Author Topic: Chinese Military,Political and Social Superthread  (Read 987331 times)

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Offline MarkOttawa

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Re: Chinese Military,Political and Social Superthread
« Reply #3325 on: July 19, 2017, 16:00:57 »
And a tweet by Mr Glavin:
https://twitter.com/TerryGlavin/status/887730576882417664

Quote
@TerryGlavin

"I told President Xi, 'Now we come to the part where I perform a cloying Canadian folk dance,' and he sighed, 'OK.'"


Governor General defends China visit amid Nobel peace laureate's death

As Gov. Gen. David Johnston prepares to end his service as the Queen’s representative in Canada, he took a moment to defend his goodwill mission to Chin...
http://www.ctvnews.ca/politics/governor-general-defends-china-visit-amid-nobel-peace-laureate-s-death-1.3510058

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Re: Chinese Military,Political and Social Superthread
« Reply #3326 on: July 24, 2017, 14:16:34 »
A tweet--NATO on notice?

Quote
SeaWaves Magazine‏ @seawaves_mag

Chinese Navy deployed


https://twitter.com/seawaves_mag/status/889251816998883328

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Re: Chinese Military,Political and Social Superthread
« Reply #3327 on: July 24, 2017, 16:23:04 »
Excerpts from longish piece:

Quote
Does China’s J-20 rival other stealth fighters?
...

...
How might China utilize the J-20

The J-20 has the potential to considerably enhance China’s regional military strength. According to a 2014 U.S. Naval War College report, an operational stealth fighter would “immediately become the most advanced aircraft deployed by any East Asian Power,” surpassing the aircraft fielded in India, Japan, Australia, Indonesia, or Taiwan. The U.S.-China Economic and Security Review Commission advances a similar assessment, noting that the arrival of the J-20 will enhance China’s military leverage against opposing forces in the region. With the J-20 expected become fully operational in the next couple of years, the PLAAF has a considerable head start over the Indian, Japanese, and Korean air forces, which are not slated to put their locally-made advanced fighter counterparts into service until the 2020s.

Opinions vary about the J-20’s comparative strengths as an air superiority (air-to-air) fighter or a strike (air-to-ground) aircraft. Some analysts believe that the J-20’s emphasis on frontal stealth makes it an effective long-range interceptor, meant for mid-air engagements. Others see the J-20 as a long-range strike aircraft, best suited for penetrating enemy air defenses and damaging critical infrastructure on the ground. Such high-value targets would include airfields, command bases, and other military installations. A 2015 RAND report noted the J-20’s “combination of forward stealth and long range could hold U.S. Navy surface assets at risk, and that a long-range maritime strike capability may be a cause for greater concern than a short-range air-superiority fighter like the F-22.” The J-20’s size and weapons configuration may, however, preclude it from functioning as an effective strike fighter in either context. Importantly, the mission types Chinese pilots are trained for may determine how the J-20 is eventually utilized...

Reports differ regarding the J-20’s range, which is expected to fall between 1,200 and 2,700 kilometers. Regardless of this uncertainty, the J-20’s combat radius is likely to extend well-beyond the Chinese mainland. The U.S. Naval War College suggests that the J-20 could be an “effective surface-attack platform for out to several hundred nautical miles at sea.” Air Power Australia notes that the J-20 would be a suitable choice of aircraft for operating within China’s “first island chain” and “second island chain.” Should China integrate aerial refueling aircraft with the J-20, the stealth fighter’s operational range would extend even further across the Asia-Pacific.

Increased range offers China considerable flexibility in terms of basing options. Basing the J-20 further inland means the J-20 can conduct distant missions before returning to the relative safety of China’s Integrated Air Defense System. This modernized aerial defense net – composed of early warning sensors, long-range surface-to-air missiles, and air interceptors – may deter opposing air forces from pursuing J-20s into the mainland.
http://chinapower.csis.org/china-chengdu-j-20/

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Offline Thucydides

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Re: Chinese Military,Political and Social Superthread
« Reply #3328 on: August 07, 2017, 14:52:27 »
While nay saying of China's economy seems to be an annual sporting event, there are plenty of signs things are not quite the way the Chinese want us to see them:

https://www.bloomberg.com/view/articles/2017-08-06/china-s-ascent-isn-t-looking-so-inevitable-anymore

Quote
Has China's Rise Topped Out?
The spread of its global economic influence is slowing sharply.
By Michael Schuman
August 6, 2017 at 17:00:06 EDT

The fall from grace of China’s Anbang Insurance Group Co. Ltd. continues to get steeper. Not long ago, the mysterious firm was chasing one foreign deal after another, becoming a symbol of China’s global economic ambitions. Now it appears the government may be pressuring Anbang to divest those prized foreign assets. If that proves to be the case, China will have given foreign businessmen yet another reason to be wary of working with Chinese companies: the uncertainty of an erratic, intrusive state meddling in private financial affairs.

But the Anbang case is also part of something bigger, and for China’s economic future, scarier. In just about every category, China’s rise into a global economic superpower has stalled. And the Chinese government sits at the heart of the problem.

Most people around the world still seem to believe China’s ascent is relentless and inevitable. A recent survey by the Pew Research Center showed that while more of those polled still see the U.S. as the world’s leading economy, China is quickly narrowing the gap. Chinese President Xi Jinping has been feeding that positive image by presenting his country as a champion of globalization, trade and economic progress.

Statistics tell a different story. The common perception is that China is swamping the world with exports of everything from mobile phones to steel to sneakers. In fact, the entire Chinese export machine is sputtering. Between 2006 and 2011, China’s total merchandise exports nearly doubled, powering the country through the Great Recession. Since then, they’ve increased less than 11 percent, according to World Trade Organization data.

The same trend holds for China’s currency. In late 2014, the renminbi broke into the top five most-used currencies for global payments, reaching an almost 2.2 percent share. China seemed well on the way to achieving its long-stated goal of turning the yuan into a true rival to the dollar. But that progress has reversed. In June, the renminbi chalked up only a 2 percent share, according to Swift, slipping behind the Canadian dollar.

The situation isn’t very different in China’s capital markets. While the government has cracked open its stock and bond markets to foreign investors, they still prefer buying Chinese shares listed in Hong Kong or New York to those in Shanghai or Shenzhen. For instance, domestically traded A-shares in a China equities fund managed by Zurich-based GAM account for less than 10 percent of its holdings.

In part, China is simply running into the difficult transition every country faces when losing its low-cost advantage. Facing stiff competition from countries like India and Vietnam, where wages are lower, China is losing ground in apparel and textile exports to the United States. Meanwhile, the Chinese economy isn’t replacing these traditional exports with new, high-value ones quickly enough. For example, in 2016, China exported 708,000 passenger and commercial vehicles, a sharp deterioration from the more than 910,000 shipped abroad in 2014.

Rather than boosting China’s global expansion, government policy is holding it back. The renminbi remains a sideshow in currency markets because the state can’t stop fussing with its value. In May, the central bank actually reversed its stated policy to liberalize the renminbi’s trading and imposed more control. Investors haven’t forgotten the heavy hand Beijing employed to try to quell a stock market collapse in 2015, leaving them wary of exposing themselves to Chinese shares.

Nowhere is the disconnect between China’s global ambitions and actual policy greater than with the government’s interference in overseas direct investment. For a while, officials were encouraging big companies to shop abroad, resulting in a surge of deal-making by firms like Anbang. That led to a debt-crazed buying binge. Having created the problem, the government then stepped in to “fix” it, by suddenly changing course and clamping down on foreign deals. According to the American Enterprise Institute, China’s offshore investment still grew by 9 percent in the first half of 2017, but only because of one giant deal -- state-owned China National Chemical Corp.’s acquisition of Syngenta AG. Take that one out, and overseas investment would have fallen by about a third.

The root cause of China’s global stall is this continued inability to let markets be markets. Meddling in the allocation of finance has ensured that much-needed capital gets gobbled up by the politically connected, not the competitive. Then the government tries to rectify the damage with more government. In an effort to rejuvenate exports, China has unleashed a subsidy-rich industrial program to upgrade its manufacturing called “Made in China 2025.” To help companies expand around the region, the government has cooked up the Belt and Road Initiative, an infrastructure-building scheme that looks to many like a boondoggle.

The fact is that Chinese companies will face enough trouble transforming into global players -- with the brands, technology, financial savvy and management expertise to battle it out with the world’s best -- without bureaucrats intruding. Anbang may or may not be an overleveraged neophyte that bit off more than it could chew. The point is that China would be better served letting the market decide.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Dagny, this is not a battle over material goods. It's a moral crisis, the greatest the world has ever faced and the last. Our age is the climax of centuries of evil. We must put an end to it, once and for all, or perish - we, the men of the mind. It was our own guilt. We produced the wealth of the world - but we let our enemies write its moral code.

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Re: Chinese Military,Political and Social Superthread
« Reply #3329 on: August 14, 2017, 13:45:45 »
Meanwhile at the Himalayan military cockpit--a bit alarmist headline but (note Chinese leaking)...

Quote
China and India on brink of armed conflict as hopes of resolution to border dispute fade
Chinese military primed for battle, military sources say; Indian troops ‘prepared for any eventuality’

Chinese and Indian troops are readying themselves for a possible armed conflict in the event they fail in their efforts to achieve a peaceful resolution to their border dispute on the Doklam plateau in the Himalayas, observers said.

On Friday [Aug. 11], India’s defence minister Arun Jaitley told parliament that the country’s armed forces are “prepared to take on any eventuality” of the stand-off, Indian Express reported the same day.

Sources close to the Chinese military, meanwhile, said that the People’s Liberation Army is increasingly aware of the possibility of war, but will aim to limit any conflict to the level of skirmishes, such as those contested by India and Pakistan in Kashmir.

China repeats demand for remaining 53 Indian troops to leave its territory in disputed region

“The PLA will not seek to fight a ground war with Indian troops early on. Instead it will deploy aircraft and strategic missiles to paralyse Indian mountain divisions stationed in the Himalayas on the border with China,” a military insider told the South China Morning Post on condition of anonymity, adding that he believes Indian troops will probably hold out for “no more than a week”.

Another military source said that officers and troops from the Western Theatre Command have already been told to prepare for war with India over the Doklam crisis.

“There is a voice within the army telling it to fight because it was Indian troops that intruded into Chinese territory in Donglang [Doklam],” the second source said. “Such a voice is supported by the public.”

Diplomacy to defuse China-India border crisis hits a roadblock, sources say

Both sources said that China’s military believes any conflict will be controlled, and not spill over into other disputed areas, of which there are currently three along the 2,000km border between the two Asian giants.

However, Indian defence experts warned that once the first shot is fired, the conflict may escalate into full-scale war. That in turn could result in New Delhi blockading China’s maritime lifeline in the Indian Ocean.

“Any Chinese military adventurism will get a fitting reply from the Indian military,” Dr Rajeev Ranjan Chaturvedy, a research associate at the Institute of South Asian Studies at the National University of Singapore, told the Post.

“Certainly, it will be detrimental for both, but if Beijing escalates [the conflict], it will not be limited. Perhaps, it may extend to the maritime domain as well,” he said.

Amid China-India row, Modi takes to Weibo with sympathy for Sichuan quake victims

“If China engages in a military offensive against India, New Delhi will take all necessary measures ... [and will] respond to Chinese actions in its own way. Why only a border war? It could escalate to a full-scale India-China war,” he said...
http://www.scmp.com/news/china/diplomacy-defence/article/2106493/china-and-india-brink-armed-conflict-hopes-resolution

Pity North Korea getting all the attention elsewhere.

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Offline MilEME09

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Re: Chinese Military,Political and Social Superthread
« Reply #3330 on: August 15, 2017, 01:03:00 »
It's being reported that Chinese State media has given a deadline of August 19th for Indian Forces to withdraw or they will be forcefully removed from the region. This could get ugly, really fast, India is unlikely to back down and let China Annex part of Bhutan.
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Re: Chinese Military,Political and Social Superthread
« Reply #3331 on: August 15, 2017, 07:11:02 »
It's being reported that Chinese State media has given a deadline of August 19th for Indian Forces to withdraw or they will be forcefully removed from the region. This could get ugly, really fast, India is unlikely to back down and let China Annex part of Bhutan.


I agree. This is, potentially, much more serious than the American "bluster war" with North Korea.

India is anything but a pushover; the Indian Army is, I think, one of the best in the world, probably, qualitatively, quite a bit better than the Chinese PLA which is still in the midst of a generation long project aimed at making the PLA smaller and much more professional.
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as to have neither strength nor courage to contend for anything; to have nothing left worth defending and to give the name of peace to desolation.
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Re: Chinese Military,Political and Social Superthread
« Reply #3332 on: August 15, 2017, 08:06:24 »
It's being reported that Chinese State media has given a deadline of August 19th for Indian Forces to withdraw or they will be forcefully removed from the region. This could get ugly, really fast, India is unlikely to back down and let China Annex part of Bhutan.
Meanwhile, this from Indian media ...
Quote
Forays into the Indian Ocean by Chinese submarines is on the rise. On April 22, a Yuan class diesel-electric submarine was spotted in the Indian Ocean. This is one of the more modern and dependable Chinese submarines; they have a reputation of being "quiet."

The Yuan class boat visited Karachi on May 26 and left on June 1 and then, again on July 11 for six days. Karachi is perhaps a natural destination for a Chinese submarine as Pakistan is a close ally. In recent times, Sri Lanka has not been keen to host Chinese submarines or as the Lankans say, submarines from any countries. The submarine was also accompanied by a PLA vessel.

The official reason for the presence of the PLA Navy has been "anti-piracy" missions. But surely, a submarine, and one as advanced as this one, isn't the best way of fighting pirates off the coast of East Africa ...
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Offline MilEME09

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Re: Chinese Military,Political and Social Superthread
« Reply #3333 on: August 15, 2017, 12:06:35 »
Reportedly China is trying to get a naval base set up in Pakistan, if so, this could become a regional conflict really fast, and a war of three nuclear armed nations is a lot more of a worry then US vs NK
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Re: Chinese Military,Political and Social Superthread
« Reply #3334 on: September 22, 2017, 14:24:52 »
Now in Oz--will Justin Trudeau, Chrystia Freeland and free trade with the Dragon-mad Liberals notice?

Quote
Anti-espionage laws head to parliament
The Turnbull government will crack down on foreign interference with new laws to come to parliament before the end of the year.

New laws to deal with espionage and foreign interference will be brought to parliament by the end of the year.

Attorney-General George Brandis is putting the finishing touches to the laws, which were initiated in May just before media reports of Chinese Communist Party influence over the Liberal and Labor parties.

"It's the government's expectation to introduce a bill before the end of this year," Senator Brandis told Sky News on Friday.

A Four Corners-Fairfax investigation in June named two billionaires that domestic intelligence agency ASIO identified as having links to the Chinese Communist Party.

Between them, Chau Chak Wing and Huang Xiangmo donated $6.7 million to the major parties.

Senator Brandis is understood to have been briefed by US security officials on the operation of America's Foreign Agents Registration Act, which could provide a model for the Australian laws.

The US laws, which began in 1938, require people acting as agents of foreign principals in a political or quasi-political capacity to disclose on a website their relationship with the foreign principal, as well as their activities, receipts and spending.

Penalties for breaching the US laws range from $5000 to five years in jail.

Intelligence agency ASIO's last annual report said Australia was a target of espionage and foreign interference because of its alliance with the US and the desire by foreign interests to gain insights into the country's positions on international diplomatic, economic and military issues.

There was also foreign interest in Australia's energy and mineral resources, innovations in science and technology and "a desire to shape the actions of decision-makers and public opinion".

As well, ASIO has warned of "malicious insiders" - both self-motivated and recruited - who threaten to sabotage computer systems, use information to facilitate attacks or leak information to harm Australia's national security.

The government is also considering laws to ban donations from foreign citizens and entities to political parties, associated entities and third parties.
http://www.sbs.com.au/news/article/2017/09/22/anti-espionage-laws-head-parliament

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Re: Chinese Military,Political and Social Superthread
« Reply #3335 on: September 25, 2017, 12:01:29 »
To repeat--will Justin Trudeau, Chrystia Freeland and free trade with the Dragon-mad Liberals notice?

Quote
Spies and a magic weapon: why are Australia, NZ so suspicious of China?
Controversy over a New Zealand MP who taught English to Chinese spies is just the latest in a series of events undermining Beijing in the court of opinion Down Under

IF CHINA is indeed trying to influence domestic policy in Australia and New Zealand, as critics in both countries are claiming, its approach appears to be backfiring.

Recent controversies regarding Chinese influence down under – including the revelation last week that the New Zealand MP Yang Jian had taught English to Chinese spies – have prompted discussions in both Canberra and Wellington on whether more should be done to protect policymakers and parliaments from foreign interference.

Some experts said Yang’s case – as well as media reports alleging that China had been trying to buy influence through political donations and monitoring its students abroad – had raised suspicions of Beijing’s intentions and undermined it in the court of public opinion.

Last week, Yang, an MP for New Zealand’s governing National Party, confirmed he had taught English to Chinese spies in the 1980s and 1990s. The Financial Times and New Zealand website Newsroomreported that Yang had been investigated by the country’s spy agencies over connections to China – links that are yet to be proven.

Yang rejected allegations he was a spy and denied being disloyal to New Zealand despite admitting he had been a member of the Communist Party while in China, and had not declared the names of the military institutions he taught at when applying for citizenship. He claimed the allegations were a “smear campaign” to damage him and the National Party ahead of Saturday’s general election “just because I am Chinese”.

China’s foreign ministry also dismissed the reports, saying that “certain media make up fake news by inventing groundless assumptions based on hearsay evidence and fabricating something out of thin air”.

Whatever the truth of the allegations against Yang, his story has highlighted the increasing sensitivity in Australia and New Zealand regarding Chinese influence.

Professor Anne-Marie Brady at New Zealand’s University of Canterbury, who presented a conference paper on the topic over the weekend, said that under President Xi Jinping there had been a growing Chinese effort to influence domestic policy in other countries [emphasis added], including in New Zealand where Chinese consular authorities keep an eye on the growing ethnic-Chinese population and Chinese-language media has links to the Communist Party...
http://www.scmp.com/week-asia/politics/article/2112473/spies-and-magic-weapon-why-are-australia-nz-so-suspicious-china

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Re: Chinese Military,Political and Social Superthread
« Reply #3336 on: September 26, 2017, 15:09:32 »
Much else also mentioned by Chairman of JCS:

Quote
America's top general says China will probably be the 'greatest threat to our nation' by 2025

 The Chairman of the Joint Chiefs testified to the Senate Armed Services Commitee on Tuesday [Sept. 26] that China would "probably" pose the greatest threat to the United States by 2025.

In a hearing before the Committee votes to reappoint Gen. Joseph Dunford in his current role as the top military advisor to the president, he addressed the rise of China, Russia's increasing use of electronic and cyber warfare, and worries over threats from North Korea.

"The Russians, Chinese, and others are doing what I describe as conducting competition at a level that falls below conflict," Dunford said. "In my judgment, we need to improve our ability to compete in that space and in the areas specifically ... our electronic warfare and information operations capability."

Although Dunford is expected to easily win support from Congress to remain on the job, he was asked about a variety of issues. Here's what he said in response to a number of senator's questions...
http://www.businessinsider.com/americas-top-general-says-china-will-be-the-greatest-threat-by-2025-2017-9

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Re: Chinese Military,Political and Social Superthread
« Reply #3337 on: September 27, 2017, 19:19:28 »
Shape of things to come?

Quote
Live-fire show of force by troops from China’s first overseas military base
Armed forces send message of combat readiness to Djibouti militants and other potential attackers, observers say

The exercises in Djibouti on Friday [Sept. 22] involved dozens of officers and took place at the country’s national gendarmerie training range, the People’s Liberation Army Navy said in an online report.

Troops arrived at the base – China’s first overseas garrison – less than two months ago and the drill was meant to test the personnel’s capacity to handle a range of weapons and tasks in extreme heat, humidity and salinity, the report said.

Temperatures in the African nation routinely rise above 40 degrees Celsius at this time of year.

“This is the first time our soldiers stationed in Djibouti have left the camp to conduct combat training,” base commander Liang Yang was quoted as saying.

China sends troops to military base in Djibouti, widening reach across Indian Ocean

“The live-fire training will help explore a new training model for the [Chinese] overseas garrison.”

Footage aired by state-run CCTV showed PLA marine corps using various weapons – from pistols to automatic rifles, sniper rifles and machine guns – to fire at targets.

Beijing-based military expert Li Jie said the troops had to be on combat alert at all times because of the region’s complex political conditions and Djibouti’s geographic importance.

'Chinese Navy logistics base in Djibouti will drive other investment'

The African nation is at the southern entrance to the Red Sea along the route to the Suez Canal, and Eritrea and Somalia. It also hosts US, Japanese and French bases.

“The PLA troops based in Djibouti should be able to protect themselves and resist attacks from terrorists, pirates, local armed forces, or even foreign troops,” Li said.

Chinese defence adviser says Djibouti naval facility is a much-needed ‘military base’

China’s Procuratorial Daily, the top prosecutor’s official newspaper, reported earlier that a Japanese naval vessel sent divers to approach a Chinese warship as both vessels were docking at Djibouti. Without specifying the time of the encounter, the report said Chinese naval troops used “a strong light and a verbal warning” to drive away the Japanese divers.

Japanese frogmen approached Chinese warship at Djibouti, state media say

The Japan Maritime Self-Defence Force established a base in Djibouti in 2011 [emphasis added], and Tokyo said last year it was considering expanding the facility.

China began building what it describes as a logistics base in Djibouti last year, but docking facilities for navy ships, barracks and other military equipment are still under development.

The 36-hectare base will resupply vessels taking part in peacekeeping and humanitarian missions off the coasts of Yemen and Somalia...
http://www.scmp.com/news/china/diplomacy-defence/article/2112780/live-fire-show-force-troops-chinas-first-overseas

From 2015:

Quote
Why are there so many military bases in Djibouti?
...

...
http://www.bbc.com/news/world-africa-33115502#

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Offline MarkOttawa

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Re: Chinese Military,Political and Social Superthread
« Reply #3338 on: October 03, 2017, 14:05:50 »
Top Dragon grasping PLA:

Quote
Xi Jinping clears decks for top-level changes to China’s military
Party congress expected to usher in major changes at body that controls People’s Liberation Army

China’s ongoing military leadership reshuffle, which has seen two heavyweights in the powerful Central Military Commission (CMC) lose their commands in the past month, will help President Xi Jinping shake up the body, which controls the People’s Liberation Army (PLA), and increase his dominance of it, analysts said.

The ousting of General Fang Fenghui, former head of the CMC’s Joint Staff Department, and General Zhang Yang, former head of the commission’s Political Work Department, from the functional posts that gave them CMC membership is further proof that Xi, who also chairs the CMC, is cementing his control over the military.

In late August, the Ministry of National Defence revealed that General Li Zuocheng, a decorated veteran of the Sino-Vietnamese war, had replaced Fang as chief of the Joint Staff Department. Then, on September 8, the army mouthpiece PLA Daily carried a report referring to Admiral Miao Hua, formerly the PLA Navy’s political commissar, as head of the Political Work Department.

Xi promoted Li to full general and Miao to the equivalent naval rank in 2015 and both men are seen as being firmly in his camp.

Fang and Zhang were also left off the list of members of the military delegation to next month’s five-yearly Communist Party congress, while Li and Miao will be among those in attendance.

“The CMC’s Joint Staff Department head is the man who oversees the PLA’s battle operations, while the Political Work Department chief takes care of ideological education,” a Beijing-based retired senior colonel, who asked not to be named, said.

“Xi can only implement reforms when he really controls both the barrel of the gun and the pen, so he should assign men he trusts to the two important jobs,” he said.

In an unprecedented military overhaul launched in 2015, Xi announced that the PLA, the world’s biggest army, would shed 300,000 troops, taking their number down to two million. He also scrapped the PLA’s four former headquarters – General Staff, General Political, General Logistics and General Armaments – and established 15 functional departments to divide their powers. The PLA’s seven military commands were also reshaped into five theatre commands.

Sources close to the military told the South China Morning Post that Xi would use the party congress, due to open on October 18, to restructure the CMC...
http://www.scmp.com/news/china/diplomacy-defence/article/2113054/xi-jinping-clears-decks-top-level-changes-chinas

Then see this excellent, cautionary, long read:

Quote
The Chinese World Order
http://www.nybooks.com/articles/2017/10/12/chinese-world-order/

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Re: Chinese Military,Political and Social Superthread
« Reply #3339 on: October 09, 2017, 13:42:23 »
I suspect the author (a Canadian) of this AvWeek piece is on to something--perhaps the comprador Liberals' ultimate fall-back position is to have Comac effectivel take over Bombardier aviation and CRRC take Bombardier rail (but politically possible, would US allow the former?):

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Opinion: Why Boeing vs. Bombardier Is Really About China
Oct 9, 2017 Danny Lam

The trade dispute sparked by Boeing’s charges that Bombardier is dumping C Series aircraft at unfair prices is marked by loud rhetoric on both sides of the U.S.-Canada border. Ottawa’s Liberal government has threatened Boeing’s defense business in Canada and enlisted UK Prime Minister Theresa May to lobby U.S. President Donald Trump. But Canada’s attempts to derail the petitions filed by Boeing with the U.S. Commerce Department and International Trade Commission have had no effect so far. The reason: The true target is not really Canada, but China and its aircraft industry.

U.S. Trade Representative Robert Lighthizer charges that Beijing’s efforts to subsidize and create national champions and force technology transfers distorts markets throughout the world and is an “unprecedented” threat to the global trading system. Take aviation. By 2036, China is projected to be the No. 1 or No. 2 market in commercial aviation, a sector long dominated by Airbus and Boeing. Its national champion is Comac, which manufactures the ARJ21 regional jet and C919 narrow-body and is developing—with Russia—the CR929 widebody. Beijing’s “Made in China 2025” plan sets aggressive targets for its aircraft industry, tasking Comac with taking more than 10% of the domestic market for mainline commercial aircraft.

That goal is backed by mercantilist policies and substantial government subsidies. Beijing has tried to break into markets before. China has poured tens of billions of dollars into cracking the semiconductor oligopoly controlled by U.S., Japanese, South Korean and Taiwanese companies. But so far it has not been successful in securing state-of-the-art integrated-circuit manufacturing technology because the industry has worked collaboratively to frustrate Chinese mercantilist ambitions. This has prevented the semiconductor market from suffering the fate of solar photovoltaics, or steel, where the market has been gutted by excess capacity from hundreds of new Chinese businesses.

Bombardier’s China strategy amounts to aiding and abetting Chinese mercantilism in commercial aviation, with predictable consequences for the global aerospace industry. The company entered into an agreement with Comac in 2012 to explore synergies between the C Series and C919, with the goal of challenging the Airbus-Boeing duopoly. Nothing concrete came out of that, and Bombardier nearly went bankrupt in 2015 before receiving investments from Canadian provincial and federal entities of at least $3 billion.

In May 2017, the Financial Times reported that Comac and Bombardier held talks about Chinese entities buying a stake in Bombardier Commercial Aircraft or the C Series, quoting an unnamed source as saying, “everything is on the table.” That included Chinese access to Bombardier’s technologies and its marketing, distribution and support infrastructure. This potential collaboration with China is, in my opinion, the principal but unspoken reason behind Boeing’s trade complaint [emphasis added]. 

As a Canadian company, Bombardier is entitled to preferences under the North American Free Trade Act (NAFTA) that sharply restrict U.S. trade actions so long as the product qualifies as NAFTA-origin. Indeed, Canada’s entitlement to arbitration under NAFTA’s Section 19 may be its last resort in the C Series dispute short of taking its case to the World Trade Organization. Not surprisingly, the U.S. wants to eliminate Chapter 19 in the renegotiation of NAFTA now underway.

So long as components add up to 50% of transaction value or 60% of net cost, a product qualifies for NAFTA preference. What if Chinese aerospace companies gained access to those same NAFTA preferences?

In its defense against Boeing’s claims, Bombardier says more than 50% of Canadian-assembled C Series aircraft come from the U.S., including its engines and avionics. The wing comes from Bombardier’s plant in Northern Ireland, but much of the fuselage already comes from SACC in China. It is conceivable that Bombardier could incorporate NAFTA-qualified engines, avionics and subsystems, but complete the final assembly in China—and have an aircraft that still qualifies as NAFTA-origin under the current rules.

Similarly, Chinese-built aircraft branded “Bombardier” could be sold from Canada while bypassing all tariffs against a China-based manufacturer. And Bombardier technology could enable Comac to build a successor to the C919 that would be truly competitive with Airbus and Boeing offerings in China. In other words, with Chinese investment, Comac-Bombardier could rapidly stand up as a capable competitor to the Airbus-Boeing duopoly in the North American and Chinese markets [emphasis added].

Boeing’s complaints about C Series subsidies are getting the media attention, but Bombardier’s willingness to transfer technologies and knowhow to China is at the heart of this trade dispute [emphasis added]. 

Danny Lam is a research associate at the University of Waterloo in Ontario. His research includes work on China, NAFTA and defense issues. The views expressed are not necessarily those of Aviation Week.

From 2015, also based on an AvWeek piece, note links at end:

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Bombardier Really Bombing? Chicom Combardier?
https://cgai3ds.wordpress.com/2015/02/13/bombardier-really-bombing-chicom-combardier/

On rail later in 2015 (CRRC is merged super-big Chinese company):

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Running Off the Rails, or, Bust Up Bombardier? Dragon’s Embrace Section
https://cgai3ds.wordpress.com/2015/04/29/mark-collins-running-off-the-rails-or-bust-up-bombardier-dragons-embrace-section/

Mark
Ottawa

Ça explique, mais ça n'excuse pas.