partnerships.
+
+#### 2.2 AN ATLANTIC ALLIANCE STRENGTHENED IN THE CONTEXT
+
+44) NATO remains today the foundation and essential framework for Europe’s collective security. For the majority of our European partners, this observation is made with renewed force by the return of war to the continent and the open and lasting confrontation with Russia, as shown by Finland’s and Sweden’s applications for membership.
+
+45) The period opened in 2014 with the annexation of Crimea and the maintenance of a conflict in the Donbass, tangible signals of growing Russian military aggression, which forced NATO to make a major effort to adapt. This collective awareness has manifested itself in increased investment, with a third of allies reaching or exceeding 2% of GDP in their defence budgets. This significant effort must be continued as part of a collective increase in power against opponents who unapologetically pursue their own interests. This development is beneficial in that it brings our European partners closer to our view that we must collectively take more responsibility for defence.
+
+#### 2.3 THE AMERICAN PIVOT
+
+46) For the United States, the PRC is the long-term strategic priority, with a fundamental shift starting in 2007. This focus permeates many areas of US policy, relations with traditional allies and its positioning in multilateral forums.
+
+47) Washington is perceived as being in search of a formula that will allow it to reduce its involvement in regional theatres that it now considers secondary (Africa, Middle East), while strengthening the security of its partners. This objective involves, for example, an effort to promote more integrated Middle Eastern partners (Abraham Accords) and to formalise agreements in ad hoc formats around energy, political and military projects (e.g. Pacific Islands Forum). This repositioning is already prompting states in the region to invest in managing their own security.
+
+48) Through the war in Ukraine, the United States has again emerged as the main provider of European security, through the scale of its reassurance efforts and military support to Ukraine. A potential weakening of US investment in areas of European interest (Africa, Middle East), which are more exposed to the unilateral aims of middle powers and the rise of anti-Western views, could affect our ability to make a lasting contribution to the security and stability of these regions.
+
+#### 2.4 OUR PARTNERSHIPS TO BE REINVENTED
+
+49) France, a balanced power, refuses to be locked in bloc geopolitics. It is important to maintain this long-standing and authentic position in the search for a balanced relationship with our allies. France has a long history of establishing strategic partnerships in its areas of interest, in which our partners must find security, stability and development.
+
+50) In Africa, we face major security and humanitarian challenges. The terrorist threat remains high in the Sahel-Saharan strip and is spreading towards the Gulf of Guinea. Russian actors, including the private military company Wagner, are carrying out actions that are contrary to our interests, while their involvement results in a deterioration of the security situation, the predation of economic resources, numerous abuses documented by the UN and the ever-greater fragility of the states that resort to them. The PRC has a stranglehold on infrastructure, the economy and debt, creating risks of dependency of our partners, as well as of espionage and restrictions on our operating environment.
+
+51) With the Latin American and Indo-Pacific regions, France can strengthen its cooperation and consolidate the relations of our overseas departments, regions and communities with their immediate environment.
+
+52) The ability of certain competitors to propose alternative models, most often based on a transactional approach and less governed by normative concerns, also has an impact, particularly on states under political, economic or food pressure.
+
+
+## Challenges
+
+> ### Reminder of national security interests and confirmation of strategic functions
+
+53) France’s interests include all factors that contribute to its security, prosperity and influence. In particular, a distinction should be made between:
+
+- the protection of the national territory, including the overseas territories, and of French nationals against external threats and attempts at internal destabilisation, including the terrorist threat;
+
+- the security of the EU Member States and the euro-atlantic area under the treaties by which we are bound;
+
+- the stability of our neighbourhood, given the immediate repercussions that any crisis emerging there would have on our own territory, both metropolitan and overseas;
+
+- freedom of access to common spaces (cyber, space, seabed, air-sea spaces, and the poles), which is now threatened by challenges to the rules-based international order and by approaches based on power.
+
+54) Defending these interests is now more complex because of the more systematic use of force and intimidation by some of our strategic competitors, and because of an international context that has been permanently damaged by the consequences of the COVID-19 pandemic and the war in Ukraine.
+
+55) France’s main lever for achieving this remains the long-term maintenance of its autonomy of decision and sovereign action in the face of all the threats that arise. As a permanent member of the United Nations Security Council, the world’s seventh largest economy controlling the second largest exclusive economic zone (EEZ), a nuclear-weapon state, and a founding member and driver of European integration, France has essential tools to assert its interests on the international stage.
+
+56) However, the increasing number of constraints on our interests makes it more necessary than ever to have robust and sustainable means of action, adapted to recent developments in the world. Our defence apparatus contributes to this on several levels, as the basis of our independence and freedom of action in the world in the face of threats of all kinds.
+
+57) In this respect, the policies defined in 2013 and 2017 remain fully valid and their concrete implementation must be continued and accelerated.
+
+58) They establish that the defence of our security interests rests on three pillars: the strengthening of our strategic autonomy; the achievement of European sovereignty and the consolidation of our alliances; the preservation of a stable international order, based on respect for the law and multilateralism.
+
+59) In any case, it remains the ultimate responsibility of the President of the Republic to constantly assess the nature of our interests and the attacks that could be made on them.
+
+
+### 1. FRANCE’S SECURITY PRIORITIES
+
+#### 1.1 STRENGTHENING OUR STRATEGIC AUTONOMY
+
+60) Strategic autonomy is the sine qua non condition for the protection of our fundamental interests. At its core are the capacities for autonomous assessment, decision making and action.
+
+61) Our freedom of action and the protection of our fundamental interests are ensured first and foremost by the credibility of nuclear deterrence, the keystone of our defence strategy. The fundamental aim of deterrence is to prevent a major war that would threaten the survival of the nation by protecting France against any state-sponsored aggression against its vital interests and against any attempt at blackmail. In a more uncertain and complex world, where some countries are on a worrying trajectory of opacity and rapid growth of their nuclear arsenals, or even raise the spectre of using the weapon for intimidation or blackmail, maintaining the credibility of our deterrent over the long term remains essential.
+
+62) Our autonomy also depends on the strengthening of a credible, coherent and balanced armed forces model. This requires conventional forces whose size and equipment allow for a conventional-nuclear linkage that is sufficiently robust to preserve the President’s freedom of action and avoid a circumvention of deterrence from below.
+
+63) Strategic autonomy is also based on other factors: national cohesion, economic and industrial independence, securing our supplies, and international influence, particularly through strong diplomacy.
+
+#### 1.2 THE ACHIEVEMENT OF EUROPEAN SOVEREIGNTY AND THE CONSOLIDATION OF OUR ALLIANCES
+
+64) The protection and promotion of our fundamental interests cannot be limited to the national level. We must continue to contribute actively to the defence of European interests and our collective security. These objectives require the strengthening of our international cooperation, partnerships and alliances, first and foremost within the EU and NATO, where we are bound by certain security guarantees (Article 5 of the North Atlantic Treaty and Article 42-7 of the EU Treaty). Investing in ad hoc partnerships, already existing or to be created, will also allow us to forge common responses to certain challenges according to specific geographies.
+
+65) Beyond these commitments, our interests must be seen in light of the growing interweaving of the interests of European states, united in a common destiny. The return of approaches based on power and war to the European continent illustrates the importance of continuing and deepening integration among Europeans in order to foster:
+
+- the development of a common strategic culture in all fields (extension of the work undertaken in the 2022 strategic plan);
+
+- the ability of Europeans to defend their security interests against potential aggression, in particular in their immediate neighbourhood, including through the development of common defence capabilities allowing for greater interoperability;
+
+- joint European action in support of the international order based on law and multilateral management of global issues (United Nations, non-proliferation regimes, etc.);
+
+- the affirmation of the EU as a geopolitical actor.
+
+#### 1.3 THE DEFENCE OF A STABLE INTERNATIONAL ORDER BASED ON THE RULE OF LAW AND MULTILATERALISM
+
+66) In addition to our commitments to our EU partners and NATO allies, our interests must also take into account the states in our neighbourhood and those to which we are linked by partnerships or defence agreements. This concerns areas of the world where states are engaging in increasingly aggressive strategic competition, and where non-state groups may be able to directly threaten our citizens.
+
+67) As a balancing power, France has a duty to contribute to the stability and security of these regions. The location of some of our territories in these areas requires us to maintain our presence in all areas and gives us a particular legitimacy to act.
+
+
+### 2. EXPANSION OF STRATEGIC FUNCTIONS
+
+68) The various strategic functions to which the armed forces contribute, identified in the 2008 White Paper, have seen their relevance confirmed as the strategic environment has evolved. They cover knowledge-appreciation-anticipation, deterrence, protection-resilience, prevention, intervention, and now influence.
+
+69) Influence, in all its dimensions — diplomatic, military, economic, cultural, sporting, linguistic, informational — is an area of dispute, which requires a coordinated response. It is a new strategic function in its own right.
+
+70) Their proper structuring serves an integrated approach to respond to the evolving continuum of threats posed by our adversaries to our interests and values and those of our closest partners. In this respect, they remain dependent on our ability to ensure good coordination at both European and multilateral level.
+
+#### 2.1 KNOWLEDGE — APPRECIATION — ANTICIPATION
+
+71) The knowledge-appreciation-anticipation function feeds into all the other strategic functions. The maintenance of an autonomous capacity for assessment is a guarantee of sovereign decision making. It contributes directly to understanding the intentions of our competitors. While being a condition for the operational effectiveness of the forces, it contributes to the economy of the resources used.
+
+72) The five areas of this function are intelligence, knowledge of theatres of operation, diplomacy, foresight and anticipation, and information management. The recent crises and breakdowns as well as the extension of conflicts to new areas justify strengthening this function.
+
+73) The effort must focus on understanding the phenomena in order to anticipate and facilitate the reactivity of the decision. Faced with the pace of crises and escalation, but also with the saturation of irrelevant information or information manipulated by our competitors, collective effectiveness depends more and more on the ability to sort, prioritise and circulate intelligence as quickly as possible, in order to understand the phenomena it describes.
+
+74) The knowledge-appreciation-anticipation function has a strong partnership dimension. In order to maintain an autonomous assessment of the situation on priority issues, France must also rely on the assessment of its partners in addition to its own resources.
+
+#### 2.2 DETERRENCE
+
+75) Nuclear deterrence is based on its political, operational and technical credibility. In order to be solid, this credibility must continue to be based on an in-depth strategic culture, dynamic and cutting-edge scientific research, technical and operational know-how that is constantly maintained, strong industrial sovereignty, and understanding of the issues by our fellow citizens.
+
+76) The purpose of deterrence is to protect us from any state aggression against our vital interests, wherever it comes from and whatever its form, and it remains the ultimate guarantee of the Nation’s security, protection and independence. It ensures our autonomy of decision and freedom of action in the context of our international responsibilities at all times, including against attempts to blackmail us in the event of a crisis. By its existence, it contributes to the security of the Atlantic alliance and to that of Europe.
+
+77) The deterrence assets are being renewed while being maintained at a level of strict sufficiency. They must remain adapted to a wide variety of situations and continue to offer the Head of State a sufficiently wide range of mode of action. To achieve this, deterrence will continue to rely on the airborne and oceanic components. Bringing together three nuclear forces with their own characteristics, they allow, through their complementarity and their differentiated assets, a wide range of options and a high level of flexibility and responsiveness.
+
+#### 2.3 PROTECTION — RESILIENCE
+
+78) The implementation of a strategic function dedicated to protection-resilience is now essential. The notions of protection and resilience complement each other, with resilience being an indispensable prerequisite for ensuring the protection of the French people and the national territory and guaranteeing the continuity of the essential functions of the Nation. This function requires enhanced cooperation with our allies and partners.
+
+79) This protection function primarily concerns the national territory in metropolitan and overseas, as well as areas where French communities are heavily established or exposed abroad. This geographical dimension alone is no longer sufficient to respond to the nation’s vulnerabilities, given the dependence of our economy on strategic supplies and energy flows, as well as the hybrid strategies developed by France’s strategic competitors. The protection-resilience function must also include the new missions induced by the consequences of climate change and the degradation of biodiversity: food when used as a weapon, power and self-sufficiency, protection and security of value chains, assistance to our populations, securing territories and EEZ, considering chemical, biological, radiological, and nuclear (CBRN) threats, manipulation of information, etc.
+
+80) All state institutions contribute to the implementation of this function. For their part, the armed forces are permanently engaged on a daily basis to protect the national territory and the French people within the framework of their State action missions at sea or in the air, domestic missions and their own military operations. They ensure permanent air and maritime security postures (PASP and PMSP), which guarantee national sovereignty in air and maritime spaces, and help secure supply and communication routes. These day-to-day measures are reinforced according to the threat or particular events. The resurgence of unfriendly behaviour in our territorial approaches requires robust means of detection, remediation and response, including in space and in cyberspace. The capabilities of the armed forces thus need to be strengthened and structured as part of the overall state effort to deal with large-scale crises.
+
+#### 2.4 PREVENTION
+
+81) Prevention concerns both the national territory and France’s action outside its borders. Its implementation includes both the development of national and international standards and the fight against trafficking and the proliferation of weapons of mass destruction and their means of delivery, for disarmament and peace-building. Supporting the stabilisation of states in crisis contributes to conflict prevention and limits the cost of further intervention. The prevention function is based on a wide range of potential crisis or escalation scenarios, covering the top end of the spectrum and competition between great powers, as well as the manifestations of rapidly changing conflict.
+
+82) The pre-positioning of military forces plays a key role in the exercise of the prevention function, as it does for other strategic functions. The presence of French military forces in third countries, in agreement with them, contributes directly to this objective.
+
+83) The security and defence cooperation mechanism is an indirect lever for preventing future crises. This cooperation takes the form of assistance to allied partner forces to provide them with the capabilities to assert their own sovereignty.
+
+84) The prevention function must be articulated with the intervention function. This articulation is embodied in the capacity to signify determination, clarify intentions and discourage opponents — including in the field of perceptions — to “win the war before the war”.
+
+#### 2.5 INTERVENTION
+
+85) The intervention function serves three purposes: to ensure the protection of our nationals abroad; to defend our priority interests and those of our partners and allies; and to live up to our international responsibilities.
+
+86) It gives France’s security the strategic depth it needs, but also the broader credibility it needs to ensure the reliability of its alliances and its ability to train in coalitions as a framework nation. While French armies retain a capacity to act alone, the normal framework for their engagement outside the territory is that of collective action.
+
+87) In addition to the resources necessary for the protection of the national territory, the armed forces have the capacity to engage in priority areas for the defence and security of France: the European periphery, the area from the Mediterranean to the Red Sea, part of Africa — from the Sahel to equatorial Africa — the Arabian Gulf and the Indo-Pacific. France must now resolve the issue of the strategic extension of its forces, and therefore the use of support points to which the pre-positioned forces, the overseas sovereignty forces and its strategic partnerships are attached.
+
+88) The intervention function cannot be separated from the other functions, especially in a high-intensity engagement. Whether it is the knowledge-appreciation-anticipation function (anticipating and characterising threats to allow a wide range of options), prevention (the value of signalling our active deployments), protection-resilience (securing our supply chains) and deterrence (the concept of support between conventional posture and nuclear deterrence), the intervention function translates into multi-location and multi-field actions.
+
+#### 2.6 INFLUENCE
+
+89) The strategic function of influence aims to promote and defend the interests and values of France. This is an essential part of the expression of power. In this respect, France has many assets. It has a major political weight due to its seat as a permanent member of the United Nations Security Council (UNSC), its status as nuclear-weapon state and its overseas presence, a complete army model and troops deployed on many continents, its economic attractiveness, the French language spoken by 300 million people, a positive image due to our cultural influence, global projection supported by the universality of the diplomatic, cultural and educational network, our security partnerships, etc.
+
+90) The new dimension given to the capacity to influence takes note of an acceleration and hardening of competition and contestation in all fields, particularly in that of perceptions. The aggressiveness shown by our competitors reminds us that nothing can be taken for granted: in addition to our diplomatic, economic and strategic interests, the new battles for influence involve our ability to maintain the French and European model and to ensure that France’s commitment on the international stage is understood and accepted. We therefore need to take on the balance of power more directly in this field to defend the national interest.
+
+91) Influence is first and foremost part of a long-term strategy. A global policy conducted and coordinated at the interministerial level, it relies on capacities that support and legitimise our positions and our action, which must be deployed in all possible fields (training of foreign military personnel and coordination of networks, contribution to university research, aid to economic development, etc.). It also requires knowledge of the levers of influence deployed by our partners, competitors and adversaries.
+
+92) Integral to the other strategic functions described in this review, the influence function must be embodied in a national influence strategy.
+
+93) Following on from the 2021 Roadmap for Influence, this national strategy will set the general framework for action by all the actors concerned, determine the intentions and provide guidance for the national sectoral and/or geographical strategies.
+
+94) This strategy will aim to:
+
+- defend France’s long-term interests as well as universal values, the application of international law, multilateralism and the preservation of common goods;
+
+- promote and enhance its commitments in all areas;
+
+- respond or retaliate to manoeuvres or to attacks, particularly in the information field, against our interests.
+
+
+### 3. IMPACTS OF THE RECENT CONTEXT ON FRANCE’S SECURITY INTERESTS
+
+95) The return of high intensity conflict, including on European territory, the increasingly unbridled expression of the desire for power on the part of our strategic competitors and the weakening of international regulatory frameworks constrain our choices and pose an unprecedented risk to France’s priority security interests.
+
+96) The attacks on our strategic autonomy are increasing. Our strategic competitors seek to make use of our dependencies, and to undermine our sovereign judgement and national cohesion in order to shape our understanding of situations and constrain our decisions.
+
+97) The achievement of European sovereignty is essential to the defence of our interests, particularly in this period marked by a tendency towards inward-looking isolation that deeply affects the major players in the international community. Our partnerships and alliances are both one of France’s main assets on the international scene and one of the targets favoured by our strategic competitors to weaken us. The COVID-19 pandemic and then the Russian war of aggression in Ukraine have demonstrated the centrality of our partnerships and alliances in developing a common understanding of the challenges and providing appropriate responses. The Strategic Compass for the European Union and the update of NATO’s Strategic Concept set out clear roadmaps, which must now be implemented.
+
+98) The defence of a stable international order, based on the rule of law and multilateralism, has underpinned our security and prosperity since 1945. The activism of revisionist powers and the project they are carrying out, centred on the balance of power and the fait accompli, is not acceptable: our security interests require ensuring the continuity of our strategic supplies, our freedom of action in the common spaces and our sovereignty in the digital space, as well as an ambitious commitment to arms control and non-proliferation. These objectives must be based on collective and respected rules.
+
+
+> ### General ambition for 2030
+
+99) France affirms its ambition to be a balancing power on the international scene by 2030, having strengthened its influence in its areas of interest. It aims to be a driving force for European strategic autonomy in a Europe capable of facing crises and implementing solutions that guarantee its own security, in particular through a credible European defence that complements the Atlantic alliance. Finally, it fulfils its security responsibilities by aiming to preserve effective multilateral mechanisms based on international law.
+
+100) This strategic ambition must be deployed through the prism of the fracturing of the world order, highlighted in particular by the war in Ukraine. This context calls into question the current French armed-forces model, which was designed according to a logic that was mainly expeditionary. This model in 2030 will have to provide France with the capacity to deal with the need for increased prevention and influence, a possible return to high-intensity interstate conflict, and the hybrid strategies deployed by our competitors.
+
+101) In 2030, France:
+
+- is capable of defending its metropolitan and overseas territory, and of protecting and involving its citizens. This permanent ambition is based on an independent, credible and coherent nuclear deterrent, the keystone of our defence policy, supported by robust conventional armed forces. Permanent security postures adapted to the threats and involving the internal security forces and a dynamic national resilience strategy also contribute to this;
+
+- contributes to the defence of Europe and to stability in the Mediterranean by having the capability to engage in high-intensity conflict. It can assume the role of a framework nation within a NATO, EU or ad hoc coalition;
+
+- acts in the framework of balanced partnerships, providing security, in an area stretching from sub-Saharan Africa to the Arabian Gulf, via the Horn of Africa. Together with its allies, it offers its partner armies a diversified and orchestrated range of courses and training. From a network of suitable support bases, it retains a capacity for intervention or coalition support;
+
+- contributes through its influence and with its partners to the stability of the Indo-Pacific area. In it, it defends its sovereignty and respect for international law;
+
+- ensures its freedom of action in common spaces (cyber, space, seabed, air and sea) and the security of its supply routes, together with its partners.
+
+102) To achieve this, France has set itself ten strategic objectives:
+
+- a robust and credible nuclear deterrent;
+
+- a united and resilient France;
+
+- an economy that contributes to the spirit of defence;
+
+- top-ranked cyber resilience;
+
+- France, an exemplary ally in the Euro-Atlantic area;
+
+- France, one of the drivers of European strategic autonomy;
+
+- France, a partner of reliable sovereignty and credible security provider;
+
+- guaranteed autonomy of assessment and decision-making sovereignty;
+
+- a capacity to defend and act in hybrid fields;
+
+- freedom of action and the ability to conduct military operations, including high-intensity operations, autonomously or in coalition, in all fields.
+
+
+## Ten Strategic Objectives
+
+> #### Strategic objective 1
+> ### A robust and credible nuclear deterrent
+
+103) The effectiveness of French deterrence policy depends on its political, operational and technical credibility. This is reflected in a demanding posture and long-term capability commitments, but also in the ability, which has been widely demonstrated since its inception, to adapt both doctrine and resources to the strategic context and its potential changes.
+
+104) France’s deterrence policy must therefore take into account the global trends that are unfolding in the technological field as well as through hybrid forms of conflict: on the one hand, the capability developments of our competitors (air and missile defences, space, hypervelocity weapons, underwater surveillance, etc.) must constantly inform our thinking on deterrence; on the other hand, the modes of hybrid action, already at work in peacetime, are likely to affect the environment — political, normative, informational, etc. — within which deterrence is exercised and must be the subject of constant reflection on the means of countering them.
+
+
+### 1. THE EUROPEAN DIMENSION OF THE FRENCH DETERRENT
+
+105) The conflict in Ukraine is an indication of the essential role our nuclear forces play in the security of the Euro-Atlantic area. It demonstrates the need to maintain a robust and credible nuclear deterrent to prevent a major war, guarantee France’s freedom of action and preserve its vital interests, which have a European dimension.
+
+
+### 2. MAINTAINING AN EFFECTIVE, INDEPENDENT AND SOVEREIGN DETERRENT
+
+106) In this context, it is essential to maintain a credible deterrent, i.e. one that is legitimate, effective and independent, for the period to 2030 and beyond.
+
+107) Part of the challenge of preserving the legitimacy of deterrence is to redouble efforts to strengthen the strategic and deterrence culture, both nationally and within the EU and the Alliance, by enabling a wider public to understand deterrence issues.
+
+108) At the same time, in accordance with the principle of strict sufficiency, France will continue its action in favour of arms control, non-proliferation and strategic risk reduction.
+
+109) France has chosen to continue efforts to renew its two components and to ensure that the armed-forces model allows for a sufficiently robust mutual support of nuclear and conventional forces to preserve the freedom of action of the President of the Republic and to avoid circumventing deterrence from below. The war in Ukraine confirms the need to maintain a capacity to understand and constrain the risk of escalation. In addition, building national resilience to all threats will strengthen deterrence.
+
+110) Finally, the independence of the French deterrent must be perpetuated thanks to a reinforced monitoring of the fundamental and applied research teams, of the national industrial fabric linked to the deterrent and to a consolidation of the technical, industrial and operational know-how that is indispensable to it.
+
+
+> #### Strategic objective 2
+> ### A united and resilient France
+
+111) France must strengthen its resilience in the face of all the security challenges it is likely to face, whether military or non-traditional (information manipulation, climate change, resource predation, pandemics, etc.). This effort must be deployed in metropolitan and overseas France, particularly by promoting the spirit of defence and ensuring national cohesion.
+
+
+### 1. STRENGTHEN FRANCE’S CAPACITY FOR RESILIENCE, COLLECTIVELY AND IN DEPTH
+
+112) France is implementing its national resilience strategy (NRS). This aims to strengthen its ability to withstand any kind of damage to the normal life of the country. It allows for a precise and efficient connection with several mechanisms with similar objectives, adopted by both the EU and NATO.
+
+113) The NRS defines three fundamental objectives: to prepare the State in depth for crises; to develop human resources and material capacities to deal with them, by including an overall study on the question of strategic stocks and the diversification of supply sources; and to adapt public communication to the challenges of resilience. This strategy must now be extended to local and regional authorities, companies, associations and the public.
+
+
+### 2. PROMOTING A SUSTAINABLE SPIRIT OF DEFENCE IN SOCIETY AND THE STATE
+
+114) The individual moral strengths of the citizen, especially our youth, are the foundation of collective resilience. They should be strengthened in the educational field, in order to increase the skills that strengthen the resilience of society (transmission of republican values, first aid, etc.). As part of the interministerial dynamic, the armed forces contribute to the promotion of remembrance and help to spread the spirit of defence among young people. The ministries concerned will mobilise to support the ramping up of the universal national service (UNS) to provide a national pool of resilience. Finally, the overhaul of the reserve system will be undertaken globally beyond the National Guard (army and internal security forces).
+
+115) The attractiveness of the military must be strengthened, by supporting and compensating for the constraints of military life in order to consolidate the spirit of defence, forged as early as possible in the educational sphere, in concrete and rewarding approaches.
+
+116) Military uniqueness, which is essential to enable the armed forces to prepare and ensure the defence of the homeland and the higher interests of the Nation, must be preserved, particularly from the increasing normative pressure.
+
+
+### 3. DEVELOP SYNERGY BETWEEN THE MINISTRY OF THE ARMED FORCES AND ALL SERVICES OF THE STATE
+
+117) The prospect of a major crisis or even a high-intensity confrontation involving France makes it necessary to raise the level of ambition in terms of national resilience, in particular by developing a better understanding of mutual resilience between the armed forces and the nation.
+
+118) The armed forces are able to participate in the management of any major crisis with a high degree of responsiveness within the framework of a strengthened civil-military dialogue. The general economy of Operation Sentinel must be rethought in order to guarantee the freedom of action of the armed forces while responding to new security challenges. A renewal of the Operational Defence of the Territory (ODT) concept will also be undertaken.
+
+119) The commitment of the entire nation must be strengthened by increasing awareness of national defence and security issues among public officials, continuous training of crisis management actors, consolidation of the network of senior defence and security officials (SDSO), and the commitment of all ministries to ensure the support of armed forces engaged in a high intensity conflict.
+
+120) This synergy between a population imbued with the spirit of defence and public actors experienced in planning and crisis management will make it possible to strengthen national resilience in the fields of security, the economy, employment and social cohesion.
+
+
+> #### Strategic objective 3
+> ### An economy contributing to the spirit of defence
+
+121) Setting up an economy that contributes to the spirit of defence requires knowing how to mobilise all the resources of the Nation, in order to transform into a war economy, i.e. to organise itself so that French industry can support a war effort in the long term, in case of necessity for the armed forces or for the benefit of a partner.
+
+
+### 1. SECURING CRITICAL SUPPLIES AND MATCHING STOCKS TO PRODUCTION CAPACITY
+
+122) To sustain a war effort over the long term (high consumption of ammunition, attrition, etc.) the best compromise is to be sought by acting on three main levers: the constitution of strategic stocks (complete equipment but also raw materials and critical components); the relocation of the most sensitive production lines; and the diversification of supplies.
+
+123) In addition, joint stocks of components or raw materials could be set up on the initiative and under the responsibility of industry to support military industrial activities in the event of a conflict, or civilian activities in the event of an economic or health crisis. The development of recycling channels should also contribute to a circular economy, reducing the need for supply and contributing to sustainable development.
+
+124) Securing the supply of critical resources could benefit from European initiatives such as the RePowerEU action plan and its variations on raw materials (Raw Material Act) and on components (Chips Act), while respecting French sovereign interests and environmental requirements.
+
+125) In order to ensure the capacity of its government responsibilities, the State must be able to impose priorities or requisitions on the national market, depending on the evolution of the conflict.
+
+126) Since security stability is a condition for the sustainability of our society, the defence technological and industrial base (DTIB) must be able to benefit from favourable financing tools, including in the context of the development of sustainable finance. Thus, future standards for taxonomy or environmental, social and governance (ESG) criteria should not discourage investment in defence industry companies.
+
+127) Finally, the health crisis and the Ukrainian conflict have shown the importance of having secure and redundant sources of supply. Thus, the relocation of production and recycling facilities on European and national territory must be encouraged and supported in order to remedy the most critical dependence on materials, components, etc. This is the subject of in-depth work in the context of the work on the war economy.
+
+
+### 2. REDUCING PRODUCTION AND SUPPORT CYCLES FOR THE GRADUAL RISE OF THE “WAR ECONOMY”
+
+128) In addition to the acquisition, over the next few years, of the most critical equipment necessary to face a high-intensity conflict or susceptible to rapid attrition, a war economy preparation plan is being developed in order to adapt the DTIB to the different geopolitical contexts in a gradual and adjustable manner.
+
+129) Taking into account these geopolitical contexts must also be reflected in the EU and NATO defence capability tools.
+
+
+### 3. IMPLEMENTING REGULATORY, NORMATIVE, PROCUREMENT AND SUPPORT PROCESS SIMPLIFICATIONS FROM A POINT OF VIEW OF RISK MANAGEMENT
+
+130) The increasing and proactive use of innovation and value analysis in the work between the Defence procurement agency and the armed forces must enable the forces to be equipped with the most appropriate solutions while taking an acceptable risk in use and achieving the best balance between operational gains, financial gains and time gains.
+
+
+> #### Strategic objective 4
+> ### First-rate cyber resilience
+
+131) In the face of strategic developments, the focus must be on improving our cyber resilience. There is no way to envisage a cyber shield that would thwart any cyber-attack on France, but strengthening its level of cyber security is essential to prepare the country for more threats. Similarly, the application of a deterrent approach in cyberspace that would force any attacker to restrain himself against France is illusory, but adopting response strategies that mobilise all the levers of the State, both European and international, makes it possible to make cyberattacks particularly costly for the attackers.
+
+132) This cyber resilience consists in having adapted and organised capacities, that can prevent or, if necessary, reduce the impact and duration of cyber-attacks against France, at least for the most critical functions.
+
+
+### 1. IMPROVING FRANCE’S CYBER RESILIENCE, A CONDITION OF SOVEREIGNTY
+
+133) The efforts undertaken in the public and private sectors must be amplified. Notwithstanding the important work already undertaken, the State’s cybersecurity has significant room for improvement. In some critical sectors, large-scale attacks are still plausible, even if the investments made under the France Recovery plan have considerably improved the level of cyber security. As for the systemic role of certain digital actors, it is still insufficiently taken into account.
+
+
+### 2. CONSOLIDATING THE ACHIEVEMENTS OF THE FRENCH MODEL
+
+134) The fundamental achievements of the French model, established in 2008 and regularly reinforced and adapted, must be consolidated. The governance of the State’s digital security has been renovated and can now be deployed. The national capacity to design and implement public policies is illustrated by the creation of regional incident response teams (CSIRT), the opening of the Cyber Campus and the emergence of a cyber defence ecosystem in Rennes. Finally, following its presidency of the Council of the European Union, France is recognised by its peers as exemplary on cybersecurity issues. The challenge now is to ensure that the EU directives for mass cybersecurity adopted under the FPEU are implemented as soon as possible.
+
+
+### 3. INVESTING OVER THE LONG TERM TO REACH THE HIGHEST LEVEL OF CYBER RESILIENCE
+
+135) The level of cybersecurity of all public services needs to be raised significantly. This will necessarily involve investments to consolidate a homogeneous and secure digital base for the State and to strengthen institutions and administrations that are still too fragile.
+
+136) France’s action must be increased by relying on a dynamic public and private cyber ecosystem. The State cannot act alone on cybersecurity issues and must be able to mobilise all actors in the event of a major crisis. Particular attention will be paid to prevention and to assistance to all victims of malicious cyberattacks. Finally, this ecosystem must be based on a competitive national and European cyber defence industry.
+
+137) All actors in the digital world must be trained and made aware of the cyber risk. The aim is to mobilise the general public, systematically integrate it into educational curricula and strengthen the attractiveness of the professions in the sector. Efforts must also be made to ensure the accountability of digital service providers and the security of supply chains, particularly that of the State. Finally, France can support and encourage the emergence of robust and sovereign trustworthy offers at both national and European level.
+
+138) Lastly, France’s resilience depends on that of its European and international partners and on the security and stability of cyberspace as a whole. It is therefore necessary to contribute to raising the level of resilience of European and international institutions and of France’s partners, as well as to pursue the structuring of a European market for cybersecurity products and services. On the international scene, France must put forward proposals to control the trade and fight against the proliferation of cyber weapons, in particular through better use of export control tools for goods and technologies. In addition, a common standard for cyber crisis management, as well as cooperation and mutual assistance mechanisms, would enable states to avoid the risks of misunderstanding and uncontrolled escalation.
+
+
+> #### Strategic objective 5
+> ### France, an exemplary ally in the Euro-Atlantic area
+
+139) NATO is a political and military alliance that plays a key role in European security through its main mission of collective defence and, in particular, the assistance clause in Article 5 of the 1949 Treaty. The transatlantic link remains essential for the security of the Euro-Atlantic area and consequently that of France.
+
+
+### 1. CONTRIBUTING TO INCREASING THE OPERATIONAL ADDED VALUE OF THE ALLIANCE
+
+140) France will continue to contribute fully to all the missions of the Atlantic Alliance, assuming its role within the military structures and operations, as it is doing in the context of the war in Ukraine, in the Baltic States and in Romania. It will contribute to their responsiveness and adaptation.
+
+141) France wishes to confirm the Alliance’s key role in the defence of Europe. NATO strengthens the potential of armies and is the forum for addressing interoperability challenges as well as capability, technological and operational expectations.
+
+
+### 2. ENHANCE THE KEY AND UNIQUE ROLE OF FRANCE WITHIN THE ALLIANCE
+
+142) France intends to maintain a unique position within the Alliance. It has a demanding and visible position because of the specificity and independence of its defence policy, in particular because of its nuclear deterrent. On the strength of its operational credibility, its unique ability to act urgently at a high level and its financial contribution, which is among the largest in the Alliance, France intends to strengthen its influence and that of the European allies in order to weight with them on the major changes in NATO’s posture and the future of strategic stability in Europe.
+
+143) Concerned about the coherence and cohesion of the Alliance, France will continue to contribute in a proactive, realistic and sustainable way to the strengthening of the posture on the eastern flank — including as a framework nation — and to the adaptation of NATO’s command structure.
+
+
+### 3. DRIVING EU-NATO COOPERATION
+
+144) France is working to strengthen the European pillar of the Alliance in a pragmatic approach to its role, which excludes an extension to other geographical areas and in particular the Indo-Pacific. The guarantee provided by NATO’s collective defence mission remains the central pillar of security in the Euro-Atlantic area.
+
+145) Defence investment, in line with the 2014 Wales Summit commitment to spend 2% of GDP on defence, must continue to increase in Europe. This level should be seen as a floor to match the strategic disruption caused by the war in Ukraine and the capabilities needed by the European allies to ensure their security.
+
+146) This collective effort also involves the creation, at EU level, of the necessary incentives for capability and industrial cooperation between European states. These contribute to the strengthening of the continent’s resilience, which is essential for the Alliance’s effectiveness, but also for the sustainability of a robust, agile European DTIB (EDTIB) capable of meeting the operational needs of European armed forces.
+
+147) France supports a modernisation, widening and deepening of the EU-NATO partnership, to take account of the new security challenges facing Europe and the forthcoming accession of Finland and Sweden.
+
+
+> #### Strategic objective 6
+> ### France, one of the driving forces behind European strategic autonomy
+
+148) France and all European countries share the same security challenges. The adoption of an ambitious strategic compass in March 2022 and the major role played by the EU since the start of the war in Ukraine demonstrate both the power of our levers and the distance we still have to travel. It is necessary to bring about the emergence of a sovereign Europe, endowed with a common strategic culture, with a capacity for evaluation and autonomous action in the service of the shared interests of Europeans.
+
+
+### 1. COMING TOGETHER AROUND A EUROPEAN STRATEGIC AUTONOMY
+
+149) France plays a key role in strengthening European sovereignty, notably through its triple membership of the EU, NATO and the UNSC.
+
+150) France is first of all working towards a convergence of views in the assessment of situations between Europeans, all of whom have different strategic cultures or political priorities.
+
+151) France then supports the renewal of the European partnership policy initiated with the adoption of the strategic compass. It goes hand in hand with the strengthening of the EU’s defence relations with countries in Africa and the Indo-Pacific and, in the case of the United States and the United Kingdom, with the implementation of balanced relations supported by regular and intensive defence and security dialogues. Increased, sustainable and durable EU-NATO complementarity must be sought. France must play a leading role in this, promoting closer cooperation in certain key areas, such as military mobility, cyber and hybrid threats.
+
+152) Finally, the EU’s cohesion in its support for Ukraine is a priority. It is imperative that Europeans remain united and proactive, both on sanctions and in support of the Ukrainian armed and security forces. The continuation of a high level of military assistance over time through the provision of equipment and appropriate training is crucial. This consistency is necessary for Europe to remain capable of influencing the resolution of the conflict.
+
+
+### 2. BRINGING EUROPEAN DEFENCE INDUSTRIAL CAPABILITIES TO THE FORE
+
+153) The EU must continue on the path towards greater technological autonomy which goes hand in hand with the development of the European defence industry.
+
+154) European strategic autonomy depends on robust European defence industrial capabilities that meet its own needs. France supports the setting up of a short-term instrument for the joint acquisition of European equipment. It also supports the creation of a defence investment programme for the joint development and procurement of critical and innovative equipment. The central role of the European Defence Agency (EDA) must be reaffirmed and all existing instruments must be mobilised: the European Defence Fund (EDF), the Coordinated Annual Defence Review (CARD), Permanent Structured Cooperation (PESCO), the Hub for European Defence Innovation (HEDI). In addition, the provisions related to the social taxonomy must consider the specificity and needs of the EDTIB, which is a central component of European strategic autonomy.
+
+155) These efforts must be accompanied by structural and decisive progress in common capability projects with the objective of an independent EDTIB and common choices among Europeans.
+
+
+### 3. STRENGTHENING THE EU’S AND EUROPEANS’ OWN CAPACITY TO ACT
+
+156) Europe must be supported in its role as a global player, a credible defender of free access to contested spaces (sea, space, cyber, air, seabed) in the face of the hybrid strategies of its competitors. With the right strategies and capabilities, it is able to protect the citizens of the Member States, to interact and, where necessary, to intervene on all continents in strict compliance with the law.
+
+157) The Union’s normative power must be exploited as a lever of influence in a more competitive environment, in order to guard against hybrid threats and other forms of foreign interference, be it “lawfare”, commodity blackmail or information manipulation.
+
+158) In this sense, France supports the instruments developed by the European institutions: hybrid toolbox, foreign information manipulation and interference — FIMI — toolbow, anti-economic coercion regulation, etc.
+
+159) France is contributing to the development of a genuine EU STRATCOM, capable of positioning Europe and European action in relation to its citizens, their representatives, our partners and also our competitors.
+
+160) The EU must continue to build up its rapid deployment capability. It needs to be able to respond quickly and more robustly in less permissive environments. To this end, France is promoting more flexible decision-making with Article 44 of the EU Treaty and renewed decision-making and control structures (C2), as well as global mandates to act on a broad spectrum: advice, training, equipment, combat support. The Union must have the capacity to mobilise ad hoc formats when necessary, as France has already done with Takuba or EMASoH.
+
+161) France, given its geographical position, its industrial and military capabilities and its national know-how, contributes actively to the development of European airspace protection. Its deterrence is part of this.
+
+162) Finally, the European Intervention Initiative (EII) is the crucible for a common strategic culture and enhanced cooperation between its members. Launched in 2018, the format remains fully relevant today to support the increasing responsibility of Europeans in favour of their own security, resulting in operational commitments in which France can play the role of framework nation.
+
+
+> #### Strategic objective 7
+> ### France, a reliable sovereignty partner and credible security provider
+
+163) France is defending an ambitious strategic offer that translates into lucid, balanced and prioritised solidarity with its partners. In a context of exacerbated polarisation and competition, France’s offer to its partners must continue to be distinguished by its high added value and enable it not to be forced into alignment or marginalisation.
+
+
+### 1. ASSERTING ITSELF AS A LUCID PARTNER WITH HIGH ADDED VALUE
+
+#### 1.1 DEVELOPING AN INCLUSIVE STRATEGY IN EUROPE AND WITH THE US
+
+164) In Europe, France must both recast its relations with its traditional partners and develop an inclusive strategy towards other countries:
+
+- with Germany, France must deepen its relationship in order to continue to build European defence in the light of Germany’s recently expressed ambitions and the strategic and capability needs we have identified;
+
+- Italy and Spain are key partners, both in theatres of operation (Mediterranean, Middle East, Sahel) and in terms of capability cooperation;
+
+- with EU members, France must consolidate several of its strategic partnerships (Greece, Croatia) and, capability partnerships (Belgium) concluded recently, consolidate its links with certain partners (Quirinal Treaty with Italy, Treaty of Friendship and Cooperation with Spain), and strengthen its operational cooperation on the basis of shared experiences in the Sahel and in Eastern Europe (countries involved in Operation Barkhane and Takuba TF);
+
+- with partners in the EU neighbourhood (Ukraine, Moldova, Georgia), France must, preferably, contribute to their stability by capitalising on its economic aid and European programmes to support structural reforms;
+
+- with our allies, our space partnerships will be intensified;
+
+- after Brexit, a constructive dialogue on the basis of the bilateral treaties must be quickly re-established with the UK.
+
+165) With the United States, our strategic partnership will remain fundamental, and must remain ambitious, lucid and pragmatic.
+
+#### 1.2 CONTRIBUTING TO SECURITY IN AFRICA THROUGH BALANCED PARTNERSHIPS
+
+166) Faced with the evolution of the terrorist threat and the growing influence of our strategic competitors across the continent, France wishes to forge renewed partnerships in Africa based on African partners’ requests and by integrating more civilian based cooperation along a security, defence, diplomacy and development continuum, as declared in the summer of 2017. They should contribute to a better understanding of security issues and build, in the long term, a stronger strategic proximity with African armies that wish to do so, particularly in view of the renegotiation of several major treaties. Coordination with our European and international partners will continue to be essential in this regard.
+
+#### 1.3 ADOPTING AN AMBITIOUS PARTNERSHIP STRATEGY IN THE MEDITERRANEAN AND THE RED SEA
+
+167) Given the increased competition and militarisation in the Mediterranean-Red Sea continuum, France needs to strengthen its reassurance measures, support EU and NATO missions and operations, and enhance the effectiveness and level of capability cooperation with all countries in the area. The densification of certain strategic or reference partnerships will also enable France to guarantee its freedom of manoeuvre, the continuity of its supply chains and regional stability.
+
+#### 1.4 CONTRIBUTING TO REGIONAL STABILITY AND SECURING FLOWS IN THE ARABIAN GULF
+
+168) A revitalisation of France’s partnerships in the Gulf is necessary to cope with the structuring of new strategic agreements, American disengagement and the increase in regional rivalries. France must be able, with and through its partners, to hinder and counter the destabilising activities of certain regional actors and to secure its own footprint, in particular by signing security arrangements in the fields of counter-terrorism, intelligence and armaments. France must also continue to support defence and security equipment procurement projects while strengthening the fight against the diversion of war materials, the dissemination of conventional weapons and the proliferation of weapons of mass destruction and their delivery systems.
+
+#### 1.5 ENHANCING OUR ABILITY TO CONTRIBUTE TO MAINTAINING STRATEGIC STABILITY IN THE INDO-PACIFIC
+
+169) France’s role as a balancing power in the Indo-Pacific must be reaffirmed. To this end, France is committed to building partnerships with countries in the Indo-Pacific region, notably India, Australia and Japan, as well as Indonesia and Singapore. It develops its capacities of anticipation and strategic signalling, vis-à-vis its competitors, reaffirms and strengthens its position in the politico-military multilateralism of the region, by increasing its training capacity and, if necessary, by promoting the emergence of ad hoc structures. France will also promote the implementation of the EU’s strategy for the region and its partnership with the Association of Southeast Asian Nations (ASEAN).
+
+
+### 2. PREVENTING AN ARMS RACE, THE PROLIFERATION OF WEAPONS OF MASS DESTRUCTION AND THE SPREAD OF CONVENTIONAL WEAPONS
+
+170) France defends the centrality and credibility of the Non-Proliferation Treaty (NPT) and the sustainability of the four multilateral export control regimes covering chemical and biological, nuclear, ballistic and conventional weapons.
+
+171) It is continuing to invest in the intelligence needed to hinder illicit or destabilising flows, with a particular focus on intangibles, which are particularly vulnerable to cyber actions, while developing countermeasures to CBRN threats in order to promote resilience in the face of possible attacks against its forces, interests or territory. It also strengthens its capacity for action to counteract these illicit or destabilising flows.
+
+
+> #### Strategic objective 8
+> ### Guaranteed autonomy of judgement and decision-making sovereignty
+
+172) In an increasingly competitive and complex international context, France must focus its efforts on raising its level of knowledge, understanding of competitors or adversaries, and anticipating their intentions. This performance requirement calls for developing the agile orientation of the intelligence services while preserving the universality and effectiveness of the diplomatic and consular network. It also requires continued investment in the technological capabilities to exploit the ever-increasing volume of data, in order to share relevant information with the decision-making and action levels in a timely manner.
+
+
+### 1. DEVELOPING AGILE INTELLIGENCE AND SURVEILLANCE CAPABILITIES
+
+173) Intelligence services have to monitor, analyse and understand an increasing number of geographical areas and issues. They must anticipate crises, technological and military capability disruptions, the terrorist threat, the CBRN threat, the defence and promotion of national economic and industrial interests, in particular DTIB companies, and the fight against hybrid or transversal threats. One of the decisive challenges is to articulate the continuation of their action in the fight against terrorism and in support of military operations, with reinvestment in areas of strategic rivalry, in particular continental Europe and the Indo-Pacific.
+
+174) The effectiveness and agility of the intelligence services depend on ambitious reforms, long-term investments and an acceleration of coordination and intelligence exchange loops, including with the armed forces in operations. The continuation of the in-depth transformations already underway — in particular the external security general directorate and the Military intelligence directorate, following the example of the international security general directorate — must be accompanied by an ambitious human resources policy in the intelligence professions, in order to attract, retain and develop a common culture and inter-service mobility. It is also essential to ensure the universality of the diplomatic network and to strengthen its means of analysis and anticipation.
+
+
+### 2. BUILDING TECHNICAL CAPACITY
+
+175) The preservation of French sovereignty in the face of technological change requires new investments in capabilities. The growing diversity of tools and the acceleration of technological advances offer new opportunities, provided that the necessary investments are made, according to a logic of mutualisation when the missions allow it. The reactivity of the knowledge-appreciation-anticipation function must be amplified by increased interconnection around secure communication tools, ensuring technical interoperability with the main foreign partners on a case-by-case basis, particularly within the EU and NATO.
+
+176) The new technical tools will have to use the potential of quantum computing and artificial intelligence.
+
+
+> #### Strategic objective 9
+> ### A capacity to defend and act in hybrid fields 
+
+177) France’s main strategic competitors use hybrid strategies, deliberately ambiguous combinations of direct and indirect, military and non-military, legal and illegal, and often difficult-to-attribute modes of action. These strategies can have important consequences for democracies as they aim to delegitimise them, weaken their moral strength and cohesion or reduce their economic and national defence potential.
+
+178) Faced with these threats and in order to defend its fundamental interests, France must perfect its organisation, be able to respond in all fields of hybridity and protect its most critical infrastructures.
+
+
+### 1. IMPROVING OUR ORGANISATION
+
+179) France must be capable of countering and controlling the effects of these hybrid aggressions, while respecting its principles and values. To achieve this, a more agile, responsive and integrated organisation will be adopted to identify, characterise, trigger appropriate protection mechanisms and develop responses in a more multi-sectoral approach. In line with the EU’s strategic compass and the NATO 2030 concept, France also relies on its allies and partners to benefit from leverage in its fight against hybrid threats.
+
+180) This organisation is based on a national strategy of influence which must include the actions carried out in a global approach and over time to enhance France’s commitments but also to respond or retaliate effectively to informational manoeuvres or attacks against its interests. It mobilises its public diplomacy, particularly in Africa. A strategic communication is developed in order to convey a coherent, credible and effective message to competitors, partners or allies and to national and international public opinion. It can be coordinated with allies.
+
+
+### 2. ACT
+
+181) In the field of the fight against information manipulation by foreign competitors, France must have a wide range of response options, beyond public attribution, as is the case in the cyber field. France is fighting against the use of law and norms as a strategic tool (lawfare) by its competitors. It supports the adoption of European tools to combat extraterritoriality. France is developing tools to fight back against private military companies, armed groups or militias used as intermediaries — proxies — by hostile powers in order to multiply their actions of contestation or competition, while maintaining plausible deniability. Dissemination of information, national or European sanctions, legal proceedings or even military actions may target these groups if they carry out activities detrimental to French interests or if they are responsible for human rights violations and war crimes.
+
+
+### 3. STRENGTHENING THE PROTECTION OF CRITICAL INFRASTRUCTURE
+
+182) In the face of hybrid threats, the protection of our critical infrastructures is a priority. Among them, underwater and space communication infrastructures require a special effort to develop the means of detection, characterisation, deterrence and even obstruction of malicious actions. Finally, France wishes to promote the development of leading French industrial players, world leaders in the field of submarine communication cables and space operations.
+
+
+> #### Strategic objective 10
+> ### Freedom of action and ability to conduct military operations, including high-intensity operations in all fields (multi-environment and multi-field)
+
+183) The freedom of action of the forces depends on the ability to anticipate, detect and appreciate the intentions of France’s adversaries. It underpins the national capacity to show determination, to discourage hostile action or prevent the imposition of a fait accompli, and to engage in confrontation if necessary. It allows for the robust backing of nuclear forces.
+
+184) It must be preserved from the competition phase onwards, in an ever-wider spectrum, because the strategies of France’s competitors and adversaries are expressed in a growing number of fields (outer space and cyber, seabed, electromagnetic and information fields).
+
+185) France must maintain and further develop its capacities to decide and command, to federate and mobilise, to act and last, to invest in common spaces and to face uninhibited competitors, taking into account its interests, its place on the international scene and its global ambition, but also its means. These capacities are necessarily differentiated according to the geographical areas and common spaces considered.
+
+
+### 1. DECIDING AND ORDERING
+
+186) France enjoys a complete and autonomous capacity for assessment and understanding as required to support political and military decisions. The armed forces have trained and deployable command capabilities to plan, conduct and control multi-environment and multi-field operations in autonomy and in coalition when France is a framework nation at the operational level. A permanent and agile reorganized command structure controls the day-to-day and contingency operations that contribute to safeguarding its strategic interests, its metropolitan and overseas territories, its aerospace, air and sea and aeronautical approaches, and its energy supplies.
+
+
+### 2. UNITING AND CONTRIBUTING
+
+187) In Africa, the Near and Middle East, and the Indian Ocean, France is able to mobilise or accompany its partners, to constrain or discourage an aggressor by offering a command and support capability to the forces. It honours its commitments there.
+
+188) In the Pacific zone, France has the means, in coordination with its partners, to discourage or hinder a competitor.
+
+189) In Central and South America, the Arctic and Antarctic, it preserves its freedom of action, the security of its flows and its interests.
+
+190) The armed forces are constantly working to develop and maintain interoperability with allies and partners.
+
+
+### 3. ACT AND LAST
+
+191) The armed forces protect the French people against a dangerous world, participate in their daily protection and contribute to the preservation of national interests. In particular, they hold permanent positions of deterrence, air safety and maritime protection and take part in missions on national territory (including DROM-COM with sovereignty forces) in addition to or in support of internal security or civil security forces.
+
+192) The armed forces are prepared for a major engagement and ready to engage in a high-intensity confrontation, particularly in the defence of the euro-atlantic area. They are able to deploy at short notice, able to enter first, with or without possible support from allied countries. They have the capabilities to protect themselves, to last and to cope with high attrition (air superiority and fire superiority). They are able to provide an allied country with the necessary support at short notice.
+
+193) They have diversified capabilities for deep strikes in the context of first entry, support to a coalition operation, retaliatory actions, or strategic warning. France is able to target and strike (kinetic or cyber) targets of interest.
+
+194) Armies have the capacity to generate and aggregate effects in a networked approach from the competition phase onwards across the entire spectrum of conflict, with in particular military and civilian, public and private, institutional and individual, national or allied contributions.
+
+
+### 4. INVESTING IN COMMON SPACES
+
+195) France is fully present and active in preserving its freedom of action and defending its interests in common spaces that are the object of power rivalries and renewed forms of conflict.
+
+196) Faced with strategic competitors, armies acquire and maintain their freedom of assessment and action in cyberspace.
+
+197) In space, France maintains its national strategic autonomy in terms of situation assessment, decision-making and the conduct of operations. It ensures its access to the space environment and to assert its interests in this environment, notably through the support of its partners.
+
+198) France has the capacity to autonomously monitor and understand actions on the seabed. By building on partnerships, it is able to discourage hostile action.
+
+
+### 5. DEALING WITH UNINHIBITED COMPETITORS
+
+199) The armed forces have the means of prevention, reporting and coercion to influence the strategic calculations of France’s competitors and adversaries and to win the battle of perceptions.
diff --git a/_collections/_hkers/2022-11-15-ccp-inc-in-portugal.md b/_collections/_hkers/2022-11-15-ccp-inc-in-portugal.md
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+++ b/_collections/_hkers/2022-11-15-ccp-inc-in-portugal.md
@@ -0,0 +1,249 @@
+---
+layout: post
+title : CCP Inc. In Portugal
+author: Andrew Polk
+date  : 2022-11-15 12:00:00 +0800
+image : https://i.imgur.com/Vs7kBG3.jpg
+#image_caption: ""
+description: "China’s Investments in Financial Services and the Reach of the Chinese Communist Party in the Private Sector"
+excerpt_separator: <excerpt/>
+---
+
+_How did an ecosystem of Chinese party-state actors enable a range of state-owned and private Chinese companies to embed themselves in Portugal’s financial system, creating a foothold to widen China’s presence within the country and beyond?_ <excerpt/> _The report specifically focuses on Fosun International Limited, a subsidiary of the Chinese conglomerate Fosun Group, which became a key source of foreign direct investment in Portugal through strategic acquisitions that opened market access for Chinese firms. Fosun’s investments in Portugal provide insight into the Chinese Communist Party’s activism in shaping the business environment for private sector players, as the company’s international strategy faced the challenge of balancing alignment with state goals against a regulatory crackdown on private sector outbound spending._
+
+### Introduction
+
+> In recent years, China’s unique brand of state capitalism has undergone profound changes at home and abroad. These have involved a widening array of state and non-state actors and an enhanced role for the Chinese Communist Party (CCP) in both top-down economic strategy and bottom-up business decisions for a range of companies.
+
+As previous reports in this series on the evolving Chinese economic model have detailed, this latest iteration of state-directed economic decisionmaking is most notable for the increasingly complex array of incentives and alignments between commercial and national strategic objectives that characterize outbound spending by Chinese companies today. This framework for conceptualizing, and responding to, the unique non-market aspects of China’s emerging global investment regime is best articulated as a shift from “China Inc.” to “CCP Inc.”
+
+“CCP Inc.” is comprised of an ecosystem of key state-owned and private commercial actors, state-owned financiers, government regulators, and CCP organs that are connected through an increasingly complex web of direct and indirect transactional, financial, strategic, operational, and political relationships. Importantly, these ecosystems operate both within the domestic commercial space, where they have been honed to provide integral support to state development goals, as well as in the international commercial space, where they provide a significant boost to the reach and economic influence of a given Chinese commercial entity, when compared with standalone private sector competitors from other countries.
+
+This case study explores how the CCP Inc. ecosystem has enabled a range of state-owned and private Chinese companies to embed into Portugal’s financial system with a view toward widening China’s financial presence within the country, in Europe more broadly, and in a range of other markets. This study focuses in particular on Fosun International Limited [复星国际有限公司] — a Hong Kong-listed subsidiary of the Shanghai-headquartered conglomerate Fosun Group and a key private sector player — which for many years has acted as a prominent source of foreign direct investment into Portugal’s financial sector, alongside and in concert with a range of Chinese state-owned enterprises (SOEs).
+
+More specifically, this study will examine the role of two key Fosun subsidiaries in Portugal — insurer Fidelidade Companhia de Seguros, SA, (Fidelidade) and Banco Comercial Português (BCP Millennium) — and the role they have played in enabling the CCP Inc. ecosystem to engage in Portugal’s financial sector.
+
+![image01](https://i.imgur.com/pMIFvQS.png)
+_▲ __Figure 1: Key Fosun Subsidiaries in Portugal.__ Source: [“Corporate Structure,” Fosun International](https://ir.fosun.com/en/investor-relations/fosun-ecosystem/corporate-structure/)._
+
+Further, this study will explore how Fosun — as a nominally private company — was both allowed and encouraged to invest heavily in a range of Portuguese assets as the contours of the CCP Inc. model have developed in recent years. Fosun’s success in aligning its investments within the parameters of the CCP Inc. framework is particularly notable given that its expansion in Portugal occurred at a time when outbound private investment by other major Chinese conglomerates was not only under scrutiny but also being actively reined in by senior Chinese officials, who had become acutely concerned about aggressive outbound spending by the Chinese private sector.
+
+This unique ability of Fosun to continue investing abroad at a time when private sector outbound spending was otherwise being actively curtailed speaks to one key aspect of the CCP Inc. model: private sector alignment with national strategic objectives. While such alignment has long been a part of the key performance indicators for China’s SOEs, the CCP’s activism in shaping the business environment for private sector players, as well as increasingly impacting the business strategies of private companies, is a more recent phenomenon. It is also foundational to the shift from the earlier “China Inc.” model to today’s “CCP Inc.” ecosystem. Nowhere is this more evident, at present, than in China’s domestic technology sector, specifically regarding platform economies, as the CCP has sought to bring the sector firmly in line with national governance objectives over the past several years.
+
+However, this dynamic is also apparent in China’s approach to outbound spending and specifically in recent investments in Portugal’s financial sector. As Portugal has become a critical node in China’s strategy for engaging with and investing in Europe over the past decade, Fosun and other companies’ ability to align with that geopolitical objective set the stage for some of the largest Chinese investments in the continent. Moreover, this occurred even as other private sector conglomerates were being pressured to divest a range of assets throughout the world, thanks to the CCP’s efforts to contain outbound spending and reduce those companies’ overall debt loads and related systemic debt risk.
+
+This study proceeds in four chapters. The first chapter outlines the initial Chinese foray into Portugal as SOEs, and notably Fosun, played a key role in bailing out the country on the back of the European debt crisis that erupted in 2010. Importantly, these initial investments from 2011 to 2014 largely took place within the more well-known China Inc. model, whereby SOEs (primarily) invested in a foreign country to directly, and to a large extent overtly, support China’s geopolitical aims. However, these initial investments, particularly by Fosun, laid the groundwork for the more complex CCP Inc. ecosystem to deepen its presence within Portugal in the following years, especially as the importance of the Portuguese market and Sino-Portuguese relations became a linchpin in China’s Europe strategy amid increasing Sino-European tensions and European skepticism toward the CCP.
+
+The second chapter of this study examines the ways in which Fosun, in particular, used its initial investment in the Portuguese financial sector, a key element of China’s bailout of Portugal, to pave the way for additional Chinese investment and relationships within the sector. Through this investment, Fosun increasingly became part of a wider network of Chinese companies operating in the market while bolstering commercial and diplomatic ties with a key European partner.
+
+The third chapter steps back to examine the wider context in which Fosun’s investments took place. Key to this context was a concerted, protracted effort by senior Chinese officials to gain better control over outbound private sector spending, shore up financial stability, and ensure much closer alignment between private sector business operations and strategic objectives of the party-state. Private sector alignment is a key element of the CCP Inc. model, and Fosun’s ability to continue operating successfully within this narrower scope for maneuver not only epitomizes the CCP Inc. model at work but also underscores the pitfalls for nominally private Chinese companies of stepping outside of the CCP Inc. framework.
+
+The final chapter of this report concludes by highlighting the elements of Fosun’s use of the CCP Inc. model, via its two key Portuguese subsidiaries, to leverage its presence within the Portuguese financial sector to support China’s wider geopolitical and global commercial aims throughout Belt and Road Initiative (BRI) countries and Latin America.
+
+
+### Laying the Groundwork
+
+> #### The Contours of China’s Portugal Bailout
+
+Chinese companies began investing heavily in Portugal in 2011, when the country was facing mounting economic headwinds thanks to a decade of lackluster economic performance and associated debt accumulation, the lingering effects of the 2007–08 global financial crisis, and the subsequent debt crisis that metastasized throughout Europe in 2010–13.
+
+![image02](https://i.imgur.com/wDNlnLT.png)
+_▲ __Figure 2: Annual Chinese Investment into Portugal, 2010–2021.__ Source: [“China Global Investment Tracker,” American Enterprise Institute](https://www.aei.org/china-global-investment-tracker/)._
+
+The country’s challenges culminated in a €78 billion ($104 billion) economic bailout program lasting from 2011 to 2014 that was initiated by the International Monetary Fund (IMF) in conjunction with the European Central Bank (ECB) and European Commission, the three of which would colloquially come to be referred to as “the troika.” These funds provided to Portugal by the troika were part of the group’s wider European bailout program that ultimately amounted to close to €500 billion ($667 billion) and included a wide range of countries, most notably Greece, Ireland, Spain, Hungary, and Romania.
+
+The troika’s key stipulations around its bailout program for Portugal included the need for the Portuguese government to lower public debt and spending, introduce structural economic reforms, and privatize certain national assets, including stakes in national power companies. Additionally, Portugal’s domestic banks had significant exposure to the country’s economic challenges, which set the stage for Chinese companies — and Fosun in particular — to invest in state-owned assets in the financial sector.
+
+Ultimately, as part of the bailout, the Portuguese government opted to raise funds through the sale of stakes in electric utility company Energias de Portugal (EDP), grid operator Redes Energéticas Nacionais (REN), and Caixa Seguros e Saúde, the insurance arm of Caixa Geral de Depósitos (CGD), Portugal’s largest state bank. At the time, Caixa Seguros e Saúde enjoyed a 26 percent market share in the insurance sector, making it the country’s largest insurance group. Three major subsidiaries were at the core of the group: Fidelidade, Portugal’s largest insurer, health insurer Multicare, and travel and transport insurer Cares.
+
+![image03](https://i.imgur.com/dclf8vY.png)
+_▲ __Figure 3: 2013 Makeup of Key Insurance Players in Fosun’s Portugal Deal.__ Source: Author’s research based on multiple sources._
+
+Chinese SOEs stepped in to undertake investments in the Portuguese power sector, and in late 2011, Portugal completed the sale of a 22 percent stake in EDP to the China Three Gorges Corporation (CTG) [中国长江三峡集团] for €2.7 billion ($3.8 billion), making the Chinese SOE the utility company’s largest shareholder. Months later, the State Grid Corporation of China [国家电网] purchased a 25 percent stake in power company REN for €390 million ($543 million).
+
+The Chinese government’s backing of these deals, and strong interest in pushing forward a commercial and bilateral relationship with Portugal at the time, was underscored by the premium that CTG offered on the EDP investment. The Chinese SOE outbid other interested parties by offering to purchase its stake in the Portuguese utility company at a 53 percent markup on EDP’s share prices at the time, bringing in an unexpectedly large revenue windfall for the embattled Portuguese government. This revenue generation was particularly important given the troika’s requirement that the Portuguese government raise at least €5.5 billion ($7.7 billion) via asset sales during the period of the bailout program. That goal would be aided considerably by Fosun’s €1 billion ($1.39 billion) investment in Caixa Seguros e Saúde, which is more commonly referred to by the brand name of its key subsidiary, Fidelidade, the largest and most important subsidiary of the group. Ultimately, the Chinese asset purchases detailed above would account for over 70 percent of the revenue generation requirements put in place by the troika around Portugal’s bailout program.
+
+![image04](https://i.imgur.com/Uu6qcuM.png)
+_▲ __Figure 4: Key Dates in Timeline of IMF Portugal Bailout and Related Chinese Investments into Portugal.__ Source: Author’s research based on multiple sources cited throughout the report, as well as [“Portugal profile - Timeline,” BBC, May 18, 2018](https://www.bbc.com/news/world-europe-17761153)._
+
+As the economic bailout program from the IMF, ECB, and European Commission progressed, Portuguese authorities began the process of undertaking an equity sale in Caixa Seguros e Saúde throughout 2013. Lisbon contacted 66 potential investors and received five preliminary offers for the insurance group. Chinese conglomerate Fosun International Limited was one of two bidders selected to provide a final proposal, with the U.S. private equity firm Apollo Global Management tendering the other final offer. Fosun would go on to successfully win the bid and acquire an 80 percent stake in Fidelidade, Multicare, and Cares for €1 billion ($1.3 billion). Fosun’s financial adviser, Morgan Stanley, said the deal, which was financed in part by the Bank of China and the Industrial and Commercial Bank of China (ICBC), was the largest acquisition between Chinese and European financial institutions since 2008. Importantly, Manuel Rodrigues, Portugal’s secretary of state for finance, said that Fosun won the deal over Apollo not only because of a better financial offer but also because Fosun promised it would not break up the insurer.
+
+The deal enabled Fosun to become the only major private sector Chinese player to participate in Portugal’s bailout. However, the deal progressed with clear backing at the highest levels of the Chinese party-state, with Chinese president Xi Jinping and Portuguese president Aníbal Cavaco Silva both on hand to witness the official closing of deal in Beijing in May 2014. According to Fosun, the deal also marked the first major outbound investment of a Chinese firm to acquire a foreign insurance company.
+
+This investment ultimately laid the groundwork for Fosun to further deepen its presence in the Portuguese financial sector and also set up future key investments in the sector by other Chinese players, namely state-owned UnionPay [中国银联], in 2018. It also further widened the reach of Chinese players in the power sector and enabled a foray into the Portuguese healthcare sector, among other key industries.
+
+Indeed, later in 2014, Fosun joined state-owned State Grid Corporation of China as an investor in the Portuguese grid operator REN by purchasing a 3.97 percent stake in the company. Later that year, through its newly acquired Fidelidade subsidiary, Fosun acquired a 96.07 percent stake in healthcare services provider Espírito Santo Saúde – SGPS, SA, which owned one of the largest private hospitals in Lisbon, Hospital da Luz.
+
+During this period, Fosun clearly indicated the strategic nature of its investments in Portugal as an anchor through which to pursue investments throughout Europe. In the press release announcing its acquisition of Espírito Santo Saúde, for example, Fosun directly stated:
+
+> Portugal is a very important market for Fosun and a strategic destination in Fosun’s global investment footprint. Fosun aspires to anchor from Portugal to seek and identify different investment opportunities within Portugal and in other parts of Europe, covering industries including real estate, leisure travel, healthcare, and consumer sectors.
+
+While such an approach would seem to be justified in terms of the company’s business strategy toward the European market, the approach paralleled a similar tack by Chinese officialdom. The Ministry of Foreign Affairs highlighted this approach after a 2013 meeting between then-foreign minister Yang Jiechi and Portuguese minister of state and foreign minister Paulo Portas, underscoring that Portas “welcomed more Chinese enterprises to invest in Portugal, noting that Portugal is willing to further advance the bilateral comprehensive strategic partnership and thereby promote the comprehensive development of EU-China ties.” This approach by Fosun similarly parallels that of Chinese SOE investments in Portugal, with CTG’s investment in EDP being undertaken in large part as an effort by the Chinese company to gain a foothold in the wider European renewable energy market — a goal that would be further underscored by CTG’s 2018 attempt to take full ownership of EDP and its renewable energy subsidiary.
+
+This wider strategic push by Chinese authorities and companies into the Portuguese market is highlighted by the fact that overall Chinese foreign direct investment in Portugal went from virtually zero in 2010 to €5.7 billion ($6.3 billion) by the end of 2016, with Fosun playing a critical role in some of the largest investments during this period, most notably in the financial services sector.
+
+As this study details, Fosun’s ongoing ability to deepen its investment presence within Portugal throughout this period was due in significant part to the company’s recognition of and integration into the evolving CCP Inc. model of outbound investment, especially as it was crystalizing in 2017–18. As such, the company’s direct connections — including through its leadership — to different elements of the CCP are important to note, as such associations work to reinforce alignment between official party and state bodies and private sector actors in China.
+
+Most importantly, Fosun’s founder and chairman, Guo Guangchang, has long-standing connections to various CCP institutions. Guo was a member of the 10th and 11th National People’s Congresses — China’s legislature — which ran from 2003 to 2008 and 2008 to 2013, respectively. He was also a member of the 9th (1998–2003) and 12th (2013–2018) National Committees of the Chinese People’s Political Consultative Conference — China’s top political advisory body, which has a remit to undertake so-called United Front work to ensure alignment between the CCP and non-CCP groups, including the private sector. Guo is also a current member of the standing committee of the All-China Youth Federation, a CCP-led body affiliated with, among other groups, the Communist Youth League of China, a key power base of former CCP general secretaries Jiang Zemin and Hu Jintao as well as the current premier, Li Keqiang.
+
+In addition to Guo, Fosun’s board features several other members with connections to the party-state. Co-CEO and executive director Chen Qiyu, for instance, was a member of the 12th and 13th standing committees of the Shanghai Municipal People’s Consultative Conference. Another co-CEO and executive director, Xu Xiaoliang, is a member of the Shanghai Youth Federation, Shanghai’s local chapter of the All-China Youth Federation. Meanwhile, non-executive director Zhang Shengman was previously a deputy director at the Ministry of Finance, and non-executive director Zhang Huaqiao is a former People’s Bank of China official and former non-executive director of the state-owned Sinopec Oilfield Service Corporation.
+
+These are just a handful of the key public affiliations that Fosun’s leadership has, or previously had, with institutions within the party-state system. And while such affiliations are not unusual among Chinese private sector executives, such associations and relationships could only have helped in Fosun’s successful navigation of and alignment within the CCP Inc. ecosystem in recent years.
+
+Ultimately, Fosun was well placed to play a key role in China’s strategic expansion within the Portuguese financial sector, for a range of reasons. As the next chapters of this study detail, the company was able to deftly execute that expansion — not only to its own advantage, but also in a way that enabled other Chinese entities, notably some key state-owned financial institutions, to deepen their presence within the country throughout the years following the initial bailout program.
+
+![image05](https://i.imgur.com/z44Gv9U.png)
+_▲ __Figure 5: Selected Party and Government Affiliations of Fosun Board Members.__ Source: Author’s research based on multiple sources._
+
+
+### Fosun and CCP Inc.’s Growing Presence in the Portuguese Financial Sector
+
+Fosun’s initial investment in Fidelidade established a foundation through which the company would deepen its own ties, and widen the CCP Inc. network, within the Portuguese financial sector — as well as eventually act as a base of CCP Inc. connectivity throughout key BRI countries and Latin America. In coming years, these investments would enable deeper relationships for other Chinese SOEs, particularly UnionPay International and China Reinsurance Corporation (China Re), within Portugal, a process that continued to run in parallel to the wider CCP courting of Portugal as a key component in its strategy toward Europe.
+
+Following the initial Chinese bailout of Portugal, Fosun made one of its most critical investments when it purchased a sizable stake in Banco Comercial Português (BCP Millennium), Portugal’s largest private bank, in November 2016. Fosun signed a memorandum of understanding (MoU) with BCP Millennium to acquire a 16.67 percent stake for €174.6 billion ($193.2 billion) and signaled its intention to raise its stake to 30 percent over the years to come. The initial share purchase made the company BCP Millennium’s largest shareholder alongside Angolan state oil company Sonangol Group. Subsequently, Fosun acquired a 30 percent stake in multiple tranches over several years, upping its stake in the bank to 27 percent throughout 2017 and to 29.93 percent in 2020.
+
+As Fosun boosted its ownership of BCP Millennium, the bank also began to undertake a critical role in pushing forward Chinese commercial, policy, and geopolitical aims in Portugal. Critically, in May 2018, BCP Millennium acted as the intermediary for state-owned China Three Gorges Corporation (CTG) in its €9 billion ($10.6 billion) bid to take a controlling interest in utility company Energias de Portugal (EDP) as well as the company’s renewable energy arm, EDP Renováveis. CTG launched the bid as an all-cash tender offer for the outstanding shares that the Chinese SOE did not obtain in its 2011 investment in the company, looking to purchase the outstanding 76.7 percent at a 5 percent share-price premium over the €3.09 ($4.30) share price at the time.
+
+![image06](https://i.imgur.com/NJcn0T6.png)
+_▲ __Figure 6: Fosun’s Evolving Ownership Stake in BCP Millennium over Time.__ Source: Author’s research based on multiple sources._
+
+CTG’s bid was of particular importance at that time: it not only represented a major new push by a Chinese SOE into the European renewable energy market, but it came at a time when Chinese foreign direct investment into Europe had become increasingly controversial. EDP shareholders, led by activist investment firm Elliott Investment Management, which held a 2.9 percent stake in EDP at the time, eventually blocked the bid, arguing that Fosun undervalued CTG and citing a shareholder voting rights reform requirement, included by CTG as part of the takeover bid, as too onerous.
+
+Importantly, though, the potential transaction came in the wider context of increased Western skepticism around Chinese outbound investment and was under scrutiny from European and U.S. regulators. Indeed, the episode underscored a growing rift between Portuguese and other European governments over Chinese investment in Europe. Portugal’s then-prime minister António Costa indicated he had “no reservations” around the proposed takeover, even as German, French, and Italian regulators had moved to push forward a draft EU screening framework for investment into the bloc that would give EU regulators in Brussels the ability to weigh in on investments deemed “likely to affect security or public order in one or more member states.”
+
+While ultimately unsuccessful, BCP Millennium’s participation — and by extension Fosun’s participation — in facilitating the offer on behalf of CTG highlights a key example of the CCP Inc. ecosystem at work. The foothold of the nominally private Chinese company in the Portuguese financial sector was key to allowing CTG to push the bid forward. It reflected not only an effort to expand the reach of CCP Inc. into the Portuguese economy but also an attempt to further China’s foreign policy aims by boosting its presence in the European renewable energy market and trying to circumvent growing European skepticism toward Chinese investment in strategic European assets.
+
+But even as CTG’s takeover attempt faltered, BCP Millennium continued to act as a key conduit for a deepening Chinese presence in the Portuguese financial sector and the wider Portuguese economy. Indeed, throughout 2018, the bank’s ties to a number of Chinese financial institutions, and within Chinese financial markets, grew rapidly. In May of that year, BCP Millennium re-signed an MoU in Beijing with Chinese state-owned lender ICBC — one of the underwriters of Fosun’s initial Fidelidade investment in 2014 — which had initially been drawn up in 2010. BCP Millennium’s explicitly stated intention, and that of its major shareholder, Fosun International, in re-signing the MoU was to leverage the relationship to deepen economic ties between China and Portugal, using the latter as a key launching pad for deepening these same ties in Europe and Portuguese-speaking African countries. Indeed, the press statement accompanying the MoU signing stated:
+
+> [BCP Millennium] remains committed to being a relevant part of an international business platform between China/Macao, Portuguese speaking countries — namely in Africa — and Europe, in order to support trade activity and investment flows in those geographies . . . taking advantage of ICBC’s regional presence and influence as well as other potential synergies in cooperation with the bank’s principal shareholder, Fosun International.
+
+![image07](https://i.imgur.com/d5s7OQs.png)
+_▲ __Figure 7: Key Fosun Acquisitions in Portugal over Time.__ Source: Author’s research based on multiple sources._
+
+Additionally, BCP Millennium signed an agreement in June 2018 to conduct renminbi clearing and settlement with the Bank of China Macao, which “reinforced the bank’s presence in the Chinese market” as it became “the first bank in Portugal to be considered a participating bank with access to Macao’s payments system.” Importantly, the Bank of China had been another major underwriter of Fosun’s initial Fidelidade investment, underscoring the long-standing relationship between Fosun, its Portuguese subsidiaries, and the Chinese lender. That same month, BCP Millennium officially signed an agreement with Alipay (the payment arm of China’s fintech giant Ant Group), pursuant to a March 2018 MoU, which allowed it to become the first bank to facilitate transactions between Portuguese merchants and Chinese travelers.
+
+Most notably, in December 2018, BCP Millennium signed an agreement with UnionPay International — a subsidiary of the state-owned payments provider China UnionPay — to become the first European bank to issue UnionPay bank cards, marking a major overseas expansion for the Chinese SOE.
+
+![image08](https://i.imgur.com/PwB9rbU.png)
+_▲ __Figure 8: Fosun Relationships with Other Chinese Entities in Portugal through Its BCP Millennium Subsidiary.__ Source: Author’s research based on multiple sources._
+
+The BCP Millennium agreement with UnionPay marked a particularly exceptional example of the CCP Inc. ecosystem in action. Not only did the agreement offer UnionPay — officially the largest global issuer of bank cards at the time but with little presence in the European Union — a key foothold in the European market, the deal also further underscored BCP Millennium’s place as a key touch point for a range of Chinese financial and non-financial institutions in Portugal. The unique placement of BCP Millennium as a key player in the Sino-Portuguese relationship was underscored in no uncertain terms by the fact that the deal with UnionPay International was signed as part of a state visit by Xi Jinping to Portugal in late 2018.
+
+During the trip, Xi Jinping and Portuguese prime minister António Costa signed several bilateral cooperation agreements, including a formal agreement for Portugal to sign onto the BRI. These agreements were paired with an additional announcement of 17 key commercial agreements in the areas of infrastructure, finance, automobiles, and science and technology, including the UnionPay International deal with BCP Millennium. Other key deals inked at the ceremony included a memorandum between telecommunications company Altice Portugal (formerly known as Portugal Telecom) and Huawei Technologies Company to strengthen cooperation on 5G frequency band licenses and an agreement to establish the STARlab project — a joint space and maritime technology laboratory between the Chinese Academy of Sciences, Portuguese aerospace and defense company Tekever, and Portugal’s Centre for Product Engineering and Development.
+
+Additionally, the international subsidiary of the state-owned China Oil and Foodstuffs Corporation (COFCO) signed an agreement with the Portuguese Trade and Investment Agency to establish the COFCO International Centre of Excellence for corporate shared services. Following the deal, the chairman and CEO of COFCO International stated that “Portugal’s positive approach towards international business, skilled human resources and strategic location were the main reasons for choosing Portugal over several other candidate locations.”
+
+The signing of the BCP Millennium agreement with UnionPay alongside such obviously important strategic agreements in the areas of technological infrastructure, aerospace and maritime research, and agribusiness underscores both the high-level Chinese government backing for the financial sector cooperation as well as its own strategic importance. Indeed, during a meeting with Portuguese president Marcelo Rebelo de Sousa on the same state visit, Xi highlighted China’s strategic approach to the bilateral relationship with Portugal by saying that “as a member of the European Union, Portugal has huge influence on Africa and many Portuguese-speaking countries, and is a key link in China’s economic internationalization strategy.”
+
+For its part, Fosun International indicated that the BCP Millennium tie-up with UnionPay International, first floated in late 2017, was a major milestone in the company’s push to “promote the synergy of various sectors such as banking, insurance, and health” within Portugal as the company moved to “fully mobilize resources to promote outstanding domestic [Chinese] financial enterprises, [including] . . . [the] Industrial and Commercial Bank of China, China UnionPay, the China-Africa Fund, [and] the China-Portugal Fund.” Additionally, Fosun leadership indicated that “together with BCP, [the company would] help Chinese enterprises to go global, and jointly carry out cooperation in payments, investment, loan business, and other aspects.”
+
+Xi’s 2018 state visit to Portugal, and the wide array of commercial deals and relationships connected to that visit, represent a snapshot of CCP Inc. in action. While high-level state visits are used by many countries to help reinforce commercial ties, the highly strategic nature of each of the deals that were signed on Xi’s Portugal trip speaks to a more fundamental alignment between CCP strategic objectives and Chinese commercial interests abroad. It further underscores the incentives of a range of companies — including BCP Millennium’s Chinese parent, Fosun — to support official efforts to cement Portugal as a critical partner on the European continent and as a potential launching pad into the wider region.
+
+
+### Critical Context of Fosun’s Success with BCP Millennium
+
+Fosun and BCP Millennium’s success in enabling a wider CCP Inc. network of investment into Portugal is particularly notable considering that it came at a time when outbound investment by other private sector Chinese conglomerates was being actively reined in by Chinese authorities.
+
+Throughout 2017, Chinese officials had become increasingly concerned about soaring rates of outbound investment over the previous several years. For example, Vice Premier Liu He commissioned a study to examine the economic vulnerabilities created by such large outbound flows of direct investment, particularly in light of the role such investment played in bursting Japan’s economic bubble in the 1990s. According to media reports, the study included a recommendation to gain greater control over, and reduce the scale of, outbound investment by some of China’s largest private sector companies.
+
+Indeed, the topic of outbound investment, and its potential role in destabilizing the domestic financial system, reportedly emerged as a key topic of discussion at an April 2017 Politburo meeting. Importantly, China’s 25-member Politburo typically discusses key economic policy priorities at its monthly meetings once a quarter, in January, April, July, and October. And while the official readouts of the Politburo meeting and Politburo study session from that month do not explicitly mention the goal of reducing outbound spending by Chinese companies, they focus intensely on senior Chinese policymakers’ clear concern about reducing financial system volatility and instability, including vulnerabilities and potential spillover effects created by the Chinese financial system’s growing linkages with the global financial system.
+
+Critically, in the readout of the Politburo study session on financial security on April 26, 2017, Xi clearly stated that “financial security is an important part of national security and an important foundation for the stable and healthy development of the economy.”
+
+![image09](https://i.imgur.com/8WC9zxj.png)
+_▲ __Figure 9: Overall Chinese Outbound Investment 2010–2020.__ Source: [“走出去”公共服务平台 [“Going Out” Public Service Bulletin], 中华人民共和国商务部 [Ministry of Commerce of the People’s Republic of China], accessed November 10, 2022](http://fec.mofcom.gov.cn/article/tjsj/tjgb/)._
+
+These key Politburo meetings would ultimately set the stage for a prolonged, multiyear effort to de-risk the domestic Chinese financial system, part of which involved a crackdown on foreign and domestic financial activities by some of China’s largest private sector conglomerates, including the HNA Group, Dalian Wanda Group, Anbang Insurance Group, and Fosun Group.
+
+Prior to the crackdown on outbound investment deals, these four companies alone accounted for a whopping $57 billion in outbound spending from 2015 to mid-2017, representing a full 15 percent of all outbound spending by Chinese companies during this period. In June 2017, financial authorities specifically requested reports from banks on the overseas loans made to each of these companies, and over the following several years, scrutiny of the companies’ financial positions, and specifically their overseas spending and assets, ramped up.
+
+Ultimately, the State Council released a key set of opinions in August 2017 to codify and tighten the previously disparate rules around outbound investment by laying out specific areas of overseas direct investment that were encouraged, restricted, and prohibited. Encouraged investment areas included those in the services sector, in technology that would help to move China up the value chain, and for projects under the umbrella of the BRI. Restricted investment areas included real estate, hotels, cinemas, entertainment, sports clubs, and “investment platforms without specific industrial projects.” Meanwhile, prohibited investment areas included “investment involving the production of core technologies and products of the military” or “investments that endanger or may endanger the interests of the state” — a broad umbrella under which Xi had placed financial system stability just months before.
+
+Over the following several years, the four major private sector conglomerates that had been singled out by authorities for renewed scrutiny, including Fosun, would see a range of regulatory outcomes in terms of their ability to maintain and expand their respective portfolios of overseas assets, a process that further highlighted some key aspects of the emerging CCP Inc. framework at that time. Core among these was the need for nominally private sector entities to more clearly align with national strategic objectives in undertaking outbound spending.
+
+Within this context, then, it is notable that Fosun was able to continue deepening its ties in the Portuguese financial sector, through its Fidelidade subsidiary and related investment in BCP Millennium, over the course of 2017 and 2018. Indeed, of the four conglomerates that came under Beijing’s scrutiny, Fosun has seen by far the best regulatory outcomes and clearly maneuvered to get back into the good graces of senior policymakers. By comparison, Anbang Insurance Group (安邦保险集团) was taken over by the government in February 2018. The company’s non-core assets were wound down over the following three-year period of government receivership, and its founder and chairman, Wu Xiaohui, was handed an 18-year prison sentence for fraud. Meanwhile, on the very same day that Anbang’s government takeover was announced, Fosun announced plans to purchase a controlling interest in one of France’s oldest fashion design companies. For its part, HNA Group [海航集团] has been placed into bankruptcy and taken over by provincial authorities, while its chairman and CEO were both detained by authorities on suspicion of crimes in late 2021. Finally, Dalian Wanda’s [万达集团] overseas asset base is now a fraction of its peak, as the company shed assets amounting to $19.2 billion between mid-2017 and early 2019.
+
+Fosun’s success in navigating the regulatory crackdown, especially in comparison to its highly chastened peers, can be explained in part by the clear alignment between its investments in Portugal and Chinese policymakers’ objectives to leverage commercial and diplomatic relations with the country as an avenue for deepening commercial engagement and investment in Europe more broadly as well as to cultivate a key ally in mitigating rising European skepticism toward Chinese investment. Indeed, as internal concern around capital outflows via unruly overseas direct investment was beginning to percolate among the Chinese leadership in late 2016, Xi called directly for more Chinese investment in Portugal, going so far as to say that China would encourage expansion in areas including finance, insurance, and healthcare — areas in which Fosun was already the leading Chinese player in the country through its investments in Fidelidade and BCP Millennium.
+
+As the government’s crackdown on outbound investment and high debt levels among China’s private sector conglomerates moved forward, Fosun’s domestic messaging within China also began to align more closely with CCP and Chinese state priorities. As soon as July 2017, Fosun chairman Guo Guangchang began to publicly support Beijing’s tougher rules on overseas investments, citing a reduction in potential risks to financial security as one element of his support of the eradication of irrational outbound investment. Guo’s clear and public alignment with the new outbound investment framework, and his company’s subsequent ability to operate successfully within it, is particularly notable given the fates of the Anbang and HNA chairmen.
+
+Indeed, this alignment came not only on the back of the crackdown on overseas spending but also after Guo had previously been caught up in Xi’s sweeping anti-corruption crackdown on the financial sector. In late 2015, Guo was among several high-profile private sector Chinese executives that were subjected to anti-corruption investigations and temporarily went missing from public view. On December 10, 2015, local financial media reported that Fosun executives had been unable to reach Guo since noon that day. Guo’s sudden disappearance ultimately led to a brief suspension of trading for Fosun International shares on the Hong Kong exchange before he resurfaced on December 14, saying he had been assisting judicial authorities in their investigations but offering no further details. Some observers speculated that Guo’s detainment was related to his relationship with Yao Gang, vice chairman of the China Securities Regulatory Commission, or Ai Baojun, vice mayor of Shanghai, both of whom were under investigation by anti-corruption authorities at the time. Such an experience may have heightened Guo’s political sensitivity and helped him shepherd Fosun successfully through the evolution of the CCP Inc. ecosystem in the following years.
+
+Additionally, after the crackdown on outbound spending, Fosun International began to more explicitly tie its outbound investment efforts to support of the BRI, with co-CEO Xu Xiaoliang saying in September 2017, just weeks after the release of the State Council’s opinions on outbound investment, that “now that we know what the government encourages and discourages, we have a clearer idea of where to expand our global footprint.” Guo further highlighted this point in a 2018 interview, stating: “Our overseas investments are approved by the Chinese government and the local governments, not just in Europe but globally” and “The Chinese government . . . support[s] the companies who respect the law.”
+
+![image10](https://i.imgur.com/3uXqOOW.png)
+_▲ __Figure 10: Timeline of the Regulatory Crackdown on Outward Direct Investment.__ Source: Author’s research based on multiple sources._
+
+In short order, these increased efforts at public alignment with the CCP’s enhanced oversight of outbound spending by nominally private sector Chinese conglomerates were overtly recognized. In December 2017, the CCP’s official mouthpiece, the People’s Daily, went so far as to publicly praise Fosun’s outbound investment activities in an op-ed, juxtaposing those efforts directly against other Chinese companies that had failed to realign to the emerging CCP Inc. model of outbound investment.
+
+The article highlighted the achievements of China’s ongoing investment presence beyond its borders, arguing:
+
+> Behind the dazzling achievements, some enterprises take advantage of the “going out” strategy to strengthen and refine their brands; however, some are involved in undesirable foreign investment behaviors.
+
+The article went on to call out Fosun’s investment in BCP Millennium as a model for other companies to emulate, highlighting the initial groundwork that the tie-up was already laying for UnionPay to expand in Europe:
+
+> Recently, BCP [Millennium], which has Fosun as an investor, reached a strategic cooperation agreement with UnionPay to jointly carry out UnionPay card issuance, innovative payment promotion, and other cooperation in Europe. This exemplifies Fosun’s successful practice of helping the Belt and Road Initiative and Chinese enterprises with their global layout.
+
+Finally, the article hit home the point that outbound investment by a range of Chinese companies can only succeed within the framework of overt policy support, stating:
+
+> Steady and positive “going out” is not possible without policy support and guidance. In the face of the excessively rapid growth of outbound foreign investment in fields such as real estate, hotels, cinemas, entertainment, and sports clubs in recent years, relevant regulatory authorities have provided risk warnings and adopted a series of policy measures. According to Guo Guangchang, chairman of Fosun International, “Capable government ensures effective markets. Stable, predictable, more transparent, and fairer policies can support real and legal foreign investment in line with the national strategy, which guarantees long-term and healthy development of companies.”
+
+The clear realignment of Fosun within the parameters of the CCP Inc. model not only allowed the company to gain high-level backing for its ongoing investments in the Portuguese financial sector throughout 2017 and 2018 but also underpinned increasing ties between Fosun-invested Portuguese companies and other major Chinese financial players along the BRI and into a wider range of international markets over the following years, as the next chapter of this report explores. Moreover, the ability of Fosun to continue operating within Europe and to deepen its ties — and those of the wider CCP Inc. ecosystem — is even more striking when considering the outcome of similar investments by the other nominally private sector Chinese conglomerates during this period of enhanced scrutiny. Most notable in this regard is the fate of HNA Group’s 2017 investment in Germany’s Deutsche Bank AG.
+
+In a move similar to that of Fosun’s investments in Fidelidade and BCP Millennium, HNA Group bought stakes in Deutsche Bank in February and March 2017, becoming one of the bank’s largest shareholders, with a 4.8 percent stake, worth just over €1 billion ($1.13 billion). Then, in May 2017, just around the time that Fosun was increasing its stake in BCP Millennium, HNA went on to boost its investment in Deutsche Bank further, ultimately taking on a near 10 percent stake in the German lender, making the Chinese conglomerate its largest shareholder.
+
+The parallels between the HNA and Fosun investments in key European financial players are particularly notable, not only for their similar timing but also given that HNA’s investment came as the German lender was struggling under the weight of an array of regulatory penalties and poor investment decisions from 2013 to 2016, requiring infusions of outside capital to help steady the bank in 2016 and 2017. These dynamics were similar to the challenges faced by a range of Portuguese financial institutions in the wake of the European debt crisis, which opened the door for the initial Fosun investment in Fidelidade and later BCP Millennium.
+
+![image11](https://i.imgur.com/sg4CMvZ.png)
+_▲ __Figure 11: Selected Major Overseas Investments by HNA 2015–2017.__ Source: Author’s research based on multiple sources cited throughout this report and others. Please reference the endnotes for complete additional citations._
+
+However, the ultimate fate of Fosun’s investments in Portugal could not have been more starkly different than that of HNA’s investment in Deutsche Bank. Indeed, rather than utilizing its position as a key shareholder in the German lender to enable a growing presence of the CCP Inc. ecosystem within the German economy and financial sector, as Fosun was able to achieve in Portugal, HNA quickly made an about-face on its German investment, selling down its stake to 8.8 percent in February 2018 and losing its status as the firm’s largest shareholder after less than a year in that position. While this initial paring of HNA’s stake in Deutsche Bank was widely attributed to the need to raise capital in order to address liquidity issues that the Chinese conglomerate was facing in early 2018, the company continued to sell off its stake in the coming years as Chinese officials demanded that the company wind down its non-core business lines and assets. Ultimately, HNA was effectively taken over by the provincial government of Hainan, where the group is based, which began the process of restructuring the group in late 2021.
+
+The juxtaposition of HNA’s failed overseas investments, as well as the forced spin-off of its foreign assets and its ultimate takeover by local authorities, against the ongoing flourishing of Fosun’s overseas expansion throughout this period throws into stark relief just how successful the latter company was in both recognizing and aligning with the rapid evolution of the CCP Inc. model during the 2017–18 time period. Fosun’s public and high-profile alignment with the concerted regulatory push to fully align overseas spending tightly with CCP and Chinese state strategic objectives was a critical element in its continued success investing abroad.
+
+Furthermore, Fosun’s overt drive to leverage its investments and business relationships in Portugal to open additional overseas business opportunities for a range of Chinese state and private companies — both within and beyond the financial sector — speaks to a clear recognition of the importance of the ecosystem aspect of the CCP Inc. model. Indeed, in this model the outbound spending and foreign commercial presence of a given company is not simply meant to boost that company’s bottom line, nor even to solely support China’s diplomatic and strategic objectives abroad. Importantly, such investments are also meant to boost commercial opportunities for other Chinese players in overseas markets.
+
+In this way, Chinese companies — both state-owned and nominally private — can swim in the wake of other Chinese companies’ success in penetrating foreign markets, and the relationships between these companies work to reinforce China’s overall foreign commercial presence. The People’s Daily article praising Fosun’s efforts to open a pathway for UnionPay International’s expansion in Europe makes this point explicit, and Fosun would go on to further internalize and execute on this element of the CCP Inc. model in future overseas operations alongside other key Chinese SOEs.
+
+
+### Building on Success
+
+> Fidelidade’s Presence beyond Portugal
+
+Following the increased scrutiny of outbound investment by nominally private Chinese companies in 2017, Fosun continued to deepen the alignment between its global investment portfolio and China’s national objectives, further integrating into the CCP Inc. model in the process. Another key tie-up came in 2019 when Fosun’s Fidelidade subsidiary entered into a strategic partnership with China Reinsurance Corporation (China Re) [中国再保险] to provide project financing and reinsurance for the BRI.
+
+In keeping with Fosun’s moves to align both messaging and investments with CCP priorities, the agreement was signed in April 2019 in Beijing at the Second Belt and Road Forum for International Cooperation, a gathering that was widely seen as core to furthering China’s geopolitical and global commercial objectives at the time by seeking to redefine the BRI against growing global critiques of the effort. The initiative’s growing reputation as environmentally unfriendly, corrupt, and debt-fueled had led Chinese leadership to seek to recast the effort. This push fit within officials’ wider efforts to gain greater control over outbound spending as they sought “to exert more control over the program . . . including [with] clearer rules for state-owned-enterprises, restricting use of the BRI brand, and building overseas auditing and anti-corruption mechanisms.”
+
+Xi Jinping chaired the forum, which was attended by thousands of participants, many from the foreign business community, and dozens of foreign heads of state. Xi held a spate of bilateral meetings as part of the forum, including talks with President Marcelo Rebelo de Sousa of Portugal, where Xi characterized the bilateral relationship as one of “prominent strategic significance, high complementarity in interests, and strong economic complementarity.” The readout of the meeting further underscored China’s view of Portugal as a key channel for stabilizing and improving broader relations with Europe, saying “it is believed that the Portuguese side will also continue to play an active role in maintaining the right direction of China-Europe relations.”
+
+Inking the Fidelidade partnership with China Re at the forum, therefore, worked to boost the prominence of the agreement, which was listed by Chinese state media as one of 17 key investment projects announced at the gathering. Reporting around the agreement further indicated that the primary area of focus for the partnership would be to enhance “reinsurance solutions for projects in Portugal, Spain, France, Angola, Mozambique, Cape Verde and Peru.” For its part, Fidelidade expressly stated that the partnership with this important SOE, the only state-owned reinsurer in China, would enable the Fosun-owned group to widen its reach throughout various geographies to “diversify its scope and develop new opportunities for international business growth, bolstering its offer to the Chinese community around the world.”
+
+Meanwhile, China Re’s publicity around the agreement further underscored that it would help to unlock new investment opportunities within China and around the world for Fidelidade, saying: “The two sides will also seek opportunities for cooperation in the construction of the Greater Bay Area of Guangdong, Hong Kong and Macao, especially to exert the influence of Fidelidade Insurance Group of Portugal in Portuguese-speaking countries and provide professional services for Macao to exploit markets of Portuguese-speaking countries.” In addition, linked to the Fideldidade-China Re strategic cooperation was a separate effort between China and Angola to enact a strategic cooperation agreement with Fidelidade.
+
+![image12](https://i.imgur.com/f8WiP7K.png)
+_▲ __Figure 12: Key Fosun and Fidelidade Investments in Latin America 2019–2020.__ Source: [Margaret Myers, “Going Out, Guaranteed: Chinese Insurers in Latin America,” The Dialogue, January 2022](https://www.thedialogue.org/wp-content/uploads/2022/01/Chinese-Insurers-in-Latin-America-1.pdf)._
+
+While the establishment of its partnership with China Re appears to have been the marquee agreement that Fidelidade undertook in 2019, Fosun was simultaneously expanding its presence in a range of other markets around the world through its Fidelidade subsidiary with the express purpose of offering insurance support to Chinese projects, most notably throughout Latin America.
+
+That year, Fidelidade announced it would sell insurance in Chile “through a series of partnership agreements. Elsewhere in South America, the Portuguese company acquired 51 percent of Peruvian insurer La Positiva Seguros y Reaseguros, through its local subsidiary, and purchased an almost one-fourth ownership of Alianza Compañía de Seguros y Reaseguros in Bolivia.
+
+These investments were undertaken within the context of specific Chinese policies to leverage the insurance sector to support and stabilize a range of investment activities in Latin America, as emphasized in a January 2022 report on Chinese insurers in Latin America from the Inter-American Dialogue:
+
+> China’s top planners have noted the importance of enhanced insurance support for the country’s overseas operations in recent five-year plans and in policies toward Latin America. China’s 1+3+6 Cooperative Framework, introduced to the region by Xi Jinping in 2015, is among the Latin America-specific policies intended to boost funds, credit loans, and insurance to the region — in this case for project development in logistics, electricity, and information technology. . . . As Zhu Junsheng, deputy director of the Insurance Research Office of the Financial Research Institute of the Development Research Center of the State Council noted, Chinese infrastructure firms, insurers, and other actors are expected to increasingly work together to identify high-quality overseas projects and ‘increase the attractiveness of infrastructure projects to market funds.’
+
+These deepening investments and relationships, in both Latin America and BRI countries, that Fosun has pursued in recent years via its Fidelidade subsidiary show the ongoing and intensifying alignment of Fosun’s global commercial objectives with Chinese geopolitical and strategic interests. Additionally, the ever-growing roster of key SOE financial players with which Fosun and Fidelidade are partnering in these endeavors further highlights Fosun’s ability to leverage the CCP Inc. ecosystem to its advantage. That is especially true considering that over the past several years senior Chinese officials, including Xi Jinping, have repeatedly stated their view that the Portuguese relationship and market should be seen as a critical anchor for China’s growing commercial and diplomatic presence around the world.
+
+
+### Conclusion
+
+The ability of Chinese-invested companies such as Fidelidade and BCP Millennium to leverage their relationships with Chinese SOEs to expand into a wide range of markets around the world is a core component of the CCP Inc. ecosystem. Such cooperation allows for a wider array of relationship building, networking, and financial and policy support than any one company could achieve on its own.
+
+Equally as important, Fosun’s maneuvering to embed itself within the Portuguese financial sector through high-profile, strategic investments has allowed the company to act as one of the key anchors in the wider CCP Inc. approach to the Portuguese market. Indeed, the fact that this nominally private company worked to boost the presence of key state-owned actors within Portugal — including the China Three Gorges Corporation, UnionPay, the Industrial and Commercial Bank of China, and the Bank of China — rather than the other way around, speaks to the essence of the shift from “China Inc.” to “CCP Inc.” that has taken place in recent years and is ongoing today. Moreover, Fosun’s maneuvering to buoy the strategic national objective of developing commercial and diplomatic ties with Portugal as a jumping off point to pursue deeper engagement in European and other markets underscores how thoroughly the CCP has co-opted the Chinese private sector as the CCP Inc. model of economic governance has evolved.
+
+As this report has highlighted, these achievements are all the more remarkable given the fast-evolving nature of policies dictating outbound private sector Chinese investments at the time Fosun was pursuing its expansion into Portugal, especially in light of the failure of other private Chinese conglomerates to achieve similar alignment with national goals.
+
+Ultimately, this case study not only highlights some of the crucial elements of the CCP Inc. model in action but also underscores the still-evolving nature of that model. As state-owned and nominally private Chinese companies continue to widen their investment footprints throughout the global economy, it will be critical for policymakers and business leaders in Western countries to deepen their understanding of the contours of the CCP Inc. ecosystem as it has evolved to date. But additionally, to compete against the CCP Inc. ecosystem going forward, Western countries must also seek to anticipate how the ecosystem will become further refined and design forward-looking global trade and investment regimes robust enough to meet the challenge.
+
+---
+
+__Andrew Polk__ is a senior associate (non-resident) with the Freeman Chair in China studies at the Center for Strategic and International Studies (CSIS) and the cofounder and head of economic research at Trivium China, a Beijing-based strategic advisory firm.
diff --git a/_collections/_hkers/2022-11-15-winter-wars-of-2022-2023.md b/_collections/_hkers/2022-11-15-winter-wars-of-2022-2023.md
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+---
+layout: post
+title : Winter Wars Of 2022-2023
+author: Anthony H. Cordesman and Paul Cormarie
+date  : 2022-11-15 12:00:00 +0800
+image : https://i.imgur.com/krOFsoB.jpg
+#image_caption: ""
+description: "A World in Crisis: The “Winter Wars” of 2022-2023"
+excerpt_separator: <excerpt/>
+---
+
+_It is obvious that the world now faces a wide range of potential wars and crises. What is far less obvious is the level of confrontation between the U.S. and its strategic partners with both Russia and China, the rising levels of other types of violence emerging on a global level, how serious these wars and crises can become, and what kind of future could eventually emerge out of so many different crises, confrontations and conflicts, and trends._
+
+<excerpt/>
+
+This analysis explores the risk on the basis that war does not have to mean actual military conflict. Here, it is important to note that avoiding or minimizing combat is scarcely peace. As Sun Tzu pointed out in the Art of War well over 2,000 years ago, “war” does not have to involve the use of military force or any form of actual combat. His statement that “the supreme art of war is to subdue the enemy without fighting” applies to every form of major military confrontation and gray area warfare between opposing powers.
+
+It recognizes that it is all too easy to predict dire outcomes from the War in Ukraine, the current arms races with Russia and China, and growing levels of violence and confrontation between other states. There is still a case, however, for examining the broader impact of the war, the growing intensity of the arms races with Russia and China, and the current overall patterns of global conflict as the world enters the winter of 2022-2023. It is already clear that this will be a deeply troubled winter in many areas of the globe, that the level of confrontation between major powers has risen sharply, that they do seek to subdue the enemy without fighting, and their rivalry has become the equivalent of political and economic warfare.
+
+It is equally clear that the wide range of lower-level conflicts between other powers, their civil wars, and the abuses many governments commit against their own citizens are also intensifying, although many of these conflicts have been going on in some form for years or even decades. In far too many cases, the world is not moving toward peace. It is moving towards repression and war.
+
+Accordingly, this analysis argues that the world already faces a series of possible and ongoing “Winter Wars” in 2022-2023 that may not escalate to open military conflict but that are wars at the political and economic level and in competition to build-up more lethal military forces both for deterrence and to exert political leverage. It also shows that these “Wars” already pose serious risks and could escalate sharply and in unpredictable ways for at least the next five to ten years.
+
+The global list of wars that are ongoing in the winter of 2020-2023, and that seems likely to continue to affect global security in the future, that this study examines includes:
+
+- The “Winter War” in Ukraine
+
+- The “Winter War” between the West and Russia in Economics, Politics, and Energy
+
+- The “Winter War” in Conventional Force Modernization and Build-Ups by the U.S., NATO, and Russia
+
+- The “Winter War” in Nuclear Forces and Deterrence between the Major Powers
+
+- The “Winter War” in Precision Strike Capabilities, Air/Missile Defense and Emerging/Disruptive Technologies
+
+- The “Winter War” in Going from Cooperation and Competition with China to Confrontation and Active War Planning
+
+- The “Winter War” in the Middle East and the Gulf
+
+- The “Winter War” in the Koreas
+
+- The “Winter War” in Gray Area, Spoiler, and Proxy Warfare
+
+- The “Winter War” in Fragile, Divided, Authoritarian, and Undeveloped States
+
+The analysis warns that the world is not moving towards peace, that new forms of Cold War divide all the world’s major powers, and that far too few smaller states have solid levels of development, effective governance, and are moving toward peace and stability.
+
+
+### The “Winter War” in Ukraine
+
+At least one war has already escalated into a major conflict, and that involves fighting between Ukraine and Russia that seems almost certain to continue to escalate through the winter of 2022-2023. The Russian invasion of Ukraine that began in February 2022 began with what appeared to be a Russian effort to seize the entirety of Ukraine, became a war of attrition on the ground, and has now escalated to a strategic level.
+
+Ukraine, however, has had sufficient support from the West and other states to be able to defend against Russia to the point where it has forced Russia to mobilize. The U.S. alone has provided some $60 billion in arms, economic aid, and other support by early October 2022, and is fighting the equivalent of a proxy war against Russia. Britain, the EU, and several other strategic partners have been providing major aid to Ukraine as well, and while Russia may have tried mobilizing up to 300,000 troops in October, it had also mobilized a substantial part of the developed world against it in ways where their aid to Ukraine did far more to challenge Russia than any aspects of their normal defense spending and modernization of their forces.
+
+#### Tying Combat to Attacks on Ukrainian Civil Targets
+
+The U.S. and other supporters of Ukraine have waged an economic war of sanctions, and trade controls on Russia, as well as have provided economic and military aid to Ukraine, but Russia has responded more effectively in other ways with a combination of military escalation and an economic war over energy exports.
+
+Russia has escalated to conducting military attacks on Ukraine’s population and economic and military warfare against its infrastructure. Russia has adapted its past reliance on “General Winter” and “General Mud” to try to destroy Ukraine’s economy and its ability to resist. The War in Ukraine has escalated from fighting a land/air/missile battle for the control of the Eastern Ukraine to a Russian strategy designed to destroy enough of the Ukrainian economy and infrastructure to force the Ukrainian government to end the fighting in ways that leave Russia with significant territorial gains, and Ukraine with a crippled economy that will take years to repair and with an uncertain future political and economic stability.
+
+The cost of the expansion of Russian attacks to civil and critical infrastructure targets has already reached critical levels by the end of October 2022 and has briefly shut off the flow of water and electric power to the Ukrainian capital of Kyiv in early November. The Ukrainian government reported then that strikes on key electricity generating targets in Ukraine had destroyed almost a third of its electric and other power generating facilities and left at least 1.5 million Ukrainians without power. They deprived Kyiv of safe drinking water for at least several days. Ukraine may be able to repair part of its infrastructure and deploy more effective and air defenses in the months to come but this is uncertain.
+
+These Russia military attacks interacted with broader forms of economic warfare in Ukraine. They include attacks on Ukrainian grain exports and other targets that affect the entire Ukrainian economy. They have already levels of inflation that have reduced many Ukrainians to the poverty level and sharply increased Ukraine’s needs for economic aid as well as created a legacy that will require a massive post-war recovery program. Unless the Russian attacks halt or Ukraine is given a much larger set of missile and air defenses, they will create steadily growing problems in maintaining a decent life as winter progresses – often increasing poverty to the point where hard choices have to be made between “heat” and “eat.”
+
+While accurate cost and supply data are lacking, Russia’s purchase of low-cost precision-guided conventionally armed missiles and drones from Iran may allow Russia to both destroy such Ukrainian economic targets and to saturate the more advanced air/missile defense systems the U.S. is providing to Ukraine – systems which will only provide limited area coverage for much of the winter, and whose operation is substantially more costly than Russia’s missile strike forces.
+
+Such attacks may cumulatively limit internal Ukrainian popular support for the war, and sharply reduce Russian casualties and embarrassing military defeats. At a minimum, the new Russian tactics and missile strikes will extend the length and intensity of the fighting, sharply raise its cost of military and civil aid and the cost of any postwar recovery.
+
+They may well force Ukraine to compromise on a settlement or to fight a debilitating war indefinitely into the future and show NATO European states – especially those near the Russian border – that Russia still presents a major threat them regardless of the problems the fighting has revealed in its land forces. They also seem likely to make Russia steadily more reliant on such tactics in the future, and to continue to link the use of such missile and air attacks to the threat of escalating to theater nuclear warfare.
+
+#### Russian Realities Versus the Laws of War
+
+From another perspective, such Russian attacks provide all too clear a demonstration of the fact that future combat is likely to involve more intense and deliberate attacks on civilian targets in spite of the “laws” of war. The war in Ukraine is also scarcely unique. Virtually all recent lower-level conflicts have involved attacks on civil targets – often by terrorists or in internal civil conflicts, but also by states against states, regimes against parts of their own, or the factions in civil conflicts. With few exceptions, is also clear that the laws of war are unenforceable. Even most of the cases where the attackers lost the war did not result in any special punishment, and little real-world effort has been made to find more effective deterrents to such strikes on civilians.
+
+It is striking that Russia’s Defense Minister Sergei Shoigu openly stated on November 1st, 2022, that Russia was deliberately targeting the Ukraine’s critical civilian infrastructure in a legitimate effort to reduce the country’s military capacity. He stated that, “With precision-guided strikes, we continue to effectively hit military infrastructure facilities, as well as facilities that affect the reduction of Ukraine’s military potential.” The most Shoigu did to imply any restraint was to state that, “Comprehensive measures are being taken to prevent the death of Ukrainian citizens.”
+
+One key legacy of the war in Ukraine from the fighting of 2022/2023 may well be that it demonstrates that relying on unenforceable laws of war to provide real-world security for civilians may sometimes have worse consequences for the civilians involved than having no laws at all.
+
+It is also a grim reality of modern warfare that other recent conflicts have shown almost any war fought in populated areas or cities involving key lines of communication or involving the use of artillery near population centers and critical infrastructure, will produce serious civilian casualties and amounts of damage to civilian facilities. The same is likely to be true of conflicts against terrorists, extremists, and any other faction that shelters in populated areas and use civilians as some form of shield.
+
+
+### The “Winter War” between the West Politics, and Energy
+
+It currently seems doubtful that any resolution of the war in Ukraine will produce any stable form of peace or fail to lead to enduring confrontation and between Russia and the West and a continuing risk of new forms of active conflict. The current confrontation has already escalated to the level of political and economic warfare and may well be followed by a struggle to modernize and reshape the military forces on each side that has both conventional and nuclear dimensions and gray area clashes and spoiler operations.
+
+#### War Without Combat
+
+Once again, it is important to note that avoiding or minimizing combat is scarcely peace. Russia and the West, are clearly seeking to “subdue the enemy without fighting.” The same is true of the current relations between the U.S. and its strategic partners and China.
+
+In practice, many “winter wars” are being fought on a political, economic, and ideological level – and by building up national military forces in ways that give them enough strategic leverage to force the opposing side to meet its opponents’ strategic goals without direct combat between them. The versions of these wars between are also generally being fought to change the political and economic behavior of other states rather than conquer them, to keep them from intimidating or forcing given patterns of action on other states, or to make them conform to international standards that are cooperative in nature. As such, some have a massive grand strategic impact on the world even though they are being fought without combat and an effort seeking to dominate or conquer the opponent.
+
+Other such wars are far more limited. For example, proxy wars can be fought in ways that involve indirect combat. Examples are proxy wars like the West’s military aid to Ukraine, and Russia’s use of mercenaries in Libya and “advisors” in Syria. More generally, they can be fought in the form of spoiler operations that push other parties into fighting, in the form of deployments and exercises that act as military threats, and by using military forces passively to exert political leverage and influence. In practice, military deterrence is simply another a form of warfare: it too exploits the competitive use of military forces to achieve as strategic objective without fighting.
+
+This is reflected in the fact that the war in Ukraine has created broad political and economic conflicts between Russia and much of the West. Both sides have steadily escalated their political and economic conflict since the start of the Ukraine conflict in February 2022. Putin has responded by mobilizing Russia, carrying out a major political campaign against the West, denouncing the U.S. and other states for supporting Ukraine, and accusing the United States and other Western powers of seeking to dominate Europe and isolate and dismember Russia.
+
+The West has responded by building up its military presence in the forward areas of NATO, denouncing Putin, seeking support from the UN in criticizing the Russian attack and conduct of a war in Ukraine with steadily increasing civilian casualties and damage. The West not only is fighting a proxy war against Russia, but it has also launched the equivalent of economic war against Russia, which included halting gas and other imports from Russia.
+
+The U.S., Canada, European NATO and EU states, and many other states are now providing arms transfers, security assistance, financial aid, and economic aid to Ukraine while simultaneously waging economic and political war directly against Russia. And, as noted previously, Russia is replying in kind. This form of economic and political warfare, and competing major military build-ups, seems certain to escalate steadily throughout the winter and may well continue for years to come.
+
+#### The Broader Forms of Economic and Political Warfare
+
+Neither Russia nor the West are currently winning the economic and political side of the Ukraine War, nor seem likely to emerge as the winner in the near future. On the one hand, it is all too clear that Putin sharply underestimated the economic and political reaction of Western and many other states prior to his invasion of the Ukraine. There is no doubt that the Russian people have suffered deeply from Western reactions and sanctions. As yet, however, there has been only limited Russian popular resistance to the war, and Putin has escalated his war fighting efforts in spite of Western political and economic reactions.
+
+On the other hand, the West has miscalculated as well. It began to implement major economic and political sanctions against Russia immediately after its invasion of the Ukraine. However, Western planners seem to have sharply underestimated Russia’s ability to survive them. They did not foresee the sustained and escalating impact Russia’s reactions would have on European and other energy supplies, on global food exports, on global political divisions, and on Russia’s actual military behavior.
+
+As of November 2022, the economic and political side of this war has escalated to the point where the West keeps adding sanctions and trade and investment barriers, including controls over the critical technologies, components, and materials similar to the war of sanctions against Iran and North Korea. Russia has replied in kind by using its gas exports to sustain its economy, and its ability to limit Ukrainian grain and other food exports by sea – measures that have sharply increased the cost of food to many other countries.
+
+Yet, Figure One shows that Russia has actually increased its exports to a number of countries that support Ukraine and has not suffered nearly as much as some planners initially estimated in developing sanctions.
+
+![image01](https://i.imgur.com/j3JzRDK.png)
+_▲ __Figure One: Major Shifts in Russian Trade Patterns Caused by the Economic War over the Ukraine.__ Source: [Adapted from Lazaro Gamio and AnaSwanson, “How Russia Pays for War,” New York Times, October 30, 2022](https://www.nytimes.com/interactive/2022/10/30/business/economy/russia-trade-ukraine-war.html)._
+
+#### The Energy War as an Indicator of the Seriousness of Economic Warfare
+
+The trade war and political and economic sanctions are only a part of this story. Figure Two shows that Russia has successfully retaliated against NATO and the other outside powers supporting Ukraine by conducting an energy war that has done critical damage to many Western economies. This energy war has interacted with impact of COVID and other Western economic problems that COVID helped create. The end result is that the West may have suffered as much as Russia.
+
+Moreover, Russia has had some success in working with OPEC – and states as divided as Iran and Saudi Arabia – to place limits on global exports that help support its position. This has helped raise energy prices in virtually every Western and energy importing state and has succeeded in creating a level of inflation and other economic damage to the West which is roughly equivalent to the damage the West has done to Russia.
+
+The energy war has also had many negative impacts on the rest of the world. It has again interacted with the impact of COVID, an uncertain global financial situation, and the damage done by global climate change. It has helped create a broader global crisis in food supplies, the rising levels of international poverty now reported by the UN and World Bank, and internal and local wars on a global basis. It is all too clear from this aspect of the War in Ukraine that there is no global “village,” but there clearly is “globalism” in the form of vulnerability.
+
+There is no clear way to predict the future impacts of this energy warfare during the winter of 2022-2023, or how it may develop in the months and years that will follow. However, the war’s impact on Russian energy exports and the global cost of oil and gas has already been critical and may lead to major strategic changes in the flow of energy exports.
+
+However, the International Energy Agency (IEA) warned in the annual World Energy Outlook for October 2022 that,
+
+> The world is in the middle of a global energy crisis of unprecedented depth and complexity. Europe is at the center of this crisis, but it is having major implications for markets, policies and economies worldwide. As so often is the case, the poorest and most vulnerable are likely to suffer most. The strains did not begin with Russia’s invasion of Ukraine, but they have been sharply exacerbated by it. Extraordinarily high prices are sparking a reappraisal of energy policies and priorities. The Europe-Russia energy relationship lies in tatters, calling into question the viability of decades of fossil fuel infrastructure and investment decisions built on this foundation. A profound reorientation of international energy trade is underway, bringing new market risks even as it addresses longstanding vulnerabilities.
+
+> Many of the contours of this new world are not yet fully defined, but there is no going back to the way things were. And we know from past energy crises that the process of adjustment is unlikely to be a smooth one. That adjustment will also be taking place in the context of commitments made by governments to clean energy transitions. A central theme of this World Energy Outlook 2022 is how the levers of technological change and innovation, trade and investment and behavioral shifts might drive a secure transition towards a net zero emissions energy system, while minimizing the potential risks and trade-offs between various policy objectives.
+
+- Today’s energy crisis shares some parallels with the 1970s oil price shocks, but there are also important differences. The crises in the 1970s were concentrated in oil markets and the global economy was much more dependent on oil than it is today. However, the intensity of use of other fossil fuels has not declined to the same extent; for natural gas it has risen in many cases. The global nature of the current crisis, its spread across all fossil fuels and the knock-on effects on electricity prices are all warning signs of broader economic impacts.
+
+- The global energy crisis sparked by Russia’s invasion of Ukraine is having far-reaching implications for households, businesses and entire economies, prompting short-term responses from governments as well as a deeper debate about the ways to reduce the risk of future disruptions and promote energy security. This is a global crisis, but Europe is the main theatre in which it is playing out, and natural gas is center stage – especially during the coming northern hemisphere winter.
+
+- High energy prices are causing a huge transfer of wealth from consumers to producers, back to the levels seen in 2014 for oil, but entirely unprecedented for natural gas. High fuel prices account for 90% of the rise in the average costs of electricity generation worldwide, natural gas alone for more than 50%. The costs of renewables and carbon dioxide have played only a marginal role, underscoring that this is a crisis where energy transitions are the solution, rather than the problem.
+
+- Price and economic pressures mean that the number of people without access to modern energy is rising for the first time in a decade. Around 75 million people who recently gained access to electricity are likely to lose the ability to pay for it, and 100 million people may revert to the use of traditional biomass for cooking.
+
+- There remain huge uncertainties over how this energy crisis will evolve and for how long fossil fuel prices will remain elevated, and the risks of further energy disruption and geopolitical fragmentation are high. In all our scenarios, price pressures and a dim near-term outlook for the global economy feed through into lower energy demand than in last year’s Outlook.
+
+- With the loss of its largest export market in Europe, Russia faces the prospect of a much-diminished role in international energy affairs. 2021 proves to be a high-water mark for Russian export flows. Its share of internationally traded gas, which stood at 30% in 2021, falls to 15% by 2030 in the STEPS and to 10% in the APS. Importers in China have been actively contracting for liquefied natural gas, and there is no room in China’s projected gas balance for another large-scale pipeline from Russia.
+
+The trends in this energy war through early November 2022 are shown in Figure Two, and it is clear that the rise in energy prices through the late fall of 2022 illustrates the overall success of Russia’s ability to conduct economic warfare and the risks it may impose for the future. It should be stressed, however, that there is no way to predict the future extent to which Russia and OPEC states will cooperate, nor whether Russia may make a major effort to shift its energy exports from pipelines to northern Europe to pipelines to China and Turkey.
+
+Such shifts in Russian exports to China would take time to make and major new pipelines to China would be highly expensive, require gas exports to be liquified, and tie Russia to a single customer, and present potential issues in dealing with climate change to China.
+
+At the same time, estimates of future Chinese oil and gas demand by the International Energy Agency indicate that if Russia did shift its export capabilities to provide far larger exports to China, China would become a major Russian customer well beyond 2030. Moreover, any analyses of China’s strategic vulnerabilities do indicate that obtaining energy imports that did not pass through the Indian Ocean, Straits, and South China Sea could greatly reduce one of its key vulnerabilities.
+
+Some argue that there is one area where such a war might have global benefits, but such benefits are questionable. Some analysts also feel that the energy crisis may help speed reductions in the global use of fossil fuel as well. However, the IEA stressed in its October 2022 estimates that reaching zero emissions by 2050 would require clean energy investments higher than $4 trillion by 2030. It also estimated that currently planned investments would only reach half of that figure.
+
+![image02a](https://i.imgur.com/dxt4KIW.png)
+_▲ __Figure Two: The Impact of Russian Actions on Gas Supplies and World Energy Princes – Part One.__ Source: [IEA, World Energy Outlook 2022](https://www.iea.org/reports/world-energy-outlook-2022/the-global-energy-crisis#abstract); [Adapted from Lazaro Gamio and AnaSwanson, “How Russia Pays for War,” New York Times, October 30, 2022](https://www.nytimes.com/interactive/2022/10/30/business/economy/russia-trade-ukraine-war.html)._
+
+![image02b](https://i.imgur.com/VwEAwgS.png)
+_▲ __Figure Two: The Impact of Russian Actions on Energy Exports and World Energy Prices – Part Two.__ Source: [IEA, World Energy Outlook 2022](https://www.iea.org/reports/world-energy-outlook-2022/the-global-energy-crisis#abstract); [Adapted from Lazaro Gamio and AnaSwanson, “How Russia Pays for War,” New York Times, October 30, 2022](https://www.nytimes.com/interactive/2022/10/30/business/economy/russia-trade-ukraine-war.html)._
+
+
+### The “Winter War” in Conventional Build-Ups by the U.S., NATO, and Russia
+
+It is a matter of semantics as to whether an arms race should be described as political or as military warfare, and the answer is probably both. The same is true of arms control, which generally is as much a battle for political influence, and the ability to use military forces as political leverage, as any move towards peace and stability.
+
+In any case, the War in the Ukraine has already shown Russia and the world that Russian conventional military forces have serious weaknesses, has helped lead to a new and more proactive NATO strategy, and led key Western nations like Germany and Britain to call for major increases in military spending. It has also led the United States to put more emphasis on NATO at a time it sees China as its primary threat and adopt a strategy that calls for major new efforts in military reform and modernization.
+
+The U.S. made this clear in the new National Security Strategy that it issued in October 2022:
+
+> Alongside our allies and partners, America is helping to make Russia’s war on Ukraine a strategic failure. Across Europe, NATO and the European Union are united in standing up to Russia and defending shared values. We are constraining Russia’s strategic economic sectors, including defense and aerospace, and we will continue to counter Russia’s attempts to weaken and destabilize sovereign nations and undermine multilateral institutions. Together with our NATO Allies, we are strengthening our defense and deterrence, particularly on the eastern flank of the Alliance. Welcoming Finland and Sweden to NATO will further improve our security and capabilities. And we are renewing our focus on bolstering our collective resilience against shared threats from Russia, including asymmetric threats. More broadly, Putin’s war has profoundly diminished Russia’s status vis-a-vis China and other Asian powers such as India and Japan. Moscow’s soft power and diplomatic influence have waned, while its efforts to weaponize energy have backfired. The historic global response to Russia’s war against Ukraine sends a resounding message that countries cannot enjoy the benefits of global integration while trampling on the core tenets of the UN Charter.
+
+> While some aspects of our approach will depend on the trajectory of the war in the Ukraine, a number of elements are already clear. First, the United States will continue to support Ukraine in its fight for its freedom, we will help Ukraine recover economically, and we will encourage its regional integration with the European Union. Second, the United States will defend every inch of NATO territory and will continue to build and deepen a coalition with allies and partners to prevent Russia from causing further harm to European security, democracy, and institutions. Third, the United States will deter and, as necessary, respond to Russian actions that threaten core U.S. interests, including Russian attacks on our infrastructure and our democracy. Fourth, Russia’s conventional military will have been weakened, which will likely increase Moscow’s reliance on nuclear weapons in its military planning. The United States will not allow Russia, or any power, to achieve its objectives through using, or threatening to use, nuclear weapons. America retains an interest in preserving strategic stability and developing a more expansive, transparent, and verifiable arms control infrastructure to succeed New START and in rebuilding European security arrangements which, due to Russia’s actions, have fallen in to disrepair. Finally, the United States will sustain and develop pragmatic modes of interaction to handle issues on which dealing with Russia can be mutually beneficial.
+
+The new National Security Strategy also made it clear that the U.S was returning to a broader emphasis on supporting European security:
+
+> Europe has been, and will continue to be, our foundational partner in addressing the full range of global challenges. To effectively pursue a common global agenda, we are broadening and deepening the transatlantic bond – strengthening NATO, raising the level of ambition in the U.S.-EU relationship, and standing with our European allies and partners in defense of the rules-based system that underpins our security, prosperity, and values.
+
+> Today, Europe stands at the front lines of the fight to defend the principles of freedom, sovereignty, and non-aggression, and we will continue to work in lockstep to ensure that freedom prevails. America remains unequivocally committed to collective defense as enshrined in NATO’s Article 5 and will work alongside our NATO Allies to deter, defend against, and build resilience to aggression and coercion in all its forms. As we step up our own sizable contributions to NATO capabilities and readiness – including by strengthening defensive forces and capabilities, and upholding our long-standing commitment to extended deterrence – we will count on our Allies to continue assuming greater responsibility by increasing their spending, capabilities, and contributions. European defense investments, through or complementary to NATO, will be critical to ensuring our shared security at this time of intensifying competition. We stand behind NATO’s continued adaptation to modern security challenges, including its emphasis on defense in cyberspace, climate security, and the growing security risks presented by the PRC’s policies and actions.
+
+And the new U.S. strategy document described support of the Ukraine in terms close to support of continuing NATO aid at a level equivalent to proxy warfare:
+
+> Europe has been, and will continue to be, our foundational partner in addressing the full range of global challenges. To effectively pursue a common global agenda, we are broadening and deepening the transatlantic bond – strengthening NATO, raising the level of ambition in the U.S.-EU relationship, and standing with our European allies and partners in defense of the rules-based system that underpins our security, prosperity, and values. Today, Europe stands at the front lines of the fight to defend the principles of freedom, sovereignty, and non-aggression, and we will continue to work in lockstep to ensure that freedom prevails. America remains unequivocally committed to collective defense as enshrined in NATO’s Article 5 and will work alongside our NATO Allies to deter, defend against, and build resilience to aggression and coercion in all its forms.
+
+> As we step up our own sizable contributions to NATO capabilities and readiness – including by strengthening defensive forces and capabilities, and upholding our long-standing commitment to extended deterrence – we will count on our Allies to continue assuming greater responsibility by increasing their spending, capabilities, and contributions. European defense investments, through or complementary to NATO, will be critical to ensuring our shared security at this time of intensifying competition. We stand behind NATO’s continued adaptation to modern security challenges, including its emphasis on defense in cyberspace, climate security, and the growing security risks presented by the PRC’s policies and actions.
+
+#### Putting the Conventional Military Balance in Perspective
+
+As yet, there are no clear Russian plans to correct the many weaknesses the War in the Ukraine has revealed in its forces. It is clear, however, that Russia must be making such plans, and will take a much more competitive stance to shaping forces that can influence, deter, and – if necessary – fight NATO and Western supported countries. Putin’s speeches have made this all too clear, and Russia would in any case have to make major efforts to restructure and modernize its forces just to keep up with the many new advances in weaponry and military technology.
+
+The U.S., Canada, and NATO European states must make similar changes. They not only must compete with Russia, but also most must compensate for years of decline in the size of their forces, rates of modernization, and any real-world effort to improve interoperability either within their forces or by providing new forces and capabilities to match the changes in the most advanced national forces.
+
+The Russian invasion of the Ukraine has shown all too clearly that most NATO countries have underestimated the Russian threat and have taken excessive “peace dividends” in terms of cuts in their defense efforts since 1992. Most former Warsaw Pact states that are now in NATO, and on or near the borders of Russia have failed to properly convert and modernize their forces to fight as part of NATO.
+
+Moreover, most NATO countries also failed to take effective steps to correct this situation after Russia seized the Crimean Peninsula in 2014. They never met NATO’s goal of spending 2% of their GDP on military forces, and those that did found that this goal was too low to properly modernize, and maintain, readiness and force size. Seen with the hindsight provided by Russia’s invasion of Ukraine, NATO countries generally came closer to “farce” planning than force planning. So far, neither NATO nor any NATO country have made their plans to deal with this situation clearly. They do not publish meaningful force plans, net assessments, or projected budgets.
+
+As a result, there is no current way to know how well either Russia or NATO countries will engage in the “war” to modernize their forces and make them more effective, although Russia is clearly attempting to increase its influence and military role in Belarus and Moldova. The broad structure of U.S., European NATO, and Russian conventional military balance is shown in Figure Three, along with the forces of China which is the core of another winter war discussed later in this analysis.
+
+This kind of traditional comparison of personnel and major weapons strength does not, however, approach a meaningful net assessment. It does not cover the wide range of competition for economic power, dominance in technology, and the capability to fund military competition between the United State and its strategic partners, Russia, and China. This analysis is far too long to include in this analysis, but it is summarized in a different study entitled Major Powers and Strategic Partners: A Graphic Net Assessment.
+
+It does not reflect the scale and impact of the massive cuts in the military forces of the former Soviet Union as shrank to become Russia, or the equally serious cuts in the forces that NATO countries deployed in Europe in 1992. It only compares key elements of force size based on active personnel and major weapons platforms.
+
+This means that it does not compare training, other elements of readiness, sustainment and warfighting reserves, military industrial and technology bases, deployments and power projection capabilities, and interoperability. It also does not show comparative modernization and the massive shifts taking place in the role of battle management and secure communications, space, cyber, smart and long-range munitions, artificial intelligence, joint all-domain capabilities, and all the other emerging and disruptive technologies that are reshaping military forces on a global basis.
+
+Such force comparisons help put the military dimension of the winter wars in perspective, but they also have serious limits. In many ways, traditional force comparisons are the equivalent of the kind of military analysis that focus only on infantry and cavalry before World War I, or that ignored the new role of armor, air power, and changes in the role of sea power before World War II. Put generously, traditional military strength analysis probably only addresses about 20% of modern military capability, and much of the “war” in the restructuring of Russian and NATO conventional forces triggered by the ongoing war in Ukraine will parallel the changes triggered by shifts in nuclear forces, dual capable forces, and precision conventional strike capabilities discussed later in this analysis. They will play out over the coming decades as a revolution in military forces that no one can currently predict and fully characterize.
+
+![image03a](https://i.imgur.com/9llOGKe.png)
+_▲ __Figure Three: The Military Balance in 2021 – Part One.__ Source: Adapted from IISS, Military Balance 2022 with some minor adjustments using U.S. military data. Figures for all countries do not include reserve personnel by service, Coast Guard, coastal defense, and paramilitary forces; and 175,000 active personnel in Chinese strategic support forces._
+
+![image03b](https://i.imgur.com/CuyFX1l.png)
+_▲ __Figure Three: The Military Balance in 2021 – Part Two.__ Source: Adapted from IISS, Military Balance 2022 with some minor adjustments using U.S. military data. Figures for all countries do not include reserve personnel by service, Coast Guard, coastal defense, and paramilitary forces; and 175,000 active personnel in Chinese strategic support forces._
+
+#### The Ukraine War and the Conventional Arms Race
+
+At the same time, there are very real financial limits on what both sides can spend on improving and modernizing their conventional military forces, and the economic war between Russia and the West will have a major impact on their spending. The improvements in military capability that both sides must now make are also driven by the need to make very costly improvements in their military forces and will probably involve the need to higher percentages of total national GDPs over the period of a decade or more. This will inevitably increase the competition over military spending versus spending on civilian programs and needs.
+
+This is particularly true of Russia. The military and economic cost of the war in Ukraine alone has already reached levels which the Russian leadership almost certainly grossly underestimated in launching the conflict.
+
+The cost to Western states and their strategic partners of their military and economic support for Ukraine has also been far higher than political leaders anticipated in shaping their initial aid plans. The rises in prices for energy and other imports mentioned earlier have raised inflation to critical levels, and there already have been political calls for less aid to Ukraine and broader political indications that NATO countries are cutting back on their plans to modernize and improve their forces.
+
+Russia, however, is now far poorer than its Western challengers. Once again, the full range of trends involved is too complex to show in this analysis and is provided in a separate report called Major Powers and Strategic Partners: A Graphic Net Assessment. One metric alone, however, shows how serious the economic challenges Russia faces.
+
+The World Bank estimates that the U.S. alone had a GDP of $22.966 trillion in current dollars in 2021, the EU had a GDP of $17.089 trillion, and NATO estimates that NATO Europe and Canada had a GDP of some $22.687 billion. The World Bank estimates that Russia only had a GDP of $1.776 billion in 2021, which scarcely makes it an economic superpower in global terms. Unlike the U.S. its only major strategic partner is Belarus, which had a GDP of only $0.682 billion.
+
+Democracies do have to respond to popular civil demands by paying far more of their government income to meet civil needs, but NATO’s total estimated GDP in 2021 was $45,653 trillion, some 26 times the Russia GDP of $1.776 trillion.
+
+Unfortunately, there are no reliable ways to compare the publicly reported military spending of command economies like Russia or China – which often conceal key aspects of national security spending – with the relatively open and reliable reporting of Western states. If one looks at some of the best and most directly comparable estimates of military spending, however, NATO reports that the U.S. spent $793.99 billion on military forces in 2021, and NATO Europe spent $361.29 billion for a NATO total of some $1,096.6 billion. In contrast, the International Institute for Strategic Studies estimates that Russia spent only $62.2 billion by the NATO definition of defense spending. This is only 5.7% of the reported total for NATO, which is 17 times the Russian figure.
+
+In practical terms, these GDP and military spending figures indicate that Russia is anything but a superpower in economic strength and military spending military. This becomes even more clear if one looks at the GDP and military spending of China and America’s key Asian strategic partners as additional standards of comparison.
+
+The World Bank estimated that China had a GDP of $17,734 billion in current dollars, while key Asian strategic partners like Japan had a GDP of $4,937 billion and South Korea had $1,799 billion. These figures show that the World Bank estimated that China’s GDP was almost exactly ten times larger than Russia’s. If one looks at the IISS military spending estimates, the IISS indicates that China’s official military spending figure was $207 billion and was $270 billion by NATO’s definition. The $270 billion figure indicates that China was spending 4.5 times as much on military forces as Russia.
+
+These comparisons are critical because it seems likely that the winter of 2022-2023 will mark the beginning of a lasting military confrontation between Russia and NATO, and a race to modernize and improve military forces that will last at least as long as Putin is in power. If the previous economic and military spending figures do represent real comparative power, they indicate that the funding of such a race to improve the military capabilities could sharply favor the West.
+
+They also illustrate why the U.S. and Western effort to support Ukraine is so important, and so cost-effective. The U.S. aloe had sent well over $50 billion in military, humanitarian, and civil aid by November 2022 – scarcely a minor sum – and it was clear that the Ukraine would be dependent on outside aid indefinitely to both continue fighting and recover from the war after any settlement. The cost to Russia, however, was far greater and placed a burden on a far weaker economy – to the point where it was pushing Russia into the status of a second level military power. At the same time, it sent a critical message to China about U.S. strength and resolve that was equally important.
+
+The U.S. national security strategy issued in October 2022 singled out China as the primary threat to the U.S., and several key U.S. security partners in NATO – notably Britain – have recently focused on China. Funding a “race” to modernize NATO will be limited by the fact that the U.S. and some strategic partners must also focus on China and other threats.
+
+Furthermore, some experts question whether the current estimates of Russian military spending are too low. Russia has the potential military advantage of unity and a totalitarian leadership that can exert direct control over a command economy and do so with far less need to respond to popular civil needs. Although Russia also has suffered major losses in the fighting in Ukraine and has used up many of its reserves of weapons, munitions, and parts.
+
+More broadly, NATO countries will enter the winter of 2022-2023 with major civil economic problems, and new popular demands for government spending that seem likely to limit member country military spending. NATO will also begin the broader Ukrainian War arms race having taken larger peace dividends over the last two decades, and with 30 (32?) member countries that have radically different force structures, poor overall interoperability, and radically different trends in real world force modernization.
+
+More broadly, the unclassified data on the Russia military industrial base, and many key elements of its national and military technology base, are very limited. While it is not clear that this is still the case, it is also important to remember that Cold War intelligence estimates of the military expenditures of the Soviet Union were later shown to be gross underestimates of the actual spending as the West gained access to the Soviet Union. The same was true of the Soviet Union’s military research and development activities, and the size and efficiency of its military industries – many of which provide to be far larger – and at the same time less efficient – than expert estimated during the Cold War.
+
+More data are available on the U.S. and Western military industrial base, and many key elements of its national and military technology base, but a close example indicates that many seemingly comparable data are not truly comparable, and that there are many gaps in coverage, particularly on actual programs, ongoing active activities, and any credible measures of effectiveness. It is also clear from the history of many national efforts that quantity is not a measure of quality.
+
+
+### The “Winter War”in Precision Strike Capabilities, Air/Missile Defense, and Emerging/Disruptive Technologies
+
+Here, it is also important to put any such arms races in the proper context. Advances in military technology will have their own influence and all of the world’s major powers will have to compete in making major expenditures on new military technology, weapons, and new forms of warfare.
+
+Russia and Ukraine have shown that new conventional weapons with precision strike capability, and advances in targeting and related forms of intelligence, can make a major difference in both military combat and in strike civilian targets. These weapons range from short-range systems like anti-tank missiles and drones to long range missiles and launch platforms ranging from hand-held weapons to theater-wide strike capabilities.
+
+The U.S. and a number of European states already have long-range precision conventional strike systems that can destroy critical infrastructure and high value targets, and all of the world’s major powers are working on the development of new longer-range ballistic, cruise, and new approach to strike technology. Other developments include other related advances in precision strike capabilities against critical civil and military systems, advances in many forms of targeting, and the deployment of steadily more to advanced 5th generation aircraft, in multi-platform weaponry.
+
+Almost inevitably, these advances in strike systems mean that missile and air defenses will be a matching source of competition, and another form of “war.” As is discussed shortly, the advances in precision strike also creates the risk that many new systems may acquire dual capability and nuclear warheads.
+
+Even the more advanced current defense systems like the Russian S-400 and the U.S. Patriot have serious increase limits and there are good reasons why Ukraine had steadily increased its calls for more advanced air and missile defenses, why Russia will seek to speed up the development of its new systems and why the U.S. and NATO Europe must now seriously consider major near-term investment in effective theater defenses.
+
+The war in Ukraine has also highlighted the vulnerability of existing armor, the need for more advanced artillery, the vulnerability of ships to missiles, and a host of other advances in secure communications, battle management, logistic support systems. They also interact with a wide range of new military technologies that affect the use of space, cyber warfare, artificial intelligence, and other emerging and “disruptive” technologies that can do far more to integrate every aspect of military operations and forms of joint all-domain operations.
+
+None of these advances are cheap, but some deployments have already begun, and they may amount to a near revolution in military force structures and operations over the coming decade. This means the competition in the development and deployment of high technology military capabilities and systems will be a form of “warfare” where selecting the right mix of improvements could give one side a major advantage in terms of both deterrence and strategic leverage in peacetime, and where making the right investments selectively will be critical in shaping both deterrence and the nature of any actual warfighting.
+
+The winter of 2022-2023 is not likely to produce major new developments in these areas, but each round of Russian missile attacks and every expansion of the target base does increase NATO’s need to move more quickly, invest more, and develop some coherent plans for deployment in all four areas. Like many other aspects of the “winter war,” the fighting already is a major catalyst in shaping global arms races and one where it seems less and less likely that the world will return to anything like the levels of pre-Ukraine War stability, peace dividends, and arms control that had
+existed since 1992.
+
+
+### The “Winter War” inRussia, US and Western, and Chinese Nuclear Forces
+
+These challenges will also be further increased by yet another form of winter war. Russia has raised the issue of tactical nuclear warfare in the Ukraine War, and this is only a small part of the near collapse of many forms of nuclear arms control, and a steadily heightening nuclear arms that has reached the point where the competition in global strategic weapons has shifted from a competition between the U.S. and Russia to one that includes China.
+
+In practice, Russia, the U.S., Britain, France, and China became involved in a major nuclear modernization effort long before the Ukraine War began. Here, a substantial amount of official unclassified data are available. The total nuclear weapons holdings of Russia, the U.S., Britain, France, and other powers are summarized in Figure Four. U.S. nuclear modernization plans are summarized in Figure Five, and Russian and Chinese plans are summarized in Figure Five.
+
+It should be stressed that the summaries in Figures Four, Five, and Six use unclassified material developed in 2021, and their contents may differ significantly from current intelligence estimates, as well as from outside analysts who produced Figures Four and Five, which include Hans M. Kristensen, Matt Korda, Robert Norris, and Amy F. Wolf of the Congressional Research Service.
+
+The data for China are particularly uncertain, since comparatively little unclassified detail is available on Chinese nuclear weapons developments. However, there have been reports that China has built three new fields of at least 250 new missile silos, and now has three new fast breeder reactors it can use to increase its production of Plutonium and nuclear weapons. Reports have also surfaced that China will actively participate in adapting different types of theater and tactical nuclear weapons to provide proven, functional nuclear warheads for the newer missile systems of Russia, China, and the U.S.
+
+As the data for 2022 in Figure Five show, the War in the Ukraine has given Russian nuclear efforts a new and higher profile. Its importance has also been highlighted by the fact Putin has talked about “dirty” radiological bombs and made repeated references to the use of theater nuclear weapons, in his public speeches on the Ukraine War. Reports have also been made that Russian generals have begun to seriously discuss tactical and theater nuclear options, and members of the U.S. Congress have debated the need for new nuclear armed cruise missiles as a possible counter to such Russian weapons.
+
+It is far from clear what holdings Russia and each NATO country now have of operational weapons because many are in storage, but unclassified estimates in Figure Four indicate that Russia has close to 2,000 theater and tactical nuclear weapons out of an inventory of as many as nearly 4,500 stored weapons, and the U.S. has some 3,750.
+
+It is also clear that nuclear weapons represent the one major area where Russia is still a true superpower in military terms. The Ukraine war has made its weakness in conventional forces all too clear, and current estimates of its research and development resources indicate that it cannot compete with the West in military technology, or with the rising technology base of China. It does, however, have major holds of nuclear weapons that it inherited from the former Soviet Union.
+
+While some aspects of such estimates are uncertain – particularly for China; the Federation of American Scientists (FAS) is almost certainly broadly correct in estimating that Russia had some 6,257 nuclear weapons in its total inventory in 2021. This compared with 5,550 for the U.S., 350 for China, 225 for Britain, 290 for France, 160 for India, 165 for Pakistan, 90 for Israel, and 45 for North Korea.
+
+Russia’s holdings also give it the ability to deploy large numbers of theater/tactical nuclear weapons, although the figures involved are uncertain. An unclassified estimate by the FAS indicates that Russia had 2,565 strategic nuclear warheads and 1,912 non-strategic and defensive force warheads in early 2022 and reported that some experts felt the latter number might double 2030. It also listed possible deployments of tactical and theater weapons in naval, air, land, and missile defense forces, and a wide range of possible delivery systems.
+
+There are no similar estimates of the holdings of non-strategic weapons by most other states, but the FAS does indicate that the U.S. may be the only power with large holdings that could be rapidly adapted for theater and tactical use. It could draw upon 2,000 nuclear in storage and 1,750 more weapons awaiting dismantlement.
+
+The FAS also reports that the U.S. had 100 B-61 nuclear bombs in Europe for F-16, F-18, Tornado, and F-35 combat aircraft with yields from 50 KT to 170 KT and is adapting some strategic weapons to have a lower yield option that could be used for theater and tactical targeting. It states that, “Belgian, Dutch, German, and Italian air forces are assigned nuclear strike missions with US nuclear weapons.” It reports France had some 300 variable yield nuclear weapons – three sets of 16 for its submarines and 54 cruise missiles for carrier and land-based Rafale delivery systems which could be used for both strategic and theater strikes. It does not report Britain as having tactical or theater nuclear weapons and indicate all of its weapons are for its SSBNs.
+
+The Arms Control Association reports that the United States has some 100 B-61 nuclear gravity bombs, and that that are forward-deployed at six NATO bases in five European countries: Aviano and Ghedi in Italy; Büchel in Germany; Incirlik in Turkey; Kleine Brogel in Belgium; and Volkel in the Netherlands. Another 130 U.S. B-61s are in inventory. France and Britain also may have low yield or other nuclear weapons in storage that could be used or modified for theater use.
+
+In short, a situation already exists where there is a revival of active competition in the deployment of theater nuclear forces as forms of military leverage and a higher – if still limited – risk of their use actual warfare fighting. It is also clear that the future of arms control is highly uncertain, and that Russia has on obvious incentive to try to use its nuclear weapons to obtain political and military leverage. Combined with the faltering progress in arms control and the fact the U.S must now compete with China as well as Russia, the War in the Ukraine again highlights the fact that there is another kind of Winter War, and one that potentially is far more dangerous.
+
+![image04](https://i.imgur.com/xJhpzzQ.png)
+_▲ __Figure Four: Estimate of Total World Nuclear Weapons Holding by Country.__ Source: [Hans M. Kristensen. Matt Korda, and Robert Norris, “Status of World Nuclear Forces,” 2022](https://fas.org/issues/nuclear-weapons/status-world-nuclear-forces)._
+
+![image05](https://i.imgur.com/9LVHP02.png)
+_▲ __Figure Five: Russian, and Chinese Nuclear Modernization.___
+
+> #### Chinese Nuclear Modernization
+
+- Seems to be more than doubling its stockpile of nuclear weapons. May have risen from around 200 to 350 by 2020. 272 operational for exiting missiles and bombs and 78 for new systems. Possibly grew by 118 warheads during 2020-2021.
+
+- Have detected 270+ new missile silos. 119 in Northwestern China seem to be for ICBMs.
+
+- Has shunned arms control and transparency.
+
+- Steadily improving nuclear command and control and battle management systems.
+
+- Deploying advanced solid-fuel mobile ICBMs (DF-21 & DF-31/DF-31A/DF-32AG), MIRV’d liquid-fueled ICBM (DF-5B), new MIRV’d DF-41 ICBM, Type 094 SSBN with JL-2 SLBMs.
+
+- Developing low noise 096 SSBN and 9,000 kilometer range 096 SLBM.
+
+- Progressively harder to determine what theater and short-range delivery systems may become dual-capable. DF-21 MRBM (2,150 KM) and DF-26 IRBM (4,000 KM) known to be nuclear. DF-21 is precision strike, dual-capable and could deliver low-yield nuclear weapons.
+
+- Modifying H-6 nuclear bombers to H-6N with refueling, missile carrying capability. H-20 stealth bomber in development.
+
+- May be evolving far beyond countervalue second strike capability. Examining use as theater warfare threat?
+
+_Source: [Hans M. Kristensen. Matt Korda, and Robert Norris, “Status of World Nuclear Forces,” 2022](https://fas.org/issues/nuclear-weapons/status-world-nuclear-forces); [SIPRI Yearbook, Section 2: China’s Nuclear Forces: Moving Beyond a Minimal Deterrent, 2021](https://www.uscc.gov/sites/default/files/2021-11/Chapter_3_Section_2--Chinas_Nuclear_Forces_Moving_beyond_a_Minimal_Deterrent.pdf); and DIA, China, Military Power, 2021._
+
+![image06a](https://i.imgur.com/oH31AQX.png)
+_▲ __Figure Six: U.S. Nuclear Modernization – Part One.__ Source: [Data for early 2022 are excerpted and adapted from Shannon Bugos, “Nuclear Modernization Program Fact Sheet,” Arms Control Association, January 2022](https://www.armscontrol.org/factsheets/USNuclearModernization#snapshot), and data for October 2022 are excerpted from [2022 Nuclear Posture Review, DoD web site, October 27, 2022](https://media.defense.gov/2022/Oct/27/2003103845/-1/-1/1/2022-NATIONAL-DEFENSE-STRATEGY-NPR-MDR.PDF)._
+
+![image06b](https://i.imgur.com/sjpf178.png)
+_▲ __Figure Six: U.S. Nuclear Modernization – Part Two.__ Source: [2022 Nuclear Posture Review, DoD web site, October 27, 2022](https://media.defense.gov/2022/Oct/27/2003103845/-1/-1/1/2022-NATIONAL-DEFENSE-STRATEGY-NPR-MDR.PDF), p. 21_
+
+
+### The “Winter War” in China: From Cooperation and Competition to Confrontation and Active War Planning
+
+More broadly, it is clear that the levels of tension between China and the U.S and several of its strategic partners have created yet another form of winter war. While the active combat in Ukraine has gotten more public attention than the growing level of political, economic, and military confrontation between China and the US and its European and Asian strategic partners, the extent of political and economic warfare between the U.S. and China is nearly as great, and the current level of military confrontation between the U.S. and China has received at least as much attention in U.S. strategic and war planning as the confrontation between the U.S. and Russia.
+
+The level of tension between China and the West has also increased sharply as the world has entered the winter of 2022-2023. President Xi Jinping clearly emerged at the dominant leader of China at the 20th Party Congress in October 2022 and made it clear that he was committed to make China the dominant economic and military power in the world, and to expanding its political role and leverage on a global basis.
+
+#### The Role of China in the New U.S. National Security Strategy
+
+The U.S. National Security Strategy issued October 2022 makes it clear that the U.S. now sees China as the primary threat to its security, and more in terms of war than any real intention to emphasize cooperation.
+
+> The 2022 National Defense Strategy advances a strategy focused on the PRC ,and on collaborating with our growing network of Allies and partners on common objectives. It seeks to prevent the PRC’s dominance of key regions while protecting the U.S. homeland and reinforcing a stable and open international system. Consistent with the 2022 National Defense Strategy, a key objective is to dissuade the PRC from considering aggression as a viable means of advancing goals that threaten vital U.S. national security interests. Conflict with the PTC is neither inevitable or desirable. The Department’s priorities support broader whole-of-government efforts to develop terms of interaction with the PRC that are favorable to our interests and values, while managing strategic competition and enabling the pursuit of cooperation on common challenges.
+
+> ...The most comprehensive and serious challenge to U.S. national security is the PRC’s coercive and increasingly aggressive endeavor to refashion the Indo-Pacific region and the international system to suit its interests and authoritarian preferences, The PRC seeks to undermine U.S. alliances and security partnerships in the Indo-Pacific region, and leverage its growing strength and military footprint to coerce its neighbors and threaten their interests, The PRC’s increasingly provocative rhetoric and coercive activity towards Taiwan are destabilizing, risk miscalculation, and threaten the peace and stability of the Taiwan Strait. This is part of a broader pattern of destabilizing and coercive Chinese behavior that stretches across the East China Sea, and along the Line of Actual Control. The PRC has expanded and modernized nearly every aspect of the PLA, with a focus on offsetting U.S. military advantages. The PRC is therefore the pacing challenge for the Department.
+
+> The PRC is the only competitor with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it. Beijing has ambitions to create an enhanced sphere of influence in the Indo-Pacific and to become the world’s leading power. It is using its technological capacity and increasing influence over international institutions to create more permissive conditions for its own authoritarian model, and to mold global technology use and norms to privilege its interests and values. Beijing frequently uses its economic power to coerce countries. It benefits from the openness of the international economy while limiting access to its domestic market, and it seeks to make the world more dependent on the PRC while reducing its own dependence on the world. The PRC is also investing in a military that is rapidly modernizing, increasingly capable in the Indo-Pacific, and growing in strength and reach globally – all while seeking to erode U.S. alliances in the region and around the world.
+
+> ...Our strategy toward the PRC is threefold: 1) to invest in the foundations of our strength at home – our competitiveness, our innovation, our resilience, our democracy, 2) to align our efforts with our network of allies and partners, acting with common purpose and in common cause, and 3) compete responsibly with the PRC to defend our interests and build our vision for the future. The first two elements – invest and align – are described in the previous section and are essential to out-competing the PRC in the technological, economic, political, military, intelligence, and global governance domains.
+
+> Competition with the PRC is most pronounced in the Indo-Pacific, but it is also increasingly global. Around the world, the contest to write the rules of the road and shape the relationships that govern global affairs is playing out in every region and across economics, technology, diplomacy, development, security, and global governance. In the competition with the PRC, as in other arenas, it is clear that the next ten years will be the decisive decade. We stand now at the inflection point, where the choices we make and the priorities we pursue today will set us on a course that determines our competitive position long into the future.
+
+> Many of our allies and partners, especially in the Indo-Pacific, stand on the frontlines of the PRC’s coercion and are rightly determined to seek to ensure their own autonomy, security, and prosperity. We will support their ability to make sovereign decisions in line with their interests and values, free from external pressure, and work to provide high-standard and scaled investment, development assistance, and markets. Our strategy will require us to partner with, support, and meet the economic and development needs of partner countries, not for the sake of competition, but for their own sake.
+
+> We will act in common purpose to address a range of issues – from untrusted digital infrastructure and forced labor in supply chains and illegal, unreported, and unregulated fishing. We will hold Beijing accountable for abuses – genocide and crimes against humanity in Xinjiang, human rights violations in Tibet, and the dismantling of Hong Kong’s autonomy and freedoms – even as it seeks to pressure countries and communities into silence. We will continue prioritizing investments in a combat credible military that deters aggression against our allies and partners in the region, and can help those allies and partners defend themselves.
+
+#### Growing Chinese Ties to Russia?
+
+At the same time, serious questions exist about the extent to which U.S. and other security efforts to deal with China can be separated from those necessary to deal with Russia. Although most experts feel there are serious limits to the level of “friendship” and alliance between the two countries, this is far from certain. For example, Japan’s 2022 defense white paper notes that Russian and Chinese overflights and naval exercises have sharply increased in the areas north of Japan and treats them as a serious potential threat.
+
+The U.S. National Security Strategy, issued in October 2022 makes it clear that the U.S. sees both China and Russia as major threats to the international order, although it views such threats as different in character:
+
+> The People’s Republic of China harbors the intention and increasingly, the capacity to reshape the international order in favor of one that tilts the global playing field to its benefit, even as the United States remains committed to managing the competition between our countries responsibly....The most pressing strategic challenge facing our vision is from powers that layer authoritarian governance with a revisionist foreign policy. It is their behavior that poses a challenge to international peace and stability – especially waging or preparing for wars of aggression, actively undermining the democratic political processes of other countries, leveraging technology and supply chains for coercion and repression, and exporting an illiberal model of international order. Many non-democracies join the world’s democracies in forswearing these behaviors.
+
+> Unfortunately, Russia and the People’s Republic of China (PRC) do not. Russia and the PRC pose different challenges. Russia poses an immediate threat to the free and open international system, recklessly flouting the basic laws of the international order today, as its brutal war of aggression against Ukraine has shown. The PRC, by contrast, is the only competitor with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to advance that objective.
+
+> ... we recognize that globalization has delivered immense benefits for the United States and the world but an adjustment is now required to cope with dramatic global changes such as widening inequality within and among countries, the PRC’s emergence as both our most consequential competitor and one of our largest trading partners, and emerging technologies that fall outside the bounds of existing rules and regulations. We have an affirmative agenda for the global economy to seize the full range of economic benefits of the 21st century while advancing the interests of American workers. Recognizing we have to move beyond traditional Free Trade Agreements, we are charting new economic arrangements to deepen economic engagement with our partners, like the Indo-Pacific Economic Framework for Prosperity (IPEF); a global minimum tax that ensures corporations pay their fair share of tax wherever they are based in the world; the Partnership for Global Investment and Infrastructure (PGII) to help low- and middle-income countries secure high-standard investment for critical infrastructure; updated rules of the road for technology, cyberspace, trade, and economics; and ensuring the transition to clean energy unlocks economic opportunities and good jobs around the world.
+
+> ... The world is now at an inflection point. This decade will be decisive, in setting the terms of our competition with the PRC, managing the acute threat posed by Russia, and in our efforts to deal with shared challenges, particularly climate change, pandemics, and economic turbulence.
+
+China has also made it clear since at least the early 1990s that its military build-up is focused largely on the U.S., the Pacific, Southeast Asia, Central Asia, the Indian Ocean, and the Middle East. It has cooperated with Russia in the Shanghai Cooperation Organization since the days when it was the Shanghai Five.
+
+China has also based much of its military modernization on Russian weapons and technology, and Japan’s 2022 defense white paper notes that Russian and Chinese overflights and naval exercises have sharply increased in the areas north of Japan and treats them as a serious potential threat.
+
+While it seems likely that Russia will ultimately emerge from the war in the Ukraine in greater need of a major outside strategic partners, China and Russia could both gain from a stronger partnership in the strategic aspects of their wars in energy, economics, and technology, and building up their military strength in gaining military leverage and in the event of any serious regional or theater conflict. It is true that authoritarian regimes tend to seek partnerships that serve the ambitions of their individual leader, but in this case that ambitions may increasingly coincide.
+
+#### China’s Military Build-Up
+
+China does seem to be far more successful than Russia in moving towards the point where it can compete directly with the U.S. and its strategic partners in conventional military power. The new U.S. strategy describes China’s efforts to improve its conventional military forces in terms that describe them as focusing on all the major elements of the U.S. effort to improve its conventional military forces:
+
+> In addition to expanding its conventional forces, the PRC is rapidly advancing and integrating its space, counterspace, electronic, and informational warfare capabilities to support its holistic approach to joint warfare. The PLA seeks to target the ability of the Joint Force to project power to defend vital U.S. interests and our Allies in a crisis or conflict. The PRC is also expanding the PLA’s global footprint and working to establish a more robust overseas and basing infrastructure to allow it to project power at greater distances. In parallel, the PRC is accelerating the modernization and expansion of its nuclear capabilities. The United States and its Allies and partners will increasingly face the challenge of deterring two major powers with modern and diverse nuclear capabilities – the PRC and Russia – creating new stress on strategic stability.
+
+China has already made significant progress in achieving parity with the U.S. The conventional balance shown earlier in Figure Three reflects massive increases in China’s conventional military strength since 1990, and these numbers only show a comparatively small part of the massive Chinese shift away from a reliance on creating the largest possible ground forces to defend Chinese territory in 1990 to creating land, naval forces, and air forces as modern or more modern that U.S. forces. China has been creating major power projection capabilities in the Pacific and Indian Ocean since at least the md-1990s, and China has published a variety of unclassified defense white papers and strategies that make it clear that it is seeking to become superior in its ability to use the most advanced emerging and disruptive technologies.
+
+An unclassified series of estimates of the growth of Chinese sea power relative to U.S. sea power is shown in Figure Seven, and shows that China is not only becoming a major blue water navy, but could also overtake the US Navy in numbers. While Chinese ships would generally be smaller, they do not need the ability to project power across the entire Pacific over long periods of time that the U.S. Navy must provide, and work by the Congressional Budget Office (CBO) and General Accountability Office (GAO) warn that the U.S. Navy may have significantly overestimated the ship building efforts that current budgets allow it to perform.
+
+The impact of Chinese efforts over the past few decades are also reflected in the estimate of the military balance in the northwestern Pacific is shown in Figure Eight. It shows that Chinese, Taiwanese, and U.S. military forces are already postured for a possible war over Taiwan, and the overall level of military confrontation in the region.
+
+More broadly, Figure Nine shows that unclassified intelligence assessments, and a variety of unclassified studies by outside experts, report that that China is increasing its military spending far more quickly than Russia, and Figure Ten highlights a Japanese official estimate of how the increases in Chinese military spending are affecting some key aspects of the regional balance by showing the rising totals of modern Chinese naval surface vessels, submarines, and combat aircraft.
+
+Figures Nine and Ten show that China and Xi can also draw upon a far stronger economic base and level of military spending in stepping up such competition than Putin can in Russia. China is also making a far larger annual investment in technology and a far higher level of manufacturing capability. These affect many aspects of its comparative military industrial base and ability to eventually match the U.S. and West’s technology base – trends that are shown in detail in Major Powers and Strategic Partners: A Graphic Net Assessment.
+
+The trends in latter assessment also show that China’s rapid growth as a global economic trading power, aggressive foreign investment, and state-driven ability to seek economic ties and leverage on global basis – exemplified by its Belt and Road Initiative – have made it a much more serious challenger than Russia, although its action have alienated a number of states.
+
+China’s future growth does, however, face growing challenges. Its rate of economic growth has diminished since 2021, it has badly mismanaged its effort to deal with COVID, its property market is in a crisis, its labor and manufacturing costs are rising, it is over-regulating its technology sector, unemployment is rising, and its population is aging. Nevertheless, China is still growing sharply as a military and global power, and the U.S. National Security Strategy issued October 2022 makes it clear that the U.S. now sees China as the primary threat to its security, and more in terms of war than any real intention to emphasize cooperation.
+
+> The 2022 National Defense Strategy advances a strategy focused on the PRC ,and on collaborating with our growing network of Allies and partners on common objectives. It seeks to prevent the PRC’s dominance of key regions while protecting the U.S. homeland and reinforcing a stable and open international system. Consistent with the 2022 National Defense Strategy, a key objective is to dissuade the PRC from considering aggression as a viable means of advancing goals that threaten vital U.S. national security interests. Conflict with the PTC is neither inevitable or desirable. The Department’s priorities support broader whole-of-government efforts to develop terms of interaction with the PRC that are favorable to our interests and values, while managing strategic competition and enabling the pursuit of cooperation on common challenges.
+
+> ...The most comprehensive and serious challenge to U.S. national security is the PRC’s coercive and increasingly aggressive endeavor to refashion the Indo-Pacific region and the international system to suit its interests and authoritarian preferences, The PRC seeks to undermine U.S. alliances and security partnerships in the Indo-Pacific region, and leverage its growing strength and military footprint to coerce its neighbors and threaten their interests, The PRC’s increasingly provocative rhetoric and coercive activity towards Taiwan are destabilizing, risk miscalculation, and threaten the peace and stability of the Taiwan Strait. This is part of a broader pattern of destabilizing and coercive Chinese behavior that stretches across the East China Sea, and along the Line of Actual Control. The PRC has expanded and modernized nearly every aspect of the PLA, with a focus on offsetting U.S. military advantages. The PRC is therefore the pacing challenge for the Department.
+
+#### Guessing at the Future
+
+There is no reliable way to project the comparative rate of Chinese and U.S. modernization at this point of time. As has already been discussed in the case of Russia, the unclassified data on Chinese military industrial base, and many key elements of its national and military technology base, are very limited.
+
+Once again, it is also important to point out that more unclassified data are available on the U.S. and Western military industrial base, and many key elements of its national and military technology base, but a close example indicates that many seemingly comparable data are not truly comparable, and that there are many gaps in coverage, particularly on actual programs, ongoing active activities, and any credible measures of effectiveness. It is also clear from the history of many national efforts that quantity is not a measure of quality.
+
+The available unclassified data do clearly indicate that China’s efforts are now massively greater than Russia. Nevertheless, it is still far from clear when China expects achieve any parity in its conventional forces and power projection capabilities in its areas of primary interest. Chinese national strategy and defense reports have listed a number of possible years for such parity that have extended from the late 2020s to well beyond 2035. In practice, however. China has been careful to qualify their meaning and strategic impact. It also has failed to tie them to future forces levels, success in meeting modernization goals, and levels of defense spending, or any clear intensions to use them for active combat as distinguished from military leverage.
+
+As noted earlier, the full range of U.S. efforts to reshape and modernize its forces to deal with China is also unclear. The full impact of the new strategy on U.S. plans to deal with China and Russia will only begin to become clear when the President submits his new defense budget proposal to Congress early in 2023.
+
+The U.S., however, is already reshaping its Navy and Marine Corps to deal with the emerging Chinese threat, however, and media reports make it clear that it is conducting a wide range of war games and studies to deal with the possibility of war to defend Taiwan from a Chinese invasion as well as to support Japan, Australia, South Korea, and other partners and friendly states. The National Security Strategy document notes that,
+
+> We have an abiding interest in maintaining peace and stability across the Taiwan Strait, which is critical to regional and global security and prosperity and a matter of international concern and attention. We oppose any unilateral changes to the status quo from either side, and do not support Taiwan independence. We remain committed to our one China policy, which is guided by the Taiwan Relations Act, the Three Joint Communiques, and the Six Assurances. And we will uphold our commitments under the Taiwan Relations Act to support Taiwan’s self-defense and to maintain our capacity to resist any resort to force or coercion against Taiwan.
+
+Any major conflict or clash between the U.S. and China seems unlikely in the near term, and both President Biden and a top U.S. official in the Department of Defense have stated that war is unlikely in next two years, although he expects the PRC to increase pressure on Taiwan as it expands its military capabilities for an amphibious invasion. Two years, however, is scarcely a long period in strategic terms, and media reports make it clear that the U.S. is conducting war games and exercises to find the best way to deal with a Chinese invasion of Taiwan, and is planning for a sudden war over Taiwan and one that could easily escalate to cover much of the South China Sea and the rest of the western Pacific.
+
+In practice, the “Winter War” between the U.S. and China is far more serious at a practical military level than U.S. and Chinese political rhetoric usually indicates and presents a special challenge for the US. The late Andrew Marshal highlighted this challenge early in China’s competition with the U.S. by highlight what he called “countervailing power:” The ability of one side to pressure the other by create a military crisis and build-up that forced the other spend far more of its money and military efforts to meet a challenge than the other.
+
+In some ways, Taiwan is a clear case in point. Competing at the far end of the Pacific where China normally deploys much of its military power, and over the comparative vast distances the Pacific imposes in terms of power projection, is far more expensive for the U.S. than for China. China could step up the level of force the U.S. needs to compete through relatively simple deployments and at little cost, and it takes relatively minimal risk. A successful U.S. defense of Taiwan would scarcely lead to an invasion of China and would confront the U.S. with having to then sustain a far greater forward military presence tailored to the defense of one strategic partner, while any U.S. failure to defend would undermine its entire strategic position in Asia. The base case for the U.S. is close to the worst case in terms of countervailing power.
+
+It is also clear from the U.S. National Security Strategy that the U.S. sees the expansion of Chinese influence in Southeast Asia, the Indian Ocean, and the Gulf, the rest of the Middle East, and Africa as hostile and as a far broader threat. No one on either side can dismiss that risk of a conflicts somewhere else in the Pacific or Asia, or be certain of the level of theater-wide escalation or intensity of combat that might occur.
+
+Moreover, the level of tension over trade, economic policy, and technological espionage has also reached a level of confrontation bordering on economic warfare. China is after all the land of Sun Tzu and has already shown how well it can focus on forms of warfare that rely on economic power and military influence rather than combat.
+
+Finally, it seems likely that if the full range of Western intelligence on Chinese nuclear weapons, and nuclear and dual-capable delivery systems was made public, it might well indicate that China intends to become a far larger nuclear power and one that can directly compete in strength with the U.S. and Russia. Certainly, its improvement in ICBMs and SSBNs, and its development of a wide range of longer range and advanced strike systems will be given far greater capacity than it has had in the past.
+
+A meeting of President Biden and President XI on November 14th, 2022, tried to put a different face on these developments, and give the impression that the U.S. and China were actively seeking to improve their level of cooperation. In reality, however, it seemed to be largely an attempt to find ways to maintain trade and more limited forms of economic cooperation between two powers that were actively involved in political and economic warfare in many areas than any real progress towards real cooperation and cutbacks in their military build-ups on ongoing levels of political and economic warfare. It was all too clear from the White House statements about the meeting that the meeting did not resolve any key issues, but was designed rather to find some areas where both sides could benefit without making any serious changes in their competition, and that it reflected more of a reaction to the common problems the U.S. and China faced because of COVID and the war in Ukraine than any serious effort to change their strategic positions.
+
+In short, Xi and the 20th Party Congress, and the new US National Security Strategy issued in October 2022 have already made China part of a “winter war,” and one with all of the same major risks as the “winter war” with Russia. However, this is a combination of military confrontation and political and economic conflict whose intensity has been steadily rising for more than a decade, and that seems just as likely to ensure for years to come as the “winter war” with Putin’s Russia.
+
+![image07](https://i.imgur.com/7TyrJTw.png)
+_▲ __Figure Seven: The Massive Increases in Chinese Military Spending.__ Source: [Cailtlin Campbell, China Primer: The People’s Liberation Army (PLA), Congressional Research Service, January 5, 2021](https://crsreports.congress.gov/product/pdf/IF/IF11719/4); and Bastian Giegerich, Emile Hokayem, and Sharinee Jagtiani, Regional security and alliances in the Middle East and the Indo-Pacific: Implications for European security, IISS, Hans Seidel Foundation, January 2022, p. 3_
+
+![image08](https://i.imgur.com/EzCxl9A.png)
+_▲ __Figure Eight: U.S. Navy Estimate of Chinese Combat Shipbuilding Relative to U.S. Navy.__ Source: Adapted from Ronald O’Rourke,Chinese Naval Modernization: Implications for U.S. Capabilities, Congressional Research Service RL33153, pp. 9&10_
+
+![image09](https://i.imgur.com/ZMr0rw5.png)
+_▲ __Figure Nine: Japanese MOD Estimate of the Military Forces in the Western Pacific and Taiwan in 2022.__ [Adapted from Japan, Ministry of Defense, Defense of Japan 2022, August 2022](https://s3.documentcloud.org/documents/22187264/doj2022_en_full.pdf), p. 5_
+
+![image10](https://i.imgur.com/cnTe5pB.png)
+_▲ __Figure Ten: Chinese Deployment of Advanced Modern Submarines, Surface Ships, and 4th and 5th Generation Aircraft.__ [Adapted from Japan, Ministry of Defense, Defense of Japan 2022, August 2022](https://s3.documentcloud.org/documents/22187264/doj2022_en_full.pdf), p. 43_
+
+
+### The “Winter War” in the Middle East
+
+There are a wide range of other active and potential “winter wars,” most of which preceded the War in Ukraine, and that involve threats and actual conflicts that will continue through the winter of 2022-2023. Many seem certain to continue for years to come. All have the potential to become much worse, however, and their cumulative impact places yet another major burden on U.S. and partner resources and capabilities.
+
+One key center of such “winter wars” is North Africa, the Middle East, and the Persian/Arab Gulf. Algeria and Libya are key centers of instability and civil tension in North Africa. Syria and Iran are key centers of instability in the Middle East, Iraq’s stability and unity is uncertain, and it seems likely that the Sudan, Ethiopia, Eritrea, Tigray, Somalia, and Yemen will continue to be flashpoints in the future.
+
+This helps explain why the U.S. has been actively involved in warfare in the Persian/Arab Gulf region since at least the first Gulf War in 1990, although it was indirectly involved in the Iran-Iraq War during 1980-1988, as well as every major Arab-Israel conflict. It is still involved in the fighting in eastern Syria and support its strategic partners in their fight against terrorism and their deterrence of external threats. Russia is involved in the civil war in Libya and Syria.
+
+From a purely military viewpoint, Iran is the most current serious regional threat in the region. Its arms race with the Arab Guld states has been a war for political and military leverage. Iran is also a potential nuclear power, and one that may well have completed the design and passive testing of non-fissile nuclear weapons. It can come steadily closer to the production of weapons grade Uranium, and it that may form serious security and economic ties to Russia and China. There is also a risk that Iran may be able to form a more serious security alliance with Syria, Iraq, Yemen, and even a Hezbollah dominated Lebanon.
+
+China and Russia are both competing with the U.S., Britain, and France for military influence and leverage in the region. China now has a military base in Djibouti, is playing a major role in the development of Pakistan’s ports and may be seeking to create more serious ties to Iran that include port facilities on its territory outside the Gulf. Russia is buying missiles and drones from Iran and Russian mercenaries have been active in the Libyan civil war. In contrast, U.S. ties to Egypt and the Arab Gulf states are weakening, as is European influence and ability to deploy land and air forces east of Suez. It is also clear that extremist and terrorist movements continue to be a threat.
+
+As Figure Eleven shows, the Middle East and nearby areas in North Africa and Asia are also major centers of terrorism and extremism. The terrorist activities sometimes interact on a regional basis, and most are driven by both failed governance and development, and at least low-level fighting between sects, ethnic groups, and tribes.
+
+As yet, these shifts do not seem to pose serious risks of new levels of conflict, but they do have that potential. Moreover, U.S. relations with Turkey do seem to be steadily more distant, and the overall level of development, stability, and security in the region continues to decline.
+
+![image11](https://i.imgur.com/fvl0Eni.png)
+_▲ __Figure Eleven: Major Terrorist Groups in Africa and the Middle East.__ [Adapted from Japan, Ministry of Defense, Defense of Japan 2022, August 2022](https://s3.documentcloud.org/documents/22187264/doj2022_en_full.pdf), p. 43_
+
+
+### The “Winter War” in Asia and the Koreas
+
+The Afghan conflict seems to be over, although the Taliban have yet to show they can actually govern effectively. However, Asia and the Indian Ocean region present a continuing range of regional and internal security problems and the own range of wars for territory and military influence. China has recently clashed with India. India and Pakistan are steadily arming for another possible round of war, that could involve the use of nuclear weapons. Myanmar is a nightmare of internal conflict and repression, Afghanistan faces major internal instability, and there is a wide range of religious and ethnic tensions that include Chinese repression of the Uyghurs.
+
+The most serious current risk of a major conflict in the in the region, however, seems to be the rising level of tension and arms race between North Korea and South Korea, which could easily escalate to involve the U.S. and Japan, and possibly Russia and China.An estimate of the conventional military balance in the Koreas is shown in Figure Twelve, but it seems likely that the level of U.S. forces in South Korea would change so quickly if a serious combat began that such a Figure can only provide limited insight into the risks involved. It also does not mention North Korea’s possession of nuclear weapons.
+
+The second half of Figure Twelve also warns that North Korea has begun a new kind of “winter war” by sharply increasing its missile firings, and this chart does not include the further massive increases in missile tests, and violations of South Korean territory in October and November of 2022. By early November. North Korea had already launched 86 missiles – an annual record – and fired 23 missiles in one day.
+
+The Northern Korean missile tests have illustrated its potential threat to Japan, and to U.S. military bases in Japan and Guam, and North Korea seems to have tested an ICBM-like missile in November 2022, although the test failed. It is clear that North Korea is increasing its nuclear weapons inventory, is making extensive use of its centrifuge facilities to produce more fissile material and may conduct its first nuclear weapon test in years during the winter of 2022-2023.
+
+At present, this new level of confrontation does seem to be designed more to use military force to gain influence than present a near-term risk of any major conflict. Nevertheless, the possibility remains of that incident could trigger such a conflict. North Korea’s ties to China, its recent sales of artillery weapons Russia, and the sheer extremism of North Korea’s authoritarian leader are all warnings that such an incident could occur in ways that involve all of the major powers.
+
+![image12](https://i.imgur.com/wnNM2W5.png)
+_▲ __Figure Twelve: Developments in the Korean Military Balance.__ [Adapted from Japan, Ministry of Defense, Defense of Japan 2022, August 2022](https://s3.documentcloud.org/documents/22187264/doj2022_en_full.pdf), pp. 77&120_
+
+
+### The “Winter Wars” in Gray Area, Spoiler, and Proxy Campaigns
+
+There is no way to predict what existing or new gray area, spoiler, or proxy campaigns will escalate to the point where they become serious problems for the U.S. or its partners, but many risks already exist – including ones in Latin America and the rest of Africa, and rising tensions with China and Russia will inevitably increase this risk over time.
+
+As noted earlier, Russia’s trade war with the West qualifies as a serious level of gray area operations, as does the West’s proxy war in the Ukraine, and Russia’s more direct proxy roles in Syria and Libya. So does China’s effort to control critical mineral and manufacturing resources in solid state devices, batteries, and other areas.
+
+The U.S. and its strategic partners also have come to realize how serious industrial and technology espionage and efforts to dominate key areas of trade have become, and that these are serious forms of gray area warfare that they have taken actions to address that approach to economic warfare. The same seems to be true of Chinese efforts to control strategic minerals and investment patterns that have been designed to give China added economic leverage, particularly in areas like the materials need for advanced batteries and solid-state devices – area critical to both civil and military technology.
+
+
+### The “Winter War” in Fragile, Divided, Autonomous Undeveloped States, and Against Terrorism and Extremism
+
+Finally, there is no doubt that the larger “winter wars” are only part of the overall threat to the developing world, where most states face increasing problems in terms of food supplies, energy imports, and poverty this winter, as well as serious damage from climate change and global warming. These have, however, been increased to some extent by the War in the Ukraine’s impact on food exports and energy costs, and many of these problems are the result of internal tensions and violence.
+
+The new U.S. National Security Strategy recognizes the existence of a growing global food crisis and energy problems. The various NGO lists of fragile states also reflect a growing number of what are called “fragile states,” also they often should really be called “failed states” or governments – something that is all too clear when the rankings of “fragile states” are compared with the corruption rankings of Transparency International and the governance rankings of the World Bank. UN estimates of population growth, and various failed state indices of NGOs warn that this is a major problem for poorer and less developed states that gets far too little practical attention.
+
+The global trends in the winter of 2022-2023, and the risk they create of more serious forms of war, are also clear. The IMF World Economic Outlook for 2022, issued in October 2022, warns that,
+
+> Our latest forecasts project global growth to remain unchanged in 2022 at 3.2 percent and to slow to 2.7 percent in 2023 – 0.2 percentage points lower than the July forecast – with a 25 percent probability that it could fall below 2 percent. More than a third of the global economy will contract this year or next, while the three largest economies – the United States, the European Union, and China – will continue to stall. In short, the worst is yet to come, and for many people 2023 will feel like a recession. Russia’s invasion of Ukraine continues to powerfully destabilize the global economy.
+
+> Beyond the escalating and senseless destruction of lives and livelihoods, it has led to a severe energy crisis in Europe that is sharply increasing costs of living and hampering economic activity. Gas prices in Europe have increased more than four-fold since 2021, with Russia cutting deliveries to less than 20 percent of their 2021 levels, raising the prospect of energy shortages over the next winter and beyond. More broadly, the conflict has also pushed up food prices on world markets, despite the recent easing after the Black Sea grain deal, causing serious hardship for low-income households worldwide, and especially so in low-income countries.
+
+> Persistent and broadening inflation pressures have triggered a rapid and synchronized tightening of monetary conditions, alongside a powerful appreciation of the US dollar against most other currencies. Tighter global monetary and financial conditions will work their way through the economy, weighing demand down and helping to gradually subjugate inflation. So far, however, price pressures are proving quite stubborn and a major source of concern for policymakers. We expect global inflation to peak in late 2022 but to remain elevated for longer than previously expected, decreasing to 4.1 percent by 2024.
+
+The World Bank warns that while the rise in global poverty caused by COVID may now be declining, this decline is uncertain and that some 75 to 95 additional millions of people are still in a state of dire poverty. Its 2022 Poverty and Prosperity Report indicates that, “nearly half the world – over 3 billion people – lives on less than US $6.85 per day, which is the average of the national poverty lines of upper-middle-income countries,” and that “574 million people – nearly 7 percent of the world’s population – will still be living on less than US $2.15 a day in 2030.”
+
+It is no coincidence that the World Bank list of Fragile and Conflict Affected Situations in FY2022 shown in Figure Thirteen includes so many countries governed by regimes that have failed to develop effectively, have failed to heal the division between their peoples are actively exploited, and/or highly authoritarian and repressive.
+
+At the same time, the UN Human Development Report for 2022, reports record levels of political polarization, and negative views of the world, and that more than 6 in 7 people polled feel insecure about the level of global progress. It notes that declines on the Human Development Index (HDI) were widespread, with over 90 percent of countries enduring a decline in 2020 or 2021. The Global Peace Index, which covers 163 countries, found the 11th deterioration in peacefulness in the last fourteen years.
+
+These negative trends were partly driven by the impact of COVID, and the inflation and food crisis caused by the War in the Ukraine, but they were also driven by failed national governance over what has normally been periods of several decades, and the end result is that there has been a steady rise in global political extremism, and in ethnic, sectarian, and tribal tensions and conflicts. They have also led to a more than 100% increase in the number of refugees since 2011, and an 8% increase in 2021.
+
+The UNHCR report on the global trends in refugees for 2022 reports that by the end of 2021, there were 27.1 million refugees globally and 53.2 million people displaced within their home countries. In virtually every case, the country involved at most received humanitarian aid and only provided temporary relief and failed to make any serious advances in development or providing lasting solutions to the problems that were creating more refugees.
+
+The sheer scale of the current level of global conflicts is illustrated in the fact that the summary list of ongoing conflicts that is available on Wikipedia is four pages long, although this list ignores many smaller ethnic, sectarian, tribal, and other low-level internal civil conflicts. ACLED also provides an extensive analysis of such conflicts.
+
+The level of global terrorism and extremism have also risen in recent years, as is shown in the graphs showing the trends in global terrorism developed by START shown in Figure Fourteen, and in the series of maps in available in the Counterterrorism Guide of the U.S. Director of National Intelligence. It also is all too clear from the 2021 U.S. State Department Country reports on Terrorism.
+
+A key irony behind any focus on these trends in terrorism and extremism, however, is that they are a relatively minor part of the problems affecting the overall patterns in global violence, particularly in lower incomes states. If one examines the trends and impact of poor governance, corruption, leadership that favors given internal factions, failed development efforts, and repression; they almost certainly do more to threaten their populations than terrorists or extremists.
+
+This is especially true of governments that Steven Levitsky and Lucan Way have characterized as competitive authoritarianism: “In competitive authoritarian regimes, formal democratic institutions are widely viewed as the principal means of obtaining and exercising political authority. Governments that control a pliant or cowed media as well as the security services and many elements of the economy and where the regime fails to meet conventional minimum standards for democracy.”
+
+In fact, such authoritarian governments probably do at least an order of magnitude more damage to their peoples than terrorist and extremist movements. They also make their countries more vulnerable to exploitation by more developed powers and encourage more developed powers to exploit their weakness and instability interact with the forces creating instability. One key example is Assad’s Syria. His Russian-backed war to reestablish his power and control has been estimated to have killed as many as 499,700 to 600,000 by March 2022. More conservative estimates put the figure at over 350,000.
+
+Estimates of the total deaths caused by terrorism and extremism differ sharply, but a high estimate indicates that they average around 26,000 per year over the same ten-year period as the estimate for Syria, or a total 260,000. Statista reports annual figures ranging from 11,098 to 32,763, or 250,141 for the eleven years of the Syrian civil war. The Global Terrorism Index For 2022 reports only 7,142 deaths from terrorism and extremism, in 2021, and an uneven pattern of decline in deaths from a peak of only 10,669 in 2015.
+
+And Syria is only the worst of many countries where governments kill their peoples. No similar estimates are available, but there are all too many examples. Myanmar is certainly one of the worst. Iran is another, and there are all too many additional states in Africa and Asia.
+
+And it should be remembered that all of these trends generally interact with failures to adequately cope with disease, global warming, and population growth. The first two of these trends are already the source of global attention, but Figure Fifteen indicates a massive rate of actual population growth between 1950 and 2020 that makes the additional threat from population pressure all too clear.
+
+![image13](https://i.imgur.com/pbXOA3H.png)
+_▲ __Figure Thirteen: World Bank List of Fragile States and Conflict Situations in 2022.__ [Adapted from World Bank, date base](https://thedocs.worldbank.org/en/doc/bb52765f38156924d682486726f422d4-0090082021/original/FCSList-FY22.pdf)._
+
+![image14](https://i.imgur.com/J2en6fb.png)
+_▲ __Figure Fourteen: START Estimate of Trends in Global Terrorism: 1970-2020.__ Source: [START, University of Maryland](https://www.start.umd.edu/gtd/search/Results.aspx?chart=overtime&search=map)._
+
+![image15](https://i.imgur.com/BJMa752.png)
+_▲ __Figure Fifteen: The Growing Global Threat from Population Pressure: 1950-2020.__ Source: [United Nations, World Population Prospects](https://population.un.org/wpp/graphs/) and, [United Nations, Data Portal](https://population.un.org/dataportal/data/indicators/49/locations/900/start/1950/end/2100/line/linetimeplotsingle)._
+
+
+### From Peace, “Globalism,” and a “Global Village” to a World Filled with Global Tensions and Warfare
+
+In conclusion, this discussion of “winter wars” may seem to be deliberately pessimistic and to focus on worst cases. It also discusses wars that have sometimes already gone on for decades, and many that seem likely to gone on for a decade or more after the winter of 2022-2023. It is still striking, however, that it describes overall patterns in global violence and conflict a world where it has taken less than a decade to go from a focus on how the world might come together in a form of “globalism” – one that approximates a peaceful and cooperative “global village” – to a world with so many tensions and risks.
+
+As for the broad use of the term “war,” this analysis also shows that Sun Tzu was all too correct in stating that “the supreme art of war is to subdue the enemy without fighting.” World War I and World War II have shown how dangerous it can be to escalate to major conflicts, and today’s world of nuclear weapons, tightly integrated global supply chains, and steadily more lethal forms of conventional combat have greatly increased the damage a truly major war can inflict. It is all too clear that the relations between the great powers, and between the more advanced and developed democracies and authoritarian and repressive states, have shifted from the image of cooperation to active confrontation.
+
+The analysis shows that major powers and developed nations are actively involved in trying to achieve the “supreme art of war.” The list of “winter wars” makes it all too clear that major powers now focus on political and economic conflicts and confrontations and on efforts to use military force that are limited to exploiting political and military leverage without engaging in combat.
+
+While the major powers still seem to find it obligatory to at least mention “cooperation,” and actively seek to keep some degree of real-world cooperation in areas where all sides can still benefit from cooperation, the primary focus of their political and economic confrontation, and military build-ups, has clearly shifted. They are all trying to achieve their strategic objectives by creating a far more confrontational set of military goals and plans, and taking more serious risks in terms of political and economic struggles that at least approach a form of warfare and increase the risk of some form of escalation to the actual use of force.
+
+Moreover, the analysis does understate the full threat of “winter wars” to the extent it has touched relatively briefly on the number of developing and poorer states that are experiencing serious internal violence, and where the failures of their governments to come to grips with internal tensions, population growth, and sustained development makes them as much of a threat to their peoples as any terrorist or extremist faction. It has not tried to address the combined impact of war, climate change, population pressure, and disease – although all of these problems reinforce each other, and climate change, population pressure, and disease – like failed governance – often have greater impact.
+
+Finally, the analysis has concentrated on the nature and scale of key types of political, economic and military conflicts, but not on whether any given side has a clear strategic objective in trying to “win.” Putin’s grand strategic objective seems to be close to one of rebuilding the former Soviet Union and strategic partnerships of equal importance, but there is no way to know how real this goal really is. The same is true of China’s grand strategic objectives which are equally broad and vague.
+
+The U.S. new national strategy does talk about the creation of a world with a common economic system and set of international rules – one most it strategic partners support but does not present any plan for achieving it. As for all too much of the rest of the world – rhetoric aside – the national grand strategic goal of its leadership seems to be to retain or expand their power at the national, local, and regional level. The current process of a given “winter war” is clear, but the grand strategic goal is not defined beyond some broad level of rhetoric.
+
+Santana once warned that “he who forgets the past is condemned to repeat it.” In some ways, the world has already done so in two World Wars. For all of the military tensions that preceded World War I, most Europeans though assumed that the equivalent of a stable level of deterrence had been established following the war of 1870, which would prevent any major European conflict in spite of the arms races that were increasing the lethality and size of European forces.
+
+The results were devastating, but similar assumptions about postwar stability largely governed Europe until the depression and the collapse of the Weimar democracy in Germany, and then helped encourage isolationism and appeasement until the German invasion of Poland. The result was World War II – a war that did even more damage on a global basis than World War I, and then helped to create a Cold War that may well be returning in more lethal and even more global form.
+
+If anything, this analysis of Winter Wars warns that the corollary to Santana’s thesis may well be that “we repeat the past regardless of whether we remember it or not.”
+
+---
+
+__Anthony H. Cordesman__ is the Emeritus Chair in Strategy at the Center for Strategic and International Studies (CSIS). He has previously served in the Office of the Secretary of Defense, the National Security Council, the State Department, and the Department of Energy. Dr Cordesman also served as the national security assistant to Senator John McCain, and he previously held the position of adjunct professor at Georgetown University.
+
+__Paul Cormarie__ is the Intern of the Burke Chair in Strategy at CSIS.