Gaining Competitive Advantage in the Gray Zone Response Options for Coercive Aggression Below the Threshold of Major War Lyle J. Morris, Michael J. Mazarr, Jeffrey W. Hornung, Stephanie Pezard, Anika Binnendijk, Marta Kepe C O R P O R A T I O N For more information on this publication, visit www.rand.org/t/RR2942 Library of Congress Cataloging-in-Publication Data is available for this publication. ISBN: 978-1-9774-0309-4 Published by the RAND Corporation, Santa Monica, Calif. © Copyright 2019 RAND Corporation R® is a registered trademark. Cover: Stringer China/Reuters. Limited Print and Electronic Distribution Rights This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited. Permission is given to duplicate this document for personal use only, as long as it is unaltered and complete. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial use. For information on reprint and linking permissions, please visit www.rand.org/pubs/permissions. The RAND Corporation is a research organization that develops solutions to public policy challenges to help make communities throughout the world safer and more secure, healthier and more prosperous. RAND is nonprofit, nonpartisan, and committed to the public interest. RAND’s publications do not necessarily reflect the opinions of its research clients and sponsors. Support RAND Make a tax-deductible charitable contribution at www.rand.org/giving/contribute www.rand.org Preface The United States is entering a period of intensifying strategic compe- tition with several rivals, most notably Russia and China. U.S. officials expect this competition to be played out primarily below the threshold of armed conflict, in what is sometimes termed the gray zone between peace and war. This report offers the results of a RAND Corporation study examining how the United States might respond to Russian and Chinese efforts to seek strategic advantage through coercive actions. The study sought to build on extensive work to define and understand the gray zone challenge by focusing especially on what to do about it—laying out a strategic concept for the issue and a menu of response options. This report defines the principles on which a theory of success should rest, outlines a four-part concept for responding to gray zone aggression, and identifies and evaluates 35 types of responses that can be used as options for U.S. policy in dealing with gray zone threats. This research was sponsored by the Office of the Deputy Assis- tant Secretary of Defense for Force Development and Strategy in the Office of the Secretary of Defense. It was conducted within the Inter- national Security and Defense Policy Center of the RAND National Defense Research Institute, a federally funded research and develop- ment center sponsored by the Office of the Secretary of Defense, the Joint Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community. For more information on the RAND International Security and Defense Policy Center, see www.rand.org/nsrd/ndri/centers/isdp or contact the director (contact information is provided on the webpage). iii Contents Preface ............................................................................. iii Figures and Tables ...............................................................vii Summary .......................................................................... ix Acknowledgments .............................................................. xxi Abbreviations .................................................................. xxiii CHAPTER ONE The Gray Zone Challenge ....................................................... 1 Nature and Methodology of the Study .......................................... 5 Defining the Gray Zone........................................................... 7 CHAPTER TWO The Character of the Gray Zone Challenge from China and Russia .........................................................................13 Russia ...............................................................................14 China .............................................................................. 27 CHAPTER THREE Findings from Field Research on Gray Zone Challenges in Europe ....................................................................... 43 France .............................................................................. 44 Germany ...........................................................................53 Czech Republic ....................................................................62 Poland ..............................................................................73 Georgia ............................................................................ 80 Overall Findings: Field Research in Europe ................................. 88 v vi Gaining Competitive Advantage in the Gray Zone: Response Options CHAPTER FOUR Findings from Field Research on Gray Zone Challenges in Asia .......91 Japan ............................................................................... 92 Vietnam .......................................................................... 107 The Philippines .................................................................. 112 Indonesia ......................................................................... 115 Singapore ......................................................................... 119 Australia .......................................................................... 122 Overall Findings: Field Research in East and Southeast Asia ............. 126 CHAPTER FIVE Responding to the Gray Zone Challenge: A Strategic Concept ....... 129 Principles Governing a Strategy ............................................... 130 Working Toward a Strategy: A Theory of Success .......................... 133 A Concept for Gaining Strategic Advantage in the Gray Zone ........... 136 Organizing the Response: Institutional Reforms ........................... 152 CHAPTER SIX A Menu of Options for Responding to Gray Zone Threats ............ 155 Military Response Options .................................................... 157 Diplomatic Response Options ................................................. 166 Informational Response Options .............................................. 172 Economic Response Options .................................................. 177 Illustrative Cases: Using Response Options to Promote U.S. Interests ... 180 Conclusion ....................................................................... 187 References ....................................................................... 189 Figures and Tables Figures S.1. Overarching Strategic Concept for Responding to Gray Zone Threats ................................................ xvii 2.1. Russian Supplies as a Percentage of Total Gas Imports in Europe ............................................................ 23 2.2. Areas of Gray Zone Competition Between China and Regional States .......................................................29 4.1. Chinese Government Vessels Near the Senkaku Islands ........95 4.2. Map of the Senkaku and Surrounding Islands .................. 99 5.1. Overarching Strategic Concept for Responding to Gray Zone Threats ................................................ 138 Tables 5.1. Levels of Gray Zone Activities ................................... 137 6.1. Military Response Options ....................................... 158 6.2. Diplomatic Response Options ................................... 167 6.3. Informational Response Options ................................ 173 6.4. Economic Response Options ..................................... 178 6.5. Response Package for Chinese Paramilitary Aggression Against the Senkaku Islands ..................................... 182 6.6. Response Package for Chinese Operations to Reclaim Scarborough Shoal ................................................. 184 6.7. Response Package for Russian Cyber and Disinformation Attacks Seeking to Undermine the Polish Government ...... 186 vii Summary The 2017 U.S. National Security Strategy and the publicly released summary of the 2018 National Defense Strategy agree on one fun- damental theme: The United States is entering a period of intensify- ing strategic competition with several rivals, most notably Russia and China. Numerous statements from senior U.S. defense officials make clear that they expect this competition to be played out primarily below the threshold of major war—in the spectrum of competition that has become known as the gray zone. Although such tactics as psychological warfare, subversion of political systems, and covert paramilitary and information operations are not new phenomena in international conflict and competition, our analysis shows that some of the tactics employed by Russia and China are comparatively new in form and effect. Moreover, the methods of gray zone coercion vary significantly between Russia and China and require differentiation of scope of threat posed to the United States, as well as types of potential responses. Both problems represent a strategic threat to U.S. and allied interests, especially as techniques and technol- ogies evolve over time. The United States and its allies, we find, have yet to come to terms with the challenge of the threat,