May 4, 2018: The anti-corruption effort continues to get a lot of media attention in China. This is no accident because the government is concentrating on corruption prosecutions in areas that most Chinese are angry about and that impacts them the most. This means medical care, pollution, and anything that resonates with most Chinese is under constant scrutiny. What that means is that the government is using opinion surveys (another essential of economic freedom) to determine what areas should get the most attention from anti-corruption efforts. For example, air and other forms of pollution are a big problem and most Chinese encounter it regularly. The pollution is believed to cause over a million premature deaths a year and the censors have been unable to keep Chinese from knowing this, or discussing it. Senior officials can buy expensive air filtration systems for their homes and offices, but they and their families could not completely escape the dirty air. So going after any corruption that is related to pollution is a higher priority and right after that comes medical care (where corruption is currently rampant).

Corruption investigations have been increasing every year but who gets investigated is still a corrupted process. There were only 54,000 in 2015, which was 37 percent more than 2014. The number of investigations continues to grow but the pattern of who is prosecuted and who is punished had not changed. About 90 percent of those investigated for corruption go on trial and only about five percent were punished. Only about 12 percent of those punished were “tigers” (senior officials) while the rest were “flies” (those with no power or clout to avoid prosecution). The government says (quietly, to foreign observers who know what is really going on) that it is really trying to discourage corruption, not create a lot of enemies in its own senior bureaucracy. Thus the need to get maximum popular goodwill from each corruption prosecution. This means equally, or more urgent areas of corruption (like banking and finance) get less attention.

Some tigers accused of corruption use bribes and intimidation to avoid punishment, although few are able to keep their jobs. The government prefers to make deals that avoid a trial or prison if the accused can provide evidence of other senior people who are guilty and not known to prosecutors. Those punished most severely are the ones responsible for something that got a lot of people killed. This often results in execution, especially if the offender is a civilian (usually a senior business executive). Another pattern noticed by foreigners (working from public records) is that “tigers” accused of corruption tend to be disproportionately people who had not supported leader-for-life Xi Jinping before he became head of the government and then permanent leader. Those who did support Xi Jinping for a long time and are caught up in a corruption investigation still tend to get punished, but in the form of quietly retiring and often allowed to keep much, if not all, of the wealth they stole. One area where this “friends of Xi Jinping” angle does not work so well is the military. The senior officers accused of corruption had fewer opportunities to support (or not) Xi Jinping, who came up through the civilian and Communist Party bureaucracy. Corruption in the military has been an ancient tradition and there’s a lot more opportunities to steal now. Xi Jinping has made it his personal goal to break that tradition, or at least greatly erode the extent of corruption in the military and that means a lot of the accused “tigers” tend to be generals and admirals. For the senior leaders corruption in the military is important mainly because the current Chinese military pledges allegiance to the CCP (Chinese Communist Party), not China.

Marching Orders

The government has issued new guidelines for the military. China has done this about once a decade since the 1950s and these directives from the CCP, the organization the armed forces is pledged to protect, defines significant changes in military policy. The new guidelines concentrated on ensuring the loyalty of the military to the CCP and the need to improve combat capability. To that end there were new rules on mandatory physical fitness standards and restrictions on use of cell phones and the Internet (especially social media and shopping) by military personnel. The new rules also go after the endemic corruption that has always been present in the peacetime Chinese military. The latest guidelines specifically address standard of living issues for all military personnel and the need to ensure these living standards are maintained. These items are essential because more than any time in the past the Chinese military now depends on attracting well educated volunteers and retaining them. With such volunteers it is easier to concentrate on realistic combat training and readiness for war. This would be another rare event for the Chinese peacetime military. But this sort of thing is essential of the new (and unique in Chinese history) navy is to become an effective force and equally important for the rapidly modernizing air force. China has been having some success making these new rules work and that has caught the attention of foreign military analysts.

For example American air force leaders are now paying more attention to how the mighty Soviet Air Force, while now long gone, has, since the late 1990s been replaced by a rapidly modernizing Chinese Air Force that is decidedly Old School when it came to air combat training. Chinese combat pilots were getting the same quality of aircraft and training the U.S. Air Force used to enjoy and were on a trajectory to surpass their Western rivals. This seemed to alarm and motivate the army and navy more than the air force. That’s because naval aviation was still led by combat pilots who still got lots of flight hours, usually while operating off an aircraft carrier at sea. That is what makes navies dangerous, spending a lot of time at sea where, even in peacetime, it can be very dangerous just moving around out there. Carrier pilots were always recognized as being special because operating from a carrier is a lot more difficult and dangerous than from a land base.

By 2010 it became obvious that China was building modern fighters and while these pilots got some training in delivering smart bombs, most of their combat training was about taking control of the air away from the Americans. American fighter pilots saw this as a serious challenge, U.S. Air Force leaders were less impressed although they had to pay attention to how their dwindling number of fighter pilots making it clear that inattention to combat flight training was their main reason for leaving. Those flight hours are expensive and the American air force has to choose between new aircraft and enough flight hours to keep U.S. pilots at peak effectiveness. China has a much smaller collection of modern warplanes but it is determined these fighters will be operated by pilots who can match (now or soon) the Americans.

Little Russia

Russia admits it is losing satellite launch business to China and the United States (with their cheaper SpaceX tech). Russia has also been cancelling ICBM programs for lack of cash and qualified technical personnel. Same thing with their warship construction efforts. Aircraft development is doing no better. India recently withdrew from the joint development agreement for the Su-57 stealth fighters. This project is way behind schedule while the Chinese already have one stealth fighter in service and others about to be. The American F-35 is getting good reviews and Russia is getting a close up view because Israel recently put its first F-35s into service. Meanwhile the Russian GDP ($1.3 trillion) is stagnant and the population continues to shrink because more people are leaving and not enough children are being born. Few want to move to Russia, at least not for economic opportunities. Russia projects a more powerful image than it can sustain. Russia needs a win but so far can only manage some feeble threats.

India has in turn bought less from Russia, long the main supplier, and depended more on Western nations (mainly the U.S. and Israel). China has become a major threat to customers Russia long believed they had a lock on. China can offer a wider range of inexpensive weapons similar to what Russia has long offered but deliver stuff of higher quality, higher quantity and customized to customer requirements. Moreover China turns around these orders more quickly. There are still some Chinese weapons suppliers who have acquired some of the bad Russian habits but these are usually bottom feeders supplying the lowest cost stuff to the most desperate customers. China encourages its arms manufacturers to take the high road, except when it comes to practical measures like paying bribes to get the sale and get it delivered. If India and China did not have some many border disputes India would be buying Chinese weapons in place of the increasingly shoddy ones Russia is offering.

Compliant Korea

Six weeks after the rare visit to China by Kim Jong Un it appears that the talks with the Chinese leader cleared the way for North Korea to make peace with South Korea and the West in general. The meeting was at the request of Kim and China expressed satisfaction with the results. China apparently showed its approval by loosening up the sanctions a bit. A few hundred North Korea female workers were allowed back into China and there were a few other minor concessions. Apparently China also relaxed its enforcement of sanctions when it came to sending all North Korea workers home. Everyone is optimistic and in the last week North Korea announced that it was willing to give up its nukes and officially end the Korean War. All this was possible if South Korea and the West (especially the Americans) provided some immediate help for broken economy in North Korea. The South Koreans and Americans indicated that was all possible. But the devil was in the details and those details were not known yet.

Historically North Korea has been difficult, if not impossible, to negotiate with. In the past they would renege on the few deals they appeared to make and always asked for more than could expect to get. This time it appears to be different. China is fed up. Even with the Chinese censorship of their Internet some public issues (corruption, pollution, North Korea) do break loose and it is possible to see what Chinese really think. North Korea is one of those “we are fed up” issues in China. The Chinese leader apparently told Kim Jong Un that China can solve its North Korea problem a lot more easily than they can the corruption and pollution problems in China. This is not a sudden development, the Chinese have been pressing North Korea for over a decade to change and that eventually escalated to the current “change or else” level. New leaders in South Korea and the United States are unwilling to tolerate any more North Korean unwillingness to make peace. The world agrees and the UN has approved the recent expansion of sanctions and these sanctions are so extensive and strictly enforced that they are having an unprecedented impact on North Korea.

The most advantageous move for North Korea is to give up the nukes in return for economic aid and at the same time institute more economic reforms inside North Korea. Because North Korea has often rejected the most advantageous moves in the past there is no guarantee that North Korea will do what is in its best interest this time. Yet it appears that the North Koreans are ready and willing to actually help themselves for once. Then again the Chinese may have pointed out that North Korea cannot feed itself without access to Chinese food supplies and that China has many friends in the North Korea bureaucracy and the North Korean leader knows that because he tried, and failed, to get rid of them. There were too many and often these pro-China officials had hidden their attitudes very well. China could replace the Kim government. It would be messy and expensive for China but it could be done. However if North Korea had a lot of effective nuclear weapons (which they do not have yet) that could be an unacceptable threat to China. It also became clear to North Korea that for once the Americans, China and South Korea are all united in insisting that there be some fundamental reforms in North Korea. By the end of May the meetings with South Korean and American leaders and Kim Jong Un will have taken place. A deal will have been agreed on, or not. If there is a deal it will require verification and that can be implemented quickly, as can the delivery of economic aid. So within two or three months it will be clear if all this is a major change for North Korea or more of the same old mistakes. That in itself is progress of a sort.

The Height And Heft Advantage

The 3,500 kilometer border shared by India and China is largely uninhabited areas where news does not travel fast. Indians call this border the LAC (Line of Actual Control) because so much of it is disputed by China and both countries have increased military forces along the most frequently contested areas. The Chinese have managed to quietly gain a crucial advantage in these areas. India has noted that China has put a number of surveillance satellites into service that specialize in border surveillance along the much of the LAC. In addition China has been seen installing ground based sensors as well (cameras, radars and other devices). As a result the Chinese can react more quickly to whatever happens (natural or manmade) along the LAC. China has a much larger space program and electronics industry than India and used that to develop an intel advantage along the LAC that India is unlikely to match (because it is so expensive and depends an tech that India does not have access to.) China also uses its tech and industrial advantage to supply its troops with more effective weapons and equipment. Thus Chinese troops along the often frozen LAC have been gear to handle the cold and weapons that are more reliable in those frozen conditions.

Pacifying Pakistan

The current head of the Pakistani military, Qamar Javed Bajwa, has expressed an interest in making some kind of peace deal with his neighbors (especially India). Bajwa seems to recognize that he cannot run Pakistan (via another military government) and that the growing tensions with India are indeed dangerous. The Indians have nukes and a track record of defeating Pakistan every time the two nations get into a war. China has openly proclaimed that it is not a “military ally” of Pakistan so Bajwa realizes he actually is in a weak position that is liable to get worse and end very badly for Pakistan, Bajwa and the Pakistani military. China also openly urges Pakistan to make peace with India. As open to peace talks as Bajwa says he is he can’t even admit that he has imposed on himself a lot of difficult restrictions. He cannot admit that Pakistan is sponsoring Islamic terrorism in Afghanistan and India. Then there is the Pakistani history of making peace deals and regularly violating them. No wonder Bajwa sounds worried and unsure what he can do about the mess he and his predecessors have created. In private discussions with Chinese and American officials Bajwa is called out on his actual policies. Bajwa can deny the accusations from the Americans but the Chinese cannot be lied to. The Chinese support Pakistani lies publicly but privately urge the Pakistanis to face reality before they trigger a nuclear war that would destroy a lot of valuable Chinese investments. To help this peace effort along the Chinese openly deny they are any kind of military ally of Pakistan.

May 3, 2018: China insisted the missiles and other weapons installed on three of their artificial islands (Fiery Cross Reef, Subi Reef, and Mischief Reef) in the South China Sea are for defense purposes only and a threat to no one just passing through these Chinese territorial waters.

May 2, 2018: The government announced that it expanding its weather satellite coverage to all countries participating in the Obor (One Belt, One Road) project (by allowing China to build roads, railroads, pipelines and ports) and will share weather information with those nations. This is a big deal with many nations participating in OBOR, especially those in Central and Southeast Asia. Pakistan, Nepal and Burma are all Obor participants although all of these countries are pulling out of economic deals with China because the terms, as interpreted by China, are unacceptable. At the same time China has become the largest foreign investor in Iran (since sanctions were lifted in 2015) and most of these investment support Obor directly or indirectly. Thus in most cases Obor investments are seen as a positive (or potentially so) thing. The Iranians were long involved with running a large section of the original Silk Road and developed a reputation of being formidable negotiators. The Iranians don’t trust the Chinese and have made deals with India and Afghanistan to resurrect the ancient Iranian portion of the Silk Road and expand it a bit. This involves a new Iranian port on the Indian Ocean and a railroad and highway connection to Afghanistan and Central Asian railroads. Projects like this help keep the peace because they provide competition for projects like Obor, which are seen as an attempt to establish a cartel and then control trade and prices mainly to favor China. The Iranians deal with the Chinese as equals but many other Obor countries are deemed more exploitable by the Chinese and often, but not always, are. For the last few years Chinese officials have been describing their economic and military expansion plan internally as Obor. In early 2017 China went public with Obor via a PR campaign that described it as a revival of the ancient “Silk Road.” That’s not accurate as the ancient Silk Road was only partially run by the Chinese. Most of it was operated by other major powers (Iranian, Indian, Turks and Arabs) and was largely put out of business after the 16th century by European innovations in ship building and management of sea routes that provided a safer and cheaper way to move goods worldwide. Moreover, until the late 20th century Chinese leaders never encouraged (and often banned) foreign trade. For most of Chinese history the leaders believed China had all it needed (largely true) and considered all non-Chinese and their products inferior. The big change now is that China needs international trade and Obor is the Chinese plan to control as much of it as possible. This is essential for a prosperous economy because without that the communists are in big trouble. Obor means China owning or otherwise controlling as many of the new roads, railways, ports, pipelines and sea routes as possible. China is investing nearly $200 billion in Obor construction. This includes land routes through Central Asia to Europe and the Middle East, another through the Himalaya Mountains to the Indian Ocean (soon to be under new management if China has its way) and new land connections into Southeast Asia. The key to China’s new sea routes is asserting ownership of the South China Sea. Pakistan, Nepal and Burma are all demanding renegotiation of terms and rejecting Chinese interpretations of some of the deals. For example China assumed that trade along the Obor would accept the Chinese yuan as an international currency similar to the dollar, yen or euro. Many nations are not ready for that and let the Chinese know that when China tried to implement its interpretation of how the yuan was to be treated.

April 29, 2018: The leaders of India and China finished two days of meetings in China. This was an informal summit meeting requested by China, which wants to peacefully settle, or at least suspend, some or all of the current disputes it has with India. China would also like to get Indian cooperation for the Obor project. Already China is building one land branch through Pakistan and would like to build another branch through India as well as obtain Indian cooperation for a maritime Obor link via the Indian Ocean. Neither country got all they wanted but the two days of talks did quiet things down between the two most populous nations on the planet and set in motion some efforts to increase economic, diplomatic and military cooperation.

One of the long shot opportunities China sees with India is another customer for Chinese military equipment. Since 2000 India has bought less from Russia, long the main supplier, and depended more on Western nations (mainly the U.S. and Israel).

April 28, 2018: South Korea complained to China that another Chinese military aircraft had violated South Koreas’ ADIZ (Air Defense Identification Zone). South Korea is also seeing more ADIZ activity because of Chinese intrusions. In 2013 China announced a new ADIZ that overlapped South Korean, Philippine and Japanese air space. China demanded that any foreign military or commercial aircraft request permission before flying into this zone. South Korea and Japan protested while the United States quickly flew some B-52s into the disputed zone without asking for Chinese permission. China protested and the United States ignored them.

April 27, 2018: The leaders of the two Koreas met personally for the first time. The meeting took place at the “Peace Village” on the DMZ. This had long been the scene of fruitless negotiations over disagreements between the two Koreas. North Korea leader Kim Jong Un and South Korean president Moon Jae In met and agreed that the Korean peninsula should be free of all nuclear weapons. The two also agreed that there should be an official end to the Korean War, which has been suspended (by an armistice) since 1953. Next comes the meeting between Kim and the American president later in May. If there is more agreement at the May meeting then comes working out the details of the denuclearization agreement and how it would be monitored. The North Koreans have cheated often in the past and unless there are adequate monitoring safeguard there will be no deal. The U.S. leader has made that clear and there is general agreement with that demand in the U.S., South Korea and Japan. China will have a veto over any deals, mainly because China has been, and will probably remain, North Korea’s main trading partner even after sanctions are lifted.

April 26, 2018: The government confirmed that the DF-26 IRBM (Intermediate Range Ballistic Missile) had entered service with about 18 operational. DF-26 has a range of 3,500 kilometers and based on the earlier DF-21. In late 2014 China revealed (apparently by accident) the existence of the DF-26 There have been reports of such a missile since 2007 and the DF-26C version is notable because it has the range to hit American military bases on the Central Pacific island of Guam with nuclear or conventional warheads. 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. Another version of the DF-26 is supposed to have a terminal guidance system enabling it to hit a large warship (like an American carrier) at sea. This version has never been confirmed as operational. The DF-26 is fired from a mobile (large truck) launcher.

Iraq offered eleven areas for oil and gas exploration to foreign firms. This was a typical auction and none of the major oil companies, especially the Western ones, made bids. The major Russian and Chinese firms also declined. All considered eleven areas too risky to invest in. In some cases the areas were much fought over and still contained a lot of unexploded bombs and shells. Some areas in the north were suffering from growing ISIL violence while other areas were near the Iranian border and the chance of the Americans reviving sanctions on Iran made those areas unattractive for oil exploration. The main problem here is that the major oil companies are expected to invest billions of dollars and send in hundreds of the technical people to explore for oil and gas and then build wells and pipelines to make it all profitable. None of the major companies were willing to take on the degree of risk involved, especially not in a nation as corrupt and violence prone as Iraq.

April 25, 2018: China has refused to extend a temporary (two years so far) suspension of Venezuelan oil deliveries to China, to pay down loans China has made. This suspension of payments has cost China over $12 billion in costs to purchase the oil elsewhere. Now China wants the resumption of oil shipments and the eventual delivery of the suspended oil shipments. China has concluded that the current socialist government of Venezuela is incapable of turning the economic situation around, As China often does in situations like this, China is going to recover what it can out of this mess, which might include ownership of some Venezuelan oil reserves or major participation in rehabilitating and running those oil fields.

In March China said it would not make any additional loans to Venezuela. China had been a major lender to Venezuela and provided over $50 billion since 2007. Most of these loans are repaid with Venezuelan oil. The amount of oil owed China increases as the oil price declines, which means Venezuela has less oil to sell or use for domestic needs. Venezuelan oil is difficult to refine, which is why the U.S. is the major buyer as the Americans have built special refineries to handle it. China faces huge losses because Venezuela became officially bankrupt at the end of 2017 and its socialist government has wrecked its oil industry and ability to pump and ship oil. The bankruptcy was not unexpected but China knew there would be great risks and potentially high costs for establishing themselves in South America. China will extend payment terms on current loans but is taking a “wait and see” attitude to the growing political and economic catastrophe in Venezuela.

April 24, 2018: China allowed several teams of researchers to go public with the results of studies on radioactive fallout coming from the North Korean underground test site, which is in northwest North Korea near the Chinese border. The increase in radioactive fallout began after the last North Korea nuclear test in September 2017. The Chinese scientists concluded that the mountain had suffered a massive internal collapse and was now unstable and at risk of collapsing still further and emitting a lot of radioactive fallout that would drift across the border into China. This conclusion was apparently reached by the end of 2017 because three months ago the Chinese installed radiation monitor along its North Korean border that immediately detect increased radiation and report it. This is to deal with North Korean nuclear weapons research and testing facilities near the border, some of which have released large quantities of radiation in 2017. There are also portable radiation monitors distributed to villages along the North Korean border. These are to be used if there is an American attack on North Korea with nuclear weapons. The monitors will alert local officials when it is time to evacuate because of highly radioactive fallout. After the release of this report the Chinese suggested that if North Korea agreed to get rid of their nukes it would be nice if the Americans agreed to pay the cost about doing something to contain the potential radioactive fallout lead from the test site. The Americans may well prefer that the Chinese pay for that. It is also suspected that the North Koreans were the first to figure out the test site mess. North Korea has not allowed Chinese scientists to visit the site, which could mean the situation is worse than suspected and that may have prompted North Korea to offer up its nuclear weapons program in exchange for some massive foreign aid. If there was a massive leak of radioactive fallout from the test sight and it showed up in China North Korean and Chinese officials would have a massive public relations problem on their hands because they would have a hard time blaming all this on the Americans.

April 23, 2018: The Chinese economy is large in so many ways. For example during 2017 China received $64 billion in remittances from Chinese living abroad. This was the second largest amount for any nation in the world. The world leader is India, which received $69 billion in 2017 closely followed by China with $64 billion, the Philippines $33 billion, Mexico $31 billion and Nigeria $22 billion.

April 21, 2018: The American commander of U.S. naval forces in the western Pacific confirmed that China had built sufficient port and aircraft facilities on islands in the South China Sea to quickly station warships and combat aircraft at these new facilities and, in effect, declare that it controlled the South China Sea and dare anyone to oppose that control. Many of the islands are artificial, made by dredging up sand from nearby reefs and shallow waters. Apparently China has also installed anti-ship and anti-aircraft missiles on some of these islands (Fiery Cross Reef, Subi Reef, and Mischief Reef, all just west of the Philippines) in addition to EW (Electronic Warfare) equipment, including jammers as well. China did not announce installing this military equipment but aerial and satellite photos show the equipment appearing in the South China Sea during April, if not earlier.

April 20, 2018: North Korea announced it would suspend nuclear weapons tests and ballistic missile launches. This will apparently last until negotiations with South Korea (this month) and the Americans (in May) are concluded.

While Chinese political influence is not popular in Thailand, online services are another matter. The Chinese Alibaba Group has signed deals which allows it to operate in Thailand. Alibaba has been one of the most successful Internet based businesses in China, mainly because it has provided the same services developed and delivered in the United States by eBay, Amazon and other online firms. Alibaba succeeded in China because its managers understood how to do business in a country run by often corrupt officials of a communist police state. Currently Thailand has a similar situation and the military government is allowing Alibaba in because they understand this Chinese firm will stay out of politics and just deliver the goods (and any data the Thai generals need to stay in power).

April 18, 2018: China sent a number of its H-6K bombers on a training mission that involved flying completely around Taiwan, all the time staying in international air space. The bombers were accompanied by some support aircraft. The H-6Ks repeated this exercise on the 26th.

In the United States it was revealed that the new American Secretary of State (previously the head of the CIA) made a secret trip to North Korea in early April to meet with Kim Jong Un and determine how far the North Koreans were willing to go in their negotiations. Kim apparently said everything was negotiable and for real this time. Other details of this meeting were not made public but the American Secretary of State knew details of what was going on in North Korea and could speak with authority to Kim on what the North Korean prospects were. Apparently the results of this preliminary meeting were encouraging for the United States, especially after discussions were held with South Korean and Chinese officials. The Americans apparently found that North Korea was willing to officially end the Korean War and allow American troops to remain in South Korea as long as the American nukes were withdrawn as part of the “denuclearization” of the Korean peninsula. That meant the South Korea would promise to not develop nukes. The Americans are all for officially ending the Korean War, as that has been a goal for decades. The American president has also made it clear that he will simply walk away if his meeting with Kim Jong Un was being treated as another North Korean media stunt and not serious negotiations.

April 17, 2018: In north China (Inner Mongolia) test wells confirmed that there is nearly 300 million barrels of oil there that can be recovered at the rate of about a million barrels a year within five years.

April 16, 2018: The Chinese Air Force officially put the J-10C fighter into service. This version has updated electronic and an AESA radar and can use smart bombs or long range air-to-air missiles. Drop tanks give it the ability to operate about a thousand kilometers from base. There are also claims of stealth capabilities because of fuselage modifications and the use of some radar absorbing coatings. The J-10 first entered service in early 2007, when only about a dozen were operational. The J-10 is unique because it is a Chinese design using Israeli and American technology to produce something similar to the F-16. It is considered a domestic, not foreign, aircraft design. The more advanced J-11 is a licensed copy of the Russian Su-27/30. There are now about 300 J-10s in service, most of them older models. China still has more (over 300) J-7s (MiG-21 clones) in service along with about a hundred license built versions of the Russian twin-engine Su-30. All Chinese modern fighters still depend on Russian engines although Chinese built versions of these engines are expected to take over in the 2020s.

April 15, 2018: In the South China Sea Chinese warships confronted two Australian frigates and a support ship. The Australian ships were on their way to visit Vietnam and were passing through areas China claims to be part of China. In effect the Australians were conducting a FONOP (freedom of navigation operation) in the South China Sea. Now the Chinese and Australians differ on what actually went on when Chinese warships encountered the Australian vessels. The Australians said the Chinese commander challenged the presence of the Australians in Chinese territorial waters. The Australians disregarded that, said they were passing through and went on their way. China insists there was no challenge. To an extent the Australians agreed that there was not a successful challenge.

April 14, 2018: The United States warned pilots to avoid airspace near the new Chinese naval base being built in Djibouti (just north of Somalia). The U.S. and France have long had a special operations base in Djibouti and American transport pilots have complained about someone in the area using high powered lasers in an apparent attempt to blind pilots. The lasers were calculated to be located near the new Chinese base. China denied allegations that it was using such laser devices and pointed out that it had signed an international agreement not to use such devices.

Chinese aviation officials declared the new, Chinese made AC313 medium helicopter was ready for use. This is the commercial version of the Z-8 military transport, which is based on license built version of the French SA321 Super Frelon.

April 12, 2018: China staged its largest (to date) naval maneuvers in the South China Sea. Much of the exercise was filmed and released to news media. President Xi attended as, at one point, 48 warships and dozens of warplanes passed in review. Many of these ships and aircraft are to take part in a practice invasion of Taiwan on the 18th. In response Taiwan held its own, smaller, naval exercises. The Philippines was not amused and because of events like this is less willing to go along with Chinese demands in the South China Sea. The Philippines is already resisting Chinese pressure to sign a treaty that would enable China to carry out a search for underwater resources off the west coast of the Philippines (the “Philippines Rise”). The Filipino military has been flying aerial patrols over Scarborough Shoal, one of the many areas in the Filipino EEZ that China has seized and turned into military bases. These aerial patrols, with unarmed TC-90 aircraft (recently received from Japan as a gift), are protested by the Chinese but so far the Chinese forces on Scarborough Shoal have not opened fire. President Duterte has adopted a non-confrontational approach to China but most Filipinos oppose just letting the Chinese seize whatever Filipino offshore assets they want. So Filipino resistance continues, as does China pretending to be a friend of the Philippines.

April 11, 2018: Officials from China, South Korea and Japan agreed to meet in May to discuss denuclearization.

April 10, 2018: China has quietly released 30 North Koreans who had illegally left North Korea. In the past China would return these “defectors” to North Korea for punishment.

April 8, 2018: China has officially banned the export of 32 specific dual-use items to North Korea.