学者：中国经济困境——债毁中国

 11月30日我在本网站发表本文的上篇之后，12月5日《华尔街日报》也刊登了一篇报道，《中国的巨额隐性债务问题已到紧要关头》。中国债务问题的严重性现在已经引起了华尔街的高度重视；而且，华尔街进一步把视角扩展到了中国金融系统的巨大风险，穆迪投资者服务公司最近下调了对中国的信用评级。由此可见，如何观察中国经济的前景，再单纯看被官方操作的GDP增长率，已经变成十分幼稚的眼光了；而穿透中国潜在金融危机的本质，才是了解当下中国问题的关键所在。

一、聚焦金融部门

 金融系统包括商业银行、专业银行以及非银行金融机构。中国的商业银行分国内银行和外资银行。国内银行的主力是大型国有商业银行，如工商银行、农业银行、中国银行、建设银行、邮政储蓄银行和交通银行；此外还有一些规模较小的股份制银行，其中排名在前的是招商银行、浦发银行、中信银行、光大银行等，还有一批城市银行和农村商业银行。

    在中国开设过业务的外资银行曾达到47家，主要是美国的花旗银行、摩根·斯丹利和摩根·大通银行，香港的渣打银行，英国的汇丰银行，日本的三井住友银行和三菱东京联合银行等，台湾有12家银行在中国开办业务。花旗银行曾经多年来在中国开展高端客户服务（理财账户开户需50万元人民币起跳），去年底花旗已关闭中国的个人银行业务。今年12月8日《华尔街日报》刊登消息指出，华尔街金融机构已大幅减少对华投资。

    非银行金融机构包括保险、公募基金、私募基金、信托、证券、保险、融资租赁等机构以及财务公司等。其中也有一些外资机构，比如著名的美国先锋领航集团(Vanguard)，其全球资产管理规模超过6万亿美元，相当于中国前十名基金公司管理资产总和的六倍。这家曾活跃在中国公募基金市场上的机构最近决定，把已经收缩得很小的上海办事处关闭，退出中国。过去十年，面向中国市场的外企私募股权基金平均每年募资近一千亿美元，而今年这些基金仅募资43.5亿美元，业务大幅度萎缩。

    金融部门是国民经济的“心脏”，它不断为各行各业“输送血液”；然而，六年前上海证券交易所发布研究报告提出，要警惕中国经济的过度金融化。其背景是，中国的金融部门正在“脱实向虚”，走在不健康的扩张道路上，导致中国的经济重心逐渐从产业部门转移到金融部门。中国金融业增加值占GDP的比重，从上个世纪八十年代末金融业不发达时代的1.9%，快速上升到了现在的8.3%，这意味着金融风险的来临。

二、金融部门的债务风险迅速升高

    中国的银行是和政权的存亡绑在一起的，中共会不择手段地不让银行破产。实际上，中国的金融系统是中共最后的经济“救命药”，财政的债务主要靠银行认购地方政府的债券，国有企业的坏账靠银行消化；而银行唯一靠的就是政府信用，中国的民众倾向于相信政府不会让国有银行垮掉。正因为如此，为了维持银行业的声誉，银行奉命不得公布真实的坏账数目，也不会如实减记银行的资产。所以，中国的金融部门之债务是个黑箱，没办法准确算出来；也就是说，各家银行，主要指大型银行，它们的债务到底是多少，无法按账面数据来判断。

    今年11月23日中国的全国人大常委会公布了《对2022年度国有资产管理情况综合报告和2022年度金融企业国有资产管理情况专项报告的意见和建议》。这份官方文件指出，中国金融业增加值占GDP的比重已明显超过了欧盟的3.9%，也超过了经济合作与发展组织（OECD）成员国的4.9%；中国金融业规模巨大，但净资产收益率、不良贷款率、资本充足率等重要指标存在问题，资本金补充渠道不通，上市国有金融企业的股价普遍跌破每股净资产价值。因此，全国人大常委会要求，现在要建立重点领域金融风险识别、预警和应急处置机制。

    全国人大是中国宪法上的“国家最高权力机关”，但在中共的政治体制中，它实际上是中央领导者手中的“橡皮图章”。全国人大既没有真正的权力，也没有真正监督政府的资格；它唯一的任务就是，为中共领导者交代下来的文件走一个“议政”的过场，然后盖上一个“奉旨照准”的“图章”。因此，全国人大的公开文件中，对政府行政之弊，从来都是用温柔的语词“挠痒痒”。当这样的文件开始质疑金融风险的时候，自然就意味着金融风险已经在“叩门”了。

    虽然国际金融界无法了解中国金融部门债务黑箱的状况，但还是凭种种讯号看出了一些端倪。最近，国际信贷评级机构穆迪嗅到了中国金融风险的味道，于是将中国的主权信贷评级由“稳定”降至“负面”，同时将八家中国的重要银行之信贷评级由“稳定”降至“负面”，这八家银行包括农业银行、中国银行、建设银行、工商银行及邮政储蓄银行等五大国有商业银行，以及农业发展银行、国家开发银行及进出口银行这三家政策性银行。这种负面评价标志着，中国的金融部门潜在的风险正在显性化。

三、中国的金融“大锅饭”体制

    自由经济国家的读者不容易了解中国的金融制度，他们往往用自由经济之下私营银行的管理运作体制去看待中国的银行。其实，中国的金融体制与自由经济国家实在是天差地别的。如果说，中国的经济改革曾经改变了共产党传统的计划经济，那么，共产党传统的金融“大锅饭”体制，其实质则没有多少改变。

在共产党制度下，政府是把银行当“ATM（Automated teller machine）”来用的，财政没钱了，国有企业亏损了，一律都是靠银行用贷款来喂养的。中国改革之前，国民经济当中的资金，八成由国有企业和财政来掌控；民众非常贫困，1978年人均新增储蓄存款只有5元钱，因此，银行能运用的居民储蓄非常少。在这种状况下，银行实际上主要靠国有企业的存款和财政存款来维持经营，它服务的对象也主要是国有企业，所以银行实际上不过是财政和国有企业的“出纳”。

    中国开始经济改革以后，财政能控制的资金占国民经济的比重越来越小，而随着民众收入的增加和购买耐用消费品的需要，银行的资金来源逐渐转变成主要依靠民众的存款，银行也替代财政而成为经济成长的推手。但是，八十年代和九十年代前半期，国有企业依然占据中国经济的绝大部分江山，而国有企业依赖国有银行贷款来维持运转的局面并未改变。

    由于地方政府可以影响国有银行在各地的分行、支行，银行不能拒绝国有企业无穷尽的贷款需要，国营企业则把银行贷款看成是“政府拨款”。因此，虽然银行的很大一部分资金来源变成了居民的私人存款，可是银行贷款仍然是面向国有企业的“大锅饭”机制。这就为中国的银行体制埋下了一个致命的“地雷”，一旦银行被国有企业掏空了，银行的巨额坏账就必然动摇金融部门的安全，诱发金融危机。

四、中国银行业的第一次危机

    当前中国面临的潜在金融危机其实是改革以来的第二次，而第一次发生在1996年。

    上个世纪九十年代前半期，城镇就业者中86%是国有部门和具有国有部门特征的集体企业员工。中共为了政治稳定，试图稳定国有经济，为此江泽民提出了“安定团结贷款”这个金融方针，即为了稳定城市的国有企业，要无条件地为国有企业提供它需要的银行贷款。然而，国有部门的效率却持续下降，当金融资源里国有部门占用份额占八成时，这个部门对GDP的贡献只有四成多。这代表着国有部门的生存靠的是“汲取”国民经济资源，同时国有部门负债累累，越来越多的国企开始向银行“打白条”，即不仅不再偿还贷款，连利息也不再支付。从1979年到1994年，国有部门的净资产率（equity rate）从76%降到25%，1994年12万个国有企业的资产负债率达到了83%。

    在中共的这种经济政策之下，当时金融系统进入了危机状态，四大银行贷款的两成已成坏账，若加上逾期呆滞贷款，贷款总额的七成实际上已沦为无法归还的烂账。1991年四大银行的呆帐约4,300亿元，而同期这些银行的资本金只有1,500多亿，银行系统已严重地资不抵债。1994年中国银行业出现了历史上第一次严重的全面亏损，银行的资金平衡表上出现了历史上首次的自有资本减少，也就是银行的自有资本快要被国有企业吞噬殆尽。

    当时中国银行业的不良贷款比例是发达国家商业银行的10到15倍，而坏帐准备金几乎为零。面对这种危险局面，中共在1997年不得不采取了激进的国企全面私有化方针，目的是为银行系统“止血”。当局掩盖私有化的词语是国企“改制”，至于改成什么所有制，则故意避而不谈。

    朱镕基1997下半年开始全面推行国企“改制”（即私有化），把十多万家国有工业企业的绝大多数都作为“包袱”甩掉，迫使几千万“全民所有制”职工低补偿或无补偿下岗，借此让中小企业私有化，同时让大型国企上市、实行部分私有化。

五、国企私有化暂时救了中共

    在中国的国企私有化过程中，当局让国有企业的厂长经理和地方政府官员充当“改制”和裁员下岗的操作者，同时也把私有化可能产生的社会不满和愤怒，从政府身上转移到了国企的厂长经理身上。当然，国企的厂长经理们不会白白当“替罪羊”。国有私有化，企业都卖给谁？事实上，国企厂长经理们的家庭积蓄根本无法满足收购企业所需要的百万、千万、甚至上亿元的资金需要，而外资在国企私有化过程中的作用微乎其微。

    在这种情况下，朱镕基鼓励国企的厂长经理们使用非法手段，摇身一变而成为各自企业的新老板。近百万国企管理者用企业作担保，从银行借款，“购买”了自己主管企业的国有财产，把企业注册在本人或家族成员名下；然后以企业所有者的身份，动用企业公款，归还他们私人购买企业的贷款。此外，许多国企管理者逼迫员工购买企业的部分股份，职工为保住饭碗，只能拿出家庭储蓄来购买本企业的股份；但普通职工拥有股份后，企业管理层并不许职工股东过问企业经营和资产转让，等于让职工出资帮企业管理层获取企业的所有权。同时，当局纵容红色权贵家庭的妻子儿女，利用关系网帮助大国有企业获准上市，以此无偿获得上市公司的股份，然后通过抬高股价大获其利。

    中国1996年有11万家国有工业企业，2008年底只剩不到1万家，其中还包括已实行部分私有化、但政府仍控股的大型国企。中国的私有化分为两个阶段。第一阶段是中小国企的私有化，从1997年下半年到2001年，历时4年。究竟谁成了国企“改制”后的新老板？据世界银行等国际组织所做的两个全国性抽样调查，大约50%到60%的国企都变成企业管理层私人拥有；约四分之一的企业的买主来自国内其他行业的投资者，其中外资所占份额不足2%；由管理层和职工共同私有化的仅占一成。

    朱镕基推动私有化的时候，中国正急于加入WTO，以扩大出口。WTO接纳中国的前提是，中国必须取消计划经济并实行国企私有化。因此，中共当时为了向世界银行等国际组织提供中国私有化进展状况的资料，为中国加入WTO铺路，特别准许境外研究人员对国企私有化做调查，因此，中国国企私有化的结果早已在国际社会公开。但当局在国内对私有化真相掩耳盗铃，不许国内媒体报道私有化的结果，也禁止国内学者研究这个专题。

    此后中共迎来了外资涌入的高潮，外企帮助中国的银行把坏账打包处理，度过了中国银行业的第一次危机；同时，借助大规模出口和“世界工厂”的形成，中国经历了经济繁荣的二十年。

六、中国银行业的第二次危机

    国企私有化确实帮银行从此甩掉了为中小型国企“输血”的任务，但并没改变大型国企“汲取”金融资源的运行特征。不仅如此，地方政府为了通过开发房地产赚钱，发行了大量债券，大部分让银行认购，因此，2010年开始，各级地方政府都加入了从银行“吸血”的行列。中国的金融“大锅饭”体制并没被改变，相反却成了地方政府赖以生存的“生命线”。连民营的房地产企业也学会了吃金融“大锅饭”，最终引发了大型房地产公司接连爆雷，戳破了房地产泡沫。

    房地产泡沫破灭之后，地方政府的巨额债务、国企和民企的巨额贷款坏账，再加上民众无法归还的大量贷款，最后都把压力集中到银行系统，导出了中国改革以来的第二次金融危机。本文提出的“债毁中国”现象，从根本上讲，就是共产党统治下吃金融“大锅饭”的结果。中共为了控制金融资源，只让银行上市圈钱，却把大一点的银行之主要所有权掌控在自己手里，结果中国的第二次金融危机，与第一次金融危机一样，仍然构成了政权的危机。

    2023年10月底全国金融机构账面上的贷款是235万亿，承购债券是64万亿，合起来是300万亿。目前官方承认的坏账率是1.8%，实际上，因为地方政府的债券很大一部分还不了，仅仅按地方政府债券的坏账率50%，企业贷款的坏账率为10%来计算，金融部门的坏账就有56万亿。

    如果把中央和地方政府的债务114万亿，加上国有非金融企业的债务220万亿，再加上金融系统的最低债务56万亿，合起来就是390万亿，将近400兆。这个数字是中国GDP的3倍多。假如把中国比喻成一家中共控制的大公司，营业额是每年120万亿，负债则高达400万亿，这家公司是不是已经快要破产了？

七、重新审视中国的债务

    我估计的中国债务，比国际货币基金组织公布的计算结果要高很多。IMF预测的中国负债占GDP的比重似乎不算高，比美国和日本的这个数值低一些。但是，IMF的统计有三个错误。第一，IMF低估了中国地方政府的隐性债务；第二，IMF的计算排除了国有非金融企业的巨额债务，而国有企业以其政府背景、向银行大量借的不会归还的贷款，其实也是中共的政府债务；第三，IMF的计算完全没考虑中国的国有金融系统的巨额坏账。

    由于美国和日本都没有中国的这三种状况，所以美国和日本的负债占GDP的比重，其实与中国并没有可比性。中国的负债占GDP的比例实际上早已是世界第一，而且是美国的两倍多。

    此外，中国的大量国际债务是不能用人民币偿还的，因为人民币不是硬通货。而中国三万亿美元的外汇储备，除了要偿还外债，还要应付数万亿美元外企投资（包括直接投资和金融投资）汇出盈利和撤回投资的需要。单从这个角度看，中共的债务危机就很难化解了。

    那中共能象度过第一次银行业危机那样，再一次把国企私有化，从而化险为夷吗？私有化靠私营企业的实力，美国和日本的私营企业都是世界级大公司，主导着本国经济和国际经济；但中国的私营企业除了房地产公司之外，大部分都是小公司，完全没办法把国有的巨无霸公司民营化。一句话，此路不通。

    中共的第一次银行业危机是靠美国帮忙解决的，而这一次银行业危机就没有美国帮忙了。地球上只有一个WTO，中共无法再找到另一个脱身危机的外助。其实，中共的第一次银行业危机，美国是不知道底细的，糊里糊涂地帮了忙；而这第二次“债毁中国”，美国的华尔街已经比较了解中国经济的真实状况了，当然不会再上当。《华尔街日报》发表的文章就是一个信号，这篇报道的标题是，《“不碰中国”的投资战略行之有效》。

Is Vladimir Putin right to think he’s winning in the war against Ukraine?

 Vladimir Putin says more than 600,000 Russian soldiers are in Ukraine, almost twice the number he started the war with. His “freeloading” adversary will soon run out of Western support. And in a sign of his growing confidence at his traditional end-of-year press conference, he insists that Ukraine’s forces have “failed everywhere” in their counter-offensive. But as the snow starts to fill trenches at the end of a second year of fighting he initially expected to be over in days, is he right?

Fading optimism

It is certainly true that summer optimism around Ukraine’s ability to retake land down to the coast by Christmas wilted as autumn turned to winter. Now burnt-out equipment, some Western donated, slowly rusts in sleet splashed red with blood.

But that blood is Russian too. Kyiv’s forces continue to repel waves of morally repugnant “meat assaults” from Putin’s troops: ill-equipped Russian men running terrified and occasionally drunk at Ukrainian guns. Even as the ground freezes such attacks continue. The MoD today revealed that a newly formed Russian paratroop division “suffered exceptionally heavy losses” when it tried to dislodge Ukrainian forces from the left bank of the Dnipro river. The MoD said the 104th Guards Airborne Division (104 GAD) was “poorly supported by airpower and artillery, while many of the troops were highly likely inexperienced”. Russian bloggers demanded the officer in command resign.

That’s the kind of criticism that Putin likes to pretend does not exist, and which forced him to cancel last year’s press conference. Even today’s press conference was not immune to domestic barbs aimed at him – with critical questions from the public mistakenly displayed behind him on the big screen including: “I’d like to know, when will our president pay attention to his own country? We’ve got no education, no healthcare. The abyss lies ahead...” Mr Putin may like to present Ukraine’s backers as divided and Russia united, but – as he apologised for the price of eggs in his own country – the conflict is certainly not all going his own way.

The failed counter-attack

Ukraine’s counter-offensive culminated in November. Culmination is a military term essentially meaning a force is exhausted, either physically or in terms of logistics expended. It needs a pause, a regroup, a replenishment.

To culminate is not to be defeated – it doesn’t follow that just because a force cannot keep going forwards it will automatically be pushed back. Rather, culmination is a routine and expected phase of any military advance. The trick for military commanders is to anticipate when it will occur and plan accordingly, so that the last objective is taken and secured against enemy counter-attack just as the force has to pause.

Kyiv will have taken many lessons about planning, force integration and training from the counter-offensive, but in geographic terms the advance has not reached any of the major objectives it was likely designed to: Tokmak, Melitopol, perhaps even, although this would always have been a bit ambitious, the Sea of Azov.

There’s no denying Ukraine wished for more from the counter-offensive on land, but those saying the culmination of this operation shows Ukraine’s effort is finished and President Zelensky might as well just take his chances with negotiations are very wrong. War doesn’t work like that. Look at Dunkirk. Or, look at the failed raid in 1942 on the port of Dieppe. Canadian-led Operation Jubilee, the first large offensive in Europe after Dunkirk, was criticised as having been launched out of a desire just to “do something”. The operation was a disaster with over half the force killed, wounded or captured, but the experience there did influence the success of D-Day two years later. Lessons such as prioritising the landing on wide open beaches to allow space for large numbers of troops and vehicles to be offloaded quickly and to develop vehicles (known as “Hobart’s Funnies” after the ingenious Major-General Percy Hobart) specifically to breach the fortifications of the Atlantic Wall, led Lord Mountbatten, an architect of the raid, to claim “the battle of D-Day was won on the beaches of Dieppe”.

Russian soldiers walk through a destroyed part of a Mariupol steel plant - AP

Take another famous battle: Operation Market Garden, immortalised in the film A Bridge Too Far, was the effort in September 1944 to push across the Lower Rhine river to create an invasion route into northern Germany. Lessons from that operation – to drop paratroopers in a single lift instead of numerous waves over a number of hours and only a short distance behind enemy lines to make the link-up with ground forces all the swifter – directly fed into the conduct of Operation Varsity six months later, the successful airborne effort that did get over the Rhine.

The military lesson here is that even a well-planned, well-equipped and well-led operation can fail, or at least not meet all of its objectives, and should from time to time in war be expected to, but if the correct analysis is applied - which could result in reorganisation and even the removal of senior leaders – lessons will be learnt that should lead to more successful operations in the future.

Undoubtedly though, Ukraine ends 2023 in a precarious position on the battlefield. Defence analyst Konrad Muzyka says Russia is slowly regaining the initiative following the culmination of Ukraine’s counter-offensive.

“The tables may have turned for the foreseeable future,” he says. “It’s incredibly important for Ukraine now to start building their own fortifications, as deep as they possibly can.”

Ukraine’s priority now should be thinking about a “theory of victory”.

“How would they like to end this war? Is getting Crimea back still on the table? Or just retaking territory Russia captured since February last year? The political leadership needs to articulate that one way or another.”

Stasis on land, triumph at sea

With both sides dug in, the war in Ukraine is entering a phase of what General Valery Zaluzhny, the head of Ukraine’s armed forces, referred to recently in an essay, as “positional warfare”, i.e. largely static. This is opposed to manoeuvre warfare, when lines can shift rapidly and dramatically, and which we witnessed last year when Ukraine broke through Russian lines near Kharkiv and dashed eastwards for about 50 miles, or when Moscow pulled its troops back from Kheron and across the Dnipro river.

Positional doesn’t mean stalemate, however; Gen Zaluzhny chose his words carefully.

Putin – pictured with Admiral Nikolai Yevmenov, commander-in-chief of the Russian Navy – oversees the launch of new nuclear submarines - Kirill Iodas/Pool Sputnik Kremlin

Even if the land campaign hasn’t seen any major breakthroughs, the overall direction of the war – which is, of course, the ability of one country to impose its will on another through military means – is governed by many more factors.

Look, for example, at the Black Sea. The risk of being hit by long-range missiles such as Britain’s Storm Shadow or the French equivalent, SCALP, means the Russian fleet has been forced to move many assets – including, it is thought, its entire fleet of Kilo-class diesel electric submarines – out of Sevastopol. The headquarters of Moscow’s Black Sea Fleet was also destroyed a few weeks ago in a strike that reportedly killed its commander, Admiral Viktor Sokolov.

The Emperor Alexander III is one of Russia's new nuclear submarines, built to showcase the country's naval power - Kirill Iodas/Pool Sputnik Kremlin

Russian naval assets have been shown to be incredibly vulnerable away from port, too. Ukraine’s modified Neptune missiles and naval drones have proven adept at hitting ships at sea. The consequent reduction in the number of Russian vessels deployed that are capable of firing Kalibr cruise missiles into Odessa and other ports has enabled Ukraine to revive its international trade in grain, a vital economic lifeline. Russia’s de facto blockade of Ukrainian ports on the sea and the Danube river has been broken; an astonishing result for a country without a navy.

Stalemate and wavering allies

Prof Timothy Snyder, Levin Professor of History and Global Affairs at Yale University, takes issue with the very notion of “stalemate”. “I hate and despise, with my entire being, the metaphor of ‘stalemate’,” he says. “War is not a game of chess.”

He says the word allows us to move away from the “grimy, difficult truths” about war. It is also a false reference, he adds, noting that “in a war, I can give you five more kings. Britain, the US or the EU could say, ‘Okay, we’re going to give you a lot of counter-battery [artillery]. Or instead of giving you 20 Bradley (a US-made infantry fighting vehicle) we’re going to give you 300.’ Rules don’t actually exist.”

At this stage of the war, Prof Snyder says Russia doesn’t have meaningful offensive potential, a situation that will endure if Ukraine’s international partners continue to send arms.

“In a long war the economic advantage the Ukrainians indirectly have should eventually be telling,” he says, pointing out that even if US support was withdrawn the combined economic heft of the EU and Britain substantially outmatches Russia.

He is not the only one to highlight the potential economic and industrial advantage Ukraine could enjoy, if the resolve of partner nations endures. Although, “right now, that’s a pretty big ‘if’,” he cautions.

At the Lucerne Dialogue, held in Switzerland each November, Sir Richard Barrons, a retired British general, said: “The only way Ukraine wins is if we mobilise our industry and our will behind that.”

Addressing business and political leaders he criticised the lacklustre efforts to ramp up European defence industrial production: “Do not tell me it’s unaffordable, because you represent an economy of 15 trillion euros a year and I can feed the Ukrainian army on about 75 billion euros for two or three years and I can make them win,” he said. “This is not about affordability, this is about choice.”

Similar warnings have been sounded in a new paper for the Royal United Services Institute.

Professor Justin Bronk, senior research fellow for Airpower and Technology, says Russia’s economy is now on a war footing, with armament production rising sharply.

“The Kremlin’s strategy is to conquer Ukraine by continuing to fight until the West gives up, so forcing Kyiv to ‘negotiate’ won’t end the war, it will only encourage Russia to fight on.”

Another push?

When will Ukraine attempt another push? That depends on a number of things.

First, the combatants have to get through winter. Once that descends in earnest on the battlefields it will largely snuff out all but the most determined movement. The trenches will still be inhabited, of course, but troops freeze easily when standing still just keeping watch for the enemy.

Morale can dip just as quickly as the temperature. Kyiv’s troops, in better winter gear and with a legitimate cause to fight for, should be expected to weather such conditions in better order than the Russians.

It will still be brutal, however. Exposed fingers can freeze to the barrel of a frozen rifle, injuring the owner of the arm that tries to rip them off. Feet, the critical enabler for infantry, must be protected against trench foot in the wet weather and frost bite in the cold. Poor quality clothing, especially boots (or LPCs - Leather Personnel Carriers, as the British Army’s gallows humour had it) will create as many casualties as the enemy.

Ukraine may attempt another push but morale can dip just as quickly as the temperature – and the winter months will be brutal - ANATOLII STEPANOV/AFP

Second, Ukraine may well decide a number of failed small offensives conducted in quick succession – to shore up domestic and international support – could be more damaging than waiting until they have a much bigger and more capable force.

Kyiv may take the view that 2024 is not a year to attempt bold advances on the battlefield, but as a time to build. To amass stocks of armaments, train military forces in more than just the most basic infantry tactics, and to develop a deep and resilient defence industrial base.

The return of Trump

If Kyiv’s international partners truly believe that the fight in Ukraine benefits all who believe in the international rules-based order, they will also be required to dig in – figuratively, in terms of political support, and literally, by building new factories to win the attritional war of resources.

That may make military sense, but there’s a problem: time, and it’s probably not on Ukraine’s side.

Giorgia Meloni, the Italian prime minister, was caught out recently on a prank call saying: “I see that there is a lot of fatigue… from all sides”. This speaks of the risk of “compassion fatigue” and raises questions of how easily the international community can be convinced that setbacks in war are to be expected and not signs of a losing strategy.

Time is also ticking away to next November’s US presidential election.

If Donald Trump beats Joe Biden for the presidency, it could change the course of the Ukraine war - MANDEL NGAN/AFP

There is no guarantee Donald Trump will win the Republican Party’s nomination – although that is looking increasingly likely given the polling figures – or that he could beat Joe Biden (the chances of the Democrats ditching the current President as their nominee are vanishingly small).

Given the war in Ukraine, a belligerent China, Iran and North Korea and challenges to the rules-based international order from Venezuela (that might be about to start a war in South America) and Turkey (evading international sanctions to trade with Russia) a possible second Trump presidency could be even more consequential for the world than the first.

Which Trump might return to the White House? A vindictive geopolitical amateur, in thrall to the “Big Man” theory of history and more interested in using his power to settle domestic scores, or a statesman able to take difficult decisions? He did, after all, authorise the strike that killed Qasem Soleimani, head of Iran’s Quds Force and the man responsible for Tehran’s extraterritorial and clandestine military operations.

Russian dissent

There is much hard work ahead for President Zelensky to ensure the right lessons are learned from the recent counter-offensive and to reinforce morale, outside the country as much as within. His priority for 2024 will likely be to convince Ukraine’s international partners to take long-term political, military and industrial positions, regardless of any “fatigue” and ahead, potentially, of a distracted or disinterested White House.

Western officials note Putin has geared his economy for war at the expense of other domestic considerations. Russia’s defence spending in 2024 will be higher than health and education combined and demands for fighters at the front mean there are personnel shortages back home. This is unsustainable and will have domestic repercussions.

There is no political opposition in Russia to speak of, but there are signs of dissent.

Putin announced that war expenses would remain a priority, with huge implications for other domestic considerations - MAXIM SHEMETOV/REUTERS

Evgenia Kara-Murza, a human rights activist and wife of political prisoner Vladimir Kara-Murza, says the level of repression inside Russia shows Putin’s regime, although strong, is “totally paranoid”.

Mrs Kara-Murza, whose husband was sentenced in April 2023 to 25 years in prison, says: “I understand the fear and why the regime is using such repressive mechanisms against dissenters. They want to intimidate some and silence others.

“If there was no dissent in the country the regime would not be using such atrocious mechanisms of repression.

“The regime is going so cruelly after dissenters in Russia because it wants to annihilate that alternative that does exist in the country. It wants also to show the world a warped image of reality in which the entire Russian population stands strongly supporting Vladimir Putin and the war in Ukraine. This has nothing to do with reality. The voices of those who run impossible risks to say ‘no’ to the regime need to be heard.”

Overcoming distractions

Lord Cameron now says that defeating Russian aggression is “the challenge of this generation” while retired Gen Sir Mark Carleton-Smith, the former head of the British Army, told the Telegraph that the international community “needs to continue to hold its nerve and to sustain this commitment to Ukraine”.

Hamas’s attack on Israel sucked some of the oxygen and the attention of events in Europe, he suggests. “Where one reads that there might be a growing sense that, given the events of the summer, Ukraine is going to find it very difficult to defeat Russia militarily, one might reflect that that’s possibly of our own making at the moment. Because incrementalism is no way to fight a war.”

Prof Bronk, of Rusi, frames this challenge through the context of a potential war in the Pacific: “The extent of China’s military capability advances mean that the US military is increasingly overstretched in the Indo-Pacific,” he says.

“In the event of a flashpoint conflict or even serious standoff later in the 2020s, the US will not have sufficient capacity concurrently to reinforce Europe at scale.

“Russia will have a strong incentive to use any US-China clash in the late 2020s to trigger Article 5 by attacking a small area of Nato territory while the US cannot respond, unless Europe urgently invests in rearmament.”

The institutions and norms of international behaviour, built over the last few decades from the carnage of the Second World War, are under strain as never before. The so-called “rules-based international order” has no divine right to exist and others, notably China and Russia, are happy to pull at loose threads; to offer an alternative model for the 21st century.

Baulk at confronting these challenges and the message will be sent far and wide that the values the West says it cares about so much aren’t actually that important. The consequences could be severe.

A Western official says support for Ukraine “is not conditional on any battlefield breakthrough”. But Putin’s bluster in Moscow suggests he knows different. This winter will begin to determine who has more right to feel confident.

Where is Russia's next wave of men coming from?

 Logan Nye

Tue, November 28, 2023

There seems to be a recurring point made in the current discussion around the Russo-Ukrainian War. Ukraine will always struggle with manpower as a smaller, democratic country. And Russia will always thrive in the manpower fight because it is larger and run by an autocrat.

So Ukraine and Russia are two battling animals, and Russia can bleed for longer than Ukraine can fight.

But...what? Did we all forget that Russia announced a conscription of 300,000 last year and saw hundreds of thousands of Russians flee the country? Indeed, over 1 million Russians entered Georgia in the nine months after the Russian invasion of Ukraine. So, let's interrogate the idea that Russia has an endless pool of manpower.

But first, we should acknowledge that Ukraine also faces real manpower shortages.

Ukraine's manpower struggles

KYIV, UKRAINE - NOVEMBER 27: People stand around a memorial to fallen Ukrainian soldiers after a snowfall on November 27, 2023 in Kyiv, Ukraine. (Photo by Danylo Antoniuk/Global Images Ukraine via Getty Images)

We should get this out of the way because, while the author unabashedly supports Ukraine, it would be quite dishonest to discuss Russia's manpower woes without admitting that Ukraine faces a lot of the same problems.

Ukraine has the much smaller population of the two countries. Ukraine has just shy of 14 million men aged 15-64 years. Russia has over 45 million. Ukraine's pool is literally less than a third of the size.

And Ukraine has faced problems with draft dodging. An estimated 20,000 fighting-age men fled by November of 2023. That's five brigades worth, an entire division, if Ukraine was into divisions.

Meanwhile, it has already lost an estimated 200,000 casualties among its troops and over 26,000 civilian casualties.

Ukraine, in theory, has millions more men that it can press into service. But in practical terms, its military has tripled in size since February 2022 but probably couldn't double again without major strain.

Russia's manpower struggles

So, yes, Russia's population is nearly triple the size of Ukraine's. And it's taking losses at just 1.5 times the rate of Ukraine (an estimated 300,000 Russian casualties to 200,000 Ukrainian ones). If Russia and Ukraine both poured their men's blood into a pit at the current rates, Ukraine would run out long before Russia.

But Russia is fighting a war of choice and aggression very poorly. And its poor and disenfranchised masses understand that they're being used as fodder for Putin's vanity war. Russia's population is surprisingly diverse, with five minorities representing over 1 percent each of the population, and over 23 percent of Russians not claiming Russian ethnicity.

But Russia is disproportionately calling up its ethnic minorities, and they've noticed. And, believe it or not, oppressed minorities would typically rather not die subjecting other ethnicities to oppression.

Remember, when Russia called up 300,000 men for military service and an estimated more than 200,000 fled the country in a week?

And AP just released phone calls of Russian soldiers who want to flee their units.

Russia can barely keep up the bonuses needed to keep drawing volunteers into the military, and that's without paying many of the death bonuses. Because, yes, Russian families are supposed to get death gratuities, but Russia is reportedly hiding many deaths to prevent paying out.

Meanwhile, the Russian economy continues to flash warning signs, the economy that's needed to provide those bonuses. As well as pay for the massive amounts of destroyed war material.

A conscription further damages the economy, requires more money for training, money for enforcement, and then more money for death bonuses and funerals. Indeed, Putin is reportedly afraid to call another mass mobilization precisely because of the damage to the economy and popular sentiment.

The Russian economy is in the toilet

Most media credulously prints whatever economic numbers that Russia claims. But more skeptical economists have double-checked Russia's claims. First, the bulk of Russia's income, as always, comes from the sale of Urals Crude. But Urals Crude is trading at less than $62 a barrel as of the time of writing. And that's despite massive OPEC production cuts and Russia restricting exports. So Russia is collecting little per barrel while also selling fewer barrels.

The exact numbers are hidden since so much Russian oil is smuggled on a "dark" tanker fleet, that Russia had to buy, but oil revenues are definitely down.

Meanwhile, Russia claims that its economy has grown while admitting that large portions of it now exclusively produce war goods instead of consumer goods. But even those numbers are suspect, since researchers at the European Central Bank found that Russia claimed its factories were humming at full-strength even as air quality data and energy consumption showed quite clearly that Russian factories must have either gone entirely solar or else were sitting dormant.

Economist Dr. Joeri Schasfoort held a YouTube live with one of the European Central Bank researchers on his channel Money & Macro. He said academics largely trusted Russia's numbers before the war, but its data since sanctions started are entirely suspect.

https://www.youtube.com/watch?v=QZMi9QZqy6M

So, yes, Russia is the larger country with the larger population. But with its economy already strained, its men already fleeing conscription at nearly the pace that men are accepting it, and it taking heavier losses than Ukraine, it's not actually clear that it has some endless pool of soldiers.

Instead, we should see Russia as an already wounded animal. We may not know how much blood it has left. But we also know it will pass out or die before it hits zero. Imagining that Russia can bleed forever is a weird, dark fantasy.

Logan Nye was an Army journalist and paratrooper in the 82nd Airborne Division. Now, he’s a freelance writer and live-streamer. In addition to covering military and conflict news at We Are The Mighty, he has an upcoming military literacy channel on Twitch.tv/logannyewrites.

Ukraine’s counter-offensive has failed for now – the West needs a new plan

 Sat, November 11, 2023 at 10:00 PM PST·

It’s mud season again in Ukraine, a phenomenon with such significance there that it has a special name: “bezdorizhzhia”, the season of bad roads. The Russians say “rasputitsa”. It’s most severe in the spring, when melting winter ice makes the earth muddy, but it generally happens with the autumn rains too.

Bezdorizhzhia has a paralysing effect on armies, especially armies on the attack. Even tanks, which are specifically designed for off-road mobility and exert much less pressure on the ground than cars or trucks do (the enormous weight of the tank is spread over a much greater area by the tank’s tracks), frequently can’t move off paved roads during mud season.

They often can’t move at all, as paved roads laid across mud country may break up if you drive heavy vehicles on them during bezdorizhzhia.

Most soldiers and most of an army’s supplies move in wheeled vehicles, rather than tracked vehicles such as tanks. Almost all wheeled vehicles are strictly road-bound in mud season and often the rest of the time too. A marching soldier also can’t cross the mud with any ease.

Attacking during mud season, then, is a terrible idea.

The Russian army, reinforcing the impression of incompetence it has given ever since the invasion, is of course mounting a huge attack in the Avdiivka area right now.

Reportedly a third assault wave of 40,000 men is about to be thrown in. Ten days of rain are forecast, with temperatures remaining well above freezing. British military intelligence has already suggested that Russian losses in Avdiivka will be the worst in any operation this year, and that’s saying something.

Ukrainian President Volodymyr Zelensky, under intense international pressure, has sought to give the impression that his army’s counter-offensive has not come to a halt as was strongly suggested by his commander-in-chief, General Valery Zaluzhny, last week. But despite Zelensky’s upbeat tone, Zaluzhny will certainly not be attacking for the next few weeks unless the weather is unusual: it would be simply throwing his men away.

Bezdorizhzhia doesn’t last into the winter: as it gets cold the rain gives way to snow and the ground becomes firm again. But winter brings its own problems. Again, it favours the defender over the attacker, especially in eastern Europe. “General Winter” was famously always the deadliest Russian commander that French and German invaders had to face.

Zaluzhny can’t attack seriously through the winter, it’s that simple. The counter-offensive has halted.

Far from a Blitzkrieg

All across the Western world this is being treated as some kind of failure by the Ukrainians. It’s unfortunate that many Western commentators, often former military officers, have previously given it as their opinion that Western tanks, used correctly, would enable a brilliant Blitzkrieg-style breakthrough and end the war in a matter of weeks.

A Blitzkrieg-style breakthrough hasn't quite materialised in Ukraine - Efrem Lukatsky/The Associated Press

They argued that Russia’s huge, well-equipped tank forces failed in the initial invasion because the Russians were doing it all wrong: they didn’t know how to coordinate their tanks, infantry and artillery in “combined arms” warfare the way Western soldiers can.

Western tanks have been promised to Ukraine: the German Leopard, the US Abrams and British Challengers. But the actual delivery took a long time. Just 87 Leopards and 14 Challengers had reached Ukraine as of August and precisely zero Abrams. Denmark and the Netherlands’ contributions won’t arrive until next year.

Even so, a hundred tanks is a lot of tanks: it’s enough for an armoured brigade. The Ukrainians also had lots of decent Soviet-pattern ones. They had managed to pull a lot of troops out of the line to be rested, re-equipped and trained – often by Western instructors from the same armies that produced the confident ex-military commentators. They had the division-sized armoured force that Western officers had said could win the war.

Yet the mighty Ukrainian armoured spearhead has advanced just 10 miles. Far from a Blitzkrieg, this has been more like erosion than lightning.

This is uncomfortable for the Western military commentators. One of two things must be the case: either they were wrong and tanks, even with Western training and tactics, are no longer a decisive weapon; or the Ukrainians, despite being trained by Western armies, must be doing something wrong.

Nobody likes admitting that they might be wrong, so Western military and ex-military opinion (not usually expressed in public, but nonetheless fairly universal and stated in writing) is that the Ukrainians have been doing it wrong and this is the real reason they haven’t defeated the Russians.

The suggestion is that if Western officers had been given an armoured division they would have done much better with it.

Even if one is an armoured warfare true believer, it’s still hard to picture a Western general really doing much better than Zaluzhny and his colleagues. In order to carry out a classic Blitzkrieg operation, after all, one must first get past the enemy’s front lines. This is extremely difficult to do if they are heavily manned, heavily fortified and protected by deep minefields and lots of heavy weapons.

Heinz Guderian, the German general generally credited with carrying out the first Blitzkrieg in the assault on France in 1940, was up against the heavily fortified Maginot Line. He solved his problem by simply going around it through Luxembourg and Belgium. It’s not usually possible for a defender to have strong fortifications everywhere.

Russia today certainly doesn’t have strong fortifications everywhere. The Russia-Ukraine border all the way from the battle front to Belarus is only lightly protected.

However, Ukraine can mount only minor, semi-deniable operations on Russian soil and cannot use any Western equipment in them, because that has been a condition of Western support.

Even the battle front itself from the border to Donetsk does not have to be very strongly held by the Russians, as Ukrainians breaking through that part of the lines would have the Russian border in front of them, where they would have to stop and the Russians wouldn’t. Any Ukrainian attack there would probably be a feint.

Then, from Zaporizhzhia to Crimea, the front line is along the Dnipro river, a formidable obstacle.

That just leaves a hundred miles of front, from Zaporizhzhia to Donetsk, where the Ukrainians are not blocked by the river and can drive for the Azov Sea. If they could get there they would have cut the Russian army in two, leaving the Crimean half totally dependent on the Kerch bridges for supply – bridges that would then be within range of some Ukrainian weapons. The war would be all but won.

But knowing where the Ukrainian attack has to come means that the Russians can build their Maginot Line – actually called the Surovikin Line – and the Ukrainians have to attack straight into it. Even Heinz Guderian might not have made much progress in this kind of situation.

Ukraine is hampered by the West's refusal to let its weapons breach Russian territory - Libkos/The Associated Press

But they can’t do any of these things because we won’t let them.They could mount a major attack across the almost undefended eastern border, or go around the eastern end of the battle front Guderian-style and roll the Russians up.

Both these options would force the Russians to pull troops and guns and construction effort out of the Surovikin Line. The Ukrainians could mount their real assault somewhere between Donetsk and Russia, ending their drive to the Azov on Russia’s coast. But they can’t do any of these things because we won’t let them.

First we forbid the Ukrainians from operating on Russian territory (or anyway, using our weapons to do so), which forces them to attack along a very limited front. Second, just to make sure they really have no chance of success, we dithered for months before agreeing to supply tanks and then took more months to actually send them, just to make sure that the Russians had lots of time to build the Surovikin Line.

Bluntly, there has been no Ukrainian military failure here. We in the West have forced them to fight with their hands tied behind their backs. The fact that they have made any progress at all is impressive.

Still, it remains a fact that the offensive is stopped for the winter. And it’s also pretty clear that if nothing changes, next year will be a lot like this year: grinding, attritional warfare.

“There will be no deep and beautiful breakthrough,” General Zaluzhny admitted last week. “We have reached the level of technology that puts us into a stalemate.”

Putin’s diminishing power

The prospect of stalemate, bizarrely, is seen by some in the West as a reason to reduce or cut off military support.

The thinking seems to be: well, we’ve spent a lot of money and given you lots of equipment with which our military men say they could have defeated the Russians and you’ve totally failed to defeat them, so we’re not going to give you any more. We’ll just let you run out of ammunition and die, and allow the same criminals who raped and murdered and tortured at Bucha and elsewhere, the same regime that steals children en masse and rounds people up for disappearance into the gulags, to take your country from you.

And we’ll just hope that we’re not next: that Russia won’t rest and rearm and then move in on somewhere else.

However, cutting support doesn’t make sense even if you don’t care at all about Ukraine. Even if we care only about ourselves and our own safety and want that safety at the lowest possible cost, we should keep sending aid.

As a few of the more perceptive commentators have pointed out, spending money on military aid for Ukraine is the most cost-effective defence spending anyone in Nato has ever done.

As long as he faces opposition in Ukraine, Putin’s threat to anyone else is shrinking - GAVRIIL GRIGOROV/AFP

The Ukrainians have destroyed the Russian army as it existed in 2022: its tough, volunteer “kontraktniki” contract soldiers are gone, as are all the better classes of conscripts and all of Russia’s best tanks, armoured vehicles and artillery pieces.

Putin is reduced to sending the dregs of his jails to war in ancient vehicles rescued from the scrapheap. Russian air and sea power, too, have been badly mauled – or else exposed as missing or ineffectual, in not a few cases. Russia’s entire ability to make war is tied up: even basic defence capabilities in places other than Ukraine have been degraded.

As long as the Ukrainians are fighting, Vladimir Putin’s threat to anyone else is hugely diminished. Westerners are spending small percentages of our normal defence budgets on Ukraine assistance in order to be more or less entirely safe from Russia. It would be madness to stop doing so, no matter how long the stalemate might last. As long as the Ukrainians are willing to fight, we should back them.

Sliding into a stalemate

Even still, a stalemate is undesirable. Ukraine will run out of men before Russia does and the more people of working age it loses, the harder it will be to rebuild its society and economy after the war.

The risk is there that large numbers of refugees taken in across Europe may not want to return home and this problem worsens with every Ukrainian killed or maimed and every Russian bomb, missile or shell fired. We need Ukraine back as a strong ally and the breadbasket of Europe as it was, not as a shattered, depopulated wasteland.

Given that the stalemate is our fault, we Westerners should end it. This is the more so as it would involve no difficult or dangerous action by us.

The clue is in General Zaluzhny’s remark: Ukraine has reached a level of technology that puts it in a stalemate. We have sent tanks, artillery, and armoured vehicles. We have sent missiles of certain types, but only Britain and France have dared to send long-range precision strike missiles – and we only had the Storm Shadow / SCALP to send.

The Storm Shadow / SCALP (“Système de Croisière Autonome à Longue Portée”) is a somewhat modified version of a French 1980s-vintage runway-buster weapon called APACHE. We in Britain like to claim it was jointly developed with France, but it is really just an APACHE with a British bunker-busting warhead that doesn’t work terribly well (as colleagues of mine in the bomb-disposal world discovered during the Iraq invasion).

As one would expect with such an old weapon, it’s not all that effective. In particular, being a subsonic cruise weapon – in other words, a small robotic jet aeroplane – it is relatively easy to detect and shoot down. Its makers nowadays like to claim that it has some kind of “stealth” attributes but this appears to be no more than marketing fluff.

The Ukrainians have managed to make Storm Shadow strikes on the Russian naval base at Sevastopol in Crimea, but they had to carry out various special-forces raids and other attacks beforehand in order to take down Russian air defences so that the missiles could fly in.

They have not managed to put the Crimean airbase at Saky out of commission and the Storm Shadow is simply not delivering the effect it theoretically should: that of putting all Russian-occupied Ukraine under Zelensky’s guns.

Despite the fact that the Kerch bridges ought to be well within the Storm Shadow’s reach, they are still standing – allowing supplies and munitions to flow into Crimea and the “land bridge” of Russian-held territory south of the Surovikin Line. It’s generally thought that the Storm Shadow’s British bunker-buster warhead, backronymed to be dubbed BROACH (“Bomb, Royal Ordnance, Augmented Charge”), can’t do bridges.

In any event, by this point we can say that Storm Shadow isn’t going to break the stalemate for Ukraine. Nor is the obsolete, short-ranged M39 version of the US Army Tactical Missile System (ATACMS), which Joe Biden has grudgingly and belatedly sent.

This is a supersonic ballistic missile, which is much harder to shoot down. But the M39 cannot reach Saky, Sevastopol or Kerch and its cluster warhead cannot do bridges or hardened targets.

Breaking the deadlock

What the Ukrainians need is one of the proper, full fat versions of ATACMS that followed the original M39: one with a unitary warhead rather than cluster submunitions, meaning that it can take out concrete structures.

Joe Biden is afraid to send real ATACMS because he thinks the Ukrainians would use it to take out the Kerch bridges, once and for all. He’s afraid that this might lead Putin to nuclear escalation. Olaf Scholz is refusing to send Germany’s Taurus missile – much like Storm Shadow, but with a better warhead that can do bridges – for the same reason.

Appeasement is in the air. Biden, Scholz and their school of thought do not want to give the appearance of supplying a war-changing weapon because they are afraid it would make Vladimir Putin angry.

The arrival of American missiles helped the Ukrainians drive back Russian forces during the 2022 counter-offensive - Anadolu Agency

But this timid attitude isn’t terribly logical. War-changing weapons have been sent before.

The counter-offensive of 2022, in which the Russians were driven back across the southern Dnipro river, was a huge success because of the arrival of another American missile, the Guided Multiple Launch Rocket System (GMLRS), mostly fired from the Himars vehicle. This can make precision strikes to ranges of more than 70km, much further than anything the Ukrainians had before. The Russians had not realised that the Ukrainians (or friends of theirs) had a way to locate all their field headquarters.

Multiple headquarters and other important targets like ammo dumps were duly taken out by volleys of GMLRS. The Russian army west of the Dnipro fell into disarray and the Ukrainians pushed it back across the river. A US-supplied weapon had changed the war.

Similarly, it was argued that sending Western tanks would provoke Putin. It took Britain’s offer of Challengers to show Biden and Scholz that sending tanks was safe.

Again, it was widely thought that supplying Storm Shadow missiles would lead to the Kerch bridges falling and Russian headquarters across the theatre being pummelled as the weapon’s limitations were not widely known. Yet the sending of Storm Shadow did not provoke Putin to anything more than bluster.

We should stop listening to the argument that the Ukrainians are fighting wrongly. Yes, Western tank armies have beaten Soviet-equipped ones easily in Iraq and Kuwait but this was not because they had Western tanks and Western officers: they won because they had total dominance of the air and thus could use precision strike weapons anywhere in theatre.

We should give the same capability to Ukraine, firstly in the form of proper full-fat ATACMS and then by making sure that the coming F-16 fighter jets are equipped with everything up to and including the Joint Air-to-Surface Standoff Munition (JASSM), which is everything that Storm Shadow is supposed to be and more.

It’s time to cease taking counsel of our fears and end the stalemate in Ukraine, by taking steps no more aggressive than those we have already taken.

The West needs to get this war wrapped up, so that we can look elsewhere.