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Warship-Buying Spree Prompts New Worry In Washington, Tokyo
By GORDON FAIRCLOUGH
KAOLAO, China -- On one side of a rocky promontory jutting into the Yellow Sea here sits a ramshackle fishing village, its wooden boats pulled up on the beach. On the other, lie well-guarded berths that are home to some of the most advanced vessels in the Chinese navy: heavily armed attack submarines.
The stealthy subs, their black conning towers and tail fins rising above the water, are one of the most potent signs of China's ambitious effort to modernize its armed services, particularly its long-neglected navy.
Many believe China's growing ties to the world economy and its dependence on imported oil and raw materials will ensure China's "peaceful rise," as Beijing's leaders have pledged. But these same commercial interests -- and the need to defend them -- are also driving China to pursue military might.
"The oceans are our lifelines. If commerce were cut off, the economy would plummet," says Ni Lexiong, a fellow at the Shanghai National Defense Institute and an outspoken proponent of Chinese sea power. "We need a strong navy."
For Chinese strategists, the country's rapid economic growth -- which underpins the Communist Party's continued hold on political power -- and its military advancement are now inextricably linked. "Security issues related to energy, resources, finance, information and international shipping routes are mounting," says a government white paper published last December that lays out China's defense policy.
In response, China says it will spend nearly $45 billion on its military this year, an increase of about 18% from 2006. It has also embarked on a ship-buying spree, acquiring advanced vessels from Russia, and also building its own. Over time, the strategy could remake the maritime balance of power, first in Asia, and then in the rest of the world.
China's leadership insists that the world has nothing to fear from a better-armed China. The navy, known officially as the People's Liberation Army Navy, is still smaller and less capable than that of the U.S., which has more than 100 major surface combat ships, including 11 aircraft carriers. China has 76 main surface combatants and no carriers, according to the International Institute for Strategic Studies. The Chinese fleet is also untested in modern naval warfare.
But as China's navy becomes better equipped and farther ranging, it is causing alarm bells to ring in Washington, Tokyo and Taipei. The U.S. is strengthening its forces in Asia, partly in response to China. It is also encouraging Japan to boost its own military and naval capabilities, and is even cultivating ties with Mongolia, on China's northern border.
"The improvement in the Chinese military is significant. That is obviously of interest to us and to everyone in the world -- and appropriately so," says Adm. Timothy J. Keating, commander in chief of U.S. forces in the Pacific.
Much of China's concern stems from its dependence on foreign oil. China imports nearly 50% of its oil and is more dependent on imported Middle Eastern crude than the U.S. Roughly 72% of China's imported oil now comes from the Persian Gulf and Africa on tankers that pass through the narrow Strait of Malacca -- a strategic choke point -- between the Indonesian island of Sumatra and peninsular Malaysia.
President Hu Jintao has referred to the potential vulnerability of his country's energy supplies as China's "Malacca dilemma." The country has no ships stationed permanently near the straits.
China also depends on the outside world for a host of other raw materials -- from copper to coal and iron ore -- required to keep what is now the world's fourth-largest economy humming. Nearly all of China's trade moves by sea from the country's east coast. Many exports are carried by China's own burgeoning fleet of merchant ships.
"Economic globalization entails globalization of the military means for self-defense," Zhang Wenmu, a professor of strategic studies at the Beijing University of Aeronautics and Astronautics, wrote last year in China Security, a military-affairs journal. "With these complex and expanding interests, risks to China's well-being have not lessened, but have actually increased."
At the submarine base here in eastern Shandong province, there are signs of the naval shift. Submarines shelter behind breakwaters between sea patrols. Chinese subs have been detected in the waters around Japan and as far into the western Pacific as Guam, site of important U.S. military installations.
A short way down the coast at the headquarters of China's North Sea Fleet in Qingdao, warships -- including some destroyers equipped with powerful Russian-made guided missiles -- share the sprawling port with civilian container ships and oil tankers.
For most of its history, China's military, the People's Liberation Army, has focused on defeating domestic opponents of the Communist Party and fighting along the nation's land borders. The navy had a relatively small role in that mission and concentrated primarily on coastal defense. Today, the navy accounts for about 13% of the 2.3 million people in China's armed forces.
For the first 30 years of Communist Party rule, China remained primarily an agricultural country caught up in political upheaval. There was little foreign trade, and economic growth was so slow that there was little demand for resources from outside.
But as China began to open in earnest in the late 1980s and early 1990s, a series of geopolitical shifts and China's accelerating economy combined to radically alter Chinese leaders' views of the kind of military the country needs.
In 1996, during a standoff between leaders in Beijing and Taipei over Taiwanese moves to assert independence, China test-fired missiles near the island. The U.S. responded by ordering carrier battle groups to the area.
China's inability to prevent this U.S. show of military strength and support for Taiwan rankled political and military leaders in Beijing. They started to develop what is viewed by the Pentagon as an "anti-access strategy." The Pentagon says it is designed to limit the U.S. military's freedom of movement in Asia and, specifically, its ability to intervene in any conflict between China and Taiwan.
The cornerstone of China's effort is its elite submarine force. In recent years, eight new Russian-built, diesel-powered Kilo-class submarines have been added to the fleet, joining a growing number of new Chinese-built attack submarines, including some powered by nuclear reactors. The Kilo subs are especially stealthy and hard to detect when submerged.
China's navy now has nearly 60 submarines, according to U.S. estimates. Some of the newest are equipped with Russian-made cruise missiles that fly at supersonic speeds when they approach their targets and were specifically designed to attack and sink aircraft carriers, according to U.S. naval officers. Some subs also have advanced torpedoes, which home in on ships' wakes at high speed.
China's shipyards have been working on two new types of nuclear-powered submarines, which are undergoing sea trials, according to Chinese naval officers. And late last year, China received the second of two sophisticated Russian-made, Sovremenny II guided-missile destroyers, adding to its tally of Russian-built surface ships.
While the immediate driver of China's naval development has been the potential for conflict over Taiwan, its longer-term goals are much broader. Navy officers speak of developing three oceangoing fleets, one that would patrol the areas around Korea and Japan, another that would push out into the western Pacific and a third that would protect the Strait of Malacca and the Indian Ocean.
"The navy needs to be able to go wherever China has economic interests," says one senior Chinese naval officer who spoke on condition of anonymity. "China should have naval forces stationed at strategic points," the officer says, even though "this would certainly push China into more direct confrontation with developed countries."
China has helped finance and engineer the construction of a deep-water port in Pakistan that U.S. defense planners say could be used by Chinese naval forces in the future, giving them easier access to the Arabian Sea and Persian Gulf region. U.S. military officers also believe China is operating listening posts in southern Myanmar to monitor shipping traffic through the Strait of Malacca.
China has also begun building a network of satellites that can be used to guide navigation by its own ships at sea, as well as to keep track of other countries' vessels. Chinese military leaders are even talking about building aircraft carriers -- which for decades have been the mainstay of U.S. maritime power.
Concerns over the potential cost of building and operating such an extensive navy have prompted some national security experts in China to argue against it. These critics say China should continue to be a so-called free rider, allowing the U.S. and its global navy to bear the burden of policing the seas.
For now, the sea power advocates appear to be winning. China's President Hu attended a navy conclave in Beijing in December. "We should strive to build a powerful navy that adapts to the needs of our military's historical mission in this new century and at this new stage," Mr. Hu told the assembled officers.
China's expanding naval presence is already being felt in the Pacific. In October, a Chinese submarine armed with torpedoes and powerful antiship cruise missiles surfaced within firing range of the American aircraft carrier USS Kitty Hawk, part of the U.S. Seventh Fleet, during maneuvers in the Pacific Ocean east of the Philippines.
The encounter ended peacefully. But the admiral commanding American forces in the Pacific at the time, William Fallon, later told reporters that the incident could have "escalated into something very unforeseen."
The U.S. is the only country that regularly operates aircraft carriers in Northeast Asia. And U.S. officers feel that China's pursuit of weapons that can be used against carriers has put U.S. forces in its sights. "When you acquire those niche capabilities, it raises questions," says one U.S. officer assigned to monitoring Chinese military advances. "We're a little unclear on why they are focusing on those."
Adm. Keating, the new U.S. commander in the Pacific, says he is trying to get a better understanding of Beijing's motives and military capabilities. He is pushing for more access to Chinese forces and more exchanges and expanded joint exercises by the two navies.
The U.S. is also strengthening its military posture in Asia. "I don't think China necessarily has to be a threat. I don't think they've made up their mind yet," says one veteran Pentagon Asia specialist. "That's why we have to take a hedging strategy."
China, in turn, looks at these steps as all the more reason to push ahead with its military buildup. The U.S. moves also strengthen the hand of nationalists in China, who believe Washington and others are intent on blocking China's development. Such views are also held in the mainstream parts of the government.
"If we develop a strong navy with more advanced weapon systems, we have more choices. It's possible that China will join in a cooperative system headed by the U.S.," says Mr. Ni of the Shanghai National Defense Institute. "But we would also be ready to fight if we have to."
--Ellen Zhu in Shanghai contributed to this article.
Europe's central bank releases £64bn emergency funds as US bad debt crisis takes hold around the globe
David Teather and Andrew Clark in New York
Friday August 10, 2007
Central banks on both sides of the Atlantic pumped billions into the financial system to calm nerves over an impending credit crunch yesterday - but their actions only served to heighten alarm, leading to a fresh plunge in global share prices.
The European Central Bank injected an emergency €95bn (£64.5bn) into the markets, in its first intervention since the turmoil triggered by the 9/11 terrorist attacks on New York and Washington DC in 2001.
In America, the Federal Reserve added $24bn in temporary reserves to the US banking system to shore up liquidity and bring down short-term interest rates, while the Bank of Canada mounted a similar operation.
The moves, however, seemed to fuel a sense of crisis over defaults in America's mortgage lending industry, which are causing a ripple effect through the banking industry as much of the debt is bundled up and sold on.
On Wall Street, blue-chip shares had their worst day in four months as the Dow Jones Industrial Average dropped by 387 points to 13,270. Stock prices swung wildly, and trading volumes hit an all-time record with 2.8bn shares changing hands. Of the Dow's 30 component stocks, 29 ended the day lower.
Bourses across Europe fell, with the FTSE 100 in London finishing down 122.7 at 6271.2. The nervousness spread to all assets that appeared risky, including commodities.
The fresh sell-off was sparked by an announcement from the French bank BNP Paribas that it had blocked withdrawals from three investment funds worth €2bn because of the "complete evaporation" of liquidity. A spokesman for the bank described it as a technical issue, and said he hoped it would be a temporary situation.
There were also reports that the US bank Goldman Sachs has suffered losses in two of its hedge funds. Goldman is said to have sold down positions at its North American Equity Opportunities and Global Alpha funds, both of which rely on computer models rumoured to have struggled with recent volatility.
Nick Parsons, head of markets strategy at nabCapital, said that one of reason investors were so nervous was the sheer complexity of contemporary financial markets with the growth of instruments such as securitisation and credit derivatives.
"The problem for the markets is they don't know where this is heading. It is like walking blindfold through a minefield. There is no way of knowing who owns this stuff. But what is clear is that this is not just a US problem. This debt is owned by a huge variety of institutions, some you've heard of, some you've never heard of, and some you are probably going to hear of soon."
The ECB's intervention was the largest ever one-day amount stumped up by the institution. It lent the cash to banks at a bargain rate of 4%. The last time the ECB took this kind of measure was when it put €100bn into the markets over two days following the September 11 attacks.
It described the intervention as a "fine-tuning operation" to ensure "orderly conditions in the euro money market".
US president George Bush tried to calm the situation, telling reporters that the problems in sub-prime mortgages were unlikely to spread to the wider credit market. "The fundamentals of our economy are strong," he said, although he accepted there was a need for better financial education on the part of mortgage borrowers, whose struggle to keep up repayments is at the root of the crisis. "Anyone who loses their house is someone we've got to show enormous empathy for," he said. "A lot of people have signed up for things when they've not been sure what they're agreeing to."
America's 10th-biggest home lender, American Home Mortgage, filed for bankruptcy this week, while Bear Stearns co-president Warren Spector resigned following the meltdown of two mortgage hedge funds run by his department. The world's biggest insurer, AIG, felt obliged to reassure investors that it had ample cash yesterday, saying it did not need to sell any of its securities to raise cash in a "chaotic market".
Mervyn King, the governor of the Bank of England, went against the prevailing winds on Wednesday when he maintained that there was no international financial crisis.
The Bundesbank meanwhile hosted a meeting with banks involved in the rescue of Europe's highest profile sub-prime victim, the lender IKB, to arrange details of its €3.5bn bailout. The market in Germany was rife with rumours of particular banks being in trouble. West LB was forced to deny that it was heavily exposed to the sub-prime market. The US Treasury said it "remains vigilant".
Dutch bank NIBC called off a planned initial public offering, blaming exposure to the US credit markets. Market sources suggested last night that Britain's hedge fund operator Man Group was delaying a plan to float one of its funds, because of deteriorating market conditions.
Ten advances towards the end of freedom and privacy in the United States
From Robert... email news source
The top ten advances towards tyranny in the United States during the
tenure of the Bush administration, from the Patriot Act to the latest
expansion of the illegal eavesdropping surveillance program.
1) The USA Patriot Act
The party line often heard from Neo-Cons in their attempts to defend the
Patriot Act either circulate around the contention that the use of the
Patriot Act has never been abused or that it isn't being used against
The Patriot Act was the boiler plate from which all subsequent attacks
on the Constitution were formed.
2) Total Information Awareness
"Every purchase you make with a credit card, every magazine subscription
you buy and medical prescription you fill, every Web site you visit and
e-mail you send or receive, every academic grade you receive, every bank
deposit you make, every trip you book and every event you attend — all
these transactions and communications will go into what the Defense
Department describes as "a virtual, centralized grand database,"
infamously wrote New York Times writer William Safire , announcing the
birth of Total Information Awareness, a kind of Echelon on steroids
introduced a year after 9/11.
TIA was not canned, it was simply removed from the newspaper, renamed
and continues to operate under a guise of different programs.
3) USA Patriot Act II
The second Patriot Act was a mirror image of powers that Julius Caesar
and Adolf Hitler gave themselves. Whereas the First Patriot Act only
gutted the First, Third, Fourth and Fifth Amendments, and seriously
damaged the Seventh and the Tenth, the Second Patriot Act reorganized
the entire Federal government as well as many areas of state government
under the dictatorial control of the Justice Department, the Office of
Homeland Security and the FEMA NORTHCOM military command.
The Domestic Security Enhancement Act 2003, also known as the Second
Patriot Act is by its very structure the definition of dictatorship.
4) Military Commissions Act
Slamming the final nail in the coffin of everything America used to
stand for, the boot-licking U.S. Senate gave President Bush the legal
authority to abduct American citizens in the name of the war on terror
in passing the Military Commissions Act and officially ending Habeas
There is nothing in the "detainee" legislation that protects American
citizens from being kidnapped by their own government and tortured.
The New York Times stated that the legislation introduced,
"A dangerously broad definition of “illegal enemy combatant” in the bill
could subject legal residents of the United States, as well as foreign
citizens living in their own countries, to summary arrest and indefinite
detention with no hope of appeal. The president could give the power to
apply this label to anyone he wanted."
Yale Law Professor Bruce Ackerman states in the L.A. Times ,
"The compromise legislation....authorizes the president to seize
American citizens as enemy combatants, even if they have never left the
United States. And once thrown into military prison, they cannot expect
a trial by their peers or any other of the normal protections of the
Bill of Rights."
Similarly, law Professor Marty Lederman explains:
"this [subsection (ii) of the definition of 'unlawful enemy combatant']
means that if the Pentagon says you're an unlawful enemy combatant --
using whatever criteria they wish -- then as far as Congress, and U.S.
law, is concerned, you are one, whether or not you have had any
connection to 'hostilities' at all."
5) John Warner Defense Authorization Act
The Bush Junta quietly "tooled up" to utilize the U.S. military in
engaging American dissidents after the next big crisis, with a
frightening and overlooked piece of legislation that was passed
alongside the Military Commissions Act, the John Warner Defense
Authorization Act , which greased the skids for armed confrontation and
abolishes posse comitatus.
6) Illegal Domestic Wiretapping Program
"Months after the Sept. 11 attacks, President Bush secretly authorized
the National Security Agency to eavesdrop on Americans and others inside
the United States to search for evidence of terrorist activity without
the court-approved warrants ordinarily required for domestic spying,
according to government officials," reported the New York Times on
December 16, 2005
The secret warrantless spying program was a complete violation of both
the 4th Amendment and FISA.
7) Expansion of Illegal Domestic Wiretapping Program
Not content with now being lawfully allowed to force ISP's and cell
phone companies to turn over data about customers without a warrant, the
Bush administration is pushing for even more authority to spy on
American citizens, and has already been handed a 6 month window within
which to impose any surveillance policy it likes, and for that program
to remain legal in perpetuity.
The administration has a 6 month window in which to impose any
surveillance program it chooses and that program will go unchallenged
and remain legally binding in perpetuity - it cannot be revoked. Under
the definitions of the legislation, Bush has been granted absolute
dictator status for a minimum of 6 months.
If he so chooses, and so long as it's implemented within the next half
year, Bush could build a database of every website visited by every
American - and the policy would be immune from Congressional challenge
even after the "surveillance gap" legislation reaches its sunset.
8) Martial Law Presidential Decision Directive 51
New legislation signed on May 9, 2007, declares that in the event of a
"catastrophic event", the President can take total control over the
government and the country, bypassing all other levels of government at
the state, federal, local, territorial and tribal levels, and thus
ensuring total unprecedented dictatorial power .
The National Security and Homeland Security Presidential Directive ,
which also places the Secretary of Homeland Security in charge of
domestic "security", was signed earlier this month without the approval
or oversight of Congress and seemingly supercedes the National Emergency
Act which allows the president to declare a national emergency but also
requires that Congress have the authority to "modify, rescind, or render
dormant" such emergency authority if it believes the president has acted
9) Destruction of the Dollar
Former World Bank Vice President, Chief Economist and Nobel Prize winner
Joseph Stiglitz has predicted a global economic crash within 24 months -
unless the current downturn is successfully managed. Asked if the
situation was being properly handled Stiglitz emphatically responded "no,".
Stiglitz caused controversy in October 2001 when he exposed rampant
corruption within the IMF and blew the whistle on their nefarious
methods of inducing countries to fall under their debt before stripping
them of sovereignty and hollowing out their economies. Stiglitz agreed
that the process of hijacking and looting key infrastructure on the part
of the IMF and World Bank, as an offshoot of predatory globalization,
had now moved from the third world to Europe, the United States and Canada.
10) Amnesty & The North American Union
The open plan to merge the US with Mexico and Canada and create a Pan
American Union has long been a Globalist brainchild but its very real
and prescient implementation on behalf of the Council on Foreign
Relations has finally been reported on by mainstream news outlets.
The framework on which the American Union is being pegged is the NAFTA
Super Highway, a four football-fields-wide leviathan that stretches from
southern Mexico through the US up to Montreal Canada. Coupled with
Bush's blanket amnesty program , the Pan American Union is the final
jigsaw piece for the total dismantling of America as we know it.
For an explanation of the timeline to tyranny in a wider context, click
here to listen to Alex Jones' rant on the subject.
Bush has gut feeling Karzai wrong about Iran
China National News
Thursday 9th August, 2007
On Monday, the Iranophobia of US president George Bush was once again on display.
The occasion was the joint press conference he gave at his Camp David resort along with Afghanistan's president, Hamid Karzai.
Contradicting Karzai's statement in a CNN interview on Sunday that Iran was "a helper and a solution" to his country, Bush urged him to be "very cautious about whether or not the Iranian influence there in Afghanistan is a positive force".
Such a statement could only come from someone ignorant of the recent history of Tehran's relationship with its eastern neighbour.
Long before 9/11, the Iranian regime was at loggerheads with the Taliban who captured Kabul in September 1996. As orthodox Sunnis of the Hanafi code, the Taliban held Shias in low esteem, and banned their annual ritual of Ashura.
When the Taliban authorities held a dozen Iranian diplomats hostage in Mazar-e Sharif in the summer of 1998, relations between the two neighbours deteriorated to the point when a war between them seemed imminent. In the end cool heads prevailed. Iran withdrew the revolutionary guard troops it had amassed along the Afghan-Iranian border.
Following 9/11, as the Bush administration prepared to attack the Taliban, the Iranians shared intelligence with it surreptitiously.
At their urging, Ismail Khan, the anti-Taliban Afghan leader based in the Iranian city of Mashhad, along with his fighters, coordinated his attack on the Taliban in western Afghanistan with the Pentagon's campaign in the north and the east. Ismail Khan's militia captured Herat, an important city near the Iranian border.
At the international conference held in Bonn, Germany, in late December 2001, Iran's foreign minister, Kamal Kharrazi, actively co-operated with the Americans to install Hamid Karzai as the leader of the post-Taliban Afghanistan.
At the subsequent international donors' gathering, in Tokyo, Iran pledged $500m aid to Afghanistan over five years. Unlike many other nations at the Tokyo conference, it has fulfilled its initial promise. It has been involved in several infrastructure and health care projects, particularly in western Afghanistan.
In 2003, when Ismail Khan, an ethnic Tajik, refused to send an envoy to Kabul when Karzai, an ethnic Pashtun, was formally installed as president, it was the Iranian government which persuaded him to fly his son for the inaugural ceremony. In return, Karzai appointed Khan's son as a cabinet minister.
Furthermore, ever since the Islamic revolution in Iran in 1979, the Iranian regime has been battling the Afghan drug dealers who use Iran as a transit route for shipping their products to Europe. In the course of hundreds of fire fights between the smugglers and the Iranian Revolutionary Guards (charged with monitoring the national borders), a few thousand guards have lost their lives.
The anti-narcotic campaign by Iran, which has continued since the overthrow of the Taliban in December 2001, has been praised not only by the Karzai government but also by the UN.
However, given Bush's deep-seated aversion towards the Islamic Republic, it was unlikely that a brief history of Iran's anti-narcotic campaign was conveyed to him during the "more than a fair amount of time" he spent with Karzai discussing the fact that Afghanistan accounted for 95% of the world's poppy production used to produce heroin.
Overall, in the light of the recent history of the region, Karzai's description of Iran as "a helper and a solution" of Afghanistan was rooted in facts.
By contrast, Bush damaged his already low credibility in foreign affairs when he went on to claim that Iran had a government "that has proclaimed its desire to build a nuclear weapon."
This statement is false. On September 12 2004, Iran's supreme leader Ayatollah Ali Khamanei issued a fatwa (religious decree) that it was "un-Islamic" to use an atom bomb.
In his Friday prayer sermon on November 5 2004, Khamanei declared that "developing, producing or stockpiling nuclear weapons is forbidden under Islam" and for "our believing nation", and added: "They accuse us of pursuing nuclear weapons program. I am telling them as I have said before that we are not even thinking about nuclear weapons."
But then again, in George Bush the world is dealing with a politician who prides himself on acting on gut feeling - rather than facts, expertise or historical experience.
Dilip Hiro was educated in India, Britain and America, where he received a master's degree at Virginia Polytechnic and State University. He settled in London in the mid-1960s, and became a full-time writer, journalist and commentator. He has published 27 books.
Air Force Flexes Its Muscles with Exercise Over Pacific
Friday, August 10, 2007. Issue 3718. Page 3.
Russian bombers have flown to the Pacific island of Guam for the first time since the Cold War during an Air Force exercise intended to show the nation's resurgent military power, a top general said Thursday.
Air Force Major General Pavel Androsov said two Tu-95 bombers reached Guam, home to a large U.S. military base, as part of an exercise this week.
Their crews smiled at pilots of U.S. fighters scrambled to intercept them, he said at a news conference.
"Whenever we saw U.S. planes during our flights over the ocean, we greeted them," Androsov said. "On Wednesday, we renewed the tradition when our young pilots flew by Guam in two planes. We exchanged smiles with our counterparts, who flew up from a U.S. carrier and returned home."
The sortie by the two turboprop bombers, from a base near Blagoveshchensk in the Far East, lasted 13 hours, Androsov said. The Tu-95, codenamed "Bear" by NATO, is a Cold War icon and may stay in service until 2040.
The flight to Guam was part of a three-day Air Force exercise during which strategic bombers made 40 sorties and launched eight cruise missiles, said Androsov, who commands the country's long-range bomber force.
During the Cold War, Soviet bombers routinely flew far over the Arctic, Atlantic and Pacific oceans -- the areas from where they would launch their nuclear-tipped cruise missiles at the United States in case of war.
The military has intensified Air Force exercises, sending strategic bombers to areas off Norway and Iceland, as well as Russia's northeast corner, across the Bering Strait from Alaska. (AP, Reuters)
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