★ Big Data, Driver for Artificial Intelligence… but Not in the Future?

On 10 and 11 April 2018, Mark Zuckerberg, the founder and chief executive of Facebook went through a two-day congressional testimony in the U.S. (Cecilia Kang et al., “Mark Zuckerberg Testimony: Day 2 Brings Tougher Questioning“, The New York Times, 11 April 2018).

The questioning followed the scandal involving Facebook and Cambridge Analytica, a data analysis consulting company, over the improper use of private data shared, without their owners’ consent, by the social network with the consulting firm. Cambridge Analytica then utilised the data notably for psychological profiling (e.g. BBC News, “Facebook scandal ‘hit 87 million users‘”, 4 April 2018; Brian X. Chen, “I Downloaded the Information That Facebook Has on Me. Yikes.” The New York Times, 11 April 2018). Here, the private data, ranging from contacts to travels or eating habits, through estimated beliefs, of up to 87 million users were shared and used. Considering the quantity of data involved, we are dealing with what has come to be known as Big Data, and which existence and use both scare and fascinate people, even more so when Big Data is associated with Artificial Intelligence (AI).

In this article we shall dwell more in detail into these “Big Data”, focusing on their role as a crucial driver and force behind the current exponential development of AI, or more exactly behind the expansion of Deep Learning (DL), a sub-field of AI. Previously, we identified “Big Data” as one of the six drivers that not only act as forces behind the expansion of AI but also, as such, become stakes in the AI competition among actors in the race for AI-power (Helene Lavoix, “Artificial Intelligence – Forces, Drivers and Stakes” The Red (Team) Analysis Society, 26 March 2018).

We shall first explain why Big Data is a driver for a sub-field of Deep Learning. Supervised Learning. We shall then dive into the characteristics of these Big Data as needed for AI to understand better our driver. This will notably allow us to start envisioning the impacts and the stakes at work in the new emerging AI world, and show how a driver – Big Data – may also become a stake and with which potential geopolitical consequences. Meanwhile two new drivers for AI are identified, namely imagination and this very emerging AI-world we seek to better understand. We shall finally turn to what could well be the new frontier in AI, Reinforcement Learning, which does not need Big Data. Big Data could then be only a temporary driver.

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Conclusion

Thus, Big Data is only a driver for the development and expansion of one sub-field of AI, DL in the SL approach. On the contrary, Big Data is not a driver for what could well be the latest and most advanced development of AI, the approach through RL, apart from the need to pre-train AI-agents, notably when large datasets are not labelled. As far as RL is concerned, we shall thus need to focus on other drivers, notably architecture and algorithms, as identified previously, but also, most probably the capability of humans to understand and describe a problem in terms of sets of rules, which could lead us to identify new drivers and thus forces for AI expansion as well as AI-power, beyond the new drivers identified here, such as imagination or the very emergence of the AI-world.

Featured image by xresch, Pixabay, Public Domain – Cropped.

Scenario The Rise of the Renminbi – Futures of the US Dollar Supremacy

In this article, part of our series on the possible futures of the US dollar supremacy, we focus our attention on the scenario “The Rise of the Renminbi”, which we deem more interesting in the way it would unfold. In the previous article, we highlighted three different main lead scenarios that could potentially describe the developments that will take place in the future, “The Rise of the Renminbi” being one of them. With this series, trying to understand the possible futures of the US dollar supremacy, we analysed the currency functions (medium of exchange, store of value, unit of account) that make the dollar the necessary currency together with the challenges looming over the petrodollar system, the perspective of the renminbi as a leading …

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★ Artificial Intelligence – Forces, Drivers and Stakes

Here we shall present the drivers and forces behind the current exponential development of Artificial Intelligence (AI). Deep Learning, a sub-field of AI, leads this expansion, as we explained in “When Artificial Intelligence will Power Geopolitics – Presenting AI” (open access) and in “Artificial Intelligence and Deep Learning – The New AI-World in the Making” (semi-open access/members only).

Because we are seeing emerging an international race to AI-power – i.e. how one ranks in the global relative distribution of power, as probably increasingly determined by AI – on the one hand, the birth of AI-governance and AI-management on the other, as we pointed out previously (The New AI-World in the Making), the current AI drivers are not only forces behind the expansion of AI but also stakes in the AI competition, which we are seeing as increasingly operating. Meanwhile, how this competition is handled, its dynamics, the defeats and victories it will entail will also shape the new AI-world in the making.

The first series of drivers is classically technological, and composed of algorithms, computing power and big data. The second series of drivers is also rather technological and scientific, and composed of a critical uncertainty, the race to quantum supremacy, and of the challenge of “acting outputs”. Needs and Usages is the last driver we identified, but not the least. Each driver and stake will be further examined in detail in following articles.

An adapted version of this article was included in a keynote speech given at the concluding plenary of the 6th European Forum of the fraud and prevention network Reso-Club, focused this year on Digital Identity: New Rights and New Risks.

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Featured image: Cover page of Army AL&T Magazine October-December 2018 [Public Domain].

Space Mining, Artificial Intelligence and Transition?

Is space mining the short and long-term future for energy and industry?

Nowadays, this question is rooted in the rapid development of the industrial, financial, technological and legal apparatus around the idea of mining asteroids. For example, on 6 January 2015, the US President, then Barack Obama, signed the US commercial space launch competitiveness act. This act aims at “spurring private aerospace competitiveness and entrepreneurship” (US Commercial Space Launch Competitiveness Act). It allows US citizens to “engage in the commercial exploration and exploitation of “space resources””, including water and minerals. In other terms, this law obviates the 1967 international space law treaty based on the principle of non-appropriation of space bodies. Thus it makes possible to develop private industrial ventures in deep space, through the right of appropriation of the resources that can be found there (K.G. Orphanides, “American companies could soon mine asteroids for profit“, Wired.com, 2015)”.

It must be noted that, since the beginning of the second decade of this century, the mining of resources in space has become a growing industrial project, through the creation of asteroid mining companies, which attract billion of dollars in funding (Helene Lavoix, “Beyond fear of near-Earth objects: mining resources from space?”, The Red (Team) Analysis Society, February 18, 2013). In the same time, the space mining idea is spreading at the international level. It is of interest to the West private sector as well as for, for example, to the Chinese and Emirati state sector (Jean-Michel Valantin, “The UAE Grand strategy for the future – from Earth to space”, The Red (Team) Analysis Society, July 4, 2016).

The attraction exerted on the mining sector by the concept of asteroid mining is itself driven by the international competition for mineral resources, being progressively depleted (Michael Klare, The Race for What’s Left, 2012). The international movement of energy transition towards more sustainable forms of electricity production necessitates huge amounts of these rare enough minerals (reference?. Furthermore, the current industrial and economic worldwide growth demands more and more minerals, especially in the exponentially growing digital sector. In other terms, space mining could be the basis of the Earth international energy transition and industrial sustainability (David S. Abraham, The elements of power, gadgets, guns, and the struggle for a sustainable future in the rare metal age, 2015).

However, it is necessary for this industrial space revolution to integrate the new capabilities emerging from the artificial intelligence and robotics current revolution: only autonomous robots can accomplish the extremely dangerous and heavy work necessitated for asteroid mining.

Building upon Helene Lavoix seminal article which identified the issue first and put it on the Red (Team) Analysis Society, the first article of this series will look at the drivers of the “space mining” race, from a space industry point of view. It will point out that the new imperatives emerging from the energy transition and the digital revolution is one of the considerable forces behind space mining. Then, we shall look at the new risk and opportunities arising from space mining.

Identifying the new (space) industrial frontier

On 19 July 2015, the asteroid 2011 UW 158 passed closed by Earth at 1.5 million kilometres away. It was identified as an “X type” asteroid, i.e. a metallic object. According to the Sloosh Community Observatory, this asteroid could be packed with 90 million tons of precious metals, among them platinum. This means that this asteroid contains more platinum than has ever been mined during human history and could have a 300 billion to 5.4 trillion dollars net worth and while this quantity of metal is not injected in the current commodity market (Robert Hackett, “Asteroid passing close to Earth could contain $5.4 trillion of precious metal”, Fortune, July 20, 2015). It must be noted that Planetary Resources has identified this asteroid as being potentially “suitable for mining” (Eric Mack, “Trillion dollar baby” has wanabee space miners salivating”, Forbes, July 19, 2015).

The industrial interest that is so expressed for asteroids is rooted into the new race for minerals, especially the famous “rare earths” generated by the exponential growth of electronic and internet technologies, as well as by the current energy transition towards an expanded energy mix (Guillaume Pitron, La guerre des métaux rares, la face cache de la transition énergétique et numérique, 2018). The rapid and massive development of energy transition, in particular through the rapid growth of photovoltaic industries, especially in Asia, besides the related industrial efforts made by countries like China, India, the United Arab Emirates, Morocco, Norway, numerous states of the United States, among many others, necessitates huge and growing amounts of those precious minerals (Jean-Michel Valantin, “The United Arab Emirates, The Rise of an industrial sustainable industrial empire”, The Red (Team) Analysis Society, June 13 2016 and David S. Abraham, ibid). The current energy transition is such that in 2040 more than 25% of the global energy production could be produced by the renewable energy sector (Michael Klare, “Go Green young man, young woman”, TomDispatch, Decembre 13, 2015).

The combination of digital growth and energy transition is creating a worldwide system of need for minerals, knowing that the number of terrestrial deposits is limited, even if all of those are not yet exploited. This tension between the perpetually growing and developing humanity and the Earth’s limited resources creates an “international mineral need” that is an economic and political power in itself. In effect, this “need for minerals” is felt as well by countries as by public and private companies, and is driving the development of the whole digital and cyber sector, as well as the aerospace and defence sector and all that activities that depend of it. This convergence of “mineral needs” creates an international nexus of needs and thus a “global need” for minerals that powers the race for mining as well as it drives the political and economic decision that it entails. New actors are emerging in order to answer this need and thus harness its power.

Convergence of the current industrial revolutions

Those actors are leading a deep and rapid transformation of the space sector and of the mining sector, notable through the combination of the two. On the space sector side, a revolution is currently happening in the launching and transport capabilities fields (Monica Grady, “Private companies are launching a new space-here is what to expect”, The Conversation, October 3, 2017).

We witness notably the rapid development of the Chinese public sector combined with the expansion of the Chinese space program, while in the U.S. the evolution takes place not only in the public sector but also in the private space sector, as evidenced by the new Space X created by Elon Musk and Blue Origin, created by arch-billionnaire Jeff Bezos. On the U.S. public side, the NASA, the historic U.S. space agency, is very active to be present in the space-mining field (Karla Lant, “NASA is fast-tracking plans to explore a metal asteroid worth $ 10 000 quadrillion”, Futurism, May 28, 2017).

In the same dynamic, the NASA, is already preparing the Psyche mission that will be composed of the launching of an orbiter satellite around the metal asteroid 16 Psyche, in order to study its composition (Brid Aine-Parnell, “NASA Will Reach Unique Metal Asteroid Worth $10,000 Quadrillion Four Years Early », Forbes, 26 May 2017). The iron and nickel payload of this asteroid could be up to 10 000 quadrillion dollars. If these numbers are primarily a way to express the potential economic interest of asteroids, they also exemplify how the space sector, as well as the solar system is becoming a new kind of industrial attractor. For example, the asteroid belt between Mars and Jupiter is composed of hundreds of thousands of asteroids of multiple sizes (Matt Williams, “What is the asteroid belt?“, Universe Today, 23 August, 2015). More than 200 of these are already identified as being potentially exploitable (Suzanne Barton and Hanna Recht, “The massive prize luring miners to the stars”, Bloomberg, 2018). The NASA already targets the Bennu asteroid in order to send a mission to grab some samples of its surface. Thus, the mission will accomplish both a fundamental scientific goal about the understanding of the origins of our solar system and driving the development of the robotics necessitated for asteroid operations (Barton and Recht, ibid).

Towards “intelligent space-mining” and entrepreneurship?

This dynamic towards space mining has driven the creation of companies that are aiming at exploiting asteroids, mainly Planetary Resources-The Asteroid mining company and Deep Space industries (Helene Lavoix, “Beyond fear of near-Earth objects: mining resources from space?”, The Red (Team) Analysis Society, February 18, 2013). These companies are developing space-mining-based business models for mining the Moon, Mars and the deep space asteroid belt between Mars and Jupiter.

This is creating a technological nexus where the different industrial revolutions taking currently place i.e. the artificial intelligence and the robotic revolution potentially meet mining. Artificial intelligence is currently being integrated to the mining industry, through the use of autonomous robots and a rapid enhancement of captors that allow robots, workers, artificial intelligence and analysts to better analyse the state of their working environment and to optimize extraction and safety (John Walker, “AI in mining – mineral exploration, autonomous drilling, and more”, Tech emergence, December 3, 2017). Some are already calling this trend “intelligent mining” (John Walker, ibid). This evolution of the mining industry is led, for example, by partnerships of artificial intelligence companies as NVIDIA, and IBM and mining companies as Komatsu (Kevin Krewell, “NVIDIA and Komatsu partner on AI-based intelligent equipment for improved safety and efficiency”, Forbes, December 12, 2017).

In the same time, China develops its public space program that aims at installing an autonomous robot base on the Moon, and integrates artificial intelligence development to its space program. The Russian Foundation for advanced studies is developing a robot able to intervene in extreme environments, such as space, while developing a very close space partnership with China (jean-Michel Valantin, “Jean-Michel Valantin, “The Chinese-Russian Robot and Space cooperation – China (1) and « Russia » (2)”, The Red (Team) Analysis Society, January 8, 2018).

This dynamic also attracts investors, such as the American high-tech multi-billionaires Jeff Bezos, Elon Musk, and Peter Thiel, as we already saw, as well as countries, such as Luxemburg or the United Arab Emirates, i.e. investors and countries with a massive financial leverage capability (Clive Cookson, “Luxemburg boldly goes into asteroid mining”, Financial Times, May 5, 2016). This financial dimension expresses the way investors may consider space mining as having a massive potential for return on investment. It must also be kept in mind that space ventures being dramatically costly and hazardous, the commitment of the financial community is in itself vital, besides being a powerful signal of interest.

These new public and private capabilities are currently being gathered. It must now be seen how these new industrial and financial actors could lead to a displacement of an important part of the world economy towards space.

Featured image: Artist’s impression of NASA’s Space Launch System (SLS) 70-metric-ton configuration launching to space. – 2014 – NASA – Public Domain via Wikimedia.

About the author: Jean-Michel Valantin (PhD Paris) leads the Environment and Geopolitics Department of The Red (Team) Analysis Society. He is specialised in strategic studies and defence sociology with a focus on environmental geostrategy.

Scenarios for the Future of the US Dollar Supremacy

With this series, trying to understand the possible futures of the US dollar supremacy, we have analysed the currency functions (medium of exchange, store of value, unit of account) that make the dollar the necessary currency together with the challenges looming over the petrodollar system, the perspective of the renminbi as a leading international currency and the possible impacts of cryptocurrencies over the international monetary system. We shall now outline the main lead scenarios (and eventual sub-scenarios) regarding the future of the US dollar supremacy, out of the corresponding set of scenarios covering the whole range possibilities for the future. In the next article, we shall focus our attention on the scenario we deem more interesting in the way it would …

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The U.A.E. and the Artificial Intelligence and Sustainability Revolution

The United Arab Emirates is shifting rapidly towards the artificial intelligence revolution. This shift is expressed by numerous decisions taken by the highest U.A.E. political authorities. For example, on 16 October 2017, the Sheikh Mohamed Bin Rashid Al Maktoum, vice-president of the U.A.E. and ruler of Dubai, appointed Omar Bin Sultan al Olama as minister for artificial intelligence (AI) of the Union. This appointment, in itself a world first, was followed up by the publication of the U.A.E. Strategy for Artificial Intelligence (“UAE looks to artificial intelligence to prepare for the future”, The National, October 16, 2017, and “UAE strategy for artificial intelligence”, Governement.ae).

This singular political move is inscribed in the emergence of what Helene Lavoix identifies as “AI Governance”, i.e. the “intersection between AI development and politics” (“When artificial intelligence will power geopolitics – Presenting AI”, The Red Team Analysis Society, November 29, 2017). This institutionalisation of the “U.A.E. AI governance” as a key and central component of theU.A.E. grand strategy expresses the way the Emirates are starting to elaborate their development into an AI-driven sustainable power. In other terms, AI is becoming the cornerstone of a new definition of development and power for theU.A.E., in a world of climate change and limited resources.

In a first part, we shall study how AI is going to be used as a driver towards a more sustainable model of development. Second, we shall see how this shift towards sustainability is integrated to the way the Union is already starting to answer its coming oil depletion and its water needs. Finally, we shall see how this move towards artificial intelligence integration is already used to support the U.A.E. grand strategy of becoming a power through its adaptation to new energy and planetary conditions.

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Featured image: Dubai aerial by Nino Verde (Own work) [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons.

China and the United Kingdom “Golden Relationship” on the Belt and Road

In 2015, on the eve of his first state visit to the UK, the Chinese President Xi Jinping praised the “visionary and strategic choice” of the British government and its will to build a “golden era” of Sino-British relationships (“Xi Jinping visit: UK-China ties will be lifted to new height”, BBC News, 20 October 2015). The first Chinese freight train for the UK was launched on 1 January 2017; then on 1 May 2017, a cargo train coming from London arrived in in Chinese city of Yiwu, after a “rapid” voyage of 11000 kilometres, which lasted only two weeks (Louise Moon, “China launches freight train to Britain”, The Telegraph, 2 January 2017, and Will Worley, “First direct train from UK to China arrives in north-east town of Yiwu after 7 500 mile journey”, The independent, 2 May 2017). Six months later, on 28 January 2018, British Prime Minister Theresa May went to China for a three days state visit, during which the Chinese and British governments signed more than 13 billion dollars agreements, ranging from agriculture to innovative technologies, nuclear projects and clean energy.

These deals were accompanied by declarations from Prime Minister Theresa May and President Xi Jinping regarding the way the UK could become more involved in the Chinese inter continental Belt and Road initiative and in global governance. It must be noted that these official declarations are being supported by major political and finance decisions, rapidly piling up, especially since 2015, when Prime Minister David Cameron declared the start of a “golden age” of China-UK relations (“China Britain” to benefit from “golden era” in ties”, Reuters, October 18, 2015).

In other words, the China-UK relationship is turning Great Britain into a massive “hub” for the Chinese international development, at the very moment when Britain negotiates its “Brexit” with the European Union. In the same dynamic and time line, China, i.e. one of the current major world powers (Martin Jacques, When China Rules the World, 2012), is becoming a massive political and economic partner of the UK. This means that a crucial power shift is happening through the new and “golden” relationship between the UK and China, in a time of geopolitical transformations.

In a first part, we shall point out how the principles, ways and means of the Belt and Road initiative are deeply compatible with the way the UK defines its Chinese policy. In a second part, we shall see how and why the UK is developing this “golden relationship”. In a third part, we shall emphasise the massive geopolitical shift implied by this new “China-UK” connection.

The UK long march on the Chinese Belt and Road

Since 2015, the UK is quite pro-active about the Chinese “Belt & Road” initiative. For example, Britain has been among the first countries to become a “founding member” of the China-led Asian Infrastructures and investment Bank (AIIB). It must be remembered that the AIIB is major player of the “Belt & Road” or Chinese New Silk Road, previously known as “One Belt, One Road” (OBOR) The UK Government announced its intention to join the AIIB in March 2015, and officially joined up on 29 June 2015 (“UK ratifies articles of agreement of the Asian Infrastructure and Investment Bank”, GOV.UK, 3 December 2015).

The AIIB finances or co-finances multinational infrastructures’ development in Asian nations, among these the Kazakh segment of the Western China-Highway-Western Europe (“AIIB and OBOR”, OBOReurope One Belt one Road Europe). These transport infrastructures’ development play a fundamental role in the Chinese “New Silk Road / Belt and Road” initiative (BRI). Thus, the action of the AIIB is deeply complementary to the BRI. In effect, the BRI is an economic and infrastructures strategy aimed at ensuring the constant flow of energy resources, commodities, products, money and data that are necessary to the current industrial and capitalist development and enrichment of the 1,4 billion strong “Middle Kingdom” (Jean-Michel Valantin, “China and the New Silk Road – From oil wells to the moon … and beyond”, The Red (Team) Analysis Society, July 6 2015). Since 2013, China has been deploying the NSR/ BRI initiative, which attracts the interest and commitment of numerous Asian, African and Middle Eastern countries.

As we detailed previously, the Belt and Road Initiative is a new expression of the Chinese philosophical and strategic thought (Valantin, “China and the New Silk Road: the Pakistani strategy”, The Red Team Analysis, May 18, 2015). It is grounded in an understanding of the spatial dimension of China, in the geographic sense, as well as in a comprehension of the different countries that are involved in the deployment of the NSR. Space is conceived as a support to spread Chinese influence and power to the “outside”, but also to allow the Middle Kingdom to “aspirate” what it needs from the “outside” to the “inside” (Quynh Delaunay, Naissance de la Chine moderne, L’Empire du Milieu dans la globalisation, 2014). This is why we qualify some spaces as being “useful” to the deployment of the OBOR, and why each “useful space” is related, and “useful”, to other “useful spaces”.

Thus, the UK, by actively choosing to become part of the BRI, seems to become a fundamental “geographic useful space” for China, while China seems to become a very strong attractor for the UK.

An emerging “Golden Relationship”?

It is interesting to note that, in May 2015, during a visit of the Chinese Foreign Minister Wang in London, the then Prime Minister David Cameron announced that

“Britain is committed to developing relations with China and is willing to become its most open partner”.

Minister Wang answered that

“Both nations could explore new space for growth in the China-Britain comprehensive strategic partnership, and add new momentum to their cooperation in international productivity, global finance, growth and innovation, and global governance and development.”

It is important to note that this exchange encapsulates the main structural economic preoccupation of modern states, i.e. economic growth and development in a global multipolar world (“British PM hails “golden year” in UK-China relations” Xinhuanet, 2015-06-10 and Giovanni Arrighi, Adam Smith in Beijing, 2007).

Since this 2015 visit, followed in October 2015 by the state visit of President Xi Jinping in the UK, the two governments launched numerous political initiatives. For example, since the start of December 2017, foreign finance companies are allowed to own up to 51% of local fund managers, securities ventures and brokerages in China, instead of being limited to 49%. In other terms, this decision opens up the Chinese financial market to the City of London, at the moment when UK firms are looking for ways to access new markets after the Brexit, especially given the fact that they could therefore access the very large base of China’s savings (Cecily Liu, “Chinese market will entice UK financial service”, ChinaDaily, 2017-11-26 and Huang Ge, “Opportunities abound in sino-UK economic, trade ties: China Britain Business Club Chief”, Global Times, 2018-1-28). This thematic of an enhanced financial cooperation between the two countries was also central to the exchanges between Chancellor of the Exchequer Philip Hammond and Chinese Premier Li Keqiang in December 2017 (“Premier Li meet British Chancellor of the Exchequer”, The State Council, The People’s Republic of China, December 16, 2017).

However, the financial side of the “Sino-British golden relationship” is part of the larger picture of the common political project that is woven by both parties. This larger picture integrates developments in the nuclear field, in clean energy, in high-speed train, in high technology trade, which are integrated to the Belt and Road framework (Josh Hallyday, “UK-China relations still “golden”, says PM, as investments talk open”, The Guardian, 10 Nov, 2016). In other terms, the “golden relationship” allows China to develop a strategic relationship with the fifth economic power in the world, furthermore a crucial actor in one of the most geopolitically charged situation in the world: indeed, the UK is both a European power and an Atlantic power, with deep and historical ties in Asia, in particular with China, notably through its past “ownership” of Hong Kong until 1997 (John King Fairbanks, Merle Goldman, China, a New History, 2006).

For the UK, the deployment of the Belt and Road initiative opens a new geo-economic and political landscape. In effect, joining the Belt and Road initiative literally means for Great Britain that it develops deep links with the most important Asian powerhouse, at a moment when world economics are more and more centred in Asia, which is moreover currently leading global growth (“Asia’s dynamic economies continue to lead global growth”, International Monetary Fund, May 9, 2017). This “connection” is constructed through railroad interconnections, the development of financial cooperation, technological exchanges. Furthermore, between today and 2020, this “Golden relationship” could also become a “golden inter-connexion”, given the project of construction of a submarine fibre optic cable of 10 500 km that could, or will, connect Russia, Japan, Russia and Norway and Finland. This trans-Arctic link will be destined to connect with the Baltic and Northern sea submarine fibre optic network that, among others, are connected to the UK. This connection will reinforce data exchanges between Great Britain and china (Jean-Michel Valantin, “The Russian Arctic, China’s (digital) development and Northern Europe”, The red (team) Analysis Society, January 29, 2018).

A historical geopolitical shift?

It is difficult not to understand the British expression of a “golden relationship”, coined to qualify the new dimension of the China-UK set of relations, as an allusion to the “special relationship” that has defined the dense, complicated and tangled relations between Britain and the US. The very expression itself – the “special relationship” – was created by Winston Churchill in 1946, during its famous “Iron Curtain Speech”, to salute the way both countries had fought side by side against Nazi Germany and Imperial Japan, while having a new common enemy, the Soviet Union (Daniel Yergin, Shattered peace: the origins of the Cold war and of the National security state, 1977).

Thus, the new notion of a “golden relationship” expresses a major shift from the British geopolitical history of the twentieth century and early twenty-first century, including, more recently, the alliance forged with the US for the “war on terror” and the fight against Islamic terrorist networks as well as for the war in Iraq. It signals Britain’s “pivot” to China, the Middle Kingdom being perceived as the new siege of international power (“Britain eyes closer cooperation with China Belt and Road”, Global Times, 2018/2/1).

Reciprocally, for China, the integration of the UK to the B&R is of a major geopolitical importance, because it allows Chinese firms, among others, for example, to benefit from the financial knowledge, capability and global reach of the City (“Time to shine “Golden era” for China-Britain ties brighter”, Global Times, 2018-1-31). It turns the UK into a “source” of financial resources for China while transforming the B&R into a potential transport, electronic, and political Eurasian loop going from China to “Extreme Europe” up to the North Atlantic.

Thus, the Belt and Road initiative could lead towards an “Asian Britain” and an “Atlantic China”.

The world is shifting.

Featured image: The City of London seen from the south bank of the river Thames in London, United Kingdom, by By 0x010C (Own work) [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons.

Blockchain, not Bitcoin, the Next Game-Changer?

In this article, we shall analyse the drivers behind the rise in cryptocurrencies’ value and market capitalization and start envisioning future evolutions, focusing notably on Bitcoin and blockchain technology. Previously, we explained what is a cryptocurrency and highlighted the possible revolutionary impact of blockchain, the technology underlying the majority of cryptocurrencies. We, meanwhile described the main features of the three most capitalized cryptocurrencies: Bitcoin, Ethereum and Ripple.

Here, after having addressed the drivers behind Bitcoin’s rise, we shall highlight the challenges that Bitcoin and other cryptocurrencies will have to face in the upcoming months. Moreover, we shall also try to understand if the traditional currencies’ stance on global markets could be hampered by a dramatic surge in the daily basis use of independent (i.e. not controlled by a central bank) cryptocurrencies like Bitcoin. In conclusion, we shall assess the perspective of the blockchain technology to be used in sectors other than cryptocurrencies.

Executive Summary

As we continue to analyse the different challenges that could hinder the supremacy of the US Dollar over the global monetary system, here we focus on the perspectives that Bitcoin seems to have in this regard. Could cryptocurrencies ever replace traditional, centralized, public authority-regulated currencies? In this article we give a first answer. We also focus on blockchain, the technology behind the majority of cryptocurrencies, which could be the true revolutionary breakthrough.

Mistrust in governments, the ICO (Initial Coin Offering) boom, and speculative activities are the main reasons behind Bitcoin’s rise. We highlight that Bitcoin still has no meaningful use as unit of account or means of exchange and that it is a very poor store of value. Furthermore, Bitcoin is likely to suffer from governmental regulation, also because it is widely used for illicit purposes. Nonetheless, the cryptocurrency craze is likely here to stay as companies, Telegram for example, launch their own digital tokens. Yet, cryptocurrencies are not likely to replace traditional currencies, at least in the short-term.

Blockchain, for its part, has found concrete applications in a wide variety of industries. Companies operating in the financial industry, in energy and in commodities trading are currently using this technology which promises to be a game-changer, even if Bitcoin will eventually fail as a currency.

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These examples of blockchain’s wide applicability may therefore mean that Bitcoin may be nothing more than “a distraction from the true significance of the blockchain” technology (Steven Johnson, ibid.).

About the author: Leonardo Frisani (MA Paris) focuses currently on challenges to the US Dollar supremacy. Beyond that, his specialization is in international security, and his main interests are in geopolitics, macroeconomics, climate change, international energy and history.

Featured image: The DigitalArtist, CC0 Creative Commons, via Pixabay

Main References

Alpeyev, A. (2018), “Line Expands Into Cryptocurrency Trading Amid Surprise Loss”, Bloomberg Technology, 31 January 2018.

Campbell, D. (2017), “Goldman Sachs to Explore Starting Bitcoin Trading Venture”, Bloomberg Markets, 2 October 2017.

Cornish, C. and Waters, R. (2018), “Silicon Valley investors line up to back Telegram ICO”, Financial Times, 25 January 2018.

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The Russian Arctic, China’s (Digital) Development and Northern Europe

Massive geopolitical changes are occurring in the Arctic, because of the rapid warming of this region due to climate change. These geopolitical shifts are particularly important in the Russian Arctic Exclusive Economic Zone, which spans from the Bering Strait to Norway, along the Siberian coast. This is where Russia develops the North East passage known as the “Northern Sea Route”. As we shall see in this article, the warming of this zone is turning this Northern Sea Route into the backbone of a massive Russia – Asia – Northern Europe – Northern Atlantic economic and digital integration process, with massive geopolitical consequences.

It combines the reinforcement of maritime cooperation between Russia and China through “conventional” maritime transport infrastructures with the deeply transformative project of a trans-artic fibre optic cable that could, maybe as soon as 2020, connect China and Japan to Russia and Norway.

In other terms, the Russian zone of the warming arctic is becoming the support of a continental geopolitical and economic shift. Given the fact that the accelerating warming trend is thus “harnessed” to the Asia and Russia development trend, it is necessary to understand what is at stake in this region for Asia, Russia and the North Atlantic region: the encounter between a rapidly, digitally developing China, Russia as a “climate change great power” and the North Atlantic.

In a first part, we shall see how the Northern Sea Route is being developed as a strategic asset by Russia in a time of climate change. Then we shall look at the way the Northern Sea Route is becoming increasingly important for the development of the Arctic’s and Northern Europe’s dimension of the Chinese “Belt and Road”. Finally, we shall anticipate the transformation brought about by the project of data fiber cable, which could be laid down along the Northern Sea route, to Asia, Russia and Northern Europe, in a time of growing interconnection in a warming world.

Full article 1920 words – approx. 5 PAGES

Featured image: A Snapshot of Sea Ice – This image was compiled using data gathered by NASA’s Aqua satellite on Sept. 3, 2010. Credit: NASA Goddard’s Scientific Visualization Studio.

The Chinese-Russian Robot and Space Strategic Cooperation (2) – Russia

This article focuses on the Russian part of the mammoth space cooperation developed between Russia and China and potential geopolitical impacts. This cooperation is further reinforced by the agreement signed the 1 November 2017 that involves six space-related areas, such as lunar and deep space, joint spacecraft development, space electronics, Earth remote sensing data and space debris monitoring (“China, Russia agree cooperation on lunar and deep space exploration, other sectors”, Global Times, Nov 02, 2017). The Chinese part was addressed in the first article of the series. This Sino-Russian cooperation is a de facto synergy about a new definition of industrial and strategic power. Indeed, space industry evolutions as well as the convergence of Chinese and Russian artificial intelligence strategies added to robotic development …

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