February 20, 2008: Taiwan averted a military catastrophe recently when it discovered that a new military communications system had been compromised by a Chinese spy, who had bought secret codes from an employee of the American supplier. Now the codes could be changed, but if the Chinese theft had not been discovered, China could have disrupted Taiwanese air-defense communications during an attack. At the same time, Taiwan finally overcame years of political bickering, and agreed to buy 12 U.S. P-3C maritime patrol aircraft, to replace 22 smaller, and aging S-2, aircraft.

Meanwhile, back in China, the booming economy has revealed a serious military weakness; the electricity supply. China has not been able to build power plants quickly enough to keep up with an economy that has been growing ten percent a year for several decades. The power production and distribution systems are ramshackle, prone to breakdowns and vulnerable to wartime attack. Knocking out a few plants and distribution facilities could cause widespread power outages and severe shortages. Since the Chinese military is very dependent on civilian infrastructure in wartime, these power disruptions would impair any military activities.

The government's efforts to battle corruption are hobbled by the lack of tools. The justice system does not favor independent investigation and prosecution of corrupt officials (who have a lot of power over the people and organizations that would investigate them.) Until China changes its justice system, attempts to root out corruption at the local level will be very difficult (as in "don't hold your breath waiting for it.")

China's Internet users are getting restless. There are increasing attacks on government websites by Chinese hackers annoyed at Chinese Internet censors. Moreover, about a quarter of all Chinese Internet users maintain blogs, and the government Internet police are having a hard time policing all these outspoken Internet users. The government still enjoys the loyalty of many hackers, and Australia became the latest Western country to openly complain of Internet based espionage from China. But the Chinese governments increasingly energetic attempts to control the flow of information on the Internet are encountering more and more resistance. It's liable to get even uglier this Summer, as China hosts the Summer Olympics, and plays hosts to thousands of foreign journalists. Chinese security police are compiling a list of international "troublemakers" (including journalists) who will either be barred from entering the country, or kept under close watch if they are let in.

In the United States, a Chinese spy ring was broken up, after nearly two decades of stealing classified data on the American Space Shuttle program. This appears to account for the many similarities between the U.S. and Chinese reusable space vehicle programs. But this works both ways. The new United States "spy sub", the USS Ohio (which carries commandos and over 150 cruise missiles) is visiting South Korea, and apparently planning a clandestine tour down the Chinese coast, to see how well prepared the Chinese are to deal with the kind of snooping this new type of American sub is capable of.