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US Deploys Three Carrier Battle Groups To Face-Off Against Chinese Aircraft Carrier In South China Sea

Last week, we reported that satellite images had captured China’s only aircraft carrier in deployment, the Liaoning, flanked by 40 other warships and submarines, conducting unprecedented live-fire drills in the South China Sea. This massive Chinese naval exercise was observed for the first time, with China watchers pointing out that such a forceful display of deterrence was highly unusual for the People’s Liberation Army Navy. Perhaps in light of recent events, it was merely a warning.

Li Jie, a Beijing-based naval specialist, said, “it was the first time the Liaoning had taken part in live-fire drills. This will test the Liaoning’s real combat strength as well as joint-operations skills between the aircraft carrier and warships from other fleets.”

“China wants to show the outside world its determination to defend the fruits of its economic reforms over the past 40 years,” Beijing-based military analyst Zhou Chenming said.“Like the US, China’s military might is one of the government’s political tools to protect the country’s national interests.”

Now, according to the South China Morning Post, as Beijing flexes its naval war muscle, the US is preparing for its own “show of force” naval drill in the Asia-Pacific region, and in close proximity to the Liaoning. The Pentagon is reportedly sending an unprecedented three aircraft carrier battle groups to the region, with the USS Theodore Roosevelt flotilla arriving in Singapore sometime early next week.

Separately, the USS Carl Vinson and its fleet have just paid a first visit to the Vietnamese coastal city of Da Nang since the end of the Vietnam war, a move Chinese military experts said was aimed at countering Beijing’s influence in the region.

…click on the above link to read the rest of the article…

China Says US Warship Sailing Near Spratly Islands Is “Severe Provocation”

After carrying out no fewer than four “Freedom of Navigation” operations last year and one in January, The US sent a Navy Destroyer to sail within 12 nautical miles of the Spratly Islands – a move that China condemned as a “severe provocation” just as the two countries are on the verge of an all-out trade war.

The operation was the US’s latest attempt to push back against an expanding Chinese military presence in the Pacific that at least one US military leader has characterized as an ominous national security threat that could lead to all-out war. Admiral Harry Harris said last month that the US should be “prepared for war” with China due to its increasingly aggressive posture, which he said was a veiled attempt by Beijing to undermine the national world order.

The officials, speaking on condition of anonymity, said the US destroyer Mustin traveled close to Mischief Reef in the Spratly Islands and “carried out maneuvering operations.” The Spratly Islands, located in the South China Sea, are the epicenter of a territorial dispute between China and several of its neighbors, per Reuters. Twelve nautical miles is the internationally recognized territorial limit.

When asked about the operation, the U.S. military said its activities are carried out under international law and American forces operate in the region on a daily bases.

“We conduct routine and regular freedom of navigation operations, as we have done in the past and will continue to do in the future,” said Lieutenant Commander Nicole Schwegman, a spokeswoman for US Pacific Fleet.

China’s Defense Ministry said two Chinese naval ships had been sent to identify the US ship and warn it to leave the area immediately.

China opposes “illegal and provocative” operations, and denies US allegations that it’s cracking down on freedom of movement in the region.

A spokesperson for China’s Defense Ministry said “the provocative behavior by the US side will only cause the Chinese military to further strengthen building up defense abilities in all areas.”

…click on the above link to read the rest of the article…

 

According to the Doomsday Clock, the End Is Near

According to the Doomsday Clock, the End Is Near

The hypothetical “Doomsday Clock” is closer to midnight – the hour of doom – than it has been since 1953, the year that the US and the USSR both tested hydrogen bombs at the beginning of the global nuclear arms race.

The Bulletin of the Atomic Scientists (BAS) announced on Tuesday that the time on the clock was now two minutes to midnight. The BAS is a group of science and policy experts who assess human advancement…and risk…say that we’re getting alarmingly close to the Zero Hour. Their statement said:

To: Leaders and citizens of the worldRe: Two minutes to midnightDate: January 25, 2018

In 2017, world leaders failed to respond effectively to the looming threats of nuclear war and climate change, making the world security situation more dangerous than it was a year ago—and as dangerous as it has been since World War II.

The greatest risks last year arose in the nuclear realm. North Korea’s nuclear weapons program made remarkable progress in 2017, increasing risks to North Korea itself, other countries in the region, and the United States.Hyperbolic rhetoric and provocative actions by both sides have increased the possibility of nuclear war by accident or miscalculation.

But the dangers brewing on the Korean Peninsula were not the only nuclear risks evident in 2017: The United States and Russia remained at odds, continuing military exercises along the borders of NATO, undermining the Intermediate-Range Nuclear Forces Treaty (INF), upgrading their nuclear arsenals, and eschewing arms control negotiations.

In the Asia-Pacific region, tensions over the South China Sea have increased, with relations between the United States and China insufficient to re-establish a stable security situation.

In South Asia, Pakistan and India have continued to build ever-larger arsenals of nuclear weapons.

And in the Middle East, uncertainty about continued US support for the landmark Iranian nuclear deal adds to a bleak overall picture.

…click on the above link to read the rest of the article…

Beijing Outraged As US Warship Sails Within 12 Miles Of Contested Island

The new year is barely three weeks old and already the US Navy’s “freedom of navigation” operations are eliciting furious threats of retaliation from the Chinese military.

Since President Donald Trump took office one year ago, the Navy and Air Force have increasingly sought to test the Chinese military response in the Pacific by sailing or flying within a certain perimeter – usually 12 miles – of one of China’s disputed territorial holdings in the South China Sea, according to RT.

In the latest clash, the USS Hopper missile destroyer sailed within 12 nautical miles of Huangyan Dao, a tiny island claimed by China, on Jan. 17.

As is common during US “Freeops,” the US destroyer didn’t solicit Beijing’s permission for entering the waters and was subsequently intercepted by the Chinese Navy, with China’s Foreign Ministry accusing the US of violating “sovereignty and security interests” as well as posing a “grave threat” to its forces stationed in the area.

“China is strongly dissatisfied with that and will take necessary measures to firmly safeguard its sovereignty,” Foreign Ministry spokesperson Lu Kang said in a statement on Saturday. He also warned US forces against further “provocative moves” for the sake of“China-US relations and regional peace and stability.”

The spokesman added that China has “indisputable” control over the territory, which is also claimed by Taiwan (itself the subject of a sovereignty dispute with the mainland) and the Philippines.

China’s Defense ministry echoed Lu’s tone in a separate statement on Saturday, stressing that the military will step up vigilance against air and sea patrols to defend national and regional peace and stability.

The US and Chinese militaries have had frequent standoffs in the South China Sea. Despite Washington having no territorial claims in the area – unlike China, Vietnam, the Philippines, Indonesia, Malaysia, and Brunei – it has always stressed the necessity for freedom of navigation in the area and opposed China’s claims.

…click on the above link to read the rest of the article…

China Accuses US Warship Of “Trespassing” In Disputed Waters, Warns It To “Leave Immediately”

China Accuses US Warship Of “Trespassing” In Disputed Waters, Warns It To “Leave Immediately”

In the first unofficial challenge to Beijing over China’s domination of disputed waters in the South China Sea since President Trump took office, a US navy warship sailed within 12 nautical miles of an artificial island built up by China in the South China Sea according to the WSJ.  The navy vessel, the USS Dewey, traveled close to the Mischief Reef in the Spratly Islands, among a string of islets, reefs and shoals over which China has territorial disputes with its neighbors.


The USS Dewey

The “freedom of navigation” operation which in the past has infuriated Beijing, comes as Trump is seeking Beijing’s cooperation to rein in ally North Korea’s nuclear and missile programs. Territorial waters are generally defined by U.N. convention as extending at most 12 nautical miles from a state’s coastline. China’s claims to the South China Sea, which sees about $5 trillion in ship-borne trade pass every year, are challenged by Brunei, Malaysia, the Philippines, and Vietnam, as well as Taiwan.


Mischief Reef in the disputed Spratly Islands in the South China Sea

The U.S. patrol, the first of its kind since October, marks the latest attempt to counter what Washington sees as Beijing’s efforts to limit freedom of navigation in the strategic waters. One official said it was the first operation near a land feature which was included in a ruling last year against China by an international arbitration court in The Hague. The court invalidated China’s claim to sovereignty over large swathes of the South China Sea.

 

…click on the above link to read the rest of the article…

Australia more vulnerable than ever to fuel import disruptions

Australia more vulnerable than ever to fuel import disruptions

This is because after the closure of 3 oil refineries in Sydney and Brisbane fuel imports have skyrocketed and these additional imports come from and pass through an area where there are high tensions now: the South China Sea and Korea.

Vinson10

Fig 1: USS Carl Vinson

10/4/2017 A US Navy strike group including a nuclear-powered aircraft carrier has moved into a strategic position in the Western Pacific Ocean, just off the Korean peninsula.
http://www.abc.net.au/pm/content/2016/s4651328.htm

Apr 13 2017 U.S. May Launch Strike If North Korea Reaches For Nuclear Trigger
http://www.nbcnews.com/news/world/u-s-may-launch-strike-if-north-korea-reaches-nuclear-n746366

Asian oil supply context

This comes at a time when Asian oil production is on an oil production plateau for 5 years now while oil demand seems to increase forever.

Asia_oil_production_consumption_2005-2015_fill_in-2035

Fig 2: Asia’s oil consumption growth is unsustainable

Asian_refinery_capacities_1965-2015

Fig 3: Stellar growth in Asian refinery capacities

Note that growth in the last 15 years has come only from 3 countries: China, India and South Korea. Singapore’s refining capacity and that of Indonesia, Malaysia, Thailand and Taiwan is basically flat. Japan’s capacity is in decline.

Most of Asia’s oil imports come from the Middle East as this tanker map shows:

Tanker_traffic_ME-Asia_Apr2017
Fig 4: Tanker traffic between the Middle East and Asia
https://www.marinetraffic.com/en/ais/home/centerx:119/centery:-2/zoom:3

Australia net oil importer

Australia_oil_production_vs_consumption_1965-2015Fig 5: Australian oil balance

Australia_crude_condensate_production_1990-Dec2017

Fig 6: Australian oil production decline

Australian crude oil imports

Australian_crude_oil_imports_by_country_2004_Jan2017

Fig 7: Australian crude oil imports

Fig 7 shows:

  • Crude imports from neighbouring Asian countries peaked 12/2007
  • Imports from Vietnam declined dramatically to 2% of imports because Vietnam’s crude production peaked in 2004-05
  • UAE is the only long-term supplier from Middle East (19% of imports)
  • Decline from Asia was compensated by imports from West Africa – good job
  • Crude imports declined from 550 kb/d to around 350 kb/d as Australian refineries closed
  • Before the refinery closures the diversity of crude imports was quite high and – given Australia’s remoteness on the global oil trade map – these refineries did a good job in sourcing crude oil from far away like Russia, Azerbaijan, the Mediterranean and West Africa

…click on the above link to read the rest of the article…

China Opposes “Threatening And Damaging” US Carrier Patrols In South China Sea

China Opposes “Threatening And Damaging” US Carrier Patrols In South China Sea

One day after the US announced it had dispatched the USS Carl Vinson aircraft carrier group in the contested South Chine Sea on “routine” patrols (through a post on the aircraft carrier’s Facebook page), China responded and predictably, it wasn’t thrilled. In a statement by the foreign ministry, Beijing said on Tuesday that it opposed action by other countries “under the pretext of freedom of navigation” that could “threaten and damage” its sovereignty, a clear reference to US patrols in territory that China considers its own.

“China always respects the freedom of navigation and overflight all countries enjoy under international law,” Chinese foreign ministry spokesman Geng Shuang said at a daily news briefing. “But we are consistently opposed to relevant countries threatening and damaging the sovereignty and security of littoral countries under the flag of freedom of navigation and overflight,” Geng said in China’s first official comment on the latest U.S. patrol since it began.

Without explicitly naming the US, Geng said that “we hope relevant countries can do more to safeguard regional peace and stability.”

For the time being, the U.S. carrier strike group has not referred to its recent operations in the South China Sea as “freedom of navigation” patrols, although it will likely have to justify its presence in the region in the coming days, especially if confronted with Chinese naval forces.  As Reuters adds, U.S. ships last year conducted several such patrols to counter any efforts to limit freedom of navigation in the strategic waters.

Meanwhile, China just wrapped up its own naval exercises in the South China Sea on Friday. War games involving its own aircraft carrier have unnerved neighbors with which it has long-running territorial disputes. Beijing most recently warned Washington against challenging its sovereignty in the South China Sea last week.

…click on the above link to read the rest of the article…

Only ‘large-scale war’ would allow US to block Beijing from S. China Sea islands, state media warns

Only ‘large-scale war’ would allow US to block Beijing from S. China Sea islands, state media warns

Only 'large-scale war' would allow US to block Beijing from S. China Sea islands, state media warns
Chinese state media has warned that the US would have to launch a “large-scale war” to prevent Beijing from accessing islands it has built in the South China Sea. It comes after secretary of state nominee Rex Tillerson said such access should be restricted.

“Unless Washington plans to wage a large-scale war in the South China Sea, any other approaches to prevent Chinese access to the islands will be foolish,” the state-sanctioned Global Times newspaper wrote on its English-language website.

It went on to stress that the US “has no absolute power to dominate the South China Sea,” warning that Tillerson “had better bone up on nuclear power strategies if he wants to force a big nuclear power to withdraw from its own territories.”

The article also said that China has so far “shown restraint” when Trump’s cabinet picks have expressed “radical views,” as the president-elect has not yet been sworn in. However, it stressed that the US “should not be misled into thinking that Beijing will be fearful of their threats.”

“If Trump’s diplomatic team shapes future Sino-US ties as it is doing now, the two sides had better prepare for a military clash,” the article reads, adding that Tillerson’s statements are “far from professional.”

The former ExxonMobil CEO’s comments were made during his Senate confirmation hearing on Wednesday, in which he said that China’s activities in the disputed South China Sea were “extremely worrisome.”

“Building islands and then putting military assets on those islands is akin to Russia’s taking of Crimea. It’s taking of territory that others lay claim to,” Tillerson said, referring to the reunification of Crimea and Russia, which took place following a referendum in 2014.

…click on the above link to read the rest of the article…

Four Flash Points That Could Trigger World War III: “We Have Not Been This Close To Nuclear War In A Long Time”

Four Flash Points That Could Trigger World War III: “We Have Not Been This Close To Nuclear War In A Long Time”

nukeattack1

As can readily be seen by the current events, the world has not been this close to a nuclear war and World War 3 in a long time.  There are four major flashpoints right now that could easily escalate and ignite a powder keg, transforming from a regional conflict or conflicts into a world war: Syria, the South China Sea, Ukraine, and North and South Korea.  The “reconstruction” of a Cold War-type faceoff, initiated by the U.S. and NATO building up forces in Eastern Europe and facing off against Russia.

A nuclear war will be initiated by an EMP (Electromagnetic Pulse) detonation over the continental U.S., followed by a nuclear exchange and a war with conventional forces.

As of this writing, the U.S. has “mistakenly” bombed Syrian governmental military forces, causing at least 60 deaths with more than 100 others wounded.  The Russian government is sizzling, especially with the response by (of all people) Samantha Power, U.S. Ambassador to the UN had this to say to the media, as reported by CNN:

“We are investigating the incident.  If we determine that we did indeed strike Syrian military personnel, that was not our intention. And we of course regret the loss of life.”

True humanitarians, all, and especially she, the wife of Cass Sunstein and a true Marxist disciple of the Weather Underground (along with Cass) regrets the loss of life.  The airstrikes occurred just two days before the U.S. and Russia were supposed to have joint airstrikes against ISIS.  As ISIS is a creation of the U.S. State Department and the administration, it seems the U.S. decided to strike their true intended target…the Assad government forces…as it wants to topple Syria, and escalate things with the Russians.

…click on the above link to read the rest of the article…

China Threatens To Leave UN Sea Convention If Court Invalidates Maritime Claims

China Threatens To Leave UN Sea Convention If Court Invalidates Maritime Claims

As an arbitration court in The Hague gets ready to make a decision regarding an ongoing territorial dispute between China and the Philippines, China has reportedly told some other Asian countries that it may leave the UN Convention on the Law of the Sea if it disagrees with the ruling.

The Philippines has been the most vocal critic of China’s activities in the South China Sea, and filed a case with the Permanent Court of Arbitration in The Hague in 2013 in an attempt to invalidate China’s “nine-dash line”, China’s version of what territory it owns.

Here is a map showing different maritime claims each country has, many overlap each other.

Zoomed version

China believes the worst outcome would be for the tribunal to rule that Beijing’s claim over the sea has no international legal grounds, and invalidates its line.

From Kyodo News

China thinks the worst outcome would be for the tribunal, constituted by the 1982 convention, or UNCLOS, to rule that Beijing’s claim of “historic rights” over the sea has no international legal grounds and invalidate its expansive line, according to the sources.

China has told some diplomats of the Association of Southeast Asian Nations that it does not rule out withdrawing from the convention, often referred to as the constitution of the oceans, if that happens, the sources said.

Many experts believe that the ruling will not be favorable for China, which also has territorial disputes in the South China Sea with three other members of the 10-member association, namely Vietnam, Malaysia and Brunei.

…click on the above link to read the rest of the article…

Xi warns Obama against threatening China’s sovereignty & national interests

Xi warns Obama against threatening China’s sovereignty & national interests

US President Barack Obama(not shown) and China's President Xi Jinping take part in a bilateral meeting on the sidelines of the Nuclear Security Summit at the Walter E. Washington Convention Center on March 31, 2016 in Washington, DC. © Mandel Ngan
China has warned the US that it will protect its sovereignty in the disputed waters of the South China Sea and rejects attempts to use international laws and freedom of navigation as a pretext to undermine its national security interests.

In a meeting with US President Barack Obama at the fourth Nuclear Security Summit in Washington DC, his Chinese counterpart Xi Jinping said that while he believes in the peaceful resolution of conflicts through direct talks, China will take steps to protect its national interests and sovereignty.

“China will firmly safeguard the sovereignty and related rights in the South China Sea,” Xi said in a meeting, according to Xinhua news.

While acknowledging that Beijing “respects and safeguards the freedom of navigation and overflight other countries are entitled to under international law,” Xi stressed that China will “not accept any freedom of navigation as an excuse to undermine China’s sovereignty and national security interests.”

The US has been taking steps to counter China’s growing influence in the region and has increased its regular naval patrols in the South China Sea as part of “freedom of navigation” drills near the disputed islands chain.

Washington has also increased air surveillance in addition to stepping up US-led war games with its Asian allies. In response China deployed its surface-to-air missile systems on Woody Island earlier this year, in addition to military aircraft.

…click on the above link to read the rest of the article…

Japan’s Finance Minister Accidentally Reveals How It All Ends: “War”

Japan’s Finance Minister Accidentally Reveals How It All Ends: “War”

While this all started with a currency “war,” it seems – according to a stunningly candid transcript of Japan’s finance minister’s conversation with none other than Paul Krugman – that the real endgame here is actual war. Aso remarked that “a similar [deflationary mindset] had occurred in the US in the 1930s. What solved the question? War! Because World War II had occurred during the 1940s and that became the solution for the United States. [We] have to switch [the Japanese] mindset… we are looking for the trigger.

Japanese Prime Minister Shinzo Abe has been the most hawkishly militaristic PM of a generation, shifting from the passive society to an aggressor, beginning around 2013. This has only been emboldened by rising nationalism and escalatuing tensions in the South China Sea.

We note this by way of background as just-released transcripts of a conversation between Japanese finance minister Aso and Uber-Keynesian Paul Krugman reveal perhaps the reality that Japan faces as its economic and social structure collapses…

(Minister of Finance Aso)

During the 1930’s, I remember that in the United States likewise there was a situation of deflation. And the New Deal policies have been introduced by then President Roosevelt. As a result, it worked out very nicely, but the largest issue associated with it is that for a long period of time entrepreneurs and managers of companies did not go to make a capital investment by receiving the loan. It had continued up until the late 1930’s and that is the situation occurring in Japan too. The record high earnings have been generated by the Japanese companies but they would not spend in the capital investment.

…click on the above link to read the rest of the article…

Peak oil in the South China Sea (part 1)

Peak oil in the South China Sea (part 1)

The recent deployment of missile launchers and jet fighters on Woody Island of the Paracel islands have put the spotlight on the South China Sea (SCS).

Fig 1: The 200 mile Economic Exclusion Zone claimed by China around Woody Island and the overlapping 108 nm range of the HQ-9 SAM system. Image via ISI. [Image Sat International]   http://defense-update.com/20160218_woody_island_hq9.html

In this post, we focus on oil production around the SCS.

 Oil production (crude and NGLs)

Fig 2: Black triangles denote country peaks, the red triangle shows the SCS peak

Oil production in 2015 was down around 14% from the peak in 2001.

Fig 3: China dominates all of South China Sea’s adjoining countries

Fig 4: China’s monthly production 2013-2015

Although production in 2015 was higher than in 2013 and 2014 it seems that production in the 4thquarter will not be much different from the previous years. A 100 kb/d difference is just 1% of China’s 2015 demand of 11.2 mb/d (IEA January Oil Market Report, p 57)

Chart of the Day: No turning back for China’s oil production

21/11/2015
China’s domestic oil production likely peaked this year and is about to enter a long-term structural decline, according to Nomura.
http://www.scmp.com/business/commodities/article/1881188/chart-day-no-turning-back-chinas-oil-production

Fig 5: Production of 3 oil majors in China

…click on the above link to read the rest of the article…

Missiles Just the Latest Chapter in the South China Sea Saga

Missiles Just the Latest Chapter in the South China Sea Saga

 

US Navy, public domain 

With the recent placement of surface-­to-­air missiles (SAMs) on Woody Island, a subset of the Paracel Islands, China has taken a major step toward militarization of the South China Sea. The action was taken during the recent US-­ASEAN “Sunnylands” Summit, where economics, security, and international law were all discussed. In the context of recent and historical events however, the action, though not entirely justified, could not have come as a surprise to any of the parties involved and forms only the latest chapter in the ongoing book of the South China Sea.

FONOPS and the First Island Chain 

Recently, the U.S. initiated “freedom of navigation” (FONOPS) maneuvers in the South China Sea, designed to ensure the free flow of maritime commerce between the various claimants in the South China Sea disputes. More importantly, the FONOPS actions are designed to ensure military freedom of maneuver for the U.S. Navy. Strategically, the U.S. cannot allow the rise of a peer competitor and definitely not in Asia, the swiftly emerging locus of world economic activity and geopolitical consequence, hence its “rebalance” strategy. Tactically, the U.S. also cannot allow any doubt to emerge regarding its willingness to defend its regional allies in a conflict scenario. To negate this doubt, it must show its resolve to sail anywhere necessary in regional waters to affect this end, citing international law.

From the Chinese viewpoint, the FONOPS are highly hypocritical. This is because while the U.S. purports to support freedom of navigation for itself and its allies within the First Island Chain, it simultaneously seeks to deny that freedom to China outside the chain. This chain stretches from southern Japan to Taiwan to the Philippines and on to the South China Sea.

…click on the above link to read the rest of the article…

Defense Industry Revenue Forecast Gushes Over Global Turmoil

Defense Industry Revenue Forecast Gushes Over Global Turmoil

The global aerospace and defense industry is out of its doldrums. According to a new report by the accounting firm Deloitte, “the resurgence of global security threats” promises a lucrative “rebound” in defense spending.

The report alerts investors that “revenue growth” is “expected to take a positive turn” due to the terrorism and war in the Middle East and the tensions in Eastern Europe and the South China Sea.

Many analysts predicted declining revenue for the weapons industry as the U.S. scaled down military involvement in Iraq and Afghanistan. After all, as this chart from the Deloitte report shows, no other country even comes close to spending as much as the U.S. does.

But now governments around the world have moved swiftly to hike defense budgets to “combat terrorism and address sovereign security matters.”

The Deloitte report is almost giddy:

2015 was a pivotal year that saw heightened tensions between China, its neighbors and the US over “island building” in the South and East China Seas, and the related claims of sovereign ocean territory rights by China. In addition, Russia and the Ukraine are at odds related to Russia’s takeover of Crimea and their military actions in Eastern Ukraine. North Korea continues to threaten its neighbors with its nuclear ambitions and aggressive rocket launches. The Islamic State (ISIS) has become a key threat in Syria, Iraq, and Afghanistan and is involved in exporting terrorism to Europe, Africa, and elsewhere. The recent tragic bombings in Paris, Beirut, Mali, the Sinai Peninsula, and other places have emboldened nations to join in the fight against terrorism.

Several governments affected by these threats are increasing their defense budgets to combat terrorism and address sovereign security matters, including cyber-threats. For defense contractors, this represents an opportunity to sell more equipment and military weapons systems.

…click on the above link to read the rest of the article…

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