System Modelling of Hybrid Warfare in Grey Zones: An Analysis of Synergistic Effects Between Disruptive Networks and Financial Market Manipulation

This study examines an emerging yet systematically uncharacterised strategic attack pattern: adversaries, without declaring war, simultaneously orchestrate infrastructure disruption incidents within target nations using highly dispersed, deniable small-scale infiltration units. Concurrently, they pre-establish short-selling financial positions in global capital markets, leveraging panic narratives to precipitate rapid downgrades in sovereign credit ratings and key corporate valuations. This enables arbitrage opportunities and self-financing for subsequent operations. This paper defines this as an evolved form of ‘grey zone hybrid warfare,’ noting its lethality has shifted from physical destruction to ‘credit damage’: the target nation remains legally at peace yet is rapidly priced as a high-risk entity in capital markets, facing increased financing costs, forced fiscal bailouts, and undermined governing legitimacy. To explain this mechanism, this paper proposes a ‘dual-layer synergistic model’: the upper layer comprises a discrete disruption network (multiple, small-scale, low-attributability physical disruptions), while the lower layer is the financial exploitation layer (converting these events into realisable profits via put options, sovereign credit default swaps, and similar instruments). The two layers are coupled through a ‘disruption-pricing feedback loop’: pre-emptive betting → multi-point disruptions → amplified narratives of ‘state failure’ → markets treating local incidents as systemic risks → downgraded sovereign credit and corporate valuations → profit recovery and reinvestment, forming an expandable attack industrial chain. This paper proposes three quantitative metrics: the market overreaction coefficient β (measuring the extent to which single incidents are perceived as systemic collapse evidence), the self-financing ratio SFR (arbitrage gains/action costs, where SFR>1 indicates attacks can self-sustain and scale), and credit-grade lethality (measuring effectiveness via sovereign spread widening speed and leading enterprises' market capitalisation evaporation rate). Research indicates this model systematically circumvents existing collective defence frameworks: actions may superficially appear as industrial accidents or public order issues, making it difficult to trigger countermeasures from military entities at the alliance level. Yet capital markets instantly impose ‘credit punishment’ on the targeted nation. Consequently, defence priorities shift from preventing isolated disruptions to severing the closed-loop: integrating intelligence, financial regulation, and public clarification into a unified real-time coordination system to pre-emptively identify anomalous positions and synchronised harassment; legally elevating ‘infrastructure sabotage + financial arbitrage’ to sovereign-level threats; and deploying ‘credit firewalls’ to suppress beta and constrain SFR, preventing attacks from evolving into replicable profit-driven models.