October 10, 2015:   Despite rumors (false) of a Chinese aircraft carrier visiting Syria and joining a Russian effort to intervene there China is concentrating on more pressing matters at home. This has to do with keeping things quiet at home. This is proving difficult because of growing unemployment and bankruptcy. The extent of the economic problems can be seen in the growing unrest among workers. Strikes have been increasing since February, as have worker demonstrations and riots. China does little to protect workers from bad employers, and workplace deaths and injuries are much higher than in the West. Chinese workers have become aware of this, and want change, they want it now, and a growing number of them are willing to fight openly for it. But for many it is just something as basic as remaining employed, especially at heavily subsidized state owned firms. Despite being a communist state and committed to worker welfare the corruption, especially among Communist Party members who manage state owned firms and government agencies that are supposed to look out for worker welfare, leads to growing fraud and abuse at worker expense. This worker anger cannot be suppressed by government censors and the bad news gets around like never before. Unable to hide the problems the government has been forced to try and clean up the mess. That has proved very difficult. But the government perseveres and keeps going after a growing number of ever more senior officials. Thus recently, for the first time, a provincial governor was accused of corruption. There have been investigations of former governors but never one who was still on the job. That sends a signal, to Chinese in general and senior officials in particular, that no one is safe if they are corrupt. It also indicates that the government is not simply using corruption prosecutions to punish officials who have offended the national leadership in one way or another.

While any government official can be fired, that still leaves an opponent (with yet another grievance) on the loose. A successful corruption prosecution is much more effective and so many officials are corrupt and careless about covering their tracks, that many are vulnerable. While more corrupt officials are becoming cautious few are giving up their bad (and profitable) behavior. For that to change the government has to punish so many corrupt officials that the others will realize that staying clean is the only way to survive. So far that tipping point has not been reached and popular anger continues to grow. The government had hoped that cultivating nationalism and creating “foreign threats” (usually the United States and Japan) would distract people. If does, but not often enough to slow the growth of corruption related unrest. Corruption is an everyday reality while foreign threats are far away and, for most Chinese, more a form of entertainment than an immediate threat.

Another problem with the anti-corruption campaign is that it is often going on at the same time long overdue reforms are being carried out. This is a big problem in the state owned companies (that still generate over a third of GDP) and the military. Both these institutions have long (even before the communists took over in the late 1940s) been known for rampant inefficiency and corruption. The bureaucracies involved are proving very resistant to reforms and anti-corruption efforts. These attitudes are particularly dangerous in the military as China has a long history of rogue (and often corrupt) generals trying (and sometimes succeeding) to take political power. The communists running China are well aware of that and that is why Chinese military personnel take an oath of loyalty to the Chinese Communist Party, not the Chinese state or the Chinese people. Recently the party leaders have been reminding officers of that oath and eliminating officers who appear disloyal or potentially unreliable.  

Many of the officials (military and civilian) fear for their jobs, especially the older bureaucrats who cannot find other employment and will have to live on a small pension plus whatever they have saved from any corrupt opportunities they had. Many officials do not have a lot of opportunities for corruption that generates cash or valuable assets. So the recent government announcement that the military would be cut by 300,000 personnel (13 percent of the total) was seen by many ineffective or unneeded officers (they tend to know who they are) as mainly excuse to force them out. The government has responded by increasing military retirement benefits and extending such benefits to all who are forced out of the military. The government is proceeding more carefully with military reforms, after all the people involved are armed and potentially dangerous.

Meanwhile the military has not been idle. Aerial and satellite photos indicate that Chinese military construction efforts on Woody Island (one of the disputed Paracel Islands) are largely complete. The garrison consists of a battalion of naval infantry (not quite marines but close) and a 2,300 meter long air strip. This is long enough to support warplanes and commercial transports as large as Boeing 737s (which China has a lot of). A school building was completed in 2013 for the 40 children of officials and their families stationed there. There is an artificial harbor that can handle ships of up to 5,000 ton displacement. This harbor is heavily used because there is no local water supply and much of the water still has to be brought in along with fuel for all the vehicle (land, sea and air) as well as the generators. While there is some recreational fishing going on, the two thousand people on the island require regular food deliveries from the mainland.  In addition to the military garrison there is also a civilian rescue detachment equipped with helicopters and small boats. This detachment is largely for the waters around Woody Island and a few smaller islands that amount to about 13 square kilometers of land. That is expected to increase by 10-20 percent via dredging. All this activity makes the military proud and all the neighbors nervous.

A senior (number five overall) Chinese official arrived in North Korea to hold four days of talks with his North Korean counterparts. This is expected to include China delivering some ultimatums to the increasingly troublesome and disrespectful North Korean leadership. North Korea’s traditional allies China and Russia, despite still providing some aid and other benefits (help in smuggling) are finding that, unlike in the past, they now have little sway over the North Korean government. The Russians can ignore all this but China cannot. To make matters worse China has found itself being publicly insulted by North Korea, something that was unknown until recently but is now becoming common. In response China is publicly criticizing things that are wrong in North Korea (mismanagement, nuclear weapons, criminality in general). This sort of thing rarely ends well and the current visit to North Korea is expected to spell the consequences out in some detail. As usual with North Korea, this could get very interesting.

October 9, 2015: The Chinese Navy visited Finland for the first time, as a Chinese destroyer, frigate and supply ship arrived. This is part of the six month world cruise for these three ships and making official visits to countries along the way including seven in the Baltic Sea.

In Hong Kong over a thousand university faculty and students gathered, for the second week in a row, to protest government efforts to weaken the academic freedom long enjoyed by Hong King universities. The government is concerned about these academic protests morphing into another embarrassment like what happened in 2014. That involved thousands of pro-democracy demonstrators tying up the streets for 79 days. The government prosecuted some of the 2014 protest leaders and that proved to be yet another unpopular move that many Chinese consider corrupt.   

October 8, 2015: In the face of growing domestic and international criticism China has agreed to meet the international data standards established and administered by the IMF (International Monetary Fund). This Chinese concession came about because of data veracity problems that became big news in 2015. Earlier in the year estimates of GDP growth for 2015 (7 percent) were believed to be too high because of inaccurate data used (and often provided) by the Chinese government. Chinese and foreign investors were increasingly concerned about the veracity of government economic data used to mask the real dangers. This is a major reason for the 2015 stock market crash in China. Because of the Internet, and despite Chinese efforts to “control” (censor and influence) information, it is possible to gather enough economic data to seriously challenge official government numbers. This is forcing the Chinese to reveal ugly truths they would prefer to keep hidden. The government is trying to clean up the corruption in the banking sector and state owned enterprises but does not want the public watching. That’s partly because a lot of senior officials (present and past) were criminally responsible for this mess and partly because if these credit and government budget problems are not fixed there could be a major financial crises and years of economic depression. Most Chinese also know that if a crises is imminent government officials want to get the information first so they can save their own personal wealth before the Chinese currency and stock markets lose most of their value. IMF leaders are aware of all this and warn that it won’t be easy actually getting the Chinese to start, and continue providing accurate data. This is particularly important because Chinese government debt has gone from a trillion dollars to $25 trillion in the last fifteen years and a lot of those loans were the result of corruption and largely wasted. Many Chinese officials would rather not allow foreigners (or most Chinese) access to the details.

October 4, 2015: The U.S. has confirmed its continued diplomatic and military support for Taiwan in any disputes with China.

October 3, 2015: In China the Pakistani Air Force concluded a series of joint training exercises it has been holding there over the last four weeks. Pakistan is buying more combat aircraft from China and considers China an ally. While the two countries do not have a mutual defense pact, India considers Pakistan and China enemies and likely to cooperate in any future war by either of them with India. This, to India, explains why China is selling Pakistan eight of the latest model Chinese diesel-electric submarines. One of these subs in Chinese service visited Pakistan earlier in 2015. China considers continued free passage of Chinese ships through the Indian Ocean crucial and now has an ally paying to be equipped with warships China itself uses. Among other things it means China and Pakistan would both have facilities to support the same class of submarines. The implications of all this is not lost on India.

October 1, 2015: In the south (Guangxi province) 18 bombs went off in the last two days leaving ten dead and 51 wounded. Police later said they had arrested the man responsible (a quarry worker with access to explosives) but later said DNA evidence showed the man responsible died in one of the blasts. This has made many Chinese suspicious because the Internet censors are trying to suppress discussion of this incident and speculation about who did it and why. No group or individual has taken credit for the attacks, which police attributed to the quarry worker having disagreements with many people.

September 25, 2015: A visit by the Chinese president to the United States to meet with his American counterpart there was no progress in settling the dispute over Chinese claims to the South China Sea. The Americans continue to insist the claims are illegal and will support, with force if necessary, free passage through the area. The U.S. will also support nations bordering the South China Sea that face increasingly aggressive Chinese efforts to take possession of sea and land areas that, by international law, belong to the countries (like Vietnam, Japan, Taiwan and the Philippines) confronting China over the issue. The Americans were angry over earlier Chinese promises to not build military bases in the disputed areas while continuing to do so. China believes the current American leadership is too timid to really oppose Chinese efforts in the South China Sea, which are following a classic (as in ancient) Chinese strategy of gradually asserting a claim and imposing Chinese control. This can take decades, but the Chinese see it as a way to win without risking war.  

September 21, 2015: The Chinese Defense Minister visited Burma and made it clear that Burma had to restore order on its border with China or there would be consequences. China is a major investor in Burma, especially large economic projects in northern Burma. But Chinese are also involved in a lot illegal activity in northern Burma, which adds to the anger of tribal rebels up there and Burmese in general.

September 15, 2015: China sent North Korea congratulations on the anniversary of its founding. North Korea played down this message, which in East Asia is seen as disrespectful. This is apparently in reaction to North Korean dismay over a recent show of disrespect by China. This is all about why North Korean leader Kim Jong Un agreed to go to China for the September 3rd parade marking the 70th anniversary of the end of World War II (according to the Chinese Communist Party) but later decided not to show up. The visit was cancelled without explanation. At the end of August rumors of what happened showed up and rapidly spread. It appears that Kim Jong Un expected to be standing next to Chinese leader Xi on the reviewing stand but was told this was not going to happen. Kim Jong Un took this as an insult and cancelled his visit. China told him this was disrespectful and there would be repercussions. That apparently led to China telling North Korea they were on their own during the August confrontation with South Korea and that forced North Korea to back down. North Korea denies there was any dispute with China over where anyone would stand during the parade but North Koreans believed the “petulant Kim Jong Un” version and Kim Jong Un is not happy about that, especially since the South Korean president attended and was seated close to Xi. China has made it clear that it considers South Korea, now a major trading partner, the more important part of Korea. That relationships has a downside as China is the largest export customer for South Korea and the showdown of the Chinese economy over the last year has caused a recession in South Korea.

In the northeast (130 kilometers off shore in the Yellow Sea between China and Korea) a Chinese fighter almost collided with an American RC-135 electronic reconnaissance aircraft. A similar incident in early 2001 resulted in a collision that caused the fighter to crash and killed the pilot. The damaged American recon aircraft made an emergency landing at a Chinese airport that resulted in China getting an even closer look at an American recon aircraft. It is unclear this time if the Chinese fighter pilot was operating under orders to not. Last time it was determined that the pilot was simply being reckless.