July 26, 2017: In the northwest (Xinjiang province) the government has introduced mandatory spyware installation on all smart phones used by residents of the province. There are many Turks (Uighurs and other Central Asian minorities) in Xinjiang and most of them are Moslem and the source of most of the few Islamic terrorism recruits China has produced. The main cause of unrest in Xinjiang is ethnic and economic but China justifies (at least to the outside world) the growing list of restrictions in Xinjiang with the need to eliminate Islamic terrorism. Nationwide most of the violent unrest is because corruption and government failures but that sort of thing is not given as much media coverage as Islamic terrorism and other foreign threats (like American warships passing through the South China Sea). The new mandatory spyware in Xinjiang monitors smart phone use in much more detail and constantly reports back to the government censors. Normally most of the several million people working for the national Internet censorship bureaucracy look for anti-government activity online. The use of the new spyware is an earlier effort to introduce similar spyware nationwide. That generated more trouble (and backlash) than it was worth and was halted. The Xinjiang effort seems to be another test of the idea. Police in Xinjiang are checking locals (who must produce their ID cards at the many checkpoints established in the past few years) and those whose smart phones do not have the spyware are punished. Naturally the spyware is not popular but the government publicized some recent arrests (for incorrect through online) to the spyware.

Meanwhile Xinjiang is a problem and more so than Tibet, the other troublesome western province. Xinjiang has about eight times the population of Tibet but only a third more territory. Unlike Tibet Xinjiang is still angry enough to generate lots of violent attacks on security forces and recent migrants from eastern China. There was less violence in 2016 but at the end of the year three Uighurs 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.

The government has had a media blackout in Xinjiang for years but Chinese language media outside of China has been able to interview Xinjiang residents, including some 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 are 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. That attitude has intensified since then. 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 but not eliminated.

Making Corruption Useful

President Xi Jinping is accused of using the anti-corruption campaign to purge the government of officials he considers insufficiently loyal. There is some truth to that but so far there have been no false accusations but some corrupt officials have escaped punishment and many of those appear to be cozy with Xi and his cronies. The anti-corruption effort against senior officials has been going on since 2012.

So far in 2017 0ver 201,000 government officials have been punished for corruption. That is on track to match the number punished for all of 2016. What is most encouraging is that many more very senior officials are being hit and hit hard with jail time and confiscation of what they stole. This is where the accusations against Xi Jinping fade because most Chinese don’t care, for the moment. The fact is that there are so many corrupt senior officials going to jail who long considered themselves immune to punishment. If taking down many of these senior crooks also eliminates someone who displeased Xi Jinping that is not a problem until it is. China is still a communist police state, but an uncharacteristically prosperous one. There are well-founded fears that Xi Jinping is trying to make himself leader for as long as he wants. Most Chinese don’t care as long as the good economic times last and they otherwise feel good to be Chinese. .

Meanwhile Xi Jinping regularly meets with the senior leadership and repeats how important it is to eliminate corruption in the military and for the military to keep in mind that its primary loyalty is to the CCP (Chinese Communist Party). A growing number of junior officers are indicating that they are not focused on that aspect of their military duties. The government has been taking several steps to educate everyone. In November 2016 Xi Jinping persuaded the senior members of the government to add to his titles one (translated as “core” or “core leader”) that makes him equal to communist China founder Mao Zedong. No other Chinese leader since Mao Zedong (who died in 1976) has had that kind of power. While Mao has become popular with many Chinese, those who lived through the 1960s see Mao as a major failure. That is what led to the economic reforms that have transformed China. Xi Jinping has, as expected, used this Mao-grade power to deal with the corruption that still persists in the senior ranks of the government and military. To demonstrate that as soon as Xi was declared a core leader the Communist Party Central Committee announced punishments for many senior party officials for corruption. Since then there have been regular announcements about senior officials being accused or punished for corruption.

Keeping India Scared And Pakistan Safe

For the first time since 2008 another ancient and unresolved border dispute between China and India escalated because China wanted it to. This is taking place in the south, in Tibet where northeastern India’s Sikkim State borders China to the north, Bhutan to the east and Nepal to the west. Sikkim is small (7,100 square kilometers) and has a population of less than 700,000. East of Bhutan is the Indian state of Arunachal Pradesh, which China claims most of. China claims smaller bits of Bhutan and Sikkim. The problem with Sikkim is that it was an independent monarchy until 1975 when the king allowed a referendum on joining India, which won. China protested Sikkim becoming part of India in part because of the border disputes China long had with independent Sikkim. The current incident began in mid-June when China began building a road into Bhutan that was seen as part of a Chinese effort to threaten the Siliguri Corridor (a 22 kilometer wide strip of land between China and Bangladesh that connects northeast India to the rest of India). India had agreed to help Bhutan oppose Chinese efforts to just grab the disputed area (which is 3,000 meters up on a plateau that has no real value to anyone). China and India had signed an agreement in 2012 to respect the existing Bhutan border. But like most Chinese territorial claims revived recently incidents like this serve to make the Chinese government look like it is “serving the people” and are carried out at little cost in lives or money. So thousands of Chinese and Indian troops have been moved to this inhospitable part of the world because the Chinese government wants some good publicity inside China.

Pakistan is more of an economic problem. For example Pakistan regularly threatens to block road access to Afghanistan if the United States does not back down on its efforts to shut own Islamic terrorist sanctuaries in Pakistan. This escalation threat ultimately fails for Pakistan because the only major ally they have is China and the Chinese have made it very clear that they will not join Pakistan in such an escalation. China is more concerned maintaining order and economic growth in Afghanistan. China has also made it clear that the Pakistani ability to protect that thousands of Chinese coming into Pakistan each year to build new infrastructure projects is vital to the continued good relations with China. Pakistan has over 100,000 soldiers and police dedicated to the security of these Chinese and their growing number of work sites. There are still thousands of Islamic terrorists inside Pakistan who see the Chinese as a legitimate target.

Pakistan does indeed encourage and support Islamic terrorists who attack India and Afghanistan and China warns that whenever this Pakistani obsession threatens China economically or otherwise China will act swiftly and without warning. Meanwhile China has a grand strategic plan involving Pakistan and a lot of other Asian countries. This is Obor (One Belt, One Road) and Chinese describes it as a revival of the ancient “Silk Road” but with a major difference. The ancient Silk Road was only partially run by the Chinese. Most of it was operated by other major powers (Iranian, Indian 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 communist rulers 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.

Another feature of Obor is that it offers business relationships that are more acceptable (than Western ones) to most of the countries Obor is investing in. The Chinese can, as they like to put it, be more flexible and respectful of local customs. In other words the Chinese don’t see bribes and corruption as a defect but an opportunity. This is great for the foreign political and business leaders but less so with most of the others and this is causing problems. Africans and Asians living near many Chinese foreign operations complain that China is the major investor in illegal extraction of raw materials and keeping local gangsters and corrupt politicians in business. The Chinese also violate local labor laws with impunity and prefer to hire their own armed security personnel who will shoot to kill if threatened by angry workers or local residents. Keeping local tyrants in power serves Chinese interests when it comes to things like establishing new military bases or preventing other nations from doing so. Corrupt locals also make it easier to carry out espionage operations (locally or in nearby areas). Helping to keep unelected leaders in power also serves to maintain the legitimacy of the current Chinese government which is basically a communist police state and the CCP (Chinese Communist Party) wants to keep it that way. All this is nothing new. For example once China got its seat in the UN back (from Taiwan) in 1971 it has been notorious for encouraging and using corrupt practices in the UN. Many nations play along and as China became wealthier they were willing and able to buy whatever they needed inside the UN. The latest example of this is how Chinese pressure has caused the UN to withdraw investigators (responding to local complaints of serious crimes) looking too closely at Chinese owned operations in Africa.

Korea

China continues to go through the motions of enforcing the sanctions on North Korea. In effect China makes it a crime on their side of the border to export a growing list of goods to North Korea. Couple that with the increasing anti-corruption efforts in China and border security personnel in both countries note that this is a situation where boldness can make to rich. This is less of a problem in China, where living standards have grown rapidly since the free market economic reforms of the 1980s. For Chinese corruption is a problem but in North Korea corruption is often a matter of life or death but for those collecting the bribes it is way to get out alive. By amassing enough money to bribe your way out of the country you and members of your family get to live. With the corruption spreading throughout the North Korean security services there is hardly anything you cannot bribe your way out of or past. But for most North Koreans the heavier use of bribes means that the cost of everything goes up. More police and security personnel now see it as a fringe benefit of their job to demand bribes whenever they can. So they do.

The bribes required to escape across the border into China are much higher this year and often do not work. This is the case on parts of the border where North Korea has installed an electrified fence. While the Chinese are sending more troops to the North Korean border this is more for keeping out deserting North Korean soldiers, who often come across in uniform with their weapons and create a very visible (and embarrassing) North Korean threat in China. In part because of that this year China finished installing all-weather surveillance cameras all along the border.

The growing number of Chinese troops on this border are mainly there to stop any large scale movement of desperate North Koreans trying to escape a government collapse in North Korea. In the last few months these Chinese troops have carried large scale training exercises on the North Korean border, visible from the North Korea side of the rivers that form most of the border.

Although North Korea GDP rose a bit (4 percent) in 2016 that was mainly because of all the weather related disasters North Korea suffered from in 2015. This year does not look as promising. Moreover North Korea has a miniscule GDP ($29 billion in 2016) which is pathetic compared South Korea ($1.3 trillion), Russia ($1.2 trillion) and China ($11 trillion, second only to nearly $19 trillion for the United States.) On a per-capita basis South Korea GDP is more than 20 times larger than the north and per capita GDP of China and Russia is more than five times larger than North Korea. The problem here is that the current North Korean leadership insists on developing ICBMs with nuclear weapons so they can threaten the wealthiest nations to give them all the economic aid they need to make their communist police state viable. China is not threatened by any North Korean economic or military threat but is concerned about a flood of North Korean refugees heading for China in a crises. The Russian border and economy are much less accessible and the South Korean border is protected by minefields and massed North and South Korean troops. What makes this worse for China is the fact that most Chinese despise the North Korean leadership and what they have created. This is one thing most Chinese and South Koreans can agree on.

Since 2016 China has been enforcing more economic sanctions on North Korea and has agreed to cooperate more with the UN, the U.S. and South Korea to enforce the sanctions. But one area China is reluctant to discuss is the role of corruption in China that enables North Korea to bypass a lot of the economic sanctions. The Chinese government is very visibly waging a major campaign against its own corruption but does not like to go into details with foreigners. Same with South Korea where the capital and much of the economy is built so close to the North Korean border that North Korea could destroy most of the economic prosperity (and millions of South Koreans) using the capabilities they already have. The North Korean ICBM threat to the United States is not seen as comparable to what North Korea’s neighbors face if they push North Korea too far.

July 23, 2017: Two Chinese jet fighters threatened a U.S. Navy EP-3 maritime patrol aircraft flying in international air space (the East China Sea 140 kilometers from the Chinese coast). One of the Chinese fighters flew close enough (under 100 meters) to cause the American aircraft to maneuver away. A similar encounter in 2016 involved a Chinese jet moving to within ten meters of an EP-3. Since the late 1990s China has been trying to keep American recon aircraft away from their coast to prevent these aircraft from detecting and recording activity by Chinese air defense systems and other military electronics. Carefully analyzing these systems from a distance (international waters are anything at least 22 kilometers from the coast) reveals vulnerabilities that U.S. could exploit in wartime. This is doubly troubling to the Chinese because the Americans are known to share this kind of information with their allies, especially Taiwan, South Korea and Japan.

July 21, 2017: For the first time Chinese warships visited the Baltic Sea. The Chinese are there for joint training exercises with the Russian Navy. This has been an annual event since 2012 but until this year were held in the Pacific. One of the Chinese ships in the Baltic is a Type 052D destroyer, one of the most modern Chinese warships and equipped with a radar system similar to the Aegis system popularized by the United States over the last few decades. These naval firsts are popular news items in the Chinese state-controlled media and have been occurring a lot in the last decade. For example in late 2013 Chinese warships carried out multiple firsts. This included warships visiting Chile and Argentina and passing through the Strait of Magellan. At the same time a Chinese amphibious ship with marines on board visited Syria. This was the first time a Chinese amphibious ship had visited the Mediterranean.

July 20, 2017: India turned down the Chinese offer to mediate the Kashmir dispute between India and Pakistan. China also has territorial claims on Kashmir and is a close ally of Pakistan.

July 16, 2017: In Iran another American citizen was prosecuted, convicted and sentenced to prison (10 years) for espionage. The latest victim is Xiyue Wang, a graduate student in Iranian history who was born in China but is a naturalized American citizen. He was arrested in mid-2016 and, like all other foreigners imprisoned this way, to be used to trade for the freedom of Iranians arrested in the West for espionage, smuggling or whatever. China considers “overseas Chinese” as still subjects of China and will make similar arrests and accuse American citizens of Chinese ancestry of treason to the motherland. Iran often does that with Iranian-Americans who return for a visit. The overseas Chinese have been a presence in Asia and elsewhere for centuries. But until now the Chinese government was never much concerned with them. China was never, until the late 20th century, a major international trading power. Now China is and it is spending heavily to finance the migration of more Chinese to settle in foreign lands, and never forget where they came from. For those who do, when the motherland calls, the Chinese government will remind the unwilling that they still have kin or other links back in China and how shameful would it be if this lack of cooperation became known.

July 12, 2017: It’s been a year since the Permanent Court of Arbitration, after two years of deliberations, ruled that that China was acting illegally with its claims in the South China Sea. Britain and other Western nations said they would enforce any penalties levied but none were. While the Permanent Court of Arbitration is universally recognized (and backed by the UN) its rulings require other nations to enforce them, or not. It this case China pushed back and nothing has really happened because of the ruling. The Philippines, America, Australia, Japan and South Korea all openly opposed the Chinese claims early on while other nations in the area (Taiwan, Indonesia, Vietnam, Malaysia and India) held back for a while but eventually lined up against China. Only Japan, the United States and Australia openly called on China to obey the court rulings. The United States told China that any efforts to build an artificial island on Scarborough Shoal and install a military base would be resisted with more than diplomatic protests. The base was built and is still there. Another reason for the lack of success in halting Chinese aggression is because China offers to hold regular talks with the Philippines over these disputes. The Philippines refused at first because it did not consider the situation a dispute but rather a case of unwarranted Chinese aggression. But around the same time the court ruling came through the Philippines elected a new president who was willing to negotiate. Now China has offered the Philippines $24 billion in economic aid plus trade deals. This has changed attitudes in the Philippines.

July 11, 2017: Thailand approved a $5.5 billion Chinese railway project that will build six stations and a 250 kilometer high-speed line linking Bangkok and the northeast. As a practical matter this will cut travel time (from Bangkok to the north) 75 percent (to 90 minutes). Once this project is completed in 2021 China will seek to get that high speed line extended to the Laos border and have further railroad projects under way. China has been trying to get this first rail project approved since 2010 but many Thais opposed the financial terms and the control China wanted over running the rail line. In 2016 China agreed to a lower price for a joint Thai-China railroad project. China says it has now basically agreed to the terms Thailand insisted on since 2010. But the final approval came as the military government invoked some emergency powers to disregard remaining delays and order construction to start by September. Thus Thailand will build a rail line of their own design and finance it themselves with some technical assistance and financing help from China. This will enable China to eventually construct a 900 kilometer rail line from the Laotian border to Bangkok. China hopes to have the new railway operational by the mid-2020s. Meanwhile China is building a high speed line in Laos that will complete a 1,250 kilometers line from China (Yunan) to Bangkok. This is part of a larger project to build a “Shanghai to Singapore” high speed rail line. This would cut the cost of travel (currently mainly by air) for Chinese by more than half and increase the number of Chinese tourists to Thailand by at least two million a year. The Chinese were too insistent for too long on doing the 900 kilometer long rail line their way and resisted Thai suggestions and preferences. Many Thais don’t trust the Chinese and negotiations continued until China quietly agreed to comply with the Thai preferences. Meanwhile the military government, using the power it seized in 2014, managed to silence most of the public criticism of the China railroad deal. The generals have been less successful silencing the growing number of Thais pointing out how China is expanding its influence in Thailand with the active cooperation of the military government. Nany Thais see their own military shifting from protecting Thailand against foreign threats to becoming a partner with the largest regional threat as a means of keeping the unelected military government in power.

July 4, 2017: Russia and China have come up with a new plan to deal with the North Korean crises. This one involves North Korea agreeing to temporarily halt its nuclear weapons and ballistic missile programs and in return South Korea, the United States and Japan would temporarily halt joint training exercises. At that point all parties would enter negotiations to develop a permanent solution. Russia and China also want South Korea to consider getting rid of its anti-missile defenses, especially THAAD, as it is seen by China and Russia as a threat to the effectiveness of Chinese and Russian ballistic missiles. These proposals did not gain much, if any, acceptance from anyone they were directed at. China and Russia understand that what North Korea wants is cash and access to essential imports (food, oil and all manner of tech) and will not accept any substitutes.

July 2, 2017: An American warship (the destroyer USS Stethem) carried out a FONOP (freedom of navigation operation) in the South China Sea and came closer than 22 kilometers to Triton Island in the Paracel Islands. The U.S. Navy last did a FONOP off Triton in 2016. China has claimed (and occasionally occupied) Triton Island since 1974 when it used force to drive off South Vietnamese forces seeking to take possession. China considers Triton Island part of China and that all waters within 22 kilometers of this Chinese territory are Chinese as well and unauthorized visits by foreigners are forbidden. The problem is that international law does not recognize this Chinese claims and the Chinese make it clear they do not care what the rest of the world thinks. Triton Island is still claimed by Vietnam as well as Taiwan. Chinese media reported report these FONOPs as a violation of international law and often triggering a response by Chinese warships or warplanes. In reality China rarely opposes the American warships. These exercises are meant to affirm that many of the Chinese claims to the entire South China Sea are invalid and that the right to free passage through China’s EEZ is assured.

For the second time in less than a year, one of China’s Long March 5 satellite launcher rockets failed and this time a Chinese communications satellite was lost. Back in August 2016 a Chinese Long March 4C rocket failed and lost a very expensive Gaofen 10 photo reconnaissance satellite. The Long March 4C has been in service since 2006 and had 19 successful launches since then. The 2016 failure was the first for the Long March since 2013 and had proved reliable. The failure today was to the Long March 5 model, developed for carrying the heaviest loads (25 tons low orbit or 14 tons high orbit). The Long March 5 is the heaviest launcher (at 867 tons) China has and the only one that can lift certain cargoes, like portions of the new Chinese space station or major space missions, like the upcoming second Chinese mission to put robot exploration vehicles on the moon.

The Long March type rockets have been in use since 1970 and have failed only the 13 times out of 249 launches. That’s a 95 percent success rate, which is quite good. But China has yet to fully explain the 2016 failure and why two of the last fifteen Long March launches failed. That’s only an 87 percent success rate and something commercial customers and their insurance companies pay a lot of attention to. Long March is mainly used for commercial launches and that is big business that China is seeking to dominate.

The Long March series has always been China's main satellite launcher and that is largely because it is based on Russian designs. That means it is simple, cheap and reliable. This has made China a major player in the satellite launching business where minimum levels of reliability are mandatory. China can handle the mandatory requirements and competes on price. The U.S. Space Shuttle was retired because it was the most expensive way to get stuff into orbit. Satellites sent up via the Space Shuttle cost $25 million a ton put in orbit. The Russians and Chinese will do it for under $10 million a ton. But insurance can more than double that cost if there have been a number of recent failures with Russian and Chinese boosters. This keeps more reliable American and European boosters in business.

The Long March has a failure rate of about five percent, which was a little higher than twice the rate for the most used Russian launcher. The Space Shuttle failure rate was two percent, as were most Western satellite launchers. While the Russians are also having problems with their satellite launchers that’s because the Russian government has less money to invest in its space program or satellite launchers in general. In addition Russia has been losing skilled personnel (from manufacturing workers to rocket scientists) since the Soviet Union fell apart in 1991. In the same time period China has been increasing the quantity and quality of personnel as its space and satellite launcher programs grew enormously. China also pays better, for the same skills, than Russia. Whatever problems China is having with the Long March they are much better able to deal with than the Russians who suffer from a growing list of failures in that area and defense manufacturing in general.

June 28, 2017: China launched the first of four Type 055 destroyers. This was not unexpected because evidence of such a ship (Internet photos of ship mockups for training and chatter) began showing up in early 2015. Back then it appeared that this new (Type 055) 12,000 ton cruiser class ship would have 128 VLS (vertical launch system) tubes and much else besides. China claimed this ship would be the equivalent of a U.S. Burke class destroyer. The Type 055 would be, and now is, the largest surface combat ship China has ever built. Before 2015 the new Chinese Type 052 destroyers were described as similar to the Burkes but in reality the Type 052s were “Burke Lite” while the Type 055 is much closer to the Burkes in capabilities and, at least on paper, surpasses the American ships in some ways. The first Type 055 won’t enter service until early 2018 and the sea trials will be closely watched by foreign navies. This is usually very revealing about what works and what doesn’t. The Chinese have, so far, been quite persistent in fixing flaws discovered during sea trials and regular operations and that makes the new Chinese ship designs rather more frightening.

China flew in some emergency military aid to the Philippines in the form of 3,000 CQ-A5 assault rifles (and five million rounds of 5.56mm ammo) and 80 CS-LR4 7.62mm sniper rifles (and 800,000 rounds of ammo). The aid was valued at $7.3 million. It was noted that these two weapons, while Chinese made, looked like two famous rifles from the 1960s; the U.S. 5.56mm M-16 and the Russian 7.62mm SVD sniper rifle. Both are indeed that, Chinese copies of these two weapons manufactured mainly for the export market. Filipino troops have long used the M-16 as their standard assault rifle and Filipino snipers use several different sniper rifles and like variety. The Philippines thanked China and later thanked the United States as well for providing intel resources as well as American Special Forces troops on the ground to advise and assist.