China's economic growth over the last three decades was accomplished largely by the government stepping back, and allowing the business community to do whatever it wanted. This provided an opening for dishonest businessmen to ignore patents and such and produce cheap copies of goods. When dealing with foreign partners, Chinese firms got used to bribing Chinese police and courts to side with the Chinese company. Over the last few years, the government has been under growing international, and domestic, pressure to rein in this outlaw mentality. It's not just foreign nations that are striking back (to shut down counterfeiter factories and the blatant theft of intellectual property), but Chinese companies as well. As Chinese firms develop new technology, they find themselves being undercut by the Chinese pirates and their factories turning out cheap knockoffs of locally developed (at great expense) products. So the government is doing a serious crackdown on the pirates, mainly to protect outraged Chinese companies. Meanwhile, foreign nations have become more forceful in opposing shabby treatment of their citizens doing business inside China. The foreigners have become more threatening, and that has gotten the attention of the government. But Chinese police and security agencies can still be bought, by Chinese firms. There's growing use of unofficial jails, and literally kidnapping foreign businessmen who are having a dispute with Chinese firms (who have bribed officials to put pressure on the foreigners). The Chinese government denies that this sort of thing goes on, but it dos.
The government has also been forced to make concessions to the rural Chinese. Sixty years ago, 90 percent of Chinese lived in rural (usually poor) areas. Now only about fifty percent do, but until the law was changed recently, urban Chinese had four times as many representatives in the national "people's congress". While this parliament has no real power, the selection process puts people from all over China into the capital, where they can be useful. But until the rule was changed, it took four times as many citizens to get a rural member selected, than an urban one. Back in the 1980s, it was eight times. Basically, Chinese culture looks down on the country folk. But this has been changing, as the rural population has become more violent when protesting corruption and other abuse. Historically, it was rural unrest that brought down governments. Chinese leaders pay close attention to historical precedents.
China has sent a third flotilla of warships to Somalia, to relieve the second group of ships. The new flotilla also has a commando detachment with it. But the government is embarrassed by the fact that the Chinese warships already there, did nothing with their commandos when a Chinese cargo ship was recently seized by pirates. Other nations, particularly France and the United States, quietly offered the Chinese assistance in a commando operation to free the Chinese ship. But, fearful of being accused of needing (rather than simply accepting) foreign help, and unwilling to trust the capabilities of its own commandos, China did nothing. Negotiations are underway to pay a ransom for the ship and crew. A commando op is still a possibility, as many Chinese are dismayed at the lack of action. Especially in light of all the "we are strong" speeches at recent the 60th anniversary parades.
The Chinese military have made the Somalia situation more embarrassing by continuing to brag about the great things that are coming. Chinese air force commanders have spoken out about how China would have to build up offensive and defensive capabilities in space, to protect the growing fleet of Chinese satellites, and threaten foreign ones. Another general boasted that in ten years, China would have a stealth fighter. But in the present, the Chinese Internet was full of snide remarks about Somali pirates defeating the mighty Chinese military.
The Chinese climate of corruption has created a freebooter attitude towards a lot of things. Take foreign relations. China believes in "whatever works" and has gained economic advantages by working with any foreign government that appears to be in charge. That has made China popular with the dictators and tyrants of the world. China is the country that will do business with anyone. The downside is that you have to play by Chinese rules, which favors the Chinese. But nations all over the world are eager for economic and diplomatic relations with a major industrial power that doesn't lecture them on correct behavior.
China is pressuring the U.S. to keep its military ships and aircraft 371 kilometers from the coast (the distance international law recognizes as the "economic zone"), rather than 22 kilometers (the distance international law recognizes as "territorial waters"). Ignoring international agreements on this subject, China is determined to bully the U.S. into backing off to the 371 kilometer line. So far, the U.S. is refusing.
The government is carrying out yet another anti-corruption campaign. These things usually have little impact. But in the last few years, the number of trials, and executions, has been going up. The victims are usually politicians who are corrupt, and have too many enemies among their fellow officials. But now it appears that even some well connected, but dirty, officials, are being hit. These guys don't get executed, but they often lose their jobs, or get demoted. This is a strong warning to everyone else.
Taiwan believes that China is not serious about negotiating a long term peace deal. While China turns out optimistic sounding press releases, Chinese military forces continue to grow in the coastal areas opposite Taiwan.