The Cable

Situation Report: China flexes muscles while cutting troops; sends ships north; Saudi to buy new Navy; questions over civilian casualties in Syria; Baiji again contested; U.S. Air Force closer to its new bomber; and lots more

By Paul McLeary with Adam Rawnsley Shipping news. The U.S. Navy is tracking five Chinese warships sailing in the Bering Sea off the coast of Alaska, marking the first time the Chinese Navy has ventured that far north, according to defense officials. While the ships are perfectly within their rights plying international waters, the deployment ...

By Paul McLeary with Adam Rawnsley

Shipping news. The U.S. Navy is tracking five Chinese warships sailing in the Bering Sea off the coast of Alaska, marking the first time the Chinese Navy has ventured that far north, according to defense officials. While the ships are perfectly within their rights plying international waters, the deployment — which includes three surface warships, a replenishment ship, and an amphibious assault ship — was spotted at the same time that Beijing hosted a massive military parade to mark the 70th anniversary of the end of the Second World War. The ships had just completed a joint exercise with the Russian navy which ended last week, before moving north.

Show and tell. The military parade in Beijing Thursday morning marked a significant coming out party for the People’s Liberation Army, as the military had the chance to flex its muscles on the world stage in a big way, just days before President Xi Jinping visits Washington to meet with President Barack Obama.

While the event included 12,000 troops, about 200 planes and helicopters, and around 500 troop carriers, tanks, rocket launchers and missiles, Xi took the world by surprise by announcing he’s cutting the 2 million-strong force by about 300,000 personnel. Echoing the U.S. Defense Department, China is focusing more on high-tech naval and air assets as opposed to ground troops, requiring fewer but better trained troops in the coming years.

Analysis firm IHS estimated on Wednesday that China’s defense budget would grow to approximately $260 billion in 2020, about doubling what Beijing spent in 2010. Five years ago, China spent an estimated $134 billion on defense, but “across this decade, China is expected to spend almost $2 trillion on defence,” the group’s analysts conclude.

Alone, together. Even with increasing budgets and a decreasing number of troops, however, Beijing is running into some of the same budgetary problems as the Pentagon, China analyst Dean Cheng of The Heritage Foundation tells SitRep. With its increasing military capabilities, China “needs to pay for a lot of things, like training, new equipment,” and the salaries that come along with maintaining a skilled, professional military, as opposed to merely relying on draftees as it has traditionally done. That doesn’t come cheap, and the political leadership in Beijing appears to be making the calculation that less, in some respects, is more.

The guns of September. Of particular interest to China-watchers is a weapon that made its first public appearance on Thursday, the massive Dongfeng 21-D “carrier killer” missile, which has been the object of much speculation in the Pentagon since the Chinese announced it in 2011. Defense experts generally estimate that the missile has a range of up to 1,500 km and may be able to travel at up to 10 times the speed of sound, making it almost impossible to intercept once launched. Terrifying video of columns of trucks carrying the missile on parade can be found here.

As another fine morning breaks over SitRep HQ, we’re already hard at work on scanning the day’s upcoming events for tomorrow’s edition. As always, please pass along any tips, notes, or otherwise interesting bits of information that you may have at your disposal. Best way is to send them to paul.mcleary@foreignpolicy.com or on Twitter: @paulmcleary or @arawnsley.   

Iraq

In the months-long back and forth between Islamic State fighters and the Iraqi Army for control of the contested city of Baiji — along with its heavily damaged oil refinery — the jihadists have regained the upper hand, the Pentagon admitted Wednesday. The government in Baghdad has at various times claimed the city and refinery had been completely retaken, but “in the past several days, that’s been largely reversed” Capt. Jeff Davis told reporters at the Pentagon on Wednesday. “The trend has been downward there. A lot of the gains they had made were lost.” The fight in Baiji grinds on, however, with near daily airstrikes by coalition warplanes and more Iraqi troops and equipment flowing into the city. Iraqi Prime Minister Haider al-Abadi recently claimed that winning Baji is critical to the entire war effort, declaring “victory in this battle is critical to ending Daesh’s presence in Iraq.”

Syria

Buzzfeed’s Mike Giglio and Minzer al-Awad write that the number of civilians killed in the U.S.-led bombing campaign in Syria is much higher than the two children to which the U.S. Central Command has already admitted. The Syrian Network for Human Rights, a local monitoring group, said there have been 242 civilian casualties from strikes by the U.S.-dominated coalition bombing the country, while the Syrian Observatory for Human Rights also puts the civilian death toll at more than 200. In August, independent monitoring group Airwars estimated that over 450 civilians have died due to the coalition bombing campaign in Iraq and Syria.

The business of defense

Saudi Arabia’s King Salman is due to meet with U.S. President Barack Obama at the White House on Friday, and while attention will be focused on any comments he makes about the Iran nuclear deal, lots of defense analysts are looking at some major arms deals that might be in the offing. Defense industry analyst Roman Schweizer of Guggenheim Partners sent a note to clients on Wednesday predicting that the visit could bring some “important developments related to U.S. missile defense and more progress on the long-awaited mega-deal for the Saudi Naval Expansion Program,” valued at more than $20 billion. The long-discussed naval deal — which has been in the works for several years — would upgrade and replace the entire Royal Saudi Navy’s Eastern Fleet of aging American warships. The package would likely include new U.S. frigates, patrol ships, unmanned aircraft, and maritime patrol aircraft.

North Korea

South Korea’s Yonhap News Agency reports that North Korea buzzed the DMZ with a small drone just as North and South sat down for talks to resolve the flare up in tensions along the border in late August. The drone reportedly crossed the border into South Korea, apparently to monitor troop deployments, triggering warning radars and leading a fighter jet and attack helicopter to pursue the aircraft. The drone, however, made it back to North Korea before the South could intercept it.

Islamic State

Watch out, America. The Islamic State is minting its own currency, the dinar, which it claims will destroy the dollar and the U.S. economy along with it. The news comes via a recent video by the group, “The Rise of the Khilafah and the Return of the Gold Dinar,” in which the Islamic State claims the new coins will replace the global “petro-dollar system” in which U.S. dollars dominate global transactions in oil. SitRep is not authorized to offer investment advice but you may not want to switch your retirement accounts to dinar-denominated assets just yet.

Ukraine

Ukraine lost two thirds of its navy ships along with the loss of the Crimean peninsula to Russian invaders last year. Now, according to commander of U.S. Naval Forces Europe Vice Adm. James Foggo, the country is hoping it can build up those naval forces once again. Ukrainian leaders recently met with Foggo, expressing their desire to modernize their remaining ships, potentially build new ones, and conduct training drills alongside American naval vessels.

Yemen

Al-Qaeda in the Arabian Peninsula (AQAP) is increasing its presence in Yemen’s southern port city of Aden, according to the BBC. Experts contacted by the British news organization say AQAP is exploiting the current war between Gulf Arab states and the Houthi movement, which seized power in the country earlier this year, to put more fighters in the city, which is currently occupied by ground troops from the United Arab Emirates.

Bombs away!

The U.S. Air Force is apparently much further along in the design of its next generation long-range bomber than previously thought. Defense News’ Aaron Mehta gets the scoop that   the two candidates to become the next generation bomber have already undergone some extensive wind tunnel and survivability testing. The two competing teams to eventually win the contract are being led by Northrop Grumman on one side, and a collaboration between of Boeing and Lockheed Martin on the other.

Russia

The U.S. has slapped a new round of sanctions on Russia, taking aim at a handful of defense-related organizations. Included in the sanctions are Rosoboronexport, Russia’s weapons export arm, the MiG aircraft corporation, KBP Instrument Design Bureau, which makes precision weapons, the missile designer NPO Mishinostroyenia, and Katod, which makes night vision equipment. The State Department announced that the measures were applied to Russian firms based on information that they transferred restricted weapons technology to Iran, Syria or North Korea.

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