China: Follow The Money To North Korea


July 30, 2012: Protests against polluting industrial projects continue to grow in number, size, and determination. The government is concerned about the number of times projects have to be cancelled because officials fear escalating civil unrest if security forces are used to ram the project through. The big problem here is seen as losing control of the flow of information. The government can no longer maintain the level of secrecy required to run a successful police state. Cell phones and the Internet have proved remarkably resistant to censorship and manipulation. Then there's the corruption, which is the most unpopular aspect of the communist government. People are constantly discussing and reporting (to each other) corrupt acts, which is often at the heart of these pollution protests. The Communist Party insists it is determined to eliminate corruption. But this would entail prosecuting most party members. The most popular solution among the leadership is to prosecute the most harmful (in terms of bad publicity) corruption and let it be known that officials who wish to keep their ill-gotten gains had better learn to be discreet and cultivate an image of virtue and public service. That's difficult to do at the village and county level, where the stealing and double-dealing is done right in front of the victims. This kind of open abuse, and consequent ill-will, is taken seriously by the senior leadership. Nearly all of the many popular uprisings in China's long history were in reaction to corruption and inept government. Chinese leaders pay close attention to history, and they feel this aspect of it closing in on them. Some officials (and successful entrepreneurs) despair of a solution and are shifting assets, and even some family, to other more stable nations. North America is a favorite but so is Australia and Singapore and any place that does not have a traditional hostility to Chinese migrants. This hostility has eased in the West but is still very active in Asia.

China was apparently behind the recent purge in the North Korean leadership. Several senior and mid-level North Korean officials were forced to retire and then replaced with people known to be more loyal to new leader Kim Jong Un and his Chinese-style economic reforms. It was long suspected that the young (late 20s) Kim Jong Un managed to survive the death of his father (and second member of the Kim family, since 1945, to rule North Korea) because of the open support of China and Chinese pressure on senior North Korean leaders (especially those with wealth stashed in China). The purge curbed the independence of the North Korean military, which had long bothered the Chinese. North Korea officially denies any such Chinese influence and economic reforms, but the connections between North Korean officials and Chinese businesses and government leaders are there, as are the growing number of economic deals with China. Follow the money.

July 27, 2012: In Beijing senior officials made public apologies for poor response to the previous weeks floods. Despite government efforts to suppress reports of how officials and emergency services failed, the stories got around, often in great detail. Cell phones and a heavily censored Internet once more undercut government efforts to suppress an embarrassing story.

China's economic growth continues to slow. The reasons for this are unclear, at least according to the official statistics. But these numbers increasingly disagree with data collected by foreign firms and diplomats (spies) on the ground. It's long been suspected that the Chinese government was manipulating official economic statistics, just like it manipulates so much else in the economy. There are still a lot of state-owned firms and even more corrupt firms who use control over state-owned companies and banks to further their own criminal enterprises. Decades of such shenanigans are believed to have caused more damage to the banking system and government finances that has ever been admitted. This, it is feared, may cause a serious downturn in economic activity, at least for a while.

July 24, 2012: One of the Paracel islands (Woody Island) was declared the center of Sansha, a new Chinese municipality (city). Sansha is actually Woody Island and dozens of smaller bits of land (some of them shoals that are under water all the time) in the Paracels and the Spratly Islands to the south. In fact, the new "city" lays claim to two million square kilometers of open sea (57 percent of the South China Sea). This is part of a strategy based on the ancient principle that, when it comes to real estate, "possession is 9/10ths of the law." It's the law of the jungle because all the claimants are armed and making it clear that, at some point down the road, force will be used to enforce claims. The nations bordering the South China Sea, and the new city of Sansha, are creating alliances and trying to persuade the United States to lend some military, or at least diplomatic, support to opposing an increasingly aggressive China. This aggression is popular inside China, where the government has increasingly been playing the nationalist card. All Chinese know their recent history. In the 19th century the corrupt and inept imperial government loss control of much of China (Hong Kong, Manchuria, and so on) to better armed and aggressive foreigners. Then the communists took control over 60 years ago and began to win China some respect. Now China is asserting its ancient claims on adjacent areas, like the South China Sea. But those ancient claims also include control of Vietnam, Taiwan, the Philippines, and much of the Russian Far East. Asserting ancient claims is how the two World Wars began.

July 21, 2012: The weather service failed to detect a massive rain storm that hit the capital (Beijing). This was a storm of a size and intensity larger than any other in living memory and it caused enormous flooding and property damage. At least 77 were killed and thousands injured. Beijing residents were enraged at the lack of warning and inability of the local government to cope. The government feared large protests and calls to punish local officials.

July 18, 2012:  In Sichuan province (adjacent to Tibet) a young Tibetan monk died after setting himself on fire (to protest Chinese occupation of Tibet). This was the 44th such protest death in the last three years.  

July 15, 2012:  In the Spratly Islands a Chinese Navy frigate that ran aground four days ago, while on patrol 110 kilometers from the Philippines, was floated free and is now headed back to China for repairs. The Spratly Islands are basically a collection of atolls, shoals, and islets plus a lot of land that lurks just below the water (depending on whether the tide is high or low). It's a tricky area for larger ships, like frigates, to navigate. But more than that, China is claiming control of sea areas right off the coast of the Philippines, just the kind of land-grab that has caused wars so often in the past.



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