January 30, 2017: Although China continues its post-Cold War policy of aggressive territorial claims and risking war with its neighbors it has had to take into account growing internal problems. That is unfortunate because the use of nationalism and reviving ancient (sometimes fictional) territorial claims was supposed to distract an increasingly wealthy and concerned population from very real internal problems with corruption, pollution and ineffective government. Many Chinese were distracted but not enough and the domestic unrest continues while the neighbors increasingly see China as more of a threat than an ally and business partner.

The most widely known of these foreign adventures is the South China Sea which has been declared, by China, to be part of China This violates international agreements on such matters but China disagrees and is becoming more aggressive enforcing these claims. Same situation in other coastal waters bordering South Korea and Japan. Old territorial claims on India have been revived, but are not pursued as aggressively because India has modern nukes along with ballistic missiles to deliver them and a large military. Government efforts to introduce reforms and reduce corruption are suspect because for most Chinese the reality does not match the government propaganda. Because of that the Chinese people are proving difficult to control now that they have more education, better economic prospects and access to the Internet. Despite these difficulties China continues its long-range plan to become a military superpower. That means world class weapons designed and built in China require long-term efforts but the Chinese believe they will get there during the 2020s and 2030s. Every year China offers new weapons to the world market that are visibly more advanced. The actual performance of Chinese military technology is suspect as much of it is based on Russian stuff. During the Cold War Russian weapons always seemed to be what the losers used. But China keeps trying to improve and is making more progress than the Soviets ever did. The world is seeing more Chinese in peacekeeping missions as well as growing Chinese threats to peace. The bottom line however is keeping the communist dictatorship in power and that may be the ultimate reason for China avoiding war.

Fixing The Baby Shortage

The results are in and there are more babies but not enough. The government relaxed the “one child” policy in 2015 and basically turned into a “two child” policy. For 2016 there were nine percent more births. But that’s only 1.3 million more and not enough to make a dent in the growing shrinkage of the working age population (which declined over four million in 2016). The government had expected three million more births a year. It appears that China has, since implementing the one child policy in the 1980s, managed to acquire the “affluent mother” syndrome. That means better educated and paid women refuse to have a lot of children. South Korea, Japan and Singapore already suffer from this as does most of the industrialized world.

South China Sea

One of the most vulnerable victims of the Chinese South China Sea campaign is the Philippines. The newly elected president president Duterte remains popular with the Filipinos who elected him and has very high approval rating for a Filipino president. This is more remarkable when you realize that Duterte has made some moves that are not popular with most Filipinos or even many of his key aides and advisors. Chief among these contentious items is trying to work with China while discouraging the U.S. from actively opposing illegal Chinese territorial claims in the South China Sea. Recent polls find that China is still the least liked and trusted nation for most Filipinos. Thus 38 percent of Filipinos trust China compared to 76 percent trusting the United States, 74 trusting the UN and 70 percent Japan. Only half trusted the EU (European Union) and fewer trusted Russia. All this has not hurt presidential popularity because saying nice things about China has led China to pledge nine billion dollars for an ambitious development plan. So far Duterte has gotten $33 billion in loan or aid pledges for this effort and some of that will soon be implemented. Most (54 percent) of this came from China and Japan. The goal is $140 billion and Duterte has a good chance of getting that much if he can continue to make progress in bringing corrupt officials to justice. The poll numbers seem to show Filipinos appreciate what’s going on here even if a lot of foreign critics don’t. So despite all the nice things Duterte says to China his Defense Minister openly denounces the continued Chinese efforts to build artificial islands in Filipino waters so China can claim the new islands as part of China. Duterte is seen as trying to avoid having a war between China and the United States start so close to the Philippines. Filipino military leaders point out that the U.S. would operate at a disadvantage against Chinese military moves without access to some Filipino bases and that the Philippines would probably be attacked by China no matter what. That happened to many “neutral” countries during World War II and for Chinese territorial expansion to work the Philippines is an obstacle with or without Americans involved. The eventual annexation of the Philippines by China is openly discussed in Chinese media. What is happening between the Philippines and China is typical of the approach China is taking to all of its vulnerable and angry neighbors.

South Asia

On its southwestern border China has become a major ally of Pakistan and is making major investments, but there are conditions. China has threatened to cut back if Pakistan does not improve security and is calling for greater international efforts to do the same in Afghanistan (where China has some major projects pending because of security concerns). This is a veiled criticism of Pakistani support of Islamic terrorism. Pakistan is the largest customer for Chinese weapons exports and increasingly dependent on China as a military ally and supplier of weapons. Yet even China has to deal with the terrorism threat created and sustained by the Pakistani military. All this has fueled the growing struggle within the Pakistani government as the military (and its intelligence branch, ISI) refuse to consider shutting down the remaining Islamic terrorist sanctuaries. While Afghanistan’s internal problems (corruption, ethnic and religious animosities) are caused and sustained by Afghans it doesn’t help that neighbors like Pakistan actively keep the pot boiling. That is beginning to cause a lot more problems for Pakistan and in the long run that is a good thing for Afghanistan.

On the southern border Burmese refugees are fleeing to China the Chinese government is getting angry and no longer waiting for the Burmese government to act. Since late 2016 Chinese soldiers and police have been either stopping Burmese refugees at the border or finding them inside China and forcing them to leave. China complains that the latest outbreak of tribal rebel violence in Shan and Kachin States had driven over 30,000 Burmese into China and interfered with trade and movement across the border. China wants the Burmese government to do something about it or face reduced Chinese investment. That threat has largely been ignored (or promises made and not kept) so now China is going to act without regard to Burmese promises or wishes. This means forcing refugees to return to areas where Burmese troops frequently fire on civilians or the refugee camps built inside Burma near the Chinese border. Burma can’t really afford bad relations with China, mainly because China has become a (if not the) major source of foreign investment. The Chinese want to continue doing business in Burma, but it has to be safe for those investments as well as the Chinese and Burmese working for Chinese firms in Burma. The problem is that the government has still not been able to gain control of the military, which has had a free hand in the tribal areas (especially Shan and Kachin) for over half a century. The Burmese government is having more success negotiating peace deals with the tribes but these deals often fail because the Burmese military won’t cooperate.

Adjacent to Burma is Thailand where the military government is aware of how unpopular their rule is and are striving to figure out how to stay in power permanently without being a military government. Changing the constitution is a start and the military government is depending on China to help them out. It was not surprising that the military government developed close ties with China, which is the regional expert in keeping an unpopular dictatorship in power. So China has been quietly supplying help in controlling the Thai media, especially the Internet. The military government cannot get away with doing this openly, as the Chinese communists do, so they have to quietly monitor the Internet and then arrest suspected “troublemakers” and charge them with one of a growing list of fictional offenses. The Thai government repays China by refusing to admit anyone into the country that the Chinese Communist government does not approve of. In late 2016 the government admitted that they maintain a secret blacklist of individuals and groups who are to be taken into custody if they try to enter Thailand and, if China requests, sent back to China (even if the blacklisted travelers are not citizens of China). The Thai military government also publically backs Chinese claims to the South China Sea. Most Thais oppose Chinese territorial claims and are uncomfortable about being this cooperative with their overbearing neighbor. China is now the third largest foreign investor in Thailand and is encouraging Chinese firms seeking overseas locations for production facilities to pay special attention to Thailand (which is not as cheap as nearby Vietnam, Burma or Cambodia but is now officially recognized inside China as more “Chinese friendly.”)

January 25, 2017: China has officially banned the export of “dual use” items to North Korea. It’s a long list because it is not just items that could be used for nuclear weapons or ballistic missiles, but for any military use at all. For several years now China has come under increasing international criticism for allowing its manufacturers to export “dual use” vehicles to North Korea when it is clear that North Korea wants them only for military purposes. This has been going on for decades but became big news in 2012 when a North Korea parade featured a 16 wheel TEL (Transporter Erector Launcher) carrying what appeared to be a three stage ballistic missile. A TEL is an unusual vehicle, specially built to carry, then erect and survive launch of a ballistic missile. The North Korean TEL was unlike any seen in the north before, but the cab was similar to a Chinese heavy transporter. A Chinese truck manufacturer soon admitted that they had sold North Korea the vehicle, but that is was not a TEL, unless the North Koreans turned it into one. The truck was designed to haul non-military cargo but, as is the case with many "dual-use" technologies, can easily be adapted to military use. The Chinese manufacturer added that the truck in question was an excellent vehicle and there were many satisfied users. Large trucks modified to be TELs are often not real TELs. There are a lot of manufacturers out there who build huge (12-20 wheel) trucks, and these are often used to carry military equipment (like 60 ton tanks). A 12-50 ton ballistic missile is no problem, but installing the hydraulic gear and controls to erect the missile to a vertical position is tricky. Even more difficult is hardening the rear of the vehicle to minimize the damage from the rocket exhaust. This last bit can be dropped if you only expect to use these TELs once for a live fire. The 16 wheel North Korea TEL may have been one of those "use once and abandon the trailer" models. The Chinese truck being used as a TEL was not the only new Chinese truck to show up in North Korea. Earlier in 2012 cell phone photos appeared of Chinese made jeeps being shipped (by rail) into North Korea. These were apparently to be part of the distribution (of gifts) for the April 15th celebrations. The thousand or so jeeps were gifts from new leader Kim Jong Un to select military officers. In the 12 months before this revelation China had sold (or given) North Korea some 4,000 military trucks. These were not sold as military equipment, but as trucks that were often seen being shipped across the border already painted in the colors of the North Korean Army. The dual use problem became newsworthy again in in 2015 when North Korea showed off its new guided (by a GPS type system) 300mm rockets and the launcher vehicle was later identified as a Chinese ZZ2257M5857A 6x6 vehicle built for civilian or military use. More disturbing is the fact that the new North Korean guided rockets were using technology that could also have been Chinese, as the Chinese introduced such a large guided rocket system in 2010. China has long looked the other way at these violations of international arms export bans on North Korea but now China is angry at North Korean stubbornness and enforcing embargoes it had long ago agreed to.

January 23, 2017: The Philippines agreed to not upgrade any of its military installations in the South China Sea. This is not a permanent thing and apparently in response to China committing to $3.7 billion for projects to address “poverty reduction” in the Philippines. China has pledged more deals like this, in return for some good will, or whatever, from the Philippines. At the same both Chinese and Filipino officials have to keep in mind that opinion polls in Philippines continue to show over 80 percent of the population backs opposition to Chinese claims in the South China Sea. China takes things like this as a victory and because China has managed to buy similar victories all over the region, and the world, the cumulative effort pays off.

January 20, 2017: Pressure on South Korea has not been working out so well. Two months after China banned all legal (licensed) use of South Korean movies, TV shows and popular music inside China it has expanded the list of banned imports to include popular consumer items like air purifiers and heated toilet seats. The bans began with the aspects of South Korean culture were most popular in China and very lucrative for the South Korean firms that produce them. It’s also a point of pride for South Koreans in general that Chinese admire, and pay for, a very public aspect of Korean culture. This is all about South Korean refusal to abandon efforts to expand anti-missiles defenses. Chinese pressure went into high gear after China suspended discussions on joint defense matters in early November 2016 because South Korea made it clear it would not, under any circumstances, abandon plans to install American THAAD anti-missile systems. Because of continued North Korean nuclear and ballistic missile development South Korea sped up deployment and now plans to have THAAD operational in 2017, several years earlier than originally planned. China, Russia and North Korea have long opposed THAAD. China will not come right out and say it but they object mainly because THAAD would also make South Korea less vulnerable to intimidation by Chinese ballistic missiles. South Korean voters understand that so all the threats are having less impact than China expected.

January 19, 2017: The government claims that the latest (since mid-2016) anti-corruption effort in the military has so far succeeded in eliminating 40 percent of commercial operations run by the military. The government plans to eliminate all the military business operations by 2020. China has regularly (for thousands of years) failed to suppress corruption in the military and officers expanding into commercial operations has become the latest form of military corruption. Another change is the considerable publicity the anti-corruption effort is getting. Past anti-corruption campaigns were carried out quietly since the biggest offenders were senior officials, most of whom were immune because of political connections. Chinese military corruption in the past is often well documented but it was never something the government wanted publicized as it was going on. That has changed and the current media effort is providing lots of historical examples of how Chinese troops were defeated because they had been crippled by corruption. This sends an encouraging signal to most Chinese who understand that this is a rare public (if indirect) admission of how corruption cripples the economy in general and in ways that most Chinese suffer from. Unfortunately the “strenuous efforts” to reduce corruption in the military have been going on since the 1990s and the corruption, while reduced, still exists and, according to secret police reports, the actual combat capabilities of the military are still crippled by it. While these reports are secret, the evidence of continued military corruption is not. Those in the military (or who recently left) as well as civilians working for or with the military have all seen the corruption in action and know it is still there. The government controlled mass media keeps visible examples (avoidable accidents and blatant theft or abuse of power) from being widely reported but cell phones and the Internet get a lot of that stuff, especially when there are pictures and video available, wide attention. In response the government publicizes its anti-corruption measures in the military. Then there is yet another ban on military involvement in commercial activity. These bans began in the 1990s but officers and troops kept finding ways to get around it. So additional bans are issued that, at the very least, mean military personnel have to break more laws (and face more punishment if caught) if they continue their bad behavior.

January 18, 2017: The governor of Liaoning province admitted, in the state controlled media, that provincial officials had falsified economic data between 2011 and 2014. This was not news, as anti-corruption officials had publicized this during a 2014 investigation. What this official statement did indicate was that it is safer to discuss the problem of falsified data in public and on the Internet. Bad news like this coming out of heavily industrialized Liaoning province is a big deal because the province has a population of 44 million and a GDP of about half a trillion dollars a year. Liaoning has long been portrayed as one of the most corrupt province and the only one that officially suffered a decline in GDP in 2016. There is more, as Liaoning borders North Korea, an area where corruption and false data are the norm. The extent of corruption in North Korea is recognized worldwide and makes China look good in this department. The 2016 international corruption ratings reveal that North Korea continues to occupy a position at the bottom; 174 out of 176 nations rated. China is 79, South Korea 52 and Japan 20. Corruption in the Transparency International Corruption Perception Index is measured on a 1 (most corrupt) to 100 (not corrupt) scale. The most corrupt nations (usually North Korea and/or Somalia) have a rating of under 15 while of the least corrupt (usually Denmark) is often 90 or higher. African nations are the most corrupt, followed by Middle Eastern ones. The current North Korean score is 12 compared to 40 for China, 53 for South Korea, 29 for Russia, 72 for Japan and 74 for the United States. A lower corruption score is common with nations in economic trouble.

Widespread corruption in a country usually includes false economic data. For most nations this is a minor problem because if they want financial assistance from the outside, especially international operations like the World Bank or IMF, they have to submit to audits and the kind of scrutiny that reveals a more accurate picture. China is different in that it is a communist police state that avoided the 1989-91 worldwide collapse of communist rule by switching to a market economy nearly a decade earlier. China kept the communist police state form of government and all the secrecy that involved. Even after a century of civil war, invasion and communist misrule China was large enough to finance its own reconstruction (at the cost of over 20 million dead Chinese) without intrusive outside audits of its financial data. But after three decades of sustained economic growth China has become one of the largest economies on the planet and to sustain that had to maintain closer economic ties with the international banking and finance system. That required revealing so much data that foreign economists and auditors could spot falsification of data. The government has been trying to deal with that and having senior officials admit it happens, but not as much as some foreigners believe, is a sound tactic. Maybe, but inside the government a growing number of senior officials are wondering what is really going on with the economy.

Meanwhile some key economic conditions in the country keep getting worse. For example Producer Prices (what manufacturers sell their goods for) have been falling every month for nearly four years. This is caused by low demand and in response companies have been employing fewer people for two years so far. Part of the slowdown is deliberate. China had made it more difficult to borrow in an effort to deal with the real estate bubble and corruption (bad loans) in the banking system. But now the government is loosening credit to make it easier for companies to grow. The problem is that the economy is no longer growing like it did since the 1980s, at over 10 percent a year. On top of that there is the old problem of corruption within the government when it comes to accurate economic statistics. The unreliable government statistics were long an open secret that did not seem to matter. That has changed.

GDP growth has been slowing since 2010 and that trend will continue. This is mostly about how the decades of development are over. Most of the missing (because China did not go through the Industrial Revolution until the late 20th century) infrastructure (road, ports, dams, utilities, housing) have now been built and, because of government corruption, often overbuilt and poorly built. Yet the government feels that it still needs inflated economic performance numbers to justify its continued dictatorship (of the Communist Party). The government was forced to admit that the decades of 10 percent a year GDP growth were over and appears to have settled on 6-7 percent a year being the acceptable new normal. But foreign analysts see five percent or (and eventually) less as the reality and a catastrophic economic collapse (because of mismanagement of the banking system) still a possibility.

China is still putting up impressive economic numbers but not enough of the ones that count. For example, a better (but less used) measure of economic strength is how much of the national wealth is in private hands (where it is more efficiently managed). Thus while China makes much of its GDP (at $11 trillion second only to the American $18 trillion) and capable of eventually surpassing the U.S., they are now losing ground when it comes to privately controlled wealth ($23.4 trillion versus $84.8 trillion). More Chinese, especially the wealthy middle and upper class ones, are openly protesting this deception because it ultimately puts at risk all that new wealth.

Moreover the real strength of the Chinese economy is production for domestic consumption. Starting in the 1980s, China set the economy free to finally get through Industrial Revolution (which most Western nations underwent in the 1800s) with little state interference. As happened in the West, this leads to explosive growth and problems with pollution and raw materials shortages. This makes China's neighbors nervous, because that's where lots of the raw materials come from, and some of the pollution (industrial waste) can go to.

January 17, 2017: In Africa large investments are increasingly threatened by lack of accurate data on the state of the local economies. This became a big problem recently when China refused to release $20 billion in loans it had already agreed to provide Nigeria. The reason was doubts about the accuracy of the economic data the government provided international lenders. In 2016 Chinese economists visited Nigeria and saw the extent of the corruption and economic problems that bad behavior created. The Chinese also noted that GDP had actually contracted a bit in 2016 rather than expanded as the government had predicted. China is still willing to work with Nigeria, but only if Nigerian officials can halt an economic collapse corruption has caused.

January 16, 2017: Japan and Australia approved a military cooperation agreement in which both nations share information about the military threats arising from China and North Korea.

January 15, 2017: China and Vietnam agreed not to escalate military activities over territorial disputes (mainly the South China Sea). Do protect itself from China Vietnam has been making military alliances or partnerships with a lot of nations, including the United States, Russia, Philippines, Japan and even India. The recent manifestation of that was a Japanese gift of six more patrol ships. China and Vietnam are ancient enemies and the fact that Vietnam is still independent after more than a thousand years of Chinese threats played a role in this new temporary truce.

January 12, 2017: Chinese police had arrested a team of North Korean hackers (12 programmers, one supervisor and the secret police official in charge of preventing this) heading for an unnamed foreign embassy to defect. That defection was apparently going to include the exposure of details of one of the many illegal software operations North Korea staffs and runs in China and a few other Asian countries. This team of hackers created and maintained an illegal gambling site for Chinese gangsters. Most of the money these hackers earned went to the North Korean government. Such operations survive in China with the aid of local officials (including police) who accept bribes and leave the North Koreans alone. The fourteen men are apparently being sent back to North Korea, where they will be executed and their families sent to prison (slave labor) camps.

January 11, 2017: China (or maybe just some greedy Chinese officials) are accused of making a profit on UN sponsored foreign aid for North Korea that is sent via a Chinese port. China has begun barring some foreign aid from entering China and claiming they are simply enforcing the new sanctions. But the aid groups are then quietly informed that if they buy the aid (food, equipment, medicine) from Chinese firms it can be sent into North Korea.

January 9, 2017: The government revealed some major developments in the anti-corruption effort. Two senior officials were removed (one fired, one resigned) because of corruption and new rules were announced for monitoring the 500,000 personnel that staff the national anti-corruption effort. Since 2012 17 senior anti-corruption officials have been caught and removed or prosecuted. Many Chinese see this as a sign that the anti-corruption effort is more propaganda than real. For most Chinese corrupt practices are still encountered regularly. This includes efforts to eliminate corruption in the military

Ten Chinese warplanes (six of them bombers) entered South Korean air space near Suyan Rock (also called Jeju, Ieo or Ieodo Island). South Korea sent ten fighters up to intercept and the Chinese aircraft left. This sort of thing happened several times a month in 2016 but this was the first incident for 2017. Early in 2016 Chinese pilots would blame the intrusion on navigation error and leave but by the end of 2016 that bit of theatre was abandoned. China still sometimes denies that intrusions even happened and none of their aircraft violated anyone’s air space. Ieodo is actually a submerged (nearly five meters under water) rock in the East China Sea that is 150 kilometers from South Korea and 245 kilometers from China. In 1987, South Korea built a warning beacon on the rock, which is a navigation hazard to large ships. South Korea officially claimed Ieodo in 1951 and China officially challenged that claim in 1962. In 2006 the Chinese agreed not to challenge South Korean claims to Ieodo, which are supported by the international community. But in 2008 China renewed its challenge apparently as part of a more general campaign that included claims to all of the South China Sea and large chunks of India.

A side-effect of this latest Suyan Rock incident was discovering that the China-South Korea hotline established for incidents like this was not working. The two countries set up a military hotline in 2011, so that any problems concerning North Korea, or over fishing rights or any other incident, could be quickly defused. The two countries have long standing disputes over who controls what fishing areas off South Korea’s west coast (including Suyan Rock). China is also very concerned with there being a unified Korea, as a democracy, rather than a communist police state. If North Korea collapses, China and South Korea will want to stay in touch, early and often, lest there be any dangerous misunderstandings. China had been offering to establish the hotline for years, but only if South Korea offered something in return. South Korea finally came through, by cancelling its military officer exchange program with Taiwan. It is unclear if the recent hotline failure was a technical problem or part of the Chinese campaign against South Korean anti-missile defenses (which China considers anti-Chinese). China is also angry at South Korea for rebuilding its relationships with Taiwan, which might even include South Korea exporting weapons to Taiwan. China would not like that but South Korea is becoming a major exporter of modern weapons and Taiwan is in the midst of rebuilding its military. With the South China Sea dispute China has given many of its neighbors reason to unite and cooperate as never before. Add to that a new set of American leaders less inclined to back down from Chinese threats and you have new options for those in the way of Chinese aggression.

January 8, 2017: In the northwest (Xinjiang province) a police raid met resistance and after a brief gun battle three terrorism suspects were dead. The three were the men the police were seeking in regard to an April 2015 terrorism incident in the area that was never publicized. For the last few years there has been a news blackout in Xinjiang, especially when it considered anything that could be considered terrorism or violence against Han migrants by the Uighur (Turkish) locals.

January 7, 2017: Big news in Russia recently were revelations that China had moved some of their ICBMs to the Russian border. The state controlled Russia media insisted there was nothing to worry about because these missiles were obviously meant to evade American ballistic missile defense systems and, besides, the minimum range for those DF-41 missiles is 3,000 kilometers, which means they could not be used against targets in the Russian Far East. More astute Russians observed that China could not win a nuclear exchange with the U.S. but could against Russia. And China would not want to nuke the Far East, they want to take control and fill the place with Chinese. Those DF-41s are well placed to blast Russian nukes and ICBMs far to the west. For many Russians China is seen as the only real threat to Russia and any Chinese move out there is nervously discussed in the Russian media (to calm people down) and privately (to discuss what is really happening on the Pacific coast). Since 2012 China increased spending on infrastructure in border areas of the Russian Far East (areas near the Pacific Ocean) to make it easier for Chinese businessmen to operate. This supports the rapid growth of Chinese trade in the thinly populated Far East and stirs (or confirms) Russian fears that Chinese businesses will take over the economy out there. The Chinese have done this before, over the centuries, with other neighbors. Chinese today are well aware of that and know that once you control the economy it’s a lot easier to annex the area to China. Meanwhile Russia continues to have problems getting Russians to move to the Far East and stay there. Communist and czarist governments also had this problem and the inability to solve it makes it easier for the Chinese to take over.

January 3, 2017: As expected 2016 was the first year where China launched more orbital missions (22) than Russia (17). The U.S. was tied with China for the first time with 22 launches. Since 2004 Russia has launched the most orbital missions but Russia has been having personnel and equipment problems keeping up. In 2015 Russia was first with 26 and in 2014 it was 32.

December 31, 2016: In the last month China deported thirty South Korean citizens from areas near the North Korean border. All those expelled were legal residents of China but were known (or suspected) of assisting North Koreans to escape into China.

In Pakistan the fourth nuclear power plant became operational. Built with Chinese tech, assistance and financing, Pakistan invited China to participate in building more of these plants. Western firms won’t build nuclear power plants in Pakistan because of Pakistani use of those plants for its nuclear weapons program. China is not bothered by that and that’s a major reason Pakistan favors China as a patron and ally.

December 30, 2016: China continues to create a carrier aviation capability and to the consternation of neighbors and the United States, the Chinese are doing it the only way known to work. That is, one step at a time, with persistence and a willingness to learn from mistakes and quickly adapt. There is no fast-track to creating a carrier aviation capability and the Chinese apparently understood that from the beginning. At the end of 2016 China carried out its first live-fire drills with its only aircraft carrier the Liaoning. This took place off the coast of northern China (the Bohai Sea) near the shipyard and naval base as Dailan. For the first time J-15 jets took off from the Liaoning armed with anti-ship missiles and fired those missiles at target ships. The Liaoning was also seen operating with its escorts. Together these form a carrier task force remarkably similar to the ones the United States has developed over the last 80 years.

December 28, 2016: In the northwest (Xinjiang province) the year ended on a disappointing note with an attack on a government compound. Xinjiang had much less of this sort of thing in 2016. This attack involved three attackers who drove into the government compound, set off a bomb and were shot dead by police. A policeman and a civilian also died. Aside from the bomb the Uighur attackers were only armed with knives. This comes as provincial authorities were about to announce how ethnic violence was way down in Xinjiang over the last year. The government has had a media blackout in Xinjiang for years but Chinese language media outside of China has been able to interview people from Xinjiang, including people who recently served in the security forces there. Those witnesses tell a different story, indicating that during 2016 there were about twenty protests and violent incidents a week in Xinjiang. Those familiar with how Chinese censors work point out that the government can get away with saying nothing is happening as long as no ethnic Han Chinese, with kin elsewhere in China, are killed. This is especially true when the dead are soldiers, police or government officials. These deaths stir up Internet chatter among the Han majority in China. The censors can suppress such forbidden chatter but cannot eliminate it. When the government does have to admit to anti-government violence in Xinjiang they describe the perpetrators as common criminals or Islamic terrorists.

The reality is that the Xinjiang problems more about the native ethnic Turk population resisting being overwhelmed by Han Chinese migration to the area. China accuses Islamic terror groups among the ethnic Turks (Uighurs) of Xinjiang for all these problems. Unhappy Uighurs are increasingly aggressive in protesting, if not attacking, the growing Chinese presence among them. The Xinjiang Uighurs never responded 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 made it possible for some Islamic terrorists to survive and operate there for a while. Most Uighurs are found in Xinjiang province where nine million of them 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 and in 2015 the security forces were told to do whatever they thought necessary to keep the peace. 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. While Islamic terrorism is seen as a major threat in the West the Chinese regard that threat in China as largely confined to Xinjiang. Despite the occasional attack, the Chinese now believe they have it under control.