Peter Chow: Game Theory

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Game theory studies interactive decision-making, where the outcome for each participant or “player” depends on the actions of all.

Game theory was John von Neumann’s use of mathematics to describe the structure of games and how humans play them, by studying chess and poker, and then going on to try to model more sophisticated games such as economics.

After WW ll, the Rand Corporation realized the potential of von Neumann’s ideas and hired him to work on developing Cold War strategy.

Game theory became a basic tool for generals to test their military moves by treating military strategies and geopolitics as complex games of chess.

A simple illustration of the application of game theory in warfare is the story of the “truel.”

A truel is similar to a duel, except that there are 3 participants instead of 2.

Mr, Black, Mr. Gray and Mr. White decide to resolve a conflict by truelling with pistols until only one of them survives.

Mr. Black is the worst shot, hitting his target only 1 time in 3.

Mr. Gray is a better shot, hitting his target 2 times out of 3.

Mr. White is the best shot, hitting his target every time.

To make things fairer, Mr. Black gets first shot, followed by Mr. Gray, if he is still alive.

The question is:  Where should Mr. Black aim his first shot?

Let us examine Mr. Black’s options.

First, he could aim at Mr. Gray.

If he is successful, Mr. Gray is dead,

Mr. White, who never misses, gets the next shot, and Mr. Black is a dead man.

A better option is for Mr. Black to aim at Mr. White.

If he is successful in killing Mr. White, the next shot will be from Mr. Gray, who hits his target only 2 times out of 3 and so there is a 1 in 3 chance that Mr. Black will survive to fire back at Mr. Gray and possibly win the truel.

It  would appear, at first, that Mr. Black should aim at Mr. White.

However, there is a third and even better option for Mr. Black.

Mr. Black should simply aim into the air.

Mr. Gray then will aim at Mr. White, because he is the more dangerous opponent.

If Mr. White survives, he will shoot Mr. Gray because he is more dangerous than Mr. Black.

By deliberately aiming into the air, Mr. Black is allowing Mr. Gray to kill Mr. White or vice versa.

Mr. Black will aim at whoever survives.

Mr. Black has manipulated the situation so that, instead of getting first shot in a truel, he has first shot in a duel.

In game theory, if you are a player in such a game, when choosing your course of action or “strategy” you must take into account the choices of others.

On November 30, 2018, the day Canada received an explosive U.S. extradition request for an emergency arrest of Huawei’s CFO, Meng Wanzhou, Canada was Mr. Black.

The arrest was to be carried out the very next morning, when her flight from Hong Kong landed in Vancouver.

The warning signs should have flashed red across the federal government that this request was certain to result in the seizure of Canadians in China.

More than anything, Canada needed to buy time.

Because taking two Canadian civilians hostage is exactly what China did the last time we detained a politically sensitive Chinese citizen on a U.S. warrant, in 2014.

Beijing’s political calculus was pretty clear.

Canadian hostages for each Chinese national arrest.

They knew it.  We knew it.  The Americans knew it.

An emergency provisional warrant request endangering Canadians demanded, above all, immediate diplomacy with the Americans, rather than the obsequious, timid and unquestioning processing it apparently received.

As outraged as all Canadians rightfully were at the conduct of President Xi Jinping’s government, Ottawa should have instantly objected to being strong-armed by our supposedly closest ally in a way that jeopardized our citizens’ safety.

Sermons about the rule of law distort the bigger picture that the public is entitled to know.

Canadians deserve to know that the Americans cooked up this foolhardy extradition application, solely for political and economic self-interest.

They should know the history of America’s failed strategy behind these indictments.

Our justice system, and the federal Crown were manipulated into participating in a show trial and shakedown, against our own national interests and risking our citizens.

Over the last decade, beginning under president Barack Obama, the DOJ, State and Defence departments became impatient with passively monitoring an increase of cyber-espionage, theft, and threat to critical infrastructure, particularly when conducted by proxies of countries such as China, Russia, Iran, Israel, Pakistan and North Korea.

In May 2014, the DOJ launched a new strategy of publicly naming and charging state-sponsored individuals, even those beyond reach of U.S. arrest.

Such was the infamous “Ugly Gorilla” case, in which the U.S. indicted five members of China’s People’s Liberation Army (PLA) on charges of conspiracy, hacking, and espionage directed at six American companies in the U.S. nuclear power, metals and solar products industries.

Even though the alleged PLA hackers were beyond the reach of authorities, just laying the charge was considered incendiary.

Paul M. Tiao, a former senior counsellor on cybersecurity to FBI director Robert Mueller, said at the time, “This will have significant diplomatic implications and will affect our relationship with the Chinese government.”

As Canada was about to discover, it most certainly would.

As dramatic as his PLA indictment was, the DOJ wanted to inflict even greater pain on Beijing.

The DOJ’s calculation at the time, in this game, was that the Chinese government was a rational actor that would respond rationally to pressure.

“The next case, we need a body.”

That “next body” would come from Canada.

In June 2014, the U.S. requested Canadian authorities to arrest and extradite Su Bin, a Chinese national living in Richmond, B.C., on cyber-espionage charges.

Su had spent almost six years guiding a PLA hacking operation that broke into multiple defence contractor sites and stole massive files of critical U.S. military plans representing tens of billions of dollars in development cost.

His oversight enabled the PLA, among other things, to replicate Lockheed Martin fighter jets and Boeing military cargo planes.

Su Bin was arrested in British Columbia on a US extradition request alleging multiple counts of conspiracy, espionage, and theft of military secrets.

But Beijing didn’t play the rational actor in the game as the DOJ  expected.

They retaliated by arresting and imprisoning two Canadian missionaries, Julia and Kevin Garratt, for six months and two years, respectively.

In one move, China flipped Washington’s script, and turned the criminal trial into a hostage negotiation, and Washington blinked.

In terms of U.S. national security, criminal targets don’t come much higher value than Su Bin.

Yet he consented to extradition and pled guilty to a single count, for which he was fined $10,000 and sentenced to a mere 18 additional months in custody.

By contrast, the typical plea bargain sentencing for espionage is in the range of 25 years to life imprisonment.

This was an unimaginably sweet deal for Su, but perhaps sweetest of all for Kevin Garratt, who was released shortly after the sentencing in 2016.

While informed sources suggest that Su’s deal took the Chinese government by surprise, there are likely only two explanations for such a weak plea agreement:  either Su Bin became a cooperating witness, providing the U.S. government valuable Chinese military intelligence, or he was, in effect, traded for Garratt.

The only clue we have is that Kevin and Julia Garratt were both home, safe and sound, by 2016.

If Su Bin was singing like a canary, they wouldn’t have been.

At least during the Obama administration, Canada’s interests were observed and respected in extradition matters.

On the international stage, the Su Bin plea agreement represented a humiliation for the DOJ and its indictment strategy and a vindication of China’s strategy of ruthless retribution.

The message could not have been clearer to everyone involved that the Chinese saw that hostage-taking works, and for the U.S. and Canada to avoid at all costs a replay of this scenario in the future.

The DOJ’s indictment strategy came under fire for failing to deter Chinese theft of intellectual property.

If anything, China’s methods everywhere only became stronger and more intensidied.

Yet just two years later, on November 30, 2018, the DOJ would try the extradition route again, Trump-style, this time seeking the arrest of Meng Wanzhou, the CFO of a major multinational telecom company, and the daughter of its founder, Ren Zhengfei  –  Chinese corporate royalty

So the request for yet another attempt at an unsuccessful strategy in Canada was a moment for immediate emergency diplomatic intervention — for Canada to call on the U.S. State Department to suspend or postpone its request, in order for both countries to consider all options, given the dangers facing our citizens in China.

There’s no outward sign that anything of this nature happened.

In any event, Canada meekly granted unquestioning deference to the United States.

Canada walked straight into the buzzsaw.

While it’s easy to condemn China’s indefensible conduct both domestically and on the world stage, it’s vital that Canadians understand just how objectionable the U.S. conduct of this case has been, and how inadequately Ottawa met the moment.

Any extradition request that puts Canadians in harm’s way should be manifestly necessary, urgent, effective, and support a compelling national security interest.

Not one of those conditions applied here.

Unlike Su Bin, in criminal terms, Meng’s indictment was entirely gratuitous.

While she may be technically guilty, the US has traditionally only charged corporate entities and not individuals for Iran sanctions violations.

There was no defensible rationale supporting the endangerment of other civilians just to lay inconsequential charges.

The DOJ didn’t need the Meng charges at all.

They could easily have proceeded against their main target, Huawei, without her.

Nor was there any urgency to her arrest, and the DOJ appears to have misled Canadian authorities in claiming that there was.

The American warrant stated: “Unless Meng is provisionally arrested in Canada on Saturday, Dec. 1 … it will be extremely difficult, if not impossible, to secure her presence in the United States for prosecution…”

This was not true at all.

As a senior executive of a major multi-national corporation, Meng travelled routinely all over the world, and maintained two homes in Vancouver.

She had recently traveled to the U.K., Ireland, France, Belgium, Poland and Japan, and was slated to next visit Mexico, Costa Rica and Argentina.

All are countries with mutual U.S. extradition treaties.

Why pick Canada for this request, since we’d just gone through years of hostage imprisonment on another U.S. case?

And why the unseemly rush?

There was no hint of time pressure, unless Americans had another, undisclosed objective in mind in urgently seeking a Dec. 1 arrest.

Which as it turns out, they did.

Mere hours after Meng’s arrest in Vancouver on Dec. 1, 2018, presidents Trump and Xi sat down to dinner with their trade teams at the G20 in Buenos Aires.

What could be a better pressure tactic in trade talks than to orchestrate a surprise glorified perp walk on the global stage?

Meng’s arrest wasn’t important, necessary or urgent.

It was a show.

Emerging from the meeting, Trump and Xi announced a cease-fire in the impending trade war.

But days later, Trump twisted the knife into Xi by publicly offering to exchange Meng for trade concessions.

Trump was asked if he would be willing to intervene in Meng’s case if it would help secure a trade deal with China or aid U.S. security interests.

“If I think it’s good for the country, if I think it’s good for what will be certainly the largest trade deal ever made – which is a very important thing by the way – what’s good for national security – I would certainly intervene if I thought it was necessary,”  Trump said at the time.

Trump’s comments make it clear he hoped to use Meng as leverage in trade negotiations with China.

His words cast a pall over the proceedings.

Trump shit all over the game board.

Trump reduced Ms. Meng from a human being to chattel.

Trump’s words amounted to an abuse of process and put a stain on the extradition proceedings and the Canadian justice system.

The requesting state’s conduct subverted this process, destroyed the integrity of the process.

The requesting state had not acted in good faith.

This was an affront to what is fair, right, and just.

 

Further problematic comments were made by Canadian Prime Minister Trudeau in December 2019, when he said the U.S. should not sign a trade deal with China unless the case of Meng and two Canadians being held in China was settled.

Just as he did with Ukraine, or with Turkey (for whom he fired U.S. Attorney Preet Bharara as a favour), or firing FBI director James Comey, or having his henchman AG Bill Barr get Mike Flynn’s charges dropped and Roger Stone’s sentencing manipulated, or unilaterally cancelling hard-won sanctions against China’s ZTE, Trump’s relationship with his DOJ and foreign relations was a study in corruption and self-dealing.

The moment Trump bartered Meng for a trade deal, he turned Canada’s justice system into his personal hostage-keeper.

From that moment on, indeed from the moment the DOJ presented misleading evidence for its provisional extradition warrant, this proceeding was been stripped of legitimacy.

It was after this that China seized the two Michaels.

China was not angry with Canada’s rule of law, but rather, the reality that Canada arrested Meng to enforce the rule of American law.

China consents to Canada arresting Chinese citizens for violating Canadian laws, but China does not consent to Canada arresting Chinese citizens for violating American laws.

China also has extradition law —similar to Canada and the US—and China and Russia have an extradition treaty.

Now, hypothetically speaking, if an iconic Canadian female were transiting through China, and Russia called on China to help arrest this person to face potential justice in Russia, would it be considered politically or morally correct for China to arrest her and delivering her to Russia without any political involvement?

What if almost every single Canadian believed that Russia’s request was made in bad faith?

What if even the Chinese thought that Russia’s request was made in bad faith?

If China did arrest the Canadian, and even extradited her to Russia, how should Canada react?

Answers to these questions would vary, and certainly be controversial.

The point is clear: extradition requests have the potential to be malevolent and can lead to disaster.

Which is why it is pertinent for Canadian politicians and media to remove their veil of innocence and explore China’s perspective.

Neither Canada’s compliance with its extradition treaty, nor China’s passionate reactions to the arrest of one of its citizens, were new or surprising phenomena.

What was new was the fact that the US asked for the extradition of a high-profile Chinese citizen in the manner it did, without apparent concern for the potential damage that would befall its ally, Canada.

It was also new for the US to attempt to criminalize a corporate offence and arrest a CFO for it.

The Chinese Communist Party’s legitimacy is built on the promise of ending foreign humiliations (especially the impositions of foreign treaties).

A consideration of China’s “Century of Humiliation” helps to demonstrate this.

This is the term Chinese history books use to describe the period from 1839 to 1949, during which China was subject to imperialist interventions and humiliations, by Western powers and Japan.

You may or may not agree with China’s official historical narrative, but it remains a fact that entire generations of Chinese citizens were raised on it.

The “Century of Humiliation” narrative is deeply ingrained in the culture and legacy of the Chinese nation.

Just as the Canadian education system instills a value of human rights in its young citizens and encourages them to protect it, an education in China prepares its citizens to defend the sovereignty of their country.

The impasse is evident:  Canada’s Liberal government must maintain its commitment to human rights to retain legitimacy, and China’s Communist government must uphold its commitment to sovereignty, for the same reason.

The Canadian justice system, and the federal Crown were suckered into participating in a show trial and shakedown, against Canada’s own national interests and risking our citizens.

And Canadians were roped into a cartoonishly two-dimensional portrayal of the global dynamics at play.

China bad, Canada good.

How did we get suckered so badly?

How did we fail to protect our own citizens and courts from this reckless insult and abuse?

How can we continue to dignify it by cloaking it in the robes of our judicial system, and lip-sync “rule of law” bromides?

We weren’t courageously standing on principle.

We were tip-toeing around Donald Trump, while our own citizens were rotting in a Chinese prison.

Through this whole affair, there was a vocal school of thought—counting among its members former foreign affairs minister John Manley, who told CBC that Canada should have displayed “a little bit of creative incompetence” at Vancouver International Airport —that a sharper Canadian government would have found a way out of its current position, wedged between two warring giants.

Mr. Black should have fired his gun into the air.

Reference and resources;

https://plato.stanford.edu/entries/game-theory/

https://en.wikipedia.org/wiki/Game_theory

https://www.newyorker.com/news/daily-comment/how-china-views-the-arrest-of-huaweis-meng-wanzhou

https://www.theglobeandmail.com/world/article-how-meng-wanzhous-arrest-turned-the-huawei-cfo-into-a-symbol-for/

https://apnews.com/article/donald-trump-technology-global-trade-meng-wanzhou-hong-kong-5f37832e135c77e318e960a07434b02b

https://www.china-briefing.com/news/us-china-relations-in-the-biden-era-a-timeline/

3 COMMENTS

  1. Dear Mr. Chow. You assert “On November 30, 2018, the day Canada received an explosive U.S. extradition request for an emergency arrest of Huawei’s CFO, Meng Wanzhou, Canada was Mr. Black.”

    While it is true we must take into account the choices of others, we must even more take into account that game theories can be applied to a given situation only the conditions specific to the theory are met in the given situation.

    In von Neumann’s theory Mr. Black, Mr. Gray, and Mr. White are all independent, one of the other. Other than their respective shooting skills, they none of them are in alliance with either of the other two. This we know because they ” decide to resolve a conflict by truelling with pistols until only one of them survives.”

    Mr. “Canada” Black and Mr. “US” Gray are not even remotely going to consider resolving a dispute by shooting, nor are we even going to be neutral with each other “fire into the air.” Canada and the US frequently squabble with each other on matters of whether one of them is cheating on the NAFTA agreement (cf ‘softwood lumber dispute’ and others) but they doi in fact have such agreement; they are military allies in NATO (China is not a member with them in that or any other capacity.) We share the world’s longest undefended border with each other. Neither party has shot anything in the other’s direction going back at least as far as the War of 1812, and even that predates Canada’s becoming an independent nation – we were a British colony at the time. True, we haven’t shot anything at China either, but then China isn’t right next door but almost halfway around the world from us.

    Above all, we cooperate in extradition treaties, involving many countries besides China. That is how this whole affair got started Mr. Chow. What we ‘should have done’ is to remember the bottom line, which is that even though this president or that one might dick with us, the next one is probably going to remember our mutual history, which is what Biden is doing.

    At the end of the day, this is but a footnote in Canada US relations. Our bigger more powerful brother to the south owes us one over this, and Biden knows it and has already started to make amends.

    Meanwhile the world watched, and saw how China swung its weight around. Bad, bad idea for China. Lots of face – and more – lost.

    It is China which has shot, neither at Mr. Black, Mr Gray, or in the air, but itself in the foot. .

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