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.

Satellite image of United Arab Emirates in October

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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About the authorJean-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.

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.

Eurasia location map - Physical

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).

AIIB Headquarter, Beijing

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.

One-belt-one-road

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 relationsXinhuanet, 2015-06-10 and Giovanni Arrighi, Adam Smith in Beijing, 2007).

China State Visit

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).

Theresa May

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.

About the authorJean-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.

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.

Full article 2946 words – approx. 6 PAGES (INCL. EXEC. SUMMARY)

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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. 

Frisani, L. (2017), “Towards the End of the US Dollar Supremacy? Global Currency Fundamentals”, The Red (Team) Analysis Society, 2 October 2017.

Frisani, L. (2017), “Towards the End of the US Dollar Supremacy? How Currency Internationalization Impacts State Power, The Red (Team) Analysis Society, 30 October 2017.

Graham, L. (2017),  “As China cracks down, Japan is fast becoming the powerhouse of the bitcoin market”, CNBC, 29 September 2017.

Haswidi, A. and Magtulis, P. (2017), “Southeast Asia ready to embrace blockchain”, Financial Times, 5 December 2017.  

Jensen, R. and Russo, C. (2018), “Bitcoin Storms Back From Dip Below $10,000 in White-Knuckle Ride”, Bloomberg Technology, 17 January 2018. 

Johnson, S. (2018), “Beyond the Bitcoin Bubble”, The New York Times Magazine, 16 January 2018.

Kharif, O. and Leising, M. (2017), “Bitcoin and Blockchain”, Bloomberg, 11 December 2017.

Kharif, O. and Russo, C. (2017), “Global Regulators Play Bitcoin Whack-a-Mole as Demand Explodes”, Bloomberg Markets, 11 October 2017. 

Koyanagi, K. (2018), “Inside Asia’s bitcoin economy”, Nikkei Asian Review, 31 January 2018.

Lam, E. and White, T. (2018), “Bitcoin Fall Extends to 25% as Fears of Crypto Crackdown Linger”, Bloomberg Technology, 16 January 2018.

Leinz, K. (2018),  “A Look at Who Owns Bitcoin (Young Men), and Why (Lack of Trust)”, Bloomberg Technology, 24 January 2018. 

Long, G. (2018), “Maduro’s cryptocurrency scheme met with scepticism”, Financial Times, 16 January 2018. 

Milne, R. (2018), “AP Moller-Maersk and IBM to use blockchain in global trade”, Financial Times, 16 January 2018.  

Morris, D. Z. (2017), “The SEC Filed Fraud Charges Against 2 ‘Initial Coin Offerings'”, Fortune, 1 October 2017.

Mundy, S. (2018), “India signals cryptocurrency crackdown”, Financial Times, 1 February 2018. 

Ozsoy, T. and Doff, N. (2017), “Bitcoin Breaches New Milestone by Smashing Past $5,000 Mark”, Bloomberg Technology, 12 October 2017. 

Rogoff, K. (2017), “Crypto-Fool’s Gold?”, Project Syndicate, 9 October 2017.

Roubini, N. (2018), “Blockchain’s Broken Promises”, Project Syndicate, 26 January 2018.

Scaggs, A. (2018), “ICO regulator anger translator”, Financial Times Alphaville, 23 January 2018.

Seddon, M. and Arnold, M. (2018), “Putin considers ‘cryptorouble’ as Moscow seeks to evade sanctions”, Financial Times, 2 January 2018. 

Smyth, J. (2017), “ASX chooses blockchain for equities clearing”, Financial Times, 7 December 2017. 

Son, H., Levitt, H. and Louis, B. (2017), “Jamie Dimon Slams Bitcoin as a ‘Fraud’”, Bloomberg Technology, 12 September 2017. 

Terazono, E. (2018), “Commodities trader Louis Dreyfus turns to blockchain”, Financial Times, 22 January 2018. 

Tirole, J. (2017), “There are many reasons to be cautious about bitcoin”, Financial Times, 30 November 2017. 

Urban, R., Russo, C. and Nakamura, Y. (2017), “Bitcoin Futures Deliver Wild Ride as Debut Brings Rally, Halts”, Bloomberg Technology, 11 December 2017.

Ward, A. (2017), “BP experiments with blockchain for oil and gas trading”, Financial Times, 3 October 2017. 

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.

Map of the Arctic region showing the Northeast Passage, the Northern Sea Route and Northwest Passage, and bathymetry

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.

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About the authorJean-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.

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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Signals: U.S. Sponsored Kurdish-led Border Army in Syria and Responses

Impacts and ConsequencesThe main critical uncertainty related to the American move is first the level of this commitment and then its consistency over time. As a result the survival of the Syrian autonomous region, the Kurdish-led Federation of Northern Syria has also become more uncertain.  The outcome in terms of American regional and global influence is also uncertain.The main other impacts areLower likelihood to see rapidly a constructive peace settling in for SyriaLower likelihood to see the creation of a Federal SyriaRising Middle East tensionRising global tensions, notably with the U.S. on the one hand, Russia, China, Turkey, and Iran on the other.(Nota: The symbolic board has been moved to the end of the analysis and before the sources/signals)Facts and analysisFor …

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A Deeper Look at Cryptocurrencies – Bitcoin, Ethereum and Ripple

In 2017, Bitcoin, a digital currency launched in 2009, monopolized international finance headlines. On 1st January 2017, a Bitcoin was worth 972 USD while one year later, on 1st January 2018, you would have needed to invest 14.000 USD to buy a single token, down from nearly 20.000 USD on 17 December 2017. Considering the same timeframe, its market capitalization rose from 15,5 billion to 233 billion US dollars, after having reached its peak on 17 December 2017 at 335 billion (Cryptocurrency Market Capitalizations).

Bitcoin, however, is just the tip of the iceberg. Underneath there is a whole universe of cryptocurrencies (nearly 1400) which value and market capitalization has skyrocketed in the last months of 2017. At the time of writing, on 8 January 2018, 40 cryptocurrencies have a market capitalization of 1 billion US dollars or more. As of 18 December 2017, they were 29.

Read also

Blockchain, not Bitcoin, the Next Game-Changer?

The series on the future of the US Dollar Supremacy

The rise in the value of cryptocurrencies has sparked debates over their potential future consequences for and impacts on the international monetary system: some say that Bitcoin could be a “potential threat” to central-bank-issued fiat currencies (Don Tapscott, Ten cryptocurrency predictions for 2018 from the co-founder of the Blockchain Research Institute, Quartz, 4 January 2018) such as the US Dollar (Danny Bradbury, Congressional Report Warns of Potential Bitcoin Threat to US Dollar, CoinDesk, 9 January 2014) while others, like Jamie Dimon, chief executive of JPMorgan Chase & Co., think that Bitcoin is “a fraud” (David Henry and Anna Irrera,  JP Morgan’s Dimon says Bitcoin “is a fraud”, Reuters, 21 September 2017), which value will eventually collapse.

First of all, what is a cryptocurrency? According to the Cambridge English Dictionary, a cryptocurrency is “a digital currency produced by a public network, rather than any government, that uses cryptography to make sure payments are sent and received safely”. Indeed, cryptography is used to implement the blockchain technology, which is at the base of Bitcoin and other major cryptocurrencies.

This article will explain further what a cryptocurrency is, focusing on the most common underlying technology, the blockchain, and its implementation relative to the top two cryptocurrencies by market capitalization: Bitcoin and Ethereum (respectively at 253 and 118 billion US dollars as of 9 January 2018). We shall also include in our analysis the third most-capitalized crypto: Ripple. It will thus underline commonalities and differences between the three cryptocurrencies, starting highlighting their potential advantages and dangers compared with classical international currencies. It will notably single out one of the main challenges characterizing the Bitcoin phenomenon: energy sustainability.

With the next article, we shall analyse the rise of Bitcoin and other cryptocurrencies, highlighting that climb’s main drivers. In conclusion, we shall try to understand if cryptocurrencies pose a long-term threat to traditional currencies and, therefore, to the US dollar supremacy over the international monetary system.

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Full article 2474 words – approx. 5,5 PAGES 

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

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

Main references

Bradbury,  D. (2014), “Congressional Report Warns of Potential Bitcoin Threat to US Dollar”, CoinDesk, 9 January 2014.

Brown, A. (2013), 10 things you need to know about Ripple, CoinDesk, 17 May 2013.

Cheng, E. (2018), Second-largest cryptocurrency Ripple may have run ahead of itself, CNBC, 5 January 2018.

Gupta, V. (2017), Programmable blockchains in context: Ethereum’s future, by Vinay Gupta, Medium, 1 May 2017.

Henry, D. and Irrera, A. (2017), JPMorgan’s Dimon says bitcoin ‘is a fraud’, Reuters, 21 September 2017.

Kaminska, I. (2018), The Ripple Effect, Financial Times, 5 January 2018.

Katz, L. (2017) Bitcoin Is at Risk of No Longer Being the Biggest Digital Currency, Bloomberg, 31 May 2017.

Kharif. O. and Leising, M. (2017), Bitcoin and Blockchain, Bloomberg, 11 December 2017.

Larson, S. (2018) Cryptocurrency boom: Why everyone is talking about Ripple, CNN, 4 January 2018.

Lee, T. B. (2017), Bitcoin’s insane energy consumption, explained, Ars Technica, 6 December 2017.

Robinson, E. and Leising, M. (2015), Blythe Masters Tells Banks the Blockchain Changes Everything, Bloomberg Markets, 1 September 2015.

Tapscott, D. (2018), “Ten cryptocurrency predictions for 2018 from the co-founder of the Blockchain Research Institute”, Quartz, 4 January 2018.

Thompson, D. (2017), “Bitcoin Is a Delusion That Could Conquer the World”, The Atlantic, 30 November 2017.

Worland, J. (2017), How China Could Shape the Future of Energy, TIME, 14 November 2017.

Signal: China – France Strengthening Relations

Impacts and Consequences

  • Increased likelihood to see a return to a more influential and independent foreign policy of the European states holders of veto power at UN Security Council (France and UK);
  • Increased likelihood to see a multipolar world settling in, however with also an
  • Increased likelihood to see a global perception of a rising Chinese global influence;
  • Increased likelihood to see the Chinese influence strengthening in France and Europe, and, reciprocally, France and Europe’s influence rising in the Far East;
  • Increased likelihood to see a global perception of the global U.S. influence and power lowered;
  • Increased likelihood to see rising tensions between the U.S. and China.

Facts and analysis

From 8 to 10 January, French President Emmanuel Macron has been on a State visit in China at Chinese President Xi Jinping invitation.

There, the two Presidents agreed to deepen and strengthen bilateral ties and cooperation notably in the framework of the Belt and Road initiative, including in a host of domains of interest to both China and France, such as science and technology, artificial intelligence, aviation, nuclear energy and agriculture.  Meanwhile, they also each reiterated common interests and goals at global level, such as facing climate change, global terrorism, cyber insecurity  or promoting global peace and stability and global economic governance.

China and France can build upon the historical ties existing between the two countries, notably since French President General de Gaulle recognition of the PRC and opening of diplomatic relations in 1964. The French tradition of an independent foreign policy could also be reasserted and be an asset.

The influence of the two countries could, as a result, be strengthened, while the interests of each could be furthered. Among others, for example, if China finds a way to benefit from high-tech transfers from France, yet without endangering this very French sector, China could further stress its image of a benevolent state and show again the validity of the B&R initiative and of its win-win ideal.

Internationally, notably at the U.N. Security Council level, and considering also the British Chancellor of the Exchequer visit to China in mid-December, it seems likely that we are heading towards a more balanced international order, yet one that may also be perceived by the U.S. as threatening.

Impact on Issues and Uncertainties

➚ Return to a French independent foreign policy
➚ France, and Europe influence and power in Asia
➚ France influence and power

➚ Chinese influence and power in Europe
➚ Global Chinese influence and power

 U.S. influence and power in Europe
  Global U.S. influence and power

➚ Rising tension between the U.S. and China

Sources and Signals

China, France agree to inject new impetus into ties – Global Times

China and France Tuesday agreed to further advance their comprehensive strategic partnership.

Britain eyes closer Belt and Road cooperation with China

BEIJING/LONDON (Reuters) – Britain wants closer cooperation with China over its landmark Belt and Road infrastructure scheme, finance minister Philip Hammond said on Friday at the start of a Beijing trip on which he hopes to seal a billion pounds in deals.

The Chinese-Russian Robot and Space Strategic Cooperation (1) – China

On 1 November 2017, Russian Premier Dmitry Medvedev and Chinese Premier Li Keqiang signed a mammoth deal in space cooperation.

That agreement 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”,  Li Keqiang and Dmitry Medvedev at the 21st regular meeting of Russian and Chinese heads of governmentGlobal Times, Nov 02, 2017). This deal bestows a new dimension to the already massive cooperation between these two very large powers. Indeed, as we shall explore below, the Russia – China space cooperation is a de facto synergy about a new definition of industrial and strategic power. Space industry evolutions as well as the convergence of Chinese and Russian artificial intelligence strategies and robot development strategies overdetermine the emergence and settling in of this definition.

In effect, the Chinese space program relies heavily on the combination of launching capabilities and of autonomous robots, designed to operate on the Moon (Jean-Michel Valantin “The Chinese New Silk Road, from oil wells … to the Moon and Beyond”, The Red Team Analysis Society, July 6, 2015). Similarly, Russia is working at renewing its space capabilities, as well as the industrial and military basis that supports the development of its launch and space vehicles.

Moreover, both nations want to develop space assets and install themselves on the Moon, … for a start (Yang Sheng, “China eyes unprecedented 40 space launches in 2018”, Global Times, 2018/1/4). Meanwhile, as we shall highlight below, these technological, industrial and strategic convergences are also inscribed in the race for the development of artificial intelligence. Furthermore, this convergence of the Chinese and Russian space strategies also necessitates the coordination of industrial, robotic and artificial intelligence capabilities, as well as of space capabilities. Each of these capabilities already constitutes a strategic leap for the nations that are able to develop them. The convergence of such capabilities is nothing but a geopolitical revolution.

These are the issues we shall explore in this series of articles.

In the first article of the series, we shall look at the way China is coupling both its Moon robot and space programs, while the Moon robot development is inscribed within the Chinese robots and artificial intelligence current revolution. First, we shall see that the Chinese Moon program is robot-centred. Then, we shall stress that the next step of this program is intrinsically linked to the current robotics and artificial intelligence hyper development in China. Finally, we shall focus upon the interactions between the robots, artificial intelligence and space programs and their role in the current transformation of China into a technological cutting-edge world power.

Chinese robots on the Moon

The Chinese space and Moon program is largely robot-centred. On 13 December 2013, the Chang’e 3 rocket brought the Yutu Moon Rover close to the Moon, where the rover soft-landed. This event highlighted the tremendous success of the program (“China Moon Probe VIDEO Shows ‘Chang’e’ Nail Landing On Lunar Surface », The Huffington Post, 12/17/2013). The rover’s landing was the third step of the multiple phases of the space and Moon Chinese program, after the Chang’e 1 mission, which launched the first Chinese Lunar orbiter in 2007, and the Chang’e 2 craft, which orbited around the Moon with scientific sensors, before reaching the Lagrangian point between Earth and Moon (“Chang’e 5 Test Mission”, Spaceflight.com, 3 January 2018).

Chang'e-3 lunar landing site

The Yutu Moon rover was operational for one year. Then, in 2014, it became immobile. It finally stopped functioning in August 2016. The three-years lifespan of the rover was much longer than its creators originally expected (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).

Building upon this success, the Chinese space agency is preparing the Chang’e 5 operation, which will involve the launch of a new Moon rover in 2019. (The link between Chang’e 3 and Chang’5, the Chang’e 4, is a spatial probe, designed after Chang’e 3, as a redundant part for Chang’e 5 that should be launched in 2018 (“Chang’e 4“, Wikipedia)).

The Chang’e 5 rover will be fully automated and will be able to take Moon rock samples before ascending from the Moon, then docking to a space module that will bring it back on Earth. The new rover and its landing on the Moon is conceived as an important step towards the creation of a permanent Chinese Lunar base around 2030. This Lunar base will be built and operated by robots. (Andrew Jones, “China sets out a long-term transportation roadmap plan including a nuclear space shuttle”, Global Times, Nov 16 2017 and Kyree Leary, “China just revealed its plans to pulling ahead in the space race- and they include a nuclear-powered shuttle”, Business Insider UK, Nov 18, 2017).

In this context, the success of the new Moon rover missions is a very important technological, operational and political brick for China.

Chinese robot: from artificial intelligence and industry, to the Moon

In 2013, the key to the success of the Chinese Lunar rover, named the “Jade Rabbit”, was that the robot had been designed in order to be as autonomous as possible once landed on the Moon. This autonomy capability must be greatly upgraded for the much more complex Chang’e 5 mission, which involves sampling rocks and bringing them back by a fully automated robot (“Chang’e 5 Test Mission”, Spaceflight.com, 3 January 2018).

Application field solar

This crucial issue of autonomy for the new Lunar robotic mission is embedded in the Chinese technological and industrial environment, defined by the way robots are taking up tasks of a growing complexity thanks to their integration with artificial intelligence capabilities (Jean-Michel Valantin, “The Chinese artificial intelligence revolution”, The Red (Team) Analysis Society, November 13, 2017). In effect, China, along with U.S. private companies, is at the forefront of the twin development dynamics of robots and artificial intelligence (Ma Si “Smartening the world with robots”, China Daily, 2017-09-25).

This dynamic is generated by multiple sectors, from industrial to domestic robots, while, in the same time, the Chinese government and the giant Chinese tech companies Baidu, Alibaba, Tencent, and Huawei, heavily invest in the artificial intelligence field (Sarah Hsu, “China is investing heavily into Artificial intelligence, and could soon catch up with US”, Forbes, July 3, 2017). These investments are explicitly made in order to turn China into the world leader in artificial intelligence over the next 15 years. The government plans to invest more than 150 billion dollars into this endeavour, to which private funding will need to be added (“New Generation Artificial Intelligence Development Plan” (新一代人工智能发展规划 and “China’s got a huge artificial intelligence plan”, Bloomberg Technology, 21 July 2017).

TENCENT TOWER

This Chinese dynamic that allies robotics with artificial intelligence has been officially defined by the government in the “Made in China” report of 2015, which states the official will to turn China into the international leader in the different fields, among others, of electric/smart car, information technology, aerospace equipment, agriculture machinery, which are all related to AI and robotics, actually considered as a sub-field of AI (“Made in China 2015” Plan, The State Council of the People’s Republic of China, May 19, 2015 and Jean-Michel Valantin, “China: Towards the digital ecological revolution?”, The Red (Team) Analysis Society, October 22, 2017; Helene Lavoix, “When Artificial Intelligence will Power Geopolitics – Presenting AI“, The Red (Team) Analysis Society, 27 Nov 2017 ).

This policy supports giant partnerships as well as mergers and acquisitions between Chinese companies and leading foreign companies. For example, the mammoth Chinese robotics company Midea has now acquired the German giant of industrial robotics Kuka (Li Xuena, Wang Cixin, Zhang Boling, “China’s factories are building a robot nation”, ChinaFile, March 10, 2015). In other terms, by developing literally a robot workforce coordinated by multiple levels of artificial intelligence, China installs itself at the vanguard of “intelligent” industrial productivity on a global scale (Jane Perlez, Paul Mozur, Jonathan Ansfield, “China’s technology could upset the global trade order”, The New York Times, Nov. 7, 2017). In 2017 only, China produced more than 120 000 robots (“China produces more than 100 000 industrial robots in first ten months”, Global Times, 2017/12/13).

This exponentially growing expertise and practice in the fields of robotics and of artificial intelligence is the very ecosystem of the development of the Chang’e 5 Lunar rover as an autonomous robot. In other terms, this twin development of robots and of artificial intelligence and the implementation of the Lunar and deep space Chinese program appear as interactive drivers of the development of China and of its transformation into an “intelligent” industrial power, defined by the crossover between the robots and artificial revolution and a space development revolution. The Chang’e 5 Lunar robot is at the intersection of these interactive dynamics.

The Chinese space program

Furthermore, the Chinese space and moon program is also an industrial and political Chinese-led program, integrating, through the Asia-Pacific Space Cooperation Organization (Bangladesh, China, Iran, Mongolia, Pakistan, Peru, Thailand, Turkey) and other cooperation partnerships such as with India, industrial hardware, software and also political cooperation (K.S. Jayamaran, “India and China Sign Space Cooperation Pact », Space News, September 22, 2014).

The Launch of Long March 3B Rocket

As these countries are not directly involved in the space race, or even very far from it, with the exception of Iran and India, by supporting the Chinese space program, they become part and members of the opening of the space and Moon segment of the Chinese “Belt and Road” policy of which they are already part, again with the exception of India so far. Its space program also helps China to boost its research and development, while politically and industrially sharing its success with its partners. In the meantime, China gets access to this strategic “ultimate high ground” that orbital space and lunar space are (William Burrows, This New Ocean, 1998)

It is both in this international cooperation system defined by the Russia – China “special relationship” and the Belt and Road initiative and in the space development and cooperation dimension that the new partnership between China and Russia reveals its full geopolitical meaning, which will be the topic for the next article of this series.

About the authorJean-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.

Featured image: Annotated image of the approximate landing site of the Chinese Chang’e-3 lander. It was launched at 17:30 UTC on 1 December 2013, and reached the Moon’s surface on 14 December 2013. The lunar coordinates are: 44.12°N 19.51°W. NASA, Public Domain.

Featured Interview in ‘A New Era without Certainties’ by J. Nascimento Rodrigues – Exame Expresso

The Red (Team) Analysis Society was featured in a very interesting article, “A New Era without Certainties” (Uma nova era sem certezas), by Portuguese author and journalist Jorge Nascimento Rodrigues, published in the December 2017 edition of the business and economy magazine Exame (group Expresso).

Among other references, a detailed interview of Dr Helene Lavoix, RTAS Director, around the theme of “The End of the Supremacy of the United States” (O Fim Da Supremacia dos Estados Unidos) was included in the article (see related links at the end of the page).

Among many crucial points, Jorge also stressed the importance of a little known yet most probably momentous change that is about to happen: the redrawing of the maritime frontiers of all states to include their claims over their extended continental shelf (save the U.S. as it did not sign the United Nations Convention on the Law of the Sea – UNCLOS 1982), which is expected to take place around May 2019 (read more in our “Deep Sea Resources Brief, updated 5 January 2018, created 1 June 2012). As a result, what we are certain to see happening is a fundamental redesigning of the geopolitical map of the world. Who will know how to take advantage  – or not – of this novel situation remains to be seen.

Pictures of some of the pages of Jorge Nascimento Rodrigues ‘s article “A New Era without Certainties”

Find out more on a potential U.S. Decline with:

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