Chinese Military,Political and Social Superthread

[CougarKing]

This latest provocative move by China doesn't contribute to stability in the South China Sea:

Fox News

  Exclusive: China sends surface-to-air missiles to contested island in provocative move

    The Chinese military has deployed an advanced surface-to-air missile system to one of its contested islands in the South China Sea according to civilian satellite imagery exclusively obtained by Fox News, more evidence that China is increasingly "militarizing" its islands in the South China Sea and ramping up tensions in the region.

    The imagery from ImageSat International (ISI) shows two batteries of eight surface-to-air missile launchers as well as a radar system on Woody Island, part of the Paracel Island chain in the South China Sea.

    It is the same island chain where a U.S. Navy destroyer sailed close to another contested island a few weeks ago. China at the time vowed “consequences” for the action.

(...SNIPPED)

 

[tomahawk6]

A civilian satellite picked up this image at a civilian airport of what is no doubt a copy of an F-22.

https://www.yahoo.com/autos/where-did-china-f-22-194030501.html

 

[CougarKing]

With the Chinese takeover of ownership of western defense firms such as the Italian shipyard Ferreti, of course there would be renewed interest in this, especially in the US.

And it's not just in the defense industry...there was concern here in Canada about CNOOC's acquisition of Nexen a few years ago. In Australia, their government banned Huawei technologies from building their national broadband network.

Defense News

Chinese Interest in US Firms Drives Case Surge for Watchdog Panel
By Andrew Clevenger, Defense News 9:41 p.m. EST February 22, 2016

WASHINGTON — Chinese interest in American companies continues to increase the caseload examined by the Committee on Foreign Investment in the United States (CFIUS), according to the panel’s annual report to Congress.

CFIUS examines deals that involve foreign investments in US assets for their national security implications. In its latest report on Feb. 19, the total cases CFIUS covered jumped to 358 for the three year period 2012–2014, up from 322 from 2011–2013 and 318 from 2010–2012.

China had the most cases reviewed with 68, an increase of 26 percent from the previous year’s totals, ahead of the United Kingdom’s 45, Canada’s 40, and Japan’s 37, according to the new figures. From 2011-2013, those four countries represented 54, 49, 34 and 34 cases, respectively. In the previous year’s report, the UK ranked first with 68 cases, followed by China’s 39, Canada’s 31 and France’s 28.

“I think that the spike in Chinese cases reflects the level of investment by China in the United States generally,” said Christopher Brewster, an attorney with Washington-based Stroock & Stroock & Lavan. “While we knew the number of cases was going to be large, it is instructive that the jump from 2013 to 2014 is as large as it is. It shows a fairly healthy investment in the US national security sector.”
(...SNIPPED)

 

[CougarKing]

For those here unaware, many J-11s are the Chinese reverse-engineered version of the Russian Su27, although an earlier batch of Russian Su27s was purchased.

Defense News

China Deploys Fighter Jets To Contested Island in South China Sea
Agence France-Presse 7:57 p.m. EST February 23, 2016


WASHINGTON — China has deployed fighter jets to the same contested island in the South China Sea to which it also has sent surface-to-air missiles, US officials said Tuesday.

Citing two unnamed US officials, Fox News said US intelligence services had spotted Chinese Shenyang J-11 and Xian JH-7 warplanes on Woody Island in the disputed Paracel Islands chain over the past few days.

(...SNIPPED)

 

[tomahawk6]

The Chinese evidently are placing a HF radar in the Spratley's to detect stealth aircraft,but the radar also would be capable of monitoring surface traffic.

http://www.nationalinterest.org/blog/the-buzz/look-out-america-china-can-un-stealth-us-fighter-jets-15293


China appears to be building a new high-frequency radar on an artificial feature in the Spratly Islands that could allow Beijing to track even the stealthiest American warplanes, including the Lockheed Martin F-22 Raptor, F-35 Joint Strike Fighter and even the Northrop Grumman B-2 Spirit. The Center for Strategic and International Studies has acquired satellite evidence of the construction.

“Placement of a high frequency radar on Cuarteron Reef would significantly bolster China’s ability to monitor surface and air traffic coming north from the Malacca Straits and other strategically important channels,” reads a report from the Center for Strategic and International Studies. “Improved radar coverage is an important piece of the puzzle—along with improved air defenses and greater reach for Chinese aircraft—toward China’s goals of establishing effective control over the sea and airspace throughout the nine-dash line.”

 

[tomahawk6]

The PI is going to assume even more strategic value as it is well situated for basing ships and planes to monitor PRC activities in the South China Sea.Here is a map of the area.Another option sure to anger the Chinese would be to seek use of bases in Vietnam.

https://csis.cartodb.com/viz/4c461308-d73e-11e5-9a49-0e3ff518bd15/embed_map

One of China’s highly developed islands in the northern part of the South China Sea, Woody Island, has been equipped with surface-to-air missiles and fighter aircraft. These moves have come just as many defense analysts have predicted for years and are likely an indication of things to come for China’s other island outposts throughout the South China Sea.

There is also evidence that China is installing a high-frequency long-range radar array on Cuarteron Reef, one of their handful of manmade islands in the south-central part of the South China Sea. This radar type is known to be used for detecting aircraft and ships at extreme ranges far over-the-horizon and can theoretically detect some stealthy aircraft under certain circumstances. It is just one of many other sensors popping up on this island and others, although the existence of such a capability provides even more evidence that China is actively seeking an aggressive anti-access, area denial strategy over the South China Sea.

http://nextbigfuture.com/2016/02/us-would-need-massive-military-bases-in.html

 

[CougarKing]

Another symptom of further economic troubles?

Reuters

Markets | Mon Feb 29, 2016 10:27am EST

China expects to lay off 1.8 million workers in coal, steel sectors
BEIJING | By Kevin Yao and Meng Meng

China said on Monday it expects to lay off 1.8 million workers in the coal and steel industries, or about 15 percent of the workforce, as part of efforts to reduce industrial overcapacity, but no timeframe was given.

It was the first time China has given figures that underline the magnitude of its task in dealing with slowing growth and bloated state enterprises.

Yin Weimin, the minister for human resources and social security, told a news conference that 1.3 million workers in the coal sector could lose jobs, plus 500,000 from the steel sector. China's coal and steel sectors employ about 12 million workers, according to data published by the National Bureau of Statistics.

(...SNIPPED)

 

[CougarKing]

From last month: please note the highlighted part about Chinese ships and aircraft harassing a Philippine Navy supply ship headed for outposts like that grounded LST.

Philippine Star

DFA chief: China not above international law
By Pia Lee-Brago (The Philippine Star)
March 1, 2016

A Philippine Navy cargo vessel on troop transport and re-supply operations in the vicinity of Hasa-hasa (Half Moon) Shoal - 60 nautical miles from the southern portion of mainland Palawan - last month was harassed by Chinese naval and maritime surveillance ships.

Information obtained by The STAR showed that BRP Laguna was sailing from Rizal Reef to Lawak Island when five Chinese vessels appeared and made hostile maneuvers before midnight of Feb. 5 up to dawn of Feb. 6.

"Aside from the two gray ships and three white Chinese ships, two Chinese helicopters also hovered over the BRP Laguna. The captain ordered the shutting down of lights inside the ship and nobody was allowed among us aboard to use flashlights even if we needed to go to the comfort room," one of the passengers of the Navy ship said.

The Chinese vessels later dropped anchor not far from the mooring area of BRP Laguna in the vicinity of Pag-asa Island. - Jaime Laude

(...EDITED/SNIPPED)

 

[a_majoor]

China continues to use easing to try to keep the economy from bottoming out. The question becomes how much room is left to "ease", since the fundamentals which drove the ecoonomy for the last several decades (export driven manufacturing) has cratered due to the drop in demand. There are also severalm references to "supply side" in the article, but in the context this is much like Vizzini continuing to use the word "Inconceivable!":

http://www.reuters.com/article/us-china-economy-rrr-idUSKCN0W214P

China central bank resumes easing cycle to cushion reform pain
BEIJING/SHANGHAI | By Pete Sweeney

China's central bank resumed its easing cycle on Monday, injecting an estimated $100 billion worth of long-term cash into the economy to cushion the pain from job layoffs and bankruptcies in industries plagued by overcapacity.

The People's Bank of China (PBOC) said on its website it was cutting the reserve requirement ratio, or the amount of cash that banks must hold as reserves, by 50 basis points, taking the ratio to 17 percent for the biggest lenders.

The cut came just days after China used its role as host of the Group of 20 (G20) to reassure trading partners that it did not intend to further devalue the yuan, after a surprise 2 percent devaluation last August threw markets into a spin.

The PBOC's announcement also comes shortly before the annual meeting of China's parliament, which must try to engineer a huge economic shift toward services and consumption and away from basic manufacturing, while also keeping growth stable.

The move was a surprise to some observers, given that the PBOC had previously said it would rely more on daily injections of short-term money to keep cash flowing, rather than the long-term addition of funds from an RRR cut.

The cut is effective from March 1, and it comes after signs of increasing tightness in the money market last week, despite repeated daily injections through open market operations, including a 230 billion yuan injection on Monday morning.

"This reflects the central bank is keen to ease liquidity in the China banking sector," wrote Iris Pang, an economist at Natixis in Hong Kong. She said the move would release 689 billion yuan ($105 billion) for fresh lending; economists at ANZ bank put that figure at about 650 billion yuan.

Some of that lending could help struggling industries meet the costs of restructuring.

Economists said the cut suggested regulators were less worried that moves needed to pump more money into a struggling economy would hammer the yuan exchange rate CNY=CFXS, and by extension accelerate the rate of capital outflows.

Falls in the yuan and a flood of money out of China at the end of last year unnerved global financial markets and prompted China to take steps to stabilize the yuan in on- and offshore markets. CNH= CNY=

Related Coverage
› China central bank cuts reserve requirement ratio

There is a broad consensus among private sector economists that the currency will fall further as China's economy slows, but more doubt about whether it can control that process without imposing outright capital controls.

A number of economists said Monday's move suggested Beijing might be returning to the path of easing policy and the currency steadily. Both offshore and onshore rates for the yuan fell around 0.2 percent to just over 6.55 per dollar on Monday and are now down around 1 percent since the end of the Lunar New Year holiday in mid-February.

"Previously the PBOC had stated it was worried that further RRR cuts would undermine the yuan," said Mark Williams at Capital Economics in London.

"So this shows that either the pressure is not so strong anymore or that they've changed their mind following the tighter monitoring of exchange flows we've seen recently."

China last cut the RRR on Oct. 23, when it also reduced interest rates by 25 basis points to rein in financing costs for China's heavily indebted firms.

BRIEF HIATUS

The PBOC said the RRR cut would help create an appropriate monetary environment to support a "supply-side reform" project Beijing hopes will put the world's second-largest economy on a more sustainable growth path.

The problem has been that weak demand at home and abroad, combined with high debt service costs, has punished margins at many Chinese firms, with recent data showing rising negative pressure on wages and job creation.

On Monday, Chinese regulators said they expect 1.8 million workers in the steel and coal sectors will be laid off as a result of structural reforms, but said this should not result in a spike in unemployment.

Beijing had previously announced a 100 billion yuan fund to help retrain laid off workers.

"China's government is pushing forward the 'supply-side' reform and the move needs someone to pay the costs. A loosening monetary environment is what we need," said Li Huiyong, an economist at Shenyin & Wanguo Securities in Shanghai.

"We believe the central government will keep its loosening policy stance this year to support the economy."

That tightness in the money market has been blamed for denting sentiment among stock investors, who have embarked on another round of sharp selloffs since last Thursday. [.SS]

Chinese banks, armed with fresh lending quotas, extended a record 2.51 trillion yuan of new loans in January, suggesting Beijing was keeping monetary conditions loose to counter a protracted economic slowdown.

The world second-largest economy grew 6.9 percent in 2015, its slowest pace in 25 years. A spate of soft data points to further weakness at the start of the year as Beijing struggles to cushion the slowdown.

Chinese leaders outlined initiatives after a policy meeting last October, where they reiterated goal of doubling GDP and incomes between 2010 and 2020 and committed to liberalizing the service sector to foreign investment.

($1 = 6.5535 Chinese yuan renminbi)

(Additional reporting by Kevin Yao, Shao Xiaoyi, Nicholas Heath and Nathaniel Taplin in BEIJING and Patrick Graham in LONDON; Writing by Pete Sweeney; Editing by Mike Collett-White)

 

[CougarKing]

The bully at it again:

Philippine Star

China takes Philippine atoll
By Jaime Laude (The Philippine Star) | Updated March 2, 2016 - 1:00am

MANILA, Philippines – The Chinese have taken over another traditional Filipino fishing ground near Palawan where they have stationed up to five ships to keep local fishermen at bay, sources said.

Now effectively under Chinese control is Quirino or Jackson Atoll, which has been a rich source of catch for a long time for fishermen from Palawan, Southern Luzon, Western Visayas and even Manila.

Gray and white Chinese vessels have not left the atoll, which Filipino fishermen also call Jackson Five, because of the existence of five lagoons in the area.

The Chinese are claiming almost the entire South China Sea, including the West Philippine Sea. Manila is contesting Beijing’s claim before an international arbitral court based in The Hague.
(...SNIPPED)

 

[CougarKing]

Unfortunately for the PLA-N, this floating dock can't repair ships the size of their lone aircraft carrier Liaoning, which would probably need the drydocks at Dalian or Qingdao or even the larger civilian drydocks one can find in Hong Kong, Guangzhou or Shenzhen.

Navy Recognition

China Launched Floating Dock Huachuan I to Repair PLAN Vessels Virtually Anywhere

The People's Liberation Army Navy (PLAN or Chinese Navy) launched its first self-propelled floating dock nammed Huachuan I. According to the the official People’s Liberation Army Daily, “The ship’s launch marks a further breakthrough in shifting repairs to our military’s large warships from set spots on the coast to mobility far out at sea.”
   
The dock can repair almost the entire PLAN fleet corvettes, frigates, destroyers and submarines (but not the Liaoning aircraft carrier or the Type 071 LPDs) virtually anywhere.

 

[CougarKing]

Should China fear a Trump presidency?

CNBC

Billionaire: Trump like a ‘kindergartener’ on China
By Matthew J. Belvedere | CNBC – 9 hours ago

Billionaires Stanley Druckenmiller and Ken Langone — both of whom support Ohio Gov. John Kasich for the GOP presidential nomination — blasted Republican front-runner Donald Trump a day after the outspoken real estate mogul scored big victories on Super Tuesday.

Druckenmiller, founder and former chairman of Duquesne Capital, told CNBC's " Squawk Box " on Wednesday that Trump's got it wrong when it comes to the economy, especially in his rhetoric concerning China .

"[Trump] has a kindergartner ... view of economics," the former hedge fund manager said. "The man says China is manipulating the currency. China is in the middle of the biggest currency run in history. They're losing $100 billion a month. They're intervening every day to hold their currency up."

(...SNIPPED)

 

[tomahawk6]

Should China fear a Trump presidency?

CNBC

Fear is the wrong word.He will be tougher than the present administration,but at the end of the day he is a realist and deal maker.China's encrouchment in the South China Sea,must be confronted.The recent Chinese occupation of PI territory has to stop.One way might be to see if Vietnam would be interested in allowing the US air and naval basing rights.

 

[Oldgateboatdriver]

I've been saying for a while now that any American who wishes to vote for Trump should first pass the following test:

Looking at themselves in the mirror, they have to pronounce the following sentence - having thought through the consequences that these words convey - without wincing, choking up or breaking out into uncontrollable laughter: "May I present to you President Trump, Leader of the free world". If they can then they can vote for him.

 

[tomahawk6]

Trump represents a protest vote against the Republican establishment.I remember when Reagan ran for office and the media tried to portray him as cowboy.He turned out pretty good.

 

[George Wallace]

Trump represents a protest vote against the Republican establishment.I remember when Reagan ran for office and the media tried to portray him as cowboy.He turned out pretty good.

I think the majority of Trump detractors are not seeing beyond the "Television personality" of Donald Trump.  He has proven himself to be successful, capable of recovering from defeat and bankruptcy in the past, to rebuild his businesses.  Not something that most are capable of. 

While many dismiss Trump for this, they totally ignore Hillary Clinton having been caught up in lies about Bosnia, Bengazi, and other lies; as well as her lack of concern for National Security with her handling of her email and other electronic accounts/communications.

Americans have some very hard choices to make in this election.

 

[a_majoor]

China may announce a 20% increase in military spending. I can think of another nation which needs a boost in military spending.....

http://nextbigfuture.com/2016/03/chinaexpected-to-announce-20-military.html

China Expected to announce a 20% military budget increase to fund accelerated weapon system modernization and procurement

China is expected to announce its biggest military budget increase in nearly a decade in the next couple of days, fuelled by increasing tensions in the South China Sea and the need for the latest weaponry.

China's military insiders say the budget could increase by up to 20 per cent. Last year the budget was $200 billion.

"The Chinese Government is not only determined but capable of continuously increasing the military budget," Professor Shi Yinhong from the Renmin University of China said.

"In the arms race in the Western Pacific, China wants to close the gap with the US."

The increase will fund a massive reform program, which will make the People's Liberation Army a meaner and leaner fighting machine.

The world's largest army has cut 300,000 soldiers and money is needed to pay them out.

On top of this, to keep morale and loyalty up, President Xi Jinping will hand out a pay rise.

Most of the increase will be for advanced weapons like new missiles.

Of course, like Russia, China is facing increasing economic pressures, which may derail these plans.

 

[CougarKing]

The USS John C. Stennis CSG is on its way after the PLA-N's seizure of Jackson Atoll/Quirino Atoll from the Philippines earlier this week:

Defense News

The U.S. just sent a carrier strike group to confront China
By David Larter, Navy Times 5:53 p.m. EST March 3, 2016


The U.S. Navy has dispatched a small armada to the South China Sea.

The carrier John C. Stennis, two destroyers, two cruisers and the 7th Fleet flagship have sailed into the disputed waters in recent days, according to military officials. The carrier strike group is the latest show of force in the tense region, with the U.S. asserting that China is militarizing the region to guard its excessive territorial claims.

Stennis is joined in the region by the cruisers Antietam and Mobile Bay, and the destroyers Chung-Hoon and Stockdale. The command ship Blue Ridge, the floating headquarters of the Japan-based 7th Fleet, is also in the area, en route to a port visit in the Philippines, and Stennis deployed from Washington state on Jan. 15.

(...SNIPPED)

 

[a_majoor]

Adding another bead to the "String of Pearls?"

http://www.the-american-interest.com/2016/03/12/is-china-encircling-india/

Is China Encircling India?

New Delhi has long worried that Beijing is establishing a “string of pearls” to encircle India in the Indian Ocean. One of the projects stirring those fears was a “port city” in Sri Lanka. Yet the development, which was embroiled in various controversies, looked like it might die after Sri Lanka’s former China-friendly president lost his election last year.

A year later, the new president has put it back on track. The Guardian:

President Maithripala Sirisena had suspended the contentious $1.4bn plan to build on reclaimed land next to Colombo’s main harbour shortly after taking power in January last year.

But the port city, initiated by Chinese president Xi Jinping in September 2014 and expected to include housing, a marina and a Formula One racetrack, was again given the green light on Thursday.

“The cabinet committee on economic management has recommended allowing resumption of the project subject to limitations and conditions stipulated in the EIA (environmental impact assessment),” the government said in a statement.
It did not say what the conditions were, but official sources told AFP that Chinese investors were given permission to resume work on the project without any major modifications.

In 2010, China financed another deepwater port in Sri Lanka which had India’s analysts squirming. So far, India’s response to Colombo’s decision has been muted. But we imagine officials in New Delhi aren’t happy. In the past year, we haven’t heard so much about India’s “string of pearls” worries. That could be about to change.

 

[CougarKing]

Haven't they learned anything from 2008?  :facepalm:

The Diplomat

Can ‘New’ Keynesianism Save the Chinese Economy?March 06, 2016

... recent economic policies in China appear to have overlooked “productivity” – the essence of economic growth – entirely and focused instead on encouraging the sale of more houses and apartments at steadily rising prices. ...

The Chinese government relies on property-related taxes and sales for some 40-60 percent of its financing. So it is not just individual and institutional investors who are addicted to the property bubble, but also all levels of government. Local government together with infrastructure-related industries have also accumulated tremendous debt due to the aggressive and excessive expansion of cities and towns. The fate of commercial banks, needless to say, is tied to ever-higher property prices. ...

... when it comes to technologies that are developed in competitive market environments through continuous investment in R&D over a span of decades, Chinese industries typically struggle to bridge the gap. This can be attributed to an economic system that gives extraordinarily high returns to rent-seeking behaviors – for instance, monopolizing markets through administrative and even legislative means, bribing authorities to bypass labor regulations, quality regulations and environmental regulations, or pirating patents and design for free ...

... it is worth mentioning that the other part of China’s “New” Keynsianism, namely the One Belt One Road initiative, which is about exporting the products and services of over-capacity, infrastructure-related industries overseas, also seems riskier than usual. Put another way, if these proposed infrastructure projects in targeted developing countries were attractive and low risk, they would have been financed and done. The fact that they are not itself implies higher risks are involved.