China: Dealing With Hidden Flaws



April 15, 2021: The continuing trade war with the United States has had growing impact on both countries. Over the last year there were many months where China dropped into second place as the largest trading partner of the U.S., replaced by Mexico. China and the U.S. have been reducing or halting exports of key items to each other. This is disrupting production in both countries. The American response has been to resume production of items it allowed China to create market dominance or a monopoly in. China is less able to do this and the trade war is exposing how China is more vulnerable than the United States. Some aspects of this vulnerability are sensitive issues China refuses to recognize. For example, China is a communist police state and the current communist government regards that as an advantage, not an impediment to survival. With its market economy run by a dictatorship, China has become the classic definition of a fascist state, and none of those have lasted long. China does recognize that it has an “innovation” problem and refuses to admit that its immigration policies have any part in it.

Western democracies benefit from migration, at least the legal variety. China strictly limits both legal and illegal immigration and considers ethnic Chinese who are citizens other nations to still be more Chinese than foreigner and subject to Chinese law, especially if they visit China after doing anything the government does not approve of. Chinese espionage efforts often rely on this “Chinese are always Chinese” principle when recruiting or coercing “overseas Chinese” to spy for China. That usually fails but it succeeds often enough to continue using the technique. One damaging side effect of this policy is that it encourages more Chinese to migrate or not even visit China to visit relatives. More overseas Chinese are reporting recruitment attempts to local governments, even though China has a policy of retaliating if they find out.

This ethnic nationalism is common in most of the world, but much less so in nations that grew largely through migration and democratic rule. The granting of citizenship to legal migrants is not an accepted practice in most of the world and is especially unacceptable in East Asian nations. Americans are often surprise to discover this attitude still exists in many European countries. Fascist countries tend to take this ethnic nationalism to extremes, as did Germany and Japan during World War II. Germany largely abandoned the strict “blood” requirements for who could become a German citizen after World War II. Not so much in Japan and the rest of East Asia. Combine ethnic nationalism with a police state and you put yourself at a disadvantage when it comes to innovation and adaptability in general. This can be seen in democratic East Asian nations. South Korea is the best example. While still practicing ethnic nationalism, where it is taken for granted as an ancient component of what makes a Korean a Korean, South Korea prospered the more it became democratic and more accepting of outside ideas. On a per-capita basis South Korea has been more of an economic and innovations success than China. Same story with Taiwan, post-World War II Japan and Singapore. China does not wish to dwell on such issues.

April 14, 2021: With reports coming in from round the world about the ineffectiveness of the Chinese covid19 vaccine, China admitted that their locally developed vaccines have an effectiveness rate of only 50 percent. This is the threshold for a vaccine to be used widely and Chinese vaccines barely made it because China did not use the new tech Western vaccines used, based on the mRNA technology recently developed in the United States. That happened because one researcher was able to keep her work going for three decades until it was recognized as a success. Covid19 vaccines could be developed more quickly using mRNA tech and have demonstrated effectiveness rates as high as 90 percent. China played down when it realized the shortcomings of their vaccines and quietly started developing an mRNA-based vaccine. China did admit they had at least one mRNA-based vaccine nearly ready for trials. Left unsaid was the fact that Chinese and North Korean hackers have been particularly active trying to steal tech secrets from Western firms that developed mRNA vaccines in less than a year. China has sold millions of doses of vaccines to several countries and is now facing a backlash because the Chinese vaccines performed so poorly compared to Western vaccines. This is also an issue in China where over 35 million Chinese have received both doses of Chinese vaccines and noticed the low effectiveness rate. There were public protests but China does not report these because they are illegal.

April 12, 2021: In the south (over the Taiwan Straits) China sent 25 warplanes to briefly violate Taiwanese airspace. This was the largest incursion yet and a pointed reminder that China could use force to make Taiwan a part of China. Such incursions are not the only tactic used. China has increasingly been sending warships, which remain in international waters, to surround Taiwan. One of these recent “surround exercises” involved of Chinas new aircraft carriers, which launched some warplanes to fly towards Taiwan. China has been threatening to take Taiwan back by force since the 1950s and demonstrations like this tend to increase when there is a new government in the United States that appears more vulnerable to intimidation. American assurances that they will actively join in the defense of Taiwan during a Chinese invasion has been the primary deterrent to such an attack since the 1950s.

April 10, 2021: In the southwest China has a very short border with Afghanistan and some very large investments in Afghanistan itself. The investments and the border are threatened the Afghan Taliban trying drag China into Taliban efforts to play Iran and Pakistan against each other. This Taliban tactic is difficult to make work because Iran considers the Taliban a Pakistan controlled operation. Similar situations exist on the Central Asian borders. China has a miniscule border with Afghanistan that is virtually impossible for any smugglers to use. China is also the major supplier of weapons to Pakistan and provides billions of dollars’ worth of construction projects, especially new road, rail and pipeline links from China to a new port near the Iranian border. China and Iran recently signed a 25-year military-economic cooperation deal that will make Iran as dependent on China as Pakistan already is. Iran has an alternative to China in India, which Iran maintains good diplomatic and economic relations with. China and India are locked in a bitter and increasingly violent border dispute. In this case geography and history matter as Iran and India have been trading and interacting for thousands of years while China was a distant mystery on the other side of the world’s highest mountains. One of the India-Iran historical interactions was joint control of Afghanistan when the ancient Silk Road caravan route between China and the rest of Eurasia was a valuable economic link between strangers. China is decidedly anti-drug and anti-Islamic terrorism. China has leverage, but not control, over Pakistan and Iran. If China opposes another Taliban attempt to take control of the entire country, chances of Taliban success decline to miniscule levels.

April 9, 2021: The Philippines has invoked its mutual defense treaty with the United States. That treaty, signed right after World War II, considered any assault on Filipino territory an assault on American territory. So far, the U.S. has not gone to war over this because the Chinese have been careful to not fire on any Filipinos. Meanwhile in the South China Sea an American ARP (Amphibious Ready Group) task force that is centered on a smaller (40,000-ton) amphibious LHD (Landing Helicopter Dock) carrier joined with a larger carrier task force that is centered on the larger 104,000-ton Nimitz class carrier. The combined force will undertake nearly a week of joint training. The larger nuclear carrier carries 90 aircraft, most of them warplanes while the LHD normally carries 25 helicopters plus six F-35B fighters that can take off and land like a helicopter. A larger number of F-35Cs are on the carrier, which take off with a boost from a catapult and can land on the carrier. The LHD can be equipped with up to twenty F-35Bs and a few helicopters. The Americans have experimented with this and found that it works quite well.

April 8, 2021: The Chinese navy has a worsening problem attracting qualified recruits for its growing fleet of new warships. The larger new ships, like carriers and amphibious assault ships require large crews and operate as part of task forces containing many additional smaller ships. Not enough Chinese are willing to serve on these ships. The recruiting problem is caused by several factors. The longer voyages are essential to train sailors to Western standards and this sort of thing is particularly unpopular with young Chinese. Then there is the growing labor shortage in China that provides too many more better paying jobs that don’t involve months at sea on a warship. The labor shortage is turning into a crisis that was caused by a 1980s policy of one-child per couple. This limited population growth, as intended, but the introduction of a market economy helped create the first large (several hundred million strong) Chinese middle class of well-educated engineers and other professionals. These are the people who were key to China quickly creating the second largest GDP in the world. But there is a catch. Affluent, talented women everywhere, and throughout history, don’t have a lot of children. Even though the one-child rule was revoked several years ago, the population is not growing, especially with educated couples. Worse the children of middle-class families are not eager to join the military, which needs their skills to operate all this new gear. China has conscription but it is not enforced because it is unpopular, especially among the educated. Those carriers, and all their support ships, need lots of capable officers and sailors. Someone did the math and realized the ships could be built faster than competent crews could be found. One carrier task force, with a carrier, five warship escorts and four or five resupply ships, requires over 5,000 sailors. That’s as many as an army combat brigade or an air force aircraft division. The military, in general, has had a hard time getting capable young men to do all the tech jobs the army and air force, as well as what the navy now requires. Given the shrinking workforce, because of the one-child rule, that situation is not going to improve for a decade or more.

The army and air force are more attractive options for Chinese seeking a military career. China has no tradition of a high-seas fleet, something the West invented and have been using for over 500 years. The only other East Asian nation to develop a high-seas fleet was Japan, which starved its economy in the 1920s and 30s to do so and saw that impressive fleet largely destroyed by the American fleet after two years of heavy combat.

April 7, 2021: In the south, across the border in India (Ladakh State) Chinese forces have slowed their agreed withdrawal from disputed territory in Ladakh. Both nations had concentrated thousands of troops along the shore of Pangong Lake. In September 2020 both agreed to halt their operations on the Indian border and continue negotiations. Both sides declared victory but China was the actual winner because now a thousand square kilometers of additional Indian territory along Panglong Lake is under Chinese control. By the end of 2020 the two sides had agreed to pull most of their forces back because of the frigid weather in the high mountains surrounding Pangong Lake. China has been slow to carry out all those withdrawals.

This is was not unexpected and was another example of the Chinese SSSN (Shove, Stop, Stands Fast) tactics, which have once again prevailed, as they have many times in the recent past. China initially expressed no interest in retreating but was willing to negotiate. With the cold weather approaching last September India was in no position to refuse the Chinese offer. China believes they will prevail by repeating their SSSN and push Indian forces out of all the disputed areas along their common border. SSSN is slow and it would take decades to grab all the Indian territory claimed by China. As long as China maintains a stronger military than India and can keep more troops near the disputed border areas, India will not feel confident to defend forcefully and risking a large-scale battle on the border.

India feels more capable in opposing China because of growing Indian economic power. Indian GDP nearly doubled in the last decade; from $1.7 trillion to the current $2.9 trillion. This made India the fifth largest economy, recently surpassing Britain and France. The rest of the top five are the U.S., China, Germany and Japan. Chinese GDP growth is slowing although in the last decade it more than doubled from $6.1 trillion to $14 trillion. Over three decades of spectacular economic growth in China resulted in the Chinese GDP becoming over fourteen times larger than it was in 1989. In that same period the U.S. GDP doubled. After World War II India had a larger GDP than China and never felt the same urgency as China to modernize and expand the economy. Actions have consequences and, in this case, it means China can push India around on their mutual border.

Another reason for this is that India is still haunted by the last battle between Indian and Chinese forces back in 1962. In a month of fighting that began on 20 October 1962, India lost 7,000 troops (57 percent prisoners, the rest dead or missing) compared to 722 Chinese dead. China declared a ceasefire that India accepted. China actually advanced in two areas, a thousand kilometers apart and ended up taking 43,000 square kilometers of Indian territory.

The source of the 1962 war and current border disputes are a century old and heated up again when China resumed control over Tibet in the 1950s. From the end of the Chinese empire in 1912 up until 1949 Tibet had been independent. But when the communists took over China in 1949, they sought to reassert control over their "lost province" of Tibet. This began slowly, but once all of Tibet was under Chinese control in 1959, China had a border with India and there was immediately a disagreement about exactly where the border should be. That’s because, in 1914, the newly independent Tibet government worked out a border (the McMahon line) with the British who then controlled India. China considers this border agreement illegal and wants 90,000 square kilometers back. India refused, especially since this would mean losing much of the state of Arunachal Pradesh in northeastern India and some bits elsewhere there and all along the new northern border.

India, as a democracy with a free press, has a public discussion of Chinese tactics and possible Indian responses. China also tries to take advantage of the Indian media freedom by buying favorable coverage in the Indian press. This is done via bribes, offers of investments or loans as well as economic concessions within China. Military strategy in China, since ancient times, has placed emphasis on having a powerful military but using it mainly as a threat and giving enemies an incentive to accept bribes and allow China to get what they want. Yet India has rarely been seen as an enemy of China. There is nothing valuable on their mutual border which for thousands of years has been along high mountains and thinly populated lowland jungles. Neither India nor China had any incentive to raise large armies to threaten each other.

Because of this background, the border disputes since the 1960s are seen by Indians as inexplicable and by Chinese as overdue restitution for centuries of humiliations inflicted by Western invaders. India, ever since it emerged from centuries of British colonial rule in 1947, insisted that India and China shared a background of oppression by the West. China sees India as trying to perpetuate Western crimes against China. To most Chinese, Indians look and sound like Westerners therefore India must be an enemy of China. India has come to accept that the Chinese are obsessed with making India pay for real or imagined wrongs inflicted by Western imperialists and see nothing wrong with using ancient Chinese imperialist methods to get their way. Suddenly British imperialism is not the worst thing that could ever happen to India. China is seeking to provide something much worse and much closer.

April 6, 2021: In the south the Filipino president announced he would seek a peaceful solution to the dispute with China over “Whitsun Reef”. President Duterte deliberately used the international name for the reef, which is known in the Philippines as Julian Felipe Reef because that is what Filipinos call it and until China came along the Philippines had the strongest claim on the, until recently underwater, reef. Such a reef is valuable because it is prime fishing grounds and does provide some shelter from large waves during bad weather. Duterte has tried playing nice with the Chinese but so far has been burned more often than benefitted from this approach.

April 5, 2021: In North Africa ambitious Chinese foreign policy is running into trouble. Both China, the West and oil-rich Arab states are willing to provide aid and loans to Libya, but only if certain conditions are met. China has few demands but wants economic and military access as well pro-China foreign policy. China is willing to take its losses in places like Libya, as well as exploiting the local corruption to get what China wants. The West wants reduced corruption (including illegal migrants) and the removal of foreign troops, especially the Turks. The Arab oil states want more power for Islam in the new government and help with controlling Iranian and Turkish efforts to gain more control over Moslem states in the region. Israel wants peace, economic ties and cooperation in dealing with Islamic terrorism. Most Libyans agree the Western, Arab and Israeli conditions. China is a “maybe” because of the Chinese reputation for doing whatever it takes. Most Libyans also want the foreign troops out and less corruption. On a personal level most Libyans want some other Libyan to go first when it comes to abandoning the many corrupt practices that have long been generally acceptable, or at least tolerated in Libya. All of these foreign powers are willing to reopen their embassies and such. That will clarify the local situation for foreigners, which won’t help if all the foreigners see is corruption and mismanagement.

April 4, 2021: In the South China Sea an American carrier group arrives, soon to be joined by an amphibious ARP task force. The two task forces will train together but the carrier task for is there mainly to carry out another FONOP (freedom of navigation operations) near areas China is trying to take from other nations that have long owned them. This is the second FONOP for this carrier group in the South China Sea this year. In 2020 the U.S. carried a record 13 FONOPS in the South China Sea. This was up from nine in 2019. Even more FONOPS were carried out in the South China Sea by other nations opposing the Chinese claims.

In addition to more FONOPS, in mid-2020 the Americans took a stronger stand against Chinese aggression by declaring Chinese claims to offshore resources across most of the South China Sea as completely unlawful. This included the Chinese campaign of bullying other nations to gain exclusive control of these resources. In 2016 an international court ruled against China and stated that occupying uninhabitable rocks and building artificial islands did not confer an EEZ (Exclusive Economic Zone). Ownership of “rocks” gets you, at best 22 kilometers of territorial waters from the edge of each rock rather than 360 kilometers for EEZ rights. Before this change the U.S. merely called for China to comply with the court ruling, something China said it would not do even before the court completed its deliberations. The Americans did continue to carry out aerial and naval FONOP with warships to assert the right of innocent passage. This annoyed the Chinese, who claimed most of the South China Sea was under Chinese control and no foreign ship or aircraft could enter without permission. China has been claiming areas long recognized as belonging to Vietnam, Indonesia, Malaysia, Taiwan and the Philippines. That has caused all these nations, plus the United States, Japan and South Korea to form an alliance to halt Chinese aggression.

In response to all this opposition, China has become more aggressive in word and deed. This includes a January 2021 announcement that a new Chinese law authorized their navy and coast guard to use lethal force to “protect” Chinese coastal waters, including those that are disputed by other nations. In other words, Chinese coast guard and navy vessel commanders have the authority to open fire on trespassers, even when international courts have declared China the outlaw and trespasser in the South China Sea. Until this new “permission to open fire” law, Chinese armed coast guard and navy vessels had only been used to intimidate “trespassers” and had never opened fire. There has been violence in the form of bumping or even ramming “trespassers”. This has led to the other countries threatening to send warships to defend their territory. Until now this would usually cause the Chinese warships to back off. But the new law allows Chinese captains to order crews to prepare for combat and use the fire control radars to concentrate on possible targets. In the Chinese playbook this means the Chinese want to goad someone else to open fire first, which would make China the designated victim (according to Chinese media) and justified in unleashing violent and probably overwhelming retaliation.

The latest Chinese escalation is the use of large (over 200) numbers of fishing boats inside the V shaped Julian Felipe Reef, which is 324 kilometers west of Palawan, one the Filipino main islands. The reef is part of the Spratly Islands. The nearest undisputed Chinese territory is 1,148 kilometers away from the reef. China is using illegal claims on other South China Sea islands or reefs to justify its claim Julian Felipe Reef. In this case there is another problem. Julian Felipe Reef was not legally “land” that could be claimed until about five years ago. As happens often in the South China Sea, reefs grow and shrink because of the natural movement of sand. Parts of Julian Felipe Reef had long emerged from the water only during low tide. According to international law, that did not qualify as “land”. There are suspicions that China covertly did some dredging at Julian Felipe Reef to get the permanent sand to show. This is unlikely because commercial satellite coverage of the South China Sea has been nearly constant for over a decade.

This satellite coverage and the growing number of visits by Filipino air force and coast guard patrols plus fishermen operating there has provided an accurate record of increased Chinese activity there. The has shown Chinese fishing boats and naval militia (fishing boats not currently equipped for fishing) showing up at Julian Felipe Reef since November 2020. By mid-March 2021 there were over 200 Chinese naval militia fishing boats inside the reef. Most of them were lashed together in groups of five to twenty boats that formed pattern preventing real fishing boats from operating inside the reef. Most fishing boats in the South China Sea are trawler type boats. These boats deploy their nets and then move through an area containing a lot of fish and haul their catch on board and into a refrigerated compartment. Many of the Chinese militia boats are formally called "freezer trawlers." These ships are up to 100 meters (320 feet) long and have facilities onboard to store hundreds of tons of frozen fish. These ships normally stay at sea months at a time and have crews of 14-30.

The number of Chinese trawlers has expanded enormously since 1985 when there were only 13. Now there are over 2,400 of them operating worldwide. China helped with this expansion by subsidizing ocean-going fishing boats. Those subsidies have since been withdrawn but meanwhile, the number of larger (than 100 meter) freezer trawlers has grown and these are meant for use in far distant waters.

China claimed all those Chinese fishing boats were taking shelter from bad weather. This is often the case with reefs in the South China Sea, but there was no correlation between the presence of Chinese boats inside the reef and the actual weather in the area. The Chinese claims don’t stand up to close scrutiny. With so many cellphone videos and high-res images from aircraft and warships available, all China can do is keep lying and do it aggressively and with assurance that no one will do much about it.

The Chinese naval militia has been a major factor in Chinese intimidation operations in the South China Sea. This militia has been around since the 1950s but never used this aggressively. For example, during the first three months of 2019 China deployed 900 navy, coast guard and naval militia ships around Pagasa Island to block access to fishing areas that Filipinos have been using for centuries. International law makes it clear that these are Filipino waters but the Chinese naval effort, and base constructed on Pagasa, challenge Filipino ownership blatantly and often physically.

Since 2015 China has hired several hundred Chinese fishing boats and their crews as a part-time naval militia to conduct a blockage of bits of land in the South China Sea that the Philippines physically occupies, hoping to block supplies and force the Filipinos to evacuate these outposts so that China can take possession. The Chinese fishermen don’t mind the militia work, seeing it as something of a paid vacation with overtones of patriotic service to the state. The militia boats are not true volunteers. When the government “requests” a Chinese fishing boat work for the militia the boat owner complies. Sometimes boat owners grumble when they are called up during a prime fishing season, but refusal is not an option and they make the best of it.

The Philippines appears to get most of the unwanted Chinese attention in the South China Sea because the Philippines has the most to lose. In terms of land area, the 7,600 islands that comprise the Philippines amount to only 300,000 square kilometers (120,000 square miles) of land area. Compare this to China, with 9.6 million square kilometers of land. According to international law, the Philippines controls (via its EEZ or Exclusive Economic Zone) water areas covering 2.26 million square kilometers. By the same standards the Chinese EEZ waters comprises 877,000 square kilometers. The Philippines is also the weakest (in military terms) nation China is seizing territory from and their mutual defense treaty with the United States is not always adequate to deal with the Chinese tactics. Moreover, the American government can change readily every four years because of presidential elections. The current U.S. president is seen as less steadfast in dealing with China. So far that has not been the case, but the new American government has only been in power since January 2021.

April 3, 2021: The Filipino Defense Secretary demanded that Chinese vessels leave Julian Felipe Reef. China quickly responded that the reef belonged to China, the Chinese ships were seeking shelter from bad weather and the Philippines had no right to make demands. There were still 44 Chinese vessels inside the reef and the weather had been calm for over a week. This is typical Chinese behavior towards the Philippines.

April 2, 2021: In the south, neighboring Myanmar (Burma) has a new military government seeking to maintain its close ties with China while it struggles to establish control of the country after a February 1st coup. China promptly used their veto powers in the UN to block UN actions against the new military rulers of Burma. Within two weeks Russia also proclaimed support for the military government. The response of the military was not unexpected, because the civilian government knew that the Burmese generals maintained their connections in China and was the main reason China has sold $1.4 billion worth of military equipment to Burma since 2010. Russia sold $800 million worth. Together China and Russia accounted for over 90 percent Burmese spending on imports of military gear.

The coup has not worked out as planned because the country is now sliding towards economic crisis and civil war. Anti-government demonstrations continue despite troops and police being ordered to open fire. So far over 600 demonstrators have been killed by the security forces and ten times that number wounded or arrested so far. The Burmese military is comfortable with a cozy relationship with China and Russia but most Burmese are not. This has led to Chinese businesses being attacked and some have been set on fire. The alliance of separatist northern tribes, which reached a peace agree with the elected government in 2016 refused to recognize or cooperate with the military government. Burmese military leaders were surprised at the extent and duration of mass protests during the last two months. By popular agreement the economy is shut down and the generals have to worry about the morale and loyalty of their troops because of the weeks of popular protests and being ordered to open fire on fellow Burmese. The military still has income because during their decades of rule (from 1962 to 2010) they came to control many businesses and some of those were joint ventures with China. A lot of Chinese firms pay the Burmese military directly for joint ventures. This provides the military with at least a billion dollars a year, assuming the Chinese operations can keep functioning. Burmese army officers made a lot of money allowing China to do business in the tribal north, often at the expense of local civilians, most of them tribal people. After the return of democracy in 2011, China no longer had as much freedom in the north. Russia is of little help economically bit is one of the few nations supporting the military government.

March 28, 2021: In Africa, over a third of Zambia’s national debt is owed to China, which has provided loans and investments in virtually every sector of Zambia’s economy – agriculture, industry and, of course mining. This week Angola thanked China for donating the Sinopharm COVID-19 vaccine. An Angola government official noted that China is the first country to provide Covid-19 vaccine aid to Angola. The official did not mention that China is likely the source of the epidemic outbreak because of a low effectiveness.

March 27, 2021: In Iran, Chinese and Iranian officials signed a 25-year economic/political/military agreement. The basic terms are that China will buy most of Iranian oil exports at an unspecified discount and invest over $400 billion to build infrastructure in support of the BRI (Belt and Road Initiative) that is creating a new Silk Road via land and sea from China to the rest of Eurasia and Africa. There will also be military cooperation and intelligence sharing. Most other details of the agreement were not revealed. Negotiations on terms for the 25-year deal have been under negotiation since early 2020. The draft documents indicated Iran was willing to make a lot of concessions to become a close economic partner of China. That would mean China would have an incentive to protect Iran diplomatically, economically and militarily. The document makes Iran the major supplier of petroleum to China and China the major source of foreign investment as well as becoming Iran’s largest trading partner. China has long been helpful to Iran. For example, in mid-2019 China sided with Iran in the Iranian effort to evade the renewed American sanctions. China made this public during an emergency meeting of the JCPOA (Joint Comprehensive Plan of Action). This is the group of six nations (China, France, Russia, the Britain, the U.S. and Germany) that negotiated and signed the 2015 treaty with Iran to lift economic sanctions in return for Iran halting its nuclear weapons program (which Iran insisted it did not have). Inside Iran this treaty was considered a great victory that would cost Iran nothing and provide much benefit. The nuclear program would be halted for a while but not dismantled. This angle was documented in early 2018 when an Israeli intelligence operation in Iran got away with tons of documents from an Iranian storage facility. This was a major embarrassment for Iran, which declared all the evidence fakes. Western intel agencies, especially American and Israeli ones, already knew what Iran was doing with its nuclear weapons program but did not have such explicit documentary evidence. The Americans left the 2015 treaty in 2017, citing the clause that allowed for this if Iran was in violation. That did not persuade any other JCPOA members to do the same. The Americans were seen as a special case as they were the only JCPOA member that Iran has openly been at war with since the 1980s. Iran still holds anti-American demonstrations several times a year in which everyone repeatedly shouts “death to America.” Iran perpetuates that attitude mainly because of the support the U.S. has long provided to Israel, which Iran also wants to destroy. The other JCPOA members believe they can avoid any trouble with Iran by supporting Iranian efforts to evade the American sanctions

China is now violating the Iranian sanctions in a big way. This is done using the techniques long practiced by North Korea and Iran to evade sanctions that limited oil exports and imports. It involves using deception at sea, as in illegally turning off tanker ship location devices, and then rendezvousing with another tanker and transferring oil cargoes at sea where it is usually not detected. There are incidents that are detected but if nations like China won’t punish their shipping companies to this sort of thing, the sanctions don’t work. China still refuses to blatantly violate the sanctions by sending its tankers to Iran and then take the oil to China. This would allow the Americans to legally seize the offending Chinese tanker. Using some deception provides enough deniability to keep the illegal trade going without risking Chinese tankers being seized.

March 25, 2021: North Korea launched two short range missiles from its east coast into the Sea of Japan. One missile went 420 kilometers while the other went 430 kilometers into the Sea of Japan. Japan protested to North Korea. These launches were the first since the new American government took power in January. North Korea and the United States are about to resume negotiations and the North Koreans have noted that the Chinese are treating the new American government with contempt and expecting he Americans to back down. Japan is another matter. Japan is going ahead with the delayed 2020 Olympic Games that are going to be staged in a few months. Foreign spectators will not be allowed in, just the athletes and their support personnel. The Japanese apparently told North Korea that they were not going to be intimidated by more missile tests or anything else and would retaliate if they had to. The North Koreans were hoping for some free food.

March 22, 2021: China won’t admit defeat in its trade war with Australia but the stark reality is that they have lost. Australia has found other markets for the coal exports that long were monopolized by China. The major advantage Australia has as a supplier of raw materials is that the Australians are more efficient and reliable than the alternatives. For example, China gets about 60 percent of its iron ore from Australia. Another potential major supplier, Brazil, has proved much less reliable, as well as much farther way. Even more risky are African suppliers. China has spent billion investing in the West African state of Guinea to develop the iron ore deposits found there. These will not replace all of the Australian imports but will give China some ammunition in its campaign to force Australia to adopt pro-China policies and attitudes. So far, this effort has not turned out well for China. For example, a late 2020 effort to increase the economic pressure on Australia by refusing to accept coal they had ordered because of “quality” problems. There are no quality problems but there is over half a billion dollars’ worth of Australian coal stuck on 57 ships waiting for either side to back down. When other buyers for the stranded Australian coal showed up, and China was unable to scare them off, the Chinese knew they were beat. They would not admit it but at least lowered their media animosity towards Australia and increased the tonnage of iron ore they have to keep buying from Australia because there is no other supplier so close and so capable of providing what the Chinese cannot afford to lose.

China is also angry at Australia for cracking down on Chinese espionage and influence operations inside Australia as well as criticism of, and active opposition to Chinese claims in the South China Sea. China is still Australia’s largest trading partner, accounting for over 30 percent of imports and exports. Australia still has a favorable trade balance with China as China bought far more (mainly raw materials) from Australia than the other way around. China accounted for 85 percent of the positive Australian trade balance and that has been going on for decades. This has made Australia immune to all the global economic recessions since the 1990s and given the Australian GDP and standard-of-living an unprecedented period of growth. Australia has found that this favorable situation came at a price. China expected Australia to do whatever China wanted. When Australia stuck with the United States over illegal Chinese trade practices China decided to teach Australia a lesson about who was in charge in the West Pacific.

As a result, Australia and China engaged in a major power dispute. China tried using trade restrictions (reducing purchases from Australia) to coerce Australia. Even though China is the largest customer for Australian exports, this coercion was not well received in Australia. One response from Australia was to repeat its accusations that Chinese claims in the South China Sea are illegal. At the same time Australia acknowledges that China has militarized its bases in the South China Sea and that makes it riskier for foreign warships that carry out FONOPS (Freedom Of Navigation Operations) there. Australia has increased its military spending because of the growing threat of attack by China.

Australia is not alone when it comes to Chinese economic pressure. Most of China’s neighbors have had a taste of this and that played a role in the formation of a local coalition opposed to the Chinese efforts at domination. This is a problem for China because this coalition does have the military capability to block Chinese forces. That coalition includes the United States, Australia, Japan and South Korea and several other local nations. For the moment it is a war of words and economic attacks and it’s up to China to escalate that to open warfare.

March 18, 2021: More problems with Chinese investments in southwest Pakistan (Baluchistan) where there has been some open defiance by the military because of the CPEC (China-Pakistan Economic Corridor) project. The Navy and Coast Guard refuse to give up 47 hectares (116 hectares) at the site of the new Gwadar port project. The commanders of the Navy and Coast Guard are making a public protest against the policy of being so economically and militarily dependent on China. This opposition has been growing within the military leadership, who see this dependence on China as a surrender of independence and putting Pakistan at risk of becoming collateral damage if China decides to fight Indian and its Western and East Asian allies for control of the Indian Ocean. The Pakistani naval officers have done the math and believe China has little chance of prevailing against that kind of coalition. Worse is the fact that Pakistan is becoming so economically and diplomatically dependent on their northern neighbor. This public protest, which the Chinese are demanding be resolved quickly, began in late 2020 and surfaced now because the Chinese are visibly upset at this insubordination. The growing opposition within Pakistan, and the Pakistani military towards the increasing brutality of the military against elected officials, critical media and anyone who opposes the military getting its way, also exists in the military. Not just among junior members but among senior commanders.

The military decided over a decade ago that Pakistan should be willing to pay a high price to get CPEC done because it means Pakistan has an ally against Iran and even Western powers that might have some violent disagreement with Pakistan. China addressed that by pointing out that China does not have allies, just powerful trading partners (the West in general) and client states (like Pakistan). That has always been the Chinese outlook and it hasn’t changed.

While China is picking up most of the $60 billion cost of CPEC, it means that China owns many of those new economic assets, especially the new port of Gwadar. In early 2017 China and Pakistan finally signed the agreement that granted China a 40-year lease on new Chinese built facilities China at Gwadar. The lease grants China most (over 80 percent) of the revenue brought in by port and free trade zone operations. China usually imports its own workers from China to do most of the work on projects like this. By 2022 China expects to have about half a million Chinese in Pakistan, some of them with their families. The easiest way to provide protection is to have most of them live in a heavily guarded and restricted access area. Gwadar is a key part of CPEC and it has the misfortune of being in a province (Baluchistan) that does not want to be part of Pakistan. China and the Pakistanis try to ignore this by not reporting on non-Islamic terror attacks on CPEC construction projects. The government has long been accused of suppressing news of tribal separatists in Baluchistan attacking government targets and especially those related to CPEC. The separatists claim they regularly carry out attacks on CPEC construction projects, but most of their attacks are still directed at Pakistani security forces and government facilities.

Because of the security threat to Gwadar, China demanded that Pakistan build 30 kilometers of three-meter-high security fencing near the two main entrances to Gwadar. In addition, the Chinese are installing 500 security cameras within the perimeter of the port. Pakistanis fear the entire port area will eventually be fenced off to protect what is described by locals as a Chinese naval base guarded by Chinese and Pakistani troops. Since early 2019 Pakistan has been responding to Chinese complaints that about lack of security, and agreed to add more troops to the security forces already assigned to guard over 300 Chinese projects in Pakistan and the 15,000 foreigners (mainly Chinese) who work on them. The existing force has over 15,000 personnel with 9,000 being soldiers and the rest local para-military forces. This will be in addition to the special naval force that protects navy facilities in Gwadar and the waters off Pakistan.

In mid-2017 Pakistan also agreed to build a walled and restricted residential area near the port of Gwadar to house up to half a million Chinese that will eventually be working in Pakistan. The Chinese construction work on Gwadar port facilities is visible to anyone on the ground or flying by and it was noticed that some features of the new port and airport facilities are clearly intended for military use. India has long claimed China (despite denials) was planning to use Gwadar as a base for Chinese warships and naval aircraft. Pakistan never had a problem with Chinese military using Gwadar as it helps keep local troublemakers out. Pakistan has assured China that there would be no terrorist violence against Chinese working on upgrading the port of Gwadar and land links north to China. The military now has to assure their Chinese overlords that dissent with the Pakistani military will be suppressed as well.

March 17, 2021: Russia is recalling its ambassador to the United States for unspecified reason. Russia and China are united in calling the new (since January) American government weak and vulnerable. Both are demanding that the U.S. lift its sanctions and treat Russia and China with more respect.


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