The government is providing money for continued development and procurement of new weapons (stealth fighters, UAVs, killer satellites, and so on). There is also more money for training (which can use up a lot of expensive fuel and spare parts, as well as wearing out gear). This is alarming the neighbors and causing a regional arms race as nations bordering China upgrade their armed forces and buy new weapons and equipment.
The new Chinese leadership openly called for the military to get ready for regional (with the neighbors) war. Newly elected leaders in Japan and South Korea made similar pronouncements, in response to growing Chinese aggression. In particular, the Chinese are claiming all the islets and reefs in the South China sea, including some that are clearly in the waters (as recognized by international law) of other nations. Outside the South China Sea China and Japan are contesting ownership of the Diaoyu (in Chinese) Islands (Senkaku in Japanese and Tiaoyutai in Taiwan).
The islands are actually islets, which are 167 kilometers northeast of Taiwan and 426 kilometers southeast of Japan's Okinawa and have a total area of 6.3 square kilometers. Taiwan also claims the islands, which were discovered by Chinese fishermen in the 16th century and taken over by Japan in 1879. They are valuable now because of the 380 kilometer economic zone nations can claim in their coastal waters. This includes fishing and possible underwater oil and gas fields. For China the islands are a valuable source of fish, whith Chinese fishing boats taking over 150,000 tons a year from the vicinity of the Senkakus. China fears that Japan might try to prohibit Chinese fishing in the area. A conservative Japanese political group built the lighthouse in 1986, to further claims of Japanese ownership. Currently, the Japanese have the most powerful naval forces in the region and are backed up by a mutual defense treaty with the United States. China was long dissuaded by that but no more. China is no longer backing off on its claims, and neither is Japan. So these confrontations are becoming more serious. Taiwan is not considered a serious contender in this dispute but is showing up anyway.
The air force has conducted its first successful large scale movement of squadrons (to a “forward air base”) and had the ground crews organize a “surge” (lots of takeoffs in a short period of time) operation. The Chinese had not been capable of surging effectively before, which is a key element in the superiority of Western air forces.
The navy has conducted seven training operations in the Western Pacific this year and announced that it would continue this tempo in the future and increase the number of operations and ships involved. China also announced that operations in the Indian Ocean would continue but that there would be more cooperation with Indian Ocean nations (particularly India, which has made it clear that it does not welcome the Chinese Navy to the “Indian” Ocean). These exercises provide essential training for crews. Lots of time at sea has long been the key to the superiority of Western navies (this includes nations like Australia and Japan). These exercises are closely watched by Western intelligence forces, to monitor the progress of the Chinese in improving their naval warfare capabilities.
December 22, 2012: The government arrested over a thousand members of the “Almighty God” religious group because of real or suspected anti-government activity. This group is only twenty years old and usually maintains a low profile. But recently many members have publicized the end of the world on December 22nd (because of a misinterpretation about how the Mayan calendar works). The government is very hostile to new religions as Chinese history is full of instances where new religious movements have triggered major rebellions against corruption.
December 18, 2012: Three Chinese Navy ships (including a supply ship) visited Sydney Australia for four days. The ships were on their way back from three months of anti-piracy duty off Somalia. The Chinese and Australian navies have been cooperating more, including joint training exercises. China is a major customer for Australian raw materials and a major factor in two decades of prosperity in Australia (where the GDP has more than quadrupled to $1.4 trillion).
December 16, 2012: Indian officials repeated their belief that China was now India’s major military threat, not Pakistan.
December 14, 2012: China protested to Japan about the over flight of the disputed Senkaku Islands by Japanese aircraft. This was in response to Chinese aircraft flying over the islands yesterday and movements by Chinese patrol boats and survey ships near the islands.
December 13, 2012: China, in cooperation with Russia and several Arab states, failed in an effort to get the UN control of the Internet (at least in terms of setting general rules all users must obey, as well as technical matters). This would make it easier for countries to censor the Internet.
December 12, 2012: China reacted to the North Korean use of a long-range ballistic missile to launch a small satellite by calling for calm. China had tried to persuade the North Koreans from not launching the missile, an act that is forbidden by international sanctions. China is still having a hard time trying to get is neighbor to pay more attention to economic issues and not fantasies of invading South Korea again (as it did, unsuccessfully, in 1950).
China has removed a Catholic bishop from his post and apparently put him under house arrest. The bishop had announced his allegiance to the pope, something the government has not allowed since 1951. Since then the senior officials for Catholics in China have been selected by the state. This remains an unpopular policy among China’s ten million Catholics.