FP’s Situation Report: China and Russia cement ties; The Islamic State gets a new ally; Ukraine closer to all out war; Happy Veterans Day; and much more.

By David Francis with Sabine Muscat

China and Russia show President Obama what he is up against in the Asian-Pacific upon his arrival to the APEC summit in Beijing. The two countries had to stay outside as Obama huddled in the U.S. embassy with 11 other participants of the ongoing Trans-Pacific Partnership (TPP) trade negotiations. But while the deadline for concluding TPP is unlikely to be met at the end of this year, China and Russia presented a massive energy agreement for a second gas-export route from Siberia to China.

"The preliminary accord, which comes just months after China and Russia inked a landmark, $400 billion natural gas deal, is a reflection of the shifting balance of power in Asia. It’s a marriage based on needs: Russia’s to break out of the isolation imposed by the West in the wake of its annexation of Crimea and China’s for reliable and affordable sources of energy," reports FP’s Keith Johnson on Putin’s recent "pivot to Asia."

The deal is far from complete. More from FP’s Johnson: "The two sides laid the groundwork over the weekend, but a host of unresolved issues remain, especially regarding the price China will pay for the gas. The first deal took more than a decade to hammer out and involved substantial concessions by Moscow on pricing." More here.  

In an effort to set the Sino-U.S. relationship on a new footing, Obama invited China to share global responsibilities. "We compete for business, but we also seek to cooperate on a broad range of challenges and shared opportunities," Obama said at the APEC CEO summit. "If China and the United States can work together, the world benefits."

China’s Global Times sees a U.S. president eager to soften his stance on China as he struggles on so many other fronts: "Sino-U.S. relations are not in good shape as Washington has played a role in the disputes in the South China Sea and East China Sea. But since the U.S. has already sunk into a quagmire in Ukraine, and as a result of Islamic State terrorism, China-U.S. relations may become the only area where Obama can leave a legacy." More in the English edition of the People’s Daily here.

Obama presented the first concrete step for deeper economic and social integration with a visa agreement, extending the validity of student, business and tourist visas to up to ten years (journalist visas for China, which have been getting harder to procure, were not covered by the agreement). The United States hopes to attract more Chinese travelers, as Calum MacLeod of USA Today reports. More here.

Obama and Putin mostly tried to avoid each other in Beijing, but they did have a brief meeting behind the scenes today. They exchanged views on Syria and the nuclear negotiations with Iran, as both the White House and the Kremlin have confirmed. Reuters’ Matt Spetalnick describes the few awkward public interactions the two leaders had on different occasions during the summit. More here.  

The Islamic State gets a new ally in Egypt. One of the main concerns about the rise of the Islamic State is that its radical ideology could be attractive to other Islamists in the Middle East. Egypt’s most dangerous militant group, Ansar Beit al-Maqdis, pledged its obedience to the organization.

From the New York Times’ David D. Kirkpatrick: "The decision injects the Islamic State into the most populous and historically most influential Arab nation, a milestone achievement weeks into an American-led bombing campaign against its strongholds in Syria and Iraq. The endorsement is a major victory for the Islamic State in its rivalry with Al Qaeda — a group with storied Egyptian roots — and could now help recruit fighters and affiliates far beyond Egypt." More here.  

Egypt and other American allies in the Middle East have been weighing a greater role in the fight against the Islamic State. The presence of a group that has now formally affiliated itself with radicals in Iraq and Syria could be what’s needed to get Egypt and other allies involved in the fight. But there’s a tradeoff: the creation of a pan-Arab force would increase resources while potentially expanding the war.

More on the Islamic State below.

Welcome to Tuesday’s edition of the Situation Report.

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Who’s Where When Today

President Obama and Secretary of State John Kerry attend the final day of APEC meetings in Beijing. 1:00 p.m. Secretary of Defense Chuck Hagel participates in a Veterans Day observance at the Vietnam Veterans Memorial in Washington, D.C. 6:30 p.m. Senator John McCain speaks about his new book Thirteen Soldiers at the National Press Club.

What’s Moving Markets

Bloomberg‘s Tony Capaccio on defense contractors making money off the fight against the Islamic State. More here.

More from Bloomberg, this time from Holly Rosenkrantz and Daryna Krasnolutska on new sanction threats from the West against Russia. "The U.S. and its allies are stepping up criticism of Russia after a Nov. 2 election by the self-proclaimed separatist republics of eastern Ukraine’s Donetsk and Luhansk regions raised tensions and threatened to plunge the region into open warfare." More here.

The Wall Street Journal‘s Bob Davis on the United States and China agreeing to drop trade tariffs. The deal could cover $1 trillion dollars in trade. More here.

APEC

Writing for FP, Min Ye on China’s strategy to counter the TPP: "On Nov. 8, Chinese President Xi Jinping announced the establishment of a $40 billion Silk Road infrastructure fund, focusing on building ‘roads, railways, ports and airports across Central Asia and South Asia.’" More here.

Writing for The New York Times, Wang Dong, Robert A. Kapp and Bernard Loeffke call for Obama and Xi to build a "new model" for their relationship: "Broadly put, the two presidents must act to arrest and reverse the emergence and deepening of a dynamic in which efforts by either nation to bolster its own security causes the other to feel less secure. The relationship between the United States and China must not become a strategic rivalry, spiraling downward." More here.

The Washington Post‘s Ellen Nakashima on the unfortunate timing of another Chinese cyber breach: "Chinese government hackers are suspected of breaching the computer networks of the United States Postal Service, compromising the data of more than 800,000 employees — including the postmaster general’s." More here.

After today’s summit with President Xi in Beijing, Myanmar will be the next stop of Obama’s Asia voyage. The resumption of ties with the country after the end of military rule was touted as one of his administration’s major diplomatic breakthroughs. But Myanmar’s democratization has not been moving along as hoped, reports FP’s Larry Jagan. More here.

Russia

U.K. Prime Minister David Cameron will meet Putin at the G20 summit this weekend in Australia. In a foreign policy speech Cameron "warned his business audience that Britain’s economic security depended on its national security, adding: ‘Russia’s illegal actions are destabilizing a sovereign state and violating its territorial integrity.’" More from the Guardian’s Patrick Wintour here.  

Nicolas Miletitch in the Sydney Morning Herald on the threat of all-out war in Ukraine: "Intense weekend shelling around Donetsk and more armored columns heading to the city have fueled concerns the rebels could be gearing up for an offensive after weeks of localized skirmishes." More here.  

As Russia turns it attention east, China has been making inroads in the Arctic, writes Emanuele Scimia in World Politics Review: "The Kremlin would do well to monitor the actions in the Arctic of its occasional partner and possible future rival, China, rather than those of its trans-Atlantic adversary." More here.

Islamic State

McClatchy’s Nancy Youssef on the return of American troops to Anbar province, where the United States suffered its heaviest losses in the Iraq war: "The force of 50 troops has been tasked with determining how to send more American advisers and trainers to the restive province to prepare Iraqi forces to combat the Islamic State, which controls an estimated 80 percent of province." More here.

Is Abu Bakr al-Baghdadi dead or alive? The Associated Press’ Vivian Salama on the possibilities: "Iraq’s Defense and Interior ministries both said Sunday that al-Baghdadi had been wounded. On Monday, Iraqi military spokesman Saad Maan Ibrahim walked back from the earlier Defense Ministry claim, telling the AP: ‘The investigation is ongoing into the possible injury of Abu Bakr al-Baghdadi.’" More here.

The BBC’s Aymenn Jawad Al-Tamimi asks, can the Islamic State survive without its leader? "IS is heavily invested in the image of Baghdadi, who had projected himself as a caliph for a year before a caliphate was declared in June 2014." More here.

Newsweek’s Jeff Stein, on how the CIA vets potential fighters in Syria: "[A] system that worked pretty well during four decades of the Cold War has been no match for the linguistic, cultural, tribal and political complexities of the Middle East, especially now in Syria." More here.

Al-Monitor‘s Julian Pecquet: Obama wants $165 million to support Syrian rebels. More here.

Iran

The Washington Post‘s Carol Morello on the outcome of two days of nuclear talks in Oman: "Kerry left Oman late Monday after devoting more than 10 hours to talks over two days with Iran’s foreign minister, Mohammad Javad Zarif, and E.U. representative Catherine Ashton…[T]he Reuters news agency reported an Iranian official as saying that little had been accomplished and that large gaps remained." More here.

FP’s Raymond Tanter on how to tell if Tehran is lying: "The narrative of talks between the major powers and Iran focuses on whether Iran will agree to curb uranium enrichment by cutting down on centrifuges in exchange for sanctions relief. But the backstory — Tehran’s serial cheating — should be the front narrative." More here.

Der Spiegel’s Susanne Koelbl interviews Iranian diplomat Takht Ravanchi on the status of the talks: "If we cannot come to a conclusion by Nov. 24, I am sure that those who are performing an objective analysis of the situation definitely will not blame Iran for the possible lack of progress, because Iran has shown its determination to finish the job." More here.

Israel

In FP, Jonathan Schanzer on Palestinian terror attacks in Jerusalem: "The Jerusalem attacks, which have taken place against the backdrop of months of sporadic violence in East Jerusalem, mark a watershed moment for the city’s Arab community." More here.

The Washington Post’s William Booth on a video of a Palestinian terror suspect being shot: "It is not unusual for Israeli security forces to shoot Palestinian terrorism suspects. In the past month, it has happened three times in Jerusalem, a city roiling with anger and violence." More here.

Writing for FP, Aaron David Miller asks whether Hillary Clinton could repair ties with Israel: "[S]he has some natural advantages that would help mitigate some of the gratuitous tensions that have made an already tough relationship tougher and perhaps lay the groundwork for more productive cooperation." More here.

Afghanistan

Bloomberg‘s Eltaf Najafizada reports that Afghan police turn to opium as $6/day salaries delayed: "The delays are coming even as the U.S. spends more than $6 billion this year to pay for Afghanistan’s security and keep its government afloat." More here.

The Washington Post‘s Sayed Salahuddin on attacks that killed 11 in Kabul yesterday. More here.

Veterans Day

Gen. Martin Dempsey has an op-ed in Defense One on how Americans can serve veterans: "The conversation between the military and the American public needs to move towards deeper dialogue and understanding. Veterans of the post-9/11 generation — like those from previous generations — prefer understanding to veneration, and they desire opportunity over charity. Veterans do not seek to be defined as either heroes or victims, but rather as members of the American community, committed to working with their fellow citizens to serve the common good." More here.

The Washington Post’s Emily Wax-Thibodeaux on a massive restructuring at the VA: "Secretary of Veteran Affairs Robert McDonald said that ‘the largest restructuring in the department’s history is under way’ and that at least 35 people are facing disciplinary action, with as many as 1,000 to follow." More here.

ESPN’s "SportsCenter" will be broadcasting live all day from Brooke Army Medical Center in San Antonio. It’s part of their weeklong salute to veterans. More here.

The Concert for Valor, featuring artists Bruce Springsteen and Eminem, is happening tonight at 7 p.m. on the National Mall. Check here for updates on how to get there or watch it live on HBO.

Many of the Situation Report’s readers are veterans and many others will someday be veterans. Thank you for your service.

NSA

FP’s Stephen M. Walt asks whether NSA spying makes us less safe. "What would the United States, Great Britain, and other wealthy and powerful nations do if they didn’t have these vast surveillance powers? What would they do if they didn’t have armed drones, cruise missiles, or other implements of destruction that can make it remarkably easy (and in the short-term, relatively cheap) to target anyone they suspect might be a terrorist?" More here.

Drones

The Washington Post’s Dan Lamothe on DOD’s drone aircraft carrier: "The Defense Advanced Research Projects Agency is exploring whether it would be possible to turn an existing plane into a flying fortress capable of launching and recovering numerous drone aircraft." More here.

Boko Haram

The New York Times’ Adam Nossiter on the slaughter of 50 students by Boko Haram in Nigeria: "The bomber was wearing a school uniform when he appeared at the morning assembly at the Government Senior Science Secondary School in Potiskum, said Mohammed Abubakar, a local journalist who had just returned from the attack scene." More here.

Ebola

From The New York Times’ Anemona Hartocollis: "Craig Spencer, the New York City doctor who became the first person in the city to test positive for Ebola, is free of the virus and is set to be released from Bellevue Hospital Center on Tuesday, hospital officials said on Monday." More here.

And finally, FP’s Elias Groll, on Sputnik, Russia’s newest propaganda tool. More here.