Having failed to manipulate the Taiwanese parliament into halting new American arms sales to Taiwan, China is now trying to play the U.S. Department of Defense and Congress to get the sale stopped. For the last few decades, China has successfully used diplomacy (propaganda, threats, cash and business opportunities) to persuade other nations to shun Taiwan. For example, China recently persuaded France to reduce its cooperation in providing upgrades and spares for French warships and jet fighters used by Taiwan. China increasingly hurts American defense firms by offering much cheaper weapons and equipment, or additional diplomatic and economic incentives. Currently, the United States is the major target of this campaign. America has long been the primary ally of Taiwan, and is now more important than ever.
China insists that its growing military power is for defense. That makes sense, as a lot of money is going into the navy, which protects the imports (mainly of raw materials) and exports (of manufactured goods) that are driving the unprecedented economic growth. The Chinese try to explain away the military buildup opposite Taiwan as political theater. This may be true, for a failed attempt to take Taiwan by force would not only disrupt the economy (and create a lot of unhappy Chinese), but would be a major failure by the government. Dictatorships cannot survive too many such failures, or too many angry citizens. So it makes sense that the Chinese military growth is largely for defense. But those large defensive forces can also be used to bully or intimidate neighbors, which is what the neighbors are worried about.
The Chinese government recently suffered a major defeat when workers at several large car parts factories managed to organize and sustain a strike for higher wages. China has labor unions, but these are government controlled, and intended to keep workers in line, and prevent strikes (unless the government wants them). The workers used cell phones and the Internet in creative ways, getting around government electronic surveillance to keep workers informed and maintain morale, and the strike. There will be repercussions. Strike leaders will be sought and punished and efforts to block use of cell phones and the internet to support such forbidden activities (strikes) will accelerate.
China has been losing a lot of these battles with modern communications. There are 400 million Internet users in China, and nearly twice as many cell phone users. Billions of dollars a year has been spent on controlling Internet use in China (the Golden Shield effort). Similar, but far less successful, efforts have been made to control cell phone use. Users find ways around censorship (computerized systems that check texting for forbidden or suspicious words). Shutting down cell phone access to areas works, but forces the government to rely on military communications, which is far less effective than cell phones. The government is not discouraged, and is investigating new solutions (like special government cell phones, that still operate when everyone else is shut down during an emergency.) Chinese officials believe that while the Internet and cell phones have caused them to lose control of the flow of information, it is a temporary situation, which will be fixed once the right control (filtering and censorship) technology is found. However, technology is a moving target. The growing popularity of smart phones (more personal-computer-like devices built into a cell phone) in China creates a device that is more capable of evading censorship and government control.
June 18, 2010: Toyota Motors suspended half its car production in China, because of an illegal strike at one of its parts factories. China is the biggest automobile market (16 million vehicles a year) in the world, and this strike alone halted production of over a thousand vehicles a day so far. Other vehicle parts strikes over the last month, have been settled, with workers getting raises of up to 24 percent. The word has quickly gotten around, including advice from striking workers, to other workers, on how to carry out a successful strike.
The strikes are possible partly because of a shortage of skilled or experienced workers. More and more of the migrants from rural areas have less education and work experience, forcing employers to spend more money on training, and to raise wages to attract the desired people. Moreover, workers are less willing to put up with low pay and poor working conditions. The big problem in China is that the country does not have the natural resources to support higher living conditions for a lot more of the population, or deal with the growing pollution. Nearly all Chinese are now aware of better opportunities, and want a chance of having a better life. But the government is corrupt and inefficient, and has been unable to improve education or infrastructure fast enough to keep up with peoples' expectations. This is causing more and more unrest, and threatens Communist Party control of the government. Democracy would put ultimate control back on the people, and avoid much of the unrest. But the millions of Communist Party bureaucrats, who are prospering because they control the government, do not want to give that up.
The Chinese communists has been flexible in dealing with unrest. They have allowed more public participation in decision making (mostly via opinion surveys). And when there are uprisings (like the many against corruption, and the current wave of illegal strikes), there have been compromises. Chinese leaders have always (for thousands of years) been acutely aware of history, and how certain trend reappear, and play out the same way again and again. So they know that compromise is often the best solution. But there has never been a situation of such rapid technology change before, and it is difficult finding guidance in historical examples. Despite that, the Communist Party mandarins do the best they can.
An example of this flexibility is a recent order that went out to bus drivers in the Chinese capital. In the future they were to address adult passengers as "sir" or "madam", and "passenger" for kids (it's impolite to use the same terms to address adults and kids), rather than "comrade." Older passengers wearing the "Mao suit" (which was mandatory in the 1960s), can still be addressed as "comrade" Many bus drivers are aware that kids are using "comrade" as an insult, and adults just didn't like the old communist era term.
June 7, 2010: China accused North Korean border guards of killing three Chinese and wounding another, who were on a boat, on the Chinese side of a river forming the border. The North Korean guards were under orders to open fire if they thought they saw smugglers trying to sneak across the river at night. China has had problems before with trigger happy North Korean border guards. The North Koreans have to be careful how they deal with China now, because the North Korean torpedoing of a South Korean corvette three months ago has forced China to withdraw its unconditional support for North Korea. South Korea, a major trading partner with China, demanded that China chastise North Korea for the torpedo attack. China refused to do so publicly, but did so privately.
May 30, 2010: This is a big deal in China. The courts have ruled that evidence obtained via torture can no longer be used to convict anyone of a crime. The police regularly use beatings, and worse, to get people to confess, or simply to remind them to do what the police, or local communist officials, want.