What merits attention is the armed conflict that broke out between Russia and Georgia on August 8 over the breakaway province of South Ossetia. Although it lasted only five days, the war had complicated historical roots and major geopolitical implications. The United States and Europe are countering Russia's growing national strength by expanding NATO eastward toward the Russian border.

At the same time, the revolution in military affairs with informatization as the centerpiece is driving an increase in military spending among all the major powers. In fiscal year 2008, the base budget for the U.S. military was $481.4 billion, a 4.35 percent increase year on year. Britain and France also increased their military budgets to $64.6 billion and $52.2 billion, respectively. Military spending in Japan stood at $40.2 billion.

Events in 2008 also led major world powers to reassess the nuclear security environment and consider retooling their nuclear policies. The United States and Russia continued to clash over the deployment of an American missile defense system in Eastern Europe. In response, Russia announced that it would deploy the Eskander short-range ballistic missile system in Kaliningrad Oblast and postpone plans to dismantle its Kozelsk intercontinental ballistic missile division. Russia also accelerated the deployment of its mobile Topol-M intercontinental ballistic missile and test-fired the Bulava submarine-launched ballistic missile several times.

The international rivalry in space is also mounting. The United States has continued to develop anti-satellite weapons and space-to-land attack weapons in an effort to retain its supremacy in space. Meanwhile, Russia stepped up development of its GLONASS satellite navigation system. Refusing to be left out, India launched its first lunar orbiter. Japan, for its part, changed its law to allow the Japanese military to operate in space.

The nuclear programs in North Korea and Iran were top international security issues. Efforts to disable North Korea's nuclear complex at Yongbyon finally made headway in June, as North Korea submitted a nuclear declaration and exploded the facility's cooling tower. In exchange, on October 11 the U.S. State Department removed North Korea from its list of states that sponsor terrorism. Negotiators at the six-party talks hit a roadblock, however, in December when they were unable to agree on how to verify North Korea's nuclear declaration.

The Iranian nuclear issue remains at a stalemate. The United States and Europe bypassed the UN Security Council to impose a number of sanctions on Iran in an attempt to force Iran to give up its nuclear program but to no avail. Iran has used both hard and soft tactics with the United States and Europe to buy more time for its nuclear development.

Non-traditional security issues

In addition to terrorism, non-traditional security threats have spilled into other sectors such as finance, energy and food. China was not immune to these threats in 2008.

The current international financial crisis is shaping up to be that year's most prominent security issue. The U.S. subprime mortgage crisis toppled multiple financial institutions, sending the stock market tumbling in September. From there the crisis spread to Europe, and from the developed economies to the entire world.

Mounting economic difficulties in the second half of the year compelled the Chinese Government to take steps to protect economic and financial stability. The Chinese Government has resolved to practice flexible and prudent macroeconomic policy, active fiscal policy and appropriately accommodative monetary policy, and has ramped up support for reforming the model of economic development and overhauling the economic structure.

Despite the progress made in the global fight against terrorism, the situation remains grim. As of the end of October 2008, there had been 898 terrorist attacks worldwide, a 17.7-percent increase year on year. These attacks killed more than 4,800 and wounded 8,400 more. South Asia was especially targeted. From January to October 2008, the region suffered more than 380 terrorist attacks, accounting for 42 percent of the total. On the evening of November 26, a series of coordinated attacks shocked Mumbai, India's financial center, claiming 174 lives and wounding more than 300.

China also experienced several high-profile attacks in 2008, starting in March, when secessionist individuals in Lhasa, Tibet Autonomous Region, committed the violent crimes of beating, smashing, looting and burning. In August, the "East Turkestan" terrorist forces carried out four consecutive attacks in Xinjiang Uygur Autonomous Region, leaving 50 people dead or wounded. Chinese institutions and personnel operating abroad were also subject to attack. There were five separate attacks on Chinese citizens overseas from January to the end of September, which claimed six lives. On October 18, nine Chinese oil workers were kidnapped in Sudan, five of whom were killed.

Fluctuations in international oil prices drew attention to energy security. On January 3, the price of oil per barrel broke the $100 mark for the first time and kept going, peaking on July 11 at a record high $147.27 a barrel. By November, the price had fallen below $50 a barrel, and it even dipped below $40 on December 18. The market volatility underscored the need for countries to secure their oil supplies. This is especially important for China to maintain economic growth.