China: The Lessons Of The Last Emperor

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September 26, 2014: The anti-corruption effort can be measured in many ways, and one of those methods involves the activity of wealthy Chinese gamblers. More of them are gambling outside of China. That’s because Chinese corruption investigators have been gathering information from Chinese casinos and used that to prove corruption by the many gamblers who obtained their money via corrupt practices inside China. Some Chinese “whales” (wealthy gamblers) have stopped gambling in Chinese casinos (where it is legal, at least in Macau) or now visit foreign casinos where guest spending data is kept confidential. Even that can be dangerous since investigators can trace those visits and ask embarrassing questions of corruption suspects. The government is also trying many other anti-corruption measures. One of these is an effort to attract more “true believers” to its ruling Communist Party. Current membership is 87 million but most are there only for the political connections. Most Chinese communist are contemptuous (often openly) of communist doctrine. The government sees this as one of the main reasons communists in East Europe and Russia lost power in 1989-91. The government fears that is happening in China and a growing number of Chinese not only agree with that assessment but welcome it. Thus the apparent sincerity of the most recent anti-corruption drive. For most Chinese, the rampant corruption among Communist Party members is the main reason they want the communists gone. The communists, like the last emperor (deposed in 1910) don’t want to go, not without a struggle anyway.

Over the last few months the efforts to tighten up on government control of what appears on the Internet inside China has brought increasing complaints from Chinese businesses. The new monitoring and censoring efforts have increasingly interfered with Chinese firms taking care of business, especially if that business involves communicating via the Internet with customers outside of China. So far the government is listening to the complaints but the internal debate over what to do make take weeks or months more to resolve. While the government is mainly interested in ridding the Chinese Internet of anti-government material, China has also been trying to eliminate pornography for over a decade. Recently China has also gone after the use of rumor and false information campaigns as well as sharing opinions about politics or issues of public interest. The use of rumor and false information have long (since the Internet began to be a major media force in the late 1990s) been used by businesses, and some individuals in China to attack and discredit competitors and rivals. Even government officials will use it against those they are having disputes with, as in other officials, businessmen or foreigners.  This sort of thing is more common in China than elsewhere and has become a very rough and unregulated form of media manipulation and public relations. In 2013 the government rolled out a campaign to restrict this bad behavior. The government is prosecuting and making an example of celebrities and other high profile offenders, to ensure that the message gets around. The new rules only allow government approved organizations to do “public relations” work via the Internet. This includes commenting on the news. This new program went into high gear in early 2104 when China ordered its Internet censors to crack down on what people said on Chinese social media. This quickly led to many local critics (or simply commentators) of the Chinese government disappearing from the Chinese Internet. China is also sharply cutting the number of foreign TV shows that can be sold via Internet streaming in China. This has been enormously popular, not just for American movies and TV shows, but also shows from South Korea and other East Asian countries. The government wants to limit foreign cultural influences but most Chinese like this stuff and are not happy with the growing restrictions on access to foreign entertainment and information in general. All this does not surprise most Chinese, especially since in 2013 the government finally revealed the number of people (two million) involved in Internet censorship operations. This operation is called Golden Shield (or “Great Firewall of China” in the West) and it’s a huge information control system that has been under construction since for over a decade.

The standoff on the Indian border continues. For most of the month Chinese troops have been several kilometers inside Indian territory trying to force the Indians to halt construction of roads, military bases and other infrastructure in what the Chinese claim is their territory. Even the recent visit of the Chinese leader to India did not settle this dispute. Military and diplomatic officials from both sides are meeting regularly to try and resolve the dispute, or at least avoid an escalation.

There is growing anger in Burma against China. A major issue is all the illegal industries in the tribal north that export to China. This involves lumber, gems and other raw materials as well as illegal drugs. This trade is believed to be worth more than the $3.4 billion a year in legitimate exports and most of the cash flows through semi-legal Burmese banks on the Chinese border. China has strict controls on moving cash (no more than $50,000 a year per person) in or out. No such rules in Burma and it’s much easier to open bank accounts in Burma. Chinese banking officials estimate that legal and illegal cash flows from China to Burma are over $30 billion a year. While most of the cash flow is out of China (to pay for the illegal and legal imports and investments in Burma) little of the money stays in the north. Much of the illegal cash is laundered and moved to other parts of the world considered safer for questionable cash. If all the illegal business in the north were legitimate more of the money would stay in the north. That is not going to happen anytime soon. The illegal drugs (mostly meth and heroin) are not going to be legalized and the other raw materials are protected by powerful (and violence prone) groups in Burma and China.

China has managed to help the North Koreans grow their economy, but this has not helped reduce the poverty there that is causing growing unrest. Although the North Korean GDP has increased by 25 percent in the last decade, most of that increase went to the military and the few thousand families that run the country. They have Western gadgets, new cars and impressive homes (visible on Google Earth) outside the capital. Inside the capital there is a lot of new construction, including stores selling luxury goods. In the rest of the country all you see is a poorly maintained slum with frequent electrical blackouts and growing shortages of fuel for heating and transportation. The GDP growth comes largely by allowing Chinese firms to operate mines and factories, using cheaper North Korean labor. The government seizes most of the profits from this increased economic activity, leaving most North Koreans with less than they had a decade ago. This has caused growing unrest, including anti-government graffiti (unknown a decade ago) and more people fleeing to China and from there to South Korea with details of the hell up north. China has been urging North Korea to allow economic freedom, as China did in the 1980s. But many in the North Korean leadership believe this would lead to revolution and catastrophe for them.  The economic sanctions against North Korea have changed over the years to target the leadership. This has not worked well because China refuses to participate. Thus Chinese firms do a brisk business supplying several hundred thousand families that comprise the North Korean ruling elite with luxury goods.

September 25, 2014: The government agreed to send 700 peacekeepers, and armored vehicles, to South Sudan (where a civil war is currently in progress). The UN will decide when the Chinese troops should arrive, but it will happen before the end of the year.

For the second time this month a Chinese submarine visited Sri Lanka, the large island-nation off the southern tip of India. The sub was a nuclear powered Type 091 and it was the first time a Chinese nuclear sub had visited Sri Lanka. Earlier in the month a diesel-electric Type 039 visited. In 2013 China agreed, as part of a $2.2 billion loan for economic projects, to provide training for troops in Sri Lanka. This deal will also include delivery of more military equipment. Sri Lanka (which has long had tense relations with India) has become the beneficiary of Chinese economic and military aid over the last decade and has become very friendly with the Chinese. Sri Lanka received crucial military aid from China during the war with Tamil rebels (who received a lot of aid from Tamils in southern India and were finally defeated in 2009). India can't become too friendly with Sri Lanka without causing political problems with its own Tamils (many of whom still support the defeated Tamil rebels of Sri Lanka, where Tamils have long been a troublesome minority.)

September 24, 2014: A Chinese warship (a destroyer) visiting Iran participated in joint training exercises with Iran. The destroyer had arrived three days earlier, the first time a Chinese warship had visited Iran.

September 23, 2014: A prominent scholar (Ilham Tohti) was sentenced to life in prison because of his vigorous (but non-violent) defense of Uighur separatism. Tohti is a Uighur and sending him to jail is seen as another government attempt to diminish the growing separatist violence. Most of this is happening in the northwest (Xinjiang). China accuses Islamic terror groups among the ethnic Turks (Uighurs) of Xinjiang for all these problems. The government is greatly embarrassed at its inability to halt the violence. Unhappy Uighurs are increasingly aggressive in attacking the growing Chinese presence among them. In Xinjiang province the local Uighurs are not responding well to growing pressure from Han Chinese soldiers and intrusive Han government officials. Because of that many Uighurs continue to support anti-Han activity and this makes it possible for Islamic terrorists to survive and operate. Most Uighurs are found in Xinjiang province. There the nine million Uighurs are now less than half the population and most of the rest are Han Chinese. The government has been publicly urging soldiers and police to be more aggressive against uncooperative Uighurs. The government accuses Uighur activists of endangering state security and tries to keep the unrest out of the news. The same thing is happening in Tibet, where the government is using the same tools to keep everyone under control. Since 2011 several hundred have died in Xinjiang because of Uighur violence against Han rule. Thousands of Uighurs have been arrested and hundreds sentenced to prison, or death.

September 21, 2014: In the northwest (Xinjiang) there was another Uighur terror attack involving a market, two police stations and a store. Over 40 were killed, most of them attackers or civilians, along with four policemen. Most of the dead were Uighur but over a dozen appear to have been ethnic (Han) Chinese. The last major attack, on July 28th, left over a hundred dead. Subsequently the government prosecuted and punished 17 local politicians and police commanders for not preventing the attack and not handling it well when it did occur.

September 18, 2014:  The Chinese leader visited India and discussed investing $100 billion India over the next five years. This would be remarkable, as Chinese have invested only about $400 million in the last ten years. Some see this as a Chinese response to a recent announcement that Japan plans to invest $35 billion in India. The Chinese proposal, real or not, is seen by many Indians as another form of Chinese aggression. India would have a difficult time opposing Chinese efforts to seize Indian territory on the border if the Chinese were in the midst of pouring billions of much needed investment into India. Meanwhile India announced that it was accelerating the effort to ready its new anti-missile system for service. Eight more tests of the system are scheduled and the current plan is for the system to be operational by 2016. This would provide some protection against Chinese ballistic missiles armed with nuclear warheads. China has no similar system anywhere close to deployment.

September 17, 2014: The government is providing $89.5 billion to the five largest banks in order to help stimulate economic growth. Corruption (especially over a trillion dollars in questionable loans by banks), foreign hostility towards growing Chinese territorial claims and foreign economic competition have been slowing down the Chinese economic growth. For nearly three decades China grew at a rate of 10 percent a year or more but since 2008 that rate has been falling. It is now under seven percent a year and nothing the government has done since 2008 has been able to halt the slide. This has a growing number of Chinese worried.

September 15, 2014: Mali signed a number of economic aid and trade deals with China totaling $11 billion. Most of this is for building or upgrading two rail lines from landlocked Mali to the coasts of neighboring Guinea and Senegal. The details of these deals have been kept secret, no doubt to conceal large bribes and other questionable aspects of these contracts. China likes to play by local rules while many Western nations and financial institutions do not. For example, it was revealed that this deal included $41 million for gifts and interest free loans. All this will bring some economic benefit to southern Mali, even though the Chinese bring in their own people (from China) to handle a lot of the work. This usually includes thousands of lower level workers who could have been hired locally. These practices are a growing cause of friction in Africa, especially since some of these workers remain in the African countries were they worked on some Chinese funded project. These Chinese settlers generate more economic activity, but often generate friction with the less economically successful locals. It’s an old problem in Africa.

September 14, 2014: The Philippines released more photos showing how China is building military facilities on the disputed Johnson South (Chigua) Reef and several other reefs. China will not admit that it is expanding these reefs (by dredging up sand) and usually insists that they are merely trying to rebuild a reef that has been damaged by storms. This is not the sort of thing China does. Building bases on reefs, on the other hand, is something the Chinese do frequently in the South China Sea. The Chinese “reclamation” project on Johnson South looks more like a new island than a restored reef, complete with a new airstrip and lots of buildings. The reef is claimed by the Philippines, Brunei, Malaysia, Taiwan, and Vietnam. Until 1978 it was occupied by Vietnam but in that year China took it by force, killing 70 Vietnamese (and sinking two ships) in the process.  The Philippines accuses China of violating a 2002 agreement not to expand existing islets or reefs and build bases there. Not only is China ignoring that agreement on Johnson South, but also on Mabini, Calderon and Gaven reefs. These bases often include air strips long enough to handle jet fighters.

September 12, 2014: China warned its citizens to stay away from the Philippines. This is in reaction to a recent plot to bomb Chinese targets in the Philippines. The police disrupted these plans and there were no casualties, but the obvious anger of Filipinos towards China because of Chinese claims on Filipino territory has the Chinese government concerned.

September 11, 2014: Chinese troops have built a two kilometer long road into Indian territory near Ladakh (northwest India). India responded by sending soldiers to destroy this road. China has sent in troops and civilians to “protest” Indian activities on the Indian side of the border when anything happens on terrain China claims.

The Philippines published a 969 year old Chinese map showing that Chinese territory in the South China Sea did not extend beyond Hainan Island. Other old maps show areas now claimed by China as clearly considered the territory of nearby states, not distant China. Although China has access to lots of these old maps they ignore them when justifying their claims on all of the South China Sea.

China announced plans to invest $50 million in Pakistani economic projects over the next three years. Much of this will be spent on new roads and railroads that make it easier to move people and goods between the two countries.

September 10, 2014: Recent opinion polls in China and Japan show that 53 percent of Chinese and 29 percent of Japanese believe that war between China and Japan is inevitable. The Chinese government promotes these pro-war attitudes to distract Chinese from the growing problems at home. This is an ancient tactic by rulers at risk of being ousted by a popular uprising. China is also still very concerned with Japanese military and economic power. Add to that the smoldering resentment for Japanese occupation and atrocities from the 1880s to the 1940s, and you have potential for war that is little appreciated outside the region. In fact, China has tense relationships with all its neighbors, in addition to a long history of Chinese aggression. The growing economic power of China is seen, but Chinese neighbors, as another weapon the Chinese will use against them.

September 9, 2014: The military is organizing a fifth service (in addition to army, navy, air force, strategic weapons force), the Aerospace Force. This one will concentrate on operations in space.

September 8, 2014: China recently revealed (apparently by accident) the existence of the DF-26 IRBM (Intermediate Range Ballistic Missile.) This one appears to have a range of 3,500 kilometers and based on the earlier DF-21. There have been reports of such a missile since 2007 and the DF-26C appears to have been in service for several years. The DF-26C is notable because it has the range to hit American military bases in the Central Pacific island of Guam.  China tends to keep a lot of military data secret, even after foreigners have discovered the new items via satellite photos or curious Chinese taking cell phone photos and posting them.

September 7, 2014: A recently released survey (Global Competitiveness Report 2014-15) ranked China 28 out of 148 countries.  Each nation was scored on how well it did in areas like education, government effectiveness, technology, market efficiency, infrastructure and acceptance of innovation. Corruption, more than anything else, is what harms global competiveness. Some nearby nations did much better in these worldwide rankings. Singapore is number 2, Japan 6, Hong Kong 7, Taiwan 14, Malaysia 20, Thailand 31, India 71 and Burma 134. 

 

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