A retired Chinese army officer (a general) has caused an unpleasant situation for the military leadership by going public with details of corruption in the army. Many such details (like the unexplained wealth of many army officers) are not hard to spot but the government controlled media stays away from it, and there are so many other forms of corruption that directly impact Chinese that no one else bothers with the misbehaving officers either. But the general’s Internet posts provide details on how the thefts cripple the ability of the troops to fight, or even operate, effectively. Historically, this is old news, as is the usually very poor performance of the Chinese military in the opening stages of a war. China is a large country, so wars usually lasted long enough for the corruption to be quashed and more competent leadership to set things right. But this costs a lot in terms of lives and money and the new, improved army is not supposed to following the bad old ways. But as the general points out, in the army the past prospers, at least for corrupt officers. The navy and air force have a way to fight corruption that the army lacks. The government can provide more money to have ships at sea and aircraft in the air more often. You can’t fake that and the best training for sailors and pilots (and their maintenance crews) is constant use of their expensive equipment. The army leaders can more easily steal and they are doing so more frequently.
China's Cyber War activities are getting more publicity. The government does not want this kind of attention but Chinese hackers are getting cocky and careless and are increasingly detected and identified. For example, internet security researchers find identical bits of code (the human readable text that programmers create and then turn into smaller binary code for computers to use) and techniques for using it in hacking software popular with Chinese groups that sneak into military, government, and corporate networks in the West. The hackers are often traced back to China and increasingly to Chinese military and government facilities. The best hackers hide their tracks better than this. It's also been noted that Chinese behavior is distinctly different from that encountered among East European hacking operations. The East European hackers are more disciplined and go in like commandos and get out quickly once they have what they were looking for. Some Chinese operate like that, but a lot of them go after more targets with less skillful attacks and stick around longer than they should. That's how so many hackers are tracked back to China, often to specific servers known to be owned by the Chinese military or government research institutes.
The East Europeans have been at this longer and most of these hackers work for criminal gangs, who enforce discipline, select targets, and protect their hackers from local and foreign police. The East European hacker groups are harder to detect (when they are breaking in) and much more difficult to track down. Thus the East Europeans go after more difficult (and lucrative) targets. The Chinese hackers are a more diverse group. Some work for the government, many more are contractors, and even more are independents, who often slip over to the dark side and scam Chinese. This is forbidden by the government and these hackers are sometimes caught and punished, or simply disappear. The Chinese hackers are, compared to the East Europeans, less skilled and disciplined. There are some very, very good Chinese hackers but they often lack adult supervision (or some Ukrainian gangster ready to put a bullet in their head is they don't follow orders exactly).
For Chinese hackers that behave (don't do cybercrimes against Chinese targets) the rewards are great. Large bounties are paid for sensitive military and government data taken from the West. This encourages some unqualified hackers to take on targets they can't handle. This is seen when these hackers are detected trying to get into a high-security network like the U.S. White House network that deals with emergency communications with the military and nuclear forces. China doesn’t want to discourage this sort of ambition and will likely tolerate it. China believes that no matter how angry the West gets, they won’t go to war over this massive theft of government secrets and, more importantly, commercial data that is worth trillions of dollars to the Chinese economy. China complains that it is hacked as well, but for the moment China has a lot less to steal and its more important for China to keep plundering the West.
The government has to worry about a more mundane form of hacking closer to home. The growing number of surveillance cameras in China catches criminals as well government officials misbehaving. People with access (legal or otherwise) to these videos increasingly release onto the Internet vids showing misbehavior by government officials. Despite government efforts to censor this kind of publicity, it usually leads to the official being fired or prosecuted. The officials are definitely shamed and losing face like that causes much mental anguish in East Asia. Policing all that video has provided the police with an impossible task, so far.
The growing number of arrests and prosecutions of smugglers obtaining illegal weapons components for Iran have revealed a pattern of preferring Chinese suppliers and shippers to get it done. The Chinese government denies any approval of this sort of behavior. But corruption being what it is in China, enough cash can get you past whatever official prohibitions there are against helping arm Iran. The Iranians are willing to pay the extra charges.
The toll from Tibetans burning themselves to death recently reached 101. A growing number of Tibetans are questioning this practice because the Chinese government appears immune to local or international criticism for its harsh tactics in Tibet.
February 28, 2013: The government announced the success of another police crackdown on Internet pornography. This time over 300 web sites were shut down, along with at least 30,000 blogs and microblog accounts (Weibo, the equivalent of Twitter, which is banned in China). While porn was the main target, the police also went after pirated material, unsanctioned online gaming, and the politically incorrect. Operations like this serve to remind Chinese that they do live in a police state.
February 27, 2013: The first of many new 1,400 ton Type 056 corvettes entered service. Four or more will do so this year, as at least twenty are under construction. This is part of a massive naval construction program. In part, this was to help out Chinese shipyards suffering from a five year global depression in the ship building industry. This program also replaces hundreds of older Russian designs with new, more Western type ships. New technology makes these ships cheaper to run. The Type 056, for example, has a crew of only 60, which is a third of what ships of this size previously had. The growth in new patrol ships, which is what the Type 056 is, makes it easier to constantly cruise the disputed waters of the South China Sea and intimidate those who might intrude into waters claimed by China.
February 24, 2013: The government has finally admitted what Internet commentators have been pointing out for years; people living close to polluting industries have much higher cancer rates. The Internet critics call these places “cancer villages” and there are more and more of them as corruption enables more industrial facilities to bribe their way out of having to implement expensive environmental safety measures. Pollution is becoming a major national issue, as more and more public demonstrations against pollution take place. Some protest groups have succeeded in preventing a potential polluter from building a facility nearby. The only solution to this is environmental regulations that are actually applied. The pervasive corruption makes that impossible or, at the least, very difficult. Meanwhile, airborne pollution is becoming an international issue as South Korea and Japan are detecting more Chinese pollution (the prevailing winds are to the east).
February 23, 2013: A Chinese patrol ship entered disputed waters around one of the Senkaku Islands but left after an hour when a Japanese warship showed up. Japan protested to the Chinese government and said such transgressions would not be tolerated. Both China and Japan are escalating this dispute. The Chinese believe they can eventually bully Japan into giving up their Senkaku claims, but if you follow Japanese media you get the impression that the Chinese tactic is more likely to lead to war. This would probably be preceded by a Japanese announcement that they now have nuclear weapons. This process has long been openly discussed in the Japanese media, despite official Japanese hostility towards having nukes. With nukes, a short naval war would be a fair fight and one that China could lose.
February 18, 2013: Japan accused a Chinese destroyer of activating its targeting radar against a Japanese warship off the Senkaku Islands. China simply denied the charge and Japan refused to detail how it detected the Chinese electronic activity, as that information might aid the Chinese in future encounters.
February 12, 2013: North Korea carried out its third nuclear test. China was not pleased and escalated that displeasure by taking the unprecedented step of summoning the North Korean ambassador for some face-to-face criticism. North Korea responded, after a few days, by telling China that it is planning one or two additional nuclear weapons tests this year. This indicates that the February 12th test was a success and that a few more will enable North Korea to perfect their design, and then sell it to Iran (and anyone else willing to pay) for a lot of money. China knows this and the Chinese leadership are unsure how they should proceed. They could order a coup in North Korea, to replace the Kim family with a pro-China group. But this is not a sure thing, as the Kim clan has been aware of China cultivating members of the leadership over the last decade. There are periodic purges of senior officials, sometimes accompanied by a death sentence. If a Chinese sponsored coup attempt failed, then China would have to choose between military intervention or dealing with an even more hostile and unpredictable neighbor. The North Korean nuclear program is also causing popular unrest inside China. The Internet reaction, despite government censorship, was very negative and there were even some unauthorized demonstrations (usually at large public festivities where the protestors can do this sort of thing and avoid arrest) against the North Korean nukes.