Chinese Military,Political and Social Superthread

[a_majoor]

Disturbing economic news:

http://www.nytimes.com/2011/09/09/business/chinas-flawed-inflation-figures.html?_r=1&src=recg

China’s Flawed Inflation Figures
Associated Press

Volatile prices on items like pork greatly affect China's inflation number.
By JOHN FOLEY and MARTIN HUTCHINSON
Published: September 8, 2011
 
When China reports this week that the consumer price index rose at an annualized rate of about 6 percent in August, economists may say inflation has peaked. They said the same last year, when the C.P.I. was running half as fast. The problem isn’t bad forecasting: China’s headline inflation measure is flawed.

Headline inflation is easily bent by volatile prices. Take pork, which rose 57 percent year on year in July. Vegetable prices are increasing more than 5 percent a week, and the effect is magnified because food composes a third of the C.P.I. basket. Conversely, some prices are artificially low, like energy and transport. A ticket on Beijing’s subway has cost a flat 2 renminbi for three years.

China’s size creates another problem. While Shanghai urbanites lament the price of their lattes, farmers in the hinterland have different concerns. Perhaps it would be better to have one C.P.I. for the city and one for the country. New tailored bank rules for low-income Xinjiang Province make that not so far-fetched.

Finding the genuine inflation number isn’t easy. One insight comes with the difference between nominal and real reported gross domestic product, the so-called G.D.P. deflator. By that measure, 2010’s inflation was around twice the C.P.I.’s reported 3.3 percent rise. If that’s a guide, today’s inflation could be in double digits.

Savers, who are robbed by rising prices, are giving a strong signal. They have flocked to real estate and high-yielding wealth products to beat the measly 3.5 percent mandated one-year deposit rate. That makes inflation harder to fight, since money pushed into informal lending channels isn’t affected by monetary policy tools like bank credit quotas. Allowing deposits to be set by the market would draw more back into the banks. But the fear of eroding banks’ margins seems to stand in the way of what would be a potent inflation-fighting tool.

And then there are the dog whistles from politicians. Premier Wen Jiabao wrote in a state magazine on Sept. 1 that price stability was his priority, and warned of “unstable” conditions. Whatever the numbers say, when savers and politicians worry, investors should, too.

Proximity Blues

Canada’s economic comfort is suffering at the hands of its troubled southern neighbor. The Bank of Canada on Wednesday stopped raising interest rates at 1 percent, largely because of deteriorating conditions in the United States. That’s a pity — Canada would benefit from rates above inflation. But sluggishness and policy-wrangling south of the border sap growth and make its currency less competitive.

That makes the central bank’s decision understandable. Canadian short-term rates are already 1 percentage point higher than America’s zero rates, while the Canadian dollar has strengthened 5 percent against the greenback in the last year. The prevailing near parity between the two currencies hurts Canadian exports, slows growth and hampers job creation, even though the country’s resources sectors remain competitive.

A pick-up in growth in the United States would help Canada’s exports, while higher interest rates in the United States would reduce the upward pressure on the Canadian dollar. But neither of those things is likely in the short term, and the Federal Reserve’s commitment to a zero-rate policy through 2013 could even at some point put pressure on the Bank of Canada to reduce rates.

Yet Canadian inflation approached 3 percent in the year to July, and the nation’s savings rate, at 4.1 percent in the second quarter, is uncomfortably low and has fallen by 2.7 percentage points in the last year. Higher rates could help on both counts. Increased savings could also help the government as it chips away at the budget deficit and tries to balance its books.

Not that inflation, let alone growth, can be said to be overheating. But that, like the Bank of Canada’s rates policy, has a lot to do with the cold wind from the south. The United States represented 73 percent of exports in 2010 and the hobbled European Union and Japan a further 11 percent.

A push to build closer ties with faster-growing developing countries could help long term. Location makes that diversification challenging and, if a United States diplomatic cable published by WikiLeaks is to be believed, Prime Minister Stephen Harper’s foreign travel — for instance, to Brazil last month — isn’t especially to his liking. But it’s a worthy goal. In the meantime, Canada’s erstwhile geographical advantage is, for now, its millstone.

For more independent financial commentary and analysis, visit www.breakingviews.com.

 

[a_majoor]

It will be bad enough when the Chinese "bubble" deflates. What happens if it pops?

Out Of The "Hard Landing" Pan And Into The "Crash" Fire - Are Things About To Get Even Worse For China?

Submitted by Tyler Durden on 10/02/2011 13:51 -0400

Over the past week one of the more hotly debated and market moving topics was the resurgence of speculation that China may be on the verge of a "hard landing." To a large extent this was driven by renewed concerns that the country's debt load, especially at the local government level, will be a substantially greater hindrance to growth and hence, concern than previously thought. This was paralleled by concerns that Chinese growth will likely slow down substantially more than previously expected, even as inflation remains stubbornly high. The result: a move wider in Chinese CDS in the past week whose severity was matched only by a similar move around the time of Lehman, when the world was widely seen as ending. Concerns that delusions about decoupling are precisely that (courtesy of 3 out of 4 BRICs printing a contractionary sub-50 ISM also led to the biggest drop in the Hang Seng index since 2001, after it tumbled 22% in Q3 as fears that a Chinese slow down would impact all developing economies with an emphasis on East Asia. Yet if a Hard Landing is all it took to disturb the precarious balance in which China always somehow always ride off into the sunset having rescued the entire world, we wonder what would happen if the market started expressing concerns that a Hard Landing is the optimistic case, and nothing short of a Crash Landing may be the baseline. Because according to the Economist, which informs us of a very troubling development out of China in which foreigners may be about to face a new entitlement funding tax for all domestic workers beginning October 15, and hence a surge in overall labor costs, then a "Crash Landing" may well be in the cards for the world's biggest marginal economy.

In "The Coming Squeeze", the Economist writes that the "cost of expatriate labor in China may be about to soar." The reason - a new tax levied on foreigners to fund the perpetually weakest link of Chinese society: its entitlement programs. "Officials have now unveiled some detailed rules which seem to require foreigners as of October 15th, to pay into China's public scheme that provides pensions, health care and unemployment benefits. The likely costs of the new measures are unknown. It is possible, but not certain, that foreigners will face stiffer taxes than locals. All that is clear, says KPMG, a tax consultancy, is that the law will squeeze both expats and their employers."

By this point a major red flag should have gone off: with international employers sourcing a key portion of the labor demand pool in China, a tax provision such as the one envisioned, which sees both foreign workers and foreign multinationals, would result in a surge in labor equivalent costs for what was once the cheapest labor market in the world (yet one which as Zero Hedge discussed several months ago may be poised to hit parity with the US in a few short years). Yet while natural labor supply/demand imbalances would have taken a long time to fully materialize, a government tax levy would have an immediate impact, and hit MNC bottom lines very hard. The net result would be a crunch in corporate bottom lines. The logical consequences would be scaled layoffs to preserve profitability, and a shift to a US-style labor relationship in which corporations extract a pound of productive efficiency flesh from their workers in exchange for the "privilege' of having a job. It is only logical that employees of domestic companies will demand comparable treatment and a prefunding of their own social safety net as the push for another Welfare State goes into high gear. One need only look what happened to Chinese auto companies two years ago when the domino effect of rising salaries forced most to increase their employee wages substantially or else face a disruptive (to put it mildly) work climate.

Needless to say, foreign workers met with a much more restrictive tax regime will also flee the country in droves, relocating to more tax-friendly havens, especially since as The Economist writes, "foreigners are unlikely to benefit from unemployment insurance, because it fhtey lose their jobs they typically lose the right to live in China. The rules suggest that pensions may be portable, but do not say how exactly this will work - and it is difficult for retired foreigners to obtain permanent residency in China.

Two other big red flags result from the implications of this move, which fundamentally is nothing short of a government-induced push to stick foreigners with the check for the country's non existent safety net:

1). China is very actively starting to consider having a safety net, which implies that even the government no longer has much faith in the export-driven mercantilist model (aka the symbiotic, or stated-better, Mutual Assured Destruction with the US model). Whether this is due to ongoing economic turbulence in which China can no longer rely as much on the US and global consumer is unclear, but we are fairly confident it is a significant factor.

2). China is now taking a much more hardline approach vis-a-vis international corporations, and foreign labor in general. Without doubt this is driven by the push to promote domestic corporate interests which China is seeing as not benefiting proportionately. The Economist agrees with this:

    The climate for foreign firms in China is starting to feel frosty. Costs are rising, regulations are growing more burdensome. Local competitors are playing rough. Some, like Cosco, a shipping giant, have brazenly tried to renege on contracts. Others have used their political allies to squeeze out foreign partners. One Westerner reveals that two foreign firms on whose boards he serves have recently been forced to leave the country shedding their assets in fire sales. China is much too big and booming for foreign firms to ignore, and plenty of multinationals are doing splendidly there. But this latest turn of the screw may not be the last.

Some would say that it would be economic and political suicide for China to proceed with this plan. But when things start to turn ugly, as they have in the past several months, centrally-planned (not to mention hard line communist) economies have been known to make less than rational decisions. China would not be the first, nor, judging by rising expectations that our own Fed Chairman may soon resume exporting outright inflation to China yet again via yet another monetary stimulus, last.

 

[a_majoor]

Oh snap....

http://www.zerohedge.com/news/china-fires-back-us-senate-which-may-have-just-started-sino-us-currency-wars

China Fires Back At US Senate Which May Have Just Started The Sino-US Currency WarsSubmitted by Tyler Durden on 10/03/2011 21:55 -0400

A few hours ago, the maniac simians at the Senate finally did it and fired the first round in the great US-China currency war, after they took aim at one of China's core economic policies, voting to move forward with a bill designed to press Beijing to let its currency rise in value in the hope of creating U.S. jobs. As Reuters reports, "Senators voted 79-19 to open a week of Senate debate on the Currency Exchange Rate Oversight Reform Act of 2011, which would allow the U.S. government to slap countervailing duties on products from countries found to be subsidizing their exports by undervaluing their currencies. Monday's strong green light for debate on the bill bolsters prospects it will clear the Democrat-run Senate later this week, but prospects for action in the Republican-controlled House of Representatives are murky. If the bill did clear both chambers, it would present President Barack Obama with a tough decision on whether to sign the popular legislation into law and risk a trade war with Beijing, or veto it to pursue a more diplomatic approach." The response has been quick and severe: "China's foreign ministry said it "adamantly opposes" a bill pushed by the U.S. Senate that will allow the United States to impose duties on countries that undervalue their currencies." And just because China is now certain that the US will continue with its provocative posture, most recently demonstrated by the vocal response in the latest US-Taiwan military escalation, we would not be surprised at all to find China Daily report that China has accidentally sold a few billions in US government bonds... just because.

Reuters explains why this is one issue in which the Senate and Congress may actually agree:

Passage of the bill by the Democratic-controlled Senate would send it to the House, which is run by traditionally free-trade-friendly Republicans.


A China currency bill passed the House last year with 99 Republican votes, but lapsed because the Senate took no action. This year, the bill already has more than 200 House co-sponsors and this week supporters expect to reach 218, the number needed to pass it.


However, House Republican leaders have not shown a great appetite to pursue currency legislation, and it is unclear if the bill would ever face a vote in that chamber.


House Majority Leader Eric Cantor, a key player in deciding whether the chamber will take up the bill, did not tip his hand on Monday, telling reporters he was watching the Senate debate and "curious, really, where the White House is on that."


Cantor, who voted against similar legislation a year ago, said he was "really interested to hear what impact that move will have and if there are any unintended consequences that may result."


Critics of the bill, including U.S. business groups, warn that the legislation, if enacted, would risk a trade war with China -- one of the fastest-growing markets for U.S. goods -- at a time when a sputtering global economy can least afford it.

The trade war may have already started:

The Emergency Committee for American Trade called the bill "a highly damaging unilateral approach that will undermine broader efforts to address China's currency undervaluation."


It also said the bill was unlikely to pass muster at the World Trade Organization and would open the door to Chinese retaliation "to the detriment of U.S. exports and jobs."

And if there is one thing China hates more than anything, it is being presented with no diplomatic choice, and appearing to bend to the will of D.C.

China rejects outside criticism of its yuan policies as interference in a sovereign decision and note that the currency has appreciated about 30 percent since 2005.


While similar bills have foundered in the past, jobs are such a hot topic heading into next year's U.S. elections that prospects may have shifted.


"On issue after issue, China is mercantilist, plain and simple," Democratic Senator Charles Schumer told the Senate.

Alas, when dysfunctional scapegoat politics enter into the equation, the worst possible outcome is guaranteed. Sure enough, China already responded:

In a statement posted on China's official government website (www.gov.cn) on Tuesday, foreign ministry spokesman Ma Zhaoxu warned the United States not to "politicise" currency issues.


He said the United States was using currency as an excuse to adopt protectionist trade measures that violated global trading rules.


"By using the excuse of a so-called 'currency imbalance', this will escalate the exchange rate issue, adopting a protectionist measure that gravely violates WTO rules and seriously upsets Sino-U.S. trade and economic relations," he said. "China expresses its adamant opposition to this."


Ma Zhaoxu repeated Beijing's position that it will continue to gradually reform its currency policy, "strengthening the flexibility of the renminbi exchange rate."


He urged U.S. legislators to "proceed from the broader picture of Sino-U.S. trade and economic cooperation" and "forsake protectionism".

However this ends, one thing is certain: it's all downhill from here, as both sides now push their luck to see just how far either one can go in the increasingly more tenuous Nash Equilibrium without the other one defecting, or being perceived as having done so.

 

[Edward Campbell]

Oh snap....

http://www.zerohedge.com/news/china-fires-back-us-senate-which-may-have-just-started-sino-us-currency-wars
...
...  if there is one thing China hates more than anything, it is being presented with no diplomatic choice, and appearing to bend to the will of D.C.
...

My, personal, assessment is that China will not accept any diktats from Washington. If this bill goes anywhere, which I doubt it will - because not everyone in Washington is suicidal, then it will start a trade and currency war with Beijing ... and Beijing will win.

No one, much, fears the USA any more, but China? ... that's a horse of another colour, people are less inclined to mess with China. If (when?) the trade/currency war starts Washington will have too few friends.

 

[a_majoor]

Censorship and control of free speech. I remember a time when it was thought that personal computers and FAX machines would bring down the USSR. Do the Chinese authorities have the same belief?

http://www.washingtonpost.com/world/asia-pacific/china-moves-to-rein-in-microblogs/2011/10/03/gIQAXLLsKL_print.html

China moves to rein in microblogs
By Keith B. Richburg, Published: October 4

BEIJING — Chinese authorities have stepped up efforts in recent weeks to rein in the hugely popular microblogging sites that have become an alternative source of real-time news for millions while challenging the Communist Party’s traditional grip on information.

Journalists, bloggers, media analysts and others said the moves are part of an intensifying control of the media landscape ahead of next year’s crucial Communist Party Congress, which will bring the broadest leadership change in China in a decade. Although leadership shuffles here are routinely decided behind the scenes and carefully choreographed for the public, they are still often fraught with uncertainty — and jittery authorities typically want to take no chances.

The 2012 leadership change will be the first since the explosion here of Weibo, the microblogging sites that are like a Chinese version of Twitter with some of the visual elements of Facebook tossed in. Weibo has more than 200 million users, and the number is growing.

Although the traditional media here remain largely controlled by government censors, Weibo has emerged as a freewheeling forum for breaking news, exposés and edgy opinion — often to the chagrin of censors. For example, Weibo users first broke the news of the July 23 high-speed train collision in Wenzhou that killed 40 people — even using cellphones to post photos directly from the crash site — well before traditional government-controlled media reported the accident.

Also, although newspapers, television and radio are typically owned by the government or the Communist Party, the Weibo sites are run by private companies, meaning the censors’ control had to be more indirect.

But that seems to have changed.

Last Friday, a spokesman for the State Council Internet Office, which is under China’s State Council, or cabinet, issued a statement warning Internet users to “show self discipline and refrain from spreading rumors.” The statement was carried by Xinhua, the official Chinese news agency.

A day before, Wang Chen, minister of the State Council Internet Office, told a conference here that social networking sites posed a problem for the government.

“Many people are considering how to prevent the abuse of these networks following violent crimes that took place in some parts of the world this year,” Wang said, referring to rioting in Britain that was fueled in part by youths using BlackBerry messaging and cellphones. “The Internet should not be used to jeopardize the national or public interest,” he said.

Intensifying pressure

The companies that run the most popular microblogging sites seem to have gotten the message. Sina, whose Weibo site is the most commonly used, has stepped up efforts to remove what it calls unsubstantiated rumors from its site and to indefinitely freeze the accounts of users who spread rumors.

Sina’s move came after Beijing Party Secretary Liu Qi, who is also a member of the party’s Politburo, visited its head office in Beijing in August. Afterward, Sina said in a statement that it would “put more effort into attacking all kinds of rumors.”

Sina also said it would monitor more closely the content of users with more than 50,000 followers.

But it seems that not only rumormongers are having their Weibo accounts suspended. In Shanghai, a Weibo microblogger using the online name “General Secretary of the Flower and Fruit Mountain” gained 20,000 followers by taking published photographs of government officials, zooming in on their luxury wristwatches and identifying their make and cost. Starting in July, General Secretary posted dozens of photos of officials and their watches.

The point was clear: Officials on low government salaries were publicly sporting pricy Rolexes, Omegas and Piagets — just the kind of potential corruption the party has said it wants to stamp out. But for his trouble, General Secretary received a call from Sina last month telling him that his account was being shut down and that all his posts were being deleted.

“I think the pressure on social media in China is intensifying, particularly given the strong role platforms such as Sina microblog have played on recent news stories,” said David Bandurski, editor of the China Media Project Web site at the University of Hong Kong. He said the moves to rein in Weibo were part of the “cyclical nature” of media control in China.

Sina did not respond to questions about how many user accounts it has suspended since the new government edict came down. According to media reports, Sina has a large team, led by 10 editors, combing through the millions of daily Weibo posts trying to confirm whether news circulating online is true.

Murky situation

The efforts to control the microblogs come as authorities have made other recent moves against traditional media.

In September, two papers, the Beijing News — known for its aggressive reporting and investigations — and the Beijing Times, were placed under the control of the Beijing municipal propaganda department. Newspapers in China must have a “supervising authority,” and the two papers had been indirectly under the control of the central government.

Some journalists and media advocates said the situation was murky and unpredictable because competing power centers are vying for position before next year’s leadership changes.

“Each official is worrying that the media will be the tool of their enemies to attack them at this moment, which will be harmful to their political life,” said one Chinese investigative reporter, who spoke on the condition of anonymously for fear of facing reprisals. “For example, if a newspaper of Hubei province reported a scandal out of Henan province, then the Henan officials will be really embarrassed.”

Investigative reporters and columnists have also been targets of the media tightening; many of them have lost their jobs.

Deng Fei, an investigative reporter for Phoenix Weekly, said, “The circle of Chinese investigative reporters is shrinking now. Many of them want to change jobs.”

He added, “This is really discouraging. I have been working in this field for 10 years. I also switched to working for a charity organization this year. I can’t see a future on this road.”

Staff researcher Zhang Jie contributed to this report.

 

[Nemo888]

I am beyond contempt. This is the new superpower?
http://www.youtube.com/watch?v=oo7BDbH17qA&feature=player_embedded#!

 

[Bruce Monkhouse]

The story for the above video.
http://www.torontosun.com/2011/10/18/hit-and-run-in-china-sparks-soul-searching

 

[SupersonicMax]

I am beyond contempt. This is the new superpower?
http://www.youtube.com/watch?v=oo7BDbH17qA&feature=player_embedded#!

It's not like stuff similar to that never happened in Canada or the US...

 

[Bruce Monkhouse]

I don't know,....what if had been a young BOY laying there?

 

[mariomike]

Very disturbing story.
From last September,
"Guidelines warn against hasty help: BEIJING - A just-released guideline on how to help elderly people who have fallen down is not connected with a series of recent cases where people have gone unassisted, said a Ministry of Health official.":
http://www.chinadaily.com.cn/china/2011-09/08/content_13645436.htm

 

[Edward Campbell]

I am beyond contempt. This is the new superpower?
http://www.youtube.com/watch?v=oo7BDbH17qA&feature=player_embedded#!

This is reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail:

http://www.theglobeandmail.com/news/world/asia-pacific/leaders-admit-chinas-cultural-development-is-lagging/article2205465/

Leaders admit China’s ‘cultural development’ is lagging

MARK MACKINNON
BEIJING— From Wednesday's Globe and Mail

Published Tuesday, Oct. 18, 2011

China’s rapid economic development over the past two decades is something to celebrate. But after the display of horrifying indifference that some Chinese showed toward a bleeding two-year-old girl – in a video watched by millions around the world – the country’s leaders acknowledged Tuesday that the country’s “cultural development” lags behind its other accomplishments.

The official report released by the Xinhua news agency at the end of the annual gathering of the powerful Central Committee of the Communist Party made no mention of Wang Yue, the toddler who was run over twice and ignored by 18 passersby as she lay in a pool of her own blood in a Guangdong market last week. But it was hard not to see a connection between the jarring incident – which has provoked widespread soul-searching among Chinese Internet users – and the Central Committee’s call for a shift in focus from the country’s booming economy to addressing the voids that success has created.

After a four-day closed-door meeting, the 200-plus member Central Committee issued a communiqué calling for the country to build a “powerful socialist culture” that would involve “significantly improving the nation’s ideological and moral qualities.” Earlier, senior Politburo member Li Changchun was quoted as saying “venality, lack of integrity and moral anomalies” were on the rise in Chinese society.

Little Yueyue, as the girl is known here, remained in intensive care in a Guangzhou hospital yesterday, clinging to life, breathing with the help of a respirator. Local media quoted the hospital’s head of neurosurgery as saying the girl will likely remain in a vegetative state if she survives.

The Central Committee decided on cultural development as its main theme for this year’s plenum (last year’s focused on the five-year economic plan) well before the shocking video started an emotional discussion on the Chinese Internet about why people seem to have so little compassion for each other. Yueyue’s case was just the latest scandal in a country that has become increasingly accustomed to astonishing stories of wanton corruption, Internet scams, tainted baby food, and even child abductions with official involvement.

Many see the Communist Party as having created the vacuum it now seeks to fill. Religion was crushed following the country’s 1949 Revolution, and the ideology that was supposed to replace it – Maoism – went out the window when the country undertook its economic reforms of the 1980s and 1990s.

“The Central Committee knows there’s something very, very seriously wrong with the Chinese value system. Officially, they say that they do have a socialist value system, but no one knows what that means,” said Bo Zhiyue, an expert on Chinese politics at the National University of Singapore. “No one believes in Marxism any more, Confucianism is not being revived, and the so-called Western universal values are not being accepted.”

What the government can do about it is unclear. A statue of Confucius was briefly erected on the edge of Tiananmen Square early this year, signalling what some saw as a campaign to resurrect the great scholar’s values as something of a moral code for the country. However the statue’s placement raised the ire of Maoists, and it was later moved to a less prominent spot inside the nearby National Museum.

The communiqué issued by the Central Committee suggested the Ministry of Culture and the Propaganda Department will lead the push to create a more ethical “socialist” culture, following the long-standing Communist tradition of trying to lead the masses through media and propaganda campaigns. But many Chinese believe that little can change unless the country’s widely distrusted legal system is overhauled.(Many Internet commentators admitted they understood the reaction of those who walked by injured Yueyue, since getting involved in another’s business can often have unpredictable consequences.)

With President Hu Jintao and Premier Wen Jiabao set to retire next year, the debate over the country’s direction will almost certainly fall to the next generation of China’s leaders to resolve. Not mentioned in the communiqué was the behind-the-scenes jockeying for posts in the next Standing Committee of the Politburo, the Party’s top decision-making body.

While Vice-President Xi Jinping and Vice-Premier Li Keqiang are seen as virtual locks to succeed Mr. Hu and Mr. Wen next year, there could be as many as seven other spots available on the nine-person Politburo.

A taste of the campaigning taking place behind the sealed doors of the Great Hall of the People drifted onto the pages of the People’s Daily newspaper, which on the eve of the Central Committee meeting devoted a 3,000-word front-page article to the accomplishments of Bo Xilai, the charismatic boss of the megacity of Chongqing.

Mr. Bo has made himself the hero of the Party’s “new left” through his campaigns in Chongqing – which have included a harsh crackdown on crime and an effort to restore “Red culture” by encouraging the singing of Mao-era songs – and the prominent article was seen as a sign that he and the leftists might be in ascendance.

But on Monday, the Party’s liberals – often seen as the weaker grouping – got their moment in the People’s Daily, which devoted only slightly less prominent front-page coverage to Wang Yang, the reformist Party boss of coastal Guangdong province.

Mr. Wang recently launched a campaign known as “Happy Guangdong,” arguing that the region’s development needs to be measured by factors other than the pace of economic development. Citizens need to be “both rich of pocket and rich of brain,” the People’s Daily quoted him as saying.

The disconnect between Chines ideals and Chinese actions has been a problem for 2,500 years. Venality does not coexist easily with altruism - not in China and not in Canada, either.

Dr. Bo Zhiyue has it about right: “No one believes in Marxism any more, Confucianism is not being revived, and the so-called Western universal values are not being accepted.” The Chinese need to find a way to restore their traditional, very conservative, social values to a level which is commensurate with their fast growing wealth. Deng Xiaoping may have said that it is "glorious" to be rich, but he also understood that, in Confucius' words, "Wealth and high station are what men desire," and for 25 years that has been the main, almost only focus of the Chinese leadership.

The Chinese leadership is fond of using the media - especially TV and TV historical dramas, that are hugely popular in China - to "teach" lessons. Now is the time for some moral lessons using that powerfully persuasive medium.

 

[Kalatzi]

China Wants Bases an Endless War in Pakistan


http://www.wired.com/dangerroom/2011/10/china-pakistan-bases/

"Washington just got a golden opportunity to end its decade-long excursion into central Asia and deplete the power of its Pacific rival/banker, all in one fell swoop. The Chinese are seeking bases in the tribal regions of Pakistan, precisely where the U.S. fights its drone war."

"Think about it. The Chinese entangle themselves in a region where the U.S. found itself exhausted in an inconclusive effort. Since it’s China’s backyard, the domestic and internal military pressures to keep fighting there will likely be great. China can batter the residual terrorist presence in tribal Pakistan — its brutal Army will kill U.S. enemies as well as its own, if history is any indication — and also experience the pleasures of dealing with Islamabad, selling it weapons, and being responsible for Pakistani security. Surely Beijing will enjoy an intransigent ally that rejects its advice while keeping its money. And if China really wants a larger role in global affairs, tribal Pakistan is the most advantageous place for the U.S. to pass the baton."

 

[Edward Campbell]

Any significant, marked Chinese presence in the region would constrain US action: it is one thing to bomb your suspect, albeit putative ally Pakistan; it is another to bomb, again, your major creditor, China.

 

[Nemo888]

The classic blunder,...
http://www.youtube.com/watch?v=7LUUk6wVNrY

 

[a_majoor]

Retaining the "Mandate of Heaven" is becoming more difficult in the digital age:

http://www.nationalpost.com/todays-paper/Operation+Free+Chen+example+speed+power+netizens+that+scares+China/5626454/story.html

Operation Free Chen is an example of the speed and power of 'netizens' that scares China's leaders

AFP, Getty Images
Plainclothes policemen patrol outside Chen's house, where he has lived since his release from jail.

Peter Foster, The Daily Telegraph · Oct. 29, 2011 | Last Updated: Oct. 29, 2011 4:08 AM ET

The policeman's hand slapped the woman's face with an audible crack.

Standing only five feet tall in her sneakers, barely the height of her assailant's epaulettes, she took the blow without a cry.

The scene was witnessed by The Daily Telegraph this week in a small police station near a village in Shandong province, northeast China, that has become a magnet for activists of all stripes protesting against a dark corner of the Chinese state that operates beyond the law.

The woman who took the slap, Wang Xuezhen, 30, is one of a stream of people who have come together over the Internet and travelled to Dongshigu to support a man they believe is being persecuted, a blind lawyer named Chen Guangcheng.

Stumbling out of the police station and holding her stinging face, Ms. Wang bitterly observed a truth about contemporary China: the country's lawlessness begins with the law itself.

Then she turned on her cellphone and asked a friend to post a message on Weibo, China's version of Twitter, relaying the news of the assault to the world.

Almost immediately, her supporters began passing on the message and posting their own messages of support. By the evening the slap had been picked up by an Asian television channel.

"These animals, they lack all humanity, I hate them so much. I wish I could go and join your fight!" wrote one of her followers.

The power and speed of China's social networks have alarmed the government, which announced plans Wednesday to police the buzz of messages more tightly, in the name of maintaining what it calls "social stability."

In the two years since it was launched, the Weibo platform has attracted more than 200 million users, weighing in with a chorus of commentary on the failings of an authoritarian state that often questions and contradicts the output of the tightly controlled state media.

Even though the Weibo microblogs are carefully policed - censors block and delete content deemed seditious - the controls are often overwhelmed by the sheer volume of outpourings by netizens.

Operation Free Chen Guangcheng is perhaps one of the clearest examples of what frightens the Communist party. It began this year when activists began suggesting online people should go as "tourists" to visit the 39year-old, who has been under illegal house arrest for more than a year.

What started as a trickle of visitors has become a steady river, with more than 30 people arriving last weekend alone, despite the almost certain prospect of being greeted by violence.

Mr. Chen upset local Communist party officials by exposing a gruesome program of forced abortions and sterilizations as part of China's one-child policy.

Using his skills as a self-taught lawyer - he was blinded at a young age and was illiterate until he was in his early 20s - he filed a class action lawsuit on behalf of numerous women who had suffered brutal and illegal enforcement of China's onechild policy, embarrassing local officials and forcing national authorities to investigate.

The suit was rejected and only one official was punished, but Mr. Chen - nicknamed the "barefoot lawyer" - refused to give up, becoming more outspoken despite beatings and intimidation.

By September 2005, Mr. Chen was placed under house arrest and on Aug. 24, 2006, after a two-hour trial, which his lawyers were unable to attend, he was jailed for four years and three months for "damaging property and organizing a mob to disturb traffic."

Since his release in September last year - the same year he was nominated, along with the eventual winner Liu Xiaobo, for the Nobel Peace Prize - he and his family have been locked into their home with steel shutters covering the windows.

In addition, his phones and Internet lines were cut and 200 thugs were hired - by whom no one is quite sure - to patrol the perimeters of his village night and day.

Although several activists trying to visit him have been beaten, the flow of people has not stopped, with one activist saying they are "like mosquitoes settling on the hide of an elephant."

All sorts of people have been drawn to Dongshigu - a strange mixture of brave activists, principled citizen journalists and a few thrillseekers.

One, a young man, who prefers not to be interviewed because he is "politically connected," is driving an Audi and wears designer jeans; he also visibly relishes the daily game of cat-and-mouse with the local secret police.

He is part of a five-man team that recently infiltrated the fringes of the village at night to set off a cannonade of fireworks, sending a message "to tell Blind Chen the people care."

A video of the fireworks was posted online, attracting 6,000 hits before it was removed by the censors.

Ironically, Ms. Wang and two others were visiting the police station to ask for protection from the thugs who - just like the officer who struck her and removed the Velcro patch with his police number - operate above the law, but apparently with its tacit support.

Their request was met with scorn.

"You are citizens of China, of course you are free to visit the village," said the senior officer, who would not give his name, but did wear his ID number, 076970.

"If there are problems we will protect you, but we cannot protect you against imaginary difficulties."

It was then Ms. Wang started to argue, retorting the last time she came to Dongshigu, on Sept. 21, a bag was put over her head before she was beaten and robbed, and yet the police offered her no protection and refused to investigate her case.

It was after she fired a particularly strong insult at the officer that the slap suddenly rang out. But what would be grounds for an assault charge in the West was brushed off as just another unavoidable knock.

Earlier, tailed by a black car whose occupants also watched her eat lunch, Ms. Wang stopped to buy pens, pencils and pencil-sharpeners for Mr. Chen's six-year-old daughter Chen Kesi, who has only this month been released from her father's "prison" and allowed to attend the nearby elementary school.

Online, people had donated 5,000 yuan ($780) for the little girl, who is regularly trailed by the thugs as she goes to school.

"This is the way that the common people show their feelings for what is happening to Chen," said Ms. Wang, describing her purchases.

At the school gates she waited until the bell rang for the end of class, before trying to hand over the art materials for Chen Kesi and her classmates. She was rebuffed by men in leather jackets who said "no child of that name attends this school."

Seeing the activists at the gates, the children were shooed indoors. Ms. Wang was left to tie the bag of goodies and toss it into the courtyard of one of Mr. Chen's older brothers with a note asking him to pass it on.

The netizens were seeking justice for Mr. Chen by a thousand cuts, explained Li Jianjun, a prominent investigative journalist, who was fired from China's mainstream media for refusing to accept the censorship, and also witnessed Ms. Wang being slapped.

He believes the activism is working, citing the decision to allow Mr. Chen's daughter to go to school and a recent editorial in the state-run Global Times newspaper warning the local government was mishandling the situation.

"The central government wanted to cover up Chen's case, but so many netizens and citizen journalists came and told about what happening, that it was no longer possible," he said.

"So then they turned to a different method - robbing and beating the netizens - but, unexpectedly, the people were not frightened. More came and more people are now talking about it. This is such a strong expression of public opposition, it is a great achievement."

 

[GAP]

There's been an Asian Spring slowly building momentum......it may take decades to achieve, but I think the old ways are cracking ......and only the people can do it.

 

[leroi]

I think you are right GAP. Those children and youth who are products of the one child policy won't tolerate a repressive system as they grow and age. They want an open country and they've been raised with much more freedom than their ancestors.

 

[Edward Campbell]

A bit of (revealing) news about the PLA in this article which is reproduced under the fair Dealing provisions of the Copyright Act from the Globe and Mail:

http://www.theglobeandmail.com/news/world/a-bit-chunky-with-a-tattoo-chinas-military-will-take-you/article2222313/

A bit chunky with a tattoo? China’s military will take you

CHRISTOPHER BODEEN
BEIJING— The Associated Press

Published Wednesday, Nov. 02, 2011

China's military is accepting recruits who are heavier and have more visible tattoos, conceding to rising prosperity and individuality among the nation's young.

In keeping with a drive for better-educated recruits, the military is also opening up to university students willing to take time off to serve, offering them an additional 6,000 yuan ($944) annually to subsidize their educational costs and guaranteeing that their university places will be there for them when they return to campus.

The changes announced by the Defence Ministry on Wednesday took effect during the People's Liberation Army's current winter recruitment drive. The People's Liberation Army is the world's largest, with 2.3 million people in uniform.

The ministry said would-be recruits will no longer be rejected for having face or neck tattoos as long as the body art doesn't exceed 2 centimetres.

The changes also allow for body weight up to 25 per cent greater or 15 per cent lower than the military's standard, in contrast to the former limits of 20 per cent greater and 10 per cent lower.

Prohibitions on ear piercings will also be eliminated, as long as the holes are not too obvious.

The reforms reflect how China's educated youths are becoming increasingly selective about jobs at the same time as the military rapidly modernizes. As in the West, increased food consumption and more sedentary lifestyles are producing recruits who are less fit and more choosy about the physical activities they engage in.

With China's enormous population and huge amounts of excess rural labour, the army in the past could afford to be highly selective in whom it admitted, requiring recruits to meet strict standards for height and weight and automatically tossing out those with less than perfect vision or other slight physical defects.

While China's growing economy offers numerous alternatives, military pay and benefits have been improving in line with double-digit annual percentage increases in the defence budget. The armed forces also retain a privileged position in communist society, and a military background can lead to careers in security, local government, and other areas, so serving remains a relatively attractive choice.

While China maintains a draft, the army has been essentially all-voluntary for many years as so many young men sought to join. Rejection rates among those taking the basic physical exams have run at about 70 per cent in past years.

The U.S. military changed its policy for recruits in 2006 to ban any tattoos above the collar, including on the neck, head, or face, as well as those anywhere on the body of an extremist, sexist, racist, or indecent nature. The rules set no limits on piercings, but forbid earrings and other such body decorations except in some cases for female soldiers.

Chinese soldiers are required to be slightly taller than U.S. recruits, with a minimum height of 5 feet, 3 inches for men, as opposed to 5 feet for Americans.

While American male soldiers can weigh between 97 and 259 pounds, depending on age and height, the People's Liberation Army calculates its standard weights only by height, starting at 115 pounds.

My impression, based on reading, a small handful of conversations and a tiny bit of observation, is that the current PLA is much, much smaller but qualitatively much more powerful than the 1981 version.

 

[The Bread Guy]

Likely not a huge surprise to veteran China watchers around here.....

Nearly half of China's wealthiest citizens are considering emigrating, with the United States

and Canada the most popular destinations, according to a new report from the authors of China's rich list.

The survey by the Bank of China and the Hurun Report, which publishes luxury magazines and runs a research institute, found that 46 percent of Chinese with assets worth more than 10 million yuan ($1.6 million) were considering moving abroad.

Another 14 percent had already begun the process, it said. Many said they were seeking a better education for their children and cited concerns about the security of their assets in China.

Nearly a third of the respondents said they already had investments overseas, in many cases to enable them to emigrate. Some countries offer residency to foreign citizens who are prepared to invest large sums.

High inflation and the difficulty of investing overseas were also cited in the survey, which took in 980 people in 18 Chinese cities ....

Agence France-Presse, 1 Nov 11

 

[a_majoor]

China's space program:

http://www.popularmechanics.com/science/space/news/chinas-space-docking-what-does-it-mean

China’s Space Docking: What Does It Mean?
This week China launched a capsule that joined with its prototype space station already in orbit. It’s a small step in space, but what does it say about China’s larger intentions?
By Rand Simberg

November 4, 2011 3:00 PM
On Tuesday, Nov. 1., China launched the Shenzhou-8 space capsule into the same orbital plane as its Tiangong-1 prototype space station. Over the course of several Earth orbits, the capsule performed a rendezvous maneuver and slowly caught up to the space station. Eventually, when it got close enough, Shenzhou-8 made some final burns to precisely match its velocity and location with the Tiangong-1, and the two spacecraft docked, temporarily becoming one. It was the first successful space docking in China’s history.

As milestones go, this could be seen as a small one. After all, China merely performed a feat that Americans achieved more than 45 years earlier (and its space station is about the size of the Salyut 1 Russia flew about 40 years ago). There was a key difference, though: While the first American docking was with a manned Gemini capsule and an unmanned Agena upper stage, the Chinese performed the entire operation with unmanned spacecraft—a feat that the U.S. had never actually performed until recently, and a tribute to the intervening decades of technological development. The question now is: What does China’s recent success say about its goals in space?

When NASA achieved its first orbital docking in 1966, it was a key demonstration needed to develop the confidence to later go to the moon. That’s because the Apollo mission required a similar rendezvous and docking in lunar orbit between the ascending lunar module and the orbiting command module in order to get the astronauts back home to earth.

Chinese leaders openly want to have a manned space station by the end of the decade, and this demonstration is crucial to that goal for two reasons. First, assembling a space station during multiple missions (as the U.S. and other nations did with the International Space Station) requires the capability to mate two pieces in orbit. And even if the station could be launched in a single piece (as Skylab was in the 1970s), every visit to a space station requires a rendezvous and docking. With this mission a success, expect manned flights on Shenzhou missions in the next couple years.

But how about beyond low Earth orbit (LEO)? Former NASA administrator Mike Griffin, who for years has warned that China could go to the moon before the U.S. could break out its holding pattern in LEO, testified before Congress on this subject just a few weeks ago. In this telling exchange, he outlines how China—taking advantage of the docking sophistication it displayed this week—could mount a mission to the moon without even building a heavy-lift rocket:

I know the Chinese Long March 5 rocket is in development. I wondered if you could compare that to anything we have in the American inventory. When it’s built will it really be larger than anything we have? And why do you think that the Chinese are building such a large rocket?

Griffin: Well, the Long March 5 is comparable in scale to today’s Delta IV Heavy or to the Ares I crew vehicle—which we were going to build and which was cancelled. So it’s on the order of, and of course until it flies regularly we won’t actually know, but it’s on the order of 25 tons of payload to LEO. So it’s not in the class of, say, the Saturn V or the new SLS [Space Launch System].

But it’s a very significant capability and in fact by launching and rendezvousing four of those in LEO it would be possible for the Chinese to construct a manned lunar mission with no more than that rocket and no more than Apollo technology. And I have in the past written up on how that mission would work from an engineering perspective. So with the Long March 5 the Chinese inherently possess the capability to return to the moon should they wish to do so.

And you are saying that we do not have anything comparable to that other than what had been talked about?

We do not. Well, we have nice view graphs (laughter in the background).

Actually, contrary to Griffin’s implication, the Delta IV Heavy has flown, so it’s more than "view graphs." And the Long March 5 isn’t scheduled to fly until 2014. But even in that timeline, China could be thinking about a moon visit relatively soon. In the U.S., by comparison, the Space Launch System NASA is now mandated to build couldn’t return Americans to the moon until at least the late 2020s (and would add tens of billions to the cost), according to a recently leaked NASA internal document.

China has yet to make any specific commitments to manned lunar missions, though the Chang’e series of unmanned lander missions, which are planned to culminate in a sample return rocket in 2020, could be a precursor to such missions. The nation’s nonmilitary space program (though it’s somewhat hard to separate military from nonmilitary, as China doesn’t have a civil space agency like NASA and its "taikonauts" are military personnel) seems aimed primarily at national prestige and cementing relations with the developing world through cooperative activities. It’s not clear how a lunar program will fit into that.

However, some aerospace bigwigs see aggressive lunar goals in China’s future. A couple weeks ago, at a space conference in Las Cruces, N.M., space real-estate developer and Bigelow aerospace founder Bob Bigelow made a second major speech in 2011, warning that, in his view, the Chinese plan not only to visit, but also to claim the moon, casting aside the 1967 Outer Space Treaty that forbids nations from claiming sovereignty of off-planet property. "China already has a grand national vision," he said then. "Their vision is that China wants to be indisputably No. 1 in the world, measured any way you want to measure."

And Washington certainly isn’t doing anything to diminish the idea of a second space race based on national pride. The same day China achieved its space docking, Virginia Congressman Frank Wolfe, chairman of the appropriations committee for NASA, called a hearing to find out why administrator Charles Bolden and presidential science adviser John Holdren had been meeting with Chinese space officials, when the NASA budget expressly forbids any cooperation with China. (The dispute is over $3,500 spent to host the meeting, so this is simply a symbolic squabble.)

But Congress should perhaps be careful what they wish for in excluding China from cooperative space activities. In the 1970s, the French were upset by what they considered unreasonable demands for American control over the use of satellites that they were going to launch in the Space Shuttle, then in development. The result was the European Ariane rocket, which has taken a lot of launch business not just from the Shuttle, but also from American commercial launch providers over the past decades.

Besides, there’s one other point to consider in how much of a threat the Chinese are. China’s space industry has expressed concerns that it won’t be able to compete with the SpaceX Falcon on cost, even with Chinese government subsidies. So as long as we don’t regulate our own competitive private industry out of business, we may not need to be so restrictive.


Read more: China’s Space Docking: What Does It Mean? - Shenzhou-8 - Popular Mechanics