China's Defense/Military Breaking News Thread

supercat

Major
China sees new world order with oil benchmark backed by gold
Yuan-denominated contract will let exporters circumvent US dollar

DENPASAR, Indonesia -- China is expected shortly to launch a crude oil futures contract priced in yuan and convertible into gold in what analysts say could be a game-changer for the industry.

The contract could become the most important Asia-based crude oil benchmark, given that China is the world's biggest oil importer. Crude oil is usually priced in relation to Brent or West Texas Intermediate futures, both denominated in U.S. dollars.

China's move will allow exporters such as Russia and Iran to circumvent U.S. sanctions by trading in yuan. To further entice trade, China says the yuan will be fully convertible into gold on exchanges in Shanghai and Hong Kong.

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"The rules of the global oil game may begin to change enormously," said Luke Gromen, founder of U.S.-based macroeconomic research company FFTT.

The Shanghai International Energy Exchange has started to train potential users and is carrying out systems tests following substantial preparations in June and July. This will be China's first commodities futures contract open to foreign companies such as investment funds, trading houses and petroleum companies.

Most of China's crude imports, which averaged around 7.6 million barrels a day in 2016, are bought on long-term contracts between China's major oil companies and foreign national oil companies. Deals also take place between Chinese majors and independent Chinese refiners, and between foreign oil majors and global trading companies.

Alan Bannister, Asia director of S&P Global Platts, an energy information provider, said that the active involvement of Chinese independent refiners over the last few years "has created a more diverse marketplace of participants domestically in China, creating an environment in which a crude futures contract is more likely to succeed."

China has long wanted to reduce the dominance of the U.S. dollar in the commodities markets. Yuan-denominated gold futures have been traded on the Shanghai Gold Exchange since April 2016, and the exchange is planning to launch the product in Budapest later this year.

Yuan-denominated gold contracts were also launched in Hong Kong in July -- after two unsuccessful earlier attempts -- as China seeks to internationalize its currency. The contracts have been moderately successful.

The existence of yuan-backed oil and gold futures means that users will have the option of being paid in physical gold, said Alasdair Macleod, head of research at Goldmoney, a gold-based financial services company based in Toronto. "It is a mechanism which is likely to appeal to oil producers that prefer to avoid using dollars, and are not ready to accept that being paid in yuan for oil sales to China is a good idea either," Macleod said.

Yuan-denominated gold contracts have significant implications, especially for countries like Russia and Iran, Qatar and Venezuela, said Louis-Vincent Gave, chief executive of Gavekal Research, a Hong Kong-based financial research company.

These countries would be less vulnerable to Washington's use of the dollar as a "soft weapon," if they should fall foul of U.S. foreign policy, he said. "By creating a gold contract settled in renminbi [an alternative name for the yuan], Russia may now sell oil to China for renminbi, then take whatever excess currency it earns to buy gold in Hong Kong. As a result, Russia does not have to buy Chinese assets or switch the proceeds into dollars," said Gave.

Grant Williams, an adviser to Vulpes Investment Management, a Singapore-based hedge fund sponsor, said he expects most oil producers to be happy to exchange their oil reserves for gold. "It's a transfer of holding their assets in black liquid to yellow metal. It's a strategic move swapping oil for gold, rather than for U.S. Treasuries, which can be printed out of thin air," he said.

Market share

China has been indicating to producers that those happy to sell to them in yuan will benefit from more business. Producers that will not sell to China in yuan will lose market share.

Saudi Arabia, a U.S. ally, is a case in point. China proposed pricing oil in yuan to Saudi Arabia in late July, according to Chinese media. It is unclear if Saudi Arabia will yield to its biggest customer, but Beijing has been reducing Saudi Arabia's share of its total imports, which fell from 25% in 2008 to 15% in 2016.

Chinese oil imports rose 13.8% year-on-year during the first half of 2017, but supplies from Saudi Arabia inched up just 1% year-on-year. Over the same timeframe, Russian oil shipments jumped 11%, making Russia China's top supplier. Angola, which made the yuan its second legal currency in 2015, leapfrogged Saudi Arabia into second spot with an increase of 22% in oil exports to China in the same period.

If Saudi Arabia accepts yuan settlement for oil, Gave said, "this would go down like a lead balloon in Washington, where the U.S. Treasury would see this as a threat to the dollar's hegemony... and it is unlikely the U.S. would continue to approve modern weapon sales to Saudi and the embedded protection of the House of Saud [the kingdom's ruling family] that comes with them."

The alternative for Saudi Arabia is equally unappetizing. "Getting boxed out of the Chinese market will increasingly mean having to dump excess oil inventories on the global stage, thereby ensuring a sustained low price for oil," said Gave.

But the kingdom is finding other ways to get in with China. On Aug. 24, Saudi Vice Minister of Economy and Planning Mohammed al-Tuwaijri, told a conference in Jeddah that the government was looking at the possibility of issuing a yuan-denominated bond. Saudi Arabia and China have also agreed to establish a $20 billion joint investment fund.

Furthermore, the two countries could cement their relationship if China were to take a cornerstone investment in the planned initial public offering of a 5% state in Saudi Aramco, Saudi Arabia's national oil company. The IPO is expected to be the largest ever, although details on the listing venue and valuation are yet scant.

If China were to buy into Saudi Aramco the pricing of Saudi oil could shift from U.S. dollars to yuan, said Macleod. Crucially, "if China can tie in Aramco, with Russia, Iran et al, she will have a degree of influence over nearly 40% of global production, and will be able to progress her desire to exclude dollars for yuan," he said.

"What is interesting is that China's leadership originally planned to clean up the markets next year, but brought it forward to this year. One interpretation of that change is that they have brought forward the day when they pay for oil in yuan," said Simon Hunt, a strategic adviser to international investors on the Chinese economy and geopolitics.

China is also making efforts to set other commodity benchmarks, such as gas and copper, as Beijing seeks to transform the yuan into the natural trading currency for Asia and emerging markets.

Yuan oil futures are expected to attract interest from investors and funds, while state-backed oil majors, such as
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and
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will provide liquidity to ensure trade. Locally registered entities of JPMorgan, a U.S. bank, and UBS, a Swiss bank, are among the first to have gained approval to trade the contract. But it is understood that the market will be also open to retail investors.

https://www.sinodefenceforum.com/chinas-defense-military-breaking-news-thread.t1432/page-101

More Russian and Iranian oil through pipelines and less reliance on shipping in the future, to say the least.
 

delft

Brigadier
I find #1011 at
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China sees new world order with oil benchmark backed by gold
Yuan-denominated contract will let exporters circumvent US dollar

DAMON EVANS, Contributing writer
This is a pretty sensational development. It was expected but not yet this year.
 

FORBIN

Lieutenant General
Registered Member

Figaro

Senior Member
Registered Member
PLA's college recruits ...
College students account for large majority of new military recruits
Source : Global Times Editor : Dong Zhaohui Time : 2017-09-10

Young people in China who have just joined the army are moving to places where they are needed the most on a national scale. Among them, college students and graduates form the majority.

On Sunday, 250 newly recruited soldiers from Beijing set off from the capital to the units they belong to by high-speed railway. According to the staff in charge of the recruitment in Beijing, for the first time, the proportion of college graduates surpassed 80 percent of the newly recruited soldiers.

Excellent young people of higher education were given priority, which largely raised the quality of this year's recruits.

This is also the case nationwide, including in places like Shenzhen, Guangzhou, Hebei Province, Guangxi Zhuang Autonomous Region, and so on.

In Yuexiu district of Guangzhou, 83 percent of the newly recruited soldiers are college students. In Shenzhen, the proportion reaches 74 percent, a 12 percent increase from last year.

In Urumqi, capital of the Xinjiang Uyghur Autonomous Region, each of the 51 college students and graduates who are recruited into the army this year received an award of 5,000 yuan ($771.93) as encouragement.

To attract more college students to the army, different cities and provinces nationwide have put forward preferential policies in terms of school recruitment, employment, subsidies, and so on, which is in line with China's ongoing quality-oriented military reform focusing on optimizing the army's structure and building an elite combat force.

By the end of August, the number of college students who entered their names for military recruiment reached 1.07 million, an increase of 57,000 from last year.
 

taxiya

Brigadier
Registered Member
After the turbulence not long ago, some good development (in September) between China and Singapore:), the development reminds me of changes seen in Philippines.

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A recent visit by Singaporean defense minister.

and

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. A recent visit by PM Lee.

P.S. Military cooperation is mentioned in both two visits, I would not be surprised if in the near future that Singapore has its troops trained on Mainland (China) soil just like it was doing in Taiwan and now in Australia, an arrangement that China offered before.

All these changes say one thing, "大势所趋", it is the tide, a trend that is not to be changed regardless of small hiccups or someone's dirty tricks.
 

KIENCHIN

Junior Member
Registered Member
After the turbulence not long ago, some good development (in September) between China and Singapore:), the development reminds me of changes seen in Philippines.

Please, Log in or Register to view URLs content!
A recent visit by Singaporean defense minister.

and

Please, Log in or Register to view URLs content!
. A recent visit by PM Lee.

P.S. Military cooperation is mentioned in both two visits, I would not be surprised if in the near future that Singapore has its troops trained on Mainland (China) soil just like it was doing in Taiwan and now in Australia, an arrangement that China offered before.

All these changes say one thing, "大势所趋", it is the tide, a trend that is not to be changed regardless of small hiccups or someone's dirty tricks.
The Phillipines had a change of government wherelse HSL Lee had to eat humble pie. Happy that the Singaporeans had realise their mistake and being the chair of ASEAN it would be interesting if they continue to be openly hostile towards China. At stake would also be the HSR project that would ultimately link to Thailand and end up in China.
 

Figaro

Senior Member
Registered Member
China completes registration of 8,000-strong UN peacekeeping force, defence ministry says

Expanded unit fulfils pledge made by Xi Jinping, and will give soldiers chance to experience real-life combat situations, military watchers say

PUBLISHED : Friday, 29 September, 2017, 9:10pm

(SCMP) As required, the standby peacekeeping force would “conduct task-specific and adaptive training in accordance with the UN training standards,” China’s defence ministry spokesman Wu Qian said on Thursday.

Its members were drawn from six infantry battalions, two multi-purpose helicopter platoons, two transport companies, he said, adding that for the first time ever, the group would include an unmanned aerial vehicle, or drone, unit.

The registration process was completed on September 22, he said.

China’s President Xi Jinping promised to make 8,000 troops available to the UN in 2015, at which time he also offered to help train 2,000 peacekeepers from other countries, provide US$100 million in military aid to the African Union, and deploy more engineering, transport and medical personnel.

The increased numbers of military troops is indicative of Beijing’s desire to play a bigger role in global policing.

According to figures from Xinhua, China’s first UN force, of 400 engineering corps, was dispatched in August 1992, while at the end of last month it had 2,466 troops on active duty for the global agency.

In recent years, Chinese military personnel have taken part in UN missions in Cambodia, the Republic of the Congo, Liberia, Sudan and Lebanon. In 2015, a combat deployment was sent to South Sudan, where China has significant oil investments.

Miwa Hirono, a professor of Chinese international relations at Ritsumeikan University in Kyoto, Japan, said the composition of the new peacekeeping force represented a “comprehensive contribution that ... reflects the current challenges peacekeepers have”.

China had chosen to deploy more peacekeeping forces to represent itself as a “responsible great power,” while indirectly protecting its own interests, she said.

“Maintaining peace and security in conflict areas has become a really important challenge for China because [it] has a lot of assets and people in those places,” Hirono said.

When China sent a security force to Mali as part of a peacekeeping mission in 2013, it triggered questions as to whether it was straying from its non-intervention policy on foreign affairs.

Antony Wong Dong, a Macau-based military expert, said the new peacekeeping force comprised marine, air and land forces capable of conducting joint operations.

“Beijing wants to use the peacekeeping missions to train PLA [People’s Liberation Army] soldiers, who have never been engaged in real battles,” he said.

“The missions will help to test their fighting capability.”

Shi Yinhong, an international relations professor at Renmin University in Beijing, agreed that overseas missions would provide a good training opportunity, while also showcasing China’s presence on the global stage.

The government has frequently cited the peacekeeping force as an example of how “China is bearing the international responsibilities of a great power”, he said.

Marc Lanteigne, a security studies lecturer at Massey University in New Zealand, said that while China had initially been reluctant to engage with UN peacekeeping operations – seeing them as a revisionist tool of Western powers – over the past two decades, it had become one of its strongest proponents.

“It’s a product of China really wanting to demonstrate that it is a great power, and not only interested in resource diplomacy,” he said.
 

supercat

Major
China is opening a new quantum research supercenter
The country wants to build a quantum computer with a million times the computing power of all others presently in the world.

By
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14 hours ago

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National Laboratory for Quantum Information Sciences

The $10 billion National Laboratory for Quantum Information Sciences in Hefei will be the center of China's attempt to take the global lead in quantum computing and sensing.

On 37 hectares (nearly 4 million square feet) in Hefei, Anhui Province, China is building a $10 billion research center for quantum applications. This news comes on the heels of the world's first video call made via quantum-encrypted communications and the completion of a quantum-encrypted fiber optic trunk cable.

The National Laboratory for Quantum Information Sciences, slated to open in 2020, has two major research goals:
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and building a quantum computer. Both efforts would support military and national defense efforts, as well civilian innovators.

But let's back up. What is quantum metrology, anyway? Basically it measures minute changes in gravity and other physical effects, which can be used to build highly accurate, self-contained navigation systems. This has a key application for autonomous vehicles and submarines, which wouldn't have to rely on GPS or other external navigation signals that could be jammed or used to detect their location.

And then there are quantum computers. Pan Jianwei, a leading Chinese quantum scientist, says that the first general-purpose Chinese quantum computer could have a million times the computing power of all other computers presently in the world. In the computers we use today, information is encoded in a series of bits set as either 1 or 0. In a quantum computer, bits would theoretically be able to hold one, both, or some combination of these states. They could be used to speedily crack encrypted messages or solve complicated research problems involving anything from weather modeling to fusion research and biomedicine, because quantum bits allow certain calculations that happen one by one on a standard computer to occur simultaneously.

This work aligns with a broader national push for quantum research and technology. The success of the Micius quantum satellite is enabling China to build a nationwide quantum network for military communications and financial transactions. Quantum communications systems are proofed against eavesdropping, as any attempt to eavesdrop would change the entangled quantum state, alerting the users. The future of information technology and security may be a quantum one, and China is ensuring in the loop, if not leading the way.

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