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Chinese Military,Political and Social Superthread

S.M.A. said:
For those wondering about China's F35 knockoff called the J31, here's its crucial weakness:

The RD-93s look very similar to the Hornet's F404 in size, weight, and thrust. The biggest difference seems to be a larger diameter and higher bypass ratio, maybe to improve fuel economy. I'm not sure how much stock to put into any plane before it actually hits production - at this stage, the design could always be revised later when the definitive engines become available. (The Rafale demonstrator flew with F404s

The real engine to watch carefully is the WS-10 - that's supposed to be used on the J-10, as well as China's various Flanker derivatives (the J-11B, J-15, and J-16) but production delays led to the earlier J-10 and J-11Bs getting Russian engines instead. Being able to produce it in volume greatly reduces reliance on the Russians for parts and aircraft manufacturing.
 
Russia's still willing to sell more Sukhoi jets to China despite the bad memory that came behind the origin of China's J-11 fighter/unauthorized Su-27 knockoff.

Janes IHS 360

Russia ready to supply 'standard' Su-35s to China, says official

Russia is ready to supply 'standard' versions of the Su-35 combat aircraft to China, Sukhoi first deputy director general Boris Bregman recently told IHS Jane's .

"During talks we informed the Chinese side that we can supply a standard version of the Su-35 fighter, which has been fully completed, tested, and received Russian Air Force certification," he said on the sidelines of Airshow China 2014 in Zhuhai.

Bregman said that the adaptation of the fighter to meet customer requirements - or 'Sinification' - can be performed only as part of a supplementary contract. This work may include some design and development to include the integration of different enhancements, additional algorithms, and Chinese-language user interfaces.

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The sheer scale of this malinvestment is staggering. How this will end will be something new, simply due to the size and scope, but history suggests that it will end in tears:

http://www.the-american-interest.com/2014/11/28/useless-investments-massive-waste/

Useless Investments, Massive Waste
Has China really wasted $7 trillion since the global financial crisis? Yes, yes it has, say researchers. The Financial Times:

In 2009 and 2013 alone, “ineffective investment” came to nearly half the total invested in the Chinese economy in those years, according to research by Xu Ce of the National Development and Reform Commission, the state planning agency, and Wang Yuan from the Academy of Macroeconomic Research, a former arm of the NDRC.

China is this year on track to grow at its slowest annual pace since 1990, and the report highlights growing concern in the Chinese leadership about the potential economic and social consequences if wasteful investment leaves projects abandoned and bad loans overloading the financial system.

Anyone who has driven past miles and miles of empty residential skyscapers surrounding second tier cities in China has figured something like this was at work. And the scale of misdirected investment is truly immense.

How it all works out is anyone’s guess, as nothing on the scale of China’s industrialization has ever been seen before, and those who call time on China’s bubble have been proven wrong many times over. Nevertheless, the least likely scenario of all would be for China to move seamlessly and smoothly from its current state up to fully developed status without suffering one or more massive economic checks and setbacks.
 
This is the big thing out of yesterday's Taiwan elections: "It’s possible, for example, that concern over fallout in Taiwan was a factor leading to cautious approach toward Hong Kong democracy protests. If the pro-China KMT continues to lose at the polls, will Beijing feel more freedom to crackdown in Hong Kong?"

My answers are: Yes to the preamble but No! to the question, itself. In fact I suspect that China will look at the Taiwan municipal elections as a warning: Taiwan is losing faith in "one country, two systems" and is less and less inclined towards voluntary reunification.

China has an overwhelming strategic vital interest in a peaceful reunification of Taiwan into China and many Chinese scholars see Hong Kong as the "canary in the coal mine;" when things are going well in HK - economically, socially and, above all, politically - then Taiwan is more inclined to look favourably on reunification ... currently, in the face of Beijing's (relatively, but not really) hard line, Taiwan is backing away.
 
This won't be the end of the Hong Kong democracy movement, no matter how much the CCP hardliner members wish it...

Reuters

Hong Kong 'Occupy' leaders surrender as pro-democracy protests appear to wither

By Clare Jim and Clare Baldwin

HONG KONG (Reuters) - Leaders of Hong Kong's Occupy Central movement surrendered to police on Wednesday for their role in democracy protests that the government has deemed illegal, the latest sign that the civil disobedience campaign may be running out of steam.

Three founders turned themselves in a day after calling on students to retreat from protest sites in the Asia financial center amid fears of further violence, just hours after student leader Joshua Wong had called on supporters to regroup.

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The problem with these three 'leaders' is that they lost control on Day 2 or 3 of the movement and two different groups of students took over.

The news here (in HK) seems to suggest that the authorities are not too interested in these three: it is the more active (and now and again even violent) protesters who are the problem.
 
E.R. Campbell said:
Yeah, but the data is based on PPP (purchasing power parity) which is excellent when measuring, say, Australia, Belgium, Canada, Denmark and Estonia; it's less useful when you add, say, Malaysia, Fiji and China to the mix and it becomes almost useless when the economies are too disparate ~ say Australia, Benin and China.

Second, don't forget that there are "three Chinas:" a wealthy, first world country on the East Coast, a developing country in the centre and a third world country in thew West.

And again China's economy in the media is trumpeted as the largest...

Market Watch/Yahoo News

It’s official: America is now No. 2
By Brett Arends | MarketWatch – 10 hours ago

(...SNIPPED)

The International Monetary Fund recently released the latest numbers for the world economy. And when you measure national economic output in “real” terms of goods and services, China will this year produce $17.6 trillion — compared with $17.4 trillion for the U.S.A.

As recently as 2000, we produced nearly three times as much as the Chinese.

To put the numbers slightly differently, China now accounts for 16.5% of the global economy when measured in real purchasing-power terms, compared with 16.3% for the U.S.

This latest economic earthquake follows the development last year when China surpassed the U.S. for the first time in terms of global trade.

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After hearing a lot in recent years about the high end of the PLA's technological spectrum (ASAT weapons, ballistic missile-carrying subs, etc.), here is an article about the low end...

What China's Army-issue underwear reveals

Source: Christian Science Monitor/Yahoo News

There’s a lot to learn from an article that just appeared on the website of the Chinese People’s Liberation Army; for example, Chinese soldiers’ underpants were equipped with elasticated waistbands only in the 21st century.

Until recently, the article recalls, an infantryman would “have to worry about the rope of his big underpants, which would loosen suddenly but could never be untied when he wanted to answer the call of nature.”

Behind this tantalizing tidbit lies an illuminating point: Chinese military planners pay more attention to aircraft carriers and satellite-killer rockets than they do to their foot soldiers. Chinese infantrymen have a tradition of stripped-down fighting that dates back to the days when the Communist Party was fighting a guerrilla war before the revolution. Money is no longer so scarce, but Beijing is still not spending much on its lowly grunts.

The battlefield equipment that the average Chinese fighter wears would cost the equivalent of “two entry level iPhone6's,” says the article. His American counterpart would be carrying gear worth 10 times that, the equivalent of “a mid-level car,” according to the reporter’s estimate.

An example: US soldiers wear Kevlar helmets equipped with communications technology. Most Chinese soldiers, the article says, are still wearing steel helmets; only a minority have Kevlar models and none of them have earphones or microphones.

“Communications basically relies on yelling,”

the article quotes a soldier on the point of retiring after 16 years’ service, Wang Fujian, as saying.

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A one-time gesture or a sign that cooperation in space between these two powers will grow?

Defense News


China-US Space Relations See Small but Important Step
Dec. 14, 2014 - 02:50PM  |  By AARON MEHTA

WASHINGTON — China has taken a small, but potentially meaningful, step toward more normalized relations with the international space community, a top US general announced this month.

Gen. John Hyten, the head of US Air Force Space Command, told an audience at a Dec. 5 Air Force Association event that Chinese officials, for the first time, have asked that the US share space situational awareness information directly through a military-to-military connection.

Space Command typically shares that information with industry and other nations through conjunction summary messages (CSM), essentially small reports that tell satellite operators the Air Force predicts their system will be traveling dangerously close to another in-orbit object. The goal is to give those operators enough time to move their systems out of the way, either from another satellite or from space debris.

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Adverse effects on the Chinese economy from the continuing drop in oil prices and the US vs. OPEC oil war?

Reuters

Oil prices fall as China's factories slow
Reuters

By Henning Gloystein
SINGAPORE (Reuters) - Oil prices fell on Tuesday, with Brent mired near a 5-1/2 year low close to $60 per barrel, as Chinese factory activity slowed and concerns rose over the health of emerging market economies and their currencies.
Oil prices have almost halved since June amid rising output and cooling demand, but producer club OPEC has so far resisted calls to cut production to shore up prices.

Data showing activity in China's factory sector shrank for the first time in seven months in December, adding to a slew of reports showing more fatigue in the world's No.2 economy, further dragged on oil prices.

Brent for January delivery was at $60.81 a barrel at 0420 GMT (11:20 p.m. EST), down 25 cents and close to the 5-1/2-year low of $60.20 hit on Monday.

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Corruption in state-owned enterprises' foreign investments...

Reuters

Special Report: Depleted oil field is window into China's corruption crackdown

(...SNIPPED)

A subsidiary of China National Petroleum Corporation (CNPC), PetroChina Daqing Oilfield, paid $85 million to pump from three blocks in the ageing Limau field under a 2013 contract with Indonesia’s state-owned oil company, Pertamina, according to senior Chinese oil industry officials with knowledge of the transaction.

Today, the three Limau blocks squeeze out less than three percent of the oil pumped when output peaked in the 1960s. When PetroChina Daqing announced the deal, it didn’t disclose the seller, the price or any other financial details.

“We all know it is a ridiculous investment, but I have no idea where the money has actually ended up,” says a senior Chinese oil industry official who has seen budget figures for the Limau wells.

The management at CNPC is now investigating the deal as part of a sweeping crackdown on official graft by Chinese President Xi Jinping that has destroyed a powerful political rival who once ran the oil giant – Zhou Yongkang. The anti-corruption campaign is cutting a swathe through the senior management ranks at CNPC, with at least a dozen former top managers under arrest.

There is vast scope for corruption inside the CNPC empire, which includes its huge listed subsidiary PetroChina Company Ltd and hundreds of other units, say company officials familiar with the investigation. The group is one of the world’s biggest corporations, last year reporting revenues of $432 billion. Current and former senior company officials say it is difficult to keep track of all the businesses and deals underway.

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Chinese oil industry officials say they have identified two other suspect deals in Indonesia in which the CNPC group paid a combined $350 million to buy assets from little-known private companies. “Basically, they are worthless,” says the same oil industry official who has seen the budgeting figures for the Limau deal. “It has caused heavy losses for the state.”

CNPC chairman Zhou Jiping told an internal meeting in August that the company would “actively explore” new ways of conducting investigations in its overseas operations as part of its crackdown on corruption, the company said in a statement on its website. A CNPC group spokesman in Beijing declined to answer questions from Reuters about the suspect deals.

The story of the Limau transaction provides a window into the mechanics of what Chinese oil industry officials say is one suspect deal.

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With this amount of "hot" money floating around in the global economy, there should be identifiable ripple effects that can be traced (much like "hot" drug money distorted the real estate market in Miami in the 1980's as dealers looked for safe assets to put their cash into, as well as launder the money so they could withdraw it as "clean" cash:

http://qz.com/313393/more-than-1-trillion-in-secret-cash-sneaked-out-of-china-in-the-last-10-years/

More than $1 trillion in secret cash sneaked out of China in the last 10 years
WRITTEN BY
Gwynn Guilford
China's Transition
December 16, 2014

China’s capital account might be closed—but it’s not that closed. Between 2003 and 2012, $1.3 trillion slipped out of mainland China—more than any other developing country—says a report (pdf) by Global Financial Integrity (GFI), a financial transparency group. The trends illuminate China’s tricky balancing act of controlling the economy and keeping it liquid.

GFI says the most common way money leaks out in the developing world is through fake trade invoices. The other big culprit is “hot money,” likely due to corruption—which GFI gleans from inconsistencies in balance of payments data.
In China, both activities have picked up since 2009. In fact, $725 billion—more than half of the outflows from the last decade—has left since 2009, just after the Chinese government launched its 4 trillion yuan ($586 billion) stimulus package.

Even after that wound down, the government encouraged investment to boost the economy, prodding its state-run banks to lend. Since loan officers dish out credit to the safest companies—those with political backing—this overwhelmingly benefited government officials and their cronies.

That’s left small private companies so starved for capital that they’ll pay exorbitant rates for shadow-market loans, which a lot of China’s sketchy trade invoicing outflows likely sneaked back in to speculate on shadow finance and profit from the appreciating yuan. Corrupt officials, meanwhile, shifted their ill-gotten gains into overseas real estate and garages full of Bentleys.

Those re-inflows inflate risky debt and had driven up the yuan’s value, threatening export competitiveness. China’s leaders were not exactly happy about this, and in March its central bank drove down the value of the currency in order to discourage hot money speculation on the yuan’s appreciation.

China’s policies leave it with few other options. To avoid the economic nosedive that likely would follow if the bad debt got written down, China’s leaders have the banks extending and re-extending loans, hoping to deleverage gradually.

That requires an ever-ballooning supply of money, though. The slowing of China’s trade surplus and foreign direct investment inflows leaves the financial system dependent on new sources of money—like speculative inflows from fake trade invoicing.

The developing countries with the most capital outflow in 2012, according to GFI.
The danger of this is apparent already. For example, the government’s June 2013 crackdown on fake trade invoicing caused a seize-up in liquidity, pushing banks close to a meltdown.

This precarious relationship with liquidity might partially explain “Operation Fox Hunt,” the crackdown on Chinese government officials who have fled China or transferred assets to family members abroad. Already, 329 “foxes” have been snagged, and the government just demoted around 1,000 officials (paywall) whose relatives abroad refuse to return to China.

Xi’s so-called anti-corruption crusade has boosted his populist bona fides with the people. But there’s likely more behind it than just public relations. With China’s real estate market in the doldrums, its economy slowing, and its leader cracking down, the “foxes” have more reason than ever to sneak their spoils overseas. Making sure they don’t isn’t just a matter of legality, but of protecting China’s financial system from freezing up once again.
 
A development that may infuriate Tokyo:

Military.com

China Reportedly Building Military Base on Islands Near Japan

China's military is building large-scale base facilities on islands near the Senkaku Islands southwest of mainland Japan, several Chinese sources said Sunday.

Construction is under way in the Nanji Islands in Zhejiang Province, lying about 300 kilometers to the northwest of the Japanese-administered, uninhabited Senkaku Islands in the East China Sea. China claims the Senkakus as Diaoyu.

The base is expected to enhance China's readiness to respond to potential military crises in the region as well as strengthen surveillance over the air defense identification zone it declared over part of the East China Sea in November last year, the sources said.

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Xi consolidating power as he continues his anti-corruption/graft drive...

Reuters

Special Report: Fear and retribution in Xi's corruption purge

(...SNIPPED)

The dossier provides rare insight into the vast purge now convulsing the Chinese Communist Party under President Xi Jinping. The mainland businessmen who provided the dossier, along with material on multiple earlier missions Chen led to Hong Kong and overseas, were frank about their intention: to paint the then-governor as a profligate spender and put him in the sights of corruption investigators who are hunting officials all over China on Xi’s orders. As part of his crackdown on graft, Xi is demanding that senior officials halt lavish travel and entertainment.

The detailed nature of the documents purportedly describing Chen’s visit illustrate the lengths some in China are prepared to go to in an effort to exploit the crackdown.
Xi’s graft busters are urging whistle-blowers to denounce officials as well as managers of state-owned companies in a campaign that is taking on some of the frenzy of the mass political movements of the Party’s early years. The crackdown is providing a rare opportunity to bring down the high and mighty in what is normally a tightly hierarchical party.

(...FULL ARTICLE AT LINK ABOVE)
 
Matthew Fisher recently speculated that, despite ISIS and wars in Ukraine capturing news media focus, developments in China through 2014 will have greater influences on our future in the years beyond 2015.

http://www.edmontonjournal.com/second+thought+Ukraine+Iraq+crises+news+China+moves+were+most+consequential/10681815/story.html#__federated=1
 
More Chinese troops head to Sudan; in the past an engineering battalion and other support units were sent as part of the UN peacekeeping forces there.

Oil for peace? China to send 700 peacekeepers to S. Sudan, signs energy deal

[rt.com]

Quote
China has announced it will deploy a 700-strong infantry battalion in South Sudan at the beginning of 2015. It comes as the war-torn African country signed an agreement with Chinese petroleum giant CNPC to boost oil production.

rtr3zlla.si.jpg
 
Some of the long term fallout of China's "one child" policy is now coming to the surface: "Bachelor villages" where the men vastly outnumber the women, and most eligible women move to the cities where the men have the ability to pay the "bride price" (which is rising to some pretty impressive levels). What the long term impact of such a huge demographic bulge of young men will do is debatable, but I suspect that it won't be good:

http://www.bloombergview.com/articles/2014-12-25/china-needs-millions-of-brides-asap

CHINA
China Needs Millions of Brides ASAP
139 DEC 25, 2014 6:00 PM EST
By Adam Minter

In the villages outside of Handan, China, a bachelor looking to marry a local girl needs to have as much as $64,000 -- the price tag for a suitable home and obligatory gifts. That's a bit out of the price range of many of the farmers who live in the area. So in recent years, according to the Beijing News, local men have been turning to a Vietnamese marriage broker, paying as much as $18,500 for an imported wife, complete with a money-back guarantee in case the bride fled.

But that fairy tale soon fell apart. On the morning of November 21, sometime after breakfast, as many as 100 of Handan’s imported Vietnamese wives -- together with the broker -- disappeared without a trace. It was a peculiarly Chinese instance of fraud. The victims are a local subset of a fast-growing underclass: millions of poor, mostly rural men, who can’t meet familial and social expectations that a man marry and start a family because of the country's skewed demographics. In January, the director of China’s National Bureau of Statistics announced that China is home to 33.8 million more men than women out of a population exceeding 1.3 billion.

China's vast population of unmarried men is sure to pose an array of challenges for China, and perhaps its neighbors, for decades to come. What's already clear is that fraudulent mail-order wives are only the start of a much larger problem.

The immediate cause of China’s gender imbalance is a long-standing cultural preference for boys. In China’s patrilineal culture, they’re expected to carry on the family name, as well as serve as a social security policy for aging parents. In the 1970s, China’s so-called One Child policy transformed this preference into an imperative that parents fulfilled via sex selective abortions (made possible by the widespread availability of ultrasounds). As a result, millions of girls never made it onto China’s population rolls. In 2013, for example, the government reported 117.6 boys were born for every 100 girls. (The natural rate is 103 to 106 boys to every 100 girls.) In the countryside, the ratio can run much higher -- Mara Hvistendahl, in her 2011 book, Unnatural Selection, reports on a town where ratios run as high as 150 to 100. Long-term, such imbalances can create an excess of males that might reach 20 percent of the overall male population by 2020, according to one estimate.

Of course, social expectations aren’t just confined to boys. In China, daughters are expected to marry up -- and in a country where men far outnumber women, the opportunities to do so are excellent, especially in the cities to which so many of China’s rural women move. The result is that bride prices -- essentially dowries paid to the families of daughters -- are rising, especially in the countryside. One 2011 study on bride prices found that they’d increased seventy-fold between the 1960s and 1990s in just one representative, rural hamlet.

It’s a society-wide problem, but particularly in China’s countryside, where sex ratios are much wider, and the lack of affluence drives out young, marriageable women. These twin factors have given rise to what’s widely known as “bachelor villages” -- thousands of small towns and hamlets across China overflowing with single men, with few women. Though there’s no definitive study on their frequency, bachelor villages have received widespread attention from academics, as well as journalists. The 2011 study on bride prices cites Baoshi Village in Shaanxi Province, population 1013, including 87 single males over the age of 35. In rural China, where men are expected to marry before 30, those 87 men are likely to remain lifelong bachelors. They are also, in all likelihood, poor and uneducated. According to a 2006 study, 97 percent of Chinese bachelors between 28 and 49 haven’t completed high school.

The social consequences of a world without women is hotly debated, with lines drawn over whether a population heavily tilted toward men necessarily leads to more violence. A controversial 2007 study based on 16 years of province-level crime data claimed that rising sex ratios may account for one-seventh of China’s overall rise in crime, while a book from the same year suggests that an excess of male threatens both China’s domestic stability and the international order. Meanwhile, other studies argue just the opposite: that a gender imbalance reduces family conflicts and violence across society.

One outcome, however, is indisputable: a market where the demand for brides far outweighs the supply will inevitably give rise to industries that aim to close the gap. Bride trafficking is one such response, and it has a long history in China. In recent years, however, the limited data on the phenomenon suggests that the traffickers are increasingly focused on women from outside of China, including North Korea. According to the Diplomat, around 90 percent of North Korean defectors are blackmailed into the sex industry and forced marriages (the threatened alternative -- a return to North Korea -- is unthinkable). Women from the remote and impoverished minority regions of Vietnam are targets, as well. Vietnam’s Ministry of Public Security reports that more than 5800 women have been trafficked out of the country in recent years, the majority of them having gone to China.

It’s unclear whether or not the Vietnamese women who ended up in Handan were trafficked, and it’d be unfair to assume that they were. Many Vietnamese women move to China’s countryside for the same reason that women from China’s countryside move to its cities: better economic opportunities. But the fact that the marriage broker who brought the wives to Handan has disappeared, and is now sought by police, strongly suggests that an organized ring of some kind was behind the marriages -- and the disappearances. It wouldn’t be the first time, either. Stories of runaway Vietnamese brides are common in the Chinese press.

In all likelihood, there will be more. One-hundred runaway brides seems like a lot, except when measured against tens of millions of bachelors whose best hope of a family might be convincing -- and paying -- a foreigner (or her broker/matchmaker) to settle down in his village. But for every bachelor who manages that, there will be thousands more who can’t. Indeed, even if they had the cash, there simply aren’t enough women in Vietnam and North Korea, even if they were all willing to settle into a farmer’s life in China’s countryside.

To contact the author on this story:
Adam Minter at aminter@bloomberg.net

To contact the editor on this story:
Cameron Abadi at cabadi2@bloomberg.net
 
The "First gay superpower since Sparta" is actually from Mark Steyn, maybe the cleverest writer going these days.

Still, there are a great many second and third order effects of this that will be difficult to predict, much like cars were predicted for centuries [Leonardo Da Vinci had a design for a recognizable clockwork powered vehicle in the 1400's], but no one predicted shopping malls, drive in theatres or suburbs as a outcomes of automobile usage.


 
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