In Taiwan and Japan, politicians are getting increasingly agitated about the growth of the Chinese armed forces. Japan, although it is cutting its defense budget a bit, is matching China in terms of naval power, and Taiwan is buying more missiles and high tech equipment. That said, while China is investing more money in the military, it's mainly new technology, not large quantities of new technology. China is getting ready for a distant future, not tomorrow.
December 22, 2005: A Chinese general, who said publicly that China would use nuclear weapons if the U.S. intervened during a Chinese invasion of Taiwan, has been rebuked by his superiors. Major General Zhu Chenghu's punishment was mild, no consideration for promotion for a year. But he was the first Chinese official to be rebuked for such warlike statements.
December 20, 2005: Chinese economists have found ways to measure the underground economy (about $280 billion a year), and have revised the size of the Chinese of the Chinese economy (to $2 trillion a year.) This makes China a major global player. The U.S. economy is $12.6 trillion a year. In the last two decades, China has experienced the fastest economic growth of any nation in modern history. The government has largely left private businesses alone, and the economy has thrived. This has provided money for military modernization, but has also created a middle class of over 100 million people, that is not easily bullied, and has cell phones and Internet access.
December 16, 2005: The government put on trial a Communist Party official, and 26 others, involved with the December 7th attack on people from the village of Dongzhou. The government tried to cover up the attack, and the deaths of about twenty villagers. But the proliferation of cell phones and Internet access has made that, for the moment, impossible. This forced the government to prosecute those responsible, or face far more unrest elsewhere.