December 31, 2011: While Taiwan and China continue to prepare for war they also increase their economic cooperation. Starting in 2012, Taiwanese can set up individual businesses in China (as opposed to investing in larger operations with Chinese partners). At the same time, three million Chinese tourists visited Taiwan in the last three years as part of groups. Starting six months ago, individual Chinese tourists were allowed to visit. China hopes to conquer Taiwan by force or economic integration, whichever works best.
As China's neighbors scramble to form alliances against growing Chinese military power, some of these alliances are feared more than others. India and Japan, two of the three (besides China) major naval powers in Asia, are cooperating much more. This bothers China a great deal. Meanwhile tiny Singapore (an island city-state) is negotiating to become an American naval base. U.S. warships already provide most of the seaborne muscle in the Persian Gulf (to protect Arab allies and counter a hostile Iran). This is a critical area for China, which obtains most of its oil from the Persian Gulf and ships it via the Indian Ocean and right past Singapore. So Americans being part of a local anti-Chinese alliance (especially one including Japan and India) is a big deal.
South Korea also has a powerful navy and, unlike Japan, exports weapons. Although Japan is debating allowing arms exports, South Korea has been turning itself into a major player. For example, South Korea recently signed a deal to build three submarines for Indonesia. South Korea also has warmer diplomatic relations with China than Japan (which is still disliked because of atrocities in the first half of the 20th century). South Korea's main dispute with China is over who shall control North Korea after the current inept and cruel government collapses. China has made it clear that it will maintain control of North Korea. This is a very unpopular position in South Korea and could lead to war. Not a long war, China and America both have nuclear weapons and would not want a disastrous escalation. For years, China has urged North Korea to adopt Chinese style economic reforms (a market economy under a communist dictatorship). North Korea has long resisted this but the recent death of North Korean leader Kim Jong Il may have changed that. But even before Kim Jong Il passed away on December 17, North Korea-China trade was up 74 percent this year. Much of this was due to international sanctions against North Korea for its nuclear weapons programs. Currently, 83 percent of North Korean imports come from China. But a lot of the increased China trade was because of Chinese companies being given permission to set up major industrial operations in North Korea.
What scares China's neighbors the most is the amount of money and effort going into the navy. China has produced a lot of experimental ships and systems. While much of this stuff has already been tried in the West, the Chinese know that they have to actually build and use these items (multi-hull surface ships, different types of nuclear subs, plus many varieties of missiles and electronics) to acquire the needed skill to reliably build and use more advanced high tech.
China is retiring a lot of military officers, as it shrinks the size of the military. It is providing Internet training to these officers in an attempt to encourage them to become Internet based businessmen. Most retired officers expect a government job, but there are not enough of those to go around these days.
In the south, the unprecedented uprising in the coastal town of Wukan has been met by some reasonableness. For most of December, the town of 20,000 has been in open rebellion against the government because of corrupt local officials (who also killed a popular protest leader). The national government has taken over the situation and has surrounded the town and banned foreigners, especially journalists, from the area. Internet access was cut off but information was still getting out. At the same time, national officials admitted that the people of Wukan have a point and that they were mistreated. The government is trying to work out a peace deal with the rebellious Wukanese. The government does not want stuff like this to spread because there have been hundreds of outbreaks similar (but not as extensive) to Wukan in the past year. Enough Wukans happening at the same time and in the same area could spark a wider rebellion. It's happened many times before in China's history and Chinese officials, especially at the national level, pay close attention to history. So the Wukan situation (and several others in the south) are being exploited by the national leadership as an opportunity to punish local officials and serve them up as examples to the many more local officials who do the same thing, but more discreetly. The national officials would like to get rid of corruption but discreet corruption is an acceptable alternative.
Chinese efforts to control the Internet inside China has created a uniquely (and heavily censored and monitored) Chinese subset of the global Internet. While enterprising and technically savvy Chinese can get past the "Great Firewall of China" to the global Internet we all take for granted, inside China you see a rather different Internet, and have to be very careful what you say. In addition to extensive monitoring (by software and over a hundred thousand full time and volunteer censors), China has forbidden the use of Twitter (which can spread news faster than it can be controlled) and increased control over locally developed "micro-blogging" (a pretty effective Twitter substitute). There is also tight control over any social-media sites. Most Chinese Internet users simply accept the restrictions, if only because they have never experienced a truly open and free Internet. The Chinese government is determined to keep it that way.
It's not just the Internet that disturbs the communist government in China, it's also the fact that an increasing number of Communist Party members are becoming religious and believers in capitalism. Communist believers are still recovering from the decision, several years ago, to allow businessmen to become Communist Party members. Now, to see party members attending religious services and celebrating alternatives to socialism is, if nothing else, bad for morale at the highest levels of the party.
December 28, 2011: The government released details of an investigation into the July 23 crash of one of China's high-speed "bullet trains". The accident killed 40 and injured over a hundred. The incident, and recently released report, revealed that corruption and poor management were responsible for the accident. This sort of behavior does not officially exist but everyone knows it is true.
December 27, 2011: China's answer to GPS, Compass, went active and is now serving anyone with a Compass receiver. The Compass (or Baidou) system is actually in test mode for the next year, providing only 25 meter accuracy. After the test period, Compass will then provide the same accuracy as GPS (10 meters). The Chinese Compass will have a string of as many as 35 satellites, including five geostationary ones and the rest Medium Earth Orbit (MEO) satellites. Compass will cover the entire globe. The necessity of a military satellite navigation system for a nation comes to the fore during wartime. Depending on a foreign SatNav system like GPS can leave Chinese aircraft and weapon systems at a disadvantage. The American military grade GPS can be restricted to only U.S. forces and close American allies. When Compass is completed in a few years the total cost will be over $10 billion.
December 26, 2011: A Chinese writer, Chen Xi, was sentenced to ten years in prison for publishing on overseas Chinese language web sites, essays critical of the current Chinese government. The Chinese prosecutors declared this to be treason during the 150 minute trial.
December 21, 2011: Japan has decided to buy the American F-35 fighter. Japan had been trying to obtain the more advanced F-22, but the Americans, alarmed at Chinese success in getting American military secrets from Japan, refused. Japan decided to go for the F-35 because of obvious Chinese success in developing a similar aircraft (the J-20).
December 20, 2011: Like most Western armed forces, China has developed a Military Training Department for the entire armed forces. This staff organization will find or develop new training methods and implement them throughout the armed forces. Before this, training was left to subordinate organizations. This led to low standards and not much innovation.
In addition, China will increase its information and personnel exchanges with foreign militaries. In the last year, officers and troops from fifty foreign nations visited China, and China sent officers and troops to nearly as many foreign nations. China increasingly provides weapons and training for less-advanced nations and seeks to obtain more technology and ideas from Western forces. This is either done openly, via visits, official exchanges, etc. or via Internet and other espionage.