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Economic Warfare and Hub States

In the wake of the Renault industrial espionage case--where there are now concerns that details of its new electric vehicle may have been acquired by Chinese interests--France's industry minister Eric Besson said that the moniker "economic warfare" is an appopriate one for describing the new environment we are in. Reuters correspondent Peter Apps also reports, "Some analysts also suspect information theft may be helping China close the gap faster than expected as it builds a "stealth fighter" to rival Lockheed Martin's F-22."

The realization that the ability to project "hard" power rests even more on economic foundations--and that inflicting economic damage may be more important in pursuing one's national interests vis-a-vis other states, led Ian Bremmer, the president of the Eurasia Group, to comment: "What you're seeing is a change in the nature of what war itself means. It's not going to be so much a matter of bombs and missiles as deniable cyberwarfare, corporate espionage, economic struggles. That's going to be a particularly difficult environment for Western corporates."

Reacting is going to be difficult, particularly for a U.S. policy process that divided "national security/defense" issues from economic ones, and where there is no tradition of using government intelligence resources to support the work of private sector U.S. firms. Add to this the problem of the growing internationalization of U.S. firms (or having significant stakes be purchased by non-U.S. interests) and the "naturalization" of foreign firms by creating U.S.-based affiliates, and coordination could prove difficult.

But at the same time, there is another trend at work. Judah Grunstein of World Politics Review observes that "the best way to advance strategic interests is to maximize connectedness. But although connectedness is in itself valuable, some kinds of connectedness are more strategically valuable than others. So the key is to be a node that is highly integrated not just within the network, but within the right parts of the network."

But he raises an interesting conundrum at the end. If the rising and established powers are increasingly finding themselves at "economic odds" (per Bremmer), then those states which have attempted to secure their position in a globalized world (and Grunstein cites Ukraine, Turkey and Colombia attempting to balance between different vectors) may find themselves being asked to "take sides" by some of their partners. It leads him to the following conclusion: "How well these states manage to defend the principle of connectedness against the demands of power politics will in many ways determine the direction and shape of the emerging global order."

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